Document:

Unassociated Document

EXHIBIT 4.1

Execution Copy

 

GE CAPITAL CREDIT CARD MASTER NOTE TRUST,

 

as Issuer

 

And

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

 

as Indenture Trustee

 

SERIES 2012-1 INDENTURE SUPPLEMENT

 

Dated as of January 25, 2012

 

  

  

  

 

TABLE OF CONTENTS

	  	  	
Page

	  	  	  
	
ARTICLE I

	
DEFINITIONS

	  
	
SECTION 1.1.

	
Definitions

	
 

	
SECTION 1.2.

	
Incorporation of Terms

	
14

	
ARTICLE II

	
CREATION OF THE SERIES 2012-1 NOTES

	  
	
SECTION 2.1.

	
Designation

	
14

	
SECTION 2.2.

	
Transfer Restrictions

	
14

	
ARTICLE III

	
REPRESENTATIONS, WARRANTIES AND COVENANTS

	  
	
SECTION 3.1.

	
Representations, Warranties and Covenants with respect to Receivables

	
16

	
SECTION 3.2.

	
Representations, Warranties and Covenants with respect to ERISA

	
16

	
ARTICLE IV

	
RIGHTS OF SERIES 2012-1 NOTEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS

	  
	
SECTION 4.1.

	
Determination of Interest and Principal

	
17

	
SECTION 4.2.

	
Establishment of Accounts

	
18

	
SECTION 4.3.

	
Calculations and Series Allocations

	
19

	
SECTION 4.4.

	
Application of Available Finance Charge Collections and Available Principal Collections

	
22

	
SECTION 4.5.

	
Distributions

	
25

	
SECTION 4.6.

	
Investor Charge-Offs

	
26

	
SECTION 4.7.

	
Reallocated Principal Collections

	
26

	
SECTION 4.8.

	
Excess Finance Charge Collections

	
26

	
SECTION 4.9.

	
Shared Principal Collections

	
26

	
SECTION 4.10.

	
Reserve Account

	
27

	
SECTION 4.11.

	
Spread Account

	
28

	
SECTION 4.12.

	
Investment of Accounts

	
28

	
SECTION 4.13.

	
Controlled Accumulation Period

	
29

	
SECTION 4.15.

	
Deposit of Collections

	
30

	
ARTICLE V

	
DELIVERY OF SERIES 2012-1 NOTES; REPORTS TO SERIES 2012-1 NOTEHOLDERS

	  
	
SECTION 5.1.

	
Delivery and Payment for the Series 2012-1 Notes

	
30

	
SECTION 5.2.

	
Reports and Statements to Series 2012-1 Noteholders

	
30

 

  

-i-

  

 

TABLE OF CONTENTS

(continued)

	  	  	  	
Page

	  	  	  	  
	
ARTICLE VI

	
SERIES 2012-1 EARLY AMORTIZATION EVENTS

	  
	
SECTION 6.1.

	
Series 2012-1 Early Amortization Events

	
30

	
ARTICLE VII

	
REDEMPTION OF SERIES 2012-1 NOTES; FINAL DISTRIBUTIONS; SERIES TERMINATION

	  
	
SECTION 7.1.

	
Optional Redemption of Series 2012-1 Notes; Final Distributions

	
32

	
SECTION 7.2.

	
Series Termination

	
33

	
SECTION 7.3.

	
Sale of Collateral

	
33

	
ARTICLE VIII

	
MISCELLANEOUS PROVISIONS

	  
	
SECTION 8.1.

	
Ratification of Indenture; Amendments

	
33

	
SECTION 8.2.

	
Form of Delivery of the Series 2012-1 Notes

	
34

	
SECTION 8.3.

	
Counterparts

	
34

	
SECTION 8.4.

	
GOVERNING LAW

	
34

	
SECTION 8.5.

	
Limitation of Liability

	
35

	
SECTION 8.6.

	
Rights of the Indenture Trustee

	
35

	
SECTION 8.7.

	
Notice Address for Rating Agencies

	
35

	
SECTION 8.8.

	
Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations

	
35

	
SECTION 8.9.

	
Notes to be Treated as Debt for Tax

	
36

	
SECTION 8.10.

	
Deemed Consent

	
36

	
EXHIBITS

	  
	  	  
	
EXHIBIT A-1

	
FORM OF CLASS A NOTE

	  	  
	
EXHIBIT A-2

	
FORM OF CLASS B NOTE

	  	  
	
EXHIBIT A-3

	
FORM OF CLASS C NOTE

	  	  
	
EXHIBIT B

	
FORM OF MONTHLY NOTEHOLDER’S STATEMENT

	
SCHEDULES

	  
	  	  
	
SCHEDULE I

	
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS (WITH RESPECT TO RECEIVABLES)

 

  

-ii-

  

 

SERIES 2012-1 INDENTURE SUPPLEMENT, dated as of January 25, 2012 (the “Indenture Supplement”), between GE CAPITAL CREDIT CARD MASTER NOTE TRUST, a Delaware statutory trust (herein, the “Issuer” or the “Trust”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, not in its individual capacity, but solely as indenture trustee (herein, together with its successors as provided in the Master Indenture referred to below, the “Indenture Trustee”) under the Master Indenture, dated as of September 25, 2003 (the “Indenture”), between the Issuer and the Indenture Trustee, as amended by the Omnibus Amendment No.1 to Securitization Documents, dated as of February 9, 2004, among RFS Holding, L.L.C., RFS Funding Trust, the Issuer, Deutsche Bank Trust Company Delaware, as trustee of RFS Funding Trust, RFS Holding, Inc., and the Indenture Trustee, as further amended by the Second Amendment to Master Indenture, dated as of June 17, 2004, between the Issuer and the Indenture Trustee, as further amended by the Third Amendment to Master Indenture, dated as of August 31, 2006, between the Issuer and the Indenture Trustee, as further amended by the Fourth Amendment to Master Indenture, dated as of June 28, 2007, between the Issuer and the Indenture Trustee, as further amended by the Fifth Amendment to Master Indenture, dated as of May 22, 2008, between the Issuer and the Indenture Trustee, and as further amended by the Sixth Amendment to Master Indenture, dated as of August 7, 2009, between the Issuer and the Indenture Trustee (the Indenture, together with this Indenture Supplement, the “Agreement”).

 

The Principal Terms of this Series are set forth in this Indenture Supplement to the Indenture.

 

ARTICLE I

DEFINITIONS

 

SECTION 1.1.  Definitions.

 

(a)           Capitalized terms used and not otherwise defined herein are used as defined in Section 1.1 of the Indenture. This Indenture Supplement shall be interpreted in accordance with the conventions set forth in Section 1.2 of the Indenture.

 

(b)           Each capitalized term defined herein relates only to Series 2012-1 and to no other Series.  Whenever used in this Indenture Supplement, the following words and phrases shall have the following meanings:

 

“Accumulation Shortfall” means (a) for the first Payment Date during the Controlled Accumulation Period, zero; and (b) thereafter, for any Payment Date during the Controlled Accumulation Period, the excess, if any, of the Controlled Deposit Amount for the previous Payment Date over the amount deposited into the Principal Accumulation Account pursuant to Section 4.4(c)(i) for the previous Payment Date.

 

“Addition Date” means an “Addition Date” as such term is defined in the Transfer Agreement.

 

“Additional Interest” means, for any Payment Date, Class A Additional Interest, Class B Additional Interest and Class C Additional Interest for such Payment Date.

  

  

  

 

“Administration Agreement” means the Administration Agreement, dated as of September 25, 2003, between the Administrator and the Issuer.

 

“Administrator” means General Electric Capital Corporation, in its capacity as Administrator under the Administration Agreement or any other Person designated as an Administrator under the Administration Agreement.

 

“Agreement” is defined in the preamble.

 

“Allocation Percentage” means, with respect to any date of determination in any Monthly Period, the percentage equivalent of a fraction:

 

(a)      the numerator of which shall be equal to:

 

(i)  for Principal Collections during the Revolving Period and for Finance Charge Collections and Default Amounts at any time, the Collateral Amount at the end of the last day of the prior Monthly Period (or, in the case of the first Monthly Period, on the Closing Date); or

 

(ii)  for Principal Collections during the Early Amortization Period and the Controlled Accumulation Period, the Collateral Amount at the end of the last day of the Revolving Period; provided that on and after the date on which the Principal Accumulation Account Balance equals the Note Principal Balance, the numerator shall equal zero; and

 

(b)      the denominator of which shall be the greater of (x) the Aggregate Principal Receivables determined as of the close of business on the last day of the prior Monthly Period (or, in the case of the first Monthly Period, on the Closing Date) and (y) the sum of the numerators used to calculate the allocation percentages for allocations with respect to Finance Charge Collections, Principal Collections or Default Amounts, as applicable, for all outstanding Series on such date of determination; provided that if one or more Reset Dates occur in a Monthly Period, the denominator determined pursuant to clause (x) of this clause (b) shall be (A) the Aggregate Principal Receivables as of the close of business on the last day of the prior Monthly Period for the period from and including the first day of the current Monthly Period, to but excluding such Reset Date and (B) the Aggregate Principal Receivables as of the close of business on such Reset Date, for the period from and including such Reset Date to the earlier of the last day of such Monthly Period (in which case such period shall include such day) or the next succeeding Reset Date (in which case such period shall not include such succeeding Reset Date); and provided, further, that notwithstanding the preceding proviso, if a Reset Date occurs during any Monthly Period and the Issuer is permitted to make a single monthly deposit to the Collection Account pursuant to Section 8.4 of the Indenture for such Monthly Period, then the denominator determined pursuant to clause (x) of this clause (b) for each day during such Monthly Period shall equal the Average Principal Balance for such Monthly Period.

  

2

  

“Available Finance Charge Collections” means, for any Monthly Period, an amount equal to the sum of (a) the Investor Finance Charge Collections for such Monthly Period, (b) the Series 2012-1 Excess Finance Charge Collections for such Monthly Period, (c) Principal Accumulation Investment Proceeds, if any, with respect to the related Transfer Date, (d) interest and earnings on funds on deposit in the Reserve Account which will be deposited into the Finance Charge Account on the related Payment Date to be treated as Available Finance Charge Collections pursuant to Section 4.10(a), and (e) amounts, if any, to be withdrawn from the Reserve Account which will be deposited into the Finance Charge Account on the related Transfer Date to be treated as Available Finance Charge Collections pursuant to Section 4.10(c).

 

“Available Principal Collections” means, for any Monthly Period, an amount equal to the sum of (a) the Investor Principal Collections for such Monthly Period, minus (b) the amount of Reallocated Principal Collections with respect to such Monthly Period which pursuant to Section 4.7 are required to be applied on the related Payment Date, plus (c) the sum of (i) any Shared Principal Collections with respect to other Principal Sharing Series (including any amounts on deposit in the Excess Funding Account that are allocated to Series 2012-1 for application as Shared Principal Collections), (ii) the aggregate amount to be treated as Available Principal Collections pursuant to Sections 4.4(a)(vi), (vii) and (x), and (iii) during an Early Amortization Event, the amount of Available Finance Charge Collections used to pay principal on the Notes pursuant to Section 4.4(a)(xiii) for the related Payment Date.

 

“Available Reserve Account Amount” means, for any Transfer Date, the lesser of (a) the amount on deposit in the Reserve Account (after taking into account any interest and earnings retained in the Reserve Account pursuant to Section 4.10(a) on such date, but before giving effect to any deposit made or to be made pursuant to Section 4.4(a)(viii) to the Reserve Account on such date) and (b) the Required Reserve Account Amount.

 

“Available Spread Account Amount” means, for any Transfer Date, an amount equal to the lesser of (a) the amount on deposit in the Spread Account (exclusive of Investment Earnings on such date and before giving effect to any deposit to, or withdrawal from, the Spread Account made or to be made with respect to such date) and (b) the Required Spread Account Amount, in each case on such Transfer Date.

 

“Average Principal Balance” means for any Monthly Period in which a Reset Date occurs, the sum of (i) the Aggregate Principal Receivables determined as of the close of business on the last day of the prior Monthly Period, multiplied by a fraction the numerator of which is the number of days from and including the first day of such Monthly Period, to but excluding the related Reset Date, and the denominator of which is the number of days in such Monthly Period, and (ii) for each such Reset Date, the product of the Aggregate Principal Receivables determined as of the close of business on such Reset Date, multiplied by a fraction, the numerator of which is the number of days from and including such Reset Date, to the earlier of the last day of such Monthly Period (in which case such period shall include such date) or the next succeeding Reset Date (in which case such period shall exclude such date), and the denominator of which is the number of days in such Monthly Period.

 

“Base Rate” means, for any Monthly Period, the annualized percentage equivalent of a fraction, the numerator of which is equal to the sum of (a) the Monthly Interest, (b) the amount required to be paid pursuant to Section 4.4(a)(i) and (c) the Noteholder Servicing Fee, each with respect to the related Payment Date, and the denominator of which is the Collateral Amount plus amounts on deposit in the Principal Accumulation Account, each as of the close of business on the last day of such Monthly Period.

  

3

  

 

“Benefit Plan” means (i) an “employee benefit plan” as defined in Section 3(3) of ERISA, that is subject to Title I of ERISA, (ii) a “plan” as defined in Section 4975 of the Code that is subject to Section 4975 of the Code, or (iii) an entity whose underlying assets include plan assets by reason of investment by an employee benefit plan or plan in such entity.

 

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of New York or the State of Connecticut.

 

“Class A Additional Interest” is defined in Section 4.1(a).

 

“Class A Deficiency Amount” is defined in Section 4.1(a).

 

“Class A Monthly Interest” is defined in Section 4.1(a).

 

“Class A Note Initial Principal Balance” means $750,000,000.

 

“Class A Note Interest Rate” means a per annum rate of 1.03%.

 

“Class A Note Principal Balance” means, on any date of determination, an amount equal to (a) the Class A Note Initial Principal Balance, minus (b) the aggregate amount of principal payments made to the Class A Noteholders on or prior to such date.

 

“Class A Noteholder” means the Person in whose name a Class A Note is registered in the Note Register.

 

“Class A Notes” means any one of the Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of Exhibit A-1.

 

“Class A Required Amount” means, for any Payment Date, an amount equal to the excess of the amounts described in Sections 4.4(a)(i), (ii) and (iii) over Available Finance Charge Collections applied to pay such amount pursuant to Section 4.4(a).

 

“Class B Additional Interest” is defined in Section 4.1(b).

 

“Class B Deficiency Amount” is defined in Section 4.1(b).

 

“Class B Monthly Interest” is defined in Section 4.1(b).

 

“Class B Note Initial Principal Balance” means $94,637,224.

 

“Class B Note Interest Rate” means a per annum rate of 1.62%.

 

“Class B Note Principal Balance” means, on any date of determination, an amount equal to (a) the Class B Note Initial Principal Balance, minus (b) the aggregate amount of principal payments made to the Class B Noteholders on or prior to such date.

 

  

4

  

 

“Class B Noteholder” means the Person in whose name a Class B Note is registered in the Note Register.

 

“Class B Notes” means any one of the Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of Exhibit A-2.

 

“Class B Required Amount” means, for any Payment Date, an amount equal to the excess of the amount described in Section 4.4(a)(iv) over Available Finance Charge Collections applied to pay such amount pursuant to Section 4.4(a).

 

“Class C Additional Interest” is defined in Section 4.1(c).

 

“Class C Deficiency Amount” is defined in Section 4.1(c).

 

“Class C Monthly Interest” is defined in Section 4.1(c).

 

“Class C Note Initial Principal Balance” means $63,880,126.

 

“Class C Note Interest Rate” means a per annum rate of 2.42%.

 

“Class C Note Principal Balance” means, on any date of determination, an amount equal to (a) the Class C Note Initial Principal Balance, minus (b) the aggregate amount of principal payments made to the Class C Noteholders on or prior to such date.

 

“Class C Noteholder” means the Person in whose name a Class C Note is registered in the Note Register.

 

“Class C Note Transfer” is defined in Section 2.2(b).

 

“Class C Notes” means any one of the Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of Exhibit A-3.

 

“Class C Required Amount” means with respect to any Payment Date, an amount equal to the excess of the amount described in Section 4.4(a)(v) over Available Finance Charge Collections applied to pay such amount pursuant to Section 4.4(a).

 

“Closing Date” means January 25, 2012.

 

“Collateral Amount” means, as of any date of determination, an amount equal to the excess of (a) the Initial Collateral Amount, over (b) the sum of (i) the amount of principal previously paid to the Series 2012-1 Noteholders (other than any principal payments made from funds on deposit in the Spread Account), (ii) reductions in the Collateral Amount pursuant to Section 4.4(f), (iii) the Principal Accumulation Account Balance, and (iv) the excess, if any, of the aggregate amount of Investor Charge-Offs and Reallocated Principal Collections over the reimbursements of such amounts pursuant to Section 4.4(a)(vii) prior to such date.

  

5

  

“Controlled Accumulation Amount” means, for any Payment Date with respect to the Controlled Accumulation Period, $908,517,350; provided, however, that if the Controlled Accumulation Period Length is determined to more than one month pursuant to Section 4.13, the Controlled Accumulation Amount for each Payment Date with respect to the Controlled Accumulation Period will be equal to (i) the initial Note Principal Balance divided by (ii) the Controlled Accumulation Period Length; provided, further, that the Controlled Accumulation Amount for any Payment Date shall not exceed the Note Principal Balance minus any amount already on deposit in the Principal Accumulation Account on such Payment Date.

 

“Controlled Accumulation Period” means, unless an Early Amortization Event shall have occurred prior thereto, the period commencing at the opening of business on November 22, 2014 or such other date as is determined in accordance with Section 4.13 and ending on the first to occur of (a) the commencement of the Early Amortization Period and (b) the Final Payment Date.

 

“Controlled Accumulation Period Length” is defined in Section 4.13.

 

“Controlled Deposit Amount” means, for any Payment Date with respect to the Controlled Accumulation Period, an amount equal to the sum of the Controlled Accumulation Amount for such Payment Date and any existing Accumulation Shortfall.

 

“Covered Amount” means an amount, determined as of each Transfer Date for any Interest Period, equal to the sum of:

 

(a)           product of (i) the Class A Monthly Interest and (ii) a fraction (A) the numerator of which is equal to the lesser of the Principal Accumulation Account Balance and the Class A Note Principal Balance, each as of the last day of the calendar month preceding such Transfer Date, and (B) the denominator of which is equal to the Class A Note Principal Balance as of the last day of the calendar month preceding such Transfer Date;

 

(b)           product of (i) the Class B Monthly Interest and (ii) a fraction (A) the numerator of which is equal to the lesser of (x) the excess of the Principal Accumulation Account Balance over the Class A Note Principal Balance as of the last day of the calendar month preceding such Transfer Date and (y) the Class B Note Principal Balance, as of the last day of the calendar month preceding such Transfer Date, and (B) the denominator of which is equal to the Class B Note Principal Balance as of the last day of the calendar month preceding such Transfer Date; and

 

(c)           product of (i) the Class C Monthly Interest and (ii) a fraction (A) the numerator of which is equal to the lesser of (x) the excess of the Principal Accumulation Account Balance over the sum of the Class A Note Principal Balance and the Class B Note Principal Balance, each as of the last day of the calendar month preceding such Transfer Date and (y) the Class C Note Principal Balance as of the last day of the calendar month preceding such Transfer Date, and (B) the denominator of which is equal to the Class C Note Principal Balance as of the last day of the calendar month preceding such Transfer Date.

  

6

  

“Default Amount” means, as to any Defaulted Account, the amount of Principal Receivables (other than Ineligible Receivables, unless there is an Insolvency Event with respect to the Originator or the Transferor) in such Defaulted Account on the day it became a Defaulted Account.

 

“Defaulted Account” means an Account in which there are Charged-Off Receivables.

 

“Dilution” means any downward adjustment made by Servicer in the amount of any Transferred Receivable (a) because of a rebate, refund or billing error to an accountholder, (b) because such Transferred Receivable was created in respect of merchandise which was refused or returned by an accountholder or (c) for any other reason other than receiving Collections therefor or charging off such amount as uncollectible.

 

“Distribution Account” means the account designated as such, established and owned by the Issuer and maintained in accordance with Section 4.2.

 

“Early Amortization Period” means the period commencing on the date on which a Trust Early Amortization Event or a Series 2012-1 Early Amortization Event is deemed to occur and ending on the Final Payment Date.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Excess Collateral Amount” means, at any time, the excess of (a) the sum of (i) the Collateral Amount, and (ii) the Principal Accumulation Account Balance, over (b) the Note Principal Balance.

 

“Excess Spread Percentage” means, for any Monthly Period, a percentage equal to (a) the Portfolio Yield for such Monthly Period, minus (b) the Base Rate for such Monthly Period.

 

“Expected Principal Payment Date” means the January 2015 Payment Date.

 

“Final Payment Date” means the earliest to occur of (a) the date on which the Note Principal Balance is paid in full, (b) the date on which the Collateral Amount is reduced to zero and (c) the Series Maturity Date.

 

“Finance Charge Account” means the account designated as such, established and owned by the Issuer and maintained in accordance with Section 4.2.

 

“Finance Charge Shortfall” is defined in Section 4.8.

 

“Group One” means Series 2012-1 and each other outstanding Series previously or hereafter specified in the related Indenture Supplement to be included in Group One.

 

“Indenture” is defined in the preamble.

 

“Indenture Trustee” is defined in the preamble.

 

  

7

  

 

“Initial Collateral Amount” means $946,372,240, which equals the sum of (i) the Class A Note Initial Principal Balance, (ii) the Class B Note Initial Principal Balance, (iii) the Class C Note Initial Principal Balance and (iv) the Initial Excess Collateral Amount.

 

“Initial Excess Collateral Amount” means $37,854,890.

 

“Interest Period” means, for any Payment Date, the period from and including the Payment Date immediately preceding such Payment Date (or, in the case of the first Payment Date, from and including the Closing Date) to but excluding such Payment Date.

 

“Investment Earnings” means, for any Payment Date, all interest and earnings on Permitted Investments included in the Spread Account (net of losses and investment expenses) during the period commencing on and including the Payment Date immediately preceding such Payment Date and ending on but excluding such Payment Date.

 

“Investor Charge-Offs” is defined in Section 4.6.

 

“Investor Default Amount” means, for any Monthly Period, the sum for all Accounts that became Defaulted Accounts during such Monthly Period, of the following amount:  the product of (a) the Default Amount with respect to each such Defaulted Account and (b) the Allocation Percentage on the day such Account became a Defaulted Account.

 

“Investor Finance Charge Collections” means, for any Monthly Period, an amount equal to the aggregate amount of Finance Charge Collections retained or deposited in the Finance Charge Account for Series 2012-1 pursuant to Section 4.3(b)(i) for such Monthly Period.

 

“Investor Principal Collections” means, for any Monthly Period, an amount equal to the aggregate amount of Principal Collections retained or deposited in the Principal Account for Series 2012-1 pursuant to Section 4.3(b)(ii) for such Monthly Period.

 

“Investor Uncovered Dilution Amount” means, for any Monthly Period, an amount equal to the product of (a) the Series Allocation Percentage for such Monthly Period (determined on a weighted average basis, if a Reset Date occurs during that Monthly Period), and (b) the aggregate Dilutions occurring during such Monthly Period as to which any deposit is required to be made hereunder but has not been made, provided that, if the Free Equity Amount is greater than zero at the time the deposit referred to in clause (b) is required to be made, the Investor Uncovered Dilution Amount shall be deemed to be zero.

 

“Issuer” is defined in the preamble.

 

“Minimum Free Equity Percentage” means, for purposes of Series 2012-1, 4%; provided that, at any time that GE Capital’s long-term unsecured debt is rated below Aa3 by Moody’s, the Minimum Free Equity Percentage shall be 7.0%.

 

“Monthly Interest” means, for any Payment Date, the sum of the Class A Monthly Interest, the Class B Monthly Interest and the Class C Monthly Interest for such Payment Date.

 

  

8

  

 

“Monthly Period” means, as to the March 2012 Payment Date, the period beginning on the Closing Date and ending on February 21, 2011, and as to each Payment Date thereafter, the period beginning on the 22nd day of the second preceding calendar month and ending on the 21st day of the immediately preceding calendar month.

 

“Monthly Principal” is defined in Section 4.1(d).

 

“Monthly Principal Reallocation Amount” means, for any Monthly Period, an amount equal to the sum of:

 

(a)           the lesser of (i) the Class A Required Amount and (ii) 20.75% of the Initial Collateral Amount minus the sum of (x) the amount of unreimbursed Investor Charge-Offs (after giving effect to Investor Charge-Offs for the related Monthly Period) and unreimbursed Reallocated Principal Collections (as of the previous Payment Date) and (y) any reductions to the Collateral Amount pursuant to Section 4.4(f), but not less than zero;

 

(b)           the lesser of (i) the Class B Required Amount and (ii) 10.75% of the Initial Collateral Amount minus the sum of (x) the amount of unreimbursed Investor Charge-Offs (after giving effect to Investor Charge-Offs for the related Monthly Period) and unreimbursed Reallocated Principal Collections (as of the previous Payment Date and as required in clause (a) above) and (y) any reductions to the Collateral Amount pursuant to Section 4.4(f), but not less than zero; and

 

(c)           the lesser of (i) the Class C Required Amount and (ii) 4.00% of the Initial Collateral Amount minus the sum of (x) the amount of unreimbursed Investor Charge-Offs after giving effect to Investor Charge-Offs for the related Monthly Period) and unreimbursed Reallocated Principal Collections (as of the previous Payment Date and as required in clauses (a) and (b) above) and (y) any reduction to the Collateral Amount pursuant to Section 4.4(f), but not less than zero.

