Document:

Exhibit

EXECUTION VERSION

AM CAPITAL FUNDING, LLC 
Issuer

CITIBANK, N.A. 
Indenture Trustee 
On behalf of the Series 2018-1 Noteholders, Class A and Class B

________________
SERIES 2018-1 SUPPLEMENT
Dated as of September 14, 2018
to
MASTER INDENTURE
Dated as of September 14, 2018

________________

$72,000,000 SECURED SENIOR TERM NOTES, 
SERIES 2018-1, CLASS A
$28,000,000 SECURED SUBORDINATED TERM NOTES, 
SERIES 2018-1, CLASS B

    

Table of Contents
Page
ARTICLE I 
 
CREATION OF SERIES 2018-1 NOTES, CLASS A AND CLASS B
		
	Section 1.01
	Designation.    2

ARTICLE II 
 
DEFINITIONS
		
	Section 2.01
	Definitions.    2

		
	Section 2.02
	Other Defined Terms.    6

		
	Section 2.03
	Rules of Construction.    6

ARTICLE III 
 
SERIES 2018-1 ACCOUNTS
		
	Section 3.01
	Series 2018-1 Accounts.    7

ARTICLE IV 
 
INTEREST, PRINCIPAL AND APPLICATION OF ALLOCATED 
SERIES COLLECTIONS
		
	Section 4.01
	Interest, Principal, Etc.    10

		
	Section 4.02
	Distributions.    11

		
	Section 4.03
	Funding Conditions.    12

ARTICLE V 
 
DELIVERY OF SERIES 2018-1 NOTES; FORM OF NOTES

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DAL:968991.6

Table of Contents
(continued)
Page

		
	Section 5.01
	Delivery and Payment for Series 2018-1 Notes.    12

		
	Section 5.02
	Form of Series 2018-1 Notes; Denominations.    13

ARTICLE VI 
 
EARLY AMORTIZATION EVENTS AND EVENTS OF DEFAULT
		
	Section 6.01
	Early Amortization Events.    13

		
	Section 6.02
	Events of Default; Priorities.    13

ARTICLE VII 
 
REDEMPTION OF SERIES 2018-1 NOTES
		
	Section 7.01
	Optional Redemption of Series 2018-1 Notes in Full.    13

ARTICLE VIII 
 
RESTRICTIONS ON TRANSFER
		
	Section 8.01
	Restrictions on Transfer.    14

ARTICLE IX 
 
MISCELLANEOUS PROVISIONS
		
	Section 9.01
	Amendment.    14

		
	Section 9.02
	Governing Law.    14

		
	Section 9.03
	Counterparts.    15

		
	Section 9.04
	Ratification of Master Indenture and the Supplement.    15

		
	Section 9.05
	Cross-references.    15

		
	Section 9.06
	Tax Treatment.    15

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DAL:968991.6

Table of Contents
(continued)
Page

		
	Section 9.07
	Notice to Rating Agency; Rating Confirmation for Change in Required Equity Level.    15

		
	Section 9.08
	Specific Notice to Trustee and Noteholders of Occurrence of Significant NPV Period.    15

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DAL:968991.6

SCHEDULES AND EXHIBITS
Schedule I    Series 2018-1 Accounts
Exhibit A    Form of Series 2018-1 Class A Notes
Exhibit B    Reserved
Exhibit C    Form of Series 2018-1 Class B Notes
Exhibit D    Form of QIB Investor Representation Letter 
Exhibit E    Form of Upfront Agreed-Upon Procedures

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DAL:968991.6

This SERIES 2018-1 SUPPLEMENT is dated as of September 14, 2018 (as amended, supplemented, restated or otherwise modified from time to time, this “Supplement”), between AM CAPITAL FUNDING, LLC, a limited liability company organized under the laws of the State of Delaware (the “Issuer”), and CITIBANK, N.A., as indenture trustee hereunder and under the Master Indenture (the “Trustee”).
W I T N E S S E T H:
WHEREAS, the Issuer and the Trustee are parties to the Master Indenture;
WHEREAS, the Issuer has, pursuant to the Master Indenture, provided for the creation and issuance of separate Series of Notes, including within such Series individual Classes thereof, pursuant to Supplements thereunder specifying the principal terms thereof;
WHEREAS, the Issuer and the Trustee, through this Supplement, intend to provide for the issuance and specification of the principal terms of $72,000,000 of the Issuer’s Secured Senior Term Notes, Series 2018-1, Class A (the “Series 2018-1 Class A Notes”) and $28,000,000 of the Issuer’s Secured Subordinated Term Notes, Series 2018-1, Class B (the “Series 2018-1 Class B Notes”);
NOW THEREFORE, in consideration of the mutual agreements herein contained, and of other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
GRANTING CLAUSES
In addition to the grants and assignments made pursuant to the Master Indenture, the Issuer hereby grants and assigns to the Trustee for the benefit of the Series 2018-1 Noteholders, all of the Issuer’s right, title and interest in and to (a) the Collections from time to time allocated to the Series 2018-1 Noteholders under the Master Indenture, (b) all funds from time to time on deposit in the Series 2018-1 Accounts, including all Eligible Investments purchased with funds therein and all income from the investment of funds therein, and (c) all present and future claims, demands, causes of action and choses in action regarding any of the foregoing and all payments on any of the foregoing and all proceeds of any nature whatsoever regarding any of the foregoing, including all proceeds of the conversion thereof (voluntarily or involuntarily) into cash or other liquid property, and all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, general intangibles, investment property, rights to payment of any kind and other forms of obligations, and receivables, instruments and other property that at any time constitute any part of or are included in the proceeds of any of the foregoing.
The foregoing grants and assignments are made in trust to secure the Series 2018-1 Notes equally and ratably without prejudice, priority or distinction among any Series 2018-1 Note (except as specified herein with respect to the subordination of the Series 2018-1 Class B Notes to the Series 2018-1 Class A Notes) and to secure (i) the payment of all amounts due on the Series 2018-1 Notes in accordance with their terms, and (ii) the payment of all other sums payable under, 

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and compliance with the provisions of, the Master Indenture and this Supplement as the same relate to the Series 2018-1 Notes.
The Trustee hereby acknowledges the foregoing grants and assignments, accepts the trusts under this Supplement in accordance with the provisions hereof and agrees to perform its duties herein provided.
ARTICLE I 
 
CREATION OF SERIES 2018-1 NOTES, CLASS A AND CLASS B
Section 1.01    Designation. The Issuer hereby designates a Series of Notes for issuance on the Closing Date (as defined below) as the “Series 2018-1 Notes” (sometimes referred to as “Series 2018-1”) pursuant to the Master Indenture and this Supplement.  The Series 2018-1 Notes, from and after the date hereof, shall be an authorized Series of Notes governed by the Master Indenture and this Supplement.  The Series 2018-1 Notes are designated as two separate Classes thereof, the Issuer’s “Secured Senior Term Notes, Series 2018-1, Class A” and the Issuer’s “Secured Subordinated Term Notes, Series 2018-1, Class B”.
(a)    The Series 2018-1 Notes and this Supplement shall be deemed to be an individual “Series” of “Notes” and a “Supplement,” respectively, for all purposes under the Master Indenture.  In addition, the Series 2018-1 Class A Notes and Series 2018-1 Class B Notes constituting Series 2018-1 shall be deemed individual Classes of Series 2018-1 for all purposes under the Master Indenture.  If any term or provision contained in the Series 2018-1 Notes or this Supplement conflicts with or is inconsistent with any term or provision contained in the Master Indenture, the terms and provisions of the Series 2018-1 Notes or this Supplement, as the case may be, shall be controlling with respect to the Series 2018-1 Notes.
(b)    Each term defined in Section 2.01 of this Supplement shall relate only to the Series 2018-1 Notes and this Supplement and to no other Series or other Supplement related thereto.
ARTICLE II     
 
DEFINITIONS
Section 2.01    Definitions.    Whenever used in this Supplement, the following words and phrases shall have the following meanings:
“Alternate Base Rate” means, on any day, a fluctuating rate of interest per annum equal to the highest of: (i) the Prime Rate reported as of the close of business of the preceding Business Day, and (ii) the Federal Funds Rate plus 0.50%.
“Amortization Period” means the period commencing with the Amortization Period Commencement Date, and ending on the day on which the Series 2018-1 Class A Principal Amount 

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and Series 2018-1 Class B Principal Amount have each been repaid in full. The Issuer shall promptly notify the Trustee upon the commencement of the Amortization Period. 
“Amortization Period Commencement Date” means the earlier of (i) the Early Amortization Commencement Date, or (ii) the Schedule Amortization Commencement Dates.
“Closing Date” means, with respect to Series 2018-1, September 14, 2018.
“Cut-off Date” means, with respect to Series 2018-1, the Business Day immediately preceding the Closing Date.
“Early Amortization Commencement Date” means, with respect to Series 2018-1, the earlier of (i) the date on which an Early Amortization Event occurs and (ii) the date on which an Event of Default occurs.
“Early Amortization Event” for Series 2018-1 means: 
(i)    failure on the part of the Issuer to make any payment or deposit required to be made by the Issuer by the terms of (1) the Servicing Agreement or (2) any Supplement, with such failure continuing for two Business Days after the date such payment or deposit is required to be made or, to the extent a force majeure event has occurred in respect of the Servicer or Issuer, five Business Days;
(ii)    any Lien (other than a Permitted Lien) is imposed on the Loans or any other of the Trust Estate assets, and such Lien has not been removed or extinguished within ten days of its imposition;
(iii)    CFC’s, the Servicer’s or the Issuer’s failure to otherwise observe or perform in any material respect any covenants or agreements set forth in any Program Agreement to which they are a party which failure would have a Material Adverse Effect and which continues unremedied for a period of 30 days after the date on which written notice of such failure shall have been given to the offending party by the Issuer, the Servicer, the Trustee or a Majority of Noteholders, as the case may be (provided, that any failure to perform a covenant or agreement pertinent to a Loan or related Loan Agreement with respect to which CFC performs its repurchase obligation under Section 7.02 of the Transfer and Sale Agreement, shall not constitute an Early Amortization Event); 
(iv)    any representation or warranty made by CFC in the Transfer and Sale Agreement, or by the Issuer in the Master Indenture or any Supplement, shall prove to have been incorrect in any material respect when made or when delivered, and which shall continue to be incorrect in any material respect for a period of 30 days after the date on which written notice of such failure shall have been given to the Issuer by the Trustee, or to the Issuer and the Trustee by a Majority of Noteholders (provided, that an incorrect misrepresentation or warranty with respect to which CFC performs its repurchase obligation under Section 7.02 of the Transfer and Sale Agreement, shall not constitute an Early Amortization Event); or

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(v) a Significant NPV Period shall have occurred after taking into account Collections each day;
provided that any such Early Amortization Event (other than the events described in clauses (v) above) may be waived with the written consent of a Majority of Noteholders, and written notice to the Rating Agencies.
“Early Amortization Period” means the period beginning on the Early Amortization Commencement Date and ending on the day on which the Series 2018-1 Class A Principal Amount and the Series 2018-1 Class B Principal Amount have each been repaid in full, and all other Secured Obligations attributable to the Series 2018-1 Notes have been paid in full.
“Federal Funds Rate” means the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for the day (or, if the day is not a Business Day, the immediately preceding Business Day) by the Federal Reserve Bank of New York; provided that if the rate is not so published for any Business Day, the rate for purposes of this clause will be the average of the quotations for the day on such transactions received by the Paying Agent from three Federal funds brokers of recognized standing selected by it.
“Global Notes” as defined in Section 5.01 hereto.
“Holder” and “Series 2018-1 Noteholder” means a Holder (as defined in Annex X to the Master Indenture) of a Series 2018-1 Note. 
“Majority Noteholders” or “Majority of Noteholders” means, for Series 2018-1 and for all purposes as to which such term is used in any Program Agreement or the Annex X Definitions in relation to Series 2018-1, (i) for so long as any Series 2018-1 Class A Principal Amount remains outstanding, Holders of Series 2018-1 Class A Notes, evidencing more than 50% of the Series 2018-1 Class A Principal Amount applicable to such Holders, on such date, together with Holders of Series 2018-1 Class B Notes evidencing more than 50% of the outstanding Series 2018-1 Class B Principal Amount, and (ii) otherwise, Holders of Series 2018-1 Class B Notes evidencing more than 50% of the outstanding Series 2018-1 Class B Principal Amount.
“Monthly Period” means the period from and including any Payment Date to (but excluding) the next succeeding Payment Date, except that the first Monthly Period after the Closing Date for the Series 2018-1 Notes shall begin on and include such Closing Date and shall extend to (but exclude) the Payment Date in October 2018.
“Prime Rate” means the prime rate of interest as published from time to time in the most recent Pacific Edition of The Wall Street Journal.
“Revolving Period” means, with respect to Series 2018-1, the period beginning on the Closing Date and ending on the day before the Amortization Period Commencement Date.

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“Scheduled Amortization Commencement Dates” mean, with respect to each class of the Series 2018-1 Notes, the Payment Date six months prior to the Series 2018-1 Maturity Date.
“Series 2018-1” is defined in Section 1.01(a).
“Series 2018-1 Account” means the accounts established pursuant to Section 3.01(a).
“Series 2018-1 Class A Distribution Amount” means, with respect to any Payment Date, all funds available in the Principal Funding Account, not to exceed in the aggregate the Series 2018-1 Class A Principal Amount as of such Payment Date (prior to giving effect to any distribution in respect of principal of the Series 2018-1 Class A Notes to be made on such Payment Date).
“Series 2018-1 Class A Holder” means a Holder of a Series 2018-1 Class A Note. 
“Series 2018-1 Class A Interest” means the Note Interest payable in respect of the Series 2018-1 Class A Notes as calculated in accordance with Section 4.01 hereof.
“Series 2018-1 Class A Note Purchase Agreement” means, collectively, each Series 2018-1 Class A Note Purchase Agreement dated as of the Closing Date among the Issuer, the Servicer and the respective purchasers of the Series 2018-1 Class A Notes.  The Series 2018-1 Class A Note Purchase Agreement is hereby designated a “Program Agreement” for purposes of Annex X to the Master Indenture.
“Series 2018-1 Class A Note Rate” means with respect to the Series 2018-1 Class A Notes, a fixed rate of 4.98% per annum. 
“Series 2018-1 Class A Notes” is defined in the preamble hereto.  
“Series 2018-1 Class A Principal” means the Note Principal payable in respect of the Series 2018-1 Class A Notes as calculated in accordance with Section 4.01 hereof.
“Series 2018-1 Class A Principal Amount” means, at any time, the aggregate principal amount of Series 2018-1 Class A Notes issued on the Closing Date, reduced (but not below zero) by the aggregate amount of all distributions that have been made to the Series 2018-1 Class A Holders in repayment of principal.
“Series 2018-1 Class B Distribution Amount” means, with respect to any Payment Date, all funds available in the Principal Funding Account, not to exceed in the aggregate the Series 2018-1 Class B Principal Amount as of such Payment Date (prior to giving effect to any distribution in respect of principal of the Series 2018-1 Class B Notes to be made on such Payment Date).
“Series 2018-1 Class B Holder” means a Holder (as defined in Annex X to the Master Indenture) of a Series 2018-1 Class B Note. 
“Series 2018-1 Class B Interest” means the Note Interest payable in respect of the Series 2018-1 Class B Notes as calculated in accordance with Section 4.01 hereof.

