Document:

Exhibit 10.1 Asset Purchase Agreement

Exhibit 10.1

ASSET PURCHASE AGREEMENT
BY AND BETWEEN
NE OPCO, INC.,
CENVEO CORPORATION
AND 
CENVEO, INC.
                                
Dated as of August 21, 2013

	Table of Contents

				
	 
	 
	Page

	ARTICLE I
	DEFINITIONS
	2

	1.1
	

	Certain Definitions.
	2

	1.2
	

	Terms Defined Elsewhere in this Agreement
	12

	1.3
	

	Other Definitional and Interpretive Matters.
	13

	 
	 
	 

	ARTICLE II
	PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
	14

	2.1
	

	Purchase and Sale of Assets
	14

	2.2
	

	Excluded Assets
	16

	2.3
	

	Assumption of Liabilities
	17

	2.4
	

	Excluded Liabilities
	17

	2.5
	

	Assumption and Assignment of Contracts; Cure Amounts
	19

	2.6
	

	Further Conveyances and Assumptions
	20

	2.7
	

	Bulk Sales Laws
	20

	 
	 
	 

	ARTICLE III
	CONSIDERATION
	20

	3.1
	

	Consideration
	20

	3.2
	

	Purchase Price Deposit.
	21

	3.3
	

	DIP Savings Determination Procedure.
	22

	3.4
	

	DIP Savings Amount and Payment
	22

	3.5
	

	Re-payment of Pre-Paid Amounts
	23

	 
	 
	 

	ARTICLE IV
	CLOSING AND TERMINATION
	23

	4.1
	

	Closing Date
	23

	4.2
	

	Deliveries by Seller
	23

	4.3
	

	Deliveries by Purchaser and Issuer
	24

	4.4
	

	Termination of Agreement
	25

	4.5
	

	Procedure Upon Termination
	26

	4.6
	

	Effect of Termination.
	26

	 
	 
	 

	ARTICLE V
	REPRESENTATIONS AND WARRANTIES OF SELLER
	26

	5.1
	

	Organization and Good Standing
	26

	5.2
	

	Authorization of Agreement
	26

	5.3
	

	Conflicts; Consents of Third Parties.
	27

	5.4
	

	Financial Statements.
	28

	5.5
	

	No Undisclosed Liabilities
	28

	5.6
	

	Title to Purchased Assets; Sufficiency and Condition of Assets.
	28

	5.7
	

	Taxes.
	29

i

	Table of Contents

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	Page

	5.8
	

	Real Property.
	29

	5.9
	

	Tangible Personal Property Leases
	30

	5.10
	

	Intellectual Property.
	30

	5.11
	

	Material Contracts.
	31

	5.12
	

	Employee Benefits.
	33

	5.13
	

	Labor.
	34

	5.14
	

	Litigation
	35

	5.15
	

	Compliance with Laws; Permits.
	35

	5.16
	

	Environmental Matters
	35

	5.17
	

	Suppliers and Customers
	36

	5.18
	

	Investment Representations.
	36

	5.19
	

	Absence of Certain Changes
	37

	5.20
	

	No Subsidiaries and Parent’s Assets
	37

	5.21
	

	Financial Advisors
	37

	5.22
	

	No Other Representations or Warranties; Schedules.
	37

	 
	 
	 

	ARTICLE VI
	REPRESENTATIONS AND WARRANTIES OF PURCHASER
	39

	6.1
	

	Organization and Good Standing
	39

	6.2
	

	Authorization of Agreement.
	39

	6.3
	

	Conflicts; Consents of Third Parties.
	40

	6.4
	

	Litigation
	41

	6.5
	

	Financial Advisors
	41

	6.6
	

	Financial Capability
	41

	6.7
	

	Common Stock Shares.
	41

	6.8
	

	Periodic Reports
	42

	6.9
	

	Condition of the Business.
	42

	 
	 
	 

	ARTICLE VII
	BANKRUPTCY COURT MATTERS
	43

	7.1
	

	Reserved.
	43

	7.2
	

	Bankruptcy Court Filings
	43

	 
	 
	 

	ARTICLE VIII
	COVENANTS
	44

	8.1
	

	Access to Information
	44

	8.2
	

	Operations of the Purchased Assets Pending the Closing.
	44

	8.3
	

	Consents
	46

	8.4
	

	Regulatory Approvals.
	46

	8.5
	

	Further Assurances
	46

	8.6
	

	Confidentiality
	47

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	Page

	8.7
	

	Preservation of Records.
	47

	8.8
	

	Publicity
	47

	8.9
	

	Schedules
	48

	8.10
	

	Lock-Up and Standstill.
	48

	8.11
	

	Post-Closing Periodic Reports
	50

	8.12
	

	Common Stock Shares
	51

	8.13
	

	Hilco Transition Services
	51

	 
	 
	 

	ARTICLE IX
	Employees and Employee Benefits
	51

	9.1
	

	Employment.
	51

	9.2
	

	Employee Benefits.
	52

	 
	 
	 

	ARTICLE X
	CONDITIONS TO CLOSING
	52

	10.1
	

	Conditions Precedent to Obligations of Purchaser
	52

	10.2
	

	Conditions Precedent to Obligations of Seller
	54

	10.3
	

	Conditions Precedent to Obligations of Purchaser and Seller
	55

	10.4
	

	Frustration of Closing Conditions
	56

	 
	 
	 

	ARTICLE XI
	NO SURVIVAL
	56

	11.1
	

	No Survival of Representations and Warranties
	56

	 
	 
	 

	ARTICLE XII
	TAXES
	56

	12.1
	

	Transfer Taxes
	56

	12.2
	

	Tax Payments
	57

	12.3
	

	Purchase Price Allocation (Federal Income Tax)
	57

	12.4
	

	Cooperation
	57

	 
	 
	 

	ARTICLE XIII
	MISCELLANEOUS
	57

	13.1
	

	Expenses
	57

	13.2
	

	Injunctive Relief
	58

	13.3
	

	Governing Law
	58

	13.4
	

	Submission to Jurisdiction; Consent to Service of Process.
	58

	13.5
	

	WAIVER OF RIGHT TO TRIAL BY JURY
	59

	13.6
	

	Entire Agreement; Amendments and Waivers
	59

	13.7
	

	Notices
	59

	13.8
	

	Severability
	60

	13.9
	

	Binding Effect; No Third-Party Beneficiaries; Assignment
	61

iii

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	Page

	13.10
	

	Non-Recourse
	61

	13.11
	

	Counterparts
	61

iv

TABLE OF EXHIBITS AND SCHEDULES
	
		
	Exhibits and Schedules
	Name

	Exhibit A
	Form of Bill of Sale, Assignment and Assumption Agreement

	Exhibit B
	Form of Sale Order

	Exhibit C
	Form of Purchaser Note

	Schedule 1.1(a)
	Leased Locations

	Schedule 1.1(b)
	Excluded Contracts

	Schedule 1.1(c)
	Knowledge of Seller

	Schedule 1.1(d)
	Permitted Exceptions

	Schedule 1.1(e)
	Purchased Contracts

	Schedule 1.1(f)
Schedule 1.1(g)
	Purchased Intellectual Property
Post-Petition Trade Payables

	Schedule 2.2
	Excluded Assets

	Schedule 2.12-2
	Events and Occurrences Regarding Suppliers and Customers

	Schedule 3.1
	Illustrative Purchase Price Calculation

	Schedule 3.1(b)

Schedule 3.4

Schedule 3.5
	Allocation of Common Stock Shares to Share Recipients
DIP Savings Conditions Levels Relating to Inventory and Accounts Receivable
Pre-Paid Amounts

	Schedule 4.3(g)
	Legends

	Schedule 5.4(b)

	Closing Financial Statements - Accounting Principles, Policies and Practices

	Schedule 5.7
	Taxes

	Schedule 5.8(a)
Schedule 5.8(h)
	Real Property Leases
Real Property Improvements

	Schedule 5.9
Schedule 5.10(a)-(1)
Schedule 5.10(a)-(2)

Schedule 5.10(a)-(3)
	Personal Property Leases
Registered Domain Names
Registered Marks and Pending Applications for Registration of Marks
Unregistered Marks Owner by Seller

	Schedule 5.11
	Material Contracts

	Schedule 5.12
	Employee Benefit Plans

	Schedule 5.13(a)
Schedule 5.13(c)
	Collective Bargaining Agreements
Employees

	Schedule 5.14
Schedule 5.15(b)
	Litigation
Permits Held by Seller Relating to Purchased Assets

	Schedule 5.16(a)
Schedule 5.17-1
Schedule 5.19
	Environmental Matters
Suppliers and Customers
Absence of Certain Changes

	
		
	Exhibits and Schedules
	Name

	Schedule 8.2(a)

Schedule 8.2(b)
	Operation of the Purchased Assets Pending Closing
Approved Budget (as defined in the DIP Credit Agreement)

	Schedule 9.2(b)
	Accrued and Unused Vacation Pay

	Schedule 12.3
	Purchase Price Allocation (Tax)

	 
	 

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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of August 21, 2013 (this "Agreement"), by and among NE Opco, Inc., a Delaware corporation ("Seller"), Cenveo Corporation, a Delaware corporation ("Purchaser"), and Cenveo, Inc., a Colorado corporation ("Issuer").  Seller, Purchaser and Issuer are sometimes herein referred to collectively as the "Parties" and individually as a "Party."
W I T N E S S E T H:
WHEREAS, on June 10, 2013 (the "Petition Date"), Seller and NEV Credit Holdings, Inc., a Delaware corporation ("Holdings"), and the owner of all of the outstanding common stock of Seller, filed voluntary petitions for relief (the "Bankruptcy Case") under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. § 101 et seq. (the "Bankruptcy Code"), in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court");
WHEREAS, Seller continues to operate the Business as a debtor in possession; 
WHEREAS, Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires to purchase, acquire and assume from Seller, all of the Purchased Assets and Assumed Liabilities, all as more specifically provided herein; 
WHEREAS, Purchaser is a direct wholly-owned subsidiary of Issuer and Issuer has agreed to issue Common Stock as part of the consideration for the Purchased Assets;
WHEREAS, simultaneously with the execution of this Agreement, (i) Seller has entered into an Asset Purchase Agreement, dated as of the date of this Agreement (the "Hilco Purchase Agreement") with HRV NE, LLC, a Delaware limited liability company ("Hilco"), for all of Seller's accounts receivables, (ii) Seller has entered into an Asset Purchase Agreement, dated as of the date of this Agreement (the "Inventory Purchase Agreement") with Southern Paper, LLC a Florida limited liability company (the "Inventory Purchaser"), for certain of Seller's Inventory, and (iii) in order to induce Purchaser to execute this Agreement, each of IP and Gores is executing a letter agreement with Issuer and Purchaser (each, a "Letter Agreement"); and
WHEREAS, it is a condition to the consummation of the Transactions that this Agreement, the Hilco Purchase Agreement and the Inventory Purchase Agreement close simultaneously.  
NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements hereinafter contained, the sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I 
 
DEFINITIONS
1.1    Certain Definitions.
For purposes of this Agreement, the following terms shall have the meanings specified in this Section 1.1:
"503(b)(9) Claim Amount" means cash in the amount of $500,000 that will be used by Seller for the payment of $500,000 of the 503(b)(9) Claim Liabilities that are allowed administrative expenses in the Bankruptcy Case.
"503(b)(9) Claim Liabilities" means all Liabilities of Debtors under Section 503(b)(9) of the Bankruptcy Code.
“Accredited Investor” has the meaning ascribed to such term in Rule 501 of Regulation D promulgated under the Securities Act.  
"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.
"Business" means the business of Seller.
"Business Day" means any day of the year on which national banking institutions in New York are open to the public for conducting business and are not required or authorized to close.
"Cash and Cash Equivalents" means all of Seller's cash (including petty cash and checks and drafts received or in transit, including, without limitation, all checks and drafts that have been submitted, posted or deposited, prior to the consummation of the Closing), checking account balances, marketable securities, certificates of deposits, time deposits, bankers' acceptances, commercial paper and government securities and other cash equivalents.
“Change of Control Transaction” means the consummation of:  (a) a sale of all or substantially all of the assets of Issuer and its subsidiaries, taken as a whole (other than a sale of all or substantially all of the assets of Issuer and its subsidiaries to one or more controlled Affiliates of Issuer); or (b) a recapitalization, reorganization, merger, consolidation or similar transaction immediately after which  the Persons who were the beneficial owners of the outstanding shares of voting capital stock of Issuer immediately prior to such recapitalization, reorganization, merger, consolidation or similar transaction, will, directly or indirectly, own less than 50% of the combined voting power of the then outstanding voting capital stock of Issuer immediately after such recapitalization, reorganization, merger, consolidation or similar transaction.

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"Code" means the Internal Revenue Code of 1986, as amended.
“Commission” means the United States Securities and Exchange Commission.
“Committee” means the Official Committee of Unsecured Creditors of the Debtors.
"Common Stock" means Issuer’s common stock, par value $0.01 per share.
"Common Stock Price" means the volume-weighted average price of the Common Stock as reported by the New York Stock Exchange, obtained from Bloomberg L.P., for the trading hours from 9:30 a.m. to 4:00 p.m. Eastern Time during the 25 trading days beginning 12 trading days prior to the date of this Agreement; provided, however, that in no event will the Common Stock Price be less than $2.00 and more than $2.40.
"Common Stock Shares" means the number of shares of Common Stock (rounded down to the nearest whole share) equal to $5,000,000 divided by the Common Stock Price.  
"Contract" means any oral or written contract, indenture, note, bond, lease or other agreement.
"Credit Documents" means the DIP Credit Agreement, the Subordinated Lien Credit Agreement, the International Paper Supply Agreement and the International Paper Note and all other Contracts executed and delivered in connection with, or contemplated by, any of the foregoing.
“Dataroom” means Seller’s virtual data room in the RR Donnelly Venue.
"Debtors" means Seller and Holdings.
"Designation Deadline" means the date that is the earlier of (i) Ninety (90) Days after the Closing Date, or (ii)  the expiration of the period provided for under Section 365(d)(4) of the Bankruptcy Code (as such period may be extend in accordance with such section).
"DIP Credit Agreement" means that certain Debtor-In-Possession Credit Agreement, dated as of June 10, 2013, among Seller, as debtor and debtor-in-possession, Holdings, each lender from time to time party thereto, and Salus Capital Partners, LLC, as administrative agent and collateral agent, as amended, restated, supplemented or otherwise modified, replaced or refinanced from time to time.
"DIP Savings Amount" means the amount, if any, by which as of the Closing, (A) the face amount of Eligible Trade Receivables (as defined in and calculated pursuant to the DIP Credit Agreement as in effect as of the date of this Agreement), net of Receivables Reserves, multiplied by (B) ninety-five percent (95%); plus (C) the Cost of Eligible Inventory (as defined in and calculated pursuant to the DIP Credit Agreement as in effect as of the date of this Agreement), net of Inventory Reserves (as defined in the DIP Credit Agreement as in effect as of the date of this Agreement), multiplied by (D) the product of the Appraisal Percentage (as defined in the DIP Credit Agreement as in effect as of the date of this Agreement) multiplied by (E) the Appraised Value of Eligible Inventory (as defined in the DIP Credit Agreement as in effect as of the date of this 

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Agreement); less (F) the Tranche A outstanding borrowings, calculated in accordance with the DIP Credit Agreement (as in effect as of the date of this Agreement), exceeds $2,883,000.
"Documents" means all files, documents, electronically stored information in any format or in any medium or other storage device including electronically transmitted written or vocal messages, instruments, papers, books, reports, records, tapes, microfilms, photographs, letters, budgets, forecasts, ledgers, journals, title policies, customer lists, regulatory filings, operating data and plans, other data or data compilations, technical documentation (design specifications, functional requirements, operating instructions, logic manuals, flow charts, etc.), user documentation (installation guides, user manuals, training materials, release notes, working papers, etc.), marketing documentation (sales brochures, flyers, pamphlets, web pages, etc.), and other similar materials related to the Business or the Purchased Assets, in each case whether or not in electronic form.
"Effective Date" means the date of this Agreement.
"Employees" means all individuals employed by Seller on or prior to the date of this Agreement, together with individuals who are hired by Seller after the date of this Agreement and prior to the consummation of the Closing, if any.
"Environmental Law" means any foreign, federal, state or local Law relating to (a) pollution, the protection of human health and safety or the environment or natural resources; (b) emissions, discharges, releases or threatened releases of any Hazardous Material into the environment (including ambient air, surface water, ground water, land surface or subsurface strata); (c) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport or handling of any Hazardous Material; (d) liability for personal injury or property damage arising out of the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport, handling, emission, discharge, release, threatened release, or presence of Hazardous Materials at real property (whether or not owned, leased or used by the Company or any of its Subsidiaries); (e) remediation, reclamation or restoration of real property (whether or not owned, leased or used by the Company or any of its Subsidiaries); or (f) workplace health and safety and protection of employees from workplace hazards including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. App. § 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), and the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), and the regulations promulgated pursuant thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
“Escrow Agreement” means that certain Escrow Agreement, dated on or about the date hereof, among Purchaser, Seller and Escrow Holder.  
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

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"Excluded Contracts" means, other than the Purchased Contracts, each Contract to which Seller is a party or by which its assets are bound or otherwise subject, including, without limitation, the Contracts set forth on Schedule 1.1(b), and the Spirit Lease.
"Excluded Matter" means any one or more of the following: (a) the effect of any change in the United States or foreign economies or securities or financial markets in general; (b) the effect of any change that generally affects any industry in which Seller operates; (c) the effect (in and of itself) of any change arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities or acts of war, sabotage or terrorism; (d) the effect of any changes in applicable Laws or accounting rules; (e) the effect of any action taken by Purchaser or its Affiliates outside of the ordinary course of business in violation of this Agreement; provided, however, that the Excluded Matters contained in the foregoing clauses (a), (b), (c) and (d) shall not apply to the extent that such effect has a disproportionate adverse effect on Seller as compared to the adverse impact such circumstance, state of facts or matters, change, event, occurrence, action or omission has on other companies operating in the industries or markets in which Seller operates.
"Furniture and Equipment" means all furniture, fixtures, furnishings, equipment, vehicles, leasehold improvements, and other tangible personal property owned, used or held for use by Seller, including all such machines, tools, artwork, desks, chairs, tables, Hardware, copiers, telephone lines and numbers, facsimile machines and other telecommunication equipment, cubicles and miscellaneous office furnishings and supplies.
"GAAP" means generally accepted accounting principles in the United States.
“Gores” means Galactic Holdings, LLC, a Delaware limited liability company, and Gores Group LLC, a Delaware limited liability company.
"Governmental Body" means any government or governmental or regulatory body including, without limitation, any agency, bureau, commission, dependent or similar body, or any political subdivision thereof, whether foreign, federal, state, or local, or any instrumentality or authority thereof, or any court or arbitrator (public or private).
“GUC Trust” means the General Unsecured Creditors Trust formed in connection with the Bankruptcy Case and pursuant to the GUC Trust Agreement.
“GUC Trust Agreement” means that certain Trust Agreement of the GUC Trust, entered into in connection with the Bankruptcy Case prior to the Closing.
"Hardware" means any and all computer and computer-related hardware, including, but not limited to, computers, file servers, facsimile servers, scanners, color printers, laser printers and networks.
"Hazardous Material" means any and all solid, liquid, gaseous and other materials (including substances, chemicals, compounds, mixtures, wastes, pollutants and contaminants) (i) to the extent such materials are prohibited, limited or regulated by the Environmental Laws as 

5

"hazardous" (including "hazardous substances" or "hazardous wastes"), a "pollutant", or a "contaminant" or "toxic" pursuant to any Law, including asbestos, urea formaldehyde, polychlorinated biphenyls (PCBs), radon, petroleum (including its derivatives, by-products or other hydrocarbons); and any other substance which is subject in any respect to any Law, or which poses or could pose a threat or nuisance to health or the environment or (ii) petroleum products and their derivatives.
"Indebtedness" of any Person means, without duplication:  (a) the principal, accreted value, accrued and unpaid interest, prepayment and redemption premiums or penalties (if any), unpaid fees or expenses and other obligations in respect of (i) indebtedness of such Person for money borrowed and (ii) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (b)  all obligations of such Person issued or assumed as the deferred purchase price of property or services (including, without limitation, all "seller notes" and earn-outs), all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable and other accrued current liabilities arising in the Ordinary Course of Business); (c) all obligations of such Person under leases required to be capitalized in accordance with GAAP; (d) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction or under any performance or surety bonds; (e) all obligations of such Person under any interest rate, currency or other hedging agreement; (f) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any capital stock or other equity securities or any warrants, rights or options to acquire such capital stock or other equity securities, valued, in the case of redeemable preferred stock, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (g) all obligations of the type referred to in clauses (a) through (f) of for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (h) all obligations of the type referred to in clauses (a) through (f) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person). Without limitation of the foregoing, Indebtedness of a Person shall include all fees, costs and other expenses incurred in connection with the repayment at or prior to the consummation of the Closing of any obligations described in clauses (a) through (h) above.
"Intellectual Property" means all intellectual property rights, including, without limitation, the following:  (a) all patents and applications therefor, including continuations, divisionals, continuations-in-part, or reissues of patent applications and patents issuing thereon, (b) all registered and unregistered trademarks, service marks, trade names, service names, brand names, trade dress rights, logos, Internet domain names and corporate names and general intangibles of a like nature, together with the goodwill associated with any of the foregoing, and all applications, registrations and renewals thereof (collectively, "Marks"), (c) all copyrights and registrations and applications therefor, works of authorship, and mask work rights, and all registrations, applications, renewals, extensions and reversions thereof, (d) all trade secrets, including, without limitation, confidential and proprietary information and know-how , (e) all software, and (f) all moral rights, rights of publicity and other intellectual property and proprietary rights of a similar nature.  

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"Intellectual Property Licenses" means (a) any grant by Seller to a third Person of any right to use any of the Purchased Intellectual Property owned by Seller and (b) any grant to Seller of a right to use a third Person's intellectual property rights which is necessary for the use of any Purchased Intellectual Property which is not owned by Seller.
"International Paper Note" means that certain Amended and Restated Secured Promissory Note, dated as of February 5, 2013, issued by Seller to IP, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
"International Paper Supply Agreement" means that certain Paper Supply Agreement, dated as of September 7, 2010, between IP and Seller, as amended by the Amendment thereto, dated June 21, 2012, and the Second Amendment thereto, dated February 5, 2013, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“IP” means International Paper Company, a New York corporation.
"IRS" means the Internal Revenue Service.
"Knowledge of Seller" means the actual knowledge of those officers and directors of Seller identified on Schedule 1.1(c) after inquiring of their direct reports.
"Law" means any federal, state, local or foreign law, statute, code, ordinance, rule, regulation, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, injunctions, rulings, or awards, including general principles of common and civil law and equity.
"Leased Locations" means the Real Property described on Schedule 1.1(a) that is subject to certain of the Real Property Leases.  
"Legal Proceeding" means any actual or threatened judicial, administrative or arbitral actions, suits, proceedings (public or private) or claims or any proceedings or investigations by or before a Governmental Body.
"Liability" means any debt, liability, commitment or other obligation of any kind or nature (whether direct or indirect, known or unknown, matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due), and including all costs and expenses relating thereto.
"Lien" means any lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement or encumbrance.
"Material Adverse Effect" means any circumstance, state of facts or matters, change, event, occurrence, action or omission that has, or would be reasonably likely to have, a material adverse effect on (i) the business, assets and liabilities (taken as a whole), properties, results of operations, financial condition or cash flows of Seller, other than an effect resulting from an Excluded 

7

Matter or (ii) the ability of Seller to consummate the Transactions or perform its obligations under this Agreement or any of the other Seller Documents.
"Order" means any order, injunction, judgment, decree, ruling, writ, verdict, determination, settlement, assessment, award or other decision issued, promulgated or entered by or with a Governmental Body.
"Ordinary Course of Business" means an action:  (a) in the ordinary and usual course of normal day-to-day operations of the Business through the Effective Date consistent with past practice; (b) not required to be authorized by the board of directors of Seller and not required to be specifically authorized by Holdings; and (c) consistent with the representations and warranties in Section 5.15(a).
"Permits" means any franchises, approvals, authorizations, consents, qualifications, orders, registrations, variances, licenses, permits or certificates of, or similar rights granted by, a Governmental Body.
"Permitted Assigns" means any Person appointed (a) pursuant to a plan of reorganization or liquidation to administer and implement such plan of reorganization or liquidation, as applicable, or (b) to facilitate the administration and closure of the Bankruptcy Case whether under Chapter 11 or Chapter 7 of the Bankruptcy Code.
"Permitted Exceptions" means: (a) Liens for current Taxes, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings to the extent an accrual for such Taxes, assessments or other governmental charges but only to the extent that such Taxes, assessments or other charges constitute Assumed Liabilities; (b) mechanics', carriers', workers', warehousemens', repairers' and similar Liens arising or incurred in the Ordinary Course of Business but only to the extent they constitute Assumed Liabilities; (c) zoning, entitlement and other land use and environmental regulations by any Governmental Body provided that such regulations have not been violated; (d) title of a lessor under a capital or operating lease; and (e) all Liens set forth on Schedule 1.1(d).
"Person" means any individual, corporation, limited liability company, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Body or other entity.
“Plastic Suppliers” means Plastic Suppliers, Inc.
"Post-Closing Wind-Down Amount" means cash in the amount of $500,000 to be used by Seller to satisfy administrative expenses and priority claims incurred by the Debtors in the wind-down of their estates, the payment of such expenses and claims shall be paid by Seller after providing  five (5) Business Days’ prior notice to Purchaser with opportunity for Purchaser to (i) object to such payment to Seller or (ii) file an objection to such payment with the Bankruptcy Court (it being understood and agreed that (i) if an objection to a payment is timely made, such payment shall not be made unless and until approved by the Bankruptcy Court; and (ii) no payment shall be made to any shareholder or debtholder of Seller or any of their Affiliates.

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"Post-petition Trade Payables" means Seller's trade payables incurred after the Petition Date and prior to the Closing Date.
"Post-petition Trade Payables Amount" means cash in the amount not to exceed the amount set forth on Schedule 1.1(g) with respect to the Post-petition Trade Payables set forth therein.
"Prepetition Agent" means Wells Fargo Capital Finance, LLC, a Delaware limited liability company.
"Prepetition Agent Security" means the up to $150,000 that is being held by the Prepetition Agent or its counsel in the Bankruptcy Case to secure contingent indemnification obligations arising under or related to the Loan Documents (as defined in the Prepetition Credit Agreement as in effect on the date of this Agreement), as contemplated by Paragraph E.(vi)(f) of, and as authorized by, the  Final Order Pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 364 and 507 (1) Approving Postpetition Financing, (2) Authorizing Use of Cash Collateral, (3) Granting Liens and Providing Superpriority Administrative Expense Status, (4) Granting Adequate Protection,  and (5) Modifying Automatic Stay [Docket No. 180 - filed July 19, 2013].
"Prepetition Credit Agreement" means that certain Credit Agreement, dated as of September 7, 2010, the Debtors, the lenders party thereto, the Prepetition Agent, as agent to the lenders and the bank product providers, and as co-lead arranger, Bank of America, N.A., a national banking association, as the syndication agent and co-lead arranger, as amended, restated, supplemented or otherwise modified, replaced or refinanced from time to time.
“Private Placement” means a private placement to Accredited Investors pursuant to Regulation D promulgated under the Securities Act.
"Products" means any and all products developed, manufactured, marketed or sold by Seller, whether work in progress or in final form. 
"Professional Fee Carve-Out" means the money held by Richards, Layton & Finger, P.A. in the amount of the Carve-Out Amount (as defined in the DIP Credit Agreement as in effect on the date of this Agreement) for the Carve-Out (as defined in the DIP Credit Agreement as in effect on the date of this Agreement). 
“Property” means the property located at 705 N. Baldwin Park Boulevard, City of Industry, CA.
"Purchased Contracts" means all outstanding purchase orders relating to the sale of Products or the provision of services by Seller and the Contracts, which are all set forth on Schedule 1.1(e), including any other Contract added to Schedule 1.1(e) by Purchaser by notice delivered to Seller at any time during the period from and after the Effective Date until the fifth (5th) Business Day prior to the Closing Date, or with respect to the Real Property Leases, prior to the Designation Deadline after the Closing Date; provided that Purchaser shall not be permitted to add any Contracts previously rejected in the Bankruptcy Case.  

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"Purchased Intellectual Property" means all Intellectual Property owned, used or held for use by Seller, including, without limitation, all Intellectual Property set forth on Schedule 1.1(f).
"Purchaser Material Adverse Effect" means any circumstance, state of facts or matters, change, event, occurrence, action or omission that has, or would be reasonably likely to have, a material adverse effect on the ability of Purchaser to consummate the Transactions or perform its obligations under this Agreement.
"Purchaser Note" means that certain promissory note, substantially in the form attached hereto as Exhibit D, made by Purchaser in favor of Seller, in an amount equal to the sum of the principal and interest due and owing under the Tranche B Note (as defined in the DIP Credit Agreement as in effect on the date of this Agreement) at the Closing, such amount shall not in any event exceed $2,600,000. 
"Real Property" means the real property subject to the Real Property Leases.
"Related to the Business" means in connection with, or otherwise related to or required for the conduct of, the Business.
"Release" means any spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, or leaching into the  environment, but excludes any discharge in compliance with a Permit and not otherwise in violation of Law.
"Remedial Action" means all actions to (a) clean up, remove, treat or in any other way address any Release of a Hazardous Material into the environment, (b) prevent or minimize the Release of any Hazardous Material so it does not migrate to cause substantial danger to public health or welfare or the indoor or outdoor environment, or (c) perform pre-remedial studies and investigations or post-remedial monitoring and care.
"Sale Motion" means the motion or motions of Seller seeking approval and entry of the Sale Order.
"Sale Order" means an Order of the Bankruptcy Court, in the form of Exhibit C, with such changes as are reasonably acceptable to Purchaser and Seller after consultation with the DIP Agent, the Committee, Gores and IP.
"Schedules" means the Schedules prepared in connection with this Agreement.
“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.
"Spirit Lease" means the Master Lease entered into by and between National Envelope Corporation, as lessee, and Spirit SPE Portfolio 2006-4, LLC, as lessor, dated as of December 28, 2006, as amended by the First Amendment to Master Lease, entered into by and between National Envelope Corporation, as lessee, and Spirit SPE Portfolio 2006-4, LLC, as lessor, dated as of January 12, 2009, as further amended by the Second Amendment to Master Lease, 

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entered into by and between Seller (assignee of National Envelope Corporation), as lessee, and Spirit SPE Portfolio 2006-4, LLC, as lessor, December 15, 2010, for the properties located at:
a.252 Pearce Industrial Road, Shelbyville, Kentucky 40065;
a.    70 Turnpike Industrial Road, Westfield, Massachusetts 01085;
b.    888 Elm Hill Pike, Nashville, Tennessee 37202;
c.    1 Wedding Lane, Scottdale, Pennsylvania 15683;
d.    303 Eagleview Boulevard, Exton, Pennsylvania 19341;
e.    3800 W. Wisconsin Avenue, Appleton, Wisconsin 54914.
"Subordinated Lien Credit Agreement" means that certain Credit Agreement, dated as of September 7, 2010, among Holdings, Seller, the persons from time to time party thereto as lenders, and Galactic Holdings, LLC, as agent (as successor in such capacity to General Electric Capital Corporation), as amended, restated, supplemented or otherwise modified, replaced or refinanced from time to time.
"Tax Return" means all returns, declarations, reports, estimates, information returns and statements required to be filed in respect of any Taxes.
"Taxes" means (a) all federal, state, local or foreign taxes, charges or other assessments, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, and (b) all interest, penalties, fines, additions to tax or additional amounts imposed in connection with any item described in clause (a).
“Tender Offer” shall mean a bona fide public offer subject to the provisions of Regulation 14D under the Exchange Act, by a Person or “group” to purchase or exchange for cash or other consideration Voting Securities of Issuer which consists of an offer to acquire 50% or more of the outstanding Voting Securities of Issuer, as the case may be.
"Transactions" means the transactions contemplated by this Agreement.
"WARN Laws" means Worker Adjustment and Retaining Notification Act, 29 U.S.C. Section 21.01 et seq., and any other similar provision of any federal, state, regional, foreign or local law governing plant closings or mass layoffs.
1.2    Terms Defined Elsewhere in this Agreement.  For purposes of this Agreement, the following terms have meanings set forth in the Sections indicated:

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	Term
	Section

	Agreement
	Preamble

	Allocation Instructions
	3.1

	Asset Acquisition Statement
	12.3

	Assumed Liabilities
	2.3

	Balance Sheet
	5.4(a)

	Balance Sheet Date
	5.4(a)

	Bankruptcy Case
	Recitals

	Bankruptcy Code
	Recitals

	Bankruptcy Court
	Recitals

	Cash Purchase Price
	3.1

	Closing
	4.1

	Closing Date
	4.1

	COBRA
	2.4(e)

	Collective Bargaining Agreements
	5.13(a)

	Confidentiality Agreement
	8.6

	Cure Amount
Employee Benefit Plans
	2.5
5.12(a)

	Employee List
	9.1(a)

	DIP Savings Conditions
	3.4

	DIP Savings Conditions Determination
	3.3(a)

	Disposition
	8.10(a)

	ERISA Affiliate
	5.12(c)

	Escrowed Funds
	3.2(a)

	Escrow Holder
	3.2(a)

	Excluded Assets
	2.2

	Excluded Liabilities
	2.4

	Financial Statements
	5.4(a)

	Frisco Facility
	8.13

	Hilco
	Recitals

	Holdings
	Recitals

	Information
	8.6 (as defined in the Confidentiality Agreement)

	Inventory Purchaser
	Recitals

	Issuer
	Preamble

	Issuer SEC Documents
	6.8

	Letter Agreement
	Recitals

	Marks
	1.1 (in Intellectual Property definition)

	Material Contracts
	5.11

	Noticing Party
	8.7(b)

	Original Notice
	8.7(b)

	Party or Parties
	Preamble

	Personal Property Leases
	5.9

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	Term
	Section

	Petition Date
	Recitals

	Post-Closing Tax Period
	12.2

	Pre-Closing Tax Period
	12.2

	Pre-paid Expense Reimbursement
	3.5

	Privileged Confidential Information
	2.1(h)

	Property Taxes
	12.2

	Purchase Price
	3.1

	Purchased Assets
	2.1

	Purchaser
	Preamble

	Pre-paid Expense Reimbursement
Purchaser Documents
	3.5
6.2

	Purchaser Plans
	9.2(a)

	Real Property Lease
	5.8(a)

	Registered IP
	5.10(a)

	Restricted Period
	8.10(b)

	Revised Statements
	12.3

	Seller
	Preamble

	Seller Documents
	5.2

	Shareholder Meeting
	8.10(c)

	Seller IP
	5.10(a)

	Share Recipients
	3.1

	Termination Date
	4.4(a)

	Transfer Taxes
	12.1

	Transferred Employees
	9.1(a)

	Utility Deposits
	2.1(c)

	Voting Securities
	8.10(b)

1.3    Other Definitional and Interpretive Matters.
(a)    Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:
Calculation of Time Period.  When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded.  If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.
Dollars.  Any reference in this Agreement to $ shall mean U.S. dollars.
Exhibits/Schedules.  All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.

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Gender and Number.  Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.
Headings.  The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement.  All references in this Agreement to any "Article" or "Section" are to the corresponding Article or Section of this Agreement unless otherwise specified.
Herein.  The words such as "herein," "hereinafter," "hereof," and "hereunder" refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.
Including.  The word "including" or any variation thereof means "including, without limitation" and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.
(b)    The Parties have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.
ARTICLE II     
 
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
2.1    Purchase and Sale of Assets.  On the terms and subject to the conditions set forth in this Agreement, at the Closing (or on the date of entry of the Order of the Bankruptcy Court approving the assumption of the Real Property Leases which are Purchased Contracts), Purchaser shall purchase, acquire and accept from Seller, and Seller shall sell, transfer, assign, convey and deliver to Purchaser, the Purchased Assets, free and clear of all Liens, other than Permitted Exceptions.  "Purchased Assets" means all of the assets, properties, privileges, claims and rights of Seller (but excluding the Excluded Assets and the assets being sold pursuant to the Hilco Purchase Agreement or the Inventory Purchase Agreement), whether such assets, properties, privileges, claims or rights are real, personal or mixed, tangible or intangible, wherever located, whether or not any of such assets, properties, privileges, claims or rights have any value for accounting purposes or are carried or reflected on or specifically referred to in Seller's books or financial statements, including, without limitation all of the following (but excluding the Excluded Assets and the assets being sold pursuant to the Hilco Purchase Agreement or the Inventory Purchase Agreement):
(a)    reserved;
(b)    reserved;

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(c)    all deposits (including customer deposits and security deposits for rent or otherwise) and prepaid charges and expenses of Seller related to the Purchased Assets other than (i) all prepaid charges and expenses or other prepayments delivered to utility providers and utility deposits held by Richards, Layton & Finger, P.A. pursuant to the utilities procedures for the Bankruptcy Case approved by the Bankruptcy Court (collectively, the "Utility Deposits") (ii) the Prepetition Agent Security, (iii) the Professional Fee Carve-Out, (iv) the deposits listed on Schedule 2.2, and (v) other deposits, prepaid charges and expenses to the extent paid in connection with, or relating to, any Excluded Assets;
(d)    all of the Real Property Leases which are Purchased Contracts, together with all improvements, fixtures and other appurtenances thereto and rights in respect thereof;
(e)    the Furniture and Equipment;
(f)    the Purchased Intellectual Property;
(g)    the Purchased Contracts and all rights of Seller thereunder;
(h)    all Documents to the extent relating to the Purchased Assets or the Assumed Liabilities, including any Documents relating to Products, services, marketing, advertising, promotional materials, Purchased Intellectual Property, personnel files for Transferred Employees, all files, customer files and documents (including credit information), supplier lists, records, literature and correspondence, whether or not physically located on any of the premises referred to in clause (d) above;
(i)    all Permits held by Seller and owned, used or held for use in connection with the Purchased Assets to the extent assignable;
(j)    all supplies owned by Seller and owned, used or held for use in connection with the Purchased Assets;
(k)    all rights of Seller under non-disclosure or confidentiality, non-compete, or non-solicitation agreements with Employees and agents of Seller or with third parties;
(l)    all rights of Seller under or pursuant to all warranties, representations and guarantees made by suppliers, manufacturers and contractors to the extent relating to the Purchased Assets, or services provided to Seller in connection with the Purchased Assets, to the extent assignable;
(m)    goodwill and other intangible assets associated with Seller or the Purchased Assets, including customer and supplier lists and the goodwill associated with the Marks included in the Purchased Intellectual Property; and
(n)    any and all causes of action against any Person that is not an Insider arising under Section 547 of the Bankruptcy Code; provided, however, Purchaser agrees that it shall not prosecute or assert any such cause of action against such Person for any reason whatsoever or sell, transfer or convey any such cause of action to any other Person.

