Document:

Purchase and Sale Agreement dated effective September 21, 2015

 Exhibit 10.1 
  

 
  

SALE OF CRESCENT COOL SPRINGS APARTMENTS 

200 RESOURCE PARKWAY 

FRANKLIN, TENNESSEE 

*   *   * 

PURCHASE AND SALE AGREEMENT 

BETWEEN 

GGT CRESCENT COOL SPRINGS TN VENTURE, LLC, 

AS SELLER 

AND 

SHLP ACQUISITION, LLC, 

AS PURCHASER 

*   *   * 

EFFECTIVE DATE: SEPTEMBER 21, 2015 

 
  

 

							
	 ARTICLE 1
	 	 PURCHASE AND SALE OF PROPERTY
	  	 	1	  
			
	 1.1
	 	 Land
	  	 	1	  
	 1.2
	 	 Improvements
	  	 	1	  
	 1.3
	 	 Personal Property
	  	 	1	  
	 1.4
	 	 Leases
	  	 	1	  
	 1.5
	 	 Licenses
	  	 	2	  
	 1.6
	 	 Security Deposits
	  	 	2	  
	 1.7
	 	 Guaranties
	  	 	2	  
	 1.8
	 	 Contracts
	  	 	2	  
	 1.9
	 	 Permits
	  	 	2	  
	 1.10
	 	 Intangibles
	  	 	2	  
	 ARTICLE 2
	 	 PURCHASE PRICE AND DEPOSIT
	  	 	2	  
			
	 2.1
	 	 Payment
	  	 	2	  
	 2.2
	 	 Deposit
	  	 	3	  
	 ARTICLE 3
	 	 TITLE AND SURVEY
	  	 	3	  
			
	 3.1
	 	 State of Title to be Conveyed
	  	 	3	  
	 3.2
	 	 Title Commitment and Survey
	  	 	3	  
	 ARTICLE 4
	 	 PROPERTY INFORMATION
	  	 	5	  
			
	 4.1
	 	 Property Information
	  	 	5	  
	 ARTICLE 5
	 	 PURCHASER’S DUE DILIGENCE
	  	 	5	  
			
	 5.1
	 	 Purchaser’s Due Diligence
	  	 	5	  
	 5.2
	 	 As Is, Where Is
	  	 	7	  
	 ARTICLE 6
	 	 REPRESENTATIONS AND WARRANTIES
	  	 	8	  
			
	 6.1
	 	 Seller’s Representations and Warranties
	  	 	8	  
	 6.2
	 	 Purchaser’s Representations and Warranties
	  	 	9	  
	 6.3
	 	 Knowledge
	  	 	10	  
	 6.4
	 	 Survival
	  	 	10	  
	 ARTICLE 7
	 	 COVENANTS OF PURCHASER AND SELLER
	  	 	11	  
			
	 7.1
	 	 Operation of Property
	  	 	11	  
	 7.2
	 	 Governmental Notices
	  	 	12	  
	 7.3
	 	 Litigation
	  	 	12	  
	 7.4
	 	 Tradenames and Service Marks
	  	 	12	  
	 7.5
	 	 Post-Closing Property Maintenance Obligations
	  	 	13	  
	 ARTICLE 8
	 	 CONDITIONS PRECEDENT TO CLOSING
	  	 	14	  
			
	 8.1
	 	 Conditions Precedent to Purchaser’s Obligation to Close
	  	 	14	  
	 8.2
	 	 Conditions Precedent to Seller’s Obligation to Close
	  	 	14	  
	 8.3
	 	 Failure of a Condition
	  	 	14	  
	 8.4
	 	 Representations and Warranties
	  	 	15	  

  
 -i- 

							
	 ARTICLE 9
	 	 CLOSING
	  	 	15	  
			
	 9.1
	 	 Closing Date
	  	 	15	  
	 9.2
	 	 Seller’s Obligations at the Closing
	  	 	15	  
	 9.3
	 	 Purchaser’s Obligations at the Closing
	  	 	17	  
	 9.4
	 	 Escrow
	  	 	17	  
	 9.5
	 	 Costs and Adjustments at Closing
	  	 	17	  
	 ARTICLE 10
	 	 DAMAGE AND CONDEMNATION
	  	 	20	  
			
	 10.1
	 	 Damage
	  	 	20	  
	 10.2
	 	 Condemnation and Eminent Domain
	  	 	20	  
	 ARTICLE 11
	 	 REMEDIES AND ADDITIONAL COVENANTS
	  	 	21	  
			
	 11.1
	 	 Seller Default At or Before Closing
	  	 	21	  
	 11.2
	 	 Seller Default From and After Closing
	  	 	21	  
	 11.3
	 	 Purchaser Default
	  	 	22	  
	 11.4
	 	 Delivery of Materials
	  	 	22	  
	 ARTICLE 12
	 	 BROKERAGE COMMISSION
	  	 	22	  
			
	 12.1
	 	 Brokers
	  	 	22	  
	 12.2
	 	 Indemnity
	  	 	22	  
	 ARTICLE 13
	 	 NOTICES
	  	 	23	  
			
	 13.1
	 	 Written Notice
	  	 	23	  
	 13.2
	 	 Method of Transmittal
	  	 	23	  
	 13.3
	 	 Addresses
	  	 	23	  
	 ARTICLE 14
	 	 ASSIGNMENT
	  	 	24	  
			
	 ARTICLE 15
	 	 MISCELLANEOUS
	  	 	25	  
			
	 15.1
	 	 Entire Agreement
	  	 	25	  
	 15.2
	 	 Modifications
	  	 	25	  
	 15.3
	 	 Gender and Number
	  	 	25	  
	 15.4
	 	 Captions
	  	 	25	  
	 15.5
	 	 Successors and Assigns
	  	 	25	  
	 15.6
	 	 Controlling Law
	  	 	25	  
	 15.7
	 	 Exhibits
	  	 	25	  
	 15.8
	 	 No Rule of Construction
	  	 	25	  
	 15.9
	 	 Severability
	  	 	25	  
	 15.10
	 	 Time of Essence
	  	 	25	  
	 15.11
	 	 Business Days
	  	 	25	  
	 15.12
	 	 No Memorandum
	  	 	25	  
	 15.13
	 	 Press Releases
	  	 	26	  

  
 -ii- 

							
	 15.14
	 	 Attorneys’ Fees and Costs
	  	 	26	  
	 15.15
	 	 Counterparts and Expiration of Offer
	  	 	26	  
	 15.16
	 	 Waiver of Jury Trial
	  	 	26	  
	 15.17
	 	 Confidentiality
	  	 	26	  
	 15.18
	 	 Jurisdiction and Service of Process
	  	 	27	  
	 15.19
	 	 Exculpation
	  	 	27	  

  
 -iii- 

 EXHIBITS AND SCHEDULES

  

			
	Exhibits	 	
		
	Exhibit A –	 	Legal Description
	Exhibit B –	 	Escrow Agreement
	Exhibit C –	 	Form of Special Warranty Deed
	Exhibit D –	 	Form of Bill of Sale
	Exhibit E –	 	Form of Assignment and Assumption Agreement
	Exhibit F –	 	Form of Tenant Notification Letter

			
		
	Schedules	 	
		
	Schedule 1.4    –	 	  Rent Roll
	Schedule 1.5    –	 	  Licenses
	Schedule 1.8    –	 	  Contracts
	Schedule 6.1.3 –	 	  Litigation
	Schedule 6.1.8 –	 	  Violations of Law

  
 -ıv- 

 PURCHASE AND SALE AGREEMENT 

This PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of the date set forth on the cover page
hereof (the “Effective Date”), by and between GGT CRESCENT COOL SPRINGS TN VENTURE, LLC, a Delaware limited liability company (“Seller”), and SHLP ACQUISITION, LLC, a Delaware limited liability company
(“Purchaser”). 
 ARTICLE 1 PURCHASE AND SALE OF PROPERTY 

On the terms and conditions stated in this Agreement, Seller hereby agrees to sell to Purchaser and Purchaser hereby agrees to purchase from
Seller all of the following described property (collectively, the “Property”): 
 1.1 Land. Seller’s fee simple
interest in and to all of that certain tract of land situated at 200 Resource Parkway, Franklin, Williamson County, Tennessee, and described more particularly in Exhibit A attached hereto and incorporated herein by reference, together
with all rights and appurtenances pertaining to such land, including, without limitation, all of Seller’s right, title and interest in and to (i) all minerals, oil, gas, and other hydrocarbon substances thereon; (ii) all adjacent
strips, streets, roads, alleys and rights-of-way, public or private, open or proposed; (iii) all development rights, covenants, easements, privileges, and hereditaments, whether or not of record, and (iv) all access, air, water, riparian,
development, utility, and solar rights (collectively, the “Land”). 
 1.2 Improvements. A 252-unit multi-family
apartment project, and all other fixtures, improvements and structures constructed on the Land in connection therewith (the “Improvements”). 

1.3 Personal Property. All of Seller’s right, title and interest in and to all equipment, machinery, furniture, furnishings,
supplies and other tangible personal property owned by Seller now or hereafter located in and used exclusively in connection with the operation, ownership or management of the Land and Improvements including the following (collectively, the
“Personal Property”; provided, the “Personal Property” shall specifically exclude any property owned by tenants under leases): 

1.3.1 mechanical systems, fixtures, machinery and equipment comprising a part of or attached to or located upon the Improvements; 

1.3.2 maintenance equipment and tools, if any, owned by Seller and used exclusively in connection with, and located in or on, the
Improvements; 
 1.3.3 site plans, surveys, plans and specifications and floor plans in Seller’s possession, if any, that relate to the
Land or Improvements; and 
 1.3.4 other tangible personal property owned by Seller and used exclusively in connection with, and located in
or on, the Land or Improvements as of the Effective Date and as of the Closing (as hereinafter defined), including the tangible personal property described in Schedule 1.3 attached hereto and incorporated by this reference. 

1.4 Leases. Seller’s right, title and interest in all leases with tenants or other persons or entities leasing all or any portion
of the Improvements (the “Leases”), a current list of which is shown on the rent roll attached as Schedule 1.4. 

  
 1 

 1.5 Licenses. Seller’s right, title and interest in all licenses, license agreements
and other similar agreements with licensees or other persons or entities using any portion of the Improvements (collectively, the “Licenses”), a current list of which is attached hereto as Schedule 1.5. 

1.6 Security Deposits. Seller’s right, title and interest in all security deposits held by Seller in connection with the Leases
and not applied pursuant to the terms thereof and in accordance with the terms of this Agreement. 
 1.7 Guaranties. Seller’s
right, title and interest in any and all guaranties of the Leases, if any. 
 1.8 Contracts. Subject to
Section 7.1.2 hereof, Seller’s right, title and interest in all contract rights related to the Land, Improvements, Personal Property or Leases that will remain in existence after Closing, to the extent assignable, including, without
limitation, Seller’s interest in the following: parking, management, maintenance, commission, architectural, supply or service contracts, plans and specifications, surveys, warranties and guarantees related to the Land, Improvements, Personal
Property, or Leases, but expressly excluding (i) the existing property management agreement that will be terminated as of the time of Closing, and (ii) the surety and maintenance bonds and letters of credit referred to in
Section 7.5 (collectively, the “Contracts”), a current list of which is attached hereto as Schedule 1.8. 

1.9 Permits. Seller’s right, title and interest in all permits, licenses, certificates of occupancy, if any, entitlements and
governmental approvals that relate to the Land, Improvements, Personal Property, Leases, or Contracts, to the extent assignable (collectively, the “Permits”). 

1.10 Intangibles. Intangibles. Seller’s right, title and interest, if any, in and to the following items, to the extent
assignable and without warranty: consents, licenses, approvals, certificates, development rights, warranties (including, but not limited to, all assignable termite warranties and bonds and all assignable roof warranties), resident and tenant files
for current residents and tenants, if any and to the extent owned by Seller and assignable, any telephone numbers and facsimile numbers associated with the Improvements; the plans and specifications and other architectural and engineering drawings
for the Improvements; all assignable warranties or contract rights related to the construction, operation, ownership or management of the Land and Improvements; tenant lists and correspondence and all records and files pertaining thereto; and any
other goodwill and intangible interests of Seller associated therewith; but expressly excluding (i) any name or trademark containing the phrase “Crescent”, or any variation or derivative thereof, relating to the Land, the Improvements
and/or Personal Property; and (ii) any web sites, web content, web design, links, Internet domain names, manuals and instruction materials, marketing materials relating to the Land, the Improvements and/or Personal Property (collectively, the
“Intangibles”). 
 ARTICLE 2 PURCHASE PRICE AND DEPOSIT 

2.1 Payment. The purchase price for the Property (the “Purchase Price”) is Sixty Million and 00/100 Dollars
($60,000,000.00). The cash due at Closing on account of the Purchase Price shall be subject to adjustment as set forth in this Agreement. The Purchase Price shall be paid by wire transfer of immediately available funds at the Closing. Seller and
Purchaser shall mutually agree, each acting in good faith, on the allocation of the Purchase Price among the Land, Personal Property and Improvements prior to the Study Period (as hereinafter defined). Such
agreed-upon allocation shall be used solely for transfer, sales and similar tax purposes and in any declaration or filing with any governmental authority in connection with the same. The allocation of the
Purchase Price for all other purposes, whether for local, state or federal taxes or otherwise, shall not be restricted by this Agreement and shall not require the consent of the other party. 

  
 2 

 2.2 Deposit. 

2.2.1 Within two (2) Business Days following the Effective Date, Purchaser shall deposit with First American Title Insurance Company,
National Commercial Services in Atlanta, Georgia, Attention: Terry W. Wilson, Senior Escrow Officer (the “Escrow Agent” or “Title Company”), by bank wire transfer the sum of Five Hundred Thousand and 00/100 Dollars
($500,000.00), as an earnest money deposit to assure Purchaser’s performance hereunder (together with all interest thereon if any, the “Initial Deposit”). Prior to making the Initial Deposit, Seller, Purchaser and the Escrow
Agent shall enter into an escrow agreement substantially in the form of Exhibit B attached hereto (the “Escrow Agreement”). So long as Purchaser does not terminate this Agreement as provided in Section 5.1.4, then
no later than one (1) Business Day following the expiration of the Study Period, Purchaser shall deposit with the Escrow Agent by bank wire transfer the additional sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the
“Second Deposit”), as a non-refundable deposit (except as otherwise provided herein) to assure Purchaser’s performance hereunder. The Initial Deposit and the Second Deposit, in the total amount of One Million and 00/100 Dollars
($1,000,000.00), together with all interest thereon, if any, are referred to collectively as the “Deposit.” 
 2.2.2 Escrow
Agent shall place the Initial Deposit and the Second Deposit (if made) in an interest-bearing escrow account at a federally-insured (to the extent of the FDIC limits) commercial bank acceptable to both Seller and Purchaser. The Escrow Agent shall
hold the Deposit in accordance with this Agreement and the Escrow Agreement. At Closing (as hereinafter defined), Escrow Agent shall deliver the Deposit to Seller and credit the Deposit against the Purchase Price. 

ARTICLE 3 TITLE AND SURVEY 

3.1 State of Title to be Conveyed. Title to the Property shall be conveyed to Purchaser at Closing in fee simple by Special Warranty
Deed, free and clear of any and all liens, mortgages, deeds of trust, security interests and other encumbrances, except for the following (collectively, the “Permitted Exceptions”): (i) real property taxes and assessments
attributable to the Property for the year in which Closing occurs and thereafter, not yet due and payable; (ii) zoning and other regulatory laws and ordinances affecting the Property; (iii) any easement, right of way, limitation,
encroachment, conflict, discrepancy, overlapping of improvements, protrusion, lien, encumbrance, restriction, condition, covenant, exception or other matter with respect to the Property that is reflected or addressed on the Survey or the Title
Commitment to which Purchaser fails to timely object pursuant to Section 3.2.3 or 3.2.4 of this Agreement; (iv) any Purchaser’s Objection (as hereinafter defined) that remains uncured, for whatever reason, at Closing
hereunder, and (v) the rights and interests of parties claiming under the Leases, as tenants only under unrecorded leases, with no options to purchase and no rights of first refusal. 

3.2 Title Commitment and Survey. 

3.2.1 Seller shall obtain a title commitment (the “Title Commitment”) for an ALTA owner’s policy of title insurance (on
the current ALTA 2006 Form) in the amount of the Purchase Price with respect to the Property issued by the Title Company. Seller shall deliver copies of the Title Commitment and all items listed as title exceptions therein (to the extent provided to
Seller by the Title Company) to Purchaser within ten (10) days after the Effective Date. 
 3.2.2 Purchaser may obtain, at
Purchaser’s sole cost and expense, a survey of the Property (certified to include Seller) prepared by a licensed surveyor (the “Survey”). Purchaser shall deliver a copy of the Survey to Seller and the Title Company within three
(3) days after Purchaser’s receipt of the Survey. 
 3.2.3 If (i) the Survey shows any easement, right-of-way, encroachment,
conflict, protrusion or other matter that is unacceptable to Purchaser, or (ii) any exceptions appear in the Title 

  
 3 

 
Commitment that are unacceptable to Purchaser, Purchaser shall, no later than September 21, 2015, notify Seller in writing of such matters (“Purchaser’s Objections”).
Except for Purchaser’s Objections that are timely raised pursuant to the preceding sentence or pursuant to Section 3.2.4, Purchaser shall be deemed to have accepted the form and substance of the Survey, all matters shown thereon, and all
exceptions to the Title Commitment and other items shown thereon. Within six (6) days after Seller’s receipt of Purchaser’s Objections, Seller shall notify Purchaser in writing of the Purchaser’s Objections, if any, which Seller
elects to attempt to cure at or prior to Closing. Seller’s failure to provide such a notice will be deemed an election by Seller not to cure any Purchaser’s Objections. If Seller is unable or unwilling to eliminate or modify all of
Purchaser’s Objections to the sole satisfaction of Purchaser, Purchaser may (as its sole and exclusive remedy) terminate this Agreement by delivering written notice to Seller by the earlier to occur of (i) 5:00 p.m. (Eastern time) on the
last day of the Study Period or (ii) five (5) days after Seller’s written notice (or deemed notice) to Purchaser of Seller’s intent to not cure one or more of such Purchaser’s Objections; in which event, the Deposit will be
returned to Purchaser, and neither party shall have any rights or obligations under this Agreement (other than any obligations of either party that expressly survive termination). 

3.2.4 If any revision or update to the Survey or any supplemental title commitment or update issued subsequent to the date of the original
Title Commitment discloses any matters not set forth on the original Survey or the original Title Commitment, then, no later than the later of (i) the expiration of the Study Period, or (ii) five (5) days after Purchaser’s
receipt of the updated Survey, or (iii) five (5) days after Purchaser’s receipt of the supplemented or updated Title Commitment, as applicable, Purchaser shall have the right to object to any such matter, in which event the same
procedures for response, termination and waiver set forth above shall apply to such new Purchaser’s Objections. Notwithstanding the foregoing, in the event that any such matter not set forth on the original Survey or the original Title
Commitment is the result of an intentional act of Seller after the Effective Date that is not otherwise permitted under this Agreement, then Purchaser shall be permitted to pursue the remedies provided in Section 11.1 hereof. 

3.2.5 Notwithstanding anything contained herein to the contrary, Seller shall be obligated at Closing to discharge and remove, at
Seller’s sole cost and expense: (i) any mortgage, deed to secure debt, deed of trust, security interest or similar security instrument encumbering all or any part of the Property, if any, that was created or entered into by Seller or any
party claiming by, through or under Seller; (ii) any mechanic’s, materialman’s or similar lien affecting or encumbering the Property as a result of the action(s) or grossly negligent or willful omission(s) of Seller or the action(s)
or grossly negligent or willful omission(s) of any party claiming by, through or under Seller, which, if disputed and not yet resolved, may be bonded over by Seller in compliance with a statutory bonding procedure that has the legal effect of
removing the item as a lien on the Property, but expressly excluding any such lien resulting from any act or omission of Purchaser or any of its agents, contractors, representatives or employees, or any tenant of the Property and with the
understanding that if such lien is disputed and not yet resolved, that same may be bonded over by Seller in compliance with a statutory bonding procedure that has the legal effect of removing the item as a lien on the Property in lieu of satisfying
same; (iii) the lien of ad valorem real or personal property taxes, assessments and governmental charges affecting all or any portion of the Property which are delinquent; and (iv) any judgment lien of record against Seller in Williamson
County, Tennessee (with the understanding that if such judgment lien is disputed and not yet resolved, that same may be bonded over by Seller in compliance with a statutory bonding procedure that has the legal effect of removing the item as a lien
on the Property in lieu of satisfying same). Purchaser and Seller agree that such mortgages, liens, judgments or other encumbrances, if any, may be paid out of the cash consideration to be paid by Purchaser at Closing. 

  
 4 

 ARTICLE 4 PROPERTY INFORMATION 

4.1 Property Information. Prior to the Effective Date, Seller has made available to Purchaser, either at the property management office
at the Property or via a due diligence website, certain materials which pertain to the Property. All materials pertaining to the Property that have been made available to Purchaser on the due diligence website or at the property management office on
or before the Effective Date are hereinafter collectively referred to as the “Property Information”. Purchaser shall keep such Property Information confidential, subject to Purchaser’s right to disseminate Property Information
to or among the parties listed in Section 15.17 of this Agreement, and subject to the restrictions set forth in Section 15.17. Seller makes no representation or warranty as to the truth or accuracy of the Property Information
provided to Purchaser, except as otherwise expressly provided in this Agreement. 
 ARTICLE 5 PURCHASER’S DUE DILIGENCE 

5.1 Purchaser’s Due Diligence 

5.1.1 Subject to the provisions of this Section, Purchaser and its agents, employees, consultants, inspectors, appraisers, engineers and
contractors (collectively “Purchaser’s Representatives”) shall have the right, through the Closing Date, from time to time, upon the advance notice required pursuant to this Section 5.1, to enter upon and pass
through the Property during normal business hours to examine and inspect the same. Notwithstanding any such inspection, or anything to the contrary contained herein, other than Purchaser’s right to terminate this Agreement pursuant to
Section 5.1.4, Purchaser’s obligations hereunder shall not be limited or otherwise affected as a result of any fact, circumstance or other matter of any kind discovered following the date hereof in connection with any such
inspection, access or otherwise; it being agreed that Seller is permitting Purchaser such right of inspection and access as a courtesy to Purchaser in its preparation for taking title to the Property. 

5.1.2 In conducting any inspection of the Property or otherwise accessing the Property, Purchaser shall at all times comply with all laws and
regulations of all applicable governmental authorities, and neither Purchaser nor any of Purchaser’s Representatives shall (i) contact or have any discussions with any of Seller’s employees, agents or representatives, or with any
tenants (including, without limitation, having any contacts whatsoever with tenants, including but not limited to telephone conversations or electronic mail messages) at, or contractors providing services to, the Property, unless in each case
Purchaser obtains the prior written consent of Seller (which may be given via electronic mail), it being agreed that all such contacts or discussions shall, pending any such approval, be directed to Willis W. Chapman via electronic mail (at
WChapman@crescentcommunities.com) and Darren Pierce via electronic mail at DPierce@crescentcommunities.com), (ii) interfere with the business of Seller conducted at the Property or disturb the use or occupancy of any tenant or
occupant of the Property or (iii) damage the Property. In conducting any inspection of the Property or otherwise accessing the Property, Purchaser and Purchaser’s Representatives shall at all times comply with, and shall be subject to, the
rights of the tenants under the Leases (and any persons claiming by, under or through such tenants). Seller may from time to time establish reasonable rules of conduct for Purchaser and Purchaser’s Representatives in furtherance of the
foregoing, and Purchaser shall comply with all of Seller’s requirements regarding entry upon the Property. Purchaser shall schedule and coordinate all inspections, including, without limitation, any environmental tests, and other access with
Seller and shall give Seller at least two (2) Business Days’ prior notice thereof. Seller shall be entitled to have a representative present at all times during each such inspection or other access. Purchaser agrees to pay to Seller on
demand the cost of repairing and restoring any damage or disturbance which Purchaser or Purchaser’s Representatives shall cause to the Property. All inspection fees, appraisal fees, engineering fees and other costs and expenses of any kind
incurred by Purchaser or Purchaser’s Representatives relating to such inspection and its other access shall be at the sole expense of Purchaser. Purchaser shall keep all information obtained during its inspections and access to the Property
confidential. 

  
 5 

 
If the Closing shall not occur for any reason whatsoever, Purchaser shall: (A) if requested by Seller, and upon receipt of the reimbursement of the costs therefor, promptly deliver to Seller
without representation or warranty of any kind, express or implied, the originals of all third party tests, reports and inspections of the Property, made and conducted by Purchaser or Purchaser’s Representatives or for Purchaser’s benefit,
that are in the possession or control of Purchaser or Purchaser’s Representatives; (B) promptly return to Seller copies of all due diligence materials delivered by Seller to Purchaser; and (C) promptly destroy all copies and abstracts
of the materials referenced in (A) and (B) above. Purchaser and Purchaser’s Representatives shall not be permitted to conduct borings of the Property or drilling in or on the Property, or any other invasive, intrusive or destructive
testing in connection with the preparation of an environmental audit or in connection with any other inspection of the Property without the prior written consent of Seller, which shall not be unreasonably withheld (and, if such consent is given,
Purchaser shall be obligated to pay to Seller on demand the cost of repairing and restoring any damage as aforesaid). This Section 5.1.2 shall survive the Closing or any termination of this Agreement. 

5.1.3 Prior to conducting any physical inspection or testing at the Property, Purchaser and Purchaser’s Representatives shall obtain, and
during the period of such inspection or testing shall maintain, at their expense: (i) commercial general liability (“CGL”) insurance, issued on a form at least as broad as Insurance Services Office (“ISO”)
Commercial General Liability Coverage “occurrence” form CG 00 01 10 01 or another “occurrence” form providing equivalent coverage, including contractual liability and personal injury liability coverage, with limits of not less
than Two Million Dollars ($2,000,000) for any one occurrence and Five Million Dollars ($5,000,000) in the aggregate; (ii) comprehensive automobile liability insurance (covering any automobiles owned or operated by Purchaser or Purchaser’s
Representatives) issued on a form at least as broad as ISO Business Auto Coverage form CA 00 01 07 97 or other form providing equivalent coverage; (iii) worker’s compensation insurance or participation in a monopolistic state workers’
compensation fund, and (iv) employer’s liability insurance or (in a monopolistic state) Stop Gap Liability insurance. Such automobile liability insurance shall be in an amount not less than One Million Dollars ($1,000,000) for each
accident. Such worker’s compensation insurance shall carry minimum limits as defined by the law of the jurisdiction in which the Property is located (as the same may be amended from time to time). Such employer’s liability insurance shall
be in an amount not less than One Million Dollars ($1,000,000) for each accident, One Million Dollars ($1,000,000) disease-policy limit, and One Million Dollars ($1,000,000) disease-each employee. Seller, and its property manager, shall be covered
as additional insureds on the CGL and automobile liability insurance policies with respect to liability arising out of the named insured’s acts or omissions relating to the Property. The insurer and the terms and conditions of all the foregoing
policies shall be acceptable to Seller. Prior to making any entry upon the Property, Purchaser shall furnish to Seller a certificate of insurance evidencing the foregoing coverages, which certificate of insurance shall be in form and substance
satisfactory to Seller. 
 5.1.4 Purchaser shall have until 5:00 p.m. (Eastern time) on September 28, 2015 (the “Study
Period”) within which to determine for any reason or no reason, in its sole discretion, whether all matters related to the Property are satisfactory to Purchaser. If Purchaser, in its sole discretion, determines that the purchase of the
Property is not feasible and/or that Purchaser does not desire to proceed with the transactions contemplated under this Agreement, then Purchaser shall deliver to Seller, prior to the expiration of the Study Period, written notice that Purchaser
does not desire to proceed with the transactions contemplated under this Agreement and in such case, this Agreement shall terminate upon Seller’s receipt of such notice, except for those matters which are indicated herein as surviving
termination, and the Deposit shall be immediately returned to Purchaser. If Purchaser fails to timely notify Seller prior to the expiration of the Study Period (with time being of the essence) that Purchaser does not desire to proceed with the
transactions contemplated under this Agreement as aforesaid, then Purchaser shall be deemed to have waived its right to terminate this Agreement under this Section 5.1.4. 

5.1.5 Purchaser hereby agrees to indemnify, defend, and hold harmless Seller, its partners, members, affiliates, property manager, and their
respective officers, directors, agents, employees, and representatives (collectively, the “Indemnified Parties”) from and against any and all liens, claims, or damages of any kind or nature, including any demands, actions or causes
of action, assessments, losses, costs, expenses, liabilities, interest and penalties, and reasonable attorneys’ fees suffered, incurred, or sustained by any of the Indemnified Parties directly caused by Purchaser or Purchaser’s
Representatives with respect to any due-diligence activities at the Property pursuant to this Agreement, except any arising from the discovery of preexisting conditions (so long as Purchaser does not exacerbate any such condition). This
Section 5.1.5 shall survive the Closing or any termination of this Agreement. 

  
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 5.2 As Is, Where Is. 

5.2.1 Except as provided in the express representations and warranties of Seller set forth in Sections 6.1 and 12 of this
Agreement and in Seller’s Special Warranty Deed and the Bill of Sale (all as hereinafter defined) (collectively, the “Express Representations”), Seller does not, by the execution and delivery of this Agreement, and Seller shall
not, by the execution and delivery of any document or instrument executed and delivered in connection with the Closing, make any representation or warranty, express or implied, of any kind or nature whatsoever, with respect to the Property, and all
such warranties are hereby disclaimed. 
 5.2.2 Without limiting the generality of the foregoing, other than the Express Representations,
Seller makes, and shall make, no express or implied warranty as to matters of title, zoning, acreage, tax consequences, physical or environmental condition (including, without limitation, laws, rules, regulations, orders and requirements pertaining
to the use, handling, generation, treatment, storage or disposal of any toxic or hazardous waste or toxic, hazardous or regulated substance), valuation, governmental approvals, governmental regulations or any other matter or thing relating to or
affecting the Property (collectively, the “Disclaimed Matters”). 
 5.2.3 Notwithstanding anything to the contrary set
forth in this Agreement, but subject to the Express Representations and Seller’s obligations set forth in Section 7.1 of this Agreement, and subject to Article 10 hereof, the Property, including without limitation the
roofs, all structural components, all heating, ventilating, air conditioning, mechanical, plumbing, and electrical systems, fire and life safety and all other parts of the Improvements constituting a portion of the Property, shall be conveyed to
Purchaser, and Purchaser shall accept same, in their “AS IS” “WHERE IS” condition on the Closing Date, “WITH ALL FAULTS” and “SUBJECT TO ALL DEFECTS.” Purchaser acknowledges that Seller’s willingness to
sell the Property to Purchaser at the Purchase Price has been induced, in part, by the agreement of Purchaser to purchase the Improvements and the Personal Property in such “AS IS” condition. Purchaser hereby acknowledges, represents and
warrants that it is not in a disparate bargaining position with respect to Seller in connection with the transaction contemplated hereby, that Purchaser freely and fairly agreed to the waivers and conditions of this Section 5.2 as part
of the negotiations of this Agreement, and Purchaser has been represented by adequate legal counsel in connection herewith and has conferred with such legal counsel concerning the waivers and other conditions of this Section 5.2. 

5.2.4 Without in any way limiting any provision of this Section 5.2, Purchaser specifically acknowledges and agrees that, except
with respect to the Express Representations and the obligations of Seller set forth in Section 7.1 of this Agreement, and subject to Article 10 hereof, in the event Purchaser does not elect to terminate this Agreement prior to the
expiration of the Study Period, Purchaser shall be deemed to waive, release and discharge any claim it has, might have had or may have against Seller with respect to (i) the Disclaimed Matters, (ii) the condition of the Property as of the
Closing Date, (iii) the past, present or future condition or compliance of the Property with regard to any environmental protection, pollution control or land use laws, rules, regulations, orders or requirements, including, without limitation,

  
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CERCLA (as hereinafter defined), or (iv) any other state of facts that exists with respect to the Property. The waiver, release and discharge set forth in this Section 5.2.4
shall survive the Closing or any termination of this Agreement. 
 ARTICLE 6 REPRESENTATIONS AND WARRANTIES 

6.1 Seller’s Representations and Warranties. Seller represents to Purchaser as of the Effective Date as follows: 

6.1.1 Organization. Seller is a Delaware limited liability company, duly formed and validly existing under the laws of the State of
Delaware and in good standing under the laws of the State of Tennessee. 
 6.1.2 Authority/Consent. Seller possesses all requisite
power and authority, and has taken all actions required by its organizational documents and applicable law, to execute and deliver this Agreement and to do all things required of it under this Agreement and will by Closing have taken all actions
required by its organizational documents and applicable law, to consummate the transactions contemplated by this Agreement. 
 6.1.3
Litigation. To Seller’s knowledge, except as may be disclosed on Schedule 6.1.3 attached hereto, no action, suit or other proceeding (including, but not limited to, any condemnation action or real estate tax appeal) is
pending or, to Seller’s knowledge, has been threatened in writing that concerns or involves the Property or Seller’s right to transfer the Property. 