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“Series 2018-1 Class B Note Purchase Agreement” means the Series 2018-1 Class B Note Purchase Agreement dated as of the Closing Date among the Issuer, the Servicer and the purchaser of the Series 2018-1 Class B Notes.  The Series 2018-1 Class B Note Purchase Agreement is hereby designated a “Program Agreement” for purposes of Annex X to the Master Indenture.
“Series 2018-1 Class B Note Rate” means with respect to the Series 2018-1 Class B Notes, a fixed rate of 5.98% per annum.
“Series 2018-1 Class B Notes” is defined in the preamble hereto.  
“Series 2018-1 Class B Principal” means the Note Principal payable in respect of the Series 2018-1 Class B Notes as calculated in accordance with Section 4.01 hereof.
“Series 2018-1 Class B Principal Amount” means, at any time, the aggregate principal amount of Series 2018-1 Class B Notes issued on the Closing Date, reduced (but not below zero) by the aggregate amount of all distributions that have been made to the Series 2018-1 Class B Holders in repayment of principal.
“Series 2018-1 Investor Percentage” means the percentage equivalent of a fraction, the numerator of which is the Series 2018-1 Principal Amount and the denominator of which is the sum of the Principal Amounts of all Series as to which an Amortization Period, or any Delineated Principal Funding Period, has commenced and is continuing. 
“Series 2018-1 Maturity Date” means the Payment Date occurring in December 2023.
“Series 2018-1 Principal Amount” means, (i) with respect to the Series 2018-1 Class A Notes, the Series 2018-1 Class A Principal Amount; and (ii) with respect to the Series 2018-1 Class B Notes, the Series 2018-1 Class B Principal Amount.
“Series 2018-1 Supplement” means this supplement to the Master Indenture.
“Special Liquidation Circumstance” means the occurrence of an Event of Default or the undertaking by the Servicer, Successor Servicer or Trustee of the liquidation actions described in Section 5.04 of the Servicing Agreement or comparable liquidation actions following a foreclosure of the Lien of the Master Indenture as to the Trust Estate assets.
“Unmatured Early Amortization Event” means an event or condition that, upon the giving of notice or the passage of time, or both, would become an Early Amortization Event.
Section 2.02    Other Defined Terms.        Capitalized terms used in this Supplement that are not otherwise defined have the meanings assigned thereto in Annex X to the Master Indenture.
Section 2.03    Rules of Construction.    Except as otherwise expressly provided in this Supplement or unless the context otherwise clearly requires:

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(a)    Defined terms include, as appropriate, all genders and the plural as well as the singular.  References to designated articles, sections, and other subdivisions of this Supplement, such as “Section 6.12(a),” refer to the designated article, Section or other subdivision of this Supplement as a whole and to all subdivisions of the designated article, section, or other subdivision.  The words “herein,” “hereof,” “hereto,” “hereunder” and other words of similar import refer to this Supplement as a whole and not to any particular article, Section or other subdivision of this Supplement.
(b)    Any term that relates to a document or a statute, rule, or regulation includes any amendments, modifications, supplements, or any other changes that may have occurred since the document, statute or rule came into being, including changes that occur after the date of this Supplement.
(c)    Any party may execute any of its obligations under this Supplement either directly or through others, and the right to cause something to be done rather than doing it directly shall be implicit in every requirement under this Supplement; provided, however, that each party shall nonetheless remain responsible to the other parties hereto for the proper performance of its obligations hereunder.
(d)    The term “including” and all its variations mean “including but not limited to.”  Except when used in conjunction with the word “either,” the word “or” is always used inclusively (for example, the phrase “A or B” means “A or B or both,” not “either A or B but not both”).
(e)    All accounting terms used in an accounting context shall be construed in accordance with generally accepted accounting principles.  Capitalized terms used in this Supplement without definition that are defined in the Uniform Commercial Code are used in this Supplement as defined in the Uniform Commercial Code.
(f)    In the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” or “until” mean “to but excluding.”
ARTICLE III     
 
SERIES 2018-1 ACCOUNTS
Section 3.01    Series 2018-1 Accounts. 
(a)    Creation of Accounts.
(i)    The Trustee, for the benefit of the Series 2018-1 Noteholders and the individual Classes thereof, as applicable, shall establish and maintain in the name of the Trustee at a Qualified Institution a non-interest bearing trust account accessible only by the Trustee (the “Series 2018-1 Required Amounts Account”), which shall be identified as the “Required Amounts Account for AM Capital Funding, LLC Secured Senior Term and Subordinated Term Notes, Series 2018-1” and shall bear a designation clearly indicating 

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that the funds deposited therein are held for the benefit of the Series 2018-1 Noteholders.  The Series 2018-1 Required Amounts Account shall be established by and initially maintained with the Trustee at the direction of the Servicer in accordance with the Servicing Agreement.
(ii)    The Trustee, for the benefit of the Series 2018-1 Noteholders and the individual Classes thereof, as applicable, shall establish and maintain in the name of the Trustee at a Qualified Institution a non-interest bearing trust account accessible only by the Trustee (the “Series 2018-1 Principal Funding Account”), which shall be identified as the “Principal Funding Account for AM Capital Funding, LLC Secured Senior Term and Subordinated Term Notes, Series 2018-1” and shall bear a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2018-1 Noteholders.  The Series 2018-1 Principal Funding Account shall be established by and initially maintained with the Trustee at the direction of the Servicer in accordance with the Servicing Agreement.   
(b)    Eligible Investments.
(i)    At the written direction of the Servicer (which may be a standing direction), funds on deposit in the Series 2018-1 Accounts shall be invested by the Trustee in Eligible Investments selected by the Servicer that will mature so that they will be available on or before the Payment Date for the Monthly Period in which the investment is made.  All such Eligible Investments shall be held by the Trustee for the benefit of the Series 2018-1 Noteholders.  
(ii)    All investment earnings (net of losses and investment expenses) on funds on deposit in the Series 2018-1 Accounts shall be deposited into the Collection Account on the Business Day on which the related Eligible Investments mature and are available and shall be treated as a portion of the Collections allocable to Series 2018-1 for the Monthly Period in which the investments were made.
(iii)    In no event shall the Trustee be liable for the selection of Eligible Investments or for investment losses incurred thereon.  The Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any Eligible Investment prior to its stated maturity or any failure of the Servicer to provide timely written direction.
(c)    Maintenance of Accounts.
(i)    The Trustee shall possess all right, title and interest in and to all funds on deposit in, and all Eligible Investments, if any, credited to, and in all proceeds of, the Series 2018-1 Accounts.  The Series 2018-1 Accounts shall be under the sole dominion and control of the Trustee for the benefit of the Series 2018-1 Noteholders.  If, at any time, any Series 2018-1 Account is held by an institution other than a Qualified  Institution, the Trustee (or the Servicer, at the direction of the Trustee and on its behalf) shall within five Business Days establish an equivalent new Series 2018-1 Account meeting the conditions for that account in this Section and shall transfer any cash and any investments to such new account.  Neither the Servicer, the Issuer nor any Person or entity claiming through the Servicer or 

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the Issuer shall have any right, title or interest in or to, or any right to withdraw any amount from, any Series 2018-1 Account, except as expressly provided in this Supplement or in the Servicing Agreement.  Schedule I hereto identifies each Series 2018-1 Account by account number, the account designation of each account, and the name and location of the institution with which each account has been established.  If a substitute Series 2018-1 Account is established pursuant to this Section, the party establishing such substitute Series 2018-1 Account shall promptly provide to the Servicer and the Trustee an amended Schedule I, with the relevant information for such substitute Series 2018-1 Account.
(ii)    Notwithstanding anything in this Supplement to the contrary, the Servicer shall have the power, revocable by the Trustee at the direction of the Majority Noteholders for the Series 2018-1 Notes, to instruct the Trustee to make withdrawals and payments from the Series 2018-1 Accounts to carry out the Servicer’s or the Trustee’s duties under this Supplement and the Servicing Agreement.
(iii)    Any direction by the Servicer to invest funds on deposit in any Series 2018-1 Account shall be in writing, or by telephone, confirmed promptly in writing, and shall certify that the requested investment is an Eligible Investment that matures at or prior to the time required by this Supplement.

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ARTICLE IV     
 
INTEREST, PRINCIPAL AND APPLICATION OF ALLOCATED 
SERIES COLLECTIONS
Section 4.01    Interest, Principal, Etc. 
(a)    Determination of Series 2018-1 Class A Interest.
(i)    Interest on the outstanding Series 2018-1 Class A Principal Amount shall accrue during any Interest Accrual Period at the Series 2018-1 Class A Note Rate, calculated on the basis of 12 months of 30 days, or calculated on the basis of a three hundred sixty (360) day year for the actual number of calendar days during the stub period from the Closing Date to the first Interest Payment Date.
(ii)    Interest with respect to the Series 2018-1 Class A Notes due but not paid on any Payment Date will be due on demand with additional interest on the amount at the Alternate Base Rate, to the extent permitted by law, with such interest to be compounded daily.
(b)    Determination of Series 2018-1 Class B Interest.
(i)    Interest on the outstanding Series 2018-1 Class B Principal Amount shall accrue during any Interest Accrual Period at the Series 2018-1 Class B Note Rate, calculated on the basis of 12 months of 30 days , or calculated on the basis of a three hundred sixty (360) day year for the actual number of calendar days during the stub period from the Closing Date to the First Interest Payment Date.
(ii)    Interest with respect to the Series 2018-1 Class B Notes due but not paid on any Payment Date will be due on demand with additional interest on the amount at the Alternate Base Rate, to the extent permitted by law, with such interest to be compounded daily.
(c)    Determination of Series 2018-1 Class A Principal and Series 2018-1 Class B Principal.  Series 2018-1 Class A Principal and Series 2018-1 Class B Principal shall be payable, from the Series 2018-1 Investor Percentage of daily Collections allocated therefor and on deposit in the Series 2018-1 Principal Funding Account in accordance with Section 4.03 of the Servicing Agreement, in the manner and order of priority set forth below:
(i)    during any Amortization Period, on each Payment Date during such Amortization Period, Series 2018-1 Class A Principal shall be payable in an amount equal to the largest Series 2018-1 Class A Distribution Amount which does not exceed such allocated Collections on deposit in the Series 2018-1 Principal Funding Account as of the close of business on the last Business Day of the calendar month preceding the month in which such Payment Date occurs (plus, in respect of a Payment Date constituting the Series 2018-1 Maturity Date or a Payment Date following acceleration of the Series 2018-1 Notes 

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after an Event of Default, the Series Allocation Percentage of any amounts then on deposit in the Equalization Cash Account, which in such circumstance shall be allocated to the Series 2018-1 Principal Funding Account for repayment of principal on Series 2018-1 as aforesaid), provided, however, that (A) with respect to any Payment Date, Series 2018-1 Class A Principal may not exceed the Series 2018-1 Class A Principal Amount outstanding, (B) on and after the Series 2018-1 Maturity Date, or following acceleration of the Series 2018-1 Class A Notes after an Event of Default, the Series 2018-1 Class A Principal payable shall be an amount equal to the Series 2018-1 Class A Principal Amount outstanding on such date, and (C) to the extent that such allocated Collections do not exceed the smallest Series 2018-1 Class A Distribution Amount, Series 2018-1 Class A Principal shall (except as specified in clause (B) above) be deemed to be zero; and
(ii)    during any Amortization Period, on each Payment Date during such Amortization Period, (A) no Series 2018-1 Class B Principal shall be payable until all Series 2018-1 Class A Principal Amount outstanding has been repaid in full (or a priority allocation under clause (i) above results in sufficient funds to repay the Series 2018-1 Class A Principal Amount in full on the current upcoming Payment Date), and (B) thereafter Series 2018-1 Class B Principal shall be payable in an amount equal to the largest Series 2018-1 Class B Distribution Amount which does not exceed the remaining allocated Collections on deposit in the Series 2018-1 Principal Funding Account, not theretofore allocated to pay Series 2018-1 Class A Principal, as of the close of business on the last Business Day of the calendar month preceding the month in which such Payment Date occurs (plus, in respect of a Payment Date constituting the Series 2018-1 Maturity Date or a Payment Date following acceleration of the Series 2018-1 Notes after an Event of Default, the Series Allocation Percentage of any amounts then on deposit in the Equalization Cash Account, which in such circumstance shall be allocated to the Series 2018-1 Principal Funding Account for repayment of principal on Series 2018-1 as aforesaid), provided, however, that (1) with respect to any Payment Date, Series 2018-1 Class B Principal may not exceed the Series 2018-1 Class B Principal Amount outstanding, (2) on and after the Series 2018-1 Maturity Date, or following acceleration of the Series 2018-1 Class B Notes after an Event of Default, the Series 2018-1 Class B Principal payable shall be an amount equal to the Series 2018-1 Class B Principal Amount outstanding on such date (but subject to subclause (A) of this clause (ii) above), and (3) to the extent that such allocated Collections do not exceed the smallest Series 2018-1 Class B Distribution Amount, Series 2018-1 Class B Principal shall (except as specified in clause (2) above) be deemed to be zero.
Section 4.02    Distributions.     On each Payment Date, the Trustee shall in accordance with instructions set out in the applicable Daily Report, distribute to the Series 2018-1 Class A Holders and Series 2018-1 Class B Holders, as applicable, all accrued and unpaid Series 2018-1 Class A Interest and Series 2018-1 Class B Interest, as applicable, payable on such Payment Date with respect to such Series 2018-1 Class.  In addition, the Trustee shall, in accordance with instructions set out in the applicable Daily Report, distribute to the Holders, the following amounts:

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(a)    on any Payment Date, from funds deposited in the Series 2018-1 Principal Funding Account, the Series 2018-1 Class A Principal to be distributed in repayment of the Series 2018-1 Class A Principal Amount as and to the extent provided in Section 4.01 hereof;
(b)    on any Payment Date, from funds deposited in the Series 2018-1 Principal Funding Account, the Series 2018-1 Class B Principal to be distributed in repayment of the Series 2018-1 Class B Principal Amount as and to the extent provided in Section 4.01 hereof; and
(c)    on any Payment Date, any further amounts in respect of Servicing Fees, Trustee Fees and/or Backup Servicer Fees to be paid to the parties entitled to such payment from the Required Amounts Account for Series 2018-1, in accordance with Section 4.03(d) of the Servicing Agreement (and without duplication of the payments described above).
In addition, following repayment in full of all principal amount outstanding and accrued interest on the Series 2018-1 Notes, and all other Secured Obligations related to Series 2018-1, any amounts remaining in the Required Amounts Account for Series 2018-1 shall be released from such account and allocated as Collections in accordance with Section 4.03 of the Servicing Agreement (or, if no other Series of Notes or other Secured Obligations are then outstanding, released to the Issuer free and clear of the lien of the Master Indenture and this Supplement).
All distributions pursuant to this Section shall be distributed to the Holders or other parties entitled thereto in immediately available funds by wire transfer, in accordance with written instructions provided by the applicable payee.
Section 4.03    Funding Conditions.
(a)    The initial issuance of Series 2018-1 Class A Notes and Series 2018-1 Class B Notes is subject to the satisfaction of the following conditions: 
(b)    an amount at least equal to the Required Amounts for Series 2018-1 shall at the time of such issuance be on deposit in the Required Amounts Account for Series 2018-1; and
(c)    the Servicer shall cause a firm of Independent Public Accountants to review a random sample of Daily Reports and the Settlement Statement(s) to prepare and deliver to the Trustee and each Rating Agency a report setting forth the verifications of data and information specified in Exhibit E attached hereto. 
ARTICLE V     
 
DELIVERY OF SERIES 2018-1 NOTES; FORM OF NOTES
Section 5.01    Delivery and Payment for Series 2018-1 Notes.    On or before the Closing Date, the Issuer shall execute, and the Trustee shall authenticate at the written direction of the Issuer, the Series 2018-1 Class A Notes and Series 2018-1 Class B Notes in accordance with Section 2.03 of the Master Indenture.  The Series 2018-1 Class A Notes shall be initially issued and shall be maintained 

12

as global notes to be held in book-entry form by the Trustee as custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee (the “Global Notes”), except that one Class B Note in the amount of $5,000,000 shall be issued to A-Mark Precious Metals, Inc.  The aggregate outstanding amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and DTC, or their respective nominees, as the case may be, as hereinafter provided. 
Section 5.02    Form of Series 2018-1 Notes; Denominations.    The Series 2018-1 Class A Notes and Series 2018-1 Class B Notes shall be substantially in the form attached hereto (respectively) as Exhibit A and Exhibit C, and shall be issued in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof, except that one Note of each Class may be issued in a lesser denomination. 
ARTICLE VI     
 
EARLY AMORTIZATION EVENTS AND EVENTS OF DEFAULT
Section 6.01    Early Amortization Events.    With respect to Series 2018-1, Early Amortization Events, and waivers in respect thereof, shall be determined consistent with the definition of Early Amortization Events set forth herein and other relevant provisions of the Master Indenture.
Section 6.02    Events of Default; Priorities.    If an Event of Default occurs and is continuing and the Trustee collects any money or property pursuant to Article V of the Master Indenture, it shall deposit such amounts into the Collection Account and allocate the amounts deposited therein to Series 2018-1 and other outstanding Series (if any) in accordance with Section 4.03 of the Servicing Agreement (and, with respect to Series 2018-1, in accordance with Article IV of this Supplement with an Amortization Period in effect).
ARTICLE VII     
 
REDEMPTION OF SERIES 2018-1 NOTES
Section 7.01    Optional Redemption of Series 2018-1 Notes in Full.    The Series 2018-1 Notes are subject to early redemption in full at the Series 2018-1 Principal Amount on or after the occurrence of the Scheduled Amortization Commencement Dates. The Notes are not otherwise subject to early redemption or prepayment at the Issuer’s option, in whole or in part, prior to maturity.  However, the commencement of an Early Amortization Period for Series 2018-1 as a result of an Event of Default or Early Amortization Event can result in the allocation of Collections to the Principal Funding Account and the repayment on subsequent Payment Dates of all or portions of outstanding principal 

13

on the Class A Notes and Class B Notes (in that order of priority) prior to their final maturity.  
After  the occurrence of the Scheduled Amortization Commencement Dates, the Issuer shall provide at least ten (10) days’ prior notice to the Trustee and the Trustee shall provide prompt (but not later than five (5) days prior to the applicable redemption date) notice thereof to DTC (and the Noteholders, if any Notes are held in definitive form).  Such notice of redemption shall state: (i) the redemption date, (ii) the redemption price (which shall be the Series 2018-1 Principal Amount, plus the applicable accrued and unpaid interest on the redemption date), (iii) that the Record Date otherwise applicable to such redemption date is not applicable and that payments shall only be made with respect to definitive Notes upon presentation and surrender of such Notes, (iv) the place where any such definitive Notes are to be surrendered for payment of the redemption price; (v) that interest on the Notes shall cease to accrue on the redemption date; and (vi) the CUSIP numbers (if applicable) for such Notes.
Notice of redemption shall be given by the Trustee in the name and at the expense of the Issuer.  In addition the Issuer shall notify each Rating Agency upon redemption of the Notes. Failure to give notice of redemption, or any defect therein, to any Noteholder shall not impair or affect the validity of the redemption of any Note.
The Notes to be redeemed shall, following notice of redemption as required herein, 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.
ARTICLE VIII     
 
RESTRICTIONS ON TRANSFER
Section 8.01    Restrictions on Transfer.    
(a)    No reoffer, resale, pledge or other transfer of any Series 2018-1 Note or any interest therein or participation thereof subsequent to the initial purchase from the Issuer may be made by the Trustee  unless such resale or transfer is made to a person who represents that it is “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933, as amended, who also is a “Qualified Purchaser” within the meaning of the Investment Company Act of 1940, as amended.  Notwithstanding any other provision of the Master Indenture or this Supplement, no registration or transfer of any Series 2018-1 Note shall be made unless the registrant or transferee shall deliver, at its expense, to the Issuer, the Servicer and the Trustee a fully completed investor letter, substantially in the form attached hereto as Exhibit D.
(b)    Each Series 2018-1 Note will bear legends substantially to the effect of the foregoing.

14

ARTICLE IX     
 
MISCELLANEOUS PROVISIONS
Section 9.01    Amendment.    No amendment may be made to this Supplement other than as provided in the Master Indenture.
Section 9.02    Governing Law.    THE AGREEMENT AND EACH SERIES 2018-1 NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REFERENCE TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 9.03    Counterparts.    This Supplement may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.
Section 9.04    Ratification of Master Indenture and the Supplement.    As supplemented by this Supplement, the Master Indenture and this Supplement shall be read, taken, and construed as one and the same instrument.
Section 9.05    Cross-references.    Cross-references to sections and subsections correspond to sections and subsections of this Supplement except where otherwise indicated.
Section 9.06    Tax Treatment.    The Issuer and each Holder of a Series 2018-1 Class A Note and a Series 2018-1 Class B Note (by acceptance of such Note) hereby agree to treat such Notes as indebtedness for U.S. federal, state, local and foreign income and franchise tax purposes.
As long as any Series 2018-1 Class A Note or Series 2018-1 Class B Note remains outstanding, the Issuer will not issue any additional securities or debt instruments without first obtaining an opinion from a counsel acceptable to the Trustee that after such issuance the Issuer will not be characterized as an association or publicly traded partnership for U.S. federal income tax purposes.
Section 9.07    Notice to Rating Agency; Rating Confirmation for Change in Required Equity Level.    
(a)    The Issuer shall promptly notify the Rating Agency of any claim filed against the Issuer in any court, governmental authority or arbitrator.  Such notice shall comply with Section 10.03 of the Master Indenture.

15

(b)    The Issuer shall not cause or permit the Required Equity Level (within the meaning of clause (a) of the definition thereof in Annex X) with respect to any Loan to be reduced from the level in effect under the Collection Policies as in effect on the Closing Date of Series 2018-1 unless the Rating Agency has been notified in writing and the Rating Agency Condition has been satisfied.  
Section 9.08    Specific Notice to Trustee and Noteholders of Occurrence of Significant NPV Period.    The Issuer agrees to, or agrees to cause the Servicer to, deliver written notice to the Trustee upon the occurrence of a Significant NPV Period.  The Trustee upon receiving such notice shall promptly (but in any event within five Business Days) give written notice of same to the Holders of Series 2018-1.

16

IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Supplement to be duly executed by their respective officers as of the day and year first above written. 
	
	
	AM Capital Funding, LLC, as Issuer

	 

	 

	   By:________________________________

	   Printed Name:  Thor Gjerdrum

	   Title:                 President

	 

	 

	CITIBANK, N.A., as Trustee

	 

	

By:                   

	Printed Name:

	Title:

	 

 [Signature Page to the Series 2018-1 Supplement]

SCHEDULE I
SERIES 2018-1 ACCOUNTS
	
				
	Account Designation
	Account Number
	Institution Name
	Institution Location

	A-Mark Required Amounts Account
	12055500
	Citibank, N.A.
	480 Washington Boulevard 
30th Floor 
Jersey City, NJ 07310 
Attention: Citibank Agency and Trust Operations

	A-Mark Principal Funding Account
	12055400

	A-Mark Equalization Cash Account
	12055300

	A-Mark Collection Cash Account
	12055200

 

    

EXHIBIT A
FORM OF SERIES 2018-1 CLASS A NOTES
THIS SERIES 2018-1 CLASS A NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS SERIES 2018-1 CLASS A NOTE, AGREES THAT THIS SERIES 2018-1 CLASS A NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE APPLICABLE TRANSFER RESTRICTIONS SET FORTH IN THE INDENTURE SUPPLEMENT PURSUANT TO WHICH THIS SERIES 2018-1 CLASS A NOTE HAS BEEN ISSUED.  EACH SERIES 2018-1 CLASS A NOTEHOLDER BY ACCEPTING A BENEFICIAL INTEREST IN THIS SERIES 2018-1 CLASS A NOTE IS DEEMED TO REPRESENT THAT IT IS (I) A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT, WHO ALSO IS (II) A “QUALIFIED PURCHASER” WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”). THE ISSUER HAS NOT BEEN REGISTERED, NOR WILL IT BE REGISTERED, UNDER THE INVESTMENT COMPANY ACT, AND AT NO TIME MAY MORE THAN 100 PERSONS BENEFICIALLY OWN OUTSTANDING SECURITIES (OTHER THAN SHORT-TERM PAPER) OF THE ISSUER, WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT.  
THIS SERIES 2018-1 CLASS A NOTE WILL NOT BE ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE TRUSTEE THAT THE RESTRICTIONS ON TRANSFER SET FORTH ABOVE AND IN THE INDENTURE SUPPLEMENT HAVE BEEN COMPLIED WITH.  
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

A-1

No. A-1                        Original Issue Date:  September 14, 2018 
CUSIP No.: 00166A AA5 
ISIN No.: US00166AAA51

AM Capital Funding, LLC
$72,000,000
SECURED SENIOR TERM NOTE, 
SERIES 2018-1, CLASS A

AM Capital Funding, LLC (the “Issuer”), a Delaware limited liability company, for value received, hereby promises to pay to Cede & Co. or its registered assigns, the unpaid Series 2018-1 Class A Principal Amount of this Series 2018-1 Class A Note, in the initial amount of  $72,000,000, on December 15, 2023 (the “Maturity Date” for the Series 2018-1 Class A Notes) to the extent of funds available therefor and to pay interest on this Series 2018-1 Class A Note from the Original Issue Date set forth above, or such later date to which interest has been paid (or, if earlier, the date on which the final distribution of principal is made hereon in accordance with the Indenture (as defined below)), until the Series 2018-1 Class A Principal Amount of this Series 2018-1 Class A Note is reduced to zero, at the interest rate or rates, and in the amounts, calculated in accordance with the Master Indenture, dated as of September 14, 2018 (as from time to time amended, the “Master Indenture”), between the Issuer and Citibank, N.A., as indenture trustee (the “Trustee”), as supplemented by the Series 2018-1 Supplement thereto, dated as of September 14, 2018 (as from time to time amended, the “Series 2018-1 Supplement” and, together with the Master Indenture, the “Indenture”).  The interest so calculated shall be payable on Payment Dates as defined in the Series 2018-1 Supplement.
The unpaid Series 2018-1 Class A Principal Amount of this Series 2018-1 Class A Note on the date hereof is $72,000,000 and may be redeemed or repaid from time to time hereafter in the manner provided in the Indenture.  
The principal of, and interest on, this Series 2018-1 Class A 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 funds available to the Issuer for the payment of this Series 2018-1 Class A Note shall be applied as set forth in the Indenture.
Reference is made to the further provisions of this Series 2018-1 Class A Note set forth on the reverse hereof which shall have the same effect as though fully set forth on the face of this Series 2018-1 Class A Note.

A-2

Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Series 2018-1 Class A Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

A-3

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.
Dated:  ___________, 2018
	
	
	AM Capital Funding, LLC, Issuer

	 

	 

	 

	   By:________________________________

	   Printed Name:  

	   Title:  

TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-mentioned Indenture.
Dated: ___________, 2018
CITIBANK, N.A., as Trustee

By:                            
 
     Authorized Signatory

A-4

[REVERSE OF NOTE] 
 
 
Secured Senior Term Note, Series 2018-1, Class A
This Master Series 2018-1, Class A Note is being held by Citibank, N.A., as custodian for DTC acting as Depository, and registered in the name of Cede & Co., a nominee of DTC.  This Master Note is one of a duly authorized issue of Notes, issued pursuant to a master indenture (the “Master Indenture”) between AM Capital Funding, LLC, as issuer (the “Issuer”), and Citibank, N.A., as indenture trustee (the “Trustee”), as supplemented by the Series 2018-1 Supplement thereto (the “Series 2018-1 Supplement”), and designated as the Issuer’s Secured Senior Term Notes, Series 2018-1, Class A (herein collectively called the “Notes”), and representing indebtedness of and the right to receive certain payments from the Issuer.  The term “Indenture”, unless the context requires otherwise, refers to the Master Indenture as supplemented by the Series 2018-1 Indenture Supplement.  Capitalized terms used herein that are not otherwise defined shall have the meanings assigned thereto in the Indenture.
The holder of this Note, by its acceptance hereof, agrees that it will look solely to the Trust Estate and proceeds thereof allocated to the payment of this Note for payment hereunder and that the Trustee is not liable to the Noteholders for any amount payable under this Note or the Indenture or, except as expressly provided in the Indenture, subject to any liability under the Indenture.
This Note does not purport to summarize the Indenture, and reference is made to the Indenture for the interests, rights and limitations of rights, benefits, obligations and duties evidenced thereby, and the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Indenture, interest on this Note will be payable on each Payment Date.  Payments on this Note will be made to the Person in whose name this Note is registered at the close of business on the applicable Record Date in the amount required to be paid to such registered Holder on the Payment Date pursuant to the Indenture.  The Record Date applicable to each Payment Date is the Business Day immediately preceding such Payment Date.  The Payment Date is the fifteenth day of each calendar month (or, if not a Business Day, the next Business Day).
Payments on this Note shall be made by wire transfer of immediately available funds to the account of the Holder hereof at a bank or other entity having appropriate facilities therefor if such Noteholder so notifies the Trustee in writing before the related Record Date.  If appropriate notice is not given by the Holder hereof, then payment to the Holder of this Note shall be by check mailed thereto at its address as it appears in the Note Register; provided, however, that the final payment of principal and interest on this Note shall be made only upon presentation and surrender of such Note at the office or agency specified in the notice of final payment.
The Notes are issuable only as fully-registered Notes without coupons in denominations specified in the Indenture.  The Issuer will cause to be kept a register in which a transfer agent and registrar shall provide for the registration of Notes and the registration of transfers of Notes.  Citibank, N.A. will initially be the Transfer Agent and Registrar for the purpose of 