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2.2    Excluded Assets.  Nothing herein contained shall be deemed to sell, transfer, assign or convey the Excluded Assets to Purchaser, and Seller shall retain all right, title and interest to, in and under the Excluded Assets.  "Excluded Assets" means:
(a)    all Cash and Cash Equivalents (other than deposits referred to in Section 2.1(c) that are Purchased Assets), bank deposits or similar cash items of Seller and all accounts receivable of Seller (it being understood that all accounts receivable of Seller are being sold to Hilco pursuant to the Hilco Purchase Agreement);
(b)    the Excluded Contracts;
(c)    the Utility Deposits, the deposits listed on Schedule 2.2, and all other deposits or prepaid charges and expenses of Seller to the extent paid in connection with, or relating to, any Excluded Assets;
(d)    any (i) books and records that Seller is required by Law to retain and Tax Returns, Seller's corporate filings with the State of Delaware and any filings made in any jurisdiction for Seller to qualify to do business; provided, however, that Purchaser shall have the right to make copies of any portions of such retained books and records that relate to the Purchased Assets, minute books, stock ledgers, stock certificates, Tax Returns, Seller's corporate filings with the State of Delaware and any filings made in any jurisdiction for Seller to qualify to business, provided that Seller is not required by Law to keep such retained books and records confidential or private, (ii) documents relating to proposals to acquire the Business by Persons other than Purchaser (other than non-disclosure or confidentiality agreements entered into by Seller in connection with the proposed sale of all or a portion of its assets contemplated by the Sale Motion), and (iii) personnel files for Employees who are not Transferred Employees;
(e)    any claim, right or interest of Seller in or to any refund, rebate, abatement or other recovery for Taxes other than Transfer Taxes, together with any interest due thereon or penalty rebate arising therefrom, for any Tax period (or portion thereof);
(f)    all insurance policies or rights to proceeds thereof relating to the assets, properties, business or operations of Seller;
(g)    any rights, claims or causes of action of Seller against third parties relating to assets, properties, business or operations of Seller arising out of events occurring on or prior to the Closing Date other than as provided in in Section 2.1(n) hereof; 
(h)    all rights and/or claims of Seller arising out of this Agreement and the other Seller Documents; 
(i)    the Prepetition Agent Security; 
(j)    the Professional Fees Carve-Out;
(k)    all inventory of Seller, including, without limitation, the inventory to be sold to the Inventory Purchaser pursuant to the Inventory Purchase Agreement;

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(l)    any right of Seller to any ordinary course refund or rebate arising from post-petition ordinary course purchases of goods by Seller under International Paper Supply Agreement; 
(m)    all rights of Seller under non-compete or non-solicitation provisions of agreements with Employees that are employed by Seller after August 15, 2013, and that (i) are  not offered employment from Purchaser, or (ii) with respect to each applicable Employee that receives an offer of employment from Purchaser and the Employee does not accept such offer because all of the following parameters, to the extent applicable to such Employee, are not met: (A) a compensation package from Purchaser that includes the same or better base compensation, bonus potential and commission structure, (B) with the same or more responsibility, (C) with an equivalent book of accounts to the extent applicable, (D) with the same or better severance or sub-pay (provided that the Employee is currently entitled to severance, sub-pay or retention payments from Seller), and (E) at the location where Employee is currently located or within 25 miles of such location; and
(n)    those assets listed on Schedule 2.2.
2.3    Assumption of Liabilities.  On the terms and subject to the conditions set forth in this Agreement, at the Closing, Purchaser shall assume the following Liabilities of Seller (collectively, the "Assumed Liabilities"):
(a)    all Liabilities of Seller under the Purchased Contracts relating exclusively to the period beginning after the consummation of the Closing (except for Liabilities that relate to the breach (or that, with the giving of notice, the lapse of time or both would breach) thereof prior to the consummation of the Closing); 
(b)    the Cure Amounts (solely to the extent set forth on Schedule 1.1(e)); 
(c)    all Liabilities specifically assumed by Purchaser pursuant to Article IX;
(d)    pursuant to Section 12.1, one half of any Transfer Taxes applicable to the transfer of the Purchased Assets pursuant to this Agreement; and
(e)    pursuant to Section 12.2, all real and personal property Taxes or similar ad valorem obligations relating to the Purchased Assets attributable to the Post-Closing Tax Period of any taxable period that begins before and ends after the Closing Date.
2.4    Excluded Liabilities.  Purchaser shall not assume, and shall be deemed not to have assumed, and Seller shall be solely and exclusively liable with respect to, any Liabilities of Seller other than the Assumed Liabilities (collectively, the "Excluded Liabilities"). For the avoidance of doubt and without limitation of the foregoing, the Excluded Liabilities include the following:
(a)    all Liabilities based upon, arising under or with respect to:  (i) the Excluded Assets (including, without limitation, Contracts that are not Purchased Contracts); or (ii) the ownership, operation or use of any of the businesses or assets of Seller or any of its Affiliates, other than the Purchased Assets, whether before, at or after the consummation of the Closing;

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(b)    all Liabilities for Taxes:  (i) of Seller or any of its Affiliates, including, without limitation, all Taxes of Seller for which any director, officer or employee of Seller may potentially be held personally liable; and (ii) imposed on or relating to the Purchased Assets for any Tax period (or portions thereof) ending before the Closing Date; 
(c)    all Liabilities of Seller under the Credit Documents; 
(d)    reserved;  
(e)    all Liabilities arising out of, relating to or with respect to the employment or performance of services, or termination of employment or services by Seller of any individual, including, without limitation:  (i) all Liabilities arising from retention, severance or change of control payments owed to any Employee or other Person who has performed services for or on behalf of Seller, whether as consultant, independent contractor, leased employee or otherwise as a result of the transactions contemplated hereby; (ii) all Liabilities based upon, arising (whether arising before or after the Closing) under or with respect to any Employee Benefit Plan or any other current or former compensation or employee benefit plan, policy or arrangement maintained, contributed to, or entered into at any time by, Seller or any of its Affiliates or with respect to the service or termination of any current or former employee, consultant, independent contractor, leased employee or other agent by Seller or any of its Affiliates (whether or not retained by Purchaser after the consummation of Closing), including, without limitation, any Liability arising under or with respect to workers compensation, continuation of group health coverage required under Section 4980B of the Code or Sections 601-608 of ERISA (“COBRA”), unemployment insurance premiums or any claims arising under any federal, state or local tax withholding, employment, labor or discrimination Laws; (iii) all Liabilities based upon, arising under or with respect to Seller's failure to classify individuals as employees; and (iv) all Liabilities arising under the WARN Laws; 
(f)    all Liabilities arising from the sale of Products or the provision of services by Seller;
(g)    any Liabilities for claims for workers compensation with dates of injury prior to the Closing Date; 
(h)    all accounts payable incurred in the Ordinary Course of Business, including without limitation 503(b)(9) Claim Liabilities and Post-petition Trade Payables (it being understood that Purchaser shall pay the 503(b)(9) Claim Amount (to satisfy certain 503(b)(9) Claim Liabilities) and the Post-petition Trade Payable Amount (to satisfy certain Post-petition Trade Payables) to Seller as a portion of the Purchase Price pursuant to Section 3.1); 
(i)    all Liabilities of Seller based upon, arising under or with respect to any Environmental Law;
(j)    all Liabilities  of Seller with respect to any Indebtedness or any check or draft;

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(k)    all Liabilities to the extent the existence of which constitutes a breach of any representation or warranty of Seller contained in or made pursuant to the Agreement; and
(l)    all Liabilities based upon, arising under or with respect to the operation of Seller or the Business, or the operation or use of the Purchased Assets, in each case, prior to the consummation of the Closing arising by operation of law under any common law or statutory doctrine (including successor liability or de facto merger) and any other obligation or liability based upon, arising under or with respect to events or conditions occurring at or prior to the consummation of the Closing; and
(m)    all Liability for providing COBRA coverage to (i) Transferred Employees and "qualified beneficiaries" (as defined in Section 4980B of the Code) of Transferred Employees who incur a "qualifying event" (as defined in Section 4980B of the Code) prior to the Closing Date (other than as a result of the Transferred Employee becoming an employee of Purchaser); and (ii) current or former employees of Seller or any of its predecessors who are not Transferred Employees and "qualified beneficiaries" (as defined in Section 4980B of the Code) of such current or former employees.
2.5    Assumption and Assignment of Contracts; Cure Amounts.  The Sale Order shall provide for the assumption by Seller, and the Sale Order shall provide for the assignment to the extent legally capable of being assigned, by Seller to Purchaser, of the Purchased Contracts on the terms and conditions set forth in the remainder of this Section 2.5, and shall provide for the Designation Deadline with respect to the properties under the Real Property Leases that are Purchased Contracts.  At Closing (or later for any Contracts with respect to the properties under the Real Property Leases designated as Purchased Contracts after Closing and on or before the Designation Deadline), and pursuant to Section 365 of the Bankruptcy Code and the Sale Order, Seller shall assume and assign to Purchaser, and Purchaser shall assume from Seller, the Purchased Contracts, including the Personal Property Leases and Real Property Leases that are Purchased Contracts (it being understood that the only Liabilities under the Purchased Contracts assumed by Purchaser shall be Assumed Liabilities).  The cure amounts, as determined by the Bankruptcy Court, if any, necessary to cure all pre-petition defaults, if any, and to pay all actual or pecuniary pre-petition losses that have resulted from such defaults under the Purchased Contracts, including the Personal Property Leases and Real Property Leases that are Purchased Contracts (collectively, the "Cure Amounts"), shall, to the extent set forth on Schedule 1.1(e), be paid by Purchaser, on or before the consummation of the Closing, and not by Seller, and Seller shall have no liability therefor.  (For the avoidance of doubt, it is understood that Seller (and not Purchaser) shall pay, and be liable for, any amounts incurred post-petition that are determined to be Cure Amounts, but are not set forth on Schedule 1.1(e).)
2.6    Further Conveyances and Assumptions.  From time to time following the consummation of the Closing, Seller and Purchaser shall execute, acknowledge and deliver all such further conveyances, notices, assumptions and such other instruments, and shall take such further actions, as may be reasonably necessary or appropriate to:  (a) assure that Purchaser and its successors and assigns benefit from all of the properties, rights, titles, interests, estates, remedies, powers and privileges intended to be conveyed to Purchaser under this Agreement, the other Purchaser 

19

Documents and the other Seller Documents; (b) assure that Seller and its successors and assigns benefit from the assumption of the liabilities and obligations intended to be assumed by Purchaser under this Agreement, the other Purchaser Documents and the other Seller Documents: (c) otherwise make effective the Transactions and the transactions contemplated by the other Purchaser Documents and the other Seller Documents.  In furtherance of the foregoing, from time to time following the Closing, Seller shall, unless prohibited by applicable Law, make available to Purchaser such data in personnel records of the Transferred Employees as is reasonably necessary for Purchaser to transition such Transferred Employees into Purchaser's records.  Notwithstanding the foregoing, nothing in this Section or this Agreement (including Section 8.7) shall require Seller to remain a validly existing entity beyond the Closing Date or to take any action, perform any obligations, or comply with any terms or covenants set forth in this Section after the Closing Date if Seller's corporate existence has ceased or has been cancelled (it being understood and agreed that Seller shall maintain its corporate existence until at least the second anniversary of the Closing Date).
2.7    Bulk Sales Laws.  Purchaser hereby waives compliance by Seller with the requirements and provisions of any “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the sale and transfer of any or all of the Purchased Assets to Purchaser.  The Parties agree that the Sale Order will, pursuant to language that is reasonably acceptable to each, provide that the sale and transfer of any or all of the Purchased Assets to Purchaser will be free and clear of any obligations relating to any “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable.
ARTICLE III     
 
CONSIDERATION
3.1    Consideration.  The aggregate consideration for the Purchased Assets (the “Purchase Price”) shall be:  (a) an amount in cash (the “Cash Purchase Price”) equal to the sum of (i) the aggregate amount of principal and interest outstanding as of the Closing Date under the Tranche A-1 Note (as defined in the DIP Credit Agreement and, in the case of such Tranche A-1 Note and the DIP Credit Agreement, as in effect on the date of this Agreement), such amount shall not in any event exceed $17,500,000; plus (ii) the 503(b)(9) Claim Amount, plus (iii) the Post-Closing Wind-Down Amount, plus (iv) the Post-petition Trade Payables Amount (such amount not to exceed $1,000,000), plus (v) 25% of the DIP Savings Amount, if any; and (vi) minus (A) the amount by which the aggregate gross proceeds received by Seller pursuant to the Hilco Purchase Agreement and Inventory Purchase Agreement exceeds the aggregate amount of principal and interest outstanding as of the Closing Date under the Tranche A Revolver (as defined in the DIP Credit Agreement and, in the case of such Tranche A Revolver and the DIP Credit Agreement, as in effect on the date of this Agreement) or plus (B) any shortfall of the amount referred to in subclause (A); (b) the Common Stock Shares issued to Galactic Holdings, LLC, IP (or its designee who is an Accredited Investor and delivers a representation letter addressed to Purchaser and Issuer on the Closing Date making the representations set forth in Section 5.18(a) and (b) as to itself rather than the Seller) and Seller (the “Share Recipients”), allocated amongst the Share Recipients in accordance with Schedule 3.1(b); (c) the Purchaser Note; and (d) the assumption of the Assumed Liabilities.  Schedule 3.1 contains an example of the Purchase Price calculation for illustrative purposes.  For 

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purposes of the allocation of the Common Stock Shares to the Share Recipients in accordance with Schedule 3.1(b), on the Closing Date Seller shall provide Purchaser with written instructions specifying the number of Common Stock Shares to be allocated to each Share Recipient (the “Allocation Instructions”).  In allocating the Common Stock Shares, Purchaser shall be entitled to rely on the Allocation Instructions provided by Seller and shall not have any liability for any error in the allocation of Common Stock Shares to the Share Recipients so long as such allocation is done in accordance with the Allocation Instructions.
3.2    Purchase Price Deposit. 
(a)    Upon the execution of this Agreement, pursuant to the terms of the Escrow Agreement, Purchaser shall immediately deposit with Richards, Layton & Finger, P.A., in its capacity as escrow holder (the “Escrow Holder”), Three Millions Dollars ($3,000,000) (the “Escrowed Funds”) by wire transfer of immediately available funds, to be released by the Escrow Holder and delivered to either Purchaser or Seller, in accordance with the provisions of the Escrow Agreement.  
(b)    Pursuant to the Escrow Agreement, the Escrowed Funds (together with all accrued investment income thereon) shall be distributed as follows:
(i)    if the Closing shall occur, the Escrowed Funds and all accrued investment income thereon shall be applied towards the Cash Purchase Price payable by Purchaser to Seller in accordance with Section 4.3(a);
(ii)    if (A) all of the conditions precedent set forth in Section 10.1 (other than Section 10.1(e)) and Section 10.3  are satisfied, (B) Seller has provided irrevocable notice to Purchaser of its intention to immediately consummate the transactions contemplated by this Agreement (such notice and intention not being revoked prior to the Termination Date), (C) Purchaser fails to consummate the transactions contemplated by this Agreement by the Termination Date, and (D) Seller or Purchaser terminates this Agreement pursuant to Section 4.4(a), the Escrowed Funds, together with all accrued investment income thereon, shall be delivered to Seller; or
(iii)    if this Agreement is terminated other than in accordance with Section 3.2(b)(ii), the Escrowed Funds, together with all accrued investment income thereon, shall in each case be returned to Purchaser.  
(c)    Notwithstanding any provision of this Agreement to the contrary, Seller agrees that, except in the case of fraud, (i) payment of the Escrowed Funds (together with all accrued investment income thereon) in accordance with Section 3.2(b)(ii) shall be the sole and exclusive remedy of Seller against Purchaser and its Affiliates, and any of their respective former, current or future officers, directors, employees, agents, representatives, or stockholders or other equityholders, and (ii) none of the foregoing Persons shall have any further liability or obligation, in any such case relating to, arising out of or with respect to this Agreement or any of the Purchaser Documents (whether relating to, arising out of or with respect to any matter(s) forming the basis for such termination or otherwise).  Without limitation of the foregoing, neither Seller nor any other Person shall be entitled to bring or maintain any proceeding, claim, suit or action against, or seek damages 

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from, Purchaser, any of its Affiliates, or any other Person referred to in subclause (i) above, in contravention of the preceding sentence.
3.3    DIP Savings Determination Procedure.
(a)    Purchaser shall determine the DIP Savings Amount, if any, as of the Closing and whether Seller has satisfied the DIP Savings Conditions (as defined in Section 3.4 below) (the “DIP Savings Conditions Determination”) and shall deliver its determination of the DIP Savings Amount and the DIP Savings Conditions Determination to Seller within thirty (30) days following the Closing Date.
(b)    If within thirty (30) days following delivery of Purchaser's determination of the DIP Savings Amount and the DIP Savings Conditions Determination, Seller has not given Purchaser written notice of its objection as to the DIP Savings Amount determination by Purchaser or the DIP Savings Conditions Determination, then the DIP Savings Amount determined by Purchaser and the DIP Savings Conditions Determination shall be binding and conclusive on the Parties.
(p)    If Seller duly gives Purchaser notice of objection to the DIP Savings Amount and/or the DIP Savings Conditions Determination, and if Seller and Purchaser fail to resolve the issues outstanding with respect to the DIP Savings Amount determination and/or the DIP Savings Conditions Determination within thirty (30) days of Purchaser's receipt of Seller's objection notice, Seller and Purchaser shall submit the issues remaining in dispute to the Bankruptcy Court for resolution. If issues are submitted to the Bankruptcy Court for resolution, the determination by the Bankruptcy Court, shall be final, binding and conclusive on the Parties.
3.4    DIP Savings Amount and Payment.  Within three (3) Business Days after the calculation of the DIP Savings Amount becomes binding and conclusive on the Parties pursuant to Section 3.3, Purchaser shall pay Seller 25% of the DIP Savings Amount by wire transfer, in immediately available funds, to an account specified by Seller; if and only if (i) the inventory and accounts receivables included in the assets purchased pursuant to the Hilco Purchase Agreement and the Inventory Purchase Agreement, as applicable, (calculated in accordance with GAAP applied on a consistent basis with the methodologies used in the Approved Budget (as defined in the DIP Credit Agreement as in effect on the date of this Agreement)) are at least at the levels set forth on Schedule 3.4; and (ii) since the date of this Agreement, Seller has continued to maintain its equipment and facilities included in the Purchased Assets in the ordinary course (the “DIP Savings Conditions”) (it being understood that if either of the DIP Savings Conditions set forth in (i) and (ii) are not satisfied, Purchaser shall have no obligation to pay Seller any amount under this Section 3.4).  To the extent any amount is payable to Seller under this Section 3.4, Purchaser shall be permitted to set off against any such payable amount any amount that is owed by Seller to Purchaser under this Agreement and that has not been paid in full at the time such amount becomes payable by Purchaser under this Section 3.4, after providing Seller with five (5) Business Days prior notice of the set off with opportunity to object to the set off, provided, however, if Seller timely objects to the set off, Purchaser shall pay the portion, if any, of the 25% of the DIP Savings Amount that is not subject to the set off to Seller and will pay to Seller the remaining amount of the 25% of the DIP Savings 

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Amount that is subject to the set off after Purchaser files an application with the Bankruptcy Court and receives a determination of the Bankruptcy Court that such set off is not permitted.  
3.5    Re-payment of Pre-Paid Amounts.  If any pre-paid expense that is set forth on Schedule 3.5 is included in the Purchased Assets, then to the extent Purchaser is able to utilize the asset that is related to such pre-paid expense, Purchaser shall remit the amount of pre-paid expense (each, a “Pre-paid Expense Reimbursement” and collective, the “Pre-paid Expense Reimbursements”) to Seller within 30 days after the end of each month following the Closing Date in which such pre-paid expense was utilized; provided that to the extent any Pre-paid Expense Reimbursements is payable to Seller under this Section 3.5, Purchaser shall be permitted to set off against any such Pre-paid Expense Reimbursement that is payable any amount that is owed by Seller to Purchaser under this Agreement and that has not been paid in full at the time such amount becomes payable by Purchaser under this Section 3.5, after providing Seller five (5) Business Days prior notice of the set off with opportunity to object to the set off, provided, however, if Seller timely objects to the set off, Purchaser shall pay the portion, if any, of the Pre-paid Expense Reimbursement that is not subject to the set off to Seller and will pay to Seller the remaining amount of the Pre-paid Expense Reimbursement that is subject to the set off after Purchaser files an application with the Bankruptcy Court and receives a determination of the Bankruptcy Court that such set off is not permitted.
ARTICLE IV     
 
CLOSING AND TERMINATION
4.1    Closing Date.  Subject to the satisfaction of the conditions precedent set forth in Section 10.1, Section 10.2 and Section 10.3 (or the waiver thereof by the Party or Parties entitled to waive that condition), the closing of the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities provided for in Article II (the "Closing") shall take place at the offices of Richards, Layton & Finger, P.A., One Rodney Square, 920 North King Street, Wilmington, Delaware 19801 (or at such other place as Seller and Purchaser may designate in writing) at 10:00 a.m. (eastern time) on the date that is four (4) Business Days following the satisfaction or waiver of the conditions precedent set forth in Article X (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), unless another time or date, or both, are agreed to in writing by Seller and Purchaser.  The date on which the Closing shall be held is referred to in this Agreement as the "Closing Date."
4.2    Deliveries by Seller.  At the Closing, Seller shall deliver, or cause to be delivered, to Purchaser:
(a)    a bill of sale, assignment and assumption agreement, in the form of Exhibit A, duly executed by Seller;
(b)    assignments of Purchased Intellectual Property, in forms suitable for recording in the U.S. Patent and Trademark Office and the U.S. Copyright Office (and in form and substance reasonably acceptable to Purchaser), as applicable, duly executed by Seller, and general 

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assignments of all other Purchased Intellectual Property (in form and substance reasonably acceptable to Purchaser), if any, duly executed by Seller;
(c)    the officer's certificate required to be delivered pursuant to Section 10.1(c) and 10.1(b); 
(d)    the Allocation Instructions;
(e)    a certificate of the Secretary of Seller certifying as to:  (i) the full force and effect of its certificate of incorporation and bylaws attached as exhibits; (ii) the full force and effect of the resolutions of its board of directors and stockholders authorizing the execution and delivery by Seller of this Agreement and the other Seller Documents, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the Transactions; and (iii) the signature and incumbency of each officer of Seller executing this Agreement or any of the other Seller Documents;
(f)    a certificate evidencing the good standing of Seller in its jurisdiction of organization as of a recent date;
(g)    a certificate of Seller certifying as to the matters set forth in Section 5.7(b) (in the form prescribed by applicable IRS regulations), duly executed by Seller;
(h)    all other instruments of conveyance and transfer, in form and substance reasonably acceptable to Seller and Purchaser, as may be necessary to convey the Purchased Assets to Purchaser; and
(i)    such other documents, instruments and certificates as Purchaser may reasonably request.
4.3    Deliveries by Purchaser and Issuer.  At the Closing, Purchaser or Issuer, as applicable, shall deliver, or cause to be delivered, to Seller:
(a)    by wire transfer of immediately available funds into one or more accounts designated by Seller, the Cash Purchase Price less the sum of the Escrowed Funds together with all accrued investment income thereon (which shall be released to Seller by the Escrow Holder);
(b)    a bill of sale, assignment and assumption agreement, in the form of Exhibit A, duly executed by Purchaser;
(c)    the officer's certificates required to be delivered pursuant to Section 10.2(c); 
(d)    reserved.
(e)    (1) a certificate of the Secretary of Purchaser certifying as to:  (i) the full force and effect of its certificate of incorporation and bylaws attached as exhibits; (ii) the full force and effect of the resolutions of its board of directors authorizing the execution and delivery by Purchaser of this Agreement and the other Purchaser Documents, the performance by Purchaser of 

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its obligations hereunder and thereunder and the consummation by Purchaser of the Transactions; and (iii) the signature and incumbency of each officer of Purchaser executing this Agreement or any of the other Purchaser Documents; and (2) a certificate of the Secretary of Issuer certifying as to:  (i) the full force and effect of the resolutions of its board of directors authorizing the execution and delivery by Issuer of this Agreement and the other Purchaser Documents to which it is a party, the performance by Issuer of its obligations hereunder and thereunder and the consummation by Purchaser and Issuer of the Transactions; and (ii) the signature and incumbency of each officer of Issuer executing this Agreement or any of the other Purchaser Documents;
(f)    certificates evidencing the good standing of Purchaser and Issuer in its jurisdiction of organization as of a recent date; 
(g)    certificates representing the required number of Common Stock Shares to the Share Recipients (allocated to the Share Recipients in accordance with Schedule 3.1(b)) and with the legend referred to in Schedule 4.3(g);
(h)    the Purchaser Note, in substantially the form attached hereto as Exhibit E, duly executed by Purchaser; and
(i)    such other documents, instruments and certificates as Seller may reasonably request.
4.4    Termination of Agreement.  This Agreement may be terminated prior to the Closing as follows:
(a)    by Seller or Purchaser, if the Closing shall not have occurred by the close of business on September 13, 2013 (the "Termination Date"); provided, that if the Closing shall not have occurred on or before the Termination Date due to a material breach of any representations, warranties, covenants or agreements contained in this Agreement by Purchaser or Seller, then the breaching Party may not terminate this Agreement pursuant to this Section 4.4(a);
(b)    by mutual written consent of Seller and Purchaser;
(c)    by Seller or Purchaser, if there shall be in effect a final nonappealable Order of a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the Transactions; or
(d)    by Seller or Purchaser, if the Bankruptcy Court enters an order that otherwise precludes the consummation of the Transactions on the terms and conditions set forth in this Agreement.
4.5    Procedure Upon Termination.  In the event of termination by Purchaser or Seller, or both, pursuant to Section 4.4, written notice thereof shall forthwith be given to the other Party or Parties, and this Agreement shall terminate, and the purchase of the Purchased Assets hereunder shall be abandoned, without further action by Purchaser or Seller.  If this Agreement is terminated as provided herein, each Party shall redeliver all documents, work papers and other material of any 

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other Party relating to the Transactions, whether so obtained before or after the execution hereof, to the Party furnishing the same.  
4.6    Effect of Termination.
(a)    In the event that this Agreement is validly terminated as provided herein, then each of the Parties shall be relieved of its duties and obligations arising under this Agreement after the date of such termination and such termination shall be without liability to Purchaser or Seller; provided, however, that the obligations of the Parties set forth in Section 8.6 and Section 3.2 shall survive any such termination and shall be enforceable hereunder. 
(b)    Nothing in this Section 4.6 shall relieve Purchaser or Seller of any liability for a breach of this Agreement, or the inaccuracy of any representation or warranty contained herein, prior to the date of termination.  The damages recoverable by the non-breaching Party shall include all attorneys' fees reasonably incurred by such Party in connection with the Transactions.
(c)    The Confidentiality Agreement shall survive any termination of this Agreement and nothing in this Section 4.6 shall relieve Purchaser or Seller of its obligations under the Confidentiality Agreement.
ARTICLE V     
 
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser that:
5.1    Organization and Good Standing.  Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.  Seller is duly qualified or authorized to do business and is in good standing under the laws of each jurisdiction in which it leases real property or in which the conduct of its business or the ownership of its property requires such qualification or authorization, except where the failure to be so qualified, authorized or in good standing, individually and in the aggregate, has not had and is not reasonably likely to have a Material Adverse Effect.  
5.2    Authorization of Agreement.  Seller has all requisite corporate power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement to which it is a party or to be executed by Seller in connection with the consummation of the Transactions (together with this Agreement, the "Seller Documents"), to perform its obligations hereunder and thereunder and to consummate the transaction contemplated hereby and thereby.  The execution, delivery and performance by Seller of this Agreement and the other Seller Documents and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Seller, and no other approval on the part of Seller and its stockholders or any other holder of its equity is required.  This Agreement has been, and each of the other Seller Documents will be at or prior to the Closing, duly and validly executed and delivered by Seller and (assuming the due authorization, 

26

execution and delivery by the other parties hereto and thereto and the entry of the Sale Order) this Agreement constitutes, and the other Seller Documents when so executed and delivered will constitute, legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
5.3    Conflicts; Consents of Third Parties.
(a)    None of the execution and delivery by Seller of this Agreement or the other Seller Documents, the performance by Seller of its obligations hereunder or thereunder or the consummation by Seller of the transactions contemplated hereby or thereby does or will (i) conflict with or violate any provision of the certificate of incorporation or bylaws of Seller; (ii) subject to entry of the Sale Order, and with such exceptions as, individually and in the aggregate, do not have, and are not reasonably likely to have, a Material Adverse Effect, conflict with, result in a violation or breach of, constitute a default under, result in the acceleration of, give rise to any right to accelerate, terminate, modify or cancel, or require any notice, consent, authorization, approval or waiver under, or result in any other adverse consequence under, any Contract or Permit to which Seller is a party or by which Seller or any of its properties or assets is bound or otherwise subject; (iii) subject to entry of the Sale Order, violate or breach the terms of or cause any default under any Order of any Governmental Body applicable to Seller or any of the properties or assets of Seller; (iv) subject to entry of the Sale Order, violate or breach the terms of or cause any default under any applicable Law; (v) result in the imposition of any Lien upon any assets or properties of Seller; or (vi) with the passage of time, the giving of notice or the taking of any action by another Person, have any of the effects described in clauses (i) through (v) of this Section 5.3(a).
(b)    No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body is required on the part of Seller in connection with the execution and delivery by Seller of this Agreement or any of the other Seller Documents, the performance by Seller of any of its obligations hereunder or thereunder, the consummation by Seller of the transactions contemplated hereby or thereby or the taking by Seller or of any other action contemplated hereby or thereby, except for the entry of the Sale Order.
(c)    Any existing default, including with respect to the failure to execute this Agreement on August 17, 2013, under the DIP Credit Agreement has been waived and reasonably satisfactory evidence of any such waiver by the creditor thereunder has been provided to Purchaser prior to the date of this Agreement.
5.4    Financial Statements.  
(a)    Seller has delivered to Purchaser copies of the unaudited consolidated balance sheet of Seller as at June 30, 2013 and the related consolidated statements of income and cash flows of Seller for the six (6) month period then ended and copies of the unaudited consolidated 

27

balance sheets of Seller as at December 31, 2011 and 2012 and the related consolidated statements of income and cash flows of Seller for the years then ended (such unaudited statements, including the related notes and schedules thereto, are referred to herein as the "Financial Statements").  For the purposes hereof, the unaudited consolidated balance sheet of Seller as at June 30, 2013 is referred to as the "Balance Sheet" and June 30, 2013 is referred to as the "Balance Sheet Date."
(b)    The Financial Statements were prepared from and are consistent with the books and records of Seller.  Except as set forth on Schedule 5.4(b), the Financial Statements have been prepared in accordance with GAAP consistently applied and on that basis present fairly, in all material respects, the financial position, results of operations and cash flows of Seller as of the applicable date and for the periods indicated.  The Financial Statements indicate all adjustments, which consist of only normal recurring accruals (that are not, individually or in the aggregate, material) necessary for such fair presentations.  The statements of income included in the Financial Statements do not contain any items of special or nonrecurring income except as expressly specified therein, and the balance sheets included in the Financial Statements do not reflect any write-up or revaluation increasing the book value of any assets.
(c)    The books of account and other financial records of Seller:  (i) reflect all material items of income and expense and all material assets and Liabilities required to be reflected therein in accordance with GAAP applied on a basis consistent with the practices of Seller; (ii) are in all material respects true, correct and complete; and (iii) do not contain or reflect any material inaccuracies or discrepancies.
5.5    No Undisclosed Liabilities.  Seller has not incurred any Indebtedness, obligations or other Liabilities of any kind that would have been required to be reflected in, reserved against or otherwise described in the Balance Sheet or the notes thereto in accordance with GAAP, other than Liabilities incurred in the Ordinary Course of Business since the Balance Sheet Date, Liabilities under this Agreement, Excluded Liabilities, and Liabilities that, individually and in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect.
5.6    Title to Purchased Assets; Sufficiency and Condition of Assets.  
(a)    Seller owns the Purchased Assets, and will at the Closing sell to Purchaser good and marketable title to Purchased Assets, free and clear of all Liens, other than Permitted Exceptions.
(b)    The Purchased Assets, together with the Excluded Assets and the assets being sold pursuant to the Hilco Purchase Agreement and the Inventory Purchase Agreement constitute all the assets, properties and rights owned, used or held for use in the Business.
5.7    Taxes.
(a)    Except as set forth on Schedule 5.7: (i) Seller has timely filed all material Tax Returns required to be filed with the appropriate Tax Authorities in all jurisdictions in which such Tax Returns are required to be filed (taking into account any extension of time to file granted 

28

or to be obtained on behalf of Seller); and (ii) all Taxes shown as due on such Tax Returns have been paid.
(b)    Seller is not a foreign person within the meaning of Section 1445 of the Code.
(c)    Seller has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to the assessment of any Tax, or any deficiency with respect thereto.
(d)    To the Knowledge of Seller, Seller has properly withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any stockholder, member, owner, employee, creditor, independent contractor or other third party and has complied with all information reporting requirements in connection with such payments.
(e)    Seller (i) has never been a member of an affiliated group of corporations within the meaning of Section 1504 of the Code and (ii) has no Liability for Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign tax Law), as a transferee or successor, by contract or otherwise.
5.8    Real Property.  
(a)    Schedule 5.8(a) sets forth a complete list of all real property and interests in real property leased by Seller, as lessee (individually, a "Real Property Lease" and collectively, the "Real Property Leases").
(b)    Seller does not currently own any real property. 
(c)    To the Knowledge of Seller, all buildings, structures, improvements, fixtures, building systems, and all components thereof, included on the Leased Locations are in good operating condition and repair, ordinary wear and tear excepted; are suitable for the purposes for which they are currently being used and have been maintained and tested in accordance with normal industry practice.
(d)    The Leased Locations:  (i) are adequate for the uses for which they are used by Seller; and (ii) are not, to the Knowledge of Seller, the subject of any pending condemnation, eminent domain or inverse condemnation proceedings or any other taking by public authority with or without payment of consideration therefor, nor has any such notice of such a proposed condemnation or taking been received by Seller.
(e)    To the Knowledge of Seller, the construction, operation, management, occupancy and use of the Leased Locations are in compliance with the zoning, subdivision or building codes and all other Laws, without reliance on any Permit, variances or other exception.
(f)    To the Knowledge of Seller, all public utilities (including, without limitation, sanitary sewer, storm sewer, electricity, water and telephone) required for the operation of the Leased Locations, or any part thereof, are installed and operating and have been accepted by such utility 

29

company or Governmental Body.  There is permanent vehicular and pedestrian egress from and egress to the real property over public roads that abut the Leased Locations.
(g)    Except for this Agreement, the Hilco Purchase Agreement, the Inventory Agreement or the Real Property Leases, Seller has not entered into any, and to the Knowledge of Seller there is no, Contract with respect to the purchase, assignment or transfer or lease or occupancy of all or any portion of the Leased Locations which is currently in effect.
(h)    To the Knowledge of Seller:  (i) except as set forth on Schedule 5.8(h), the improvements on the Leased Locations are structurally sound, the roofs are free of leaks and in good condition, and the Leased Locations have no material  hidden or latent defects; and (ii) all plumbing, fire protection, alarm, heating, ventilating, air conditioning, electrical, public and private utility, sewer, septic and other waste, and other systems, and all fixtures and appliances (including, without limitation, trade fixtures) included in the Leased Locations are in good working order and free of deferred maintenance.
5.9    Tangible Personal Property Leases.  Schedule 5.9 sets forth all leases of personal property ("Personal Property Leases") involving annual payments in excess of $25,000 relating to personal property used by Seller or to which Seller is a party or by which the properties or assets of Seller are bound or otherwise subject.  
5.10    Intellectual Property.  
(a)    Schedule 5.10(a)-1 to Schedule 5.10(a)-3 set forth an accurate and complete list of: (1) all domain names of which Seller is the registrant or of which a third party is the registrant for the benefit of a Vendor, specifying for each its registrant (unless such registrant is Seller) and administrative contact email address and renewal date, and whether it is active; and (2) all registered Marks and pending applications for registration of Marks owned by Seller (collectively, the "Registered IP"); and (3) all unregistered Marks owned by Seller (collectively, the Registered IP together with the unregistered Marks and all other Intellectual Property owned by Seller, the "Seller IP").  Except as set forth on Schedule 5.10(a)-4, Seller has no patents or any registered or unregistered Copyrights or any pending applications for registration of Copyrights.  To the Knowledge of Seller, except as set forth on Schedule 5.10(a)-4, the conduct of the Business (including the products or services distributed, sold or offered by Seller and all Intellectual Property) as currently conducted, does not infringe upon or misappropriate or violate the Intellectual Property rights or the confidential and proprietary information, including trade secrets, of any third party.  Except as set forth on Schedule 5.10(a)-4, none of the Seller IP has been the subject of a judicial finding or opinion, nor has any written notice or claim challenging the ownership, validity, registrability, enforceability, use or licensed right to use any Intellectual Property been received by Seller.  Except as set forth on Schedule 5.10(a)-4, no claim or notice has been asserted against Seller in writing or, to the Knowledge of Seller, orally, that the conduct of the Business as currently conducted infringes in any material respect upon or misappropriates the Intellectual Property rights or the confidential and proprietary information, including trade secrets, of any third party, in each case, except with respect to claims or notices that have been fully resolved nor, to the Knowledge of Seller, is there a basis for such a claim.  Except as set forth on Schedule 5.10(a)-4, Seller has timely paid all filing, examination, issuance, post registration and maintenance fees, annuities and the like associated 

30

with or required with respect to any of the Registered IP, and all documents, recordations and certificates necessary to be filed by Seller to maintain the effectiveness of the Registered IP have been filed with the relevant patent, copyright, trademark or other authorities so that no item required to be listed in Schedule 5.10(a)-1 to Schedule 5.10(a)-3, has lapsed, expired or been abandoned or canceled other than in the Ordinary Course of Business.
(b)    Seller has exercised a degree of care that is, in light of the nature of the Business, appropriate in order to preserve the exclusive use of all trade secrets of Seller.
(c)    There are no claims asserted or threatened by Seller that a third party infringes, misappropriates or otherwise violates any of the Seller IP.
(d)    The Seller IP, together with the rights granted to Seller under any "shrink-wrap" or "click-wrap" license agreements relating to software desktop applications, are sufficient for the conduct of the Business in every jurisdiction where it is conducted.
(e)    Seller has not collected any confidential information from their customers other than information that is necessary or incidental to the work performed for them, including the names and addresses of their customers' customers.
5.11    Material Contracts.
(a)    Schedule 5.11 sets forth all of the following Contracts to which Seller is a party or by which Seller is bound or by which the Purchased Assets may be bound or affected (collectively, together with the Real Property Leases, the Personal Property Leases and Collective Bargaining Agreements the "Material Contracts"):
(i)    Contracts with any Affiliate or current or former officer or director of Seller other than contracts with such officers set forth on Schedule 5.11(a);
(ii)    Contracts with any labor union or association representing any Employees;
(iii)    Contracts for the sale of any of the Purchased Assets, other than sales of inventory in the Ordinary Course of Business pursuant to Contracts that may be terminated by either party "at will" (and without any required payment) on notice of 60 days or less;
(iv)    Contracts relating to the acquisition by Seller of any operating business or the capital stock of any other Person;
(v)    Contracts for the employment of any individual other than contracts with such employees set forth on Schedule 5.11(a);
(vi)    Contracts relating to incurrence of Indebtedness or the making of any loans, other than the Credit Documents;

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(vii)    Contracts which involve the expenditure of more than $25,000 in the aggregate or require performance by any party more than one (1) year from the date hereof that, in either case, are not terminable by Seller without penalty on less than one hundred eighty (180) days' notice; 
(viii)    Contracts with customers;
(ix)    Contracts granting any Person a Lien on any of the Purchased Assets;
(x)    Contracts providing for the grant of any preferential rights to purchase or lease any of the Purchased Assets;
(xi)    confidentiality or non-disclosure, non-compete, and non-solicitation agreements;
(xii)    Contracts (A) containing non-competition, non-solicitation or other limitations restricting the conduct of the Business, or the ability of Seller or any Affiliate of the Business to compete with any Person or to solicit the employees or customers of any Person, (B) granting to the other party or any third party "most favored nation" status or (C) granting to the other party or any third party any exclusive right or rights or in which any third party grants Seller any exclusive right or rights;
(xiii)    any partnership, joint venture and similar Contracts; and
(xiv)    Contracts providing for the sale, lease, license or control of, or otherwise relating to any Intellectual Property to or from Seller, including any Contract relating to nondisclosure or appropriation of Intellectual Property by Seller's current or former employees.
(b)    True, correct and complete copies of all Material Contracts, together with all modifications, amendments and supplements thereto, have been provided to Purchaser in the Dataroom prior to the date of this Agreement.    
(c)    Other than relating to Seller's inability to pay pre-petition amounts owed under certain Material Contracts due to the commencement of the Bankruptcy Case and the implementation of the automatic stay under Section 362 of the Bankruptcy Code and with such exceptions that, individually and in the aggregate, do not have, and are not reasonably likely to have, a Material Adverse Effect: (i) all of the Purchased Contracts are in full force and effect and are valid and binding on and enforceable against Seller in accordance with their terms and, to the Knowledge of Seller, on and against the other parties thereto, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity); (ii) Seller is not, and to the Knowledge of Seller, no other party to any Purchased Contract, in breach of, or default under, any Purchased Contract; (iii) Seller has not waived any right under any Purchased Contract; (iv) no event has occurred that, with the giving of notice or the lapse of time or both, would constitute a breach of, or default under, any Purchased 

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Contract; (v) there are no unresolved disputes under any of the Purchased Contracts; and (vi) Seller has not given to or received from any other Person, any notice or other written communication regarding any actual, alleged, possible or potential violation or breach or, or default under, any Purchased Contract.
5.12    Employee Benefits.
(a)    Schedule 5.12 lists all "employee benefit plans" (as defined in Section 3(3) of ERISA) and all other plans, policies, arrangements or Contracts (other than governmental plans), including, without limitation, equity, bonus, incentive compensation, deferred compensation, change in control, pension, welfare benefit, severance, sick leave, vacation pay, salary continuation, disability, life insurance, and educational assistance plans, policies, arrangements or Contracts as to which Seller and its Affiliates have any Liability for current or former employees of Seller (the "Employee Benefit Plans").
(b)    True, correct and complete copies of the following documents, with respect to each of the Employee Benefit Plans have prior to the date of this Agreement been made available to Purchaser in the Dataroom: (i) any plan and related trust documents, and all amendments thereto; (ii) the most recent Form 5500 and schedules thereto; (iii) the most recent financial statement and actuarial valuation; (iv) the most recent IRS determination letter; and (v) the most recent summary plan description (including letters or other documents updating such description).
(c)    None of the Employee Benefit Plans is or has been a "multiemployer plan" (as defined in Section 3(37) of ERISA) or is or has been subject to Sections 4063 or 4064 of ERISA, or is or has been subject to Section 412 of the Code or Title IV of ERISA, and Seller has no Liability under any such plan, including, but not limited to, any plan previously maintained or contributed to by Seller or any plan currently or previously maintained or contributed to by a Person treated as a single employer with Seller under Section 414(b), (c), (m) or (o) of the Code (an "ERISA Affiliate").
(d)    Each of the Employee Benefit Plans intended to qualify under Section 401 of the Code has been determined by the IRS to be so qualified and, to the Knowledge of Seller, nothing has occurred with respect to the operation of any such plan which could reasonably be expected to result in the revocation of such favorable determination.
(e)    Seller has never been controlled by or under common control with a Person, including any ERISA Affiliate, that has maintained, sponsored or contributed to a plan that provides benefits or compensation to employees in the United States.
(f)    Each Employee Benefit Plan is and has been in all material respects operated and administered in accordance with its terms and all applicable Laws.  
(g)    No Employee Benefit Plan provides health, life insurance or other welfare benefits to retirees or other terminated employees of either Company, other than continuation coverage required by Section 4980B of the Code or Sections 601-608 of ERISA.  Schedule 5.12(g) lists the former employees of Seller or any of its predecessors and the “qualified beneficiaries” 

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of any current or former employees of Seller or any of its predecessors who, as of the date of this Agreement, are receiving or eligible for benefits under such sections of the Code or ERISA.
(h)    There are no Legal Proceedings with respect to any Employee Benefit Plan pending, or to the Knowledge of Seller, threatened, that are reasonably expected to give rise to a material Liability.  There is currently no audit or, to the Knowledge of Seller, investigation by any Governmental Body or any claim (other than routine claims for benefits in the Ordinary Course of Business) or Legal Proceeding against or involving any Employee Benefit Plan.
(i)    No event has occurred and no condition exists with respect to any Employee Benefit Plan or any other employee benefit plan or arrangement currently or previously maintained or contributed to by Seller, any of its Affiliates, or any of their respective ERISA Affiliates, that could subject Purchaser, or any of its Affiliates or their respective officers, directors, employees or agents, directly or indirectly, to any Tax, penalty, fine or other Liability or that could result in the imposition of any Lien.
(j)    All material contributions and premium payments required to have been paid under or with respect to any Employee Benefit Plan have been timely paid.
(k)    (x) No Employee Benefit Plan is (i) subject to Section 430 of the Code or Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, (ii) subject to Sections 4063 or 4064 of ERISA, or (iii) a multiemployer plan within the meaning of Section 3(37) of ERISA, and (y) Seller has no obligation to contribute, and otherwise has no Liability with respect to, any such plans previously maintained or contributed to by Seller.
5.13    Labor.
(a)    Schedule 5.13(a) sets forth a list of each currently effective labor or collective bargaining agreement, works council or similar agreement to which Seller is a party or by which Seller or any of its properties or assets is bound or otherwise subject (the "Collective Bargaining Agreements").
(b)    There are no (i) strikes, work stoppages, work slowdowns or lockouts pending or, to the Knowledge of Seller, threatened against or involving Seller, or (ii) unfair labor practice charges, grievances or complaints pending or, to the Knowledge of Seller, threatened by or on behalf of any employee or group of employees of Seller.
(c)    Schedule 5.13(c) lists each Employee as of the date of this Agreement, including for each such Employee his or her (i) name, (ii) date of birth, (iii) job title, (iv) status as a full-time, part-time or temporary employee, consultant, independent contractor or leased employee, (v) base salary or wage rate, (vi) 2012 bonus, (vii) date of hire, (viii) direct supervisor, and (ix) work location.  Schedule 5.13(c) also lists as of the date of this Agreement each Employee who is not actively at work for any reason other than vacation and the reason for such absence.  Except for one sales representative located in Canada, no individual who performs services for Seller is a leased employee or is domiciled outside of the United States.  

