Document:

08142006 8K Exhibit 10.5

EXHIBIT 10.5

FOURTH AMENDMENT TO NEW LEASE

This Fourth Amendment to New Lease ("Amendment") is entered into, and dated
for reference purposes, as of August 14, 2006 (the "Execution Date"), with the
understanding and agreement that it shall be effective

retroactively as of August 1, 2006 (as provided further in Section 1(b) below),
by and between METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation
("Metropolitan"), as Landlord ("Landlord"), and Pharmacyclics, Inc., a Delaware
corporation ("Pharmacyclics"), as Tenant ("Tenant"), with reference to the
following facts ("Recitals"):

	Landlord and Tenant are parties to that certain written lease comprised of
the following: that certain Lease and Lease Termination Agreement dated as of
June 14, 2000 (the "New Lease"), that certain First Amendment to New Lease dated
as of April 10, 2001 (the "First Amendment"), that certain Second Amendment to
New Lease dated as of June 29, 2001 and that certain Third Amendment to New
Lease dated as of February 5, 2003 for the premises more particularly described
therein of 64,776 rentable square feet ("RSF") located at 995 and 999 E. Argues
Avenue, Sunnyvale, California ("Existing Premises"). The New Lease, as amended,
is referred to herein as the "Existing Lease."
	Landlord and Tenant desire to provide for extension of the Lease Term and
other amendments of the Existing Lease as more particularly set forth
below.

NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants set forth herein and of other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:

Section 1.Scope of Amendment: Defined Terms.

	Except as expressly provided in this Amendment, the Existing Lease shall
remain in full force and effect. Should any inconsistency arise between this
Amendment and the Existing Lease as to the specific matters which are the
subject of this Amendment, the terms and conditions of this Amendment shall
control. The term 'New Lease' as used herein and in the Existing Lease shall
refer to the Existing Lease as modified by this Amendment, except as expressly
provided in this Amendment. All capitalized terms used in this Amendment and not
defined herein shall have the meanings set forth in the Existing Lease unless
the context clearly requires otherwise.
	The parties acknowledge and agree that this Lease has been executed by both
parties after August 1, 2006, but this Amendment shall be effective
retroactively as of August 1, 2006 with the same force and effect as if executed
on that date. Tenant shall be entitled to credit against the rents due and
becoming due under this Lease the amount of rent actually paid under the
Existing Lease by Tenant for the period after July 31, 2006, and Tenant shall
pay Landlord within ten days after notice from Landlord the amount (if any) by
which the rent actually paid by Tenant underpaid the rents payable under this
Lease for such period.

Section 2.Extension of Term.  Landlord and Tenant
acknowledge and agree that, before giving effect to this Amendment, pursuant to
the Existing Lease, the Expiration Date of the Lease Term of the Existing Lease
is scheduled to be December 31, 2007. Notwithstanding any provision of the
Existing Lease to the contrary, the Existing Lease is hereby amended to provide
that the Expiration Date of the Lease Term of the Existing Lease shall be
extended for an additional term of 24 months (the "Second Extended Term") from
December 31, 2007 to December 31, 2009 (hereafter, the "Expiration Date" with
respect to the Second Extended Term), unless sooner terminated pursuant to the
terms of the Lease. Landlord and Tenant acknowledge and agree that this
Amendment provides all rights and obligations of the parties with respect to
extension of the current Term, whether or not in accordance with any other
provisions, if any, of the Existing Lease regarding renewal or extension, and
any such provisions, options or rights for renewal or extension provided in the
Existing Lease are hereby deleted as of the Execution Date. The defined term
"Lease Term" in the Existing Lease shall be deemed to include the Second
Extended Term.

Section 3.Modification of Monthly Rent.  Notwithstanding
any provision of the Existing Lease to the contrary, commencing on August 1,
2006 and continuing through the Expiration Date of the Second Extended Term:

(a)the amount of Monthly Installments of rent due and payable monthly by
Tenant for the Existing Premises is hereby amended and shall be as follows: 

	
Period
from/through
	Monthly Rate

 
	
 Monthly
Installment 

	
 8/1/06-7/31/07 
	$1.15/NNN

 
	
$74,492.40 

	
 8/1/07-7/31/08 
	$1.18/NNN

 
	
$76,435.68 

	
 8/1/08-7/31/09 
	$1.22/NNN

 
	
$79,026.72 

	
 8/1/09-12/31/09 
	$1.26/NNN

 
	
$81,617.76 

(b)Tenant shall continue to pay Tenants Pro Rata Share of 81.2% of all Property
Taxes and other charges which the Existing Lease obligates Tenant to pay on the
basis of Tenants Pro Rata Share.

Section 4.Security Deposit.  Landlord acknowledges that as
of the Execution Date it holds a Security Deposit composed of cash in the amount
of Seventy Three Thousand Four Hundred Ten Dollars ($73,410.00) and the Letter
of Credit in the amount of Four Hundred Fifty Thousand Dollars ($450,000.00)
(the "Letter of Credit"). Notwithstanding any provision of the Existing Lease to
the contrary, Tenant shall keep the Letter of Credit in full force and effect
through and including February 14, 2010. Within 30 days after the Execution
Date, Tenant shall deliver to Landlord a written amendment of the Letter of
Credit deleting the reference to December 31, 2008 as the date beyond which the
Letter of Credit will not be automatically renewed and inserting in its place
February 14, 2010.

Section 5."AS IS" Condition.  Notwithstanding any provision
of the Existing Lease to the contrary, Tenant hereby leases for the Second
Extended Term and accepts the Existing Premises in its "AS IS" condition
existing on the Execution Date, without any express or implied representations
or warranties of any kind by Landlord, its brokers, manager or agents, or the
employees of any of them regarding the Premises; and Landlord shall not have any
obligation to construct or install any tenant improvements or alterations or to
pay for any such construction or installation. Tenant acknowledges that Tenant
presently occupies the Existing Premises.

Section 6. Brokers.  Notwithstanding any other provision of
the Lease to the contrary, Landlord and Tenant each respectively represents that
it has had no dealings with any real estate broker or agent in connection with
this Amendment, and it knows of no other real estate broker or agent who is
entitled to a commission in connection with this Amendment. Tenant agrees to
indemnify, protect, defend and hold harmless Landlord against and from all
claims, liability, loss, damage, cost and expense arising out of any claims for
brokerage commissions or fees by any broker or agent claiming to represent or to
have dealt with Tenant in connection with the subject matter of this Amendment.
Landlord agrees to indemnify, protect, defend and hold harmless Tenant against
and from all claims, liability, loss, damage, cost and expense arising out of
any claims for brokerage commissions or fees by any broker or agent claiming to
represent or to have dealt with Landlord in connection with the subject matter
of this Amendment. The foregoing representations and obligations shall survive
the expiration or sooner termination of the Lease.

Section 7.Time of Essence.  Without limiting the generality
of any other provision of the Lease, time
is of the essence to each and every term and condition of this Amendment.

Section 8.Attorneys' Fees.  Each party to this Amendment
shall bear its own attorneys' fees and costs incurred in connection with the
discussions preceding, negotiations for and documentation of this Amendment. In
the event any party brings any suit or other proceeding with respect to the
subject matter or enforcement of this Amendment or the Lease as amended, the
prevailing party (as determined by the court, agency or other authority before
which such suit or proceeding is commenced) shall, in addition to such other
relief as may be awarded, be entitled to recover attorneys' fees, expenses and
costs of investigation as actually incurred, including court costs, expert
witness fees, costs and expenses of investigation, and all attorneys' fees,
costs and expenses in any such suit or proceeding (including in any action or
participation in or in connection with any case or proceeding under the
Bankruptcy Code, 11 United States Code Sections 101 et seq., or any
successor statutes, in establishing or enforcing the right to indemnification,
in appellate proceedings, or in connection with the enforcement or collection of
any judgment obtained in any such suit or proceeding).

Section 9.Effect of Headings: Recitals: Exhibits.  The
titles or headings of the various parts or sections hereof are intended solely
for convenience and are not intended and shall not be deemed to or in any way be
used to modify, explain or place any construction upon any of the provisions of
this Amendment. Any and all Recitals set forth at the beginning of this
Amendment are true and correct and constitute a part of this Amendment as if
they had been set forth as covenants herein. Exhibits, schedules, plats and
riders hereto which are referred to herein are a part of this Amendment.

Section 10.Entire Agreement: Amendment.  This Amendment
taken together with the Existing Lease, together with all exhibits, schedules,
riders and addenda to each, constitutes the full and complete agreement and
understanding between the parties hereto and shall supersede all prior
communications, representations, understandings or agreements, if any, whether
oral or written, concerning the subject matter contained in this Amendment and
the Existing Lease, as so amended, and no provision of the Lease as so amended
may be modified, amended, waived or discharged, in whole or in part, except by a
written instrument executed by all of the parties hereto.

Section 11.Authority.  Each party represents and warrants
to the other that it has full authority and power to enter into and perform its
obligations under this Amendment, that the person executing this Amendment is
fully empowered to do so, and that no consent or authorization is necessary from
any third party. Landlord may request that Tenant provide Landlord evidence of
Tenant's authority.

Section 12.Counterparts.  This Amendment may be executed in
two or more counterparts, which when taken together shall constitute one and the
same instrument, and the signature of any party to any counterpart shall be
deemed a signature to, and may be appended to, any other counterpart. Each
counterpart shall be equally admissible in evidence, and each original shall
fully bind each party who has executed it. The parties contemplate that they may
be executing counterparts of this Amendment transmitted by facsimile and agree
and intend that a signature by facsimile machine shall bind the party so signing
with the same effect as though the signature were an original signature.

  IN WITNESS WHEREOF, the
parties hereto have executed this Amendment as of the date first set forth
above.

TENANT:PHARMACYCLICS, INC., 

a Delaware corporation

By:
/s/  RICHARD MILLER

Print Name:Richard Miller

Title:CEO

(Chairman of Board, President or Vice President)

By:
/s/  LEIV LEA

Print Name:Leiv Lea

Title:VP & CFO

(Secretary, Assistant Secretary, CFO or Assistant Treasurer)

LANDLORD:METROPOLITAN LIFE INSURANCE COMPANY, 

a New York corporation

By:
/s/  JOEL R. REDMON

Print Name:Joel R. Redmon

Title:Assistant Vice-PresidentEX-10.1

 

EXHIBIT
10.1

EXECUTION COPY

 

WILMINGTON TRUST COMPANY, AS OWNER TRUSTEE OF THE

HSBC PRIVATE LABEL CREDIT CARD MASTER NOTE TRUST (USA) I

Issuer

and

U.S. BANK NATIONAL ASSOCIATION

Indenture Trustee and Securities Intermediary

AMENDED AND RESTATED

MASTER INDENTURE

Dated as of August 11, 2006

amending and restating in full the

Master Indenture

dated as of June 12, 2001

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	 
	Section 1.01 Definitions
	 	 	2	 
	Section 1.02 Other Definitional Provisions
	 	 	14	 
	 
	ARTICLE II THE NOTES
	 	 	16	 
	 
	Section 2.01 Form Generally
	 	 	16	 
	Section 2.02 Denominations
	 	 	16	 
	Section 2.03 Execution, Authentication and Delivery
	 	 	16	 
	Section 2.04 Authenticating Agent
	 	 	17	 
	Section 2.05 Registration of and Limitations on Transfer and Exchange of Notes
	 	 	18	 
	Section 2.06 Mutilated, Destroyed, Lost or Stolen Notes
	 	 	19	 
	Section 2.07 Persons Deemed Owners
	 	 	20	 
	Section 2.08 Appointment of Paying Agent
	 	 	20	 
	Section 2.09 Access to List of Noteholders’ Names and Addresses
	 	 	20	 
	Section 2.10 Cancellation
	 	 	21	 
	Section 2.11 Release of Collateral
	 	 	21	 
	Section 2.12 New Issuances
	 	 	21	 
	Section 2.13 Book-Entry Notes
	 	 	22	 
	Section 2.14 Notices to Clearing Agency or Foreign Clearing Agency
	 	 	23	 
	Section 2.15 Definitive Notes
	 	 	24	 
	Section 2.16 Global Note; Euro-Note Exchange Date
	 	 	24	 
	Section 2.17 Meetings of Noteholders
	 	 	24	 
	Section 2.18 Uncertificated Classes
	 	 	25	 
	 
	ARTICLE III REPRESENTATIONS AND COVENANTS OF ISSUER
	 	 	26	 
	 
	Section 3.01 Payment of Principal and Interest
	 	 	26	 
	Section 3.02 Maintenance of Office or Agency
	 	 	26	 
	Section 3.03 Money for Note Payments to Be Held in Trust
	 	 	26	 
	Section 3.04 Existence
	 	 	27	 
	Section 3.05 Protection of Trust
	 	 	28	 
	Section 3.06 Opinions as to Collateral
	 	 	28	 
	Section 3.07 Performance of Obligations; Servicing of Receivables
	 	 	29	 
	Section 3.08 Negative Covenants
	 	 	30	 
	Section 3.09 Statements as to Compliance
	 	 	31	 
	Section 3.10 Issuer May Consolidate, Etc., Only on Certain Terms
	 	 	31	 
	Section 3.11 Successor Substituted
	 	 	32	 
	Section 3.12 No Other Business
	 	 	33	 
	Section 3.13 No Borrowing
	 	 	33	 
	Section 3.14 Servicer’s Obligations
	 	 	33	 
	Section 3.15 Guarantees, Loans, Advances and Other Liabilities
	 	 	33	 
	Section 3.16 Capital Expenditures
	 	 	33	 
	Section 3.17 Restricted Payments
	 	 	33	 
	Section 3.18 Notice of Events of Default
	 	 	33	 
	Section 3.19 Further Instruments and Acts
	 	 	34	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	 
	ARTICLE IV SATISFACTION AND DISCHARGE
	 	 	35	 
	 
	Section 4.01 Satisfaction and Discharge of this Indenture
	 	 	35	 
	Section 4.02 Application of Trust Money
	 	 	36	 
	 
	ARTICLE V AMORTIZATION EVENTS, DEFAULTS AND REMEDIES
	 	 	37	 
	 
	Section 5.01 Amortization Events
	 	 	37	 
	Section 5.02 Events of Default
	 	 	37	 
	Section 5.03 Acceleration of Maturity; Rescission and Annulment
	 	 	38	 
	Section 5.04 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee
	 	 	38	 
	Section 5.05 Remedies; Priorities
	 	 	40	 
	Section 5.06 Optional Preservation of the Collateral
	 	 	42	 
	Section 5.07 Limitation on Suits
	 	 	42	 
	Section 5.08 Unconditional Rights of Noteholders to Receive Principal and Interest
	 	 	43	 
	Section 5.09 Restoration of Rights and Remedies
	 	 	43	 
	Section 5.10 Rights and Remedies Cumulative
	 	 	43	 
	Section 5.11 Delay or Omission Not Waiver
	 	 	43	 
	Section 5.12 Rights of Noteholders to Direct Indenture Trustee
	 	 	43	 
	Section 5.13 Waiver of Past Defaults
	 	 	44	 
	Section 5.14 Undertaking for Costs
	 	 	44	 
	Section 5.15 Waiver of Stay or Extension Laws
	 	 	44	 
	Section 5.16 Sale of Receivables
	 	 	45	 
	Section 5.17 Action on Notes
	 	 	45	 
	 
	ARTICLE VI THE INDENTURE TRUSTEE
	 	 	46	 
	 
	Section 6.01 Duties of the Indenture Trustee
	 	 	46	 
	Section 6.02 Notice of Amortization Event or Event of Default
	 	 	47	 
	Section 6.03 Rights of Indenture Trustee
	 	 	48	 
	Section 6.04 Not Responsible for Recitals or Issuance of Notes
	 	 	49	 
	Section 6.05 May Hold Notes
	 	 	49	 
	Section 6.06 Money Held in Trust
	 	 	49	 
	Section 6.07 Compensation, Reimbursement and Indemnification
	 	 	49	 
	Section 6.08 Replacement of Indenture Trustee
	 	 	50	 
	Section 6.09 Successor Indenture Trustee by Merger
	 	 	50	 
	Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee
	 	 	51	 
	Section 6.11 Eligibility; Disqualification
	 	 	52	 
	Section 6.12 Preferential Collection of Claims Against
	 	 	52	 
	Section 6.13 Tax Returns
	 	 	52	 
	Section 6.14 Representations and Covenants of the Indenture Trustee
	 	 	52	 
	Section 6.15 Custody of the Collateral
	 	 	53	 
	Section 6.16 Information to be Provided by the Indenture Trustee
	 	 	53	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	 
	ARTICLE VII NOTEHOLDERS’ LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER
	 	 	55	 
	 
	Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders
	 	 	55	 
	Section 7.02 Preservation of Information; Communications to Noteholders
	 	 	55	 
	Section 7.03 Reports by Issuer
	 	 	55	 
	Section 7.04 Reports by Indenture Trustee
	 	 	56	 
	Section 7.05 Notices
	 	 	56	 
	 
	ARTICLE VIII ALLOCATION AND APPLICATION OF COLLECTIONS
	 	 	57	 
	 
	Section 8.01 Collection of Money
	 	 	57	 
	Section 8.02 Rights of Noteholders
	 	 	57	 
	Section 8.03 Establishment of Collection Account and Special Funding Account
	 	 	57	 
	Section 8.04 Collections and Allocations
	 	 	59	 
	Section 8.05 Shared Principal Collections and Shared Transferor Principal Collections
	 	 	61	 
	Section 8.06 Directions Regarding Additional Withdrawals from the Collection Account
	 	 	62	 
	Section 8.07 Allocation of Collateral to Pools
	 	 	62	 
	Section 8.08 Release of Collateral; Eligible Loan Documents
	 	 	63	 
	 
	ARTICLE IX DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
	 	 	64	 
	 
	ARTICLE X SUPPLEMENTAL INDENTURES
	 	 	65	 
	 
	Section 10.01 Supplemental Indentures Without Consent of Noteholders
	 	 	65	 
	Section 10.02 Supplemental Indentures With Consent of Noteholders
	 	 	66	 
	Section 10.03 Direction to Indenture Trustee
	 	 	68	 
	Section 10.04 Effect of Supplemental Indenture
	 	 	68	 
	Section 10.05 Conformity With Trust Indenture Act
	 	 	68	 
	Section 10.06 Reference in Notes to Supplemental Indentures
	 	 	68	 
	 
	ARTICLE XI TERMINATION
	 	 	69	 
	 
	Section 11.01 Termination of Trust
	 	 	69	 
	Section 11.02 Final Distribution
	 	 	69	 
	Section 11.03 Transferor’s Termination Rights
	 	 	70	 
	Section 11.04 Defeasance
	 	 	70	 
	 
	ARTICLE XII MISCELLANEOUS
	 	 	72	 
	 
	Section 12.01 Compliance Certificates
	 	 	72	 
	Section 12.02 Form of Documents Delivered to Indenture Trustee
	 	 	73	 
	Section 12.03 Acts of Noteholders
	 	 	74	 
	Section 12.04 Notices
	 	 	74	 
	Section 12.05 Notices to Noteholders; Waiver
	 	 	75	 
	Section 12.06 Alternate Payment and Notice Provisions
	 	 	76	 
	Section 12.07 Conflict with Trust Indenture Act
	 	 	76	 

-iii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	 
	Section 12.08 Effect of Headings and Table of Contents
	 	 	76	 
	Section 12.09 Successors and Assigns
	 	 	76	 
	Section 12.10 Separability
	 	 	76	 
	Section 12.11 Benefits of Indenture
	 	 	76	 
	Section 12.12 Limitation on Voting Preferred Stock
	 	 	76	 
	Section 12.13 Governing Law
	 	 	77	 
	Section 12.14 Counterparts
	 	 	77	 
	Section 12.15 Trust Obligation
	 	 	77	 
	Section 12.16 No Petition
	 	 	77	 

-iv-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 
	EXHIBITS	 	 	 	 	 	Page	 
	EXHIBIT A-1
	 	Form of Report on Assessment of Compliance with Applicable Pursuant to Item 1122 of Regulation AB Servicing Criteria	 	 	A-1	 

-v-

 

 

RECONCILIATION AND TIE BETWEEN TRUST INDENTURE

ACT OF 1939 AND INDENTURE PROVISIONS*

	 	 	 	 	 
	Trust Indenture	 	 
	   Act Section	 	Indenture Section
	310(a)(1)
	 	 	6.11	 
	(a)(2)
	 	 	6.11	 
	(a)(3)
	 	 	6.10	 
	(a)(4)
	 	Not Applicable
	(a)(5)
	 	 	6.11	 
	(b)
	 	 	6.08,	  6.11
	(c)
	 	Not Applicable
	311(a)
	 	 	6.12	 
	(b)
	 	 	6.12	 
	(c)
	 	Not Applicable
	312(a)
	 	 	7.01, 	 7.02(a)
	(b)
	 	 	7.02	(b)
	(c)
	 	 	7.02	(c)
	313(a)
	 	 	7.04	 
	(b)
	 	 	7.04	 
	(c)
	 	 	7.03,	 7.04
	(d)
	 	 	7.04	 
	314(a)
	 	 	3.09, 	 7.03(a)
	(b)
	 	 	3.06	 
	(c)(1)
	 	 	2.11, 	 8.08(c), 12.01(a)
	(c)(2)
	 	 	2.11,	 8.08(c), 12.01(a)
	(c)(3)
	 	 	2.11,	 8.08(c), 12.01(a)
	(d)(1)
	 	 	2.11,	 8.08(c), 12.01(b)
	(d)(2)
	 	Not Applicable
	(d)(3)
	 	Not Applicable
	(e)
	 	 	12.01	(a)
	315(a)
	 	 	6.01	(b)
	(b)
	 	 	6.02	 
	(c)
	 	 	6.01	(c)
	(d)
	 	 	6.01	(d)
	(d)(1)
	 	 	6.01	(d)
	(d)(2)
	 	 	6.01	(d)
	(d)(3)
	 	 	6.01	(d)
	(e)
	 	 	5.14	 
	316(a)(1)(A)
	 	 	5.12	 
	316(a)(1)(B)
	 	 	5.13	 
	316(a)(2)
	 	Not Applicable
	316(b)
	 	 	5.08	 
	317(a)(1)
	 	 	5.04	 
	317(a)(2)
	 	 	5.04	(d)

 

			
	*	 	This reconciliation and tie shall not, for any
purpose, be deemed to be part of the within indenture.

 

 

	 	 	 	 	 
	Trust Indenture	 	 
	   Act Section	 	Indenture Section
	317(b)
	 	 	5.04	(a)
	318(a)
	 	 	12.07	 

-2-

 

          This AMENDED AND RESTATED MASTER INDENTURE, dated as of August 11, 2006 (herein, as
amended, modified or supplemented from time to time as permitted hereby, called the
“Indenture”), between WILMINGTON TRUST COMPANY, not in its individual capacity but solely
as Owner Trustee on behalf of the HSBC Private Label Credit Card Master Note Trust (USA) I, a
Delaware common law trust (formerly known as Household Credit Card Master Note Trust I, herein,
together with its permitted successors and assigns, called the “Issuer” or the
“Trust”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as indenture
trustee (herein, together with its successors in the trusts hereunder, called the “Indenture
Trustee”) and securities intermediary, amends and restates in full the Master Indenture, dated
as of June 12, 2001, between the Issuer and the Indenture Trustee. This Indenture may be
supplemented at any time and from time to time by an Indenture Supplement in accordance with
Article X hereof (an “Indenture Supplement,” and any Indenture Supplement together with
this Indenture and amendments hereof collectively referred to as the “Agreement”). If a
conflict exists between the terms and provisions of this Indenture and any Indenture Supplement,
the terms and provisions of the Indenture Supplement shall be controlling with respect to the
related Series.