6.1.4 Bankruptcy. No bankruptcy, insolvency, reorganization or similar action or proceeding, whether voluntary or involuntary, is
pending, or, to Seller’s knowledge, threatened, against Seller. 
 6.1.5 Contracts. Except for the Contracts referenced on
Schedule 1.8, there are no current contracts of construction, employment, parking, maintenance, commission, management, service, or supply in effect and entered into by Seller which will affect the Property after Closing. Seller has
provided Purchaser with true, correct and complete copies, in all material respects, of all Contracts, including all amendments and modifications thereof, prior to the execution of this Agreement by Purchaser and Seller. 

6.1.6 Employees. Seller has no employees. Purchaser is not obligated to continue the employment of any of Seller’s property
manager’s employees and has no obligation or liability whatsoever to any of Seller’s property manager’s employees under any agreements between Seller or Seller’s agent or property manager and its employees. 

6.1.7 Leases. To Seller’s knowledge, the Rent Roll attached hereto as Schedule 1.4 (the “Rent Roll”) and
incorporated herein by this reference is true, correct and complete in all material respects as of the date set forth therein. Except for (i) the Leases referenced on the Rent Roll, (ii) the Licenses referenced on Schedule 1.5, and
(iii) the leases, amendments or other occupancy agreements which may be entered into by Seller pursuant to Section 7.1 of this Agreement, there are no leases, rental agreements, licenses, license agreements or other occupancy
agreements with anyone in effect which will affect the Property after Closing. To Seller’s knowledge, each Lease is in full force and effect. Seller will provide Purchaser with true, correct and complete copies of all Leases, including all
amendments and modifications thereto, as part of the Property Information. 
 6.1.8 Violations of Law. Except as set forth on
Schedule 6.1.8, Seller has not received written notice from any governmental authority of any material violation of any federal or municipal laws, 

  
 8 

 
ordinances, orders, regulations and requirements affecting the Property or any portion thereof (including the conduct of business operations thereon) which are unresolved, including without
limitation the Fair Housing Act and the American with Disabilities Act, environmental matters, building, land use or zoning codes, or Seller’s use of the Property. 

6.1.9 Foreign Person. Seller is not a “foreign person,” “foreign trust” or “foreign corporation” within
the meaning of the United States Foreign Investment in Real Property Tax Act of 1980 and the Internal Revenue Code of 1986, as subsequently amended (the “Code”). 

6.1.10 No Conflicts. The execution and delivery of this Agreement by Seller and the consummation by Seller of the transactions
contemplated hereby will not: (i) violate any judgment, order, injunction, or decree to which Seller or the Property is subject, or (ii) conflict with, result in a breach of, or constitute a default under the organic documents of Seller or
any lease, mortgage, loan agreement, covenant, or other agreement or instrument to which Seller is a party or by which Seller or the Property may be bound. 

6.1.11 Prohibited Transaction. Neither Seller nor any person, group, entity or nation that Seller is acting, directly or indirectly
for, or on behalf of, is named by any Executive Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States
Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or is otherwise a banned or blocked person, group, entity, or nation pursuant to any Law that is enforced or administered by the Office of Foreign
Assets Control, and Seller is not engaging in the transactions contemplated by this Agreement, directly or indirectly, on behalf of, or instigating or facilitating the transactions contemplated by this Agreement, directly or indirectly, on behalf
of, any such person, group, entity or nation. Seller is not engaging in the transactions contemplated by this Agreement, directly or indirectly, in violation of any laws relating to drug trafficking, money laundering or predicate crimes to money
laundering. None of the funds of Seller have been or will be derived from any unlawful activity with the result that the investment of direct or indirect equity owners in Seller is prohibited by law or that the transactions contemplated by this
Agreement or this Agreement is or will be in violation of applicable law. Seller has and will continue to implement procedures, and has consistently and will continue to consistently apply those procedures, to ensure the foregoing representations
and warranties remain true and correct at all times prior to Closing. 
 6.1.12 Environmental. (i) Seller has received no
written notice from any governmental authority asserting any violation of, and to Seller’s knowledge there is no violation of, Environmental Laws related to the Property which has not been cured or corrected as of the Effective Date, and
(ii) to Seller’s knowledge, other than the environmental reports previously delivered to Purchaser, Seller has not commissioned any study relating to the presence or absence of Hazardous Materials on the Property. The term
“Environmental Laws” includes without limitation the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation, and Liability Act and other federal laws governing the environment as in effect
on the date of this Agreement together with their implementing regulations as of the date of this Agreement applicable to the Property, and all applicable state, regional, county, municipal and other local laws, regulations and ordinances that are
equivalent or similar to the federal laws recited above or that purport to regulate hazardous or toxic substances and materials. The term “Hazardous Materials” includes petroleum (including crude oil or any fraction thereof) and any
substance, material, waste, pollutant or contaminant listed or defined as hazardous or toxic under any Environmental Laws, in any case at levels or concentrations requiring monitoring, reporting, remediation or removal in accordance with
Environmental Laws. 
 6.2 Purchaser’s Representations and Warranties. Purchaser represents to Seller, as of the Effective Date,
as follows: 
 6.2.1 Organization. Purchaser is a limited liability company, duly formed, validly existing and in good standing under
the laws of the State of Delaware, and, prior to Closing shall be qualified to do business in the State of Tennessee. 

  
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 6.2.2 Authority/Consent. Purchaser possesses all requisite power and authority, has taken
all actions required by its organizational documents and applicable law, and has obtained all necessary consents, to execute and deliver this Agreement and will by Closing have taken all actions required by its organizational documents and
applicable law, to consummate the transactions contemplated in this Agreement. 
 6.2.3 Prohibited Transaction. Neither Purchaser nor
any person, group, entity or nation that Purchaser is acting, directly or indirectly for, or on behalf of, is named by any Executive Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or is otherwise a banned or blocked person, group, entity, or nation
pursuant to any Law that is enforced or administered by the Office of Foreign Assets Control, and Purchaser is not engaging in the transactions contemplated by this Agreement, directly or indirectly, on behalf of, or instigating or facilitating the
transactions contemplated by this Agreement, directly or indirectly, on behalf of, any such person, group, entity or nation. Purchaser is not engaging in the transactions contemplated by this Agreement, directly or indirectly, in violation of any
laws relating to drug trafficking, money laundering or predicate crimes to money laundering. None of the funds of Purchaser have been or will be derived from any unlawful activity with the result that the investment of direct or indirect equity
owners in Purchaser is prohibited by law or that the transactions contemplated by this Agreement or this Agreement is or will be in violation of applicable law. Purchaser has and will continue to implement procedures, and has consistently and will
continue to consistently apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times prior to Closing. 

6.2.4 ERISA. Purchaser is not an employee pension benefit plan subject to the provisions of Title IV of the Employee Retirement Income
Security Act of 1974, as in effect from time to time (“ERISA”) or subject to the minimum funding standards under Part 3, Subtitle B, Title I of ERISA or Section 412 of the Code or Section 302 of ERISA, and none of its
assets constitutes or will constitute assets of any such employee benefit plan subject to Part 4, Subtitle B, Title I of ERISA. Purchaser is not a “governmental plan” within the meaning of Section 3(32) of ERISA and the funds used by
Purchaser to acquire the Interest are not subject to any state statutes regulating investments of and fiduciary obligations with respect to governmental plans. The transactions contemplated by this Agreement are not specifically excluded by Part
I(b) of PTE 84-14. 
 6.3 Knowledge. For purposes of this Agreement, the phrase “to Seller’s knowledge” means the
present, actual knowledge of Brian J. Natwick (the “Seller Knowledge Individual”), the person in the primary position of responsibility with respect to the Property, without investigation or review of files relating to the Property.
In no event shall the Seller Knowledge Individual have any personal liability hereunder. 
 6.4 Survival. All of the representations
and warranties set forth in this Article 6 shall survive the Closing for a period of one hundred eighty (180) days, subject to the provisions of Section 11.1 of this Agreement (the “Survival Period”). Purchaser
shall provide Seller with written notice (a “Notice of Breach”) of any alleged breach or failure of any representation or warranty made by Seller and specifying the nature thereof within five (5) Business Days after
Purchaser’s discovery of such alleged breach or failure. Purchaser shall commence any action, suit, or proceeding with respect to any breach or failure that is the subject of the Notice of Breach, if at all (as provided below), on or before the
date that is sixty (60) days after the expiration of the Survival Period (“Suit Deadline”). Seller acknowledges and agrees that the resolution 

  
 10 

 
of such action, suit, or proceeding may not occur until after the expiration of the Survival Period, and the Survival Period shall be deemed to be tolled with respect to (and only with respect
to) any alleged breach or failure of a representation or warranty of which Seller receives a Notice of Breach before the expiration of the Survival Period, provided Purchaser files an action, suit, or proceeding, and serves Seller, with respect
thereto prior to the Suit Deadline. Notwithstanding the foregoing to the contrary, Seller shall have no liability in connection with this Agreement by reason of any inaccuracy of a representation or warranty if, and to the extent that, such
inaccuracy is disclosed to Purchaser or otherwise included in the Property Information at the time of the Closing and Purchaser elects, nevertheless, to consummate the transaction contemplated hereby.  

ARTICLE 7 COVENANTS OF PURCHASER AND SELLER 

7.1 Operation of Property. From the Effective Date until the earlier of (i) the termination of this Agreement, and
(ii) Closing, Seller shall operate the Property in accordance with the terms of this Section 7.1. 
 7.1.1 (a) From the
Effective Date until the Closing, Seller shall operate and maintain the Property pursuant to Seller’s customary procedures consistent with the manner in which Seller has operated and maintained the Property during Seller’s ownership so as
to keep the Property in good order and repair in a good and workmanlike manner. From the Effective Date until the Closing, Seller shall continue to market the Property to prospective tenants and enter into Leases in the ordinary course of business
at rates and terms which are not inconsistent with Seller’s policies and practices as of the Execution Date. However, Seller shall not take any of the following actions after the expiration of the Study Period without the prior written consent
of Purchaser, which consent may be give or withheld in Purchaser’s sole discretion: 
  

	 	(i)	make or permit to be made any material alterations to or upon the Property except as required under Section 7.2 hereof; 

  

	 	(ii)	enter into any contracts for the provision of services and/or supplies to the Property which are not terminable without premium or penalty by Purchaser upon thirty (30) days’ prior written notice following the
Closing, or amend or modify the Contracts in any manner, unless such Contract as amended may be terminated without premium or penalty upon thirty (30) days’ prior written notice, or knowingly fail to timely perform its material obligations
under the Contracts (provided that in the case of emergency or other exigent circumstances, Seller shall have the right to enter into contracts to perform repairs or replacements without Purchaser’s consent); 

 

	 	(iii)	encumber the Property or any interest therein; or 

  

	 	(iv)	settle, compromise, withdraw or terminate any real estate tax appeal or proceeding affecting the Property other than any relating solely to periods prior to calendar year 2015 (which Seller retains the full and
unfettered right to settle or compromise, and any refunds applicable to such period shall belong solely to Seller). 

 Prior to the expiration
of the Study Period, Seller shall have the right to take any of the aforesaid actions without obtaining Purchaser’s consent thereto, but Seller shall keep Purchaser reasonably informed as to material actions Seller has taken or proposes to
take. 
 (b) Whenever in this Section 7.1.1 Seller is required to obtain Purchaser’s consent with respect to any proposed
action or transaction, Purchaser shall, within five (5) Business Days after receipt of Seller’s receipt of request therefor, notify Seller of its approval or disapproval of same and, if Purchaser fails to notify Seller in writing of its
disapproval within said five (5) Business Day period, Purchaser shall be deemed to have disapproved same. 

  
 11 

 7.1.2 Prior to the expiration of the Study Period, Purchaser shall review the Contracts to
determine, among other things, whether such Contracts are terminable, and to determine whether Purchaser desires to assume any of such Contracts. Not later than five (5) Business Days prior to the expiration of the Study Period, Purchaser shall
deliver a notice to Seller setting forth which of such Contracts, if any, that Purchaser elects to have Seller terminate. Seller shall promptly deliver notices of termination canceling such Contracts as Seller is timely notified of by Purchaser and
Purchaser shall have no obligation with respect to such cancelled Contracts after the Closing Date. At Closing, Seller shall assign to Purchaser, and Purchaser shall assume, the Contracts (as identified on Schedule 1.8 hereto) which
Purchaser does not elect to terminate pursuant to the Bill of Sale and Assignment and Assumption Agreement. 
 7.1.3 Unless and until this
Agreement is terminated pursuant to the terms hereof, Seller will not solicit any offers to sell the Property or make or accept any offers to sell the Property or any part thereof to anyone other than Purchaser, its successors and assigns, engage in
any negotiations with any third party with respect to the sale or other disposition of the Property or any part thereof with anyone other than Purchaser, its successors or assigns, or enter into any contracts or agreements (whether binding or not)
regarding any disposition of the Property or any part thereof with anyone other than Purchaser. 
 7.2 Governmental Notices. Promptly
after receipt, Seller shall provide Purchaser with copies of any written notices that Seller receives with respect to (i) any special assessments or proposed increases in the valuation of the Property; (ii) any condemnation or eminent
domain proceedings affecting the Property; or (iii) any violation of any Environmental Law or any zoning, health, fire, safety or other law, regulation or code applicable to the Property. In addition, Seller shall deliver or cause to be
delivered to Purchaser, promptly upon receipt thereof by Seller, copies of any written notices of default given or received by Seller under any of the Leases. 

7.3 Litigation. Seller will advise Purchaser promptly of any litigation, arbitration proceeding or administrative hearing that
materially affects Seller or the Property and that is instituted after the Effective Date. 
 7.4 Tradenames and Service Marks. 

7.4.1 Purchaser hereby acknowledges and agrees that the name “Crescent”, any other trade name or service mark which includes the
word “Crescent” or any other trade name or service mark of Seller or its members (hereinafter collectively referred to as the “Marks”), and each of them, are trade names and service marks of Crescent Communities, LLC; that
the Marks, and each of them, are the sole and exclusive property of Crescent Communities, LLC, which owns all right, title, and interest in and to the Marks, and each of them; and that, by this Agreement, Purchaser shall acquire no ownership right
or interest of any kind in or to the Marks, or any of them. Purchaser further acknowledges and agrees that any use by Purchaser of the Marks, or any of them, in any manner in connection with the Property or otherwise, will result in immediate and
irreparable injury to Seller and its affiliates, including, Crescent Communities, LLC, and that Seller and/or its affiliates, including, Crescent Communities, LLC, shall be entitled to temporary, preliminary, and permanent injunctive relief against
Purchaser in the event of any such use of the Marks, or any of them, by Purchaser, or in the event of any other violation by Purchaser of this Section 7.4.1. Purchaser may continue to use “Cool Springs” in the name of the Property
after Closing provided Purchaser does not use the “Crescent” name or any of the Marks; provided, however, nothing contained herein shall be deemed to be a warranty of Seller’s or Purchaser’s right to use such names.

 7.4.2 Purchaser agrees to remove the “Crescent” name from the Property after Closing, including changes in signage, lease
forms, and the like. Purchaser agrees to attach a substantial, temporary 

  
 12 

 
sign over the existing “Crescent” name or logo on all sign(s) within three (3) Business Days after Closing so that the word “Crescent” will not be visible. Purchaser
shall keep such temporary signage in place until Purchaser installs permanent replacements of such signage, and Purchaser shall install such permanent replacement signage on or before the date that is thirty (30) days after Closing. All other
signage on the Property containing the Crescent name or any of the Marks shall be promptly removed or replaced, but in any event, on or before the date that is thirty (30) days after Closing. 

7.4.3 This Section 7.4 shall survive the Closing. 

7.5 Post-Closing Property Maintenance Obligations. The Parties acknowledge that Seller has caused certain surety and maintenance bonds
and/or letters of credit (as may be amended, extended, increased, reduced or replaced from time to time, the “Maintenance Bonds”) to be issued to the City of Franklin, Tennessee as security for certain obligations of Seller to
maintain, for a limited period of time, (i) streets (including access), storm drainage and sidewalks; and (ii) onsite and offsite landscaping (the “Maintenance Obligations”). Seller (or an affiliate) shall be required to
maintain the Maintenance Bonds in place until complete satisfaction of the Maintenance Obligations and release of the Maintenance Bonds by the City of Franklin, Tennessee, at which time Seller’s obligation to perform the Maintenance Obligations
shall terminate. The parties agree as follows with respect to the Maintenance Obligations and Maintenance Bonds: 
 7.5.1 Seller and
Seller’s agents and contractors shall have access to the Property, and shall have the right to perform the Maintenance Obligations, on business days and Saturdays, between the hours of 8:00 a.m. and 6:00 p.m. local time. Each time Seller, its
agents and contractors, enter upon the Property, such entrant shall check in with the on-site property manager prior to commencing any work with respect to the Maintenance Obligations. Prior to Seller and Seller’s agents and contractors
entering the Property, Seller shall provide Purchaser with certificates of insurance showing that Seller and its agents and contractors have obtained commercial general liability insurance in amounts reasonably acceptable to Purchaser; provided that
Seller shall only be required to provide such certificates of insurance for those parties actually accessing the Property. 
 7.5.2 Except
as provided in Section 7.5.3, all expenses incurred by Seller in connection with the Maintenance Obligations shall be paid by Seller (or its affiliate), and Seller shall indemnify, defend and hold harmless Purchaser from and against any loss,
cost, damage, liability or expense incurred by Purchaser relating to the Maintenance Obligations and/or Seller’s failure to perform the Maintenance Obligations or pay any expenses relating thereto, and arising from Seller’s and
Seller’s agents’ and contractors’ entry on the Property and their actions or inactions thereon. 
 7.5.3 So long as the
Maintenance Obligations are outstanding, Purchaser agrees to use good faith efforts operate the Property at all times in a manner that would not cause Seller (or its affiliate) to incur the Maintenance Obligations. Notwithstanding anything to the
contrary in this Agreement, Purchaser shall indemnify, defend and hold harmless Seller from and against any loss, cost, damage, liability or expense incurred by Seller (i) in connection with any Maintenance Obligations of Seller that relate
solely to onsite landscaping at the Property; and (ii) with respect to all Maintenance Obligations that do not relate solely to onsite landscaping at the Property, arising out of the negligent or willful act or omission of Purchaser, its
agents, employees, contractors, tenants, licensees or representatives. 
 7.5.4 Purchaser shall cooperate as reasonably requested by Seller
(or its affiliate), including the scheduling of inspections by governmental officials, so as to facilitate the timely satisfaction of all Maintenance Obligations and release of all Maintenance Bonds. 

7.5.5 This Section 7.5 shall survive the Closing. 

  
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 ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING 

8.1 Conditions Precedent to Purchaser’s Obligation to Close. Purchaser’s obligation to purchase the Property is subject to
satisfaction on or before the Closing Date (as such date may be extended as provided herein) of the following conditions, any of which may be waived in writing by Purchaser in Purchaser’s sole and absolute discretion. 

8.1.1 Seller shall have performed and observed, in all material respects, all covenants and obligations of Seller under this Agreement to be
performed or complied with by it prior to or at Closing, including the delivery of the documents for Closing set forth in Section 9.2. 

8.1.2 Subject to the provisions of Section 8.4 below, all representations and warranties of Seller set forth in this Agreement
shall be true and correct in all material respects as if made on the Closing Date. 
 8.1.3 The Title Company shall be committed to issue,
at Closing, upon payment of the premium therefor, the owner’s extended coverage policy of title insurance as described in the Title Commitment, dated the date that the Deed is recorded, insuring Purchaser’s fee simple title to the
Property, with coverage in the amount of the Purchase Price, title the Property is vested in Purchaser subject only to the Permitted Exceptions, and insuring the gap period, if any, between the Closing Date and the recording of the Deed. 

8.2 Conditions Precedent to Seller’s Obligation to Close. Seller’s obligation to sell the Property is subject to
satisfaction, on or before the Closing Date (as such date may be extended as provided herein) of the following conditions, any of which may be waived in writing by Seller, in Seller’s sole and absolute discretion: 

8.2.1 Purchaser shall have performed and observed, in all material respects, all covenants and obligations of Purchaser under this Agreement.

 8.2.2 All representations and warranties of Purchaser set forth in this Agreement shall be true and correct in all material respects as
if made on the Closing Date. 
 8.3 Failure of a Condition 

8.3.1 In the event that any condition precedent to Closing has not been satisfied on or before the Closing Date, then the party whose
conditions to Closing have not been satisfied (the “Unsatisfied Party”) shall give notice to the other party of the condition or conditions which the Unsatisfied Party asserts are not satisfied. If the conditions specified in such
notice are not satisfied within ten (10) Business Days after receipt of such notice, then the party whose condition precedent was not satisfied may terminate this Agreement, whereupon neither party shall have any further rights or obligations
hereunder (other than any obligations of either party that expressly survive termination) and the Deposit shall be returned to Purchaser; provided, however, that if such failure of a condition is due to a default by one of the parties, the
disposition of the Deposit shall be governed solely by Article 11 of this Agreement and not by this Section 8.3.1. Notwithstanding anything contained herein to the contrary, if any of the conditions precedent to Purchaser’s
obligation to close, as set forth in Section 8.1 of this Agreement, are not satisfied within the ten (10) Business Day period specified above and the same are reasonably susceptible of being cured, Seller shall have the right to extend
such period in which to satisfy the unsatisfied condition for a period of up to ten (10) additional days, by giving notice thereof to Purchaser within such ten (100 Business Day period. Further, Purchaser shall have the right to waive the
unsatisfied condition or conditions, by notice to Seller within five (5) Business Days after expiration of the applicable satisfaction period, without satisfaction having occurred, in which event the Closing Date shall be the date which is five
(5) Business Days after Seller’s receipt of Purchaser’s waiver notice. 
 8.3.2 If the transaction contemplated by this
Agreement closes, the parties shall be deemed to have waived any and all unmet or unsatisfied conditions, other than any unmet or unsatisfied conditions arising out of a breach by either party of any of its representations and warranties hereunder
of which the other party has no knowledge as of Closing. 

  
 14 

 8.4 Representations and Warranties. All representations and warranties made by Seller in
this Agreement shall be true and correct in all material respects as of the Closing Date; provided, however, that if on the Closing Date any such representations and warranties are not true and correct in all material respects or Seller has not
performed any material covenants required to be performed by Seller pursuant to this Agreement, Purchaser shall in any event be required to close hereunder and pay the Purchase Price to Seller without any reduction or credit unless the breach of any
representations and warranties or covenants will have, in the aggregate, a “material adverse effect” and in such event, Seller shall be entitled, at its option and in its sole discretion, to credit to Purchaser the amount necessary to cure
the representation and warranty in which event Purchaser shall be required to close hereunder. In the event that the Seller’s breach of the representations and warranties have a material adverse effect and Seller does not agree to provide a
credit to Purchaser in the amount necessary to cure the breach, Purchaser shall have the right to terminate this Agreement. If Purchaser elects to terminate this Agreement, Purchaser shall give notice to Seller thereof, the Deposit shall be returned
to Purchaser, and thereafter neither party will have any further rights or obligations hereunder, except for any obligations that expressly survive termination. As used herein, a “material adverse effect” shall be deemed to have occurred
if by reason of such misrepresentation or breach of covenant such inaccuracy has an adverse effect on the value of the Property in excess of Fifty Thousand Dollars ($50,000.00), or (y) affects the ability of Seller to consummate the
transactions contemplated hereby in accordance with the terms of this Agreement. 
 ARTICLE 9 CLOSING 

9.1 Closing Date. The consummation of the transaction contemplated hereby (the “Closing”) will take place at the
office of Escrow Agent, via an escrow closing, on October 8, 2015 (with time being of the essence with respect thereto), or such earlier date as Seller and Purchaser may mutually agree upon in writing (the “Closing Date”);
provided, however, Purchaser shall use commercially reasonable efforts to consummate the Closing no later than September 30, 2015. Purchaser and Seller agree to finalize and execute all documents necessary for the consummation of the
transaction contemplated herein, including but not limited to the settlement statement, and to deliver all such documents to the Title Company in escrow not later than the end of the Business Day immediately preceding the Closing Date in order to
ensure the orderly and timely transfer of all funds necessary for Closing by not later than 2:00 p.m. (Eastern time) on the Closing Date. 

9.2 Seller’s Obligations at the Closing. At the Closing, Seller will do, or cause to be done, the following: 

9.2.1 Closing Documents. Seller shall execute, acknowledge (if necessary) and deliver originals of the following documents: 

9.2.1.1 Special Warranty Deed in the form of Exhibit C hereto (the “Deed”), Seller and Purchaser
agreeing that the Deed will contain a Restriction Against Condominium Conversion in the form of Exhibit B to the Deed; 

9.2.1.2 Bill of Sale in the form of Exhibit D hereto; 

  
 15 

 9.2.1.3 Assignment and Assumption Agreement in the form of Exhibit E
hereto; 
 9.2.1.4 Letters to each tenant under the Leases in the form of Exhibit F hereto, notifying tenants of
the conveyance of the Property to Purchaser and advising them that, following the Closing Date, all future payments of rent are to be made in the manner set forth therein; 

9.2.1.5 Letter to each of the contractors under the Contracts assumed by Purchaser advising each of the service providers under
such Contracts of the sale of the Property to Purchaser. 
 9.2.1.6 Settlement statement showing all of the payments,
adjustments and prorations provided in Section 9.5 and otherwise agreed upon by Seller and Purchaser; 
 9.2.1.7
A rent roll for the Property dated as of the Closing Date, and certified, to Seller’s knowledge, as true, correct and complete in all material respects as of the date thereof by Seller; 

9.2.1.8 Subject to Section 8.4, a certificate stating that each of Seller’s representations and warranties
contained in this Agreement is true and correct in all material respects as of the Closing Date; 
 9.2.1.9 Seller shall
execute and deliver to Purchaser a certificate of nonforeign status, in the form of the Certificate of Nonforeign Status; 

9.2.1.10 A duly executed affidavit in a form customarily used for commercial real estate transactions in the State of Tennessee
and which is acceptable to the Title Company, showing among other things that all debts for labor and materials in respect of the Property incurred by or on behalf of Seller have been paid in full and that there are no outstanding claims, suits,
debts, rights of occupancy, encumbrances, liens or judgments against the Property, except matters approved or waived by Purchaser pursuant to Article III hereof in order to delete the standard exceptions set forth in the Title Commitment so
that Purchaser may obtain an extended coverage ALTA 2006 owner’s policy. 
 9.2.1.11 Such evidence as is reasonably
required by the Title Company evidencing the authority of Seller and those individuals acting on behalf of Seller to enter into this Agreement and consummate the transaction contemplated herein. 

9.2.1.12 Such real property excise tax affidavits and any and all forms, affidavits and certificates required to be filed in
connection with the imposition and/or payment of any and all applicable federal, state, county, municipal and other transfer taxes in connection with conveyance of the Property, in proper form for submission. and 

9.2.1.13 Copies of notices of termination of such other service agreements and contracts that Purchaser elected to have
terminated in accordance with Section 7.1.2. 
 9.2.2 Original Property Information Documents. Seller will deliver to
Purchaser originals within Seller’s possession of all items constituting the Property Information referenced in Article 4. 

9.2.3 Possession. Seller will deliver to Purchaser possession of the Property, subject to the Leases. 

9.2.4 Keys. Seller will deliver to Purchaser all keys for the Property in the possession or subject to the control of Seller,
including, without limitation, master keys as well as combinations, card keys and cards for the security systems, if any. 
 9.2.5
Costs. Seller will pay all costs allocated to Seller pursuant to Section 9.5 of this Agreement. 

  
 16 

 9.3 Purchaser’s Obligations at the Closing. At the Closing, Purchaser will do, or
cause to be done, the following: 
 9.3.1 Closing Documents. At Closing, Purchaser shall execute, acknowledge (if necessary) and
deliver originals of the following documents: 
 9.3.1.1 Bill of Sale in the form of Exhibit D hereto; 

9.3.1.2 Assignment and Assumption Agreement in the form of Exhibit E hereto; 

9.3.1.3 Settlement statement showing all of the payments, adjustments and prorations provided for in Section 9.5
and otherwise agreed upon by Seller and Purchaser; 
 9.3.1.4 Such evidence as may be reasonably required by the Title
Company with respect to the authority of the person(s) executing the documents required to be executed by Purchaser on behalf of Purchaser; and 

9.3.1.5 A certificate stating that each of Purchaser’s representations and warranties contained in this Agreement is true
and correct. 
 9.3.2 Payment of Consideration. Purchaser shall pay to Escrow Agent by bank wire transfer of immediately available
funds at Closing the Purchase Price in accordance with Article 2 of this Agreement (subject to the credits, prorations and adjustments provided hereby). The net closing proceeds due to Seller shall be wire transferred to such account or
accounts as Seller may designate, and actually received in such account or accounts, not later than 2:00 p.m. (Eastern time) on the Closing Date (the “Wiring Deadline”), with time being strictly of the essence with respect thereto.

 9.3.3 Costs. Purchaser will pay all costs allocated to Purchaser pursuant to Section 9.5 of this Agreement. 

9.4 Escrow. The delivery of the documents and the payment of the sums to be delivered and paid at the Closing shall be accomplished
through an escrow with the Escrow Agent. 
 9.5 Costs and Adjustments at Closing. 

9.5.1 Expenses. Seller shall pay (a) the fees of any counsel representing Seller in connection with this transaction,
(b) one-half (1/2) of the escrow fee charged by Escrow Agent, (c) all charges and costs for all title examinations, title commitments and premiums for base owner’s title insurance policies, excluding the costs of any endorsements
and (d) the recording charges for the deed and any other documents to clear title. Purchaser shall pay (i) the fees of any counsel representing Purchaser in connection with this transaction, (ii) documentary stamp or transfer taxes
for recording the deed conveying the Property to Purchaser; (iii) costs and expenses related to the Survey, (iv) the costs and expenses related to all of Purchaser’s due diligence studies and investigations, (v) one-half
(1/2) of the escrow fee charged by Escrow Agent, (vi) all costs related to Purchaser’s financing of the Property (including, but not limited to, documentary stamp taxes and non-recurring intangible taxes in connection therewith), if
applicable, and (vii) all charges and costs for any endorsements to the title insurance policies obtained by Purchaser and the costs of any lender’s title insurance policy obtained by Purchaser. Any other costs or expenses incident to this
transaction and the closing thereof not expressly provided for above shall be allocated between and paid by the parties in accordance with custom and practice in Williamson County, Tennessee. 

  
 17 

 9.5.2 Real Estate and Personal Property Taxes. Real estate, personal property and ad
valorem taxes for the year in which the Closing occurs will be prorated between Seller and Purchaser as of the Apportionment Time (as hereinafter defined) on the basis of actual bills therefor, if available. If such bills are not available, then
such taxes and other charges shall be prorated on the basis of the most currently available tax bills and, thereafter, promptly re-prorated upon the availability of actual bills for the applicable period and either Seller or Purchaser may demand at
any time after Closing Date a payment from the other party correcting such malapportionment and the other party shall make payment within thirty (30) days of demand. Any and all rebates or reductions in taxes received subsequent to Closing for
the calendar year in which Closing occurs, net of costs of obtaining the same (including without limitation reasonable attorneys’ fees) and net of any amounts due to tenants, shall be prorated as of the Apportionment Time, when received. The
current installment of all special assessments, if any, which are a lien against the Property at the time of Closing and which are being or may be paid in installments shall be prorated as of the Apportionment Time. As used herein, the term
“Apportionment Time” shall mean 11:59 p.m. Eastern time on the date immediately prior to the Closing Date. 
 9.5.3
Lease Security Deposits. At Closing, Seller shall pay to Purchaser, as a credit against the Purchase Price, an amount equal to all security deposits and other deposits held by Seller under the Leases (together with accrued interest thereon
required by law or by the terms of the Leases), and thereafter Purchaser shall be solely obligated for the return of such security deposits and other deposits. 