A-5

registering Notes and transfers of Notes.  Upon surrender for registration of transfer of any Note at the office or agency of the Transfer Agent and Registrar maintained pursuant to the Indenture, the Issuer will execute and the Trustee will authenticate and deliver at the direction of the Issuer, in the name of the designated transferees, new Notes (of the same Series and Class) in any authorized denominations of like aggregate principal amount.  At the option of a Noteholder, Notes may be exchanged for other Notes (of the same Series and Class) in any authorized denominations and of like aggregate principal amount, upon surrender of the Notes to be exchanged at the office or agency of the Transfer Agent and Registrar.  Whenever any Notes are so surrendered for exchange, the Issuer will execute and the Trustee will authenticate and deliver at the direction of the Issuer, the Notes that the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes will evidence the same obligations and the same debt, and their Holders shall be entitled to the same rights and privileges under the Indenture, as the surrendered Notes or the Holders thereof, as applicable.
Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by (i) a written instrument of transfer in a form satisfactory to the Trustee and duly executed by its Holder or any attorney-in-fact thereof duly authorized in writing, (ii) any representation letters or certifications required by the Notes or Series 2018-1 Supplement and (iii) any other documents reasonably required by the Trustee.  The Holder hereof must satisfy all transfer restrictions set forth in this Note and in the Indenture.
No service charge shall be made for any registration of transfer or exchange of Notes, but the Transfer Agent and Registrar or any co-transfer agent and registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of the Notes.
The Issuer and the Trustee and any agent of the Issuer or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, and neither the Issuer, the Trustee nor any such agent shall be affected by any notice to the contrary.
The Notes are subject to repayment or redemption in whole or in part, in accordance with the Series 2018-1 Supplement.  
The Notes will be retired on the date on which the final distribution of principal is made to the Noteholders, whether as a result of optional redemption by the Issuer pursuant to the Indenture or otherwise.

A-6

ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
_____________________
_____________________
_____________________
(Please print or typewrite name and address including postal zip code of assignee)
the rights evidenced by the within Note and hereby authorizes the transfer of registration of such rights to assignee on the Note Register of the Issuer.
I (We) further direct the Trustee to issue a new Note of alike denomination and Class to the above named assignee and deliver such Note to the following address:
_____________________
Dated:  __________ ___, ____
                        
 
Signature by or on behalf of assignor

A-7

DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available funds to:
_____________________
_____________________
_____________________
for the account of ____________, account number _____________, or, if mailed by check, to _____________.  Applicable statements should be mailed to _____________.
This information is provided by _____________, the assignee named above, or _____________, as its agent.

A-8

SCHEDULE A TO AM CAPITAL FUNDING, LLC 
SECURED SENIOR TERM NOTE, SERIES 2018-1, CLASS A
	
				
	Date
	Principal Balance
Exchange or Transferred_
	Remaining Principal
Balance of this Note
	Notation Made by

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

EXHIBIT B
RESERVED
EXHIBIT C
FORM OF SERIES 2018-1 CLASS B NOTES
THE RIGHTS OF THE HOLDERS OF THIS SERIES 2018-1 CLASS B NOTE TO RECEIVE PAYMENTS THEREON ARE SUBORDINATE TO THE RIGHTS OF THE HOLDERS OF THE SERIES 2018-1 CLASS A NOTES AS AND TO THE EXTENT SPECIFIED IN THE INDENTURE REFERRED TO HEREIN.
THIS SERIES 2018-1 CLASS B NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS SERIES 2018-1 CLASS B NOTE, AGREES THAT THIS SERIES 2018-1 CLASS B NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE APPLICABLE TRANSFER RESTRICTIONS SET FORTH IN THE INDENTURE SUPPLEMENT PURSUANT TO WHICH THIS SERIES 2018-1 CLASS B NOTE HAS BEEN ISSUED.  EACH SERIES 2018-1 CLASS B NOTEHOLDER BY ACCEPTING A BENEFICIAL INTEREST IN THIS SERIES 2018-1 CLASS B NOTE IS DEEMED TO REPRESENT THAT IT IS (I) A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT, WHO ALSO IS (II) A “QUALIFIED PURCHASER” WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”). THE ISSUER HAS NOT BEEN REGISTERED, NOR WILL IT BE REGISTERED, UNDER THE INVESTMENT COMPANY ACT, AND AT NO TIME MAY MORE THAN 100 PERSONS BENEFICIALLY OWN OUTSTANDING SECURITIES (OTHER THAN SHORT-TERM PAPER) OF THE ISSUER, WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT.    
THE HOLDER OF THIS SERIES 2018-1 CLASS B NOTE, BY ITS ACCEPTANCE HEREOF, REPRESENTS AND WARRANTS FOR THE BENEFIT OF THE ISSUER, ITS AFFILIATES AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS (AS DEFINED IN 29 C.F.R. SECTION 2510.3-101 OR OTHERWISE UNDER ERISA) BY REASON OF A PLAN’S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING PLAN ASSETS OF ANY SUCH PLAN (INCLUDING, WITHOUT LIMITATION, FOR PURPOSES OF CLAUSE (IV) AND THIS CLAUSE (V), ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THIS SERIES 2018-1 CLASS B NOTE WILL NOT BE ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE TRUSTEE THAT THE RESTRICTIONS ON TRANSFER SET FORTH ABOVE AND IN THE INDENTURE SUPPLEMENT HAVE BEEN COMPLIED WITH.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No. B-1                        Original Issue Date: September 14, 2018 
CUSIP No: 00166A AB3 
ISIN No.: US00166AAB35
AM CAPITAL FUNDING, LLC 
 
SECURED SUBORDINATED TERM 
NOTE, SERIES 2018-1, CLASS B
AM Capital Funding, LLC (the “Issuer”), a Delaware limited liability company, for value received, hereby promises to pay to Cede & Co. or its registered assigns, the unpaid Series 2018-1 Class B Principal Amount of this Series 2018-1 Class B Note, in the amount of $28,000,000 (subject to any modification as forth on Schedule A), on December 15, 2023 (the “Series 2018-1 Class B Maturity Date” for the Series 2018-1 Class B Notes) to the extent of funds available therefor and to pay interest on this Series 2018-1 Class B Note from the Original Issue Date set forth above, or such later date to which interest has been paid (or, if earlier, the date on which the final distribution of principal is made hereon in accordance with the Indenture (as defined below)), until the Series 2018-1 Class B Principal Amount of this Series 2018-1 Class B Note is reduced to zero, at the interest rate or rates, and in the amounts, calculated in accordance with the Master Indenture, dated as of September 14, 2018 (as from time to time amended, the “Master Indenture”), between the Issuer and Citibank, N.A. as indenture trustee (the “Trustee”), as supplemented by the Series 2018-1 Supplement thereto, dated as of September 14, 2018 (as from time to time amended, the “Series 2018-1 Supplement” and, together with the Master Indenture, the “Indenture”).  The interest so calculated shall be payable on Payment Dates as defined in the Series 2018-1 Supplement.
The unpaid Series 2018-1 Class B Principal Amount of this Series 2018-1 Class B Note on the date hereof is $28,000,000 and may be redeemed or repaid from time to time hereafter in the manner provided in the Indenture.  
The principal of, and interest on, this Series 2018-1 Class B 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 funds available to the Issuer for the payment of this Series 2018-1 Class B Note shall be applied as set forth in the Indenture.
Reference is made to the further provisions of this Series 2018-1 Class B Note set forth on the reverse hereof which shall have the same effect as though fully set forth on the face of this Series 2018-1 Class B Note.
Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Series 2018-1 Class B Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.
Dated:  _________, 2018
	
	
	AM Capital Funding, LLC, Issuer

	

	 

	   By:________________________________

	   Printed Name:  Thor Gjerdrum

	   Title:                 President

TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-mentioned Indenture.
Dated:  __________, 2018
CITIBANK, N.A., as Trustee

By:                            
 
     Authorized Signatory
[REVERSE OF NOTE] 
 
AM Capital Funding, LLC 
Secured Subordinated Term Notes, Series 2018-1, Class B
This Master Series 2018-1, Class B Note is being held by Citibank, N.A., as custodian for DTC acting as Depository, and registered in the name of Cede & Co., a nominee of DTC.  This Master Note is one of a duly authorized issue of Notes, issued pursuant to a master indenture (the “Master Indenture”) between AM Capital Funding, LLC, as issuer (the “Issuer”), and Citibank, N.A., as indenture trustee (the “Trustee”), as supplemented by the Series 2018-1 Supplement thereto (the “Series 2018-1 Supplement”), and designated as the Issuer’s Secured Subordinated Term Notes, Series 2018-1, Class B (herein collectively called the “Notes”), and representing indebtedness of and the right to receive certain payments from the Issuer.  The term “Indenture”, unless the context requires otherwise, refers to the Master Indenture as supplemented by the Series 2018-1 Indenture Supplement.  Capitalized terms used herein that are not otherwise defined shall have the meanings assigned thereto in the Indenture.
The holder of this Note, by its acceptance hereof, agrees that it will look solely to the Trust Estate and proceeds thereof allocated to the payment of this Note for payment hereunder and that the Trustee is not liable to the Noteholders for any amount payable under this Note or the Indenture or, except as expressly provided in the Indenture, subject to any liability under the Indenture.
This Note does not purport to summarize the Indenture, and reference is made to the Indenture for the interests, rights and limitations of rights, benefits, obligations and duties evidenced thereby, and the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Indenture, interest on this Note will be payable on each Payment Date.  Payments on this Note will be made to the Person in whose name this Note is registered at the close of business on the applicable Record Date in the amount required to be paid to such registered Holder on the Payment Date pursuant to the Indenture. The Record Date applicable to each Payment Date is the Business Day immediately preceding such Payment Date.  The Payment Date is the fifteenth day of each calendar month (or, if not a Business Day, the next Business Day).
Payments on this Note shall be made by wire transfer of immediately available funds to the account of the Holder hereof at a bank or other entity having appropriate facilities therefor if such Noteholder so notifies the Trustee in writing before the related Record Date.  If appropriate notice is not given by the Holder hereof, then payment to the Holder of this Note shall be by check mailed thereto at its address as it appears in the Note Register; provided, however, that the final payment of principal and interest on this Note shall be made only upon presentation and surrender of such Note at the office or agency specified in the notice of final payment.
The Notes are issuable only as fully-registered Notes without coupons in denominations specified in the Indenture.  The Issuer will cause to be kept a register in which a transfer agent and registrar shall provide for the registration of Notes and the registration of transfers of Notes.  Citibank, N.A. will initially be the Transfer Agent and Registrar for the purpose of registering Notes and transfers of Notes.  Upon surrender for registration of transfer of any Note at the office or agency of the Transfer Agent and Registrar maintained pursuant to the Indenture, the Issuer will execute and the Trustee will authenticate and deliver at the direction of the Issuer, in the name of the designated transferees, new Notes (of the same Series and Class) in any authorized denominations of like aggregate principal amount.  At the option of a Noteholder, Notes may be exchanged for other Notes (of the same Series and Class) in any authorized denominations and of like aggregate principal amount, upon surrender of the Notes to be exchanged at the office or agency of the Transfer Agent and Registrar.  Whenever any Notes are so surrendered for exchange, the Issuer will execute and the Trustee will authenticate and deliver at the direction of the Issuer, the Notes that the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes will evidence the same obligations and the same debt, and their Holders shall be entitled to the same rights and privileges under the Indenture, as the surrendered Notes or the Holders thereof, as applicable.
Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by (i) a written instrument of transfer in a form satisfactory to the Trustee and duly executed by its Holder or any attorney-in-fact thereof duly authorized in writing, (ii) any representation letters or certifications required by the Notes or Series 2018-1 Supplement and (iii) any other documents reasonably required by the Trustee.  The Holder hereof must satisfy all transfer restrictions set forth in this Note and in the Indenture.
No service charge shall be made for any registration of transfer or exchange of Notes, but the Transfer Agent and Registrar or any co-transfer agent and registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of the Notes.
The Issuer and the Trustee and any agent of the Issuer or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, and neither the Issuer, the Trustee nor any such agent shall be affected by any notice to the contrary.
The Notes are subject to repayment or redemption in whole or in part, in accordance with the Series 2018-1 Supplement.  
The Notes will be retired on the date on which the final distribution of principal is made to the Noteholders, whether as a result of optional redemption by the Issuer pursuant to the Indenture or otherwise.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
_____________________
_____________________
_____________________
(Please print or typewrite name and address including postal zip code of assignee)
the rights evidenced by the within Note and hereby authorizes the transfer of registration of such rights to assignee on the Note Register of the Issuer.
I (We) further direct the Trustee to issue a new Note of alike denomination and Class to the above named assignee and deliver such Note to the following address:
_____________________
Dated:  __________ ___, ____
    
 
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available funds to:
_____________________
_____________________
_____________________
for the account of ____________, account number _____________, or, if mailed by check, to _____________.  Applicable statements should be mailed to _____________.
This information is provided by _____________, the assignee named above, or _____________, as its agent.
SCHEDULE A TO AM CAPITAL FUNDING, LLC  
SECURED SUBORDINATED TERM NOTE, SERIES 2018-1, CLASS B
	
				
	Date
	Principal Balance 
Exchange or Transferred_
	Remaining Principal 
Balance of this Note
	Notation Made by

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

EXHIBIT D
FORM OF INVESTOR REPRESENTATION LETTER FOR SERIES 2018-1 NOTES
AM Capital Funding, LLC 
2121 Rosecrans Ave., Suite 6301 
El Segundo, California 90245 
Attention: Thor Gjerdrum
Citibank, N.A. 
as Trustee 
388 Greenwich Street, 14th Floor 
New York, New York 10013 
Attention: Jennifer McCourt
		
	Re:
	AM Capital Funding, LLC Secured Senior Term Notes, Series 2018-1, Class A (the “Class A Notes”) and Secured Subordinated Term Note, Series 2018-1, Class B (the “Class B Notes” and collectively with the Class A Notes, the “Notes”)

