Document:

efc14-394_ex41.htm

Exhibit 4.1

 

 

$1,987,290,000

Asset Backed Notes

 

MERCEDES-BENZ AUTO LEASE TRUST 2014-A,

as Issuer,

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

as Indenture Trustee

 

 

 

INDENTURE

 

Dated as of April 1, 2014

 

  

 

 

  

  

  

 

 

CROSS REFERENCE TABLE*

 

	
   TIA

Section

	  	

Indenture

Section

	 	 	 
	
310

	
(a)(1)

	
6.11

	  	
(a)(2)

	
6.11

	  	
(a)(3)

	
6.10; 6.11

	  	
(a)(4)

	
N.A.**

	  	
(a)(5)

	
6.11

	  	
(b)

	
6.08; 6.11

	  	
(c)

	
N.A.

	
311

	
(a)

	
6.12

	  	
(b)

	
6.12

	  	
(c)

	
N.A.

	
312

	
(a)

	
7.01

	  	
(b)

	
7.02

	  	
(c)

	
7.02

	
313

	
(a)

	
7.04

	  	
(b)(1)

	
7.04

	  	
(b)(2)

	
7.04

	  	
(c)

	
7.04; 11.05

	  	
(d)

	
7.04

	
314

	
(a)

	
3.09; 7.03

	  	
(b)

	
3.06; 11.15

	  	
(c)(1)

	
11.01

	  	
(c)(2)

	
11.01

	  	
(c)(3)

	
11.01

	  	
(d)

	
11.01

	  	
(e)

	
11.01

	  	
(f)

	
11.01

	
315

	
(a)

	
6.01

	  	
(b)

	
6.05; 11.01

	  	
(c)

	
6.01

	  	
(d)

	
6.01

	  	
(e)

	
5.13

	
316

	
(a)

	
1.01

	  	
(a)(1)(A)

	
5.11

	  	
(a)(1)(B)

	
5.12

	  	
(a)(2)

	
N.A.

	  	
(b)

	
5.07

	  	
(c)

	
N.A.

	
317

	
(a)(1)

	
5.03

	  	
(a)(2)

	
5.03

	  	
(b)

	
3.03

	
318

	
(a)

	
11.07

	
*

	
This Cross Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

**    N.A. means Not Applicable.

 

 

  

  

  

TABLE OF CONTENTS

 

Page

 

	
ARTICLE ONE

	 
	
DEFINITIONS

	 
	
Section 1.01. Capitalized Terms; Rules of Usage

	
3

	
Section 1.02. Incorporation by Reference of Trust Indenture Act

	
4

	 	 
	
ARTICLE TWO

	 	 
	
THE NOTES

	 
	
Section 2.01. Form

	
5

	
Section 2.02. Execution, Authentication and Delivery

	
5

	
Section 2.03. Temporary Notes

	
6

	
Section 2.04. Tax Treatment

	
6

	
Section 2.05. Registration; Registration of Transfer and Exchange

	
6

	
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes

	
8

	
Section 2.07. Persons Deemed Owner

	
9

	
Section 2.08. Payment of Principal and Interest

	
9

	
Section 2.09. Cancellation

	
10

	
Section 2.10. Book-Entry Notes

	
10

	
Section 2.11. Notices to Clearing Agency

	
11

	
Section 2.12. Definitive Notes

	
11

	
Section 2.13. Release of Collateral

	
11

	
Section 2.14. [Reserved]

	
11

	
Section 2.15. Authenticating Agents

	
12

	 	 
	
ARTICLE THREE

	 	 
	
COVENANTS AND REPRESENTATIONS

	 	 
	
Section 3.01. Payment of Principal and Interest

	
13

	
Section 3.02. Maintenance of Office or Agency

	
13

	
Section 3.03. Money for Payments to be Held in Trust

	
13

	
Section 3.04. Existence

	
14

	
Section 3.05. Protection of the Trust Estate

	
14

	
Section 3.06. Opinions as to Trust Estate

	
15

	
Section 3.07. Performance of Obligations; Servicing of 2014-A Leases and 2014-A Vehicles

	
16

	
Section 3.08. Negative Covenants

	
18

	
Section 3.09. Issuer May Consolidate, etc., Only on Certain Terms

	
18

	
Section 3.10. Successor or Transferee

	
20

	
Section 3.11. Servicer’s Obligations

	
20

 

  

i

  

 

Page

 

	
Section 3.12. Guarantees, Loans, Advances and Other Liabilities

	
20

	
Section 3.13. Capital Expenditures

	
20

	
Section 3.14. Removal of Administrator

	
20

	
Section 3.15. Restricted Payments

	
21

	
Section 3.16. Notice of Events of Default

	
21

	
Section 3.17. Further Instruments and Acts

	
21

	
Section 3.18. Delivery of 2014-A Exchange Note

	
21

	
Section 3.19. Compliance With Laws

	
21

	
Section 3.20. Annual Statement as to Compliance

	
21

	
Section 3.21. Representations

	
22

	 	 
	
ARTICLE FOUR

	 	 
	
SATISFACTION AND DISCHARGE

	 	 
	
Section 4.01. Satisfaction and Discharge of Indenture

	
23

	
Section 4.02. Satisfaction, Discharge and Defeasance of the Notes

	
24

	
Section 4.03. Application of Trust Money

	
25

	
Section 4.04. Repayment of Monies Held by Note Paying Agent

	
25

	 	 
	
ARTICLE FIVE

	 	 
	
EVENTS OF DEFAULT; REMEDIES

	 	 
	
Section 5.01. Events of Default

	
26

	
Section 5.02. Acceleration of Maturity; Rescission and Annulment

	
27

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

	
27

	
Section 5.04. Remedies; Priorities

	
29

	
Section 5.05. Optional Preservation of the Trust Estate

	
31

	
Section 5.06. Limitation of Suits

	
31

	
Section 5.07. Unconditional Rights of Noteholders to Receive Principal and Interest

	
32

	
Section 5.08. Restoration of Rights and Remedies

	
32

	
Section 5.09. Rights and Remedies Cumulative

	
32

	
Section 5.10. Delay or Omission Not a Waiver

	
32

	
Section 5.11. Control by Noteholders of the Controlling Class

	
33

	
Section 5.12. Waiver of Past Defaults

	
33

	
Section 5.13. Undertaking for Costs

	
33

	
Section 5.14. Waiver of Stay or Extension Laws

	
34

	
Section 5.15. Action on Notes

	
34

	
Section 5.16. Performance and Enforcement of Certain Obligations

	
34

	
Section 5.17. Sale of Trust Estate

	
35

 

  

ii

  

Page

 

	
ARTICLE SIX

	 	 
	
THE INDENTURE TRUSTEE

	 	 
	
Section 6.01. Duties of Indenture Trustee

	
36

	
Section 6.02. Rights of Indenture Trustee

	
37

	
Section 6.03. Individual Rights of Indenture Trustee

	
38

	
Section 6.04. Indenture Trustee’s Disclaimer

	
38

	
Section 6.05. Notice of Defaults and Repurchase Requests

	
38

	
Section 6.06. Reports by Indenture Trustee to Holders

	
38

	
Section 6.07. Compensation and Indemnity

	
39

	
Section 6.08. Replacement of Indenture Trustee

	
39

	
Section 6.09. Successor Indenture Trustee by Merger

	
40

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

	
41

	
Section 6.11. Eligibility; Disqualification

	
42

	
Section 6.12. Preferential Collection of Claims Against Issuer

	
42

	
Section 6.13. Issuer as Holder of the 2014-A Exchange Note

	
42

	
Section 6.14. Representations and Warranties of Indenture Trustee

	
43

	
Section 6.15. Furnishing of Monthly Investor Reports and Other Documents

	
44

	
Section 6.16. Encryption

	
44

	 	 
	
ARTICLE SEVEN

	 	 
	
NOTEHOLDERS’ LISTS AND REPORTS

	 	 
	
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders

	
45

	
Section 7.02. Preservation of Information; Communications to Noteholders

	
45

	
Section 7.03. Reports by Issuer

	
45

	
Section 7.04. Reports by Indenture Trustee

	
46

	 	 
	
ARTICLE EIGHT

	 	 
	
DISBURSEMENTS AND RELEASES

	 	 
	
Section 8.01. Collection of Money

	
47

	
Section 8.02. Monthly Investor Report

	
47

	
Section 8.03. Disbursement of Funds

	
47

	
Section 8.04. 2014-A Bank Accounts; General Provisions Regarding 2014-A Bank Accounts.

	
50

	
Section 8.05. Release of Trust Estate

	
51

	 	 
	
ARTICLE NINE

	  
	 	 
	
SUPPLEMENTAL INDENTURES

	  
	 	 
	
Section 9.01. Supplemental Indentures Without Consent of Noteholders

	
53

 

  

iii

  

Page

 

	
Section 9.02. Supplemental Indentures With Consent of Noteholders

	
54

	
Section 9.03. Execution of Supplemental Indentures

	
56

	
Section 9.04. Effect of Supplemental Indenture

	
56

	
Section 9.05. Conformity with Trust Indenture Act

	
56

	
Section 9.06. Reference in Notes to Supplemental Indentures

	
56

	 	 
	
ARTICLE TEN

	 	 
	
REDEMPTION OF NOTES

	 	 
	
Section 10.01. Redemption

	
57

	
Section 10.02. Form of Redemption Notice

	
57

	
Section 10.03. Notes Payable on Redemption Date

	
57

	 	 
	
ARTICLE ELEVEN

	 	 
	
MISCELLANEOUS

	 	 
	
Section 11.01. Compliance Certificates and Opinions, etc.