PRELIMINARY STATEMENT

          The Issuer has duly authorized the execution and delivery of this Indenture to provide for an
issue of its asset backed notes (the “Notes”) as provided in this Indenture. All covenants
and agreements made by the Issuer herein are for the benefit and security of the Noteholders. The
Issuer is entering into this Indenture, and the Indenture Trustee is accepting the trusts created
hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.

          The Issuer has entered into the Amended and Restated Transfer and Servicing Agreement with
HSBC Funding (USA) Inc. V, a Delaware corporation, as Transferor (the “Transferor”), and
HSBC Finance Corporation, a Delaware corporation, as Servicer (in such capacity, the
“Servicer”), pursuant to which (a) the Transferor has conveyed and will continue to convey
to the Issuer all of its right, title and interest in, to and under the Receivables, which the
Transferor will have received from a Seller pursuant to a Receivables Purchase Agreement and (b)
the Servicer has agreed to service the Receivables and make collections thereon on behalf of the
Noteholders.

          Under the Receivables Purchase Agreements and the Transfer and Servicing Agreement,
Receivables arising in the Accounts from time to time will automatically be conveyed thereunder to
the Issuer without any further action by the Sellers or Transferor being necessary.

GRANTING CLAUSES

          The Owner Trustee on behalf of the Issuer hereby Grants to the Indenture Trustee, for the
benefit of the Holders of the Notes, all of its right, title and interest, whether now owned or
hereafter acquired, in, to and under (a) the Receivables, (b) Interchange, if applicable, and
Recoveries related to and all money, instruments, investment property and other property (together
with all earnings, dividends, distributions, income, issues, and profits relating to) distributed
or distributable in respect of the Receivables pursuant to the terms of the Transfer and Servicing
Agreement, this Indenture and any Indenture Supplement, (c) all Eligible Investments and all money,
investment property, instruments and other property on deposit from time to time in, credited to or
related to the Collection Account, the Series Accounts and the Special Funding Account (including
any subaccounts of such account), and in all interest, dividends, earnings, income and other
distributions from time to time received, receivable or otherwise distributed or distributable
thereto or in respect thereof (including any accrued discount realized on liquidation of any
investment purchased at a discount), (d) all rights, remedies, powers, privileges and claims of the
Owner Trustee or the Issuer under or with respect to any Series Enhancement or the Transfer and
Servicing Agreement (whether arising pursuant to the terms of such Series Enhancement or

 

 

the Transfer and Servicing Agreement or otherwise available to the Owner Trustee or Issuer at
law or in equity), including, without limitation, the rights of the Owner Trustee on behalf of the
Issuer to enforce such Series Enhancement or the Transfer and Servicing Agreement, and to give or
withhold any and all consents, requests, notices, directions, approvals, extensions or waivers
under or with respect to such Series Enhancement or the Transfer and Servicing Agreement to the
same extent as the Owner Trustee on behalf of the Issuer could but for the assignment and security
interest granted to the Indenture Trustee for the benefit of the Noteholders, (e) all money,
accounts, general intangibles, chattel paper, instruments, documents, goods, investment property,
deposit accounts, certificates of deposit, letters of credit, and advices of credit belonging to
the Issuer, (f) the Preferred Stock, (g) all other property of the Issuer, (h) all present and
future claims, demands, causes and chose in action in respect of any or all of the foregoing and
all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or
all of the foregoing, including all proceeds, products, rents, receipts or profits of the
conversion, voluntary or involuntary, into cash or other property, all cash and non-cash proceeds,
and other property consisting of, arising from or relating to all or any part of any of the
foregoing, and (i) any proceeds of the foregoing; in each case, excluding the Transferor Amount and
all amounts distributable to the Holders of the Transferor Certificates pursuant to the terms of
any Transaction Document (collectively, the “Collateral”).

ARTICLE I

DEFINITIONS

     Section 1.01 Definitions.

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

          “Accumulation Period” shall mean, with respect to any Series, or any Class within a
Series, a period following the Revolving Period during which Collections of Principal Receivables
are accumulated in an account for the benefit of the Noteholders of such Series or Class within
such Series, which shall be the controlled accumulation period, the early accumulation period, the
optional accumulation period, the partial accumulation period or other accumulation period, in each
case as defined with respect to such Series in the related Indenture Supplement.

          “Act” shall have the meaning specified in Section 12.03(a).

          “Adjusted Pool Principal Balance” shall, with respect to any Series, have the meaning
specified in the applicable Indenture Supplement.

          “Adverse Effect” shall have the meaning specified in the Transfer and Servicing
Agreement.

          “Aggregate Investor Percentage” shall mean, with respect to Principal Receivables,
Finance Charge and Administrative Receivables and Defaulted Receivables relating to a particular
Pool, as the case may be, as of any date of determination, the sum of such Investor Percentages (as
such term is defined in the related Indenture Supplements) of all Series of Notes relating to such
Pool issued and outstanding on such date of determination; provided, however, that the Aggregate
Investor Percentage shall not exceed 100%.

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          “Agreement” shall mean this Indenture, as the same may be amended, supplemented or
otherwise modified from time to time, including, with respect to any Series or Class, the related
Indenture Supplement.

          “Amortization Event” shall mean, with respect to any Series, a Trust Amortization
Event or a Series Amortization Event.

          “Amortization Period” shall mean, with respect to any Series, or any Class within a
Series, a period following the Revolving Period during which Collections of Principal Receivables
are distributed to Noteholders, which shall be the controlled amortization period, the rapid
amortization period, the optional amortization period, the partial amortization period or other
amortization period, in each case as defined with respect to such Series in the related Indenture
Supplement.

          “Applicants” shall have the meaning specified in Section 2.09.

          “Authorized Officer” shall mean:

     (a) with respect to the Issuer, any officer of the Owner Trustee who is authorized to
act for the Owner Trustee in matters relating to the Issuer and who is identified on the
list of Authorized Officers, containing the specimen signature of each such Person,
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter) and any Vice President or more
senior officer of the Servicer who is authorized to act for the Servicer in matters relating
to the Issuer and to be acted upon by the Servicer pursuant to the Transfer and Servicing
Agreement and who is identified on the list of Authorized Officers (containing the specimen
signatures of such officers) delivered by the Servicer to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time thereafter);

     (b) with respect to the Transferor, any officer of the Transferor who is authorized to
act for the Transferor in matters relating to the Transferor and who is identified on the
list of Authorized Officers, containing the specimen signature of each such Person,
delivered by the Transferor to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter); and

     (c) with respect to the Servicer, any officer of the Servicer who is authorized to act
for the Servicer in matters relating to the Servicer and who is identified on the list of
Authorized Officers, containing the specimen signature of each such Person, delivered by the
Servicer to the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).

          “Bank” shall mean HSBC Bank Nevada, National Association (formerly known as Household
Bank (SB), N.A.), and its successors and permitted assigns.

          “Bearer Notes” shall have the meaning specified in Section 2.01.

          “Beneficial Owner” shall mean, with respect to a Book-Entry Note, the Person who is
the owner of such Book-Entry Note, as reflected on the books of the Clearing Agency or Foreign
Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency or
Foreign Clearing Agency (directly as a Clearing Agency Participant or as an Indirect Participant,
in accordance with the rules of such Clearing Agency or Foreign Clearing Agency).

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          “Book-Entry Notes” shall mean beneficial interests in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency or Foreign Clearing
Agency as described in Section 2.13.

          “Class” shall mean, with respect to any Series, any one of the classes of Notes of
that Series.

          “Clearing Agency” shall mean an organization registered as a “clearing agency”
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and serving as clearing
agency for a Series or Class of Book-Entry Notes.

          “Clearing Agency Participant” shall mean a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.

          “Clearstream” shall mean Clearstream Banking Luxembourg, a professional depository
incorporated under the laws of Luxembourg, and its successors.

          “Closing Date” shall mean, with respect to any Series, the closing date specified in
the related Indenture Supplement.

          “Code” shall mean the Internal Revenue Code of 1986, as amended.

          “Collateral” shall have the meaning specified in the Granting Clause of this
Indenture.

          “Collection Account” shall have the meaning specified in Section 8.03.

          “Commission” shall mean the Securities and Exchange Commission and its successors in
interest.

          “Corporate Trust Office” means the office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office at date of the
execution of this Agreement is located at 209 South LaSalle Street, 3rd Floor, Chicago, IL 60604
or at such other address as the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Transferor, or the principal corporate trust office of any successor Indenture
Trustee (the address of which the successor Indenture Trustee will notify the Noteholders and the
Transferor).

          “Coupon” shall have the meaning specified in Section 2.01.

          “Default” shall mean any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.

          “Defeasance” shall have the meaning specified in Section 11.04(a).

          “Defeased Series” shall have the meaning specified in Section 11.04(a).

          “Definitive Notes” shall mean Notes in definitive, fully registered form.

          “Deposit Date” shall mean each day on which the Servicer deposits Collections in the
Collection Account.

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          “Determination Date” shall mean, unless otherwise specified in the Indenture
Supplement for a particular Series, the earlier of the third Business Day and the fifth calendar
day (or if the fifth calendar day is not a Business Day, then the preceding Business Day) preceding
the fifteenth day of each calendar month.

          “Distribution Date” shall mean, with respect to any Series, the date specified in the
applicable Indenture Supplement.

          “Dollars”, “$” or “U.S. $” shall mean United States dollars.

          “DTC” shall mean The Depository Trust Company.

          “Due Period” shall mean, with respect to each Distribution Date, unless otherwise
provided in an Indenture Supplement, the period from and including the first day of the preceding
calendar month to and including the last day of such calendar month.

          “Eligible Institution” shall mean any depository institution (which may be the Owner
Trustee or the Indenture Trustee) organized under the laws of the United States or any one of the
states thereof, including the District of Columbia (or any domestic branch of a foreign bank),
which depository institution at all times (a) is a member of the FDIC and (b) has (i) a long-term
unsecured debt rating in the highest rating category of Standard & Poor’s, Moody’s and, if rated by
Fitch, of Fitch, or such other rating acceptable to the Rating Agency or (ii) a short-term rating
in the highest rating category of Standard & Poor’s, Moody’s, and if rated by Fitch, of Fitch, or
such other rating acceptable to the Rating Agency. Notwithstanding the previous sentence any
institution the appointment of which satisfies the Rating Agency Condition shall be considered an
Eligible Institution. If so qualified, the Servicer may be considered an Eligible Institution for
the purposes of this definition.

          “Eligible Investments” shall mean instruments, investment property or other property
with respect to any of the following:

     (a) direct obligations of, or obligations fully guaranteed as to timely payment by, the
United States of America;

     (b) demand deposits, time deposits or certificates of deposit (having original
maturities of no more than 365 days) of depository institutions or trust companies
incorporated under the laws of the United States of America or any state thereof, including
the District of Columbia (or domestic branches of foreign banks) and subject to supervision
and examination by federal or state banking or depository institution authorities; provided
that at the time of the Trust’s investment or contractual commitment to invest therein, the
short-term debt rating of such depository institution or trust company shall be in the
highest rating category of Standard & Poor’s, Moody’s and, if rated by Fitch, of Fitch, or
such other rating category acceptable to the Rating Agency;

     (c) commercial paper (having original or remaining maturities of no more than 30 days)
having, at the time of the Trust’s investment or contractual commitment to invest therein, a
rating in the highest rating category of Standard & Poor’s, Moody’s and, if rated by Fitch,
of Fitch, or such other rating category acceptable to the Rating Agency;

     (d) demand deposits, time deposits and certificates of deposit which are fully insured
by the FDIC having, at the time of the Trust’s investment therein, a rating in the highest
rating

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category of Standard & Poor’s, Moody’s and, if rated by Fitch, of Fitch, or such other
rating category acceptable to the Rating Agency;

     (e) bankers’ acceptances (having original maturities of no more than 365 days) issued
by any depository institution or trust company referred to in clause (b) above;

     (f) money market funds having, at the time of the Trust’s investment therein, a rating
in the highest rating category of Standard & Poor’s, Moody’s and, if rated by Fitch, of
Fitch, or such other rating category acceptable to the Rating Agency (including funds for
which the Indenture Trustee or any of its Affiliates is investment manager or advisor);

     (g) (x) time deposits (having maturities not later than the succeeding Distribution
Date) other than as referred to in clause (d) above, with a Person the commercial paper of
which has a credit rating satisfactory to the Rating Agency or (y) notes which are payable
on demand issued by HSBC Finance Corporation; provided such notes will constitute Eligible
Investments only if HSBC Finance Corporation has, at the time of the Trust’s investment in
such notes, a commercial paper rating of not less than A-1 by Standard & Poor’s, P-1 by
Moody’s and F1 by Fitch (or such other rating as shall be satisfactory to such Rating
Agency); or

     (h) any other investment of a type or rating that satisfies the Rating Agency
Condition.

          “Enhancement Agreement” shall mean any agreement, instrument or document governing the
terms of any Series Enhancement or pursuant to which any Series Enhancement is issued or
outstanding.

          “Euroclear Operator” shall mean Euroclear Bank S.A./N.V., as operator of the Euroclear
System or its successor as operator of such system or any system that is a successor to such
system.

          “Event of Default” shall have the meaning specified in Section 5.02.

          “Excess Finance Charge and Administrative Collections” shall have the meaning
specified in Section 8.07(d).

          “Excess Finance Charge Sharing Group” shall mean all Excess Finance Charge Sharing
Series that have the same Excess Finance Charge Sharing Group designation.

          “Excess Finance Charge Sharing Series” shall mean a Series that, pursuant to the
Indenture Supplement therefor, is entitled to receive certain excess Collections of Finance Charge
and Administrative Receivables from other Series in the same Excess Finance Charge Sharing Group,
as more specifically set forth in such Indenture Supplement.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

          “Finance Charge Shortfalls” shall have the meaning specified in Section
8.07(d).

          “Foreclosure Remedy” shall have the meaning specified in Sections 5.05(a)(iii)
and (iv).

          “Foreign Clearing Agency” shall mean Clearstream and the Euroclear Operator.

          “Global Note” shall have the meaning specified in Section 2.16.

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          “Grant” means to mortgage, pledge, bargain, warrant, alienate, remise, release,
convey, assign, transfer, create, and grant a lien upon and a security interest in and right of
set-off against, deposit, set over and confirm pursuant to this Indenture. A Grant of the
Collateral or of any other agreement or 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 for, collect, receive and give receipt for principal and interest
payments in respect of the Collateral and all other moneys payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or receive thereunder or
with respect thereto.

          “Group” shall mean, with respect to any Series, a group or groups of Series (including
any Reallocation Group, Excess Finance Charge Sharing Group, Principal Sharing Group, Shared
Enhancement Group or any other Group established by an Indenture Supplement) in which the Indenture
Supplement for each such Series specifies such Series is to be included for the purpose of sharing
certain collections of Finance Charge and Administrative Receivables and/or Principal Receivables.
A particular Series may be included in more than one Group if the Indenture Supplement for such
Series so provides.

          “HSBC Finance Corporation” shall mean HSBC Finance Corporation (successor by merger to
Household Finance Corporation), a Delaware corporation, and its successors and permitted assigns.

          “Indenture” shall mean this Amended and Restated Master Indenture, dated as of August
11, 2006, between the Issuer and the Indenture Trustee, as the same may be amended, supplemented or
otherwise modified from time to time.

          “Indenture Supplement” shall mean, with respect to any Series, a supplement to the
Indenture, executed and delivered in connection with the original issuance of the Notes of such
Series pursuant to Section 10.01(a)(vii), and an amendment to the Indenture executed
pursuant to Sections 10.01 or 10.02, and, in either case, including all amendments
thereof and supplements thereto.

          “Indenture Trustee” shall mean U.S. Bank National Association, in its capacity as
trustee under the Indenture, its successors in interest and any successor indenture trustee under
the Indenture.

          “Independent” shall mean, when used with respect to any specified Person, that the
Person (a) is in fact independent of the Issuer, any other obligor upon the Notes, the Transferor
and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest
or any material indirect financial interest in the Issuer, any such other obligor, the Transferor
or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Transferor or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

          “Independent Certificate” shall mean a certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 12.01, made by an Independent appraiser or other expert
appointed by an Issuer Order, and such opinion or certificate shall state that the signer has read
the definition of “Independent” in this Indenture and that the signer is Independent within the
meaning thereof.

          “Indirect Participant” shall mean other Persons such as securities brokers and
dealers, banks and trust companies that clear or maintain a custodial relationship with a
participant of DTC, either directly or indirectly.

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          “Invested Amount” shall mean, with respect to any Series and for any date, an amount
equal to the invested amount, unless the term “adjusted invested amount” is applicable to such
Series, specified in the related Indenture Supplement.

          “Investment Company Act” shall mean the Investment Company Act of 1940, as amended.

          “Issuer” shall mean the Trust.

          “Issuer Order” and “Issuer Request” shall mean a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee.

          “New Issuance” shall have the meaning specified in Section 2.12(a).

          “Note Interest Rate” shall mean, as of any particular date of determination and with
respect to any Series or Class, the interest rate as of such date specified therefor in the related
Indenture Supplement.

          “Note Owner” shall mean, with respect to a Book-Entry Note, the Person who is the
owner of such Book-Entry Note, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in accordance with the rules of such Clearing Agency).

          “Note Register” shall have the meaning specified in Section 2.05.

          “Noteholder” or “Holder” shall mean the Person in whose name a Note is
registered on the Note Register and, if applicable, the holder of any Bearer Note, Global Note, or
Coupon, as the case may be, or such other Person deemed to be a “Noteholder” or
“Holder” in any related Indenture Supplement.

          “Notes” shall mean all Series of Notes issued by the Trust pursuant to the Indenture
and the applicable Indenture Supplement.

          “Officer’s Certificate” shall mean, unless otherwise specified in this Agreement, a
certificate delivered to the Indenture Trustee signed by any Authorized Officer of the Issuer,
Transferor, or Servicer, as applicable, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 12.01.

          “Opinion of Counsel” shall mean a written opinion of counsel, who may be counsel for,
or an employee of, the Person providing the opinion and who shall be reasonably acceptable to the
Indenture Trustee; provided, that a Tax Opinion shall be an opinion of nationally recognized tax
counsel.

          “Outstanding” shall mean, as of the date of determination, all Notes theretofore
issued under this Indenture except:

     (a) Notes theretofore cancelled by the Registrar or delivered to the Registrar for
cancellation;

     (b) Notes or portions thereof the payment for which money in the necessary amount has
been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the
Holders of such Notes (provided, however, that if such Notes are to be redeemed, notice of
such

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redemption has been duly given pursuant to this Indenture or provision therefor,
satisfactory to the Indenture Trustee, has been made);

     (c) Notes deemed to be satisfied and discharged pursuant to Sections 4.01 or
11.04; and

     (d) Notes in exchange for or in lieu of other Notes which have been issued pursuant to
this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser;

provided that in determining whether the Holders of the requisite Outstanding Amount of the Notes
have given any request, demand, authorization, direction, notice, consent or waiver hereunder,
Notes owned by the Issuer, any other obligor upon the Notes, the Transferor, the Servicer or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee actually knows to be so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the
Transferor, the Servicer or any Affiliate of any of the foregoing Persons. In making any such
determination, the Indenture Trustee may rely on the representations of the pledgee and shall not
be required to undertake any independent investigation.

          “Outstanding Amount” means the aggregate principal amount of all Notes Outstanding at
the date of determination.

          “Owner Trustee” shall mean Wilmington Trust Company, in its capacity as owner trustee
under the Trust Agreement, its successors in interest and any successor owner trustee under the
Trust Agreement.

          “Paired Series” shall mean (a) each Series which has been paired with another Series
(which Series may be prefunded or partially prefunded), such that the reduction of the Invested
Amount or Adjusted Invested Amount of such Series results in the increase of the Invested Amount of
such other Series, as described in the related Indenture Supplements, and (b) such other Series.

          “Paying Agent” shall mean any paying agent appointed pursuant to Section 2.08
that meets the eligibility standards for the Indenture Trustee specified in Section 6.11
and shall initially be the Indenture Trustee; provided, that if the Indenture Supplement for a
Series so provides, a different or additional Paying Agent may be appointed with respect to such
Series.

          “Pool” shall mean the pool of Receivables having the same pool designation as listed
on the schedule, and as to which the Series that relate to such Pool (as designated in the
Indenture Supplement for such Series) primarily look to for support in respect of payments,
proceeds, Recoveries and Collections; and specifically shall mean, (a) with respect to any
Receivables conveyed to the Trust pursuant to Section 2.01 of the Transfer and Servicing
Agreement listed from time to time on Schedule 1 thereto, Pool One, and (b) with respect to any
other Receivables conveyed to the Trust pursuant to Section 2.09 of the Transfer and
Servicing Agreement, the Pool as specified by the Transferor in the notice delivered pursuant to
Section 2.09(c)(i) of the Transfer and Servicing Agreement, with respect to such
Receivables shall be reflected in an appropriate related schedule which shall be created or amended
to reflect the current composition of such Pool.

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          “Portfolio Yield” shall mean with respect to any Pool and, with respect to any Due
Period, unless otherwise specified in an Indenture Supplement related to such Pool, the annualized
percentage equivalent of a fraction (a) the numerator of which is equal to the Collections of
Finance Charge and Administrative Receivables during such Due Period calculated on a cash basis,
after subtracting therefrom the Defaulted Amount with respect to such Due Period and (b) the
denominator of which is the sum of (i) total amount of Principal Receivables related to such Pool
plus (ii) the Special Funding Amount related to such Pool, each as of the last day of the
immediately preceding Due Period.

          “Principal Sharing Group” shall mean all Principal Sharing Series that have the same
Principal Sharing Group designation.

          “Principal Sharing Series” shall mean a Series that, pursuant to the Indenture
Supplement therefor, is entitled to receive Shared Principal Collections within a specified
Principal Sharing Group from other Series in the same Principal Sharing Group, as more specifically
set forth in such Indenture Supplement.

          “Principal Shortfalls” shall have the meaning specified in Section 8.05.

          “Principal Terms” shall mean, with respect to any Series, (a) the name or designation;
(b) the initial principal amount (or method for calculating such amount) and the Invested Amount;
(c) the Note Interest Rate for each Class of Notes of such Series (or method for the determination
thereof); (d) the payment date or dates and the date or dates from which interest shall accrue; (e)
the Distribution Date; (f) the method for allocating Collections to Noteholders; (g) the
designation of any Series Accounts and the terms governing the operation of any such Series
Accounts; (h) the Servicing Fee; (i) the issuer and terms of any form of Series Enhancements with
respect thereto; (j) the terms on which the Notes of such Series may be exchanged for Notes of
another Series, repurchased by the Transferor or remarketed to other investors; (k) the Series
Final Maturity Date; (l) the number of Classes of Notes of such Series and, if more than one Class,
the rights and priorities of each such Class; (m) the extent to which the Notes of such Series will
be issuable in temporary or permanent global form (and, in such case, the depositary for such
global note or notes, the terms and conditions, if any, upon which such global note may be
exchanged, in whole or in part, for Definitive Notes, and the manner in which any interest payable
on a temporary or global note will be paid); (n) whether the Notes of such Series may be issued in
bearer form and any limitations imposed thereon; (o) the priority of such Series with respect to
any other Series; (p) its Pool designation; (q) and whether such Series will be part of a
Reallocation Group and, if so, its Reallocation Group designation; (r) whether such Series will be
a Principal Sharing Series and, if so, its Principal Sharing Group designation; (s) whether such
Series is entitled to share Shared Transferor Principal Collections; (t) whether such Series will
be an Excess Finance Charge Sharing Series, and, if so, its Excess Finance Charge Sharing Group
designation; (u) whether such Series or subseries within such Series will be part of a Shared
Enhancement Group and, if so, its Shared Enhancement Group designation; (v) whether such Series
will or may be a Paired Series and the Series with which it will be paired; and (w) any other terms
of such Series.

          “Proceeding” shall mean any suit in equity, action at law or other judicial or
administrative proceeding.