Ladies and Gentlemen:
In connection with the proposed purchase by the undersigned (the “Transferee”) of the above-referenced Notes, the Transferee hereby confirms as follows (capitalized terms used herein to have the meaning such terms would be assigned if used in the Indenture, as defined in and pursuant to which the Notes are issued):
1.    That he or she is [Title of Officer] of [Name of Transferee], a [savings institution] [corporation] [trust] duly organized and existing under the laws of [the State of ____________] [the United States], on behalf of which he or she makes this affidavit.
2.    The Transferee understands that the Notes have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) and are being sold in a transaction that is exempt from the registration requirements of the Securities Act.
3.    The Purchaser is a “qualified institutional buyer” within the meaning of Rule 144A (“Rule 144A”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The Purchaser is aware that the transfer is being made in reliance on Rule 144A, and the Purchaser has had the opportunity to obtain the information required to be provided pursuant to paragraph (d)(4)(i) of Rule 144A.
4.     The Purchaser’s intention is to acquire the Notes (a) for investment for the Purchaser’s own account or (b) for resale to “qualified institutional buyers” in transactions under Rule 144A. The Purchaser understands that the Notes (and any subsequent Notes) have not been registered under the Securities Act, by reason of a specified exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the Purchaser’s investment intent (or intent to resell to only certain investors in certain exempted transactions), as expressed herein.
5.    The Transferee understands that the Issuer has not been and will not be registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”).  The Transferee certifies that (i) it is a “qualified purchaser” (within the meaning of Section 3(c)(7) of the Investment Company Act), and (ii) that it is acquiring the Notes for its own account and not for the account of any other beneficial owner (within the meaning of Section 3(c)(1) of the Investment Company Act).
6.    With respect to a transfer of the Class A Notes, the Transferee represents and warrants for the benefit of the Issuer, its Affiliates and the Trustee that, on the date of transfer and at all times on which the transferee holds the Class A Notes, such Transferee either (i) is not and will not be, acquiring the Notes for, or on behalf of, an employee benefit plan or any entity deemed to hold the assets of an employee benefit plan (each of the foregoing being a “Benefit Plan”) that is subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or to Section 4975 of the Internal Revenue Code of 1986, as amended (“Code”), or to any substantially similar law (“Similar Law”) or (ii), the acquisition and holding of the Notes for, or on behalf of, a Benefit Plan is exempt from the prohibited transaction restrictions of Section 406 of ERISA and Section 4975 of the Code or Similar Law because one or more of the following Prohibited Transaction Class Exemptions (“PTCE”) applies to the acquisition and holding of the Notes and the conditions of such PTCE(s) are met:  PTCE 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, or PTCE 96-23 (or another applicable PTCE or statutory exemption reasonably acceptable to each of the Issuer, its Affiliates and the Trustee). With respect to a transfer of the Class B Notes, the Transferee represents and warrants for the benefit of the Issuer, its Affiliates and the Trustee that, on the date of transfer and at all times on which the transferee holds the Class B Notes, such Transferee is not and will not be acquiring the Class B Notes for, or on behalf of a Benefit Plan that is subject to Section 406 of ERISA or to Section 4975 of the Code or to any Similar Law.
7.    If the Transferee is a U.S. person (as defined in the Code), the Transferee has fully and accurately completed and delivered to the Issuer IRS Form W-9 (or any successor form thereto), a copy of which is attached hereto as Annex A.  If the Transferee is not a U.S. person (as defined in the Code), the Transferee has fully and accurately completed and delivered to the Issuer the applicable IRS Form W-8 (or any successor form thereto), a copy of which is attached hereto as Annex B.  The Transferee will promptly inform the Issuer of any change in the applicable status of the Transferee, and execute and deliver to the Issuer a new Form W-8 or W-8, as applicable.
8.    The Transferee agrees to treat the Notes as evidencing indebtedness of the Issuer for U.S. federal, state, local and foreign income and franchise tax purposes.
9.    The Transferee understands that it may not transfer any beneficial interest in the Notes unless the subsequent transferee delivers to the Trustee an executed certificate in substantially the form of this certificate and otherwise in compliance with the provisions and restrictions of the Indenture.
10.    The Transferee has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Notes, and that it is able to bear the economic risk of such investment and has no need for immediate liquidity in its investment in the Notes.
11.    The Transferee has read the Indenture and the Servicing Agreement and has had access to such financial and other information concerning the Issuer, the initial Servicer and the Trustee as it deemed necessary or appropriate in order to make an informed investment decision with respect to its purchase of the Notes, including an opportunity to ask questions of and request information from the Issuer, the initial Servicer and the Trustee.
12.    The Transferee is not relying upon any information, representation or warranty by the Issuer, the initial Servicer or the Trustee in determining to invest in the Notes; and it has consulted to the extent deemed appropriate by the Transferee with the Transferee’s own advisors as to the financial, tax, legal, accounting and related matters concerning an investment in the Notes and on that basis believes that an investment in the Notes is suitable and appropriate for the Transferee.
13.    The Transferee agrees to be bound by the terms of the Indenture as applicable and relevant to its investment in the Notes.  
14.    The Transferee understands that the Trustee is conclusively entitled to rely upon the truth of the statements and the genuineness of the signatures contained herein.    
This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.
[NAME OF PURCHASER OR TRANSFEREE]

By:                         
 
Name:
 
Title:

Name of Registered Holder:    _____________________
Taxpayer ID Number:    _____________________
Payment Instructions:    _____________________
Name and Address of 
Contact for Notices:    _____________________

EXHIBIT E

Form of Upfront Agreed‐Upon Procedures 
[See attached.]

A-9Exhibit

EXECUTION VERSION

	
	
	

Collateral Finance Corporation
 
a Delaware corporation,

and

AM Capital Funding, LLC,
 
a Delaware limited liability company

______________________________
 

 TRANSFER AND SALE AGREEMENT
______________________________

dated as of September 14, 2018

TABLE OF CONTENTS
SECTION    HEADING    PAGE
		
	DEFINITIONS
	1

ARTICLE 2 SALE TO THE TRANSFEROR; IDENTIFICATION OF ADDITIONAL DESIGNATED ACCOUNTS2
Section 2.01Sale of Loans    2
Section 2.02Identification of Designated Accounts    3
Section 2.03Consideration and Payment    3
Section 2.04Delivery of Additional Loans    3
Section 2.05Effectiveness of Conveyances    3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES4
Section 3.01Representations and Warranties Relating to CFC    4
Section 3.02Representations and Warranties Relating to Loans and Related Interests    8
Section 3.03Representations and Warranties of the Issuer    12
ARTICLE 4 COVENANTS OF CFC13
Section 4.01CFCs Covenants    13
ARTICLE 5 COVENANTS OF THE ISSUER16
Section 5.01Covenants of the Issuer    16
ARTICLE 6 CONDITIONS PRECEDENT17

i

Section 6.01Conditions to the Issuer’s Purchase of Loans    17
ARTICLE 7 ADMINISTRATION AND PAYMENTS18
Section 7.01Administration of Loan Agreements    18
Section 7.02Repurchase Upon Breach of Certain Representations, Warranties and Agreements    18
Section 7.03Manner of Repurchase    19
ARTICLE 8 OBLIGOR DEFAULT19
Section 8.01Liquidation in the Event of Defaulted Loans    19
ARTICLE 9 INDEMNIFICATION19
Section 9.01Indemnities of CFC    19
Section 9.02Indemnities by the Issuer    20
ARTICLE 10 TERM AND TERMINATION20
Section 10.01Term    20
ARTICLE 11 MISCELLANEOUS20
Section 11.01Notices    20
Section 11.02Successors and Assigns of CFC    21
Section 11.03Separability Clause    21
Section 11.04Amendments    21
Section 11.05Governing Law    21
Section 11.06Survival of Representations, Warranties and Covenants    21

ii

Section 11.07Assignment for Security for the Notes    21
Section 11.08[Reserved]    22
Section 11.09Counterparts    22
Section 11.10No Waiver; Remedies    22
Section 11.11Costs, Expenses and Taxes    22
Section 11.12Account and Loan Substitution    22

Exhibit A    Form of Loan Agreement between CFC and the Obligor
Exhibit B    Form of Loan Agreement between Worth Group, Inc. and the Obligor
Schedule 1    Listing of Existing Loans
Schedule 2.02    Initial Listing of Designated Accounts

iii

This TRANSFER AND SALE AGREEMENT (this ‘“Agreement”) dated as of September 14, 2018, is by and between COLLATERAL FINANCE CORPORATION, a Delaware corporation (“CFC”) and AM CAPITAL FUNDING, LLC, a Delaware limited liability company (the “Issuer”).
WITNESSETH
WHEREAS, on the date hereof CFC is selling, transferring and assigning to the Issuer, the Loans (and Related Interests in respect thereof) listed on Schedule 1 attached hereto (collectively, the “Existing Loans” and each an “Existing Loan”);
WHEREAS, the Issuer intends to finance such purchase with the proceeds derived by its issuance of Notes under the Master Indenture on the date hereof;
WHEREAS, the Issuer wishes to pledge and assign the Existing Loans and all Related Interests related thereto to the Trustee under the Master Indenture to secure the Notes;
WHEREAS, CFC will from time to time further originate Loans or acquire Loans from Worth Group, Inc. in respect of Designated Accounts pursuant to Loan Agreements, and wishes from time to time to sell and assign such Loans, including its security interest in the Metals Collateral securing such Loans, on a continuous basis to the Issuer upon the terms and conditions hereinafter set forth;
WHEREAS, the Issuer wishes to purchase Loans from time to time (whether originated or acquired in respect of existing Designated Accounts or in respect of Additional Designated Accounts identified on such Purchase Date pursuant to Section 2.02 below);
WHEREAS, the Issuer has also granted a security interest in such additional Loans and the interests in related Loan Agreements and the Metals Collateral transferred to the Issuer hereunder to the Trustee under the Master Indenture to secure the Notes; and
WHEREAS, in order to further secure the Notes, the Issuer has granted and assigned to the Trustee under the Master Indenture a security interest in the Issuer’s rights under this Agreement and CFC agrees that all representations, warranties, covenants and agreements made by CFC herein shall also be for the benefit of the Trustee on behalf of the Noteholders;
Now, THEREFORE, it is hereby agreed by and between the parties hereto as follows:

ARTICLE 1 
 
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided herein, capitalized terms used herein (including in the preamble above) shall have the meanings assigned to them in Annex X to the Master Indenture.

ARTICLE 2     
 
SALE TO THE TRANSFEROR; IDENTIFICATION OF 
ADDITIONAL DESIGNATED ACCOUNTS

Section 2.01    Sale of Loans. (%3) Subject to and upon the terms and conditions set forth herein, on each Purchase Date CFC hereby sells, conveys and assigns to the Issuer, without recourse and without any formal or other instrument of assignment, any and all of CFC’s right, title and interest, whether now existing or hereafter acquired, in, to and under the following:
(i)    all Loans in respect of Designated Accounts, including, but not limited to those Accounts which are added to the List of Designated Accounts pursuant to Section 2.02 in existence as of the related Cut-Off Date, together with all Collections in respect thereof,
(ii)    all rights related thereto under such Loan Agreements and all accounts, chattel paper, general intangibles, instruments and other obligations of an Obligor with respect to such Loans and Loan Agreements,
(iii)    all security interests in the related Metals Collateral securing such Loans,
(iv)    all rights to or under any lock-box account relating to the Loans, and in the Lock-Box Agreement, together with all funds, certificates and instruments, if any, from time to time representing or evidencing or held in such lock-box account, and
(v)    all proceeds or products of any of the foregoing;
such sale and conveyance being in consideration of the Issuer’s payment of the Purchase Price therefor on such Purchase Date and other good and valuable consideration, the sufficiency of which is hereby acknowledged.  Any assets of the type owned by the Issuer as of the date hereof and described in clauses (i) through (v) that relate to Existing Loans are referred as “Existing Loans and Related Interests.” The property and assets described in clauses (i) through (v) above are sometimes referred to herein as the “Loans and Related Interests.” With respect to any Purchase Date occurring on or after the date hereof, the Loans to be sold to the Issuer on such Purchase Date are sometimes referred to herein as the “Additional Loans” and the Loans and Related Interests to be sold to the Issuer on such Purchase Date are sometimes referred to herein as the “Additional Loans and Related Interests.” Unless the context otherwise requires, references to Loans and Related Interests owned by the Issuer and pledged to the Trustee for the benefit of the Noteholders shall be 

2

deemed to include Existing Loans and Related Interests and Additional Loans and Related Interests that have been sold and conveyed to the Issuer.
(b)    The parties to this Agreement intend that the transactions contemplated hereby shall be, and shall be treated as, purchases by the Issuer and sales by CFC of the Loans and Related Interests relating thereto. The sale of Loans and Related Interests by CFC hereunder shall be without recourse to, or representation or warranty of any kind (express or implied) by CFC, except as otherwise specifically provided herein. If, notwithstanding the express intent of the parties hereto, it is determined that the transactions contemplated under this Agreement do not constitute sales, transfers and assignments of ownership by CFC to the Issuer, CFC shall also he deemed to have granted to the Issuer a first priority perfected “security interest” (as that term is defined in the UCC) in such property of CFC which comprises the transferred Loans and Related Interests, and this Agreement shall be deemed to constitute a security agreement under the UCC securing a monetary obligation of CFC in respect of the Issuer’s payment to it of the Purchase Price.

Section 2.02    Identification of Designated Accounts. Designated Accounts in respect of Existing Loans are listed on the List of Designated Accounts attached hereto as Schedule 2.02. On any Purchase Date, CFC may identify additional Accounts to the Issuer and the parties agree that such additional Accounts shall be added to the List of Designated Accounts upon such identification (each such Account being an “Additional Designated Account”). CFC agrees to sell to the Issuer, and the Issuer agrees (subject to the terms and conditions herein) to purchase from CFC, all of CFC’s right, title and interest in each Loan and Related Interest then originated, acquired and existing, or thereafter to be originated or acquired from time to time by CFC in respect of such Additional Designated Accounts as described in and in accordance with Section 2.01, in consideration of the Issuer’s payment of the Purchase Price in respect thereof to be paid on such Purchase Date and other good and valuable consideration, the sufficiency of which is hereby acknowledged.

Section 2.03    Consideration and Payment. (%3) The purchase price for the Loans and Related Interests to be sold by CFC to the Issuer on any Purchase Date shall be an amount equal to the Purchase Price and shall be paid or provided for on the Purchase Date by payment of cash Dollars in immediately available funds derived from available financing sources of the Issuer or pursuant to Section 4.03(d)(iv) of the Servicing Agreement. CFC may also, in its discretion and to the extent the Issuer does not have Dollars available to fund the Purchase Price as aforesaid, contribute Additional Loans as an equity capital contribution to the Issuer (the value of which contribution shall be deemed to be the amount of the Purchase Price for such Loans) in consideration of cash and/or Subordinated, Deferred Payment Obligation from the Issuer, which contribution and conveyance shall be treated for all other purposes hereunder as if a purchase funded by the Issuer’s payment of the Purchase Price therefor in Dollars.
(a)    All cash Dollar payments made to CFC with respect to the Purchase Price of Additional Loans shall be made not later than 9:00 am (New York time) on the related Purchase Date in lawful money of the United States of America in same day funds to the bank account designated in writing by CFC to the Issuer.