	
59

	
Section 11.02. Form of Documents Delivered to Indenture Trustee

	
60

	
Section 11.03. Acts of Noteholders

	
61

	
Section 11.04. Notices

	
61

	
Section 11.05. Notices to Noteholders; Waiver

	
62

	
Section 11.06. Conflict with Trust Indenture Act

	
63

	
Section 11.07. Alternate Payment and Notice Provisions

	
63

	
Section 11.08. Effect of Headings and Table of Contents

	
63

	
Section 11.09. Successors and Assigns

	
63

	
Section 11.10. Severability

	
63

	
Section 11.11. Benefits of Indenture

	
63

	
Section 11.12. Legal Holidays

	
63

	
Section 11.13. GOVERNING LAW

	
64

	
Section 11.14. WAIVER OF JURY TRIAL

	
64

	
Section 11.15. Counterparts

	
64

	
Section 11.16. Recording of Indenture

	
64

	
Section 11.17. Issuer Obligation

	
64

	
Section 11.18. No Petition

	
65

	
Section 11.19. No Recourse

	
65

	
Section 11.20. Inspection

	
65

	
Section 11.21. Subordination

	
66

	
Section 11.22. Termination of Collateral Agent’s Lien

	
66

	
Section 11.23. Each Exchange Note Separate; Assignees of Exchange Note

	
67

 

  

iv

  

Page

 

EXHIBITS

 

	
Exhibit A – Form of Notes

	
A-1

	
Exhibit B – Form of Repurchase Request

	
B-1

	
Exhibit C – Perfection Representations, Warranties and Covenants

	
C-1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

v

  

This INDENTURE, dated as of April 1, 2014, is between MERCEDES-BENZ AUTO LEASE TRUST 2014-A, a Delaware statutory trust (the “Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee and not in its individual capacity (the “Indenture Trustee”).

 

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Issuer’s 0.20000% Class A-1 Asset Backed Notes (the “Class A-1 Notes”), 0.48% Class A-2-A Asset Backed Notes (the “Class A-2-A Notes”), LIBOR + 0.18% Class A-2-B Asset Backed Notes (the “Class A-2-B Notes”), 0.68% Class A-3 Asset Backed Notes (the “Class A-3 Notes”) and 0.90% Class A-4 Asset Backed Notes (the “Class A-4 Notes” and, together with the Class A-1 Notes, the Class A-2-A Notes, the Class A-2-B Notes and the Class A-3 Notes, the “Notes”):

 

GRANTING CLAUSE

 

The Issuer hereby Grants to the Indenture Trustee on the 2014-A Closing Date, as Indenture Trustee for the benefit of the Holders of the Notes, without recourse, all of the Issuer’s right, title and interest in and to (i) all rights (but none of the obligations) of the Issuer as holder of the 2014-A Exchange Note, including the right of the Issuer to receive payments with respect to the 2014-A Exchange Note, (ii) all rights of the Issuer in the 2014-A Bank Accounts, all funds on deposit in the 2014-A Bank Accounts and all investments and proceeds, including all investment earnings (net of losses and investment expenses), from amounts on deposit in the 2014-A Bank Accounts, (iii) all rights of the Issuer under the 2014-A Basic Documents, including its rights as assignee of the Transferor under the First-Tier Sale Agreement, (iv) the rights of the Issuer as third-party beneficiary of the Basic Servicing Agreement, the 2014-A Servicing Supplement and the 2014-A Exchange Note Supplement and (v) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing (collectively, the “2014-A Collateral”).

 

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority or distinction, except as otherwise provided in this Indenture and the other 2014-A Basic Documents, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

 

The Indenture Trustee, as trustee on behalf of the 2014-A Secured Parties, acknowledges such Grant and the Grant by the Titling Trust under the Titling Trust Control Agreement of a security interest in the 2014-A Exchange Note Collection Account, accepts the trusts under this Indenture in accordance with the provisions of this Indenture and agrees to perform its duties required in this Indenture in accordance with the terms hereof.

 

  

  

  

Notwithstanding any statement to the contrary contained herein or in any other 2014-A Basic Document, neither the Indenture Trustee, any Holder nor other Person shall have a security interest in any funds held in connection with the Tax Owner’s Master Exchange Program in an account that is not one of the 2014-A Bank Accounts established pursuant to the 2014-A Servicing Supplement for the exclusive benefit of the Noteholders, including any funds that represent the net proceeds from the sale or other disposition of a 2014-A Vehicle, and no funds in any such other accounts shall be included in the Trust Estate; provided, that, so long as an Event of Default has occurred and is continuing, the Servicer shall remit actual net proceeds from the sale or other disposition of a 2014-A Vehicle directly into the 2014-A Exchange Note Collection Account.  It is the intention of the parties hereto that the preceding sentence shall satisfy the requirements of Section 1.1031(k)-1(g)(4) of the Treasury Regulations with respect to prohibiting the Tax Owner from having the right to receive, pledge, borrow or otherwise obtain the benefits of money or other property held in such other accounts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

2

  

ARTICLE ONE

 

DEFINITIONS

 

Section 1.01.  Capitalized Terms; Rules of Usage.  Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in Appendix 1 to the 2014-A Servicing Supplement or, if not defined therein, in Appendix A to the Basic Collateral Agency Agreement, which Appendices are hereby incorporated into and made a part of this Agreement.  Appendix 1 also contains rules as to usage applicable to this Indenture.  Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture.  In the event of any conflict between a definition appearing below and any other 2014-A Basic Document, the definition appearing below shall control for purposes of this Indenture.

 

“2014-A Servicing Supplement” means the 2014-A Servicing Supplement, dated as of April 1, 2014, to the Basic Servicing Agreement, among MBFS USA, as servicer and lender, Daimler Trust, as titling trust, and Daimler Title Co., as collateral agent.

 

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

 

“Authenticating Agent” means any Person authorized by the Indenture Trustee to act on behalf of the Indenture Trustee to authenticate and deliver the Notes.

 

“Authorized Newspaper” means a newspaper of general circulation in The City of New York, printed in the English language and customarily published on each Business Day, whether or not published on Saturdays, Sundays and holidays.

 

“Basic Collateral Agency Agreement” means the Amended and Restated Basic Collateral Agency Agreement, dated as of March 1, 2009, among Daimler Trust, the Administrative Agent, Daimler Title Co., as collateral agent, and MBFS USA, as lender and as servicer.

 

“Basic Servicing Agreement” means the Amended and Restated Servicing Agreement, dated as of March 1, 2009, among MBFS USA, as lender and as servicer, Daimler Trust, as titling trust, and Daimler Title Co., as collateral agent.

 

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

 

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

 

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

 

  

3

  

“PTCE” means Prohibited Transaction Class Exemption.

 

“Trust Estate” means all of the Issuer’s right, title and interest in and to the 2014-A Collateral.  Notwithstanding the foregoing, it is understood that for all purposes of this Indenture and the other 2014-A Basic Documents, with respect to the proceeds from the sale or other disposition of a 2014-A Vehicle that are part of 2014-A Collections, the Servicer shall remit when due an amount equal to such proceeds (less related Liquidation Expenses) rather than the actual proceeds from such sale or other disposition, which actual proceeds shall be deposited into a Qualified Intermediary Account and shall not constitute part of the Trust Estate; provided, that, so long as an Event of Default has occurred and is continuing, the Servicer shall remit the actual proceeds (less related Liquidation Expenses) from such sale or other disposition directly into the 2014-A Exchange Note Collection Account.

 

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939.

 

Section 1.02.  Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the TIA, that provision is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

 

“indenture securities” means the Notes.

 

“indenture security holder” means a Noteholder.

 

“indenture to be qualified” means this Indenture.

 

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

 

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

 

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

 

 

 

  

4

  

 

ARTICLE TWO

 

THE NOTES

 

Section 2.01.  Form.  The Notes, together with the Indenture Trustee’s certificate of authentication, shall be substantially in the form set forth in Exhibit A, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the Authorized Officer of the Issuer executing such Notes, as evidenced by his or her execution of the Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

 

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

 

Each Note shall be dated the date of its authentication.  The terms of the Notes set forth in Exhibit A are part of the terms of this Indenture.

 

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

 

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

 

The Indenture Trustee shall upon Issuer Order authenticate and deliver Notes for original issue the Notes in the following aggregate principal amounts: (i) $393,000,000 of Class A-1 Notes, (ii) $405,000,000 of Class A-2-A Notes, (iii) $405,000,000 of Class A-2-B Notes, (iv) $564,290,000 of Class A-3 Notes and (v) $220,000,000 of Class A-4 Notes.  The aggregate principal amount of Class A-1 Notes, Class A-2-A Notes, Class A-2-B Notes, Class A-3 Notes and Class A-4 Notes outstanding at any time may not exceed such respective amounts except as provided in Section 2.06.