          “Qualified Account” shall mean either (a) a segregated account with an Eligible
Institution, (b) a segregated trust account with the corporate trust department of the Securities
Intermediary, or (c) a segregated securities account with the Securities Intermediary.

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          “Rating Agency” shall mean, with respect to any outstanding Series or Class, each
rating agency, as specified in the Indenture Supplement applicable to such outstanding Series or
Class, selected by the Transferor to rate the Notes of such Series or Class.

          “Rating Agency Condition” shall mean, with respect to any action, that each Rating
Agency shall have notified the Transferor, the Servicer, the Owner Trustee and the Indenture
Trustee in writing that such action will not result in a reduction or withdrawal of the then
existing rating of any outstanding Series or Class with respect to which it is a Rating Agency or,
with respect to any outstanding Series or Class not rated by any Rating Agency, as specified in the
Indenture Supplement for such Series.

          “Reallocation Group” shall mean a group of one or more Series as specified in the
related Indenture Supplement, if any, with respect to which reallocation of certain Collections of
Finance Charge and Administrative Receivables and other similar amounts are to be made among such
Series, where applicable, for certain specified purposes as specified in the Agreement or any
related Indenture Supplement, including, to the extent so specified, pooling amounts available to
all Series in the particular Reallocation Group prior to any application for individual Series
requirements and sharing such amounts among such Series on the basis of the relative requirements
for each such Series.

          “Record Date” shall mean, with respect to any Distribution Date, the last day of the
calendar month immediately preceding such Distribution Date unless otherwise specified for a Series
in the related Indenture Supplement.

          “Redemption Date” shall mean, with respect to any Series, the date or dates specified
in the related Indenture Supplement.

          “Registered Notes” shall have the meaning specified in Section 2.01.

          “Registrar” shall have the meaning specified in Section 2.05.

          “Regulation AB” shall mean Subpart 229.1100 – Asset Backed Securities (Regulation AB),
17 C.F.R. §§229.1100-229.1123 under the Exchange Act, as such may be amended from time to time.

          “Reinvestment Event” shall mean, if applicable with respect to any Series, any
Reinvestment Event specified in the related Indenture Supplement.

          “Required Minimum Principal Balance” shall mean, unless otherwise provided in an
Indenture Supplement relating to a Series having a Paired Series, with respect to any date and any
Pool (a) the sum of the Series Adjusted Invested Amounts for each Series outstanding on such date
in such Pool plus the Required Transferor Amount on such date, minus (b) the Special Funding
Amount.

          “Required Transferor Amount” shall mean, with respect to any date and the related
Pool, the product of the Required Transferor Percentage for such Pool and the aggregate Series
Adjusted Invested Amounts (as defined in the related Indenture Supplement) of all Series which
relate to such Pool.

          “Required Transferor Percentage” shall, with respect to any Series, have the meaning
set forth in the related Indenture Supplement.

          “Responsible Officer” shall mean, when used with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee with direct responsibility for
the administration of the Indenture and also, with respect to a particular corporate trust matter,
any other

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officer of the Indenture Trustee to whom such matter is referred because of such officer’s
knowledge of and familiarity with the particular subject.

          “Revolving Period” shall have, with respect to each Series, the meaning specified in
the related Indenture Supplement.

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

          “Securities Intermediary” shall mean U.S. Bank National Association, in its capacity
as securities intermediary pursuant to Section 6.15, its successors in interest and any successor
securities intermediary.

          “Seller” shall mean the Person or Persons identified as seller under a Receivables
Purchase Agreement.

          “Series” shall mean any series or subseries of Notes issued pursuant to this Agreement
and the related Indenture Supplement.

          “Series Account” shall mean any deposit, trust, securities escrow or similar account
maintained for the benefit of the Noteholders of any Series or Class, as specified in any Indenture
Supplement.

          “Series Adjusted Invested Amount” shall have the meaning specified in the related
Indenture Supplement.

          “Series Amortization Event” shall have, with respect to any Series, the meaning
specified pursuant to the related Indenture Supplement.

          “Series Enhancement” shall mean the rights and benefits provided to the Trust or the
Noteholders of any Series or Class pursuant to any subordination, collateral interest, insurance
policy, cash collateral guaranty or account, swap arrangements, interest rate cap agreement, letter
of credit, surety bond, spread account, reserve account, guaranteed rate agreement, tax protection
agreement or other similar arrangement. The subordination of any Series or Class to another Series
or Class shall be deemed to be a Series Enhancement.

          “Series Enhancer” shall mean the Person or Persons providing any Series Enhancement,
other than (except to the extent otherwise provided with respect to any Series in the Indenture
Supplement for such Series) the Noteholders of any Series or Class which is subordinated to another
Series or Class.

          “Series Final Maturity Date” shall mean, with respect to any Series, the final
maturity date for such Series specified in the related Indenture Supplement.

          “Series Issuance Date” shall mean, with respect to any Series, the date on which the
Notes of such Series are to be originally issued in accordance with Section 2.12 and the
related Indenture Supplement.

          “Servicer” shall have the meaning specified in the Transfer and Servicing Agreement.

          “Shared Enhancement Group” shall mean a group of one or more Series as specified in
the related Indenture Supplement, if any, with respect to which credit enhancement, including
subordination of a particular Class or Classes or Series, and collections are shared among such
Series.

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          “Shared Principal Collections” shall have the meaning specified in Section 8.05(a).

          “Shared Transferor Principal Collections” shall have the meaning set forth in
Section 8.05(b).

          “Special Funding Account” shall have the meaning set forth in Section 8.03.

          “Special Funding Amount” shall mean the amount on deposit in a Special Funding
Account.

          “Successor Servicer” shall have the meaning specified in Transfer and Servicing
Agreement.

          “Tax Opinion” shall mean, with respect to any action, an Opinion of Counsel to the
effect that, for federal income tax purposes, (a) such action will not adversely affect the tax
characterization as debt of the Notes of any outstanding Series or Class that were characterized as
debt at the time of their issuance and (b) such action will not cause the Trust to be deemed to be
an association (or publicly traded partnership) taxable as a corporation.

          “Transaction Documents” shall mean, with respect to any Series of Notes, the Trust
Agreement, the Receivables Purchase Agreements, the Transfer and Servicing Agreement, this
Indenture, the related Indenture Supplement, and such other documents and certificates delivered in
connection therewith.

          “Transfer Agent” shall have the meaning specified in Section 2.05.

          “Transfer and Servicing Agreement” shall mean the Amended and Restated Transfer and
Servicing Agreement, dated as of August 11, 2006, among the Transferor, the Servicer and the
Issuer, as the same may be amended, supplemented or otherwise modified from time to time.

          “Transfer Date” shall mean with respect to each Distribution Date, the Business Day
immediately preceding such Distribution Date.

          “Transfer Restriction Event” shall mean any event in which any Transferor is unable
for any reason to transfer Receivables to the Trust in accordance with the provisions of the
Transfer and Servicing Agreement or any order of any governmental authority.

          “Transferor” shall have the meaning specified in the Transfer and Servicing Agreement.

          “Transferor Amount” shall mean with respect to any Pool, on any date of determination
an amount equal to the difference between (a) the sum of (i) the total amount of Principal
Receivables at the end of the day immediately prior to such date of determination plus (ii) the
related Special Funding Amount at the end of the day immediately prior to such date of
determination minus (b) the aggregated Series Adjusted Invested Amounts of all Series of Notes
related to such Pool issued and outstanding on such date of determination.

          “Transferor Percentage” shall mean, on any date of determination, when used with
respect to Principal Receivables, Finance Charge and Administrative Receivables and Defaulted
Receivables in a Pool, a percentage equal to 100% minus the Aggregate Investor Percentage for
Series related to such Pool with respect to such category of Receivables.

- 13 -

 

          “Trust” shall mean the HSBC Private Label Credit Card Master Note Trust (USA) I
(formerly known as Household Private Label Credit Card Master Note Trust I), acting by and through
Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee.

          “Trust Agreement” shall mean the Amended and Restated Trust Agreement relating to the
Trust, dated as of August 11, 2006, between HSBC Funding (USA) Inc. V and the Owner Trustee, as the
same may be amended, supplemented or otherwise modified from time to time.

          “Trust Amortization Event” shall have, with respect to each Series, the meaning
specified in Section 5.01.

          “Trust Indenture Act” or “TIA” shall mean the Trust Indenture Act of 1939, as
amended.

          “Trust Termination Date” shall have the meaning specified in the Trust Agreement.

          “UCC” shall have the meaning specified in the Transfer and Servicing Agreement.

     Section 1.02 Other Definitional Provisions.

          (a) With respect to any Series, all terms used herein and not otherwise defined herein shall
have meanings ascribed to them in the Trust Agreement, the Transfer and Servicing Agreement or the
related Indenture Supplement, as applicable.

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

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

          (d) Any reference to each Rating Agency shall only apply to any specific rating agency if such
rating agency is then rating any outstanding Series.

          (e) Unless otherwise specified, references to any amount as on deposit or outstanding on any
particular date shall mean such amount at the close of business on such day.

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

          (g) Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:

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     “indenture securities” means the Notes.

     “indenture security holder” means a Noteholder.

     “indenture to be qualified” means this Indenture.

     “indenture trustee” or “institutional trustee” means the Indenture Trustee.

     “obligor” on the indenture securities means the Issuer and any other obligor on the
indenture securities.

          All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by Commission rule have the meaning assigned to them by
such definitions.

[END OF ARTICLE I]

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ARTICLE II

THE NOTES

     Section 2.01 Form Generally.

          Any Series or Class of Notes, together with the Indenture Trustee’s certificate of
authentication related thereto, may be issued in bearer form (the “Bearer Notes”) with
attached interest coupons and a special coupon (collectively, the “Coupons”) or in fully
registered form (the “Registered Notes”) and shall be in substantially the form of an
exhibit to the related Indenture Supplement with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this Indenture or such Indenture
Supplement, and may have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may, consistently herewith, be determined by the officers executing
such Notes, as evidenced by their execution of such Notes. Any portion of the text of any Note may
be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.
The terms of any Notes set forth in an exhibit to the related Indenture Supplement are part of the
terms of this Indenture, as applicable.

          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 its execution of such Notes.

          Each Global Note will be dated the Closing Date and each Definitive Note will be dated as of
the date of its authentication.

     Section 2.02 Denominations.

          Except as otherwise specified in the related Indenture Supplement and the Notes, each class of
Notes of each Series shall be issued in fully registered form in minimum amounts of $1,000 and in
integral multiples of $1,000 in excess thereof (except that one Note of each Class may be issued in
a different amount, so long as such amount exceeds the applicable minimum denomination for such
Class), and shall be issued upon initial issuance as one or more Notes in an aggregate original
principal amount equal to the applicable Invested Amount for such Class or Series.

     Section 2.03 Execution, Authentication and Delivery.

          Each Note shall be executed by manual or facsimile signature on behalf of the Issuer by an
Authorized Officer.

          Notes bearing the manual or facsimile signature of an individual who was, at the time when
such signature was affixed, authorized to sign on behalf of the Issuer shall not be rendered
invalid, notwithstanding the fact that such individual ceased to be so authorized prior to the
authentication and delivery of such Notes or does not hold such office at the date of issuance of
such Notes.

          At any time and from time to time after the execution and delivery of this Indenture, the
Issuer may deliver Notes executed by the Issuer to the Indenture Trustee for authentication and
delivery, and the Indenture Trustee shall authenticate and deliver such Notes as provided in this
Indenture or the related Indenture Supplement and not otherwise.

          No Note shall be entitled to any benefit under this Indenture or the applicable Indenture
Supplement or be valid or obligatory for any purpose, unless there appears on such Note a
certificate of

- 16 -

 

authentication substantially in the form provided for herein or in the related Indenture
Supplement executed by or on behalf of the Indenture Trustee by the manual signature of a duly
authorized signatory, 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 2.04 Authenticating Agent.

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

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

          (c) An authenticating agent may at any time resign by giving written notice of resignation to
the Indenture Trustee, the Issuer and the Servicer. The Indenture Trustee may at any time
terminate the agency of an authenticating agent by giving notice of termination to such
authenticating agent and to the Issuer and the Servicer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time an authenticating agent shall cease
to be acceptable to the Indenture Trustee or the Issuer and the Servicer, the Indenture Trustee may
promptly appoint a successor authenticating agent. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an authenticating agent.
No successor authenticating agent shall be appointed unless acceptable to the Issuer and the
Servicer.

          (d) The Issuer agrees to pay to each authenticating agent from time to time reasonable
compensation for its services under this Section.

          (e) The provisions of Sections 6.01 and 6.04 shall be applicable to any
authenticating agent.

          (f) Pursuant to an appointment made under this Section, the Notes may have endorsed thereon,
in lieu of or in addition to the Indenture Trustee’s certificate of authentication, an alternative
certificate of authentication in substantially the following form:

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

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	as Authenticating Agent	 	 
	 

	 	 	 	for the Indenture Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Authorized Signatory”	 	 

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     Section 2.05 Registration of and Limitations on Transfer and Exchange of Notes.

          The Issuer shall cause to be kept a register (the “Note Register”) in which the Issuer
shall provide for the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee initially shall be the transfer agent and registrar (in such capacity, the
“Transfer Agent” and “Registrar”) for the purpose of registering Notes and
transfers of Notes as herein provided. Upon any resignation of any Transfer Agent and Registrar,
the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment,
assume the duties of Transfer Agent and Registrar.

          If a Person other than the Indenture Trustee is appointed by the Issuer as Transfer Agent and
Registrar, the Issuer will give the Indenture Trustee prompt written notice of the appointment of a
Transfer Agent and Registrar and of the location, and any change in the location, of the Transfer
Agent and Note Register. The Indenture Trustee shall have the right to inspect the Note Register
at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the
right to rely upon a certificate executed on behalf of the Transfer Agent and Registrar by an
officer thereof as to the names and addresses of the Noteholders and the principal amounts and
numbers of such Notes.

          Upon surrender for registration of transfer of any Note at the office or agency of the
Transfer Agent and Registrar, to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(a) of the UCC are met, the Issuer shall execute, and upon receipt of
such surrendered Note the Indenture Trustee shall authenticate and deliver to the Noteholder, in
the name of the designated transferee or transferees, one or more new Notes (of the same Series and
Class) in any authorized denominations of like aggregate principal amount.

          At the option of a Noteholder, Notes may be exchanged for other Notes (of the same Series and
Class) in any authorized denominations and of like aggregate principal amount, upon surrender of
such Notes to be exchanged at the office or agency of the Transfer Agent and Registrar. Whenever
any Notes are so surrendered for exchange, if the requirements of Section 8-401(a) of the UCC are
met, the Issuer shall execute, and upon receipt of such surrendered Note the Indenture Trustee
shall authenticate and deliver to the Noteholder, the Notes which the Noteholder making the
exchange is entitled to receive.

          All Notes issued upon any registration of transfer or exchange of Notes shall evidence the
same obligations, evidence the same debt, and be entitled to the same rights and privileges under
this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

          Every Note presented or surrendered for registration of transfer or exchange shall be duly
endorsed by, or be accompanied by a written instrument of transfer in a form satisfactory to the
Indenture Trustee duly executed by, the Noteholder thereof or his attorney-in-fact duly authorized
in writing, and by such other documents as the Indenture Trustee may reasonably require.

          The registration of transfer of any Note shall be subject to the additional requirements, if
any, set forth in the related Indenture Supplement.

          No service charge shall be made for any registration of transfer or exchange of Notes, but the
Issuer and Registrar 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 such
Notes.

          All Notes surrendered for registration of transfer and exchange shall be cancelled by the
Issuer and delivered to the Indenture Trustee for subsequent destruction without liability on the
part of either. The Indenture Trustee shall destroy the Global Note upon its exchange in full for
Definitive Notes and shall deliver a certificate of destruction to the Issuer. Such certificate
shall also state that a certificate

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or certificates of each Foreign Clearing Agency to the effect referred to in Section
2.16 was received with respect to each portion of the Global Note exchanged for Definitive
Notes.

          The preceding provisions of this section notwithstanding, the Issuer shall not be required to
make, and the Registrar need not register, transfers or exchanges of Notes for a period of 20 days
preceding the due date for any payment with respect to the Note.

          If and so long as any Series of Notes are listed on a stock exchange and such exchange shall
so require, the Indenture Trustee shall appoint a co-transfer agent and co-registrar in accordance
with the rules of such exchange. Any reference in this Agreement to the Transfer Agent and
Registrar shall include any co-transfer agent and co-registrar unless the context otherwise
requires. The Indenture Trustee will enter into any appropriate agency agreement with any
co-transfer agent and co-registrar not a party to this Indenture, which will implement the
provisions of this Indenture that relate to such agent.

     Section 2.06 Mutilated, Destroyed, Lost or Stolen Notes.

          If (a) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its reasonable satisfaction of the destruction, loss or theft of any Note, and
(b) there is delivered to the Indenture Trustee such security or indemnity as may be required by it
to hold the Issuer, the Noteholders and the Indenture Trustee harmless, then, in the absence of
notice to the Issuer, the Transfer Agent and Registrar or the Indenture Trustee that such Note has
been acquired by a bona fide purchaser, the Issuer shall execute, and the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a replacement Note of like tenor (including the same date of issuance) and principal
amount, bearing a number not contemporaneously outstanding; provided, however, that if any such
mutilated, destroyed, lost or stolen Note shall have become or within seven days shall be due and
payable, or shall have been selected or called for redemption, instead of issuing a replacement
Note, the Issuer may pay such Note without surrender thereof, except that any mutilated Note shall
be surrendered. If, after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the
original Note in lieu of which such replacement Note was issued presents for payment such original
Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking such replacement Note
from such Person to whom such replacement Note was delivered or any assignee of such Person, except
a bona fide purchaser, and 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 Issuer or the Indenture
Trustee in connection therewith.

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

          Every replacement Note issued pursuant to this Section in replacement of any mutilated,
destroyed, lost or stolen Note shall constitute complete and indefeasible evidence of an obligation
of the Trust, as if originally issued, whether or not the mutilated, destroyed, lost or stolen Note
shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

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

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     Section 2.07 Persons Deemed Owners.

          Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture
Trustee and any agent of the Transferor, the Issuer or the Indenture Trustee shall treat the Person
in whose name any Note is registered as the owner of such Note for the purpose of receiving
distributions pursuant to the terms of the applicable Indenture Supplement and for all other
purposes whatsoever, whether or not such Note is overdue, and neither the Transferor, the Issuer,
the Indenture Trustee nor any agent of the Transferor, the Issuer or the Indenture Trustee shall be
affected by any notice to the contrary.

     Section 2.08 Appointment of Paying Agent.

          (a) The Issuer reserves the right at any time to vary or terminate the appointment of a Paying
Agent for the Notes, and to appoint additional or other Paying Agents, provided that it will at all
times maintain the Indenture Trustee as a Paying Agent.

          If and so long as any Series of Notes are listed on a stock exchange and such exchange shall
so require, the Indenture Trustee will appoint a co-paying agent in accordance with the rules of
such exchange. The Indenture Trustee will enter into any appropriate agency agreement with any
co-paying agent not a party to this Indenture, which will implement the provisions of this
Indenture that relate to such agent.

          Notice of all changes in the identity or specified office of a Paying Agent will be delivered
promptly to the Noteholders by the Indenture Trustee.

          (b) The Indenture Trustee shall cause the Paying Agent (other than itself) to execute and
deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the
Indenture Trustee that such Paying Agent will hold all sums, if any, held by it for payment to the
Noteholders in trust for the benefit of the Noteholders entitled thereto until such sums shall be
paid to such Noteholders and shall agree, and if the Indenture Trustee is the Paying Agent it
hereby agrees, that it shall comply with all requirements of the Code regarding the withholding by
the Indenture Trustee of payments in respect of federal income taxes due from the Beneficial
Owners.

     Section 2.09 Access to List of Noteholders’ Names and Addresses.

          (a) The Issuer will furnish or cause to be furnished to the Indenture Trustee, the Servicer,
any Noteholder or the Paying Agent, within five Business Days after receipt by the Issuer of a
written request therefor from the Indenture Trustee, the Servicer, such Noteholder or the Paying
Agent, respectively, a list of the names and addresses of the Noteholders. Unless otherwise
provided in the related Indenture Supplement, holders of 10% of the Outstanding Amount of the Notes
of any Series (the “Applicants”) may apply in writing to the Indenture Trustee, and if such
application states that the Applicants desire to communicate with other Noteholders of any Series
with respect to their rights under this Agreement or under the Notes and is accompanied by a copy
of the communication which such Applicants propose to transmit, then the Indenture Trustee, after
having been adequately indemnified by such Applicants for its costs and expenses, shall afford or
shall cause the Transfer Agent and Registrar to afford such Applicants access during normal
business hours to the most recent list of Noteholders held by the Indenture Trustee and shall give
the Servicer notice that such request has been made, within five Business Days after the receipt of
such application. Such list shall be as of a date no more than 45 days prior to the date of
receipt of such Applicants’ request.

          (b) Every Noteholder, by receiving and holding a Note, agrees that none of the Issuer, the
Indenture Trustee, the Transfer Agent and Registrar and the Servicer nor any of their

- 20 -

 

respective agents and employees shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Noteholders hereunder, regardless of the
sources from which such information was derived.

     Section 2.10 Cancellation.

          All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by it. The Issuer may at any time deliver to the Indenture Trustee
for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may
have acquired in any lawful manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted by this Indenture.
All cancelled Notes held by the Indenture Trustee shall be destroyed unless the Issuer shall direct
by a timely order that they be returned to it.

     Section 2.11 Release of Collateral.

          Subject to Section 12.01, the Indenture Trustee shall release property from the lien
of this Indenture only upon receipt of an Issuer Request accompanied by an Officer’s Certificate
and, to the extent required, in accordance with TIA §§314(c) and 314(d) Independent Certificates.

     Section 2.12 New Issuances.

          (a) The Transferor may from time to time direct the Owner Trustee, on behalf of the Issuer, to
issue one or more new Series of Notes (each such issuance a “New Issuance”) pursuant to one
or more Indenture Supplements. The Notes of all outstanding Series shall be equally and ratably
entitled as provided herein to the benefits of this Indenture without preference, priority or
distinction, all in accordance with the terms and provisions of this Indenture and the applicable
Indenture Supplement except, with respect to any Series or Class, as provided in the related
Indenture Supplement. Interest on the Notes of all outstanding Series shall be paid on the dates
specified in or pursuant to the Indenture Supplement relating to such outstanding Series.
Principal of the Notes of each outstanding Series shall be paid as specified in or pursuant to the
Indenture Supplement relating to such outstanding Series.

          (b) On or before the Series Issuance Date relating to any new Series of Notes, the parties
hereto will execute and deliver an Indenture Supplement which will specify the Principal Terms of
such Series. The terms of such Indenture Supplement may modify or amend the terms of this
Indenture solely as applied to such new Series. The obligation of the Indenture Trustee to
authenticate and deliver the Notes of any Series (other than any Series issued pursuant to an
Indenture Supplement dated as of the date hereof) and to execute and deliver the related Indenture
Supplement is subject to the satisfaction of the following conditions:

          (i) on or before the fifth day immediately preceding the Series Issuance Date the
Transferor shall have given the Indenture Trustee, the Owner Trustee, the Servicer and each
Rating Agency notice (unless such notice requirement is otherwise waived) of such issuance
and the Series Issuance Date;

          (ii) the Transferor shall have delivered to the Indenture Trustee and the Owner Trustee
any related Indenture Supplement, in form satisfactory to the Indenture Trustee and the
Owner Trustee, executed by each party hereto (other than the Indenture Trustee);

- 21 -

 

          (iii) the Transferor shall have delivered to the Indenture Trustee and the Owner
Trustee any related Enhancement Agreement executed by each of the parties thereto, other
than the Indenture Trustee and the Owner Trustee, as the case may be;

          (iv) the Rating Agency Condition shall have been satisfied with respect to such
issuance;

          (v) such issuance will not result in any Adverse Effect and the Transferor shall have
delivered to the Indenture Trustee and the Owner Trustee an Officer’s Certificate, dated the
Series Issuance Date to the effect that the Transferor reasonably believes that such
issuance will not, based on the facts known to such officer at the time of such
certification, have an Adverse Effect;

          (vi) the Transferor shall have delivered to the Indenture Trustee and the Owner Trustee
(with a copy to each Rating Agency) a Tax Opinion, dated the Series Issuance Date with
respect to such issuance; and

          (vii) the aggregate amount of Principal Receivables in the related Pool shall be
greater than the Required Minimum Principal Balance as of the Series Issuance Date and after
giving effect to such issuance.

