ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES TRUST 2009-A INDENTURE

Exhibit 10.1

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES TRUST 2009-A

INDENTURE

Dated as of June 26, 2009

The Bank of New York Mellon,

as Indenture Trustee

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES TRUST

EQUIPMENT LOAN NOTES

RECEIVABLES NOTES

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INDENTURE, dated as of June 26, 2009, between ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES TRUST 2009-A, a Delaware statutory trust (together with its permitted successors and assigns, the “ Issuer ”) and THE BANK OF NEW YORK MELLON, a New York banking corporation, as trustee (the “ Indenture Trustee ”).

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Notes.

GRANTING CLAUSE

In order to secure (i) payment of the Notes and all other amounts payable by the Issuer under the terms of the Basic Documents and (ii) the performance by the Issuer of all of its covenants and agreements in this Indenture and the other Basic Documents to which it is a party, the Issuer hereby Grants to the Indenture Trustee, as trustee for the benefit of the Noteholders and the Administrative Agent (each of the foregoing, a “ Beneficiary ” and collectively, the “ Beneficiaries ”) to secure the Issuer’s obligations under the Notes and the Basic Documents to which it is a party, all of the Issuer’s assets, whether now owned or hereafter acquired, including all of the Issuer’s right, title and interest in, to and under:

(a) the Equipment Loans, including any Substitute Loans and all documents and instruments evidencing or governing the Loans and all related Loan Files and all monies paid or payable thereon (including Liquidation Proceeds);

(b) the Equipment, including all security interests therein, granted by Obligors pursuant to the Loans and any other collateral securing the Loans;

(c) the Receivables and all monies paid or payable thereon;

(d) any Insurance Policies and Proceeds thereof, and all rights and benefits thereunder with respect to the Equipment and any other collateral securing the Loans;

(e) any Guaranties, all other Supporting Obligations with respect to each Loan or Account, and Proceeds thereof;

(f) the Lockboxes and the Lockbox Accounts and all funds on deposit from time to time in the Lockboxes or in the Lockbox Accounts and all Proceeds thereof;

(g) the Pooling and Servicing Agreement and the other Basic Documents (including all of its rights under the Purchase Agreement, the Custodial Agreement and any Assignment, but excluding the Trust Agreement, the Certificates and the documents and certificates executed in connection therewith);

(h) the Interest Rate Cap Agreements;

(i) the Reserve Account and all proceeds thereof including the Initial Reserve Account Deposit and all cash and other amounts, investments and investment property held from time to time in the Reserve Account (whether in the form of deposit accounts, Physical Property, book-entry securities, uncertificated securities or otherwise including any sub-accounts);

(j) the Loan Collection Account and the Receivables Collection Account, including any sub-accounts and all the Proceeds thereof including all other amounts, investments and investment property held from time to time in the Loan Collection Account and the Receivables Collection Account (whether in the form of deposit accounts, Physical Property, book-entry securities, uncertificated securities or otherwise);

(k) any Warranty Payments and Administrative Purchase Payments;

(l) the Letters of Credit;

(m) all Accounts;

(n) all Contracts;

(o) all Deposit Accounts;

(p) all Security Entitlements;

(q) all Documents;

(r) all UCC Equipment;

(s) all Goods;

(t) all General Intangibles and Payment Intangibles;

(u) all Instruments;

(v) all Inventory;

(w) all Investment Property;

(x) all Chattel Paper;

(y) all Supporting Obligations;

(z) all Letter-of-Credit Rights;

(aa) all FCIA Insurance covering Receivables, the Obligors with respect to which are not residents in the United States; and

(bb) all present and future claims, contract rights, demands, causes and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and loans, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing.

 

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All of the Issuer’s right, title and interest in, to and under the items in (a) through (bb) being referred to as the “ Trust Estate .”

The foregoing Grant is made in trust to secure the payment of principal of, and interest on, and any other amounts owing in respect of the Notes of a class equally and ratably without prejudice, priority or distinction, and among the class of Notes in accordance with the priorities set forth herein and to secure compliance with the provisions of this Indenture, all as provided in this Indenture. This Indenture constitutes a security agreement under the UCC.

The foregoing Grant includes all rights, powers and options (but none of the obligations, if any) of the Issuer under any agreement or instrument included in the Trust Estate, including the immediate and continuing right to claim for, collect, receive and give receipt for payments in respect of the Equipment Loans and the Receivables included in the Trust Estate and all other monies payable under the Trust Estate, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Issuer or otherwise and generally to do and receive anything that the Issuer is or may be entitled to do or receive under or with respect to the Trust Estate.

The Indenture Trustee, as trustee on behalf of the Beneficiaries, acknowledges such Grant, and accepts the trusts under this Indenture in accordance with the provisions of this Indenture.

The pledge of the Trust Estate by the Issuer pursuant to this Indenture does not constitute, and is not intended to result in, an assumption by the Indenture Trustee or any Beneficiary of any obligation of the Issuer, the Servicer, Owner Trustee, or Transferor to any Obligor or other Person in connection with the Equipment, the Loans, the Receivables, the Insurance Policies, the FCIA Insurance, the Guaranties, any document in the Loan Files, or any other part of the Trust Estate other than those obligations specifically assumed pursuant to the terms of the Basic Documents.

The Issuer hereby irrevocably authorizes the Indenture Trustee, at any time, and from time to time, to file in any filing office in any jurisdiction any initial financing statements and amendments thereto that (a) indicate the Trust Estate (including any such financing statements and amendments thereto that identify the Trust Estate as including all assets of the Issuer), regardless of whether any particular asset comprised in the Trust Estate falls within the scope of Article 9 of the UCC, and (b) provide any other information required for the sufficiency or filing office acceptance of any financing statement or amendment. The Issuer agrees to furnish any such information to the Indenture Trustee promptly upon the Indenture Trustee’s request. The Issuer also ratifies its authorization for the Indenture Trustee, to have filed in any UCC jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof. The Indenture Trustee shall have no obligation to file any financing statement or continuation statement unless it is directed to do so by the Issuer, the Servicer or the Administrative Agent and it is provided with the financing statement in form for filing.

 

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ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1 Definitions . Certain capitalized terms used in this Indenture shall have the respective meanings assigned them in Part I of Appendix A to the Pooling and Servicing Agreement of even date herewith among the Issuer, ALER and ALS (as it may be amended, supplemented or modified from time to time, the “ Pooling and Servicing Agreement ”). All references herein to “the Indenture” or “this Indenture” are to this Indenture as it may be amended, supplemented or modified from time to time, the exhibits hereto and the capitalized terms used herein which are defined in such Appendix A. All references herein to Articles, Sections, subsections and exhibits are to Articles, Sections, subsections and exhibits contained in or attached to this Indenture unless otherwise specified. All terms defined in this Indenture shall have the defined meanings when used in any certificate, notice, note or other document made or delivered pursuant hereto unless otherwise defined therein. The rules of construction set forth in Part II of such Appendix A shall be applicable to this Indenture.

ARTICLE II

THE NOTES

SECTION 2.1 Form .

(a) Each of the Equipment Loan Notes and Receivables Notes, with the Indenture Trustee’s certificate of authentication, shall be substantially in the forms set forth in Exhibits A-1 and A-2 , respectively, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and each such class may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

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

(c) Each Note shall be dated the date of its authentication. The terms of each Note, as provided for in  Exhibits A-1 and
A-2 , are part of the terms of this Indenture.