 

Each Note shall be dated the date of its authentication.  The Notes shall be issuable as registered notes in book-entry form in minimum denominations of $1,000 and in integral multiples of $1,000 in excess thereof; provided, however, that on the 2014-A Closing Date, one Class A-1 Note, one Class A-2-A Note, one Class A-2-B Note, one Class A-3 Note and one Class A-4 Note may be issued in a denomination that includes any remaining portion of the Initial Class A-1 Note Balance, the Initial Class A-2-A Note Balance, the Initial Class A-2-B Note Balance, the Initial A-3 Note Balance and the Initial Class A-4 Note Balance, respectively.

 

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual signature of one of its 

 

  

5

  

 

authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

Section 2.03.  Temporary Notes.  Pending the preparation of Definitive Notes pursuant to Section 2.12, the Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes.

 

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

 

Section 2.04.  Tax Treatment.  The Issuer has entered into this Indenture, and the Notes will be issued, with the intention that, for all purposes, including federal, State and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the Issuer secured by the Trust Estate.  The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner, by its acceptance of an interest in the applicable Book-Entry Note), agree (i) to treat the Notes for all purposes, including federal, State and local income, single business and franchise tax purposes, as indebtedness and (ii) not to take any action inconsistent with the agreement in clause (i) above, including claiming a Note represents ownership of any 2014-A Vehicles or the right to take deductions for depreciation or otherwise.

 

Section 2.05.  Registration; Registration of Transfer and Exchange.

 

(a)           The Issuer shall cause to be kept a register (the “Note Register”) in which the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. Notwithstanding anything herein to the contrary, no assignment or transfer of any Note shall be effective unless such assignment or transfer shall have been recorded in the Note Register.  The Indenture Trustee initially shall be the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar.

 

If a Person other than the Indenture Trustee is appointed by the Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Indenture Trustee shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to rely upon a certificate 

 

  

6

  

 

executed on behalf of the Note Registrar by an Executive Officer thereof as to the names and addresses of the Holders of Notes and the principal amounts and number of such Notes.

 

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

 

(c)           At the option of the related Noteholder, Notes may be exchanged for other Notes in any authorized denominations, of a like aggregate principal amount, upon surrender of such Notes at such office or agency.  Whenever any Notes are so surrendered for exchange, if the requirements of Section 8-401 of the UCC are met, the Owner Trustee shall execute, on behalf of the Issuer, the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee the Notes that the Noteholder making such exchange is entitled to receive.

 

Every Note presented or surrendered for registration of transfer or exchange shall (if so required by the Issuer or the Indenture Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form and substance satisfactory to the Issuer and the Indenture Trustee, duly executed by the Noteholder thereof or its attorney-in-fact duly authorized in writing.

 

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

 

No service charge shall be made to a Noteholder for any registration of transfer or exchange of Notes, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith, other than exchanges pursuant to Sections 2.03 or 9.06 not involving any transfer.

 

(d)           The preceding provisions of this Section notwithstanding, the Issuer shall not be required to make, and the Note Registrar need not register, transfers or exchanges of any Note selected for redemption.

 

(e)           By acquiring a Note (or interest therein) each purchaser and  transferee (and if the purchaser or transferee is a Benefit Plan, its fiduciary) will be required to represent in the case of a Definitive Note, or deemed to represent, in the case of a Book-Entry Note, that either (i) it is not and is not acting on behalf of, or using the assets of, a Benefit Plan or (ii) its acquisition and continued holding of the Note (or interest therein) will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or result in a non-exempt violation of any Similar Law.

 

(f)           The Indenture Trustee shall not be responsible for ascertaining whether any transfer complies with, or for otherwise monitoring or determining compliance with, the requirements or terms of the Securities Act, applicable State securities laws, ERISA,  as applicable, or the Code; except that if a certificate is specifically required by the terms of this 

 

  

7

  

 

Section to be provided to the Indenture Trustee by a prospective transferor or transferee, the Indenture Trustee shall be under a duty to receive and examine the same to determine whether it conforms substantially on its face to the applicable requirements of this Section.

 

(g)           Any purported transfer of a Note not in accordance with this Section shall be null and void and shall not be given effect for any purpose whatsoever.

 

Section 2.06.  Mutilated, Destroyed, Lost or Stolen Notes.  If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Note Registrar or the Indenture Trustee that such Note has been acquired by a Protected Purchaser, and provided that the requirements of Sections 8-405 and 8-406 of the UCC are met, the Issuer shall execute, and upon receipt of an Issuer Request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of like tenor and principal amount; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof.  If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a Protected Purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom such replacement Note was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a Protected Purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.

 

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

 

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

 

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

 

  

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Section 2.07.  Persons Deemed Owner.  Prior to due presentment for registration of transfer of any Note, the Issuer and any agent of the Issuer or the Indenture Trustee will treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

 

Section 2.08.  Payment of Principal and Interest.

 

(a)           The Notes shall accrue interest at their respective Interest Rates, and such interest shall be payable on each Payment Date as specified therein, subject to Sections 3.01 and 8.03.  In the case of the Class A-2-B Notes, the Interest Rate thereon shall be a floating rate determined for each Interest Period as set forth in Section 8.03(f).  Any installment of interest or principal payable on a Note that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date by wire transfer, except that, with respect to Notes registered on the Record Date in the name of the nominee or the Clearing Agency (initially, such nominee to be Cede & Co.), payment will be made by wire transfer in immediately available funds to the account designated by such nominee; provided, however, that the final installment of principal payable with respect to such Note on a Payment Date or on the Final Scheduled Payment Date for such Note (and except for the Note Redemption Price for any Note called for pursuant to Section 10.01), which shall be payable as provided below.  The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.03.

 

(b)           The principal of each Note shall be payable in installments on each Payment Date as provided in Section 8.03.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable, if not previously paid, on the earliest of (i) date on which an Event of Default shall have occurred and be continuing, if the Indenture Trustee or the Majority Noteholders of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.02, (ii) the Final Scheduled Payment Date for such Class of Notes and (iii) the Redemption Date, if any.  All principal payments on the Notes shall be made pro rata to the Noteholders entitled thereto.  The Indenture Trustee shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects that the final installment of principal of and interest on such Note will be paid.  Such notice shall be mailed or transmitted by facsimile prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment.  Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.02.

 

(c)           If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) at the applicable Interest Rate, which shall be due and payable on the Payment Date following such default.  The Issuer shall pay such defaulted interest to the Persons who are Noteholders on the Record Date for such following Payment Date.

 

  

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

 

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

 

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

 

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

 

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

 

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

 

(v)     whenever this Indenture requires or permits actions to be taken based upon instructions or directions of the Holders of Notes (or Holders of Notes of any Class, including the Controlling Class) evidencing a specified percentage of the Note Balance, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the 

 

  

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beneficial interest in the Notes or such Class of Notes and has delivered such instructions to the Indenture Trustee.

 

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

 

Section 2.12.  Definitive Notes.  Definitive Notes will be issued only if:

 

(i)      (a) the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Book-Entry Notes and (b) the Indenture Trustee is not able to locate a qualified successor; or

 

(ii)      after the occurrence of an Event of Default, owners of Book-Entry Notes representing the Majority Holders of the Controlling Class of Notes advise the Indenture Trustee and the Clearing Agency Participant through the Clearing Agency, in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of such Note Owners.

 

In each case, the Indenture Trustee shall then notify Note Owners of the related Class of Notes through the Clearing Agency of the occurrence of any such event and of the availability of Definitive Notes of the related Class of Notes to Note Owners requesting the same.

 

Upon surrender to the Indenture Trustee of the Note or Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuer at its own expense shall execute and deliver the Definitive Notes to the Indenture Trustee and the Indenture Trustee shall authenticate the Definitive Notes in accordance with the instructions of the Clearing Agency.  None of the Issuer, the Note Registrar or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of Definitive Notes of a Class, the Indenture Trustee shall recognize the Noteholders of the Definitive Notes as Noteholders hereunder.

 

Section 2.13.  Release of Collateral.  Subject to Section 11.01 and the terms of the other Basic Documents, the Indenture Trustee shall release property from the Lien of this Indenture only upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and, if required by Section 11.01, Independent Certificates in accordance with Sections 314(c) and 314(d)(1) of the TIA or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates.  If the Commission shall issue an exemptive order under TIA Section 304(d) modifying the Indenture Trustee’s obligations under TIA Sections 314(c) and 314(d)(1), the Indenture Trustee shall release property from the Lien of this Indenture in accordance with the conditions and procedures set forth in such exemptive order.

 

Section 2.14.  [Reserved].

 

  

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Section 2.15.  Authenticating Agents.  Upon the request of the Issuer, the Indenture Trustee shall appoint one or more Authenticating Agents with power to act on its behalf and subject to its direction in the authentication of Notes in connection with issuance, transfers and exchanges under Sections 2.02, 2.03, 2.05, 2.06 and 9.05, as fully to all intents and purposes as though each such Authenticating Agent had been expressly authorized by such Sections to authenticate such Notes.  For all purposes of this Indenture, the authentication of Notes by an Authenticating Agent pursuant to this Section shall be deemed to be the authentication of Notes by the Indenture Trustee.