Any Note held by the Transferor at any time after the date of its initial issuance may be
transferred or exchanged only upon the delivery to the Indenture Trustee of a Tax Opinion dated as
of the date of such transfer or exchange, as the case may be, with respect to such transfer or
exchange.

          (c) Any Indenture Supplement providing for the issuance of subseries of Notes within the
Series subject to such Indenture Supplement may specify conditions, in addition to the conditions
applicable to each such subseries as a Series hereunder, for issuance of such subseries, which
conditions shall be consistent with the conditions for issuance of the related Series.

          (d) Upon satisfaction of the above conditions, pursuant to Section 2.03, the Owner
Trustee, on behalf of the Issuer, shall execute and the Indenture Trustee shall authenticate and
deliver the Notes of such Series as provided in this Indenture and the applicable Indenture
Supplement. Notwithstanding the provisions of this Section, prior to the execution of any
Indenture Supplement, the Indenture Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such Indenture Supplement is authorized or permitted by
this Indenture and any Indenture Supplement related to any outstanding Series. The Indenture
Trustee may, but shall not be obligated to, enter into any such Indenture Supplement which
adversely affects the Indenture Trustee’s own rights, duties or immunities under this Indenture.

          (e) The Issuer may direct the Indenture Trustee to deposit the net proceeds from any New
Issuance in the Special Funding Account with respect to the related Pool. The Issuer may also
specify that on any Transfer Date the proceeds from the sale of any new Series which is a Principal
Sharing Series may be withdrawn from the Special Funding Account for the related Pool and treated
as Shared Principal Collections with respect to the same Principal Sharing Group.

     Section 2.13 Book-Entry Notes.

          Unless otherwise provided in any related Indenture Supplement, the Notes, upon original
issuance, shall be issued in the form of typewritten Notes representing the Book-Entry Notes to be

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delivered to the depository specified in such Indenture Supplement which shall be the Clearing
Agency or Foreign Clearing Agency, by or on behalf of such Series.

          The Notes of each Series shall, unless otherwise provided in the related Indenture Supplement,
initially be registered in the Note Register in the name of the nominee of the Clearing Agency or
Foreign Clearing Agency for such Book-Entry Notes and shall be delivered to the Indenture Trustee
or, pursuant to such Clearing Agency’s or Foreign Clearing Agency’s instructions held by the
Indenture Trustee’s agent as custodian for the Clearing Agency or Foreign Clearing Agency.

          Unless and until Definitive Notes are issued under the limited circumstances described in
Section 2.15, no Beneficial Owner shall be entitled to receive a Definitive Note
representing such Beneficial Owner’s interest in such Note. Unless and until Definitive Notes have
been issued to the Beneficial Owners pursuant to Section 2.15:

          (a) the provisions of this Section shall be in full force and effect with respect to each such
Series;

          (b) the Indenture Trustee shall be entitled to deal with the Clearing Agency or Foreign
Clearing Agency and the Clearing Agency Participants for all purposes of this Indenture (including
the payment of principal of and interest on the Notes of each such Series) as the authorized
representatives of the Beneficial Owners;

          (c) to the extent that the provisions of this Section conflict with any other provisions of
this Indenture, the provisions of this Section shall control with respect to each such Series;

          (d) the rights of Beneficial Owners of each such Series shall be exercised only through the
Clearing Agency or Foreign Clearing Agency and the applicable Clearing Agency Participants and
shall be limited to those established by law and agreements between such Beneficial Owners and the
Clearing Agency or Foreign Clearing Agency and/or the Clearing Agency Participants. Pursuant to
the depository agreement applicable to a Series, unless and until Definitive Notes of such Series
are issued pursuant to Section 2.15, the initial Clearing Agency shall make book-entry
transfers among the Clearing Agency Participants and receive and transmit distributions of
principal and interest on the Notes to such Clearing Agency Participants; and

          (e) whenever this Indenture requires or permits actions to be taken based upon instructions or
directions of the Holders of Notes evidencing a specified percentage of the Outstanding Amount of
the Notes, the Clearing Agency or Foreign Clearing Agency shall be deemed to represent such
percentage only to the extent that they have received instructions to such effect from the
Beneficial Owners and/or Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has delivered such instructions to
the Indenture Trustee.

     Section 2.14 Notices to Clearing Agency or Foreign Clearing Agency.

          Whenever a notice or other communication to the Noteholders is required under this Indenture,
unless and until Definitive Notes shall have been issued to Beneficial Owners pursuant to
Section 2.15, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders to the Clearing Agency or Foreign Clearing Agency, as
applicable, and shall have no obligation to the Beneficial Owners.

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     Section 2.15 Definitive Notes.

          If (i) (a) the Servicer advises the Indenture Trustee in writing that the Clearing Agency or
Foreign Clearing Agency is no longer willing or able to properly discharge its responsibilities as
Clearing Agency or Foreign Clearing Agency with respect to the Book-Entry Notes of a given Class
and (b) the Servicer is unable to locate and reach an agreement on satisfactory terms with a
qualified successor, (ii) the Servicer, at its option, advises the Indenture Trustee in writing
that it elects to terminate the book-entry system through the Clearing Agency or Foreign Clearing
Agency with respect to such Class or (iii) after the occurrence of a Servicer Default or an Event
of Default, Beneficial Owners aggregating more than 50% of the Outstanding Amount of the Notes of
such Class advise the Indenture Trustee and the applicable Clearing Agency or Foreign Clearing
Agency through the applicable Clearing Agency Participants in writing that the continuation of a
book-entry system is no longer in the best interests of the Beneficial Owners of such Class, the
Indenture Trustee shall notify all Beneficial Owners of such Class of the occurrence of such event
and of the availability of Definitive Notes to Beneficial Owners of such Class requesting the same.
Upon surrender to the Indenture Trustee of the Notes of such Class, accompanied by registration
instructions from the applicable Clearing Agency, the Issuer shall execute and the Indenture
Trustee shall authenticate Definitive Notes of such Class and shall recognize the registered
holders of such Definitive Notes as Noteholders under this Indenture. Neither the Issuer nor the
Indenture Trustee shall be liable for any delay in delivery of such instructions, and the Issuer
and the Indenture Trustee may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes of such Series, all references herein to
obligations imposed upon or to be performed by the applicable Clearing Agency or Foreign Clearing
Agency shall be deemed to be imposed upon and performed by the Indenture Trustee, to the extent
applicable with respect to such Definitive Notes, and the Indenture Trustee shall recognize the
registered holders of the Definitive Notes of such Series as Noteholders of such Series hereunder.
Definitive Notes will be transferable and exchangeable at the offices of the Transfer Agent and
Registrar.

     Section 2.16 Global Note; Euro-Note Exchange Date.

          If specified in the related Indenture Supplement for any Series, Notes may be initially issued
in the form of a single temporary Global Note (the “Global Note”) in bearer form, without
interest coupons, in the denomination of the Initial Invested Amount and substantially in the form
attached to the related Indenture Supplement. Unless otherwise specified in the related Indenture
Supplement, the provisions of this Section shall apply to such Global Note. The Global Note will
be authenticated by the Indenture Trustee upon the same conditions, in substantially the same
manner and with the same effect as the Definitive Notes. The Global Note may be exchanged in the
manner described in the related Indenture Supplement for Registered Notes or Bearer Notes in
definitive form. Except as otherwise specifically provided in the Indenture Supplement, any Notes
that are issued in bearer form pursuant to this Indenture shall be issued in accordance with the
requirements of Code section 163(f)(2).

     Section 2.17 Meetings of Noteholders.

          To the extent provided by the Indenture Supplement for any Series issued in whole or in part
in Bearer Notes, the Servicer or the Indenture Trustee may at any time call a meeting of the
Noteholders of such Series, to be held at such time and at such place as the Servicer or the
Indenture Trustee, as the case may be, shall determine, for the purpose of approving a modification
of or amendment to, or obtaining a waiver of, any covenant or condition set forth in this Agreement
with respect to such Series or in the Notes of such Series, subject to Article X.

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     Section 2.18 Uncertificated Classes.

          Notwithstanding anything to the contrary contained in this Article II or in Article XI, unless
otherwise specified in any Indenture Supplement, any provisions contained in this Article II and in
Article XI relating to the registration, form, execution, authentication, delivery, presentation,
cancellation and surrender of Notes shall not be applicable to any uncertificated Notes, provided,
however, that, except as otherwise specifically provided in the Indenture Supplement, any such
uncertificated Notes shall be issued in “registered form” within the meaning of Code section
163(f)(1).

[END OF ARTICLE II]

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ARTICLE III

REPRESENTATIONS AND COVENANTS OF ISSUER

     Section 3.01 Payment of Principal and Interest.

          (a) The Issuer will duly and punctually pay principal and interest in accordance with the
terms of the Notes as specified in the relevant Indenture Supplement.

          (b) The Noteholders of a Series as of the Record Date in respect of a Distribution Date shall
be entitled to the interest accrued and payable and principal payable on such Distribution Date as
specified in the related Indenture Supplement. All payment obligations under a Note are discharged
to the extent such payments are made to the Noteholder of record.

     Section 3.02 Maintenance of Office or Agency.

          The Issuer will maintain an office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The
Issuer hereby initially appoints U.S. Bank National Association, currently located at 209 South
LaSalle Street, 3rd Floor, Chicago, Illinois 60604, Attention: Corporate Trust Department
(facsimile no. (312) 325-8905), to serve as its agent for the foregoing purposes. The Issuer will
give prompt written notice to the Indenture Trustee and the Noteholders of the location, and of any
change in the location, of any such office or agency. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee at its Corporate Trust Office as
its agent to receive all such presentations, surrenders, notices and demands.

     Section 3.03 Money for Note Payments to Be Held in Trust.

          As specified in Section 8.03 herein and in the related Indenture Supplement, all
payments of amounts due and payable with respect to the Notes which are to be made from amounts
withdrawn from the Collection Account and the Special Funding Account shall be made on behalf of
the Issuer by the Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Collection Account or the Special Funding Account shall be paid over to or at the direction of the
Issuer except as provided in this Section and in the related Indenture Supplement.

          On or before each Distribution Date, in accordance with Section 8.04 the Issuer shall
deposit or cause to be deposited in the Series Account, specified in the related Indenture
Supplement, of each outstanding Series an aggregate sum sufficient to pay the amounts then becoming
due under the Notes of such outstanding Series, such sum to be held in trust for the benefit of the
Persons entitled thereto, and (unless the Paying Agent is the Indenture Trustee) shall promptly
notify the Indenture Trustee in writing of its action or failure so to act.

          Whenever the Issuer shall have a Paying Agent in addition to the Indenture Trustee, it will,
on or before the Business Day next preceding each Distribution Date, direct the Indenture Trustee
to deposit with such Paying Agent on or before such Distribution Date an aggregate sum sufficient
to pay the amounts then becoming due, such sum to be (i) held in trust for the benefit of Persons
entitled thereto and (ii) invested, pursuant to an Issuer Order, by the Paying Agent in an Eligible
Investment in accordance with the terms of the related Indenture Supplement; provided that if the
Issuer fails to specify

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in an Issuer Order the Eligible Investments in which such sums shall be invested and the
percentage of funds to be invested in each Eligible Investment, then the Paying Agent shall invest
such sums in Eligible Investments described in clause (f) of the definition thereof. For all
investments made by a Paying Agent under this Section, such Paying Agent shall be entitled to all
of the rights and obligations of the Indenture Trustee under the related Indenture Supplement, such
rights and obligations being incorporated in this paragraph by this reference.

          The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and
deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the
Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject
to the provisions of this Section, that such Paying Agent, in acting as Paying Agent, is an express
agent of the Issuer and, further, that such Paying Agent will:

          (i) hold all sums held by it for the payment of amounts due with respect to the Notes
in trust for the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and pay such sums to such Persons
as herein provided;

          (ii) give the Indenture Trustee notice of any default by the Issuer (or any other
obligor upon the Notes) of which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;

          (iii) at any time during the continuance of any such default, upon the written request
of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust
by such Paying Agent;

          (iv) immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee
all sums held by it by in trust for the payment of Notes if at any time it ceases to meet
the standards required to be met by a Paying Agent at the time of its appointment; and

          (v) comply with all requirements of the Code with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection therewith.

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

     Section 3.04 Existence.

          The Issuer will keep in full effect its existence, rights and franchises as a common law trust
under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of America, in which
case the Issuer will keep in full effect its existence, rights and franchises under the laws of
such other jurisdiction) and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other related instrument or
agreement.

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     Section 3.05 Protection of Trust.

          The Issuer will from time to time prepare, or cause to be prepared, execute and deliver all
such supplements and amendments hereto and all such financing statements, continuation statements,
instruments of further assurance and other instruments, and will take such other action necessary
or advisable to:

     (a) Grant more effectively all or any portion of the Collateral as security for the
Notes;

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

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

     (d) enforce any of the Collateral; or

     (e) preserve and defend title to the Collateral securing the Notes and the rights
therein of the Indenture Trustee and the Noteholders secured thereby against the claims of
all Persons and parties.

          The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute
any financing statement, continuation statement or other instrument required pursuant to this
Section.

          The Issuer shall pay or cause to be paid any taxes levied on all or any part of Receivables
securing the Notes.

     Section 3.06 Opinions as to Collateral.

          (a) On the Series Issuance Date relating to any new Series of Notes, the Issuer shall furnish
to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel,
such action has been taken to perfect the lien and security interest of this Indenture, including
without limitation with respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the execution and
filing of any financing statements and continuation statements, as are so necessary and reciting
the details of such action, or stating that, in the opinion of such counsel, no such action is
necessary to maintain the perfection of such lien and security interest.

          (b) On or before April 30 in each calendar year, the Issuer shall furnish to the Indenture
Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has
been taken to perfect the lien and security interest of this Indenture, including without
limitation with respect to the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and with respect to the execution
and filing of any financing statements and continuation statements as is so necessary and reciting
the details of such action or stating that in the opinion of such counsel no such action is
necessary to maintain the perfection of such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the execution and filing of
any financing statements and continuation statements that will, in the opinion of

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such counsel, be required to maintain the perfection of the lien and security interest of this
Indenture until April 30 in the following calendar year.

     Section 3.07 Performance of Obligations; Servicing of Receivables.

          (a) The Issuer will not take any action and will use its best efforts not to permit any action
to be taken by others that would release any Person from any of such Person’s material covenants or
obligations under any instrument or agreement included in the Collateral or that would result in
the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or
effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture,
the Transfer and Servicing Agreement or such other instrument or agreement.

          (b) The Issuer may contract with other Persons to assist it in performing its duties under
this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee
in an Officer’s Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Servicer to assist the Issuer in performing its
duties under this Indenture.

          (c) The Issuer will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the other Transaction Documents and in the instruments and agreements
relating to the Collateral, including but not limited to filing or causing to be filed all UCC
financing statements and continuation statements required to be filed by the terms of this
Indenture and the Transfer and Servicing Agreement in accordance with and within the time periods
provided for herein and therein.

          (d) If the Issuer shall have knowledge of the occurrence of a Servicer Default under the
Transfer and Servicing Agreement, the Issuer shall cause the Indenture Trustee to promptly notify
the Rating Agencies thereof, and shall cause the Indenture Trustee to specify in such notice the
action, if any, being taken with respect to such default. If a Servicer Default shall arise from
the failure of the Servicer to perform any of its duties or obligations under the Transfer and
Servicing Agreement with respect to the Receivables, the Issuer shall take all reasonable steps
available to it to remedy such failure.

          (e) On and after the receipt by the Servicer of a Termination Notice pursuant to Section
7.01 of the Transfer and Servicing Agreement, the Servicer shall continue to perform all
servicing functions under the Transfer and Servicing Agreement until the date specified in the
Termination Notice or otherwise specified by the Indenture Trustee or until a date mutually agreed
upon by the Servicer and the Indenture Trustee. As promptly as possible after the giving of a
Termination Notice to the Servicer, the Indenture Trustee shall appoint a Successor Servicer, and
such Successor Servicer shall accept its appointment by a written assumption in a form acceptable
to the Indenture Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as Servicer, the Indenture
Trustee without further action shall automatically be appointed the Successor Servicer. The
Indenture Trustee may delegate any of its servicing obligations to an Affiliate or agent in
accordance with Section 3.01(b) and Section 5.07 of the Transfer and Servicing
Agreement. Notwithstanding the foregoing, the Indenture Trustee shall, if it is legally unable so
to act, petition at the expense of the Servicer a court of competent jurisdiction to appoint any
established institution qualifying as an Eligible Servicer as the Successor Servicer hereunder.
The Indenture Trustee shall give prompt notice to each Rating Agency and each Series Enhancer upon
the appointment of a Successor Servicer. Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions under the Transfer
and Servicing Agreement and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions thereof, and all references in
this Indenture to the Servicer shall be deemed to refer to the Successor Servicer. In connection
with any Termination Notice, the Indenture Trustee will review any bids which it

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obtains from Eligible Servicers and shall be permitted to appoint any Eligible Servicer
submitting such a bid as a Successor Servicer for servicing compensation, subject to the
limitations set forth in Section 7.02 of the Transfer and Servicing Agreement.

          (f) Without derogating from the absolute nature of the assignment granted to the Indenture
Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees
(i) that it will not, without the prior written consent of the Indenture Trustee and more than 50%
in Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate or surrender, or
agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of
any Collateral (except to the extent otherwise provided in the Transaction Documents) or the
Transaction Documents (except to the extent otherwise provided in the Transaction Documents), or
waive timely performance or observance by the Servicer or the Transferor under the Transfer and
Servicing Agreement; and (ii) that any such amendment shall not (A) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of payments on the
Receivables or distributions that are required to be made for the benefit of the Noteholders or (B)
reduce the aforesaid percentage of the Notes that is required to consent to any such amendment,
without the consent of the Holders of all the affected Outstanding Notes. If any such amendment,
modification, supplement or waiver shall be so consented to by the Indenture Trustee and such
Noteholders, the Issuer agrees, promptly following a request by the Indenture Trustee to do so, to
execute and deliver, in its own name and at its own expense, such agreements, instruments, consents
and other documents as the Indenture Trustee may deem necessary or appropriate in the
circumstances.

     Section 3.08 Negative Covenants.

          So long as any Notes are Outstanding, the Issuer will not:

          (a) sell, transfer, exchange, pledge or otherwise dispose of any part of the Collateral except
as expressly permitted by the Indenture and any Indenture Supplement, the Trust Agreement or the
Transfer and Servicing Agreement;

          (b) claim any credit on, or make any deduction from, the principal and interest payable in
respect of the Notes (other than amounts properly withheld from such payments under the Code or
applicable state law) or assert any claim against any present or former Noteholder by reason of the
payment of any taxes levied or assessed upon any part of the Collateral;

          (c) incur, assume or guarantee any direct or contingent indebtedness other than incurred
pursuant to the Transaction Documents;

          (d) (i) permit the validity or effectiveness of this Indenture to be impaired, or permit the
lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with respect to the Notes under
this Indenture except as may be expressly permitted hereby, (ii) permit any Lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the Collateral or any part thereof or
any interest therein or the proceeds thereof or (iii) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Collateral; or

          (e) voluntarily dissolve or liquidate in whole or in part.

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     Section 3.09 Statements as to Compliance.

          The Issuer will deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer, an Officer’s Certificate stating, as to the Authorized Officer signing such
Officer’s Certificate, that

          (a) a review of the activities of the Issuer during the 12-month period ending at the end of
such fiscal year (or in the case of the fiscal year ending December 31, 2001, the period from the
Closing Date to December 31, 2001) and of performance under this Indenture has been made under such
Authorized Officer’s supervisions, and

          (b) to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has
complied with all conditions and covenants under this Indenture throughout such year, or, if there
has been a default in the compliance of any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status thereof.

     Section 3.10 Issuer May Consolidate, Etc., Only on Certain Terms.

          (a) The Issuer shall not consolidate or merge with or into any other Person, unless:

          (1) the Person (if other than the Issuer) formed by or surviving such consolidation or
merger shall be a Person (i) organized and existing under the laws of the United States of
America or any state or the District of Columbia and (ii) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture Trustee, in a form
satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and
interest on all Notes and the performance of every covenant of this Indenture on the part of
the Issuer to be performed or observed;

          (2) the Person is not subject to regulation as an “investment company” under the
Investment Company Act of 1940, as amended;

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

          (4) the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate
stating that (i) such consolidation or merger and such supplemental indenture comply with
this Section, (ii) all conditions precedent in this Section relating to such transaction
have been complied with (including any filing required by the Exchange Act), and (iii) such
supplemental indenture is duly authorized, executed and delivered and is valid, binding and
enforceable against such person;

          (5) the Rating Agency Condition shall have been satisfied with respect to such
transaction;

          (6) the Issuer shall have received a Tax Opinion and an Opinion of Counsel dated the
date of such consolidation or merger (and shall have delivered copies thereof to the
Indenture Trustee) to the effect that such transaction will not have any material adverse
tax consequence to any Noteholder; and

          (7) any action that is necessary to maintain the lien and security interest created by
this Indenture shall have been taken.

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          (b) The Issuer shall not convey or transfer any of its properties or assets, including those
included in the Collateral, substantially as an entirety to any Person, unless:

          (1) the Person that acquires by conveyance or transfer the properties and assets of the
Issuer the conveyance or transfer of which is hereby restricted shall (A) be a United States
citizen or a Person organized and existing under the laws of the United States of America or
any state, or the District of Columbia, (B) expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and interest on all
Notes and the performance or observance of every agreement and covenant of this Indenture on
the part of the Issuer to be performed or observed, all as provided herein, (C) expressly
agree by means of such supplemental indenture that all right, title and interest so conveyed
or transferred shall be subject and subordinate to the rights of Holders of the Notes, (D)
unless otherwise provided in such supplemental indenture, expressly agree to indemnify,
defend and hold harmless the Issuer against and from any loss, liability or expense arising
under or related to this Indenture and the Notes and (E) expressly agree by means of such
supplemental indenture that such Person (or if a group of Persons, then one specified
Person) shall make all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;

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

          (3) the Rating Agency Condition shall have been satisfied with respect to such
transaction;

          (4) the Issuer shall have received a Tax Opinion and an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that such transaction
will not have any material adverse tax consequence to any Noteholder;

          (5) any action that is necessary to maintain the lien and security interest created by
this Indenture shall have been taken; and

          (6) the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate
stating that such conveyance or transfer and such supplemental indenture comply with this
Section and that all conditions precedent herein provided for relating to such transaction
have been complied with (including any filing required by the Exchange Act).

     Section 3.11 Successor Substituted.

          Upon any consolidation or merger, or any conveyance or transfer of the properties and assets
of the Issuer substantially as an entirety in accordance with Section 3.10 hereof, the
Person formed by or surviving such consolidation or merger (if other than the Issuer) or the Person
to which such conveyance or transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same effect as if such
Person had been named as the Issuer herein. In the event of any such conveyance or transfer, the
Person named as the Issuer in the first paragraph of this Indenture or any successor which shall
theretofore have become such in the manner prescribed in this Section shall be released from its
obligations under this Indenture as issued immediately upon the effectiveness of such conveyance or
transfer, provided that the Issuer shall not be released from any obligations or liabilities to the
Indenture Trustee or the Noteholders arising prior to such effectiveness.