Section 2.04    Delivery of Additional Loans. On each Purchase Date, CFC shall deliver, or shall cause to be delivered, the Additional Loans and Related Interests which it is selling to the Issuer on such Purchase Date by delivering to the Issuer an amendment to the List of Designated Accounts specifying to the Issuer the Outstanding Balance of the respective Additional Loans and all other Relevant Information relating thereto.

Section 2.05    Effectiveness of Conveyances. Upon the delivery on a Purchase Date of the amendments referred to in Section 2.02 (as applicable) and Section 2.04 above, the payment of the Purchase Price as provided for in Section 2.03 and the fulfillment of the other conditions set forth in Article 6, all of CFC’s right, title and interest in and to the applicable Loans and Related Interests shall have been sold, assigned, transferred, conveyed and set over to the Issuer as of such Purchase Date.

ARTICLE 3     
 
REPRESENTATIONS AND WARRANTIES

Section 3.01    Representations and Warranties Relating to CFC. CFC makes and shall be deemed to have made, as of the Closing Date and as of each Purchase Date, the following representations and warranties to the Issuer, on which the Issuer relies in acquiring the Loans and Related Interests contemplated herein:
(a)    CFC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
(b)    CFC is duly qualified to do business as a foreign corporation and is in good standing, and has obtained all necessary licenses and approvals, under the laws of each other jurisdiction in which the ownership or lease of its property or the conduct of its business or activities requires such qualification, licensing or approval, except where failure to so qualify or be in good standing, or to obtain such licenses or approvals, would not have a Material Adverse Effect.
(c)    The sale, conveyance and assignment of the Loans and Related Interests, the performance of the obligations of CFC under this Agreement and the consummation of the transactions herein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute (with or without notice or the expiration of any grace or cure period or both) a default under, or result in the creation or imposition of any Lien upon any of the property or assets of CFC, pursuant to the terms of any material indenture, mortgage, deed of trust, or other agreement or instrument to which CFC is a party or by which CFC is bound or to which any of CFC’s property or assets is subject, nor will such action result in any violation of the provisions of CFC’s charter or bylaws or any law, order, rule or regulation of any court or any regulatory authority or other governmental agency or body having jurisdiction over CFC or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any court, or any such regulatory authority or other governmental agency or body is required for the sale, conveyance and assignment of the Loans and Related Interests or the consummation of the other transactions contemplated by this Agreement except such consents, approvals and authorizations which have been obtained or such registrations or qualifications which have been made.
(d)    CFC has the power and authority to execute and deliver this Agreement and the other Program Agreements to which it is a party and to carry out its terms and their terms respectively; CFC has the power and authority to own its properties and conduct its business as such properties are currently owned and such business is currently conducted; CFC has the power and authority to sell, convey and assign the Loans and Related Interests to be sold and assigned to and deposited with the Issuer by it and has duly authorized such sale and assignment to the Issuer by all necessary action; and the execution, delivery and performance of this Agreement and the other Program Agreements to which CFC is a party have been duly authorized by it by all necessary action.
(e)    This Agreement and the other Program Agreements to which CFC is a party have been duly executed and delivered by CFC and will constitute legal, valid and binding obligations of CFC, enforceable against CFC in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, reorganization, receivership, insolvency, moratorium and other similar laws affecting creditors’ rights generally, and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(f)    CFC does not believe, nor does it have any reasonable cause to believe, that it cannot perform each and every covenant contained in this Agreement and any other Program Agreement to which it is a party.
(g)    The transactions contemplated by this Agreement and the other Program Agreements to which CFC is a party are being consummated by CFC in furtherance of its ordinary business purposes with no contemplation of insolvency and with no intent to hinder, delay or defraud any of its present or future creditors.
(h)    The consideration received by CFC for the sale, conveyance and assignment of Loans and Related Interests (including the increase in the value of CFC’s equity interests in the Issuer in respect of Loans contributed as described in Section 2.03), constitutes fair consideration having value reasonably equivalent to or in excess of that of the Loans and Related Interests being transferred.
(i)    The chief executive office and sole place of business of CFC is as follows:
2121 Rosecrans Ave., Suite 6301 
El Segundo, California 90245

(j)    CFC has had no office location other than the location described in Section 3.01(i) above and 429 Santa Monica Boulevard, Suite 220, Santa Monica, California 90401 during the five years prior to the date of this Agreement.
(k)    CFC does not operate under or otherwise use any other name in the conduct of its business, and CFC has not changed its name within the last six years.
(l)    No Event of Default, Prospective Event of Default, Early Amortization Event or Prospective Early Amortization Event has occurred or is continuing.
(m)    CFC is solvent and will not become insolvent after giving effect to the transactions contemplated hereunder and in the other Program Agreements to which it is a party; CFC is paying its debts as they become due; and CFC, after giving effect to the transactions contemplated hereunder and in the other Program Agreements to which it is a party, will have adequate capital to conduct its business.
(n)    The sale, conveyance and assignment of Loans and Related Interests contemplated herein are and will be treated by CFC in a manner consistent with CFC’s obligations under Section 4.01(p).
(o)    CFC shall operate its business generally such that the Issuer would not be substantively consolidated in the bankruptcy estate of CFC and the Issuer’s separate existence disregarded in the event of CFCs bankruptcy.
(p)    There are no proceedings or investigations pending, or to the knowledge of CFC, threatened against or affecting CFC in or before any court, governmental authority or agency, regulatory body, arbitration board or other tribunal including, but not limited to, any such proceeding or investigation with respect to any environmental or other liability, asserting the invalidity of this Agreement or any Program Agreement to which it is a party, seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement or Program Agreement to which it is a party, or seeking any determination or ruling that, individually or in the aggregate, could materially and adversely affect the properties, business, prospects, profits or condition (financial or otherwise) of CFC, or the ability of CFC to perform its obligations under this Agreement, or otherwise have a Material Adverse Effect, or seeking to affect adversely the federal income tax or other federal, state or local tax characterization of; or seeking to impose any excise, franchise, transfer or similar tax upon, the transfer and acquisition of the Loans and Related Interests hereunder or under the Master Indenture. CFC is not in default with respect to, and the consummation of the transactions contemplated by the Program Agreements to which it is a party would not constitute a default with respect to, any order of any court, governmental authority or agency or arbitration board or tribunal.
(q)    CFC (i) is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject, (ii) has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its property or to the conduct of its business, and (iii) is not in violation in any material respect of any term of any agreement, charter instrument, bylaw or instrument to which it is a party or by which it may be bound which violation or failure to obtain might materially adversely affect the business or condition (financial or otherwise) of CFC or otherwise constitute a Material Adverse Effect.
(r)    CFC has filed on a timely basis all required tax returns and has paid or made adequate provision for payment of all taxes, assessments or other governmental charges due from it. It knows of no basis for any material additional tax assessment for any fiscal year for which adequate reserves have not been established in accordance with generally accepted accounting principles.
(s)    All CFC (and consolidated subsidiary) pension or profit sharing plans have been fully funded in accordance with CFC’s applicable obligations, including under ERISA and the regulations promulgated thereunder.
(t)    CFC is not liable to pay salaries, expenses or losses of the Issuer, except as expressly contemplated in the Program Agreements to which it is a party.
(u)    CFC is not an “investment company” or a company controlled by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or is exempt from all provisions of such Act.
(v)    No proceeds of the sale of any Loan hereunder received by CFC will be used (i) to acquire any security in any transaction that is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended; (ii) to acquire any equity security of a class which is registered pursuant to Section 12 of such Act or (iii) for any purpose that violates applicable laws and regulations, including Regulations T, U or X of the Federal Reserve Board.
(w)    No injunction, writ, restraining order or other order of any nature exists which would adversely affect CFC’s performance of the Loan Agreements, this Agreement, or any other agreement or transaction contemplated hereunder.
(x)    The Loans are being transferred with the intention of removing them from CFC’s estate pursuant to Section 541 of the Bankruptcy Code, as the same may be amended from time to time. Notwithstanding the foregoing, this Agreement, if not constituting a sale, creates a valid and continuing security interest (as defined in the UCC) in the Loans and Related Interests transferred hereunder in favor of the Issuer, which security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from CFC.
(y)    CFC has taken all steps necessary to perfect the security interest against the Obligors in the Metals Collateral securing the Loans transferred hereunder.
(z)    At the time of conveyance hereunder CFC owned and had good and marketable title to the Loans and Related Interests free and clear of any Lien, claim or encumbrance of any Person (other than Permitted Liens and Liens, if any, which by their terms or otherwise are released in full upon conveyance hereunder).
(aa)    CFC has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the transfer of the Loans and Related Interests granted to the Issuer hereunder.
(bb)    Other than the transfer to the Issuer pursuant to this Agreement, and any Liens or encumbrances which by their terms or otherwise are released in full upon conveyance hereunder, CFC has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Loans and Related Interests. CFC has not authorized the filing of and is not aware of any financing statements against CFC that include a description of collateral covering the Loans and Related Interests other than any financing statement relating to the transfers hereunder or that has been terminated or that relates to a Lien that is or was released in full upon or prior to the transfer hereunder. CFC is not aware of any judgment or tax lien filings against CFC.
(cc)    CFC acknowledges that, with respect to original Loan Agreements in its possession, it is holding such Loan Agreements solely on behalf and for the benefit of the Issuer and any further assignees of the Issuer.
The representations and warranties set forth in this Section 3.01 are true and correct as of the execution and delivery of this Agreement and as of each Purchase Date, and shall survive the execution and delivery of this Agreement and the transfer and assignment of the Loans to the Issuer. Upon discovery by any party hereto of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice thereof to each Rating Agency and the Trustee, and to the other parties hereto.

Section 3.02    Representations and Warranties Relating to Loans and Related Interests. CFC makes, as of the Closing Date, with respect to Existing Loans and related Loan Agreements, Metals Collateral and related Accounts, and as of each Purchase Date, with respect any Additional Loans and Related Interests and Additional Designated Accounts conveyed to the Issuer pursuant to this Agreement on such Purchase Date, the following agreements, representations and warranties:
(a)    Each Loan Agreement was originated by CFC or acquired by CFC from Worth Group, Inc. and was transferred by CFC to the Issuer without any fraud or misrepresentation on the part of CFC or any other Person.
(b)    CFC is the holder of all right, title and interest in and to the Eligible Loans and Related Interests, free from any Lien. Notwithstanding the foregoing, no Loan Agreement is subject to any right of rescission, setoff, counterclaim or defense and no such right has been asserted or threatened with respect to any Loan Agreement.
(c)    CFC has in its possession, pending delivery to each Custodian in accordance with the respective Custodial Agreement, all original executed copies of the Loan Agreements originated by CFC, and has heretofore caused all such copies in its possession to be separately identified and distinguished from CFC’s other customer loan agreements. As of the Closing Date, CFC has caused, and as of each Purchase Date as of which Additional Designated Accounts have been designated, CFC will have caused (with respect to Loan Agreements in respect of such Additional Designated Accounts) each such Loan Agreement to be affixed with an appropriate marking, attachment or legend clearly disclosing the fact that such Loan Agreement and all security interests in the related Metals Collateral have been transferred and that the Issuer is the owner thereof and further disclosing the fact that such Loan Agreements and security interests in the related Metals Collateral have been further assigned by the Issuer to the Trustee, and any copies of such Loan Agreements subsequently coming into the possession of CFC also will be so identified. Such Loan Agreements do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Issuer and any further assignees of the Issuer. All financing statements filed or to be filed against CFC in favor of the Issuer in convection herewith describing the Loans and Related Interests contain or will contain a statement to the following effect: “A purchase of or security interest in any collateral described in this financing statement will violate the rights of AM Capital Funding, LLC and/or its assignees.” 
(d)    The Loan Agreements represent the genuine, legal, valid, binding and enforceable obligations of the parties thereto, subject, as to enforcement, to applicable bankruptcy, insolvency, reorganization and other similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity regardless of whether enforcement is sought in a court of law or equity; and all parties to each Loan Agreement had full legal capacity to execute and deliver such Loan Agreement and all other documents related thereto and to grant the security interest purported to be granted thereby.
(e)    No Obligor is the United States of America or any State or any agency, department, subdivision or instrumentality thereof.
(f)    At the related Cut-off Date, no Obligor had been identified on the records of CFC as being the subject of a bankruptcy proceeding.
(g)    The information set forth at Schedule 1 of this Agreement was true and correct as of the close of business on the related Cut-off Date.
(h)    There is only one original executed copy of each Loan Agreement.
(i)    No Loan Agreement is assumable by another Person in a manner that would release the Obligor thereof from such Obligor’s obligations to CFC with respect to such Loan Agreement.
(j)    No selection procedures adverse to the Noteholders or the Issuer were utilized in selecting the Loans from those Loans owned by CFC.
(k)    The Metals Collateral securing the Loans and held by each of the Metals Depositories is covered by insurance procured by the applicable Metals Depository in the usual and customary amounts maintained by prudent metals depositories engaging in similar business, naming the applicable Metals Depository, or its assignee, as a loss payee and insuring against loss and damage due to theft and other risks covered by comprehensive coverage. All premiums due on such insurance have been paid in full.
(l)    The Loans were not originated in and are not subject to the laws of any jurisdiction whose laws would make the transfer of the Loans under this Agreement unlawful or unenforceable.
(m)    All requirements of any applicable federal, state or local law, including, without limitation, usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Moss-Magnuson Warranty Act, the Federal Reserve Board’s Regulations “B” and “Z” (including amendments to the Federal Reserve’s Official Staff Commentary to Regulation Z, effective October 1, 1998, concerning negative equity loans), the Soldiers’ and Sailors’ Civil Relief Act of 1940, state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code and other consumer credit laws and equal credit opportunity and disclosure laws, applicable to the Loans have been complied with in all material respects and each Loan Agreement and the sale of the Metals Collateral evidenced by each Loan Agreement complied with and now complies with all legal requirements.
(n)    No Loan has been satisfied, subordinated or rescinded, and the Metals Collateral securing each such Loan has not been released from the Lien of the related Loan in whole or in part. No terms of any Loan Agreement have been waived, altered or modified in any respect since its origination, except as otherwise expressly provided. All funds payable to or on behalf of the Obligors with respect to the Loans have been fully disbursed.
(o)    No Loan was originated in, or is subject to the laws of any jurisdiction the laws of which would make unlawful, void or voidable the sale, transfer and assignment of such Loan and Related Interests under this Agreement. For the validity of the sale, transfer and assignment of the Loans and Related Interests to the Issuer and the Trustee, no consent by any Obligor or other Person is required under any agreement or applicable law.
(p)    The Loan Agreements create a valid, binding, subsisting and enforceable first priority perfected security interest in favor of CFC (or its assignees) in the Metals Collateral. Such security interest is prior to all other Liens upon and security interests in such Metals Collateral that now exist or may arise or be created. As to the related Cut-off Date, there were no Liens or claims for taxes, work, labor or materials affecting the Metals Collateral that are or may be Liens prior or equal to the Liens of the related Loan.
(q)    The Loans were originated or acquired by CFC in the regular course of its business and taken into possession in the ordinary course of CFCs business, without knowledge that the Loans or Metals Collateral were subject to any Lien or other claim, except for Liens which are or were released or extinguished upon or prior to the purchase of the Loans on such Purchase Date hereunder.
(r)    No Loan has been sold, transferred, assigned or pledged by CFC to any Person other than the Issuer. No Person has an unpaid participation in, or other right to receive, proceeds of any Loan. Except as contemplated in the Program Agreements, CFC has not taken any action to convey any right to any Person that would result in such Person having a right to payments received under the Loans. CFC has not done anything to convey any right to any Person (other than the Issuer or the Trustee) that would result in such Person having a right to payments due under the Loan Agreement or otherwise impair the rights of the Issuer, the Trustee and the Noteholders in any Loan Agreement or the Proceeds thereof.
(s)    There is no default, breach, violation or event permitting acceleration existing under the respective Loan Agreements with respect to Loans and no condition exists or event has occurred and is continuing that, with notice or the expiration of any grace or cure period or both, would constitute such a default, breach, violation or event permitting acceleration under such Loan Agreement. CFC has not waived any such default, breach, violation or event permitting acceleration. As of the Cut-off Date, no Metals Collateral has been repossessed by or at the direction of CFC or any other Person.
(t)    No Liens or claims have been filed or made affecting the Metals Collateral securing the Loan Agreements which are or may be Liens prior to, or equal or coordinate with, the interest established by the Loan Agreement.
(u)    The Loan Agreements contain customary and enforceable provisions such as to render the rights and remedies of claimants thereunder adequate for the realization against the Metals Collateral of the benefits of the security.
(v)    All filings (including, without limitation, UCC filings) and recordings, or possession, required to be made by any Person and actions required to be taken or performed by any Person, as may be necessary to give the Issuer and the Trustee a first priority perfected Lien on or ownership interest in the Loans and Related Interests being sold, conveyed and assigned hereunder have been made, taken, performed or accomplished and are in full force and effect.
(w)    The List of Designated Accounts (as supplemented when and if Additional Loans are sold on any Purchase Date) contains a complete and correct list of all Loans sold by CFC hereunder originated or acquired under and related to the existing Designated Accounts.
(x)    All Loan Agreements evidencing Loans sold by CFC hereunder are substantially similar in all material respects to the form of loan agreement attached hereto as Exhibit A and Exhibit B as the same may be modified from time to time in accordance with Section 4.01(e).
(y)    With respect to any Loans and Related Interests transferred to the Issuer by CFC pursuant to this Agreement, (i) CFC has transferred and the Issuer has obtained legal and equitable title thereto, and (ii) no such transfer has been made on account of an antecedent debt owed by CFC to the Issuer or is voidable under any provision of the Bankruptcy Code.
(z)    The Loan Agreements constitute tangible chattel paper under the UCC as in effect in the Relevant UCC State.
(aa)    The Loans were originated in accordance with and do not contravene (1) any laws, rules or regulations applicable thereto, or (2) any contract or other agreement between CFC and any third party, and no party to a Loan Agreement is in violation of any such law, rule or regulation.
(bb)    No procedures or investigations are pending or threatened which would adversely affect the payment or enforcement of the Loans or the security interest in the related Metals Collateral.
(cc)    The Loans made to Obligors pursuant to the Loan Agreements sold and to be sold to the Issuer are secured by Eligible Metals Collateral.
(dd)    The bank which is a signatory to the Lockbox Agreement and is maintaining the lock-box account described therein is the only institution holding any lock-box account for receipt of payment from Obligors in respect of the Loans, and all Obligors have been instructed to make payments to such lock-box account referred to in the Lockbox Agreement and such instructions will be in full force and effect. Except as expressly contemplated in the Lockbox Agreement, neither CFC nor any Person claiming through or under CFC has any claim or interest in such lock-box account.
The representations and warranties set forth in this Section 3.02 shall survive the transfer and assignment of the Loans to the Issuer. Upon discovery by any party hereto of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice thereof to each Rating Agency and to the Trustee, and to the other parties hereto.