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(d)    Seller has, in good faith, properly classified for all purposes (including for Tax purposes and for purposes of determining eligibility to participate in any Employee Benefit Plan) all Persons who have performed services for or on behalf of Seller and has properly withheld and paid all applicable Taxes and makes appropriate filings in connection with services provided by such Persons to Seller in accordance with such classifications.
5.14    Litigation.  Except (a) as set forth on Schedule 5.14 and (b) the Bankruptcy Case, (i) there are no Legal Proceedings pending or, to the Knowledge of Seller, threatened against Seller before any Governmental Body, other than ordinary course Legal Proceedings, and (ii) Seller is not subject to any Order.
5.15    Compliance with Laws; Permits.
(a)    Seller is in compliance in all material respects with all Laws.  Seller has not received any written notice, to Seller's Knowledge, any other notice, of or been charged with the violation in any material respects of any Laws.
(b)    Schedule 5.15(b) lists all Permits held by Seller that relate to the Purchased Assets.  Seller has obtained all Permits required under all applicable Laws necessary to operate the Purchased Assets.  Seller is not in default or violation (and no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or provision of any Permit related to the Purchased Assets.
5.16    Environmental Matters.  To the extent any of the representations and warranties contained in this Section 5.16 are expressly covered by, and substantively identical to, another representation and warranty contained in Article V, then such other representation and warranty shall not be deemed breached by Seller if the applicable representation and warranty set forth in this Section 5.16 is not breached by Seller.     
(a)    With such exceptions as, individually and in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect or as set forth on Schedule 5.16(a), with respect to the Purchased Assets and the Leased Locations:
(i)    Seller is in compliance with all applicable Environmental Laws and all Permits issued pursuant to Environmental Laws;
(ii)    Seller has obtained all Permits required under all applicable Environmental Laws necessary to operate the Purchased Assets;
(iii)    Seller is not the subject of any outstanding Order or Contract with any Governmental Body respecting Environmental Laws, including any Remedial Action or any Release or threatened Release of a Hazardous Material;
(iv)    Seller has not received any written communication alleging either or both that (i) Seller may be in violation of any Environmental Law, or any Permit issued pursuant to Environmental Law, or (ii) Seller may have any liability under any Environmental Law; and

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(v)    to the Knowledge of Seller, there are no investigations pending or threatened which would reasonably be expected to result in the imposition of any material liability pursuant to any Environmental Law.
(b)    Seller has, prior to the date of this Agreement, provided to Purchaser in the Dataroom true, correct and complete copies of all reports, studies, analyses or tests, and any results of monitoring programs, in the possession or control of Seller or any of its Affiliates, pertaining to the generation, storage, use, handling, transportation, treatment, emission, spillage, disposal, release or removal of Hazardous Materials at, in, on or under any of the Leased Locations.
5.17    Suppliers and Customers.  Schedule 5.17-1 lists the names and addresses of the ten largest customers and ten largest suppliers of products and/or services for the Business (indicating approximate dollar value for each (based on invoice price)) during the fiscal years ended December 31, 2011 and 2012 and the six months ended June 30, 2013.  To the Knowledge of Seller, except as set forth on Schedule 2.12-2:  (a) no event, occurrence or fact has occurred or is likely to occur which threatens to adversely and materially affect Seller's arrangements with such customers, suppliers and vendors; and (b) no event, occurrence, or fact has occurred or is likely to occur which would lead it to believe that any of such customers, suppliers or vendors will not continue to supply the current level and type of materials, supplies, merchandise, services and other goods currently being provided to Seller on similar terms and conditions.
5.18    Investment Representations.  
(a)    Seller has sufficient knowledge and experience in financial, tax and business matters to enable it to utilize the information made available to it in connection with the sale of the Common Stock Shares to it pursuant hereto, to evaluate the merits and risks of an investment in the Common Stock Shares and to make an informed investment decision with respect to an investment in the Common Stock Shares.
(b)    Seller will not sell or otherwise transfer the Common Stock Shares without registration under the Securities Act and applicable state securities laws or an applicable exemption therefrom.  Seller acknowledges that neither the offer nor sale of the Common Stock Shares has been registered under the Securities Act or under the securities laws of any state.  Seller is an “accredited investor,” as such term is defined in Rule 501 of Regulation D under the Securities Act and is not acquiring the Common Stock Shares with a view toward resale or distribution in violation of the Securities Act.  Seller is aware that (i) the Common Stock Shares are not currently eligible for sale in reliance upon Rule 144 promulgated under the Securities Act and (ii) neither Issuer nor Purchaser has any obligation to register the Common Stock Shares.  To the foregoing effects, Seller agrees that the certificates representing the Common Stock Shares shall bear the legend set forth on Schedule 4.3(g).
(c)    Seller does not, directly or through any Affiliates or subsidiaries, own any Common Stock, other than the Common Stock Shares issuable or issued to Seller hereunder.

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5.19    Absence of Certain Changes.  Except for the commencement of the Bankruptcy case or as set forth on Schedule 5.19, since the Balance Sheet Date, Seller has conducted the Business only in the Ordinary Course of Business and:
(a)    there has been no circumstance, state of facts or matters, change, event, occurrence, action or omission that, individually or in the aggregate, has, or would be reasonably likely to have, a Material Adverse Effect; and
(b)    Seller has not taken any action that it is prohibited from taking after the date of this Agreement pursuant to Section 8.2.
5.20    No Subsidiaries and Parent’s Assets.  Seller has no subsidiaries or investments in any other Person.  Other than the outstanding common stock of Seller, Holdings does not own any material assets that relate to the Business.
5.21    Financial Advisors.  Except for PricewaterhouseCoopers LLP, no Person has acted, directly or indirectly, as a broker, finder or financial advisor for Seller in connection with the Transactions, and no Person is entitled to any fee or commission or like payment from Purchaser in respect thereof (it being understood that the fees and commissions due to PricewaterhouseCoopers LLP are the responsibility of Seller and not Purchaser).
5.22    No Other Representations or Warranties; Schedules.  
(a)    NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, SELLER ACKNOWLEDGES AND AGREES THAT, EXCEPT IN THE CASE OF FRAUD, PURCHASER AND ISSUER ARE NOT MAKING ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, BEYOND THOSE EXPRESSLY GIVEN BY PURCHASER AND ISSUER IN ARTICLE VI.  EXCEPT IN THE CASE OF FRAUD, ANY CLAIMS SELLER MAY HAVE FOR BREACH OF REPRESENTATION OR WARRANTY SHALL BE BASED SOLELY ON THE REPRESENTATIONS AND WARRANTIES OF PURCHASER AND ISSUER, AS APPLICABLE, SET FORTH IN ARTICLE VI.  SELLER FURTHER REPRESENTS THAT NEITHER PURCHASER, ISSUER NOR ANY OF THEIR RESPECTIVE AFFILIATES NOR ANY OTHER PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING PURCHASER, ISSUER OR THE TRANSACTIONS NOT EXPRESSLY SET FORTH IN THIS AGREEMENT, AND, EXCEPT IN THE CASE OF FRAUD, PURCHASER AND ISSUER HAVE NOT, NOR WILL ANY OF THEIR RESPECTIVE AFFILIATES OR ANY OTHER PERSON HAVE OR BE SUBJECT TO ANY LIABILITY TO SELLER OR ANY OTHER PERSON RESULTING FROM THE DISTRIBUTION TO SELLER OR ITS REPRESENTATIVES OR SELLER'S USE OF, ANY SUCH INFORMATION, INCLUDING ANY INFORMATION DISTRIBUTED ON BEHALF OF PURCHASER OR ISSUER RELATING TO PURCHASER OR ISSUER OR OTHER PUBLICATIONS OR INFORMATION PROVIDED TO SELLER OR ITS REPRESENTATIVES, OR ANY OTHER DOCUMENT OR INFORMATION IN ANY FORM PROVIDED TO SELLER OR ITS REPRESENTATIVES IN CONNECTION WITH THE TRANSACTIONS.  SELLER ACKNOWLEDGES THAT IT HAS CONDUCTED TO 

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ITS SATISFACTION, ITS OWN INDEPENDENT INVESTIGATION OF PURCHASER AND ISSUER AND, IN MAKING THE DETERMINATION TO PROCEED WITH THE TRANSACTIONS, SELLER HAS RELIED ON THE REPRESENTATIONS AND WARRANTIES IN ARTICLE VI AND THE RESULTS OF ITS OWN INDEPENDENT INVESTIGATION.
(b)    EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE V (AS QUALIFIED, TO THE EXTENT PERMITTED BY SECTION 8.9, BY THE SCHEDULES), OR IN THE CASE OF FRAUD, SELLER DOES NOT MAKE ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO SELLER, THE BUSINESS, THE PURCHASED ASSETS, THE ASSUMED LIABILITIES OR THE TRANSACTIONS, AND SELLER DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY SELLER, ANY AFFILIATE OF SELLER OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES.  EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE V (AS QUALIFIED, TO THE EXTENT PERMITTED BY SECTION 8.9, BY THE SCHEDULES) OR IN THE CASE OF FRAUD, SELLER (I) EXPRESSLY DISCLAIMS AND NEGATES ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AT COMMON LAW, BY STATUTE, OR OTHERWISE, RELATING TO THE CONDITION OF THE PURCHASED ASSETS (INCLUDING ANY IMPLIED OR EXPRESSED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS) AND (II) DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, PROJECTION, FORECAST, STATEMENT, OR INFORMATION MADE, COMMUNICATED, OR FURNISHED (ORALLY OR IN WRITING) TO PURCHASER OR ITS AFFILIATES OR REPRESENTATIVES (INCLUDING ANY OPINION, INFORMATION, PROJECTION, OR ADVICE THAT MAY HAVE BEEN OR MAY BE PROVIDED TO PURCHASER BY ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT, CONSULTANT, OR REPRESENTATIVE OF SELLER OR ANY OF ITS AFFILIATES).  SELLER DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES TO PURCHASER REGARDING THE PROBABLE SUCCESS OR PROFITABILITY OF THE BUSINESS OR THE PURCHASED ASSETS.  THE DISCLOSURE OF ANY MATTER OR ITEM IN ANY SCHEDULE SHALL NOT BE DEEMED TO CONSTITUTE AN ACKNOWLEDGMENT THAT ANY SUCH MATTER IS REQUIRED TO BE DISCLOSED OR IS MATERIAL OR THAT SUCH MATTER WOULD BE REASONABLY LIKELY TO RESULT IN A MATERIAL ADVERSE EFFECT.
ARTICLE VI     
 
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller with respect to the provisions of this Article VI that relate to Purchaser, and Issuer hereby represents and warrants to Seller with respect to the provisions of this Article VI that relate to Issuer, that:
6.1    Organization and Good Standing.  Purchaser is a Delaware corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has 

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all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.  Issuer is a Colorado corporation duly organized, validly existing and in good standing under the laws of the State of Colorado and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.  The Articles of Incorporation of Issuer, as presently in effect, have been provided to Seller prior to the execution and delivery of this Agreement and have not been amended or otherwise modified and remain in full force and effect. The Certificate of Designations of Series A Junior Participating Preferred Stock of Issuer attached to the Form 8-K of Issuer filed with the Commission on April 21, 2005 and the Bylaws of Issuer attached to the Form 8-K of Issuer filed with the Commission on April 18, 2005 have not been amended or otherwise modified and remain in full force and effect.
6.2    Authorization of Agreement.  
(a)    Purchaser has all requisite corporate power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by Purchaser in connection with the consummation by Purchaser of the Transactions (together with this Agreement, the "Purchaser Documents"), to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance by Purchaser of this Agreement and the other Purchaser Documents to which Purchaser is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on behalf of Purchaser, and no other approval on the part of Purchaser or any holder of its equity is required.  This Agreement has been, and each of the other Purchaser Documents to which Purchaser is a party will be at or prior to the Closing, duly executed and delivered by Purchaser and (assuming the due authorization, execution and delivery by the other parties hereto and thereto and the entry of the Sale Order) this Agreement constitutes, and each other Purchaser Document when so executed and delivered will constitute, legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
(b)    Issuer has all requisite corporate power and authority to execute and deliver this Agreement and each other Purchaser Documents to which it is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance by Issuer of this Agreement and the other Purchaser Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on behalf of Issuer, and no other approval on the part of Issuer or any holder of its equity is required.  This Agreement has been, and each of the other Purchaser Documents to which Issuer is a party will be at or prior to the Closing, duly executed and delivered by Issuer and (assuming the due authorization, execution and delivery by the other parties hereto and thereto and the entry of the Sale Order) this Agreement constitutes, and each other Purchaser Document when so executed and delivered will constitute, legal, valid and binding obligations of Issuer, enforceable against Issuer in accordance with their 

39

respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
6.3    Conflicts; Consents of Third Parties.
(a)    None of the execution and delivery by Purchaser or Issuer of this Agreement or the other Purchaser Documents, the performance by Purchaser and Issuer of its obligations hereunder or thereunder or the consummation by Purchaser and Issuer of the transactions contemplated hereby or thereby do or will (i) conflict with or violate any provision of the certificate of incorporation or bylaws of Purchaser or Issuer, as applicable; (ii) subject to entry of the Sale Order and with such exceptions as, individually and in the aggregate, do not have, and are not reasonably likely to have, a Purchaser Material Adverse Effect, conflict with, result in a violation or breach of, constitute a default under, result in the acceleration of, give rise to any right to accelerate, terminate, modify or cancel, or require any notice, consent, authorization, approval or waiver under, or result in any other adverse consequence under, any Contract or Permit to which Purchaser or Issuer is a party or by which Purchaser, Issuer or any of Purchaser's or Issuer's properties or assets is bound or otherwise subject; (iii) subject to entry of the Sale Order and such consents, approvals, notices and waivers which have been obtained or made prior to the date of this Agreement, violate or breach the terms of or cause any default under any Order of any Governmental Body applicable to Purchaser, Issuer or any of Purchaser's or Issuer's properties or assets; (iv) subject to entry of the Sale Order and assuming the representations and warranties in the Letter Agreements and the representations of Seller in Section 5.18 are true and correct, violate or breach the terms of or cause any default under any applicable Law; or (v) with the passage of time, the giving of notice or the taking of any action by another Person, have any of the effects described in clauses (i) through (iv) of this Section 6.3(a).
(b)    Subject to the entry of the Sale Order, such consents, approvals, notices and waivers which have been obtained or made prior to the date of this Agreement, and assuming the representations and warranties in the Letter Agreements and the representations of Seller in Section 5.18 are true and correct,  no consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body is required on the part of Purchaser or Issuer in connection with the execution and delivery by Purchaser or Issuer of this Agreement or any of the other Purchaser Documents, the performance by Purchaser with any of its obligations hereunder or thereunder, the consummation by Purchaser and Issuer of the transactions contemplated hereby or thereby or the taking by Purchaser or Issuer of any other action contemplated hereby or thereby, or for Purchaser to operate the Purchased Assets, except for the entry of the Sale Order, the application to the New York Stock Exchange relating to the Common Stock Shares hereunder and filings, if any, pursuant to the Exchange Act.
6.4    Litigation.  There are no Legal Proceedings pending or, to the knowledge of Purchaser or Issuer, threatened against Purchaser or Issuer, or to which Purchaser or Issuer is otherwise a party before any Governmental Body, which, individually and in the aggregate, have not had and are not reasonably likely to have be expected to have a Purchaser Material Adverse Effect.  Neither 

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Purchaser nor Issuer is subject to any Order except for those that individually and in the aggregate, have not had and are not reasonably likely to have a Purchaser Material Adverse Effect.
6.5    Financial Advisors.  Except for Macquarie Group Limited, no Person has acted, directly or indirectly, as a broker, finder or financial advisor for Purchaser in connection with the Transactions, and no Person is entitled to any fee or commission or like payment from Seller in respect thereof (it being understood that the fees and commissions due to Macquarie Group Limited are the responsibility of Purchaser and not Seller).
6.6    Financial Capability.  Purchaser (a) at the Closing will have, sufficient funds available to pay the Cash Purchase Price and any expenses incurred by Purchaser in connection with the Transactions, and (b) has, and at the Closing will have, the resources and capabilities (financial or otherwise) to perform its obligations hereunder.
6.7    Common Stock Shares.  
(a)    The Common Stock Shares: (i) have been duly authorized for issuance by all necessary corporate action on the part of Issuer in accordance with its certificate of incorporation, bylaws and applicable Law; and (ii) when paid for and delivered at the Closing in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable.
(b)    The Common Stock Shares to be delivered at the Closing pursuant to Section 4.3(g) will be free of any and all Liens and restrictions on transfer, other than restrictions on transfer under applicable federal or state securities laws and subject to the provisions of this Agreement and the Letter Agreements.
(c)    Issuer’s Common Stock is listed on the New York Stock Exchange, and Issuer has not received any written notice of delisting from such exchange.
6.8    Periodic Reports.  Issuer’s forms, registration statements, reports, schedules and statements required to be filed by it since June 30, 2012 under the Exchange Act or the Securities Act (all such documents filed prior to the date hereof, collectively the “Issuer SEC Documents”) have been filed with the Commission on a timely basis giving effect to permissible extensions in accordance with Rule 12b-25 under the Exchange Act).  The Issuer SEC Documents, including, without limitation, any audited or unaudited financial statements and any notes thereto or schedules included therein, at the time filed (or in the case of registration statements, solely on the dates of effectiveness) (except to the extent corrected by a subsequent Issuer SEC Document) (a) did not contain any untrue statement of a material fact or omit 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, (b) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be and (c) complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto.
6.9    Condition of the Business.  

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(a)    NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT IN THE CASE OF FRAUD, SELLER IS NOT MAKING ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, BEYOND THOSE EXPRESSLY GIVEN BY SELLER IN ARTICLE V (AS QUALIFIED, TO THE EXTENT PERMITTED BY SECTION 8.9, BY THE SCHEDULES), AND PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE V, THE PURCHASED ASSETS ARE BEING TRANSFERRED ON AN "AS IS," "WHERE IS" AND "WITH ALL FAULTS" BASIS AND WITHOUT REPRESENTATIONS, WARRANTIES OR GUARANTEES, EXPRESSLY IMPLIED OR STATUTORY, WRITTEN OR ORAL, OF ANY KIND, NATURE OR DESCRIPTION, BY SELLER, ITS AGENTS, ITS REPRESENTATIVES OR ITS ESTATES.  EXCEPT IN THE CASE OF FRAUD, ANY CLAIMS PURCHASER MAY HAVE FOR BREACH OF REPRESENTATION OR WARRANTY SHALL BE BASED SOLELY ON THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN ARTICLE V (AS QUALIFIED, TO THE EXTENT PERMITTED BY SECTION 8.9, BY THE SCHEDULES).  PURCHASER FURTHER REPRESENTS THAT NEITHER SELLER NOR ANY OF ITS AFFILIATES NOR ANY OTHER PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING SELLER, THE PURCHASED ASSETS, THE BUSINESS OR THE TRANSACTIONS NOT EXPRESSLY SET FORTH IN THIS AGREEMENT, AND, EXCEPT IN THE CASE OF FRAUD, SELLER HAS NOT, NOR WILL ANY OF ITS AFFILIATES OR ANY OTHER PERSON HAVE OR BE SUBJECT TO ANY LIABILITY TO PURCHASER OR ANY OTHER PERSON RESULTING FROM THE DISTRIBUTION TO PURCHASER OR ITS REPRESENTATIVES OR PURCHASER'S USE OF, ANY SUCH INFORMATION, INCLUDING ANY CONFIDENTIAL MEMORANDA DISTRIBUTED ON BEHALF OF SELLER RELATING TO THE BUSINESS OR THE PURCHASED ASSETS OR OTHER PUBLICATIONS OR DATA ROOM INFORMATION PROVIDED TO PURCHASER OR ITS REPRESENTATIVES, OR ANY OTHER DOCUMENT OR INFORMATION IN ANY FORM PROVIDED TO PURCHASER OR ITS REPRESENTATIVES IN CONNECTION WITH THE SALE OF THE BUSINESS, THE PURCHASED ASSETS  AND THE TRANSACTIONS.  PURCHASER ACKNOWLEDGES THAT IT HAS CONDUCTED TO ITS SATISFACTION, ITS OWN INDEPENDENT INVESTIGATION OF THE BUSINESS AND THE PURCHASED ASSETS AND, IN MAKING THE DETERMINATION TO PROCEED WITH THE TRANSACTIONS, PURCHASER HAS RELIED ON THE REPRESENTATIONS AND WARRANTIES IN ARTICLE V AND THE RESULTS OF ITS OWN INDEPENDENT INVESTIGATION.
(b)    EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE VI, OR IN THE CASE OF FRAUD, PURCHASER AND ISSUER DO NOT MAKE ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO PURCHASER, ISSUER, OR THE TRANSACTIONS, AND PURCHASER AND ISSUER DISCLAIM ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY PURCHASER, ISSUER, ANY AFFILIATE OF PURCHASER OR ISSUER OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES.  PURCHASER AND ISSUER DO NOT 

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MAKE ANY REPRESENTATIONS OR WARRANTIES TO SELLER  REGARDING THE PROBABLE SUCCESS OF CONSUMMATION OF THE TRANSACTION, ISSUER OR PURCHASER.  
ARTICLE VII     
 
BANKRUPTCY COURT MATTERS
7.1    Reserved.
7.2    Bankruptcy Court Filings.  Seller will file the Sale Motion no less than three (3) Business Days after the date of this Agreement.  After the Sale Motion is filed, Seller shall provide Purchaser copies of any additional filings to be made as far as advance as possible (but in no event less than twelve (12) hours) and will incorporate into such filing all reasonable comments provided by Purchaser prior to the filing thereof. Purchaser and Seller each agree that it will promptly take such actions as are reasonably necessary to obtain entry of the Sale Order approving this Agreement and authorizing the Transactions, including furnishing affidavits or other documents or information for filing with the Bankruptcy Court for the purposes, among others, of (in the case of Purchaser) providing necessary assurances of performance by Purchaser under this Agreement, including providing a witness to testify on behalf of Purchaser in the Bankruptcy Court as to Purchaser's  ability to pay the Purchase Price, and demonstrating that Purchaser is a "good faith" purchaser under Section 363(m) of the Bankruptcy Code.  Purchaser shall consult with Seller prior to filing, joining in or otherwise supporting in any manner whatsoever any motion or other pleading relating to the sale of the Purchased Assets hereunder.  In the event the entry of the Sale Order is appealed, Seller and Purchaser shall use their respective commercially reasonable efforts to defend such appeal and to oppose any request for a stay pending any such appeal.
ARTICLE VIII     
 
COVENANTS
8.1    Access to Information.  Seller agrees that, prior to the Closing Date, Purchaser shall be entitled, through its officers, employees and representatives (including its legal advisors and accountants), to make such investigation of the Purchased Assets and such examination of the books and records of the Business, the Purchased Assets and the Assumed Liabilities as it reasonably requests and to make extracts and copies of such books and records.  Any such investigation and examination shall be conducted during regular business hours upon reasonable advance notice and under reasonable circumstances and shall be subject to restrictions under applicable Law.  Seller shall cause the officers, employees, consultants, agents, accountants, attorneys and other representatives of Seller to cooperate with Purchaser and Purchaser's representatives in connection with such investigation and examination, and Purchaser and its representatives shall cooperate with Seller and its representatives and shall use their commercially reasonable efforts to minimize any disruption to the Business.  Notwithstanding anything herein to the contrary, for the avoidance of doubt, the Transactions and the provisions of this Section are subject to the Confidentiality Agreement.  

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8.2    Operations of the Purchased Assets Pending the Closing.  
(a)    Except (1) as set forth on Schedule 8.2(a), (2) as required by applicable Law or Order of the Bankruptcy Court, (3) as otherwise contemplated by this Agreement or (4) with the prior written consent of Purchaser, Seller shall:
(i)    operate the Purchased Assets only in the Ordinary Course of Business; and 
(ii)    use its commercially reasonable efforts to (A) preserve the present business operations, organization and goodwill of the Purchased Assets, (B) preserve the present relationships with customers and suppliers of Seller that relate to the Purchased Assets, (C) keep available to Purchaser the services of all Employees who perform services for or on behalf of Seller to whom Purchaser is reasonably expected to make an offer to continue to provide services on behalf of the Business after the consummation of the Closing (as an employee, consultant, independent contractor, leased employee, intern or otherwise), (D) maintain the Purchased Assets in good operating condition and repair consistent with past practice, ordinary wear and tear excepted, and (E) continue in full force and effect without modification any existing policies or binders of insurance currently maintained by Seller.
(b)    Seller may pre-pay any items contemplated by the Approved Budget (as defined in the DIP Credit Agreement as in effect on the date of this Agreement and attached hereto as Schedule 8.2(b)) and that are allowed to be pre-paid by the DIP Credit Agreement.
(c)    Except (1) as set forth on Schedule 8.2, (2) as required by applicable Law or Order of the Bankruptcy Court, (3) as otherwise contemplated by this Agreement or (4) with the prior written consent of Purchaser, Seller shall not:
(i)    (A) increase the annual level of compensation of any Employee, (B) grant any additional compensation to any Employee, (C) increase the coverage or benefits available under any Employee Benefit Plan or (D) enter into any employment, deferred compensation, severance or similar Contract (or amend any such Contract) to which Seller is a party with an Employee;
(ii)    subject any of the Purchased Assets to any Lien, except for Permitted Exceptions and any Lien securing any debtor in possession loan facility;
(iii)    except in the Ordinary Course of Business, acquire any properties or assets that would be Purchased Assets or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the Purchased Assets (except for the purpose of disposing of obsolete or worthless assets);
(iv)    cancel or compromise any material Indebtedness or claim or waive or release any material right of Seller, in each case, that constitutes a Purchased Asset;
(v)    incur, or enter into any commitment to incur, capital expenditures;

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(vi)    enter into, modify or terminate any labor or collective bargaining agreement other than, if Purchaser will not be liable thereunder or required to assume, such agreements, (A) in the Ordinary Course of Business, (B) as required by any such labor or collective bargaining agreement, or (C) modifications which are consistent with current or past practices of Seller; 
(vii)    amend, modify or terminate, or waive of any rights under, any Material Contract or enter into any Contract that would be a Material Contract if it had been entered into on or prior to the date of this Agreement other than sale orders entered into in the Ordinary Course of Business that do not require aggregate expenditures by either party thereto in excess of $500,000;
(viii)    change or modify the accounting of the Business, except as required by GAAP or a change in Law; 
(ix)    change or modify any of the following:  (i) billing and collection policies, procedures and practices with respect to accounts receivable or unbilled charges that relate to the Business; or (ii) policies, procedures and practices with respect to the provision of discounts, rebates or allowances that relate to the Business; 
(x)    agree to do, authorize, approve, commit to do or take any action in furtherance of anything prohibited by this Section 8.2.
8.3    Consents.  Seller shall use its commercially reasonable efforts, and Purchaser shall cooperate with Seller, to obtain at the earliest practicable date all consents and approvals required to consummate the Transactions, including the consents and approvals referred to in Section 5.3(b); provided, however, that neither Seller nor Purchaser shall be obligated to pay any consideration therefor to any third party from whom consent or approval is requested or to initiate any litigation or Legal Proceedings to obtain any such consent or approval, and Buyer shall not be required to incur any Liability in complying with its obligations under this Section 8.3.
8.4    Regulatory Approvals.  
(a)    If the Parties determine that any filing or submission to any Governmental Body is required with respect to the transactions contemplated by this Agreement, then Seller and Purchaser shall use commercially reasonable efforts to make such filing or submission and cooperate in all respects with each other in connection therewith, including, without limitation, furnishing to the other Party such necessary information and reasonable assistance as the other Party may request in connection with its preparation of such filing or submission.  In addition, Seller and Purchaser agree to supply as promptly as reasonably practicable any information and documentary material that may be reasonably requested by any Governmental Body with respect to the transactions contemplated by this Agreement. 
(b)    Each of Seller and Purchaser shall promptly notify the other of any correspondence or contact with any other Governmental Body and except as may be prohibited by any Governmental Body or by any applicable Law, or as necessary to preserve any applicable legal 

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privilege, shall furnish to the other (if necessary or advisable, on an outside counsel basis) all such information.
8.5    Further Assurances.  Seller and Purchaser shall use their commercially reasonable efforts to (a) take all actions necessary or appropriate to consummate the Transactions and (b) cause the fulfillment at the earliest practicable date of all of the conditions to their respective obligations to consummate the Transactions; provided, however, that Purchaser shall not be obligated to pay any consideration to third parties or to incur any Liability in complying with its obligations under this Section 8.5.  Notwithstanding anything to the contrary contained in this Agreement, nothing in this Agreement will require or obligate Purchaser or any of its Affiliates to (and in no event shall any representation, warranty, covenant or other agreement of Purchaser contained in this Agreement be breached or deemed breached in the event Purchaser or its Affiliates shall fail to) (x) agree to or otherwise become subject to any limitations on (1) the right of Purchaser or its Affiliates to effectively to control or operate its business (including the Business) or assets (including the Purchased Assets), (2) the right of Purchaser to acquire the Purchased Assets, or (3) the right of Purchaser to exercise full rights of ownership of its business (including the Business) or assets (including the Purchased Assets), (y) agree or be required to sell or otherwise dispose of, hold (through the establishment of a trust or otherwise), or divest itself of all or any portion of the business, assets or operations of Purchaser or any of its Affiliates or the Business or any of the Purchased Assets, or (z) otherwise take any steps to avoid or eliminate any impediment that may be asserted under any Law governing competition, monopolies or restricted trade practices.  Nothing contained in this Section 8.5 is intended to limit or restrict the ability of Seller to operate the Business and Purchased Assets prior to the Closing Date so long as there are no restrictions or limitations placed on the Business or the Purchased Assets that would be applicable after Closing.
8.6    Confidentiality.  Purchaser acknowledges that the Evaluation Information (as defined in the Confidentiality Agreement) provided to it in connection with this Agreement, including under Section 8.1, and the consummation of the Transactions, is, until the consummation of the Closing, subject to the terms of the confidentiality agreement between Seller, Holdings and Purchaser dated May 24, 2013 (the "Confidentiality Agreement"), the terms of which are incorporated herein by reference.  The Parties agree that the Confidentiality Agreement shall not survive the consummation of the Closing, and that the obligations of the Parties thereunder shall terminate upon the consummation of the Closing and that the Parties shall have no further obligations thereunder.
8.7    Preservation of Records.
(a)    Each of Seller and Purchaser agree to preserve and keep the records, or in the case of Seller, arrange for the preservation and keeping of the records, held by it or their Affiliates relating to the Purchased Assets for a period of six (6) years from the Closing Date,  and shall make such records and personnel available to the other Party and the GUC Trust as may be reasonably required by such Party or the GUC Trust in connection with, among other things, any insurance claims, Legal Proceedings or Tax audits against or governmental investigations of Seller or Purchaser or any of their Affiliates or in order to enable Seller or Purchaser or the GUC Trust to comply with its obligations under this Agreement or the GUC Trust Agreement, as applicable and each other agreement, document or instrument contemplated hereby or thereby.  

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(b)    Notwithstanding Section 8.7(a), in the event Seller or Purchaser wishes to destroy records subject to the preservation requirements of Section 8.7(a), such Party (the "Noticing Party") shall be entitled to destroy such records by (i) giving ninety (90) days prior written notice (the "Original Notice") to the other Party and the GUC Trust and such other Party and the GUC Trust shall have the right at its option and expense, upon prior written notice given to the Noticing Party within such ninety (90) day period, to take possession of the records within one hundred and eighty (180) days after the date of the Original Notice, or (ii) seeking and obtaining an order of the Bankruptcy Court approving the destruction of such records and complying with such order of the Bankruptcy Court.  
8.8    Publicity.  Prior to consummation of the Closing, neither Seller nor Purchaser shall issue any press release or public announcement concerning this Agreement or the Transactions without obtaining the prior written approval of the other Party, which approval will not be unreasonably withheld or delayed, unless, in the judgment of Purchaser or Seller, disclosure is otherwise required by applicable Law, the rules of any securities exchange where the securities of a Party or its Affiliates are listed for trading or by order of the Bankruptcy Court with respect to filings to be made with the Bankruptcy Court in connection with this Agreement (it being understood that, in the event, in the judgment of a Party, disclosure is otherwise required, the Party making such disclosure need not obtain the approval of the other Party); provided, however, that the Party intending to make such release shall use its commercially reasonable efforts consistent with such applicable Law or Order of the Bankruptcy Court to consult with the other Party (Seller, in the case of approval from Seller) with respect to the text thereof. 
8.9    Schedules.  The exceptions to the representations and warranties of Seller are set forth on the Schedules.  Seller may, at its option, include in the Schedules items that are not material in order to avoid any misunderstanding, and such inclusion, or any references to Dollar amounts, shall not be deemed to be an acknowledgement or representation that such items are material, to establish any standard of materiality or to define further the meaning of such terms for purposes of this Agreement.  Each Section number reference in any Schedule corresponds to a Section of this Agreement to which the disclosure or disclosures contained in such Section relates.  While cross-references to other Schedules are made where appropriate, the information contained in a Schedule shall be deemed to be incorporated by reference in other applicable Schedules only if the applicability of such information to such other Schedules is reasonably apparent on its face. Purchaser and Seller shall have the right to supplement or amend the Schedules with respect to any matter hereafter arising or discovered after the delivery of the Schedules pursuant to this Agreement.  No such supplement or amendment shall have any effect on the satisfaction of the condition to closing set forth in Sections 10.1(a)-10.1(c).
8.10    Lock-Up and Standstill.
(a)    For a period of six (6) months from the Closing Date, Seller shall not, directly or indirectly, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of or transfer (a “Disposition”) any Common Stock Shares issued to Seller at Closing, or any options or warrants to purchase any shares of such Common Stock Shares, or any securities convertible into, exchangeable for or that represent the right to receive such Common 

47

Stock Shares, whether owned directly or indirectly by Seller (including holding as a custodian) or with respect to which Seller has beneficial ownership within the rules and regulations of the Commission.  The foregoing restriction shall preclude Seller from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale, disposition or other transfer of Common Stock Shares issued to Seller at Closing even if such shares would be disposed of or transferred by someone other than Seller. Such prohibited hedging or other transactions would include, without limitation, any short sale or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any of the Common Stock Shares issued to Seller at Closing or with respect to any security that includes, relates to, or derives any significant part of its value from such shares.  The foregoing restrictions shall not apply to any Disposition (i) pursuant to a transaction that has been approved in writing by Issuer, (ii) pursuant to a Tender Offer by a third party or other change of control transaction that is recommended by the Board of Directors of Issuer or (iii) pursuant to a merger, consolidation, or reorganization to which Issuer or any of its Affiliates is a party.
(b)    From and after the date of this Agreement and until the eighteen month anniversary of the date of Agreement (such period, the “Restricted Period”), Seller shall not and shall cause its controlled Affiliates not to, without the prior written consent of Issuer: (i) acquire, offer to acquire, or agree to acquire directly or indirectly, by purchase or otherwise, any voting securities or direct or indirect rights to acquire any securities of Issuer or any of its subsidiaries having the power generally to vote on the election of directors and other matters submitted to a vote of shareholders (“Voting Securities”), or of any successor to Issuer, or any assets of Issuer or any of its subsidiaries other than (A) the acquisition of the Common Stock Shares by Seller pursuant to or in connection with this Agreement and the holding of such shares or (B) the acquisition of Voting Securities pursuant to a stock split, share dividend, recapitalization or similar transaction with respect to Seller’s Common Stock Shares; (ii) seek representation on the Board of Directors of Issuer or initiate, propose or solicit any change in the composition or size of the Board of Directors or the number of terms of the directors; (iii) initiate, propose or solicit any material change in the business or corporate structure of Issuer or to its certificate of incorporation or bylaws or make any public statement with respect thereto; (iv) make any proposal, whether written or oral, to the Board of Directors of Issuer, or to any director, officer or agent of Issuer, or make any public announcement or proposal whatsoever with respect to a merger or other business combination, sale or transfer of assets, recapitalization, dividend, share repurchase, liquidation or other extraordinary corporate transaction with Issuer or any other transaction which could result in a change of control, solicit or encourage any other person to make any such statement or proposal, or take any action which would require Issuer to make a public announcement regarding the possibility of any transaction referred to in this subclause (iv) or similar transaction or advise, assist or encourage any other Persons in connection with the foregoing; (v) make, or in any way participate, directly or indirectly, in any “solicitation” of “proxies” to vote (as such terms are used in the rules of the Securities and Exchange Commission), or advise, encourage or knowingly induce any Person with respect to the voting of any Voting Securities of Issuer, initiate or propose any shareholder proposal or knowingly induce or attempt to induce any other Person to initiate any shareholder proposal, or execute any written consent with respect to Issuer; (vi) form, join or in any way participate in a “group” (as defined in Section 13(d)(3) of the Exchange Act), in connection with any of the foregoing; (vii) tender Common Stock Shares that are “beneficially owned” (as defined in Rule 13d-3 under the Exchange Act) by 

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Seller or any of its controlled Affiliates to a third party which makes or intends to make an unsolicited acquisition proposal to Issuer or provide debt or other financing in connection with such unsolicited proposal; (viii) call or seek to call any special meeting of Issuer’s shareholders for any reason whatsoever; (ix) deposit any Voting Securities in a voting trust or subject any Voting Securities to any arrangement or agreement with respect to the voting of such Voting Securities, other than this Section 8.10(b) or any arrangement or agreement entered into between Seller and any of its Affiliates so long as such securities are voted in accordance with the terms of Section 8.10(b); publicly request Issuer or the Board of Directors of Issuer to amend, modify or waive any provision of Section 8.10; make a public request to Issuer or any of its Affiliates  (or its directors, officers, shareholders, employees or agents) to take any action in respect of the foregoing matters; (x) publicly disclose any intention, plan or arrangement inconsistent with the foregoing; or (xi) grant any proxy to a third party in respect of any shares of Common Stock Shares beneficially owned by Seller or any of its controlled Affiliates, other than to an Affiliate, so long as such Affiliate votes such Common Stock Shares in accordance with the terms of Section 8.10(b).  Notwithstanding the foregoing, this Section 8.10(b) shall be of no force and effect upon (i) the consummation of a Change of Control Transaction that is recommended by the Board of Directors of Issuer or (ii) the commencement of any voluntary or involuntary bankruptcy, insolvency, dissolution or liquidation proceedings involving Issuer or Purchaser, and, in the case of any involuntary proceeding, a proceeding that has not been discharged within 90 days.  In addition, in the event Issuer has entered into a definitive agreement with respect to a Change of Control Transaction, Seller shall be permitted to make one private communication to the Board of Directors of Cenveo with respect to such Change of Control Transaction and such communication shall not violate the terms of subclause (i), (ii), (iii) or (iv) of Section 8.10(b).
(c)    Until the termination of the Restricted Period, at any meeting of the shareholders of Issuer, however called, or at any adjournment or postponement thereof (a “Shareholders’ Meeting”), or in any other circumstances upon which a vote, consent or other approval (including by written consent) is sought by or from the shareholders of Issuer: (i) Seller shall use commercially reasonable efforts to appear at such Shareholders’ Meeting or otherwise cause all of the shares of Common Stock beneficially owned by Seller and its Affiliates on the record date for such Shareholders’ Meeting to be counted as present thereat for the purpose of establishing a quorum; and (ii) with respect to any matter upon which a vote, consent or other approval (including by written consent) is sought by or from the shareholders of Issuer (A) for the election or removal of directors of Issuer (or relating to procedures applicable to the election of directors), (B) relating to equity incentive plans or other employee or director compensation matters or (C) with respect to or in connection with any proxy or consent solicitation involving any proposal or offer (including without limitation any proposal or offer to shareholders of Issuer) not agreed to by Issuer, for a merger, consolidation, share exchange, business combination or similar transaction involving Issuer or any of its subsidiaries or to acquire in any manner, directly or indirectly, an equity interest in any Voting Securities of, or a substantial portion of the assets of, Issuer or any of its subsidiaries, then in all of the foregoing instances Seller shall use commercially reasonable efforts to vote and cause to be voted all of the Common Stock Shares in the manner recommended by the Board of Directors at any such Shareholders’ Meeting or under any such other circumstances upon which a vote, consent or other approval (including by written consent) is sought.