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     Section 3.12 No Other Business.

          The Issuer shall not engage in any business other than financing, purchasing, owning and
selling and managing the payment obligations in the manner contemplated by this Indenture and the
other Transaction Documents and all activities incidental thereto.

     Section 3.13 No Borrowing.

          The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or
indirectly, for any indebtedness except as expressly provided for pursuant to the terms of the
Transaction Documents and the Notes.

     Section 3.14 Servicer’s Obligations.

          The Issuer shall cause the Servicer to comply with all of its obligations under the
Transaction Documents.

     Section 3.15 Guarantees, Loans, Advances and Other Liabilities.

          Except as contemplated by this Indenture or the Transfer and Servicing Agreement, the Issuer
shall not 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
capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities
of, or any other interest in, or make any capital contribution to, any other Person.

     Section 3.16 Capital Expenditures.

          The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for
capital assets (either realty or personalty).

     Section 3.17 Restricted Payments.

          The Issuer shall not, directly or indirectly, (a) pay any dividend or make any distribution
(by reduction of capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (b)
redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or
security or (c) set aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Issuer may make, or cause to be made, (i) distributions as contemplated by, and
to the extent funds are available for such purpose under, the Transfer and Servicing Agreement or
the Trust Agreement and (ii) payments to the Indenture Trustee pursuant to Section 6.07
hereof. The Issuer will not, directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with the Transaction Documents.

     Section 3.18 Notice of Events of Default.

          The Issuer agrees to give the Indenture Trustee and the Rating Agencies prompt written notice
of each Event of Default hereunder and, immediately after obtaining knowledge of any of the
following occurrences, written notice of each default on the part of the Servicer or the Transferor
of its

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obligations under the Transfer and Servicing Agreement and each default on the part of a
Seller of its obligations under the Receivables Purchase Agreement.

     Section 3.19 Further Instruments and Acts.

          Upon request of the Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

[END OF ARTICLE III]

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ARTICLE IV

SATISFACTION AND DISCHARGE

     Section 4.01 Satisfaction and Discharge of this Indenture.

          This Indenture shall cease to be of further effect with respect to the Notes of any Series
except as to (a) rights of registration of transfer and exchange, (b) substitution of mutilated,
destroyed, lost or stolen Notes, (c) the rights of Noteholders to receive payments of principal
thereof and interest thereon, (d) Sections 3.03, 3.07, 3.08, 3.11,
3.12, and 12.16, (e) the rights and immunities of the Indenture Trustee hereunder,
including the rights of the Indenture Trustee under Section 6.07, and the obligations of
the Indenture Trustee under Section 4.02, and (f) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the Indenture Trustee and
payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the
Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to such Notes when:

     (i) either

     (A) all Notes of such Series theretofore authenticated and delivered (other
than (1) Notes which have been destroyed, lost or stolen and which have been
replaced, or paid as provided in Section 2.06, and (2) Notes for whose full
payment money has theretofore been deposited in trust or segregated and held in
trust by the Indenture Trustee thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.03) have been delivered to the
Indenture Trustee for cancellation; or

     (B) all Notes of such Series not theretofore delivered to the Indenture Trustee
for cancellation:

     (1) have become due and payable;

     (2) will become due and payable at the Series Final Maturity Date for
such Class or Series of Notes; or

     (3) are to be called for redemption within one year under arrangements
satisfactory to the Indenture Trustee for the giving of notice of redemption
by the Indenture Trustee in the name, and at the expense, of the Issuer;

and the Issuer, in the case of (1), (2) or (3) above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which will
mature prior to the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due at the
Series Final Maturity Date for such Class or Series of Notes or the Redemption Date
(if Notes shall have been called for redemption pursuant to the related Indenture
Supplement), as the case may be;

          (ii) the Issuer has paid or caused to be paid all other sums payable hereunder by the
Issuer; and

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          (iii) the Issuer has delivered to the Indenture Trustee an Officer’s Certificate and
(if required by the TIA or the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements of Section
12.01(a) and each stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied with.

          Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Issuer to the Indenture Trustee under Section 6.07 and of the Indenture Trustee to the
Noteholders under Section 4.02 shall survive.

     Section 4.02 Application of Trust Money.

          All monies deposited with the Indenture Trustee pursuant to Section 4.01 hereof shall
be held in trust and applied by it, in accordance with the provisions of the Notes, this Indenture
and the applicable Indenture Supplement, to make payments, either directly or through any Paying
Agent, as the Indenture Trustee may determine, to the Noteholders and for the payment in respect of
which such monies have been deposited with the Indenture Trustee, of all sums due and to become due
thereon for principal and interest; but such monies need not be segregated from other funds except
to the extent required herein or in the Transfer and Servicing Agreement or required by law.

[END OF ARTICLE IV]

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ARTICLE V

AMORTIZATION EVENTS, DEFAULTS AND REMEDIES

     Section 5.01 Amortization Events.

          If any one of the following events (each, a “Trust Amortization Event”) shall occur:

          (a) the occurrence of an Insolvency Event as defined in Section 6.01 of the Transfer
and Servicing Agreement relating to the Transferor;

          (b) a Transfer Restriction Event shall occur; or

          (c) the Trust shall become subject to regulation by the Securities and Exchange Commission as
an “investment company” within the meaning of the Investment Company Act;

          then an Amortization Event with respect to all Series of Notes shall occur without any notice
or other action on the part of the Indenture Trustee or the Noteholders immediately upon the
occurrence of such event.

          Upon the occurrence of an Amortization Event, an Amortization Period or, if so specified on
the related Indenture Supplement, an Accumulation Period shall commence and payment on the Notes of
each Series will be made in accordance with the terms of the related Indenture Supplement.

     Section 5.02 Events of Default.

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

          (a) default in the payment of the principal of any Note, if and to the extent not previously
paid, when the same becomes due and payable on its Series Final Maturity Date; or

          (b) default in the payment of any interest on any Note when the same becomes due and payable,
and such default shall continue for a period of 35 days; or

          (c) the filing of a decree or order for relief by a court having jurisdiction in the premises
in respect of the Issuer in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a receiver, conservator,
liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or
ordering the winding-up or liquidation of the Issuer’s affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 or more consecutive days; or

          (d) the commencement by the Issuer of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the
Issuer to the entry of an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment of or the taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator or similar official of the Issuer, or the
making by the Issuer of any general assignment for the benefit of creditors, or the failure by the
Issuer generally to pay, or the admission in

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writing by the Issuer of its inability to pay, its debts as such debts become due, or the
taking of action by the Issuer in furtherance of any of the foregoing; or

          (e) default in the observance or performance of any covenant or agreement of the Issuer made
in this Indenture (other than a covenant, or agreement, a default in the observance or performance
of which is elsewhere in this Section specifically dealt with), and such default shall continue or
not be cured for a period of 60 days and, as a result of such failure, the interests of such
Noteholders are materially adversely affected and continue to be materially adversely affected,
after there shall have been given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25% of the
Outstanding Amount of the Notes of any affected Series, a written notice specifying such default
and requiring it to be remedied and stating that such notice is a “Notice of Default”
hereunder; or

          (f) any other Events of Default described in the related Indenture Supplement.

          The Issuer shall deliver to the Indenture Trustee, within five days after the occurrence
thereof, written notice in the form of an Officer’s Certificate of any event which with the giving
of notice and the lapse of time would become an Event of Default, its status and what action the
Issuer is taking or proposes to take with respect thereto.

     Section 5.03 Acceleration of Maturity; Rescission and Annulment.

          If an Event of Default described in (i) Sections 5.02 (a), (b), (e) or
(f) should occur and be continuing, then the Indenture Trustee or the Holders of Notes
representing more than 50% of the Outstanding Amount of the Notes may declare, by a notice in
writing to the Issuer (and to the Indenture Trustee if declared by the Noteholders) and (ii)
Sections 5.02(c) or (d) should occur and be continuing the Indenture Trustee shall
be deemed to have automatically declared all the Notes of such Series to be immediately due and
payable, and upon any such declaration the Revolving Period (or, if applicable, any other period of
principal payment or accumulation other than an Early Amortization Period (as such term is defined
in the related Indenture Supplements)) with respect to such Series shall terminate, an Early
Amortization Period (as such term is defined in the related Indenture Supplements) will commence
and the unpaid principal amount of such Notes, together with accrued and unpaid interest thereon
through the date of acceleration, shall become immediately due and payable. The Indenture Trustee
shall provide written notice to the Issuer of the declaration of an Event of Default promptly
thereafter, but any failure to provide such notice shall not affect such declaration or its
validity.

          At any time after such declaration of acceleration of maturity has been made and before a
judgment or decree for payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Holders of Notes representing more than 50% of the
Outstanding Amount of the Notes of such Series, by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences with respect to such Series.

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

     Section 5.04 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee.

          (a) The Issuer covenants that if (i) default is made in the payment of any interest on any
Note when the same becomes due and payable, and such default continues for a period of 35 days
following the date on which such interest became due and payable, or (ii) default is made in the
payment of principal of any Note, if and to the extent not previously paid, when the same becomes
due and payable

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on its Series Final Maturity Date, the Issuer will, upon demand of the Indenture Trustee, pay
to it, for the benefit of the Holders of the Notes of the affected Series, the whole amount then
due and payable on such Notes for principal and interest, with interest upon the overdue principal,
and, to the extent payment at such rate of interest shall be legally enforceable, interest upon
overdue installments of interest, at the applicable Note Interest Rate borne by the Notes of such
Series, and in addition thereto will pay such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel.

          (b) In case the Issuer shall fail forthwith to pay such amounts upon such demand, the
Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding
for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or
final decree, and may enforce the same against the Issuer or other obligor upon such Notes and
collect in the manner provided by law out of the property of the Issuer or other obligor upon such
Notes, wherever situated, the moneys adjudged or decreed to be payable.

          (c) If an Event of Default occurs and is continuing, the Indenture Trustee may, as more
particularly provided in Section 5.05, in its discretion, proceed to protect and enforce
its rights and the rights of the Noteholders of the affected Series, by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.

          (d) In case there shall be pending, relative to the Issuer or any other obligor upon the Notes
of the affected Series, or any Person having or claiming an ownership interest in the Collateral,
Proceedings under Title 11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, conservator, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator, custodian or similar official
shall have been appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes of such Series, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall
then be due and payable as therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand pursuant to the provisions of this
Section 5.04, shall be entitled and empowered, by intervention in such Proceedings or
otherwise:

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

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

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

          (iv) to file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee or the Holders of Notes of
such Series allowed in any judicial Proceedings relative to the Issuer, its creditors and
its property;

and any trustee, receiver, conservator, liquidator, custodian, assignee, sequestrator or other
similar official in any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to
the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts
as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or bad faith.

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

          (f) All rights of action and of asserting claims under this Indenture, or under any of the
Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the
production thereof in any trial or other Proceedings relative thereto, and any such action or
Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements
and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the benefit of the Holders of the Notes of the affected Series
as provided herein.

          (g) In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving
the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a
party), the Indenture Trustee shall be held to represent all the Holders of the Notes of the
affected Series, and it shall not be necessary to make any such Noteholder a party to any such
Proceedings.

     Section 5.05 Remedies; Priorities.

          (a) If an Event of Default shall have occurred and be continuing, the Indenture Trustee may do
one or more of the following:

          (i) institute Proceedings in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Notes of the affected Series or under this
Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Notes moneys adjudged
due;

          (ii) take any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the Holders of the Notes of the affected Series;

- 40 -

 

          (iii) at its own election or at the direction of the Holders of more than 50% of the
Outstanding Amount of the Notes of any affected Series, institute foreclosure Proceedings
from time to time with respect to the portion of the Collateral which secures such Notes by
causing the Trust to sell Principal Receivables from the related Pool in an amount equal to
the Invested Amount with respect to the accelerated Series of Notes and the related Finance
Charge and Administrative Receivables in accordance with Section 5.16 hereof, but
only if the Indenture Trustee determines that the proceeds of such sale will be sufficient
to pay principal of and interest on such Notes in full; and

          (iv) at the direction of not less than 662/3% of the Outstanding Amount of
each Class of the Notes of such Series, institute foreclosure Proceedings from time to time
with respect to the portion of the Collateral which secures such Notes, regardless of the
sufficiency of the proceeds thereof, by causing the Trust to sell Principal Receivables from
the related Pool in an amount equal to the Invested Amount with respect to the accelerated
Series of Notes and the related Finance Charge and Administrative Receivables in accordance
with Section 5.16 hereof (each of the actions described in clauses (iii) and (iv) a
“Foreclosure Remedy”).

     In determining such sufficiency or insufficiency with respect to clause (iii) and (iv), the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such proposed action and
as to the sufficiency of the Collateral for such purpose.

          (b) If the Indenture Trustee collects any money or property pursuant to this Article V
following the acceleration of the maturities of the Notes of the affected Series pursuant to
Section 5.03 (so long as such declaration shall not have been rescinded or annulled), it
shall pay out the money or property in the following order:

          FIRST: to the Indenture Trustee for amounts due pursuant to Section 6.07;

          SECOND: to the Servicer for amounts due and unpaid to such Servicer with respect to the
Servicing Fee;

          THIRD: to Holders of the Notes of such Series for amounts due and unpaid on such Notes for
interest, ratably, without preference or priority of any kind (except to the extent different
priorities are established for a Series in the applicable Indenture Supplement), according to the
amounts due and payable on such Notes for interest;

          FOURTH: to Holders of the Notes of such Series for amounts due and unpaid on such Notes for
principal, ratably, without preference or priority of any kind (except to the extent different
priorities are established for a Series in the applicable Indenture Supplement), according to the
amounts due and payable on such Notes for principal; and

          FIFTH: to the Owner Trustee for distribution pursuant to Section 2.11 of the Trust
Agreement.

          (c) The Indenture Trustee may, upon notification to the Issuer, fix a record date and payment
date for any payment to Noteholders of the affected Series pursuant to this Section. At least
fifteen (15) days before such record date, the Indenture Trustee shall mail or send by facsimile to
each such Noteholder a notice that states the record date, the payment date and the amount to be
paid.

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          (d) In addition to the application of money or property referred to in Section 5.05(b)
for an accelerated Series, amounts then held in the Collection Account, Special Funding Account or
any Series Accounts for such Series and any amounts available under the Series Enhancement for such
Series shall be used to make payments to the Holders of the Notes of such Series and the Series
Enhancer for such Series in accordance with the terms of this Indenture, the related Indenture
Supplement and the Series Enhancement for such Series. Following the sale of the Collateral (or
portion thereof) for a Series and the application of the proceeds of such sale to such Series and
the application of the amounts then held in the Collection Account, the Special Funding Account and
any Series Accounts for such Series as are allocated to such Series and any amounts available under
the Series Enhancement for such Series, such Series shall no longer be entitled to any allocation
of Collections or other property constituting the Collateral under this Indenture, and the Notes of
such Series shall no longer be Outstanding.

     Section 5.06 Optional Preservation of the Collateral. If the Notes of any Series have
been declared to be due and payable under Section 5.03 following an Event of Default and
such declaration and its consequences have not been rescinded and annulled, and the Indenture
Trustee has not received direction from the Noteholders pursuant to Section 5.12, the
Indenture Trustee may, but need not, elect to maintain possession of the Collateral. It is the
desire of the parties hereto and the Noteholders that there be at all times sufficient funds for
the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such
desire into account when determining whether or not to maintain possession of the Collateral. In
determining whether to maintain possession of the Collateral, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.

     Section 5.07 Limitation on Suits.

          No Noteholder shall have any right to institute any Proceedings, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

     (a) subject to the provisions of Section 5.05(a)(iv) and 5.12 hereof, the Holders of
not less than 25% of the Outstanding Amount of each affected Series of Notes have made
written request to the Indenture Trustee to institute such proceeding in its own name as
indenture trustee;

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

     (c) such Noteholder or Noteholders has offered to the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in compliance with such
request;

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

     (e) no direction inconsistent with such written request has been given to the Indenture
Trustee during such 60-day period by more than 50% of the Outstanding Amount of the Notes of
such Series;

it being understood and intended that no one or more Noteholders of the affected Series shall have
any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture
to affect, disturb or prejudice the rights of any other Noteholders of such Series or to obtain or
to seek to obtain

- 42 -

 

priority or preference over any other Noteholders of such Series or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable benefit of all the
Noteholders of such Series.

          In the event the Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Noteholders of such affected Series, each representing less
than a majority of the Outstanding Amount of such Notes, the Indenture Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding any other provisions
of this Indenture.

     Section 5.08 Unconditional Rights of 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 of and interest in respect
of such Note as such principal and interest becomes due and payable and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without the consent of such
Noteholder.

     Section 5.09 Restoration of Rights and Remedies.

          If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or abandoned, or has been
determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case
the Issuer, the Indenture Trustee and the Noteholder 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 Indenture Trustee and the Noteholders shall continue as
though no such Proceeding had been instituted.

     Section 5.10 Rights and Remedies Cumulative.

          No right, remedy, power or privilege herein conferred upon or reserved to the Indenture
Trustee or to the Noteholders is intended to be exclusive of any other right, remedy, power or
privilege, and every right, remedy, power or privilege shall, to the extent permitted by law, be
cumulative and in addition to every other right, remedy, power or privilege given hereunder or now
or hereafter existing at law or in equity or otherwise. The assertion or exercise of any right or
remedy shall not preclude any other further assertion or the exercise of any other appropriate
right or remedy.

     Section 5.11 Delay or Omission Not Waiver.

          No failure to exercise and no delay in exercising, on the part of the Indenture Trustee or of
any Noteholder or other Person, any right or remedy occurring hereunder upon any Event of Default
shall impair any such right or remedy or constitute a waiver thereof of any such Event of Default
or an acquiescence therein. Every right and remedy given by this Article V or by law to the
Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be
deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

     Section 5.12 Rights of Noteholders to Direct Indenture Trustee.

          Subject to the provisions of Section 5.05(a)(iv) and Section 12.12, more than 50% of the
Outstanding Amount of any Outstanding Series of Notes shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the Indenture Trustee
with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee with
respect to the Notes; provided, however, that subject to Section 6.01:

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     (a) the Indenture Trustee shall have the right to decline any such direction if the
Indenture Trustee, after being advised by counsel, determines that the action so directed is
in conflict with any rule of law or with this Indenture, and

     (b) the Indenture Trustee shall have the right to decline any such direction if the
Indenture Trustee in good faith shall, by a Responsible Officer of the Indenture Trustee,
determine that the Proceedings so directed would be illegal or involve the Indenture Trustee
in personal liability or be unjustly prejudicial to the Noteholders not parties to such
direction.

     Section 5.13 Waiver of Past Defaults.

          Prior to the declaration of the acceleration of the maturity of the Notes of the affected
Series as provided in Section 5.03, more than 50% of the Outstanding Amount of such Notes
may, on behalf of all such Noteholders waive in writing any past default with respect to such Notes
and its consequences, except a default:

     (a) in the payment of the principal or interest in respect of any Note of such Series,
or

     (b) in respect of a covenant or provision hereof that under Section 10.02
hereof cannot be modified or amended without the consent of the Noteholder of each
Outstanding Note affected.

          Upon any such written waiver, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
After a declaration of acceleration, only waivers pursuant to Section 5.03 are permitted.

     Section 5.14 Undertaking for Costs.

          All parties to this Indenture agree, and each Noteholder by its acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against the Indenture
Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Indenture Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, (in compliance with Section 5.08 hereof), holding in the aggregate more than
10% of the Outstanding Amount of the Notes of the affected Series, or to any suit instituted by any
Noteholder for the enforcement of the payment of the principal or interest in respect of any Note
on or after the Distribution Date on which any of such amounts was due (or, in the case of
redemption, on or after the applicable Redemption Date).

     Section 5.15 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 adversely
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,

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delay or impede the execution of any power herein granted to the Indenture Trustee, but will
suffer and permit the execution of every such power as though no such law had been enacted.

     Section 5.16 Sale of Receivables.

          (a) The method, manner, time, place and terms of any sale of Receivables (or interest therein)
pursuant to Section 5.05(a) shall be commercially reasonable. The Indenture Trustee may
from time to time postpone any sale by public announcement made at the time and place of such sale.
The Indenture Trustee hereby expressly waives its right to any amount fixed by law as compensation
for any sale.

          (b) The Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of
the Issuer in connection with any sale of Receivables pursuant to Section 5.05(a)(iii) and
(iv). No purchaser or transferee at any such sale shall be bound to ascertain the
Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.

          (c) In its exercise of the Foreclosure Remedy pursuant to Section 5.05(a), the
Indenture Trustee shall solicit bids for the sale of Principal Receivables in an amount equal to
the Invested Amount with respect to the affected Series of Notes at the time of sale and the
related Finance Charge and Administrative Receivables (or interests therein). The Transferor or
any of its affiliates shall be entitled to participate in, and to receive from the Indenture
Trustee a copy of each other bid submitted in connection with, such bidding process. The Indenture
Trustee shall sell such Receivables (or interests therein) to the bidder with the highest cash
purchase offer. The proceeds of any such sale shall be applied in accordance with Section
5.05(b).

     Section 5.17 Action on Notes.

          The Indenture Trustee’s right to seek and recover judgment on the Notes or under this
Indenture shall not be affected by the seeking or obtaining of or application for any other relief
under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Collateral or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied as specified in the applicable
Indenture Supplement.

[END OF ARTICLE V]

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ARTICLE VI

THE INDENTURE TRUSTEE

     Section 6.01 Duties of the Indenture Trustee.

          (a) If an Event of Default has occurred and is continuing and a Responsible Officer shall have
actual knowledge or written notice of such Event of Default, the Indenture Trustee shall, prior to
the receipt of directions, if any, from more than 50% of the Outstanding Amount of the Notes or as
otherwise provided herein in the case of certain directions, exercise the rights and powers vested
in it by this Indenture and use the same degree of care and skill in their exercise as a prudent
person would exercise or use under the circumstances in the conduct of such person’s own affairs.

          (b) Except during the continuance of an Event of Default:

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

          (ii) in the absence of bad faith or negligence on its part, the Indenture 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 Indenture Trustee and
conforming to the requirements of this Indenture; provided, however, the Indenture Trustee,
upon receipt of any resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to the Indenture Trustee which are specifically
required to be furnished pursuant to any provision of this Indenture or any Indenture
Supplement, shall examine them to determine whether they substantially conform to the
requirements of this Indenture or any Indenture Supplement. The Indenture Trustee shall
give prompt written notice to the Noteholders and each Rating Agency of any such instrument
that does not substantially conform to the applicable requirements of this Indenture or any
Indenture Supplement discovered by the Indenture Trustee which would entitle a majority of
the Outstanding Amount of the Notes to take any action pursuant to this Indenture or any
Indenture Supplement.

          (c) In case an Amortization Event has occurred and is continuing and a Responsible Officer
shall have actual knowledge or written notice of such Amortization Event, the Indenture Trustee
shall, prior to the receipt of directions, if any, from more than 50% the Outstanding Amount of the
Notes, exercise such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs.

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

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

          (ii) the Indenture Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Indenture Trustee was
negligent in ascertaining the pertinent facts; and

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          (iii) the Indenture Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the Indenture and/or
the direction more than 50% of the Outstanding Amount of the Notes of each outstanding
Series of Notes relating to the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee, or for exercising any trust or power conferred
upon the Indenture Trustee, under this Indenture. The Indenture Trustee shall not be liable
for any action taken, suffered or omitted to be taken by it in good faith in accordance with
the direction of the Servicer, the Transferor or the Trust in compliance with the terms of
this Agreement.

          (e) No provision of this Indenture shall require the Indenture Trustee 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 or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.

          (f) Every provision of this Indenture that in any way relates to the Indenture Trustee is
subject to subsections (a), (b), (c) and (d) of this Section.