 

“Note Purchase Agreement” means the Note Purchase Agreement, dated as of January 25, 2012, between the Transferor and GE Capital, as initial Class B Noteholder and as initial Class C Noteholder.

 

“Note Principal Balance” means, on any date of determination, an amount equal to the sum of the Class A Note Principal Balance, the Class B Note Principal Balance and the Class C Note Principal Balance.

 

“Noteholder Servicing Fee” means, for any Transfer Date, an amount equal to one-twelfth of the product of (a) the Series Servicing Fee Percentage and (b) the Collateral Amount as of the last day of the Monthly Period preceding such Transfer Date; provided, however, that with respect to the first Transfer Date, the Noteholder Servicing Fee shall be calculated based on the Collateral Amount as of the Closing Date and shall be pro rated for the number of days in the first Monthly Period.

 

“Payment Date” means March 15, 2012 and the 15th day of each calendar month thereafter, or if such 15th day is not a Business Day, the next succeeding Business Day.

 

  

9

  

 

“Percentage Allocation” is defined in Section 4.3(b)(ii)(y).

“Portfolio Yield” means, for any Monthly Period, the annualized percentage equivalent of a fraction, (a) the numerator of which is equal to the excess of (i) the Available Finance Charge Collections (excluding any Excess Finance Charge Collections), over (ii) the Investor Default Amount and the Investor Uncovered Dilution Amount for such Monthly Period and (b) the denominator of which is the Collateral Amount plus amounts on deposit in the Principal Accumulation Account, each as of the close of business on the last day of such Monthly Period.

 

“Principal Account” means the account designated as such, established and owned by the Issuer and maintained in accordance with Section 4.2.

 

“Principal Accumulation Account” means the account designated as such, established and owned by the Issuer and maintained in accordance with Section 4.2.

 

“Principal Accumulation Account Balance” means, for any date of determination, the principal amount, if any, on deposit in the Principal Accumulation Account on such date of determination.

 

“Principal Accumulation Investment Proceeds” means, with respect to each Transfer Date, the investment earnings on funds in the Principal Accumulation Account (net of investment expenses and losses) for the period from and including the immediately preceding Transfer Date to but excluding such Transfer Date.

 

“Principal Shortfall” is defined in Section 4.9.

 

“Quarterly Excess Spread Percentage” means (a) with respect to the May 2012 Payment Date, the percentage equivalent of a fraction the numerator of which is the sum of (i) the Excess Spread Percentage for the Monthly Period relating to the April 2012 Payment Date and (ii) the Excess Spread Percentage for the Monthly Period relating to the May 2012 Payment Date and the denominator of which is two, and (b) with respect to the June 2012 Payment Date and each Payment Date thereafter, the percentage equivalent of a fraction the numerator of which is the sum of the Excess Spread Percentages determined with respect to the Monthly Periods relating to such Payment Date and the immediately preceding two Payment Dates and the denominator of which is three.

 

“Rating Agency” means, as of any date and with respect to any Class of the Series 2012-1 Notes, the nationally recognized statistical rating organizations that have been requested by the Transferor to provide ratings of such class and that are rating the Series 2012-1 Notes on such date.

 

“Rating Agency Condition” means, with respect to Series 2012-1 and any action, 10 days’ prior written notice (or, if 10 days’ advance notice is impracticable, as much advance notice as is practicable) delivered electronically to each applicable Rating Agency as provided in Section 8.7.

 

“Reallocated Principal Collections” is defined in Section 4.7.

 

  

10

  

 

“Reassignment Amount” means, with respect to Series 2012-1, the Redemption Amount.

“Redemption Amount” means, for any Transfer Date, after giving effect to any deposits and payments otherwise to be made on the related Payment Date, the sum of (i) the Note Principal Balance on such Payment Date, (ii) Monthly Interest for such Payment Date and any Monthly Interest previously due but not distributed to the Series 2012-1 Noteholders and (iii) the amount of Additional Interest, if any, for the related Payment Date and any Additional Interest previously due but not distributed to the Series 2012-1 Noteholders on a prior Payment Date.

 

“Reference Banks” means four major banks in the London interbank market selected by the Servicer.

 

“Removal Date” means a “Removal Date” as such term is defined in the Transfer Agreement.

 

“Required Excess Collateral Amount” means, at any time, 4.00% of the Collateral Amount; provided that:

 

(a)           except as provided in clause (c), the Required Excess Collateral Amount shall never be less than 3.00% of the Initial Collateral Amount;

 

(b)           except as provided in clause (c), the Required Excess Collateral Amount shall not decrease during an Early Amortization Period; and

 

(c)           the Required Excess Collateral Amount shall never be greater than the excess of the Note Principal Balance over the balance on deposit in the Principal Accumulation Account.

 

“Required Reserve Account Amount” means, for any Transfer Date on or after the Reserve Account Funding Date, an amount equal to (a) 0.50% of the Note Principal Balance or (b) any other amount designated by the Issuer; provided, however, that if such designation is of a lesser amount, the Issuer shall (i) provide the Indenture Trustee with evidence that the Rating Agency Condition shall have been satisfied and (ii) deliver to the Indenture Trustee a certificate of an Authorized Officer to the effect that, based on the facts known to such officer at such time, in the reasonable belief of the Issuer, such designation will not cause an Early Amortization Event or an event that, after the giving of notice or the lapse of time, would cause an Early Amortization Event to occur with respect to Series 2012-1; provided, further, however, that at any time during which the Controlled Accumulation Period Length is equal to one month, the Required Reserve Account Amount shall be equal to $0.00.

 

“Required Spread Account Amount” means, for the March 2012 Payment Date and the April 2012 Payment Date, zero, and for any Payment Date thereafter, the product of (i) the Spread Account Percentage in effect on such date and (ii) during (x) the Revolving Period, the Collateral Amount, and (y) during the Controlled Accumulation Period or the Early Amortization Period, the Collateral Amount as of the last day of the Revolving Period; provided that, prior to the occurrence of an Event of Default and acceleration of the Series 2012-1 Notes, the Required Spread Account Amount will never exceed the Class C Note Principal Balance (after taking into account any payments to be made on such Payment Date).

 

  

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“Reserve Account” means the account designated as such, established and owned by the Issuer and maintained in accordance with Section 4.2.

 

“Reserve Account Funding Date” means the Payment Date selected by the Servicer on behalf of the Issuer which occurs not later than the earliest of the Payment Date with respect to the Monthly Period which commences three months prior to the commencement of the Controlled Accumulation Period (which commencement shall be subject to postponement pursuant to Section 4.13); provided, however, that if the Rating Agency Condition is satisfied, the Issuer may postpone the Reserve Account Funding Date.

 

“Reserve Account Surplus” means, as of any Transfer Date following the Reserve Account Funding Date, the amount, if any, by which the amount on deposit in the Reserve Account exceeds the Required Reserve Account Amount.

 

“Reserve Draw Amount” means, with respect to each Transfer Date relating to the Controlled Accumulation Period or the first Transfer Date relating to the Early Amortization Period, the amount, if any, by which the Principal Accumulation Investment Proceeds for such Payment Date are less than the Covered Amount determined as of such Transfer Date.

 

“Reset Date” means:

 

(a)           each Addition Date;

 

(b)           each Removal Date on which, if any Series of Notes has been paid in full, Principal Receivables for that Series are removed from the Trust;

 

(c)           each date on which there is an increase in the outstanding balance of any Variable Interest; and

 

(d)           each date on which a new Series or Class of Notes is issued.

 

“Revolving Period” means the period beginning on the Closing Date and ending at the close of business on the day immediately preceding the earlier of the day the Controlled Accumulation Period commences or the day the Early Amortization Period commences.

 

“Series Accounts” means, collectively, the Finance Charge Account, the Principal Account, the Principal Accumulation Account, the Distribution Account, the Reserve Account and the Spread Account.

 

“Series Allocation Percentage” means, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the numerator used in determining the Allocation Percentage for Finance Charge Collections for that Monthly Period and the denominator of which is the sum of the numerators used in determining the Allocation Percentage for Finance Charge Collections for all outstanding Series on such date of determination; provided that if one or more Reset Dates occur in a Monthly Period, the Series Allocation Percentage for the portion of the Monthly Period falling on and after each such Reset Date and prior to any subsequent Reset Date will be determined using a denominator which is equal to the sum of the numerators used in determining the Allocation Percentage for Finance Charge Collections for all outstanding Series as of the close of business on the subject Reset Date.

  

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“Series Maturity Date” means, with respect to Series 2012-1, the January 2018 Payment Date.

 

“Series Servicing Fee Percentage” means 2% per annum.

 

“Series 2012-1” means the Series of Notes the terms of which are specified in this Indenture Supplement.

 

“Series 2012-1 Early Amortization Event” is defined in Section 6.1.

 

“Series 2012-1 Excess Finance Charge Collections” means Excess Finance Charge Collections allocated from other Series in Group One to Series 2012-1 pursuant to Section 8.6 of the Indenture.

 

“Series 2012-1 Note” means a Class A Note, a Class B Note or a Class C Note.

 

“Series 2012-1 Noteholder” means a Class A Noteholder, a Class B Noteholder or a Class C Noteholder.

 

“Similar Law” means any applicable law that is substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code.

 

“Spread Account” means the account designated as such, established and owned by the Issuer and maintained in accordance with Section 4.2.

 

“Spread Account Deficiency” means the excess, if any, of the Required Spread Account Amount over the Available Spread Account Amount.

 

“Spread Account Percentage” means, (i) 0% if the Quarterly Excess Spread Percentage on such Payment Date is greater than or equal to 5.00%, (ii) 2.00% if the Quarterly Excess Spread Percentage on such Payment Date is less than 5.00% and greater than or equal to 4.50%, (iii) 2.50% if the Quarterly Excess Spread Percentage on such Payment Date is less than 4.50% and greater than or equal to 4.00%, (iv) 3.50% if the Quarterly Excess Spread Percentage on such Payment Date is less than 4.00% and greater than or equal to 3.50%, (v) 4.50% if the Quarterly Excess Spread Percentage on such Payment Date is less than 3.50% and greater than or equal to 3.00%, (vi) 5.50% if the Quarterly Excess Spread Percentage on such Payment Date is less than 3.00% and greater than or equal to 2.50%, (vii) 6.50% if the Quarterly Excess Spread Percentage on such Payment Date is less than 2.50% and greater than or equal to 1.50%, (viii) 7.50% if the Quarterly Excess Spread Percentage on such Payment Date is less than 1.50% and greater than or equal to 0.50% and (ix) 8.50% if the Quarterly Excess Spread Percentage on such Payment Date is less than 0.50%.

 

“Surplus Collateral Amount” means, with respect to any Payment Date, the excess, if any, of the Excess Collateral Amount over the Required Excess Collateral Amount, in each case calculated after giving effect to any deposits into the Principal Accumulation Account and payments of principal on such Payment Date, but before giving effect to any reduction in the Collateral Amount on such Payment Date pursuant to Section 4.4(f).

  

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“Target Amount” is defined in Section 4.3(b)(i).

 

“Trust” is defined in the preamble.

 

SECTION 1.2.  Incorporation of Terms.  The terms of the Indenture are incorporated in this Supplement as if set forth in full herein. As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and both together shall be read, taken and construed as one and the same agreement. If the terms of this Supplement and the terms of the Indenture conflict, the terms of this Supplement shall control with respect to the Series 2012-1.

 

ARTICLE II

CREATION OF THE SERIES 2012-1 NOTES

 

SECTION 2.1.  Designation.

 

(a)           There is hereby created and designated a Series of Notes to be issued pursuant to the Indenture and this Indenture Supplement to be known as “GE Capital Credit Card Master Note Trust, Series 2012-1” or the “Series 2012-1 Notes.”  The Series 2012-1 Notes shall be issued in three Classes, known as the “Class A Series 2012-1 1.03% Asset Backed Notes,” the “Class B Series 2012-1 1.62% Asset Backed Notes” and the “Class C Series 2012-1 2.42% Asset Backed Notes.”

 

(b)           Series 2012-1 shall be included in Group One and shall be a Principal Sharing Series.  Series 2012-1 shall be an Excess Allocation Series with respect to Group One only.  Series 2012-1 shall not be subordinated to any other Series.

 

(c)           The Class A Notes and the Class B Notes shall be issued in minimum denominations of $100,000 and in integral multiples of $1,000 and the Class C Notes shall be issued in minimum denominations of $100,000 and in integral multiples of $1.

 

SECTION 2.2.  Transfer Restrictions Applicable to the Class C Notes.

 

(a)           The Class C Notes have not been registered under the Securities Act or any state securities law.  None of the Issuer, the Note Registrar or the Indenture Trustee is obligated to register the Class C Notes under the Securities Act or any other securities or “blue sky” laws or to take any other action not otherwise required under this Indenture Supplement or the Trust Agreement to permit the transfer of any Class C Note without registration.

 

(b)           Until such time as any such Class of Notes has been registered under the Securities Act and any applicable state securities law, the Class C Notes may not be sold, transferred, assigned, participated, pledged or otherwise disposed of (any such act, a “Class C Note Transfer”) to any Person except in accordance with the provisions of this Section 2.2, and any attempted Class C Note Transfer in violation of this Section 2.2 will be null and void.

 

  

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(c)           Each Class C Note will bear a legend to the effect of the following unless determined otherwise by the Administrator (as certified to the Indenture Trustee in an Officer’s Certificate) consistent with applicable law:

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH IN THE NEXT SENTENCE.  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER OF THIS NOTE:

 

	
  

	
(1)

	
AGREES FOR THE BENEFIT OF THE ISSUER AND THE TRANSFEROR THAT THIS NOTE MAY BE SOLD, TRANSFERRED, ASSIGNED, PARTICIPATED, PLEDGED OR OTHERWISE DISPOSED OF ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS, AND ONLY (I) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE l44A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (II) TO THE DEPOSITOR OR ITS AFFILIATES, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES; AND

 

	
  

	
(2)

	
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

 

(d)           By acceptance of any Class C Note, the Class C Noteholder specifically agrees with and represents to the Transferor, the Issuer and the Note Registrar, that no Class C Note Transfer will be made unless (i) the registration requirements of the Securities Act and any applicable state securities laws have been complied with, (ii) such Class C Note Transfer is to the Transferor or its Affiliates, or (iii) such Class C Note Transfer is exempt from the registration requirements under the Securities Act because such Class C Note Transfer is in compliance with Rule 144A under the Securities Act, to a transferee who the transferor reasonably believes is a QIB that is purchasing for its own account or for the account of a QIB and to whom notice is given that such Class C Note Transfer, as applicable, is being made in reliance upon Rule 144A under the Securities Act.

 

(e)           The Issuer will make available to the prospective transferor and transferee of a Class C Note information requested to satisfy the requirements of paragraph (d)(4) of Rule 144A.

 

  

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(f)           Each Class A Note, Class B Note and Class C Note will bear a legend to the effect of the following unless determined otherwise by the Administrator (as certified to the Indenture Trustee in an Officer’s Certificate) consistent with applicable law:

 

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST THEREIN, SHALL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (I) SUCH HOLDER IS NOT (AND FOR SO LONG AS IT HOLDS SUCH NOTE WILL NOT BE), IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS SUCH NOTE WILL NOT BE ACTING ON BEHALF OF), AND IS NOT INVESTING THE ASSETS OF (A) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO TITLE I OF ERISA, (B) A "PLAN" (AS DEFINED IN SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO BE PLAN ASSETS OF A PLAN DESCRIBED IN (A) OR (B) ABOVE (EACH, A “BENEFIT PLAN”) OR (D) A GOVERNMENTAL PLAN, CHURCH PLAN OR NON-U.S. PLAN THAT IS SUBJECT TO ANY APPLICABLE LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (“SIMILAR LAW”) OR (II) ITS ACQUISITION, CONTINUED HOLDING AND DISPOSITION OF THIS NOTE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF ANY SIMILAR LAW.  BENEFIT PLANS MAY NOT ACQUIRE THIS NOTE AT ANY TIME THAT THIS NOTE DOES NOT HAVE A CURRENT INVESTMENT GRADE RATING FROM A NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION.

 

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

SECTION 3.1.  Representations, Warranties and Covenants with respect to Receivables.  The parties hereto agree that the representations, warranties and covenants set forth in Schedule I shall be a part of this Indenture Supplement for all purposes.

 

SECTION 3.2.  Representations, Warranties and Covenants with respect to ERISA.  By acquiring a Series 2012-1 Note (or interest therein), each purchaser and subsequent transferee shall be deemed to represent and warrant that either (i) it is not (and for so long as it holds such Series 2012-1 Note will not be), is not acting on behalf of (and for so long as it holds such Series 2012-1 Note will not be acting on behalf of), and is not investing the assets of a Benefit Plan or a governmental plan, church plan or non-U.S. plan that is subject to any Similar Law or (ii) its acquisition, continued holding and disposition of such Series 2012-1 Note will not result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code or a violation of any Similar Law.  Benefit Plans may not acquire the Series 2012-1 Notes at any time that the Series 2012-1 Notes do not have a current investment grade rating from a nationally recognized statistical rating organization.

  

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ARTICLE IV

RIGHTS OF SERIES 2012-1 NOTEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS

 

SECTION 4.1.  Determination of Interest and Principal.

 

(a)           The amount of monthly interest (“Class A Monthly Interest”) due and payable with respect to the Class A Notes on any Payment Date shall be an amount equal to the product of (i) a fraction, the numerator of which is 30 and the denominator of which is 360, (ii) the Class A Note Interest Rate in effect with respect to the related Interest Period and (iii) the Class A Note Principal Balance as of the close of business on the last day of the preceding Monthly Period (or, with respect to the initial Payment Date, the Class A Note Initial Principal Balance).

 

With respect to each Payment Date, the Issuer shall determine the excess, if any (the “Class A Deficiency Amount”), of (x) the aggregate amount of Class A Monthly Interest payable pursuant to this Section 4.1(a) as of the prior Payment Date over (y) the amount of Class A Monthly Interest actually paid on such Payment Date.  If the Class A Deficiency Amount for any Payment Date is greater than zero, on each subsequent Payment Date until such Class A Deficiency Amount is fully paid, an additional amount (“Class A Additional Interest”) equal to the product of (i) a fraction, the numerator of which is 30 and the denominator of which is 360, (ii) the Class A Note Interest Rate in effect with respect to the related Interest Period plus 2% per annum and (iii) such Class A Deficiency Amount (or the portion thereof which has not been paid to the Class A Noteholders) shall be payable as provided herein with respect to the Class A Notes.  Notwithstanding anything to the contrary herein, Class A Additional Interest shall be payable or distributed to the Class A Noteholders only to the extent permitted by applicable law.

 

(b)           The amount of monthly interest (“Class B Monthly Interest”) due and payable with respect to the Class B Notes on any Payment Date shall be an amount equal to the product of (i) a fraction, the numerator of which is 30 and the denominator of which is 360, (ii) the Class B Note Interest Rate in effect with respect to the related Interest Period and (iii) the Class B Note Principal Balance as of the close of business on the last day of the preceding Monthly Period (or, with respect to the initial Payment Date, the Class B Note Initial Principal Balance).

 

With respect to each Payment Date, the Issuer shall determine the excess, if any (the “Class B Deficiency Amount”), of (x) the aggregate amount of Class B Monthly Interest payable pursuant to this Section 4.1(b) as of the prior Payment Date over (y) the amount of Class B Monthly Interest actually paid on such Payment Date.  If the Class B Deficiency Amount for any Payment Date is greater than zero, on each subsequent Payment Date until such Class B Deficiency Amount is fully paid, an additional amount (“Class B Additional Interest”) equal to the product of (i) a fraction, the numerator of which is the 30 and the denominator of which is 360, (ii) the Class B Note Interest Rate in effect with respect to the related Interest Period plus 2% per annum and (iii) such Class B Deficiency Amount (or the portion thereof which has not been paid to the Class B Noteholders) shall be payable as provided herein with respect to the Class B Notes.  Notwithstanding anything to the contrary herein, Class B Additional Interest shall be payable or distributed to the Class B Noteholders only to the extent permitted by applicable law.

  

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(c)           The amount of monthly interest (“Class C Monthly Interest”) due and payable with respect to the Class C Notes on any Payment Date shall be an amount equal to the product of (i) a fraction, the numerator of which is 30 and the denominator of which is 360, (ii) the Class C Note Interest Rate in effect with respect to the related Interest Period and (iii) the Class C Note Principal Balance as of the close of business on the last day of the preceding Monthly Period (or, with respect to the initial Payment Date, the Class C Note Initial Principal Balance).

 

With respect to each Payment Date, the Issuer shall determine the excess, if any (the “Class C Deficiency Amount”), of (x) the aggregate amount of Class C Monthly Interest payable pursuant to this Section 4.1(c) as of the prior Payment Date over (y) the amount of Class C Monthly Interest actually paid on such Payment Date.  If the Class C Deficiency Amount for any Payment Date is greater than zero, on each subsequent Payment Date until such Class C Deficiency Amount is fully paid, an additional amount (“Class C Additional Interest”) equal to the product of (i) a fraction, the numerator of which is 30 and the denominator of which is 360, (ii) the Class C Note Interest Rate in effect with respect to the related Interest Period plus 2% per annum and (iii) such Class C Deficiency Amount (or the portion thereof which has not been paid to the Class C Noteholders) shall be payable as provided herein with respect to the Class C Notes.  Notwithstanding anything to the contrary herein, Class C Additional Interest shall be payable or distributed to the Class C Noteholders only to the extent permitted by applicable law.

 

(d)           The amount of monthly principal to be transferred from the Principal Account with respect to the Notes on each Payment Date (the “Monthly Principal”), beginning with the Payment Date in the Monthly Period following the Monthly Period in which the Controlled Accumulation Period or, if earlier, the Early Amortization Period, begins, shall be equal to the least of (i) the Available Principal Collections on deposit in the Principal Account with respect to the related Monthly Period, (ii) for each Payment Date with respect to the Controlled Accumulation Period, the Controlled Deposit Amount for such Payment Date, (iii) the Collateral Amount (after taking into account any adjustments to be made on such Payment Date pursuant to Sections 4.6 and 4.7) prior to any deposit into the Principal Accumulation Account on such Payment Date, and (iv) the Note Principal Balance, minus any amount already on deposit in the Principal Accumulation Account on such Payment Date.

 

SECTION 4.2.  Establishment of Accounts.

 

(a)           As of the Closing Date, the Issuer covenants to have established and shall thereafter maintain the Finance Charge Account, the Principal Account, the Principal Accumulation Account, the Distribution Account, the Reserve Account and the Spread Account, each of which shall be an Eligible Deposit Account.

 

(b)           If the depositary institution wishes to resign as depositary of any of the Series Accounts for any reason or fails to carry out the instructions of the Issuer for any reason, then the Issuer shall promptly notify the Indenture Trustee on behalf of the Noteholders.

  

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(c)           On or before the Closing Date, the Issuer shall enter into a depositary agreement to govern the Series Accounts pursuant to which such accounts are continuously identified in the depositary institution’s books and records as subject to a security interest in favor of the Indenture Trustee on behalf of the Noteholders and, except as may be expressly provided herein to the contrary, in order to perfect the security interest of the Indenture Trustee on behalf of the Noteholders under the UCC, the Indenture Trustee on behalf of the Noteholders shall have the power to direct disposition of the funds in the Series Accounts without further consent by the Issuer; provided however, that prior to the delivery by the Indenture Trustee on behalf of the Noteholders of notice otherwise, the Issuer shall have the right to direct the disposition of funds in the Series Accounts; provided further that the Indenture Trustee on behalf of the Noteholders agrees that it will not deliver such notice or exercise its power to direct disposition of the funds in the Series Accounts unless an Event of Default has occurred and is continuing.

 

(d)           The Issuer shall not close any of the Series Accounts unless it shall have (i) received the prior consent of the Indenture Trustee on behalf of the Noteholders, (ii) established a new Eligible Deposit Account with the depositary institution or with a new depositary institution satisfactory to the Indenture Trustee on behalf of the Noteholders, (iii) entered into a depositary agreement to govern such new account(s) with such new depositary institution which agreement is satisfactory in all respects to the Indenture Trustee on behalf of the Noteholders (whereupon such new account(s) shall become the applicable Series Account(s) for all purposes of this Indenture Supplement), and (iv) taken all such action as the Indenture Trustee on behalf of the Noteholders shall reasonably require to grant and perfect a first priority security interest in such account(s) under this Indenture Supplement.

 

SECTION 4.3.  Calculations and Series Allocations.