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8.11    Post-Closing Periodic Reports.  Until the earlier of (i) the nine-month anniversary date of the Closing; (ii) the date that Issuer ceases to be a reporting company under the Exchange Act; and (iii) the date on which all the Common Stock Shares have been sold or otherwise assigned or transferred by the Share Recipients, Issuer covenants and agrees it will use commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of Issuer under the Exchange Act.  In the event that any Share Recipient effects a sale, assignment or transfer of any Common Stock Shares pursuant to Rule 144 under the Securities Act, Issuer shall, or shall cause its transfer agent, to the extent permitted by applicable securities law, to promptly issue such Common Stock Shares to the purchaser, assignee or transferee, as the case may be, without any restrictive legend after receipt by Issuer of a legal opinion reasonably acceptable to Issuer confirming the ability of the applicable Share Recipient to sell such shares under Rule 144.   
8.12    Common Stock Shares.  The Common Stock Shares to be delivered at the Closing pursuant to Section 4.3(g) will be free of any and all Liens and restrictions on transfer, other than restrictions on transfer under applicable federal or state securities laws, including as contemplated hereby and by the Letter Agreements, and subject to the provisions of this Agreement and the Letter Agreements.
8.13    Hilco Transition Services.  To enable Seller to fulfill its obligations under Section 10(e) of the Hilco Purchase Agreement, Purchaser hereby agrees to permit Hilco to use the office facility located at 3211 Internet Boulevard, Suite 200, Frisco, Texas (the "Frisco Facility"), for a period of thirty (30) days following the Closing Date.  The Parties agree that Hilco's use of the Frisco Facility as provided in this Section 8.13 will only be in connection with Hilco exercising its rights in the Receivables and the Related Assets (each as defined in the Hilco Purchase Agreement as in effect on the date of this Agreement).     
ARTICLE IX     
 
EMPLOYEES AND EMPLOYEE BENEFITS
9.1    Employment.  
(a)    Transferred Employees.  No later than September 6, 2013, Purchaser shall provide Seller with a list of Employees (the “Employee List”) that Purchaser shall offer, or cause to be offered, employment effective as of the Closing Date who are actively at work on the Closing Date, on terms and conditions which are substantially equivalent, in the aggregate, to those Purchaser provides to Purchaser’s similarly situated new hires.  The Employee List shall contain at least 1,400 Employees if there are 1,500 or more Employees employed by Seller on the date Purchaser provides the Employee List.  If there are less than 1,500 Employees employed by Seller on such date, the Employee List shall contain a number of Employees equal to 90% of those employed.  In the event Seller hires any individual as an employee after the date of this Agreement and prior to the Closing Date, it shall give Purchaser written notice thereof no less than five (5) Business Days prior to the Closing Date.  Purchaser may, at its option, offer employment to such individual on terms and conditions which are substantially equivalent, in the aggregate, to those Purchaser provides to Purchaser’s similarly situated new hires.  Any such Employees who accept Purchaser's offer of 

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employment made under this Section 9.1(a) (including deemed acceptance by continuing to report to work following the Closing Date) are referred to herein as "Transferred Employees".  Nothing contained in this Section 9.1(a) or elsewhere in this Agreement shall be construed to prevent the termination of employment of any individual Transferred Employee by Purchaser or any change in the particular benefits made available to any individual Transferred Employee by Purchaser.
(b)    Standard Procedure.  Pursuant to the "Standard Procedure" provided in Section 4 of Revenue Procedure 2004-53, 2004-2 CB 320, (i) Purchaser and Seller shall report on a predecessor/successor basis as set forth therein, (ii) Seller will not be relieved from filing a Form W‐2 with respect to any Transferred Employees, and (iii) Purchaser will undertake to file (or cause to be filed) a Form W‐2 for each such Transferred Employee with respect to the portion of the year during which such Employees are employed by Purchaser that includes the Closing Date, excluding the portion of such year that such Employee was employed by Seller or its Affiliates.
9.2    Employee Benefits.  
(a)    For purposes of eligibility and vesting (but not benefit accrual) under the employee benefit plans of Purchaser providing benefits to Transferred Employees (the "Purchaser Plans"), Purchaser shall credit each Transferred Employee with his or her continuous service with Seller from his or her most recent date of hire with Seller through the Closing Date.
(b)    Purchaser shall be responsible for all Liabilities with respect to the accrued and unused vacation pay of Transferred Employees as of the Closing to the extent set forth in Schedule 9.2(b); provided that Seller shall, to the extent it will not impair the Business, encourage the Transferred Employees to use all accrued and unused vacation days prior to the Closing.  Seller shall, on or before the Closing, pay the accrued and unpaid salary and wages of each Transferred Employee as of the Closing Date attributable to periods prior to the Closing Date.
ARTICLE X     
 
CONDITIONS TO CLOSING
10.1    Conditions Precedent to Obligations of Purchaser.  The obligation of Purchaser and Issuer to consummate the Transactions is subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions (any or all of which may be waived by Purchaser in whole or in part to the extent permitted by applicable Law):
(a)    The representations and warranties of Seller set forth in Section 5.1 (Organization and Good Standing), Section 5.2 (Authorization of Agreement), 5.3 (other than clause (a)(ii) or insofar as it relates to clause (a)(ii), clause (vi)) (Conflicts; Consents of Third Parties), 5.5 (No Undisclosed Liabilities), 5.18 (Investment Representations) and 5.19(a) (Absence of Certain Changes) shall have been true, correct and complete when made and as of the Closing Date, as though made on and as of the Closing Date (except to the extent any such representation and warranty is expressly made as of an earlier date, in which case such representation and warranty need only be so true, correct and complete as of such earlier date).  The other representations and warranties of Seller set forth in Article V shall have been true, correct and complete (without giving effect to 

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any limitation or qualification on any representation or warranty indicated by the words "Material Adverse Effect" or "material") when made and as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any representation and warranty is expressly made as of an earlier date, in which case such representation and warranty need only be so true, correct and complete as of such earlier date), and except in each case where the failure of any such representations and warranties to be so true, correct and complete, individually and in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect.
(b)    Seller shall have in all material respects performed and complied with all obligations and agreements required in this Agreement to be performed or complied with by it on or prior to the Closing Date.
(c)    Seller shall have furnished to Purchaser a certificate dated the Closing Date and signed by an executive officer of Seller to the effect that the conditions precedent set forth in Sections 10.1(a) and (b) have been satisfied.  
(d)    The Purchased Assets shall be free and clear of all Liens other than Permitted Exceptions.
(e)    (i) there shall not be any pending or threatened Legal Proceeding, whether by a Governmental Body or any other person or entity, seeking to enforce Section 7 of the Clayton Antitrust Act, 15 U.S.C § 18 or otherwise any law, regulation statute or act of any state concerning competition, antitrust, consumer protection, unfair competition, or trade practices, the result of which could permanently or temporarily enjoin the closing of the Transactions or otherwise reasonably be expected to limit or adversely affect Purchaser's ability effectively to exercise full rights of ownership of the Purchased Assets, (ii) none of the parties hereto or any of their Affiliates shall have received written notice from any Governmental Body of (A) its intention to institute any Legal Proceeding to restrain, enjoin or nullify this Agreement or the Transactions or to commence any investigation of, or into the consummation of, the Transactions, or (B) the actual commencement of such a Legal Proceeding, (iii) there shall not be any pending or threatened Legal Proceeding by any Governmental Body that could reasonably be expected to limit or adversely affect Purchaser's ability effectively to exercise full rights of ownership of the Purchased Assets, and (iv) no action shall have been taken, and no statute, rule, regulation or order shall have been promulgated or enacted by any Governmental Body, which would prevent or make illegal the consummation of the transactions contemplated hereby or thereby. 
(f)    reserved.
(g)    No fewer than 75% of the Employees set forth on the Employee List who have received offers of employment from Purchaser prior to the Closing Date shall have accepted Purchaser's offer of employment.
(h)    Purchaser shall have received all consents from third parties required by Section 365 of the Bankruptcy Code in connection with this Agreement and the other Purchaser Documents and Seller Documents and the Transactions.

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(i)    (i) No payment Default or Event of Default (each as defined in the DIP Credit Agreement as in effect on the date of this Agreement) shall have occurred since the date of this Agreement, (ii) the aggregate amount of outstanding Tranche A Loans (as defined in the DIP Credit Agreement and, in the case of such Tranche A Loans and the DIP Credit Agreement, as in effect on the date of this Agreement) shall not exceed $43,077,000 at the Closing Date, and (iii) at no time since the date of the DIP Credit Agreement shall Seller and Holdings have borrowed (in the aggregate) an outstanding amount in excess of the Tranche A Borrowing Base as of such time (it being understood that any amendment to the DIP Credit Agreement that results in a change in the values set forth in Section 10.1 shall result in a corresponding re-calculation of such values).
(j)    Seller’s gross accounts receivable balance (calculated in accordance with GAAP applied on a consistent basis with the methodologies used in the Approved Budget (as defined in the DIP Credit Agreement as in effect on the date of this Agreement) and gross of any unapplied cash), shall not be less than $39,000,000 and cannot exceed $45,000,000 at the Closing Date, and (a) at least sixty percent (60%) of the aggregate Cut-Off Date Claim Amount (as defined Hilco Purchase Agreement as in effect on the date of this Agreement) represents Current Accounts (as defined Hilco Purchase Agreement as in effect on the date of this Agreement); (b) at least fifteen percent (15%) of the aggregate Cut-Off Date Claim Amount (as defined Hilco Purchase Agreement as in effect on the date of this Agreement) represents Accounts (as defined Hilco Purchase Agreement as in effect on the date of this Agreement) which are at least one (1) day but not more than thirty (30) days past due; (c) not more than fifteen percent (15%) of the aggregate Cut-Off Date Claim Amount (as defined Hilco Purchase Agreement as in effect on the date of this Agreement) represents Accounts (as defined Hilco Purchase Agreement as in effect on the date of this Agreement) which are more than thirty (30) days past due, but not over sixty-one (61) days past due; and (d) not more than ten percent (10%) of the aggregate Cut-Off Date Claim Amount (as defined Hilco Purchase Agreement as in effect on the date of this Agreement) represents Accounts (as defined Hilco Purchase Agreement as in effect on the date of this Agreement) which are over sixty-one (61) days past due. Further, any unapplied cash in transit at Closing shall be provided to Hilco pursuant to the Hilco Purchase Agreement.  
(k)    Seller’s gross inventory level (calculated in accordance with GAAP applied on a consistent basis with the methodologies used in the Approved Budget (as defined in the DIP Credit Agreement as in effect on the date of this Agreement)) shall not exceed $24,000,000 and cannot be less than $20,000,000, and the total of Plastic Suppliers’ inventory cannot exceed $75,000 at the Closing Date.
(l)    No breach of the Letter Agreements shall have occurred since the date of this Agreement and the representations and warranties contained in Section 7 therein shall be true and correct as of the Closing.
(m)    Seller shall have delivered, or caused to be delivered, to Purchaser all of the items set forth in Section 4.2.
(n)    The consummation of the transactions contemplated by the Hilco Purchase Agreement shall have occurred or will be occurring simultaneously with the Closing.

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(o)    The consummation of the transactions contemplated by the Inventory Purchase Agreement shall have occurred or will be occurring simultaneously with the Closing.
10.2    Conditions Precedent to Obligations of Seller.  The obligation of Seller to consummate the Transactions are subject to the fulfillment, prior to or on the Closing Date, of each of the following conditions (any or all of which may be waived by Seller in whole or in part to the extent permitted by applicable Law):
(a)    The representations and warranties of Purchaser set forth in Section 6.1 (Organization and Good Standing), 6.2 (Authorization of Agreement), 6.3 (other than clause (a)(ii) or insofar as it relates to clause (a)(ii), clause (vi)) (Conflicts; Consents of Third Parties) and  Section 6.7 (Common Stock Shares) shall have been true, correct and complete when made and as of the Closing Date, as though made on and as of the Closing Date (except to the extent any such representation and warranty is expressly made as of an earlier date, in which case such representation and warranty need only be so true, correct and complete as of such earlier date).  The other representations and warranties of Purchaser set forth in Article VI shall have been true, correct and complete (without giving effect to any limitation or qualification on any representation or warranty indicated by the words "Purchaser Material Adverse Effect" or "material") when made and as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any representation and warranty is expressly made as of an earlier date, in which case such representation and warranty need only be so true, correct and complete as of such earlier date), and except in each case where the failure of any such representations and warranties to be so true, correct and complete, individually and in the aggregate, have not had and are not reasonably likely to have a Purchaser Material Adverse Effect.
(b)    Purchaser and Issuer shall have in all material respects performed and complied with all obligations and agreements required in this Agreement to be performed or complied with by it on or prior to the Closing Date.
(c)    Purchaser and Issuer shall have furnished to Seller  certificates dated the Closing Date and signed by an executive officer of Purchaser or Issuer, as applicable, to the effect that the conditions precedent set forth in Sections 10.2(a) and (b) have been satisfied.  
(d)    Purchaser shall have delivered, or caused to be delivered, to Seller all of the items set forth in Section 4.3.
(e)    The consummation of the transactions contemplated by the Hilco Purchase Agreement shall have occurred or will be occurring simultaneously with the Closing.
(f)    The consummation of the transactions contemplated by the Inventory Purchase Agreement shall have occurred or will be occurring simultaneously with the Closing.
10.3    Conditions Precedent to Obligations of Purchaser and Seller.  The respective obligations of Purchaser, Issuer, and Seller to consummate the Transactions are subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions (any or all of which 

54

may be waived by Purchaser and Seller in whole or in part to the extent permitted by applicable Law):
(a)    There shall not be in effect any Order by a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the Transactions.
(b)    The Bankruptcy Court shall have entered the Sale Order and any stay period applicable to the Sale Order shall have expired or shall have been waived by the Bankruptcy Court.
(c)    The issuance of the Common Stock Shares to the Share Recipients shall comply with the provisions of Regulation D promulgated under the Securities Act applicable to a Private Placement. 
10.4    Frustration of Closing Conditions.  Neither Purchaser nor Seller nor Issuer may rely on the failure of any condition set forth in Sections 10.1, 10.2 or 10.3, as the case may be, if such failure was caused by such Party's failure to comply with any provision of this Agreement.
ARTICLE XI     
 
NO SURVIVAL 
11.1    No Survival of Representations and Warranties.  The representations, warranties, covenants, obligations and agreements of the parties contained in this Agreement shall survive (and not be affected in any respect by) any investigation conducted by any Party or any information or knowledge any Party may have or receive.  The Parties agree that the representations and warranties contained in this Agreement shall not survive the consummation of the Closing, and none of the Parties shall have any Liability to each other after the Closing for any breach thereof other than for fraud or intentional misrepresentation.  The Parties agree that the covenants contained in this Agreement to be performed at or after the Closing shall survive the Closing, and each Party shall be liable to the other after the Closing for any breach thereof.
ARTICLE XII     
 
TAXES
12.1    Transfer Taxes.  Purchaser and Seller shall each pay one-half of any sales, use, stamp, documentary, filing, recording, transfer or similar fees or Taxes or governmental charges (including any real property transfer Taxes, UCC-3 filing fees, real estate, aircraft and motor vehicle registration, title recording or filing fees and other amounts payable in respect of transfer filings, and including any interest and penalty thereon) payable in connection with the Transactions ("Transfer Taxes") (to the extent such Transfer Taxes are due and payable at the Closing, Purchaser and Seller shall each pay one-half thereof thereat; to the extent such Transfer Taxes become due and payable after the Closing, Purchaser and Seller shall each pay one-half thereof as the same shall become due and payable in accordance with the next sentence; provided, that if Seller does not pay due and payable Transfer Taxes on the Closing Date or place the amount of such Transfer Taxes in escrow, then Purchaser shall be permitted to set off against any amount that is due and payable by 

55

Purchaser to Seller under this Agreement the amount of the Transfer Taxes that has not been paid or put in escrow and Purchaser shall remit such amount to the appropriate taxing authority on behalf of Seller).  Seller shall prepare and file all Tax Returns required to be filed with respect to such Transfer Taxes unless otherwise required by applicable law.  Promptly following the filing of any Tax Return in respect of Transfer Taxes, the filing party shall submit a copy of such Tax Return, together with a receipt or other evidence of payment, to the non-filing party, and the non-filing party will reimburse the filing party 50% of the amount reflected thereon within ten (10) days after receipt thereof.  Seller and Purchaser shall reasonably cooperate and consult with each other prior to filing any Tax Returns in respect of Transfer Taxes.  Seller and Purchaser shall cooperate and otherwise take commercially reasonable efforts to obtain any available exemptions (including any exemptions under Bankruptcy Code Section 1146 or otherwise) from, reductions of refunds for Transfer Taxes.
12.2    Tax Payments.  All real property, personal property and similar ad valorem Taxes ("Property Taxes") levied with respect to the Purchased Assets for a taxable period that includes (but does not end on) the Closing Date shall be apportioned between Seller, on the one hand, and Purchaser, on the other hand, as of the Closing Date based on the number of days of such taxable period included in the period ending with and including the Closing Date (with respect to any such taxable period, the "Pre-Closing Tax Period"), and the number of days of such taxable period beginning after the Closing Date (with respect to any such taxable period, the "Post-Closing Tax Period").  Seller shall be liable for the proportionate amount of such Property Taxes that is attributable to the Pre-Closing Tax Period and shall indemnify Purchaser, its Affiliates and each of their respective officers, directors, employees, shareholders, agents and representatives for such Property Taxes, and Purchaser shall be liable for the proportionate amount of such Taxes that is attributable to the Post-Closing Tax Period and shall indemnify Seller, its Affiliates and each of their respective officers, directors, employees, shareholders, agents and representatives for such Property Taxes.  Each of Seller, on the one hand, and Purchaser, on the other hand, shall provide reimbursement to the other Party as necessary to give effect to this Section 12.2. 
12.3    Purchase Price Allocation (Federal Income Tax).  Seller and Purchaser shall allocate the purchase price (including the Assumed Liabilities) among the Purchased Assets as specified in Schedule 12.3 and, in accordance with such allocation, Purchaser shall prepare and deliver to Seller copies of Form 8594 and any required exhibits thereto (the "Asset Acquisition Statement").  Purchaser shall prepare and deliver to Seller from time to time revised copies of the Asset Acquisition Statement (the "Revised Statements") so as to report any matters on the Asset Acquisition Statement that need updating (including purchase price adjustments, if any) consistent with the agreed upon allocation.  The purchase price for the Purchased Assets shall be allocated in accordance with the Asset Acquisition Statement or, if applicable, the last Revised Statements, provided by Purchaser to Seller, and all income Tax Returns and reports filed by Purchaser and Seller shall be prepared consistently with such allocation, except as provided by a change in applicable Tax Law or the good faith resolution of a Tax contest.
12.4    Cooperation.  Seller, on the one hand, and Purchaser, on the other hand, will provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return, amended Tax Return or claim for refund, determining a Liability for Taxes or a right to a refund of Taxes, or participating in or conducting any audit or other proceeding 

56

in respect of Taxes.  Such cooperation and information shall include providing copies of relevant Tax Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings and other determinations by Tax Authorities.  
ARTICLE XIII     
 
MISCELLANEOUS
13.1    Expenses.  Except as otherwise provided in this Agreement, Seller and Purchaser shall bear their own expenses incurred in connection with the negotiation and execution of this Agreement and each other agreement, document and instrument contemplated by this Agreement and the consummation of the transactions contemplated hereby and thereby; provided, however, that Purchaser shall be responsible for any governmental charges relating to UCC‐3 filing fees, FAA, ICC, DOT, real estate and motor vehicle registration, title recording or filing fees and other amounts payable in respect of transfer filings in connection with the Transactions.
13.2    Injunctive Relief.  Damages at law may be an inadequate remedy for the breach of any of the covenants, promises and agreements contained in this Agreement, and, accordingly (but subject to Section 3.2(c)), any Party shall be entitled to injunctive relief with respect to any such breach, including specific performance of such covenants, promises or agreements or an order enjoining a Party from any threatened, or from the continuation of any actual, breach of the covenants, promises or agreements contained in this Agreement.  Except as provided in Section 3.2(c), the rights set forth in this Section 13.2 shall be in addition to any other rights which a Party may have at law or in equity pursuant to this Agreement.
13.3    Governing Law.  This Agreement, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement (including the Exhibits and Schedules), or the negotiation, execution, termination, performance or nonperformance of this Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and performed in such State, without regard to any conflict of laws principles thereof.
13.4    Submission to Jurisdiction; Consent to Service of Process.
(a)    Without limiting any Party's right to appeal any order of the Bankruptcy Court, (i) the Bankruptcy Court (and any applicable court thereof) shall retain exclusive jurisdiction to enforce the terms of this Agreement and to decide any claims or disputes which may arise or result from, or be connected with, this Agreement, any breach or default hereunder, or the Transactions, and (ii) any and all proceedings related to the foregoing shall be filed and maintained only in the Bankruptcy Court, and the Parties hereby consent to and submit to the jurisdiction and venue of the Bankruptcy Court and shall receive notices at such locations as indicated in Section 13.7; provided, however, that if the Bankruptcy Case has closed, the Parties agree to unconditionally and irrevocably submit to the exclusive jurisdiction of the United States District Court for the District of Delaware sitting in New Castle County or the courts of the State of Delaware sitting in New Castle County and any appellate court from any thereof, for the resolution of any such claim or dispute.  The Parties hereby irrevocably waive, to the fullest extent permitted by 

57

applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute.  Each of the Parties agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(b)    Each of the Parties hereby consents to process being served by any Party in any suit, action or proceeding by delivery of a copy thereof in accordance with the provisions of Section 13.7.
13.5    WAIVER OF RIGHT TO TRIAL BY JURY.  EACH PARTY HERETO WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, MATTER OR PROCEEDING BASED UPON, ARISING OUT OF, OR RELATED TO THIS AGREEMENT, ANY PROVISION HEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
13.6    Entire Agreement; Amendments and Waivers.  This Agreement (including the Schedules and Exhibits), the Confidentiality Agreement and the Escrow Agreement represent the entire understanding and agreement between the Parties with respect to the subject matter hereof.  This Agreement can be amended, supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement signed by the Party against whom enforcement of any such amendment, supplement, modification or waiver is sought.  No action taken pursuant to this Agreement, including any investigation by or on behalf of any Party, shall be deemed to constitute a waiver by the Party taking such action of compliance with any representation, warranty, covenant or agreement contained herein.  The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach.  No failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.
13.7    Notices.  All notices and other communications under this Agreement shall be in writing and shall be deemed given (a) when delivered personally by hand (with written confirmation of receipt), (b) when sent by facsimile (with written confirmation of transmission) (or, if sent by facsimile after normal business hours, on the next Business Day), (c) five (5) days after being deposited with the United States Post Office, by registered or certified mail, postage prepaid, (d) one (1) Business Day following the day sent by overnight courier (with written confirmation of receipt), or (e) when sent by electronic mail (with acknowledgment received) (or, if sent by facsimile after normal business hours, on the next Business Day), in each case at the following addresses and facsimile numbers (or to such other address or facsimile number as a Party may have specified by notice given to the other Party pursuant to this provision):
If to Seller, to:

58

NE Opco, Inc.
3211 Internet Blvd., Ste. 200
Frisco, Texas 75034 
Attention:  Brian Zollinger
Facsimile: 972-731-2763
email: BZollinger@natenv.com 
With a copy (which shall not constitute notice) to:
Richards, Layton & Finger 
One Rodney Square 
920 North King Street
Wilmington, Delaware 19801 
Attention: John H. Knight
Facsimile: (302) 651-7701
email: knight@rlf.com
If to Purchaser, to:
c/o Cenveo, Inc.
One Canterbury Green
201 Broad Street
Stamford, Connecticut 06901
Attention:  Joseph Burton, Executive Vice President
Facsimile: (203) 595-3070
email: joseph.burton@cenveo.com 
With a copy (which shall not constitute notice) to:
c/o Cenveo, Inc.
One Canterbury Green
201 Broad Street
Stamford, Connecticut  06901
Attention:  Ian R. Scheinmann, General Counsel
Facsimile:  (267) 940-3000
email:  ian.scheinmann@cenveo.com
and
Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 1004-1482
Attention:  Kenneth A. Lefkowitz 
Facsimile:  (212) 422-4726 
email:  lefkowit@hugheshubbard.com

59

13.8    Severability.  If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any law or public policy, all other terms or provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any Party.  Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the Transactions are consummated as originally contemplated to the greatest extent possible.
13.9    Binding Effect; No Third-Party Beneficiaries; Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.  Nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person or entity not a party to this Agreement except as provided below.  No assignment of this Agreement or of any rights or obligations hereunder may be made by Seller or Purchaser (by operation of law or otherwise) without the prior written consent of the other Parties (by Seller, in the case of a proposed assignment by Purchaser) and any attempted assignment without the required consents shall be void; provided, however, that Purchaser may assign this Agreement and its rights and obligations hereunder to any of its Affiliates and may collaterally assign this Agreement and its rights hereunder to any of its financing sources.  Upon any permitted assignment by Purchaser, as assignor, the references in this Agreement to Purchaser shall also apply to the assignee of Purchaser's rights or obligations unless the context otherwise requires.  No assignment of any obligations hereunder shall relieve the Parties of any such obligations.   
13.10    Non-Recourse.  No past, present or future director, officer, employee, incorporator, member, partner, agent or equityholder of Seller or Holdings shall have any Liability for any Liabilities of Seller under this Agreement or the Seller Documents of or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby and thereby, and no past, present or future director, officer, employee, incorporator, member, partner, agent or equityholder of Purchaser or Issuer shall have any Liability for any Liabilities of Purchaser or Issuer under this Agreement or the Purchaser Documents of or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby and thereby.
13.11    Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.
[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have caused this Asset Purchase Agreement to be executed by their respective officers thereunto duly authorized, as of the date first written above.
SELLER
	
				
	NE OPCO, INC.

	 
	 

	By:
	/s/ James Pinto
	 

	 
	Name: James Pinto
Title: Chief Executive Officer
	 

PURCHASER
	
				
	CENVEO CORPORATION

	 
	 

	By:
	/s/ Rob Burton Jr.
	 

	 
	Name: Rob Burton Jr.
Title: President
	 

	 
	 
	 

ISSUER
	
				
	CENVEO, INC.

	 
	 

	By:
	/s/ Rob Burton Jr.
	 

	 
	Name: Rob Burton Jr.
Title: President
	 

The undersigned agrees to be bound by the provisions of the last sentence of Section 8.6 as though it were a party thereto and confirms that the Confidentiality Agreement will terminate upon consummation of the Closing.
NEV CREDIT HOLDINGS, INC.
	
		
	By:
	/s/ James Pinto

	 
	Name: James Pinto
Title: President

Exhibit A

Bill of sale, Assignment and Assumption Agreement

This bill of sale, Assignment and Assumption Agreement (this “Agreement”) is made and entered into as of ______ 2013, by and among NE Opco, Inc., a Delaware corporation (“Assignor”), and Cenveo Corporation, a Delaware corporation (“Assignee”).

WHEREAS, Assignor and Assignee are parties to that certain Asset Purchase Agreement dated as of August [ ], 2013 (the “Purchase Agreement”), pursuant to which Assignee has purchased the Purchased Assets; and

WHEREAS, pursuant to the Purchase Agreement, Assignor has agreed to assign the Purchased Assets to Assignee, and Assignee has agreed to assume the Assumed Liabilities from Assignor, as set forth herein, and this Agreement is contemplated by Sections 4.2(a) and 4.3(b) of the Purchase Agreement;

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

1.    Capitalized Terms. Capitalized terms used but not defined herein shall have the meanings for such terms that are set forth in the Purchase Agreement.

2.    Assignment and Assumption. Effective as of ______:______ ______.m.  (______ time) on ______, 2013, (i) Assignor hereby sells, transfers, assigns, conveys and delivers to Assignee the Purchased Assets, free and clear of all Liens, other than Permitted Exceptions, and assigns to Assignee the Assumed Liabilities, and (ii) Assignee hereby purchases, acquires and accepts the Purchased Assets, and assumes the Assumed Liabilities.

3.    Terms of the Purchase Agreement. The terms of the Purchase Agreement, including but not limited to Assignor’s representations, warranties and covenants relating to the Purchased Assets and the Assumed Liabilities, are incorporated herein by this reference. Assignor acknowledges and agrees that the representations, warranties and covenants contained in the Purchase Agreement shall not be superseded hereby but shall remain in full force and effect to the full extent provided therein. In the event of any conflict or inconsistency between the terms of the Purchase Agreement and the terms hereof, the terms of the Purchase Agreement shall govern.

4.    Further Actions. Each of the parties hereto covenants and agrees, at its own expense, to execute and deliver, at the request of the other party hereto, such further instruments of transfer and assignment and to take such other action as such other party may reasonably request to more effectively transfer and assign to and vest in Assignee the Purchased Assets and Assumed Liabilities.

    

5.    Amendments.  This Agreement may only be amended or modified by an instrument in writing signed by both Assignee and Assignor.

6.    Execution in Counterparts.  This Agreement may be executed in counterparts, including by facsimile, .pdf or other electronic signature, each of which shall be deemed to be an original but which together shall constitute one and the same instrument.

7.    Governing Law.  This Agreement, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution, termination, performance or nonperformance of this Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and performed in such State, without regard to any conflict of laws principles thereof.

[Signature page follows]

    

IN WITNESS WHEREOF, the parties have executed this Bill of Sale, Assignment and Assumption Agreement as of the date first above written.

ASSIGNOR                    ASSIGNEE

NE Opco, Inc.                Cenveo Corporation

a Delaware corporation            a Delaware corporation

By: ______________________        By: _______________________

Its: ______________________        Its: ______________________

    

EXHIBIT B
IN THE UNITED STATES BANKRUPTCY COURT 
FOR THE DISTRICT OF DELAWARE
	
			
	

In re

NE OPCO, INC., et al.,

Debtors.
	 
	

Chapter 11

Case No. 13-11483 (CSS)

Jointly Administered

Re: Docket No. _____

[PROPOSED] FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER AUTHORIZING (A) THE SALE OF SUBSTANTIALLY ALL OF THE DEBTOR’S ASSETS FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES, AND OTHER INTERESTS, (B) THE DEBTOR’S ENTRY INTO AND PERFORMANCE OF ITS OBLIGATIONS UNDER THE ASSET PURCHASE AGREEMENTS, (C) THE DEBTOR’S ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES AND (D) RELATED RELIEF
Upon the motion (the “Motion”) of the debtors and debtors-in-possession in the above-captioned cases (individually, the “NE Opco Debtor” and the “NEV Credit Debtor” and collectively, the “Debtors”), for the entry of an order (the “Order”) pursuant to sections 105(a), 363, and 365 of title 11 of the United States Code (the “Bankruptcy Code”), Rules 2002, 6004, 6006, 9014, and 9019 of the Federal Rules of Bankruptcy Procedure (as amended from time to time, the “Bankruptcy Rules”), and Rule 6004-1 of the Local Rules of Bankruptcy Practice and Procedure of the Bankruptcy Court for the District of Delaware (the “Local Rules”) (a) approving the sale of the Purchased Assets, (the “Sale Transactions”) pursuant to and as described in the Asset Purchase Agreements (individually, an “APA” and collectively, the “APAs”) among the NE Opco Debtor, Cenveo Inc. and Cenveo Corporation, dated [DATE] (the “Cenveo APA”), the NE Opco 

    

Debtor and [Hilco], dated [DATE] (the “[Hilco] APA”), and the NE Opco Debtor and [Inventory Purchaser], dated [DATE] (the “[Inventory Purchaser] APA”) (each, a “Purchaser” and collectively, the “Purchasers”), free and clear of any lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement or encumbrance (collectively, the “Liens and Claims”) other than the Permitted Exceptions, (b) authorizing the NE Opco Debtor’s entry into and performance of its obligations under each of the APAs, (c) authorizing the assumption and assignment of certain executory contracts and unexpired leases (the “Purchased Contracts”) identified by the Purchaser pursuant to the APAs, and (c) granting related relief; the Court having reviewed and considered (i) the Motion, (ii) the objections thereto, if any, and (iii) the hearing on the Motion and heard argument of counsel, as appropriate, and the Court after due deliberation having determined that the relief requested in the Motion is in the best interests of the Debtors, their estates, and their creditors; and good and sufficient cause having been shown;
IT IS HEREBY FOUND AND DETERMINED THAT
A.On June 10, 2013 the Debtors filed voluntary petitions under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Court”).  The Debtors are authorized to continue to operate their businesses and to manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.  By an order of the Court [Docket No. 30], the Debtors’ chapter 11 cases (collectively, the “Chapter 11 Cases”) have been consolidated for procedural purposes only and are being administered jointly.

    

B.The Court has jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. §§ 157 and 1334.  Venue is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409.  This is a core proceeding pursuant to 28 U.S.C. § 157(b).
C.The statutory predicates for the relief sought in the Motion and granted pursuant to this Order are Bankruptcy Code sections 105, 363, 365, as supplemented by Bankruptcy Rules 2002, 6004, and 6006 and Local Rule 6004-1.  
D.This Order constitutes a final and appealable order within the meaning of 28 U.S.C. § 158(a).  Consistent with Bankruptcy Rules 6004(h) and 6006(d), and to the extent necessary under Bankruptcy Rule 9014 and Rule 54(b) of the Federal Rules of Civil Procedure, as made applicable by Bankruptcy Rule 7054, the Court finds that there is no just reason for delay in the implementation of this Order and that waiver of any applicable waiting period is appropriate, and expressly directs entry of judgment as set forth herein.
E.As evidenced by the affidavits of service filed with the Court and the representations on the record, proper, timely, adequate and sufficient notice of the hearing to approve (i) the sale of the Purchased Assets (the “Sale Hearing”), (ii) the assumption and/or assignment of the Purchased Contracts, and (iii) the issuance of shares of common stock of Cenveo Inc. in partial exchange for claims and as a portion of the purchase price for the Purchased Assets, in accordance with the Settlement Order, has been provided to all parties in interest in light of the circumstances of this case and applicable law, including without limitation, sections 102(1) and 363(b) of the Bankruptcy Code, Rules 2002, 6004, 6006, and 9014 of the Bankruptcy Rules, and requisite Local Rules.  No 

    

other or further notice of the Motion, the Sale Hearing, the assumption and/or assignment of the Purchased Contracts or entry of this Order is required.  
F.The Debtors thoroughly and fairly marketed the Purchased Assets prior to the filing of the Motion and conducted the related sale process in good faith.  Potential purchasers had a full and fair opportunity to submit offers.  Potential bidders executed nondisclosure agreements and submitted expressions of interest.
G.Each APA was negotiated in good faith and at arm’s length by the Purchasers and the Debtors, and entry into each APA represents a valid and sound exercise of the NE Opco Debtor’s business judgment.  The NE Opco Debtor has articulated good and sufficient business reasons justifying the Sale Transactions.  Such business reasons include, but are not limited to, the following: (i) the APAs and the closing thereon will present the best opportunity to realize the value of the Purchased Assets on a going concern basis and avoid decline and devaluation of the Purchased Assets; and (ii) unless the Sale Transactions and the other transactions contemplated by the APAs are concluded expeditiously, as provided for in the Motion and pursuant to the APAs, recoveries to creditors will be diminished. 
H.The Purchaser Note is an arm’s length transaction negotiated in good faith and is an integral part of the Sale Transactions.
I.The Purchasers are not mere continuations of the Debtors or the Debtors’ estates, there is no continuity or common identity between the Purchasers and the Debtors, and there is no continuity of enterprise between the Purchasers and the Debtors.  The Purchasers are not holding themselves out to the public as a continuation of the Debtors.  The Purchasers are not successors to the Debtor or the Debtor’s estate and the 

    

Sale Transactions and related transactions do not amount to a consolidation, merger or de facto merger of the Purchasers with or into the Debtor.  
J.The sale of the Purchased Assets to the Purchasers is not being undertaken for the purpose of escaping liability for any of the Debtors’ debts or hindering, delaying or defrauding creditors under the Bankruptcy Code or under the laws of the United States, or any state, territory, or possession thereof or located therein, or the District of Columbia. 
K.Each APA neither impermissibly restructures the rights of the Debtors’ creditors nor impermissibly dictates the terms of a chapter 11 plan for the Debtors and, therefore, does not constitute a sub rosa plan. 
L.The Purchasers are not insiders of the Debtors as that term is defined in Section 101 of the Bankruptcy Code.  No director or officer or other insider of the Debtors holds any interest in or is otherwise related to the Purchasers.  As such, the Purchasers are good faith purchasers under section 363(m) of the Bankruptcy Code and are entitled to the protections afforded thereby.
M.The evidence demonstrates that the Purchasers are good faith purchasers for value and, as such, are entitled to all of the protections afforded under section 363(m) of the Bankruptcy Code and any other applicable or similar bankruptcy and non-bankruptcy law.  Specifically, (i) the Purchasers recognized that the Debtors were free to deal with any other party interested in purchasing the Purchased Assets, (ii) all payments to be made by the Purchasers in connection with the Sale Transactions have been disclosed, (iii) no common identity of directors, officers, or controlling stockholders exists among the Purchasers and the Debtors, (iv) the negotiation of each of the APAs 

    

was at arm’s-length and in good faith, and at all times each of the Purchasers and Debtors were represented by competent counsel of their choosing, (v) the Purchasers did not induce or cause the chapter 11 filing of the Debtors, and (vi) the Purchasers have not acted in a collusive manner with any person. 
N.Purchasers and their affiliates, successors and assigns are not “successor employers” of the Debtors’ employees as defined by 26 C.F.R. § 54.4980B-9, as a result of Purchasers’ acquisition of the Purchased Assets.
O.The consideration and terms and conditions provided by the Purchasers to the NE Opco Debtor for the Purchased Assets under the APAs are fair and reasonable and constitute fair consideration and reasonably equivalent value under the Bankruptcy Code and any applicable state law.  Further, neither of the Debtors nor any Purchaser has engaged in any action or conduct that would justify or permit the APAs to be avoided under Section 365(n) of the Bankruptcy Code. 
P.The Issuance of the Common Stock Shares to the Share Recipients complies with the provisions of Regulation D promulgated under the Securities Act of 1933 (the “Securities Act”).
Q.The Share Recipients are “accredited investors,” as such term is defined in Rule 501 of Regulation D under the Securities Act.
R.The Purchasers would not have entered into the APAs and would not consummate the transactions contemplated hereby, including, without limitation, the Sale Transactions and the assumption and assignment of the Purchased Contracts, (i) if the transfer of the Purchased Assets were not free and clear of every lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of 

    

first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement or encumbrance (subject only to the Permitted Exceptions) or (ii) if the Purchasers would, or in the future could, be liable for any such Liens and Claims (other than the Permitted Exceptions) or any of the Excluded Liabilities.  The Purchasers will not consummate the transactions contemplated by the APAs unless this Court expressly orders that none of the Purchasers, their affiliates, their present or contemplated members or shareholders, or the Purchased Assets will have any liability whatsoever with respect to, or be required to satisfy in any manner, whether at law or equity, or by payment, setoff, or otherwise, directly or indirectly, any lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement or encumbrance (other than the Permitted Exceptions, with respect to the Purchased Assets), any Excluded Liability, or based on any taxes, successor, or transferee liability.  Not transferring the Purchased Assets free and clear of all such Liens and Claims (subject only to the Permitted Exceptions), and of the Excluded Liabilities, would adversely impact the Debtors’ efforts to maximize the value of their estates; and such a transfer would be of substantially less benefit to the Debtors’ estates.
S.The Purchasers have (i) cured, or have provided adequate assurance of cure, of any pre-petition default under any of the Purchased Contracts, within the meaning of section 365(b)(1)(A) of the Bankruptcy Code, and (ii) provided compensation or adequate assurance of compensation to any party for any actual pecuniary loss to such party resulting from a pre-petition default under any of the Purchased Contracts within 

    

the meaning of section 365(b)(1)(B) of the Bankruptcy Code.  The Purchasers have provided or will provide adequate assurance of future performance of and under the Purchased Contracts within the meaning of section 365(b)(1)(C) of the Bankruptcy Code.  
T.The Debtors have (i) cured, or have provided adequate assurance of cure, of any post-petition default, if any, under any of the Purchased Contracts, within the meaning of section 365(b)(1)(A) of the Bankruptcy Code, and (ii) provided compensation or adequate assurance of compensation to any party for any actual pecuniary loss, if any, to such party resulting from a post-petition default under any of the Purchased Contracts within the meaning of section 365(b)(1)(B) of the Bankruptcy Code. 
U.The sale of the Purchased Assets must be approved and consummated promptly in order to preserve the value of the Purchased Assets.  Therefore, time is of the essence in consummating the Sale Transactions, and the Debtors and the Purchasers intend to close the Sale Transactions as soon as reasonably practicable. 
V.The evidence proffered or adduced by the Debtors demonstrates compelling circumstances and a good, sufficient, and sound business purpose and justification for the immediate approval and consummation of the transaction contemplated by each of the APAs, including, without limitation, the Sale Transactions and the assumption and assignment of the Purchased Contracts.  In addition, consummation of the Sale Transactions will prevent the continuing accrual of interest and fees to the DIP Lenders. 
W.The Debtors have all right, title, and interest in the Purchased Assets required to transfer and convey the Purchased Assets as contemplated by the APAs.