          (g) Except as expressly provided in this Indenture, the Indenture Trustee shall have no power
to vary the Collateral, including, without limitation, by (i) accepting any substitute payment
obligation for a Receivable initially transferred to the Trust under the Transfer and Servicing
Agreement, (ii) adding any other investment, obligation or security to the Trust or (iii)
withdrawing from the Trust any Receivable (except as otherwise provided in the Transfer and
Servicing Agreement).

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

          (i) The Indenture Trustee shall notify each Rating Agency (i) of any change in any rating of
the Notes by any other Rating Agency of which a Responsible Officer of the Indenture Trustee has
actual knowledge and (ii) immediately of the occurrence of any actual or potential Event of Default
or Amortization Event of which a Responsible Officer of the Indenture Trustee has actual knowledge
or has actual notice from the Servicer.

          (j) For all purposes under this Indenture, the Indenture Trustee shall not be deemed to have
notice or knowledge of any Event of Default, Amortization Event or Servicer Default unless a
Responsible Officer assigned to and working in the Corporate Trust Office of the Indenture Trustee
has actual knowledge thereof or has received written notice thereof. For purposes of determining
the Indenture Trustee’s responsibility and liability hereunder, any reference to an Event of
Default, Amortization Event or Servicer Default shall be construed to refer only to such event of
which the Indenture Trustee is deemed to have notice as described in this Section.

     Section 6.02 Notice of Amortization Event or Event of Default.

          Upon the occurrence of any Amortization Event or Event of Default of which a Responsible
Officer has actual knowledge or has received notice thereof, the Indenture Trustee shall transmit
by mail to all Noteholders as their names and addresses appear on the Note Register and the Rating
Agencies, notice of such Amortization Event or Event of Default hereunder known to the Indenture
Trustee within 30 days after it occurs or within ten Business Days after it receives such notice or
obtains actual notice, if later.

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     Section 6.03 Rights of Indenture Trustee.

          Except as otherwise provided in Section 6.01 hereof:

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

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

          (c) as a condition to the taking, suffering or omitting of any action by it hereunder, the
Indenture Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in-good faith and in reliance thereon;

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

          (e) the Indenture Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, appraisal, approval, bond, note or other paper or document
believed by it to be genuine, unless requested in writing so to do by Holders of Notes evidencing
more than 25% of the aggregate unpaid principal amount of all Notes (or, with respect to any such
matters that do not relate to all Series, 25% of the aggregate unpaid principal amount of the Notes
of all Series to which such matters relate);

          (f) the Indenture Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents, attorneys, custodians or nominees and the
Indenture Trustee shall not be responsible for (i) any misconduct or negligence on the part of any
agent, attorney, custodians or nominees appointed with due care by it hereunder or (ii) the
supervision of such agents, attorneys, custodians or nominees after such appointment with due care;

          (g) the Indenture Trustee shall not be liable for any actions taken, suffered or omitted by it
in good faith and believed by it to be authorized or within the discretion or rights conferred upon
the Indenture Trustee by this Indenture; and

          (h) in the event that the Indenture Trustee is also acting as Paying Agent and Transfer Agent
and Registrar, the rights and protections afforded to the Indenture Trustee pursuant to this
Article VI shall also be afforded to such Paying Agent and Transfer Agent and Registrar.

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     Section 6.04 Not Responsible for Recitals or Issuance of Notes.

          The recitals contained herein and in the Notes, except the certificate of authentication of
the Indenture Trustee, shall be taken as the statements of the Issuer, and the Indenture Trustee
assumes no responsibility for their correctness. The Indenture Trustee makes no representation as
to the validity or sufficiency of the Agreement, the Notes, or any related document. The Indenture
Trustee shall not be accountable for the use or application by the Issuer of the proceeds from the
Notes.

     Section 6.05 May Hold Notes.

          The Indenture Trustee, any Paying Agent, Transfer Agent and Registrar or any other agent of
the Issuer, in its individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Issuer with the same rights it would have if it were not Indenture
Trustee, Paying Agent, Transfer Agent and Registrar or such other agent.

     Section 6.06 Money Held in Trust.

          Money held by the Indenture Trustee in trust hereunder need not be segregated from other funds
held by the Indenture Trustee in trust hereunder except to the extent required herein or required
by law. The Indenture Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed upon in writing by the Indenture Trustee and the Issuer.

     Section 6.07 Compensation, Reimbursement and Indemnification.

          Pursuant to the Transfer and Servicing Agreement, the Issuer shall direct the Servicer to pay
and the Servicer shall pay to the Indenture Trustee from time to time such compensation for its
services as shall be agreed upon in writing. The Indenture Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust. Pursuant to the Transfer and
Servicing Agreement, the Servicer shall reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and
experts. Pursuant to the Transfer and Servicing Agreement, the Issuer shall direct the Servicer to
indemnify and the Servicer shall indemnify the Indenture Trustee against any and all loss,
liability or expense (including the fees of either in-house counsel or outside counsel (which the
Indenture Trustee shall determine), but not both) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer and the Servicer promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer and the Servicer shall not relieve the
Issuer or the Servicer of its obligations hereunder unless such loss, liability or expense could
have been avoided with such prompt notification and then only to the extent of such loss, expense
or liability which could have been so avoided. Pursuant to the Transfer and Servicing Agreement,
the Servicer shall defend any claim against the Indenture Trustee, the Indenture Trustee may have
separate counsel and, if it does, the Servicer shall pay the fees and expenses of such counsel.
Neither the Issuer nor the Servicer need reimburse any expense or indemnify against any loss,
liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful
misconduct, negligence or bad faith.

          The Servicer’s payment obligations to the Indenture Trustee pursuant to this Section shall
survive the discharge of this Indenture. When the Indenture Trustee incurs expenses after the
occurrence of an Event of Default specified in Section 5.02(c) or (d) with respect
to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of
the United States Code or any other applicable federal or state bankruptcy, insolvency or similar
law.

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     Section 6.08 Replacement of Indenture Trustee.

          No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the successor Indenture
Trustee pursuant to this Section. The Indenture Trustee may resign at any time by giving 30 days’
written notice to the Issuer. More than 50% of the Outstanding Amount of the Notes may remove the
Indenture Trustee by so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Owner Trustee at the direction of the Transferor shall remove the Indenture Trustee
if:

          (i) the Indenture Trustee fails to comply with Section 6.11;

          (ii) the Indenture Trustee is adjudged a bankrupt or insolvent;

          (iii) a receiver of the Indenture Trustee or of its property shall be appointed, or any
public officer takes charge of the Indenture Trustee or its property or its affairs for the
purpose of rehabilitation, conservation or liquidation; or

          (iv) the Indenture Trustee otherwise becomes legally unable to act.

If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture
Trustee for any reason (the Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Owner Trustee at the direction of the Transferor shall promptly
appoint a successor Indenture Trustee.

          A successor Indenture Trustee shall deliver a written acceptance of its appointment to the
retiring Indenture Trustee, the Issuer and to the Servicer. Thereupon the resignation or removal
of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall
have all the rights, powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to Noteholders. The retiring
Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee.

          If a successor Indenture Trustee does not take office within 60 days after the retiring
Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Holders
of more than 50% of the Outstanding Amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.

          If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.

          Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the
Issuer’s obligations under Section 6.07 shall continue for the benefit of the retiring
Indenture Trustee.

     Section 6.09 Successor Indenture Trustee by Merger.

          If the Indenture Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking association without any
further act shall be the successor Indenture Trustee; provided, that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11. The Indenture
Trustee shall provide the Rating Agencies written notice of any such transaction promptly after
such transaction.

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          In case at the time such successor or successors by merger, conversion, consolidation or
transfer to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the
Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor Indenture Trustee and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such Notes in the name of
the successor to the Indenture Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Notes or in this Indenture provided that the certificate of the
Indenture Trustee shall have.

     Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

          (a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of
meeting any legal requirement of any jurisdiction in which any part of the Collateral may at the
time be located, the Indenture Trustee shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Collateral, and to vest in such Person or
Persons, in such capacity and for the benefit of the Noteholders, such title to the Collateral, or
any part hereof, and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11, and no notice to Noteholders of the appointment of
any co-trustee or separate trustee shall be required under Section 6.08 hereof.

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

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

          (ii) no trustee hereunder shall be personally liable by reason of any act or omission
of any other trustee hereunder; and

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

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

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

     Section 6.11 Eligibility; Disqualification.

          The Indenture Trustee shall at all times satisfy the requirements of TIA §310(a). The
Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in
its most recent published annual report of condition and its long-term unsecured debt shall be
rated at least Baa3 by Moody’s, BBB- by Standard & Poor’s and BBB- by Fitch. The Indenture Trustee
shall comply with TIA §310(b), including the optional provision permitted by the second sentence of
TIA §310(b)(9); provided, however, that there shall be excluded from the operation of TIA
§310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding
if the requirements for such exclusion set forth in TIA §310(b)(1) are met.

     Section 6.12 Preferential Collection of Claims Against. The Indenture Trustee shall
comply with TIA §311(a), excluding any creditor relationship listed in TIA §311(b). An Indenture
Trustee who has resigned or been removed shall be subject to TIA §311(a) to the extent indicated.

     Section 6.13 Tax Returns.

          In the event the Trust shall be required to file tax returns, the Servicer shall prepare or
shall cause to be prepared such tax returns and shall provide such tax returns to the Owner Trustee
for signature at least five days before such tax returns are due to be filed. The Servicer, in
accordance with the terms of each Indenture Supplement, shall also prepare or shall cause to be
prepared all tax information required by law to be distributed to Noteholders and shall deliver
such information to the Indenture Trustee at least five days prior to the date it is required by
law to be distributed to Noteholders. The Owner Trustee, upon request, will furnish the Servicer
with all such information known to the Owner Trustee as may be reasonably required in connection
with the preparation of all tax returns of the Trust, and shall, upon request, execute such
returns. In no event shall the Owner Trustee be liable for any liabilities, costs or expenses of
the Trust or any Noteholder arising under any tax law, including without limitation, federal, state
or local income or excise taxes or any other tax imposed on or measured by income (or any interest
or penalty with respect thereto arising from a failure to comply therewith).

     Section 6.14 Representations and Covenants of the Indenture Trustee.

          The Indenture Trustee represents, warrants and covenants that:

     (a) The Indenture Trustee is a national banking association duly organized and validly
existing under the laws of the United States;

     (b) The Indenture Trustee has full power and authority to deliver and perform this
Indenture and has taken all necessary action to authorize the execution, delivery and
performance by it of this Indenture and other Transaction Documents to which it is a party;
and

     (c) Each of this Indenture and other Transaction Documents to which it is a party has
been duly executed and delivered by the Indenture Trustee and constitutes its legal, valid
and binding obligation in accordance with its terms.

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     Section 6.15 Custody of the Collateral.

          The Indenture Trustee shall hold such of the Collateral as consists of instruments, deposit
accounts, negotiable documents, money, goods, letters of credit, and advices of credit in the State
of Minnesota. The Indenture Trustee shall hold such of the Collateral as constitutes investment
property through the Securities Intermediary, and U.S. Bank National Association, as the initial
Securities Intermediary hereby agrees (and any successor Securities Intermediary before being
appointed as Securities Intermediary shall agree) with the Indenture Trustee that (a) such
investment property shall at all times be credited to a securities account of the Indenture
Trustee, (b) such Securities Intermediary shall treat the Indenture Trustee as entitled to exercise
the rights that comprise each financial asset credited to such securities account, (c) all property
credited to such securities account shall be treated as financial assets, (d) such Securities
Intermediary shall comply with entitlement orders originated by the Indenture Trustee without the
further consent of any other person or entity, (e) such Securities Intermediary will not agree with
any person or entity other than the Indenture Trustee to comply with entitlement orders originated
by such other person or entity, (f) such securities accounts and the property credited thereto
shall not be subject to any lien, security interest, or right of set-off in favor of such
Securities Intermediary or anyone claiming through it (other than the Indenture Trustee), and (g)
such agreement (including this agreement by U.S. Bank National Association, as the initial
Securities Intermediary) shall be governed by the laws of the State of New York. Terms used in this
Section that are defined in the Minnesota UCC or the New York UCC, as applicable, and not otherwise
defined herein shall have the meaning set forth in the Minnesota UCC or the New York UCC, as
applicable. Except as permitted by this Section 6.15, the Indenture Trustee shall not hold any part
of the Collateral through an agent or nominee.

     Section 6.16 Information to be Provided by the Indenture Trustee.

          (a) For so long as the Issuer is required to report under the Exchange Act, the Indenture
Trustee shall (i) on or before the fifth Business Day of each month, provide to the Servicer, in
writing, such information regarding the Indenture Trustee as is required for the purpose of
compliance with Item 1117 of Regulation AB; provided, however, that the Indenture Trustee shall not
be required to provide such information in the event that there has been no change to the
information previously provided by the Indenture Trustee to the Servicer, and (ii) as promptly as
practicable following notice to or discovery by a Responsible Officer of the Indenture Trustee of
any changes to such information, provide to the Servicer, in writing, such updated information.

          (b) As
soon as available, but no later than March 15 of each calendar year, for so long as the
Issuer is required to report under the Exchange Act, commencing in
2007, or as reasonably requested by the Servicer upon a good faith
determination that such delivery is necessary to comply with the
provisions of Regulation AB, the Indenture Trustee shall:

          (i) deliver to the Servicer a report regarding the Indenture Trustee’s assessment of
compliance with the Servicing Criteria during the immediately preceding calendar year, to
the extent required under paragraph (b) of Rule 13a-18, Rule 15d-18 of the Exchange Act and
Item 1122 of Regulation AB substantially in the form attached hereto as Exhibit A-1
or such other form as mutually agreed upon by the Servicer and the Indenture Trustee. Such
report shall be signed by an authorized officer of the Indenture Trustee and shall address
each of the servicing criteria specified in Schedule I or
such other criteria as
mutually agreed upon by the Servicer and the Indenture Trustee; and

          (ii) deliver to the Servicer, to the extent required by Item 1122 of Regulation AB, a
report of a registered public accounting firm that attests to, and reports on, the
assessment of compliance made by the Indenture Trustee and delivered pursuant to the
preceding paragraph.

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Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation
S-X under the Securities Act and the Exchange Act.

[END OF ARTICLE VI]

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ARTICLE VII

NOTEHOLDERS’ LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER

     Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.

          The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) upon each
transfer of a Note, a list, in such form as the Indenture Trustee may reasonably require, of the
names, addresses and taxpayer identification numbers of the Noteholders as they appear on the Note
Register as of the most recent Record Date, and (b) at such other times, as the Indenture Trustee
may request in writing, within 10 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that for so long as the Indenture Trustee is the Transfer Agent and
Registrar, no such list should be required to be furnished.

     Section 7.02 Preservation of Information; Communications to Noteholders.

          (a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of the Noteholders contained in the most recent list furnished to the
Indenture Trustee as provided in Section 7.01 and the names, addresses and taxpayer
identification numbers of the Noteholders received by the Indenture Trustee in its capacity as
Transfer Agent and Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.

          (b) Noteholders may communicate, pursuant to TIA §312(b), with other Noteholders with respect
to their rights under this Indenture or under the Notes.

          (c) The Issuer, the Indenture Trustee and the Transfer Agent and Registrar shall have the
protection of TIA §312(c).

     Section 7.03 Reports by Issuer.

          (a) The Issuer shall:

          (i) file with the Indenture Trustee, within 15 days after the Issuer is required to
file the same with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

          (ii) file with the Indenture Trustee and the Commission in accordance with rules and
regulations prescribed from time to time by the Commission such additional information,
documents and reports with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time by such rules and
regulations; and

          (iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail
to all Noteholders described in TIA §313(c)) such summaries of any information, documents
and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this
Section as may be required by rules and regulations prescribed from time to time by the
Commission.

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          (b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on
December 31 of each year.

     Section 7.04 Reports by Indenture Trustee.

          If required by TIA §313(a), within 60 days after each March 31, the Indenture Trustee shall
mail to each Noteholder as required by TIA §313(c) a brief report dated as of such date that
complies with TIA §313(a). The Indenture Trustee also shall comply with TIA §313(b).

          A copy of each report at the time of its mailing to Noteholders shall be filed by the
Indenture Trustee with the Commission and each stock exchange, if any, on which the Notes are
listed. The Issuer shall notify the Indenture Trustee if and when the Notes are listed on any
stock exchange.

     Section 7.05 Notices.

          All notices required to be given to the Noteholders shall be given by publication at least
once, if any Notes are listed on a stock exchange and the rules of such stock exchange shall so
require, in a publication meeting the requirements of such stock exchange.

[END OF ARTICLE VII]

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ARTICLE VIII

ALLOCATION AND APPLICATION OF COLLECTIONS

     Section 8.01 Collection of Money.

          Except as otherwise expressly provided herein and in the related Indenture Supplement, the
Indenture 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 Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall hold all such money and property received by it in trust for the
Noteholders and shall apply it as provided in this Indenture. Except as otherwise expressly
provided in this Indenture, if any default occurs in the making of any payment or performance under
the Transfer and Servicing Agreement or any other Transaction Document, the Indenture Trustee may,
and upon the request of the Holders of more than 50% of the Outstanding Amount of the Notes 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 claim a Amortization Event or a Default or Event of Default under this Indenture
and to proceed thereafter as provided in Article V hereof.

     Section 8.02 Rights of Noteholders.

          The Collateral shall secure the obligations of the Trust to pay to the Holders of the Notes of
each Series principal and interest and other amounts payable pursuant to this Indenture and the
related Indenture Supplement. Except as specifically set forth in the Indenture Supplement with
respect thereto, the Notes of any Series or Class shall not have the right to payment from any
Series Account or Series Enhancement allocated for the benefit of any other Series or Class.

     Section 8.03 Establishment of Collection Account and Special Funding Account.

          The Servicer, for the benefit of the Noteholders, shall establish and maintain for each Pool
with the Indenture Trustee or its nominee in the name of the Indenture Trustee, on behalf of the
Trust, a Qualified Account (including any subaccount thereof) bearing a designation clearly
indicating that the funds and other property credited thereto are held for the benefit of the
Noteholders relating to such Pool (the “Collection Account”). Where the Indenture or any
Indenture Supplement employs the term “Collection Account” such reference shall implicitly refer to
the “Collection Account” of the related Pool, unless explicitly otherwise provided. The Indenture
Trustee shall possess all right, title and interest in all monies, instruments, investment
property, documents, certificates of deposit and other property credited from time to time to the
Collection Account and in all proceeds, earnings, income, revenue, dividends and distributions
thereof for the benefit of the Noteholders.

          Each Collection Account shall be under the sole dominion and control of the Indenture Trustee
for the benefit of the Noteholders relating to such Pool. Except as expressly provided in this
Indenture and the Transfer and Servicing Agreement, the Servicer agrees that it shall have no right
of setoff or banker’s lien against, and no right to otherwise deduct from, any funds held in the
Collection Account for any amount owed to it by the Indenture Trustee, the Trust, any Noteholder or
any Series Enhancer. If, at any time, the Collection Account ceases to be a Qualified Account, the
Indenture Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may consent) establish a new
Collection Account meeting the conditions specified above, transfer any monies, documents,
instruments, investment property, certificates of deposit and other property to such new Collection
Account and from the date such new Collection Account is established, it shall be the
“Collection Account.” Pursuant to the authority granted

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to the Servicer in Section 3.01(b) of the Transfer and Servicing Agreement, the
Servicer shall have the power to instruct the Indenture Trustee to make withdrawals and payments
from the Collection Account for the purposes of carrying out the Servicer’s or the Indenture
Trustee’s duties hereunder and under the Transfer and Servicing Agreement, as applicable. The
Servicer shall reduce deposits into the Collection Account payable by the Transferor on any Deposit
Date to the extent the Transferor is entitled to receive funds from the Collection Account on such
Deposit Date, but only to the extent such reduction would not reduce the Transferor Amount to an
amount less than the Required Transferor Amount.

          Funds on deposit in the Collection Account (other than investment earnings and amounts
deposited pursuant to Sections 2.06, 6.01, or 7.01 of the Transfer and
Servicing Agreement or Section 11.02 of this Agreement) shall at the written direction of
the Servicer be invested by the Indenture Trustee in Eligible Investments selected by the Servicer.
All such Eligible Investments shall be held by the Indenture Trustee for the benefit of the
Noteholders pursuant to Section 6.15. Investments of funds representing Collections collected
during any Due Period shall be invested in Eligible Investments that will mature so that such funds
will be available no later than the close of business on each monthly Transfer Date following such
Due Period in amounts sufficient to the extent of such funds to make the required distributions on
the following Distribution Date. No such Eligible Investment shall be disposed of prior to its
maturity; provided, however, that the Indenture Trustee may sell, liquidate or dispose of any such
Eligible Investment before its maturity, at the written direction of the Servicer, if such sale,
liquidation or disposal would not result in a loss of all or part of the principal portion of such
Eligible Investment or if, prior to the maturity of such Eligible Investment, a default occurs in
the payment of principal, interest or any other amount with respect to such Eligible Investment.
Unless directed by the Servicer, funds deposited in the Collection Account on a Transfer Date with
respect to the immediately succeeding Distribution Date are not required to be invested overnight.
On each Distribution Date, all interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Collection Account shall be paid to the Transferor, except as
otherwise specified in any Indenture Supplement. The Indenture Trustee shall bear no
responsibility or liability for any losses resulting from investment or reinvestment of any funds
in accordance with this Section nor for the selection of Eligible Investments in accordance with
the provisions of this Indenture and any Indenture Supplement.

          The Servicer, for the benefit of the Noteholders with respect to a particular Pool, shall
establish and maintain with the Indenture Trustee or its nominee in the name of the Indenture
Trustee, on behalf of the Trust, a Qualified Account (including any subaccounts thereof) bearing a
designation clearly indicating that the funds and other property credited thereto are held for the
benefit of the Noteholders relating to such Pool (the “Special Funding Account”). The
Indenture Trustee shall possess all right, title and interest in all monies, instruments,
investment property, documents, certificates of deposit and other property credited from time to
time to the Special Funding Account and in all proceeds, dividends distributions, earnings, income
and revenue thereof for the benefit of the Noteholders. The Special Funding Account with respect
to a Pool shall be under the sole dominion and control of the Indenture Trustee for the benefit of
the Noteholders relating to such Pool. Except as expressly provided in this Indenture and the
Transfer and Servicing Agreement, the Servicer shall have no right of setoff or banker’s lien
against, and no right to otherwise deduct from, any funds and other property held in the Special
Funding Account for any amount owed to it by the Indenture Trustee, the Trust, any Noteholder or
any Series Enhancer. If, at any time, the Special Funding Account ceases to be a Qualified
Account, the Indenture Trustee (or the Servicer on its behalf) shall within 10 Business Days (or
such longer period, not to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Special Funding Account meeting the conditions specified above, transfer any
monies, documents, instruments, investment property, certificates of deposit and other property to
such new Special Funding Account and from the date such new Special Funding Account is established,
it shall be the “Special Funding Account.” Where this Indenture or any Indenture
Supplement employs the term “Special Funding Account” such reference shall implicitly refer to the
“Special Funding Account” of the related Pool,

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unless explicitly otherwise provided. Upon deposit of funds into the Special Funding Account,
the Servicer shall provide written notice of the allocation of any funds deposited to the Special
Funding Account to a particular Pool.