 

(a)           Allocations.  Finance Charge Collections, Principal Collections and Charged-Off Receivables allocated to Series 2012-1 pursuant to Article VIII of the Indenture shall be allocated and distributed as set forth in this Article.  Notwithstanding anything to the contrary in Section 4.3(b), during any period when the Issuer is permitted by Section 8.4 of the Indenture to make a single monthly deposit to the Collection Account, amounts allocated to the Noteholders pursuant to Section 4.3(b) with respect to any Monthly Period need not be deposited into the Collection Account or any Series Account prior to the related Payment Date, and, when so deposited, (x) may be deposited net of any amounts required to be distributed to Transferor and, if GE Capital or an Affiliate thereof is Servicer, any amounts owed to the Servicer, and (y) shall be deposited into the Finance Charge Account (in the case of Collections of Finance Charge Receivables) and the Principal Account (in the case of Collections of Principal Receivables (not including any Shared Principal Collections allocated to Series 2012-1 pursuant to Section 8.5 of the Indenture)).

 

(b)           Allocations to the Series 2012-1 Noteholders.  The Issuer shall on each Date of Processing, allocate to the Series 2012-1 Noteholders the following amounts as set forth below:

  

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(i)           Allocations of Finance Charge Collections.  The Issuer shall allocate to the Series 2012-1 Noteholders an amount equal to the product of (A) the Allocation Percentage and (B) the aggregate Finance Charge Collections processed on such Date of Processing and, subject to Section 4.15, shall deposit such amount into the Finance Charge Account; provided that, with respect to each Monthly Period falling in the Revolving Period (and with respect to that portion of each Monthly Period in the Controlled Accumulation Period falling on or after the day on which Collections of Principal Receivables equal to the related Controlled Deposit Amount have been allocated pursuant to Section 4.3(b)(ii) and deposited pursuant to Section 4.3(a)), Collections of Finance Charge Receivables shall be transferred into the Finance Charge Account only until such time as the aggregate amount so deposited equals the sum (the “Target Amount”) of (A) the fees payable to the Indenture Trustee, the Trustee and the Administrator on the related Payment Date, (B) the Monthly Interest on the related Payment Date, (C) if GE Capital or an Affiliate thereof is not the Servicer, the Noteholder Servicing Fee (and if GE Capital or an Affiliate thereof is the Servicer, then the Issuer covenants to pay directly to the Servicer as payment of the Noteholder Servicing Fee amounts that otherwise would have been transferred into the Finance Charge Account pursuant to this clause (C)), and (D) any amount required to be deposited in the Reserve Account and the Spread Account on the related Payment Date; provided further, that, notwithstanding the preceding proviso, if on any Business Day the Issuer determines that the Target Amount for a Monthly Period exceeds the Target Amount for that Monthly Period as previously calculated by Issuer, then (x) Issuer shall (on the same Business Day) inform Transferor of such determination, and (y) within two Business Days thereafter cause Transferor to deposit into the Finance Charge Account funds in an amount equal to the amount of Collections of Finance Charge Receivables allocated to the Noteholders for that Monthly Period but not deposited into the Finance Charge Account due to the operation of the preceding proviso (but not in excess of the amount required so that the aggregate amount deposited for the subject Monthly Period equals the Target Amount); and provided, further, that if on any Transfer Date the Free Equity Amount is less than the Minimum Free Equity Amount after giving effect to all transfers and deposits on that Transfer Date, the Issuer shall cause Transferor, on that Transfer Date, to deposit into the Principal Account funds in an amount equal to the amounts of Available Finance Charge Collections that are required to be treated as Available Principal Collections pursuant to Section 4.4(a)(vi) and (vii) but are not available from funds in the Finance Charge Account as a result of the operation of the second preceding proviso.

 

With respect to any Monthly Period when deposits of Collections of Finance Charge Receivables into the Finance Charge Account are limited to deposits up to the Target Amount in accordance with clause (i) above, notwithstanding such limitation: (1) “Reallocated Principal Collections” for the related Transfer Date shall be calculated as if the full amount of Finance Charge Collections allocated to the Series 2012-1 Noteholders during that Monthly Period had been deposited in the Finance Charge Account and applied on the related Payment Date in accordance with Section 4.4(a); and (2) Collections of Finance Charge Receivables released to Transferor pursuant to clause (i) above shall be deemed, for purposes of all calculations under this Indenture Supplement, to have been applied to the items specified in Section 4.4(a) to which such amounts would have been applied (and in the priority in which they would have been applied) had such amounts been available in the Finance Charge Account on the related Payment Date.  To avoid doubt, the calculations referred to in the preceding clause (2) include the calculations required by clause (b)(iv) of the definition of Collateral Amount.

 

  

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(ii)           Allocations of Principal Collections.  The Issuer shall allocate to the Series 2012-1 Noteholders the following amounts as set forth below:

 

(x)           Allocations During the Revolving Period.

 

(1)           During the Revolving Period an amount equal to the product of the Allocation Percentage and the aggregate amount of Principal Collections processed on such Date of Processing, shall be allocated to the Series 2012-1 Noteholders and first, if any other Principal Sharing Series is outstanding and in its accumulation period or amortization period, retained in the Principal Account for application, to the extent necessary, as Shared Principal Collections to other Principal Sharing Series on the related Payment Date, second deposited in the Excess Funding Account to the extent necessary so that the Free Equity Amount is not less than the Minimum Free Equity Amount and third paid to the holders of the Transferor Interest.

 

(2)           With respect to each Monthly Period falling in the Revolving Period, to the extent that Collections of Principal Receivables allocated to the Series 2012-1 Noteholders pursuant to this Section 4.3(b)(ii) are paid to Transferor, the Issuer shall cause Transferor to make an amount equal to the Reallocated Principal Collections for the related Transfer Date available on that Transfer Date for application in accordance with Section  4.7.

 

(y)           Allocations During the Controlled Accumulation Period.  During the Controlled Accumulation Period an amount equal to the product of  the Allocation Percentage and the aggregate amount of Principal Collections processed on such Date of Processing (the product for any such date is hereinafter referred to as a “Percentage Allocation”) shall be allocated to the Series 2012-1 Noteholders and transferred to the Principal Account until applied as provided herein; provided, however, that if the sum of such Percentage Allocation and all preceding Percentage Allocations with respect to the same Monthly Period exceeds the Controlled Deposit Amount during the Controlled Accumulation Period for the related Payment Date, then such excess shall not be treated as a Percentage Allocation and shall be first, if any other Principal Sharing Series is outstanding and in its accumulation period or amortization period, retained in the Principal Account for application, to the extent necessary, as Shared Principal Collections to other Principal Sharing Series on the related Payment Date, second deposited in the Excess Funding Account to the extent necessary so that the Free Equity Amount is not less than the Minimum Free Equity Amount and third paid to the holders of the Transferor Interest.

  

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(z)           Allocations During the Early Amortization Period.  During the Early Amortization Period, an amount equal to the product of  the Allocation Percentage and the aggregate amount of Principal Collections processed on such Date of Processing shall be allocated to the 2012-1 Noteholders and transferred to the Principal Account until applied as provided herein; provided, however, that after the date on which an amount of such Principal Collections equal to the Note Principal Balance has been deposited into the Principal Account such amount shall be first, if any other Principal Sharing Series is outstanding and in its accumulation period or amortization period, retained in the Principal Account for application, to the extent necessary, as Shared Principal Collections to other Principal Sharing Series on the related Payment Date, second deposited in the Excess Funding Account to the extent necessary so that the Free Equity Amount is not less than the Minimum Free Equity Amount and third paid to the holders of the Transferor Interest.

 

SECTION 4.4.  Application of Available Finance Charge Collections and Available Principal Collections.  On or prior to each Transfer Date or related Payment Date, as applicable, the Issuer shall withdraw, to the extent of available funds, the amount required to be withdrawn from the Finance Charge Account, the Principal Accumulation Account, the Principal Account and the Distribution Account as follows:

 

(a)           On or prior to each Payment Date, an amount equal to the Available Finance Charge Collections with respect to the related Monthly Period will be paid or deposited in the following priority:

 

(i)           to pay, on a pari passu basis, the following amounts, to the extent allocated to Series 2012-1 pursuant to Section 8.4(d) of the Indenture: (A) the payment to the Indenture Trustee of the accrued and unpaid fees and other amounts owed to the Indenture Trustee up to a maximum amount of $25,000 for each calendar year, (B) the payment to the Trustee of the accrued and unpaid fees and other amounts owed to the Trustee up to a maximum amount of $25,000 for each calendar year and (C) the payment to the Administrator of the accrued and unpaid fees and other amounts owed to the Administrator up to a maximum amount of $25,000 for each calendar year;

 

(ii)         an amount equal to the Noteholder Servicing Fee for such Transfer Date, plus the amount of any Noteholder Servicing Fee previously due but not paid by the Issuer on a prior Transfer Date, shall be paid to the Servicer;

 

(iii)        an amount equal to Class A Monthly Interest for such Payment Date, plus any Class A Deficiency Amount, plus the amount of any Class A Additional Interest for such Payment Date, plus the amount of any Class A Additional Interest previously due but not paid to Class A Noteholders on a prior Payment Date, shall be deposited into the Distribution Account;

 

(iv)        an amount equal to Class B Monthly Interest for such Payment Date, plus any Class B Deficiency Amount, plus the amount of any Class B Additional Interest for such Payment Date, plus the amount of any Class B Additional Interest previously due but not paid to Class B Noteholders on a prior Payment Date, shall be deposited into the Distribution Account;

  

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(v)         an amount equal to Class C Monthly Interest for such Payment Date, plus any Class C Deficiency Amount, plus the amount of any Class C Additional Interest for such Payment Date, plus the amount of any Class C Additional Interest previously due but not paid to the Class C Noteholders on a prior Payment Date shall be deposited into the Distribution Account;

 

(vi)         (A) first, an amount equal to the Investor Default Amount for such Payment Date shall be treated as a portion of Available Principal Collections for such Payment Date and (B) second, an amount equal to any Investor Uncovered Dilution Amount for such Payment Date shall be treated as a portion of Available Principal Collections for such Payment Date, and any amounts treated as Available Principal Collections pursuant to subclause (A) or (B) of this clause (vi) during the Controlled Accumulation Period or the Early Amortization Period, shall be deposited into the Principal Account on the related Payment Date;

 

(vii)       an amount equal to the sum of the aggregate amount of Investor Charge-Offs and the amount of Reallocated Principal Collections which have not been previously reimbursed pursuant to this Section 4.4(a)(vii) shall be treated as a portion of Available Principal Collections for such Payment Date and, during the Controlled Accumulation Period or Early Amortization Period, shall be deposited into the Principal Account on the related Payment Date;

 

(viii)      on each Transfer Date from and after the Reserve Account Funding Date, but prior to the date on which the Reserve Account terminates as described in Section 4.10(e), an amount up to the excess, if any, of the Required Reserve Account Amount over the Available Reserve Account Amount shall be deposited into the Reserve Account;

 

(ix)         an amount equal to the amounts required to be deposited in the Spread Account pursuant to Section 4.11(e) shall be deposited into the Spread Account;

 

(x)          without duplication of the amount specified in clause (vi)(B) of this Section 4.4(a), an amount equal to the Series Allocation Percentage (calculated by excluding all outstanding Series of Notes excluded from this calculation pursuant to the terms of the Indenture Supplement for such Series) of the excess, if any, of the Minimum Free Equity Amount over the Free Equity Amount, shall be treated as a portion of Available Principal Collections for such Payment Date and, during the Controlled Accumulation Period or the Early Amortization Period, deposited into the Principal Account on the related Payment Date;

 

(xi)         [Reserved];

 

(xii)        unless an Early Amortization Event shall have occurred and be continuing, on a pari passu basis any amounts owed to such Persons listed in clause (i) above that have been allocated to Series 2012-1 pursuant to Section 8.4(d) of the Indenture and that have not been paid pursuant to clause (i) above shall be paid to such Persons; and

  

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(xiii)       the balance, if any, will constitute a portion of Excess Finance Charge Collections for such Payment Date and will be applied in accordance with Section 8.6 of the Indenture; provided that during an Early Amortization Period, if any such Excess Finance Charge Collections would be paid to the Transferor in accordance with Section 8.6 of the Indenture, the portion of such Excess Finance Charge Collections that would otherwise be payable to the Transferor, first shall be used to pay Monthly Principal pursuant to Section 4.4(c) to the extent not paid in full from Available Principal Collections (calculated without regard to amounts available to be treated as Available Principal Collections pursuant to this clause (xiii)), second, shall be used to pay on a pari passu basis any amounts owed to such Persons listed in clause (i) above that have been allocated to Series 2012-1 pursuant to Section 8.4(d) of the Indenture and that have not been paid pursuant to clauses (i) and (xii) above, and, third, any amounts remaining after payment in full of the Monthly Principal and amounts owed to such Persons listed in clause (i) above shall be paid to the Issuer.

 

(b)           On or prior to each Transfer Date with respect to the Revolving Period, an amount equal to the Available Principal Collections for the related Monthly Period shall be treated as Shared Principal Collections and applied in accordance with Section 8.5 of the Indenture.

 

(c)           On or prior to each Transfer Date or Payment Date, as applicable, with respect to the Controlled Accumulation Period or the Early Amortization Period, an amount equal to the Available Principal Collections for the related Monthly Period shall be paid or deposited in the following order of priority:

 

(i)           during the Controlled Accumulation Period, an amount equal to the Monthly Principal for each Transfer Date shall be deposited into the Principal Accumulation Account on the related Payment Date;

 

(ii)          during the Early Amortization Period, an amount equal to the Monthly Principal for each Transfer Date shall be deposited into the Distribution Account on the related Payment Date and on such Payment Date shall be paid, first to the Class A Noteholders on the related Payment Date until the Class A Note Principal Balance has been reduced to zero; second to the Class B Noteholders until the Class B Note Principal Balance has been reduced to zero; and third to the Class C Noteholders until the Class C Note Principal Balance has been reduced to zero; and

 

(iii)         the balance of such Available Principal Collections remaining after application in accordance with clauses (i) and (ii) above shall be treated as Shared Principal Collections and applied in accordance with Section 8.5 of the Indenture.

 

(d)           On each Payment Date, the Issuer shall pay in accordance with Section 4.5 to the Class A Noteholders from the Distribution Account, the amount deposited into the Distribution Account pursuant to Section 4.4(a)(iii) on such Payment Date, to the Class B Noteholders from the Distribution Account, the amount deposited into the Distribution Account pursuant to Section 4.4(a)(iv) on such Payment Date and to the Class C Noteholders from the Distribution Account, the amount deposited into the Distribution Account pursuant to Section 4.4(a)(v) on such Payment Date.

  

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(e)           On the earlier to occur of (i) the first Payment Date with respect to the Early Amortization Period and (ii) the Expected Principal Payment Date, the Issuer shall withdraw from the Principal Accumulation Account and deposit into the Distribution Account the amount deposited into the Principal Accumulation Account pursuant to Section 4.4(c)(i) and on such Payment Date shall pay such amount first to the Class A Noteholders, until the Class A Note Principal Balance is paid in full; second to the Class B Noteholders until the Class B Principal Balance is paid in full; and third to the Class C Noteholders until the Class C Note Principal Balance is paid in full.

 

(f)           As of any Payment Date during the Controlled Accumulation Period or Early Amortization Period on which Available Principal Collections are treated as Shared Principal Collections, the Collateral Amount shall be reduced by an amount equal to the lesser of (x) the amount of Available Principal Collections applied as Shared Principal Collections and (y) the Surplus Collateral Amount.

 

SECTION 4.5.  Distributions.

 

(a)           On each Payment Date, the Issuer shall pay to each Class A Noteholder of record on the related Record Date such Class A Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Payment Date and as are payable to the Class A Noteholders pursuant to this Indenture Supplement.

 

(b)           On each Payment Date, the Issuer shall pay to each Class B Noteholder of record on the related Record Date such Class B Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Payment Date and as are payable to the Class B Noteholders pursuant to this Indenture Supplement.

 

(c)           On each Payment Date, the Issuer shall pay to each Class C Noteholder of record on the related Record Date such Class C Noteholder’s pro rata share of the amounts on deposit in the Distribution Account (including amounts withdrawn from the Spread Account (at the times and in the amounts specified in Section 4.11)) that are allocated and available on such Payment Date and as are payable to the Class C Noteholders pursuant to this Indenture Supplement.

 

(d)           The payments to be made pursuant to this Section 4.5 are subject to the provisions of Section 7.1 of this Indenture Supplement.

 

(e)           All payments to Noteholders hereunder shall be made by (i) check mailed to each Series 2012-1 Noteholder (at such Noteholder’s address as it appears in the Note Register), except that for any Series 2012-1 Notes registered in the name of the nominee of a Clearing Agency, such payment shall be made by wire transfer of immediately available funds and (ii) except as provided in Section 2.7(b) of the Indenture, without presentation or surrender of any Series 2012-1 Note or the making of any notation thereon.

 

  

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SECTION 4.6.  Investor Charge-Offs.  On each Determination Date, the Issuer shall calculate the Investor Default Amount and any Investor Uncovered Dilution Amount for the preceding Monthly Period.  If, on any Transfer Date, the sum of the Investor Default Amount and any Investor Uncovered Dilution Amount for the preceding Monthly Period exceeds the amount of Available Finance Charge Collections allocated with respect thereto pursuant to Section 4.4(a)(vi) with respect to such Transfer Date, the Collateral Amount will be reduced (but not below zero) by the amount of such excess (such reduction, an “Investor Charge-Off”).

 

SECTION 4.7.  Reallocated Principal Collections.  On each Transfer Date, the Issuer shall apply Investor Principal Collections with respect to that Transfer Date, to fund any deficiency pursuant to and in the priority set forth in Sections 4.4(a)(i), (ii), (iii), (iv) and (v) (any such Investor Principal Collections so allocated, “Reallocated Principal Collections”); provided, that for any Monthly Period, Reallocated Principal Collections may not exceed the Monthly Principal Reallocation Amount for such Monthly Period.  On each Transfer Date, the Collateral Amount shall be reduced by the amount of Reallocated Principal Collections for such Transfer Date.

 

SECTION 4.8.  Excess Finance Charge Collections.  Series 2012-1 shall be an Excess Allocation Series with respect to Group One only.  Subject to Section 8.6 of the Indenture, Excess Finance Charge Collections with respect to the Excess Allocation Series in Group One with respect to any Monthly Period will be allocated to Series 2012-1 in an amount equal to the product of (x) the aggregate amount of Excess Finance Charge Collections with respect to all the Excess Allocation Series in Group One for such Monthly Period and (y) a fraction, the numerator of which is the Finance Charge Shortfall for Series 2012-1 for such Monthly Period and the denominator of which is the aggregate amount of Finance Charge Shortfalls for all the Excess Allocation Series in Group One, in each case with respect to payments to be made on or prior to the Payment Date following such Monthly Period.  The “Finance Charge Shortfall” for Series 2012-1 for any date on which Excess Finance Charge Collections are allocated pursuant to Section 8.6 of the Indenture will be equal to the excess, if any, of (a) the full amount required to be paid, without duplication, pursuant to Sections 4.4(a)(i) through (xii) with respect to the next following Payment Date over (b) the Available Finance Charge Collections with respect to the related Monthly Period (excluding any portion thereof attributable to Excess Finance Charge Collections).

 

SECTION 4.9.  Shared Principal Collections.  Subject to Section 8.5 of the Indenture, Shared Principal Collections allocable to Series 2012-1 with respect to any Monthly Period will be equal to the product of (x) the aggregate amount of Shared Principal Collections with respect to all Principal Sharing Series for such Monthly Period and (y) a fraction, the numerator of which is the Principal Shortfall for Series 2012-1 for such Monthly Period and the denominator of which is the aggregate amount of Principal Shortfalls for all the Series which are Principal Sharing Series, in each case with respect to payments to be made on or prior to the Payment Date following such Monthly Period.  The “Principal Shortfall” for Series 2012-1 for any date on which Shared Principal Collections are allocated pursuant to Section 8.5 of the Indenture will be equal to (a) for any allocation date with respect to the Revolving Period or any allocation date during the Early Amortization Period prior to the earlier of (i) the end of the Monthly Period immediately preceding the Expected Principal Payment Date and (ii) the date on which all outstanding Series are in early amortization periods, zero, (b) for any allocation date with respect to the Controlled Accumulation Period, the excess, if any, of the Controlled Deposit Amount with respect to the next following Payment Date over the amount of Available Principal Collections for the related Monthly Period (excluding any portion thereof attributable to Shared Principal Collections or amounts available to be treated as Available Principal Collections pursuant to clause (xiii) of Section 4.4(a)) and (c) for any allocation date on or after the earlier of (i) the end of the Monthly Period immediately preceding the Expected Principal Payment Date and (ii) the date on which all outstanding Series are in early amortization periods, the Note Principal Balance.

  

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SECTION 4.10.  Reserve Account.

 

(a)           On each Transfer Date, all interest and earnings (net of losses and investment expenses) accrued since the preceding Transfer Date on funds on deposit in the Reserve Account shall be retained in the Reserve Account (to the extent that the Available Reserve Account Amount is less than the Required Reserve Account Amount) and any remaining interest and earnings (net of losses and investment expenses) shall be deposited into the Finance Charge Account and included in Available Finance Charge Collections for the related Monthly Period.  For purposes of determining the availability of funds or the balance in the Reserve Account for any reason under this Indenture Supplement, except as otherwise provided in the preceding sentence, investment earnings on such funds shall be deemed not to be available or on deposit.

 

(b)           On or before each Transfer Date with respect to the Controlled Accumulation Period and on or before the first Transfer Date with respect to the Early Amortization Period, the Issuer shall calculate the Reserve Draw Amount; provided, however, that such amount will be reduced to the extent that funds otherwise would be available for deposit in the Reserve Account under Section 4.4(a)(viii)  on the following Payment Date.

 

(c)           If for any Transfer Date the Reserve Draw Amount is greater than zero, the Reserve Draw Amount, up to the Available Reserve Account Amount, shall be withdrawn from the Reserve Account on such Transfer Date by the Issuer and deposited into the Finance Charge Account for application as Available Finance Charge Collections on the following Payment Date.

 

(d)           If the Reserve Account Surplus on any Transfer Date, after giving effect to all deposits to and withdrawals from the Reserve Account with respect to such Transfer Date, is greater than zero, the Indenture Trustee, acting in accordance with the written instructions of the Issuer, shall withdraw from the Reserve Account an amount equal to such Reserve Account Surplus and distribute any such amounts to the holders of the Transferor Interest.

 

(e)           Upon the earliest to occur of (i) the termination of the Trust pursuant to Article VIII of the Trust Agreement, (ii) the first Transfer Date relating to the Early Amortization Period and (iii) the Expected Principal Payment Date, the Issuer, after the prior payment of all amounts owing to the Series 2012-1 Noteholders that are payable from the Reserve Account as provided herein, shall withdraw from the Reserve Account all amounts, if any, on deposit in the Reserve Account and distribute any such amounts to the holders of the Transferor Interest.  The Reserve Account shall thereafter be deemed to have terminated for purposes of this Indenture Supplement.

 

  

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SECTION 4.11.  Spread Account.

 

(a)           On or before each Transfer Date, if the aggregate amount of Available Finance Charge Collections available for application pursuant to Section 4.4(a)(v) is less than the aggregate amount required to be deposited pursuant to Section 4.4(a)(v), the Issuer shall withdraw from the Spread Account the amount of such deficiency up to the Available Spread Account Amount and if the Available Spread Account Amount is less than such deficiency, Investment Earnings credited to the Spread Account and shall apply such amount in accordance with Section 4.4(a)(v).

 

(b)           Unless an Early Amortization Event occurs, the Issuer will withdraw from the Spread Account and deposit in the Collection Account for payment to the Class C Noteholders on the Expected Principal Payment Date for the Class C Notes an amount equal to the lesser of:  (i) the amount on deposit in the Spread Account after application of any amounts set forth in clause (a) above and (ii) the Class C Note Principal Balance.

 

(c)           Upon an Early Amortization Event, the amount, if any, remaining on deposit in the Spread Account, after making the payments described in clause (a) above, shall be applied to pay principal on the Class C Notes on the earlier of the Series Maturity Date and the first Payment Date on which the Class A Note Principal Balance and the Class B Note Principal Balance have been paid in full.

 

(d)           On any day following the occurrence of an Event of Default with respect to Series 2012-1 that has resulted in the acceleration of the Series 2012-1 Notes, the Issuer shall withdraw from the Spread Account the Available Spread Account Amount and deposit such amount in the Distribution Account for payment to the Series 2012-1 Notes in the following order of priority until all amounts owed to such Noteholders have been paid in full: (i) the Class C Noteholders, (ii) the Class A Noteholders and (iii) the Class B Noteholders.

 

(e)           If on any Payment Date, after giving effect to all withdrawals from the Spread Account, the Available Spread Account Amount is less than the Required Spread Account Amount then in effect, Available Finance Charge Collections shall be deposited into the Spread Account pursuant to Section 4.4(a)(ix) up to the amount of the Spread Account Deficiency.

 

(f)           If, after giving effect to all deposits to and withdrawals from the Spread Account with respect to any Payment Date, the amount on deposit in the Spread Account exceeds the Required Spread Account Amount, the Issuer shall withdraw an amount equal to such excess from the Spread Account and distribute such amount to the Transferor.  On the date on which the Class C Note Principal Balance has been paid in full, after making any payments to the Noteholders required pursuant to Sections 4.11(a), (b), (c) and (d), the Issuer shall withdraw from the Spread Account all amounts then remaining in the Spread Account and pay such amounts to the holders of the Transferor Interest.