    

X.Upon entry of this Order, the Debtors shall have full corporate power and authority to execute, deliver, and consummate the APAs.
Y.Approval of the APAs and consummation of the Sale Transaction at this time are in the best interests of the Debtors and their respective creditors, equity holders, and other parties in interest.
IT IS HEREBY ORDERED THAT
1.The Motion is GRANTED as set forth herein.
2.All objections and responses to the Motion that have not been overruled, withdrawn, waived, settled or resolved, and all reservations of rights included therein, are hereby overruled on the merits and denied.
3.The Purchasers’ offers for the Purchased Assets, as embodied in the APAs, constitute the highest and best terms for the sale of the Purchased Assets under the circumstances of these cases and are hereby approved.
4.The form of the APAs annexed hereto as Exhibit 1, Exhibit 2, and Exhibit 3 are hereby approved pursuant to section 363(b) of the Bankruptcy Code. The Debtors are authorized to consummate and perform all of their obligations under the APAs, including the execution of such other documents and instruments that may be reasonably necessary or desirable to implement the APAs and the taking of such other or further actions as are necessary or appropriate to assign, transfer, grant or convey to Purchasers all of the Purchased Assets as contemplated by the APAs.
5.The Purchaser Note and the terms thereof are hereby authorized and approved in their entirety.

    

6.The Debtors are authorized and directed to irrevocably assign, transfer, convey and deliver to International Paper Company (free and clear of any Liens and Claims) the Purchaser Note and all of the Debtor’s rights thereunder immediately upon the Closing of the Cenveo APA, pursuant to the terms of the Assignment between NE Opco Debtor (as assignor) and International Paper Company (as assignee), dated as of ___________  2013 (the “IP Assignment”) (Attached hereto as Exhibit 4).
7.The IP Assignment and terms thereof are hereby authorized and approved in their entirety and the Debtors are hereby authorized and directed, immediately upon the Closing of the Cenveo APA, to execute and deliver to International Paper Company the IP Assignment together with the original Purchaser Note.
8.The Debtors’ assignment, transfer, conveyance and delivery of the Purchaser Note to International Paper Company pursuant to the terms of the IP Assignment shall be free and clear of any Liens and Claims and shall not be subject to any Permitted Exceptions.
9.Pursuant to section 363(f) of the Bankruptcy Code, the Purchased Assets will be transferred to the Purchasers free and clear of any lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement or encumbrance, other than the Permitted Exceptions, and free and clear of any Excluded Liability.
10.Pursuant to sections 105(a) and 363(b) of the Bankruptcy Code, the Sale Transactions by the Debtors to the Purchasers of the Purchased Assets and transactions 

    

related thereto, upon the closing under the APAs, are authorized and approved in all respects.
11.The Sale Transactions are free and clear of every lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement or encumbrance other than Permitted Exceptions, and the Excluded Liabilities, and all such liens, encumbrances, pledges, mortgages, deeds of trust, security interests, claims, leases, charges, options, rights of first refusal, easements, servitudes, proxies, voting trusts or agreements, transfer restrictions under any shareholder or similar agreement or encumbrances (other than Permitted Exceptions), if any (including, without limitations, such Liens and Claims in respect of post-petition financing, if any), and the Excluded Liabilities shall be released, terminated and discharged as to the Purchased Assets and, subject to the Settlement Order, shall be, and hereby are transferred and attached to the proceeds from the Sale Transactions in the order of their priority, with the same validity, force and effect such liens, encumbrances, pledges, mortgages, deeds of trust, security interests, claims, leases, charges, options, rights of first refusal, easements, servitudes, proxies, voting trusts or agreements, transfer restrictions under any shareholder or similar agreement or encumbrances (other than Permitted Exceptions) had against such Purchased Assets immediately prior to the Sale Transactions and subject to the rights, claims, defenses, and objections, if any, of the Debtors and all interested parties with respect to any such asserted liens, encumbrances, pledges, mortgages, deeds of trust, security interests, claims, leases, charges, options, rights of first refusal, easements, servitudes, proxies, 

    

voting trusts or agreements, transfer restrictions under any shareholder or similar agreement or encumbrances (other than Permitted Exceptions).
12.Except as expressly permitted by the APAs as to Assumed Liabilities, all persons and entities, including, but not limited to, the Debtors, all debt security holders, equity security holders, governmental, tax and regulatory authorities, lenders, trade creditors, contract counterparties, customers, landlords, licensors, employees, litigation claimants and other persons, holding any lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement or encumbrance of any kind or nature whatsoever against or in the Debtors or the Debtors’ interests in the Purchased Assets (whether known or unknown, legal or equitable, matured or unmatured, contingent or noncontingent, liquidated or unliquidated, asserted or unasserted, whether arising prior to or subsequent to the commencement of these Chapter 11 Cases, whether imposed by agreement, understanding, law, equity or otherwise), arising under or out of, in connection with, or in any way relating to, the Debtors, the Purchased Assets, the operation of the Debtors’ businesses before the Closing or the transfer of the Debtors’ interests in the Purchased Assets to the Purchasers, including, without limitation, the holders of Excluded Liabilities, shall not assert, prosecute or otherwise pursue claims against the Purchasers, their property (including, without limitation, the Purchased Assets), their successors and assigns or affiliates, or interfere with the Purchasers’ title to, use, or enjoyment of the Purchased Assets.

    

13.Without limiting the generality of the foregoing, the Debtors, their estates and any successor of the Debtors shall be deemed to have unconditionally released the Purchasers and their officers, directors and affiliates from any and all claims, obligations, rights, suits, damages, causes of action, remedies and liabilities whatsoever, whether known or unknown, foreseen or unforeseen, existing or hereafter arising in law, equity or otherwise, arising from or relating to, or involving the Excluded Liabilities, Purchased Assets, the sale thereof to the Purchasers or the Purchasers’ quiet use and enjoyment of the Purchased Assets that arose up to the date of the closing of the sale, with all such claims, obligations, rights, suits, damages, causes of action, remedies and liabilities attaching to the proceeds of the sale; provided, however, that the foregoing release shall not apply to any such claims, obligations, rights, suits, damages, causes of action, remedies and liabilities of the Debtors, their estates and any successors of the Debtors arising from or relating to a breach of the APAs by the Purchasers.
14.Neither the Purchasers nor their affiliates, successors or assigns shall, as a result of the consummation of the APAs: (i) be a successor to the Debtors or the Debtors’ estates; (ii) have, de facto or otherwise, merged or consolidated with or into the Debtors or the Debtors’ estates, or (iii) be a continuation or substantial continuation of the Debtors or any enterprise of the Debtors.  Except for the Assumed Liabilities, Purchasers shall not assume, nor be deemed to assume, or in any way be responsible for any liability or obligation of any of the Debtors and/or their estates including, but not limited to, any bulk sales law, lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement or 

    

encumbrance.  Except for the Assumed Liabilities, the transfer of the Purchased Assets to the Purchasers under the APAs shall not result in (i) the Purchasers or the Purchased Assets having any liability or responsibility for any Interest against the Debtors or against an insider of the Debtors, (ii) the Purchased Assets having any liability whatsoever with respect to or be required to satisfy in any manner, whether at law or in equity, whether by payment, setoff or otherwise, directly or indirectly, any Interest or Excluded Liability, or (iii) Purchaser or the Purchased Assets, having any liability or responsibility to Debtors. 
15.Without limiting the generality of the foregoing, Purchasers and their affiliates, successors and assigns are not required to offer or provide any COBRA coverage to any former employee of the Debtors under any United States statute or treasury regulation, including, without limitation, 26 C.F.R. § 54.4980B-9, as a result of Purchasers’ acquisition of the Purchased Assets.
16.The issuance of the Common Stock Shares to the Share Recipients pursuant to the Cenveo APA is exempt from registration under the Securities Act or any similar federal, state, or local law in reliance on the exemption set forth in Regulation D promulgated under the Securities Act.
17.There shall be no payment accelerations, assignment fees, increases or any other fees charged to the Purchasers (or any of their designees) or the Debtors as a result of the assumption, assignment, and sale of the Purchased Contracts.  
18.The Assumption Procedures described in the Motion relating to the Contracts and Leases are approved in their entirety, including, without limitation, the following procedures relating to the rejection or assumption and assignment of Leases:

    

The Assets Purchaser shall have until the date that is the earlier of ninety (90) days after the Closing Date or the expiration of the period provided for under section 365(d)(4) of the Bankruptcy Code (as such period may be extended in accordance with such section) (the “Lease Designation Deadline”) to make a determination whether to direct the Debtors to assume any Lease and assign such Lease to the Assets Purchaser.  Should the Assets Purchaser direct the Debtors to assume and assign one or more Leases to the Assets Purchaser prior to the Lease Designation Deadline, the Debtors shall file a motion to assume and assign any such Lease pursuant and subject to section 365 of the Bankruptcy Code.  Pending the rejection or assumption and assignment of any Lease, from and after the Closing Date through the effective date of such rejection or assumption and assignment, the Assets Purchaser shall be obligated to pay, and shall be liable for, any and all amounts arising under any such Lease, including any and all amounts accruing under any such Lease which have not yet come due as of the effective date of the rejection or assumption and assignment of such Lease; provided, however, that the Assets Purchaser shall not be liable for actual or pecuniary losses resulting from any breach of such Lease by the Debtors arising after the Petition Date, except for breaches which are caused by the Assets Purchaser.
19.Pursuant to section 365 of the Bankruptcy Code, the assignment and assumption of the Purchased Contracts, as identified in the APAs, by the Purchasers or designated affiliates of the Purchasers, is hereby authorized and approved in all respects.  Each of the Debtors is hereby authorized in accordance with section 365 of the Bankruptcy Code to assume and assign to the Purchasers effective upon the Closing each 

    

of the Purchased Contracts, free and clear of every lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement or encumbrance other than the Permitted Exceptions.  The assumption and assignment to the Purchasers or their designated affiliates is in the best interests of the Debtors and each of their creditors and estates and represents a prudent exercise of the Debtors’ business judgment.
20.The Cure Amounts to be paid by the Debtors with respect to certain Purchased Contracts, listed on Exhibit 5 hereto, are established at the amounts set forth therein.  Debtors shall promptly pay all Cure Amounts after Closing, and the Purchasers and their affiliates shall have no liability for any other obligations under the Purchased Contracts arising or accruing prior to the Closing (or with respect to Contracts for properties under the Spirit Lease in accordance with Section 2.5 of the Cenveo APA, prior to the applicable date of effective assumption by Cenveo Corporation), except for the Cure Amounts that are Assumed Liabilities listed in Schedule 1.1(e) of the Cenveo APA.  All defaults or other obligations of the Debtors under the Purchased Contracts arising prior to the Closing are deemed satisfied by the payment, pursuant to the terms of the APAs, of the Cure Amounts with respect to each Purchased Contract in those amounts set forth in Exhibit 5 to this Order.  The assumption and/or assignment to the Purchasers or their designees of the Purchased Contracts constitutes adequate assurance of the Purchasers’ future performance under the Purchased Contracts within the meaning of sections 365(b)(1)(C) and 365(f)(2)(B) of the Bankruptcy Code.  The Purchased Contracts shall, upon assignment to the Purchasers, be valid, binding and in full force and 

    

effect and enforceable by Purchasers and their designees in accordance with their respective terms, notwithstanding any provision of any Purchased Contracts (including those of the type described in sections 365(b)(2) and 365(f) of the Bankruptcy Code) that prohibits, restricts or conditions such assignment or transfer, and, pursuant to section 365(k) of the Bankruptcy Code, the Debtors shall be relieved from further liability with respect to the Purchased Contracts upon the Closing.
21.The stays provided for in Bankruptcy Rules 6004(h) and 6006(d) are hereby waived and this Order shall be effective immediately upon its entry.
22.The terms of this Order shall be binding on the Purchasers and their successors, the Debtors, creditors of the Debtors and all other parties in interest in the Bankruptcy Cases, and any successors of the Debtors, including any trustee or examiner appointed in these cases or upon a conversion of these cases to chapter 7 of the Bankruptcy Code.
23.The Purchasers are good faith purchasers entitled to the benefits and protections afforded by section 363(m) of the Bankruptcy Code.  In the absence of a stay of this Order, the Purchasers will be acting in good faith within the meaning of section 363(m) of the Bankruptcy Code in consummating the transactions contemplated by the APAs, including assumption and assignment of contracts, at any time after the entry of this Order.  
24.The Court’s approval of these Sale Transactions and entry of this Order is and shall be without prejudice to or effect (including collateral estoppel or res judicata) on any rights, claims, causes of action, defenses or interests, of the Debtors, creditors, equity holders or any statutory committee appointed in any of these bankruptcy cases 

    

with respect to any person or entity other than the Purchasers or any of their respective affiliates, designees, successors, assigns, directors, officers including but not limited to any claim for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, setoff, recoupment, subordination or recharacterization, whether or not arising out of any actions taken in connection with the Sale Transactions or the APAs.  To be clear, to the extent that there is any inconsistency between this paragraph 24 and paragraph 11 hereof, the terms of paragraph 11 shall govern.
25.With respect to the transactions consummated pursuant to this Order, this Order shall be sole and sufficient evidence of the transfer of title to the Purchaser, and the sale transaction consummated pursuant to this Order shall be binding upon and shall govern the acts of all persons and entities who may be required by operation of law, the duties of their office, or contract, to accept, file, register or otherwise record or release any documents or instruments, or who may be required to report or insure any title or state of title in or to any of the property sold pursuant to this Order, including without limitation, all filing agents, filing officers, title agents, title companies, recorders of mortgages, recorders of deeds, administrative agencies, governmental departments, secretaries of state, and federal, state, and local officials, and each of such persons and entities is hereby directed to accept this Order as sole and sufficient evidence of such transfer of title and shall rely upon this Order in consummating the transactions contemplated hereby.
26.This Court retains jurisdiction to interpret, implement and enforce the provisions of, and resolve any disputes arising under or related to, this Order and the 

    

APAs, all amendments thereto, any waivers and consents thereunder and each of the agreements executed in connection therewith.
27.Nothing in this Order shall modify or waive any closing conditions or termination rights in the APAs, and all such conditions and rights shall remain in full force and effect in accordance with their terms.
28.The failure specifically to include any particular provisions of the APAs or any of the documents, agreements or instruments executed in connection therewith in this Order shall not diminish or impair the force of such provision, document, agreement or instrument, it being the intent of the Court that the APAs and each document, agreement or instrument be authorized and approved in its entirety.
29.The consideration under the APAs shall be distributed in accordance with the Settlement Order, including, without limitation, to first satisfy the obligations under the DIP Facility.  Additionally, for the avoidance of doubt, all deposits recovered or otherwise received by the Debtors shall first be used to satisfy the Debtors’ obligations under the DIP Facility in accordance with the Settlement Order.  In the event of any inconsistency between this Order and the Settlement Order, the Settlement Order shall govern.
30.The APAs may be amended, supplemented or changed, and any provision thereof may be waived, only by written instrument making specific reference to the applicable APA(s) signed by the party thereto against whom enforcement of any such amendment, supplement, modification or waiver is sought; provided, however, that, after the entry of this Order, any such amendment, supplement, change or waiver which 

    

materially adversely affects a Share Recipient shall also require the express written consent of such Share Recipient in order to be effective

31.The Debtors are authorized to take all actions necessary to effectuate the relief granted pursuant to this Order in accordance with the Motion.

Dated:    _____________, 2013 
    Wilmington, Delaware
_____________________________________
THE HONORABLE CHRISTOPHER S. SONTCHI 
                    UNITED STATES BANKRUPTCY JUDGE

    

EXHIBIT 1

Cenveo Asset Purchase Agreement

    

EXHIBIT 2

Hilco Asset Purchase Agreement

    

EXHIBIT 3

Inventory Purchaser Asset Purchase Agreement

    

EXHIBIT 4

IP Assignment

    

EXHIBIT 5

Cure Amounts

    

THIS UNSECURED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR (ii) AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
UNSECURED PROMISSORY NOTE
[$2,600,000.00]  Insert an amount (not to exceed $2,600,000) equal to the sum of the principal and accrued and unpaid interest due and owing as of the date of the Closing under the Purchase Agreement pursuant to that certain Tranche B Note issued to International Paper Company as a Tranche B Lender pursuant to that certain Debtor-In-Possession Credit Agreement dated as of June 10, 2013 (as amended, amended and restated, supplemented or otherwise modified) among NE Opco, Inc., as debtor and debtor-in-possession, the other loan parties party thereto, the lenders party thereto and Salus Capital Partners, LLC, as administrative agent and collateral agent.    
	
					
	[$2,600,000.00] 1

	 
	 
	 
	New York, New York

	 
	 
	 
	 
	_________ ___, 2013

FOR VALUE RECEIVED, Cenveo Corporation, a Delaware corporation (“Payor”), hereby promises to pay to the order of NE Opco, Inc., a Delaware corporation (together with its successors and permitted assigns, “Payee”), the principal sum of [Two Million Six Hundred Thousand Dollars ($2,600,000.00)] 2 
The outstanding principal amount of this Note shall be due and payable in full on ______ __, 2013 3  (or on such earlier date due to an acceleration of the maturity of this Note pursuant to the terms hereof).  Except as set forth in the following paragraph, the principal amount of this Note shall not bear interest.
If any amount payable hereunder is not paid when due, whether at stated maturity, by acceleration or otherwise, such overdue amount shall bear interest at a rate per annum equal to ten percent (10.0%) from the date of such non-payment until such amount is paid in full.  All computations of interest shall be made on the basis of a 360‐day year, for the actual number of days elapsed in the relevant period (including the first day but excluding the last day).  In no event shall the interest rate payable on this Note exceed the maximum rate of interest permitted to be charged under applicable law.
Payment of principal and interest shall be made in lawful money of the United States of America, by wire transfer of immediately available funds, to such account as Payee may direct Payor in writing.  

    

Payor may at any time, upon not less than one (1) Business Day’s prior written notice to Payee, prepay all or any portion of the principal or interest owing under this Note, without premium or penalty.  Any prepayment of the principal amount of this Note shall be accompanied by all accrued and unpaid interest on such principal amount.
This Note is being issued pursuant to, and constitutes the “Purchaser Note” under, the Asset Purchase Agreement, dated as of August __, 2013 (as amended, supplemented or otherwise modified from time to time, the “Purchase Agreement”), by and among Payee, Cenveo and Parent.  Capitalized terms used and not otherwise defined herein have the meanings specified in the Purchase Agreement as in effect on the date hereof.
The occurrence and continuance of any of the following shall constitute an event of default (each an “Event of Default”) hereunder: (i) Payor fails to pay any principal, interest or any other amount under this Note when due; (ii)  Payor fails to pay when due any of its other debt having an aggregate principal amount greater than $35,000,000 or any interest or premium on such debt when due (whether by scheduled maturity, acceleration, demand or otherwise) and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such debt; (iii)(a) Payor commences any case, proceeding or other action (1) under any existing or future law relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts or (2) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Payor makes a general assignment for the benefit of its creditors; (b) there is commenced against Payor any case, proceeding or other action of a nature referred to in clause (iii)(a) above which results in the entry of an order for relief or any such adjudication or appointment; (c) there is commenced against Payor any case, proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief; (d) Payor takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clauses (iii)(a), (iii)(b) or (iii)(c) above; or (e) Payor is generally not, or shall be unable to, or admits in writing its inability to, pay its debts as they become due; or (iv) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding $35,000,000 (to the extent not covered by insurance) shall be entered against Payor and all of such judgments or orders shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof.
If any Event of Default occurs and is continuing, Payee may at its option, by written notice to Payor, (i) declare the entire principal amount of this Note, together with all accrued interest thereon and all other amounts payable hereunder, immediately due and payable; and/or (ii) exercise any or all of its rights, powers or remedies under applicable law; provided, however, that, if an Event of Default described in clause (iii) of the immediately preceding paragraph shall occur, the principal amount of this Note, together with all accrued interest 

    

thereon and all other amounts payable hereunder, shall become immediately due and payable without any notice, declaration or other act on the part of Payee.
Should any action be instituted for the collection of this Note, the reasonable and documented costs and attorneys’ fees of the holder of this Note shall be paid by Payor.
No failure or delay on the part of Payee or any other holder of this Note to exercise any right, power or privilege under this Note and no course of dealing between Payor and Payee shall impair such right, power or privilege or operate as a waiver of any default or an acquiescence therein, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies expressly provided in this Note are cumulative to, and not exclusive of, any rights or remedies that Payee would otherwise have.  
If any provision in or obligation under this Note shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

This Note shall be binding upon Payor and its successors and assigns and shall inure to the benefit of Payee and its successors and assigns, provided, however, that (a) Payor shall not have the right to assign its rights or obligations hereunder or any interest herein without the prior written consent of Payee, and any such assignment without such consent shall be null and void ab initio, and (b) NE Opco, Inc. shall have the right to assign this Note and its rights and interests under this Note to (and only to) International Paper Company, a New York corporation (“IP”); provided, that IP delivers to Payor a copy of a duly executed assignment or endorsement of this Note.  Except as set forth in the foregoing clause (b), Payee shall not have the right to assign its rights hereunder or any interest herein to any other Person without the prior written consent of Payor, and any such assignment without such consent shall be null and void ab initio.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF PAYOR AND PAYEE HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PAYOR ARISING OUT OF OR RELATING TO THIS NOTE MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS NOTE PAYOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY 

    

JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS NOTE.  Payor hereby agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to Payor at its address set forth below, such service being hereby acknowledged by Payor to be sufficient for personal jurisdiction in any action against Payor in any such court and to be otherwise effective and binding service in every respect.  Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of Payee to bring proceedings against Payor in the courts of any other jurisdiction.
PAYOR AND, BY THEIR ACCEPTANCE OF THIS NOTE, PAYEE AND ANY SUBSEQUENT HOLDER OF THIS NOTE, HEREBY IRREVOCABLY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS NOTE AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.  The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims.  Payor and, by their acceptance of this Note, Payee and any subsequent holder of this Note, each (i) acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this relationship, and that each will continue to rely on this waiver in their related future dealings and (ii) further warrants and represents that each has reviewed this waiver with its legal counsel and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF THIS NOTE.  In the event of litigation, this provision may be filed as a written consent to a trial by the court.
Payor hereby waives the benefit of any statute or rule of law or judicial decision which would otherwise require that the provisions of this Note be construed or interpreted most strongly against the party responsible for the drafting thereof.
Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing and mailed, delivered or transmitted by facsimile to Payor or Payee (as applicable) at the address set forth below.  All such notices and other communications shall be deemed to be given or made at the times provided below.
All notices and other communications under this Note shall be in writing and shall be deemed given (a) when delivered personally by hand (with written confirmation of receipt), (b) when sent by facsimile (with written confirmation of transmission) (or, if sent by facsimile after normal business hours, on the next Business Day), (c) five (5) days after being deposited with the United States Post Office, by registered or certified mail, postage 

    

prepaid, or (d) one (1) Business Day following the day sent by overnight courier (with written confirmation of receipt), in each case at the following addresses and facsimile numbers (or to such other address or facsimile number as Payor or Payee may have specified by notice given to the other pursuant to this provision):
If to Payor:

Prior to September 9, 2013:

Cenveo Corporation
One Canterbury Green
201 Broad Street
Stamford, Connecticut  06901
Attention:  Scott J. Goodwin, Chief Financial Officer
Facsimile:  (203) 595-3085

On and after September 9, 2013:

Cenveo Corporation
200 First Stamford Place, 2nd Floor
Stamford, Connecticut  06902
Attention:  Scott J. Goodwin, Chief Financial Officer
Facsimile:  (203) 595-3085
If to Payee:
NE Opco, Inc.
3211 Internet Blvd., Ste. 200
Frisco, Texas 75034 
Attention:  Brian Zollinger
Facsimile: 972-731-2763
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Payor has caused this Note to be executed and delivered by its duly authorized officer as of the day and year and at the place first above written.

    

PAYOR                    CENVEO CORPORATION
By:                    
Name:             
Title:
                            

    

1  Insert an amount (not to exceed $2,600,000) equal to the sum of the principal and accrued and unpaid interest due and owing as of the date of the Closing under the Purchase Agreement pursuant to that certain Tranche B Note issued to International Paper Company as a Tranche B Lender pursuant to that certain Debtor-In-Possession Credit Agreement dated as of June 10, 2013 (as amended, amended and restated, supplemented or otherwise modified) among NE Opco, Inc., as debtor and debtor-in-possession, the other loan parties party thereto, the lenders party thereto and Salus Capital Partners, LLC, as administrative agent and collateral agent.
2   See footnote 1.
		
	3 
	Insert date that occurs 45 days after the date of this Note or, if such date is not a Business Day, the next succeeding Business Day.indenture.htm

Exhibit 4.1

Execution Copy

 

 

INDENTURE

 

 

between

 

 

BMW VEHICLE OWNER TRUST 2013-A,

as Issuer,

 

 

and

 

 

U.S. BANK NATIONAL ASSOCIATION,

as Indenture Trustee

 

 

Dated as of October 1, 2013

 

  

  

  

TABLE OF CONTENTS

 

 

	 	 	
Page

 

	
ARTICLE I.

 

	
DEFINITIONS AND INCORPORATION BY REFERENCE

 

	
2

	
SECTION 1.01.

 

	
Definitions

 

	
2

	
SECTION 1.02.

 

	
Other Definitional Provisions

 

	
9

	
SECTION 1.03.

 

	
Incorporation by Reference of Trust Indenture Act

 

	
10

	
ARTICLE II.

 

	
THE NOTES

 

	
10

	
SECTION 2.01.

 

	
Form

 

	
10

	
SECTION 2.02.

 

	
Execution, Authentication and Delivery

 

	
11

	
SECTION 2.03.

 

	
Temporary Notes

 

	
11

	
SECTION 2.04.

 

	
Registration; Registration of Transfer and Exchange

 

	
12

	
SECTION 2.05.

 

	
[Reserved]

 

	
13

	
SECTION 2.06.

 

	
Mutilated, Destroyed, Lost or Stolen Notes

 

	
13

	
SECTION 2.07.

 

	
Persons Deemed Owners

 

	
14

	
SECTION 2.08.

 

	
Payment of Principal and Interest; Defaulted Interest

 

	
14

	
SECTION 2.09.

 

	
Cancellation

 

	
15

	
SECTION 2.10.

 

	
Book-Entry Notes

 

	
16

	
SECTION 2.11.

 

	
Notices to Clearing Agency

 

	
16

	
SECTION 2.12.

 

	
Definitive Notes

 

	
17

	
SECTION 2.13.

 

	
Authenticating Agents

 

	
17

	
SECTION 2.14.

 

	
Tax Treatment

 

	
18

	
ARTICLE III.

 

	
COVENANTS

 

	
18

	
SECTION 3.01.

 

	
Payment of Principal and Interest

 

	
18

	
SECTION 3.02.

 

	
Maintenance of Office or Agency

 

	
18

	
SECTION 3.03.

 

	
Money for Payments To Be Held in Trust

 

	
18

	
SECTION 3.04.

 

	
Existence

 

	
20

	
SECTION 3.05.

 

	
Protection of Trust Estate

 

	
20

	
SECTION 3.06.

 

	
Opinions as to Trust Estate

 

	
21

	
SECTION 3.07.

 

	
Performance of Obligations; Servicing of Receivables

 

	
21

	
SECTION 3.08.

 

	
Negative Covenants

 

	
23

	
SECTION 3.09.

 

	
Annual Statement and Assessment as to Compliance

 

	
23

	
SECTION 3.10.

 

	
Issuer May Consolidate, etc., Only on Certain Terms

 

	
24

 

  

ii

  

	
SECTION 3.11.

 

	
Successor or Transferee

 

	
26

	
SECTION 3.12.

 

	
No Other Business

 

	
26

	
SECTION 3.13.

 

	
No Borrowing

 

	
26

	
SECTION 3.14.

 

	
Servicer’s Obligations

 

	
26

	
SECTION 3.15.

 

	
Guarantees, Loans, Advances and Other Liabilities

 

	
26

	
SECTION 3.16.

 

	
Capital Expenditures

 

	
27

	
SECTION 3.17.

 

	
Removal of Administrator

 

	
27

	
SECTION 3.18.

 

	
Restricted Payments

 

	
27

	
SECTION 3.19.

 

	
Notice of Events of Default

 

	
27

	
SECTION 3.20.

 

	
Further Instruments and Acts

 

	
27

	
SECTION 3.21.

 

	
Perfection Representations

 

	
27

	
ARTICLE IV.

 

	
SATISFACTION AND DISCHARGE

 

	
28

	
SECTION 4.01.

 

	
Satisfaction and Discharge of Indenture

 

	
28

	
SECTION 4.02.

 

	
Application of Trust Money

 

	
29

	
SECTION 4.03.

 

	
Repayment of Moneys Held by Paying Agent

 

	
29

	
SECTION 4.04.

 

	
Release of Collateral

 

	
29

	
ARTICLE V.

 

	
REMEDIES

 

	
29

	
SECTION 5.01.

 

	
Events of Default

 

	
29

	
SECTION 5.02.

 

	
Acceleration of Maturity; Rescission and Annulment

 

	
31

	
SECTION 5.03.

 

	
Collection of Indebtedness and Suits for Enforcement by Indenture Trustee

 

	
32

	
SECTION 5.04.

 

	
Remedies; Priorities

 

	
34

	
SECTION 5.05.

 

	
Optional Preservation of the Receivables

 

	
36

	
SECTION 5.06.

 

	
Limitation of Suits

 

	
36

	
SECTION 5.07.

 

	
Unconditional Rights of Noteholders To Receive Principal and Interest

 

	
37

	
SECTION 5.08.

 

	
Restoration of Rights and Remedies

 

	
37

	
SECTION 5.09.

 

	
Rights and Remedies Cumulative

 

	
38

	
SECTION 5.10.

 

	
Delay or Omission Not a Waiver

 

	
38

	
SECTION 5.11.

 

	
Control by Noteholders

 

	
38

	
SECTION 5.12.

 

	
Waiver of Past Defaults

 

	
38

	
SECTION 5.13.

 

	
Undertaking for Costs

 

	
39

	
SECTION 5.14.

 

	
Waiver of Stay or Extension Laws

 

	
39

 

  

iii

  

	
SECTION 5.15.

 

	
Action on Notes

 

	
39

	
SECTION 5.16.

 

	
Performance and Enforcement of Certain Obligations

 

	
40

	
ARTICLE VI.

 

	
THE INDENTURE TRUSTEE

 

	
40

	
SECTION 6.01.

 

	
Duties of Indenture Trustee

 

	
40

	
SECTION 6.02.

 

	
Rights of Indenture Trustee

 

	
42

	
SECTION 6.03.

 

	
Individual Rights of Indenture Trustee

 

	
44

	
SECTION 6.04.

 

	
Indenture Trustee’s Disclaimer

 

	
44

	
SECTION 6.05.

 

	
Notice of Defaults

 

	
44

	
SECTION 6.06.

 

	
Reports by Indenture Trustee to Holders

 

	
44

	
SECTION 6.07.

 

	
Compensation and Indemnity

 

	
44

	
SECTION 6.08.

 

	
Replacement of Indenture Trustee

 

	
45

	
SECTION 6.09.

 

	
Successor Indenture Trustee by Merger

 

	
46

	
SECTION 6.10.

 

	
Appointment of Co-Indenture Trustee or Separate Indenture Trustee

 

	
46

	
SECTION 6.11.

 

	
Eligibility; Disqualification

 

	
48

	
SECTION 6.12.

 

	
[Reserved]

 

	
48

	
SECTION 6.13.

 

	
Preferential Collection of Claims Against Issuer

 

	
48

	
SECTION 6.14.

 

	
Waiver of Setoffs

 

	
48

	
SECTION 6.15.

 

	
Licenses

 

	
48

	
SECTION 6.16.

 

	
Additional Duties

 

	
48

	
ARTICLE VII.

 

	
NOTEHOLDERS’ LISTS AND REPORTS

 

	
48

	
SECTION 7.01.

 

	
Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders

 

	
48

	
SECTION 7.02.

 

	
Preservation of Information; Communications to Noteholders

 

	
49

	
SECTION 7.03.

 

	
Reports by Issuer

 

	
50

	
SECTION 7.04.

 

	
Reports by Indenture Trustee

 

	
50

	
ARTICLE VIII.

 

	
ACCOUNTS, DISBURSEMENTS AND RELEASES

 

	
51

	
SECTION 8.01.

 

	
Collection of Money

 

	
51

	
SECTION 8.02.

 

	
Trust Accounts

 

	
51

	
SECTION 8.03.

 

	
General Provisions Regarding Accounts

 

	
52

	
SECTION 8.04.

 

	
Release of Trust Estate

 

	
53

	
SECTION 8.05.

 

	
Opinion of Counsel

 

	
53

 

  

iv

  

	
ARTICLE IX.

 

	
SUPPLEMENTAL INDENTURES

 

	
54

	
SECTION 9.01.

 

	
Supplemental Indentures Without Consent of Noteholders

 

	
54

	
SECTION 9.02.

 

	
Supplemental Indentures with Consent of Noteholders

 

	
55

	
SECTION 9.03.

 

	
Execution of Supplemental Indentures

 

	
56

	
SECTION 9.04.

 

	
Effect of Supplemental Indenture

 

	
57

	
SECTION 9.05.

 

	
Reference in Notes to Supplemental Indentures

 

	
57

	
SECTION 9.06.

 

	
Conformity with Trust Indenture Act

 

	
57

	
ARTICLE X.

 

	
REDEMPTION OF NOTES

 

	
57

	
SECTION 10.01.

 

	
Redemption

 

	
57

	
SECTION 10.02.

 

	
Form of Redemption Notice

 

	
57

	
SECTION 10.03.

 

	
Notes Payable on Redemption Date

 

	
58

	
ARTICLE XI.

 

	
MISCELLANEOUS

 

	
58

	
SECTION 11.01.

 

	
Compliance Certificates and Opinions, etc

 

	
58

	
SECTION 11.02.

 

	
Form of Documents Delivered to Indenture Trustee

 

	
60

	
SECTION 11.03.

 

	
Acts of Noteholders

 

	
61

	
SECTION 11.04.

 

	
Notices, etc., to Indenture Trustee, Issuer and Rating Agencies

 

	
61

	
SECTION 11.05.

 

	
Notices to Noteholders; Waiver

 

	
62

	
SECTION 11.06.

 

	
[Reserved]

 

	
62

	
SECTION 11.07.

 

	
Effect of Headings and Table of Contents

 

	
62

	
SECTION 11.08.

 

	
Successors and Assigns

 

	
62

	
SECTION 11.09.

 

	
Separability

 

	
63

	
SECTION 11.10.

 

	
Benefits of Indenture

 

	
63

	
SECTION 11.11.

 

	
Legal Holidays

 

	
63

	
SECTION 11.12.

 

	
Governing Law

 

	
63

	
SECTION 11.13.

 

	
Counterparts

 

	
63

	
SECTION 11.14.

 

	
Recording of Indenture

 

	
63

	
SECTION 11.15.

 

	
Trust Obligation

 

	
63

	
SECTION 11.16.

 

	
No Petition

 

	
64

	
SECTION 11.17.

 

	
Inspection

 

	
64

	
SECTION 11.18.

 

	
Conflict with Trust Indenture Act

 

	
64

	
SECTION 11.19.

 

	
Limitation of Liability

 

	
64

	
SECTION 11.20.

 

	
Intent of the Parties; Reasonableness

 

	
65

 

  

v

  

	
SECTION 11.21.

 

	
Communications with Rating Agencies

 

	
65

	
ARTICLE XII.

 

	
COMPLIANCE WITH THE FDIC RULE

 

	
66

	
SECTION 12.01.

 

	
Purpose

 

	
66

	
SECTION 12.02.

 

	
Requirements of the FDIC Rule

 

	
67

	
SECTION 12.03.

 

	
Performance

 

	
69

	
SECTION 12.04.

 

	
Effect of Section 941 Rules

 

	
69

	
SECTION 12.05.

 

	
Actions Upon Repudiation

 

	
69

	
SECTION 12.06.

 

	
Notice

 

	
71

	
SECTION 12.07.

 

	
Reservation of Rights

 

	
71

	  	  	  

 

SCHEDULES AND EXHIBITS

SCHEDULE A                               Schedule of Receivables

SCHEDULE B                                Perfection Representations, Warranties and Covenants

EXHIBIT A-1                                Form of Class A-1 Note

EXHIBIT A-2                                Form of Class A-2 Notes

EXHIBIT A-3                                Form of Class A-3 Notes

EXHIBIT A-4                                Form of Class A-4 Note

EXHIBIT B                                    Form of the Note Depository Agreement

EXHIBIT C                                    Servicing Criteria to be Addressed in Assessment of Compliance

  

vi

  

THIS INDENTURE, dated as of October 1, 2013, is between BMW VEHICLE OWNER TRUST 2013-A, a Delaware statutory trust (the “Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee and not in its individual capacity (the “Indenture Trustee”).

 

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Issuer’s 0.23000% Asset Backed Notes, Class A-1 (the “Class A-1 Notes”), 0.41% Asset Backed Notes, Class A-2 (the “Class A-2 Notes”), 0.67% Asset Backed Notes, Class A-3 (the “Class A-3 Notes”) and 1.12% Asset Backed Notes, Class A-4 (the “Class A-4 Notes” and, together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the “Notes”):

 

GRANTING CLAUSE

 

The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of the Holders of the Notes, all of the Issuer’s right, title and interest in and to the following assets and property, whether now owned or existing or hereafter acquired or arising: (a) the Receivables and all moneys received thereon after the close of business on September 30, 2013; (b) the security interests in the Financed Vehicles and any accessions thereto granted by Obligors pursuant to the Receivables and any other interest of the Issuer in such Financed Vehicles; (c) any Liquidation Proceeds and Recoveries, and any other proceeds with respect to the Receivables from claims on any theft, physical damage, credit life or disability insurance policies covering Financed Vehicles or Obligors, including any vendor’s single interest or other collateral protection insurance policy; (d) all proceeds from any Receivables repurchased by a Dealer pursuant to a Dealer Agreement; (e) any property that shall have secured a Receivable and that shall have been acquired by or on behalf of a Seller, the Depositor, the Servicer, or the Issuer; (f) all documents and other items contained in the Receivable Files; (g) the Trust Accounts and all funds on deposit from time to time in the Trust Accounts and in all investments therein and proceeds thereof (including all Investment Earnings thereon); (h) the Issuer’s rights and benefits, but none of its obligations, under the Sale and Servicing Agreement (including the Issuer’s right to cause the Sellers or the Servicer, as the case may be, to repurchase Receivables from the Issuer under the circumstances described therein); (i) the Depositor’s and the Issuer’s rights and benefits under the Receivables Purchase Agreements, including the representations and warranties and the cure and repurchase obligations of the Sellers thereunder, and the Sale and Servicing Agreement; and (j) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property that at any time constitute all or part of or are included in the proceeds of any of the foregoing (collectively, the “Collateral”).

 

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, equally and ratably without

 

  

1

  

prejudice, priority or distinction, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

 

The Indenture Trustee, on behalf of the Holders of the Notes, acknowledges such Grant, accepts the trusts under this Indenture in accordance with the provisions of this Indenture and agrees to perform its duties required in this Indenture to the best of its ability to the end that the interests of the Holders of the Notes may be adequately and effectively protected.

 

ARTICLE I.

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01.      Definitions.

 

(a)      Definitions.  Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture.

 

“Act” has the meaning specified in Section 11.03(a).

 

“Administration Agreement” means the Owner Trust Administration Agreement, dated as of October 1, 2013, among the Administrator, the Issuer and the Indenture Trustee.

 

“Administrator” means BMW FS, or any successor Administrator under the Administration Agreement.

 

“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Authenticating Agents” has the meaning specified in Section 2.13.

 

“Authorized Officer” means, with respect to the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and, so long as the Administration Agreement is in effect, any Vice President or more senior officer of the Administrator who is authorized to act for the Administrator in matters relating to the Issuer and to be acted upon by the Administrator pursuant to the Administration Agreement and who is identified on the list of Authorized Officers delivered by the Administrator to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter).

 

“BMW Bank” means BMW Bank of North America and its successors and assigns.

 

  

2

  

“BMW FS” means BMW Financial Services NA, LLC, a Delaware limited liability company, and its successors and assigns.

 

“Book-Entry Notes” means a beneficial interest in the Notes, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.10.

 

“Business Day” shall have the meaning assigned thereto in the Sale and Servicing Agreement.