(d) The Notes in substantially the forms set forth in Exhibits A-1 and A-2 shall represent the Notes which have been issued and sold to the Noteholders pursuant to the Note Purchase Agreement.

SECTION 2.2 Execution, Authentication and Delivery .

(a) Each Note shall be dated the date of its authentication.

 

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(b) The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Notes may be manual or facsimile.

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

(d) The Indenture Trustee shall upon Issuer Order authenticate and deliver to, or upon the order of, the Issuer, the Equipment Loan Notes for original issue in aggregate principal amount of up to $330,000,000 and Receivables Notes in the aggregate principal amount of up to $60,000,000. The aggregate principal amount of all unpaid Advances under all Notes Outstanding may not exceed $330,000,000.

(e) No Notes shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form set forth in Exhibits A-1 and A-2 , executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

(f) No additional series of Notes may be issued pursuant to this Indenture.

SECTION 2.3 Advances and Repayments . Prior to the applicable Conversion Date each Note shall be a revolving note and Advances shall be made thereon at the times and in the amounts set forth in the Note Purchase Agreement. The Indenture Trustee shall maintain a record of all Advances and repayments made on the Notes, and absent manifest error, such records shall be conclusive. The Indenture Trustee shall forward requests for Advances to the Noteholders at the times set forth in the Note Purchase Agreement.

SECTION 2.4 Registration; Registration of Transfer and Exchange of Notes .

(a) The Issuer shall cause to be kept and maintained the Note Register, comprising separate registers for each class of Notes, in which, the Issuer shall provide for the registration of the Notes (which shall include the names of the owners of each such Note and the registration of both principal of and stated interest on each such Note) and the registration of transfers and exchanges of the Notes. The Indenture Trustee shall initially be the Note Registrar for the purpose of registering the Notes and transfers of the Notes as herein provided. Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor Note Registrar or, if it elects not to make such an appointment, assume the duties of the Note Registrar.

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

 

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(c) Upon surrender for registration of transfer of any Note at the Corporate Trust Office of the Indenture Trustee or the Agency Office of the Issuer (and following the delivery, in the former case, of such Notes to the Issuer by the Indenture Trustee), the Issuer shall execute, the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Notes in any authorized denominations, of a like aggregate principal amount.

(d) At the option of the Noteholder, Notes may be exchanged for other Notes of the same class in any authorized denominations, of a like aggregate principal amount, upon surrender of the Notes to be exchanged at the Corporate Trust Office of the Indenture Trustee or the Agency Office of the Issuer (and following the delivery, in the former case, of such Notes to the Issuer by the Indenture Trustee), the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes which the Noteholder making the exchange is entitled to receive.

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

(f) Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee and the Note Registrar, duly executed by the Holder thereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by a commercial bank or trust company located, or having a correspondent located, in the City of New York or the city in which the Corporate Trust Office of the Indenture Trustee is located, or by a member firm of a national securities exchange, and such other documents as the Indenture Trustee may require.

(g) No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Issuer or Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Sections 2.3 or 9.6 not involving any transfer.

(h) The preceding provisions of this Section 2.4 notwithstanding, the Issuer shall not be required to transfer or make exchanges, and the Note Registrar need not register transfers or exchanges, of Notes that: (i) if applicable, have been selected for redemption pursuant to Article X ; or (ii) are due for repayment in full within fifteen (15) days of submission to the Corporate Trust Office or the Agency Office.

SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes .

(a) If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any

 

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Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Note Registrar or the Indenture Trustee that such Note has been acquired by a bona fide purchaser, the Issuer shall execute and upon the Issuer’s request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of a like class and aggregate principal amount; provided , however , that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven (7) days shall be due and payable in full, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may make payment to the Holder of such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date, if applicable, without surrender thereof.

(b) If, after the delivery of a replacement Note or payment in respect of a destroyed, lost or stolen Note pursuant to subsection (a), any bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from (i) any Person to whom it was delivered, (ii) the Person taking such replacement Note from the Person to whom such replacement Note was delivered or (iii) any assignee of such Person, except any bona fide purchaser, and the Issuer and the Indenture Trustee shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.

(c) In connection with the issuance of any replacement Note under this Section 2.5, the Issuer may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including all fees and expenses of the Indenture Trustee) connected therewith.

(d) Any duplicate Note issued pursuant to this Section 2.5 in replacement for any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be found at any time or be enforced by any Person, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

(e) The provisions of this Section 2.5 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

SECTION 2.6 Persons Deemed Noteholders . Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name any Note is registered (as of the day of determination) as the Noteholder for the purpose of receiving payments of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

 

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SECTION 2.7 Payment of Principal, Interest and Certain Fees .

(a) On each Distribution Date, interest will be due and payable on each Equipment Loan Note then Outstanding and each Receivables Note then Outstanding in an amount equal to the Equipment Loan Note Interest Payment and the Receivables Note Interest Payment, respectively, and each such amount shall be paid from amounts on deposit in the Loan Collection Account or the Receivables Collection Account, as the case may be, in accordance with the priority of payment provisions of Section 8.2 . Each such interest payment shall be paid to the Person in whose name such Note is registered in the Note Register on the applicable Record Date, by wire transfer in immediately available funds to the account designated by the Noteholders.

(b) [Reserved]

(c) The principal of each class of Notes shall be due and payable in full on the applicable Final Scheduled Distribution Date and, to the extent of funds available therefor, due and payable in installments on the Distribution Dates (if any) and/or Business Days preceding the applicable Final Scheduled Distribution Date, in the amounts and in accordance with the priorities set forth in Sections 8.2(c ), (d) , (e)  and (f) , as applicable. All principal payments on each class of Notes shall be made pro rata to the Noteholders of such class entitled thereto. Any installment of principal payable on any Note shall be punctually paid or duly provided for from amounts on deposit in the Loan Collection Account or the Receivables Collection Account, as the case may be, for payment to Noteholders on such Distribution Date or Business Day and shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered in the Note Register on the applicable Record Date, by wire transfer in immediately available funds to the account designated by the Noteholder.

(d) In no event shall the interest charged with respect to a Note exceed the maximum amount permitted by applicable law. If at any time the interest rate charged with respect to the Notes exceeds the maximum rate permitted by applicable law, the rate of interest to accrue pursuant to this Indenture and such Note shall be limited to the maximum rate permitted by applicable law, but any subsequent reductions in the Alternative Rate shall not reduce the interest to accrue on such Note below the maximum amount permitted by Applicable Law until the total amount of interest accrued on such Note equals the amount of interest that would have accrued if a varying rate per annum equal to the maximum interest rate permitted by applicable law had at all times been in effect. If the total amount of interest paid or accrued on the Note under the foregoing provisions is less than the total amount of interest that would have accrued if the maximum interest rate permitted by applicable law had at all times been in effect, the Issuer agrees to pay to the Noteholders an amount equal to the difference between (a) the lesser of (i) the amount of interest that would have accrued if the maximum rate permitted by applicable law had at all times been in effect, or (ii) the amount of interest that would have accrued if the interest rate had at all times been in effect, and (b) the amount of interest accrued in accordance with the other provisions of this Indenture.