 

SECTION 4.12.  Investment of Accounts.  (a)  To the extent there are uninvested amounts deposited in the Series Accounts, the Issuer shall cause such amounts to be invested in Permitted Investments selected by the Issuer that mature no later than the following Transfer Date.

 

  

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(b)           On each Transfer Date with respect to the Controlled Accumulation Period and on the first Transfer Date with respect to the Early Amortization Period, the Issuer shall transfer from the Principal Accumulation Account to the Finance Charge Account the Principal Accumulation Investment Proceeds on deposit in the Principal Accumulation Account for application as Available Finance Charge Collections in accordance with Section 4.4.

 

(c)           Principal Accumulation Investment Proceeds (including reinvested interest) shall not be considered part of the amounts on deposit in the Principal Accumulation Account for purposes of this Indenture Supplement.

 

(d)           On each Transfer Date (but subject to Section 4.11(a)), the Investment Earnings, if any, credited since the preceding Transfer Date on funds on deposit in the Spread Account shall be retained in the Spread Account (to the extent that the Available Spread Account Amount is less than the Required Spread Account Amount) and the balance, if any, shall be paid to the holders of the Transferor Interest.  For purposes of determining the availability of funds or the balance in the Spread Account for any reason under this Indenture Supplement (subject to Section 4.11(a)), all Investment Earnings shall be deemed not to be available or on deposit; provided that after the maturity of the Series 2012-1 Notes has been accelerated as a result of an Event of Default, all Investment Earnings shall be added to the balance on deposit in the Spread Account and treated like the rest of the Available Spread Account Amount.

 

SECTION 4.13.  Controlled Accumulation Period.  The Controlled Accumulation Period is scheduled to commence at the beginning of business on November 22, 2014; provided that if the Controlled Accumulation Period Length (determined as described below) on any Determination Date is less than or more than the number of months in the scheduled Controlled Accumulation Period, upon written notice to the Indenture Trustee, with a copy to each Rating Agency, the Issuer shall either postpone or accelerate, as applicable, the date on which the Controlled Accumulation Period actually commences, so that, as a result, the number of Monthly Periods in the Controlled Accumulation Period will equal the Controlled Accumulation Period Length; provided that the length of the Controlled Accumulation Period will not be less than one month.  The “Controlled Accumulation Period Length” will mean a number of whole months such that the amount available for payment of principal on the Notes on the Expected Principal Payment Date is expected to equal or exceed the Note Principal Balance, assuming for this purpose that (1) the payment rate with respect to Principal Collections remains constant at the lowest level of such payment rate during the twelve preceding Monthly Periods, (2) the total amount of Principal Receivables in the Trust (and the principal amount on deposit in the Excess Funding Account, if any) remains constant at the level on such date of determination, (3) no Early Amortization Event with respect to any Series will subsequently occur and (4) no additional Series (other than any Series being issued on such date of determination) will be subsequently issued.  Any notice by Issuer modifying the commencement of the Controlled Accumulation Period pursuant to this Section 4.13 shall specify (i) the Controlled Accumulation Period Length, (ii) the commencement date of the Controlled Accumulation Period and (iii) the Controlled Accumulation Amount with respect to each Monthly Period during the Controlled Accumulation Period.

 

SECTION 4.14.  [Reserved.]

  

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SECTION 4.15.  Deposit of Collections.  Notwithstanding anything to the contrary in the Indenture, for any Monthly Period during which the Issuer is permitted to make a single monthly deposit to the Collection Account pursuant to Section 8.4 of the Indenture for such Monthly Period, the Issuer need not make the daily deposits of Collections into the Collection Account as provided in Section 8.4 of the Indenture, but may make a single deposit in the Collection Account in immediately available funds not later than 12:00 noon, New York City time, on the related Payment Date.

 

ARTICLE V

DELIVERY OF SERIES 2012-1 NOTES;

REPORTS TO SERIES 2012-1 NOTEHOLDERS

 

SECTION 5.1.  Delivery and Payment for the Series 2012-1 Notes.

 

The Issuer shall execute and issue, and the Indenture Trustee shall authenticate, the Series 2012-1 Notes in accordance with Section 2.2 of the Indenture.  The Indenture Trustee shall deliver the Series 2012-1 Notes to or upon the written order of the Issuer when so authenticated.

 

SECTION 5.2.  Reports and Statements to Series 2012-1 Noteholders.

 

(a)           Not later than the second Business Day preceding each Payment Date, the Issuer shall deliver or cause the Servicer to deliver to the Trustee, the Indenture Trustee and each Rating Agency a statement substantially in the form of Exhibit B prepared by the Servicer; provided that the Issuer may amend the form of Exhibit B from time to time, with the prior written consent of the Indenture Trustee.

 

(b)           A copy of each statement or certificate provided pursuant to Section 5.2(a) may be obtained by any Series 2012-1 Noteholder by a request in writing to the Issuer.

 

(c)           On or before January 31 of each calendar year, beginning with January 31, 2012, the Issuer shall furnish or cause to be furnished to each Person who at any time during the preceding calendar year was a Series 2012-1 Noteholder the information for the preceding calendar year, or the applicable portion thereof during which the Person was a Noteholder, as is required to be provided by an issuer of indebtedness under the Code to the holders of the Issuer’s indebtedness and such other customary information as is necessary to enable such Noteholder to prepare its federal income tax returns.  Notwithstanding anything to the contrary contained in this Agreement, the Issuer shall, to the extent required by applicable law, from time to time furnish to the appropriate Persons, at least five Business Days prior to the end of the period required by applicable law, the information required to complete a Form 1099-INT.

 

ARTICLE VI

SERIES 2012-1 EARLY AMORTIZATION EVENTS

 

SECTION 6.1.  Series 2012-1 Early Amortization Events.  If any one of the following events shall occur with respect to the Series 2012-1 Notes:

  

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(a)           (i)  failure on the part of Transferor to make any payment or deposit required to be made by it by the terms of the Trust Receivables Purchase Agreement or the Transfer Agreement on or before the date occurring five (5) Business Days after the date such payment or deposit is required to be made therein or herein or (ii) failure of the Transferor duly to observe or perform in any material respect any other of its covenants or agreements set forth in the Trust Receivables Purchase Agreement or the Transfer Agreement which failure has a material adverse effect on the Series 2012-1 Noteholders and which continues unremedied for a period of sixty days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Transferor by the Indenture Trustee, or to the Transferor and the Indenture Trustee by any Noteholder of the Series 2012-1 Notes;

 

(b)           any representation or warranty made by Transferor in the Transfer Agreement or the Trust Receivables Purchase Agreement or any information contained in an account schedule required to be delivered by it pursuant to Section 2.1 or Section 2.6(c) of the Transfer Agreement, Trust Agreement or the Bank Receivables Sale Agreement shall prove to have been incorrect in any material respect when made or when delivered, which continues to be incorrect in any material respect for a period of sixty days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Transferor by the Indenture Trustee, or to the Transferor and the Indenture Trustee by any Noteholder of the Series 2012-1 Notes and as a result of which the interests of the Series 2012-1 Noteholders are materially and adversely affected for such period; provided, however, that a Series 2012-1 Early Amortization Event pursuant to this Section 6.1(b) shall not be deemed to have occurred hereunder if the Transferor has accepted reassignment of the related Transferred Receivable, or all of such Transferred Receivables, if applicable, during such period in accordance with the provisions of the Transfer Agreement or the Trust Receivables Purchase Agreement;

 

(c)           a failure by Transferor under the Transfer Agreement to convey Transferred Receivables in Additional Accounts or Participations to the Trust when it is required to convey such Transferred Receivables pursuant to Section 2.6(a) of the Transfer Agreement;

 

(d)           any Servicer Default or any Indenture Servicer Default shall occur;

 

(e)           (i) the average of the Portfolio Yields for the two Monthly Periods immediately preceding the May 2012 Payment Date is less than the average of the Base Rates for the same Monthly Periods, or (ii) beginning with the three consecutive Monthly Periods immediately preceding the June 2012 Payment Date, the average of the Portfolio Yields for three consecutive Monthly Periods is less than the average of the Base Rates for the same Monthly Periods (for the avoidance of doubt, the Monthly Period preceding the March 2012 Payment Date shall be excluded for purposes of calculating the three-month average Portfolio Yield and Base Rate under this clause (e)(ii));

 

(f)           the Note Principal Balance shall not be paid in full on the Expected Principal Payment Date; or

 

(g)           without limiting the foregoing, the occurrence of an Event of Default with respect to Series 2012-1 and acceleration of the maturity of the Series 2012-1 Notes pursuant to Section 5.3 of the Indenture;

  

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then, in the case of any event described in subsection (a), (b) or (d), after the applicable grace period, if any, set forth in such subparagraphs, either the Indenture Trustee or the holders of Series 2012-1 Notes evidencing more than 50% of the aggregate unpaid principal amount of Series 2012-1 Notes by notice then given in writing to the Issuer (and to the Indenture Trustee if given by the Series 2012-1 Noteholders) may declare that a “Series Early Amortization Event” with respect to Series 2012-1 (a “Series 2012-1 Early Amortization Event”) has occurred as of the date of such notice, and, in the case of any event described in subsection (c), (e), (f) or (g) a Series 2012-1 Early Amortization Event shall occur without any notice or other action on the part of the Indenture Trustee or the Series 2012-1 Noteholders immediately upon the occurrence of such event.

 

ARTICLE VII

REDEMPTION OF SERIES 2012-1 NOTES; FINAL DISTRIBUTIONS; SERIES TERMINATION

 

SECTION 7.1.  Optional Redemption of Series 2012-1 Notes; Final Distributions.

 

(a)           On any day occurring on or after the date on which the outstanding principal balance of the Series 2012-1 Notes is reduced to 10% or less of the initial outstanding principal balance of Series 2012-1 Notes, Transferor has the option pursuant to the Trust Agreement to reduce the Collateral Amount to zero by paying a purchase price equal to the greater of (x) the Collateral Amount, plus the applicable Allocation Percentage of outstanding Finance Charge Receivables and (y) a minimum amount equal to (i) if such day is a Payment Date, the Redemption Amount for such Payment Date or (ii) if such day is not a Payment Date, the Redemption Amount for the Payment Date following such day.  If Transferor exercises such option, Issuer will apply such purchase price to repay the Notes in full as specified below.

 

(b)           Issuer shall give the Indenture Trustee at least thirty (30) days prior written notice of the date on which Transferor intends to exercise such optional redemption.  Not later than 12:00 noon, New York City time, on such day Transferor shall deposit into the Distribution Account in immediately available funds the excess of the Redemption Amount over the amount, if any, on deposit in the Principal Accumulation Account.  Such redemption option is subject to payment in full of the Redemption Amount.  Following such deposit into the Distribution Account in accordance with the foregoing, the Collateral Amount for Series 2012-1 shall be reduced to zero and the Series 2012-1 Noteholders shall have no further security interest in the Transferred Receivables.  The Redemption Amount shall be paid as set forth in Section 7.1(d).

 

(c)           (i)  The amount to be paid by the Transferor with respect to Series 2012-1 in connection with a reassignment of Transferred Receivables to the Transferor pursuant to Section 6.1(f) of the Transfer Agreement shall not be less than the Redemption Amount for the first Payment Date following the Monthly Period in which the reassignment obligation arises under the Transfer Agreement.

 

(ii)           The amount to be paid by the Issuer with respect to Series 2012-1 in connection with a repurchase of the Notes pursuant to Section 10.1 of the Trust Agreement shall not be less than the Redemption Amount for the Payment Date of such repurchase.

  

32

  

(d)           With respect to (i) the Redemption Amount deposited into the Distribution Account pursuant to Section 7.1 or (ii) the proceeds of any sale of Transferred Receivables pursuant to Section 5.3 of the Indenture with respect to Series 2012-1, the Indenture Trustee shall, in accordance with the written direction of the Issuer, not later than 12:00 noon, New York City time, on the related Payment Date, make payments of the following amounts (in the priority set forth below and, in each case, after giving effect to any deposits and payments otherwise to be made on such date) in immediately available funds:  (i) (x) the Class A Note Principal Balance on such Payment Date will be paid to the Class A Noteholders and (y) an amount equal to the sum of (A) Class A Monthly Interest due and payable on such Payment Date or any prior Payment Date, (B) any Class A Deficiency Amount for such Payment Date and (C) the amount of Class A Additional Interest, if any, for such Payment Date and any Class A Additional Interest previously due but not paid to the Class A Noteholders on any prior Payment Date, will be paid to the Class A Noteholders, (ii) (x) the Class B Note Principal Balance on such Payment Date will be paid to the Class B Noteholders and (y) an amount equal to the sum of (A) Class B Monthly Interest due and payable on such Payment Date or any prior Payment Date, (B) any Class B Deficiency Amount for  such Payment Date and (C) the amount of Class B Additional Interest, if any, for such Payment Date and any Class B Additional Interest previously due but not paid to the Class B Noteholders on any prior Payment Date, will be paid to the Class B Noteholders, (iii) (x) the Class C Note Principal Balance on such Payment Date will be paid to the Class C Noteholders and (y) an amount equal to the sum of (A) Class C Monthly Interest due and payable on such Payment Date or any prior Payment Date, (B) any Class C Deficiency Amount for such Payment Date and (C) the amount of Class C Additional Interest, if any, for such Payment Date and any Class C Additional Interest previously due but not paid to the Class C Noteholders on any prior Payment Date will be paid to the Class C Noteholders and (iv) any excess shall be released to the Issuer.

 

SECTION 7.2.  Series Termination.

 

On the Series Maturity Date, the unpaid principal amount of the Series 2012-1 Notes shall be due and payable.

 

SECTION 7.3.  Sale of Collateral.

 

If the Indenture Trustee exercises its right to sell any portion of the Collateral in accordance with Section 5.16 of the Indenture upon the occurrence of an Event of Default with respect to Series 2012-1, GE Capital shall have a right of first refusal to purchase any portion of the Collateral for which the Indenture Trustee has received a bona fide offer from a third-party that is not an affiliate of the Transferor at a price equal to the highest price bid for such Collateral by such third-party bidder.

 

ARTICLE VIII

MISCELLANEOUS PROVISIONS

 

SECTION 8.1.  Ratification of Indenture; Amendments.  As supplemented by this Indenture Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by this Indenture Supplement shall be read, taken and construed as one and the same instrument.  This Indenture Supplement may be amended only by a Supplemental Indenture entered in accordance with the terms of Section 9.1 or 9.2 of the Indenture.  For purposes of the application of Section 9.2 to any amendment of this Indenture Supplement, the Series 2012-1 Noteholders shall be the only Noteholders whose vote shall be required.

  

33

  

 

SECTION 8.2.  Form of Delivery of the Series 2012-1 Notes.  The Class A Notes, the Class B Notes and the Class C Notes shall be Book-Entry Notes and shall be delivered as provided in Sections 2.1 and 2.2 of the Indenture.

 

SECTION 8.3.  Counterparts.  This Indenture Supplement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.

 

SECTION 8.4.  GOVERNING LAW.  (a) THIS INDENTURE SUPPLEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401(1) OF THE GENERAL OBLIGATIONS LAW, BUT WITHOUT REGARD TO ANY OTHER CONFLICT OF LAW PROVISIONS THEREOF) AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  THIS INDENTURE SUPPLEMENT IS SUBJECT TO THE TRUST INDENTURE ACT OF 1939, AS AMENDED, AND SHALL BE GOVERNED THEREBY AND CONSTRUED IN ACCORDANCE THEREWITH.

 

(b)           EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS INDENTURE SUPPLEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS INDENTURE SUPPLEMENT; PROVIDED, THAT EACH PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY; PROVIDED, FURTHER, THAT NOTHING IN THIS INDENTURE SUPPLEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE INDENTURE TRUSTEE FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE NOTES, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE INDENTURE TRUSTEE.  EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.  EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT ITS ADDRESS DETERMINED IN ACCORDANCE WITH SECTION 10.4 OF THE INDENTURE AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY’S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER POSTAGE PREPAID.  NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

  

34

  

 

BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS INDENTURE SUPPLEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 8.5.  Limitation of Liability.  Notwithstanding any other provision herein or elsewhere, this Indenture Supplement has been executed and delivered by BNY Mellon Trust of Delaware, not in its individual capacity, but solely in its capacity as Trustee of the Trust, in no event shall BNY Mellon Trust of Delaware in its individual capacity have any liability in respect of the representations, warranties, or obligations of the Issuer hereunder or under any other document, as to all of which recourse shall be had solely to the assets of the Trust, and for all purposes of this Indenture Supplement and each other document, the Trustee (as such or in its individual capacity) shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement.

 

SECTION 8.6.  Rights of the Indenture Trustee.  The Indenture Trustee shall have herein the same rights, protections, indemnities and immunities as specified in the Master Indenture.

 

SECTION 8.7.  Notice Address for Rating Agencies.  Delivery of any notices required to be delivered to the Rating Agencies by the Issuer, the Indenture Trustee or the Trustee shall be sufficient for the purposes of this Indenture Supplement and the other Related Documents if sent to such mailing addresses or such email addresses as may be provided by the Rating Agencies.

 

SECTION 8.8.  Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations.  In order to comply with laws, rules and regulations applicable to banking institutions, including those relating to the funding of terrorist activities and money laundering, the Indenture Trustee is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Indenture Trustee.  Accordingly, each of the parties hereto agrees to provide to the Indenture Trustee upon its request from time to time such  identifying information  and documentation as may be available for such party in order to enable the Indenture Trustee to comply with applicable law.

 

  

35

  

 

SECTION 8.9.  Notes to be Treated as Debt for Tax.  It is the intent of the parties hereto that, for purposes of federal, state and local income and franchise tax and any other tax measured in whole or in part by income, the Class A Notes, the Class B Notes and the Class C Notes shall be treated as debt and a person purchasing such Notes agrees to treat such Notes as debt for such purposes.

 

SECTION 8.10.  Deemed Consent.  The Series 2012-1 Noteholders will be deemed to have consented to any amendment to any Related Document that changes the definition of “Rating Agency Condition” in such Related Document to match the definition of “Rating Agency Condition” in this Indenture Supplement.

 

[SIGNATURE PAGE FOLLOWS]

 

  

36

  

IN WITNESS WHEREOF, the undersigned have caused this Indenture Supplement to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

 

	  	
GE CAPITAL CREDIT CARD MASTER NOTE TRUST, as Issuer

	  	  
	  	
By:

	
BNY MELLON TRUST OF DELAWARE, not in its individual capacity, but solely as Trustee on behalf of Issuer

 

	  	
By:

	/s/ Kristine K. Gullo
	  	  	
Name: Kristine K. Gullo

	  	  	
Title: Vice President

	  	  
	  	
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Indenture Trustee

	  	  
	  	
By: DEUTSCHE BANK NATIONAL TRUST COMPANY

	 	 	 
	  	
By:

	/s/ Susan Barstock
	  	  	
Name: Susan Barstock

	  	  	
Title: Vice President

	  	  
	  	
By:

	/s/ Michele H.Y. Voon
	  	
   

	
Name: Michele H.Y. Voon

	  	
   

	
Title: Vice President

Indenture Supplement

Series 2012-1

 

  

S-1

  

 

EXHIBIT A-1

FORM OF CLASS A SERIES 2012-1 1.03% ASSET BACKED NOTE

 

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

 

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES THAT IT WILL NOT AT ANY TIME DIRECTLY OR INDIRECTLY INSTITUTE OR CAUSE TO BE INSTITUTED AGAINST THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDING OR OTHER PROCEEDING UNDER ANY FEDERAL OR STATE BANKRUPTCY LAW UNLESS NOTEHOLDERS OF NOT LESS THAN 662⁄3% OF THE OUTSTANDING PRINCIPAL AMOUNT OF EACH CLASS OF EACH SERIES HAS APPROVED SUCH FILING AND IT WILL NOT DIRECTLY OR INDIRECTLY INSTITUTE OR CAUSE TO BE INSTITUTED AGAINST THE TRANSFEROR ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDING OR OTHER PROCEEDING UNDER ANY FEDERAL OR STATE BANKRUPTCY LAW IN ANY INSTANCE; PROVIDED, THAT THE FOREGOING SHALL NOT IN ANY WAY LIMIT THE NOTEHOLDER’S RIGHTS TO PURSUE ANY OTHER CREDITOR RIGHTS OR REMEDIES THAT THE NOTEHOLDERS MAY HAVE FOR CLAIMS AGAINST THE ISSUER.

 

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

 

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST THEREIN, SHALL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (I) SUCH HOLDER IS NOT (AND FOR SO LONG AS IT HOLDS SUCH NOTE WILL NOT BE), IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS SUCH NOTE WILL NOT BE ACTING ON BEHALF OF), AND IS NOT INVESTING THE ASSETS OF (A) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO TITLE I OF ERISA, (B) A "PLAN" (AS DEFINED IN SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO BE PLAN ASSETS OF A PLAN DESCRIBED IN (A) OR (B) ABOVE (EACH, A “BENEFIT PLAN”) OR (D) A GOVERNMENTAL PLAN, CHURCH PLAN OR NON-U.S. PLAN THAT IS SUBJECT TO ANY APPLICABLE LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (“SIMILAR LAW”) OR (II) ITS ACQUISITION, CONTINUED HOLDING AND DISPOSITION OF THIS NOTE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF ANY SIMILAR LAW.  BENEFIT PLANS MAY NOT ACQUIRE THIS NOTE AT ANY TIME THAT THIS NOTE DOES NOT HAVE A CURRENT INVESTMENT GRADE RATING FROM A NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION.

 

  

Exhibit A-1 (Page 1)

  

	
REGISTERED

No. R- _______________                                                     

	
$_________________________

CUSIP NO. 36159J CS8

GE CAPITAL CREDIT CARD

MASTER NOTE TRUST SERIES 2012-1

 

CLASS A SERIES 2012-1 1.03% ASSET BACKED NOTE

 

GE Capital Credit Card Master Note Trust (herein referred to as the “Issuer” or the “Trust”), a Delaware statutory trust governed by a Trust Agreement dated as of September 25, 2003, for value received, hereby promises to pay to Cede & Co., or registered assigns, subject to the following provisions, the principal sum of                                    DOLLARS, or such greater or lesser amount as determined in accordance with the Indenture, on the January 2018 Payment Date, except as otherwise provided below or in the Indenture.  The Issuer will pay interest on the unpaid principal amount of this Note at the Class A Note Interest Rate on each Payment Date until the Final Payment Date (which is the earlier to occur of (a) the Payment Date on which the Note Principal Balance is paid in full, (b) the date on which the Collateral Amount is reduced to zero and (c) the January 2018 Payment Date). Interest on this Note will accrue for each Payment Date from and including the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, for the initial Payment Date, from and including the Closing Date to but excluding such Payment Date.  Interest will be computed on the basis of a 360-day year and twelve 30-day months.  Principal of this Note shall be paid in the manner specified in the Indenture Supplement referred to on the reverse hereof.

 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has been executed by or on behalf of the Indenture Trustee, by manual signature, this Note shall not be entitled to any benefit under the Indenture or the Indenture Supplement referred to on the reverse hereof, or be valid for any purpose.

 

  

Exhibit A-1 (Page 2)

  

IN WITNESS WHEREOF, the Issuer has caused this Class A Note to be duly executed.

 

	  	
GE CAPITAL CREDIT CARD MASTER NOTE TRUST, as Issuer

	  	  
	  	
By:

	
BNY MELLON TRUST OF DELAWARE,  not in its individual capacity but solely as  Trustee on behalf of Issuer

	  	  
	  	
By:

	  
	  	  	
Name:

	  	  	
Title:

Dated: ____________,________           

 

  

Exhibit A-1 (Page 3)

  

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	  	
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Indenture Trustee

	  	  
	  	
By:

	  
	  	  	
Authorized Signatory

 

  

Exhibit A-1 (Page 4)

  

 

GE CAPITAL CREDIT CARD

MASTER NOTE TRUST SERIES 2012-1

 

CLASS A SERIES 2012-1 1.03% ASSET BACKED NOTE

 

Summary of Terms and Conditions

 

This Class A Note is one of a duly authorized issue of Notes of the Issuer, designated as GE Capital Credit Card Master Note Trust, Series 2012-1 (the “Series 2012-1 Notes”), issued under a Master Indenture dated as of September 25, 2003 (as amended, the “Master Indenture”), between the Issuer and Deutsche Bank Trust Company Americas, as indenture trustee (the “Indenture Trustee”), as supplemented by the Indenture Supplement dated as of January 25, 2012 (the “Indenture Supplement”), and representing the right to receive certain payments from the Issuer.  The term “Indenture,” unless the context otherwise requires, refers to the Master Indenture as supplemented by the Indenture Supplement.  The Notes are subject to all of the terms of the Indenture.  All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture.  In the event of any conflict or inconsistency between the Indenture and this Note, the Indenture shall control.

 

The Class B Notes and the Class C Notes will also be issued under the Indenture.

 

The Noteholder, by its acceptance of this Note, agrees that it will look solely to the property of the Issuer allocated to the payment of this Note for payment hereunder and that neither the Owner Trustee nor the Indenture Trustee is liable to the Noteholders for any amount payable under the Notes or the Indenture or, except in the case of the Indenture Trustee as expressly provided in the Indenture, subject to any liability under the Indenture.