 

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

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE THREE

 

COVENANTS AND REPRESENTATIONS

 

Section 3.01.  Payment of Principal and Interest.  The Issuer will duly and punctually pay the principal of and interest, if any, on the Notes in accordance with the terms of the Notes and this Indenture. Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.

 

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

 

Section 3.03.  Money for Payments to be Held in Trust.  As provided in Sections 5.04(b) and 8.03, all payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the 2014-A Distribution Account pursuant to such Sections shall be made on behalf of the Issuer by the Indenture Trustee or by a Note Paying Agent, and no amounts so withdrawn from the 2014-A Distribution Account for payments of Notes shall be paid over to the Issuer except as provided in this Section.

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

Section 3.05.  Protection of the Trust Estate.  The Issuer intends the security interest Granted pursuant to this Indenture in favor of the Indenture Trustee on behalf of the Noteholders 

 

  

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to be prior to all other Liens in respect of the Trust Estate, and the Issuer shall take all actions necessary to obtain and maintain, for the benefit of the Indenture Trustee on behalf of the Noteholders, a first Lien on and a first priority, perfected security interest in the Trust Estate.  The Issuer will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

 

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

 

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

 

(c)           enforce any of the Trust Estate;

 

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

 

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

 

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

 

The Issuer authorizes the Indenture Trustee and its counsel to file UCC financing statements in form and substance satisfactory to the Indenture Trustee, describing the collateral as “all assets of the Issuer, including its present and future right, title and interest in, to and under (but not, except to the extent required by law, any obligations with respect to) such assets, whether now owned or existing or hereafter arising or acquired and wheresoever located” or words to that effect, and any limitations on such collateral description.

 

Section 3.06.  Opinions as to Trust Estate.

 

(a)           On the 2014-A Closing Date, the Issuer shall furnish or cause to be furnished to the Indenture Trustee, an Opinion of Counsel to the effect that, in the opinion of such counsel, the execution and delivery of the Indenture and the delivery for value to and taking of physical possession in the State of New York by the Indenture Trustee of the 2014-A Exchange Note, will create a valid first priority perfected security interest, for the benefit of the Indenture Trustee on behalf of the Holders of Notes in the 2014-A Exchange Note.

 

(b)           On or before April 30th of each calendar year, beginning with April 30, 2015, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel to the effect that in the opinion of such counsel, either (i) all financing statements and continuation statements have been filed that are necessary to continue the lien and security interest of the Indenture Trustee in the 2014-A Exchange Note and reciting the details of such filings or referring to prior Opinions of 

 

  

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Counsel in which such details are given or (ii) no such action is necessary to continue such lien and security interest.

 

Section 3.07.  Performance of Obligations; Servicing of 2014-A Leases and 2014-A Vehicles.

 

(a)           The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s material covenants or obligations under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture and the other 2014-A Basic Documents or such other instrument or agreement.

 

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

 

(c)           The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the other 2014-A Basic Documents and in the instruments and agreements included in the Trust Estate, including filing or causing to be filed all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the other 2014-A Basic Documents, in accordance with and within the time periods provided for herein and therein.

 

(d)           If the Issuer shall have knowledge of the occurrence of an Exchange Note Servicer Event of Default, the Issuer shall promptly notify the Indenture Trustee, the Transferor and the Rating Agencies thereof, and shall specify in such notice the action, if any, the Issuer is taking with respect to such default.  If an Exchange Note Servicer Event of Default shall arise from the failure of the Servicer to perform any of its duties or obligations under the 2014-A Servicing Agreement with respect to the Trust Estate, the Issuer shall take all reasonable steps available to it to remedy such failure.  Upon the occurrence of an Exchange Note Servicer Event of Default, all the rights and obligations of the Servicer may be terminated pursuant to Section 8.03(c) of the Basic Servicing Agreement and a successor Servicer shall be appointed pursuant to Section 8.04 of the Basic Servicing Agreement.

 

(e)           Upon any termination of the Servicer’s rights and powers pursuant to Sections 8.01 or 8.03 of the Basic Servicing Agreement or Section 7.01 of the 2014-A Servicing Supplement or resignation of the Servicer pursuant to Section 3.06 of the Basic Servicing Agreement, the Issuer or the Indenture Trustee shall promptly, but in any event within two Business Days of the Issuer or a Responsible Officer receiving notice or having knowledge of such termination or resignation, notify the other entity thereof.  As soon as a Successor Servicer is appointed pursuant to Section 8.04 of the Basic Servicing Agreement and Section 7.01 of the 2014-A Servicing Supplement, and in any event within two Business Days of the Issuer or a Responsible Officer receiving notice or having knowledge thereof, the Issuer or the Indenture 

 

  

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Trustee shall notify the other entity of such appointment, specifying in such notice the name and address of such successor Servicer.

 

(f)           As promptly as possible after the giving of notice of termination to the Servicer of the Servicer’s rights and powers pursuant to Section 7.01 of the 2014-A Servicing Supplement, the Indenture Trustee without further action shall be the successor to the Servicer in all respects.  The Indenture Trustee may resign as the Successor Servicer by giving written notice of such resignation to the Transferor and the Owner Trustee and in such event will be released from such duties and obligations, such release not to be effective until the date a new Servicer assumes the obligations under the 2014-A Servicing Agreement.  Upon delivery of any such notice, the Indenture Trustee shall appoint, or petition a court of competent jurisdiction to appoint, a new Servicer as the Successor Servicer.

 

If the Indenture Trustee shall succeed to the duties of the Servicer as provided herein, it shall do so in its individual capacity and not in its capacity as Indenture Trustee and, accordingly, except as otherwise provided in the proviso to Section 6.01(a), the provisions of Article Six shall be inapplicable to the Indenture Trustee in its duties as the successor to the Servicer and the servicing of the 2014-A Leases and 2014-A Vehicles.  In case the Indenture Trustee shall become successor to the Servicer under the 2014-A Servicing Agreement, the Indenture Trustee shall be entitled to appoint as Servicer any one of its Affiliates or agents; provided, that the Indenture Trustee, in its capacity as Servicer, shall be fully liable for the actions and omissions of such Affiliate or agent in such capacity as Successor Servicer.  Notwithstanding any other provisions of this Indenture to the contrary, in no event shall the Indenture Trustee be liable for any servicing fee or for any differential in the amount of the servicing fee paid under the 2014-A Servicing Agreement and the amount necessary to induce any Successor Servicer to act as Successor Servicer under the 2014-A Servicing Agreement.

 

(g)           Without derogating from the absolute nature of the assignment granted to the Indenture Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees that (i) it will not, without the prior written consent of the Indenture Trustee or the Majority Noteholders of the Controlling Class, amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of any assets of the Trust Estate (except to the extent otherwise provided in the 2014-A Basic Documents), or waive timely performance or observance by the Servicer under the 2014-A Servicing Agreement and (ii) any such amendment shall not (A) increase or reduce in any manner the amount of, or accelerate or delay the timing of, distributions that are required to be made for the benefit of the Noteholders or (B) reduce the aforesaid percentage of the Notes that is required to consent to any such amendment, without the consent of the Holders of all the Outstanding Notes.  If any such amendment, modification, supplement or waiver shall be so consented to by the Indenture Trustee or such Holders, the Issuer agrees, promptly following a request by the Indenture Trustee to do so, to execute and deliver, in its own name and at its own expense, such agreements, instruments, consents and other documents as the Indenture Trustee (acting at the direction of the Majority Noteholders of the Controlling Class) may deem necessary or appropriate in the circumstances.

 

  

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

 

(a)           engage in any business or activities other than financing, purchasing, owning, acquiring, selling, pledging and managing the 2014-A Exchange Note as contemplated by this Indenture and the other 2014-A Basic Documents;

 

(b)           except as expressly permitted by this Indenture or the other 2014-A Basic Documents, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Trust Estate, unless directed to do so by the Indenture Trustee (acting at the direction of the Majority Noteholders of the Controlling Class);

 

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

 

(d)           dissolve or liquidate in whole or in part;

 

(e)           (i) permit the validity or effectiveness of this Indenture to be impaired, or permit the Lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (ii) permit any Lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than Permitted Liens and the Lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof (other than tax Liens, mechanics’ Liens and other Liens that arise by operation of law, in each case on any of the 2014-A Vehicles and arising solely as a result of an action or omission of the related Obligor) or (iii) permit the Lien of this Indenture not to constitute a valid first priority (other than with respect to any such tax, mechanics’ or other lien) security interest in the Trust Estate; or

 

(f)           incur, assume or guarantee any indebtedness other than indebtedness incurred in accordance with, or otherwise permitted by, the 2014-A Basic Documents.

 

Section 3.09.  Issuer May Consolidate, etc., Only on Certain Terms.