(e) On each Distribution Date prior to the Loan Conversion Date to the extent funds are available therefor in accordance with the priority of payments in Section 8.2 , the Issuer shall pay to the Equipment Loan Noteholders a fee (the “ Equipment Unused Facility Fee ”),

 

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which shall be in an amount equal to the sum of the product for each day during the immediately preceding Interest Period of (x) Unused Facility Fee Percentage, (y) a fraction (expressed as percentage) the numerator of which is one and the denominator of which is equal to the actual number of days in the applicable year and 102% of (z) $330,000,000 minus the Effective Receivables Commitment, minus the then outstanding Aggregate Equipment Loan Note Principal Balance on such date of determination. Such Equipment Unused Facility Fee shall be payable from amounts then on deposit in the Loan Collection Account, in accordance with the priority of payments set forth in Section 8.2 , and shall be allocated among the Equipment Loan Noteholders pro rata in accordance with their respective shares of the Equipment Loan Commitment on such date of determination.

(f) On each Distribution Date prior to the Receivables Conversion Date to the extent funds are available therefor in accordance with the priority of payments in Section 8.2 , the Issuer shall pay to the Receivables Noteholders a fee (the “ Receivables Unused Facility Fee ”), which shall be in an amount equal to the sum of the product for each day during the immediately preceding Interest Period of (x) Unused Facility Fee Percentage, (y) a fraction (expressed as percentage) the numerator of which is one and the denominator of which is equal to the actual number of days in the applicable year and 102% of (z) the Effective Receivables Commitment on such date of determination minus the then outstanding Aggregate Receivables Note Principal Balance on such date of determination. Such Receivables Unused Facility Fee shall be payable from amounts then on deposit in the Receivables Collection Amount, in accordance with the priority of payments set forth in Section 8.2 , and shall be allocated among the Receivables Noteholders pro rata in accordance with their respective shares of the Receivables Commitment on such date of determination.

SECTION 2.8 Cancellation of Notes . All Notes surrendered for payment, redemption, exchange or registration of transfer shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.8 , except as expressly permitted by this Indenture. All canceled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be returned to it; provided , however , that such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee. The Indenture Trustee shall certify to the Issuer that surrendered Notes have been duly canceled and retained or destroyed, as the case may be.

SECTION 2.9 Release of Trust Estate . The Indenture Trustee shall release property from the lien of this Indenture, other than as expressly permitted by Sections 3.21 , 8.2 , 8.4 and 10.1 of this Indenture and Section 6.09 of the Pooling and Servicing Agreement, only upon receipt of an Issuer Request accompanied by an Officer’s Certificate and with the Special Required Noteholders’ prior written consent.

SECTION 2.10 ALER as Noteholder . ALER in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not ALER (except as provided in the definition of Outstanding).

 

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SECTION 2.11 Tax and ERISA Treatment .

(a) The Issuer in entering into this Indenture, and the Noteholders, by acquiring any Note, (i) express their intention that the Notes qualify under applicable tax law as indebtedness secured by the Trust Estate, and (ii) unless otherwise required by appropriate taxing authorities, agree to treat the Notes as indebtedness secured by the Trust Estate for the purpose of federal income taxes, state and local income and franchise taxes, and any other taxes imposed upon, measured by or based upon gross or net income.

(b) Each Noteholder, by its acquisition of its Notes, represents, warrants and covenants that (A) it is not acquiring such Note with the assets of an “employee benefit plan” subject to Employee Retirement Income Security Act of 1974, as amended, a “plan described in Section 4975(e)(1) of the Code, an entity deemed to hold plan assets of any of the foregoing by reason of investment by an “employee benefit plan” or other “plan” in such entity, or a governmental plan subject to applicable law that is substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code or (B) the acquisition and holding of such Note by such purchaser of a Note, throughout the period that it holds such Note, will not result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code (or, in the case of a governmental plan, any substantially similar applicable law).

SECTION 2.12 Restrictions on Transfer . The Notes shall not be registered under the Securities Act or the securities or “Blue Sky” laws of any other jurisdiction. Consequently, the Notes shall not be transferable other than pursuant to any exemption from the registration requirements of the Securities Act and satisfaction of certain other provisions specified in this Section 2.12 . No sale, pledge or other transfer of any Note (or interest therein) may be made by any Person unless (x) such sale, pledge or other transfer is made pursuant to an exemption available under the Securities Act and (y) such transfer complies with the transfer restrictions set forth in the Note Purchase Agreement. In the case of such sale, other than transfers of the Notes by a Noteholder to its related Support Party, transfer or pledge or other transfer, the Indenture Trustee shall require that the prospective transferee certify to the Indenture Trustee and the Transferor in writing the facts surrounding such transfer and the status of such transferee, which certification shall be substantially in the form of the certificate attached hereto as Exhibit D . None of the Transferor, the Servicer, the Issuer, the Owner Trustee or the Indenture Trustee shall be obligated to register any Notes under the Securities Act, qualify any Notes under the securities or “Blue Sky” laws of any state or provide registration rights to any purchaser or holder thereof.

By accepting and holding a Note, the Holder thereof shall be deemed to have represented and warranted and/or acknowledged and agreed as follows:

(1) Except for (i) transfers of the Notes in accordance with Section 7.1(c) and (e)  of the Note Purchase Agreement and (ii) upon presentation of evidence satisfactory to the Transferor and the Indenture Trustee that the restrictions set forth in this Section 2.12 have been complied with, it acknowledges that the Indenture Trustee will not be required to accept for registration of transfer any Notes acquired by it.

 

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(2) It acknowledges that the Transferor, the Originator, the Noteholders and others will rely on the truth and accuracy of the acknowledgments, representations and agreements set forth in this Section 2.12 .

(3) That each Note will bear the following legends:

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER THE SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY PURSUANT TO AN EXEMPTION UNDER THE 1933 ACT, AS CONFIRMED BY AN OPINION OF COUNSEL ADDRESSED TO THE INDENTURE TRUSTEE AND THE TRANSFEROR WHICH OPINION AND COUNSEL ARE SATISFACTORY TO THE INDENTURE TRUSTEE AND THE TRANSFEROR, AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTIONS.

BY ACQUIRING THIS NOTE EACH PURCHASER AND TRANSFEREE WILL BE DEEMED TO REPRESENT, WARRANT AND COVENANT THAT EITHER (1) IT IS NOT ACQUIRING THIS NOTE WITH THE ASSETS OF AN “EMPLOYEE BENEFIT PLAN” SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ ERISA ”), A “PLAN” DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “ CODE ”), ANY ENTITY DEEMED TO HOLD “PLAN ASSETS” OF ANY OF THE FOREGOING BY REASON OF AN EMPLOYEE BENEFIT PLAN’S OR OTHER PLAN’S INVESTMENT IN SUCH ENTITY, OR A GOVERNMENTAL PLAN SUBJECT TO APPLICABLE LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE BY THE PURCHASER OR TRANSFEREE, THROUGHOUT THE PERIOD THAT IT HOLDS THIS NOTE, WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR APPLICABLE LAW).

SECTION 2.13 Rule 144A . The Issuer shall furnish, if it shall have received such information from ALER, upon the request of any Noteholder, to such Noteholder and a prospective purchaser designated by such Noteholder the information required to be delivered under Rule 144A(d)(4) under the 1933 Act if at the time of such request the Issuer is not a reporting company under Section 13 or Section 15(d) of the Exchange Act, and any of the Notes are “restricted securities” within the meaning of Rule 144(a)(3) under the 1933 Act at such time.