 

This Note does not purport to summarize the Indenture and reference is made to the Indenture for the interests, rights and limitations of rights, benefits, obligations and duties evidenced thereby, and the rights, duties and immunities of the Indenture Trustee.

 

THIS CLASS A NOTE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN, THE ISSUER, GE CAPITAL RETAIL BANK, RFS HOLDING, L.L.C., OR ANY OF THEIR AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

 

The Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee shall treat the person in whose name this Class A Note is registered as the owner hereof for all purposes, and neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

 

THIS CLASS A NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

  

Exhibit A-1 (Page 5)

  

 

ASSIGNMENT

 

Social Security or other identifying number of assignee                               

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                                   (name and address of assignee) the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints                              attorney, to transfer said certificate on the books kept for registration thereof, with full power of substitution in the premises.

 

	
Dated:

	
  

	  	
  

	
**

	  	  	
Signature Guaranteed:

 

	
**

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

 

  

Exhibit A-1 (Page 6)

  

 

EXHIBIT A-2

FORM OF CLASS B SERIES 2012-1 1.62% ASSET BACKED NOTE

 

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

 

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES THAT IT WILL NOT AT ANY TIME DIRECTLY OR INDIRECTLY INSTITUTE OR CAUSE TO BE INSTITUTED AGAINST THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDING OR OTHER PROCEEDING UNDER ANY FEDERAL OR STATE BANKRUPTCY LAW UNLESS NOTEHOLDERS OF NOT LESS THAN 662⁄3% OF THE OUTSTANDING PRINCIPAL AMOUNT OF EACH CLASS OF EACH SERIES HAS APPROVED SUCH FILING AND IT WILL NOT DIRECTLY OR INDIRECTLY INSTITUTE OR CAUSE TO BE INSTITUTED AGAINST THE TRANSFEROR ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDING OR OTHER PROCEEDING UNDER ANY FEDERAL OR STATE BANKRUPTCY LAW IN ANY INSTANCE; PROVIDED, THAT THE FOREGOING SHALL NOT IN ANY WAY LIMIT THE NOTEHOLDER’S RIGHTS TO PURSUE ANY OTHER CREDITOR RIGHTS OR REMEDIES THAT THE NOTEHOLDERS MAY HAVE FOR CLAIMS AGAINST THE ISSUER.

 

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

  

Exhibit A-2 (Page 1)

  

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST THEREIN, SHALL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (I) SUCH HOLDER IS NOT (AND FOR SO LONG AS IT HOLDS SUCH NOTE WILL NOT BE), IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS SUCH NOTE WILL NOT BE ACTING ON BEHALF OF), AND IS NOT INVESTING THE ASSETS OF (A) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA:)) THAT IS SUBJECT TO TITLE I OF ERISA, (B) A “PLAN: (AS DEFINED IN SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO BE PLAN ASSETS OF A PLAN DESCRIBED IN (A) OR (B) ABOVE (EACH, A “BENEFIT PLAN”) OR (D) A GOVERNMENTAL PLAN, CHURCH PLAN OR NON-U.S. PLAN THAT IS SUBJECT TO ANY APPLICABLE LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (“SIMILAR LAW”) OR (II) ITS ACQUISITION, CONTINUED HOLDING AND DISPOSITION OF THIS NOTE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF ANY SIMILAR LAW.  BENEFIT PLANS MAY NOT ACQUIRE THIS NOTE AT ANY TIME THAT THIS NOTE DOES NOT HAVE A CURRENT INVESTMENT GRADE RATING FROM A NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION.

  

Exhibit A-2 (Page 2)

  

	
REGISTERED

No. R- _______________________                                                     

	
$__________________________________

CUSIP NO. 36159J CT6

GE CAPITAL CREDIT CARD

MASTER NOTE TRUST SERIES 2012-1

 

CLASS B SERIES 2012-1 1.62% ASSET BACKED NOTE

 

GE Capital Credit Card Master Note Trust (herein referred to as the “Issuer” or the “Trust”), a Delaware statutory trust governed by a Trust Agreement dated as of September 25, 2003, for value received, hereby promises to pay to Cede & Co., or registered assigns, subject to the following provisions, the principal sum of                 DOLLARS, or such greater or lesser amount as determined in accordance with the Indenture, on the January 2018 Payment Date, except as otherwise provided below or in the Indenture.  The Issuer will pay interest on the unpaid principal amount of this Note at the Class B Note Interest Rate on each Payment Date until the Final Payment Date (which is the earlier to occur of (a) the Payment Date on which the Note Principal Balance is paid in full, (b) the date on which the Collateral Amount is reduced to zero and (c) the January 2018 Payment Date).  Interest on this Note will accrue for each Payment Date from and including the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, for the initial Payment Date, from and including the Closing Date to but excluding such Payment Date.  Interest will be computed on the basis of a 360-day year and twelve 30-day months.  Principal of this Note shall be paid in the manner specified in the Indenture Supplement referred to on the reverse hereof.

 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has been executed by or on behalf of the Indenture Trustee, by manual signature, this Note shall not be entitled to any benefit under the Indenture or the Indenture Supplement referred to on the reverse hereof, or be valid for any purpose.

 

THIS CLASS B NOTE IS SUBORDINATED TO THE EXTENT NECESSARY TO FUND PAYMENTS ON THE CLASS A NOTES TO THE EXTENT SPECIFIED IN THE INDENTURE SUPPLEMENT.

 

  

Exhibit A-2 (Page 3)

  

IN WITNESS WHEREOF, the Issuer has caused this Class B Note to be duly executed.

 

	  	GE CAPITAL CREDIT CARD MASTER NOTE TRUST, as Issuer
	  	  	  
	  	
By:

	
 BNY MELLON TRUST OF DELAWARE, not in its individual capacity but solely as

	  	  	
Trustee on behalf of Issuer

	  	  	  
	  	
By:

	  
	  	  	
Name:

	  	  	
Title:

Dated: ________,_____           

 

  

Exhibit A-2 (Page 4)

  

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	  	
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Indenture Trustee

	  	  
	  	
By:

	  
	  	  	
Name:

	  	  	
Title:

 

  

Exhibit A-2 (Page 5)

  

GE CAPITAL CREDIT CARD

MASTER NOTE TRUST SERIES 2012-1

 

CLASS B SERIES 2012-1 1.62% ASSET BACKED NOTE

 

Summary of Terms and Conditions

 

This Class B Note is one of a duly authorized issue of Notes of the Issuer, designated as GE Capital Credit Card Master Note Trust, Series 2012-1 (the “Series 2012-1 Notes”), issued under a Master Indenture dated as of September 25, 2003 (as amended, the “Master Indenture”), between the Issuer and Deutsche Bank Trust Company Americas, as indenture trustee (the “Indenture Trustee”), as supplemented by the Indenture Supplement dated as of January 25, 2012 (the “Indenture Supplement”), and representing the right to receive certain payments from the Issuer.  The term “Indenture,” unless the context otherwise requires, refers to the Master Indenture as supplemented by the Indenture Supplement.  The Notes are subject to all of the terms of the Indenture.  All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture.  In the event of any conflict or inconsistency between the Indenture and this Note, the Indenture shall control.

 

The Class A Notes and the Class C Notes will also be issued under the Indenture.

 

The Noteholder, by its acceptance of this Note, agrees that it will look solely to the property of the Issuer allocated to the payment of this Note for payment hereunder and that neither the Owner Trustee nor the Indenture Trustee is liable to the Noteholders for any amount payable under the Notes or the Indenture or, except in the case of the Indenture Trustee as expressly provided in the Indenture, subject to any liability under the Indenture.

 

This Note does not purport to summarize the Indenture and reference is made to the Indenture for the interests, rights and limitations of rights, benefits, obligations and duties evidenced thereby, and the rights, duties and immunities of the Indenture Trustee.

 

THIS CLASS B NOTE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN, THE ISSUER, GE CAPITAL RETAIL BANK, RFS HOLDING, L.L.C., OR ANY OF THEIR AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

 

The Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee shall treat the person in whose name this Class B Note is registered as the owner hereof for all purposes, and neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

 

THIS CLASS B NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

  

Exhibit A-2 (Page 6)

  

ASSIGNMENT

 

Social Security or other identifying number of assignee                              

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                                   (name and address of assignee) the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints                              attorney, to transfer said certificate on the books kept for registration thereof, with full power of substitution in the premises.

 

	
Dated:

	  	  	  	
**

	  	  	  	
Signature Guaranteed:

	  

 

	
**

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

  

Exhibit A-2 (Page 7)

  

EXHIBIT A-3

FORM OF CLASS C SERIES 2012-1 2.42% ASSET BACKED NOTE

 

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

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH IN THE NEXT SENTENCE.  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER OF THIS NOTE:

 

	 	
(1)  

	
AGREES FOR THE BENEFIT OF THE ISSUER AND THE TRANSFEROR THAT THIS NOTE MAY BE SOLD, TRANSFERRED, ASSIGNED, PARTICIPATED, PLEDGED OR OTHERWISE DISPOSED OF ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS, AND ONLY (I) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE l44A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (II) TO THE DEPOSITOR OR ITS AFFILIATES, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES; AND

 

	 	
(2)  

	
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

 

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES THAT IT WILL NOT AT ANY TIME DIRECTLY OR INDIRECTLY INSTITUTE OR CAUSE TO BE INSTITUTED AGAINST THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDING OR OTHER PROCEEDING UNDER ANY FEDERAL OR STATE BANKRUPTCY LAW UNLESS NOTEHOLDERS OF NOT LESS THAN 662⁄3% OF THE OUTSTANDING PRINCIPAL AMOUNT OF EACH CLASS OF EACH SERIES HAS APPROVED SUCH FILING AND IT WILL NOT DIRECTLY OR INDIRECTLY INSTITUTE OR CAUSE TO BE INSTITUTED AGAINST THE TRANSFEROR ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDING OR OTHER PROCEEDING UNDER ANY FEDERAL OR STATE BANKRUPTCY LAW IN ANY INSTANCE; PROVIDED, THAT THE FOREGOING SHALL NOT IN ANY WAY LIMIT THE NOTEHOLDER’S RIGHTS TO PURSUE ANY OTHER CREDITOR RIGHTS OR REMEDIES THAT THE NOTEHOLDERS MAY HAVE FOR CLAIMS AGAINST THE ISSUER.

 

  

Exhibit A-3 (Page 1)

  

 

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

 

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST THEREIN, SHALL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (I) SUCH HOLDER IS NOT (AND FOR SO LONG AS IT HOLDS SUCH NOTE WILL NOT BE), IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS SUCH NOTE WILL NOT BE ACTING ON BEHALF OF), AND IS NOT INVESTING THE ASSETS OF (A) AN “EMPLOYEE BENEFIT PLAN” (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO TITLE I OF ERISA, (B) A “PLAN” (AS DEFINED IN SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO BE PLAN ASSETS OF A PLAN DESCRIBED IN (A) OR (B) ABOVE (EACH, A “BENEFIT PLAN”) OR (D) A GOVERNMENTAL PLAN, CHURCH PLAN OR NON-U.S. PLAN THAT IS SUBJECT TO ANY APPLICABLE LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (“SIMILAR LAW”) OR (II) ITS ACQUISITION, CONTINUED HOLDING AND DISPOSITION OF THIS NOTE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF ANY SIMILAR LAW.  BENEFIT PLANS MAY NOT ACQUIRE THIS NOTE AT ANY TIME THAT THIS NOTE DOES NOT HAVE A CURRENT INVESTMENT GRADE RATING FROM A NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION.

 

  

Exhibit A-3 (Page 2)

  

	
REGISTERED

No. R- _________________________                                                     

	
$___________________________

CUSIP NO. 36159J CU3

GE CAPITAL CREDIT CARD

MASTER NOTE TRUST SERIES 2012-1

 

CLASS C SERIES 2012-1 2.42% ASSET BACKED NOTE

 

GE Capital Credit Card Master Note Trust (herein referred to as the “Issuer” or the “Trust”), a Delaware statutory trust governed by a Trust Agreement dated as of September 25, 2003, for value received, hereby promises to pay to Cede & Co., or registered assigns, subject to the following provisions, the principal sum of                    DOLLARS, or such greater or lesser amount as determined in accordance with the Indenture, on the January 2018 Payment Date, except as otherwise provided below or in the Indenture.  The Issuer will pay interest on the unpaid principal amount of this Note at the Class C Note Interest Rate on each Payment Date until the Final Payment Date (which is the earlier to occur of (a) the Payment Date on which the Note Principal Balance is paid in full, (b) the date on which the Collateral Amount is reduced to zero and (c) the January 2018 Payment Date).  Interest on this Note will accrue for each Payment Date from and including the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, for the initial Payment Date, from and including the Closing Date to but excluding such Payment Date.  Interest will be computed on the basis of a 360-day year and twelve 30-day months.  Principal of this Note shall be paid in the manner specified in the Indenture Supplement referred to on the reverse hereof.

 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has been executed by or on behalf of the Indenture Trustee, by manual signature, this Note shall not be entitled to any benefit under the Indenture or the Indenture Supplement referred to on the reverse hereof, or be valid for any purpose.

 

THIS CLASS C NOTE IS SUBORDINATED TO THE EXTENT NECESSARY TO FUND PAYMENTS ON THE CLASS A AND CLASS B NOTES TO THE EXTENT SPECIFIED IN THE INDENTURE SUPPLEMENT.

 

  

Exhibit A-3 (Page 3)

  

IN WITNESS WHEREOF, the Issuer has caused this Class C Note to be duly executed.

 

	  	
GE CAPITAL CREDIT CARD MASTER NOTE TRUST, as Issuer

	  	  
	  	
By:

	
BNY MELLON TRUST OF DELAWARE not in its individual capacity but solely as Trustee on behalf of Issuer

 

	  	  
	  	
By:

	  
	  	  	
Name:

	  	  	
Title:

Dated:________,____           

 

  

Exhibit A-3 (Page 4)

  

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	  	
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Indenture Trustee

	  	  
	  	
By:

	  
	  	  	
Authorized Signatory

 

  

Exhibit A-3 (Page 5)

  

GE CAPITAL CREDIT CARD

MASTER NOTE TRUST SERIES 2012-1

 

CLASS C SERIES 2012-1 2.42% ASSET BACKED NOTE

 

Summary of Terms and Conditions

 

This Class C Note is one of a duly authorized issue of Notes of the Issuer, designated as GE Capital Credit Card Master Note Trust, Series 2012-1 (the “Series 2012-1 Notes”), issued under a Master Indenture dated as of September 25, 2003 (as amended, the “Master Indenture”), between the Issuer and Deutsche Bank Trust Company Americas, as indenture trustee (the “Indenture Trustee”), as supplemented by the Indenture Supplement dated as of January 25, 2012 (the “Indenture Supplement”), and representing the right to receive certain payments from the Issuer.  The term “Indenture,” unless the context otherwise requires, refers to the Master Indenture as supplemented by the Indenture Supplement.  The Notes are subject to all of the terms of the Indenture.  All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture.  In the event of any conflict or inconsistency between the Indenture and this Note, the Indenture shall control.

 

The Class A Notes and the Class B Notes will also be issued under the Indenture.

 

The Noteholder, by its acceptance of this Note, agrees that it will look solely to the property of the Issuer allocated to the payment of this Note for payment hereunder and that neither the Owner Trustee nor the Indenture Trustee is liable to the Noteholders for any amount payable under the Notes or the Indenture or, except in the case of the Indenture Trustee as expressly provided in the Indenture, subject to any liability under the Indenture.

 

This Note does not purport to summarize the Indenture and reference is made to the Indenture for the interests, rights and limitations of rights, benefits, obligations and duties evidenced thereby, and the rights, duties and immunities of the Indenture Trustee.

 

THIS CLASS C NOTE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN, THE ISSUER, GE CAPITAL RETAIL BANK, RFS HOLDING, L.L.C., OR ANY OF THEIR AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

 

The Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee shall treat the person in whose name this Class C Note is registered as the owner hereof for all purposes, and neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

 

THIS CLASS C NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

  

Exhibit A-3 (Page 6)

  

ASSIGNMENT

 

Social Security or other identifying number of assignee                               

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                                   (name and address of assignee) the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints                              attorney, to transfer said certificate on the books kept for registration thereof, with full power of substitution in the premises.

 

	
Dated:

	  	 	  	
**

	  	  	 	
Signature Guaranteed:

	  

  

	
**

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

  

Exhibit A-3 (Page 7)

  

EXHIBIT B

 

FORM OF MONTHLY NOTEHOLDER’S STATEMENT

 

Monthly Noteholder’s Statement

GE Capital Credit Card Master Note Trust

 

Series 2012-1

Class A 1.03% Notes

Class B 1.62% Notes

Class C 2.42% Notes

Pursuant to the Master Indenture, dated as of September 25, 2003 (as amended and supplemented, the "Indenture") between GE Capital Credit Card Master Note Trust (the "Issuer") and Deutsche Bank Trust Company Americas, as indenture trustee (the "Indenture Trustee"), as supplemented by the Series 2012-1 Indenture Supplement (the "Indenture Supplement"), dated as of January 25, 2012, between the Issuer and the Indenture Trustee, the Issuer is required to prepare, or cause the Servicer to prepare, certain information each month regarding current distributions to the Series 2012-1 Noteholders and the performance of the Trust during the previous month.  The information required to be prepared with respect to the Payment Date of ___________, 20___, and with respect to the performance of the Trust during the Monthly Period ended ___________, 20___ is set forth below.  Capitalized terms used herein are defined in the Indenture and the Indenture Supplement. The Discount Percentage (as defined in the Transfer Agreement) remains at 0% for all the Receivables in the Trust until otherwise indicated.  The undersigned, an Authorized Officer of the Servicer, does hereby certify as follows:

 

	
Record Date:

	
___________ ___, 20___

	
Monthly Period Beginning:

	
___________ ___, 20___

	
Monthly Period Ending:

	
___________ ___, 20___

	
Previous Payment Date:

	
___________ ___, 20___

	
Payment Date:

	
___________ ___, 20___

	
Interest Period Beginning:

	
___________ ___, 20___

	
Interest Period Ending:

	
___________ ___, 20___

	
Days in Monthly Period:

	
___

	
Days in Interest Period:

	
___

	
Is there a Reset Date?

	
[No][Yes]

	
I.

	  	
Trust Receivables Information

	  
	  	  	  	  
	  	
a.

	
Number of Accounts Beginning

	  
	  	
b.

	
Number of Accounts Ending

	  
	  	
c.

	
Average Account Balance (q / b)

	  
	  	
d.

	
BOP Principal Receivables

	  
	  	
e.

	
BOP Finance Charge Receivables

	  

 

  

Exhibit B (Page 1)

  

 

	  	
f.

	
BOP Total Receivables

	  
	  	
g.

	
Increase in Principal Receivables from Additional Accounts

	  
	  	
h.

	
Increase in Principal Activity on Existing Securitized Accounts

	  
	  	
i.

	
Increase in Finance Charge Receivables from Additional Accounts

	  
	  	
j.

	
Increase in Finance Charge Activity on Existing Securitized Accounts

	  
	  	
k.

	
Increase in Total Receivables

	  
	  	
l.

	
Decrease in Principal Receivables due to Account Removal

	  
	  	
m.

	
Decrease in Principal Activity on Existing Securitized Accounts

	  
	  	
n.

	
Decrease in Finance Charge Receivables due to Account Removal

	  
	  	
o.

	
Decrease in Finance Charge Activity on Existing Securitized Accounts

	  
	  	
p.

	
Decrease in Total Receivables

	  
	  	
q.

	
EOP Aggregate Principal Receivables

	  
	  	
r.

	
EOP Finance Charge Receivables

	  
	  	
s.

	
EOP Total Receivables

	  
	  	
t.

	
Excess Funding Account Balance

	  
	  	
u.

	
Required Principal Balance

	  
	  	
v.

	
Minimum Free Equity Amount (EOP Aggregate Principal Receivables * 4.0%)

	  
	  	
w.

	
Free Equity Amount (EOP Principal Receivables - EOP Collateral Amount (II.c.ii+II.a.ii+II.b.iii))

	  

	
II.

	 	
Investor Information (Trust Level)

	 
	  	  	  	  
	  	
a.

	
Note Principal Balance (Sum of all Series)

	  
	  	  	
i.

	
Beginning of Interest Period

	  
	  	  	
ii.

	
Increase in Note Principal Balance due to New Issuance

	  
	  	  	
iii.

	
Decrease in Note Principal Balance due to Principal Paid

	  
	  	  	
iv.

	
As of Payment Date

	  
	  	  	  	  
	  	
b.

	
Excess Collateral Amount (Sum of all Series)

	  
	  	  	
i.

	
Beginning of Interest Period

	  
	  	  	
ii.

	
Additional Enhancement Amount

	  
	  	  	
iii.

	
Increase in Excess Collateral Amount due to New Issuance

	  
	  	  	
iv.

	
Reductions in Required Excess Collateral Amount

	  
	  	  	
v.

	
Increase in Unreimbursed Investor Charge-Off

	  
	  	  	
vi.

	
Decrease in Unreimbursed Investor Charge-Off

	  
	  	  	
vii.

	
Increase in Unreimbursed Reallocated Principal Collections

	  
	  	  	
viii.

	
Decrease in Unreimbursed Reallocated Principal Collections

	  
	  	  	
ix.

	
As of Payment Date

	  

 

  

Exhibit B (Page 2)

  

 

	  	
c.

	
Collateral Amount (Sum of all Series)

	  
	  	  	
i.

	
End of Prior Monthly Period

	  
	  	  	
ii.

	
Beginning of Interest Period (a.i + b.i)

	  

 

	
III.

	  	
Trust Performance Data (Monthly Period)

	  
	  	
a.

	
Gross Trust Yield (Finance Charge Collections + Recoveries / BOP Principal Receivables)

	  
	  	  	
i.

	
Current

	  
	  	  	
ii.

	
Prior Monthly Period

	  
	  	  	
iii.

	
Two Months Prior Monthly Period

	  
	  	  	
iv.

	
Three-Month Average

	  
	 	 	 	 
	  	
b.

	
Payment Rate (Principal Collections / BOP Principal Receivables)

	  
	  	  	
i.

	
Current

	  
	  	  	
ii.

	
Prior Monthly Period

	  
	  	  	
iii.

	
Two Months Prior Monthly Period

	  
	  	  	
iv.

	
Three-Month Average

	  
	 	 	 	 
	  	
c.

	
Gross Charge-Off Rate excluding Fraud (Default Amount for Defaulted Accounts – Fraud Amount / BOP Principal Receivables)

	  
	  	  	
i.

	
Current

	  
	  	  	
ii.

	
Prior Monthly Period

	  
	  	  	
iii.

	
Two Months Prior Monthly Period

	  
	  	  	
iv.

	
Three-Month Average

	  
	 	 	 	 
	  	
d.

	
Charge-Off Rate (Default Amount for Defaulted Accounts / BOP Principal Receivables)

	  
	 	 	 	 
	  	
e.

	
Net Charge-Off Rate excluding Fraud (Default Amount for Defaulted Accounts – Recoveries – Fraud Amount / BOP Principal Receivables

	  
	  	  	
i.

	
Current

	  
	  	  	
ii.

	
Prior Monthly Period

	  
	  	  	
iii.

	
Two Months Prior Monthly Period

	  
	  	  	
iv.

	
Three-Month Average

	  
	 	 	 	 
	  	
f.

	
Net Charge-Off Rate (Default Amount for Defaulted Accounts – Recoveries / BOP Principal Receivables)

	  
	 	 	 	 
	  	
g.

	
Default Amount for Defaulted Accounts

	  
	 	 	 	 
	  	
h.

	
Recoveries

	  
	 	 	 	 
	  	
i.

	
Collections

	  
	  	  	
i.

	
Total Trust Finance Charge Collections

	  
	  	  	
ii.

	
Total Trust Principal Collections

	  
	  	  	
iii.

	
Total Trust Collections

	  

 

  

Exhibit B (Page 3)

  

 

	 	
j.

	
Delinquency Data

	
Percentage

	
Amount

	 	  	
i.

	
1-29 Days Delinquent

	  	  
	 	  	
ii.

	
30-59 Days Delinquent

	  	  
	 	  	
iii.

	
60-89 Days Delinquent

	  	  
	 	  	
iv.

	
90-119 Days Delinquent

	  	  
	 	  	
v.

	
120-149 Days Delinquent

	  	  
	 	  	
vi.

	
150 or Greater Days Delinquent

	  	  

	
IV.

	  	
Series Performance Data

	  
	  	  	  	  
	  	
a.

	
Portfolio Yield (Finance Charge Collections + Recoveries – Aggregate Investor Default Amount + PAA Inv Proceeds / BOP Collateral)

	  
	  	  	
i.

	
Current

	  
	  	  	
ii.

	
Prior Monthly Period

	  
	  	  	
iii.

	
Two Months Prior Monthly Period

	  
	  	  	
iv.

	
Three-Month Average

	  
	 	 	 	 
	  	
b.

	
Base Rate (Noteholder Servicing Fee + Admin Fee + Monthly Interest / BOP Collateral)

	  
	  	  	
i.

	
Current

	  
	  	  	
ii.