9.5.4 Rents. All rents and other costs or charges paid by tenants under the Leases shall be prorated as of the Apportionment Time, to
the extent actually collected by Seller. With respect to any rent or charges that are delinquent prior to Closing, Purchaser shall use commercially reasonable efforts to collect such delinquent sums for a period of sixty (60) days. Purchaser
shall promptly remit to Seller any rent or payments for any charges received by Purchaser subsequent to Closing which are attributable to periods prior to Closing; provided, however, that such amounts received from tenants after Closing will first
be applied to such charges as are then due and then applied in their reverse order of accrual until applied in full. 
 9.5.5
Utilities. Water, sewer, electric, fuel (if any) and other utility charges, other than those for which tenants under Leases are responsible directly to the provider, shall be prorated as of the Apportionment Time. If consumption of any of the
foregoing is measured by meter, Seller shall, prior to the Closing Date, endeavor to obtain a reading of each such meter and a final bill as of the Closing Date. If there is no such meter or if the bill for any of the foregoing shall have not been
issued as of the Closing Date, the charges therefor shall be adjusted as of the Apportionment Time on the basis of the charges of the prior period for which such bills were issued and shall be further adjusted between the parties when the bills for
the correct period are issued. Seller and Purchaser shall cooperate to cause the transfer of utility accounts from Seller to Purchaser. Seller shall be entitled to retain any utility security deposits to be refunded. At Closing, Purchaser shall post
substitute utility security deposits to replace those previously paid by Seller or, if the utility provider will not refund such deposits to Seller, Seller shall be reimbursed therefor by Purchaser at Closing. 

9.5.6 Contracts. All payments made or required under Contracts assumed by Purchaser shall be adjusted and apportioned as of the
Apportionment Time. 
 9.5.7 Insurance Policies. Premiums on insurance policies will not be adjusted. As of the Closing Date, Seller
will terminate its insurance coverage and Purchaser will obtain its own insurance coverage. 
 9.5.8 Rent Ready Credit. All apartment
units that are vacant on the date that is five (5) or 

  
 18 

 
more days prior to the Closing Date must be placed in Rent Ready Condition by Seller prior to the Closing Date. For any unit not placed in Rent Ready Condition, Purchaser, at its sole and
exclusive remedy, shall receive a credit of $500.00 at Closing. Purchaser may, at its option but subject to Sections 5.1.2 and 5.1.5, inspect the Property within twenty four (24) hours prior to Closing to verify that such vacant
apartment units are in such Rent Ready Condition. “Rent Ready Condition” means that the applicable apartment unit shall be in the condition and state of repair that is typically provided by Seller upon delivery of first possession
of rented apartments. 
 9.5.9 Closing Statement. Not later than two (2) Business Days prior to the Closing, Seller or its
agents or designees shall prepare, and promptly thereafter, Seller and Purchaser shall jointly agree upon, a closing statement (the “Closing Statement”) that will show the net amount due either to Seller or to Purchaser as the
result of the adjustments and prorations provided for in this Agreement, and such net due amount shall be added to or subtracted from the cash balance of the Purchase Price to be paid to Seller at the Closing, as applicable. Not later than the date
that is the later of (i) one hundred eighty (180) days after the Closing Date, or (ii) thirty (30) days after real property tax bills for the year in which Closing occurs are available. Seller and Purchaser shall reprorate the
adjustments and prorations provided for herein respecting any items that were not capable of being determined as of the Closing Date or that previously were wrongfully determined and need to be corrected and the manner in which such items shall be
determined and paid. The net amount due Seller or Purchaser, if any, by reason of adjustments to the Closing Statement shall be paid in cash by the party obligated therefor within five (5) Business Days following the reproration by Seller and
Purchaser. The reproration agreed to by Seller and Purchaser not later than one hundred eighty (180) days after the Closing Date shall be conclusive and binding on the parties hereto except for any items that are not capable of being determined
at the time such reproration has been made by Seller and Purchaser and shall be conclusive and binding on the parties hereto except for any items that are not capable of being determined at that time of reproration, which items shall be determined
and paid promptly as soon as they are capable of being determined. Prior to and following the Closing Date, each party shall provide the other with such information as the other shall reasonably request (including, without limitation, access to the
books, records, files, ledgers, information and data with respect to the Property during normal business hours upon reasonable advance notice) in order to make the preliminary and final adjustments and prorations provided for herein. 

9.5.10 Survival. The provisions of this Section 9.5 shall survive Closing. 

  
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 ARTICLE 10 DAMAGE AND CONDEMNATION 

10.1 Damage. If, prior to the Closing, all or any portion of the Property is damaged by fire or any other cause whatsoever, Seller
shall promptly give Purchaser written notice of such damage. 
 10.1.1 Minor Damage. If the cost for repairing such damage is less
than One Million Dollars ($1,000,000.00) (as determined by Seller’s independent insurer), then Purchaser shall have the right at Closing to receive the amount of the deductible plus all insurance proceeds received by Seller as a result of such
loss, or an assignment of Seller’s rights to such insurance proceeds, and this Agreement shall continue in full force and effect with no reduction in the Purchase Price, and Seller shall have no further liability or obligation to repair such
damage or to replace the Property. 
 10.1.2 Major Damage. If the cost for repairing such damage exceeds One Million Dollars
($1,000,000.00) (as determined by Seller’s independent insurer), then Purchaser shall have the option, exercisable by written notice delivered to Seller within five (5) Business Days (and the Closing Date shall be extended by up to ten
(10) days if necessary to allow Purchaser time to make that determination) after Seller’s notice of damage to Purchaser, either (i) to receive the amount of the deductible plus all insurance proceeds received by Seller as a result of
such loss, or an assignment of Seller’s rights to such insurance proceeds, and this Agreement shall continue in full force and effect with no reduction in the Purchase Price, and Seller shall have no further liability or obligation to repair
such damage or to replace the Property; or (ii) to terminate this Agreement. If Purchaser elects to terminate this Agreement, Purchaser shall give notice to Seller thereof, the Deposit shall be returned to Purchaser, and thereafter neither
party will have any further rights or obligations hereunder, except for any obligations that expressly survive termination. If Purchaser fails to notify Seller within such five (5) Business Day period (and the Closing Date shall be extended by
up to ten (10) days if necessary to allow Purchaser time to make that determination) of Purchaser’s election to terminate this Agreement, then Purchaser shall be deemed to have elected option (ii), and Purchaser and Seller shall
proceed to Closing in accordance with the terms and conditions of this Agreement. 
 10.2 Condemnation and Eminent Domain. In the
event that any condemnation proceedings are instituted, or notice of intent to condemn is given, with respect to all or any portion of the Property, Seller shall promptly notify Purchaser thereof. 

10.2.1 Minor Condemnation. If the condemnation does not affect all or a material portion of the Property, then Purchaser shall
consummate the purchase of the Property without reduction of the Purchase Price, and the right to collect any condemnation award or compensation for such condemnation shall be assigned by Seller to Purchaser at Closing. For purposes of this
Section 10.2, a “material portion” of the Property shall mean (a) any portion of the buildings, (b) a portion which, after such condemnation, would cause the Property to be non-compliant with any applicable
governmental regulations, or (c) a portion which, after such condemnation would unreasonably restrict access to the Property to the public right of way. 

10.2.2 Major Condemnation. If the condemnation affects all or a material portion of the Property, then Purchaser shall have the option,
exercisable by written notice delivered to Seller within five (5) Business Days (and the Closing shall be extended by up to ten (10) days if necessary to allow Purchaser time to make that determination) after Seller’s notice of
condemnation to Purchaser to either (i) proceed to Closing in accordance with the terms and conditions of this Agreement (in which event Purchaser shall consummate the purchase of the Property without reduction of the Purchase Price, and the
right to collect any condemnation award or compensation for such condemnation shall be assigned by Seller to Purchaser at Closing), or (ii) to terminate this Agreement. If Purchaser elects to terminate this Agreement, Purchaser shall give
notice to Seller thereof, the Deposit shall be returned to Purchaser, and thereafter neither party will have any further rights or obligations hereunder, except for any obligations that expressly survive termination. 

  
 20 

 ARTICLE 11 REMEDIES AND ADDITIONAL COVENANTS 

11.1 Seller Default At or Before Closing. If Seller is in breach or default of any of its obligations or agreements hereunder when
performance is required on or prior to the Closing Date, or if any of the representations contained in Section 6.1 should be false in any material respect (subject to the provisions of Section 8.4) and Purchaser shall become
actually aware of same on or prior to the Closing Date, then Purchaser shall give Seller written notice of such breach or default on or prior to the Closing Date and Seller shall have ten (10) Business Days from the date of receipt of such
notice to cure such breach or default and the Closing Date shall be extended accordingly. If Seller fails to cure such breach or default within such ten (10) Business Day period, then Purchaser shall have the right, at its sole option and as
its sole remedy, and Purchaser hereby waives its right to pursue any other remedy at law or in equity, and as Purchaser’s sole and exclusive remedy, Purchaser shall either (i) to terminate this Agreement by written notice to Seller and the
Escrow Agent, in which event the Deposit shall be returned to Purchaser, whereupon neither party shall have any further rights, duties or obligations hereunder other than the obligations and rights set forth herein that expressly survive the
termination of this Agreement, or (ii) to pursue specific performance of the obligations of Seller hereunder. As a condition precedent to Purchaser’s exercising any right it may have to bring an action for specific performance hereunder,
Purchaser must commence such action for specific performance within thirty (30) days after the scheduled Closing Date. Purchaser agrees that its failure to timely commence such an action for specific performance within such thirty (30) day
period shall be deemed a waiver by it of its right to commence an action for specific performance as well as a waiver by it of any right it may have to file or record a notice of lis pendens or notice of pendency of action or similar notice
against the Property. In no event shall Purchaser seek, or Seller be liable for, any damages to Purchaser, including, without limitation, punitive or consequential damages. 

11.2 Seller Default From and After Closing. Subject to the limitations set forth in Section 6.4 of this Agreement, if
Seller is in breach or default of any of its obligations or agreements hereunder that survive the Closing when performance is required, including, without limitation, any obligations or agreements under the documents delivered at Closing by Seller
pursuant to Section 9.2.1 of this Agreement, or if any of the Express Representations should be false in any material respect and Purchaser shall first become actually aware of same after the Closing Date, then Purchaser shall give
Seller written notice of such breach or default of such obligation, agreement or representation hereunder prior to the expiration of the applicable survival period of such breach or default and Seller shall have thirty (30) days from the date
of receipt of such notice to cure such breach or default. If Seller fails to cure such breach or default within such thirty (30) day period, and the reasonably estimated losses or damages sustained as a result of Seller’s failure or
inability to perform any of its obligations, agreements or Express Representations hereunder exceed Fifty Thousand and 00/100 Dollars ($50,000.00), then Seller shall be liable for the actual direct damages suffered by Purchaser due to such
uncured breach or default from the first dollar of loss. Notwithstanding anything to the contrary contained herein, (i) in no event shall Seller be liable to Purchaser for damages in an aggregate amount in excess of Six Hundred Thousand and
00/100 Dollars ($600,000.00) (the “Cap Amount”), (ii) Seller’s inability to satisfy a condition of this Agreement shall not be considered a default by Seller hereunder unless such inability results from the breach of any
of Seller’s representations set forth in Section 6.1 or the breach of Seller’s express covenants and obligations hereunder, and (iii) if Purchaser has knowledge of a default by Seller on the Closing Date and Purchaser
elects to close the transaction contemplated herein, Purchaser shall be deemed to have irrevocably waived such default and Seller shall not have any liability with respect to such default. Notwithstanding anything to the contrary contained herein,
Seller shall maintain a net worth (a) in an amount no less than the Cap Amount throughout the Survival Period and (b) for so long after as a claim is pending in an amount equal to the liquidated amount of such claim (not to exceed,
however, the Cap Amount), and such obligation shall also survive Closing through the expiration of the Survival Period and the final resolution of any claim. Notwithstanding anything contained herein to the contrary Purchaser shall have the right to
pursue an action against Seller for Purchaser’s actual damages suffered on account of a default by Purchaser under Sections 12.2, and nothing herein shall limit Purchaser’s right to seek equitable relief against Seller to enforce
the provisions of Section 15.17 of this Agreement. The provisions of this Section 11.2 shall survive Closing. 

  
 21 

 11.3 Purchaser Default. The parties acknowledge and agree that Seller should be entitled
to compensation for any detriment suffered if Purchaser fails to consummate the purchase of the Property if and when required to do so under the terms of this Agreement, but agree that it would be extremely difficult to ascertain the extent of the
actual detriment Seller would suffer as a result of such failure. Consequently, if Purchaser fails to consummate the purchase of the Property on the Closing Date or fails to perform any of its other covenants in any material respect, or otherwise
defaults in its obligations hereunder, then Seller shall be entitled to terminate this Agreement by giving written notice thereof to Purchaser prior to or at the Closing, in which event the Deposit shall be paid to Seller as fixed, agreed and
liquidated damages, and, after the payment of the Deposit to Seller, neither Seller nor Purchaser will have any further rights or obligations under this Agreement, except for any obligations that expressly survive termination, except that Seller
shall have the right to pursue an action against Purchaser for Seller’s actual damages suffered on account of a default by Purchaser under Sections 5.1.2, 6.2, 12.2, and 15.17 of this Agreement; provided, however,
that nothing contained herein shall constitute a waiver by Seller of any damages, rights or remedies which may be available to Seller against Purchaser at law or in equity as a result of any material breach of a representation or warranty or other
material default of Purchaser hereunder (other than Purchaser’s failure to consummate the purchase of the Property on the Closing Date for which Seller shall be paid the Deposit in accordance with the immediately preceding sentence), all of
which are hereby expressly reserved by Seller; provided, however, nothing contained herein shall entitle Seller to consequential or punitive damages or any other sums in excess of Seller’s actual damages. 

11.4 Delivery of Materials. Notwithstanding anything contained in this Agreement to the contrary, if this Agreement is terminated for
any reason whatsoever, then Purchaser shall promptly deliver to Seller all Property Information provided to Purchaser by Seller, including copies thereof in any form whatsoever, including electronic form, along with any and all tests results and
studies of the Property performed by or on behalf of Purchaser pursuant to Article 5, excluding any confidential or proprietary information or financial modeling. The obligations of Purchaser under this Section 11.4 shall survive
any termination of this Agreement. 
 ARTICLE 12 BROKERAGE COMMISSION 

12.1 Brokers. Seller represents and warrants to Purchaser that Seller has not contacted or entered into any agreement with any real
estate broker, agent, finder, or any party in connection with this transaction, except for Apartment Realty Advisors of the Carolinas, Inc. (“Seller’s Broker”) and that Seller has not taken any action which would result in any
real estate broker’s or finder’s fees or commissions being due and payable to any party other than Seller’s Broker with respect to the transaction contemplated hereby. Seller will be solely responsible for the payment of Seller’s
Broker’s commission in accordance with the provisions of a separate agreement. Purchaser hereby represents and warrants to Seller that Purchaser has not contracted or entered into any agreement with any real estate broker, agent, finder, or any
party in connection with this transaction and that Purchaser has not taken any action which would result in any real estate broker’s or finder’s fees or commissions being due or payable to any party with respect to the transaction
contemplated hereby. 
 12.2 Indemnity. Each party hereby indemnifies and agrees to hold the other party harmless from and against
any loss, liability, damage, cost, or expense (including, without limitation, reasonable attorneys’ fees) paid or incurred by the other party by reason of a breach of the representation and warranty made by such party under this Article
12. Notwithstanding anything to the contrary contained in this Agreement, the indemnities set forth in this Section 12.2 shall survive the Closing or earlier termination of this Agreement. 

  
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 ARTICLE 13 NOTICES 

13.1 Written Notice. All notices, demands and requests which may be given or which are required to be given by either party to the
other party under this Agreement must be in writing. 
 13.2 Method of Transmittal. All notices, demands, requests or other
communications required or permitted to be given hereunder must be sent (i) by United States certified mail, postage fully prepaid, return receipt requested, (ii) by hand delivery, (iii) confirmed email (provided a copy of such notice
is deposited with a nationally recognized overnight courier for next Business Day delivery), or (iv) by FedEx or a similar nationally recognized overnight courier service. All such notices, demands, requests or other communications shall be
deemed to have been given for all purposes of this Agreement upon the date of receipt or refusal, except that whenever under this Agreement a notice is either received on a day which is not a Business Day or is required to be delivered on or before
a specific day which is not a Business Day, the day of receipt or required delivery shall automatically be extended to the next Business Day. 

13.3 Addresses. The addresses for proper notice under this Agreement are as follows: 

 

			
	As to Seller:	  	GGT Crescent Cool Springs TN Venture, LLC
		  	c/o Crescent Communities, LLC
		  	227 W. Trade Street
		  	Suite 1000
		  	Charlotte, NC 28202
		  	Email: bnatwick@crescentcommunities.com
		  	Attention: Brian J. Natwick, President Multifamily Division
		
	With copies to:	  	GGT Cool Springs Holdings, LLC
		  	CNL Center at City Commons
		  	450 South Orange Avenue
		  	Orlando, Florida 32801
		  	Email: mike.tetrick@cnl.com
		  	Attention: Michael Tetrick
		
		  	and:
		
		  	GGT Cool Springs Holdings, LLC
		  	CNL Center at City Commons
		  	450 South Orange Avenue
		  	Orlando, Florida 32801
		  	Email: tracey.bracco@cnl.com
		  	Attention: Tracey Bracco, Esq., Assistant General Counsel
		
		  	and:
		
		  	Holt Ney Zatcoff & Wasserman, LLP
		  	100 Galleria Parkway
		  	Suite 1800
		  	Atlanta, GA 30339
		  	Email: szatcoff@hnzw.com
		  	Attention: Sanford H. Zatcoff, Esq.

  
 23 

			
		
		  	and:
		
		  	Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
		  	450 South Orange Avenue, Suite 800
		  	Orlando, Florida 32801
		  	Email: joaquin.martinez@lowndes-law.com
		  	Attention: Joaquin E. Martinez, Esq.
		
	As to Purchaser:	  	SHLP Acquisition, LLC
		  	1100 Abernathy Road
		  	Suite 700
		  	Atlanta, Georgia 30328
		  	Email: paul.dewey@simpsonshousing.com
		  	Attention: Paul Dewey
		
	With a copy to:	  	McGuire Woods LLP
		  	1230 Peachtree Road, NE
		  	Suite 2100
		  	Atlanta, Georgia 30309
		  	Email: jgrieb@mcguirewoods.com
		  	Attention: John T. Grieb
		
	As to Escrow Agent:	  	First American Title Insurance Company
		  	Six Concourse Parkway
		  	Suite 2000
		  	Atlanta, Georgia 30328
		  	Email: twwilson@firstam.com
		  	Attention: Terry W. Wilson

 Either party may from time to time by written notice to the other party designate a different address for notices. Notices
sent to or from an address outside of the continental United States shall be sent only by one of the methods specified in clauses (ii), (iii) or (iv) of this Section 13.3. Anything contained in this Section 13.3 to
the contrary notwithstanding, all notices may be executed and sent by the parties’ counsel, and any notice given by counsel to a party shall have the same effect as if given by such party. 

ARTICLE 14 ASSIGNMENT 

Neither party shall have the right to assign this Agreement without the prior written consent of the other, which consent may be granted or
withheld in the sole and absolute discretion of the party whose consent has been requested. Seller hereby consents to an assignment at Closing by Purchaser of its interest in this Agreement to a wholly-owned subsidiary of Simpson Housing LLLP
without further evidence of such subsidiary’s financial capability to consummate Closing hereunder, provided that such subsidiary shall assume, in writing (by execution of an assignment and assumption agreement reasonably satisfactory to
Seller), all of Purchaser’s obligations under this Agreement. 

  
 24 

 ARTICLE 15 MISCELLANEOUS 

15.1 Entire Agreement. This Agreement embodies the entire agreement between the parties and cannot be varied except by the written
agreement of the parties and supersedes all prior agreements and undertakings. 
 15.2 Modifications. This Agreement may not be
modified except by the written agreement of the parties. 
 15.3 Gender and Number. Words of any gender used in this Agreement will
be construed to include any other gender and words in the singular number will be construed to include the plural, and vice versa, unless the context requires otherwise. 

15.4 Captions. The captions used in connection with the Articles, Sections and Subsections of this Agreement are for convenience only
and will not be deemed to expand or limit the meaning of the language of this Agreement. 
 15.5 Successors and Assigns. This
Agreement will be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns. 

15.6 Controlling Law. This Agreement will be construed under, governed by and enforced in accordance with the laws of the State of
Tennessee (without reference to conflicts of laws principles). 
 15.7 Exhibits. All exhibits, attachments, schedules, annexed
instruments and addenda referred to herein will be considered a part hereof for all purposes with the same force and effect as if set forth verbatim herein. 

15.8 No Rule of Construction. Seller and Purchaser have each been represented by counsel in the negotiations and preparation of this
Agreement; therefore, this Agreement will be deemed to be drafted by both Seller and Purchaser, and no rule of construction will be invoked respecting the authorship of this Agreement. 

15.9 Severability. In the event that any one or more of the provisions contained in this Agreement (except the provisions relating to
Seller’s obligations to convey the Property and Purchaser’s obligation to pay the Purchase Price, the invalidity of either of which shall cause this Agreement to be null and void) are held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability will not affect any other provisions hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had not been contained herein, provided, however,
that the parties hereto shall endeavor in good faith to rewrite the affected provision to make it (i) valid, and (ii) consistent with the intent of the original provision. 

15.10 Time of Essence. Time is important to both Seller and Purchaser in the performance of this Agreement, and both parties have
agreed that TIME IS OF THE ESSENCE with respect to any date set out in this Agreement. 
 15.11 Business Days. “Business
Day” means any day on which business is generally transacted by banks in the State of Tennessee. If the final date of any period which is set out in any paragraph of this Agreement falls upon a day which is not a Business Day, then, and in
such event, the time of such period will be extended to the next Business Day. 
 15.12 No Memorandum. Purchaser and Seller agree not
to record this Agreement or any memorandum hereof. 

  
 25 

 15.13 Press Releases. Prior to Closing, any release to the public of information with
respect to the sale contemplated herein or any matters set forth in this Agreement will be made only in the form approved by Purchaser and Seller except for any disclosure that may be required by law or applicable regulation to be made to any
applicable governmental or quasi-governmental authorities or to the public. After the Closing has occurred, Seller and Purchaser shall each have the right to issue a press release regarding consummation of the transactions contemplated in this
Agreement. 
 15.14 Attorneys’ Fees and Costs. In the event either party is required to resort to litigation to enforce its
rights under this Agreement, the non-prevailing party in such litigation shall pay the costs, expenses and attorneys’ fees incurred by the prevailing party in connection with such action. 

15.15 Counterparts and Expiration of Offer. This Agreement may be executed in multiple counterparts which shall together constitute a
single document. However, this Agreement shall not be effective unless and until all counterpart signatures have been obtained. An unsigned draft of this Agreement shall not be considered an offer by either party to purchase or sell the Property.

 15.16 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY
EITHER PARTY IN CONNECTION WITH ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE RELATIONSHIP OF SELLER AND PURCHASER HEREUNDER, PURCHASER’S OWNERSHIP OR USE OF THE PROPERTY, AND/OR ANY CLAIMS OF INJURY OR DAMAGE
RELATED TO THE PROPERTY. 
 15.17 Confidentiality 

15.17.1 Except as provided otherwise in this Section 15.17, Purchaser and Seller, for the benefit of each other, hereby agree that
neither of them will release or cause or permit to be released to the public any press notices, publicity (oral or written) or advertising promotion relating to, or otherwise publicly announce or disclose or cause or permit to be publicly announced
or disclosed, in any manner whatsoever, the terms, conditions or substance of this Agreement or the transactions contemplated herein, without first obtaining the consent of the other party hereto, which may be granted or withheld in the sole
discretion of the other party. However, each party consents to any disclosure of this Agreement which the other party reasonably believes is required by law, by the public disclosure obligations required by the U.S. Securities Exchange Commission,
or which is recommended in good faith by counsel to such other party. 
 15.17.2 It is understood that the foregoing shall not preclude any
party from discussing the substance or any relevant details of the transactions contemplated in this Agreement on a confidential basis with any of its partners, members, advisors, attorneys, accountants, professional consultants, financial advisors,
rating agencies, or potential lenders, as the case may be, or prevent any party hereto from complying with applicable laws, including, without limitation, governmental regulatory, disclosure, tax and reporting requirements. Notwithstanding the
foregoing, Purchaser shall have the right to deliver such information to Purchaser’s potential investors and potential lenders, in each case on a need-to-know basis after the recipients have been informed of the confidential nature of such
information and directed not to disclose such information except in accordance with this Section 15.17. The aforementioned shall not preclude the disclosure to potential investors of the proposed purchase price, the net operating income
of the Property and the approximate rate of return on the investment. 
 15.17.3 In addition to any other remedies available to Seller and
Purchaser, Seller and Purchaser shall each have the right to seek equitable relief, including, without limitation, injunctive relief or specific performance, against the other party or its representatives in order to enforce the provisions of this
Section 15.17. 
 15.17.4 Notwithstanding any other provision of this Agreement, the provisions of Section 15.17
shall survive the termination of this Agreement for one (1) year following the Effective Date, but shall not survive Closing. 

  
 26 

 15.18 Jurisdiction and Service of Process. The parties hereto agree to submit to personal
jurisdiction in the State of Tennessee in any action or proceeding arising out of this Agreement and, in furtherance of such agreement, the parties hereby agree and consent that without limiting other methods of obtaining jurisdiction, personal
jurisdiction over the parties in any such action or proceeding may be obtained within or without the jurisdiction of any court located in the State of Tennessee and that any process or notice of motion or other application to any such court in
connection with any such action or proceeding may be served upon the parties by certified mail to or by personal service at the last known address of the parties, whether such address be within or without the jurisdiction of any such court. The
provisions of this Section 15.18 shall survive the Closing or the termination hereof. 
 15.19 Exculpation. Purchaser
agrees that it does not have and will not have any claims or causes of action against the Seller Knowledge Individual or any disclosed or undisclosed officer, director, employee, trustee, shareholder, member, manager, partner, principal, parent,
subsidiary or other affiliate of Seller, or any officer, director, employee, trustee, shareholder, partner or principal of any such parent, subsidiary or other affiliate (collectively, “Seller’s Affiliates”), arising out of or
in connection with this Agreement or the transactions contemplated hereby. Purchaser agrees to look solely to Seller and its assets for the satisfaction of any liability or obligation arising under this Agreement or the transactions contemplated
hereby, or for the performance of any of the covenants, warranties or other agreements contained herein, and further agrees not to sue or otherwise seek to enforce any personal obligation against any of Seller’s Affiliates with respect to any
matters arising out of or in connection with this Agreement or the transactions contemplated hereby. Without limiting the generality of the foregoing provisions of this Section 15.19, Purchaser hereby unconditionally and irrevocably
waives any and all claims and causes of action of any nature whatsoever it may now or hereafter have against Seller’s Affiliates, and hereby unconditionally and irrevocably releases and discharges Seller’s Affiliates from any and all
liability whatsoever which may now or hereafter accrue in favor of Purchaser against Seller’s Affiliates, in connection with or arising out of this Agreement or the transactions contemplated hereby. The provisions of this
Section 15.19 shall survive the termination of this Agreement and the Closing. 
 [Signature Page Follows] 

  
 27 

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

							
	SELLER:
	
	GGT CRESCENT COOL SPRINGS TN VENTURE, LLC, a Delaware limited liability company
		
	By:	 	Crescent Cool Springs Venture, LLC, a Delaware limited liability company, its Operating Member
			
		 	By:	 	Crescent Communities, LLC, a Georgia limited liability company, its sole manager
				
		 		 	By:	 	 /s/ Brian J. Natwick

		 		 		 	Brian J. Natwick, President-Multifamily Division
	
	PURCHASER:
	
	SHLP ACQUISITION, LLC, a Delaware limited liability company
		
	By:	 	Simpson Housing LLLP, a Delaware limited liability limited partnership
			
		 	By:	 	Colomba LLC, a Delaware limited liability company
				
		 		 	By:	 	 /s/ Scott. D. Healy

		 		 	Name:	 	Scott D. Healy
		 		 	Title:	 	Senior Vice President

  
 28 

 EXHIBIT A 

LEGAL DESCRIPTION 

Intentionally Omitted 
 EXHIBIT
B 
 ESCROW AGREEMENT 

Intentionally Omitted 

EXHIBIT C 
 FORM
OF SPECIAL WARRANTY DEED 
 Intentionally Omitted 

EXHIBIT A 

PERMITTED EXCEPTIONS 

Intentionally Omitted 

EXHIBIT “B” 

TO SPECIAL WARRANTY DEED 

RESTRICTIONS AGAINST CONDOMINIUM CONVERSION 

Intentionally Omitted 
 EXHIBIT
A 
 PERMITTED EXCEPTIONS 

Intentionally Omitted 

EXHIBIT D 
 FORM
OF BILL OF SALE 
 Intentionally Omitted 

EXHIBIT A 
 REAL
PROPERTY DESCRIPTION 
 Intentionally Omitted 

 EXHIBIT B 

PERSONAL PROPERTY DESCRIPTION 

Intentionally Omitted 

EXHIBIT E 
 FORM
OF ASSIGNMENT AND ASSUMPTION AGREEMENT 
 Intentionally Omitted 

EXHIBIT A 
 Real
Property Description 
 Intentionally Omitted 

EXHIBIT B 
 Leases,
Licenses and Security Deposits 
 Intentionally Omitted 

EXHIBIT C 
 Contracts

 Intentionally Omitted 

EXHIBIT F 
 FORM OF
TENANT NOTIFICATION LETTER 
 Intentionally Omitted 

SCHEDULE 1.3 

PERSONAL PROPERTY LIST 

Intentionally Omitted 

SCHEDULE 1.4 
 RENT
ROLL 
 Intentionally Omitted 

 SCHEDULE 1.5 

LICENSES 
 NONE 

SCHEDULE 1.8 

CONTRACTS 
 Intentionally
Omitted 
 SCHEDULE 6.1.3 

LITIGATION 
 NONE 

SCHEDULE 6.1.8 

VIOLATIONS OF LAW 
 NONEEXHIBIT 4.1

	
 
    

 

INDENTURE

 

between

 

FORD CREDIT AUTO LEASE TRUST 20   -     ,
 as Issuer

 

and

 

                                                                  ,
 as Indenture Trustee

 

Dated as of            , 20     

	
 
    

 

 

TABLE OF CONTENTS

 

	
ARTICLE I   USAGE AND DEFINITIONS
    	
1
    
	
Section 1.1.
    	
Usage and Definitions
    	
1
    
	
Section 1.2.
    	
Incorporation by   Reference of Trust Indenture Act
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE II   THE NOTES
    	
2
    
	
Section 2.1.
    	
Form of Notes
    	
2
    
	
Section 2.2.
    	
Execution,   Authentication and Delivery
    	
2
    
	
Section 2.3.
    	
Tax Treatment
    	
3
    
	
Section 2.4.
    	
Note Register
    	
3
    
	
Section 2.5.
    	
Registration of   Transfer and Exchange
    	
4
    
	
Section 2.6.
    	
[Rule 144A Notes]
    	
5
    
	
Section 2.7.
    	
Mutilated, Destroyed,   Lost or Stolen Notes
    	
6
    
	
Section 2.8.
    	
Persons Deemed Owners
    	
7
    
	
Section 2.9.
    	
Payments on Notes
    	
7
    
	
Section 2.10.
    	
Cancellation of Notes
    	
8
    
	
Section 2.11.
    	
Release of Collateral
    	
8
    
	
Section 2.12.
    	
Book-Entry Notes
    	
8
    
	
Section 2.13.
    	
Definitive Notes
    	
9
    
	
Section 2.14.
    	