ARTICLE III

COVENANTS

SECTION 3.1 Payment of Principal and Interest . The Issuer shall duly and punctually pay the principal of, and interest on, the Notes in accordance with the terms of the Notes and this

 

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Indenture. On each Distribution Date and on the Redemption Date (if applicable), the Indenture Trustee shall distribute amounts on deposit in the Loan Collection Account and Receivables Collection Account to the Noteholders in accordance with Section 8.2 , less amounts properly withheld under the Code from a payment to any Noteholder of interest and/or principal. Any amounts so withheld shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.

SECTION 3.2 Maintenance of Agency Office . As long as any of the Notes remains outstanding, the Issuer shall maintain in the Borough of Manhattan, the City of New York, an office (the “ Agency Office ”), being an office or agency where Notes may be surrendered to the Issuer for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer hereby initially appoints The Bank of New York Mellon to serve as its agent for the foregoing purposes. The Issuer shall give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of the Agency Office. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office of the Indenture Trustee, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.

SECTION 3.3 Money for Payments To Be Held in Trust .

(a) As provided in Section 8.2 , all payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Loan Collection Account and the Receivables Collection Account pursuant to Section 8.2 shall be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from the Loan Collection Account and Receivables Collection Account for payments of Notes shall be paid over to the Issuer except as provided in Section 8.2 or this Section 3.3 .

(b) The Issuer shall cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee and the Administrative Agent an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section 3.3 , that such Paying Agent shall:

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

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

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

 

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

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

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

(d) The Indenture Trustee may adopt and employ, at the expense of the Issuer, any reasonable means of notification of the payment of any amount due with respect to any Note and remaining unclaimed for one (1) year after such amount has become due and payable (including, but not limited to (x) mailing notice of such payment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in monies due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder or (y) at the expense of the Issuer cause to be published once, in the eastern edition of The Wall Street Journal , notice that such money remains unclaimed and that, after a date specified therein, which shall neither be less than thirty (30) days nor more than six (6) months from the date of such publication, the Issuer shall be entitled to all unclaimed funds and other assets which remain subject hereto).

SECTION 3.4 Existence . Except as otherwise permitted by Section 3.10 , the Issuer shall keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware and shall obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Trust Estate and each other instrument or agreement included in the Trust Estate.

SECTION 3.5 Protection of Trust Estate; Acknowledgment of Pledge . The Issuer intends the security interest granted pursuant to this Indenture to be prior to all other Liens in the respect of the Trust Estate and the Issuer shall take all actions necessary to obtain and maintain in favor of the Indenture Trustee for the benefit of the Beneficiaries a first lien on and a first priority perfected security interest in the Trust Estate except for Exempt Collateral. The Issuer shall from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, amendments thereto, continuation statements, assignments, certificates, instruments of further assurance and other instruments, and shall take such other action as may be determined to be necessary or advisable in an Opinion of Counsel to the Owner Trustee delivered to the Indenture Trustee to:

 

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(i) maintain or preserve the lien and security interest (and the priority thereof) in favor of the Indenture Trustee, for the benefit of the Beneficiaries, of this Indenture or carry out more effectively the purposes hereof including by making the necessary filings of financing statements or amendments thereto within thirty (30) days after the occurrence of any of the following: (A) any change in the Issuer’s name, (B) any change in the location of the Issuer’s principal place of business, (C) any change in the Issuer’s “location” (within the meaning of Section 9-307 of the UCC) and (D) any merger or consolidation or other change in the Issuer’s identity or organizational structure and by promptly notifying the Indenture Trustee of any such filings;

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

(iii) enforce the rights of the Indenture Trustee, the Administrative Agent and the Noteholders in any of the Trust Estate;

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

(v) grant more effectively to the Indenture Trustee the security interest in all or any portion of the Trust Estate,

and the Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute any financing statement, continuation statement or other instrument as delivered to the Indenture Trustee which may be necessary, desirable or required by the Indenture Trustee pursuant to this Section 3.5 .

SECTION 3.6 Opinions as to Trust Estate .

(a) On the Closing Date, the Issuer shall furnish to the Indenture Trustee and the Administrative Agent an Opinion of Counsel, in form and substance reasonably acceptable to the Indenture Trustee and the Administrative Agent, either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, any amendments hereto and any other requisite documents, and with respect to the execution and filing of any financing statements and continuation statements as are necessary to perfect and make effective the lien and security interest in favor of the Indenture Trustee for the benefit of the Beneficiaries created by this Indenture covering such portions of the Trust Estate and such matters of law as are customary in similar transactions, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and security interest effective.

(b) On or before April 15 in each calendar year, beginning April 15, 2010, the Issuer shall furnish to the Indenture Trustee, the Administrative Agent and the Noteholders an Opinion of Counsel, in form and substance reasonably acceptable to the Indenture Trustee and the Administrative Agent, either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any amendments hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the lien

 

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and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain the lien and security interest created by this Indenture, covering the matters covered by the opinion given pursuant to Section 3.6(a) above and such other matters of law (including changes in law dealing with perfection and priority of liens) as are customary in similar transactions. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any amendments hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements with respect to the Trust Estate consistent with the opinion provided pursuant to Section 3.6(a) above and such other matters of law as are customary in similar transactions that will, in the opinion of such counsel, be required to maintain the lien and security interest (except with respect to Exempt Collateral) of this Indenture until April 15 in the following calendar year.

SECTION 3.7 Performance of Obligations; Servicing of Loans; Consent to Amendments .

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

(b) The Issuer may contract with other Persons, subject to the Required Noteholders’ consent, to assist it in performing its duties under this Indenture, and any performance of such duties by a Person shall be deemed to be action taken by the Issuer. Initially, the Issuer has contracted (with the consent of the Administrative Agent) with the Servicer and the Administrator to assist the Issuer in performing its duties under this Indenture.

(c) The Issuer shall punctually perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Estate, including but not limited to filing or causing to be filed all UCC financing statements and continuation statements required to be filed under the terms of this Indenture, the Pooling and Servicing Agreement and the Purchase Agreement in accordance with and within the time periods provided for herein and therein.

(d) If the Issuer shall have knowledge of the occurrence of a Servicer Default, the Issuer shall promptly notify the Indenture Trustee, the Administrative Agent and the Rating Agencies thereof, and shall specify in such notice the response or action, if any, the Issuer has taken or is taking with respect of such Servicer Default. If a Servicer Default shall arise from the failure of the Servicer to perform any of its duties or obligations under the Pooling and Servicing Agreement with respect to the Loans or the Receivables, the Issuer and the Indenture Trustee shall take all reasonable steps available to them pursuant to the Pooling and Servicing Agreement to remedy such failure.

(e) Without derogating from the absolute nature of the assignment granted to the Indenture Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees that it shall not, without the prior written consent of the Indenture Trustee and the

 

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Required Noteholders amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, any of the Basic Documents or the terms thereof or any portion of the Trust Estate (other than the ability of the Servicer to amend, modify or waive provisions of the Equipment Loans and the Receivables that are specifically permitted under the Pooling and Servicing Agreement), or waive timely performance or observance by the Servicer or ALER under the Pooling and Servicing Agreement or the Purchase Agreement, the Administrator under the Administration Agreement or ALS under the Purchase Agreement; provided , however , that, notwithstanding the foregoing, no action specified in the proviso to Section 9.2 shall be taken except in compliance with Section 9.2 . If any such amendment, modification, supplement, termination, waiver or surrender shall be so consented to by the Indenture Trustee and the Required Noteholders, the Issuer agrees, promptly following a request by the Indenture Trustee or the Administrative Agent to execute and deliver, in its own name and at its own expense, such agreements, instruments, consents and other documents as the Indenture Trustee, the Administrative Agent or the Required Noteholders may deem necessary or appropriate in the circumstances.