	
Prior Monthly Period

	  
	  	  	
iii.

	
Two Months Prior Monthly Period

	  
	  	  	
iv.

	
Three-Month Average

	  
	 	 	 	 
	  	
c.

	
Excess Spread Percentage (Portfolio Yield – Base Rate)

	  
	  	  	
i.

	
Current

	  
	  	  	
ii.

	
Prior Monthly Period

	  
	  	  	
iii.

	
Two Months Prior Monthly Period

	  
	  	  	
iv.

	
Quarterly Excess Spread Percentage

	  

 

	
V.

	  	
Investor Information Regarding Distributions to Noteholders

	  
	 	 	 	 
	  	
a.

	
The total amount of the distribution to Class A Noteholders per $1000 Note Initial Principal Balance.

	  
	 	 	 	 
	  	
b.

	
The amount of the distribution set forth in paragraph a. above in respect of interest on the Class A Notes, per $1000 Note Initial Principal Balance.

	  
	 	 	 	 
	  	
c.

	
The amount of the distribution set forth in paragraph a. above in respect of principal on the Class A Notes, per $1000 Note Initial Principal Balance.

	  
	 	 	 	 
	  	
d.

	
The total amount of the distribution to Class B Noteholders per $1000 Note Initial Principal Balance.

	  
	 	 	 	 
	  	
e.

	
The amount of the distribution set forth in paragraph d. above in respect of interest on the Class B Notes, per $1000 Note Initial Principal Balance.

	  

 

  

Exhibit B (Page 4)

  

	  	
f.

	
The amount of the distribution set forth in paragraph d. above in respect of principal on the Class B Notes, per $1000 Note Initial Principal Balance.

	  
	 	 	 	 
	  	
g.

	
The total amount of the distribution to Class C Noteholders per $1000 Note Initial Principal Balance.

	  
	 	 	 	 
	  	
h.

	
The amount of the distribution set forth in paragraph g. above in respect of interest on the Class C Notes, per $1000 Note Initial Principal Balance.

	  
	 	 	 	 
	  	
i.

	
The amount of the distribution set forth in paragraph g. above in respect of principal on the Class C Notes, per $1000 Note Initial Principal Balance.

	  

	
VI.

	  	
Investor Information

	  
	  	  	  	  
	  	
a.

	
Class A Note Initial Principal Balance

	  
	  	
b.

	
Class B Note Initial Principal Balance

	  
	  	
c.

	
Class C Note Initial Principal Balance

	  
	  	
d.

	
Initial Excess Collateral Amount

	  
	  	
e.

	
Initial Collateral Amount

	  
	 	 	 	 
	  	
f.

	
Class A Note Principal Balance

	  
	  	  	
i.

	
Beginning of Interest Period

	  
	  	  	
ii.

	
Principal Payment

	  
	  	  	
iii.

	
As of Payment Date

	  
	 	 	 	 
	
 

	
g.

	
Class B Note Principal Balance

	  
	  	  	
i.

	
Beginning of Interest Period

	  
	  	  	
ii.

	
Principal Payment

	  
	  	  	
iii.

	
As of Payment Date

	  
	 	 	 	 
	  	
h.

	
Class C Note Principal Balance

	  
	  	  	
i.

	
Beginning of Interest Period

	  
	  	  	
ii.

	
Principal Payment

	  
	  	  	
iii.

	
As of Payment Date

	  
	 	 	 	 
	  	
i.

	
Excess Collateral Amount

	  
	  	  	
i.

	
Beginning of Interest Period

	  
	  	  	
ii.

	
Reduction in Excess Collateral Amount

	  
	  	  	
iii.

	
As of Payment Date

	  
	 	 	 	 
	  	
j.

	
Collateral Amount

	  
	  	  	
i.

	
Beginning of Interest Period

	  
	  	  	
ii.

	
Increase/Decrease in Unreimbursed Investor Charge-Offs

	  
	  	  	
iii.

	
Increase/Decrease in Reallocated Principal Collections

	  
	  	  	
iv.

	
Reduction in Excess Collateral Amount

	  
	  	  	
v.

	
Principal Accumulation Account Deposit

	  
	  	  	
vi.

	
As of Payment Date

	  

 

  

Exhibit B (Page 5)

  

 

	  	  	
vii.

	
Collateral Amount as a Percentage of Note Trust Principal Balance

	  
	  	  	
viii.

	
Amount by which Note Principal Balance exceeds Collateral Amount

	  
	 	 	 	 	 
	  	
k.

	Required Excess Collateral Amount	  

	
VII.

	 	
Investor Charge-Offs and Reallocated Principal Collections

	  
	  	 	
(Section references relate to Indenture Supplement)

	  
	  	  	  	  
	  	
a.

	
Beginning Unreimbursed Investor Charge-Offs

	  
	  	
b.

	
Current Unreimbursed Investor Defaults

	  
	  	
c.

	
Current Unreimbursed Investor Uncovered Dilution Amount

	  
	  	
d.

	
Current Reimbursement of Investor Charge-Offs pursuant to Section 4.4(a)(vii)

	  
	  	
e.

	
Ending Unreimbursed Investor Charge-Offs

	  
	  	
f.

	
Beginning Unreimbursed Reallocated Principal Collections

	  
	  	
g.

	
Current Reallocated Principal Collections pursuant to Section 4.7

	  
	  	
h.

	
Current Reimbursement of Reallocated Principal Collections pursuant to Section 4.4(a)(vii)

	  
	  	
i.

	
Ending Unreimbursed Reallocated Principal Collections

	  

	
VIII.

	  	Investor Percentages –BOP Balance and Series Account Information	  
	  	
a.

	Allocation Percentage Numerator – for Finance Charge Collections and Default Amounts	  
	  	
b.

	Allocation Percentage Numerator – for Principal Collections	  
	  	
c.

	Allocation Percentage Denominator	  
	  	  	
i.

	
Aggregate Principal Receivables Balance as of Prior Monthly Period

	  
	  	  	
ii.

	
Number of Days at Balance

	  
	  	  	
iii.

	
Average Principal Balance

	  
	  	
d.

	Sum of Allocation Percentage Numerators for all outstanding Series with respect to Finance Charge Collections and Default Amounts	  
	  	
e.

	Sum of Allocation Percentage Numerators for all outstanding Series with respect to Principal Collections	  
	  	
f.

	Allocation Percentage, Finance Charge Collections and Default Amount (a./greater of c.iii. or d.)	  
	  	
g.

	Allocation Percentage, Principal Collections (b./ greater of c.iii. or e.)	  
	  	
h.

	Series Allocation Percentage	  

 

  

Exhibit B (Page 6)

  

	
IX.

	  	
Collections and Allocations

	  	  
	  	  	  	
Trust

	
Series

	  	
a.

	
Finance Charge Collections

	  	  
	  	
b.

	
Recoveries

	  	  
	  	
c.

	
Principal Collections

	  	  
	  	
d.

	
Default Amount

	  	  
	  	
e.

	
Dilution

	  	  
	  	
f.

	
Investor Uncovered Dilution Amount

	  	  
	  	
g.

	
Dilution including Fraud Amount

	  	  
	  	
h.

	
Available Finance Charge Collections

	  	  
	  	  	
i.

	
Investor Finance Charge Collections

	  	  
	  	  	
ii.

	
Excess Finance Charge Collections allocable to Series 2012-1

	  	  
	  	  	
iii.

	
Principal Accumulation Account Investment Proceeds

	  	  
	  	  	
iv.

	
Investment earnings in the Reserve Account

	  	  
	  	  	
v.

	
Reserve Account Draw Amount

	  	  
	  	  	
vi.

	
Recoveries

	  	  
	  	
i.

	
Available Finance Charge Collections (Sum of g.i through g.vii)

	  	  
	  	
j.

	
Total Collections to Series

	  	  
	  	
k.

	
Total Finance Charge Collections deposited in the Collection Account (net of any amounts distributed to Transferor and owed to Servicer)

	  	  

	
X.

	  	
Application of Available Funds pursuant to Section 4.4(a) of the Indenture Supplement

	  
	 	 	 	 
	  	
a.

	
Available Finance Charge Collections

	  
	  	  	
i.

	
On a pari passu basis:

	  
	  	  	  	
a.

	
Payment to the Indenture Trustee, to a maximum of $25,000

	  
	  	  	  	
b.

	
Payment to the Trustee, to a maximum of $25,000

	  
	  	  	  	
c.

	
Payment to the Administrator, to a maximum of $25,000

	  
	 	 	 	 	 
	  	  	
ii.

	
To the Servicer:

	  
	  	  	  	
a.

	
Noteholder Servicing Fee

	  
	  	  	  	
b.

	
Noteholder Servicing Fee previously due but not paid

	  
	  	  	  	
c.

	
Total Noteholder Servicing Fee

	  
	 	 	 	 	 
	  	  	
iii.

	
On a pari passu basis:

	  
	  	  	  	
a.

	
Class A Monthly Interest

	  
	  	  	  	
b.

	
Class A Deficiency Amount

	  
	  	  	  	
c.

	
Class A Additional Interest

	  
	  	  	  	
d.

	
Class A Additional Interest not paid on prior Payment Date

	  
	 	 	 	 	 
	  	  	
iv.

	
On a pari passu basis:

	  
	  	  	  	
a.

	
Class B Monthly Interest

	  
	  	  	  	
b.

	
Class B Deficiency Amount

	  
	  	  	  	
c.

	
Class B Additional Interest

	  
	  	  	  	
d.

	
Class B Additional Interest not paid on prior Payment Date

	  

 

  

Exhibit B (Page 7)

  

	  	  	
v.

	
On a pari passu basis:

	  
	  	  	  	
a.

	
Class C Monthly Interest

	  
	  	  	  	
b.

	
Class C Deficiency Amount

	  
	  	  	  	
c.

	
Class C Additional Interest

	  
	  	  	  	
d.

	
Class C Additional Interest not paid on prior Payment Date

	  
	 	 	 	 	 
	  	  	
vi.

	
To be treated as Available Principal Collections

	  
	  	  	  	
a.

	
Aggregate Investor Default Amount

	  
	  	  	  	
b.

	
Aggregate Investor Uncovered Dilution Amount

	  
	 	 	 	 	 
	  	  	
vii.

	
To be treated as Available Principal Collections, to the extent not previously reimbursed

	  
	  	  	  	
a.

	
Investor Charge-offs

	  
	  	  	  	
b.

	
Reallocated Principal Collections

	  
	 	 	 	 	 
	  	  	
viii.

	
Excess of Required Reserve Account Amount Over Available Reserve Account Amount

	  
	 	 	 	 	 
	  	  	
ix.

	
Amounts required to be deposited to the Spread Account

	  
	 	 	 	 	 
	  	  	
x.

	
To be treated as Available Principal Collections:  Series Allocation Percentage of Minimum Free Equity Shortfall

	  
	 	 	 	 	 
	  	  	
xi.

	
Unless an Early Amortization Event has occurred, amounts that have not been paid pursuant to (a)(i) above

	  
	 	 	 	 	 
	  	  	
xii.

	
The balance, if any, will constitute a portion of Excess Finance Charge Collections for such Payment Date and first will be available for allocation to other Series in Group One and, then:

	  
	  	  	  	
a.

	
Unless an Early Amortization Event has occurred, to the Transferor; and

	  
	  	  	  	
b.

	
If an Early Amortization Event has occurred, first, to pay Monthly Principal in accordance with Section 4.4(c) of the Indenture to the extent not paid in full from Available Principal Collections (calculated without regard to amounts available to be treated as Available Principal Collections pursuant to this clause), second, to pay on a pari passu basis any amounts owed to such Persons listed in clause (a)(i) above that have been allocated to Series 2012-1 in accordance with Section 8.4(d) of the Indenture and that have not been paid pursuant to clauses (a)(i) and (a)(xi) above, and, third, any amounts remaining after payment in full of the Monthly Principal and amounts owed to such Persons listed in clause (a)(i) above shall be paid to the Issuer.

	  

 

  

Exhibit B (Page 8)

  

	
XI.

	  	
Excess Finance Charge Collections (Group One)

	  
	 	 	 	 
	  	
a.

	
Total Excess Finance Charge Collections in Group One

	  
	 	 	 	 
	  	
b.

	
Finance Charge Shortfall for Series 2012-1

	  
	 	 	 	 
	  	
c.

	
Finance Charge Shortfall for all Series in Group One

	  
	 	 	 	 
	  	
d.

	
Excess Finance Charges Collections Allocated to Series 2012-1

	  

	
XII.

	  	
Available Principal Collections and Distributions (Section references relate to Indenture Supplement)

	  
	 	 	 	 
	  	
a.

	
Investor Principal Collections

	  
	 	 	 	 
	  	
b.

	
Less:  Reallocated Principal Collections for the Monthly Period pursuant to Section 4.7

	  
	 	 	 	 
	  	
c.

	
Plus:  Shared Principal Collections allocated to this Series

	  
	 	 	 	 
	  	
d.

	
Plus:  Aggregate amount to be treated as Available Principal Collections pursuant to Section 4.4(a)(vi)

	  
	 	 	 	 
	  	
e.

	
Plus:  Aggregate amount to be treated as Available Principal Collections pursuant to Section 4.4(a)(vii)

	  
	 	 	 	 
	  	
f.

	
Plus:  During an Early Amortization Period, the amount of Available Finance Charge Collections used to pay principal on the Notes pursuant to Section 4.4(a)(xiii)

	  
	 	 	 	 
	  	
g.

	
Available Principal Collections (Deposited to Principal Account)

	  
	  	  	
i.

	
During the Revolving Period, Available Principal Collections treated as Shared Principal Collections Pursuant to Section 4.4(b)

	  
	  	  	
ii.

	
During the Controlled Accumulation Period, Available Principal Collections deposited to the Principal Accumulation Account pursuant to Section 4.4(c)(i), (ii)

	  
	  	  	
iii.

	
During the Early Amortization Period, Available Principal Collections deposited to the Distribution Account pursuant to Section 4.4(c)

	  
	  	  	
iv.

	
Series Shared Principal Collections available to Group One pursuant to Section 4.4(c)(iii)

	  
	  	  	
v.

	
Principal Distributions pursuant to Section 4.4(e) in order of priority

	  
	  	  	  	
a.

	
Principal paid to Class A Noteholders

	  
	  	  	  	
b.

	
Principal paid to Class B Noteholders

	  
	  	  	  	
c.

	
Principal paid to Class C Noteholders

	  
	  	  	
vi.

	
Total Principal Collections Available to Share (Inclusive of Series 2012-1)

	  
	  	  	
vii.

	
Series Principal Shortfall

	  
	  	  	
viii.

	
Shared Principal Collections allocated to this Series from other Series

	  

 

  

Exhibit B (Page 9)

  

	
XIII.

	  	Series 2012-1 Accumulation	  
	 	 	 	 
	  	
a.

	Controlled Accumulation Period Length in months (scheduled)	  
	 	 	 	 
	  	
b.

	Controlled Accumulation Amount	  
	 	 	 	 
	  	
c.

	Controlled Deposit Amount	  
	 	 	 	 
	  	
d.

	Accumulation Shortfall	  
	 	 	 	 
	  	
e.

	Principal Accumulation Account Balance	  
	  	  	
i.

	
Beginning of Interest Period

	  
	  	  	
ii.

	
Controlled Deposit Amount

	  
	  	  	
iii.

	
Withdrawal for Principal Payment

	  
	  	  	
iv.

	
As of Payment Date

	  

	
XIV.

	  	
Reserve Account Funding (Section references relate to Indenture Supplement)

	  
	 	 	 	 
	  	
a.

	
Reserve Account Funding Date (scheduled)

	  
	 	 	 	 
	  	
b.

	
Required Reserve Account Amount (0.50% of Note Principal Balance beginning on Reserve Account Funding Date)

	  
	 	 	 	 
	  	
c.

	
Beginning Available Reserve Account Amount

	  
	 	 	 	 
	  	
d.

	
Reserve Draw Amount

	  
	 	 	 	 
	  	
e.

	
Deposit pursuant to 4.4(a)(viii) the excess of b. over c.

	  
	 	 	 	 
	  	
f.

	
Withdrawal for Reserve Account Surplus paid to Transferor pursuant to Section 4.10(d)

	  
	 	 	 	 
	  	
g.

	
Withdrawal for Reserve Account Surplus paid to Transferor pursuant to Section 4.10(e)

	  
	 	 	 	 
	  	
h.

	
Ending Available Reserve Account Amount

	  

	
XV.

	
 

	Spread Account Funding (Section references relate to Indenture Supplement)	  
	 	 	 	 
	  	
a.

	Spread Account Percentage	  
	 	 	 	 
	  	b.	Required Spread Account Amount	  
	 	 	 	 
	  	c.	Beginning Available Spread Account Amount	  
	 	 	 	 
	  	d.	Withdrawal pursuant to 4.11(a) – Section 4.4(a)(v) Shortfall	  
	 	 	 	 
	  	e.	Withdrawal pursuant to 4.11(b) – Class C Expected Principal Payment Date	  
	 	 	 	 
	  	f.	Withdrawal pursuant to 4.11(c) – Early Amortization Event	  
	 	 	 	 
	  	g.	
Withdrawal pursuant to 4.11(d) – Event of Default

	  

 

  

Exhibit B (Page 10)

  

	  	h.	
Deposit pursuant to 4.4(a)(ix) – Spread Account Deficiency

	  
	 	 	 	 
	  	i.	
Withdrawal pursuant to 4.11(f) – Spread Account Surplus Amount

	  
	 	 	 	 
	  	j.	
Ending Available Spread Account Amount

	  

	
XVI.

	  	Series Early Amortization Events	  
	 	 	 	 
	  	
a.

	The Free Equity Amount is less than the Minimum Free Equity Amount	  
	  	  	Free Equity:	  
	 	 	 	 	 
	  	  	
i.

	
Free Equity Amount

	  
	  	  	
ii.

	
Minimum Free Equity Amount

	  
	  	  	
iii.

	
Excess Free Equity Amount

	  
	 	 	 	 
	  	
b.

	The Note Trust Principal Balance is less than the Required Principal Balance Note Trust Principal Balance:	  
	  	  	
i.

	
Note Trust Principal Balance

	  
	  	  	
ii.

	
Required Principal Balance

	  
	  	  	
iii.

	
Excess Principal Balance

	  
	 	 	 	 
	  	
c.

	The three-month Average Portfolio Yield is less than three-month average Base Rate Portfolio Yield:	  
	  	  	
i.

	
Three month Average Portfolio Yield

	  
	  	  	
ii.

	
Three month Average Base Rate

	  
	  	  	
iii.

	
Three Month Average Excess Spread

	  
	 	 	 	 
	  	
d.

	The Note Principal Balance is outstanding beyond the Expected Principal Payment Date	  
	  	  	
i.

	
Expected Principal Payment Date

	  
	  	  	
ii.

	
Current Payment Date

	  
	  	
e.

	Are there any material modifications, extensions or waivers to pool asset terms, fees penalties or payments?	  
	  	
f.

	Are there any material breaches or pool of assets representations and warranties or covenants?	  
	  	
g.

	Are there any material changes in criteria used to originate, acquire, or select new pool assets?	  
	  	
h.

	Has an early amortization event occurred?	  

 

  

Exhibit B (Page 11)

  

 

IN WITNESS WHEREOF, the undersigned has duly executed this Monthly Noteholder's Statement as of the ___ day of _____________.

 

	  	
GENERAL ELECTRIC CAPITAL CORPORATION, as Servicer

	     	  
	  	  	
By:

	  
	  	  	Name:
	  	  	Title:

 

  

Exhibit B (Page 12)

  

SCHEDULE I

 

PERFECTION REPRESENTATIONS, WARRANTIES

AND COVENANTS (WITH RESPECT TO RECEIVABLES)

 

(a)           In addition to the representations, warranties and covenants contained in the Indenture, the Issuer hereby represents, warrants and covenants to the Indenture Trustee as follows as of the Closing Date:

 

(1)           The Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables in favor of the Indenture Trustee, which security interest is prior to all other Liens, and is enforceable as such against creditors of and purchasers from the Issuer.

 

(2)           The Receivables constitute either “accounts” or “general intangibles” within the meaning of the applicable UCC.

 

(3)           The Issuer owns and has good and marketable title to the Receivables free and clear of any Lien, claim or encumbrance of any Person.

 

(4)           There are no consents or approvals required for the pledge of the Receivables to the Indenture Trustee pursuant to the Indenture.

 

(5)           The Issuer (or the Administrator on behalf of the Issuer) has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest granted to the Indenture Trustee under the Indenture in the Receivables.

 

(6)           Other than the pledge of the Receivables to the Indenture Trustee pursuant to the Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed the Receivables.  The Issuer has not authorized the filing of and is not aware of any financing statements against the Issuer that include a description of the Receivables, except for the financing statement filed pursuant to the Indenture.

 

(7)           Notwithstanding any other provision of the Indenture, the representations and warranties set forth in this Schedule I shall be continuing, and remain in full force and effect, until such time as the Series 2012-1 Notes are retired.

 

(b)           The Indenture Trustee covenants that it shall not, without satisfying the Rating Agency Condition, waive a breach of any representation or warranty set forth in this Schedule I.

 

(c)           The Issuer covenants that in order to evidence the interests of the Issuer and the Indenture Trustee under the Indenture, the Issuer shall take such action, or execute and deliver such instruments as may be necessary or advisable (including, without limitation, such actions as are requested by the Indenture Trustee) to maintain and perfect, as a first priority interest, the Indenture Trustee’s security interest in the Receivables.

 

  

Schedule I (Page 1)Exhibit No. 10.1

 

CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT

 

This Convertible Note and Warrant Purchase Agreement
(this “Agreement”) is made as of January 20, 2012, by and among EntreMed, Inc., a Delaware corporation (the
“Company”), and the parties listed on the Schedule of Investors attached to this Agreement as Exhibit A
(individually, an “Investor” and collectively the “Investors”).

 

RECITALS

 

WHEREAS, the Company desires to issue
and sell convertible notes having an original principal amount of up to an aggregate of $10,000,000, and issue stock purchase warrants
to the Investors, and the Investors desire to purchase such convertible notes and warrants, in each case, on the terms and conditions
set forth herein.

 

NOW, THEREFORE, in consideration of the
mutual promises, covenants and conditions set forth in this Agreement, the parties to this Agreement mutually agree as follows:

 

I.             PURCHASE
AND SALE OF NOTES AND WARRANTS; CLOSING.

 

A.          Note
Issuance. Subject to the terms and conditions of this Agreement, at the Closing (as defined below) the Company agrees
to sell to each Investor, and each Investor severally agrees to purchase from the Company a subordinated, mandatorily convertible
note, which shall be convertible into shares of the common stock, par value $0.01 of the Company (“Common Stock”),
in substantially the form attached to this Agreement as Exhibit B (individually, a “Note”, and collectively,
the “Notes”) in the principal amount set forth opposite such Investor’s name on Exhibit A
hereto. The obligations of the Investors to purchase Notes are several and not joint.

 

B.           Warrant
Issuance. Subject to the terms and conditions of this Agreement, the Company further agrees to issue to each Investor at
the Closing a warrant, in substantially the form attached to this Agreement as Exhibit C (individually, a “Warrant”,
and collectively, the “Warrants”), which will be exercisable for a number of shares of Common Stock equal to
20% of (i) the initial principal amount of the Note issued to the Investor divided by (ii) $1.15. The exercise price of the Warrants
issued to each Investor shall be $1.40. The number of shares of Common Stock that the Investor shall be entitled to purchase upon
Warrant exercise and the per share exercise price of the Warrant shall be subject to adjustment in the manner set forth in the
Warrant.

 

C.           Use
of Proceeds. The Company will use the proceeds from the sale of the Notes and Warrants for general corporate purposes,
including additional clinical trials for ENMD-2076.

 

D.           Closing;
Delivery. The initial sale and purchase of the Notes and Warrants shall take place in a closing (the “Closing”)
to be held on January 27, 2012 at the offices of EntreMed, Inc., 9640 Medical Center Drive, Rockville, MD 20850, or at such other
time and place upon which the Company and the Investors mutually agree. At the Closing, the Company will deliver to each of the
Investors the respective Note and Warrant to be purchased by such Investor against receipt by the Company of the corresponding
purchase price set forth on Exhibit A hereto in the form of a wire transfer of immediately available funds to the
Company. Each of the Notes and Warrants will be registered in such Investor’s name in the Company’s records.

 

E.           Reservation
of Common Stock. The Company shall reserve a sufficient number of shares of its Common Stock for issuance upon conversion
of the Notes and the exercise and of the Warrants, as applicable. In connection therewith, such shares of the Company’s Common
Stock shall be duly authorized and, when issued or delivered upon (x) conversion of the Notes in accordance with the terms of the
Notes or (y) exercise of the Warrants in accordance with their terms, shall be validly issued, fully paid and non-assessable.

  

    	 

    	 

    

  

II.
           Shareholder Approval.

 

A.           Filing
of Preliminary Proxy Statement.  As soon as practicable, the Company shall cause to be prepared and filed with the Securities
and Exchange Commission (the “SEC”) a preliminary proxy statement (the “Preliminary Proxy Statement”)
to obtain approval, in accordance with the Nasdaq Listing Rules, of the issuance of the shares of Common Stock issuable upon conversion
of the Notes and exercise of the Warrants (such approval, the “Shareholder Approval”).