          Funds on deposit in the Special Funding Account shall at the written direction of the Servicer
be invested by the Indenture Trustee in Eligible Investments selected by the Servicer. All such
Eligible Investments shall be held by the Indenture Trustee for the benefit of the Noteholders
pursuant to Section 6.15. Funds on deposit in the Special Funding Account on any Distribution Date
will be invested in Eligible Investments that will mature so that such funds will be available no
later than the close of business on the Transfer Date following such Due Period. No such Eligible
Investment shall be disposed of prior to its maturity; provided, however, that the Indenture
Trustee may sell, liquidate or dispose of an Eligible Investment before its maturity, at the
written direction of the Servicer, if such sale, liquidation or disposal would not result in a loss
of all or part of the principal portion of such Eligible Investment or if, prior to the maturity of
such Eligible Investment, a default occurs in the payment of principal, interest or any other
amount with respect to such Eligible Investment. Unless directed by the Servicer, funds deposited
in the Special Funding Account on a Transfer Date with respect to the immediately succeeding
Distribution Date are not required to be invested overnight. On each Distribution Date, all
interest and other investment earnings (net of losses and investment expenses) on funds on deposit
in the Special Funding Account shall be treated as Collections of Finance Charge and Administrative
Receivables of the related Pool with respect to the last day of the related Due Period except as
otherwise specified in the related Indenture Supplement. On each Business Day on which funds are
on deposit in the Special Funding Account and on which no Series with respect to the related Pool
is in an Accumulation Period or Amortization Period, the Servicer shall determine the amount (if
any) by which the Transferor Amount with respect to such Pool exceeds the Required Transferor
Amount with respect to such Pool on such date and shall instruct the Indenture Trustee to withdraw
any such excess from the Special Funding Account and pay such amount to the holders of the
Transferor Certificates. If (i) an Accumulation Period or Amortization Period has commenced and is
continuing with respect to one or more outstanding Series with respect to the related Pool, any
funds on deposit in the Special Funding Account shall be treated as Shared Principal Collections
with respect to such Pool and shall be allocated and distributed in accordance with Section
8.05 and the terms of each Indenture Supplement and (ii) the Servicer determines, based upon
the yield of Special Funding Account investments during the previous Due Period, that by decreasing
the amount on deposit in the Special Funding Account, any Series relating to such Pool then
outstanding which is issued pursuant to an Indenture Supplement which permits partial amortization
as provided in this Section 8.03 may be prevented from experiencing an Amortization Event
based upon insufficiency of yield, the Servicer shall on the next succeeding Distribution Date
instruct the Indenture Trustee in writing to apply funds on deposit in the Special Funding Account
as “Partial Amortization SFA Amounts” to such Series (and if more than one such Series, to
each on a pro rata basis according to each such Invested Amount) in an amount such that the Special
Funding Account is reduced to an amount which, based on the then current investment yield, would
not cause a yield insufficiency Amortization Event for any such Series then outstanding. In
addition, the Servicer shall instruct the Indenture Trustee in writing to apply funds on deposit in
the Special Funding Account to each such Series on such pro rata basis as Partial Amortization SFA
Amounts on any Distribution Date to the extent the Seller so determines in written instructions
provided to the Servicer on or prior to the Determination Date preceding such Distribution Date.

     Section 8.04 Collections and Allocations.

          (a) The Servicer will instruct the Indenture Trustee to apply all funds on deposit in the
Collection Account as described in this Article VIII and in each Indenture Supplement. Except as
otherwise provided below, the Servicer shall deposit Collections received with respect to a
particular Pool into the Collection Account for such Pool as promptly as possible after the Date of
Processing of such

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Collections, but in no event later than the second Business Day following the Date of
Processing. Subject to the express terms of any Indenture Supplement, but notwithstanding anything
else in this Indenture or the Transfer and Servicing Agreement to the contrary, for so long as: (i)
HSBC Finance Corporation remains the Servicer and maintains a commercial paper rating of not less
than F1 by Fitch, P-1 by Moody’s and A-1 by Standard & Poor’s, or (ii) any other arrangements are
made and written confirmation is received from the specified Rating Agency for which the above
requirements are not satisfied such that the Rating Agency Condition is satisfied with respect to
that Rating Agency, and for five Business Days following any reduction of any such rating or change
in ownership, the Servicer need not make the daily deposits of Collections into the Collection
Account as provided in the preceding sentence, but may make a single deposit in the Collection
Account in immediately available funds not later than 1:00 p.m., New York City time, on the
Distribution Date following the Due Period with respect to which such deposit relates. Subject to
the first proviso in Section 8.05, but notwithstanding anything else in this Indenture or the
Transfer and Servicing Agreement to the contrary, with respect to any Due Period, whether the
Servicer is required to make deposits of Collections pursuant to the first or the second preceding
sentence, (i) the Servicer will only be required to deposit Collections into the Collection Account
up to the aggregate amount of Collections required to be deposited into any Series Account or,
without duplication, distributed on or prior to the related Distribution Date to Noteholders or to
any Series Enhancer pursuant to the terms of any Indenture Supplement or Enhancement Agreement and
(ii) if at any time prior to such Distribution Date the amount of Collections deposited in the
Collection Account exceeds the amount required to be deposited pursuant to clause (i) above, the
Servicer will be permitted to direct the Indenture Trustee to withdraw the excess from the
Collection Account and pay such amount pursuant to the terms of the Transaction Documents. Subject
to the immediately preceding sentence, the Servicer may retain its Servicing Fee with respect to a
Series and shall not be required to deposit it in the Collection Account.

          (b) Collections of Finance Charge and Administrative Receivables, Principal Receivables and
Defaulted Receivables will be allocated to each Series of Notes and to the Owner Trustee for
distribution to the holders of the Transferor Certificates (pursuant to the Trust Agreement) in
accordance with this Article VIII and each Indenture Supplement, and amounts so allocated to any
Series will not, except as specified in the related Indenture Supplement, be available to the
Noteholders of any other Series. Allocations of the foregoing amounts between the Holders of the
Notes and the Holders of the Transferor Certificates, among the Series and among the Classes in any
Series, shall be set forth in the related Indenture Supplement or Indenture Supplements.

          On each Determination Date, after the amounts of all allocations have been determined (i) with
respect to all outstanding Series and (ii) as provided for in any applicable Indenture Supplement,
the Servicer may, with the consent of each Transferor, allocate any excess Collections which would
otherwise be payable to the Transferor at such Transferor’s direction to one or more of the
outstanding Series subject to the following conditions:

          (i) on or before the fifth Business Day immediately preceding such allocation, the
Servicer shall have given the Indenture Trustee and each Rating Agency notice of such
allocation;

          (ii) the Rating Agency Condition shall have been satisfied with respect to such
allocation; and

          (iii) the Servicer shall have delivered to the Indenture Trustee an Officer’s
Certificate, dated the date of such allocation, to the effect that the Servicer reasonably
believes that such allocation will not have an Adverse Effect.

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     Section 8.05 Shared Principal Collections and Shared Transferor Principal Collections.

          (a) On each Distribution Date, (a) the Servicer shall allocate Shared Principal Collections
(as described below) to each Principal Sharing Series within a particular Principal Sharing Group,
pro rata, in proportion to the Principal Shortfalls, if any, with respect to each such Series and
(b) the Servicer shall withdraw from the Collection Account and pay to the Owner Trustee for
distribution to the holders of the Transferor Certificates in accordance with the Trust Agreement
an amount equal to the excess, if any, of (x) the aggregate amount for all outstanding Series in
such Principal Sharing Group of Collections of Principal Receivables which the related Indenture
Supplements specify are to be treated as “Shared Principal Collections” (including the net
proceeds from any New Issuance as provided in Section 2.12(e)) for such Distribution Date
over (y) the aggregate amount for all outstanding Series in such Principal Sharing Group which the
related Indenture Supplements specify are “Principal Shortfalls” for such Series and for
such Distribution Date; provided, however, that if the Transferor Amount for the related Pool as of
such Distribution Date (determined after giving effect to the Principal Receivables transferred to
and in the Trust on such date) is less than the Required Transferor Amount, the Servicer will not
distribute to the Owner Trustee for distribution to the holders of the Transferor Certificates in
accordance with the Trust Agreement any such amounts that otherwise would be distributed to the
Owner Trustee for distribution to the holders of the Transferor Certificates in accordance with the
Trust Agreement, but shall deposit such funds in the Special Funding Account with respect to such
Pool. The Transferor may, at its option, instruct the Indenture Trustee to deposit Shared
Principal Collections which are otherwise payable to the Owner Trustee for distribution to the
holders of the Transferor Certificates in accordance with the Trust Agreement pursuant to the
provisions set forth above into such Special Funding Account.

          (b) The Servicer will determine the amount of Collections of Principal Receivables for any Due
Period allocated to the Holders of the Transferor Certificates with respect to any Pool but not due
to the Holder of any Supplemental Certificate and other amounts payable to the Transferor with
respect to Collections of Principal Receivables with respect to such Pool, regardless of whether
such Collections were initially allocated to the Transferor or any Series (“Shared Transferor
Principal Collections”). The Servicer will allocate the Shared Transferor Principal
Collections to cover any Principal Shortfalls for Series with respect to such Pool that have not
been covered out of the Shared Principal Collections allocated to each such Series that has been
designated in the applicable Indenture Supplement as being entitled to receive Shared Transferor
Principal Collections, and the remaining Shared Transferor Principal Collections will be paid to
the Holders of the Transferor Certificates. If Principal Shortfalls remaining after the
application of Shared Principal Collections exceed related Shared Transferor Principal Collections
for any Due Period, such Shared Transferor Principal Collections will be allocated pro rata among
each such Series which in accordance with the Indenture Supplement for such Series; provided,
however, the sharing of Shared Transferor Principal Collections among Series will commence only
upon the delivery by the Transferor to the Indenture Trustee of an Officer’s Certificate to the
affect that, in the reasonable judgment of the Transferor, the sharing of Shared Transferor
Principal Collections would not have adverse regulatory implications with respect to the Transferor
or any Affiliate thereof and such sharing will continue only until such time, if any, at which the
Transferor shall deliver to the Indenture Trustee an Officer’s Certificate to the effect that, in
the reasonable belief of the Transferor, the continued sharing of Shared Transferor Principal
Collections among Series would have adverse regulatory implications with respect to the Transferor
or any Affiliate thereof. Following the delivery by the Transferor of such an Officer’s
Certificate to the Indenture Trustee, there will not be any further sharing of Shared Transferor
Principal Collections among Series.

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     Section 8.06 Directions Regarding Additional Withdrawals from the Collection Account.

          If the Servicer determines that any amounts have been misdirected to the Collection Account or
deposited in error in the Collection Account, the Servicer is permitted and authorized to withdraw
such amounts from the Collection Account to rectify any such misdirection or error.

     Section 8.07 Allocation of Collateral to Pools.

          (a) Pools. To the extent so provided in the Indenture Supplement for any Series or in
an Indenture Supplement otherwise executed pursuant to Section 10.01, Receivables conveyed
to the Trust pursuant to Section 2.01 of the Transfer and Servicing Agreement and
Receivables or Participation Interests conveyed to the Trust pursuant to Section 2.09 of
the Transfer and Servicing Agreement or any Participation Interest Supplement, and all Collections
received with respect thereto may be allocated or applied in whole or in part to one or more Pools
as may be provided in such Indenture Supplement, provided, however, that any such allocation or
application shall be effective only upon satisfaction of the following conditions:

          (i) on or before the fifth Business Day immediately preceding such allocation, the
Servicer shall have given the Indenture Trustee and each Rating Agency written notice of
such allocation;

          (ii) the Rating Agency Condition shall have been satisfied with respect to such
allocation; and

          (iii) the Servicer shall have delivered to the Indenture Trustee an Officer’s
Certificate, dated the date of such allocation, to the effect that the Servicer reasonably
believes that such allocation will not have an Adverse Effect.

          Any such Indenture Supplement may provide that (i) such allocation to one or more particular
Pools may terminate upon the occurrence of certain events specified therein and (ii) that upon the
occurrence of any such event, such assets and any Collections with respect thereto, shall be
reallocated to other Pools or to all Series, all as shall be provided in such Indenture Supplement.

          (b) Reallocation Groups. Collections of Finance Charge and Administrative Receivables
and other amounts specified in the Indenture Supplement for each Series in a Reallocation Group
shall be reallocated to cover interest and expenses related to each Series in such Group as
specified in such Indenture Supplement. The reallocation provisions of the Indenture Supplement
for each Series in the same Reallocation Group are required to be identical in all material
respects.

          (c) Shared Enhancement Groups. More than one Series in a particular Shared
Enhancement Group may share collections of Finance Charge and Administrative Receivables and
certain other amounts and share in the same credit enhancement as shall be specified in the
Indenture Supplement for each Series in such Group, or, if the sharing is between subseries in the
same Series, as shall be specified in the Indenture Supplement for the Series containing each such
subseries. Such sharing may take the form, among others, of Classes of Notes of one or more Series
in a particular Shared Enhancement Group issued from time to time which are subordinate to other
Classes issued at the same or at different times in the same or in different Series in such Group.

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          (d) Excess Finance Charge Sharing Groups.

          On each Distribution Date, (a) the Servicer shall allocate Excess Finance Charge and
Administrative Collections to each Excess Finance Charge Sharing Series in a particular Excess
Finance Charge Sharing Group pro rata, in proportion to the Finance Charge Shortfalls, if any, with
respect to each such Series and (b) the Servicer shall withdraw from the collection account and pay
to the Transferor an amount equal to the excess, if any, of (i) the aggregate amount for all such
outstanding Series of Collections of Finance Charge and Administrative Receivables which the
related Indenture Supplements specify are to be treated as “Excess Finance Charge and
Administrative Collections” for such Distribution Date over (ii) the aggregate amount for all
outstanding Series in such group which the related Indenture Supplements specify are “Finance
Charge Shortfalls” for such Series and such Distribution Date; provided, however, that the
sharing of Excess Finance Charge and Administrative Collections among Series will continue only
until such time, if any, at which the Transferor shall deliver to the Indenture Trustee an
Officer’s Certificate to the effect that, in the reasonable belief of the Transferor, the continued
sharing of Excess Finance Charge and Administrative Collections among Series would have adverse
regulatory implications with respect to the Transferor. Following the delivery by the Transferor
of such an Officer’s Certificate to the Indenture Trustee there will not be any further sharing of
Excess Finance Charge and Administrative Collections among Series.

     Section 8.08 Release of Collateral; Eligible Loan Documents.

          (a) Subject to the payment of its fees and expenses, the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and
under circumstances which are not inconsistent with the provisions of this Indenture. No party
relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall
be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any
conditions precedent or see to the application of any monies.

          (b) In order to facilitate the servicing of the Receivables by the Servicer, the Indenture
Trustee upon Issuer Order shall authorize the Servicer to execute in the name and on behalf of the
Indenture Trustee instruments of satisfaction or cancellation, or of partial or full release or
discharge, and other comparable instruments with respect to the Receivables (and the Indenture
Trustee shall execute any such documents on request of the Servicer), subject to the obligations of
the Servicer under the Transfer and Servicing Agreement.

          (c) The Indenture Trustee shall, at such time as there are no Notes outstanding, release and
transfer, without recourse, all of the Collateral that secured the Notes (other than any cash held
for the payment of the Notes pursuant to Section 4.02). The Indenture Trustee shall
release property from the lien of this Indenture pursuant to this Section only upon receipt of an
Issuer Order accompanied by an Officer’s Certificate, and (if required by the TIA) Independent
Certificates in accordance with TIA §§314(c) and 314(d)(1) meeting the applicable requirements of
Section 12.01.

          (d) Notwithstanding anything to the contrary in this Indenture, the Transfer and Servicing
Agreement and the Trust Agreement, immediately prior to the release of any portion of the
Collateral or any funds on deposit in the Series Accounts pursuant to this Indenture, the Indenture
Trustee shall remit to the Transferor for its own account any funds that, upon such release, would
otherwise be remitted to the Issuer.

[END OF ARTICLE VIII]

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ARTICLE IX

DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS

          Distributions shall be made to, and reports shall be provided to, Noteholders as set forth in
the applicable Indenture Supplement. The identity of the Noteholders with respect to distributions
and reports shall be determined according to the immediately preceding Record Date.

[END OF ARTICLE IX]

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ARTICLE X

SUPPLEMENTAL INDENTURES

     Section 10.01 Supplemental Indentures Without Consent of Noteholders.

          (a) Without the consent of the Holders of any Notes but with prior notice to the Rating
Agencies and upon satisfaction of the Rating Agency Condition with respect to the Notes of all
Series, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and
from time to time, may enter into one or more indentures supplemental hereto (which shall conform
to the provisions of the TIA as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:

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

          (ii) to evidence the succession, in compliance with Section 3.11 hereof, of
another person to the Issuer, and the assumption by any such successor of the covenants of
the Issuer herein and in the Notes contained;

          (iii) to add to the covenants of the Issuer, for the benefit of the Holders of the
Notes, or to surrender any right or power herein conferred upon the Issuer;

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

          (v) to evidence and provide for the acceptance of the appointment hereunder by a
successor trustee with respect to the Notes and to add to or change any of the provisions of
this Indenture as shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of Article VI;

          (vi) to modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary, to effect the qualification of this Indenture under the TIA or under any
similar federal statute hereafter enacted and to add to this Indenture such other provisions
as may be expressly required by the TIA;

          (vii) to provide for the issuance of one or more new Series of Notes, in accordance
with the provisions of Section 2.12 hereof; or

          (viii) to provide for the termination of any interest rate swap agreement or other form
of credit enhancement in accordance with the provisions of the related Indenture Supplement;

provided, however, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any
time and from time to time, may enter into one or more indentures supplemental hereto (which shall
conform to the provisions of the TIA as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, without the consent of the Holders of any Notes or prior
notice to the Rating Agencies (provided that a final supplemental indenture signed by the parties
thereto shall be delivered to each Rating Agency within 10 days of its execution) in order to (A)
cure any ambiguity, to correct or

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supplement any provision herein or in any supplemental indenture that may be inconsistent with any
other provision herein or in any supplemental indenture, (B) to make any other provisions with
respect to matters or questions arising under this Indenture or in any supplemental indenture and
(C) qualify for particular accounting treatment under the appropriate generally accepted accounting
principles; provided, that the Transferor shall have delivered to the Indenture Trustee an
Officer’s Certificate dated the date of any such action, stating that the Transferor reasonably
believes that such action shall not have an Adverse Effect and, in the case of clause (C), the
Transferor shall have delivered a Tax Opinion to the Indenture Trustee with respect to such
supplemental indenture.

The Indenture 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.

          (b) The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also
without the consent of any Noteholders of any Series then Outstanding but with prior notice to the
Rating Agencies and upon satisfaction of the Rating Agency Condition with respect to the Notes of
all Series, enter into an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or
of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided,
however, that the Transferor shall have delivered to the Indenture Trustee an Officer’s
Certificate, dated the date of any such action, stating that the Transferor reasonably believes
that such action will not have an Adverse Effect. Additionally, notwithstanding the preceding
sentence, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also
without the consent of any Noteholders of any Series then Outstanding, enter into an indenture or
indentures supplemental hereto to add, modify or eliminate such provisions as may be necessary or
advisable in order to enable all or a portion of the Trust to avoid the imposition of state or
local income or franchise taxes imposed on the Trust’s property or its income; provided, however,
that (i) the Transferor delivers to the Indenture Trustee and the Owner Trustee an Officer’s
Certificate to the effect that the proposed amendments meet the requirements set forth in this
subsection, (ii) the Transferor, the Servicer, the Indenture Trustee, and the Owner Trustee shall
have received written confirmation of the satisfaction of the Rating Agency Condition and (iii)
such amendment does not affect the rights, duties or obligations of the Indenture Trustee or the
Owner Trustee hereunder. The amendments which the Transferor may make without the consent of
Noteholders pursuant to the preceding sentence may include, without limitation, the addition of a
sale of Receivables.

          (c) Notwithstanding anything to the contrary in this Section 10.01, no supplemental
indenture or modification or amendment to this Indenture which has the effect of (i) materially
increasing the obligations or duties of the Servicer hereunder, (ii) materially decreasing the
compensation or rights of the Servicer hereunder, or (iii) materially and adversely effecting the
Servicer shall become effective without prior consent of the Servicer.

     Section 10.02 Supplemental Indentures With Consent of Noteholders.

          (a) The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, with
prior notice to the Rating Agencies and with the consent of the Holders of not less than 66 2/3% of
the Outstanding Amount of the Notes of each adversely affected Series of Notes, by Act of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any manner the rights of
such Noteholders under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each outstanding Note affected thereby:

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          (i) change the due date of any installment of principal of or interest on any Note, or
reduce the principal amount thereof, the interest rate specified thereon or the redemption
price with respect thereto or change any place of payment where, or the coin or currency in
which, any Note or any interest thereon is payable;

          (ii) impair the right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor, as provided in Article V,
to the payment of any such amount due on the Notes on or after the respective due dates
thereof (or, in the case of redemption, on or after the Redemption Date);

          (iii) reduce the percentage which constitutes a majority of the Outstanding Amount of
the Notes of any Series outstanding the consent of the Holders of which is required for any
such supplemental indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain defaults hereunder
and their consequences as provided for in this Indenture;

          (iv) reduce the percentage of the Outstanding Amount of any Notes, the consent of the
Holders of which is required to direct the Indenture Trustee to sell or liquidate the
Collateral if the proceeds of such sale would be insufficient to pay the principal amount
and accrued but unpaid interest on the outstanding Notes of such Series;

          (v) decrease the percentage of the Outstanding Amount of the Notes required to amend
the sections of this Indenture which specify the applicable percentage of the aggregate
principal amount of the Notes of such Series necessary to amend the Indenture or any
Transaction Documents which require such consent;

          (vi) modify or alter the provisions of this Indenture regarding the voting of Notes
held by the Trust, any other Obligor on the Notes, a Seller or any affiliate thereof; or

          (vii) permit the creation of any Lien ranking prior to or on a parity with the lien of
this Indenture with respect to any part of the Collateral for any Notes or, except as
otherwise permitted or contemplated herein, terminate the lien of this Indenture on any such
Collateral at any time subject hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture.

          (b) The Indenture Trustee may in its discretion determine whether or not any Notes would be
affected by any supplemental indenture and any such determination shall be conclusive upon the
Holders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder. The
Indenture Trustee shall not be liable for any such determination made in good faith.

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

          (d) Promptly after the execution by the Issuer and the Indenture Trustee of any Supplement
Indenture pursuant to this Section, the Indenture Trustee shall mail to the Holders of the Notes to
which such amendment or supplemental indenture relates written notice setting forth in general
terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

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          (e) Notwithstanding anything to the contrary in this Section 10.02, no supplemental
indenture or modification or amendment to this Indenture which has the effect of (i) materially
increasing the obligations or duties of the Servicer hereunder, (ii) materially decreasing the
compensation or rights of the Servicer hereunder, or (iii) materially and adversely effecting the
Servicer shall become effective without prior consent of the Servicer.

     Section 10.03 Direction to Indenture Trustee.

          The Issuer hereby authorizes and directs the Indenture Trustee to execute this Indenture, any
future supplements or amendments hereto and any further instruments as may be necessary in
connection therewith to accomplish any change or modification as the Issuer may direct subject to
Sections 10.01 or 10.02, as applicable. The Indenture Trustee may, but shall not
be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s
own rights, duties, liabilities or immunities under this Indenture or otherwise.

     Section 10.04 Effect of Supplemental Indenture.

          Upon the execution of any supplemental indenture under this Article X, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes, and every Holder of Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.

     Section 10.05 Conformity With Trust Indenture Act.

          Every amendment of this Indenture and every supplemental indenture executed pursuant to this
Article X shall conform to the requirements of the TIA as then in effect so long as this Indenture
shall then be qualified under the TIA.

     Section 10.06 Reference in Notes to Supplemental Indentures.

          Notes authenticated and delivered after the execution of any supplemental indenture pursuant
to this Article X may, and if required by the Indenture Trustee shall, bear a notation in form
approved by the Indenture 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 Indenture
Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the
Issuer and authenticated and delivered by the Indenture Trustee in exchange for the outstanding
Notes.

[END OF ARTICLE X]

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ARTICLE XI

TERMINATION

     Section 11.01 Termination of Trust.

          The Trust and the respective obligations and responsibilities of the Indenture Trustee created
hereby (other than the obligation of the Indenture Trustee to make payments to Noteholders as
hereinafter set forth) shall terminate, except with respect to the duties described in Section
11.02(b), on the Trust Termination Date.