(f) The Issuer shall ensure that, at all times during which any fixed rate Equipment Loan is outstanding, an Interest Rate Cap Agreement shall be in place and effective with an Eligible Cap Provider; provided , however , that if the latter ceases to be an Eligible Cap Provider by reason of a downgrade by the applicable Rating Agency and within thirty (30) days of such downgrade the amount of funds in the Reserve Account is greater than or equal to the Reserve Account Required Amount (including, for the avoidance of doubt, the Ineligible Cap Reserve), such Person shall, notwithstanding such ratings downgrade, be deemed to be an Eligible Cap Provider unless such Person is downgraded below “A”/“A2” from the applicable Rating Agency, in which case, the Issuer shall have (30) days to replace such Eligible Cap Provider.

SECTION 3.8 Negative Covenants . So long as any Notes are Outstanding, the Issuer shall not:

(a) except as directed by the Special Required Noteholders, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, except the Issuer may (i) collect, liquidate, sell or otherwise dispose of Warranty Loans, Administrative Loans and Defaulted Loans, (ii) make cash payments out of the Designated Accounts and (iii) take other actions, in each case solely as expressly permitted by the Basic Documents;

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

(c) voluntarily commence any insolvency, readjustment of debt, marshaling of assets and liabilities or other proceeding, or apply for an order by a court or agency or supervisory authority for the winding-up or liquidation of its affairs or any other event specified in Section 5.1(g) ; or

 

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(d) either (i) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (ii) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof (other than tax liens, mechanics’ liens and other similar liens that arise by operation of law, in each case on Equipment and arising solely as a result of an action or omission of the related Obligor), (iii) permit the lien of this Indenture not to constitute a valid first priority security interest in the Trust Estate (other than with respect to (x) any such tax, mechanics’ or other similar liens and (y) Exempt Collateral) or (iv) amend or modify the provisions of the other Basic Documents without the consent of the Required Noteholders.

SECTION 3.9 Annual Statement as to Compliance . The Issuer shall deliver to the Indenture Trustee, the Administrative Agent and the Noteholders, with a copy to the Rating Agencies, on or before April 15 of each year, beginning April 15, 2010, an Officer’s Certificate signed by an Authorized Officer dated as of the immediately preceding December 31, stating that:

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

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

SECTION 3.10 Consolidation, Merger, etc., of Issuer; Disposition of Trust Assets .

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

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

 

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

(iii) any action as is necessary to maintain the lien and security interest created by this Indenture shall have been completed;

(iv) the Issuer shall have delivered to the Indenture Trustee and the Administrative Agent an Officer’s Certificate stating that such consolidation or merger and such amendment comply with this Section 3.10 ;

(v) the Issuer shall have delivered to the Indenture Trustee and the Administrative Agent an Opinion of Counsel stating that such consolidation or merger and such amendment shall have no material adverse tax consequence to the Issuer or any Securityholder; and

(vi) the Special Required Noteholders shall have, in their sole discretion, consented to such merger or consolidation.

(b) Except pursuant to Section 10.1 or as otherwise expressly permitted by this Indenture or the other Basic Documents, the Issuer shall not sell, convey, exchange, transfer or otherwise dispose of any of its properties or assets to any Person, unless:

(i) the Person that acquires such properties or assets of the Issuer (A) shall be a United States citizen or a Person organized and existing under the laws of the United States of America or any State and (B) by an amendment hereto, executed and delivered to the Indenture Trustee and the Administrative Agent, in form satisfactory to the Indenture Trustee and the Special Required Noteholders:

(1) expressly assumes the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein;

(2) expressly agrees that all right, title and interest so sold, conveyed, exchanged, transferred or otherwise disposed of shall be subject and subordinate to the rights of Noteholders; and

(3) unless otherwise provided in such amendment, expressly agrees to indemnify, defend and hold harmless the Issuer against and from any loss, liability or expense arising under or related to this Indenture and the Notes;

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

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

 

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(iv) the Issuer shall have delivered to the Indenture Trustee and the Administrative Agent an Officer’s Certificate stating that such sale, conveyance, exchange, transfer or disposition and such amendment comply with this Section 3.10 ;

(v) the Issuer shall deliver to the Indenture Trustee and the Administrative Agent an Opinion of Counsel stating that such sale, conveyance, exchange, transfer or disposition and such amendment have no material adverse tax consequence to the Issuer or to any Noteholders or Registered Owners; and

(vi) the Special Required Noteholders, in their sole discretion, shall have consented to such sale, conveyance, exchange, transfer or disposition.

SECTION 3.11 Successor or Transferee .

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

(b) Upon a sale, conveyance, exchange, transfer or disposition of all the assets and properties of the Issuer pursuant to Section 3.10(b) , the Issuer shall be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Securityholders immediately upon the delivery of written notice to the Indenture Trustee and the Administrative Agent from the Person acquiring such assets and properties stating that the Issuer is to be so released.

SECTION 3.12 No Other Business . The Issuer shall not engage in any business or activity other than acquiring, holding and managing the Trust Estate and the proceeds therefrom in the manner contemplated by the Basic Documents, issuing the Securities, making payments on the Securities and such other activities that are necessary, suitable, desirable or convenient to accomplish the foregoing or are incidental thereto, as set forth in Section 2.3 of the Trust Agreement.

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

SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities . Except as contemplated by this Indenture or the other Basic Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

 

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SECTION 3.15 Servicer’s Obligations . The Issuer shall use its best efforts to cause the Servicer to comply with its obligations under Sections 3.10 , 5.01 and 5.02 of the Pooling and Servicing Agreement.

SECTION 3.16 Capital Expenditures . The Issuer shall not make any expenditure (whether by long-term or operating lease or otherwise) for capital assets (either real, personal or intangible property) other than the purchase of the Loans and the Receivables and other property and rights from ALER pursuant to the Pooling and Servicing Agreement.

SECTION 3.17 Removal of Administrator . So long as any Notes are Outstanding, the Issuer shall not remove the Administrator without cause unless the Required Noteholders shall have consented thereto and the Issuer shall have provided prior written notice thereof to each Rating Agency.

SECTION 3.18 Restricted Payments . Except for payments of principal or interest on or redemption of the Notes as expressly permitted pursuant to this Indenture, so long as any Notes are Outstanding, the Issuer shall not, directly or indirectly:

(a) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise, in each case with respect to any ownership or equity interest or similar security in or of the Issuer or to the Servicer;

(b) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or similar security; or

(c) set aside or otherwise segregate any amounts for any such purpose;

provided , however , that the Issuer may make, or cause to be made, distributions to the Servicer, ALER, the Indenture Trustee, the Owner Trustee and the Registered Owners solely to the extent expressly permitted by, and to the extent of Advances as contemplated by Section 3.25 or to the extent funds are available for such purpose under Section 8.2 . The Issuer shall not, directly or indirectly, make payments to or distributions from the Loan Collection Account and Receivables Collection Account except in accordance with the Basic Documents.