 

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

 

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

 

  

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

 

(iii)     the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that (A) following such consolidation or merger, the Issuer (or the surviving entity or transferee) will not be classified as an association or a publicly traded partnership taxable as a corporation, each for federal income tax purposes, (B) such consolidation or merger will not cause the Notes to be characterized other than as indebtedness for federal income tax purposes and (C) such consolidation or merger will not cause the Notes to be deemed to have been exchanged for purposes of Section 1001 of the Code;

 

(iv)     any action that is necessary to maintain the Lien created by this Indenture shall have been taken;

 

(v)      the Issuer shall have delivered to the Transferor, the Servicer and the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article and that all conditions precedent herein relating to such transaction have been complied with (including any filing required under the Exchange Act); and

 

(vi)     the Rating Agency Condition shall have been satisfied with respect to such transaction.

 

(b)           Other than as specifically contemplated by the 2014-A Basic Documents, the Issuer shall not convey or transfer any of its properties or assets, including those included in the Trust Estate, to any other Person, unless:

 

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

 

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

 

(iii)     the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that (A) following such transaction, the Issuer will not be classified as (1) an association or (2) a publicly traded 

 

  

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partnership taxable as a corporation, each for federal income tax purposes, (B) such transaction will not cause the Notes to be characterized other than as indebtedness for federal income tax purposes and (C) such transaction will not cause the Notes to be deemed to have been exchanged for purposes of Section 1001 of the Code.

 

(iv)     any action that is necessary to maintain the Lien created by this Indenture shall have been taken (including any filing required under the Exchange Act);

 

(v)      the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with; and

 

(vi)     the Rating Agency Condition shall have been satisfied with respect to such transaction.

 

Section 3.10.  Successor or Transferee.

 

(a)           Upon any consolidation or merger of the Issuer in accordance with Section 3.09(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

 

(b)           Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.09(b), the Issuer will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of written notice to the Indenture Trustee stating that the Issuer is to be so released.

 

Section 3.11.  Servicer’s Obligations.  The Issuer shall cause the Servicer to comply with the 2014-A Servicing Agreement.

 

Section 3.12.  Guarantees, Loans, Advances and Other Liabilities.  Except as otherwise contemplated by the 2014-A Basic Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

 

Section 3.13.  Capital Expenditures.  The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).

 

Section 3.14.  Removal of Administrator.  So long as any Notes are Outstanding, the Issuer shall not remove the Administrator without cause without providing prior written notice to the Rating Agencies.

 

  

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Section 3.15.  Restricted Payments.  Except as otherwise permitted by the 2014-A Basic Documents, the Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, (a) distributions as contemplated by, and to the extent funds are available for such purpose under, the 2014-A Basic Documents and (b) payments to the Trustees pursuant to Section 1.02(b) of the 2014-A Administration Agreement.  The Issuer will not, directly or indirectly, make payments to or distributions from the 2014-A Exchange Note Collection Account, the 2014-A Distribution Account or the 2014-A Reserve Account except in accordance with this Indenture and the other 2014-A Basic Documents.

 

Section 3.16.  Notice of Events of Default.  The Issuer shall give the Indenture Trustee and each Rating Agency prompt written notice of each Event of Default hereunder.

 

Section 3.17.  Further Instruments and Acts.  Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

Section 3.18.  Delivery of 2014-A Exchange Note.  On the 2014-A Closing Date, the Issuer shall deliver or cause to be delivered to the Indenture Trustee as security for its obligations hereunder, the 2014-A Exchange Note.  The Indenture Trustee shall take possession of the 2014-A Exchange Note in the State of New York and shall at all times during the period of this Indenture maintain custody of the 2014-A Exchange Note in the State of New York.

 

Section 3.19.  Compliance With Laws.  The Issuer shall comply with the requirements of all Applicable Laws, the non-compliance with which would, individually or in the aggregate, materially and adversely affect the ability of the Issuer to perform its obligations under the Notes, this Indenture or any other 2014-A Basic Document.

 

Section 3.20.  Annual Statement as to Compliance.  The Issuer will deliver to the Transferor and the Indenture Trustee, on or before June 30 of each year (commencing with the June 30 that is at least six months after the 2014-A Closing Date), an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:

 

(a)           a review of the activities of the Issuer during the preceding year (or such shorter period in the case of the first such Officer’s Certificate) and of its performance under this Indenture has been made under such Authorized Officer’s supervision; and

 

(b)           to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout the preceding year (or such shorter period in the case of the first such Officer’s Certificate) or, if there has been a default in its compliance with any such condition or 

 

  

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covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

 

Section 3.21.  Representations.  The Issuer hereby represents, warrants, and covenants to the Indenture Trustee as follows on the 2014-A Closing Date:

 

(a)           Organization and Qualification.  The Issuer is duly formed, validly existing and in good standing under the laws of its jurisdiction.

 

(b)           Power, Authorization and Enforceability.  The Issuer has the power and authority to execute, deliver and perform the terms of this Indenture.  The Issuer has authorized the execution, delivery and performance of the terms of this Indenture.  This Indenture is 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 execution and delivery by the Issuer of this Indenture, the consummation by the Issuer of the transactions contemplated by this Indenture and the compliance by the Issuer with this Indenture will not (i) violate any law, governmental rule or regulation applicable to the Issuer or any judgment or decree binding on it or (ii) conflict with, result in a breach of, or constitute (with or without notice or lapse of time or both) a default under any indenture, mortgage, deed of trust, loan agreement, guarantee or similar agreement or instrument under which the Issuer is a debtor or guarantor, in each case which conflict, breach, default, Lien, or violation would reasonably be expected to have a material adverse effect on the Issuer’s ability to perform its obligations under this Indenture.

 

(d)           No Proceedings.  To the Issuer’s knowledge, there are no proceedings or investigations pending or overtly threatened in writing before any court or other governmental authority:  (i) asserting the invalidity of this Indenture or the Notes, (ii) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Indenture or (iii) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on the 2014-A Collateral or the Issuer’s ability to perform its obligations under, or the validity or enforceability of, this Indenture or the Notes.

 

(e)           Financial Condition.  The Issuer is not insolvent or the subject of an Insolvency Event and the pledge of the 2014-A Collateral is not being made in contemplation of the occurrence thereof.

 

(f)           Perfection Representations.  The Issuer makes the representations and warranties set forth on Exhibit C.

 

  

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ARTICLE FOUR

 

SATISFACTION AND DISCHARGE

 

Section 4.01.  Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further effect with respect to the Notes except as to (a) rights of registration of transfer and exchange, (b) substitution of mutilated, destroyed, lost or stolen Notes, (c) rights of Noteholders to receive payments of principal thereof and interest thereon, (d) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and 3.13, (e) certain rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.02) and (f) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when:

 

(i)      either: (A) all Notes theretofore authenticated and delivered (other than Notes (1) that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.06 and (2) for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.03) have been delivered to the Indenture Trustee for cancellation or (B) all Notes not theretofore delivered to the Indenture Trustee for cancellation (1) have become due and payable, (2) will become due and payable at the related Final Scheduled Payment Date within one year or (3) are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the case of clauses (1), (2) or (3) above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture Trustee for cancellation when due to the related Final Scheduled Payment Date or Redemption Date (if Notes shall have been called for redemption pursuant to Section 10.01), as the case may be;

 

(ii)     the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer;

 

(iii)    the Issuer has delivered to the Transferor and the Indenture Trustee an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA or Section 11.01) an Independent Certificate, each meeting the applicable requirements of Section 11.01(a) and, subject to Section 11.02, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with; and

 

(iv)    the Issuer has delivered to the Transferor and the Indenture Trustee an Opinion of Counsel to the effect that the satisfaction and discharge of this Indenture 

 

  

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pursuant to this Section will not cause any Noteholder to be treated as having exchanged its Notes for purposes of Section 1001 of the Code.

 

Section 4.02.  Satisfaction, Discharge and Defeasance of the Notes.

 

(a)           Upon satisfaction of the conditions set forth in Section 4.02(b), the Issuer shall be deemed to have paid and discharged the entire indebtedness on all the Notes Outstanding, and the provisions of this Indenture, as it relates to such Notes, shall no longer be in effect (and the Indenture Trustee, at the expense of the Issuer, shall execute proper instruments acknowledging the same), except as to:

 

(i)      the rights of the Noteholders to receive, from the trust funds described in Section 4.02(b)(i), payment of the principal of and interest on the Notes Outstanding at maturity of such principal or interest;

 

(ii)     the obligations of the Issuer with respect to the Notes under Sections 2.05, 2.06, 3.02 and 3.03;

 

(iii)    the obligations of the Administrator to the Indenture Trustee under Section 6.07; and

 

(iv)    the rights, powers, trusts and immunities of the Indenture Trustee hereunder and the duties of the Indenture Trustee hereunder.