Section 3.03    Representations and Warranties of the Issuer. The Issuer makes the following representations and warranties to, and agreements with, CFC on and as of the Closing Date, and on and as of each Purchase Date:
(a)    The Issuer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and is duly qualified and is in good standing under the laws of each other jurisdiction in which its business or activities requires such qualification except where failure to so qualify would not have a Material Adverse Effect, and has full power and authority to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted, and had at all relevant times, and now has, power, authority and legal right to acquire, own, sell, convey and assign the Loans and Related Interests transferred to the Trustee.
(b)    The Issuer is duly qualified to do business as a foreign corporation in good standing under the laws of each other jurisdiction in which the ownership or lease of its property or the conduct of its business or activities requires such qualification.
(c)    The Issuer has full power and authority to execute, deliver and perform this Agreement and the other Program Agreements to which it is a party, and to carry out its terms and their terms respectively; the Issuer has full power and authority to grant, convey and assign the interest in the Loans and Related Interests to be granted, conveyed and assigned to the Trustee by it and has duly authorized such grant, conveyance and assignment to the Trustee by all necessary action; and the execution, delivery and performance of this Agreement and the other Program Agreements to which it is a party have been duly authorized by the Issuer by all necessary entity action.
(d)    The ownership of, transfer to or receipt by the Issuer of the Loans and Related Interests pursuant to this Agreement and the consummation of the transactions contemplated in this Agreement and the other Program Agreements to which it is a party, will not conflict with or result in a breach of any of the terms or provisions of, or constitute (with or without notice of the expiration of any grace or cure period) a default under, or result in the creation or imposition of any Lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of, any indenture, mortgage, deed of trust, or other agreement or instrument to which the Issuer is a party or by which it is bound or to which any of the property or assets of the Issuer is subject, nor will such action result in any violation of the provisions of the Operating Agreement of the Issuer or any law, order, rule or regulation of any court or regulatory authority or other governmental agency or body having jurisdiction over the Issuer or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any court or any such regulatory authority or other governmental agency or body is required for the acquisition of the Loans and Related Interests hereunder other than such as have been obtained or will be obtained by the Issuer.
(e)    This Agreement and the other Program Agreements to which it is a party have been duly authorized, executed and delivered by the Issuer and will effect a valid sale, transfer and assignment of the Loans and Related Interests, and this Agreement and the Program Agreements to which the Issuer is a party, when duly authorized, executed and delivered, will constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer and creditors of or purchasers from the Issuer in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, reorganization, receivership, insolvency, moratorium and other similar Laws affecting creditors’ rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(f)    No injunction, writ, restraining order or other order of any nature exists which would adversely affect the Issuer’s ownership of the Loans and Related Interests or the Issuer’s performance of this Agreement, or any other agreement or transaction contemplated hereunder.

ARTICLE 4     
 
COVENANTS OF CFC

Section 4.01    CFC’s Covenants. CFC hereby covenants and agrees with the Issuer as follows:
(a)    CFC will execute or endorse, acknowledge, and deliver to the Issuer and the Trustee from time to time such schedules, confirmatory assignments, conveyances, and other reassurances or instruments and take such further similar actions, as are necessary to preserve, protect and defend the interest of the Issuer in the Loans and Related Interests and the rights covered by this Agreement, and shall take such other or further actions as the Issuer or the Trustee (upon written direction of a Majority of Noteholders) may reasonably request to preserve and maintain the Issuer’s title to and interest in the Loans and Related Interests and the rights of the Issuer and the Trustee and the Noteholders therein against the claims of all persons and parties.
(b)    CFC will do nothing to disturb or impair its conveyance hereunder of the Loans and Related Interests.
(c)    CFC will from time to time, at its own expense, execute and file such additional financing statements (including continuation statements) as may be necessary to preserve the interests conveyed to the Issuer herein described and as may be reasonably requested by the Issuer or the Trustee (upon written direction of a Majority of Noteholders) and as are reasonably satisfactory in form and substance to the same.
(d)    CFC hereby covenants and agrees that prior to the date which is one year and one day after the payment in full of the Notes, it will not institute against or join with any other Person in instituting against the Issuer any Involuntary Insolvency Proceedings. This Section 4.01(d) shall survive the termination of this Agreement.
(e)    Any amendment, modification or deviation from the form of the Loan Agreement attached hereto as Exhibit A and Exhibit B will not have a material adverse effect on the collectability or timing of collection of amounts payable under the Loan Agreements.
(f)    CFC will take no action to cause any Loan, and the Loan Agreement evidencing the same, to be evidenced by any instrument (as defined in the UCC). CFC will take no action to cause any Loan, and the Loan Agreement evidencing the same, to be anything other than “tangible chattel paper” (as defined in the UCC).
(g)    Except for the conveyances hereunder, CFC will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien (other than a Permitted Lien) on any Loan, or any interest therein; CFC will immediately notify the Issuer and the Trustee of the existence of any Lien (other than a Permitted Lien) on any Loan; and CFC shall defend the right, title and interest of the Issuer and Trustee in, to and under the Loans, against all claims of third parties claiming through or under CFC.
(h)    CFC shall comply with and perform its obligations under any Loan Agreement that relates to a Designated Account.
(i)    In the event that CFC receives Collections, CFC agrees to pay to the Issuer or such other Person designated by the Issuer all such Collections as soon as practicable after receipt thereof by CFC (but in no event later than two Business Days following the date of receipt).
(j)    CFC covenants and agrees that it will not convey, assign, exchange or otherwise transfer any interest in a Designated Account to any Person other than the Issuer prior to the termination of this Agreement.
(k)    CFC shall comply in all material respects with all applicable laws, rules, regulations and orders applicable to the Loans and Related Interests, including, without limitation, usury laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy.
(l)    CFC shall preserve and maintain in all material respects its existence, rights (charter and statutory) and franchises as a corporation under the laws of Delaware.
(m)    At any reasonable time during normal business hours and from time to time, CFC shall permit (i) the Issuer or the Trustee, or any Person designated by any of them, to examine and make copies of or abstracts from the records, books of account and documents (including, without limitation, computer tapes and disks) of CFC relating to Loans and Related Interests owned or to be purchased by the Issuer hereunder and (ii) the Issuer or the Trustee, or any Person designated by any of them, to visit the properties of CFC for the purpose of examining such records, books of account and documents, and to discuss the affairs, finances and accounts of CFC relating to the Loans and Related Interests or to CFC’s performance hereunder, with any of its officers and/or with its independent certified public accountants.
(n)    CFC shall not change its name, identity or structure in any manner which might make any financing or continuation statement filed hereunder misleading within the meaning of Section 9-507 of the UCC (or any other then applicable provision of the UCC) unless it shall have given the Trustee and each Rating Agency at least 30 days’ prior written notice thereof and shall have taken all action, not later than 20 days after making such change, necessary or advisable to amend such financing statement or continuation statement so that it is not misleading. CFC shall not change its state of organization or change the location of its principal records concerning the Loans and Related Interests from the location specified in Section 3.01(g) of this Agreement unless it has given the Trustee and each Rating Agency at least 30 days’ prior written notice of its intention to do so and has taken such action as is necessary or advisable to cause the interest of the Issuer, as well as the Trustee, in the Loans and Related Interests to continue to be perfected with the priority required by this Agreement. CFC shall at all times maintain each office at which it maintains records relating to the Loans and Related Interests within the United States of America.
(o)    CFC shall promptly pay and discharge all taxes, assessments, levies and other governmental charges imposed on it, the failure of which to pay and discharge could have a Material Adverse Effect, except any such taxes, assessments, levies and other governmental charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with generally accepted accounting principles have been set aside on its books.
(p)    CFC, even if not treating the transfer of Loans and Related Interests as an “off balance sheet” conveyance under generally accepted accounting principles, shall nonetheless disclose in its financial statements (by footnote or other appropriate designation) that the Loans and Related Interests sold, transferred, assigned, and otherwise conveyed pursuant to Section 2.01 are property of the Issuer and subject to the interests of the Issuer and its further assignees, and any other disclosures to CFC’s creditors shall be consistent with the foregoing. CFC acknowledges that the Loans and Related Interests are not to constitute property of CFC under applicable state law, nor property of CFC’s estate in the event of Insolvency Proceedings involving CFC.
(q)    CFC shall promptly give the Issuer, the Trustee and each Rating Agency written notice of the following events, as soon as possible and in any event within 30 days after CFC or any of its ERISA Affiliates knows or has reason to know thereof: (i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan to which CFC or any of its ERISA Affiliates contributes, or any withdrawal by CFC or any of its ERISA Affiliates from, or the termination, reorganization or insolvency of any Multiemployer Plan to which CFC or any of its ERISA Affiliates contributes or to which contributions have been required to be made by CFC or such ERISA Affiliate during the preceding five years or (ii) the institution of proceedings or the taking of any other action by the Pension Benefit Guaranty Corporation or CFC or any of its ERISA Affiliates or any such Multiemployer Plan with respect to the withdrawal by CFC or any ERISA Affiliates from, or the termination of any such Plan or Multiemployer Plan or the reorganization or insolvency of any such Multiemployer Plan.
(r)    CFC will keep proper books of record and account in which full and correct entries shall be made of all financial transactions and the assets and business of CFC in accordance with generally accepted accounting principles consistently applied. CFC will implement and maintain administrative and operating procedures (including an ability to recreate records evidencing the Loans and Related Interests in the event of the destruction of any original records) to keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Loans and Related Interests (including, without limitation, records adequate to permit the daily identification of each new Loan and Collections of and adjustments to each existing Loan).
(s)    All written information furnished on and after the Closing Date by CFC to the Issuer, the Trustee or any Noteholder pursuant to or in connection with any Program Agreement or any transaction contemplated herein or therein shall not contain any untrue statement of a material fact or omit to state material facts necessary to make the statements made not misleading, in each case in light of the circumstances under which such statements were made or such information was furnished.
(t)    CFC shall be operated in such a way that is consistent with the assumptions set forth in the opinion of Hunton Andrews Kurth LLP delivered in connection with the initial issuance of Notes relating to the question of whether the Issuer would be substantively consolidated in the bankruptcy estate of CFC and its separate existence would be disregarded in the event of CFC’s bankruptcy.