     Section 11.02 Final Distribution.

          (a) The Servicer shall give the Indenture Trustee at least 30 days’ prior notice of the
Distribution Date on which the Noteholders of any Series or Class may surrender their Notes for
payment of the final distribution on and cancellation of such Notes (or, in the event of a final
distribution resulting from the application of Section 2.06, 6.01 or 7.01
of the Transfer and Servicing Agreement, notice of such Distribution Date promptly after the
Servicer has determined that a final distribution will occur, if such determination is made less
than 30 days prior to such Distribution Date). Not later than the fifth day of the month in which
the final distribution in respect of such Series or Class is payable to Noteholders, the Indenture
Trustee shall provide notice to Noteholders of such Series or Class specifying (i) the date upon
which final payment of such Series or Class will be made upon presentation and surrender of Notes
of such Series or Class at the office or offices therein designated, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of such Notes at the office or
offices therein specified (which, in the case of Bearer Notes, shall be outside the United States).
The Indenture Trustee shall give such notice to the Transfer Agent and Registrar and the Paying
Agent at the time such notice is given to Noteholders.

          (b) Notwithstanding a final distribution to the Noteholders of any Series or Class (or the
termination of the Trust), except as otherwise provided in this paragraph, all funds then on
deposit in the Collection Account and any Series Account allocated to such Noteholders shall
continue to be held in trust for the benefit of such Noteholders, and the Paying Agent or the
Indenture Trustee shall pay such funds to such Noteholders upon surrender of their Notes, if
certificated (and any excess shall be paid in accordance with the terms of any Enhancement
Agreement). In the event that all such Noteholders shall not surrender their Notes for
cancellation within six months after the date specified in the notice from the Indenture Trustee
described in paragraph (a), the Indenture Trustee shall give a second notice to the remaining such
Noteholders to surrender their Notes for cancellation and receive the final distribution with
respect thereto (which surrender and payment, in the case of Bearer Notes, shall be outside the
United States). If within one year after the second notice all such Notes shall not have been
surrendered for cancellation, the Indenture Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the remaining such Noteholders concerning surrender of
their Notes, and the cost thereof shall be paid out of the funds in the Collection Account or any
Series Account held for the benefit of such Noteholders. The Indenture Trustee and the Paying
Agent shall pay to the Transferor any monies held by them for the payment of principal or interest
that remains unclaimed for two years. After payment to the Transferor, Noteholders entitled to the
money must look to the Transferor for payment as general creditors unless an applicable abandoned
property law designates another Person.

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     Section 11.03 Transferor’s Termination Rights.

          Upon the termination of the Trust pursuant to Section 11.01 and the surrender of such
Transferor Certificates, the Indenture Trustee shall assign and convey to the Holders of the
Transferor Certificates or any of their designees, without recourse, representation or warranty,
all right, title and interest of the Trust in the Receivables, whether then existing or thereafter
created, all Interchange and Recoveries related thereto, all monies due or to become due and all
amounts received or receivable with respect thereto (including all moneys then held in the
Collection Account or any Series Account) and all proceeds thereof, except for amounts held by the
Indenture Trustee pursuant to Section 11.02(b). The Indenture Trustee shall execute and
deliver such instruments of transfer and assignment, in each case without recourse, as shall be
prepared and reasonably requested by the Transferor to vest in the Holders of the Transferor
Certificates or any of their designees all right, title and interest which the Indenture Trustee
had in the Collateral and such other property.

     Section 11.04 Defeasance.

          Notwithstanding anything to the contrary in this Indenture or any Indenture Supplement:

          (a) The Issuer may at its option be discharged from its obligations hereunder with respect to
any Series or all outstanding Series (each, a “Defeased Series”) on the date the applicable
conditions set forth in Section 11.04(c) are satisfied (a “Defeasance”); provided,
however, that the following rights, obligations, powers, duties and immunities shall survive with
respect to each Defeased Series until otherwise terminated or discharged hereunder: (i) the rights
of the Holders of Notes of the Defeased Series to receive, solely from the trust funds provided for
in Section 11.04(c), payments in respect of interest on and principal of such Notes when
such payments are due; (ii) the Issuer’s obligations with respect to such Notes under Sections
2.05 and 2.06; (iii) the rights, powers, trusts, duties, and immunities of the
Indenture Trustee, the Paying Agent and the Registrar hereunder; and (iv) this Section and Section
12.16.

          (b) Subject to Section 11.04(c), the Issuer at its option may cause Collections
allocated to each Defeased Series and available to purchase additional Receivables to be applied to
purchase Eligible Investments rather than additional Receivables.

          (c) The following shall be the conditions precedent to any Defeasance under Section
11.04(a):

          (i) the Issuer irrevocably shall have deposited or caused to be deposited with the
Indenture Trustee (such deposit to be made from other than the Transferor’s or any Affiliate
of the Issuer’s funds), under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Indenture Trustee, as trust funds in trust for making the
payments described below, (A) Dollars in an amount equal to, or (B) Eligible Investments
which through the scheduled payment of principal and interest in respect thereof will
provide, not later than the due date of payment thereon, money in an amount equal to, or (C)
a combination thereof, in each case sufficient to pay and discharge (without relying on
income or gain from reinvestment of such amount), and which shall be applied by the
Indenture Trustee to pay and discharge, all remaining scheduled interest and principal
payments on all outstanding Notes of each Defeased Series on the dates scheduled for such
payments in this Indenture and the applicable Indenture Supplements and all amounts owing to
the Series Enhancers with respect to each Defeased Series;

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          (ii) a statement from a firm of nationally recognized independent public accountants
(who may also render other services to the Issuer) to the effect that such deposit is
sufficient to pay the amounts specified in clause (i) above;

          (iii) prior to its first exercise of its right pursuant to this Section with respect to
a Defeased Series to substitute money or Eligible Investments for Receivables, the Issuer
shall have delivered to the Indenture Trustee an Opinion of Counsel to the effect
contemplated by clause (b) of the definition in Section 1.01, of the term “Tax
Opinion” (the preparation and delivery of which shall not be at the expense of the
Indenture Trustee) with respect to such deposit and termination of obligations, and an
Opinion of Counsel to the effect that such deposit and termination of obligations will not
result in the Trust being required to register as an “investment company” within the meaning
of the Investment Company Act;

          (iv) the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate
of the Transferor stating that the Transferor reasonably believes that such deposit and
termination of obligations will not, based on the facts known to such officer at the time of
such certification, then cause a Amortization Event with respect to any Series or any event
that, with the giving of notice or the lapse of time, would result in the occurrence of a
Amortization Event with respect to any Series; and

          (v) the Rating Agency Condition shall have been satisfied and the Issuer shall have
delivered copies of such written notice to the Servicer and the Indenture Trustee.

[END OF ARTICLE XI]

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ARTICLE XII

MISCELLANEOUS

     Section 12.01 Compliance Certificates.

          (a) Subject to Section 6.16 hereof, upon any application or request by the Issuer to
the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall
furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed action have been
complied with, and (ii) (if required by the TIA) an Independent Certificate from a firm of
certified public accountants meeting the applicable requirements of this Section, except that, in
the case of any such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional certificate or opinion need
be furnished.

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

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

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

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

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

          (b) To the extent required by the TIA:

          (i) Prior to the deposit of any Collateral or other property or securities with the
Indenture Trustee that is to be made the basis for the release of any property or securities
subject to the lien of this Indenture, the Issuer shall, in addition to any obligation
imposed in Section 12.01(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officer’s Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the
Collateral or other property or securities to be so deposited.

          (ii) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee (if
required by the TIA) an Independent Certificate as to the same matters, if the fair value to
the Issuer of the securities to be so deposited and of all other such securities made the
basis of any such withdrawal or release since the commencement of the then-current fiscal
year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above
and this clause (ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so deposited if the fair
value thereof to the Issuer as set forth in the related

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Officer’s Certificate is less than $25,000 or less than one percent of the Outstanding
Amount of the Notes.

          (iii) Whenever any property or securities are to be released from the lien of this
Indenture, the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate
certifying or stating the opinion of each person signing such certificate as to the fair
value (within 90 days of such release) of the property or securities proposed to be released
and stating that in the opinion of such person the proposed release will not impair the
security under this Indenture in contravention of the provisions hereof.

          (iv) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the matters
described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the property or
securities and of all other property or securities released from the lien of this Indenture
since the commencement of the then current calendar year, as set forth in the certificates
required by clause (iii) above and this clause (iv), equals 10% or more of the Outstanding
Amount of the Notes, but such certificate need not be furnished in the case of any release
of property or securities if the fair value thereof as set forth in the related Officer’s
Certificate is less than $25,000 or less than one percent of the then Outstanding Amount of
the Notes.

          (v) Notwithstanding Section 2.11 or any other provision of this Section, the
Issuer may (A) collect, liquidate, sell or otherwise dispose of Receivables as and to the
extent permitted or required by the Transaction Documents and (B) make cash payments out of
the Series Accounts as and to the extent permitted or required by the Transaction Documents.

     Section 12.02 Form of Documents Delivered to Indenture Trustee.

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

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

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

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

     Section 12.03 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
agent duly appointed in writing and satisfying any requisite percentages as to minimum number or
dollar value of outstanding principal amount represented by such Noteholders; and, except as herein
otherwise expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to
the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section 12.03.

          (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 Indenture 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 Holder of any Notes shall bind the Holder (and any transferee thereof) of every Note issued
upon the registration thereof in exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Note.

     Section 12.04 Notices.

          Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders
or other documents provided or permitted by the Agreement to be made upon, given or furnished to,
or filed with:

          (a) the Indenture Trustee by any Noteholder or by the Issuer shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to a Responsible Officer, by
facsimile transmission, electronic transmission, or by other means acceptable to the Indenture
Trustee to or with the Indenture Trustee at its Corporate Trust Office;

          (b) the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every
purpose hereunder if in writing and (i) mailed, first-class postage prepaid, to the Issuer
addressed to it at HSBC Private Label Credit Card Master Note Trust (USA) I, 1100 North Market
Street, Wilmington, DE 19890-0001 or at any other address previously furnished in writing to the
Indenture Trustee by the

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Issuer or (ii) delivered electronically to the address previously furnished in writing to the
Indenture Trustee. A copy of each notice to the Issuer shall be sent in writing and mailed,
first-class postage prepaid, to HSBC Private Label Credit Card Master Note Trust (USA) I, c/o
Wilmington Trust Company, 1100 North Market Street, Wilmington, DE 19890-0001;

          (c) the Servicer by any other party hereto or any Noteholder shall be sufficient for every
purpose hereunder if in writing and mailed, first-class postage prepaid, to HSBC Finance
Corporation, 2700 Sanders Road, Prospect Heights, Illinois 60070, attention: General Counsel;

          (d) Fitch by the Indenture Trustee, the Issuer or by any Noteholder shall be sufficient for
every purpose hereunder if in writing and mailed, first-class postage prepaid, to Fitch addressed
to it at Fitch, Inc., One State Street Plaza, New York, NY 10004, Attention: ABS Surveillance;

          (e) Moody’s by the Indenture Trustee, the Issuer or by any Noteholder shall be sufficient for
every purpose hereunder if in writing and mailed, first-class postage prepaid, to Moody’s addressed
to it at Moody’s Investors Service Inc., 99 Church Street, New York, NY 10007, Attention: ABS
Monitoring Group; or

          (f) Standard & Poor’s by the Indenture Trustee, the Issuer or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to
Standard & Poor’s addressed to it at Standard & Poor’s Ratings Group, 55 Water Street, New York, NY
10041, Attention: Credit Card ABS – 40th Floor.

     Section 12.05 Notices to Noteholders; Waiver.

          Where the Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and (a) mailed by
registered or certified mail or first class postage prepaid or national overnight courier service
or (b) delivered electronically in a manner acceptable to the Servicer, the Owner Trustee on behalf
of the Issuer and the Indenture Trustee, to each Noteholder affected by such event, at its address
as it appears on the Note Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where notice to Noteholders
is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Noteholder shall affect the sufficiency of such notice with respect to other
Noteholders, and any notice which is mailed in the manner herein provided shall conclusively be
presumed to have been duly given.

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

          In the event that, 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
Noteholders when such notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be
deemed to be a sufficient giving of such notice.

          Where this Indenture provides for notice to any Rating Agency, failure to give such notice
shall not affect any other rights or obligations created hereunder and shall not under any
circumstance constitute a Default or Event of Default.

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     Section 12.06 Alternate Payment and Notice Provisions.

          Notwithstanding any provision of this Indenture or any of the Notes to the contrary, the
Issuer, with the consent of the Indenture Trustee, may enter into any agreement with any Holder of
a Note providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to
such Holder, that is different from the methods provided for in this Indenture for such payments or
notices. The Issuer will furnish to the Indenture Trustee a copy of each such agreement and the
Indenture Trustee will cause payments to be made and notices to be given in accordance with such
agreements.

     Section 12.07 Conflict with Trust Indenture Act.

          If any provision hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the TIA, such required
provision shall control.

          The provisions of TIA §§310 through 317 that impose duties on any person (including the
provisions automatically deemed included herein unless expressly excluded by this Indenture) are a
part of and govern this Indenture, whether or not physically contained herein.

     Section 12.08 Effect of Headings and Table of Contents.

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

     Section 12.09 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 12.10 Separability.

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

     Section 12.11 Benefits of Indenture.

          Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, and the Noteholders, any benefit.

     Section 12.12 Limitation on Voting Preferred Stock.

          The Indenture Trustee shall hold the Preferred Stock of the Transferor in trust, for the
benefit of the Noteholders and shall vote such stock only pursuant to the written instructions of
Noteholders holding more than 50% of the Outstanding Amount of Notes of all Series. The Preferred
Stock shall be non-transferable except pursuant to the written instructions of Noteholders holding
100% of the Outstanding Amount of all Series of Notes and if the Rating Agency Condition has been
satisfied with respect to such transfer.

- 76 -

 

     Section 12.13 GOVERNING LAW.

          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, WITHOUT REGARD TO
THE CONFLICT OF LAW PRINCIPLES THEREOF.

     Section 12.14 Counterparts.

          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.

     Section 12.15 Trust Obligation.

          No recourse may be taken, directly or indirectly, with respect to the obligations of the
Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee
or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor
or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any
unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or
call owing to such entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Articles V, VI and VII of the Trust Agreement.

     Section 12.16 No Petition.

          The Indenture Trustee, by entering into this Indenture, and each Noteholder, by accepting a
Note, hereby covenant and agree that they will not at any time institute against the Issuer or the
Transferor, or join in any institution against the Issuer or the Transferor, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any
United States federal or state bankruptcy or similar law.

[END OF ARTICLE XII]

- 77 -

 

          IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Indenture to be duly
executed by their respective officers thereunto duly authorized and attested, all as of the day and
year first above written.

	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY,

not in its individual capacity, but solely

as Owner Trustee on behalf of the

HSBC PRIVATE LABEL CREDIT CARD 

MASTER NOTE TRUST (USA) I

 	 
	 	By:  	/s/ Rachel L. Simpson
 	 
	 	 	Name:  	Rachel L. Simpson 	 
	 	 	Title:  	Sr. Financial Services Officer 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION, not in its 

individual capacity, but solely as Indenture Trustee and

Securities Intermediary

 	 
	 	By:  	/s/ Patricia M. Child
 	 
	 	 	Name:  	Patricia M. Child 	 
	 	 	Title:  	Vice President 	 

- 78 -

 

	 	 	 	 	 

EXHIBIT A-1

REPORT ON COMPLIANCE WITH APPLICABLE SERVICING CRITERIA

PURSUANT TO ITEM 1122 OF REGULATION AB UNDER THE

SECURITIES EXCHANGE ACT OF 1934

     Date:

     Re: HSBC Private Label Credit Card Master Note Trust (USA) I

     U.S. BANK NATIONAL ASSOCIATION (the “Company”) hereby certifies that it is responsible for the
assessment of its compliance with the servicing criteria set forth in Item 1122 of Regulation AB
applicable to it, as described on Schedule I attached hereto (the “Applicable Servicing Criteria”),
and further certifies as follows:

     1. The Company used the criteria set forth in paragraph (d) of Item 1122 of Regulation AB to
assess compliance with the Applicable Servicing Criteria; and

     2. The Company is in compliance with the Applicable Servicing Criteria as of and for the
period ending December 31, ___ [except as described below:].

     [Accountant], an independent registered public accounting firm, has issued an attestation
report on our assessment of compliance with the Applicable Servicing Criteria as of and for the
period ending December 31, ___, a copy of which is attached hereto.

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION

As Indenture Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

A-1-1

 

	 	 	 	 	 

Schedule I

	 	 	 	 	 
	 	 	 	 	Applicable
	Servicing Criteria	 	Servicing Criteria
	Reference	 	Criteria	 	 
	 

	 	General Servicing Considerations	 	 
	 
	 	 	 	 
	1122(d)(1)(i)

	 	Policies and procedures are instituted to monitor any performance or
other triggers and events of default in accordance with the transaction
agreements.	 	 
	 
	 	 	 	 
	1122(d)(1)(ii)

	 	If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the third
party’s performance and compliance with such servicing activities.
	 	**
	 
	 	 	 	 
	1122(d)(1)(iii)

	 	Any requirements in the transaction agreements to maintain a back-up
servicer for the credit card receivables are maintained.	 	 
	 
	 	 	 	 
	1122(d)(1)(iv)

	 	A fidelity bond and errors and omissions policy is in effect on the
party participating in the servicing function throughout the reporting
period in the amount of coverage required by and otherwise in accordance
with the terms of the transaction agreements.	 	 
	 
	 	 	 	 
	 

	 	Cash Collection and Administration	 	 
	 
	 	 	 	 
	1122(d)(2)(i)

	 	Payments on credit card receivables are deposited into the
appropriate custodial bank accounts and related bank clearing accounts
no more than two business days following receipt, or such other number
of days specified in the transaction agreements.	 	 
	 
	 	 	 	 
	1122(d)(2)(ii)

	 	Disbursements made via wire transfer on behalf of an obligor or to
an investor are made only by authorized personnel.
	 	X*
	 
	 	 	 	 
	1122(d)(2)(iii)

	 	Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances,
are made, reviewed and approved as specified in the transaction
agreements.	 	 
	 
	 	 	 	 
	1122(d)(2)(iv)

	 	The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of overcollateralization, are
separately maintained (e.g., with respect to commingling of cash) as set
forth in the transaction agreements.	 	 
	 
	 	 	 	 
	1122(d)(2)(v)

	 	Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements. For
purposes of this criterion, “federally insured depository institution”
with respect to a foreign financial institution means a foreign
financial institution that meets the requirements of Rule 13k-1(b)(1)
under the Securities Exchange Act of 1934, as amended.	 	 
	 
	 	 	 	 
	1122(d)(2)(vi)

	 	Unissued checks are safeguarded so as to prevent unauthorized access.	 	 
	 
	 	 	 	 
	1122(d)(2)(vii)

	 	Reconciliations are prepared on a monthly basis for all asset-backed
securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations (A) are
mathematically accurate; (B) are prepared within 30 calendar days after
the bank statement cutoff date, or such other number of days specified
in the transaction agreements; (C) are reviewed and approved by someone
other than the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification, or such other
number of days specified in the transaction agreements.	 	 

 

			
	*	 	To be completed by Indenture Trustee if acting as Paying Agent.
	 
	**	 	If such activities have been outsourced.

I-1

 

	 	 	 	 	 
	 	 	 	 	Applicable
	Servicing Criteria	 	Servicing Criteria
	Reference	 	Criteria	 	 
	 

	 	Investor Remittances and Reporting	 	 
	 
	 	 	 	 
	1122(d)(3)(i)

	 	Reports to investors, including those to be filed with the SEC, are
maintained in accordance with the transaction agreements and applicable
SEC requirements. Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with the
terms specified in the transaction agreements; (C) are filed with the
SEC as required by its rules and regulations; and (D) agree with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of credit card accounts serviced by the servicer.	 	 
	 
	 	 	 	 
	1122(d)(3)(ii)

	 	Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth in the
transaction agreements.
	 	X*
	 
	 	 	 	 
	1122(d)(3)(iii)

	 	Disbursements made to an investor are posted within two business
days to the servicer’s investor records, or such other number of days
specified in the transaction agreements.
	 	X*
	 
	 	 	 	 
	1122(d)(3)(iv)

	 	Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank
statements.
	 	X*
	 
	 	 	 	 
	 

	 	Pool Asset Administration	 	 
	 
	 	 	 	 
	1122(d)(4)(i)

	 	Collateral or security on credit card accounts is maintained as
required by the transaction agreements or related credit card documents.	 	 
	 
	 	 	 	 
	1122(d)(4)(ii)

	 	Credit card accounts and related documents are safeguarded as
required by the transaction agreements.	 	 
	 
	 	 	 	 
	1122(d)(4)(iii)

	 	Any additions, removals or substitutions to the pool are made,
reviewed and approved in accordance with any conditions or requirements
in the transaction agreements.	 	 
	 
	 	 	 	 
	1122(d)(4)(iv)

	 	Payments on credit card receivables, including any payoffs, made in
accordance with the related credit card documents are posted to the
servicer’s obligor records maintained no more than two business days
after receipt, or such other number of days specified in the transaction
agreements, and allocated to principal, interest or other items (e.g.,
escrow) in accordance with the related credit card documents.	 	 
	 
	 	 	 	 
	1122(d)(4)(v)

	 	The servicer’s records regarding the credit card accounts agree with
the servicer’s records with respect to an obligor’s unpaid principal
balance.	 	 
	 
	 	 	 	 
	1122(d)(4)(vi)

	 	Changes with respect to the terms or status of an obligor’s credit
card account (e.g. restructurings) are made, reviewed and approved by
authorized personnel in accordance with the transaction agreements and
related credit card documents.	 	 
	 
	 	 	 	 
	1122(d)(4)(vii)

	 	Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements established by the
transaction agreements.	 	 
	 
	 	 	 	 
	1122(d)(4)(viii)

	 	Records documenting collection efforts are maintained during the
period a credit card account is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity’s activities in monitoring
delinquent credit card accounts including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or unemployment).	 	 
	 
	 	 	 	 
	1122(d)(4)(ix)

	 	Adjustments to interest rates or rates of return for credit card
accounts with variable rates are computed based on the related credit
card documents.	 	 

I-2

 

	 	 	 	 	 
	 	 	 	 	Applicable
	Servicing Criteria	 	Servicing Criteria
	Reference	 	Criteria	 	 
	1122(d)(4)(x)

	 	Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the obligor’s
credit card documents, on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest on such funds is
paid, or credited, to obligors in accordance with applicable credit card
documents and state laws; and (C) such funds are returned to the obligor
within 30 calendar days of full repayment of the related credit card
account, or such other number of days specified in the transaction
agreements.	 	 
	 
	 	 	 	 
	1122(d)(4)(xi)

	 	Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration dates,
as indicated on the appropriate bills or notices for such payments,
provided that such support has been received by the servicer at least 30
calendar days prior to these dates, or such other number of days
specified in the transaction agreements.	 	 
	 
	 	 	 	 
	1122(d)(4)(xii)

	 	Any late payment penalties in connection with any payment to be made
on behalf of an obligor are paid from the servicer’s funds and not
charged to the obligor, unless the late payment was due to the obligor’s
error or omission.	 	 
	 
	 	 	 	 
	1122(d)(4)(xiii)

	 	Disbursements made on behalf of an obligor are posted within two
business days to the obligor’s records maintained by the servicer, or
such other number of days specified in the transaction agreements.	 	 
	 
	 	 	 	 
	1122(d)(4)(xiv)

	 	Delinquencies, charge-offs and uncollectible accounts are recognized
and recorded in accordance with the transaction agreements.	 	 
	 
	 	 	 	 
	1122(d)(4)(xv)

	 	Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as
set forth in the transaction agreements.	 	 

I-3

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