 

(b)           The satisfaction, discharge and defeasance of the Notes pursuant to Section 4.02(a) is subject to the satisfaction of all of the following conditions:

 

(i)      the Issuer has deposited or caused to be deposited irrevocably (except as provided in Section 4.04) with the Indenture Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Noteholders, which, through the payment of interest and principal in respect thereof in accordance with their terms will provide, not later than one day prior to the due date of any payment referred to below, money in an amount sufficient, in the opinion of a nationally recognized firm of Independent accountants expressed in a written certification thereof delivered to the Indenture Trustee, to pay and discharge the entire indebtedness on the Notes Outstanding, for principal thereof and interest thereon to the date of such deposit (in the case of Notes that have become due and payable) or to the maturity of such principal and interest, as the case may be;

 

(ii)      such deposit will not result in a breach or violation of, or constitute an event of default under, any Issuer Basic Document or other agreement or instrument to which the Issuer is bound;

 

(iii)     no Event of Default has occurred and is continuing on the date of such deposit or on the 91st day after such date;

 

(iv)     the Issuer has delivered to the Indenture Trustee an Opinion of Counsel to the effect that the satisfaction and discharge of this Indenture provided for in the 

 

  

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Indenture relating to the defeasance contemplated by this Section will not cause any Noteholder to be treated as having exchanged its Notes for purposes of Section 1001 of the Code; and

 

(v)      the Issuer has delivered to the Indenture Trustee an Opinion of Counsel to the effect that the satisfaction and discharge of this Indenture provided for in the Indenture relating to the defeasance contemplated by this Section have been complied with.

 

Section 4.03.  Application of Trust Money.  All monies deposited with the Indenture Trustee pursuant to this Article shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Note Paying Agent, to the Holders of the particular Notes for the payment or redemption of which such monies have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest; but such monies need not be segregated from other funds except to the extent required herein or in the 2014-A Servicing Agreement or required by Applicable Law.

 

Section 4.04.  Repayment of Monies Held by Note Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all monies then held by any Note Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.03, and thereupon such Note Paying Agent shall be released from all further liability with respect to such monies.

 

 

 

 

 

 

 

 

 

  

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ARTICLE FIVE

 

EVENTS OF DEFAULT; REMEDIES

 

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

 

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

 

(b)           default in the payment of the principal of any Note on the related Final Scheduled Payment Date;

 

(c)           default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture (other than a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section specifically dealt with), and such default is materially adverse to the Noteholders, and such default shall continue or not be cured for a period of 60 days after there shall have been given, by registered or certified mail or by overnight courier, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25% of the Note Balance of the Controlling Class, a written notice specifying such default and requiring it to be remedied;

 

(d)           any breach in any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered pursuant hereto or thereto, and such misrepresentation or warranty is materially adverse to the Noteholders, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail or by overnight courier, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25% of the Note Balance of the Controlling Class, a written notice specifying such incorrect representation or warranty and requiring it to be remedied; or

 

(e)           the occurrence of an Insolvency Event with respect to the Issuer.

 

Notwithstanding the foregoing, a delay in or failure of performance referred to under clauses (a) through (d) above for a period of 120 days will not constitute an Event of Default if that failure or delay was caused by a Force Majeure.

 

The Issuer shall deliver to the Transferor and the Indenture Trustee, within five days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which with the giving of notice, the lapse of time or both would become an Event of Default under 

 

  

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clause (c) or (d) above, its status and what action the Issuer is taking or proposes to take with respect thereto.

 

Section 5.02.  Acceleration of Maturity; Rescission and Annulment.

 

(a)           If an Event of Default shall have occurred and be continuing, the Indenture Trustee or the Majority Noteholders of the Controlling Class may declare the Notes to be immediately due and payable, by a notice in writing to the Issuer (who will provide such notice to the Rating Agencies), the Indenture Trustee (if notice is given by Noteholders), the Transferor and the Servicer, and upon any such declaration the unpaid principal amount of the Notes, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable.

 

(b)           If the Notes have been declared immediately due and payable following an Event of Default, before a judgment or decree for payment of the amount due has been obtained by the Indenture Trustee as hereinafter provided in this Article, the Majority Noteholders of the Controlling Class, by written notice to the Issuer, the Transferor and the Indenture Trustee, may rescind and annul such declaration of acceleration and its consequences if:

 

(i)      the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay (A) all payments of principal of and interest on the Notes, (B) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel and (C) all other amounts that would then be due hereunder or upon the Notes if the Event of Default giving rise to such acceleration had not occurred; and

 

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

 

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

 

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

 

(a)           The Issuer covenants that if (i) there is a default relating to the payment of any interest on any Note of the Controlling Class when the same becomes due and payable, and such default continues for a period of five days or (ii) an Event of Default occurs in the payment of the principal of or any installment of the principal of any Note on the related Final Scheduled Payment Date, the Issuer will, upon demand of the Indenture Trustee, pay to it, for the benefit of the Holders of such Notes, the whole amount then due and payable on such Notes for principal and interest, with interest on the overdue principal at the applicable Interest Rate and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest at the applicable Interest Rate and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.

 

  

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(b)           In case the Issuer shall fail forthwith to pay amounts described in Section 5.03(a) upon demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor upon such Notes and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Notes, wherever situated, the monies adjudged or decreed to be payable.

 

(c)           If an Event of Default occurs and is continuing, the Indenture Trustee may, as more particularly provided in Section 5.04, acting at the direction of the Majority Noteholders of the Controlling Class, proceed to protect and enforce its rights and the rights of the Noteholders, by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

Section 5.04.  Remedies; Priorities.

 

(a)           If an Event of Default shall have occurred and be continuing, the Indenture Trustee (acting at the direction of the Majority Noteholders of the Controlling Class) may do one or more of the following (subject to Sections 5.02 and 5.05):

 

(i)      institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained and collect from the Issuer and any other obligor upon the Notes monies adjudged due;

 

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

 

  

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

 

(iv)    sell or otherwise liquidate the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law;

 

provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Trust Estate following an Event of Default, other than an Event of Default described in Section 5.01(i) or (ii), unless (A) the Holders of 100% of the Outstanding Amount of the Notes of the Controlling Class consent thereto, (B) the proceeds of such sale or liquidation distributable to the Noteholders are sufficient to discharge in full all amounts then due and unpaid upon such Notes for principal and interest or (C) the Indenture Trustee determines that the Trust Estate will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared due and payable, and the Indenture Trustee obtains the consent of Holders of 66 2/3% of the Note Balance of the Controlling Class; provided, further, that the Indenture Trustee may not sell the Trust Estate unless it shall first have obtained an Opinion of Counsel (at the expense of the Issuer) that such sale will not cause the Titling Trust or an interest therein or portion thereof or the Issuer to be classified as an association or a publicly traded partnership taxable as a corporation for federal income tax purposes.  In determining such sufficiency or insufficiency with respect to clauses (B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

 

(b)           If the Indenture Trustee collects any money or property pursuant to this Article upon sale of the Trust Estate, it shall deposit such money or property into the 2014-A Exchange Note Collection Account pursuant to Section 8.03(b), and all amounts on deposit in the 2014-A Exchange Note Collection Account and the 2014-A Reserve Account shall be distributed on the related Payment Date in the following order:

 

(i)      to the Servicer, the 2014-A Reference Pool Servicing Fee and any Nonrecoverable Advances with respect to the 2014-A Leases;

 

(ii)     pro rata, (A) to pay to the Collateral Agent any expenses and indemnified amounts due with respect to the 2014-A Exchange Note or the 2014-A Reference Pool under Section 3.01(c) of the Basic Collateral Agency Agreement or Article Eight of the Basic Collateral Agency Agreement to the extent not paid by the Borrower or the Titling Trust Administrator, (B) to pay to the Administrative Agent any expenses and indemnified amounts due with respect to the 2014-A Exchange Note or the 2014-A Reference Pool under Section 7.05 of the Basic Collateral Agency Agreement or Article Eight of the Basic Collateral Agency Agreement to the extent not paid by the Borrower or the Titling Trust Administrator and (C) to the payment of all fees, expenses and indemnified amounts then due to the Trustees to the extent not paid by the Transferor or the Administrator, in each case, without limitation;

 

  

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(iii)    to the Noteholders, the Interest Distributable Amount, to pay interest due on each Class of Notes outstanding on that Payment Date, and, to the extent permitted under applicable law, interest on any overdue interest at the related interest rate;

 

(iv)    to the Holders of the Class A-1 Notes, principal on the Class A-1 Notes, until the Class A-1 Notes have been paid in full;

 

(v)     to the Holders of the Class A-2-A Notes, the Class A-2-B Notes, the Class A-3 Notes and the Class A-4 Notes, principal on the Class A-2-A Notes, the Class A-2-B Notes, the Class A-3 Notes and the Class A-4 Notes, pro rata, until all such Classes of Notes have been paid in full;

 

(vi)    if a Successor Servicer has been appointed pursuant to the 2014-A Servicing Agreement, to such Successor Servicer, any Transition Costs due in connection with such transfer of servicing and not paid pursuant to the 2014-A Servicing Agreement plus the Additional Servicing Fee, if any, for the related Collection Period; and

 

(vii)   to the Certificateholder, any amounts remaining after the foregoing distributions.

 

(c)           If the Indenture Trustee collects any money or property pursuant to this Section, the Indenture Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this Section.  At least 15 days before such record date, the Indenture Trustee shall mail to each Noteholder, the Issuer  and the Servicer a notice that states the record date, the payment date and the amount to be paid.

 

Section 5.05.  Optional Preservation of the Trust Estate.  If the Notes have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of the Trust Estate and continue to apply the proceeds thereof, in accordance with Sections 3.01 and 8.03.  It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Trust Estate.  In determining whether to maintain possession of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

 

Section 5.06.  Limitation of Suits.  No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (i) such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default; (ii) the Holders of not less than 25% of the Note Balance of the Controlling Class have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder; (iii) such Holder or Holders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in complying with such request; (iv) the Indenture Trustee for 60 days after its receipt of such 

 

  

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notice, request and offer of indemnity has failed to institute such Proceedings; and (v) no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Majority Noteholders of the Controlling Class.