 

“Class A-1 Notes” means the 0.23000% Asset Backed Notes, Class A-1, substantially in the form of Exhibit A-1.

 

“Class A-1 Rate” means 0.23000% per annum.

 

“Class A-2 Notes” means the 0.41% Asset Backed Notes, Class A-2, substantially in the form of Exhibit A-2.

 

“Class A-2 Rate” means a 0.41% per annum.

 

“Class A-3 Notes” means the 0.67% Asset Backed Notes, Class A-3, substantially in the form of Exhibit A-3.

 

“Class A-3 Rate” means 0.67% per annum.

 

“Class A-4 Notes” means the 1.12% Asset Backed Notes, Class A-4, substantially in the form of Exhibit A-4.

 

“Class A-4 Rate” means 1.12% per annum.

 

“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

 

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

 

“Closing Date” means November 6, 2013.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder.

 

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

 

“Corporate Trust Office” means the principal office of the Indenture Trustee at which at any particular time the Indenture is administered, which office at the date of execution of this Indenture is located at (i) solely for the purposes of the transfer, surrender or exchange of Notes, 60 Livingston Avenue, EP-MN-WS2N, St. Paul, Minnesota 55107, Attn: Bondholder Services/BMW Vehicle Owner Trust 2013-A, and (ii) for all other purposes, 190 South LaSalle

 

  

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Street, 7th Floor, Chicago, Illinois 60603, Attn: BMW Vehicle Owner Trust 2013-A, or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders and the Issuer, or the principal corporate trust office of any successor Indenture Trustee at the address designated by such successor Indenture Trustee by notice to the Noteholders and the Issuer.

 

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

 

“Definitive Notes” has the meaning specified in Section 2.10.

 

“Deposit Date” means the Business Day prior to each Payment Date.

 

“Depositor” means BMW FS Securities LLC and its successors and assigns.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

 

“Event of Default” has the meaning specified in Section 5.01.

 

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

 

“Executive Officer” means, with respect to any corporation, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, any Executive Vice President, any Senior Vice President, any Vice President, the Secretary, the Controller or the Treasurer of such corporation; and with respect to any partnership, any general partner thereof.

 

“FDIC” means the Federal Deposit Insurance Corporation.

 

“FDIC Principal Amount” means, with respect to the applicable distribution date pursuant to Section 12.05, an amount equal to the sum of the Priority Principal Distribution Amount and the Regular Principal Distribution Amount, if any; provided, that, if such distribution date occurs on a day that is not also a Payment Date, then for purposes of calculating the Priority Distribution Amount and the Regular Principal Distribution Amount (and the related Target Overcollateralization Amount, Adjusted Pool Balance, Pool Balance and Yield Supplement Overcollateralization Amount referenced in those defined terms), the “Payment Date” as of which such amounts are calculated will be the applicable distribution date under Section 12.05.

 

“FDIC Rule” means the FDIC’s rule regarding the treatment by the FDIC, as receiver or conservator of an insured depository institution, of financial assets transferred by the institution in connection with a securitization or participation (12 C.F.R. § 360.6).

 

“FDIC Rule Parties” means, collectively, BMW Financial Services NA, LLC, BMW FS Securities LLC, BMW Vehicle Owner Trust 2013-A and BMW Bank of North America.

 

  

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“Final Scheduled Payment Date” means the Class A-1 Final Scheduled Payment Date, the Class A-2 Final Scheduled Payment Date, the Class A-3 Final Scheduled Payment Date or the Class A-4 Final Scheduled Payment Date, as applicable, as those terms are defined in the Sale and Servicing Agreement.

 

“Force Majeure” means any delay or failure in performance caused by acts beyond the Issuer’s reasonable control, including acts of God, war, vandalism, sabotage, accidents, fires, floods, strikes, labor disputes, mechanical breakdown, shortages or delays in obtaining suitable parts or equipment, material, labor, or transportation, acts of subcontractors, interruption of utility services, acts of any unit of government or governmental agency, or any similar or dissimilar cause.

 

“Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and grant a lien upon and a security interest in and a right of set-off against, deposit, set over and confirm pursuant to this Indenture.  A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

 

“Holder” or “Noteholder” means a Person in whose name a Note is registered on the Note Register.

 

“Indenture Trustee” means U.S. Bank National Association, a national banking association, not in its individual capacity, but as Indenture Trustee under this Indenture, or any successor Indenture Trustee under this Indenture.

 

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

 

“Independent Certificate” means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01, made by an Independent appraiser or other expert appointed by an Issuer Order, and such opinion or certificate shall state that the signer has read the definition of “Independent” in this Indenture and that the signer is Independent within the meaning thereof.

 

  

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“Interest Rate” means the Class A-1 Rate, the Class A-2 Rate, the Class A-3 Rate or the Class A-4 Rate, as the context may require.

 

“Issuer” means BMW Vehicle Owner Trust 2013-A until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the Notes.

 

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

 

“Note” means a Class A-1 Note, Class A-2 Note, Class A-3 Note or Class A-4 Note, as the context may require.

 

“Note Depository Agreement” means the letter of representations relating to the Notes, dated November 6, 2013, executed by the Issuer and delivered to The Depository Trust Company, as the initial Clearing Agency, substantially in the form of Exhibit B.

 

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

 

“Note Register” and “Note Registrar” have the respective meanings specified in Section 2.04.

 

“Officer’s Certificate” means a certificate signed by any Authorized Officer of the Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01, and delivered to the Indenture Trustee.  Unless otherwise specified, any reference in this Indenture to an Officer’s Certificate shall be to an Officer’s Certificate of any Authorized Officer of the Issuer.

 

“Opinion of Counsel” means one or more written opinions of counsel who may, except as otherwise expressly provided in this Indenture, be an employee of or counsel to the Issuer or the Administrator and who shall be satisfactory to the Indenture Trustee, and which opinion or opinions shall be addressed to the Indenture Trustee, shall comply with any applicable requirements of Section 11.01 and shall be in form and substance satisfactory to the Indenture Trustee.

 

“Outstanding” means, as of any date of determination, all Notes theretofore authenticated and delivered under this Indenture except:

 

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

 

(ii)      Notes or portions thereof the payment for which money  in the necessary amount has been theretofore deposited with the  Indenture Trustee or any Paying Agent in trust for the Holders of  such Notes (provided, however,

 

  

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that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this  Indenture or provision for such notice has been made, satisfactory to  the Indenture Trustee); and

 

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

 

provided, however, that in determining whether the Holders of the requisite Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Notes owned by the Issuer, the Depositor, the Servicer, the Sellers or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee actually knows to be so owned shall be so disregarded.  Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer, the Depositor, the Servicer, the Sellers or any Affiliate of any of the foregoing Persons.

 

“Outstanding Amount” means, as of any date of determination and as to any Notes, the aggregate principal amount of such Notes Outstanding as of such date of determination.

 

“Owner Trustee” means Wilmington Trust, National Association, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, or any successor Owner Trustee under the Trust Agreement.

 

“Paying Agent” means the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 and is authorized by the Issuer to make payments to and distributions from the Collection Account, the Note Distribution Account and the Reserve Account, including payments of principal of or interest on the Notes on behalf of the Issuer.

 

“Payment Date” means the 25th day of each month, or if any such date is not a Business Day, the next succeeding Business Day, commencing November 25, 2013.

 

“Person” means any individual, corporation, estate, partnership, limited liability company, joint venture, association, joint stock company, trust or statutory trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

 

“Predecessor Note” means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.06 in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

 

  

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

 

“Receivables” means any contract listed on Schedule A (which Schedule may be in the form of microfiche).

 

“Receivables Purchase Agreement” means each of (i) the Receivables Purchase Agreement, dated as of October 1, 2013, between BMW FS, as Seller, and the Depositor and (ii) the Receivables Purchase Agreement, dated as of October 1, 2013, between BMW Bank, as Seller, and the Depositor.

 

“Record Date” means, as to any Payment Date or the Redemption Date (i) if the Notes are issued in book-entry form, the close of business on the Business Day immediately preceding such Payment Date or the Redemption Date and (ii) if the Notes are issued in definitive form, the last Business Day of the month preceding such Payment Date or the Redemption Date.

 

“Redemption Date” means, as the context requires, in the case of a redemption of the Notes pursuant to Section 10.01, the Payment Date specified by the Servicer or the Issuer pursuant to Section 10.01.

 

“Redemption Price” means in the case of a redemption of the Notes pursuant to Section 10.01, an amount equal to the unpaid principal amount of the Notes redeemed plus accrued and unpaid interest thereon at the Interest Rate for each Note being so redeemed on such Redemption Date.

 

“Registered Holder” means the Person in whose name a Note is registered on the Note Register on the applicable Record Date.

 

      “Regulation AB” means Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

“Responsible Officer” means, with respect to the Indenture Trustee or Owner Trustee, as applicable, any officer within the Corporate Trust Office or successor group of the Indenture Trustee or the Owner Trustee, respectively, including any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other officer of the Indenture Trustee or the Owner Trustee, respectively, customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject, in each case having direct responsibility for the administration of the Basic Documents.

 

  

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“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of October 1, 2013, among the Issuer, the Depositor, BMW FS, as Sponsor, Servicer, Custodian and Administrator, and the Indenture Trustee.

 

“Schedule of Receivables” means the list of Receivables set forth in Schedule A (which Schedule may be in the form of microfiche).

 

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

 

“Seller” means each of (i) BMW FS and (ii) BMW Bank, each in its capacity as Seller under the applicable Receivables Purchase Agreement, and their respective successors in interest.

 

“Servicer” means BMW FS, in its capacity as servicer under the Sale and Servicing Agreement, and any Successor Servicer thereunder.

 

“Servicing Criteria” means the “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time.

 

“Sponsor” means BMW FS, in its capacity as sponsor under the Sale and Servicing Agreement, and any successor Sponsor thereunder.

 

“State” means any one of the 50 states of the United States of America, or the District of Columbia.

 

      “Successor Servicer” has the meaning specified in Section 3.07(f).

“Trust Agreement” means the Amended and Restated Trust Agreement, dated as of November 6, 2013, between the Depositor and Wilmington Trust, National Association, as Owner Trustee.

 

“Trust Estate” means all money, instruments, rights and other property that are subject or intended to be subject to the lien and security interest of this Indenture for the benefit of the Noteholders (including, without limitation, all property and interests Granted to the Indenture Trustee), including all proceeds thereof.

 

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as amended and as in force on the date hereof, unless otherwise specifically provided.

 

“UCC” means, unless the context otherwise requires, the Uniform Commercial Code as in effect in the relevant jurisdiction, as amended from time to time.

 

(b)      Except as otherwise specified herein or as the context may otherwise require, capitalized terms used herein but not otherwise defined shall have the meanings ascribed thereto in the Sale and Servicing Agreement.

 

SECTION 1.02.      Other Definitional Provisions.

 

  

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

 

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

 

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

 

(d)      The definitions contained in this Indenture are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

 

(e)      Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

 

SECTION 1.03.      Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

 

“Commission” means the Securities and Exchange Commission.

 

“indenture securities” means the Notes.

 

“indenture security holder” means a Noteholder.

 

“indenture to be qualified” means this Indenture.

 

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

 

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

 

  

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

 

ARTICLE II.

 

THE NOTES

 

SECTION 2.01.      Form.  The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, in each case together with the Indenture Trustee’s certificate of authentication, shall be in substantially the form set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3 and Exhibit A-4, respectively, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistent herewith, be determined by the officers executing the Notes, as evidenced by their execution of the Notes.  Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of such Note.

 

The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the Authorized Officer executing such Notes, as evidenced by their execution of such Notes.

 

Each Note shall be dated the date of its authentication.  The terms of the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3 and Exhibit A-4 are part of the terms of this Indenture.

 

SECTION 2.02.      Execution, Authentication and Delivery.  The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers.  The signature of any such Authorized Officer on the Notes may be manual or facsimile.

 

Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes.

 

The Indenture Trustee shall upon Issuer Order authenticate and deliver Class A-1 Notes for original issue in an aggregate principal amount of $215,000,000, Class A-2 Notes for original issue in an aggregate principal amount of $221,000,000, Class A-3 Notes for original issue in an aggregate principal amount of $265,000,000 and Class A-4 Notes for original issue in an aggregate principal amount of $49,000,000.  The aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes outstanding at any time may not exceed such respective amounts except as provided in Section 2.06.

 

The Notes shall be issuable as registered Notes in minimum denominations of $1,000 and in integral multiples of $1,000 in excess thereof (except for one Note of each class which may be issued in a denomination other than an integral multiple of $1,000).

 

  

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

 

SECTION 2.03.      Temporary Notes.  Pending the preparation of Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes.

 

If temporary Notes are issued, the Issuer shall cause Definitive Notes to be prepared without unreasonable delay.  After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be maintained as provided in Section 3.02, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute, and the Indenture Trustee shall authenticate and deliver in exchange therefor, a like principal amount of Definitive Notes of authorized denominations.  Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes.

 

SECTION 2.04.      Registration; Registration of Transfer and Exchange.  The Issuer shall cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall provide for the registration of Notes and the registration of all transfers of Notes.  The Indenture Trustee initially shall be the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar.

 

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

 

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

 

  

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At the option of the Holder, Notes may be exchanged for other Notes of the same Class in any authorized denominations, of a like aggregate principal amount, upon surrender of the Notes to be exchanged at the office or agency of the Issuer maintained as provided in Section 3.02.  Whenever any Notes are so surrendered for exchange, if the requirements of Section 8-401(a) of the UCC are met, the Issuer shall execute, and the Indenture Trustee, without having to verify that the requirements of 8-401(a) have been met, shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes that the Noteholder making the exchange is entitled to receive.

 

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

 

Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act.

 

No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.03 or 9.05 not involving any transfer.

 

The preceding provisions of this Section notwithstanding, the Issuer shall not be required to make and the Note Registrar need not register transfers or exchanges of Notes selected for redemption or of any Note for a period of 15 days preceding the due date for any payment with respect to the Note.

 

No Note, or any interest therein, may be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

 

  

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The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the transfer of Notes.

 

SECTION 2.05.      [Reserved].

 

SECTION 2.06.      Mutilated, Destroyed, Lost or Stolen Notes.  If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Note Registrar or a Responsible Officer of the Indenture Trustee that such Note has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuer shall execute, and upon an Issuer Order the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of the same Class; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within 15 days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof.  If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.

 

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

 

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

 

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

 

SECTION 2.07.      Persons Deemed Owners.  Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name any Note is registered (as of the day

 

  

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of determination) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

 

SECTION 2.08.      Payment of Principal and Interest; Defaulted Interest.

 

(a)      The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes shall accrue interest at the Class A-1 Rate, the Class A-2 Rate, the Class A-3 Rate and the Class A-4 Rate, respectively, as set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3 and Exhibit A-4, respectively, and such interest shall be payable on each Payment Date as specified therein, subject to Section 3.01.  Any installment of interest or principal payable on a Note that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed first-class postage prepaid to such Person’s address as it appears on the Note Register on such Record Date, except that, unless Definitive Notes have been issued pursuant to Section 2.12, with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payment shall be made by wire transfer in immediately available funds to the account designated by such nominee; provided, however, that the final installment of principal payable with respect to such Note on a Payment Date or on the related Final Scheduled Payment Date (including the Redemption Price for any Note called for redemption pursuant to Section 10.01) shall be payable as provided in paragraph (b) below.  The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.03.

 

(b)      The principal of each Note shall be payable in installments on each Payment Date as provided in Section 3.01 and on any applicable distribution date pursuant to Section 12.05 and the forms of the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3 and Exhibit A-4.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes may be declared immediately due and payable, if not previously paid, in the manner provided in Section 5.02 on any date on which an Event of Default shall have occurred and be continuing by the Indenture Trustee or the Indenture Trustee acting at the direction of the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes.  All principal payments on each Class of Notes shall be made pro rata to the Noteholders of the related Class entitled thereto.  Upon written notice thereof, the Indenture Trustee shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects the final installment of principal of and interest on such Note to be paid; provided, that such notice shall be not less than 15 days and not more than 30 days prior to such date.  Such notice shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment.  Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.02.

 

  

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(c)      If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) at the applicable Interest Rate in any lawful manner on the next Payment Date.

 

SECTION 2.09.      Cancellation.  All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture Trustee.  The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder that the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.  No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section, except as expressly permitted by this Indenture.  All cancelled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it; provided, that such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee.

 

SECTION 2.10.      Book-Entry Notes.  The Notes, upon original issuance, will be issued in the form of typewritten Notes representing the Book-Entry Notes, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer.  The Book-Entry Notes shall be registered initially on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner thereof will receive a Definitive Note representing such Note Owner’s interest in such Note, except as provided in Section 2.12.  Unless and until definitive, fully registered Notes (the “Definitive Notes”) have been issued to such Note Owners pursuant to Section 2.12:

 

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

 

(ii)      the Note Registrar and the Indenture Trustee shall be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of principal of and interest on the Notes and the giving of instructions or directions hereunder) as the sole Holder of the Notes, and shall have no obligation to the Note Owners;

 

(iii)      to the extent that the provisions of this Section conflict with any other provisions of this Indenture, the provisions of this Section shall control;

 

(iv)      the rights of Note Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the Clearing Agency or the Clearing Agency Participants pursuant to the Note Depository Agreement.  Unless and until Definitive Notes are issued pursuant to Section 2.12, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of principal of and interest on the Notes to such Clearing Agency Participants; and

 

  

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

 

SECTION 2.11.      Notices to Clearing Agency.  Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to such Note Owners pursuant to Section 2.12, the Indenture Trustee shall give all such notices and communications specified herein to be given to Holders of the Notes to the Clearing Agency, and shall have no obligation to such Note Owners.

 

SECTION 2.12.      Definitive Notes.  If (i) the Administrator advises the Indenture Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Book-Entry Notes and the Administrator is unable to locate a qualified successor, (ii) the Depositor or the Administrator, at its option, with the consent of the Clearing Agency participants, advises the Indenture Trustee in writing that it elects to terminate the book-entry system, or (iii) after the occurrence of an Event of Default or a Servicer Termination Event, Note Owners of the Book-Entry Notes representing beneficial interests aggregating at least a majority of the Outstanding Amount of such Notes advise the Indenture Trustee through the Clearing Agency in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of such Note Owners, then the Clearing Agency shall notify all Note Owners, the Administrator and the Indenture Trustee of the occurrence of any such event and of the availability of Definitive Notes to Note Owners requesting the same.  Upon surrender to the Indenture Trustee of the typewritten Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuer shall execute and the Indenture Trustee upon an Issuer Order shall authenticate the Definitive Notes in accordance with the written instructions of the Clearing Agency.  None of the Issuer, the Note Registrar, the Administrator or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes as Noteholders.

 

      The Indenture Trustee shall not be liable if a qualified successor Cleary Agency cannot be located.  The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of such methods (with or without steel engraved borders), all as determined by the officers executing the Notes, as evidenced by their execution of the Notes.

 

SECTION 2.13.      Authenticating Agents.  Upon the request of the Issuer, the Indenture Trustee shall, and if the Indenture Trustee so chooses the Indenture Trustee may, appoint one or more authenticating agents (“Authenticating Agents”) with power to act on its behalf and subject to its direction in the authentication of Notes in connection with issuance, transfers and exchanges under Sections 2.02, 2.04, 2.06 and 9.05, as fully to all intents and purposes as though each such Authenticating Agent had been expressly authorized by such Sections to authenticate such Notes.  For all purposes of this Indenture, the authentication of

 

  

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Notes by an Authenticating Agent pursuant to this Section shall be deemed to be the authentication of Notes by the Indenture Trustee.

 

      Any corporation into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, without the execution or filing of any further act on the part of the parties hereto or such Authenticating Agent or such successor corporation.

 

      Any Authenticating Agent may at any time resign by giving written notice of resignation to the Indenture Trustee and the Issuer.  The Indenture Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Issuer.  Upon receiving such notice of resignation or upon such termination, the Indenture Trustee shall promptly appoint a successor Authenticating Agent and shall give written notice of such appointment to the Issuer.

 

      The Issuer agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services and reimbursement for its reasonable expenses relating thereto.  The provisions of Sections 2.09 and 6.04 shall be applicable to any Authenticating Agent.

 

SECTION 2.14.      Tax Treatment.  The Issuer has entered into this Indenture, and the Notes will be issued, with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will qualify as indebtedness secured by the Trust Estate.  The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner by its acceptance of a beneficial interest in the applicable Book-Entry Note), agree to treat the Notes for such purposes as indebtedness.

 

ARTICLE III.

 

COVENANTS

 

SECTION 3.01.      Payment of Principal and Interest.  The Issuer will duly and punctually pay the principal of and interest, if any, on the Notes in accordance with the terms of the Notes and this Indenture.  Without limiting the foregoing, on each Payment Date and on any applicable distribution date pursuant to Section 12.05, the Issuer will cause to be distributed all amounts deposited pursuant to the Sale and Servicing Agreement or this Indenture, as applicable, into the Note Distribution Account in accordance with the priorities and amounts set forth herein and in the Sale and Servicing Agreement (i) for the benefit of the Class A-1 Notes, to the Class A-1 Noteholders, (ii) for the benefit of the Class A-2 Notes, to the Class A-2 Noteholders, (iii) for the benefit of the Class A-3 Notes, to the Class A-3 Noteholders and (iv) for the benefit of the Class A-4 Notes, to the Class A-4 Noteholders.  Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.

 

  

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SECTION 3.02.      Maintenance of Office or Agency.  The Issuer will maintain at the applicable Corporate Trust Office, an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served.  The Issuer hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes.  The Issuer will give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency.  If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.

 

SECTION 3.03.      Money for Payments To Be Held in Trust.  All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Collection Account, the Note Distribution Account and the Reserve Account shall be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from the Collection Account, the Note Distribution Account or the Reserve Account for payments of Notes shall be paid to the Issuer except as provided in this Section.

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid upon Issuer Request to the Issuer; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense and direction of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.  The Indenture Trustee shall also adopt and employ, at the expense and direction of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).

 

SECTION 3.04.      Existence.  Except as otherwise permitted by the provisions of Section 3.10, the Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral and each other instrument or agreement included in the Trust Estate.

 

SECTION 3.05.      Protection of Trust Estate.  The Issuer will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, all as prepared by the Administrator and delivered to the Issuer, and shall take such other action necessary or advisable to:

 

  

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(i)      Grant more effectively all or any portion of the Trust Estate;

 

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

 

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

 

(iv)      enforce any of the Collateral;

 

(v)      preserve and defend title to the Trust Estate and the rights of the Indenture Trustee and the Noteholders in such Trust Estate against the claims of all Persons and parties; or

 

(vi)      pay all taxes or assessments levied or assessed upon the Trust Estate when due.

 

The Issuer hereby designates the Indenture Trustee, as its agent and attorney-in-fact, to execute upon an Issuer Order any financing statement, continuation statement or other instrument required to be executed pursuant to this Section 3.05.

 

SECTION 3.06.      Opinions as to Trust Estate.

 

(a)      On the Closing Date, the Issuer shall cause to be furnished to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto, and any other requisite documents, and with respect to the execution and filing of any financing statements and continuation statements, as are necessary to perfect and make effective the lien and security interest of this Indenture and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and security interest effective.

 

(b)      On or before April 30, in each calendar year, beginning in 2014, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest.  Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture until April 30 of the following calendar year.

 

SECTION 3.07.      Performance of Obligations; Servicing of Receivables.

 

  

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

 

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

 

(c)      The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Estate, including but not limited to filing or causing to be filed all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the Sale and Servicing Agreement in accordance with and within the time periods provided for herein and therein.  Except as otherwise expressly provided therein, the Issuer shall not waive, amend, modify, supplement or terminate any Basic Document or any provision thereof without the written consent of either the Indenture Trustee or the Holders of at least a majority of the Outstanding Amount of the Notes.

 

(d)      If the Issuer shall have knowledge of the occurrence of a Servicer Termination Event under the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall specify in such notice the action, if any, the Issuer is taking with respect to such default.

 

(e)      [Reserved.]

 

(f)      Upon any termination of the Servicer’s rights and powers pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee thereof.  As soon as a successor servicer (a “Successor Servicer”) is appointed, the Issuer shall notify the Indenture Trustee in writing of such appointment, specifying in such notice the name and address of such Successor Servicer.

 

(g)      Without limitation of the absolute nature of the assignment granted to the Indenture Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees (i) except to the extent otherwise provided in any Basic Document, that it will not, without the prior written consent of the Indenture Trustee acting at the direction of the Holders of at least a majority in Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of any Collateral (except to the extent otherwise provided in the Sale and Servicing Agreement) or the Basic Documents, or waive timely performance or observance by the Servicer under the Sale and Servicing Agreement or a Seller under the related Receivables Purchase Agreement; and (ii) that any such amendment shall not (A) increase or

 

  

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reduce in any manner the amount of, or accelerate or delay the timing of, distributions that are required to be made for the benefit of the Noteholders or (B) reduce the aforesaid percentage of the Notes that is required to consent to any such amendment, without the consent of the Holders of all Outstanding Notes; provided, however, that the Indenture Trustee shall be entitled to an Opinion of Counsel that any such amendment, modification, supplement or waiver is authorized or permitted hereby and all conditions precedent thereto have been satisfied, and that the Indenture Trustee shall not be obligated to take any such action that affects the Indenture Trustee’s own rights, duties liabilities or immunities.  If the Indenture Trustee acting at the direction of such Holders agrees to any such amendment, modification, supplement or waiver, the Indenture Trustee agrees, promptly following a request by the Issuer to do so, to execute and deliver, at the Issuer’s own expense, such agreements, instruments, consents and other documents prepared by the Issuer as the Issuer may deem necessary or appropriate in the circumstances.

 

SECTION 3.08.      Negative Covenants.  So long as any Notes are Outstanding, the Issuer shall not:

 

(i)      except as expressly permitted by this Indenture, the Receivables Purchase Agreements or the Sale and Servicing Agreement, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Trust Estate;

 

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

 

(iii)      (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof (other than tax liens, mechanics’ liens and other liens that arise by operation of law, in each case on any of the Financed Vehicles and arising solely as a result of an action or omission of the related Obligor and the lien of this Indenture) or (C) permit the lien of this Indenture not  to constitute a valid first priority (other than with respect to any such tax, mechanics’ or other lien) security interest in the Trust Estate;

 

(iv)      assume or incur any indebtedness other than indebtedness incurred in accordance with the Basic Documents; or

 

  

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(v)      except as otherwise permitted by the Basic Documents, dissolve or liquidate in whole or in part.

 

SECTION 3.09.      Annual Statement and Assessment as to Compliance.

 

(a)      The Issuer will deliver to the Indenture Trustee, within 90 days after the end of each fiscal year of the Issuer (commencing with fiscal year 2013), an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:

 

(i)      a review of the activities of the Issuer during such year and of its performance under this Indenture has been made under such Authorized Officer’s supervision; and

 

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

 

(b)      The Issuer shall supply to the Indenture Trustee such summaries of any information, documents and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of Section 3.09(a) as may be required pursuant to rules and regulations prescribed from time to time by the Commission.

 

(c)      So long as the Issuer is required to file reports with the Commission pursuant to the Exchange Act, on or before March 15th of each calendar year, commencing in 2014, the Indenture Trustee shall:

 

(i)      deliver to the Issuer and the Administrator a report (in form and substance reasonably satisfactory to the Administrator, acting on behalf of the Issuer) regarding the Indenture Trustee’s assessment of compliance with the Servicing Criteria during the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.  Such report shall be signed by an authorized officer of the Indenture Trustee, and shall address each of the Servicing Criteria specified on Exhibit C hereto; and

 

(ii)      deliver to the Issuer and the Administrator a report of a registered public accounting firm that attests to, and reports on, the assessment of compliance made by the Indenture Trustee and delivered pursuant to the preceding paragraph.  Such attestation shall be in accordance with Rules 13a-18 and 15d-18 of the Securities Act and the Exchange Act and Item 1122 of Regulation AB.

 

SECTION 3.10.      Issuer May Consolidate, etc., Only on Certain Terms.

 

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

 

  

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

 

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

 

(iii)      each Rating Agency shall not have notified the Indenture Trustee, the Administrator or the Owner Trustee, within 10 days after receiving notice of a consolidation or merger, that such consolidation or merger will result in a reduction or withdrawal of its then current rating on any Class of Notes;

 

(iv)      the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse federal income tax consequences to the Issuer, any Noteholder or any Certificateholder;

 

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

 

(vi)      the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act) in all material respects.

 

(b)      The Issuer shall not convey or transfer any of its properties or assets, including those included in the Trust Estate, to any Person other than pursuant to the terms of the Basic Documents, unless:

 

(i)      the Person that acquires by conveyance or transfer the properties and assets of the Issuer the conveyance or transfer of which is hereby restricted (A) shall be a United States citizen or a Person organized and existing under the laws of the United States of America or any State, (B) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly agrees by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Holders of the Notes, (D) unless

 

  

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otherwise provided in such supplemental indenture, expressly agrees to indemnify, defend and hold harmless the Issuer and the Indenture Trustee against and from any loss, liability or expense arising under or related to this Indenture and the Notes and (E) expressly agrees by means of such supplemental indenture that such Person (or, if a group of Persons, one specified Person) shall make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Notes;

 

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

 

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

 

(iv)      the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse federal income tax consequences to the Issuer, any Noteholder or any Certificateholder;

 

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

 

(vi)      the Issuer shall have delivered to the Indenture  Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act) in all material respects.

 

SECTION 3.11.      Successor or Transferee.

 

(a)      Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

 

(b)      Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.10(b), BMW Vehicle Owner Trust 2013-A will be released from every covenant and agreement of this Indenture to be observed by or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of documents and Opinions of Counsel set forth in Section 3.10 and a written notice to the Indenture Trustee stating that BMW Vehicle Owner Trust 2013-A is to be so released.

 

SECTION 3.12.      No Other Business.  The Issuer shall not engage in any business other than financing, purchasing, owning, selling and managing the Receivables in the manner contemplated by this Indenture and the Basic Documents and any activities incidental thereto.

 

  

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SECTION 3.13.      No Borrowing.  The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Notes.

 

SECTION 3.14.      Servicer’s Obligations.  The Issuer shall cause the Servicer to comply with the Sale and Servicing Agreement, including Sections 4.09, 4.10 and 4.11 and Article VII thereof.

 

SECTION 3.15.      Guarantees, Loans, Advances and Other Liabilities.  Except as contemplated by the Trust Agreement, the Sale and Servicing Agreement or this Indenture, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any Person.

 

SECTION 3.16.      Capital Expenditures.  The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personality).

 

SECTION 3.17.      Removal of Administrator.  So long as any Notes are Outstanding, the Issuer shall not remove the Administrator unless the Rating Agency Condition shall have been satisfied with respect to each Rating Agency in connection with such removal and the Indenture Trustee receives written notice of the foregoing and consents thereto.

 

SECTION 3.18.      Restricted Payments.  Except with respect to the proceeds from issuance of the Notes, the Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, distributions as contemplated by, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement, this Indenture or the Trust Agreement.  The Issuer will not, directly or indirectly, make payments to or distributions from the Note Distribution Account, the Collection Account or the Reserve Account except in accordance with this Indenture and the other Basic Documents.

 

SECTION 3.19.      Notice of Events of Default.  The Issuer shall give the Indenture Trustee and the Rating Agencies prompt written notice of each Event of Default hereunder, and of each default on the part of (i) the Servicer of its obligations under the Sale and Servicing Agreement and (ii) the Sellers under the Receivables Purchase Agreements.

 

SECTION 3.20.      Further Instruments and Acts.  Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such

 

  

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further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

SECTION 3.21.      Perfection Representations.

 

(a)      The representations, warranties and covenants set forth in Schedule B hereto shall be a part of this Indenture for all purposes.

 

 

(b)      Notwithstanding any other provision of this Indenture or any other Basic Document, the perfection representations contained in Schedule B hereto shall be continuing, and remain in full force and effect until such time as all obligations under this Indenture have been finally and fully paid and performed.

(c)      The parties to this Indenture: (i) shall not waive any of the perfection representations contained in Schedule B hereto; (ii) shall provide the Administrator with prompt written notice of any breach of the perfection representations contained in Schedule B hereto; and (iii) shall not waive a breach of any of the perfection representations contained in Schedule B hereto.

ARTICLE IV.

 

SATISFACTION AND DISCHARGE

 

SECTION 4.01.      Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further effect with respect to the Notes except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16 and 3.18, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when

 

(A)       either:

 

(1)       all Notes theretofore authenticated and delivered (other than (i) Notes that have been mutilated, destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.06 and (ii) Notes for the payment of which money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter paid to the Persons entitled thereto or discharged from such trust, as provided in Section 3.03) have been delivered to the Indenture Trustee for cancellation; or

 

(2)       all Notes not theretofore delivered to the Indenture Trustee for cancellation:

 

  

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a.  have become due and payable,

 

b.  will become due and payable at the Class A-4 Final Scheduled Payment Date within one year, or

 

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

 

and the Issuer, in the case of a, b, or c above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States of America (that will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes (including interest and any fees due and payable to the Owner Trustee or the Indenture Trustee) not theretofore delivered to the Indenture Trustee for cancellation when due to the applicable Final Scheduled Payment Date or Redemption Date (if Notes shall have been called for redemption pursuant to Section 10.01), as the case may be;

 

	
  

	
(B)       the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer including, but not limited to, fees and expenses due to the Indenture Trustee; and

 

	
  

	
(C)       the Issuer has delivered to the Indenture Trustee an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA or the Indenture Trustee) an Independent Certificate from a firm of certified public accountants, each meeting the applicable requirements of Section 11.01(a) and, subject to Section 11.02, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this  Indenture have been complied with (and, in the case of an Officer’s Certificate, stating that the Rating Agency Condition has been satisfied with respect to each Rating Agency).

 

SECTION 4.02.      Application of Trust Money.  All moneys deposited with the Indenture Trustee pursuant to Section 4.01 shall be held in trust and applied by it in accordance with the provisions of the Notes and this Indenture to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Holders of the particular Notes for the payment or redemption of which such moneys have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest.

 

SECTION 4.03.      Repayment of Moneys Held by Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon written demand of the Issuer, be paid to the

 

  

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Indenture Trustee to be held and applied according to Section 3.03; and thereupon, such Paying Agent shall be released from all further liability with respect to such moneys.

 

SECTION 4.04.      Release of Collateral.  Subject to Section 11.01 and the terms of the Basic Documents, the Indenture Trustee shall release property from the lien of this Indenture only upon receipt by it of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and Independent Certificates in accordance with TIA § 314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates.

 

ARTICLE V.

 

REMEDIES

 

SECTION 5.01.      Events of Default.  “Event of Default”, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

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

 

(ii)      default in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable;

 

(iii)      default in the observance or performance of any representation, warranty, covenant or agreement of the Issuer made in this Indenture (other than (x) a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section specifically dealt with or (y) a covenant or agreement set forth in Section 12.02) or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25% of the Outstanding Amount of the Notes, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of Default hereunder;

 

(iv)      the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the

 

  

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appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust  Estate, or the ordering of the winding-up or liquidation of the  Issuer’s affairs, and such decree or order shall remain unstayed and  in effect for a period of 60 consecutive days; or

 

(v)      the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer  to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment of or taking of possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure  by the Issuer generally to pay its debts as such debts become due, or  the taking of any action by the Issuer in furtherance of any of the  foregoing.

 

Notwithstanding the foregoing, a delay in or failure of performance referred to under clause (i) for a period of 45 days, under clause (ii) for a period of 60 days or under clause (iii) for a period of 120 days, will not constitute an Event of Default if that failure or delay was caused by Force Majeure or other similar occurrence.

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

 

Subject to the provisions herein relating to the duties of the Indenture Trustee, if an Event of Default occurs and is continuing, the Indenture Trustee shall be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any Noteholder, if the Indenture Trustee reasonably believes that it will not be adequately indemnified against the costs, expenses and liabilities that might be incurred by it in complying with such request.  Subject to such provisions for indemnification and certain limitations contained herein, Noteholders holding not less than a majority of the Outstanding Amount shall have the right to direct the time, method and place of conducting any proceeding or any remedy available to the Indenture Trustee or exercising any trust power conferred on the Indenture Trustee, and Noteholders holding not less than a majority of the Outstanding Amount may, in certain cases, waive any default with respect thereto, except a default in the payment of principal or interest or a default in respect of a covenant or provision of the Indenture that cannot be modified without the waiver or consent of all of the holders of the Outstanding Notes.

 

SECTION 5.02.      Acceleration of Maturity; Rescission and Annulment.

 

(a)      If an Event of Default shall occur and be continuing, then and in every such case the Indenture Trustee may, or the Indenture Trustee as directed in writing by the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare all the Notes to be then immediately due and payable, by a notice in writing to the

 

  

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Issuer, and upon any such declaration the Outstanding Amount of such Notes, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable as provided in the Notes.  Notwithstanding anything to the contrary in this paragraph (a), if an Event of Default specified in clauses (iv) or (v) of Section 5.01 shall have occurred and be continuing the Notes shall become immediately due and payable at par, together with accrued interest thereon.

 

(b)      [Reserved.]

 

(c)      At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter provided in this Article V, the Holders of Notes representing at least a majority of the Outstanding Amount of the Notes, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

 

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

 

A.  all payments of principal of and interest on the Notes and all other amounts that would then be due hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and

 

B.  all sums paid by the Indenture Trustee hereunder and the reasonable compensation, expenses and disbursements of the Indenture Trustee and its agents and counsel and the reasonable compensation, expenses and disbursements of the Owner Trustee and its agents and counsel; and

 

(ii)      all Events of Default, other than the nonpayment of  the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.

 

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

 

SECTION 5.03.      Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

 

(a)      The Issuer covenants that if (i) a default is made in the payment of any interest on any Note when the same becomes due and payable, and such default continues for a period of five days, or (ii) a default is made in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable, the Issuer will, upon demand of the Indenture Trustee, pay to it, for the benefit of the Holders of the Notes, the entire amount then due and payable on such Notes in respect of principal and interest, with interest on the overdue principal and, to the extent payment at such rate of interest shall be legally enforceable, on overdue installments of interest at the related Interest Rate and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection,

 

  

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including the reasonable compensation, expenses and disbursements of the Indenture Trustee and its agents and counsel.

 

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

 

(c)      If an Event of Default occurs, the Indenture Trustee may, or shall at the direction of the Holders of at least a majority of the Outstanding Amount of the Notes, proceed to protect and enforce its rights and the rights of the Noteholders, by such appropriate Proceedings as the Indenture Trustee or the Indenture Trustee at the direction of the Holders of at least a majority of the Outstanding Amount of the Notes shall reasonably deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

 

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

 

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

 

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

 

  

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

 

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

 

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Noteholders to make payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith, and any other amounts due the Indenture Trustee under Section 6.07.

 

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

 

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

 

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

 

SECTION 5.04.      Remedies; Priorities.

 

(a)      If an Event of Default shall have occurred and be continuing, the Indenture Trustee may do one or more of the following (subject to Section 5.05):

 

(i)      institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any

 

  

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judgment obtained and collect from the Issuer and any other obligor on such Notes moneys adjudged due;

 

(ii)      institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;

 

(iii)      exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Notes; and

 

(iv)      after an acceleration of the maturity of the Notes pursuant to Section 5.02, sell the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law;

 

provided that the Indenture Trustee may not sell or otherwise liquidate the Trust Estate following an Event of Default pursuant to clause (iv) above unless:

 

	
  

	
(A)       the Event of Default is of the type described in Section 5.01(i) or (ii); or

 

	
  

	
(B)       with respect to an Event of Default described in Section 5.01(iii):

 

(i)      the Noteholders of all Outstanding Notes consent thereto; or

 

(ii)      the proceeds of such sale or liquidation are sufficient to pay in full the principal of and accrued interest on the Outstanding Notes at the date of sale; or

 

	
  

	
(C)       with respect to any Event of Default described in Section 5.01(iv) and (v):

 

(i)      the Noteholders of all Outstanding Notes consent thereto; or

 

(ii)      the proceeds of such sale or liquidation are sufficient to pay in full the principal of and the accrued interest on the Outstanding Notes; or

 

(iii)      the Indenture Trustee:

 

(x)  determines (but shall have no obligation to make such determination) that the Trust Estate will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared due  and payable; and

(y)  the Indenture Trustee obtains the consent of Noteholders of Notes evidencing not less than 66 2/3% of the Outstanding Amount of the Notes.

  

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In determining such sufficiency or insufficiency with respect to clause (B)(ii) and (C)(ii) or (C)(iii)(x), Indenture Trustee may, but need not, obtain at the Issuer’s expense, and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

 

(b)      (i) Notwithstanding the provisions of Section 8.02, following the occurrence and during the continuation of an Event of Default specified in Section 5.01 that has resulted in an acceleration of the Notes, if Indenture Trustee collects any money or property, it shall pay out such money or property (and other amounts including amounts held on deposit in the Reserve Account) held as Collateral for the benefit of the Noteholders, in the following order:

 

FIRST: to the Servicer for due and unpaid Servicing Fees;

 

SECOND: to the Noteholders for amounts due and unpaid on the  Notes in respect of interest, ratably, without preference or priority of any kind, according to  the amounts due and payable on the Notes in respect of interest;

 

THIRD: to Holders of the Class A-1 Notes for amounts due  and unpaid on the Class A-1 Notes in respect of principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class A-1 Notes in respect of principal, until the Outstanding Amount  of the Class A-1 Notes is reduced to zero;

 

FOURTH: to Holders of the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes for amounts due and unpaid on the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes in respect of principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes in respect of principal, until the Outstanding Amount of the  Class A-2 Notes, Class A-3 Notes and Class A-4 Notes is reduced to zero;

 

FIFTH: to the Indenture Trustee, any amounts due under Section 6.07; and to the Owner Trustee, any amounts due under Article VIII of the Trust Agreement; and

 

SIXTH: to the Certificate Distribution Account, for distribution to the Certificateholders.