 

B.           Shareholder
Meeting. Upon approval by the SEC of such Preliminary Proxy Statement or, if the SEC has not reviewed such, at the expiration
of 10 calendar days from the filing of the Preliminary Proxy Statement, the Company shall file a definitive proxy statement and
hold its annual meeting of shareholders no later than April 30, 2012 (the “Shareholder Meeting”) to obtain the
Shareholder Approval.

 

III.           REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. Except as otherwise described in the Company’s most recent Annual Report on Form 10-K,
the Company’s Quarterly Reports on Form 10-Q filed after the Company's most recent Annual Report on Form 10-K, the Company's
Proxy Statement for its 2011 annual meeting of shareholders, and any of the Company's Current Reports on Form 8-K filed after the
filing of the Company’s most recent Form 10-K (collectively, the “SEC Reports”), the Company hereby represents
and warrants to, and covenants with, the Investor as of the date hereof, as follows:

 

A.           Organization.
The Company is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware. The
Company has full power and authority to conduct its business as presently conducted and is registered or qualified to do business
and in good standing in each jurisdiction in which it owns property or transacts business and where the failure to be so qualified
would have a material adverse effect upon the Company and its subsidiaries as a whole or the business, financial condition, properties,
operations or assets of the Company and its subsidiaries as a whole or the Company’s ability to perform its obligations under
this Agreement, the Note and the Warrant to be issued to the Investor (collectively, the “Transaction Agreements”)
in all material respects (“Material Adverse Effect”), and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification.

 

B.           Due
Authorization. The Company has all requisite corporate power and authority to execute, deliver and perform its obligations
under the Transaction Agreements. The execution and delivery of the Transaction Agreements and the consummation by the Company
of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action and no further
action on the part of the Board of Directors or stockholders is required. Upon execution of the Transaction Agreements by the Company,
the Transaction Agreements will be validly executed and delivered by the Company and will constitute legal, valid and binding agreements
of the Company enforceable against the Company in accordance with their terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement
of creditors' rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief,
or other equitable remedies.

 

C.           Valid
Issuance. The shares of the Company’s Common Stock issuable upon conversion of the Notes and exercise of the Warrants
(the “Conversion Stock”), when issued in compliance with the provisions of the Transaction Agreements, will
be validly issued (including, without limitation, issued in compliance with applicable federal and state securities laws), fully
paid and nonassessable, and will be free of any liens or encumbrances; provided, however, that the Conversion Stock
may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or otherwise required
by such laws at the time a transfer is proposed.

  

    	 

    	 

    

  

D.           No
Conflict or Default. The execution and delivery of the Transaction Agreements and the sale and issuance of the Note
and Warrant to be sold by the Company pursuant to this Agreement, the fulfillment of the terms of the Transaction Agreements and
the consummation of the transactions contemplated thereby will not: (i) result in a conflict with or constitute a material
violation of, or material default (with the passage of time or otherwise) under, (A) any bond, debenture, note, loan agreement
or other evidence of indebtedness, or any material lease or contract to which the Company is a party or by which the Company or
their respective properties are bound, (B) the Certificate of Incorporation, by-laws or other organizational documents of
the Company, as amended, or (C) any law, administrative regulation, or existing order of any court or governmental agency,
or other authority binding upon the Company or the Company's respective properties; or, (ii) result in the creation or imposition
of any lien, encumbrance, claim or security interest upon any of the material assets of the Company or an acceleration of indebtedness
pursuant to any obligation, agreement or condition contained in any material bond, debenture, note or any other evidence of indebtedness
or any material indenture, mortgage, deed of trust or any other agreement or instrument to which the Company is a party or by which
it is bound or to which any of the property or assets of the Company is subject, except as contemplated by the Transaction Agreements.
No consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory body, administrative
agency, governmental body or any other third-party is required for the execution and delivery of the Transaction Agreements by
the Company, other than such as have been made or obtained, and except for any filings required to be made under federal or state
securities laws.

 

E.           Legal
Proceedings. There is no material legal or governmental proceeding pending, or to the knowledge of the Company,
threatened, to which the Company is a party or of which the business or property of the Company is subject that is required to
be disclosed and that is not so disclosed in the SEC Reports.

 

F.           No
Violations. To the knowledge of the Company, it is not in violation of any law, administrative regulation, ordinance
or order of any court or governmental agency, arbitration panel or authority applicable to the Company, which violation, individually
or in the aggregate, is reasonably likely to have a Material Adverse Effect. The Company is not in default (and there exists no
condition which, with the passage of time or otherwise, would constitute a default) in the performance of any bond, debenture,
note or any other evidence of indebtedness or any indenture, mortgage, deed of trust or any other material agreement or instrument
to which the Company is a party or by which the Company is bound, which such default would have a Material Adverse Effect upon
the Company.

 

G.           Governmental
Permits, Etc. The Company has all necessary franchises, licenses, certificates and other authorizations from any
foreign, federal, state or local government or governmental agency, department or body that are currently necessary for the operation
of the business of the Company as currently conducted, except where the failure to currently possess such franchises, licenses,
certificates and other authorizations is not reasonably likely to have a Material Adverse Effect.

 

H.           Financial
Statements. The financial statements of the Company and the related notes contained in the SEC Reports present fairly and
accurately in all material respects the financial position of the Company as of the dates therein indicated, and the results of
its operations, cash flows and the changes in shareholders' equity for the periods therein specified, subject, in the case of unaudited
financial statements for interim periods, to normal year-end audit adjustments. Such financial statements (including the related
notes) have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a
consistent basis at the times and throughout the periods therein specified, except that unaudited financial statements may not
contain all footnotes required by GAAP.

 

I.           
Independent Accountants. Reznick Group, P.C., who have certified certain financial statements of the Company, and have
audited the Company’s internal control over financial reporting and managements’ assessment thereof, are to the Company’s
knowledge, independent registered public accountants with respect to the Company as required by the U.S. Securities Act of 1933,
as amended (the “Securities Act”).

 

J.           Clinical
Trials. The clinical, pre-clinical and other studies and tests conducted by or on behalf of or sponsored by the Company
were and, if still pending, are being conducted in accordance with all statutes, laws, rules and regulations, as applicable (including,
without limitation, those administered by the FDA or by any foreign, federal, state or local government or regulatory authority
performing functions similar to those performed by the FDA) except where the failure to comply with such statutes, laws, rules
or regulations would not result, individually or in the aggregate, in a Material Adverse Effect. 

 

K.           No
Material Adverse Change.  Except as disclosed in the SEC Reports or in any press releases issued by the Company,
there has not been (i) an event, circumstance or change that has had or is reasonably likely to have a Material Adverse Effect
upon the Company, (ii) any obligation incurred by the Company that is material to the Company, (iii) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company, or (iv) any loss or damage (whether or not insured) to
the physical property of the Company which has had a Material Adverse Effect.

  

    	 

    	 

    
   

L.           SEC
Filings. The Company has filed or furnished all reports, schedules, forms, statements and other documents with the
SEC required to be filed or furnished by the Company under the Securities Act of 1933, as amended (the “Securities Act”)
or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) since January 1, 2010 (collectively,
the “Company SEC Documents”). As of their respective filing dates, the Company SEC Documents complied as to
form in all material respects with the requirements of the Securities Act and the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such Company SEC Documents, in each case as in effect at such time,
and none of the Company SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading.

 

IV.           REPRESENTATIONS,
WARRANTIES AND CERTAIN AGREEMENTS OF INVESTORS. Each Investor, severally and not jointly, hereby represents and warrants to,
and agrees with, the Company, that:

 

A.           Authorization.
Such Investor has full power and authority to enter into this Agreement. The Agreement, when executed and delivered by such Investor,
will constitute valid and legally binding obligations of such Investor, enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general
application affecting enforcement of creditors' rights generally, and as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.

 

B.           Purchase
Entirely for Own Account. This Agreement is made with such Investor in reliance upon the Investor’s representation
to the Company, which by such Investor’s execution of this Agreement, such Investor hereby confirms, that the Notes and Warrants
and Conversion Stock (collectively, the “Securities”) to be acquired by such Investor will be acquired for investment
for such Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof,
and that such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same.
By executing this Agreement, such Investor further represents that such Investor does not presently have any contract, undertaking,
agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with
respect to any of the Securities. Such Investor has not been formed for the specific purpose of acquiring the Securities.

 

C.           Disclosure
of Information. Such Investor has had an opportunity to discuss the Company’s business, management, financial affairs
and the terms and conditions of the offering of the Securities with the Company’s management and has had an opportunity to
review the Company's facilities. The foregoing, however, does not limit or modify the representations and warranties of the Company
in Section 3 of this Agreement or the right of such Investor to rely thereon.

 

D.           Ownership
Limitation. Such Investor acknowledges and agreed that, without Shareholder Approval, the Notes may not be converted, and
the Warrants may not be exercised, in whole or in part, as applicable, into shares of Common Stock if such conversion would result
in the Investor (either individually or as part of a “group” under the United States federal securities laws) owning,
or having a right to acquire, the greater of (i) 17.50% of the outstanding shares of the Company's Common Stock or (ii) such number
of shares that would cause a “change in control” under the applicable rules of the Nasdaq Stock Market. Such Investor
acknowledges and agrees that if Shareholder Approval is not obtained at the Shareholder Meeting, the Investor shall be subject
to the ownership limitations set forth in this Section 2.3 unless the Company holds a subsequent shareholder vote to approve the
conversion of the Notes and the exercise of Warrants in full.

  

    	 

    	 

    
   

E.           Restricted
Securities. Such Investor understands that the Securities have not been, and will not be, registered under the Securities
Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things,
the bona fide nature of the investment intent and the accuracy of the Investor's representations as expressed herein. Such Investor
understands that the Securities are “restricted securities” under applicable U.S. federal and state securities laws
and that, pursuant to these laws, such Investor must hold the Securities indefinitely unless they are registered with the
Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification
requirements is available. Such Investor further acknowledges that if an exemption from registration or qualification is available,
it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for
the Securities, and on requirements relating to the Company which are outside of such Investor's control, and which the Company
is under no obligation and may not be able to satisfy.

 

F.           No
Public Market. Such Investor understands that no public market now exists for the Notes and the Warrants, and that the
Company has made no assurances that a public market will ever exist for the Notes and the Warrants.

 

G.           Rule
144. Such Investor is aware of Rule 144 under the Securities Act and the restrictions imposed thereby and further understands
and agrees that so long as such Investor beneficially owns 10% or more of the Company’s then outstanding securities, the
Company will deem the Investor to be an “affiliate” as defined in Rule 144(a)(1) and any transfers of the Conversion
Stock by the Investor shall be subject to the limitations applicable to affiliates set forth in the Securities Act and the rules
promulgated thereunder, including without limitation Rule 144.

 

H.           Legends.
Such Investor understands that the Notes and the Warrants and Conversion Stock issued upon conversion or exercise of the Notes
and the Warrants, may bear one or all of the following legends (or substantially similar legends), unless and until the Conversion
Stock is registered under the Securities Act pursuant to an effective registration statement:

 

1.
           “NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR THE UNDERLYING SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE NOTE OR THE UNDERLYING SECURITIES OR AN EXEMPTION THEREFROM UNDER SUCH
ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THE COMPANY, IN ITS SOLE DISCRETION, SHALL HAVE THE RIGHT TO REQUIRE AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH
ANY PROPOSED TRANSFER NOR IS SUCH TRANSFER IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED
UPON ANY NOTE OR SECURITIES ISSUED IN EXCHANGE FOR, OR UPON CONVERSION OF, THIS NOTE.”

 

2.
          Any legend required by the securities laws of any state to the
extent such laws are applicable to the Securities represented by the certificate so legended.

 

I.           Accredited
Investor. Such Investor is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under
the Securities Act.

 

J.           Foreign
Investors. If such Investor is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue
Code of 1986, as amended), such Investor hereby represents that it has satisfied itself as to the full observance of the laws of
its jurisdiction in connection with any invitation to subscribe for the Notes and the Warrants or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase of the Notes and the Warrants, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the
income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of
the Securities. Such Investor’s subscription and payment for and continued beneficial ownership of the Securities will not
violate any applicable securities or other laws of such Investor’s jurisdiction.

 

K.           No
General Solicitation. Neither the Investor, nor any of its officers, directors, employees, agents, stockholders or partners
has either directly or indirectly, including through a broker or finder (a) engaged in any general solicitation, or (b) published
any advertisement in connection with the offer and sale of the Notes and the Warrants.

  

    	 

    	 

    
   

V.            CONDITIONS
TO CLOSING.

 

A.           Conditions
to Investors’ Obligations. The obligations of each Investor to purchase Notes and Warrants under this Agreement are
subject to the fulfillment or waiver, on or before Closing, of each of the following conditions:

 

1.
          each of the representations and warranties of the Company contained
in Section 3 shall be true and correct on and as of the applicable Closing with the same effect as though such representations
and warranties had been made on and as of the date of such Closing;

 

2.
          the Company shall have received the written agreement of Celgene,
in a form reasonably satisfactory to the Investors, approving the transactions contemplated by this Agreement and agreeing to:
convert all of its outstanding Series A Convertible Preferred Stock to Common Stock; waive all accrued dividends; and terminate
all governance rights, effective immediately following Shareholder Approval;

 

3.
          the Company shall have delivered a termination notice to YA
Global Master SPV Ltd. in accordance with the terms of that certain Standby Equity Distribution Agreement, dated as of June 28,
2011, to terminate such agreement;

 

4.
          the Investors have, in the aggregate, purchased a minimum of
$8 million in Notes and Warrants;

 

5.
           the Company shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the
applicable Closing and shall have obtained all approvals, consents and qualifications necessary to complete the issuance and sale
of Notes and Warrants described herein; and

 

6.
          there shall not have been any Event of Default (as defined in
the Notes) nor shall there exist any state of facts or condition that with or without the passage of time or giving of notice would
constitute an Event of Default.

 

B.           Condition
to Company’s Obligations. The obligations of the Company to each Investor under this Agreement are subject to the
fulfillment or waiver, on or before Closing, of each of the following conditions:

 

1.
          each of the representations and warranties of such Investor
contained in Section 4 shall be true and correct on the date of the Closing;

 

2.
          the Investors have, in the aggregate, purchased a minimum of
$8 million in Notes and Warrants;

 

3.
          such Investor shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the
Closing and shall have obtained all approvals, consents and qualifications necessary to complete the purchase and sale described
herein; and

 

4.
           such Investor shall have transferred to the Company, by wire
payment in immediately available funds, the purchase price for the Notes and Warrants issued to it, in the respective amount indicated
on Exhibit A hereto opposite the name of such Investor.

 

    	 

    	 

    

  

VI.           COVENANTS.

 

A.           Registration
Rights.

 

1.
           Registration. Subject to the terms and upon the conditions
of this Agreement, the Company covenants and agrees that as promptly as practicable after (and in any event no more than ninety
(90) days after) Shareholder Approval, the Company shall have prepared and filed with the SEC a Shelf Registration Statement
covering the resale of all of the Registrable Securities. The Company shall use reasonable best efforts to cause such Shelf Registration
Statement to be declared or become effective as soon as practicable and to keep such Shelf Registration Statement continuously
effective and in compliance with the Securities Act and usable for resale of such Registrable Securities until the date that is
six months from the Closing. The Company shall register the resale of the Registrable Securities on Form S-3 or such other form
it is eligible to use, and shall be effected by means of an offering to be made on a continuous basis under the Securities Act
(a “Shelf Registration Statement”) in accordance with the methods and distribution set forth in the Shelf Registration
Statement and Rule 415.  

 

2.
          Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance hereunder shall be borne by the Company. Each Holder shall pay
any Selling Expenses incurred in connection with the sale of any Common Stock sold pursuant to the Shelf Registration Statement.

 

3.
          Indemnification. The Company agrees to indemnify each
Holder and, if a Holder is a person other than an individual, such Holder’s officers, directors, employees, agents, representatives
and Affiliates, and each Person, if any, that controls a Holder within the meaning of the Securities Act (each, an “Indemnitee”),
against any and all Losses, joint or several, arising out of or based upon any untrue statement or alleged untrue statement of
material fact contained in any registration statement, including any preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto or any documents incorporated therein by reference or contained in any free writing prospectus
(as such term is defined in Rule 405) prepared by the Company or authorized by it in writing for use by such Holder (or any amendment
or supplement thereto), or any omission to state therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading; provided, however that the Company
shall not be liable to such Indemnitee in any such case to the extent that any such Loss is based solely upon an untrue statement
or omission made in such registration statement, including any such preliminary prospectus or final prospectus contained therein
or any such amendments or supplements thereto or contained in any free writing prospectus (as such term is defined in Rule 405)
prepared by the Company or authorized by it in writing for use by such Holder (or any amendment or supplement thereto), in reliance
upon and in conformity with information regarding such Indemnitee or its plan of distribution or ownership interests which was
furnished in writing to the Company by such Indemnitee expressly for use in connection with such registration statement, including
any such preliminary prospectus or final prospectus contained therein or any such amendments or supplements thereto. Such indemnity
shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnitee and shall survive the
transfer of the Registrable Securities by the Holders.

 

4.
          Assignment of Registration Rights. The rights of each
Investor to registration of Registrable Securities pursuant to this Agreement may not be assigned by the Investor to a transferee
or assignee of Registrable Securities without the prior written consent of the Company.

 

5.
          Rule 144 Reporting. With a view to making available to
the Investor and Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable
Securities to the public without registration, the Company agrees to use its reasonable best efforts to:

 

(i)
          make and keep adequate current public information with respect
to the Company available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated
under the Securities Act, at all times after the effective date of this Agreement;

 

(ii)
          so long as the Investor or a Holder owns any Registrable Securities,
furnish to the Investor or such Holder forthwith upon request: (A) a written statement by the Company as to its compliance
with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the most recent
annual or quarterly report of the Company; and (C) such other reports and documents as the Investor or Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration; and

 

    	 

    	 

    

  

(iii)
          to take such further action as any Holder may reasonably request,
all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the
Securities Act.

 

6.
           As used in this Section 6.1, the following terms shall have
the following respective meanings:

 

(i)
           “Holder” means the Investor and any other
holder of Registrable Securities to whom the registration rights conferred by this Agreement have been transferred in compliance
with Section 6.1(d) hereof.

 

(ii)
           “Loss or Losses” means any and all losses,
damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement
payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, excluding special, consequential, exemplary
and punitive damage.

 

(iii)
           “Register,” “registered”
and “registration” shall refer to a registration effected by preparing and (A) filing a registration statement
in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of effectiveness
of such registration statement or (B) filing a prospectus and/or prospectus supplement in respect of an appropriate effective
registration statement.

 

(iv)
           “Registrable Securities” means (A) all
Conversion Stock held by the Holders from time to time and (B) any equity securities issued or issuable directly or indirectly
with respect to the securities referred to in clause (A) by way of conversion, exercise or exchange thereof or stock dividend
or stock split or in connection with a combination of shares, recapitalization, reclassification, merger, amalgamation, arrangement,
consolidation or other reorganization, provided that, once issued, such securities shall cease to be Registrable Securities (1) when
they are sold pursuant to an effective registration statement under the Securities Act, (2) upon the date at which all Registrable
Securities may be sold without restriction under Rule 144, (3) when they shall have ceased to be outstanding, or (4) when
they have been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the
transferee of the securities. No Registrable Securities may be registered under more than one registration statement at one time.

 

(v)
           “Registration Expenses” means all expenses
incurred by the Company in effecting any registration pursuant to this Agreement (whether or not any registration or prospectus
becomes effective or final) or otherwise complying with its obligations under this Section 6.1, including, without limitation,
all registration, filing and listing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and the expenses of the Company’s independent accountants in connection with any regular or special reviews
or audits incident to or required by any such registration, but shall not include Selling Expenses and the compensation of regular
employees of the Company, which shall be paid in any event by the Company.

 

(vi)
           “Rule 144,” “Rule 405”
and “Rule 415” mean, in each case, such rule promulgated under the Securities Act (or any successor provision),
as the same shall be amended from time to time.

 

(vii)
           “Selling Expenses” means all discounts,
selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel
for any Holder.

 

    	 

    	 

    

  

B.            Board
Representation Rights.

 

1.
          Appointment of Investor Designees. Immediately following
the Closing, each of Emerging Technology Partners, LLC (“ETP”) and IDG-Accel (“IDG” and together
with ETP, the “Lead Investors”) shall be entitled to designate one Investor Designee (as defined below) to the
Company’s Board of Directors, as provided herein. In the event ETP or IDG declines to designate an Investor Designee, the
other shall have the right to designate a second Investor Designee. The Company’s Board of Directors shall by written consent
or meeting appoint the Investor Designee(s) to the Company’s Board of Directors, effective upon the Closing. For purposes
of this Section 6.2, “Investor Designees” shall mean the maximum number of directors that may be appointed
under Nasdaq Stock market listing rules (the “Listing Rules”) in connection with this Agreement and the transactions
contemplated hereby. If the Investor’s ownership of Securities decreases at any time (as measured in the aggregate number
of shares of Conversion Stock issuable to all Investors party hereto), the number of Investor Designees shall decrease ratably
such that the percentage of the Board of Directors represented by the Investors Designees shall not exceed the Investors’
proportionate percentage equity ownership in the Company. For the avoidance of doubt, the maximum number of Investor Designees
that may be nominated by the Lead Investors at any time shall be equal to the product, rounded up to the nearest whole number,
of (i) the Investor’s aggregate ownership percentage of Securities (on an as-converted basis), as of such date, multiplied
by (ii) the total number of directors on the Board of Directors (which total number of directors includes the proposed Investor
Designees).

 

2.
          Nomination of Investor Designees. Any Investor Designee
(including any successor designee pursuant to Subsection 6.2(d) below) shall be nominated by the Board of Directors (or a committee
thereof) for election at the annual meeting of stockholders at which such Investor’s Designee’s term will expire. Unless
otherwise agreed by the Board of Directors, each Investor Designee (other than an employee of the Company) shall comply with the
independence requirements of the Listing Rules. At least sixty (60) days prior to any such annual meeting at or by which directors
are to be elected, the Lead Investors shall notify the Company in writing of the Investor Designee(s) to be nominated for election
as a director. The Company shall disclose in its proxy the nominated Investor Designee(s). In the absence of any such notification,
it shall be presumed that the Lead Investor’s then incumbent Investor Designee(s) has been renominated as its Investor Designee(s).
The rights provided under this Section 6.2 are the exclusive rights of the Lead Investors and are not transferable.

 

3.
          Restrictions on Investor Designees. The Investor Designees
(i) shall be bound by confidentiality obligations with respect to the Company and its business to the same extent as are other
directors of the Company and as is the Investor pursuant to this Agreement; and (ii) if deemed necessary by a determination
of the Chairman of the Board or a vote of the majority of the independent members of the Board, shall not participate in any Board
deliberations or action (including, but not limited to, Board presentations or discussions), or receive Board information, relating
to any matter to which the Investor is either directly or indirectly involved or has any interest that is competing or inconsistent
with the interests of the Company. The Investor agrees to cause the Investor Designees (and each successor) to comply with the
obligations in clause (i) of the preceding sentence for the benefit of the Company and its successors.

 

4.
          Successor Designees. If an Investor Designee shall cease
to serve as a director for any reason, the Company’s Board of Directors shall appoint and elect a replacement director to
serve out the remaining term of the existing director upon written notice to the Company by the Investor. The Lead Investors may
designate a nominee to succeed any such resigning Investor Designee, and the Nominating and Corporate Governance Committee shall
consider such nominee for nomination to the Board of Directors.

 

5.
          Indemnification Agreement. The Company shall provide
each Investor Designee (or successor Investor Designee) serving on the Board of Directors with the same indemnification rights
currently granted, or such rights as may be amended from time to time, as provided to all other members of the Board of Directors.

 

    	 

    	 

    

  

6.
          Observer Rights. In lieu of an Investor Designee, IDG
and ETP may each instead elect to designate an observer to the Board of Directors (each such observer, an “Investor Observer”).  Such
Investor Observer may attend, in person, as an observer, all meetings held in person and participate in telephonic meetings of
the Board of Directors of the Company, provided that such Investor Observer shall not be entitled to vote on any matter brought
to a vote at any such meeting.  The Company reserves the right to withhold any information and to exclude such Investor
Observer from any meeting, or any portion thereof, as is reasonably determined by the Chairman of the Board or a majority of the
members of the Board of Directors or any committee thereof (in the case of committee meetings) to be necessary for purposes of
confidentiality, competitive factors, attorney-client privilege or other reasonable purposes (at the sole discretion of the Chairman
of the Board or a majority of the members of the Board of Directors or a majority of the members of any committee, with respect
to a meeting of such committee, as applicable).

 

C.
          Standstill Period. During the period from the
Closing until the Shareholders Meeting, the Company will not, directly or indirectly, offer, sell, grant any option to purchase
(except for employee and director stock options and/or stock bonuses), or otherwise dispose of (or announce any offer, sale, grant
or any option to purchase or other disposition of) (i) any equity or equity equivalent securities, including without limitation
any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible
into or exchangeable or exercisable for common stock, or (ii) incur any additional indebtedness other than in the ordinary course
of business in a manner consistent with past practice.