Authenticating Agents
    	
9
    
	
Section 2.15.
    	
Note Paying Agents
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE III   COVENANTS, REPRESENTATIONS AND WARRANTIES
    	
10
    
	
Section 3.1.
    	
Payment of Principal   and Interest
    	
10
    
	
Section 3.2.
    	
Maintenance of Office   or Agency
    	
10
    
	
Section 3.3.
    	
Money for Payments To   Be Held in Trust
    	
10
    
	
Section 3.4.
    	
Existence
    	
11
    
	
Section 3.5.
    	
Protection of   Collateral
    	
11
    
	
Section 3.6.
    	
Performance of   Obligations
    	
12
    
	
Section 3.7.
    	
Negative Covenants
    	
12
    
	
Section 3.8.
    	
Opinions on Collateral
    	
13
    
	
Section 3.9.
    	
Annual Certificate of   Compliance
    	
13
    
	
Section 3.10.
    	
Merger and   Consolidation; Transfer of Assets
    	
13
    
	
Section 3.11.
    	
Successor or Transferee
    	
14
    
	
Section 3.12.
    	
No Other Activities
    	
15
    
	
Section 3.13.
    	
Further Acts and   Documents
    	
15
    
	
Section 3.14.
    	
Restricted Payments
    	
15
    
	
Section 3.15.
    	
Notice of Events of   Default
    	
15
    
	
Section 3.16.
    	
Review of Issuer’s   Records
    	
15
    
	
Section 3.17.
    	
Issuer’s   Representations and Warranties
    	
15
    
	
Section 3.18.
    	
Issuer’s   Representations and Warranties About Security Interest
    	
16
    
	
Section 3.19.
    	
[Calculation Agent]
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   SATISFACTION AND DISCHARGE
    	
18
    
	
Section 4.1.
    	
Satisfaction and   Discharge of Indenture
    	
18
    

 

i

 

	
ARTICLE V   EVENTS OF DEFAULT; REMEDIES
    	
19
    
	
Section 5.1.
    	
Events of Default
    	
19
    
	
Section 5.2.
    	
Acceleration of   Maturity; Rescission
    	
19
    
	
Section 5.3.
    	
Collection of   Indebtedness by Indenture Trustee
    	
20
    
	
Section 5.4.
    	
Trustee May File   Proofs of Claim
    	
20
    
	
Section 5.5.
    	
Enforcement of Claims   Without Possession of Notes
    	
21
    
	
Section 5.6.
    	
Remedies; Priorities
    	
21
    
	
Section 5.7.
    	
Optional Preservation   of Collateral
    	
23
    
	
Section 5.8.
    	
Limitation on Suits
    	
23
    
	
Section 5.9.
    	
Unconditional Rights to   Receive Principal and Interest
    	
24
    
	
Section 5.10.
    	
Restoration of Rights   and Remedies
    	
24
    
	
Section 5.11.
    	
Rights and Remedies   Cumulative
    	
24
    
	
Section 5.12.
    	
Delay or Omission Not a   Waiver
    	
24
    
	
Section 5.13.
    	
Control by Noteholders
    	
24
    
	
Section 5.14.
    	
Waiver of Defaults and   Events of Default
    	
25
    
	
Section 5.15.
    	
Agreement to Pay Costs
    	
25
    
	
Section 5.16.
    	
Waiver of Stay or   Extension Laws
    	
25
    
	
Section 5.17.
    	
Performance and   Enforcement of Obligations
    	
26
    
	
 
    	
 
    	
 
    
	
ARTICLE VI   INDENTURE TRUSTEE
    	
26
    
	
Section 6.1.
    	
Indenture Trustee’s   Obligations
    	
26
    
	
Section 6.2.
    	
Indenture Trustee’s   Rights
    	
27
    
	
Section 6.3.
    	
Indenture Trustee’s   Individual Rights
    	
29
    
	
Section 6.4.
    	
Indenture Trustee’s   Disclaimer
    	
29
    
	
Section 6.5.
    	
Notice of Defaults
    	
29
    
	
Section 6.6.
    	
Reports by Indenture   Trustee
    	
29
    
	
Section 6.7.
    	
Compensation and   Indemnity
    	
30
    
	
Section 6.8.
    	
Resignation or Removal   of Indenture Trustee
    	
31
    
	
Section 6.9.
    	
Merger or   Consolidation; Transfer of Assets
    	
32
    
	
Section 6.10.
    	
Appointment of Separate   Trustee or Co-Trustee
    	
32
    
	
Section 6.11.
    	
Eligibility;   Disqualification
    	
33
    
	
Section 6.12.
    	
Preferential Collection   of Claims Against Issuer
    	
34
    
	
Section 6.13.
    	
Review of Records
    	
34
    
	
Section 6.14.
    	
Indenture Trustee’s   Representations and Warranties
    	
35
    
	
Section 6.15.
    	
Obligation to Update   Disclosure
    	
36
    
	
Section 6.16.
    	
Reporting of   Reallocations of Leases and Leased Vehicles
    	
36
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   NOTEHOLDER COMMUNICATIONS AND REPORTS
    	
37
    
	
Section 7.1.
    	
Noteholder   Communications
    	
37
    
	
Section 7.2.
    	
Noteholder Demand for   Asset Representations Review
    	
38
    
	
Section 7.3.
    	
Reports by Issuer
    	
38
    
	
Section 7.4.
    	
Reports by Indenture   Trustee
    	
39
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII   ACCOUNTS, DISTRIBUTIONS AND RELEASES
    	
39
    
	
Section 8.1.
    	
Collection of Funds
    	
39
    
	
Section 8.2.
    	
Bank Accounts;   Distributions
    	
40
    
	
Section 8.3.
    	
Bank Accounts
    	
42
    
	
Section 8.4.
    	
Release of Collateral
    	
43
    

 

ii

 

	
ARTICLE IX   AMENDMENTS
    	
44
    
	
Section 9.1.
    	
Amendments Without   Consent of Noteholders
    	
44
    
	
Section 9.2.
    	
Amendments with Consent   of Controlling Class
    	
45
    
	
Section 9.3.
    	
Execution of Amendments
    	
46
    
	
Section 9.4.
    	
Effect of Amendment
    	
46
    
	
Section 9.5.
    	
Conformity with TIA
    	
46
    
	
Section 9.6.
    	
Reference in Notes to   Supplemental Indentures
    	
46
    
	
 
    	
 
    	
 
    
	
ARTICLE X   REDEMPTION OF NOTES
    	
46
    
	
Section 10.1.
    	
Redemption
    	
46
    
	
 
    	
 
    	
 
    
	
ARTICLE XI   OTHER AGREEMENTS
    	
47
    
	
Section 11.1.
    	
No Petition
    	
47
    
	
Section 11.2.
    	
Limited Recourse;   Subordination of Claims Against Titling Companies
    	
48
    
	
Section 11.3.
    	
Limited Recourse;   Subordination of Claims against Depositor
    	
48
    
	
Section 11.4.
    	
Issuer Orders;   Certificates and Opinions
    	
49
    
	
Section 11.5.
    	
Acts of Noteholders
    	
51
    
	
Section 11.6.
    	
Conflict with Trust   Indenture Act
    	
51
    
	
Section 11.7.
    	
Issuer Obligation
    	
51
    
	
 
    	
 
    	
 
    
	
ARTICLE XII   MISCELLANEOUS
    	
52
    
	
Section 12.1.
    	
Benefits of Indenture;   Third-Party Beneficiaries
    	
52
    
	
Section 12.2.
    	
Notices
    	
52
    
	
Section 12.3.
    	
GOVERNING LAW
    	
52
    
	
Section 12.4.
    	
Submission to   Jurisdiction
    	
53
    
	
Section 12.5.
    	
WAIVER OF JURY TRIAL
    	
53
    
	
Section 12.6.
    	
No Waiver; Remedies
    	
53
    
	
Section 12.7.
    	
Severability
    	
53
    
	
Section 12.8.
    	
Headings
    	
53
    
	
Section 12.9.
    	
Counterparts
    	
53
    
	
 
    	
 
    	
 
    
	
Schedule A
    	
Notice Addresses
    	
SA-1
    
	
Exhibit A
    	
Form of Notes
    	
EA-1
    
				

 

iii

 

INDENTURE, dated as of            , 20   (this “Indenture”), between FORD CREDIT AUTO LEASE TRUST 20  -  , a Delaware statutory trust, as Issuer, and                                 , a                                             , as Indenture Trustee for the benefit of the Secured Parties.

 

In connection with a securitization transaction sponsored by Ford Credit, the Issuer will issue Notes secured by the 20  -   Exchange Note issued by the Titling Companies and purchased by the Issuer from the Depositor, who purchased it from Ford Credit.  The 20  -   Exchange Note is secured by a reference pool of Leases and Leased Vehicles purchased by the Titling Companies from motor vehicle dealers.

 

The parties agree as follows:

 

GRANTING CLAUSE

 

The Issuer Grants to the Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of the Secured Parties, all the Issuer’s right, title and interest in, to and under, whether now owned or later acquired, the Collateral.

 

This Grant is made in trust to secure (a) the payment of principal of, interest on and other amounts owing on the Notes as stated in this Indenture and (b) compliance by the Issuer with this Indenture for the benefit of the Secured Parties.

 

The Titling Companies jointly and severally Grant to the Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of the Secured Parties, all the Titling Companies’ right, title and interest in, to and under, whether now owned or existing or later acquired in, the Titling Company Collateral Accounts.  This Grant is made in trust to secure (a) the payment of principal of, interest on and other amounts owing on, the 20  -   Exchange Note as stated in the Exchange Note Supplement and (b) compliance by the Titling Companies with the Exchange Note Supplement for the benefit of the Secured Parties.

 

The Indenture Trustee acknowledges these Grants, accepts the trusts under this Indenture according to this Indenture and agrees to perform the obligations stated in this Indenture and the Exchange Note Supplement so that the interests of the Secured Parties may be adequately and effectively protected.

 

ARTICLE I
 USAGE AND DEFINITIONS

 

Section 1.1.                                 Usage and Definitions.  Capitalized terms used but not defined in this Indenture are defined in Appendix 1 to the 20  -   Exchange Note Supplement, dated as of                    , 20   (the “Exchange Note Supplement”), to the Second Amended and Restated Credit and Security Agreement, dated as of July 22, 2005, as amended and restated as of December 1, 2015 (the “Credit and Security Agreement”), among the CAB East LLC and CAB West LLC, as Borrowers, U.S. Bank National Association, as Administrative Agent, HTD Leasing LLC, as Collateral Agent, and Ford Motor Credit Company LLC, as Lender and Servicer, or in Appendix A to the Credit and Security Agreement.  Appendix 1 and Appendix A

 

 

also contain usage rules that apply to this Indenture.  Appendix 1 and Appendix A are incorporated by reference into this Indenture.

 

Section 1.2.                                 Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a part of the TIA, it is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

 

“indenture securities” means the Notes;

 

“indenture security holder” means a Noteholder;

 

“indenture to be qualified” means this Indenture;

 

“indenture trustee” or “institutional trustee” means the Indenture Trustee; and

 

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

 

Any other TIA terms used in this Indenture that are defined in the TIA, defined by TIA reference to another statute or defined by Securities and Exchange Commission rule have the meaning assigned to them by those definitions.

 

ARTICLE II
 THE NOTES

 

Section 2.1.                                 Form of Notes.

 

(a)                                 Form.  Each Class of Notes will be in substantially the form of Exhibit A with variations required or permitted by this Indenture.  The Notes may have marks of identification and legends or endorsements as determined by the Responsible Person of the Issuer executing the Notes.  The physical Notes will be produced by a method determined by the Responsible Person of the Issuer executing the Notes.

 

(b)                                 Incorporation by Reference.  Each Note will be dated the date of its authentication.  The terms of the Notes in Exhibit A are part of this Indenture and are incorporated into this Indenture by reference.

 

Section 2.2.                                 Execution, Authentication and Delivery.

 

(a)                                 Execution.  A Responsible Person of the Issuer will execute the Notes for the Issuer.  The signature of the Responsible Person on the Notes may be manual or facsimile.  Notes having the manual or facsimile signature of an individual who was a Responsible Person of the Issuer will bind the Issuer, even if the individual has ceased to be a Responsible Person before the authentication and delivery of the Notes or was not a Responsible Person on the issuance date of the Notes.

 

2

 

(b)                                 Authentication and Delivery.  The Indenture Trustee will, on Issuer Order, authenticate and deliver the Notes for original issue in the Classes, Note Interest Rates and initial Note Balances as stated below.

 

	
Class
    	
 
    	
Note Interest Rate
    	
 
    	
Initial Note Balance
    	
 
    
	
Class A-1   Notes
    	
 
    	
%
    	
 
    	
$
    	
[     ]
    	
 
    
	
Class A-2[a]   Notes
    	
 
    	
%
    	
 
    	
$
    	
[     ]
    	
 
    
	
[Class A-2b   Notes
    	
 
    	
one-month LIBOR +      %]
    	
 
    	
$
    	
[     ]
    	
 
    
	
Class A-3   Notes
    	
 
    	
%
    	
 
    	
$
    	
[     ]
    	
 
    
	
Class A-4   Notes
    	
 
    	
%
    	
 
    	
$
    	
[     ]
    	
 
    
	
Class B   Notes
    	
 
    	
%
    	
 
    	
$
    	
[     ]
    	
 
    
	
Class C   Notes
    	
 
    	
%
    	
 
    	
$
    	
[     ]
    	
 
    

 

(c)                                  Denomination.  The Notes will initially be issued as Book-Entry Notes.  The Notes, except for the Rule 144A Notes, will be issued in minimum denominations of $1,000 and in multiples of $1,000.  The Rule 144A Notes will be issued in minimum denominations of $100,000 and in multiples of $1,000 in excess of $100,000.  However, one Note of each Class may be issued in a different amount if it exceeds the minimum denomination for the Class.

 

(d)                                 Certificate of Authentication.  No Note will have the benefit of this Indenture or be valid unless it has a certificate of authentication substantially in the form included in Exhibit A manually executed by a Responsible Person of the Indenture Trustee.  The certificate of authentication on a Note will be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

 

Section 2.3.                                 Tax Treatment.  The Issuer intends that Notes owned or beneficially owned by a Person other than Ford Credit or its Affiliates will be indebtedness of the Issuer for U.S. federal, State and local income and franchise tax purposes.  The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner by its acceptance of an interest in the applicable Book-Entry Note), agree to treat the Notes for U.S. federal, State and local income and franchise tax purposes as indebtedness of the Issuer.

 

Section 2.4.                                 Note Register.  The Issuer appoints the Indenture Trustee to be the “Note Registrar” and to keep a register (the “Note Register”) for the purpose of registering Notes and transfers and exchanges of Notes.  On resignation of the Note Registrar, the Issuer will promptly appoint a successor or, if it elects not to make the appointment, assume the obligations of Note Registrar.  If the Issuer appoints a Person other than the Indenture Trustee as Note Registrar, (i) the Issuer will notify the Indenture Trustee of the appointment and (ii) the Indenture Trustee will have the right to rely on a certificate executed by an officer of the Note Registrar listing the names and addresses of the Noteholders and the principal amounts and number of the Notes.  Each of the Indenture Trustee (if it is not the Note Registrar), the Issuer and the Administrator will have the right to inspect the Note Register at reasonable times and to receive copies of the Note Register.

 

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Section 2.5.                                 Registration of Transfer and Exchange.

 

(a)                                 Transfer of Notes.  A Noteholder may transfer a Note by surrendering the Note for registration of transfer at the office or agency of the Issuer maintained under Section 3.2.  If the requirements of Section 8-401(a) of the UCC are met, the Issuer will execute and the Indenture Trustee will authenticate and deliver to the Noteholder, in the name of the transferee or transferees, new Notes of the same Class, in the same principal amount.

 

(b)                                 Exchange of Notes.  A Noteholder may exchange Notes for other Notes of the same Class by surrendering the Notes to be exchanged at the office or agency of the Issuer maintained under Section 3.2.  If the requirements of Section 8-401(a) of the UCC are met, the Issuer will execute, the Indenture Trustee will authenticate and the Noteholder will receive from the Indenture Trustee new Notes of the same Class, in the same principal amount.

 

(c)                                  Valid Obligation.  Notes issued on the registration of transfer or exchange of Notes will be the valid obligations of the Issuer, evidencing the same debt, and have the same benefits under this Indenture as the Notes surrendered for registration of transfer or exchange.

 

(d)                                 Surrendered Notes.  Every Note surrendered for registration of transfer or exchange will be (i) duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Note Registrar or the Indenture Trustee duly executed by, the Noteholder of the Note or the Noteholder’s authorized attorney, with the signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar including membership or participation in the Securities Transfer Agents Medallion Program or another “signature guarantee program”, according to the Exchange Act and (ii) accompanied by other documents the Indenture Trustee may require.

 

(e)                                  No Service Charge.  None of the Issuer, the Note Registrar or the Indenture Trustee will impose a service charge on a Noteholder for the registration of transfer or exchange of Notes.  The Issuer, the Note Registrar or the Indenture Trustee may require the Noteholder to pay an amount to cover taxes or other governmental charges that may be imposed for the registration of transfer or exchange of the Notes.

 

(f)                                   Registration of Transfers and Exchanges.  The Note Register will register transfers and exchanges of Notes in the Note Register.  However, neither the Issuer nor the Note Registrar will be required to register transfers or exchanges of Notes for which the next Payment Date is not more than 15 days after the requested date of transfer or exchange or which have been called for redemption.

 

(g)                                  ERISA Representations.  Each Note Owner that is subject to Title I of ERISA, Section 4975 of the Code or Similar Law, by accepting an interest or participation in a Note, is deemed to represent that its purchase, holding and disposition of that interest or participation is not and will not result in a non-exempt prohibited transaction under Title I of ERISA or Section 4975 of the Code due to the applicability of a statutory or administrative exemption from the prohibited transaction rules (or, if the Note Owner is subject to Similar Law, the purchase, holding and disposition is not and will not result in a non-exempt violation of that Similar Law).

 

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Section 2.6.                                 [Rule 144A Notes].

 

(a)                                 [Rule 144A Notes Not Registered.  The Rule 144A Notes have not been registered under the Securities Act or any State securities laws.  None of the Issuer, the Note Registrar or the Indenture Trustee is obligated to register the Rule 144A Notes under the Securities Act or any State securities or “blue sky” laws or to take other action not required under this Indenture or the Trust Agreement to permit the transfer of a Rule 144A Note without registration.  The Issuer, at the direction of the Depositor or the Administrator, may elect to register, or cause the registration of, the Rule 144A Notes under the Securities Act and applicable State securities laws.  In this case, the Issuer will deliver, or cause to be delivered, to the Indenture Trustee and the Note Registrar the Opinions of Counsel, Officer’s Certificates and other information necessary to effect the registration.

 

(b)                                 Restrictions on Transfer.  Until the Rule 144A Notes have been registered under the Securities Act and any applicable State securities laws under Section 2.6(a), no Rule 144A Note may be sold, transferred, assigned, participated, pledged or disposed of (each, a “Rule 144A Note Transfer”) except according to this Section 2.6, and a Rule 144A Note Transfer in violation of this Section 2.6 will be null and void (a “Void Rule 144A Note Transfer”).

 

(c)                                  Note Legend and Transferee Representation.  Each Rule 144A Note will bear the legend in Exhibit A.  As a condition to the registration of a Rule 144A Note Transfer, the prospective transferee of the Rule 144A Note will be deemed to represent to the Indenture Trustee, the Note Registrar and the Issuer the following:

 

(i)                                     It understands that the Rule 144A Notes have not been registered under the Securities Act or any State securities or “blue sky” laws.

 

(ii)                                  It understands that Rule 144A Note Transfers are only permitted if made in compliance with the Securities Act and other applicable laws and only to a person who the holder reasonably believes is a “qualified institutional buyer” within the meaning of Rule 144A (a “QIB”).

 

(iii)                               It (A) is a QIB, (B) is aware that the sale to it is being made in reliance on Rule 144A and if it is acquiring the Rule 144A Notes or an interest or participation in the Rule 144A Notes for the account of another QIB, that other QIB is aware that the sale is being made in reliance on Rule 144A and (C) is acquiring the Rule 144A Notes or an interest or participation in the Rule 144A Notes for its own account or for the account of another QIB.

 

(iv)                              It is purchasing the Rule 144A Notes for its own account or for one or more investor accounts for which it is acting as fiduciary or agent, in each case for investment, and not with a view to offer, transfer, assign, participate, pledge or dispose of the Rule 144A Notes for a distribution that would violate the Securities Act.

 

(d)                                 Rule 144A Noteholder Agreement.  By acceptance of a Rule 144A Note, the Rule 144A Noteholder agrees with and represents to the Depositor, the Issuer and the Note Registrar, that no Rule 144A Note Transfer will be made unless (i) the registration requirements of the Securities Act and applicable State securities laws have been complied with for the Rule 144A

 

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Note according to Section 2.6(a), (ii) the Rule 144A Note Transfer is to the Depositor or its Affiliates or (iii) the Rule 144A Note Transfer is exempt from the registration requirements under the Securities Act because the Rule 144A Note Transfer is in compliance with Rule 144A, to a transferee who the transferor reasonably believes is a QIB that is purchasing for its own account or for the account of a QIB and to whom notice is given that the Rule 144A Note Transfer is being made in reliance on Rule 144A.

 

(e)                                  Rule 144A Information.  The Administrator will make available to the prospective transferor and transferee of a Rule 144A Note information requested to satisfy the requirements of paragraph (d)(4) of Rule 144A (the “Rule 144A Information”). The Rule 144A Information will include any of the following items requested by the prospective transferee:

 

(i)                                     the offering memorandum, if any, relating to the Rule 144A Notes and any amendments or supplements to the offering memorandum;

 

(ii)                                  the Monthly Investor Report for each Payment Date before the request;

 

(iii)                               copies of the Transaction Documents, including any amendments; and

 

(iv)                              any other information reasonably available to the Administrator that may be considered Rule 144A Information.]

 

Section 2.7.                                 Mutilated, Destroyed, Lost or Stolen Notes.

 

(a)                                 Replacement Notes.  If a mutilated Note is surrendered to the Indenture Trustee or the Indenture Trustee receives evidence of the destruction, loss or theft of a Note, the Issuer will execute and, on Issuer Request, the Indenture Trustee will authenticate and deliver a replacement Note of the same Class and principal amount in exchange for or in place of the Note if the following conditions are met: (i) the Indenture Trustee receives security or indemnity to hold the Issuer and the Indenture Trustee harmless, (ii) none of the Issuer, the Note Registrar or the Indenture Trustee have received notice that the Note has been acquired by a protected purchaser, as defined in Section 8-303 of the UCC and (iii) the requirements of Section 8-405 of the UCC are met.  However, if a destroyed, lost or stolen Note (but not a mutilated Note) is due and payable within 15 days or has been called for redemption, instead of issuing a replacement Note, the Issuer may pay the destroyed, lost or stolen Note when so due or payable or on the Redemption Date without surrender of the Note.  If a protected purchaser of the original Note in place of which the replacement Note was issued (or the payment made) presents for payment the original Note, the Issuer and the Indenture Trustee may recover the replacement Note (or the payment) from the Person to whom it was delivered or a Person taking the replacement Note (or the payment) from the Person to whom the replacement Note (or the payment) was delivered or an assignee of that Person, except a protected purchaser, and may recover on the security or indemnity provided for the replacement Note (or the payment) for any fee, expense, loss, damage or liability incurred by the Issuer or the Indenture Trustee for the replacement Note (or the payment).

 

(b)                                 Taxes, Charges and Expenses.  On the issuance of a replacement Note under Section 2.7(a), (i) the Issuer may require the Noteholder of the Note to pay an amount to cover any taxes or other governmental charges imposed and any other reasonable expenses incurred for

 

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the replacement Note, (ii) the Indenture Trustee will, for a mutilated Note, cancel the Note and (iii) the Note Registrar will record in the Note Register that the destroyed, lost or stolen Note no longer has the benefits of this Indenture.

 

(c)                                  Additional Obligation.  Each replacement Note issued under Section 2.7(a) will be an original additional contractual obligation of the Issuer and have the benefits of this Indenture equally and proportionately with other Notes of the same Class duly issued under this Indenture.

 

(d)                                 Sole Remedy.  This Section 2.7 states the sole remedy available to Noteholders for the replacement or payment of mutilated, destroyed, lost or stolen Notes.

 

Section 2.8.                                 Persons Deemed Owners.  On any date, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name a Note is registered as of that date as the owner of the Note for all purposes, including receiving payments of principal of and interest on the Note, without regard to any notice or other information to the contrary.

 

Section 2.9.                                 Payments on Notes.

 

(a)                                 Interest Accrual.  Each Class of Notes will accrue interest on its Note Balance for each Interest Period until the Note Balance has been paid in full at a rate per annum equal to its Note Interest Rate for that Interest Period.  Interest on the Class A-1 [and Class A-2b] Notes will be calculated for each Interest Period on the basis of the actual number of days in the Interest Period and a 360-day year.  Interest on the Notes (other than the Class A-1 [and Class A-2b] Notes) for each Interest Period will be calculated on the basis of a 360-day year consisting of twelve 30-day months.  Interest on each Note for each Interest Period will be due and payable on the related Payment Date.

 

(b)                                 Principal.  The principal of each Class of Notes will be payable in installments on each Payment Date according to Article VIII.  The Note Balance of each Class of Notes will be due and payable on the earlier of the Redemption Date and its Final Scheduled Payment Date.  The Note Balance of each Class of Notes will be due and payable on the date the Notes are declared to be, or have automatically become, immediately due and payable according to Section 5.2(a).

 

(c)                                  Monthly Payment of Interest and Principal.  Interest and principal payments on each Class of Notes will be made pro rata to the Registered Noteholders of that Class on each Payment Date.  For Book-Entry Notes, payments will be made by wire transfer to the account designated by the nominee of the Clearing Agency according to Section 2.12.  For Definitive Notes, payments will be made (i) if the Noteholder has given to the Note Registrar instructions at least five Business Days before that Payment Date and the aggregate original principal amount of the Noteholder’s Notes is at least $1,000,000, by wire transfer to the account of the Registered Noteholder or (ii) by check mailed first class mail, postage prepaid, to the Registered Noteholder’s address as it appears on the Note Register on the related Record Date.  Amounts paid by wire transfers or checks that is returned undelivered will be held according to Section 3.3.

 

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(d)                                 Payment of Final Installment.  The final installment of principal (whether payable by wire transfer or check) of each Note on a Payment Date, the Redemption Date or the Final Scheduled Payment Date will be payable only on presentation and surrender of the Note.  The Indenture Trustee will notify each Registered Noteholder of the date the Issuer expects to pay the final installment on any of the Notes, which notice will be delivered no later than five days before that date, and the place where the Notes may be presented and surrendered for payment.

 

Section 2.10.                          Cancellation of Notes.  Any Person that receives a Note surrendered for payment, registration of transfer, exchange or redemption will deliver the Note to the Indenture Trustee and the Indenture Trustee will promptly cancel it.  The Issuer may surrender to the Indenture Trustee for cancellation Notes previously authenticated and delivered under this Indenture which the Issuer may have acquired, and the Indenture Trustee will promptly cancel them.  No Notes will be authenticated in place of or in exchange for Notes cancelled as stated in this Section 2.10.  The Indenture Trustee may hold or dispose of cancelled Notes according to its standard retention or disposal policy unless the Issuer directs, by Issuer Order, that they be destroyed or returned to it.

 

Section 2.11.                          Release of Collateral.  The Indenture Trustee will release property from the Lien of this Indenture only according to Sections 8.4 and 10.1.

 

Section 2.12.                          Book-Entry Notes.

 

(a)                                 Issuance and Registration.  The Notes will be issued as Book-Entry Notes on the Closing Date.  The Book-Entry Notes, on original issuance, will be issued in the form of printed Notes representing the Book-Entry Notes and delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer.  The Book-Entry Notes will be registered initially on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency.

 

(b)                                 Sole Noteholder.  The Note Registrar and the Indenture Trustee may deal with the Clearing Agency as the sole Noteholder of the Book-Entry Notes for all purposes of this Indenture and will not be obligated to the Note Owners, except as stated in Section 7.2.

 

(c)                                  Rights.  The rights of Note Owners may be exercised only through the Clearing Agency and will be limited to those established by law and agreements between the Note Owners and the Clearing Agency and/or its participants under the DTC Letter.

 

(d)                                 Clearing Agency Obligations.  The Clearing Agency will make book-entry transfers among its participants and receive and transmit payments of principal of and interest on the Book-Entry Notes to the participants.

 

(e)                                  Representation of Noteholders.  If this Indenture requires or permits actions to be taken based on instructions or directions of Noteholders of a stated percentage of the Note Balance of the Notes (or the Controlling Class), the Clearing Agency will be deemed to represent those Noteholders only if it has received instructions to that effect from Note Owners and/or the Clearing Agency’s participants owning or representing, the required percentage of the beneficial interest of the Notes (or the Controlling Class) and has delivered the instructions to the Indenture Trustee.

 

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(f)                                   Conflicts.  If this Section 2.12 conflicts with other terms of this Indenture, this Section 2.12 will control.

 

Section 2.13.                          Definitive Notes.  No Note Owner will receive a definitive, fully registered Note (a “Definitive Note”) representing the Note Owner’s interest in the Note unless and until (a) the Administrator notifies the Indenture Trustee that the Clearing Agency is no longer willing or able to properly discharge its responsibilities as depository for the Book-Entry Notes and the Administrator is unable to reach an agreement on satisfactory terms with a qualified successor, (b) the Administrator notifies the Indenture Trustee that it elects to terminate the book-entry system through the Clearing Agency or (c) after the occurrence and during the continuation of an Event of Default or a Reference Pool Servicer Termination Event for the 20  -   Reference Pool, Note Owners of a majority of the Note Balance of the Controlling Class notify the Indenture Trustee and the Clearing Agency that they elect to terminate the book-entry system through the Clearing Agency.  In these cases, the Clearing Agency will notify Note Owners and the Indenture Trustee of the availability of Definitive Notes.  After the Clearing Agency has surrendered the printed Notes representing the Book-Entry Notes and delivered the registration instructions to the Indenture Trustee, the Issuer will execute and the Indenture Trustee, on Issuer Request, will authenticate the Definitive Notes according to the instructions of the Clearing Agency.  None of the Issuer, the Note Registrar or the Indenture Trustee will be liable for delay in delivery of the instructions and may conclusively rely, and will be protected in relying, on the instructions.  On the issuance of Definitive Notes to Note Owners, the Indenture Trustee will recognize the holders of the Definitive Notes as Noteholders.

 

Section 2.14.                          Authenticating Agents.

 

(a)                                 Appointment.  The Indenture Trustee may appoint one or more Persons as authenticating agents for the Notes (each, an “Authenticating Agent”) with the power to act on its behalf and subject to its direction in the authentication of Notes for issuances, transfers, exchanges and replacements.  The authentication of Notes by an Authenticating Agent under this Section 2.14 is deemed to be the authentication of Notes “by the Indenture Trustee.”  If no Authenticating Agent is appointed, the Indenture Trustee will be the Authenticating Agent for the Notes.

 

(b)                                 Resignation and Termination.  An Authenticating Agent may resign by notifying the Indenture Trustee and the Owner Trustee.  The Indenture Trustee may terminate the agency of an Authenticating Agent by notifying the Authenticating Agent and the Owner Trustee.

 

Section 2.15.                          Note Paying Agents.

 

(a)                                 Appointment.  The Indenture Trustee may appoint one or more Note Paying Agents that meet the eligibility standards for the Indenture Trustee in Section 6.11(a).  If no Note Paying Agent is appointed, then the Indenture Trustee will be the Note Paying Agent for the Notes.  Each Note Paying Agent will have the power to make distributions from the Bank Accounts.

 

(b)                                 Resignation and Termination.  A Note Paying Agent may resign by notifying the Indenture Trustee, the Administrator and the Issuer.  The Indenture Trustee may terminate the

 

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agency of a Note Paying Agent by notifying the Note Paying Agent, the Administrator and the Issuer.

 

ARTICLE III
 COVENANTS, REPRESENTATIONS AND WARRANTIES

 

Section 3.1.                                 Payment of Principal and Interest.  The Issuer will duly and punctually pay the principal of and interest on the Notes according to the Notes and this Indenture.  Amounts withheld under the Code or State or local tax law by any Person from a payment to a Noteholder will be considered as having been paid by the Issuer to the Noteholder.