 

The Indenture Trustee may fix a Record Date and Payment Date for any payment to Noteholders pursuant to this Section.  At least 15 days before such Record Date, the Issuer shall mail to each Noteholder and the Indenture Trustee a notice that states the Record Date, the Payment Date and the amount to be paid.

 

(ii)      Notwithstanding the provisions of Sections 8.02 and 5.04(b)(i), following the occurrence and during the continuation of an Event of Default specified in Section 5.01 that has resulted in an acceleration of the Notes, if Indenture Trustee collects any money or property pursuant to this Article V upon sale of the Trust Estate, it shall pay out such money or property (and other

 

  

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amounts including amounts held on deposit in the Reserve Account) held as Collateral for the benefit of the Noteholders, net of liquidation costs associated with the sale of the Trust Estate, in the following order:

 

FIRST: pro rata, to the Indenture Trustee, any amounts due to it under Section 6.07, and to the Owner Trustee, any amounts due to it funder Article VIII of the Trust Agreement;

 

SECOND: to the Servicer for due and unpaid Servicing Fees and unreimbursed Advances;

 

THIRD: to the Noteholders for amounts due and unpaid on the Notes in respect of interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes in respect of interest;

 

FOURTH: to Holders of the Class A-1 Notes for amounts due  and unpaid on the Class A-1 Notes in respect of principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class A-1 Notes in respect of principal, until the Outstanding Amount  of the Class A-1 Notes is reduced to zero;

 

FIFTH: to Holders of the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes for amounts due and unpaid on the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes in respect of principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes in respect of principal, until the Outstanding Amount of the  Class A-2 Notes, Class A-3 Notes and Class A-4 Notes is reduced to zero; and

 

SIXTH: to the Certificate Distribution Account, for distribution to the Certificateholders.

 

The Indenture Trustee may fix a Record Date and Payment Date for any payment to Noteholders pursuant to this Section.  At least 15 days before such Record Date, the Issuer shall mail to each Noteholder and the Indenture Trustee a notice that states the Record Date, the Payment Date and the amount to be paid.

 

(iii)      Except as provided in Section 5.04(b)(i) and (ii), the Indenture Trustee shall make all payments and distributions of the Trust Estate in accordance with Section 8.02.

 

SECTION 5.05.      Optional Preservation of the Receivables.  If the Notes have been declared to be due and payable under Section 5.02 following an Event of Default, and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of the Trust Estate and continue to apply collections as provided herein.  It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to

 

  

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maintain possession of the Trust Estate.  In determining whether or not to maintain possession of the Trust Estate, the Indenture Trustee may, at the expense of the Issuer and paid in the priority set forth in Section 5.06(b) of the Sale and Servicing Agreement, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

 

SECTION 5.06.      Limitation of Suits.  No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

(i)      such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

 

(ii)      the Holders of not less than 25% of the Outstanding Amount of the Notes have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

 

(iii)      such Holder or Holders have offered to the Indenture Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities that may be incurred in complying with such request;

 

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

 

(v)      no direction inconsistent with such written request has been given to the Indenture Trustee during such 60 day period by the Holders of a majority of the Outstanding Amount of the Notes.

 

It is understood and intended that no one or more Holders of Notes shall have any right in any manner whatsoever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.

 

In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes pursuant to this Section, each representing less than a majority of the Outstanding Amount of the Notes, the Indenture Trustee shall act at the direction of the group representing the greater percentage of the Outstanding Amount of Notes and if there is no such group then in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

 

SECTION 5.07.      Unconditional Rights of Noteholders To Receive Principal and Interest.  Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such

 

  

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Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

 

SECTION 5.08.      Restoration of Rights and Remedies.  If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.

 

SECTION 5.09.      Rights and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

SECTION 5.10.      Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee, or any Holder of any Note to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein.  Every right and remedy given by this Article V or by operation of law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or the Noteholders, as the case may be.

 

SECTION 5.11.      Control by Noteholders.  Subject to the provisions of Sections 5.06, 6.02(f) and 6.02(g), Noteholders holding not less than a majority of the Outstanding Amount of the Notes shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided that:

 

(i)      such direction shall not be in conflict with any rule of law or with this Indenture;

 

(ii)      subject to the express terms of Section 5.04, any direction to the Indenture Trustee to sell or liquidate the Trust  Estate shall be by Holders of Notes representing not less than 100% of the Outstanding Amount of the Notes;

 

(iii)      if the conditions set forth in Section 5.05 have been satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant to such Section, then any written direction to the Indenture Trustee by Holders of Notes representing less than 100% of the Outstanding Amount of the Notes to sell or liquidate the Trust Estate shall be of no force and effect; and

 

  

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(iv)      the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction.

 

Notwithstanding the rights of Noteholders set forth in this Section, subject to Section 6.01, the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Noteholders not consenting to such action.

 

SECTION 5.12.      Waiver of Past Defaults.  Prior to the declaration of the acceleration of the maturity of the Notes as provided in Section 5.02, the Holders of Notes of not less than a majority of the Outstanding Amount of the Notes may waive any past Default or Event of Default and its consequences except a Default (a) in the deposit of collections or other required amounts, or any required payment from amounts held in any trust account in respect of amounts due on the Notes, (b) in payment of principal of, or interest or amounts due on any of the Notes or (c) in respect of a covenant or provision hereof that cannot be modified or amended without the consent of the Holder of each Note.  In the case of any such waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

 

Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

 

SECTION 5.13.      Undertaking for Costs.  All parties to this Indenture agree, and each Holder of a Note by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders, in each case holding in the aggregate more than 10% of the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).

 

SECTION 5.14.      Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or

 

  

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

 

SECTION 5.15.      Action on Notes.  The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture.  Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer.  Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.04(b) as provided therein, and otherwise in accordance with Section 8.02.

 

SECTION 5.16.      Performance and Enforcement of Certain Obligations.

 

(a)      Promptly following a request from the Indenture Trustee to do so and at the Administrator’s expense, the Issuer shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by a Seller or the Servicer, as applicable, of each of their obligations under or in connection with the Sale and Servicing Agreement and the Receivables Purchase Agreements, as applicable, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale and Servicing Agreement and the Receivables Purchase Agreements to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of any of the Sellers or the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by a Seller or the Servicer, as applicable, of each of their obligations under the Sale and Servicing Agreement and the Receivables Purchase Agreements; provided, however, nothing herein shall in any way impose on the Indenture Trustee the duty to monitor the performance of the Sellers or the Servicer of any of their liabilities, duties or obligations under any Basic Document.

 

(b)      If an Event of Default has occurred, the Indenture Trustee may, and at the direction (which direction shall be in writing) of the Holders of not less than a majority of the Outstanding Amount of the Notes shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Sellers and the Servicer under or in connection with the Sale and Servicing Agreement and the Receivables Purchase Agreements, including the right or power to take any action to compel or secure performance or observance by a Seller or the Servicer, as the case may be, of each of their obligations thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement and the Receivables Purchase Agreements, as the case may be, and any right of the Issuer to take such action shall be suspended.

 

ARTICLE VI.

 

THE INDENTURE TRUSTEE

 

SECTION 6.01.      Duties of Indenture Trustee.

 

  

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(a)      If an Event of Default has occurred and is continuing of which a Responsible Officer of the Indenture Trustee has actual knowledge, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

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

 

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

 

(ii)      in the absence of bad faith or negligence on its part, the Indenture Trustee may conclusively rely, as to the truth of  the statements and the correctness of the opinions expressed therein, upon the face value of the certificates, reports, resolutions, documents, orders, opinions or other instruments furnished to the Indenture Trustee and conforming to the requirements of this Indenture; provided, however, that the Indenture Trustee shall not be responsible for the accuracy or content of any such resolution, certificate, statement, opinion, report, document, order or other instrument; provided, further, however, the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.  If any such instrument is found not to conform in any material respect to the  requirements of this Indenture, the Indenture Trustee shall notify the Noteholders of such instrument in the event that the Indenture Trustee, after so requesting, does not receive a satisfactorily corrected instrument.

 

(c)      The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct or bad faith, except that:

 

(i)      this paragraph does not limit the effect of paragraph (b) of this Section;

 

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

 

(iii)      the Indenture Trustee shall not be liable with  respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to the terms of this Indenture or any other Basic Documents.

 

(d)      Notwithstanding anything to the contrary contained herein, in no event shall the Indenture Trustee be liable for special, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Indenture Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

  

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(e)      The Indenture Trustee shall not be liable for indebtedness evidenced by or arising under any of the Basic Documents, including principal of or interest on the Notes, or interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.

 

(f)      [Reserved.]

 

(g)      No provision of this Indenture shall require the Indenture Trustee to advance, expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

 

(h)      Every provision of this Indenture that in any way relates to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section and to the provisions of the TIA.

 

(i)      Except as otherwise specifically set forth in the Sale and Servicing Agreement, in no event shall the Indenture Trustee be required to perform, or be responsible for the manner of performance of, any of the obligations of the Servicer or any other party under the Sale and Servicing Agreement.

 

(j)      The Indenture Trustee shall have no duty (A) to see to any recording, filing, or depositing of this Indenture or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of any thereof, (B) to see to any insurance, or (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Estate.

 

The Indenture Trustee shall be charged with actual knowledge of any Default or an Event of Default only if a Responsible Officer actually knows of such Default or Event of Default or the Indenture Trustee receives written notice of such Default or Event of Default in accordance with the provisions of this Indenture from the Issuer, the Servicer or Noteholders owning Notes aggregating not less than 10% of the Outstanding Amount of the Notes.

 

SECTION 6.02.      Rights of Indenture Trustee.

 

(a)      The Indenture Trustee may conclusively rely and shall be protected in acting upon or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, note, direction, demand, election or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper person.  The Indenture Trustee need not investigate any fact or matter stated in the document.

 

(b)      Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel from the appropriate party.  The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s

 

  

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Certificate or Opinion of Counsel from the appropriate party.  The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture or in any Basic Document shall not be construed as a duty of the Indenture Trustee and the Indenture Trustee shall not be answerable for other than its negligence, bad faith or willful misconduct in the performance of such discretionary act.

 

(c)      The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, the Administrator, any co-trustee or separate trustee appointed in accordance with the provisions of Section 6.10 or any other such agent, attorney, custodian or nominee appointed with due care by it hereunder.

 

(d)      The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers; provided, that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

 

(e)      The Indenture Trustee may consult, at the Issuer’s expense and paid in the priority set forth in Section 5.06(b) of the Sale and Servicing Agreement, with counsel, and the written advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(f)      The Indenture Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture or to institute, conduct or defend any litigation under this Indenture or in relation to this Indenture or to honor the request or direction of any of the Noteholders pursuant to this Indenture unless such Noteholders shall have offered to the Indenture Trustee security or indemnity satisfactory to it against the reasonable costs, expenses, disbursements, advances and liabilities that might be incurred by it, its agents and its counsel in compliance with such request or direction; provided, however, that the Indenture Trustee shall, upon the occurrence of an Event of Default (that has not been cured), exercise the rights and powers vested in it by this Indenture with reasonable care and skill.

 

(g)      The Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the holders of Notes evidencing not less than 50% of the Outstanding Amount; provided, however, that if the payment within a reasonable time to the Indenture Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Indenture Trustee, not reasonably assured to the Indenture Trustee by the security afforded to it by the terms of this Indenture, the Indenture Trustee may require indemnity satisfactory to it against such cost, expense or liability as a condition to so proceeding.  The reasonable expense of each such investigation shall be paid by the Person making such request, or, if paid by the Indenture Trustee, shall be reimbursed by the Person making such request upon demand.

 

  

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(h)      Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request.

 

(i)      In the event that the Indenture Trustee is also acting as Paying Agent, Note Registrar, Certificate Registrar, authenticating agent (under the Trust Agreement), Paying Agent (under the Trust Agreement) or collateral agent, the rights and protections afforded to the Indenture Trustee pursuant to this Article VI shall be afforded to it in such capacities.

 

(j)      The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and the Indenture Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such act.

 

(k)      The Indenture Trustee shall not be required to give any bond or surety in respect of the powers granted hereunder.

 

SECTION 6.03.      Individual Rights of Indenture Trustee.  The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee.  Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights.  However, the Indenture Trustee must comply with Sections 6.11 and 6.13.

 

SECTION 6.04.      Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Trust Estate or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer in the Indenture, any Basic Document, any document issued in connection with the sale of the Notes or the Notes other than the Indenture Trustee’s certificate of authentication.

 

SECTION 6.05.      Notice of Defaults.  If a Default occurs and is continuing and if it is actually known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail to each Noteholder notice of the Default within 30 days after it occurs.  Except in the case of a Default in payment of principal of or interest on any Note (including payments pursuant to the mandatory redemption provisions of such Note), the Indenture Trustee may withhold the notice to Noteholders if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the best interests of Noteholders.

 

SECTION 6.06.      Reports by Indenture Trustee to Holders.  The Indenture Trustee, upon written request, shall deliver to each Noteholder such information as may be required to enable such holder to prepare its federal and state income tax returns.

 

SECTION 6.07.      Compensation and Indemnity.  The Indenture Trustee shall be entitled to $3,000 per annum as compensation for its services hereunder.  The Issuer shall cause the Administrator to reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services.  Such expenses shall include the reasonable out-of-pocket compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts.  The Issuer shall cause the Administrator to indemnify the Indenture Trustee for,

 

  

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and hold it harmless against, any and all loss, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the administration of this trust and the performance of its duties hereunder or under the Sale and Servicing Agreement or under any other Basic Document.  The Indenture Trustee shall notify the Issuer and the Administrator promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee to so notify the Issuer and the Administrator shall not relieve the Issuer or the Administrator of its obligations hereunder if no prejudice to the Issuer or the Administrator shall have resulted from such failure.  The Issuer shall, or shall cause the Administrator to, defend any such claim, and the Indenture Trustee may have separate counsel and the Issuer shall, or shall cause the Administrator to, pay the fees and expenses of such counsel.  Neither the Issuer nor the Administrator need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith, except that the Indenture Trustee shall not be liable (i) for any error of judgment made by it in good faith unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts, (ii) with respect to any action it takes or omits to take in good faith in accordance with a direction received by it from the Noteholders in accordance with the terms of this Indenture and (iii) for interest on any money received by it except as the Indenture Trustee and the Issuer may agree in writing.  The Indenture Trustee shall not be deemed to have knowledge of any event unless a Responsible Officer of the Indenture Trustee has actual knowledge thereof or has received written notice thereof.

 

The Administrator’s payment obligations  and  indemnities to the Indenture Trustee pursuant to this Section shall survive the discharge of this Indenture or the earlier resignation or removal of the Indenture Trustee.  When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.01(iv) or (v) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Bankruptcy Code or any other applicable federal or State bankruptcy, insolvency or similar law.

 

SECTION 6.08.      Replacement of Indenture Trustee.  No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section.  The Indenture Trustee may resign at any time by so notifying the Issuer, the Servicer and the Administrator (and the Administrator shall make such notice available to each Rating Agency).  The Holders of a majority of the Outstanding Amount of the Notes may remove the Indenture Trustee by notifying the Indenture Trustee if:

 

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

 

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

 

(iii)      a receiver or other public officer takes charge of the Indenture Trustee or its property; or

 

(iv)      the Indenture Trustee otherwise becomes incapable of acting.

 

  

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

 

A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee and to the Issuer.  Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture.  The retiring Indenture Trustee shall be paid all amounts owed to it upon its resignation or removal.

 

The successor Indenture Trustee shall mail a notice of its succession to Noteholders.  The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.  The retiring Indenture Trustee shall not be liable for the acts or omissions of any successor Indenture Trustee.

 

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

 

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

 

Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s and the Administrator’s obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee. Any costs associated with the resignation or removal of the Indenture Trustee shall be paid by the Administrator.

 

SECTION 6.09.      Successor Indenture Trustee by Merger.  If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be qualified and eligible under Section 6.11.  The Indenture Trustee shall provide the Administrator notice of any such transaction.

 

If at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Notes so authenticated; and if at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates authenticated by the successor Indenture Trustee shall have the full force

 

  

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and effect for purposes of this Indenture and the Notes as any certificate of authentication executed and delivered by the predecessor Indenture Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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protection to, the Indenture Trustee.  Every such instrument shall be filed with the Indenture Trustee.

 

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

 

SECTION 6.11.      Eligibility; Disqualification.  The Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a) and shall in addition have a combined capital and surplus of at least $50,000,000 (as set forth in its most recent published annual report of condition) and a long-term debt rating of “A” or better by, or be otherwise acceptable to, each Rating Agency.  The Indenture Trustee shall comply with TIA § 310(b), including the optional provision permitted by the second sentence of TIA § 310(b)(9); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

 

SECTION 6.12.      [Reserved].

 

SECTION 6.13.      Preferential Collection of Claims Against Issuer.  The Indenture Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).      An Indenture Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

 

SECTION 6.14.      Waiver of Setoffs.  The Indenture Trustee hereby expressly waives any and all rights of setoff that the Indenture Trustee may otherwise at any time have under applicable law with respect to any Trust Account and agrees that amounts in the Trust Accounts shall at all times be held and applied solely in accordance with the provisions hereof and of the other Basic Documents.

 

SECTION 6.15.      Licenses.  The Issuer shall take such action as, in its reasonable judgment, shall be necessary to maintain the effectiveness of all sales finance company licenses required under the Maryland Code Financial Institutions, Title 11, Subtitle 4 and all licenses required under the Pennsylvania Motor Vehicle Sales Finance Act, in connection with this Indenture and the transactions contemplated hereby until the lien and security interest of this Indenture shall no longer be in effect in accordance with the terms hereof.

 

SECTION 6.16.      Additional Duties.  U.S. Bank National Association agrees to perform the duties of Certificate Registrar, authenticating agent and Paying Agent as set forth under and pursuant to the Trust Agreement including, without limitation, those specified in Sections 3.07, 3.08, 3.09, and 5.01 of the Trust Agreement, and shall be entitled to all of the rights and indemnities of the Indenture Trustee in the performance of such duties.

 

  

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ARTICLE VII.

 

NOTEHOLDERS’ LISTS AND REPORTS

 

SECTION 7.01.      Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders.  The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five days after the earlier of (i) each Record Date and (ii) three months after the last Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Holders of Notes as of such Record Date, and (b) at such other times as the Indenture Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished.

 

SECTION 7.02.      Preservation of Information; Communications to Noteholders.

 

(a)      The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar.  The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.  The Indenture Trustee shall make such list available to the Owner Trustee on written request, and to the Noteholders upon written request of three or more Noteholders or one or more Noteholders evidencing not less than 25% of the Outstanding Amount of the Notes.  Upon receipt by the Indenture Trustee of any request by a Noteholder to receive a copy of the current list of Noteholders, the Indenture Trustee shall promptly notify the Administrator thereof by providing to the Administrator a copy of such request and a copy of the list of Noteholders in response thereto.

 

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

 

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

 

(d)      Not later than the fifth business day of each calendar month (or, if such day is not a Business Day, the immediately following Business Day), beginning December 5, 2013, the Indenture Trustee shall provide to BMW FS and the Depositor a notice with respect to any written requests received by a Responsible Officer of the Indenture Trustee from a Noteholder during the immediately preceding calendar month (or, in the case of the initial notice, since the Closing Date) that any Receivable or Financed Vehicle be repurchased.  Such notices shall be provided (i) to BMW FS at: BMW Financial Services NA, LLC at 300 Chestnut Ridge Road, Woodcliff Lake, NJ 07677, (telecopier no. (201) 307-9286), Attention: General Counsel, E-mail: ABS.Operations@bmwfs.com, or at such other address or by such other means of communication as may be specified by BMW FS to the Indenture Trustee from time to time; and (ii) to the Depositor at: BMW FS Securities LLC, 300 Chestnut Ridge Road, Woodcliff Lake, NJ 07677, Attention:

 

  

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General Counsel, E-mail: ABS.Operations@bmwfs.com, or at such other address or by such other means of communication as may be specified by the Depositor to the Indenture Trustee from time to time.  The Indenture Trustee and the Issuer acknowledge and agree that the purpose of this subsection is to facilitate compliance by BMW FS and the Depositor with Rule 15Ga-1 under the Exchange Act. The Indenture Trustee agrees to comply with reasonable requests made by BMW FS and the Depositor in good faith for delivery of information under these provisions on the basis of evolving interpretations of such rule. The Indenture Trustee shall cooperate fully with all reasonable requests of BMW FS and the Depositor to deliver any and all records and any other information, in each case in its possession, necessary to permit BMW FS and the Depositor to comply with the provisions of such rule.

 

SECTION 7.03.      Reports by Issuer.

 

(a)      The Issuer shall:

 

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

 

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

 

(iii)      supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to all Noteholders described in TIA § 313(c)) such summaries of any information, documents and reports  required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations prescribed from time to time by the Commission.

 

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

 

SECTION 7.04.      Reports by Indenture Trustee.  If required by TIA § 313(a), within 60 days after each February 21 beginning with February 21, 2014, the Indenture Trustee shall mail to each Noteholder as required by TIA § 313(c) a brief report dated as of such date that complies with TIA § 313(a).  The Indenture Trustee also shall comply with TIA § 313(b).

 

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

 

  

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ARTICLE VIII.

 

ACCOUNTS, DISBURSEMENTS AND RELEASES

 

SECTION 8.01.      Collection of Money.  Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture.  The Indenture Trustee shall apply all such money received by it as provided in this Indenture.  Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings.  Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.

 

SECTION 8.02.      Trust Accounts.

 

(a)      On or prior to the Closing Date, the Issuer shall cause the Indenture Trustee to establish and maintain, in the name of the Indenture Trustee, for the benefit of the Noteholders and, in the case of the Collection Account and the Reserve Account, the Certificateholders, the Trust Accounts as provided in Section 5.01 of the Sale and Servicing Agreement.

 

(b)      On or before each Deposit Date, the Issuer shall cause the Servicer to deposit all Available Amounts with respect to the Collection Period preceding such Payment Date in the Collection Account as provided in Section 5.01(e), 5.02, 5.04 and 5.11 of the Sale and Servicing Agreement.  On or before each Deposit Date, all amounts required to be withdrawn from the Reserve Account and deposited in the Collection Account pursuant to Section 5.07 of the Sale and Servicing Agreement shall be withdrawn by the Indenture Trustee from the Reserve Account and deposited to the Collection Account as provided therein, as to which Issuer shall cause Servicer to timely provide the related instructions.

 

(c)      On each Payment Date, the Indenture Trustee (based on the information contained in the Servicer’s Certificate delivered on or before the related Determination Date pursuant to Section 4.09 of the Sale and Servicing Agreement) shall make the withdrawals from the Collection Account and make deposits, distributions and payments, to the extent of funds on deposit in the Collection Account with respect to the Collection Period preceding such Payment Date (including funds, if any, deposited therein from the Reserve Account), in accordance with the provisions of Section 5.06(b) of the Sale and Servicing Agreement.

 

(d)      On each Payment Date, the Indenture Trustee (based on the information contained in the Servicer’s Certificate delivered on or before the related Determination Date pursuant to Section 4.09 of the Sale and Servicing Agreement) shall withdraw the funds on deposit in the Interest Distribution Account with respect to the Collection Period preceding such Payment Date and make distributions and payments to the Noteholders, in an amount equal to the accrued and unpaid interest on the Notes; provided that if there are not sufficient funds

 

  

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available to pay the entire amount of the accrued and unpaid interest on the Notes, the amounts available shall be applied to the payment of such interest on the Notes on a pro rata basis based upon the amount of interest due on each Class of Notes.

 

(e)      On each Payment Date, the Indenture Trustee (based on the information contained in the Servicer’s Certificate delivered on or before the related Determination Date pursuant to Section 4.09 of the Sale and Servicing Agreement) shall withdraw the funds on deposit in the Principal Distribution Account with respect to the Collection Period preceding such Payment Date (including, if applicable, any amount deposited by the Indenture Trustee in respect of damages received from the FDIC pursuant to Section 12.05(e)) and, so long as the maturity of the Notes has not been accelerated pursuant to Section 5.02, make distributions and payments in the following order of priority:

 

(i)      first, to the Noteholders of the Class A-1 Notes in reduction of principal until the Outstanding Amount of the Class A-1 Notes has been paid in full; provided that if there are not sufficient funds available to pay the Outstanding Amount of the Class A-1 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-1 Notes on a pro rata basis;

 

(ii)      second, to the Noteholders of the Class A-2 Notes in reduction of principal until  the Outstanding Amount of the Class A-2 Notes has been paid in full; provided that if there are not sufficient funds available to pay the Outstanding Amount of the Class A-2 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-2 Notes on a pro rata basis;

 

(iii)      third, to the Noteholders of the Class A-3 Notes in reduction of principal until the Outstanding Amount of the Class A-3 Notes has been paid in full; provided that if there are not sufficient funds available to pay the  Outstanding Amount of the Class A-3 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-3 Notes on a pro rata basis;

 

(iv)      fourth, to the Noteholders of the Class A-4 Notes in reduction of principal until the Outstanding Amount of the Class A-4 Notes has been paid in full; provided that if there are not sufficient funds available to pay the  Outstanding Amount of the Class A-4 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-4 Notes on a pro rata basis; and

 

(v)      fifth, any remaining amounts, to the Certificate Distribution Account, for distribution to the Certificateholders;

 

provided, however, that following the acceleration of the Notes pursuant to Section 5.02, distributions shall be made as provided in clauses THIRD and FOURTH of Section 5.04(b)(i).

 

SECTION 8.03.      General Provisions Regarding Accounts.  The Indenture Trustee shall not in any way be held liable by reason of any insufficiency in any of the Trust Accounts resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustee’s failure to make payments on such Eligible Investments

 

  

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issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms. If (i) the Servicer shall have failed to give investment directions for any funds on deposit in the Reserve Account to the Indenture Trustee by 11:00 a.m., New York City time (or such other time as may be agreed by the Administrator and Indenture Trustee), on any Business Day or (ii) a Default or Event of Default of which a Responsible Officer of the Indenture Trustee shall have actual knowledge shall have occurred and be continuing with respect to the Notes but the Notes shall not have been declared due and payable pursuant to Section 5.02 or (iii) if the Notes shall have been declared due and payable following an Event of Default and amounts collected or receivable from the Trust Estate are being applied in accordance with Section 5.05 as if there had not been such a declaration, then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in investments that are Eligible Investments in accordance with standing instructions most recently given in writing by the Servicer.

 

Except as otherwise provided hereunder or agreed in writing among the parties hereto, the Servicer shall retain the authority to institute, participate and join in any plan of reorganization, readjustment, merger or consolidation with respect to the issuer of any securities held hereunder in the Trust Accounts, and, in general, to exercise each and every other power or right with respect to each such asset or investment as individuals generally have and enjoy with respect to their own assets and investment, including power to vote on any securities.

 

The Indenture Trustee is authorized to deposit uninvested funds in non-interest bearing, unsecured demand deposit accounts at affiliated banks, purchase and sell investment securities through or from affiliated banks and broker-dealers, invest funds in registered investment companies that receive investment management and custodial services from the Indenture Trustee or its affiliates, subject to the limitations set forth herein.

 

The Issuer acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Issuer the right or option to receive individual confirmations of security transactions at no additional cost, as they occur, the Issuer specifically waives the option to receive such confirmation to the extent permitted by law.  The Indenture Trustee will furnish the Issuer periodic cash transaction statements that include detail for all investment transactions made by the Indenture Trustee hereunder.

 

SECTION 8.04.      Release of Trust Estate.

 

(a)      Subject to the payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture.  No party relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.

 

(b)      The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have been paid in

 

  

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full, release any remaining portion of the Trust Estate that secured the Notes from the lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds then on deposit in the Trust Accounts.  The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section 8.04(b) only upon receipt by it of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA) Independent Certificates in accordance with TIA §§ 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01.

 

(c)      The Issuer agrees, upon request by the Servicer and representation by the Servicer that it has complied with the procedure in Section 9.01 of the Sale and Servicing Agreement, to render the Issuer Request to the Indenture Trustee in accordance with Section 4.04, and take such other actions as are required in that Section.

 

SECTION 8.05.      Opinion of Counsel.  The Indenture Trustee shall receive at least seven days’ prior written notice when requested by the Issuer to take any action pursuant to Section 8.04(b), accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, as a condition to such action, an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders in contravention of the provisions of this Indenture; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Estate.  Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.

 

ARTICLE IX.

 

SUPPLEMENTAL INDENTURES

 

SECTION 9.01.      Supplemental Indentures Without Consent of Noteholders.

 

(a)      Without the consent of the Holders of any Notes, but with prior written notice made available to the Rating Agencies by the Administrator (with copy to the Indenture Trustee), the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more supplemental indentures hereto (which shall conform to the provisions of the Trust Indenture Act as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:

 

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

 

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

 

  

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

 

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

 

(v)      to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that such action shall not adversely affect the interests of the Holders of the Notes, as evidenced by an Officer’s Certificate of the Issuer;

 

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

 

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

 

The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

 

(b)      The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Notes but with prior notice made available to the Rating Agencies by the Administrator, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of any Noteholder; provided, further, that such action shall be deemed not to adversely affect in any material respect the interests of any Noteholder and no Opinion of Counsel to that effect shall be required if the Rating Agency Condition is satisfied with respect to each Rating Agency.

 

SECTION 9.02.      Supplemental Indentures with Consent of Noteholders.  The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, with prior notice made available to the Rating Agencies by the Administrator and with the consent of the Holders of not less than a majority of the Outstanding Amount of the Notes, by Act of such Holders delivered to the Issuer and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of

 

  

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the Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:

 

(i)      change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the interest rate thereon or the Redemption Price with respect thereto, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);

 

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

 

(iii)      modify or alter the provisions of the proviso to the definition of “Outstanding”;

 

(iv)      reduce the percentage of the Outstanding Amount of the Notes, required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04;

 

(v)      modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;

 

(vi)      modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of such calculation) or to affect the rights of the Holders of Notes to the benefit of any provisions for the mandatory redemption of the Notes contained herein; or

 

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

 

  

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

 

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

 

SECTION 9.03.      Execution of Supplemental Indentures.  In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture, and that all conditions precedent thereto have been met.  The Indenture Trustee and the Owner Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s or the Owner Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.  Any supplemental indenture affecting the rights, duties, immunities or liabilities of the Owner Trustee shall require the Owner Trustee’s written consent.  The Administrator shall provide a fully executed copy of any supplemental indentures to this Indenture to each Rating Agency.

 

SECTION 9.04.      Effect of Supplemental Indenture.  Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

SECTION 9.05.      Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture.  If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

 

SECTION 9.06.      Conformity with Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be qualified under the Trust Indenture Act.

 

  

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ARTICLE X.

 

REDEMPTION OF NOTES

 

SECTION 10.01.      Redemption.  The Notes are subject to redemption in whole, but not in part, at the direction of the Servicer pursuant to Section 9.01 of the Sale and Servicing Agreement, on any Payment Date on which the Servicer exercises its option to purchase the Trust Estate pursuant to said Section 9.01, for a purchase price equal to the Redemption Price; provided, that the Issuer has available funds sufficient to pay the Redemption Price.  The Servicer or the Issuer shall furnish the Rating Agencies and the Indenture Trustee notice of such redemption.  If the Notes are to be redeemed pursuant to this Section 10.01, the Servicer shall furnish notice of such election to the Indenture Trustee not later than 20 days prior to the Redemption Date and shall deposit on  the Business Day prior to the Redemption Date with the Indenture Trustee in the Note Distribution Account the Redemption Price of the Notes to be redeemed, whereupon all such Notes shall be due and payable on the Redemption Date upon the furnishing of a notice complying with Section 10.02 to each Holder of the Notes.

 

SECTION 10.02.      Form of Redemption Notice.  Notice of redemption under Section 10.01 shall be given by the Indenture Trustee by first-class mail, postage prepaid, or by facsimile mailed or transmitted not later than 10 days prior to the applicable Redemption Date to each Holder of Notes, as of the close of business on the Record Date preceding the applicable Redemption Date, at such Holder’s address or facsimile number appearing in the Note Register.

 

All notices of redemption shall state:

 

(i)      the Redemption Date;

 

(ii)      the Redemption Price;

 

(iii)      the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided in Section 3.02); and

 

(iv)      that interest on the Notes shall cease to accrue on the Redemption Date.

 

Notice of redemption of the Notes shall be given by the Indenture Trustee in the name and at the expense of the Issuer.  Failure to give notice of redemption, or any defect therein, to any Holder of any Note shall not impair or affect the validity of the redemption of any other Note.

 

SECTION 10.03.      Notes Payable on Redemption Date.  The Notes or portions thereof to be redeemed shall, following notice of redemption as required by Section 10.02 (in the case of redemption pursuant to Section 10.01), on the Redemption Date become due and payable at the Redemption Price and (unless the Issuer shall default in the payment of the Redemption Price) no interest shall accrue on the Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Price.

 

  

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ARTICLE XI.

 

MISCELLANEOUS

 

SECTION 11.01.      Compliance Certificates and Opinions, etc.

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)      (i) Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the Collateral or other property or securities to be so deposited.

 

(ii)      Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signatory thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate as to the same matters, if the fair

 

  

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value to the Issuer of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or  release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or more of the Outstanding Amount of the Notes, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Issuer as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the Outstanding Amount of the Notes.

 

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

 

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

 

(v)      Notwithstanding Section 4.04 or any other provision of this Section, the Issuer may, without compliance with the requirements of the other provisions of this Section, (A) collect, liquidate, sell or otherwise dispose of Receivables and Financed Vehicles as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Trust Accounts as and to the extent permitted or required by the Basic Documents.

 

SECTION 11.02.      Form of Documents Delivered to Indenture Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

  

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

 

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

 

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

 

SECTION 11.03.      Acts of Noteholders.

 

(a)      Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section.

 

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

 

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

 

  

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

 

SECTION 11.04.      Notices, etc., to Indenture Trustee, Issuer and Rating Agencies.  Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture shall be in writing and, if such request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders is to be made upon, given or furnished to or filed with:

 

(i)      the Indenture Trustee by any Noteholder or by the Issuer, shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Indenture Trustee at its Corporate Trust Office; or

 

(ii)      the Issuer by the Indenture Trustee or by any Noteholder, shall be sufficient for every purpose hereunder if in writing and mailed first-class, postage prepaid to the Issuer, addressed to: BMW Vehicle Owner Trust 2013-A, in care of Wilmington Trust, National Association, as Owner Trustee, 1100 North Market Street, Wilmington, Delaware, 19890, or at any other address previously furnished in writing to the Indenture Trustee by the Issuer or the Administrator.  The Issuer shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee.

 

Notices required to be given to the Rating Agencies shall be in writing, personally delivered or mailed by certified mail, return receipt requested, to (i) in the case of Moody’s, at the following address: Moody’s Investors Service, Inc., ABS/RMBS Monitoring Department, 7 World Trade Center, 250 Greenwich Street, 25th Floor, New York, New York 10007; (ii) in the case of Fitch, at the following address: Fitch Ratings, Inc., One State Street Plaza, New York, New York 10004, Attention: Asset Backed Surveillance; or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

 

SECTION 11.05.      Notices to Noteholders; Waiver.  Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at such Holder’s address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.  In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall

 

  

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be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

 

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

 

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

 

SECTION 11.06.      [Reserved].

 

SECTION 11.07.      Effect of Headings and Table of Contents.  The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

SECTION 11.08.      Successors and Assigns.  All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents.

 

SECTION 11.09.      Separability.  In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 11.10.      Benefits of Indenture.  Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders, the Owner Trustee, any other party secured hereunder, and any other Person with an ownership interest in any part of the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

SECTION 11.11.      Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.

 

SECTION 11.12.      Governing Law.  THIS INDENTURE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

  

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SECTION 11.13.      Counterparts.  This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

SECTION 11.14.      Recording of Indenture.  If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at the expense of the Servicer accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

 

SECTION 11.15.      Trust Obligation.  No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.  For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

 

SECTION 11.16.      No Petition.  The Indenture Trustee, by entering into this Indenture, each Noteholder, by accepting a Note, and each Note Owner, by accepting a beneficial interest in a Note, hereby covenant and agree that they will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

 

SECTION 11.17.      Inspection.  The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested; provided, however, that the Indenture Trustee may only cause the books of the Issuer to be audited on an annual basis, unless there occurs an

 

  

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Event of Default hereunder.  The Indenture Trustee shall, and shall cause its representatives to, hold in confidence all such information except to the extent such information is publicly available or such disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine with the advice of counsel and after consultation with the Issuer that such disclosure is consistent with its obligations hereunder.

 

SECTION 11.18.      Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

 

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

 

SECTION 11.19.      Limitation of Liability.  It is expressly understood and agreed by the parties hereto that (a) this Indenture is executed and delivered by Wilmington Trust, National Association, not individually or personally but solely as Owner Trustee of BMW Vehicle Owner Trust 2013-A, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust, National Association but is made and intended for the purpose for binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Wilmington Trust, National Association be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Indenture or any other related documents.  Wilmington Trust, National Association has made no independent investigations as to the accuracy or completeness of any of the representations or warranties hereunder.

 

SECTION 11.20.      Intent of the Parties; Reasonableness.

 

The Indenture Trustee and Issuer acknowledge and agree that the purpose of Section 3.10 of this Agreement is to facilitate compliance by the Issuer and the Depositor with the provisions of Regulation AB and related rules and regulations of the Commission.

Neither the Issuer nor the Administrator (acting on behalf of the Issuer) shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder (or the provision in a private offering of disclosure comparable to that required under the Securities Act).  Each of the parties agrees that (a) the obligations of the parties hereunder shall be interpreted in such a manner as to accomplish

  

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compliance with Regulation AB and (b) the parties’ obligations hereunder will be supplemented and modified as necessary to be consistent with any such amendments, interpretive guidance provided by the Commission or its staff, or consensus among participants in the asset-backed securities markets, in respect of the requirements of Regulation AB, and the parties shall comply with reasonable requests made by the Issuer, the Administrator or the Indenture Trustee in good faith for delivery of additional or different information to the extent such information is freely available and deliverable (provided that, in the good faith determination of the Issuer, the Administrator or the Indenture Trustee, such additional or different information is required to comply with the provisions of Regulation AB).

The Issuer (or the Administrator, acting on behalf of the Issuer) shall cooperate with the Indenture Trustee by providing timely notice of requests for information under these provisions and by reasonably limiting such requests to information required, in the reasonable judgment or the Issuer to comply with Regulation AB.

 

SECTION 11.21.      Communications with Rating Agencies.  If the Indenture Trustee shall receive any written or oral communication from any Rating Agency (or any of their respective officers, directors or employees) with respect to the transactions contemplated hereby or under the Basic Documents or in any way relating to the Notes, the Indenture Trustee agrees to refrain from communicating with such Rating Agency and to promptly (and, in any event, within one Business Day) notify the Administrator of such communication.  The Indenture Trustee agrees to act at the direction of the Administrator with respect to any communication to a Rating Agency and further agrees that in no event shall the Indenture Trustee engage in any oral communication with respect to the transactions contemplated hereby or under the Basic Documents or in any way relating to the Notes with any Rating Agency (or any of their respective officers, directors or employees) without the participation of the Administrator.

 

ARTICLE XII.

 

COMPLIANCE WITH THE FDIC RULE

 

SECTION 12.01.      Purpose.

 

(a)      Each of the Noteholders, by its acceptance of the Notes or a beneficial interest therein, each of the Certificateholders, by its acceptance of the Certificates, the FDIC Rule Parties and the Indenture Trustee acknowledges and agrees that the purpose of this Article XII is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule.  Each of the Noteholders, the Certificateholders, the FDIC Rule Parties and the Indenture Trustee acknowledges that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in this Article XII shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

 

(b)      If any provision of the FDIC Rule is amended, or any interpretive guidance regarding the FDIC Rule is provided by the FDIC or its staff, as a result of which the

 

  

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Issuer determines that an amendment to this Article XII is necessary or desirable, then the Issuer and the Indenture Trustee shall be authorized and entitled to amend this Article XII in accordance with such FDIC Rule amendment or guidance notwithstanding the requirements set forth in Sections 9.01 and 9.02, provided that the Issuer delivers to the Indenture Trustee an Opinion of Counsel to the effect that such amendment is required in order to remain in compliance with the FDIC Rule.  Nothing in this Section 12.01(b) shall limit the rights of the Indenture Trustee or the Owner Trustee pursuant to Section 9.03.

 

(c)      As used in this Article XII, but subject to the rules of interpretation specified in Section 12.01(a) and Section 12.01(b), references to (i) the “sponsor” shall mean BMW Bank, (ii) the “issuing entity” shall mean, collectively, the Depositor, BMW FS and the Issuer (except in Section 12.02(e), where such term shall have the meaning assigned thereto in the FDIC Rule), (iii) the “servicer” shall mean the Servicer or the Administrator, as applicable, (iv) “obligations” or “securitization obligations” shall be deemed to refer to the Notes, but only to the extent secured by the Receivables sold by BMW Bank to the Depositor under the related Receivables Purchase Agreement, and (v) “financial assets” shall mean the Receivables transferred to the Depositor by BMW Bank (except in Section 12.02(e), where such term shall have the meaning assigned thereto in the FDIC Rule).  As a practical matter, and subject to certain limited exceptions, the transactions contemplated by the Basic Documents do not distinguish between Receivables sold by BMW Bank to the Depositor and Receivables sold by BMW FS to the Depositor, and the provisions of Section 12.02(a) and Section 12.02(b) are true for all of the Receivables and all of the Notes for so long as any Receivables sold by BMW Bank to the Depositor are owned by the Issuer.