SECTION 3.19 Notice of Events of Default . The Issuer agrees to give the Indenture Trustee, the Administrative Agent and the Rating Agencies (with a copy to the Noteholders) prompt written notice, but in any event no later than within two (2) Business Days, of any Default, Event of Default, Rapid Amortization Event, Servicer Default, each default on the part of ALER or ALS of its respective obligations under the Pooling and Servicing Agreement and the Purchase Agreement in each case of which the Issuer has knowledge.

SECTION 3.20 Further Instruments and Acts . Upon request of the Indenture Trustee or the Administrative Agent, the Issuer shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

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SECTION 3.21 Indenture Trustee’s Assignment of Administrative Loans, Substituted Loans, Warranty Loans and Other Loans . Upon receipt of (a) the Administrative Purchase Payment or the Warranty Payment with respect to an Administrative Loan or Warranty Loan, (b) a Substitute Loan with respect to a Warranty Loan, provided all conditions to the Substitute Loans have been satisfied in full under the Basic Documents, (c) payment in full of the outstanding Loan Balance plus accrued interest on any Loan and any other amounts due and owing in connection therewith upon prepayment by an obligor in accordance with Section 3.03 of the Pooling and Servicing Agreement or (d) the proceeds upon the sale or other disposition by the Servicer of any Defaulted Loan or the collateral securing such Defaulted Loan in accordance with Section 3.04 of the Pooling and Servicing Agreement, the Indenture Trustee shall assign, without recourse, representation or warranty to the Servicer, the Warranty Purchaser or the purchaser of such Defaulted Loan or the collateral securing such Defaulted Loan, as applicable, all of the Indenture Trustee’s right, title and interest in and to such repurchased or replaced Loan, all monies due thereon, the security interest in the related Equipment and any accessions thereto, any Insurance Policies and any proceeds arising thereafter with respect to such Loan, any Guaranties and any proceeds arising thereafter with respect to such Loan and the interests of the Indenture Trustee in certain rebates of premiums and other amounts relating to the Insurance Policies and any documents relating thereto, such assignment being an assignment outright and not for security; and the Servicer, ALER, the Warranty Purchaser or other purchaser, as applicable, shall thereupon own such Loan, and all such security and documents, free of any further obligation to the Indenture Trustee or the Noteholders with respect thereto.

SECTION 3.22 Representations and Warranties by the Issuer to the Indenture Trustee . The Issuer hereby represents and warrants to the Indenture Trustee, the Administrative Agent and the Noteholders as of the Closing Date with respect to clauses (a), (b), (c) and (d) below and on each Equipment Loan Borrowing Date, Receivables Borrowing Date, and each Substitution Date with respect to clauses (a), (b) and (d) below as follows:

(a) Good Title . No Loan or Receivable has been sold, transferred, assigned or pledged by the Issuer to any Person other than the Indenture Trustee; immediately prior to the Grant pursuant to this Indenture, the Issuer had good and marketable title thereto, free of any Lien; and, upon execution and delivery of this Indenture by the Issuer, the Indenture Trustee shall have all of the right, title and interest of the Issuer in, to and under the Trust Estate, free of any Lien.

(b) All Filings Made . The Loans, the Issuer’s rights related to the Equipment Loans and the Receivables constitute UCC Collateral. All filings necessary under the UCC or other applicable laws in any jurisdiction to give the Indenture Trustee a first priority perfected security interest in the Trust Estate other than Exempt Collateral have been made. Each Loan is secured by Equipment.

(c) UCC Information . The information set forth on Schedule 3.22 is true, correct and complete in all material respects.

 

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(d) Security Interest Representations .

(1) This Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Trust Estate in favor of the Issuer, which security interest is prior to all other Liens, claims or encumbrances of any Person, and is enforceable as such as against creditors of and purchasers from the Issuer;

(2) The Receivables constitute “accounts” within the meaning of the applicable UCC. The Equipment Loans constitute “tangible chattel paper” within the meaning of the applicable UCC. The Equipment Loan Notes constitute “instruments” within the meaning of the applicable UCC and related Equipment constituting “equipment” and not “fixtures” under the applicable UCC. The Loan Collection Account, the Receivables Collection Account and the Reserve Account each constitute a “securities accounts” within the meaning of the applicable UCC. The rights to payment under the Letter of Credit constitute “letter-of-credit rights” within the meaning of the applicable UCC. The rights under the Purchase Agreement and the Pooling and Servicing Agreement each constitute “general intangibles” under the applicable UCC;

(3) The Issuer is the sole owner of the Trust Estate and owned and has good and marketable title to the Trust Estate, free and clear of any Lien of any Person (whether senior, junior or pari passu ); provided , however , that the Issuer makes no representation regarding the availability of a willing buyer;

(4) The Issuer has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Trust Estate granted to the Indenture Trustee. All financing statements filed against the Issuer in favor of the Indenture Trustee in connection herewith describing the Trust Estate contain a statement to the following effect: “A purchase or security interest in any collateral described in this financing statement except in favor of the Indenture Trustee will violate the rights of the Indenture Trustee”;

(5) Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Trust Estate except as expressly permitted hereby. The Issuer has not authorized the filing of, and is not aware of, any financing statements or documents of similar import against the Issuer that include a description of collateral covering the Trust Estate other than any financing statement or document of similar import (i) relating to the security interest granted to the Indenture Trustee or (ii) that has been terminated. The Issuer is not aware of any judgment or tax lien filings against the Issuer;

(6) The Issuer or the Indenture Trustee has received a written acknowledgement from the Custodian that the Custodian is holding the only original executed counterpart of the Equipment Loan Notes and the related security agreements on behalf of, and for the benefit of, the Indenture Trustee and is subject to the Custodian’s customary security and safekeeping procedures;

 

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(7) None of the Equipment Loan Notes or Equipment Loans have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee and other than any holder of a Lien to be released simultaneously with the purchase by the Transferor under the Purchase Agreement;

(8) The Indenture Trustee has been named the beneficiary of each Letter of Credit;

(9) The Issuer has received all necessary consents and approvals required by the terms of the Trust Estate to the pledge to the Issuer of its interest and rights in such Trust Estate hereunder;

(10) No creditor of the Issuer has in its possession any goods that constitute or evidence the Trust Estate;

(11) The Issuer has taken all steps necessary to cause The Bank of New York Mellon (in its capacity as securities intermediary) to identify in its records the Indenture Trustee as the Person having a security entitlement against the securities intermediary in each of the Loan Collection Account, the Receivables Collection Account and the Reserve Account; and

(12) The Loan Collection Account, the Receivables Collection Account and the Reserve Account are not in the name of any Person other than the Indenture Trustee. The Issuer has not consented to The Bank of New York Mellon (as the securities intermediary of any Loan Collection Account, the Receivables Collection Account and the Reserve Account) to comply with entitlement orders of any Person other than the Indenture Trustee.

The representations and warranties set forth in this Section 3.22 shall survive until the Indenture is terminated in accordance with its terms; provided, however, that, from and after the Receivables Payoff Date, the representations and warranties set forth in this Section 3.22 shall be deemed not to refer or apply to the Receivables, the Receivables Notes, the Receivables Collection Account or any other concept related to the Receivables. Any breaches of the representations and warranties set forth in this Section 3.22 may be waived upon prior written notice to the Rating Agencies and consent of the Required Noteholders unless such waiver would amount to a waiver of an Event of Default under Section 5.1(e) , which, in such case, any such waiver shall require consent of the Special Required Noteholders.