 

Section 3.2.                                 Maintenance of Office or Agency.  The Issuer will maintain an office or agency in the Borough of Manhattan, The City of New York, where Notes may be surrendered for registration of transfer or exchange, and where notices to and demands on the Issuer for the Notes and this Indenture may be served.  The Issuer initially appoints the Indenture Trustee to serve as its agent for those purposes.  The Issuer will promptly notify the Indenture Trustee of a change in the location of the office or agency.  If the Issuer fails to maintain the office or agency or fails to furnish the Indenture Trustee with the address of the office or agency, any surrender, notices and demands may be made or served at the Corporate Trust Office, and the Issuer appoints the Indenture Trustee as its agent to receive them.

 

Section 3.3.                                 Money for Payments To Be Held in Trust.

 

(a)                                 Payments on the Notes.  Payments on the Notes that are to be made from amounts withdrawn from the Bank Accounts will be made on behalf of the Issuer by the Indenture Trustee or a Note Paying Agent.  No amounts withdrawn for payments on the Notes may be paid over to the Issuer, except as stated in this Section 3.3.

 

(b)                                 Agreement by Note Paying Agent.  The Indenture Trustee will, and will cause each Note Paying Agent to, execute and deliver to the Indenture Trustee, an instrument in which the Note Paying Agent agrees with the Indenture Trustee to:

 

(i)                                     hold funds held by it for the payment of amounts due on the Notes in trust for the benefit of the Persons entitled to that money and pay it to those Persons under this Indenture;

 

(ii)                                  notify the Indenture Trustee of a default by the Issuer of which it has actual knowledge in the making of a required payment on the Notes;

 

(iii)                               during the continuance of a default, on the request of the Indenture Trustee, immediately pay to the Indenture Trustee money held by it in trust;

 

(iv)                              immediately resign as a Note Paying Agent and immediately pay to the Indenture Trustee amounts held by it in trust if it ceases to meet the eligibility standards in Section 6.11 for the Indenture Trustee; and

 

(v)                                 comply with all requirements of law for withholding and reporting requirements for payments on the Notes.

 

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(c)                                  Payment Direction.  The Issuer may by Issuer Order, direct a Note Paying Agent to pay to the Indenture Trustee money held in trust by the Note Paying Agent, which money will be held by the Indenture Trustee on the same terms as the Note Paying Agent.  On a Note Paying Agent’s payment of money held in trust to the Indenture Trustee, the Note Paying Agent will be released from liability for such amounts.

 

(d)                                 Unclaimed Money.  Subject to applicable law, money held by the Indenture Trustee or a Note Paying Agent in trust under this Section 3.3 which remains unclaimed for two years after it became due and payable will be discharged from the trust and paid to the Issuer on Issuer Request.  After discharge and payment, the Noteholder of the Note will, as an unsecured general creditor, look only to the Issuer for payment of the amount due and unclaimed, and the Indenture Trustee or the Note Paying Agent will be released from liability for such amounts.  However, the Indenture Trustee or the Note Paying Agent, before making the payment, will publish once, at the expense and direction of the Issuer, in a newspaper customarily published on each Business Day in the English language and of general circulation in The City of New York, notice that the money remains unclaimed and that after a date stated in the notice, which must be at least 30 days from the date of publication, any unclaimed balance of the money then remaining will be paid to the Issuer.  The Indenture Trustee will also use other reasonable means to notify Noteholders of unclaimed payments.

 

Section 3.4.                                 Existence.  The Issuer will maintain its existence as a statutory trust under the Delaware Statutory Trust Act and will obtain and maintain its qualification in each jurisdiction in which the qualification is or will be necessary to protect the validity and enforceability of this Indenture, the Notes and the Collateral.

 

Section 3.5.                                 Protection of Collateral.

 

(a)                                 Amendments and Financing Statements.  The Issuer will (i) execute and deliver amendments to this Indenture and other documents, (ii) file or authorize and cause to be filed financing statements and amendments and continuations of those financing statements and (iii) take other action necessary or advisable to:

 

(A)                               maintain or preserve the Lien and security interest (and the priority of the security interest) of this Indenture;

 

(B)                               perfect, maintain perfection, publish notice of or protect the validity of a Grant made or to be made by this Indenture;

 

(C)                               enforce the Collateral; or

 

(D)                               maintain and defend title to the Collateral and the rights of the Indenture Trustee and the Secured Parties in the Collateral against the claims of all Persons subject to Permitted Liens and the Transaction Documents.

 

(b)                                 Authorization to File.  The Issuer authorizes the Administrator and the Indenture Trustee to file financing and continuation statements, and amendments to the statements, in the jurisdictions and with the filing offices as the Administrator or the Indenture Trustee may determine necessary or advisable to perfect the Indenture Trustee’s interest in the Collateral.  The

 

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financing and continuation statements may describe the Collateral as the Administrator or the Indenture Trustee may reasonably determine to perfect the Indenture Trustee’s interest in the Collateral.  The Administrator or the Indenture Trustee will promptly deliver to the Issuer file-stamped copies of, or filing receipts for, any financing statement, continuation statement and amendment to a previously filed financing statement.

 

(c)                                  Indenture Trustee Not Obligated.  The Indenture Trustee not obligated to (i) make a determination of whether filing financing or continuation statements, or amendments to the statements, is required or (ii) file any financing or continuation statements, or amendments to the statements, and will not be liable for failure to do so.

 

Section 3.6.                                 Performance of Obligations.

 

(a)                                 Performance of Obligations.  The Issuer will perform all of its obligations under the Transaction Documents and documents included in the Collateral.

 

(b)                                 Subcontracting.  The Issuer may contract with other Persons to assist it in performing its obligations under this Indenture.  Initially, the Issuer has contracted with the Servicer and the Administrator to assist the Issuer in performing its obligations under this Indenture.

 

(c)                                  Reference Pool Servicer Termination Event.  If the Issuer has knowledge of a Reference Pool Servicer Termination Event for the 20  -   Reference Pool, the Issuer will notify the Indenture Trustee and the Rating Agencies of the event and any action the Issuer is taking to correct the situation.  If a Reference Pool Servicer Termination Event results from the failure of the Servicer to perform its obligations under the Servicing Supplement and the Servicing Agreement, the Issuer will take reasonable steps available to cause the Servicer to correct the failure.

 

Section 3.7.                                 Negative Covenants.  So long as Notes are Outstanding, the Issuer will not, except as permitted in the Transaction Documents:

 

(a)                                 Dispose of Collateral.  Sell, transfer, exchange or dispose of the Collateral unless directed to do so by the Indenture Trustee;

 

(b)                                 No Release of Material Obligations.  Take action, and will use its commercially reasonable efforts to prevent any action from being taken by others, that would release any Person from any material obligation under a document included in the Collateral or that would impair the validity or enforceability of the Collateral or a document included in the Collateral;

 

(c)                                  Set-off.  Claim a credit on, or make a deduction from the payments of principal or interest on, the Notes (other than amounts withheld from payments under applicable law) or assert a claim against a Noteholder by reason of the payment of the taxes levied or assessed on the Issuer or the Collateral;

 

(d)                                 Dissolve or Liquidate.  Dissolve or liquidate;

 

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(e)                                  Liens.  Permit (i) the validity or effectiveness of this Indenture to be impaired, or permit the Lien of this Indenture to be amended, subordinated, terminated or discharged, or permit a Person to be released from obligations under this Indenture except in each case as permitted by this Indenture, (ii) any Lien, other than Permitted Liens, to be created on or extend to the Collateral or (iii) the Lien of this Indenture not to be a valid first priority security interest in the Collateral, other than Permitted Liens; or

 

(f)                                   Modification of Collateral.  Subject to Article IX, amend, modify, waive, terminate or surrender any Collateral or the Transaction Documents without the consent of the Indenture Trustee or the Noteholders of a majority of the Note Balance of the Notes and notifying the Rating Agencies.

 

Section 3.8.                                 Opinions on Collateral.

 

(a)                                 Opinion on Recording.  If this Indenture is subject to recording, the Issuer, at its expense, will record it and deliver an Opinion of Counsel to the Indenture Trustee stating that the recording is necessary either for the protection of the Secured Parties or for the enforcement of a right or remedy Granted to the Indenture Trustee under this Indenture.

 

(b)                                 Opinion on Perfection.  On the Closing Date, the Issuer will furnish to the Indenture Trustee an Opinion of Counsel stating that this Indenture and all financing statements have been properly recorded or filed to perfect the Lien created by this Indenture, or stating that in the opinion of that counsel no action is necessary to perfect the Lien.

 

(c)                                  Annual Opinion.  On or before April 30 of each year, starting in the year after the Closing Date, the Issuer will furnish to the Indenture Trustee an Opinion of Counsel either (i) stating that, in the opinion of that counsel, all action has been taken for the recording, filing, re-recording and refiling of this Indenture and all financing statements and continuation statements to maintain the Lien of this Indenture or (ii) stating that in the opinion of that counsel no action is necessary to maintain the Lien.

 

Section 3.9.                                 Annual Certificate of Compliance.  The Issuer will deliver to the Indenture Trustee within 90 days after the end of each year, starting in the year after the Closing Date, an Officer’s Certificate signed by a Responsible Person of the Issuer, stating that (a) a review of the Issuer’s activities and of its performance under this Indenture during the prior year has been made under a Responsible Person’s supervision and (b) to the Responsible Person’s knowledge, based on the review, the Issuer has fulfilled in all material respects its obligations under this Indenture throughout the prior year or, if there has been a failure to fulfill an obligation in any material respect, stating each failure known to the Responsible Person and the nature and status of the failure.  A copy of the Officer’s Certificate may be obtained by any Noteholder or Person certifying it is a Note Owner by a request to the Indenture Trustee at its Corporate Trust Office.  The Issuer’s obligation to deliver an Officer’s Certificate under this Section 3.9 will terminate on the payment in full of the Notes.

 

Section 3.10.                          Merger and Consolidation; Transfer of Assets.  The Issuer will not merge or consolidate with or into any other Person or transfer all or substantially all of its assets, unless:

 

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(a)                                 Surviving Person.  The Person (if other than the Issuer) formed by or surviving the merger or consolidation, or that acquires those assets, (i) is organized and existing under the laws of the United States or any State and (ii) assumes, by an indenture supplemental to this Indenture (unless the assumption happens by operation of law), executed and delivered to the Indenture Trustee, in form reasonably satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on the Notes and the performance of the other obligations under this Indenture and the other Transaction Documents to be performed by the Issuer;

 

(b)                                 Subordination.  For a transfer of the assets included in the Collateral, the Person who acquires those assets agrees by means of the supplemental indenture executed and delivered to the Indenture Trustee that (i) all right, title and interest transferred will be subject and subordinate to the rights of the Noteholders, (ii) unless stated in the supplemental indenture, that Person will indemnify the Issuer for fees, expenses, losses, damages and liabilities (including fees and expenses of defending itself against any loss, damage or liability) related to this Indenture and the Notes and (iii) that Person will make all necessary filings, including filings with the Securities and Exchange Commission required by the Exchange Act for the Notes;

 

(c)                                  No Default or Event of Default.  Immediately after giving effect to the merger, consolidation or transfer, no Default or Event of Default will have occurred and be continuing;

 

(d)                                 Rating Agency Condition.  The Rating Agency Condition has been satisfied for the merger, consolidation or transfer;

 

(e)                                  Opinion.  The Issuer has received an Opinion of Counsel (with a copy to the Indenture Trustee) stating that the merger, consolidation or transfer will not cause (i) any security issued by the Issuer to be deemed sold or exchanged for purposes of Section 1001 of the Code or (ii) the Issuer or a Titling Company to be treated as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes;

 

(f)                                   Actions.  Any action necessary to maintain the Lien and security interest Granted by this Indenture has been taken; and

 

(g)                                  Conditions.  The Issuer has delivered to the Depositor, the Servicer, the Owner Trustee and the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that the merger, consolidation or transfer and the supplemental indenture comply with this Article III and that all the conditions in this Indenture for the merger, consolidation or transfer have been satisfied.

 

Section 3.11.                          Successor or Transferee.  On a merger or consolidation of the Issuer or a transfer under Section 3.10, (a) the Person formed by or surviving the merger or consolidation (if other than the Issuer) will succeed to, and be substituted for, and may exercise the rights and powers of, the Issuer under this Indenture with the same effect as if that Person had been named as the Issuer in this Indenture and (b) for a transfer of the assets of the Issuer under Section 3.10, the predecessor Issuer will be released from its obligations under this Indenture to be performed by the successor Issuer for the Notes immediately on receipt of notice by the Indenture Trustee stating that the Issuer is to be released.

 

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Section 3.12.                          No Other Activities.  The Issuer will not engage in activities other than financing, acquiring, owning and pledging the Trust Property as described in the Transaction Documents and activities incidental to those activities.

 

Section 3.13.                          Further Acts and Documents.  On request of the Indenture Trustee, the Issuer will take action and execute and deliver additional documents reasonably required to perform and carry out the purposes of this Indenture.

 

Section 3.14.                          Restricted Payments.

 

(a)                                 No Set-off.  The Issuer will not, directly or indirectly, (i) make payments (by reduction of capital or otherwise) to the Owner Trustee or the holder of the Residual Interest, (ii) redeem, purchase, retire or acquire for value an ownership interest in the Issuer or (iii) set aside or segregate amounts for those purposes, except as permitted under this Indenture and the other Transaction Documents.

 

(b)                                 No Other Payments.  The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except according to the Transaction Documents.

 

Section 3.15.                          Notice of Events of Default.  The Issuer will notify the Indenture Trustee, the Servicer and the Rating Agencies as soon as practicable and within five Business Days after a Responsible Person of the Issuer has knowledge of an Event of Default.

 

Section 3.16.                          Review of Issuer’s Records.  The Issuer will maintain records and documents relating to its performance under this Indenture according to its customary business practices.  On reasonable request not more than once during any year, the Issuer will give the Indenture Trustee (or its representatives) access to the records and documents to conduct a review of the Issuer’s performance under this Indenture.  Any access or review will be conducted at the Issuer’s offices during its normal business hours at a time reasonably convenient to the Issuer and in a manner that will minimize disruption to its business operations.  Any access or review will be subject to the Issuer’s confidentiality and privacy policies.

 

Section 3.17.                          Issuer’s Representations and Warranties.  The Issuer represents and warrants to the Indenture Trustee as of the Closing Date:

 

(a)                                 Organization and Qualification.  The Issuer is duly formed and validly existing as a statutory trust in good standing under the laws of the State of Delaware.

 

(b)                                 Power, Authority and Enforceability.  The Issuer has the power and authority to execute, deliver and perform its obligations under the Transaction Documents to which it is a party.  The Issuer has authorized the execution, delivery and performance of the Transaction Documents to which it is a party.  The Transaction Documents to which it is a party are the legal, valid and binding obligation of the Issuer enforceable against the Issuer, except as may be limited by insolvency, bankruptcy, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles.

 

(c)                                  No Conflicts and No Violation.  The completion of the transactions contemplated by the Transaction Documents to which it is a party and the performance of its obligations under

 

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such documents will not (i) conflict with, or be a breach or default under any indenture, mortgage, deed of trust, loan agreement, guarantee or similar document under which the Issuer is a debtor or guarantor, (ii) result in the creation or imposition of a Lien on the Issuer’s properties or assets under the terms of any indenture, mortgage, deed of trust, loan agreement, guarantee or similar document (other than this Indenture), (iii) violate the Trust Agreement or (iv) violate a law or, to the Issuer’s knowledge, an order, rule or regulation of a federal or State court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Issuer or its properties that applies to the Issuer, which, in each case, would reasonably be expected to have a material adverse effect on the Issuer’s ability to perform its obligations under the Transaction Documents to which it is a party.

 

(d)                                 No Proceedings.  To the Issuer’s knowledge, there are no proceedings or investigations pending or threatened in writing before a federal or State court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Issuer or its properties (i) asserting the invalidity of the Transaction Documents or the Notes, (ii) seeking to prevent the issuance of the Notes or the completion of the transactions contemplated by the Transaction Documents, (iii) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on the Issuer’s ability to perform its obligations under, or the validity or enforceability of, the Transaction Documents or the Notes or (iv) relating to the Issuer that would reasonably be expected to (A) affect the treatment of the Notes as indebtedness for U.S. federal income or Applicable Tax State income or franchise tax purposes, (B) be deemed to cause a taxable exchange of the Notes for U.S. federal income tax purposes or (C) cause the Issuer to be treated as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, in each case, other than the proceedings that, to the Issuer’s knowledge, would not reasonably be expected to have a material adverse effect on the Issuer, the performance by the Issuer of its obligations under, or the validity and enforceability of, the Transaction Documents or the Notes or the tax treatment of the Issuer or the Notes.

 

(e)                                  No Investment Company.  The Issuer is not an “investment company” as defined in the Investment Company Act.  In making this determination, the Issuer is relying on the exemption in Rule 3a-7 of the Investment Company Act, although other exclusions or exemptions may also be available to the Issuer.

 

(f)                                   Volcker Rule.  The Issuer is structured not to be a “covered fund” under the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as the “Volcker Rule.”

 

Section 3.18.                          Issuer’s Representations and Warranties About Security Interest.  The Issuer represents and warrants to the Indenture Trustee as of the Closing Date, which representations and warranties will survive the termination of this Indenture and may not be waived by the Indenture Trustee:

 

(a)                                 Valid Security Interest.  This Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Collateral in favor of the Indenture Trustee which is prior to all other Liens, other than Permitted Liens, and is enforceable against creditors of and purchasers from the Issuer.

 

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(b)                                 Type.  The Collateral (other than those Permitted Investments which have been credited to a Securities Account) is “certificated securities,” “instruments” or “general intangibles” within the meaning of the applicable UCC.

 

(c)                                  Good Title.  The Issuer owns and has good title to the Collateral free and clear of any Lien, other than Permitted Liens.  The executed 20    -    Exchange Note has been delivered to the Indenture Trustee.  The Issuer has received all consents and approvals required by the terms of the Collateral to Grant to the Indenture Trustee all of its right, title and interest in the Collateral, except if a requirement for consent or approval is made ineffective under the applicable UCC.

 

(d)                                 Filing Financing Statements.  The Issuer has caused, or will cause within ten days after the Closing Date, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law to perfect the security interest Granted in the Collateral to the Indenture Trustee under this Indenture.  All financing statements filed or to be filed against the Issuer in favor of the Indenture Trustee under this Indenture describing the Collateral will contain a statement to the following effect:  “A purchase of or grant of a security interest in Collateral described in this financing statement will violate the rights of the Secured Parties. “

 

(e)                                  No Other Sale, Grant or Financing Statements.  Other than the security interest Granted to the Indenture Trustee under this Indenture, the Issuer has not sold or Granted a security interest in any of the Collateral.  The Issuer has not authorized the filing of and is not aware of any financing statements against the Issuer that include a description of collateral covering any of the Collateral, other than financing statements relating to the security interest Granted to the Indenture Trustee under this Indenture.  The Issuer is not aware of any judgment or tax Lien filings against it.

 

(f)                                   Securities Account.  All Permitted Investments have been and will be credited to a Securities Account.  The securities intermediary for each Securities Account has agreed to treat all assets credited to the Securities Accounts as “financial assets” within the meaning of the applicable UCC.

 

(g)                                  Securities Intermediary Agreement.  The Issuer has delivered to the Indenture Trustee a fully executed agreement under which the securities intermediary has agreed to comply with all instructions originated by the Indenture Trustee relating to the Securities Accounts without further consent by the Issuer.

 

(h)                                 Name of Securities Accounts.  The Securities Accounts are not in the name of a Person other than the Issuer or the Indenture Trustee.  The Issuer has not consented to the securities intermediary of a Securities Account complying with entitlement orders of a Person other than the Indenture Trustee.

 

Section 3.19.                          [Calculation Agent].

 

(a)                                 [Appointment.  The Issuer agrees that for so long as the Floating Rate Notes are Outstanding there will be an agent appointed to calculate LIBOR for each Interest Period (the “Calculation Agent”).  The Issuer appoints                        as Calculation Agent only for

 

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the purposes of determining LIBOR for each Interest Period and                   accepts the appointment.  The Calculation Agent may be removed by the Issuer at any time.  If the Calculation Agent is unable or unwilling to act as Calculation Agent or is removed by the Issuer, the Issuer will promptly appoint as a replacement Calculation Agent a leading bank engaged in transactions in Eurodollar deposits in the international Eurodollar market and not an Affiliate of the Issuer or its Affiliates.  The Calculation Agent may not resign without a replacement having been duly appointed.

 

(b)                                 LIBOR Determination.  On each LIBOR Determination Date, the Calculation Agent will notify the Servicer, the Issuer and the Administrator by email of LIBOR for the following Interest Period.  All calculations of LIBOR for the Floating Rate Notes by the Calculation Agent, in the absence of manifest error, will be conclusive and binding on the Noteholders.]

 

ARTICLE IV
 SATISFACTION AND DISCHARGE

 

Section 4.1.                                 Satisfaction and Discharge of Indenture.

 

(a)                                 Conditions to Satisfaction and Discharge.  Except as stated in Section 4.1(c), this Indenture will cease to be of further effect for the Notes if:

 

(i)                                     either (A) the Notes that have been authenticated and delivered (other than (1) Notes that have been destroyed, lost or stolen and that have been replaced or paid under Section 2.7 and (2) Notes for which payment money has been deposited in trust or segregated and held in trust by the Issuer and later paid to the Issuer or discharged from the trust under Section 3.3) have been delivered to the Indenture Trustee for cancellation or (B) the Notes not delivered to the Indenture Trustee for cancellation have become due and payable and the Issuer has deposited or caused to be deposited with the Indenture Trustee money in trust in an amount sufficient to pay and discharge the outstanding principal amount of the Notes and interest accrued on the Notes on the Redemption Date;

 

(ii)                                  the Issuer has paid or caused to be paid all money payable by it under the Transaction Documents; and

 

(iii)                               the Issuer has delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel meeting the requirements of Section 11.4.

 

(b)                                 Acknowledgement of Satisfaction and Discharge.  After the satisfaction and discharge of the Indenture under Section 4.1(a), the Indenture Trustee will (i) by Issuer Order and at the expense of the Issuer, execute documents acknowledging satisfaction and discharge of this Indenture and (ii) at the request of the Owner Trustee, the Indenture Trustee will deliver to the Owner Trustee a certificate of a Responsible Person stating that all Noteholders have been paid in full.

 

(c)                                  Continuing Rights and Obligations.  After the satisfaction and discharge of this Indenture, this Indenture will continue for (i) rights of registration of transfer and exchange, (ii) replacement of mutilated, destroyed, lost or stolen Notes, (iii) the rights of Noteholders to

 

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receive payments of principal of and interest on the Notes, (iv) the obligations of the Indenture Trustee and any Note Paying Agent under Section 3.3, (v) the rights, obligations and immunities of the Indenture Trustee under this Indenture and (vi) the rights of the Secured Parties as beneficiaries of this Indenture in the property deposited with the Indenture Trustee payable to them for a period of two years following the satisfaction and discharge.

 

ARTICLE V
 EVENTS OF DEFAULT; REMEDIES

 

Section 5.1.                                 Events of Default.

 

(a)                                 Events of Default.  The occurrence of one of the following events will be an event of default under this Indenture (each, an “Event of Default”):

 

(i)                                     the Issuer fails to pay interest due on a Note of the Controlling Class on any Payment Date, and the failure continues for five days or more;

 

(ii)                                  the Issuer fails to pay the principal of a Note on its Final Scheduled Payment Date;

 

(iii)                               the Issuer fails to observe a material covenant or agreement of the Issuer in this Indenture (other than to pay interest on or principal of the Notes) or a representation or warranty of the Issuer made in this Indenture or in an Officer’s Certificate or other document delivered under this Indenture is incorrect in a material respect when made and, in each case, the failure or error continues for at least 60 days after the Issuer receives notice from the Indenture Trustee, or the Issuer and the Indenture Trustee receive notice from the Noteholders of at least 25% of the Note Balance of the Controlling Class, in each case, stating the failure or error, requiring it to be corrected and stating that the notice is a “Notice of Default”; or

 

(iv)                              an Insolvency Event of the Issuer occurs.

 

(b)                                 Issuer to Notify.  The Issuer will notify the Indenture Trustee within five Business Days after a Responsible Person of the Issuer has knowledge of the occurrence of a Default under Section 5.1(a)(iii), which notice will describe the Default, the status of the Default and what action the Issuer is taking to correct the Default.  The Issuer will deliver a copy of the notice to each Qualified Institution (if not the Indenture Trustee) maintaining a Bank Account.

 

(c)                                  Indenture Trustee to Notify.  The Indenture Trustee will notify the Noteholders within five Business Days after a Responsible Person of the Indenture Trustee has knowledge of the occurrence of an Event of Default.

 

Section 5.2.                                 Acceleration of Maturity; Rescission.

 

(a)                                 Acceleration.  If an Event of Default occurs and is continuing, the Indenture Trustee or the Noteholders of a majority of the Note Balance of the Controlling Class may declare the Notes to be accelerated by notifying the Issuer (and to the Indenture Trustee if given by the Noteholders).  On acceleration, the unpaid Note Balance of the Notes, together with

 

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accrued and unpaid interest, will become immediately due and payable.  If an Event of Default in Section 5.1(a)(iv) occurs, all unpaid principal of and accrued and unpaid interest on the Notes, and all other amounts payable under this Indenture, will automatically become immediately due and payable without a declaration or other act of the Indenture Trustee or a Noteholder.  On the declaration of acceleration or automatic acceleration, the Indenture Trustee will promptly notify each Noteholder and each Qualified Institution (if not the Indenture Trustee) maintaining a Bank Account.

 

(b)                                 Rescission of Acceleration.  The Noteholders of a majority of the Note Balance of the Controlling Class, by notifying the Issuer and the Indenture Trustee, may rescind a declaration of acceleration before a judgment or decree for payment of the amount due has been obtained by the Indenture Trustee as stated in this Article V if:

 

(i)                                     the Issuer has paid or deposited with the Indenture Trustee an amount sufficient to (A) pay the due and unpaid principal of and interest on the Notes and all other amounts that would then be due under this Indenture or on the Notes if the Event of Default giving rise to the acceleration had not occurred, (B) pay all amounts owed to the Indenture Trustee under Section 6.7 and (C) pay all other outstanding fees and expenses of the Issuer; and

 

(ii)                                  all Events of Default, other than the non-payment of the principal of the Notes that has become due solely by acceleration, have been corrected or waived under Section 5.14.

 

Section 5.3.                                 Collection of Indebtedness by Indenture Trustee.

 

(a)                                 Overdue Amounts.  If an Event of Default under Section 5.1(a)(i) or (ii) occurs and is continuing, the Issuer, on demand of the Indenture Trustee, will pay to the Indenture Trustee for the benefit of the Noteholders, the overdue amount with interest at the rate of interest then applicable to the Notes.

 

(b)                                 Collection Costs.  In addition, the Issuer will pay the costs of collection, including all amounts owed to the Indenture Trustee under Section 6.7.

 

(c)                                  Proceedings.  If the Issuer fails to pay those amounts on demand, the Indenture Trustee, in its own name and as trustee of an express trust, may start a Proceeding to collect the money due and unpaid, and may pursue the Proceeding to final judgment, and may enforce the judgment against the Issuer and collect the money due and unpaid in the manner provided by law out of the Collateral.

 

Section 5.4.                                 Trustee May File Proofs of Claim.

 

(a)                                 Proofs of Claim.  If there is a Proceeding involving the Issuer under the Bankruptcy Code or another bankruptcy, insolvency or other similar law, or in case a trustee, liquidator, receiver or similar official has been appointed for or taken possession of the Issuer or its property, the Indenture Trustee may:

 

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(i)                                     file a proof of claim for due and unpaid principal of and interest on the Notes and file other proofs of claim or documents necessary or advisable to have the claims of the Indenture Trustee on behalf of the Secured Parties allowed in the Proceedings or in other judicial proceedings involving the Issuer, its creditors and its property;

 

(ii)                                  unless prohibited by applicable law, vote on behalf of the Secured Parties in the election of a trustee, a standby trustee or a Person performing similar functions in the Proceedings; and

 

(iii)                               collect and receive any money or other property payable or deliverable on the claims and pay all amounts received on the claims of the Secured Parties, including the claims asserted by the Indenture Trustee on their behalf.

 

(b)                                 Authorization by Noteholders.  Each Noteholder authorizes a trustee, liquidator, receiver or similar official in a Proceeding to make payments to the Indenture Trustee and, if the Indenture Trustee consents to make payments directly to the Noteholders, to pay to the Indenture Trustee the amounts owed to the Indenture Trustee under Section 6.7.

 

(c)                                  No Right to Consent or Vote.  Except as permitted under Section 5.4(a)(ii), this Indenture (i) does not authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of a Noteholder a plan of reorganization, arrangement, adjustment or composition affecting the Notes and (ii) does not limit the rights of a Noteholder to authorize the Indenture Trustee to vote on the claim of a Noteholder in the Proceeding.

 

Section 5.5.                                 Enforcement of Claims Without Possession of Notes.

 

(a)                                 Notes not Required.  The Indenture Trustee may enforce its rights and make claims under this Indenture, or under the Notes, without the possession of the Notes or the production of the Notes in a Proceeding.  A Proceeding started by the Indenture Trustee will be brought in its own name as trustee of an express trust, and any recovery of judgment will be for the benefit of the Secured Parties for which the judgment has been recovered.

 

(b)                                 Proceeding.  In any Proceeding brought by the Indenture Trustee (and any Proceeding involving the interpretation of this Indenture to which the Indenture Trustee is a party), the Indenture Trustee will be held to represent all the Noteholders, and it will not be necessary to make a Noteholder a party to the Proceeding.

 

Section 5.6.                                 Remedies; Priorities.

 

(a)                                 Remedies.  If the Notes have been accelerated under Section 5.2(a) and the declaration of acceleration has not been rescinded according to Section 5.2(b), the Indenture Trustee may do one or more of the following (subject to Section 5.7), and will at the direction of the Noteholders of a majority of the Note Balance of the Controlling Class:

 

(i)                                     start a Proceeding in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture on the Notes, enforce any judgment obtained and collect from the Issuer money adjudged due;

 

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(ii)                                  start a Proceeding for the complete or partial foreclosure of this Indenture on the Collateral;

 

(iii)                               sell or liquidate all or any part of the Collateral or rights or interest in the Collateral at one or more public or private sales called and conducted in any manner permitted by law;

 

(iv)                              exercise any remedies of a secured party under the UCC; and

 

(v)                                 take any other action to protect and enforce the rights and remedies of the Indenture Trustee and the Noteholders.

 

(b)                                 Notice of Sale or Liquidation of Collateral.  The Indenture Trustee will notify each Noteholder and the Depositor of a sale or liquidation under Section 5.6(a)(iii) at least 15 days before the sale or liquidation.  A Noteholder, the Depositor or the Servicer may submit a bid during the sale or liquidation.

 

(c)                                  Limitation on Collateral Liquidation.  The Indenture Trustee may not sell or liquidate the Collateral unless:

 

(i)                                     the Event of Default is described in Section 5.1(a)(i) or (ii); or

 

(ii)                                  the Event of Default is described in Section 5.1(a)(iii) and:

 

(A)                               the Noteholders representing 100% of the Note Balance of the Notes consent to the sale or liquidation; or

 

(B)                               the proceeds of the sale or liquidation are expected to be sufficient to pay in full all amounts owed by the Issuer to the Secured Parties including all principal of and accrued interest on the Notes;

 

(iii)                               the Event of Default is described in Section 5.1(a)(iv) and:

 

(A)                               the Noteholders representing 100% of the Note Balance of the Controlling Class consent to the sale or liquidation; or

 

(B)                               the proceeds of the sale or liquidation are expected to be sufficient to pay in full all amounts owed by the Issuer to the Secured Parties including all principal of and accrued interest on the Notes; or

 

(C)                               the Indenture Trustee (1) determines that the Collateral will not continue to provide sufficient money for the payment of all amounts owed to the Secured Parties, as those payments would have become due if the Notes had not been accelerated and (2) obtains the consent of Noteholders of at least 66-2/3% of the Note Balance of the Controlling Class.