ARTICLE 5     
 
COVENANTS OF THE ISSUER

Section 5.01    Covenants of the Issuer. The Issuer hereby covenants and agrees with CFC as follows:
(a)    The Issuer shall treat transfers of Loans and Related Interests to it hereunder in a manner consistent with its ownership thereof and consistent with CFC’s obligation under Section 4.0l(p).
(b)    The Issuer shall conduct its business such that it would not be substantively consolidated in the bankruptcy estate of CFC and its separate existence disregarded in the event of CFC’s bankruptcy and that is consistent with the factual assumptions contained in the legal opinion of Hunton Andrews Kurth LLP delivered in connection with the initial issuance of Notes.
(c)    The Issuer shall at all times limit its activities to the purchase of Loans, issuance of debt and other activities contemplated by the Program Agreements or incidental thereto. The Issuer shall maintain one independent manager.
(d)    Other than as contemplated in the Program Agreements, the Issuer shall engage in no intercorporate transactions with CFC.
(e)    The Issuer shall maintain separate books and records from the books and records of CFC.
(f)    Financial statements of the Issuer shall reflect the separate legal existence of the Issuer from CFC.
(g)    The Issuer shall maintain its assets separately from the assets of CFC except to the extent otherwise permitted or contemplated under the Program Agreements.
(h)    CFC shall not pay the Issuer’s expenses, guarantee the Issuer’s obligations or advance funds to the Issuer for payment of expenses, except for the costs and expenses associated with the creation of the Issuer and its capitalization, and except to the extent otherwise permitted or contemplated under the Program Agreements.
(i)    All business correspondence of the Issuer shall be conducted in the Issuer’s own name.
(j)    CFC shall not be involved in the day-to-day management of the Issuer, except as contemplated in the Program Agreements.
(k)    Except as provided for in the Program Agreements, CFC shall not act as an agent of the Issuer; and the Issuer shall not act as an agent of CFC or any other person or entity.

ARTICLE 6     
 
CONDITIONS PRECEDENT

Section 6.01    Conditions to the Issuer’s Purchase of Loans. The obligations of the Issuer to provide CFC with the consideration described in Article 2 hereof and to make purchases as described in Article 2 shall be subject to the satisfaction of the following conditions:
(a)    All representations, warranties and covenants of CFC contained in this Agreement and all information provided in the List of Designated Accounts (as the same shall be updated from time to time on each Purchase Date in respect of Additional Loans and/or Additional Designated Accounts conveyed to the Issuer on such Purchase Date) shall be true and correct as of the applicable Purchase Date;
(b)    CFC shall have delivered all other information required or reasonably requested by the Issuer to be delivered by CFC hereunder, duly certified by an officer of CFC, and CFC shall have substantially performed all other obligations required to be performed by the provisions of this Agreement and the other Program Agreements to which it is a party;
(c)    On or prior to each Purchase Date, there shall have been made all filings (including of financing statements under the UCC), recordings and/or registrations, and there shall have been given or taken, any notice or any other similar action, as may be necessary in the opinion of the Issuer or the Trustee in order to establish and preserve the right, title and interest of the Issuer (and the Trustee as subsequent grantee) in the Loans and Related Interests;
(d)    [Reserved];
(e)    All corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Issuer and the Trustee, and the Issuer and the Trustee shall have received from CFC copies of all documents (including, without limitation, records of corporate proceedings) relevant to the transactions herein contemplated as the Issuer or the Trustee may reasonably have requested;
(f)    all Metals Collateral securing the Loans to be purchased shall be in the possession of the applicable Metals Depository with the Obligor’s ownership of and the Issuer’s security interest therein properly reflected in the books and records of the applicable Metals Depository;
(g)    no Event of Default or Early Amortization Event shall have occurred and be continuing; and
(h)    the Lockbox Agreement and the Metals Depository Agreements shall have been executed by the parties thereto and be in full force and effect with respect to the Loans and Related Interests being purchased.

ARTICLE 7     
 
ADMINISTRATION AND PAYMENTS

Section 7.01    Administration of Loan Agreements. (%3) The Issuer hereby appoints CFC as its agent for the purposes of servicing and administering the Loans (CFC, in such capacity, being the “Servicer” ).
(a)    The Servicer, in form and manner reasonably satisfactory to the Issuer and the Trustee and in addition to, and not in lieu of, any requirements imposed upon the Servicer under the Servicing Agreement, shall stamp or affix a designation to each file containing a copy of the Loan Agreements in its possession in such manner as to clearly indicate that such Loan Agreements, related Loans and CFC’s interest in the Metals Collateral have been sold and assigned to the Issuer and that the Issuer is the owner thereof and that the Issuer has further assigned such Loan Agreements, related Loans and its interest in the related Metals Collateral to the Trustee, and shall similarly mark or designate each relevant computer record. CFC shall make available any books and records with respect to the Loan Agreements, related Loans and Metals Collateral to the Issuer or the Trustee at any time upon demand.

Section 7.02    Repurchase Upon Breach of Certain Representations, Warranties and Agreements. The representations, warranties and agreements of CFC set forth in Section 3.01, Section 3.02, Section 4.01 and Section 7.01 with respect to the Loans and Related Interests shall survive so long as such Loan remains outstanding. Upon discovery by CFC, the Issuer or the Trustee that any of such representations, warranties or agreements was incorrect as of the time made, or deemed made, or (in the case of an agreement) was not performed at the time required, the party making such discovery shall give prompt notice to the others. In the event any such misrepresentation, incorrect warranty or nonperformance materially and adversely affects the interests of the Noteholders in the Loans and Related Interests, CFC shall, within 60 days of the first to occur of (i) CFC’s making such determination or (ii) CFC’s receiving written notice of such determination from the Issuer or the Trustee either (A) eliminate or cure the condition or circumstance causing such defect, misrepresentation or omission, as applicable or (B) repurchase such affected Loans and Related Interests at a price equal to the Outstanding Balance of such affected Loans. Notwithstanding anything to the contrary contained in this Agreement, no recourse may be taken, directly or indirectly, against any employee, officer or director of CFC or of any predecessor or successor of CFC with respect to any representation or warranty made by CFC hereunder (but such exclusion of remedies shall not be deemed an exclusion with respect to liability of any general partner of CFC otherwise existing under applicable law).

Section 7.03    Manner of Repurchase. CFC shall effect any repurchase of a Loan and Related Interests pursuant to this Article 7 through the deposit of the repurchase price set forth in Section 7.02 above into the Collection Account in immediately available funds.

ARTICLE 8     
 
OBLIGOR DEFAULT

Section 8.01    Liquidation in the Event of Defaulted Loans. Subject to the Trustee’s duties and rights and the Servicer’s obligations under the Servicing Agreement, in the event of a default by an Obligor under a Loan Agreement, CFC, as Servicer, will take all reasonable steps to enforce the related Loan Agreement and preserve and maintain title to the Metals Collateral and the rights of the Trustee and the Noteholders against the claims of all persons and parties.

ARTICLE 9     
 
INDEMNIFICATION

Section 9.01    Indemnities of CFC. Without limiting any other rights that the Issuer may have hereunder or under applicable law, CFC hereby agrees to indemnify the Issuer from and against any and all claims, losses and liabilities (including reasonable attorneys’ fees) (all the foregoing being collectively referred to as “Indemnified Amounts”) arising out of or resulting from this Agreement, the transactions contemplated hereby, or in respect of any Loan, Loan Agreement or Metals Collateral, excluding, however, Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of the Issuer; provided, however, that in no event will CFC have any indemnity or other obligation hereunder or otherwise with respect to any loss suffered in respect of any Loan sold to the Issuer in accordance with this Agreement because of the financial inability to pay thereof by the applicable Obligor, the parties hereby acknowledging that such sales are to be without recourse. Without limiting or being limited by the foregoing, but subject to the proviso in the immediately preceding sentence, CFC shall pay on demand to the Issuer any and all amounts necessary to indemnify the Issuer from and against any and all Indemnified Amounts relating to or resulting from:
(a)    reliance on any representation or warranty or statement made or deemed made by CFC (or any of its officers) under or in connection with this Agreement or in any certificate delivered pursuant hereto that, in either case, shall have been false or incorrect in any material respect when made or deemed made;
(b)    the failure by CFC to comply with any applicable law, rule or regulation of any governmental authority with respect to any Loan or related Metals Collateral, or the nonconformity of any Loan or Metals Collateral with any such applicable law, rule or regulation;
(c)    the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC or other applicable laws with respect to any Loan, Loan Agreement or Metals Collateral;
(d)    any failure of CFC to perform its duties or obligations under this Agreement or any other Program Agreement by which it continues to be bound;
(e)    the commingling of proceeds at any time with other funds of CFC;
(f)    any set-off by any creditor of CFC against proceeds; or
(g)    any investigation, litigation or proceeding related to this Agreement or in respect of any Loan or any Loan Agreement.

Section 9.02    Indemnities by the Issuer. Without limiting any other rights that CFC may have hereunder or under applicable law, the Issuer hereby agrees to indemnify CFC from and against any and all claims, losses and liabilities (including reasonable attorneys’ fees) arising out of or resulting from CFC’s reliance on any representation or warranty made by the Issuer in this Agreement or in any certificate delivered pursuant hereto that, in either case, shall have been false or incorrect in any material respect when made or deemed made.

ARTICLE 10     
 
TERM AND TERMINATION

Section 10.01    Term. This Agreement shall commence as of the date of execution and delivery hereof and, unless sooner terminated by mutual agreement of the parties, shall continue in full force and effect until final payment of the last outstanding Loan transferred hereunder.

ARTICLE 11     
 
MISCELLANEOUS

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Section 11.01    Notices. All notices and other communications provided for hereunder shall be in writing (including email, telegraphic, telex, facsimile or cable communication) and mailed, emailed, telegraphed, telexed, transmitted, cabled or delivered:
	
		
	If to CFC:
	Collateral Finance Corporation
2121 Rosecrans Ave., Suite 6301
El Segundo, California 90245
Attention: David Madge
Tel No: (310) 587-1414
Email: madge@amark.com

	 
	 

	If to the Issuer:
	AM Capital Funding, LLC
2121 Rosecrans Ave., Suite 6300
El Segundo, California 90245
Attention: Thor Gjerdrum
Tel No: (310) 587-1414
Email: thor@amark.com

	 
	 

	If to Morningstar:
	Morningstar Credit Ratings, LLC
4 World Trade Center, 48th Floor
15 Greenwich Street
New York, NY 10007 
Attention: Jonathan Lam
Tel No: (646) 560-4581
Email: jonathan.lam@morningstar.com

All such notices and communications shall when mailed, emailed, telegraphed, telexed, transmitted or cabled be effective when deposited in the mails, sent by email, delivered to the telegraph company, confirmed by telex answerback, transmitted by telecopier or delivered to the cable company, respectively.

Section 11.02    Successors and Assigns of CFC. This Agreement shall be binding upon CFC and its successors and assigns, except that CFC may not transfer or assign any of its obligations hereunder except in connection with a merger or sale of substantially all the assets of CFC which will not materially adversely affect the Noteholders, and only if a Ratings Confirmation is first obtained.

Section 11.03    Separability Clause. Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 11.04    Amendments. This Agreement and the rights and obligations of the parties hereunder may not be changed orally but only by an instrument in writing signed by the party against which enforcement is sought. This Agreement may not be amended by the Issuer and CFC without the prior written consent of the Trustee and a prior Ratings Confirmation. Notwithstanding the foregoing, the Schedules hereto relating to Loans and Designated Accounts may be amended or supplemented to reflect transactions authorized hereunder, and Exhibit A and Exhibit B hereto may be amended from time to time in a manner consistent with the covenant of CFC contained in Section 4.01(e).

Section 11.05    Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

Section 11.06    Survival of Representations, Warranties and Covenants. All representations, warranties and covenants made herein shall be continuing representations, warranties and covenants and shall survive the execution and delivery of this Agreement. 

Section 11.07    Assignment for Security for the Notes. CFC understands that the Issuer will transfer and assign to, as well as grant to the Trustee on behalf of the Holders of the Notes a security interest in, all its right, title and interest to this Agreement and the Loans and Related Interests. CFC consents to such assignment and grant and further agrees that all representations, warranties, covenants and agreements of CFC made herein shall also be for the benefit of and inure to the Trustee and all Holders from time to time of the Notes, and such parties are express third party beneficiaries thereof.

Section 11.08    [Reserved].

Section 11.09    Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same instrument.

Section 11.10    No Waiver; Remedies. No failure on the part of the Issuer or CFC to exercise, and no delay in exercising, any right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Section 11.11    Costs, Expenses and Taxes. In addition to the limited rights of indemnification granted to the Issuer under Article 9 hereof, CFC agrees to pay on demand all costs and expenses of the Issuer in connection with the preparation, execution and delivery of this Agreement and the documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Issuer with respect thereto and with respect to advising the Issuer as to its rights and remedies under this Agreement, and all costs and expenses (including, without limitation, reasonable counsel fees and expenses), in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement and the documents to be delivered hereunder. In addition, CFC agrees to pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of this Agreement or the other documents to be delivered hereunder, and agrees to hold the Issuer harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omitting to pay such taxes and fees.

Section 11.12    Account and Loan Substitution. CFC shall have the right from time to time, in its sole discretion, to substitute Designated Accounts and related Loans which (in the aggregate) have equivalent Outstanding Balances in replacement for Designated Accounts and Loans which have been previously sold to the Issuer pursuant to Section 2.01 hereof, provided (i) no adverse credit selection shall have occurred with respect to any Designated Account and related Loan so substituted, (ii) on a cumulative basis from the Initial Closing Date, total substitutions of Designated Accounts and related Loans shall aggregate (as measured by Outstanding Balances) no more than ten percent (10%) of the largest aggregate Outstanding Balances of Loans theretofore held by the Issuer, (iii) no such substitution may be made in respect of a Loan or Designated Account, the Obligor in respect of which is in arrears of a payment obligation under its Loan Agreement or is the subject of Insolvency Proceedings, and (iv) on the effective date of such substitution CFC shall deliver to the Issuer and the Trustee an officer’s certificate representing as to the satisfaction of the conditions set forth in clauses (i) through (iii) above, and affirming all representations and warranties set forth in this Agreement as to such substituted Loans and Designated Accounts, as would have been required or deemed to be made hereunder were such substituted Loans and Designated Accounts instead Additional Loans and Additional Designated Accounts purchased on a Purchase Date.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date hereof.
Collateral Finance Corporation, 
a Delaware corporation
By:         
Printed Name: David Madge 
Title: President
AM Capital Funding, LLC 
Delaware limited liability company
By:         
Printed Name: Thor Gjerdrum 
Title: President

EXHIBIT A
FORM OF LOAN AGREEMENT ORIGINATED BY CFC
See attached.

EXHIBIT B
FORM OF LOAN AGREEMENT ACQUIRED BY CFC

See attached.

SCHEDULE 1
LIST OF EXISTING LOANS
 
See attached. 

SCHEDULE 2.02
LIST OF DESIGNATED ACCOUNTS 

See Schedule 1

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