SECTION 3.23 Compliance with Laws . The Issuer shall comply with the requirements of all applicable laws, the non-compliance with which would, individually or in the aggregate, materially adversely affect the ability of the Issuer to perform its obligations under the Notes, this Indenture or any other Basic Document.

SECTION 3.24 Indemnity for Liability Claims . The Issuer shall indemnify, defend and hold harmless the Indenture Trustee, the Noteholders and the Administrative Agent (which shall include any of their respective directors, employees, officers and agents) against and from any and all costs, expenses, losses, damages, claims and liabilities arising out of or resulting

 

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from the use, repossession or operation of the Equipment (other than a loss in value thereof) or imposed on or asserted against the Issuer or otherwise arising out of or based on the arrangements created by this Indenture to the extent not paid by the Servicer pursuant to Section 8.01 of the Pooling and Servicing Agreement and solely to the extent that funds are available for such purpose pursuant to Section 8.2 of this Agreement; provided that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer under this Section 3.24 and that any such indemnified party agrees that it shall not, prior to the date which is one (1) year and one (1) day after the termination of this Indenture with respect to the Issuer pursuant to Section 11.1 , acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer.

SECTION 3.25 Use of Proceeds . The Issuer shall use the proceeds from the sale of the Notes solely to fund the acquisition of the Loans and Receivables, to fund the Reserve Account, to make equity distributions and to pay fees and expenses related to the transactions contemplated hereby.

SECTION 3.26 Borrowing Base Certificate . Except as otherwise agreed in writing by the Issuer and the Noteholders, the Issuer shall deliver, or cause the Servicer to deliver to the Indenture Trustee, to each Noteholder and the Administrative Agent a duly completed and executed (a) Equipment Loan Borrowing Base Certificate giving pro forma effect to any Advances to be made on any such Equipment Loan Borrowing Date two (2) Business Days prior to each such Advance; provided that, once per calendar quarter, an Advance to be made on any such Equipment Loan Borrowing Date shall only require the Issuer to deliver such Equipment Loan Borrowing Base Certificate one (1) day prior to such Advance and (b) Receivables Borrowing Base Certificate giving pro forma effect to any Advances to be made on any such Receivables Borrowing Date one (1) Business Day prior to each such Advance.

SECTION 3.27 Letters of Credit .

(a) The Issuer shall provide on or before the Closing Date and maintain so long as any Note is Outstanding, one or more Eligible Letters of Credit (or post cash or alternative collateral acceptable to the Required Noteholders), in either case in an equivalent amount to the face amount of the Letters of Credit that the Issuer would otherwise be required to maintain) for the benefit of the Indenture Trustee on behalf of the Beneficiaries. Any cash collateral posted by the Issuer in substitution for one or more Eligible Letters of Credit shall be deposited in the Reserve Account, and disbursed for the payment of principal and interest on the Notes or to remedy a shortfall in accordance with the provisions of Section 8.2(h) .

(b) On each Determination Date on which it is determined that no funds will be on deposit in the Reserve Account on the following Distribution Date (or will have been reduced to zero on such Distribution Date), the Indenture Trustee shall, upon written instructions from the Servicer, in accordance with the Servicer’s Certificate (or if a Servicer’s Certificate is not provided, in accordance with instructions from the Administrative Agent or the Required

 

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Noteholders), submit to each Letter of Credit Bank a completed Drawing Certificate in an amount equal to (x) the shortfall computed under Section 8.2(h) of this Indenture or (y) the remaining Available Drawing Amount in the case of an Event of Default (such draw, a “ Letter of Credit Drawing ”); provided , however , that in no event shall the amount of any Letter of Credit Drawing exceed the Available Drawing Amount under such Letter of Credit. The Indenture Trustee shall notify the Servicer and the Administrative Agent on the date on which it makes a Letter of Credit Drawing.

(c) The Indenture Trustee shall receive Letter of Credit Drawings as attorney-in-fact of each of the Beneficiaries and upon receipt thereof shall, subject to clauses (d) and (e) below, immediately deposit such Letter of Credit Drawings into the Loan Collection Account or the Receivables Collection Account to pay principal and interest on the Notes at the times and in the amounts specified in Section 8.2(h) . The making of a Letter of Credit Drawing does not relieve the Issuer of any obligation under any Note, this Indenture or any other Basic Document.

(d) If at any time while the Notes are Outstanding both the issuing and the confirming bank with respect to a Letter of Credit required pursuant to this Indenture shall cease to be an Eligible Bank, the Issuer shall (unless the Required Noteholders shall otherwise consent) replace the then existing Letter of Credit with a substitute Eligible Letter of Credit or post cash or alternative collateral acceptable to the Required Noteholders. The Issuer shall have thirty (30) Business Days from the date such Letter of Credit ceases to be an Eligible Letter of Credit to obtain a replacement Eligible Letter of Credit or post sufficient cash or alternative collateral acceptable to the Required Noteholders; provided that, if one of the financial institutions that issued or confirmed such Letter of Credit does not have a long-term credit rating of at least “BBB-” by S&P and “Baa3” by Moody’s, respectively, the Required Noteholders shall have the right to direct the Indenture Trustee to draw on the Letter of Credit immediately. Notwithstanding any of the foregoing, if an Eligible Letter of Credit described in clause (a)(ii) of the definition thereof is in effect and the issuer of such Letter of Credit ceases to have a long-term credit rating of at least “AA” by S&P and “Aa2” by Moody’s, respectively, but does have a long-term credit rating of at least “AA-” by S&P and “Aa3” by Moody’s, respectively, or a short-term credit rating of at least “A-1” by S&P and “P-1” by Moody’s, respectively, the Issuer shall have thirty (30) Business Days from the date such Letter of Credit ceases to be an Eligible Letter of Credit to obtain a replacement Eligible Letter of Credit or post sufficient cash or alternative collateral acceptable to the Required Noteholders. If the Issuer shall fail to deliver a replacement Eligible Letter of Credit or post sufficient cash or collateral acceptable to the Required Noteholders within such thirty (30) Business Day period, in each case referenced above, then the Indenture Trustee shall, upon written instructions from the Servicer, the Administrative Agent or the Required Noteholders, submit to the then existing Letter of Credit Bank a completed Drawing Certificate for the remaining Available Drawing Amount under such Letter of Credit. Any amounts received by the Indenture Trustee as the result of any such drawing shall be deposited into the Reserve Account, and disbursed for the payment of principal and interest on the Notes in accordance with the provisions of Section 8.2(h) . Upon receipt by the Indenture Trustee of a replacement Eligible Letter of Credit in accordance with the provisions of this Section 3.27(d) , the Indenture Trustee shall surrender the original of the replaced Letter of Credit to the issuer thereof, upon written request of the Servicer, with the consent of the Administrative Agent.