 

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In determining whether the condition in clause (ii)(B), (iii)(B) or (iii)(C) (1) above has been satisfied, the Indenture Trustee may rely on an opinion of a nationally-recognized Independent investment banking firm or firm of certified public accountants on the expected proceeds or on the sufficiency of the Collateral for that purpose.

 

(d)                                 Proceeds of Collateral.  Any money or property collected by the Indenture Trustee following the sale or other liquidation of the Collateral under Section 5.6(a)(iii) will be deposited in the Collection Account for distribution according to Section 8.2(d) on the Payment Date following the Collection Period during which those amounts are collected.  In all other circumstances, Section 8.2(c) will continue to apply after an Event of Default.

 

Section 5.7.                                 Optional Preservation of Collateral.  If the Notes have been accelerated under Section 5.2(a) and the declaration of acceleration has not been rescinded, the Indenture Trustee may elect to maintain possession of the Collateral.  The Indenture Trustee will take into account that the 20  -   Collections and other amounts expected to be received on the Collateral must be sufficient to pay the unpaid principal of and accrued and unpaid interest on the Notes when determining whether or not to maintain possession of part of the Collateral.  In making this determination, the Indenture Trustee may rely on an opinion of a nationally-recognized Independent investment banking firm or firm of certified public accountants.

 

Section 5.8.                                 Limitation on Suits.

 

(a)                                 Proceedings.  No Noteholder has the right to start a Proceeding under this Indenture or for the appointment of a receiver or trustee, or for any other remedy under this Indenture, unless:

 

(i)                                     the Noteholder has notified the Indenture Trustee of a continuing Event of Default;

 

(ii)                                  the Noteholders of at least 25% of the Note Balance of the Controlling Class have requested the Indenture Trustee to start the Proceeding for the Event of Default in its own name as Indenture Trustee under this Indenture;

 

(iii)                               the Noteholders have offered reasonable indemnity satisfactory to the Indenture Trustee against fees, expenses, losses, damages, claims and liabilities that may be incurred by the Indenture Trustee, or its agents, counsel, accountants and experts, in complying with the request;

 

(iv)                              the Indenture Trustee has failed to start the Proceedings for 60 days after it receives the notice, request and offer of indemnity; and

 

(v)                                 the Noteholders of a majority of the Note Balance of the Controlling Class have not given the Indenture Trustee a direction inconsistent with the request during that 60 day period.

 

(b)                                 No Right to Impair.  No Noteholder has the right to impair the rights of another Noteholder or to seek or obtain priority or preference over another Noteholder or to enforce any right under this Indenture, except in the manner stated in this Indenture.

 

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(c)                                  Conflicting Requests.  If the Indenture Trustee receives conflicting requests under Section 5.8(a)(ii) from two or more groups of Noteholders, each evidencing less than a majority of the Note Balance of the Controlling Class, the Indenture Trustee in its sole discretion may determine what action will be taken.

 

Section 5.9.                                 Unconditional Rights to Receive Principal and Interest.  Each Noteholder has an absolute and unconditional right to receive payment of the principal of and interest on its Note on or after the due dates stated in the Note or in this Indenture (or, for redemption, on or after the Redemption Date) and to start a Proceeding for the enforcement of the payment according to Section 5.8.  Those rights may not be impaired or affected without the consent of the Noteholder.

 

Section 5.10.                          Restoration of Rights and Remedies.  If the Indenture Trustee or a Noteholder has started a Proceeding to enforce a right or remedy under this Indenture and the Proceeding has been discontinued or abandoned or has been determined adversely to the Indenture Trustee or to the Noteholder, then the Issuer, the Indenture Trustee and the Noteholders, subject to a determination in the Proceeding, will be restored to their former positions under this Indenture, and all rights and remedies of the Indenture Trustee and the Noteholders will continue as though no Proceeding had been started.

 

Section 5.11.                          Rights and Remedies Cumulative.  No right or remedy of the Indenture Trustee or the Noteholders under this Indenture is intended to be exclusive of any other right or remedy, and every right and remedy, if permitted by law, will be cumulative and in addition to every other right and remedy under this Indenture.  The exercise of a right or remedy will not prevent the exercise of another right or remedy at the same time.  The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture will not be affected by the seeking, obtaining or use of other relief under this Indenture.  Neither the Lien of this Indenture nor the rights or remedies of the Indenture Trustee or the Noteholders will be impaired by the recovery of a judgment by the Indenture Trustee against the Issuer or by the execution of a judgment on the Collateral.

 

Section 5.12.                          Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee or a Noteholder to exercise a right or remedy after a Default or Event of Default will impair the right or remedy, or be a waiver of the Default or Event of Default.  Every right and remedy given by this Article V or by law to the Indenture Trustee or to the Noteholders may be exercised as often as deemed advisable by the Indenture Trustee or by the Noteholders.

 

Section 5.13.                          Control by Noteholders.  The Noteholders of a majority of the Note Balance of the Controlling Class have the right to direct the time, method and place of conducting a Proceeding for a remedy available to the Indenture Trustee for the Notes or exercising a trust or power of the Indenture Trustee, subject to the following terms.

 

(a)                                 No Conflict.  The direction does not conflict with law or with this Indenture.

 

(b)                                 Direction to Sell or Liquidate.  Except under Section 5.6(c), a direction to the Indenture Trustee to sell or liquidate the Collateral must have been made by the Noteholders of 100% of the Note Balance of the Controlling Class.

 

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(c)                                  Non-Unanimous Directions.  If the Indenture Trustee elects to retain the Collateral under Section 5.7, then a direction to the Indenture Trustee by Noteholders of less than 100% of the Note Balance of the Controlling Class to sell or liquidate the Collateral will not be effective.

 

(d)                                 Other Action.  The Indenture Trustee may take other action considered advisable by the Indenture Trustee that is not inconsistent with the direction from the Noteholders of a majority of the Note Balance of the Controlling Class.

 

(e)                                  Adverse Action.  The Indenture Trustee need not take an action that it determines might have a material adverse effect on the rights of Noteholders not consenting to the action.

 

Section 5.14.                          Waiver of Defaults and Events of Default.

 

(a)                                 Waiver by Controlling Class.  The Noteholders of a majority of the Note Balance of the Controlling Class may waive a Default or Event of Default except an Event of Default (i) in the payment of principal of or interest on the Notes (other than an Event of Default relating to failure to pay principal due only by reason of acceleration) or (ii) for a covenant or term of this Indenture that cannot be amended, supplemented or modified without the consent of all Noteholders.

 

(b)                                 Effect of Waiver.  On any waiver, the Default or Event of Default will be considered not to have occurred for all purposes of this Indenture.  No waiver will extend to any other Default or Event of Default or impair any right relating to any other Default or Event of Default.

 

Section 5.15.                          Agreement to Pay Costs.  The parties to this Indenture agree, and each Noteholder by its acceptance of a Note will be deemed to have agreed, that a court may in its discretion require, in a Proceeding for the enforcement of a right or remedy under this Indenture, or in a Proceeding against the Indenture Trustee for an action taken or not taken by it as Indenture Trustee, the filing by a party litigant in the Proceeding of an agreement to pay the costs of the Proceeding, and that the court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against a party litigant in the Proceeding.  This Section 5.15 will not apply to (a) a Proceeding started by the Indenture Trustee, (b) a Proceeding started by a Noteholder or group of Noteholders holding more than 10% of the Note Balance of the Notes (or for a Proceeding for the enforcement of a right or remedy under this Indenture that is started by the Controlling Class, holding more than 10% of the Note Balance of the Controlling Class) or (c) a Proceeding started by a Noteholder for the enforcement of the payment of principal of or interest on a Note on or after the respective due dates expressed in the Note and in this Indenture (or, for redemption, on or after the Redemption Date).

 

Section 5.16.                          Waiver of Stay or Extension Laws.  The Issuer agrees that it will not plead or in any manner claim or take the benefit of, a stay or extension that may affect the performance of its obligations under this Indenture, and the Issuer waives the benefit of such law.

 

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Section 5.17.                          Performance and Enforcement of Obligations.

 

(a)                                 Actions Requested by Indenture Trustee.  At the Administrator’s expense, the Issuer will promptly take any lawful action the Indenture Trustee requests to (i) compel the performance by (A) the Titling Companies, the Collateral Agent and the Servicer of their obligations to the Issuer under the Credit and Security Agreement, the Exchange Note Supplement, the Servicing Agreement or the Servicing Supplement or (B) the Depositor and Ford Credit of their obligations under the Exchange Note Purchase Agreement and the Exchange Note Sale Agreement and (ii) exercise any rights, remedies, powers, privileges and claims available to the Issuer under those agreements as directed by the Indenture Trustee.

 

(b)                                 Exercise by Indenture Trustee.  If an Event of Default has occurred and is continuing, (i) the Indenture Trustee may, and at the direction of the Noteholders of at least 66-2/3% of the Note Balance of the Controlling Class will, exercise all rights, remedies, powers, privileges and claims of the Issuer against (A) the Titling Companies, the Collateral Agent and the Servicer under the Credit and Security Agreement, the Exchange Note Supplement, the Servicing Agreement or the Servicing Supplement or (B) the Depositor and Ford Credit under the Exchange Note Purchase Agreement and the Exchange Note Sale Agreement, including the right or power to take any action to compel or secure performance or observance by those Persons of their obligations to the Issuer under those agreements, and to give a consent, request, notice, direction, approval, extension or waiver under those agreements and (ii) the right and power of the Issuer to take any such action will be suspended.

 

(c)                                  Indenture Trustee May Enforce Exchange Note.  The Indenture Trustee, acting at the direction of the Noteholders of a majority of the Note Balance of the Controlling Class, may exercise any rights, remedies, powers, privileges and claims available to the Issuer as holder of the 20  -   Exchange Note.

 

ARTICLE VI
 INDENTURE TRUSTEE

 

Section 6.1.                                 Indenture Trustee’s Obligations.

 

(a)                                 Standard of Care.  If an Event of Default has occurred and is continuing, the Indenture Trustee will exercise the rights and powers vested in it under this Indenture using the same degree of care and skill as a prudent person would use under the circumstances in the conduct of that person’s own affairs.

 

(b)                                 Obligations; Reliance.  Except during the continuance of an Event of Default:

 

(i)                                     the Indenture Trustee agrees to perform the obligations and only the obligations stated in this Indenture and no implied covenants or obligations are to be read into this Indenture; and

 

(ii)                                  in the absence of willful misconduct, bad faith or negligence on its part, the Indenture Trustee may conclusively rely, for the truth of the statements and the correctness of the opinions furnished to it, on certificates or opinions furnished to it and, if required by this Indenture, conforming to the requirements of this Indenture.  The

 

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Indenture Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements, if any, of this Indenture.

 

(c)                                  Indenture Trustee Liable.  The Indenture Trustee will not be relieved from liability for its own willful misconduct, bad faith or negligence, except that:

 

(i)                                     this Section 6.1(c) does not limit the effect of Section 6.1(b);

 

(ii)                                  the Indenture Trustee will not be liable for an error of judgment made in good faith unless it is proved that the Indenture Trustee was negligent in determining the relevant facts; and

 

(iii)                               the Indenture Trustee will not be liable for any action taken or not taken in good faith according to this Indenture or a direction received by it under Sections 5.13 and 5.17(b).

 

(d)                                 Not Liable for Interest.  The Indenture Trustee will not be liable for interest on money received by it, except as the Indenture Trustee may agree in writing with the Issuer.

 

(e)                                  Not Required to Segregate.  The Indenture Trustee need not segregate any funds held by it in trust under this Indenture from other funds unless required by law, this Indenture, the Exchange Note Supplement or the Servicing Supplement.

 

(f)                                   Section Governs.  The terms of this Indenture relating to the conduct of the Indenture Trustee, the liability of the Indenture Trustee or giving protection to the Indenture Trustee are subject to this Section 6.1 and to the TIA.

 

(g)                                  No Deemed Knowledge.  The Indenture Trustee will not be deemed to have knowledge of a Default or any Event of Default unless (i) a Responsible Person of the Indenture Trustee has knowledge of the Default or Event of Default or (ii) it has received notice of the Default or Event of Default.

 

(h)                                 Enforceable in all Capacities.  The rights, privileges, protections, immunities and benefits given to the Indenture Trustee in this Article VI, including its right to be indemnified, are extended to, and will be enforceable by, the Indenture Trustee in each of its capacities under this Indenture and the other Transaction Documents, including as Authentication Agent, Calculation Agent, Note Registrar and Note Paying Agent under this Indenture and as a “securities intermediary” as defined in Section 8-102 of the UCC and a “bank” as defined in Section 9-102 of the UCC under the Account Control Agreement and the Titling Company Account Control Agreement.

 

Section 6.2.                                 Indenture Trustee’s Rights.

 

(a)                                 Reliance on Documents.  The Indenture Trustee may rely on any document believed by it to be genuine and which appears on its face to be properly executed and signed or presented by the proper Person.  The Indenture Trustee is not required to investigate any facts or matters or to verify any calculations or amounts stated in any document.  The Indenture Trustee

 

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will not be liable for any action taken or not taken in good faith in reliance on a document believed by it to be genuine.

 

(b)                                 Reliance on Opinions.  Before the Indenture Trustee acts or does not act, it may require and rely on an Officer’s Certificate or an Opinion of Counsel.  The Indenture Trustee will not be liable for any action taken or not taken in good faith in reliance on an Officer’s Certificate or Opinion of Counsel.

 

(c)                                  Use of Agents.  The Indenture Trustee may exercise its rights or powers under this Indenture or perform its obligations under this Indenture either directly or by or through agents or attorneys or a custodian or nominee.  The Indenture Trustee will not be responsible for misconduct or negligence on the part of, or for the supervision of, the agent, counsel, custodian or nominee appointed with due care by it under this Indenture.

 

(d)                                 Good Faith.  The Indenture Trustee will not be liable for any action taken or not taken in good faith which it believes to be authorized or within its rights or powers so long as the action taken or not taken does not amount to negligence.

 

(e)                                  Advice from Counsel.  The Indenture Trustee may consult with counsel, accountants or other experts, and the advice or opinion of counsel, accountants or other experts on any matters relating to this Indenture and the Notes will be full and complete authorization and protection from liability for any action taken or not taken by it under this Indenture in good faith and according to the advice or opinion of that counsel, accountant or expert.

 

(f)                                   Not Required to Pay or Risk Funds.  The Indenture Trustee is not obligated to (i) exercise the rights or powers under this Indenture or to pay or risk its own funds or incur any financial liability in the performance of its obligations under this Indenture if it has reasonable grounds to believe that payment of such funds or adequate indemnity satisfactory to it against that risk or liability is not reasonably assured or given to it or (ii) honor the request, demand or direction of Noteholders under this Indenture, other than requests, demands or directions relating to an asset representations review demand under Section 7.2, unless the Noteholders have offered to the Indenture Trustee reasonable security or indemnity satisfactory to it for the reasonable expenses that might be incurred by the Indenture Trustee in complying with the request or direction.

 

(g)                                  Force Majeure.  The Indenture Trustee will not be responsible or liable for a failure or delay in the performance of its obligations under this Indenture from or caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages, acts of war, terrorism, civil or military disturbances, nuclear catastrophes, fires, floods, earthquakes, storms, hurricanes or other natural catastrophes and interruptions, loss or failures of mechanical, electronic or communication systems.  The Indenture Trustee will use reasonable efforts consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

(h)                                 Consequential Damages.  The Indenture Trustee will not be responsible or liable for special, punitive, indirect or consequential losses or damages (including lost profit), even if

 

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the Indenture Trustee has been advised of the likelihood of the loss or damage and regardless of the form of action.

 

Section 6.3.                                 Indenture Trustee’s Individual Rights.  The Indenture Trustee and any Note Paying Agent, Note Registrar or Authenticating Agent under this Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee or Note Paying Agent, Note Registrar or Authenticating Agent.

 

Section 6.4.                                 Indenture Trustee’s Disclaimer.  The Indenture Trustee will not be liable for (a) the validity or adequacy of this Indenture or the Notes, (b) the Issuer’s use of the proceeds from the Notes, or (c) any statement of the Issuer in this Indenture or in the Notes, other than the Indenture Trustee’s certificate of authentication, or any statement of the Issuer, the Depositor or the Servicer in any prospectus or offering document used for the offering or sale of the Notes.

 

Section 6.5.                                 Notice of Defaults.  Within 90 days after a Responsible Person of the Indenture Trustee has knowledge of, or receives notice of, a Default under this Indenture, the Indenture Trustee will mail as described in Section 313(c) of the TIA to each Noteholder, notice of the Default, unless the Default has been corrected or waived.  However, (a) except for a Default in the payment of principal of or interest on a Note, the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Persons in good faith determines that the withholding of the notice is in the interests of the Noteholders and (b) for a Default stated in Section 5.1(a)(iii), the Indenture Trustee will not notify the Noteholders until at least 30 days after a Responsible Person of the Indenture Trustee has knowledge of, or receives notice of, the Default.

 

Section 6.6.                                 Reports by Indenture Trustee.

 

(a)                                 Tax Information.  Starting in the year after the Closing Date, the Indenture Trustee will deliver or cause to be delivered to each Person who at any time during the prior calendar year was a Noteholder of record, a statement containing the information required to be given to a noteholder by an issuer of indebtedness, in the form and at the time required under the Code.

 

(b)                                 Monthly Investor Report.  On each Payment Date, the Indenture Trustee will deliver the Monthly Investor Report to each Noteholder of record as of the most recent Record Date (which delivery may be made by e-mail to the e-mail addresses in the Note Register without need for confirmation of receipt or by making the report available to the Noteholders through the Indenture Trustee’s website, which initially is located at                                                             ).

 

(c)                                  Annual Certificate of Compliance.  If required by Regulation AB and requested by the Depositor or the Servicer, the Indenture Trustee will deliver to the Administrator, the Issuer and the Servicer on or before March 1 of each year, starting in the year after the Closing Date, an Officer’s Certificate signed by a Responsible Person of the Indenture Trustee (i) stating that (A) a review of the Indenture Trustee’s activities during the prior year and of its performance under this Indenture has been made under the Responsible Person’s supervision and (B) to the

 

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Responsible Person’s knowledge, based on the review, the Indenture Trustee has fulfilled in all material respects its obligations under this Indenture throughout the prior year, or, if there has been a failure to fulfill the obligation in a material respect, stating the failure known to the Responsible Person and the nature and status of the failure and (ii) certifying to matters related to the Indenture Trustee as required under Form 10-K under the Exchange Act.

 

(d)                                 Annual Assessment of Compliance.  The Indenture Trustee will:

 

(i)                                     deliver to the Administrator, the Issuer and the Servicer, a report on its assessment of compliance with the minimum servicing criteria described in Items 1122(d)(2)(i), (2)(ii), (2)(iv), (2)(v), (3)(ii) (for payments only) and (3)(iv) of Regulation AB (the “Applicable Servicing Criteria”) during the prior year, including disclosure of any material instance of non-compliance identified by the Indenture Trustee, as required by Rule 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB; and

 

(ii)                                  cause a firm of registered public accountants to deliver to the Administrator, the Issuer and the Servicer an attestation report on the assessment of compliance with the Applicable Servicing Criteria for the prior year that (A) satisfies the requirements of Rule 13a-18 or Rule 15d-18 under the Exchange Act, as applicable, (B) complies with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and (C) indicates that the firm is qualified and independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act.

 

The reports will be delivered on or before March 1 of each year, starting in the year after the Closing Date, in a format suitable for filing with the Securities and Exchange Commission on EDGAR.

 

Section 6.7.                                 Compensation and Indemnity.

 

(a)                                 Fees.  The Issuer will pay the Indenture Trustee as compensation performing its obligations under this Indenture a fee separately agreed to by the Issuer and the Indenture Trustee.  The Indenture Trustee’s compensation will not be limited by law on compensation of a trustee of an express trust.  The Issuer will reimburse the Indenture Trustee for its reasonable expenses in performing its obligations under this Indenture and the other Transaction Documents, including costs of collection and the reasonable compensation and expenses of the Indenture Trustee’s agents, counsel, accountants and experts, but excluding expenses resulting from the Indenture Trustee’s willful misconduct, bad faith or negligence.

 

(b)                                 Indemnification.  The Issuer will indemnify the Indenture Trustee and its officers, directors, employees and agents (each, an “Indemnified Person”), for all fees, expenses, losses, damages and liabilities resulting from the administration of and the performance of its obligations under this Indenture and the other Transaction Documents (including the fees and expenses of defending itself against any loss, damage or liability and any fees and expenses incurred in connection with any proceedings brought by the Indemnified Person to enforce the Issuer’s indemnification obligations), but excluding any fee, expense, loss, damage or liability resulting from (i) the Indenture Trustee’s willful misconduct, bad faith or negligence or (ii) the Indenture Trustee’s breach of its representations or warranties in this Indenture.

 

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(c)                                  Proceedings.  If an Indemnified Person receives notice of the start of a Proceeding against it, the Indemnified Person will, if a claim under the Proceeding will be made under this Section 6.7, promptly notify the Issuer of the Proceeding.  The Issuer may participate in and assume the defense and settlement of the Proceeding at its expense.  If the Issuer notifies the Indemnified Person of its intention to assume the defense of the Proceeding with counsel reasonably satisfactory to the Indemnified Person, and so long as the Issuer assumes the defense of the Proceeding in a manner reasonably satisfactory to the Indemnified Person, the Issuer will not be liable for legal expenses of counsel to the Indemnified Person unless there is a conflict between the interests of the Issuer and the Indemnified Person.  If there is a conflict, the Issuer will pay for the separate counsel to the Indemnified Person.  No settlement of the Proceeding may be made without the approval of the Issuer and the Indemnified Person, which approvals will not be unreasonably withheld.

 

(d)                                 Survival of Obligations.  The Issuer’s obligations to the Indenture Trustee under this Section 6.7 will survive the resignation or removal of the Indenture Trustee and the discharge of this Indenture.  Expenses incurred by the Indenture Trustee after the occurrence of a Default stated in Section 5.1(a)(iv) are intended to be expenses of administration under the Bankruptcy Code or another applicable federal or State bankruptcy, insolvency or similar law.

 

(e)                                  Repayment.  If the Issuer makes a payment to an Indemnified Person under Section 6.7(b) and the Indemnified Person later collects from others any amounts for which the payment was made, the Indemnified Person will promptly repay those amounts to the Issuer.

 

(f)                                   Available Funds.  Payments required to be made by the Issuer under this Section 6.7 will be made solely from funds used to make payments under this Indenture.

 

Section 6.8.                                 Resignation or Removal of Indenture Trustee.

 

(a)                                 Resignation.  The Indenture Trustee may resign by notifying the Issuer and the Administrator.

 

(b)                                 Removal by Controlling Class.  The Noteholders of a majority of the Note Balance of the Controlling Class may, without cause, remove the Indenture Trustee and terminate its rights and obligations under this Indenture by notifying the Indenture Trustee and the Issuer.

 

(c)                                  Removal by Issuer.  The Issuer must remove the Indenture Trustee and terminate its rights and obligations under this Indenture if:

 

(i)                                     the Indenture Trustee fails to comply with the eligibility requirements in Section 6.11(a);

 

(ii)                                  the Indenture Trustee becomes legally unable to act or incapable of acting as Indenture Trustee; or

 

(iii)                               an Insolvency Event for the Indenture Trustee occurs.

 

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(d)                                 Appointment of Successor.  If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the Indenture Trustee, the Issuer or the Noteholders of a majority of the Note Balance of the Controlling Class must appoint a successor Indenture Trustee promptly.  If a successor Indenture Trustee does not take office within 60 days after the Indenture Trustee resigns or is removed, the Indenture Trustee, the Issuer or the Noteholders of a majority of the Note Balance of the Controlling Class may petition a court of competent jurisdiction to appoint a successor Indenture Trustee.

 

(e)                                  Acceptance of Appointment.  No resignation or removal of the Indenture Trustee will become effective until the acceptance of appointment by the successor Indenture Trustee under this Section 6.8.  Any successor Indenture Trustee will deliver a written acceptance of its appointment to the Indenture Trustee, the Issuer and the Administrator.  The Issuer will continue to pay amounts owed to the predecessor Indenture Trustee for the period it was Indenture Trustee according to Sections 6.7 and 8.2.  The successor Indenture Trustee will notify the Secured Parties of its succession and the Issuer or Administrator will deliver a copy of the notice to the Rating Agencies.

 

(f)                                   Transition of Indenture Trustee Obligations.  On the resignation or removal of the Indenture Trustee becoming effective under Section 6.8(e), all rights, powers and obligations of the Indenture Trustee under this Indenture will become the rights, powers and obligations of the successor Indenture Trustee.  The predecessor Indenture Trustee will promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.  The Depositor will reimburse the Indenture Trustee and any successor Indenture Trustee for expenses related to the replacement of the Indenture Trustee, if those amounts have not been paid under Section 8.2.

 

Section 6.9.                                 Merger or Consolidation; Transfer of Assets.

 

(a)                                 Merger or Consolidation.  If the Indenture Trustee merges or consolidates with, or transfers its corporate trust business or assets to, any Person, the resulting, surviving or transferee Person will be the successor Indenture Trustee so long as that Person is qualified and eligible under Section 6.11(a).  The Indenture Trustee will promptly notify the Servicer and the Issuer of the succession, and the Issuer will notify the Rating Agencies.

 

(b)                                 Authentication of Notes.  If, at the time the successor by merger or consolidation to the Indenture Trustee succeeds to the trusts created by this Indenture, Notes have been authenticated but not delivered, the successor Indenture Trustee may adopt the certificate of authentication of a predecessor Indenture Trustee and deliver the Notes so authenticated.  If at that time any Notes have not been authenticated, the successor Indenture Trustee may authenticate the Notes.  In each of those cases, the certificates will have the same force and effect given in the Notes or in this Indenture as the certificate of the predecessor Indenture Trustee.

 

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

 

(a)                                 Appointment.  For the purpose of meeting the legal requirement of a jurisdiction in which part of the Collateral may be located, after notifying the Issuer and the Servicer, the Indenture Trustee may appoint one or more Persons to act as a separate trustee or separate trustees, or co-trustee or co-trustees, of all or part of the Collateral, and to vest in those Persons,

 

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in this capacity and for the benefit of the Secured Parties, title to all or part of the Collateral, and, subject to this Section 6.10, rights, powers and obligations the Indenture Trustee may consider necessary or desirable.  No separate trustee or co-trustee will be required to be eligible as a successor trustee under Section 6.11(a) and no notice to the Secured Parties of the appointment of a separate trustee or co-trustee will be required under Section 6.8.

 

(b)                                 Terms of Appointment.  Every separate trustee and co-trustee will be appointed and act subject to the following:

 

(i)                                     all rights, powers and obligations of the Indenture Trustee will apply to and will be exercised or performed by the Indenture Trustee, or the Indenture Trustee and the separate trustee or co-trustee jointly (it being understood that the separate trustee or co-trustee will not be authorized to act separately without the Indenture Trustee joining in the act), except if under the law of a jurisdiction in which a particular act or acts are to be performed the Indenture Trustee will be incompetent or unqualified to perform those act or acts, in which event those acts will be exercised and performed singly by the separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;

 

(ii)                                  no trustee will be personally liable by reason of an act or omission of another trustee under this Indenture; and

 

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

 

(c)                                  Notices.  Any notice, request or other writing given to the Indenture Trustee will be deemed to have been given to each appointed separate trustee and co-trustee, as effectively as if given to each of them.

 

(d)                                 Rights of Appointee.  Every document appointing a separate trustee or co-trustee will refer to this Indenture and the conditions of this Section 6.10.  Each separate trustee and co-trustee, on its acceptance of its appointment will have the rights, powers and obligations stated in its appointment, subject to this Indenture.  The document will be filed with the Indenture Trustee and the Indenture Trustee will provide the Issuer with a copy of each document.

 

(e)                                  Indenture Trustee as Agent.  A separate trustee or co-trustee may appoint the Indenture Trustee as its agent or attorney-in-fact with power and authority, if permitted by law, to do each lawful act under or for this Indenture on its behalf and in its name.  If a separate trustee or co-trustee becomes incapable of acting, resigns or is removed, all of its rights, powers and obligations will be exercised by the Indenture Trustee, if permitted by law, without the appointment of a new or successor trustee.

 

Section 6.11.                          Eligibility; Disqualification.

 

(a)                                 Eligibility Requirements.  The Indenture Trustee must satisfy the requirements of Section 310(a) of the TIA and must comply with Section 310(b) of the TIA.  The Indenture Trustee or its parent must have a combined capital and surplus of at least $50,000,000 as stated in its most recent annual published report of condition and must have a long-term debt rating of investment grade by each of the Rating Agencies or must be acceptable to each of the Rating

 

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Agencies.  Within ten days after the Indenture Trustee fails to satisfy the requirements in this Section 6.11(a) or ceases to be a Qualified Institution, the Indenture Trustee will notify the Issuer and the Servicer of the failure.

 

(b)                                 Resignation.  Within 90 days after the occurrence of an Event of Default that has not been corrected or waived, unless authorized by the Securities and Exchange Commission, the Indenture Trustee will resign for the Class A, Class B and/or Class C Notes according to Section 6.8, and the Issuer will appoint a successor Indenture Trustee for the Class A, Class B and/or Class C Notes, as applicable, so that there will be separate Indenture Trustees for the Class A, Class B and Class C Notes.  If the Indenture Trustee fails to comply with the prior sentence, the Indenture Trustee must comply with TIA Section 310(b)(ii) and (iii).

 

(c)                                  Successor.  If a successor Indenture Trustee is appointed for the Class A, Class B or Class C Notes under this Section 6.11, the Issuer, the predecessor Indenture Trustee and the successor Indenture Trustee will execute an indenture supplemental to this Indenture.  The supplemental indenture will contain:

 

(i)                                     the terms on which the successor Indenture Trustee accepts its appointment;

 

(ii)                                  the terms necessary or advisable to transfer and confirm to, the successor Indenture Trustee the rights, powers and obligations of the Indenture Trustee for the Notes for which the successor Indenture Trustee is appointed;

 

(iii)                               if the predecessor Indenture Trustee is not being removed as Indenture Trustee for all of the Notes, the terms necessary or desirable to confirm that the rights, powers and obligations of the predecessor Indenture Trustee for the Notes for which the predecessor Indenture Trustee is not being removed continue to be vested in the Indenture Trustee for these Notes; and

 

(iv)                              the terms necessary to provide for or facilitate the administration of the trusts under this Indenture by more than one Indenture Trustee.

 

(d)                                 Timing.  Nothing in this Indenture or in the supplemental indenture will make the Indenture Trustees co-trustees of the same trust and the Indenture Trustee will be a trustee of a trust or trusts under this Indenture separate and apart from the trust or trusts under this Indenture administered by another Indenture Trustee.  The indenture supplement will become effective on the removal of the predecessor Indenture Trustee.

 

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

 

Section 6.13.                          Review of Records.  The Indenture Trustee agrees that, with reasonable prior notice, it will permit authorized representatives of the Issuer, the Servicer or the Administrator, during the Indenture Trustee’s normal business hours, to have access to and review the books of account, records, reports and other documents and materials of the Indenture

 

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Trustee relating to (a) the performance of the Indenture Trustee’s obligations under this Indenture, (b) the payments of fees and expenses of the Indenture Trustee for its performance and (c) any claim made by the Indenture Trustee under this Indenture.  In addition, the Indenture Trustee will permit those representatives to make copies and extracts of the books and records and to discuss them with the Indenture Trustee’s officers and employees.  Any access and review will be subject to the Indenture Trustee’s confidentiality and privacy policies.  The Indenture Trustee will maintain all relevant books, records, reports and other documents and materials for a period of two years after the termination of its obligations under this Indenture.

 

Section 6.14.                          Indenture Trustee’s Representations and Warranties.  The Indenture Trustee represents and warrants to the Issuer as of the Closing Date:

 

(a)                                 Organization and Qualification.  The Indenture Trustee is duly organized and, validly existing as a               in good standing under the laws of                          .  The Indenture Trustee [is qualified as a foreign banking corporation in good standing and] has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its properties or the conduct of its activities requires the qualification, license or approval, unless the failure to obtain the qualifications, licenses or approvals would not reasonably be expected to have a material adverse effect on the Indenture Trustee’s ability to perform its obligations under the Transaction Documents to which it is a party.