 

(d)        Each of the FDIC Rule Parties believes that the transactions and actions contemplated by the Basic Documents and the related prospectus comply with the requirements of Section 12.02.

 

SECTION 12.02.      Requirements of the FDIC Rule.  As required by the FDIC Rule:

 

(a)      Payment of principal and interest on the securitization obligations must be primarily based on the performance of financial assets that are transferred to the Issuer and, except for interest rate or currency mismatches between the financial assets and the obligations, shall not be contingent on market or credit events that are independent of such financial assets.

 

(b)        The sponsor, issuing entity, and/or servicer, as appropriate, shall make available to investors, information describing the financial assets, obligations, capital structure, compensation of relevant parties, and relevant historical performance data set forth below:

 

(i)      On or prior to issuance of obligations and at the time of delivery of any periodic distribution report and, in any event, at least once per calendar quarter, while obligations are outstanding, information about the obligations and the financial assets shall be disclosed to all potential investors at the financial asset or pool level, as appropriate for the financial assets, and security-level to enable evaluation and analysis of the credit risk and performance of the obligations and financial assets. Such information and its disclosure, at a minimum, shall comply with the requirements of Regulation AB or any successor disclosure requirements for public issuances, even if the obligations are issued in a private placement or are not otherwise required to be registered; provided that information that is unknown or not available to the sponsor or the issuing entity after reasonable investigation may be omitted if the issuing entity includes a

 

  

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statement in the offering documents disclosing that the specific information is otherwise unavailable;

 

(ii)      On or prior to issuance of obligations, the structure of the securitization and the credit and payment performance of the obligations shall be disclosed, including the capital or tranche structure, the priority of payments and specific subordination features; representations and warranties made with respect to the financial assets, the remedies for and the time permitted for cure of any breach of representations and warranties, including the repurchase of financial assets, if applicable; liquidity facilities and any credit enhancements permitted by the FDIC Rule, any waterfall triggers or priority of payment reversal features; and policies governing delinquencies, servicer advances, loss mitigation, and write-offs of financial assets;

 

(iii)      While obligations are outstanding, the issuing entity shall provide to investors information with respect to the credit performance of the obligations and the financial assets, including periodic and cumulative financial asset performance data, delinquency and modification data for the financial assets, substitutions and removal of financial assets, servicer advances, as well as losses that were allocated to such tranche and the remaining balance of financial assets supporting such tranche, if applicable, and the percentage of each tranche in relation to the securitization as a whole; and

 

(iv)      In connection with the issuance of the obligations, the nature and amount of compensation paid to the originator, sponsor, rating agency or third-party advisor, any mortgage or other broker, and the servicer(s), and the extent to which any risk of loss on the underlying assets is retained by any of them for such securitization shall be disclosed. The issuing entity shall provide to investors while any obligations are outstanding any changes to such information and the amount and nature of payments of any deferred compensation or similar arrangements to any of the parties.

 

(c)        Subject to Section 12.04, the sponsor shall retain an economic interest in a material portion, defined as not less than five (5) percent, of the credit risk of the financial assets, which retained interest will be in the form of a representative sample of the financial assets equal to not less than five (5) percent of the principal amount of the financial assets at transfer. This retained interest may not be sold or pledged or hedged, except for the hedging of interest rate or currency risk, during the term of the securitization.

 

(d)        The obligations shall not be predominantly sold to an affiliate (other than a wholly-owned subsidiary consolidated for accounting and capital purposes with the sponsor) or an affiliated broker-dealer who purchases such obligations with a view to promptly reselling such obligations to persons or entities that are neither affiliates (other than wholly-owned subsidiaries of the sponsor consolidated for accounting and capital purposes with the sponsor) nor insiders of the sponsor in the ordinary course of such broker-dealer’s business pursuant to an underwriting or similar agreement entered into in the ordinary course of business; provided that (i) at the time the obligations are sold to the affiliated broker-dealer, such broker-dealer sells not

 

  

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less than 51% of the principal amount of the obligations to persons and entities that are not affiliates (other than wholly-owned subsidiaries of the sponsor consolidated for accounting and capital purposes with the sponsor) or insiders of the sponsor; (ii) at all times after such obligations are sold to the affiliated broker-dealer, such broker-dealer holds the unsold portion of the obligations with the intent to sell such unsold portion to persons or entities that are not affiliates (other than wholly-owned subsidiaries of the sponsor consolidated for accounting and capital purposes with the sponsor) or insiders of the sponsor and (iii) the other requirements of the FDIC Rule, including, without limitation, the requirements of Sections 360.6(c)(3) and (4) of the FDIC Rule, are satisfied.

 

(e)        The sponsor shall separately identify in its financial asset data bases the financial assets transferred into any securitization and shall maintain an electronic or paper copy of the closing documents for such securitization in a readily accessible form, and a current list of all of its outstanding securitizations and issuers, and the most recent Form 10-K, if applicable, or other periodic financial report for each securitization and issuer. The sponsor shall make these records readily available for review by the FDIC promptly upon written request.

 

(f)        To the extent serving as servicer, custodian or paying agent for the securitization, the sponsor shall not commingle amounts received with respect to the financial assets with its own assets except for the time, not to exceed two Business Days, necessary to clear any payments received.

 

SECTION 12.03.      Performance.  The Issuer agrees to perform the obligations set forth in Section 12.02, except to the extent any such obligation is specifically imposed exclusively upon the servicer or the sponsor, and to the extent the performance of such obligations is necessary to facilitate compliance with this Article XII by all FDIC Rule Parties.

 

SECTION 12.04.      Effect of Section 941 Rules.  Section 12.02(c) hereof shall not be construed to require the sponsor to retain any greater economic interest in the credit risk of the financial assets than is required to comply with the FDIC Rule and other applicable law. Accordingly, upon the effective date of regulations promulgated under Section 15G of the Securities Exchange Act, 15 U.S.C. 78a et seq., added by Section 941(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (such regulations, the “Section 941 Rules” and such date, the “Section 941 Effective Date”) and thereafter, the sponsor shall have the option to adjust the amount of credit risk that it retains for purposes of the FDIC Rule, or the terms under which such credit risk is retained for purposes of the FDIC Rule, the method by which such credit risk is retained or the restrictions applicable to the credit risk retained for purposes of the FDIC Rule, to the greatest extent elected by the sponsor, so long as the sponsor’s retention shall be in compliance with the Section 941 Rules.  Within a reasonable time after the sponsor has so adjusted the amount or terms of the credit risk it retains, the sponsor shall give notice thereof to the Noteholders and the Certificateholders, and each of the Indenture Trustee and the FDIC Rule Parties is authorized and entitled to amend Section 12.02(c), in accordance with and to the extent the Issuer determines necessary or appropriate, to reflect the requirements of the Section 941 Rules.

 

SECTION 12.05.      Actions Upon Repudiation.

 

  

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(a)      In the event that the sponsor becomes the subject of an insolvency proceeding and the FDIC, as receiver or conservator for the sponsor, exercises its right of repudiation as contemplated by paragraph (d)(4)(ii) of the FDIC Rule, the Servicer shall ascertain whether the FDIC in such capacity will pay damages as provided in such paragraph (d)(4)(ii). Upon making such determination, the Servicer shall promptly, and in any event no more than one Business Day thereafter (or, if the Servicer fails to act, the Noteholders representing not less than a majority of the Outstanding Amount of the Notes or the Certificateholders representing a majority of the Certificate Percentage Interests may), notify the Indenture Trustee and the Owner Trustee.

 

(b)      Upon receipt of the notice specified in Section 12.05(a) indicating that a payment will be made, the Indenture Trustee shall determine the date (the “applicable distribution date”) for making a distribution to Noteholders and, if applicable, Certificateholders of such damages, which date shall be the earlier of (i) the next Payment Date on which such damages could be distributed and (ii) the earliest practicable date by which the Indenture Trustee could declare a special distribution date, in each case subject to all applicable provisions of this Indenture, applicable law and the procedures of any applicable Clearing Agency.

 

(c)        When the applicable distribution date is determined, the Indenture Trustee shall cause the Servicer to promptly compute the amount of interest to be paid on each Class of Notes on the applicable distribution date, which interest shall be the amount accruing up to the applicable distribution date and which (unless such applicable distribution date is a Payment Date) shall be computed by pro rating the amount that would otherwise be payable on the next succeeding Payment Date following the applicable distribution date on the basis of (x) the number (in the case of Notes other than the Class A-1 Notes, not to exceed 30) of days elapsed from and including the preceding Payment Date to such applicable distribution date divided by (y) 30.

 

(d)        If the applicable distribution date is a special distribution date, the Indenture Trustee shall (i) declare such special distribution date (the record date for which shall be the close of business on the day immediately preceding such special distribution date), (ii) declare a special distribution to Noteholders and (iii) deliver notice to the Noteholders and the Owner Trustee of such special distribution date and the amount to be distributed on such date.

 

(e)        Following payment by the FDIC of damages as provided in paragraph (d)(4)(ii) of the FDIC Rule, the Indenture Trustee shall cause the amount of such damages to be deposited in the Note Distribution Account.  If, as of the applicable distribution date, (x) the maturity of the Notes has been accelerated pursuant to Section 5.02, such damages shall be distributed on such distribution date in the order and priority set forth in Section 5.04(b)(i) or (y) the maturity of the Notes has not been accelerated pursuant to Section 5.02, such damages shall be distributed on such distribution date in accordance with the following order of priority:

 

(i)      first, to the Holders of the Notes, ratably, interest on the Notes in the amount computed by the Indenture Trustee pursuant to Section 12.05(c); provided that if there are not sufficient funds available to pay the entire amount of the accrued and unpaid interest on the Notes, the amounts available shall be

 

  

71

  

applied to the payment of such interest on the Notes on a pro rata basis based upon the amount of interest due on each Class of Notes;

 

(ii)      second, to the Holders of the applicable Notes in the order and priority set forth in Section 8.02(e), in an amount equal to the FDIC Principal Amount for such distribution date;

 

(iii)      third, to the Reserve Account, the amount, if any, necessary to cause the amount on deposit in the Reserve Account to equal the Reserve Account Required Amount (calculated as if such distribution date is a Payment Date); and

 

(iv)      fourth, any remaining amounts, to the Certificate Distribution Account, for distribution to the Certificateholders.

 

(f)      Notwithstanding anything in this Indenture or the other Basic Documents to the contrary, if any applicable distribution date is not a Payment Date, for purposes of calculating (i) the Priority Principal Distribution Amount and the Regular Principal Distribution Amount for the Payment Date immediately following the applicable distribution date, the phrase “preceding Payment Date” shall be deemed to refer to such applicable distribution date, (ii) the Servicing Fee for the Payment Date immediately following the applicable distribution date, such fee shall be adjusted, as applicable, for any period of time in the related Collection Period in respect of which the Servicer was not servicing any related Receivables on behalf of the Issuer, and (iii) interest payable on the Notes pursuant to Section 5.06(b) of the Sale and Servicing Agreement for the Payment Date immediately following the applicable distribution date, the phrase “preceding Payment Date” shall be deemed to refer to such applicable distribution date and the phrase “prior Payment Dates” shall be deemed to include such applicable distribution date.

 

SECTION 12.06.      Notice.

 

(a)      In the event that BMW Bank becomes the subject of an insolvency proceeding and the FDIC, as receiver or conservator, provides a written notice of repudiation as contemplated by paragraph (d)(4)(ii) of the FDIC Rule, the party receiving such notice shall promptly deliver such notice to each of the FDIC Rule Parties, the Indenture Trustee and the Owner Trustee.

 

(b)        If the FDIC (i) is appointed as a conservator or receiver of BMW Bank and (ii) is in default due to its failure to pay principal or interest when due following the expiration of any cure period hereunder or under the other Basic Documents, the Indenture Trustee at the direction of the Noteholders representing not less than a majority of the Outstanding Amount of the Notes, the Servicer or the Certificateholders representing not less than a majority of the Certificate Percentage Interests shall be entitled to deliver written notice to the FDIC requesting the exercise of contractual rights hereunder and under the other Basic Documents. Upon delivery of such notice, the Indenture Trustee may exercise any contractual rights it may have in accordance with the Basic Documents and the FDIC Rule. The Indenture Trustee shall, at the written direction of the Noteholders representing not less than a majority of the Outstanding Amount of the Notes, or the Owner Trustee shall, at the written direction of the

 

  

72

  

Certificateholders representing not less than a majority of the Certificate Percentage Interests, exercise such contractual rights.

 

SECTION 12.07.      Reservation of Rights.  Neither the inclusion of this Article XII in this Indenture nor the compliance by any Person with, or the acknowledgment by any Person of, this Article’s provisions constitutes an agreement or acknowledgment by any Person that, in the case of an insolvency proceeding with respect to BMW Bank, a receiver or conservator will have any rights with respect to the Trust Estate.

 

* * * * *

 

  

73

  

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

 

 

BMW VEHICLE OWNER TRUST 2013-A

 

By: WILMINGTON TRUST, NATIONAL ASSOCIATION, 

not in its individual capacity but solely as Owner Trustee

 

By:    /s/ Roseline K. Maney

Name:  Roseline K. Maney

Title:    Vice President

 

 

U.S. BANK NATIONAL ASSOCIATION, 

not in its individual capacity but solely as Indenture Trustee

 

By:    /s/ Laura DeBolt

Name:  Laura DeBolt

Title:    Vice President

  

 

  

STATE OF DELAWARE                           }

                                                                        }           ss.:

COUNTY OF NEW CASTLE                     }

BEFORE ME, the undersigned authority, a Notary Public in and for said county and state, on this day personally appeared Roseline Maney, a Vice President of WILMINGTON TRUST, NATIONAL ASSOCIATION not in its individual capacity but solely as Owner Trustee of BMW Vehicle Owner Trust 2013-A, a Delaware statutory trust (the “Trust”) known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said Trust, and that s/he executed the same as the act of said Trust for the purpose and consideration therein expressed, and in the capacities therein stated.

 

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 4th day of November, 2013.

 

/s/ Ramona L. Ringgold                                      

Notary Public in and for the State of Delaware

 

My commission expires:  09-16-2015

  

 

  

STATE OF ILLINOIS                            }

              }           ss.:

COUNTY OF COOK                              }

BEFORE ME, the undersigned authority, a Notary Public in and for said county and state, on this day personally appeared Laura DeBolt, known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of U.S. BANK NATIONAL ASSOCIATION, a national banking association, and that s/he executed the same as the act of said corporation for the purpose and consideration therein stated.

 

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 4th day of November, 2013.

 

Christopher J. Nuxoll                                                           

Notary Public in and for the State of Illinois

 

My commission expires:   4/15/14

  

 

  

SCHEDULE A

 

Schedule of Receivables

 

[Delivered to the Owner Trustee at Close]

 

  

1

  

SCHEDULE B

 

PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS

 

          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 on the Closing Date:

 

General

 

          1.       The Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables and the other Collateral 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 “chattel paper” (including “tangible chattel paper” and “electronic chattel paper”) within the meaning of the applicable UCC.

 

          3.       Each Receivable is secured by a first priority validly perfected security interest in the related Financed Vehicle in favor of the related Seller, as secured party, or all necessary actions with respect to such Receivable have been taken or will be taken to perfect a first priority security interest in the related Financed Vehicle in favor of the related Seller, as secured party.

 

          4.       Each Trust Account constitutes either a “deposit account” or a “securities account” within the meaning of the UCC.

 

Creation

 

          5.       Immediately prior to the sale, transfer, assignment and conveyance of a Receivable by the Depositor to the Issuer, the Depositor owned and had good and marketable title to such Receivable free and clear of any Lien and immediately after the sale, transfer, assignment and conveyance of such Receivable to the Issuer, the Issuer will have good and marketable title to such Receivable free and clear of any Lien.

 

Perfection

 

          6.       The Issuer has caused or will have caused, within ten days after the effective date of the Indenture, 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 in the Conveyed Assets granted to the Indenture Trustee hereunder; and the Servicer, in its capacity as custodian, has in its possession the original copies of such instruments or tangible chattel paper and the “authoritative copy” of such electronic chattel paper that constitute or evidence the Receivables, and all financing statements referred to in this paragraph contain a statement that: “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Secured Party.”

 

  

1

  

 

          7.       With respect to Receivables that constitute tangible chattel paper, such tangible chattel paper are in the possession of the Servicer and the Indenture Trustee has received a written acknowledgment from the Servicer that the Servicer (in its capacity as custodian) is holding such tangible chattel paper solely on behalf and for the benefit of the Indenture Trustee.

 

          8.       With respect to the Trust Accounts that constitute deposit accounts, either:

 

          (i) the Issuer has delivered to the Indenture Trustee a fully executed agreement pursuant to which the bank maintaining the deposit accounts has agreed to comply with all instructions originated by the Indenture Trustee directing disposition of the funds in such Trust Accounts without further consent by the Issuer; or

 

          (ii) the Issuer has taken all steps necessary to cause the Indenture Trustee to become the account holder of such Trust Accounts.

 

          9.       With respect to the Trust Accounts that constitute securities accounts or securities entitlements, either:

 

          (i) the Issuer has delivered to the Indenture Trustee a fully executed agreement pursuant to which the securities intermediary has agreed to comply with all instructions originated by the Indenture Trustee relating to such Trust Accounts without further consent by the Issuer; or

 

          (ii) the Issuer has taken all steps necessary to cause the securities intermediary to identify in its records the Indenture Trustee as the Person having a security entitlement against the securities intermediary in each of such Trust Accounts.

 

Priority

 

          10.       The Issuer has not authorized the filing of, and is not aware of any financing statements against the Issuer that include a description of collateral covering the Receivables other than any financing statement (i) relating to the conveyance of the Receivables by the Sellers to the Depositor under the Receivables Purchase Agreements, (ii) relating to the conveyance of the Receivables by the Depositor to the Issuer under the Sale and Servicing Agreement, (iii) relating to the security interest granted to the Indenture Trustee under the Indenture or (iv) that has been terminated.

 

          11.       The Issuer is not aware of any material judgment, ERISA or tax lien filings against the Issuer.

 

          12.       Neither the Issuer nor a custodian or vaulting agent thereof holding any Receivable that is electronic chattel paper has communicated an “authoritative copy” (as such term is used in Section 9-105 of the UCC) of any loan agreement that constitutes or evidences such Receivable to any Person other than the Servicer.

 

          13.       None of the instruments, tangible chattel paper or electronic chattel paper that constitute or evidence the Receivables has any marks or notations indicating that they have been

 

  

2

  

 

pledged, assigned or otherwise conveyed to any Person other than the Depositor, the Issuer or the Indenture Trustee.

 

          14.       No Trust Account that constitutes a securities account or securities entitlement is in the name of any Person other than the Issuer or the Indenture Trustee. The Issuer has not consented to the securities intermediary of any such Trust Account to comply with entitlement orders of any Person other than the Indenture Trustee.

 

          15.       No Trust Account that constitutes a deposit account is in the name of any Person other than the Issuer or the Indenture Trustee. The Issuer has not consented to the bank maintaining such Trust Account to comply with instructions of any Person other than the Indenture Trustee.

 

Survival of Perfection Representations

 

          16.       Notwithstanding any other provision of the Indenture or any other Basic Document, the perfection representations, warranties and covenants contained in this Schedule B shall be continuing, and remain in full force and effect until such time as all obligations under the Indenture have been finally and fully paid and performed.

 

No Waiver

 

          17.       The parties to this Indenture shall provide the Administrator with prompt written notice of any material breach of the perfection representations, warranties and covenants contained in this Schedule B, and shall not, without satisfying the Rating Agency Condition with respect to each Rating Agency, waive a breach of any of such perfection representations, warranties or covenants.

 

Issuer to Maintain Perfection and Priority

 

          18.       The Issuer covenants that, in order to evidence the interests of the Indenture Trustee under this Indenture, the Issuer shall take such action, or execute and deliver such instruments as may be necessary or advisable to maintain and perfect, as a first priority interest, the Indenture Trustee’s security interest in the Receivables. The Issuer shall, from time to time and within the time limits established by law, prepare and file, all financing statements, amendments, continuations, initial financing statements in lieu of a continuation statement, terminations, partial terminations, releases or partial releases, or any other filings necessary or advisable to continue, maintain and perfect the Indenture Trustee’s security interest in the Receivables as a first-priority interest.

 

  

3

  

EXHIBIT A-1

 

[FORM OF CLASS A-1 NOTE]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, 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 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 PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

  

A-1-1

  

 

	 REGISTERED	 $215,000,000(1)	 CUSIP NO.  05578X AA6
	 No.  R-1	 	 
	 	 	 

BMW VEHICLE OWNER TRUST 2013-A

 

0.23000% ASSET BACKED NOTE, CLASS A-1

 

BMW VEHICLE OWNER TRUST 2013-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of TWO HUNDRED FIFTEEN MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-1 Notes pursuant to Section 3.01 of the Indenture dated as of October 1, 2013 (the “Indenture”), between the Issuer and U.S. Bank National Association, a national banking association, as Indenture Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of October 27, 2014 (the “Class A-1 Final Scheduled Payment Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture. Capitalized terms used but not defined herein are defined in or pursuant to the Indenture, which also contains rules as to construction that shall be applicable herein.

 

 

The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date after giving effect to all payments of principal made on the preceding Payment Date, (or on the initial principal balance of this Note from and including the Closing Date in the case of the first Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture.  Interest on this Note will accrue for each Payment Date from and including the prior Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the next Payment Date.  Interest will be computed on the basis of the actual number of days elapsed in the related Interest Period and a 360-day year.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

 

The principal 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.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

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

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

 

________________

(1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

  

A-1-2

  

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

 

	
Date:

	
BMW VEHICLE OWNER TRUST 2013-A

 

By:      WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement,

 

By: _____________________________

Authorized Signatory

 

 

	 	
 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

 

 

	
Date:

	
U.S. Bank National Association,

not in its individual capacity but

solely as Indenture Trustee,

 

By:_______________________________

Authorized Officer

 

 

  

A-1-3

  

REVERSE OF CLASS A-1 NOTE

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 0.23000% Asset Backed Notes, Class A-1 (herein called the “Class A-1 Notes”), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-1 Notes are subject to all terms of the Indenture.

 

The Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes (collectively, the “Notes”) are and will be secured by the collateral pledged as security therefor as provided in the Indenture.

 

Principal of the Class A-1 Notes will be payable on each Payment Date in an amount described on the face hereof.  “Payment Date” means the 25th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing November 25, 2013.

 

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-1 Final Scheduled Payment Date or the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee may, or at the direction of Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Class A-1 Notes shall be made pro rata to the Class A-1 Noteholders entitled thereto.

 

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and

 

  

A-1-4

  

surrender of this Note at the applicable Corporate Trust Office of the Indenture Trustee or such other address as is selected by the Indenture Trustee pursuant to the terms of the Indenture.

 

The Issuer shall pay interest on overdue installments of interest at the Class A-1 Rate to the extent lawful.

 

As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the Servicer, on any Payment Date, following the last day of the Collection Period as of which the Pool Balance is equal to or less than 5% of the Initial Pool Balance.

 

As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture.

 

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in their respective individual capacities, (ii) any owner of a beneficial interest in the Issuer, including the Sellers, or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Sellers, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

 

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor

 

  

A-1-5

  

under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

 

The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will qualify as indebtedness secured by the Trust Estate.  Each Noteholder, by acceptance of this Note (and each Note Owner by acceptance of a beneficial interest in this Note), agrees to treat this Note for such purposes as indebtedness.

 

This Note, or any interest herein, may not be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

 

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing at least a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

 

  

A-1-6

  

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

 

This Note is issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Note and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

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

 

Each Noteholder, by acceptance of this Note or a beneficial interest herein, acknowledges and agrees that the purpose of Article XII of the Indenture is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule and that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in Article XII of the Indenture shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust, National Association in its individual capacity, U.S. Bank National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Sellers, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

  

A-1-7

  

ASSIGNMENT

 

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

 

__________________________________________________

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

 

_______________________________________________________________________

                                                (name and address of assignee)

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

 ____________________________________________, attorney, to transfer said Note on the 

books kept for registration thereof, with full power of substitution in the premises.

 

Dated:                                                                                                */

                                             Signature Guaranteed:

                                                                                                            */

 

	
  

	
_________________

	
*/

	
NOTICE: 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.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

  

A-1-8

  

EXHIBIT A-2

 

[FORM OF CLASS A-2 NOTE]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, 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 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 PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

  

A-2-1

  

 

	 REGISTERED	 $221,000,000(1)	 CUSIP NO.  05578X AB4
	 No.  R-1	 	 
	 

BMW VEHICLE OWNER TRUST 2013-A

 

0.41% ASSET BACKED NOTE, CLASS A-2

 

BMW VEHICLE OWNER TRUST 2013-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of TWO HUNDRED TWENTY-ONE MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-2 Notes pursuant to Section 3.01 of the Indenture dated as of October 1, 2013 (the “Indenture”), between the Issuer and U.S. Bank National Association, a national banking association, as Indenture Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of February 25, 2016 (the “Class A-2 Final Scheduled Payment Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture. Except as otherwise provided in the Indenture, no payments of principal of the Class A-2 Notes shall be made until the Class A-1 Notes have been paid in full.  Capitalized terms used but not defined herein are defined in or pursuant to the Indenture, which also contains rules as to construction that shall be applicable herein.

 

The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date after giving effect to all payments of principal made on the preceding Payment Date (or, on the initial principal balance of this Note from and including the Closing Date in the case of the first Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture.  Interest on this Note will accrue for each Payment Date from and including the 25th day of the calendar month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 25th day of the calendar month of such Payment Date.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified 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.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

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.

 

_______________

(1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

  

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Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

 

  

A-2-3

  

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

 

	
Date:

	
BMW VEHICLE OWNER TRUST 2013-A

 

By: WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement,

 

By: _____________________________

Authorized Signatory

 

 

	 	  

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

 

	
Date:

	
U.S. Bank National Association,

not in its individual capacity but

solely as Indenture Trustee,

 

By:_______________________________

Authorized Officer

 

 

  

A-2-4

  

REVERSE OF CLASS A-2 NOTE

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 0.41% Asset Backed Notes, Class A-2 (herein called the “Class A-2 Notes”), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-2 Notes are subject to all terms of the Indenture.

 

The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes (collectively, the “Notes”) are and will be secured by the collateral pledged as security therefor as provided in the Indenture.

 

Principal of the Class A-2 Notes will be payable on each Payment Date in an amount described on the face hereof only after the Class A-1 Notes are paid in full and have no Outstanding Amount.  “Payment Date” means the 25th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing November 25, 2013.

 

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-2 Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee may, or at the direction of the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Class A-2 Notes shall be made pro rata to the Class A-2 Noteholders entitled thereto.

 

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and

 

  

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surrender of this Note at the applicable Corporate Trust Office of the Indenture Trustee or such other address as is selected by the Indenture Trustee pursuant to the terms of the Indenture.

 

The Issuer shall pay interest on overdue installments of interest at the Class A-2 Rate to the extent lawful.

 

As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the Servicer on any Payment Date following the last day of the Collection Period as of which the Pool Balance is equal to or less than 5% of the Initial Pool Balance.

 

As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture.

 

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in their respective individual capacities, (ii) any owner of a beneficial interest in the Issuer, including the Sellers, or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Sellers, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

 

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor

 

  

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under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

 

The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will qualify as indebtedness secured by the Trust Estate.  Each Noteholder, by acceptance of this Note (and each Note Owner by acceptance of a beneficial interest in this Note), agrees to treat this Note for such purposes as indebtedness.

 

This Note, or any interest herein, may not be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

 

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing at least a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

 

  

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The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

 

This Note is issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Note and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

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

 

Each Noteholder, by acceptance of this Note or a beneficial interest herein, acknowledges and agrees that the purpose of Article XII of the Indenture is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule and that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in Article XII of the Indenture shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust, National Association in its individual capacity, U.S. Bank National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Sellers, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

 

  

A-2-8

  

ASSIGNMENT

 

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

 

__________________________________________________

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

 

_______________________________________________________________________

                                                (name and address of assignee)

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

 ____________________________________________, attorney, to transfer said Note on the 

books kept for registration thereof, with full power of substitution in the premises.

 

Dated:                                                                                                */

                                             Signature Guaranteed:

                                                                                                            */

 

	
  

	
_________________

	
*/

	
NOTICE: 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.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which  requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

  

A-2-9

  

EXHIBIT A-3

 

[FORM OF CLASS A-3 NOTE]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, 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 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 PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

  

A-3-1

  

 

	 REGISTERED	 $265,000,000(1)	 CUSIP NO.  05578X AC2
	 No.  R-1	 	 
	 

BMW VEHICLE OWNER TRUST 2013-A

 

0.67% ASSET BACKED NOTE, CLASS A-3

 

BMW VEHICLE OWNER TRUST 2013-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of TWO HUNDRED SIXTY-FIVE MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-3 Notes pursuant to Section 3.01 of the Indenture dated as of October 1, 2013 (the “Indenture”), between the Issuer and U.S. Bank National Association, a national banking association, as Indenture Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of November 27, 2017 (the “Class A-3 Final Scheduled Payment Date”) and the Redemption Date, if any pursuant to Section 10.01 of the Indenture. Except as otherwise provided in the Indenture, no payments of principal of the Class A-3 Notes shall be made until the Class A-1 Notes and the Class A-2 Notes have been paid in full. Capitalized terms used but not defined herein are defined in or pursuant to the Indenture, which also contains rules as to construction that shall be applicable herein.

 

The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date after giving effect to all payments of principal made on the preceding Payment Date (or, on the initial principal balance of this Note from and including the Closing Date in the case of the first Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture.  Interest on this Note will accrue for each Payment Date from and including the 25th day of the calendar month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 25th day of the calendar month of such Payment Date.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified 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.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

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.

 

______________________

(1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

  

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Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

 

  

A-3-3

  

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

 

	
Date:

	
BMW VEHICLE OWNER TRUST 2013-A

 

By: WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement,

 

By: _____________________________

Authorized Signatory

 

	 	  

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

 

 

	
Date:

	
U.S. Bank National Association,

not in its individual capacity but

solely as Indenture Trustee,

 

By:_______________________________

Authorized Officer

 

 

  

A-3-4

  

REVERSE OF CLASS A-3 NOTE

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 0.67% Asset Backed Notes, Class A-3 (herein called the “Class A-3 Notes”), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-3 Notes are subject to all terms of the Indenture.

 

The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes (collectively, the “Notes”) are and will be secured by the collateral pledged as security therefor as provided in the Indenture.

 

Principal of the Class A-3 Notes will be payable on each Payment Date in an amount described on the face hereof only after the Class A-1 Notes and the Class A-2 Notes are paid in full and have no Outstanding Amount.  “Payment Date” means the 25th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing November 25, 2013.

 

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-3 Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee may, or at the direction of the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Class A-3 Notes shall be made pro rata to the Class A-3 Noteholders entitled thereto.

 

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment

 

  

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Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the applicable Corporate Trust Office of the Indenture Trustee or such other address as is selected by the Indenture Trustee pursuant to the terms of the Indenture.

 

The Issuer shall pay interest on overdue installments of interest at the Class A-3 Rate to the extent lawful.

 

As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the Servicer on any Payment Date following the last day of the Collection Period as of which the Pool Balance is equal to or less than 5% of the Initial Pool Balance.

 

As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture.

 

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in their respective individual capacities, (ii) any owner of a beneficial interest in the Issuer, including the Sellers, or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Sellers, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

 

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government

 

  

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authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

 

The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will qualify as indebtedness secured by the Trust Estate.  Each Noteholder, by acceptance of this Note (and each Note Owner by acceptance of a beneficial interest in this Note), agrees to treat this Note for such purposes as indebtedness.

 

This Note, or any interest herein, may not be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

 

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing at least a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

 

  

A-3-7

  

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

 

This Note is issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Note and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

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

 

Each Noteholder, by acceptance of this Note or a beneficial interest herein, acknowledges and agrees that the purpose of Article XII of the Indenture is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule and that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in Article XII of the Indenture shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust, National Association in its individual capacity, U.S. Bank National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Sellers, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

  

A-3-8

  

ASSIGNMENT

 

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

 

__________________________________________________

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

 

_______________________________________________________________________

                                                (name and address of assignee)

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

 ____________________________________________, attorney, to transfer said Note on the 

books kept for registration thereof, with full power of substitution in the premises.

 

Dated:                                                                                                */

                                             Signature Guaranteed:

                                                                                                            */

 

	
  

	
_________________

	
*/

	
NOTICE: 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.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which  requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

  

A-3-9

  

EXHIBIT A-4

 

[FORM OF CLASS A-4 NOTE]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, 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 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 PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

  

A-4-1

  

 

	 REGISTERED	$49,000,000(1)	 CUSIP NO.  05578X AD0
	 No.  R-1	 	 
	 

BMW VEHICLE OWNER TRUST 2013-A

 

1.12% ASSET BACKED NOTE, CLASS A-4

 

BMW VEHICLE OWNER TRUST 2013-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of FORTY-NINE MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-4 Notes pursuant to Section 3.01 of the Indenture dated as of October 1, 2013 (the “Indenture”), between the Issuer and U.S. Bank National Association, a national banking association, as Indenture Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of April 27, 2020 (the “Class A-4 Final Scheduled Payment Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Except as otherwise provided in the Indenture, no payments of principal of the Class A-4 Notes shall be made until the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes have been paid in full.  Capitalized terms used but not defined herein are defined in the Indenture, which also contains rules as to construction that shall be applicable herein.

 

The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date after giving effect to all payments of principal made on the preceding Payment Date (or on the initial principal balance of this Note from and including the Closing Date in the case of the first Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture.  Interest on this Note will accrue for each Payment Date from and including the 25th day of the calendar month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 25th day of the calendar month of such Payment Date.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified 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.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

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.

 

___________________

(1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

  

A-4-2

  

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

 

  

A-4-3

  

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

 

	
Date:

	
BMW VEHICLE OWNER TRUST 2013-A

 

By: WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement,

 

By: _____________________________

Authorized Signatory

 

	 	  

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

 

	
Date:

	
U.S. Bank National Association,

not in its individual capacity but

solely as Indenture Trustee,

 

By:_______________________________

Authorized Officer

 

 

  

A-4-4

  

REVERSE OF CLASS A-4 NOTE

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 1.12% Asset Backed Notes, Class A-4 (herein called the “Class A-4 Notes”), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-4 Notes are subject to all terms of the Indenture.

 

The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes (collectively, the “Notes”) are and will be secured by the collateral pledged as security therefor as provided in the Indenture.

 

Principal of the Class A-4 Notes will be payable on each Payment Date in an amount described on the face hereof only after the Class A-1 Notes and the Class A-2 Notes and the Class A-3 Notes are paid in full and have no Outstanding Amount.  “Payment Date” means the 25th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing November 25, 2013.

 

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-4 Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee may, or at the direction of the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Class A-4 Notes shall be made pro rata to the Class A-4 Noteholders entitled thereto.

 

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment

 

  

A-4-5

  

Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the applicable Corporate Trust Office of the Indenture Trustee or such other address as is selected by the Indenture Trustee pursuant to the terms of the Indenture.

 

The Issuer shall pay interest on overdue installments of interest at the Class A-4 Rate to the extent lawful.

 

As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the Servicer on any Payment Date following the last day of the Collection Period as of which the Pool Balance is equal to or less than 5% of the Initial Pool Balance.

 

As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture.

 

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in their respective individual capacities, (ii) any owner of a beneficial interest in the Issuer, including the Sellers, or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Sellers, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

 

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government

 

  

A-4-6

  

authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

 

The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will qualify as indebtedness secured by the Trust Estate.  Each Noteholder, by acceptance of this Note (and each Note Owner by acceptance of a beneficial interest in this Note), agrees to treat this Note for such purposes as indebtedness.

 

This Note, or any interest herein, may not be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

 

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing at least a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

 

  

A-4-7

  

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

 

This Note is issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Note and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

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

 

Each Noteholder, by acceptance of this Note or a beneficial interest herein, acknowledges and agrees that the purpose of Article XII of the Indenture is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule and that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in Article XII of the Indenture shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust, National Association in its individual capacity, U.S. Bank National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Sellers, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

  

A-4-8

  

ASSIGNMENT

 

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

 

__________________________________________________

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

 

_______________________________________________________________________

                                                (name and address of assignee)

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

 ____________________________________________, attorney, to transfer said Note on the 

books kept for registration thereof, with full power of substitution in the premises.

 

Dated:                                                                                                */

                                             Signature Guaranteed:

                                                                                                            */

 

	
  

	
_________________

	
*/

	
NOTICE: 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.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with  the Securities Exchange Act of 1934, as amended.

  

A-4-9

  

EXHIBIT B

 

FORM OF NOTE DEPOSITORY AGREEMENT

 

 

 

[On file with the Depositor.]

 

  

1

  

EXHIBIT C

 

SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

The assessment of compliance to be delivered by the Indenture Trustee, shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”:

	
Reference

	
Criteria

	  
	  	
 

General Servicing Considerations

 

	  
	
1122(d)(1)(i)

	
Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.

	  
	
1122(d)(1)(ii)

	
If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.

	  
	
1122(d)(1)(iii)

	
Any requirements in the transaction agreements to maintain a back-up servicer for the receivables are maintained.

	  
	
1122(d)(1)(iv)

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

	  
	  	
 

Cash Collection and Administration

 

	  
	
1122(d)(2)(i)

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

	  
	
1122(d)(2)(ii)

	
Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.

	
x

	
1122(d)(2)(iii)

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

	  
	
1122(d)(2)(iv)

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

	  
	
1122(d)(2)(v)

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

	  
	
1122(d)(2)(vi)

	
Unissued checks are safeguarded so as to prevent unauthorized access.

	  
	
1122(d)(2)(vii)

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

	  

 

 

  

1

  

 

	
Reference

	
Criteria

	  

	  	
 

Investor Remittances and Reporting

 

	  
	
1122(d)(3)(i)

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

	  
	
1122(d)(3)(ii)

	
Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.

	
x

	
1122(d)(3)(iii)

	
Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.

	
x

	
1122(d)(3)(iv)

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

	
x

	  	
 

Pool Asset Administration

 

	  
	
1122(d)(4)(i)

	
Collateral or security on receivables is maintained as required by the transaction agreements or related receivables documents.

	  
	
1122(d)(4)(ii)

	
Receivables and related documents are safeguarded as required by the transaction agreements

	  
	
1122(d)(4)(iii)

	
Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.

	  
	
1122(d)(4)(iv)

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

	  
	
1122(d)(4)(v)

	
The Servicer’s records regarding the receivables agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.

	  
	
1122(d)(4)(vi)

	
Changes with respect to the terms or status of an obligor’s receivables (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with usual customary procedures.

	  
	
1122(d)(4)(vii)

	
Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with usual customary procedures.

	  
	
1122(d)(4)(viii)

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

	  
	
1122(d)(4)(ix)

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

	  

 

 

 

  

2

  

	
Reference

	
Criteria

	  

	
1122(d)(4)(x)

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

	  
	
1122(d)(4)(xi)

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

	  
	
1122(d)(4)(xii)

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

	  
	
1122(d)(4)(xiii)

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

	  
	
1122(d)(4)(xiv)

	
 Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.

	  
	
1122(d)(4)(xv)

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

	  

 

 

 

By:  _______________________________

Name:

Title:

  

3

  

TRUST INDENTURE ACT CROSS-REFERENCE CHART

(this chart is not a part of this Indenture)

 

	
TIA Section

	
Indenture Reference

	  	  
	
310(a)(1)

	
6.08, 6.11

	
310(a)(2)

	
6.11

	
310(a)(3)

	
6.10(b)

	
310(a)(4)

	
Not Applicable

	
310(a)(5)

	
6.11

	
310(b)

	
6.11

	
310(c)

	
Not Applicable

	
311(a)

	
6.13, 6.14

	
311(b)

	
Not Applicable

	
311(c)

	
Not Applicable

	
312(a)

	
7.01, 7.02(a)

	
312(b)

	
7.02(b)

	
312(c)

	
7.02(c)

	
313(a)

	
7.03, 7.04

	
313(b)

	
7.03, 7.04

	
313(c)

	
7.03, 7.04

	
313(d)

	
7.03, 7.04

	
314(a)

	
7.03(a)

	
314(b)

	
3.06(b)

	
314(c)(1)

	
11.01(a)

	
314(c)(2)

	
11.01(a)

	
314(c)(3)

	
11.01(a)

	
314(d)

	
8.04, 11.01(a)

	
314(e)

	
11.01(a)

	
315(a)

	
6.01(b)

	
315(b)

	
6.05

	
315(c)

	
6.01(a)

	
315(d)

	
6.01(c)

	
315(d)(1)

	
6.01(b), 6.01(c)(i)

	
315(d)(2)

	
6.01(c)(ii)

	
315(d)(3)

	
6.01(c)(iii)

	
315(e)

	
5.13

	
316(a)(1)(A)

	
5.11

	
316(a)(1)(B)

	
5.12

	
316(a)(2)

	
Not Applicable

	
316(b)

	
5.06, 5.07

	
316(c)

	
5.04(b)

	
317(a)(1)

	
5.03(a), 5.03(b)

	
317(a)(2)

	
5.03(d)

	
317(b)

	
3.03

	
318(a)

	
11.18

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