 

D.
          Liquidated Damages. The Company understands that
failure to obtain Shareholder Approval at the Shareholder Meeting (including any postponement or adjournment thereof) could result
in an economic loss to the Investors. As compensation to the Investors for such loss, the Company agrees to pay (as liquidated
damages and not as a penalty) an aggregate amount of $1,200,000, on a pro-rata basis to each Investor based upon the amount invested
by such Investor, within twenty Business Days of the Shareholder Meeting, and all Notes shall remain outstanding following payment
of such liquidated damages (and for the avoidance of doubt, interest shall continue to accrue on such Notes until the Maturity
Date). Such liquidated damages shall be the sole and exclusive remedy available to the Investors in the event that Shareholder
Approval is not obtained at the Shareholder Meeting, except in a circumstance where the Company has otherwise intentionally breached
its obligations under this Agreement.

 

VII.          GENERAL
PROVISIONS.

 

A.           Survival
of Warranties. The representations, warranties and covenants of the Company and the Investors contained in or made pursuant
to this Agreement shall survive the execution and delivery of this Agreement for a period of one year.

 

B.           Successors
and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties.

 

C.           Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement and the other
Transaction Agreements shall be governed by and construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. The parties irrevocably submits to the exclusive jurisdiction
of the United States District Court for the Southern District of New York located in the borough of Manhattan in the City of New
York, or if such court does not have jurisdiction, the Supreme Court of the State of New York, New York County, for the purposes
of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby (such courts, the
“New York Courts”). Each party hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and the other Transaction
Agreements and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE OTHER TRANSACTION AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
If either party shall commence an action or proceeding to enforce any provisions of this Agreement and the other Transaction Agreements,
then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

    	 

    	 

    

  

D.           Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf) or
other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid
and effective for all purposes.

 

E.           Headings.
The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement. All references in this Agreement to sections, paragraphs, exhibits and schedules shall, unless otherwise provided,
refer to sections and paragraphs hereof and exhibits attached hereto, which exhibits are incorporated herein by this reference.

 

F.           Notices.
Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will
be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation
of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service,
or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions
as may be designated in writing by the party to receive such notice.

 

if to the Company:

 

9640 Medical Center Drive

Rockville, Maryland 20850

Attention:   General Counsel & Secretary

Facsimile:  240.864.2601

 

With a copy to (which shall not constitute notice):

 

Richard E. Baltz

Arnold & Porter LLP

555 12th St., N.W.

Washington, D.C.  20004

Facsimile:  202.942.5999

 

If to the Investor:

 

At the address provided to the Company
by the Investor

 

G.           Amendments
and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance) only with the written consent of the Company and each Investor. Any amendment or waiver
effected in accordance with this Section 7.8 shall be binding upon each Investor and the Company.

 

H.           Separability
of Agreements; Severability of this Agreement. The Company’s agreement with each of the Investors is a separate agreement
and the sale of the Notes and Warrants to each of the Investors is a separate sale. Unless otherwise expressly provided herein,
the rights of each Investor hereunder are several rights, not rights jointly held with any of the other Investors. Any invalidity,
illegality or limitation on the enforceability of the Agreement or any part thereof, by any Investor whether arising by reason
of the law of the respective Investor’s domicile or otherwise, shall in no way affect or impair the validity, legality or
enforceability of this Agreement with respect to other Investors. If any provision of this Agreement shall be judicially determined
to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.

 

    	 

    	 

    

  

I.           Entire
Agreement. This Agreement, together with all exhibits and schedules hereto, and the other Transaction Agreements constitute
the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior
negotiations, correspondence, agreements, understandings duties or obligations between the parties with respect to the subject
matter hereof.

 

J.           Further
Assurances. From and after the date of this Agreement, upon the request of any Investor or the Company, the Company and
the Investors shall execute and deliver such instruments, documents or other writings as may be reasonably necessary or desirable
to confirm and carry out and to effectuate fully the intent and purposes of this Agreement and the other Transaction Agreements.

   

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK; SIGNATURE PAGES FOLLOW]

  

    	 

    	 

    

  

In
Witness Whereof, the parties hereto have executed this Agreement as of the date first above written.

 

	 	ENTREMED, INC.
	 	 
	 	By:	/s/ Michael M. Tarnow
	 	Name:  Michael M. Tarnow
	 	Title:    Executive Chairman

  

    	 

    	 

    

 

	 	INVESTORS:
	 	 	 
	 	By:	 
	 	 	 
	 	 	Name: ____________________
	 	 	 
	 	 	Title: _____________________

   

    	 

    	 

    

 

EXHIBIT A

 

Schedule of Investors

 

    	 

    	 

    

EXHIBIT B

 

Form of Subordinated Mandatorily Convertible
Note

 

NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR THE UNDERLYING SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE NOTE OR THE UNDERLYING SECURITIES OR AN EXEMPTION THEREFROM UNDER SUCH
ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THE COMPANY, IN ITS SOLE DISCRETION, SHALL HAVE THE RIGHT TO REQUIRE AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH
ANY PROPOSED TRANSFER NOR IS SUCH TRANSFER IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED
UPON ANY NOTE OR SECURITIES ISSUED IN EXCHANGE FOR, OR UPON CONVERSION OF, THIS NOTE.

 

THIS OBLIGATION IS UNSECURED AND IS SUBORDINATE IN RIGHT OF PAYMENT
TO ALL SENIOR DEBT OF THE COMPANY, WHETHER NOW EXISTING OR HEREAFTER CREATED.

 

ENTREMED, INC.

 

SUBORDINATED MANDATORILY CONVERTIBLE NOTE

 

Note No. [●]

 

$[●]

 

January [●], 2012

 

Rockville, MD

 

FOR VALUE RECEIVED, EntreMed, Inc., a Delaware
corporation (the “Company”), promises to pay to __________, or its registered assigns (the “Holder”),
in lawful money of the United States of America, subject to the conversion provisions of this Note pursuant to Section 3 below,
the principal sum of ____________ Dollars ($_________), or such lesser amount as shall equal the outstanding principal
amount hereof, together with interest from the date of this Note on the unpaid principal balance at a rate equal to six percent
(6%) per annum, computed on the basis of the actual number of days elapsed and a year of 360 days. All unpaid principal, together
with any then unpaid and accrued interest, shall be due and payable on August 31, 2012 (the “Maturity
Date”).

 

This Note was issued pursuant to the terms of
that certain Convertible Note and Warrant Purchase Agreement by and among the Company, the Holder and the Investors listed on Exhibit
A thereto, dated as of January 20, 2012, as such may be amended or supplemented from time to time (the “Purchase Agreement”).
Capitalized terms used herein and not otherwise defined shall have the meanings assigned thereto in the Purchase Agreement. This
Note and the Holder are subject to certain restrictions, and are entitled to certain rights and privileges, set forth in the Purchase
Agreement.

 

The following is a statement of the rights of
the Holder and the conditions to which this Note is subject and to which the Holder, by the acceptance of this Note, agrees:

 

    	 

    	 

    

  

1.            Definitions.
As used in this Note, the following capitalized terms have the following meanings:

 

(a)            
“Business Day” shall mean any day other than a Saturday or Sunday or other day on which the Nasdaq Stock Market is
permitted or required by law to close.

 

(b)            
“Common Stock” shall mean the Company's common stock, par value $0.01 per share, of the Company and stock of any other
class of securities into which such securities may hereafter have been reclassified or changed into.

 

(c)            
“Conversion Price” shall mean $1.15, subject to adjustment as provided pursuant to Section 5 below.

 

(d)            
“Event of Default” has the meaning given in Section 5 hereof.

 

(e)            
“Obligations” shall mean and include all loans, advances, debts, liabilities and obligations, howsoever arising, owed
by the Company to the Holder of every kind and description (whether or not evidenced by any note or instrument and whether or not
for the payment of money), now existing or hereafter arising under or pursuant to the terms of this Note, including all interest,
fees, charges, expenses, attorneys' fees and costs and accountants' fees and costs chargeable to and payable by the Company hereunder
and thereunder, in each case, whether direct or indirect, absolute or contingent, due or to become due, and whether or not arising
after the commencement of a proceeding under Title 11 of the United States Code (11 U. S. C. Section 101 et seq.),
as amended from time to time (including post-petition interest) and whether or not allowed or allowable as a claim in any such
proceeding.

 

(f)            
“Person” shall mean and include an individual, a partnership, a corporation (including a business trust), a joint stock
company, a limited liability company, an unincorporated association, a joint venture or other entity or governmental authority.

 

(g)            
“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

2.            Interest
Payments. Unless the Note is converted in accordance with Section 3 hereof, accrued interest on this Note shall be payable
on the Maturity Date.

 

3.            Conversion
Rights. 

 

(a)            Upon
Shareholder Approval, this Note shall automatically convert on the next Business Day into shares of Common Stock. The number of
shares of Common Stock issuable upon conversion of this Note under this Section 3(a) shall equal (i) the outstanding amount of
principal and accrued interest due under this Note as of the date of conversion, divided by (ii) the Conversion Price.

 

(b)            Subject
to the limitations set forth in Section 3(f), the principal balance and accrued interest due on this Note, in whole or in part,
may be converted at any time prior to the Maturity Date at the option of the Holder into shares of Common Stock. The number of
shares of Common Stock issuable upon conversion of this Note under this Section 3(a) shall equal (i) the outstanding amount of
principal and accrued interest due under this Note that the Holder elects to convert, divided by (ii) the Conversion Price.

 

(c)            Upon
conversion of this Note pursuant to Section 3(a), the applicable amount of outstanding principal and accrued interest of the Note
shall be converted without any further action by the Holder and whether or not the Note is surrendered to the Company or its transfer
agent. In order to exercise the conversion privilege pursuant to Section 3(b), the Holder shall surrender this Note to the Company,
accompanied by written notice of conversion in the form attached hereto as Exhibit A (or such other notice as is acceptable to
the Company) that the Holder elects to convert this Note. At the effective time of any conversion, the rights of the Holder as
a holder of this Note shall cease (except with respect to the right of the Holder to receive a new note of like tenor for the unconverted
principal amount of this Note if the Holder has elected pursuant to Section 3(b) to convert only a portion of the outstanding principal
amount of this Note), and the person(s) or entity(ies) entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such time. Upon a conversion pursuant to Section 3, the
Company shall instruct its transfer agent to issue the shares of Common Stock issuable upon conversion in book-entry form pursuant
to instructions provided by the Holder to the Company. If the Holder has elected to convert only a portion of the principal amount
outstanding on this Note, the Company shall also issue to the Holder a new Note of like tenor representing the balance of the unconverted
principal portion of this Note.

 

    	 

    	 

    

  

(d)            Upon
the conversion of all amounts due Holder in accordance with this terms of this Note, this Note shall be cancelled and no further
amounts shall be due hereunder. Any full or partial conversion by the Holder shall have no impact on the Warrant issued pursuant
to the Purchase Agreement concurrently herewith.

 

(e)            The
Company shall not issue fractional shares upon conversion of the Note but shall pay in cash the portion of the amount of this Note
that cannot be converted into a whole share.

 

(f)            Notwithstanding
anything in this Note to the contrary, without Shareholder Approval, the Note may not be converted in whole or in part, as applicable,
into shares of Common Stock if such conversion would result in the Holder (either individually or as part of a group) owning, or
having a right to acquire, the greater of (i) 17.50% of the outstanding shares of the Company's Common Stock or (ii) such number
of shares that would cause a “change in control” under the applicable rules of the Nasdaq Stock Market. The Holder
acknowledges and agrees that if Shareholder Approval is not obtained at the Shareholder Meeting, the Holder shall be subject to
the ownership limitations set forth in this Section 3(f).

 

(g)            Upon
receipt by the Company of evidence of the loss, theft, destruction or mutilation of this Note, and (in the case of loss, theft
or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of this Note,
if mutilated, the Company shall execute and deliver to the Holder a new Note identical in all respects to this Note.

 

(h)            Without
the prior written consent of such Holder, neither the principal amount nor any interest accrued on this Note may be prepaid by
the Company.

 

4.            Certain
Adjustments; Notice of Certain Events. 

 

(a)            Stock
Dividends and Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise
of this Note), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by
way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Conversion Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Note shall be proportionately adjusted such that the
aggregate Conversion Price of this Note shall remain unchanged. Any adjustment made pursuant to this Section 4(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

(b)            Calculations.
All calculations under this Section 4 shall be made to the nearest cent or the nearest 1/100th of a share, as
the case may be.

 

    	 

    	 

    

  

(c)            Notice
to Holders. If (A) the Company shall declare a dividend (or any other distribution) on the Common Stock; (B) the
Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize
the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of
any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock or a Sale of the Company; or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Company's note register, at least ten (10) calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders
of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, Sale of the Company or liquidation, dissolution or winding up of the Company
is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification,
Sale of the Company or liquidation, dissolution or winding up of the Company; provided, that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified
in such notice. If this Note is converted in connection with a Sale of the Company, such conversion will be made contingent upon
the consummation of the Sale of the Company.

 

5.            Events
of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:

 

(a)            Failure
to Pay. The Company shall fail to pay when due any principal or interest payment on the due date hereunder and such payment
shall not have been made within five (5) days of the Company's receipt of written notice to the Company of such failure to
pay;

 

(b)            Voluntary
Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver
for itself, (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make
a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v) become insolvent
(as such term may be defined or interpreted under any applicable statute), (vi) commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property
by any official in an involuntary case or other proceeding commenced against it, or (vii) take any action for the purpose
of effecting any of the foregoing; or

 

(c)            Involuntary
Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver for the Company, or an involuntary case
or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under
any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced, and an order for relief entered
or such proceeding shall not be dismissed or discharged within thirty (30) days of commencement.

 

6.            Rights
of Holder upon Default. Upon the occurrence of, and during the continuation of, an Event of Default, any accrued but unpaid
interest shall be capitalized into the principal amount then outstanding. Upon the occurrence or existence of any Event of Default
described in Section 5, all outstanding Obligations payable by the Company hereunder shall automatically become immediately
due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived.

 

7.            Successors
and Assigns. Subject to the restrictions on transfer described in Sections 9 and 10 below, the rights and obligations
of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees
of the parties.

 

8.            Waiver
and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the
Holder.

  

    	 

    	 

    
 

 

 

9.          Transfer
of this Note. With respect to any offer, sale or other disposition of this Note, the Holder will give written notice to the
Company prior thereto, describing briefly the manner thereof, together with (unless waived by the Company) a written opinion of
the Holder's counsel, or other evidence if reasonably satisfactory to the Company, to the effect that such offer, sale or other
distribution may be effected without registration or qualification (under any federal or state law then in effect). Upon receiving
such written notice and reasonably satisfactory opinion, if so requested, or other evidence, the Company, as promptly as practicable,
shall notify the Holder that the Holder may sell or otherwise dispose of this Note, all in accordance with the terms of the notice
delivered to the Company. If a determination has been made pursuant to this Section 9 that the opinion of counsel for the
Holder, or other evidence, is not reasonably satisfactory to the Company, the Company shall so notify the Holder promptly after
such determination has been made. Each Note thus transferred shall bear a legend as to the applicable restrictions on transferability
in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company either such legend is not
required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions. Subject to the foregoing, transfers of this Note shall be registered upon registration
books maintained for such purpose by or on behalf of the Company. Prior to presentation of this Note for registration of transfer,
the Company shall treat the registered holder hereof as the owner and holder of this Note for the purpose of receiving all payments
of principal and interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue, and the Company
shall not be affected by notice to the contrary. Notwithstanding anything in this Section 9 to the contrary, no opinion of counsel
shall be required with respect to any transfer by a Holder to its officers, directors, partners, members, other affiliates or members
of the Holder's immediate family or a trust for the benefit of members of the Holder's immediate family.

 

10.         Assignment
by the Company. Neither this Note nor any of the rights, interests or Obligations hereunder may be assigned, by operation of
law or otherwise, in whole or in part, by the Company without the prior written consent of the Holder.

 

11.         Notices.
Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will
be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation
of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service,
or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set forth in Section 7.6 of the Purchase Agreement.

 

12.         Waivers.
The Company hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and
all other notices or demands relative to this instrument.

 

13.         No
Stockholder Rights. Nothing contained in this Note shall be construed as conferring upon the Holder or any other person the
right to vote or to consent or to receive notice as a stockholder of the Company.

 

14.         Remedies
Cumulative. The remedies of the Holder as provided herein and in any other documents governing or securing repayment hereof
shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Holder, to
the extent provided herein and in the Purchase Agreement and may be exercised as often as occasion therefor shall arise. No act
or omission of the Holder, including specifically, but without limitation, any failure to exercise any right, remedy or recourse,
shall be effective as a waiver of any right of the Holder hereunder, unless set forth in a written document executed by the Holder,
and then only to the extent specifically recited therein. A waiver or release with reference to one (1) event shall not be construed
as continuing, as a bar to, or as a waiver or release of any subsequent right, remedy or recourse as to any subsequent event.

 

15.         Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by
and construed and enforced in accordance with Section 7.3 of the Purchase Agreement.

 

    	 

    	 

    

 

The Company has caused this Note to be issued
as of the date first written above.

 

	 	ENTREMED, INC.
	 	 	 
	 	By:	 
	 	Name: 	 
	 	Title: 	 

 

    	 

    	 

    

 

Exhibit A

 

Form of Conversion Notice

 

To: EntreMed, Inc.

 

The undersigned registered owner of this Note hereby exercises the
option to convert $__________ of the outstanding principal amount of this Note into shares of Common Stock, in accordance with
the terms of this Note, and directs that the check in payment of the cash deliverable upon such conversion for fractional shares
be issued and delivered to the registered holder hereof unless a different name has been indicated below and, if applicable, that
a new note of like tenor representing the unconverted portion of the principal amount of the Note be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If shares or a new note are to be issued in the name
of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto.  Any amount
required to be paid to the undersigned on account of interest accompanies this Note.

 

Fill in for registration of shares (please print name and address): 

 

___________________________________ ___________________________________

 

Name Social Security or other

 

Taxpayer Identification Number

 

____________________________________

 

Street Address

 

_____________________________________

 

City, State and Zip Code 

 

Date: __________________ Signature(s): _______________________________

 

_______________________________

 

(must correspond with the name  as written upon the face
of the Note in every particular without alteration or enlargement or any change whatever) 

 

Fill in for registration of shares of Common Stock (and a new note
representing the unconverted portion of the converted Note, if applicable) if to be delivered other than to and in the name of
the registered holder of the Note (please print name and address). 

 

    	 

    	 

    

 

	 	 	 
	Name 	 	 
	 	 	 
	(Address) 	 	Signature Guarantee* 
	 	 	*Signature(s) must be guaranteed by a participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Company).
	(City, State and Zip Code )	 	 

 

    	 

    	 

    

 

EXHIBIT C

 

entremed,
inc.

 

FORM OF

 

COMMON STOCK PURCHASE WARRANT

 

	Warrant Shares: [___]	  Issue Date: January ___, 2012

  

THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [Name of Investor]
(the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after 90 days following Shareholder Approval, or if Shareholder Approval is not obtained,
90 days after the date of the Shareholder Meeting (the “Initial Exercise Date”) and on or prior to the close
of business on the fifth anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter,
to subscribe for and purchase from EntreMed, Inc., a Delaware corporation (the “Company”), up to [____] shares
of the Company’s common stock, par value $0.01 per share (the “Common Stock”) issuable upon exercise
of this Warrant (the “Warrant Shares”). 

 

Section 1.              Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Convertible Note and
Warrant Purchase Agreement (the “Purchase Agreement”), dated January 20, 2012, by and among the Company and
the investors signatory thereto.

 

Section 2.               Exercise.

 

a)             Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or
times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other
office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the
Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed
hereto; and, within three Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall
have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s
check drawn on a United States bank. Notwithstanding anything herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder
and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for
cancellation within three Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial
exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall
have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the
applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number
of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of
Exercise Form within 1 Business Day of receipt of such notice. In the event of any dispute or discrepancy, the records of
the Holder shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase
of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time
may be less than the amount stated on the face hereof. As used in this Warrant, “Trading Day” means a day
on which the Common Stock is traded on any of the Nasdaq Stock Market, or if the Common Stock is not traded on the Nasdaq
Stock Market, the OTC Bulletin Board.

 

    	 

    	 

    

 

b)              Limitations
on Exercise. Notwithstanding anything in this Warrant to the contrary, without Shareholder Approval, the Warrant may not be
exercised in whole or in part, as applicable, if such exercise would result in the Holder (either individually or as part of a
group) owning, or having a right to acquire the greater of (i) 17.50% of the outstanding shares of the Company's Common Stock or
(ii) such number of shares that would cause a “change in control” under the applicable rules of the Nasdaq Stock Market.
The Holder acknowledges and agrees that if Shareholder Approval is not obtained at the Shareholder Meeting, the Holder shall be
subject to the ownership limitations set forth in this Section 2(b).

 

c)              Exercise
Price. The exercise price per share of the Common Stock under this Warrant shall be $1.40, subject to adjustment hereunder
(the “Exercise Price”).

 

d)              Mechanics
of Exercise.

 

i.            Delivery
of Certificates Upon Exercise. Shares purchased hereunder shall be transmitted by the Company’s transfer agent to the
Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit Withdrawal
Agent Commission (“DWAC”) system if the Company is then a participant in such system, or, if requested by the
Holder, by physical delivery of a stock certificate to the address specified by the Holder in the Notice of Exercise by the date
that is three (3) Trading Days after the latest of (A) the delivery to the Company of the Notice of Exercise Form, (B) surrender
of this Warrant (if required) and (C) payment of the aggregate Exercise Price as set forth above (such date, the “Warrant
Share Delivery Date”). This Warrant shall be deemed to have been exercised on the first date on which all of the foregoing
have been delivered to the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated
to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant
has been exercised, with payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any,
pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid.

 

ii.         Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.         No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

iv.         Charges,
Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall
be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto
duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

 

v.           Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

    	 

    	 

    

 

Section 3.              Certain
Adjustments.

 

a)             Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)        Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

c)        Notice
to Holder.

 

i.            Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company shall promptly mail to the
Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.

 

ii.         Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last
address as it shall appear upon the Warrant Register of the Company, concurrently with any notice provided to holders of the Company’s
Common Stock or filed with the Commission, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective
or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their
shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified in such notice. The Holder shall remain entitled
to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.

 

Section 4.               Transfer
of Warrant.

 

a)              Transferability.
This Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office
of the Company or its designated agent, together with (i) a written assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making
of such transfer and (ii) any other documents or certificates reasonably requested by the Company to effect such transfer. Upon
such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly
be cancelled. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.

 

    	 

    	 

    

 

b)              New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial
issuance date set forth on the first page of this Warrant and shall be identical with this Warrant except as to the number of Warrant
Shares issuable pursuant thereto.

 

c)              Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.

 

Section 5.                Miscellaneous.

 

a)              No Rights
as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as
a stockholder of the Company prior to the exercise hereof as set forth in Section 2.

 

b)              Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

c)              Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

d)              Authorized
Shares; Noncircumvention.

 

The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock
a sufficient number of shares to provide for the issuance of the Warrant Shares. The Company further covenants that its issuance
of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any requirements of the trading market upon which the Common
Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable. 

 

    	 

    	 

    

 

Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without
limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount
payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise
of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under
this Warrant.

 

Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

 

e)             Governing
Law. This Warrant shall be governed by and construed in accordance with Section 7.3 of the Purchase Agreement.

 

f)              Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies.

 

g)             Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.

 

h)             Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.

 

i)               Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.

 

j)              Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holder.

 

 

    	 

    	 

    

 

k)              Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.

 

l)              Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.

 

[Remainder of Page Intentionally Left
Blank] 

 

    	 

    	 

    
  

IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

  

	ENTREMED, INC.
		 
	By:	 
	 	Name: 
	 	Title:   

 

    	 

    	 

    

 

NOTICE OF EXERCISE

  

To:entremed, inc. 

 

(1)         The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any. Payment shall take the form of in lawful money of the United States, by wire transfer of immediately available funds or
by check.

 

(2)         Please
issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is
specified below: 

 

	_______________________________

  

The Warrant Shares shall be delivered to the following DWAC Account
Number or by physical delivery of a certificate to:

  

	_______________________________ 
	 
	_______________________________ 
	 
	_______________________________

 

  

[SIGNATURE OF HOLDER] 

 

Name of Investing Entity: ________________________________________________________________________ 

Signature of Authorized Signatory of Investing Entity: _________________________________________________ 

Name of Authorized Signatory: ___________________________________________________________________ 

Title of Authorized Signatory: ____________________________________________________________________ 

Date: ________________________________________________________________________________________

 

 

    	 

    	 

    

  

ASSIGNMENT FORM 

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.) 

 

FOR VALUE RECEIVED, [____] all of
or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

  

_______________________________________________ whose address is 

 

_______________________________________________________________.

 

 

 

_______________________________________________________________

 

 

Dated: ______________, _______ 

 

 

	Holder’s Signature:	 
	 	 
	Holder’s Address:	 
	 	 
	 	 
	 	 

  

Signature Guaranteed: ___________________________________________

 

 

NOTE: The signature to this Assignment Form must correspond with
the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed
by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file
proper evidence of authority to assign the foregoing Warrant.

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