 

(b)                                 Power, Authority and Enforceability.  The Indenture Trustee has the power and authority to execute, deliver and perform its obligations under the Transaction Documents to which it is a party.  The Indenture Trustee has authorized the execution, delivery and performance of the Transaction Documents to which it is a party.  Each of the Transaction Documents to which it is a party is the legal, valid and binding obligation of the Indenture Trustee enforceable against the Indenture Trustee, except as may be limited by insolvency, bankruptcy, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles.

 

(c)                                  No Conflicts and No Violation.  The completion of the transactions under the Transaction Documents to which it is a party, and the performance of its obligations under such documents, will not (i) conflict with, or be a breach or default under, any indenture, mortgage, deed of trust, loan agreement, guarantee or similar document under which the Indenture Trustee is a debtor or guarantor, (ii) result in the creation or imposition of a Lien on the Indenture Trustee’s properties or assets under the terms of any indenture, mortgage, deed of trust, loan agreement, guarantee or similar document, (iii) violate the Indenture Trustee’s organizational documents or by-laws or (iv) violate a law or, to the Indenture Trustee’s knowledge, an order, rule or regulation of a federal or State court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Indenture Trustee or its properties that applies to the Indenture Trustee, which, in each case, would reasonably be expected to have a material adverse effect on the Indenture Trustee’s ability to perform its obligations under the Transaction Documents to which it is a party.

 

(d)                                 No Proceedings.  To the Indenture Trustee’s knowledge, there are no proceedings or investigations pending or threatened in writing before any federal or State court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the

 

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Indenture Trustee or its properties (i) asserting the invalidity of the Transaction Documents to which it is a party, (ii) seeking to prevent the issuance of the Notes or the completion of the transactions contemplated by the Transaction Documents to which it is a party or (iii) seeking a determination or ruling that would reasonably be expected to have a material adverse effect on the Indenture Trustee’s ability to perform its obligations under, or the validity or enforceability of, the Transaction Documents to which it is a party.

 

(e)                                  Eligibility.  The Indenture Trustee satisfies the requirements of Section 310(a) of the TIA and is a Qualified Institution.  The Indenture Trustee or its parent has a combined capital and surplus of at least $50,000,000 as stated in its most recent annual published report of condition.

 

(f)                                   Information Given by the Indenture Trustee.  The information given by the Indenture Trustee in any certificate delivered by a Responsible Person of the Indenture Trustee is true and correct in all material respects.

 

Section 6.15.                          Obligation to Update Disclosure.  The Indenture Trustee will notify and provide information, and certify that information in an Officer’s Certificate, to the Depositor on the occurrence of any event or condition relating to the Indenture Trustee or actions taken by the Indenture Trustee that (a) may be required to be disclosed by the Depositor under Item 2 (the institution of, material developments in, or termination of legal proceedings against                    that are material to Noteholders) of Form 10-D under the Exchange Act within five days of the occurrence, (b) the Depositor reasonably requests of the Indenture Trustee that the Depositor, believes is necessary to comply with Regulation AB within five days of the request, (c) is required to be disclosed under Item 5 (submission of matters to a vote of Noteholders) of Form 10-D under the Exchange Act within five days of a Responsible Person of the Indenture Trustee becoming aware of the submission, (d) is required to be disclosed under Item 6.02 (resignation, removal, replacement or substitution of                     as Indenture Trustee) or Item 6.04 (failure to make a distribution when required) of Form 8-K under the Exchange Act within two days of a Responsible Person of the Indenture Trustee becoming aware of the occurrence or (e) causes the information given by the Indenture Trustee in any certificate delivered by a Responsible Person of the Indenture Trustee to be untrue or incorrect in any material respect or is necessary to make the statements given by the Indenture Trustee in light of the circumstances in which they were made not misleading within five days of a Responsible Person of the Indenture Trustee becoming aware of the event or condition.

 

Section 6.16.                          Reporting of Reallocations of Leases and Leased Vehicles.  The Indenture Trustee will (a) notify the Sponsor, the Depositor and the Servicer, as soon as practicable and within five Business Days, of demands or requests received by a Responsible Person of the Indenture Trustee for the removal of a Lease and related Leased Vehicle from the 20  -   Reference Pool and reallocation of the Lease and Leased Vehicle to the Revolving Facility Pool under Section 3.3 of the Exchange Note Sale Agreement, (b) promptly on request by the Sponsor, the Depositor or the Servicer, provide to them other information reasonably requested to facilitate compliance by them with Rule 15Ga-1 under the Exchange Act, and Items 1104(e) and 1121(c) of Regulation AB and (c) if requested by the Sponsor, the Depositor or the Servicer, provide a written certification no later than 15 days following the end of any quarter or year that the Indenture Trustee has not received any repurchase demands or requests for that period, or if

 

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repurchase demands or requests have been received during that period, that the Indenture Trustee has provided all the information reasonably requested under clause (b) above.  The Indenture Trustee and the Issuer will not have responsibility or liability for a filing required to be made by a securitizer under the Exchange Act or Regulation AB.

 

ARTICLE VII
 NOTEHOLDER COMMUNICATIONS AND REPORTS

 

Section 7.1.                                 Noteholder Communications.

 

(a)                                 Noteholder List.  If the Indenture Trustee is not the Note Registrar, the Issuer will furnish a list of the names and addresses of the Noteholders of any Definitive Notes to the Indenture Trustee (a) not more than five days after each Record Date, as of that Record Date and (b) not more than 30 days after receipt by the Issuer of a request from the Indenture Trustee, as of a date not more than ten days before the time the list is furnished.  If the Indenture Trustee is the Note Registrar, the Indenture Trustee, on the request of the Owner Trustee, will furnish within ten days to the Owner Trustee a list of Noteholders of any Book-Entry Notes as of the date stated by the Owner Trustee.

 

(b)                                 Noteholder List Retention.  The Indenture Trustee will maintain a current list of the names and addresses of the Noteholders based on the most recent list furnished to the Indenture Trustee under Section 7.1(a) and the names and addresses of Noteholders received by the Indenture Trustee in its capacity as Note Registrar.

 

(c)                                  TIA Communication.  Noteholders may communicate under Section 312(b) of the TIA with other Noteholders about their rights under this Indenture or under the Notes.  The Issuer, the Indenture Trustee and the Note Registrar will have the protection of Section 312(c) of the TIA.

 

(d)                                 Noteholder Communications with Indenture Trustee.  A Noteholder (if the Notes are represented by Definitive Notes) or a Note Owner (if the Notes are represented by Book-Entry Notes) may communicate with the Indenture Trustee and give notices and make requests and demands and give directions to the Indenture Trustee through the procedures of the Clearing Agency and by notifying the Indenture Trustee.  Any Note Owner must provide a written certification stating that the Note Owner is a beneficial owner of a Note, together with supporting documentation such as a trade confirmation, an account statement, a letter from a broker or dealer verifying ownership or another similar document evidencing ownership of a Note.  The Indenture Trustee will not be required to take action in response to requests, demands or directions of a Noteholder or a Note Owner, other than requests, demands or directions relating to an asset representations review demand under Section 7.2, unless the Noteholder or Note Owner has offered reasonable security or indemnity reasonably satisfactory to the Indenture Trustee to protect it against the fees and expenses that it may incur in complying with the request, demand or direction.

 

(e)                                  Communications between Noteholders.  A Noteholder (if the Notes are represented by Definitive Notes) or a Note Owner (if the Notes are represented by Book-Entry Notes) that seeks to communicate with other Noteholders or Note Owners, as applicable, about a

 

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possible exercise of rights under this Indenture or the other Transaction Documents may send a request to the Issuer or the Servicer, on behalf of the Issuer, to include information regarding the communication in a Form 10-D to be filed by the Issuer with the Securities and Exchange Commission.  Each request must include (i) the name of the requesting Noteholder or Note Owner, (ii) the method by which other Noteholders or Note Owners, as applicable, may contact the requesting Noteholder or Note Owner and (iii) in the case of a Note Owner, a certification from that Person that it is a Note Owner, together with at least one form of documentation evidencing its ownership of a Note, including a trade confirmation, account statement, letter from a broker or dealer or similar document.  A Noteholder or Note Owner, as applicable, that delivers a request under this Section 7.1(e) will be deemed to have certified to the Issuer and the Servicer that its request to communicate with other Noteholders or Note Owners, as applicable, relates solely to a possible exercise of rights under this Indenture or the other Transaction Documents, and will not be used for other purposes.  The Issuer will promptly deliver any request to the Servicer.  On receipt of a request, the Servicer will include in the Form 10-D filed by the Issuer with the Securities and Exchange Commission for the Collection Period in which the request was received (A) a statement that the Issuer has received a request from a Noteholder or Note Owner, as applicable, that is interested in communicating with other Noteholders or Note Owners, as applicable, about a possible exercise of rights under this Indenture or the other Transaction Documents, (B) the name of the requesting Noteholder or Note Owner, (C) the date the request was received and (D) a description of the method by which the other Noteholders or Note Owners, as applicable, may contact the requesting Noteholder or Note Owner.

 

Section 7.2.                                 Noteholder Demand for Asset Representations Review.  If a Delinquency Trigger occurs, a Noteholder (if the Notes are represented by Definitive Notes) or a Note Owner (if the Notes are represented by Book-Entry Notes) may make a demand on the Indenture Trustee to cause a vote of the Noteholders or Note Owners, as applicable, about whether to direct the Asset Representations Reviewer to conduct a Review of the Review Leases under the Asset Representations Review Agreement.  In the case of a Note Owner, each demand must be accompanied by a certification from that Person that it is a Note Owner, together with at least one form of documentation evidencing its ownership of a Note, including a trade confirmation, account statement, letter from a broker or dealer or similar document.  If Noteholders and Note Owners, of at least 5% of the aggregate Note Balance of the Notes demand a vote within 90 days of the filing of the Form 10-D reporting the occurrence of the Delinquency Trigger, the Indenture Trustee will promptly request a vote of the Noteholders through the Clearing Agency.  The vote will remain open until the 150th day after the filing of the Form 10-D.  Assuming a voting quorum of Noteholders holding at least 5% of the aggregate Note Balance of the Notes is reached, if the Noteholders of a majority of the Note Balance of Notes voted agree to a Review, the Indenture Trustee will promptly send a Review Notice to the Asset Representations Reviewer and the Servicer under the Asset Representations Review Agreement directing the Asset Representations Reviewer to conduct the Review.

 

Section 7.3.                                 Reports by Issuer.

 

(a)                                 SEC Filings.  The Issuer will, or will cause the Administrator or the Servicer to:

 

(i)                                     file with the Securities and Exchange Commission (A) the annual reports and the information, documents and other reports (or copies or parts the Securities and

 

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Exchange Commission may prescribe) that the Issuer is required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the Exchange Act, including annual reports on Form 10-K, monthly distribution reports on Form 10-D[ and monthly asset level data on Form ABS-EE], and (B) additional information, documents and reports about compliance by the Issuer with this Indenture required by the Securities and Exchange Commission;

 

(ii)                                  file with the Indenture Trustee, within 15 days after the Issuer is required to file the same with the Securities and Exchange Commission, copies of the annual reports and the information, documents or other reports filed with the Securities and Exchange Commission under Section 7.3(a)(i); and

 

(iii)                               supply to the Indenture Trustee the information, documents and reports (or summaries) required to be filed by the Issuer under Section 7.3(a)(i) and (ii) as may be required by rules and regulations prescribed by the Securities and Exchange Commission.

 

(b)                                 Documents and Reports to Noteholders.  The Indenture Trustee will mail to all Noteholders, as described in Section 313(c) of the TIA, the information, documents and reports (or summaries of such items) supplied to the Indenture Trustee under Section 7.3(a).

 

(c)                                  Fiscal Year.  The fiscal year of the Issuer will be the calendar year.

 

Section 7.4.                                 Reports by Indenture Trustee.

 

(a)                                 Annual Report.  Within 90 days after each April 15, starting in the year after the Closing Date, the Indenture Trustee will prepare and mail to each Noteholder a report dated as of April 15 of the applicable year that complies with Section 313(a) of the TIA, if the report is required under Section 313(a) of the TIA.  The Indenture Trustee will also prepare and mail to Noteholders any report required under Section 313(b) of the TIA.  A report mailed to the Noteholders under this Section 7.4(a) will be mailed according to Section 313(c) of the TIA.

 

(b)                                 Filing.  The Indenture Trustee will file with the Securities and Exchange Commission a copy of each report delivered under Section 7.4(a) at the time of its mailing to the Noteholders.

 

ARTICLE VIII
 ACCOUNTS, DISTRIBUTIONS AND RELEASES

 

Section 8.1.                                 Collection of Funds.  Except as permitted under this Indenture, the Indenture Trustee may demand payment or delivery of, and will receive and collect, directly the funds and other property payable to or to be received by the Indenture Trustee under this Indenture, the Exchange Note Supplement and the Servicing Supplement.  The Indenture Trustee will apply the funds and other property received by it, and will make deposits to, and distributions from, the Bank Accounts, under this Indenture, the Exchange Note Supplement and the Servicing Supplement.

 

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Section 8.2.                                 Bank Accounts; Distributions.

 

(a)                                 Establishment.  On and after the Closing Date, the Indenture Trustee will maintain the Bank Accounts established by the Servicer under Section 4.1 of the Servicing Supplement.

 

(b)                                 Distributions from Collection Account.  Subject to Section 8.2(d), on each Payment Date the Indenture Trustee will (based on the information in the most recent Monthly Investor Report) withdraw from the Collection Account and make deposits and payments, to the extent of Available Funds in the Collection Account for that Payment Date, in the following order of priority (pro rata within each priority level based on the amounts due except as otherwise stated):

 

(i)                                     first, to the payment of amounts, including indemnities, then due to the Indenture Trustee, the Owner Trustee and the Asset Representations Reviewer and expenses of the Issuer incurred according to the Transaction Documents, in each case, if not paid by the Depositor or the Administrator, up to a maximum of $        per year;

 

(ii)                                  second, to the Servicer, unpaid Administration Fees;

 

(iii)                               third, to the Noteholders of Class A Notes, the aggregate Accrued Note Interest for the Class A Notes, pro rata based on the Note Balances of the Class A Notes as of the prior Payment Date;

 

(iv)                              fourth, for allocation as principal under Section 8.2(c), the First Priority Principal Payment;

 

(v)                                 fifth, to the Noteholders of Class B Notes, the Accrued Note Interest for the Class B Notes;

 

(vi)                              sixth, for allocation as principal under Section 8.2(c), the Second Priority Principal Payment;

 

(vii)                           seventh, to the Noteholders of Class C Notes, the Accrued Note Interest for the Class C Notes;

 

(viii)                        eighth, to the Reserve Account, the amount required to bring the amount in the Reserve Account up to the Required Reserve Amount after taking into account each deposit made to the Reserve Account on that Payment Date under Section 5.1(a)(iv) of the Exchange Note Supplement;

 

(ix)                              ninth, for allocation as principal under Section 8.2(c), the Regular Principal Payment;

 

(x)                                 tenth, to the payment of all amounts due to the Indenture Trustee, the Owner Trustee and the Asset Representations Reviewer and any expenses of the Issuer, in each case, if not paid by the Depositor or Administrator or under Section 8.2(b)(i) on that Payment Date; and

 

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(xi)                              eleventh, to the holder of the Residual Interest, any remaining amounts.

 

(c)                                  Distributions of Principal.  On each Payment Date, the Indenture Trustee will (based on the information in the most recent Monthly Investor Report) pay any amounts allocated to principal under Section 8.2(b) in the following order of priority, in each case, applied pro rata according to the Note Balance of the Notes of that Class:

 

(i)                                     first, to the Noteholders of Class A-1 Notes in payment of principal until the Note Balance of the Class A-1 Notes has been reduced to zero;

 

(ii)                                  second, to the Noteholders of Class A-2[a] [and Class A-2b] Notes, pro rata based on the respective Note Balances], in payment of principal until the Note Balance of the Class A-2[a] [and Class A-2b] Notes has been reduced to zero;

 

(iii)                               third, to the Noteholders of Class A-3 Notes, in payment of principal until the Note Balance of the Class A-3 Notes has been reduced to zero;

 

(iv)                              fourth, to the Noteholders of Class A-4 Notes, in payment of principal until the Note Balance of the Class A-4 Notes has been reduced to zero;

 

(v)                                 fifth, to the Noteholders of Class B Notes in payment of principal until the Note Balance of the Class B Notes has been reduced to zero;

 

(vi)                              sixth, to the Noteholders of Class C Notes in payment of principal until the Note Balance of the Class C Notes has been reduced to zero; and

 

(vii)                           seventh, to the holder of the Residual Interest, any remaining amounts.

 

(d)                                 Distributions Following Acceleration.  If the Notes are accelerated following an Event of Default, on each Payment Date starting with the Payment Date relating to the Collection Period in which the acceleration occurs, the Indenture Trustee will (based on the information in the most recent Monthly Investor Report) withdraw from the Bank Accounts and make deposits and payments, to the extent of funds in the Bank Accounts for the related Collection Period, in the following order of priority (pro rata to the Persons within each priority level based on the amounts due except as stated):

 

(i)                                     first, to the payment of amounts, including indemnities, due to the Indenture Trustee, the Owner Trustee, the Asset Representations Reviewer and expenses of the Issuer incurred according to the Transaction Documents;

 

(ii)                                  second, to the Servicer, unpaid Administration Fees;

 

(iii)                               third, to the Noteholders of Class A Notes, the aggregate Accrued Note Interest for the Class A Notes, pro rata based on the Note Balances of the Class A Notes as of the end of the prior Payment Date;

 

(iv)                              fourth, to the Noteholders of Class A-1 Notes in payment of principal until the Note Balance of the Class A-1 Notes is reduced to zero;

 

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(v)                                 fifth, to the Noteholders of Class A-2[a] [and Class A-2b] Notes, in payment of principal until the Note Balance of the Class A-2[a] [and Class A-2b] Notes is reduced to zero;

 

(vi)                              sixth, to the Noteholders of Class A-3 Notes in payment of principal until the Note Balance of the Class A-3 Notes is reduced to zero;

 

(vii)                           seventh, to the Noteholders of Class A-4 Notes in payment of principal until the Note Balance of the Class A-4 Notes is reduced to zero;

 

(viii)                        eighth, to the Noteholders of Class B Notes, the Accrued Note Interest for the Class B Notes;

 

(ix)                              ninth, to the Noteholders of Class B Notes in payment of principal until the Note Balance of the Class B Notes is reduced to zero;

 

(x)                                 tenth, to the Noteholders of Class C Notes, the Accrued Note Interest for the Class C Notes;

 

(xi)                              eleventh, to the Noteholders of Class C Notes in payment of principal until the Note Balance of the Class C Notes is reduced to zero; and

 

(xii)                           twelfth, to the holder of the Residual Interest, any remaining amounts.

 

(e)                                  Subordination Agreement.  Each of (i) the subordination of interest payments to the Noteholders of the Class B Notes to the payment of any First Priority Principal Payment to the Noteholders of the Class A Notes and (ii) the subordination of interest payments to the Noteholders of the Class C Notes to the payment of any Second Priority Principal Payment to the Noteholders of the Class A Notes and the Class B Notes under Section 8.2(b) is a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code.

 

Section 8.3.                                 Bank Accounts.

 

(a)                                 Limited Liability for Permitted Investments.  Subject to Section 6.1(c), the Indenture Trustee will not be liable for any insufficiency in Bank Accounts resulting from a loss on a Permitted Investment, except for losses attributable to the Indenture Trustee’s failure to make payments on the Permitted Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee.  The Indenture Trustee is not obligated to monitor the activities of any Qualified Institution (unless the Qualified Institution is also the Indenture Trustee) and will not be liable for the actions or inactions of any Qualified Institution (unless the Qualified Institution is also the Indenture Trustee).

 

(b)                                 Notice to Qualified Institution.  A Responsible Person of the Indenture Trustee will notify the Qualified Institution maintaining the Bank Accounts (if not the Indenture Trustee) if an Event of Default has occurred and is continuing.

 

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Section 8.4.                                 Release of Collateral.

 

(a)                                 Release of Property.  The Indenture Trustee may, and when required by this Indenture will, release Collateral from the Lien of this Indenture, in each case, according to this Indenture.  Except under Sections 8.4(c), 8.4(d) and 10.1(c), the Indenture Trustee will release Collateral from the Lien of this Indenture only on receipt of an Issuer Request and an Officer’s Certificate and an Opinion of Counsel and (if required by the TIA) Independent Certificates according to Sections 314(c) and 314(d)(1) of the TIA meeting the requirements of Section 11.4.

 

(b)                                 Limited Security Interest.  The Issuer and the Indenture Trustee intend that the property in which a Lien is Granted under this Indenture will be limited to the 20  -   Exchange Note and the other Collateral as stated in the “Granting Clause” of this Indenture, and the Lien will not include direct rights in the Leases or Leased Vehicles or proceeds of the Leases or Leased Vehicles (other than for proceeds of the 20  -   Exchange Note) or other property of the Titling Companies.

 

(c)                                  Deemed Release.  The Indenture Trustee will be deemed to release, and does release, and each Noteholder or Note Owner by its acceptance of a Note or an interest or participation in a Note acknowledges that the Indenture Trustee will release Liens and other rights and interests it possesses, without further action of the parties, in, to and under:

 

(i)                                     each Lease and Leased Vehicle and all proceeds of the Lease and Leased Vehicle reallocated to the Revolving Facility Pool under Section 3.4(c) of the Exchange Note Purchase Agreement, Section 3.3(c) of the Exchange Note Sale Agreement or Section 3.3(f) of the Servicing Supplement, effective when the Lease and Leased Vehicle is deemed reallocated to the Revolving Facility Pool under the applicable Section;

 

(ii)                                  each Lease and Leased Vehicle (but not the proceeds of the sale or disposition of the Lease and Leased Vehicle) sold by the related Titling Company under Section 3.2(g) of the Servicing Agreement, effective when the Lease and Leased Vehicle is deemed sold and assigned by the Titling Company under that Section; and

 

(iii)                               each Leased Vehicle (and the proceeds of the sale or disposition of the Leased Vehicle released according to Section 3.3(b) of the Credit and Security Agreement and Section 4.2(d) of the Servicing Agreement) sold by the Servicer under Section 4.2 of the Servicing Agreement, effective when the Leased Vehicle is deemed sold and assigned by the related Titling Company under that Section.

 

(d)                                 Release of Funds.  When there are no Notes Outstanding and all amounts due from the Issuer to the Indenture Trustee have been paid in full under Section 6.7 or 10.1, the Indenture Trustee will release the Collateral from the Lien of this Indenture and release to the Issuer or any other Person entitled to those funds, the funds then in the Bank Accounts under this Indenture.  The Indenture Trustee will release Collateral from the Lien of this Indenture under this Section 8.4(d) only on receipt of an Issuer Request and an Officer’s Certificate and an Opinion of Counsel meeting the requirements of Section 11.4.

 

(e)                                  Termination Statements.  On receipt of an Issuer Request accompanied by an Officer’s Certificate and an Opinion of Counsel meeting the requirements of Section 11.4, the

 

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Indenture Trustee will execute termination statements and other documents to release Collateral as permitted by this Section 8.4 and Section 10.1.  No party relying on a document or authorization executed by the Indenture Trustee under this Article VIII is required to determine the Indenture Trustee’s authority, inquire into the satisfaction of conditions precedent or require evidence of the application of funds.

 

ARTICLE IX
 AMENDMENTS

 

Section 9.1.                                 Amendments Without Consent of Noteholders.

 

(a)                                 General Amendments.  Without the consent of the Noteholders but after notifying the Rating Agencies, the Issuer and the Indenture Trustee may, and when directed by Issuer Order will, amend this Indenture:

 

(i)                                     to correct or expand the description of property subject to the Lien of this Indenture, or better to assure, convey and confirm to the Indenture Trustee property subject or required to be subjected to the Lien of this Indenture, or to subject additional property to the Lien of this Indenture;

 

(ii)                                  to evidence the succession of any other Person to the Issuer, and the assumption by the successor of the obligations of the Issuer in this Indenture and in the Notes;

 

(iii)                               to add to the covenants of the Issuer, for the benefit of the Noteholders, or to surrender a right or power given to the Issuer in this Indenture;

 

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

 

(v)                                 to clarify an ambiguity, correct an error or correct or supplement any term in this Indenture inconsistent with another term in this Indenture or to add provisions which are not inconsistent with the provisions of this Indenture if the action does not have a material adverse effect on the interests of the Noteholders;

 

(vi)                              to evidence the acceptance of the appointment under this Indenture of a successor trustee and to add to or change this Indenture as necessary to facilitate the administration of the trusts under this Indenture by more than one trustee; or

 

(vii)                           to modify, eliminate or add to the terms of this Indenture to effect the qualification of this Indenture under the TIA and to add to this Indenture another terms required by the TIA.

 

(b)                                 Amendments without Material Adverse Effect.  Without the consent of the Noteholders, the Issuer and the Indenture Trustee may, and when directed by Issuer Order will, amend this Indenture to add terms to, to change or eliminate the terms of, or to modify (other than the modifications in Section 9.2) the rights of the Noteholders under, this Indenture, if:

 

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(i)                                     the Issuer or the Administrator delivers, to the Indenture Trustee an Officer’s Certificate stating that the amendment will not have a material adverse effect on the Notes;

 

(ii)                                  the Issuer delivers an Opinion of Counsel to the Indenture Trustee stating that the amendment will not (A) cause a Note to be considered sold or exchanged for purposes of Section 1001 of the Code, (B) cause the Issuer or a Titling Company to be treated as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes or (C) adversely affect the treatment of the Notes as debt for U.S. federal income tax purposes; and

 

(iii)                               the Rating Agency Condition has been satisfied.

 

Section 9.2.                                 Amendments with Consent of Controlling Class.

 

(a)                                 Amendments.  With the consent of the Noteholders of a majority of the Note Balance of the Controlling Class and after notifying the Rating Agencies, the Issuer and the Indenture Trustee may, and when directed by Issuer Order will, amend this Indenture to add terms to, to change or eliminate the terms of, or to modify the rights of the Noteholders under, this Indenture if the Issuer delivers an Opinion of Counsel to the Indenture Trustee stating that the amendment will not (i) cause any Note to be considered sold or exchanged for purposes of Section 1001 of the Code or (ii) cause the Issuer or a Titling Company to be treated as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes.  However, no amendment, without the consent of each Noteholder of each Outstanding Note adversely affected by the amendment, will:

 

(A)                               modify or alter Section 9.1 or this Section 9.2;

 

(B)                               change (1) the Final Scheduled Payment Date or the date of payment of any installment of principal of or interest on a Note, (2) the principal amount of or interest rate on a Note, (3) the price at which the Notes may be redeemed, (4) the priority of payments on the Notes or relating to the application of collections on, or the proceeds of the sale of, the Collateral to payment of principal of or interest on the Notes, or change the place of payment where, or the currency in which, a Note or the interest on a Note is payable or (5) the right of Noteholders to start Proceedings to enforce this Indenture;

 

(C)                               modify the percentage of the Note Balance of the Notes or the Controlling Class required for any action;

 

(D)                               modify or alter the definition of “Outstanding” or “Controlling Class”;

 

(E)                                modify the calculation of the amount of a payment of principal of and interest on a Note on a Payment Date; or

 

(F)                                 permit the creation of any Lien ranking prior or equal to the Lien of this Indenture on the Collateral, other than Permitted Liens, or, except as permitted by this Indenture or the other Transaction Documents, release the Lien of this Indenture on the Collateral.

 

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(b)                                 Noteholder Consent.  For any amendment to this Indenture or any other Transaction Document requiring the consent of the Noteholders, the Indenture Trustee will, when directed by Issuer Order, notify the Noteholders to request consent and follow its reasonable procedures to obtain consent.

 

Section 9.3.                                 Execution of Amendments.

 

(a)                                 Form; Authorization; Reliance.  Each amendment will be in form reasonably satisfactory to the Indenture Trustee.  The Indenture Trustee is authorized to execute the amendment and any other agreements required by the amendment.  For any amendment, the Indenture Trustee may request, and the Issuer will deliver, an Opinion of Counsel stating that the amendment is permitted by this Indenture and that all conditions to the amendment have been satisfied.

 

(b)                                 Indenture Trustee Not Obligated.  The Indenture Trustee is not obligated to, enter into an amendment that adversely affects the Indenture Trustee’s rights, powers, obligations, or liabilities under this Indenture.

 

(c)                                  Indenture Supplement not an Amendment.  An indenture supplement entered into under Section 6.11(c) will not be considered an amendment to this Indenture for purposes of this Article IX.

 

Section 9.4.                                 Effect of Amendment.  On the execution of an amendment under this Article IX, this Indenture will be amended by the amendment, and the amendment will be part of this Indenture for all purposes.  Every Noteholder of Notes authenticated and delivered before or after the amendment will be bound by the amendment.

 

Section 9.5.                                 Conformity with TIA.  Each amendment of this Indenture executed under this Article IX will conform to the requirements of the TIA as then in effect so long as this Indenture is qualified under the TIA.

 

Section 9.6.                                 Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of an amendment under this Article IX may, and if required by the Indenture Trustee will, bear a notation about the amendment.  New Notes modified to conform to an amendment may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for the Outstanding Notes.

 

ARTICLE X
 REDEMPTION OF NOTES

 

Section 10.1.                          Redemption.

 

(a)                                 Optional Redemption.  The Notes may be redeemed in whole, but not in part, at the direction of the Servicer on any Payment Date on which the Servicer exercises its option to purchase the 20  -   Exchange Note under Section 5.1 of the Servicing Supplement.  If the Notes are to be redeemed under this Section 10.1, the Servicer or the Issuer will notify the Indenture Trustee and the Rating Agencies at least ten days before the Redemption Date.  After

 

46

 

the Servicer or the Issuer notifies the Indenture Trustee, the Indenture Trustee will promptly notify the Noteholders:

 

(i)                                     of the Redemption Date;

 

(ii)                                  of the Note Redemption Price;

 

(iii)                               of the outstanding Note Balance of each Class of the Notes to be redeemed and that the Notes plus accrued and unpaid interest on the Notes to the Redemption Date will be paid in full;

 

(iv)                              of the place to surrender the Notes for final payment (which will be the office or agency of the Issuer maintained under Section 3.2); and

 

(v)                                 that on the Redemption Date, the outstanding Note Balance of the Notes plus accrued and unpaid interest on the Notes will become due and payable and that interest on the Notes will cease to accrue from and after the Redemption Date, unless the Issuer fails to pay the Notes on the Redemption Date.

 

(b)                                 Deposit of Note Redemption Price.  The Issuer will cause the Servicer to deposit on the Business Day before the Redemption Date (or, with satisfaction of the Rating Agency Condition, on the Redemption Date) in the Collection Account the amount required under Section 5.1 of the Exchange Note Supplement, and the Notes will be paid in full on the Redemption Date.

 

(c)                                  Release of Funds.  On the Redemption Date, the outstanding Note Balance of the Notes plus accrued and unpaid interest on the Notes will become due and payable and that interest on the Notes will cease to accrue from and after the Redemption Date, unless the Issuer fails to pay the Notes on the Redemption Date.  On redemption, the Indenture Trustee will release the Collateral from the Lien of this Indenture and release to the Issuer or any other Person entitled to funds then in the Bank Accounts under this Indenture according to Section 8.4(c).

 

ARTICLE XI
 OTHER AGREEMENTS

 

Section 11.1.                          No Petition.  The Indenture Trustee and each Noteholder or Note Owner, by accepting a Note or an interest or participation in a Note, agrees that, before the date that is one year and one day (or, if longer, any applicable preference period) after the payment in full of (a) all Secured Obligations, including all Exchange Notes, and any other Securities, (b) all securities issued by the Depositor or by a trust for which the Depositor was a depositor or (c) the Notes, it will not start or pursue against, or join any other Person in starting or pursuing against, (i) either Titling Company or either Holding Company, (ii) the Depositor or (iii) the Issuer, respectively, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy or similar law.  This Section 11.1 will survive the resignation or removal of the Indenture Trustee under this Indenture and the termination of this Indenture.

 

47

 

Section 11.2.                          Limited Recourse; Subordination of Claims Against Titling Companies.