 

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

 

In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes, each representing less than a majority of the Outstanding Amount of the Notes of the Controlling Class, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

 

Section 5.07.  Unconditional Rights of Noteholders to Receive Principal and Interest.  Notwithstanding any other provisions in this Indenture, any Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

 

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

 

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

 

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

 

  

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often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

 

Section 5.11.  Control by Noteholders of the Controlling Class.  The Majority Noteholders of the Controlling Class shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided that:

 

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

 

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

 

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

 

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

 

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

 

Section 5.12.  Waiver of Past Defaults.  Prior to the declaration of the acceleration of the maturity of the Notes as provided in Section 5.02, the Majority Noteholders of the Controlling Class may, on behalf of all Noteholders, waive any past Default or Event of Default and its consequences except a Default or Event of Default (i) in payment of principal of or interest on any of the Notes or (ii) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Note.  In the case of any such waiver, the Issuer, the Indenture Trustee and the Holders of Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

 

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

 

Section 5.13.  Undertaking for Costs.  All parties to this Indenture agree, and each Holder of a Note by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted 

 

  

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by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, the provisions of this Section shall not apply to any suit instituted by (i) the Indenture Trustee, (ii) any Noteholder, or group of Noteholders, in each case holding in the aggregate more than 10% of the Outstanding Amount of the Notes (or, in the case of any suit which is instituted by the Controlling Class, more than 10% of the Note Balance of the Controlling Class) or (iii) by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).

 

Section 5.14.  Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

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

 

Section 5.16.  Performance and Enforcement of Certain Obligations.

 

(a)           Promptly following a request from the Indenture Trustee to do so and at the Administrator’s expense, the Issuer shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Servicer of its obligations to the Issuer under or in connection with the 2014-A Servicing Agreement, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the 2014-A Servicing Agreement, as the case may be, to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Servicer of its obligations under the 2014-A Servicing Agreement.

 

(b)           If an Event of Default has occurred and is continuing, the Indenture Trustee shall, at the direction (which direction shall be in writing or by telephone (confirmed in writing promptly thereafter)) of the Holders of 66 2/3% of the Note Balance of the Controlling Class, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Servicer 

 

  

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under or in connection with the 2014-A Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Servicer of its obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the 2014-A Servicing Agreement, and any right of the Issuer to take such action shall be suspended unless such Event of Default has been waived or otherwise cured.

 

Section 5.17.  Sale of Trust Estate.  If the Indenture Trustee acts to sell the Trust Estate or any part thereof, pursuant to Section 5.04(a), the Indenture Trustee shall publish a notice in an Authorized Newspaper stating that the Indenture Trustee intends to effect such a sale in a commercially reasonable manner and on commercially reasonable terms, which shall include the solicitation of competitive bids.  Following such publication, the Indenture Trustee shall, unless otherwise prohibited by applicable law from any such action, sell the Trust Estate or any part thereof, in such manner and on such terms as provided above to the highest bidder; provided, however, that the Indenture Trustee may from time to time postpone any sale by public announcement made at the time and place of such sale.  The Indenture Trustee shall give notice to the Transferor and Servicer of any proposed sale, and the Transferor and Servicer shall be permitted to bid for the Trust Estate at any such sale.  The Indenture Trustee may obtain a prior determination from a conservator, receiver or trustee in bankruptcy of the Issuer that the terms and manner of any proposed sale are commercially reasonable.  The power to effect any sale of any portion of the Trust Estate pursuant to Section 5.04 and this Section shall not be exhausted by any one or more sales as to any portion of the Trust Estate remaining unsold, but shall continue unimpaired until the entire Trust Estate shall has been sold or all amounts payable on the Notes shall have been paid.

 

 

 

 

 

 

  

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ARTICLE SIX

 

THE INDENTURE TRUSTEE

 

Section 6.01.  Duties of Indenture Trustee.

 

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

 

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

 

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

 

(ii)     in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; however, the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

 

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

 

(i)      this paragraph does not limit the effect of Section 6.01(b);

 

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

 

(iii)    the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.11.

 

(d)           Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to Sections 6.01(a), (b), (c) and (g).

 

(e)           The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.

 

(f)           Money held in trust by the Indenture Trustee need not be segregated from other funds except to the extent required by law or the terms of this Indenture or the other 2014-A Basic Documents.

 

  

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

 

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

 

Section 6.02.  Rights of Indenture Trustee.

 

(a)           Except as provided by the second succeeding sentence, the Indenture Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper Person.  The Indenture Trustee need not investigate any fact or matter stated in the document.  Notwithstanding the foregoing, the Indenture Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Indenture Trustee that shall be specifically required to be furnished pursuant to any provision of this Indenture, shall examine them to determine whether they comply as to form to the requirements of this Indenture.

 

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

 

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

 

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

 

(e)           The Indenture Trustee may consult with counsel, and the written advice of such counsel or Opinion of Counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(f)           The Indenture Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Noteholders pursuant to this Indenture, unless such Noteholders shall have offered to the Indenture Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

 

  

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

 

Section 6.04.  Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be (i) responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, (ii) accountable for the Issuer’s use of the proceeds from the Notes and (iii) responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Indenture Trustee’s certificate of authentication.

 

Section 6.05.  Notice of Defaults and Repurchase Requests.

 

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

 

(b)           Not later than the fifth day of each calendar month (or, if such day is not a Business Day, the immediately following Business Day), beginning May 5, 2014, the Indenture Trustee shall provide to, MBFS USA and the Transferor a notice in substantially the form of Exhibit B with respect to any demands received by the Indenture Trustee during the immediately preceding calendar month (or, in the case of the initial notice, since the 2014-A Closing Date) that any 2014-A Lease be reallocated by the Servicer pursuant to Section 3.05 of the 2014-A Servicing Supplement.  The Indenture Trustee and the Issuer acknowledge and agree that the purpose of this subsection is to facilitate compliance by MBFS USA and the Transferor with Rule 15Ga-1 under the Exchange Act.  The Indenture Trustee agrees to comply with reasonable requests made by MBFS USA or the Transferor in good faith for delivery of information under these provisions on the basis of evolving interpretations of such Rule.  The Indenture Trustee shall cooperate fully with all reasonable requests of MBFS USA and the Transferor to deliver any and all records and any other information, in each case in its possession,  necessary to permit MBFS USA and the Transferor to comply with the provisions of such Rule.

 

Section 6.06.  Reports by Indenture Trustee to Holders.  On or prior to each Payment Date, the Indenture Trustee shall deliver or make available on its website (www.usbank.com/abs) to each Noteholder a copy of each Monthly Investor Report delivered to it pursuant to the 2014-A Servicing Supplement.  The Indenture Trustee shall make available electronically, within a reasonable period of time after the end of each calendar year, to each Person who at any time during such calendar year was a Noteholder, such information furnished to the Indenture Trustee as may be required to enable such Person to prepare its federal and State income tax returns.  The Indenture Trustee shall provide to each Noteholder upon request, copies of the 2014-A Basic Documents, the report regarding the Servicer’s compliance and the accountants’ attestation delivered pursuant to the 2014-A Servicing Supplement.

 

  

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Section 6.07.  Compensation and Indemnity.  The Issuer shall, or shall cause the Administrator to, pay to the Indenture Trustee from time to time reasonable compensation for its services pursuant to a fee agreement between the Administrator and the Indenture Trustee. The Indenture Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall, or shall cause the Administrator to, reimburse the Indenture Trustee for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts.

 

The Issuer shall, or shall cause the Administrator to, indemnify and hold harmless the Indenture Trustee and its officers, directors, employees, representatives and agents against any and all loss, liability, tax (other than taxes based on the income of the Indenture Trustee) or expense (including attorneys’ fees) of whatever kind or nature regardless of their merit directly or indirectly incurred by it or them without willful misconduct, negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the transactions contemplated by this Indenture, including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties under this Indenture or under any of the other 2014-A Basic Documents.  The Indenture Trustee shall notify the Issuer and the Administrator promptly of any claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the Administrator shall not relieve the Issuer or the Administrator of its obligations hereunder.  The Issuer shall, or shall cause the Administrator to, defend any such claim, and the Indenture Trustee may have separate counsel and the Issuer shall, or shall cause the Administrator to, pay the fees and expenses of such counsel.  Neither the Issuer nor the Administrator need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith.

 

The Issuer’s payment obligations to the Indenture Trustee pursuant to this Section shall survive the discharge of this Indenture.  When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.01(e) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Code or any other applicable Insolvency Law.

 

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

 

Section 6.08.  Replacement of Indenture Trustee.