 

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(e) If at any time while the Notes are Outstanding the issuer of an Eligible Letter of Credit shall have provided notice to the Indenture Trustee that such Letter of Credit shall not be renewed upon the expiration thereof, then the Indenture Trustee shall provide prompt written notice of same to the Administrative Agent and the Issuer shall (unless the Required Noteholders shall otherwise consent) not less than ten (10) Business Days prior to the date on which the Letter of Credit shall expire, replace the then existing Letter Credit with a substitute Eligible Letter of Credit, or post sufficient cash or alternative collateral acceptable to the Required Noteholders. If the Issuer shall fail to deliver a substitute Eligible Letter of Credit, cash or alternative collateral acceptable to the Required Noteholders within such ten (10) Business Day period, then the Indenture Trustee shall, upon written instructions from the Servicer, the Administrative Agent or the Required Noteholders, submit to the then existing Letter of Credit Bank a completed Drawing Certificate for the remaining Available Drawing Amount under such Letter of Credit. Any amounts received by the Indenture Trustee as the result of any such drawing shall be deposited into the Reserve Account, and disbursed for the payment of principal and interest on the Notes in accordance with the provisions of Section 8.2(h) . Upon receipt by the Indenture Trustee of a replacement Eligible Letter of Credit in accordance with the provisions of this Section 3.27(e) , the Indenture Trustee shall surrender the original of the replaced Letter of Credit to the issuer thereof, upon written request of the Servicer, the Administrative Agent or the Required Noteholders.

(f) Notwithstanding anything contained herein to the contrary, following the occurrence of the Loan Conversion Date, an Event of Default or Rapid Amortization Event, if (x) as of any Determination Date, any anticipated payment of the Notes on the related Distribution Date will cause the Available Drawing Amount to be greater than or equal to the Recourse Limit at such time, or (y) the Servicer at any time provides notice to the Indenture Trustee and the Administrative Agent that the Servicer anticipates that the Available Drawing Amount will in the foreseeable future be greater than or equal to the Recourse Limit, then (i) the Indenture Trustee shall, within one (1) Business Day following such Determination Date (as to clause (x)  above) or the date of such notice (as to clause (y)  above) (in either case, the “ LC Recourse Draw Determination Date ”) submit to each Letter of Credit Bank a completed Drawing Certificate (unless the Required Noteholders shall have provided the Indenture Trustee and the Servicer with a written notice instructing the Indenture Trustee not to make such draw), in an amount equal to the greater of (I) the sum of (a) the amount by which the Available Drawing Amount (as calculated without giving effect to any such draw or any reduction in the Available Drawing Amount pursuant to clause (ii)  below) is expected to exceed the Recourse Limit as of the LC Recourse Draw Determination Date, and (b) $500,000 and (II) the amount specified by the Servicer in the notice delivered pursuant to clause (y)  above (or, if such amount is greater than the Available Drawing Amount at such time, the entire Available Drawing Amount); provided , that, if the Servicer delivering such notice pursuant to clause (y)  above is not ALS, ALS shall have the right to approve the amount set forth in such notice, and (ii) the Available Drawing Amount shall be reduced by the amount of the drawing made pursuant to clause (i)  above, effective immediately following the receipt by the Indenture Trustee of the proceeds of such drawing. The Indenture Trustee shall notify the Servicer, ALS (if ALS is not the Servicer) and the Administrative Agent on the date on which it makes a Letter of Credit Drawing pursuant to this Section 3.27(f) . Any amounts received by the Indenture Trustee as the result of any such drawing shall be deposited into the Loan Collection Account and the Receivables Collection Account, as allocated between such accounts in accordance with Section 8.7 , and shall be

 

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distributed on the following Distribution Date to the Noteholders first in respect of interest on the Notes to the extent of any shortfalls thereon after giving effect to all allocations under Section 8.2 on such Distribution Date, and second as a payment of principal on the Notes, without regard to the priority of payments set forth in Section 8.2 , in each case pro rata , to the Equipment Loan Notes and the Receivables Notes. The Servicer shall provide prompt notice to the Indenture Trustee and the Administrative Agent if it has knowledge that the Available Drawing Amount is on any date, or is on any date expected to be, greater than or equal to the Recourse Limit at such time.

SECTION 3.28 Non Consolidation of Issuer .

(a) The Issuer shall, consistent with the Basic Agreements, be operated in such a manner that it shall not be substantively consolidated with the trust estate of any other person in the event of the bankruptcy or insolvency of the Issuer or such other Person. Without limiting the foregoing the Issuer shall (1) conduct its business in its own name, (2) maintain its books, records and cash management accounts separate from those of any other Person, (3) maintain its bank accounts separate from those of any other Person, (4) maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person, (5) pay its own liabilities and expenses only out of its own funds, (6) allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, (7) hold itself out as a separate entity, (8) maintain adequate capital in light of its contemplated business operations and (9) observe all other appropriate trust and other organizational formalities including, inter alia , remaining in good standing and qualified as a foreign trust in each jurisdiction, obtaining all necessary licenses and approvals as required under Applicable Law.

(b) Notwithstanding any provision of law which otherwise empowers the Issuer, the Issuer shall not (1) hold itself out as being liable for the debts of any other Person, (2) act other than in its trust name and through its trustee or its duly authorized officers or agents, (3) engage in any joint activity or transaction of any kind with or for the benefit of any Affiliate including any loan to or from or guarantee of the indebtedness of any Affiliate, except payment of lawful distributions to its Registered Owners, (4) commingle its funds or other assets with those of any other Person, (5) create, incur, assume, guarantee or in any manner become liable in respect of any indebtedness (except pursuant to this Indenture) other than indemnities, trade payables and expense accruals incurred in the ordinary course of its business, (6) enter into a transaction with an Affiliate unless such transaction is commercially reasonable and on the same terms as would be available in an arm’s length transaction with a Person or entity that is not an Affiliate, or (7) take any other action that would be inconsistent with maintaining the separate legal identity of the Issuer.

SECTION 3.29 No Bankruptcy Petition . The Issuer shall not (i) commence any Proceeding under Title 11 of the United States Code seeking to have an order for relief entered with respect to it, or seeking reorganization, arrangement, adjustment, wind-up, liquidation, dissolution, composition or other relief with respect to it or its debts, (ii) seek appointment of a receiver, trustee, custodian or other similar official for it or any part of its assets, (iii) make a general assignment for the benefit of creditors, or (iv) take any action in furtherance of, or consenting to or acquiescing in, any of the foregoing.

 

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SECTION 3.30 Liens . The Issuer shall not contract for, create, incur, assume or suffer to exist any Lien upon any of its property or assets, whether now owned or hereafter acquired, except for the Lien created pursuant to the terms of the Indenture other than Permitted Adverse Claims.

SECTION 3.31 Investment Company Act . The Issuer shall conduct its operations, and shall cause the Administrator to conduct the Issuer’s operations, in a manner which will not subject it to registration as an “investment company” under the Investment Company Act of 1940, as amended.

SECTION 3.32 Information Requests . The Issuer shall prepare and deliver (or shall cause the Administrator to prepare and deliver) to the Indenture Trustee, the Administrative Agent and the Noteholders from time to time such information regarding the financial condition, operations, or business of the Issuer as the Administrative Agent or the Required Noteholders may reasonably request.

SECTION 3.33 Change of Control . The Transferor shall at all times own 100% of the beneficial interests of the Issuer.

ARTICLE IV

RAPID AMORTIZATION EVENTS

SECTION 4.1 Rapid Amortization Events . For the purposes of this Indenture, “ Rapid Amortization Event ” means the occurrence, as and when declared by the Required Noteholders by written notice to the Administrative Agent and the Issuer, of any one of the following events or conditions and the continuation of such condition beyond any applicable grace and/or cure period:

(a) the occurrence of a Borrowing Base Shortfall that remains unremedied by cash payments, contribution of Eligible Loans or Eligible Receivables to the Issuer or by a draw on the Reserve Account (but not by a draw on the Letters of Credit or a draw on the Reserve Account of proce