 

(a)                                 Limited Recourse; Subordination Agreement.  The Titling Companies’ obligations under the 20  -   Exchange Note are secured solely by the Borrower Collateral, and a claim under this Indenture or a Note issued under this Indenture against a Titling Company will be limited in recourse to the 20  -   Reference Pool and the other Borrower Collateral available for payment on the 20  -   Exchange Note under the Exchange Note Supplement.  The Indenture Trustee, by entering into this Indenture, and each Noteholder and Note Owner, by accepting a Note or an interest or participation in a Note, acknowledge and agree that they have no right, title or interest in or to any other assets of the Titling Companies, including assets allocated to Specified Interests other than the Collateral Specified Interest (“Other Borrower Assets”).  If the Indenture Trustee, a Noteholder, a Note Owner or another Person having a claim under this Indenture either (i) asserts an interest in, claim to or benefit from, Other Borrower Assets or (ii) is deemed to have an interest in, claim to or benefit from Other Borrower Assets, whether by operation of law, legal process, under insolvency laws or otherwise (including under Section 1111(b) of the Bankruptcy Code), then the Indenture Trustee, each Noteholder and each Note Owner further acknowledges and agrees that the interest, claim or benefit in, to or from the Other Borrower Assets is subordinated to the indefeasible payment in full of the other obligations and liabilities of the Titling Companies (“Other Borrower Liabilities”), which, under the relevant documents relating to the securitization, conveyance or other financing or disposition of those Other Borrower Assets, are entitled to be paid from, entitled to the benefits of or secured by those Other Borrower Assets (whether or not the entitlement or security interest is legally perfected or entitled to a priority of distributions or application under applicable law, including insolvency laws, and whether or not asserted against the Titling Companies), in each case, including the payment of post-petition interest on those other obligations and liabilities.  This Section 11.2(a) is a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code.  The Indenture Trustee, each Noteholder and each Note Owner further acknowledge and agree that no adequate remedy at law exists for a breach of this Section 11.2 and this Section 11.2 may be enforced by an action for specific performance.

 

(b)                                 Election under Bankruptcy Code.  The Indenture Trustee, by entering into this Indenture, and each Noteholder and Note Owner, by accepting a Note or an interest or participation in a Note, irrevocably makes the election provided to secured creditors by Section 1111(b)(1)(A)(i) of the Bankruptcy Code to receive the treatment provided by Section 1111(b)(2) of the Bankruptcy Code for a secured claim that Person may have against Other Borrower Assets (including a Specified Interest of a Titling Company other than the Collateral Specified Interest).

 

(c)                                  Third Party Benefit.  This Section 11.2 is for the third party benefit of the holders, pledgees or other beneficiaries of Other Borrower Liabilities and will survive the termination of this Indenture.

 

Section 11.3.                          Limited Recourse; Subordination of Claims against Depositor.  The Issuer’s obligations under this Indenture are solely the Issuer’s obligations and do not represent an obligation or interest in the assets of the Depositor other than the Sold Assets conveyed to the Issuer under the Exchange Note Sale Agreement.  The Indenture Trustee, by entering into this Indenture, and each Noteholder and Note Owner, by accepting a Note or an interest or

 

48

 

participation in a Note, acknowledge and agree that they have no right, title or interest in or to Other Assets of the Depositor.  If the Indenture Trustee, Noteholder or Note Owner either (i) asserts an interest in, claim to or benefit from, the Other Assets or (ii) is deemed to have an interest in, claim to or benefit from the Other Assets, whether by operation of law, legal process, under insolvency laws or otherwise (including under Section 1111(b) of the Bankruptcy Code), then the Indenture Trustee, Noteholder or Note Owner further acknowledges and agrees that the interest, claim or benefit in, to or from the Other Assets is expressly subordinated to the indefeasible payment in full of the other obligations and liabilities, which, under the relevant documents relating to the securitization or conveyance of those Other Assets, are entitled to be paid from, entitled to the benefits of, or secured by, those Other Assets (whether or not the entitlement or security interest is legally perfected or entitled to a priority of distributions or application under applicable law, including insolvency laws, and whether or not asserted against the Depositor), including the payment of post-petition interest on those other obligations and liabilities.  This Section 11.3 is a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code.  The Indenture Trustee, each Noteholder and each Note Owner further acknowledge and agree that no adequate remedy at law exists for a breach of this Section 11.3 and it may be enforced by an action for specific performance.  This Section 11.3 is for the third-party benefit of the Depositor and any Person with an interest in the Other Assets and will survive the termination of this Indenture.

 

Section 11.4.                          Issuer Orders; Certificates and Opinions

 

(a)                                 Issuer Order or Issuer Request.  For an order or request by the Issuer to the Indenture Trustee to take an action under this Indenture or any other Transaction Document, the Issuer will deliver the following documents to the Indenture Trustee: (i) a written order (an “Issuer Order”) or a written request (an “Issuer Request”), signed in the name of the Issuer by a Responsible Person and delivered to the Indenture Trustee, (ii) an Officer’s Certificate stating that all conditions in this Indenture or such other Transaction Document for the proposed action have been satisfied, (iii) if required by the TIA or on the request of the Indenture Trustee, an Opinion of Counsel stating that the conditions have been satisfied and (iv) if required by the TIA, an Independent Certificate from a firm of certified public accountants of national reputation selected by the Issuer.  However, no certificates or opinions are required to be delivered if this Indenture requires the furnishing of specific documents for the action to be taken.

 

(b)                                 Form of Certificates and Opinions.

 

(i)                                     Each certificate or opinion on compliance with a condition or covenant in this Indenture will include:

 

(A)                               a statement that each signatory of the certificate or opinion has read the covenant or condition and the definitions in this Indenture relating to the covenant or condition;

 

(B)                               a brief statement about the nature and scope of the examination or investigation on which the statements or opinions in the certificate or opinion are based;

 

49

 

(C)                               a statement that, in the opinion of the signatory, the signatory has made an examination or investigation if necessary to enable the signatory to express an informed opinion on whether or not the covenant or condition has been complied with; and

 

(D)                               a statement about whether, in the opinion of the signatory, the condition or covenant has been complied with.

 

(ii)                                  Any Officer’s Certificate of a Responsible Person of the Issuer may be based, for legal matters, on an opinion of counsel, unless that Responsible Person knows, or in the exercise of reasonable care should know, that the opinion is erroneous.  Any Officer’s Certificate of a Responsible Person of the Issuer or opinion of counsel may be based, for factual matters, on an Officer’s Certificate of a Responsible Person of the Servicer, the Depositor or the Issuer (including by the Administrator on behalf of the Issuer), stating that the information about those factual matters is in the possession of the Servicer, the Depositor, the Issuer or the Administrator, unless the Responsible Person of the Issuer or counsel knows, or in the exercise of reasonable care should know, that the Officer’s Certificate is erroneous.

 

(c)                                  Conditions for Release.

 

(i)                                     Before depositing property or securities with the Indenture Trustee that is to be made the basis for the release of any Collateral subject to the Lien of this Indenture, the Issuer will furnish to the Indenture Trustee (A) an Officer’s Certificate stating the opinion of each Responsible Person signing the certificate about the fair value (within 90 days before the deposit) to the Issuer of the property or securities to be so deposited and (B) an Independent Certificate about the same matters, if the fair value to the Issuer of the securities to be so deposited and of other of securities withdrawn or released since the start of the then-current year, as stated in the certificates required by clause (A) and this clause (B), is 10% or more of the Note Balance of the Notes Outstanding, except that an Independent Certificate need not be furnished for property or securities so deposited if the fair value of the property or securities to the Issuer as stated in the related Officer’s Certificate is less than $25,000 or less than 1% of the Note Balance of the Notes.

 

(ii)                                  Whenever property or securities are to be released from the Lien of this Indenture, the Issuer will furnish to the Indenture Trustee (A) an Officer’s Certificate stating the opinion of each Responsible Person signing the certificate about the fair value (within 90 days before the release) of the property or securities to be released and stating that in the opinion of that Responsible Person the proposed release will not impair the security under this Indenture and (B) an Independent Certificate about the same matters, if the fair value of the property or securities and of other property, other than property as contemplated by Section 11.4(d), of securities released from the Lien of this Indenture since the start of the then-current year, as stated in the certificates required by clause (A) and this clause (B), is 10% or more of the Note Balance of the Notes Outstanding, except that an Independent Certificate need not be furnished for the release of property or securities if the fair value of the property or securities as stated in the related Officer’s Certificate is less than $25,000 or less than 1% of the Note Balance of the Notes.

 

50

 

(d)                                 Ordinary Course of Business.  The Issuer may, without furnishing any Officer’s Certificates or Independent Certificates under Section 11.4(c), (i) collect, liquidate, sell or dispose of (or, as Holder of the 20  -   Exchange Note, cause the Titling Companies to collect, liquidate, sell, remove or dispose of) Leases and Leased Vehicles in the ordinary course of its business, so long as Collections, Liquidation Proceeds, Recoveries and other proceeds of the dispositions are applied according to this Indenture and (ii) make cash payments out of the Bank Accounts, in each case, as and if permitted or required by the Transaction Documents.

 

(e)                                  Exemptive Orders.  If the Securities and Exchange Commission issues an exemptive order under Section 304(d) of the TIA modifying the Indenture Trustee’s obligations under Sections 314(c) and 314(d)(1) of the TIA, the Indenture Trustee will release property from the Lien of this Indenture only according to the Transaction Documents and the conditions and procedures stated in the exemptive order.

 

Section 11.5.                          Acts of Noteholders.

 

(a)                                 Written Documents.  Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by the Noteholders or a stated percentage of Noteholders may be included in and evidenced by one or more documents signed by the Noteholders (each, an “Act of Noteholders”).  Except as otherwise stated in this Indenture, the action will become effective when the documents are delivered to the Indenture Trustee and, if required, to the Issuer.

 

(b)                                 Binding Effect.  Any Act of Noteholders will bind the Noteholder of every Note issued on the registration of the Note or in exchange for the Note or in place of the Note, for all purposes whether or not notation of the action is made on the Note.

 

Section 11.6.                          Conflict with Trust Indenture Act.  If any part of this Indenture limits, qualifies or conflicts with any other part of this Indenture that is required or deemed to be included in this Indenture by the TIA, the required or deemed part will control.  Sections 310 through 317 of the TIA that impose obligations on a Person (including those automatically deemed included in this Indenture unless expressly excluded by this Indenture) are a part of and govern this Indenture.

 

Section 11.7.                          Issuer Obligation.  No recourse may be taken, directly or indirectly, for the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or a certificate or other writing delivered under this Indenture or the Notes, against (a) the Indenture Trustee or the Owner Trustee each in its individual capacity, (b) each holder of a beneficial interest in the Issuer, (c) each partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee, each in its individual capacity or (d) each holder of a beneficial interest in the Owner Trustee or the Indenture Trustee, each in its individual capacity.  The Indenture Trustee and the Owner Trustee have none of these obligations in their individual capacities.  For all purposes of this Indenture, the Owner Trustee will be subject to, and have the benefits of, Articles V, VI and VII of the Trust Agreement.

 

51

 

ARTICLE XII
 MISCELLANEOUS

 

Section 12.1.                          Benefits of Indenture; Third-Party Beneficiaries.  This Indenture and the Notes are for the benefit of and will be binding on the parties and their permitted successors and assigns.  The Secured Parties, each Person with rights to payments or distributions under this Indenture and the holder of the Residual Interest will be third-party beneficiaries of this Indenture and may enforce this Indenture according to its terms.  No other Person will have any right or obligation under this Indenture or the Notes.

 

Section 12.2.                          Notices.

 

(a)                                 Notices to Parties.  Notices, requests, directions, consents, waivers or other communications to or from the parties to this Indenture must be in writing and will be considered received by the recipient:

 

(i)                                     for overnight mail, on delivery or, for registered first class mail, postage prepaid, three days after deposit in the mail properly addressed to the recipient;

 

(ii)                                  for a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient;

 

(iii)                               for an email, when receipt is confirmed by telephone or reply email from the recipient; and

 

(iv)                              for an electronic posting to a password-protected website to which the recipient has access, on delivery of an email (without the requirement of confirmation of receipt) stating that the electronic posting has been made.

 

(b)                                 Notice Addresses.  A notice, request, direction, consent, waiver or other communication will be addressed to the recipient stated on Schedule A, which address the party may change by notifying the other party.

 

(c)                                  Notice to Noteholders.  Notices to a Noteholder will be considered received by the Noteholder:

 

(i)                                     for Definitive Notes, for overnight mail, on delivery or, for registered first class mail, postage prepaid, three days after deposit in the mail properly addressed to the Noteholder at its address in the Note Register; or

 

(ii)                                  for Book-Entry Notes, when delivered under the procedures of the Clearing Agency, whether or not the Noteholder actually receives the notice.

 

(d)                                 Notices to Rating Agencies.  Where this Indenture requires notice to the Rating Agencies, failure to give the notice will not affect other rights or obligations under this Indenture, and will not be a Default or Event of Default.

 

52

 

Section 12.3.                          GOVERNING LAW.  THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF NEW YORK.

 

Section 12.4.                          Submission to Jurisdiction.  Each party submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State Court sitting in New York, New York for legal proceedings relating to this Indenture.  Each party irrevocably waives, to the fullest extent permitted by law, any objection that it may now or in the future have to the venue of a proceeding brought in such a court and any claim that the proceeding was brought in an inconvenient forum.

 

Section 12.5.                          WAIVER OF JURY TRIAL.  EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN LEGAL PROCEEDINGS RELATING TO THIS INDENTURE.

 

Section 12.6.                          No Waiver; Remedies.  No party’s failure or delay in exercising a power, right or remedy under this Indenture will operate as a waiver.  No single or partial exercise of a power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other power, right or remedy.  The powers, rights and remedies under this Indenture are in addition to any powers, rights and remedies under law.

 

Section 12.7.                          Severability.  If a part of this Indenture is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining Indenture and will not affect the validity, legality or enforceability of the remaining Indenture.

 

Section 12.8.                          Headings.  The headings in this Indenture are included for convenience and will not affect the meaning or interpretation of this Indenture.

 

Section 12.9.                          Counterparts.  This Indenture may be executed in multiple counterparts.  Each counterpart will be an original and all counterparts will together be one document.

 

[Remainder of Page Left Blank]

 

53

 

	
EXECUTED   BY:
    	
 
    
	
 
    	
 
    
	
 
    	
FORD   CREDIT AUTO LEASE TRUST 20  -  ,
    
	
 
    	
as Issuer
    
	
 
    	
 
    
	
 
    	
By:
    	
                                                                         ,   not in its individual capacity but solely as Owner Trustee of Ford Credit   Auto Lease Trust 20  -
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
                                                                                     ,
    
	
 
    	
 
    	
not   in its individual capacity but solely as Indenture Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Indenture]

 

 

	
Agreed   and Acknowledged for purposes
    	
 
    
	
of   the Granting Clause:
    	
 
    
	
 
    	
 
    
	
CAB   EAST LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
CAB WEST LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Signature Page to Indenture]

 

 

Schedule A

 

Notice Addresses

 

1.                                      If to Ford Credit, in its individual capacity or as Sponsor, Servicer, Custodian or Administrator:

 

Ford Motor Credit Company LLC
 c/o Ford Motor Company
 World Headquarters, Suite 802-A3
 One American Road 
 Dearborn, Michigan 48126
 Attention:  Securitization Operations Supervisor
 Telephone:  (313) 248-9379
 Email:  FDSecops@ford.com

 

With a copy to:

 

Ford Motor Credit Company LLC
 One American Road
 Suite 2411, Office 212-016
 Dearborn, Michigan 48126
 Attention:  Corporate Secretary
 Telephone:  (313) 322-1200
 Fax:  (313) 337-1160

 

2.                                      If to the Depositor:

 

Ford Motor Credit Company LLC
 c/o Ford Motor Company
 World Headquarters, Suite 802-A3
 One American Road 
 Dearborn, Michigan 48126
 Attention:  Ford Credit SPE Management Office
 Telephone:  (313) 594-3495
 Email:  FSPEMgt@ford.com

 

With a copy to:

 

Ford Motor Credit Company LLC
 One American Road
 Suite 2411, Office 212-016
 Dearborn, Michigan 48126
 Attention:  Corporate Secretary
 Telephone:  (313) 322-1200
 Fax:  (313) 337-1160

 

SA-1

 

3.                                      If to the Issuer:

 

c/o the Owner Trustee at the Corporate Trust Office of the Owner Trustee

 

With copies to:

 

Ford Motor Credit Company LLC
 c/o Ford Motor Company
 World Headquarters, Suite 802-A3
 One American Road 
 Dearborn, Michigan 48126
 Attention:  Ford Credit SPE Management Office
 Telephone:  (313) 594-3495
 Email:  FSPEMgt@ford.com

 

and

 

Ford Motor Credit Company LLC
 One American Road
 Suite 2411, Office 212-016
 Dearborn, Michigan 48126
 Attention:  Corporate Secretary
 Telephone:  (313) 322-1200
 Fax:  (313) 337-1160

 

4.                                      If to the Owner Trustee, at the Corporate Trust Office of the Owner Trustee

 

5.                                      If to the Indenture Trustee, at the Corporate Trust Office of the Indenture Trustee;

 

6.                                      If to the Asset Representations Reviewer:

 

[address]
 Attention:  
 Telephone: 
 Fax:

 

7.                                      If to [Rating Agency]:

 

[address]
 Attention:  
 Telephone: 
 Fax:

 

SA-2

 

Exhibit A

 

Form of Notes

 

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

 

[Rule 144A Notes Only: THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE OF THE UNITED STATES.  THE HOLDER OF THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE), BY PURCHASING THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE), AGREES FOR THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE) MAY BE SOLD, TRANSFERRED, ASSIGNED, PARTICIPATED, PLEDGED OR DISPOSED OF ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS, AND ONLY (I) UNDER RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (II) TO THE DEPOSITOR OR ITS AFFILIATES, IN EACH CASE, ACCORDING TO ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND SECURITIES AND BLUE SKY LAWS OF THE STATES OF THE UNITED STATES.]

 

EACH HOLDER OF THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE) THAT IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR A FEDERAL, STATE, LOCAL OR NON-U.S. LAW OR REGULATION THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A “SIMILAR LAW”), BY ACCEPTING THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE), IS DEEMED TO REPRESENT THAT ITS PURCHASE, HOLDING AND DISPOSITION OF THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE) IS NOT AND WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE DUE TO THE APPLICABILITY OF A STATUTORY OR ADMINISTRATIVE EXEMPTION FROM THE PROHIBITED TRANSACTION RULES (OR, IF THE HOLDER IS SUBJECT TO ANY

 

EA-1

 

SIMILAR LAW, ITS PURCHASE, HOLDING AND DISPOSITION IS NOT AND WILL NOT RESULT IN A NON-EXEMPT VIOLATION OF THE SIMILAR LAW).

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS STATED IN THIS NOTE.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE OF THIS NOTE.

 

EA-2

 

	
REGISTERED
    	
$[           ]
    
	
No. R-1
    	
CUSIP NO.   [         ]
    

 

FORD CREDIT AUTO LEASE TRUST 20  -

 

CLASS [A-[  ][B][C] [  %][FLOATING RATE] ASSET BACKED NOTES

 

Ford Credit Auto Lease Trust 20  -  , a statutory trust organized under the laws of the State of Delaware (the “Issuer”), for value received, promises to pay to CEDE & CO., or registered assigns, the principal sum of [                ] DOLLARS payable on the fifteenth day of each month, or, if that day is not a Business Day, the next succeeding Business Day, starting in        20   (each, a “Payment Date”) in an amount equal to the aggregate amount payable to Noteholders of Class [A-[  ][B][C] Notes on that Payment Date from the amounts payable as principal on the Class [A-[  ][B][C] Notes under Section 3.1 of the Indenture, dated as of            , 20   (the “Indenture”), between the Issuer and                         , as Indenture Trustee (the “Indenture Trustee”).  However, the entire unpaid principal amount of this Note will be due and payable on the earlier of (a) the [          ] Payment Date (the “Class [A-[  ][B][C] Final Scheduled Payment Date”), or (b) the Redemption Date under Section 10.1 of the Indenture.  The entire unpaid principal amount of the Notes will be due and payable on the date on which the Notes are declared to be, or have automatically become, immediately due and payable under Section 5.2(a) of the Indenture.  Principal payments on the Class [A-[  ][B][C] Notes will be made pro rata to the Noteholders entitled to those principal payments. Capitalized terms used but not defined in this Note are defined in Article I of the Indenture, which also contains usage rules that apply to this Note.

 

The Issuer will pay interest on this Note [at the rate per annum shown above] [a rate based on LIBOR determined under the terms of the Indenture, equal to LIBOR plus [   ]%] on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the prior Payment Date (in each case, after giving effect to payments of principal made on the prior Payment Date), subject to limitations in Section 3.1 of the Indenture.  Interest on this Note will accrue for each Payment Date from and including the [15th day of the month before each Payment Date] [previous Payment Date on which interest has been paid] (or, for the initial Payment Date, from and including the Closing Date) to but excluding [the 15th day of the month in which that Payment Date occurs] [that Payment Date].  Interest will be computed on the basis of [actual days elapsed and] a 360-day year [of twelve 30 day months].

 

The principal of and interest on this Note are payable in the coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts.  Payments made by the Issuer on this Note will be applied first to interest due and payable on this Note as stated above and then to the unpaid principal of this Note.

 

This Note is one of a duly authorized issue of Class [A-[  ][B][C] [  %][Floating Rate] Asset Backed Notes (the “Class [A-[  ][B][C] Notes”) of the Issuer.  Also authorized under the Indenture are the Class [A-[  ][B][C] Notes.  The Indenture and indentures supplemental to the Indenture state the respective rights and obligations of the Issuer, the Indenture Trustee and the Noteholders.  The Notes are subject to the Indenture.

 

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The Class [A-[  ][B][C] Notes are and will be equally and ratably secured by the collateral pledged as security therefor under the Indenture.  Interest on and principal of the Notes will be payable according to the priority of payments stated in Section 8.2 of the Indenture.  [Class B only:][The Class B Notes are subordinated in right of payment to the Class A Notes.]  [Class C only:][The Class C Notes are subordinated in right of payment to the Class A and Class B Notes.]

 

Payments of interest on this Note on each Payment Date, together with each installment of principal if not in full payment of this Note, will be made to the Registered Noteholder of this Note either by wire transfer, to the account of the Noteholder at a bank or other entity having proper facilities for the wire transfer, if the Noteholder has given to the Note Registrar proper written instructions at least five Business Days before that Payment Date and the Noteholder’s Notes in the aggregate evidence a denomination of not less than $1,000,000, or, if not, by check mailed first class mail, postage prepaid, to the Registered Noteholder’s address as it appears on the Note Register on each Record Date.  However, unless Definitive Notes have been issued to Note Owners, payment will be made by wire transfer to the account designated by Cede & Co., as nominee of the Clearing Agency or a successor nominee.  The payments will be made without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note effected by payments made on a Payment Date will bind future Noteholders of this Note and of a Note issued on the registration of transfer of this Note or in exchange of this Note or in place of this Note, whether or not noted on this Note.  If money is expected to be available for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Registered Noteholder of this Note as of the prior Record Date by notice mailed or transmitted by fax before that Payment Date, and the amount then due and payable will be payable only on presentation and surrender of this Note at the Indenture Trustee’s Corporate Trust Office or at the office of the Indenture Trustee’s agent appointed for those purposes located in The City of New York.

 

The Issuer will pay interest on overdue installments of interest at the Class [A-[  ]/B/C] Note Interest Rate if lawful.

 

The Notes may be redeemed, in whole but not in part, in the manner and to the extent described in the Indenture and the Servicing Supplement.

 

The transfer of this Note is subject to the restrictions on transfer stated on the face of this Note and to the other limitations in the Indenture.  Subject to the satisfaction of those restrictions and limitations, the transfer of this Note may be registered on the Note Register on surrender of this Note for registration of transfer at the office or agency designated by the Issuer under the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Noteholder of this Note or its attorney-in-fact, with the signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, and then one or more new Notes of the same Class in authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for the registration of transfer or exchange of this Note, but the transferor may be required to pay an amount to cover

 

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any tax or other governmental charge that may be imposed under any registration of transfer or exchange.

 

Each Noteholder or Note Owner, by accepting a Note or, for a Note Owner, an interest or participation in a Note, agrees that no recourse may be taken, directly or indirectly, for the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or a certificate or other writing delivered for the Notes and the Indenture, against (i) the Indenture Trustee or the Owner Trustee, each in its individual capacity, (ii) any holder of a beneficial interest in the Issuer, (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee, each in its individual capacity or (iv) any holder of a beneficial interest in the Owner Trustee or the Indenture Trustee, each in its individual capacity.

 

The obligations of the Issuer under the Indenture are solely the obligations of the Issuer and do not represent an obligation or interest in any assets of the Depositor other than the Sold Assets conveyed to the Issuer under the Exchange Note Sale Agreement.  Each Noteholder and Note Owner, by its acceptance of a Note or an interest or participation in a Note, acknowledges and agrees that it has no right, title or interest in or to any Other Assets of the Depositor.  If the Noteholder or Note Owner either (i) asserts an interest or claim to, or benefit from, Other Assets or (ii) is deemed to have any interest, claim to or benefit in or from Other Assets, whether by operation of law, legal process, under insolvency laws or otherwise (including by virtue of Section 1111(b) of the Bankruptcy Code), then the Noteholder or Note Owner further acknowledges and agrees that any interest, claim or benefit in or from Other Assets is and will be expressly subordinated to the indefeasible payment in full of the other obligations and liabilities, which, under the relevant documents relating to the securitization or conveyance of those Other Assets, are entitled to be paid from, entitled to the benefits of, or secured by those Other Assets (whether or not any entitlement or security interest is legally perfected or otherwise entitled to a priority of distributions or application under applicable law, including insolvency laws, and whether or not asserted against the Depositor), including the payment of post-petition interest on the other obligations and liabilities.  THIS PARAGRAPH IS A SUBORDINATION AGREEMENT WITHIN THE MEANING OF SECTION 510(a) OF THE BANKRUPTCY CODE.

 

Any claim under a Note issued under the Indenture against one of the Titling Companies will be limited in recourse to the 20  -   Reference Pool and the other Borrower Collateral available for payment on this Note under the Exchange Note Supplement.  Each Noteholder and Note Owner, by its acceptance of a Note or an interest or participation in a Note, acknowledges and agrees that it has no right, title or interest in or to any Other Borrower Assets of a Titling Company.  If the Noteholder or Note Owner either (i) asserts an interest or claim to, or benefit from, Other Borrower Assets or (ii) is deemed to have any interest, claim to or benefit in or from Other Borrower Assets, whether by operation of law, legal process, under insolvency laws or otherwise (including by virtue of Section 1111(b) of the Bankruptcy Code), then the Noteholder or Note Owner further acknowledges and agrees that any interest, claim or benefit in or from Other Borrower Assets is and will be expressly subordinated to the indefeasible payment in full of the other obligations and liabilities, which, under the relevant documents relating to the securitization or conveyance of those Other Borrower Assets, are entitled to be paid from, entitled to the benefits of, or secured by those Other Borrower Assets (whether or not any

 

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entitlement or security interest is legally perfected or otherwise entitled to a priority of distributions or application under applicable law, including insolvency laws, and whether or not asserted against the Titling Company), including the payment of post-petition interest on the other obligations and liabilities.  THIS PARAGRAPH IS A SUBORDINATION AGREEMENT WITHIN THE MEANING OF SECTION 510(a) OF THE BANKRUPTCY CODE.

 

Each Noteholder or Note Owner, by accepting a Note or, for a Note Owner, an interest or participation in a Note, agrees that, before the date that is one year and one day (or, if longer, any applicable preference period) after the payment in full of (a) all Secured Obligations, including all Exchange Notes, and any other Securities, (b) all securities issued by the Depositor or by a trust for which the Depositor was a depositor or (c) the Notes, it will not start or pursue against, or join another Person in starting or pursuing against, (i) either Titling Company or either Holding Company, (ii) the Depositor or (iii) the Issuer, respectively, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any bankruptcy or similar law.

 

The Issuer has entered into the Indenture and this Note is issued with the intention that, for federal, State and local income and franchise tax purposes, Notes that are beneficially owned by a Person other than Ford Credit or its Affiliates will qualify as indebtedness of the Issuer secured by the Collateral.  Each Noteholder or Note Owner, by its acceptance of a Note or an interest or participation in a Note, will be deemed to agree to treat the Notes for federal, State and local income, single business and franchise tax purposes as indebtedness of the Issuer.

 

For any date, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note is registered as of that date as the owner of this Note for the purpose of receiving payments of principal of and any interest on the Note and for all other purposes, without regard to any notice or other information to the contrary.

 

The Indenture permits, with some exceptions requiring the consent of all adversely affected Noteholders under the Indenture, the amendment of the Indenture and the modification of the rights and obligations of the Issuer and the rights of the Noteholders under the Indenture by the Issuer with the consent of the Noteholders of Notes evidencing not less than a majority of the Note Balance of the Controlling Class.  The Indenture also permits the Indenture Trustee to amend or waive some terms and conditions in the Indenture without the consent of the Noteholders if some conditions are satisfied.  In addition, the Indenture contains terms permitting the Noteholders of Notes evidencing stated percentages of the Note Balance of the Notes or of the Controlling Class, on behalf of all Noteholders, to waive compliance by the Issuer with some terms of the Indenture and some defaults under the Indenture and their consequences.  Any consent or waiver by the Noteholder of this Note will be conclusive and bind the Noteholder and all future Noteholders of this Note and of any Note issued on the registration of transfer of this Note or in exchange of this Note or in place of this Note whether or not notation of the consent or waiver is made on this Note.

 

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

 

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The Issuer is permitted by the Indenture, under some circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Noteholders under the Indenture.

 

The Notes are issuable only in registered form in denominations as stated in the Indenture, subject to some limitations in the Indenture.

 

THIS NOTE AND THE INDENTURE WILL BE GOVERNED BY, AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF NEW YORK.

 

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

 

Except as permitted under the Transaction Documents, none of                    , in its individual capacity,                  , in its individual capacity, any owner of a beneficial interest in the Issuer, or their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns will be personally liable for, nor will recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications in the Indenture.  The Noteholder of this Note, by its acceptance of this Note, agrees that, except as permitted in the Transaction Documents, for an Event of Default under the Indenture, the Noteholder has no claim against those Persons for any deficiency, loss or claim from this Note.  However, nothing in this Note will be taken to prevent recourse to, and enforcement against, the assets of the Issuer for liabilities, obligations and undertakings in the Indenture or in this Note.

 

Unless the certificate of authentication on this Note has been executed by the Indenture Trustee whose name appears below by manual signature, this Note will have the benefit of the Indenture, or be valid or obligatory for any purpose.

 

[Remainder of Page Left Blank]

 

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The Issuer has caused this instrument to be signed, manually or in facsimile, by its Responsible Person, as of the date below.

 

	
Date:                   , 20
    	
 
    
	
 
    	
 
    
	
 
    	
FORD   CREDIT AUTO LEASE TRUST 20  -
    
	
 
    	
 
    
	
 
    	
By:
    	
                                                    ,   not in its individual capacity but solely as Owner Trustee of Ford Credit   Auto Lease Trust 20  -
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Responsible   Person
    

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Class [A-[  ][B][C] Notes designated above and referred to in the Indenture.

 

	
Date:                   , 20
    	
 
    
	
 
    	
 
    
	
,
    	
                                                                                ,
    
	
 
    	
 
    	
not   in its individual capacity but 
    
	
 
    	
 
    	
solely   as Indenture Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Responsible   Person
    

 

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ASSIGNMENT

 

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

 

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

 

 

 

(name and address of assignee)

 

the within Note and all rights under said Note, and hereby irrevocably constitutes and appoints                  , attorney, to transfer said Note on the books kept for registration of said Note, with full power of substitution in the premises.

 

 

	
Dated:
    	
 
    	
 
    	
                                                                                                        */
    
	
 
    	
 
    	
Signature Guaranteed*/
    

 

*/                                     NOTICE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatever.  The signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agents Medallion Program or another “signature guarantee program” selected by the Note Registrar in addition to, or in substitution for, the Securities Transfer Agents Medallion Program, according to the Exchange Act.

 

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