 

(a)           No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section. The Indenture Trustee may resign at any time by so notifying the Issuer, the Transferor, the Administrator and the Noteholders, and will provide all information reasonably requested by the Transferor in order to comply with its 

 

  

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reporting obligation under Item 6.02 of Form 8-K under the Exchange Act, with respect to the resignation of the Indenture Trustee.  The Majority Noteholders of the Controlling Class may remove the Indenture Trustee by so notifying the Indenture Trustee, the Issuer, the Transferor and the Administrator (who shall notify the Rating Agencies) and may appoint a successor Indenture Trustee.  The Issuer shall remove the Indenture Trustee if (i) the Indenture Trustee fails to comply with Section 6.11, (ii) an Insolvency Event occurs with respect to the Indenture Trustee or (iii) the Indenture Trustee otherwise becomes incapable of acting.

 

(b)           The Transferor may remove the Indenture Trustee if the Indenture Trustee fails to comply with Section 3.07(f), 6.08 or 6.09 with respect to notice to or providing information to the Transferor, or with Article Seven of the 2014-A Exchange Note Supplement, in each case if such failure continues for the lesser of ten days or such period in which the applicable Exchange Act Report can be timely filed (without taking into account any extensions).

 

(c)           If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee. A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee, the Issuer, the Transferor and the Administrator and shall also provide all information reasonably requested by the Transferor in order to comply with its reporting obligation under the Exchange Act with respect to the replacement Indenture Trustee.  Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture.  The successor Indenture Trustee shall mail a notice of its succession to the Noteholders.  The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

 

(d)           If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Majority Noteholders of the Controlling Class may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.  If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

 

(e)           Any resignation or removal of the Indenture Trustee and appointment of a successor Indenture Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Indenture Trustee pursuant to this Section and payment of all fees and expenses owed to the outgoing Indenture Trustee.  Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s and the Administrator’s obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.

 

Section 6.09.  Successor Indenture Trustee by Merger.

 

(a)           If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any 

 

  

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further act shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11.  The Indenture Trustee shall provide the Servicer (and the Servicer shall provide to the Rating Agencies) prior written notice of any such transaction.

 

(b)           In case at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Indenture Trustee shall have.

 

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

 

(a)           Notwithstanding any other provision of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, jointly with the Indenture Trustee, or separate trustee or separate trustees, of all or any part of the Issuer, and to vest in such Person or Persons, in such capacity and for the benefit of the 2014-A Secured Parties, such title to the Trust Estate, or any part hereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.08.

 

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

 

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

 

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

 

  

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

 

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

 

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

 

Section 6.11.  Eligibility; Disqualification.  The Indenture Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA and shall in addition have a combined capital and surplus of at least $50,000,000 (as set forth in its most recent published annual report of condition) and shall have a long-term debt rating of “A-” or better by Standard & Poor’s and “A3” or better by Moody’s or shall otherwise be acceptable to each Rating Agency.  The Indenture Trustee shall satisfy the requirements of Section 310(b) of the TIA.

 

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

 

Section 6.13.  Issuer as Holder of the 2014-A Exchange Note.  So long as any Notes are Outstanding, to the extent that the Owner Trustee or the Issuer has rights as a holder of the 2014-A Exchange Note, including rights to distributions and notice, or is entitled to consent to any actions taken by the Transferor, the Owner Trustee or the Issuer may initiate such action or grant such consent only with consent of the Indenture Trustee (acting at the direction of the Majority Noteholders of the Controlling Class).  To the extent that the Issuer has rights as a holder or Registered Pledgee of the 2014-A Exchange Note or has the right to consent or withhold consent with respect to actions taken by the Transferor, the Owner Trustee or the Issuer, such rights shall be exercised or consent granted (or withheld) upon the written direction of the Majority Noteholders of the Controlling Class; provided, however, that subject to Section 3.07, any direction to the Indenture Trustee to remove or replace the Servicer upon a Servicer Event of Default shall be made by Holders of Notes evidencing not less than 66 2/3% of the Outstanding Amount of the Controlling Class.

 

  

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Section 6.14.  Representations and Warranties of Indenture Trustee.  The Indenture Trustee hereby makes the following representations and warranties, as of the 2014-A Closing Date, on which the Issuer and Noteholders shall rely:

 

(a)           the Indenture Trustee is a banking association duly organized, validly existing and in good standing under the laws of the United States;

 

(b)           the Indenture Trustee has full power, authority and legal right to execute, deliver and perform this Indenture and shall have taken all necessary action to authorize the execution, delivery and performance by it of this Indenture;

 

(c)           this Indenture is an enforceable obligation of the Indenture Trustee;

 

(d)           the execution and delivery by the Indenture Trustee of this Indenture, the consummation by the Indenture Trustee of the transactions contemplated by this Indenture and the compliance by the Indenture Trustee with this Indenture will not (i) violate any law, governmental rule or regulation applicable to the Indenture Trustee or any judgment or decree binding on it or (ii) conflict with, result in a breach of, or constitute (with or without notice or lapse of time or both) a default under any indenture, mortgage, deed of trust, loan agreement, guarantee or similar agreement or instrument to which the Indenture Trustee is a party, in each case which conflict, breach, or default,  would reasonably be expected to have a material adverse effect on the Indenture Trustee’s ability to perform its obligations under this Indenture;

 

(e)           neither the Indenture Trustee nor its affiliates is in material default under any agreement, contract, instrument, or indenture of any nature whatsoever to which the Indenture Trustee or its affiliates is bound, which default would have a material adverse effect on the ability of the Indenture Trustee to perform its obligations under the 2014-A Basic Documents to which it is a party;

 

(f)           to the Indenture Trustee’s knowledge, there are no proceedings or investigations pending or overtly threatened in writing before Governmental Authority (i) asserting the invalidity of any of the 2014-A Basic Documents or the Notes, (ii) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by any of the 2014-A Basic Documents or (iii) seeking any 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, any of the 2014-A Basic Documents or the Notes;

 

(g)           the Indenture Trustee does not have any reason or cause to believe that it cannot perform each and every covenant that it is making contained in this Indenture; and

 

(h)           no consent, approval, authorization, or order of any Person, court, or governmental agency or body is required under federal law for the execution, delivery, and performance by the Indenture Trustee, or compliance by it with the Indenture or the consummation by it of the transactions contemplated by the Indenture, or if required has been obtained or can be obtained prior to the execution of the Indenture.

 

  

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Section 6.15.  Furnishing of Monthly Investor Reports and Other Documents.  The Indenture Trustee shall furnish to any Noteholder promptly upon receipt of a written request by such Noteholder or Note Owner therefor (at the expense of the requesting Noteholder or Note Owner), copies of the 2014-A Basic Documents and duplicates or copies of all reports, notices, requests, demands, certificates and any other instruments furnished to the Indenture Trustee under the 2014-A Basic Documents.

 

Section 6.16.  Encryption.  Notwithstanding anything to the contrary herein, any and all communications (both text and attachments) by or from the Indenture Trustee that the Indenture Trustee in its sole discretion deems to contain confidential, proprietary, and/or sensitive information may be encrypted or made available at the Indenture Trustee’s website at www.usbank.com/abs on a password protected basis.

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE SEVEN

 

NOTEHOLDERS’ LISTS AND REPORTS

 

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

 

Section 7.02.  Preservation of Information; Communications to Noteholders.

 

(a)           The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar.  The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.

 

(b)           Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes subject to the rights of the Indenture Trustee set forth in such Section.

 

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

 

Section 7.03.  Reports by Issuer.

 

(a)           The Issuer shall:

 

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

 

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

 

  

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

 

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

 

Section 7.04.  Reports by Indenture Trustee.

 

(a)           If required by TIA Section 313(a), within 60 days after each December 15th beginning with December 15, 2014, the Indenture Trustee shall mail to each Noteholder as required by TIA Section 313(c), a brief report dated as of such date that complies with TIA Section 313(a).  The Indenture Trustee shall also comply with TIA Section 313(b).

 

(b)           The Indenture Trustee shall provide to the Administrator and the Servicer, to be filed by the Administrator or the Servicer with the Commission and each stock exchange, if any, on which the Notes are listed, a copy of each report mailed to Noteholders pursuant to this Indenture.  The Issuer shall notify the Indenture Trustee if and when the Notes are listed on any stock exchange.

 

 

 

 

 

 

 

  

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ARTICLE EIGHT

 

DISBURSEMENTS AND RELEASES

 

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

 

Section 8.02.  Monthly Investor Report.

 

(a)           On each Determination Date, the Issuer shall cause the Servicer to deliver, pursuant to Section 6.01(b) of the 2014-A Servicing Supplement, to the Indenture Trustee, the Monthly Investor Report with respect to the related Payment Date and Collection Period.

 

(b)           The Indenture Trustee shall have no duty or obligation to verify or confirm the accuracy of any of the information or numbers set forth in the Monthly Investor Report delivered to the Indenture Trustee in accordance with this Section, and the Indenture Trustee shall be fully protected in relying upon such reports.

 

(c)           On each Payment Date, the Indenture Trustee shall send by first class mail or other reasonable means (including the posting on the Indenture Trustee’s website at www.usbank.com/abs) the Monthly Investor Report prepared by the Servicer to each Person that was a Noteholder as of the close of business on the related Record Date (which shall be Cede & Co., as the nominee of DTC unless Definitive Notes are issued under the limited circumstances described herein).  Note Owners may obtain copies of, or access to, such reports upon a request in writing to the Indenture Trustee at the Corporate Trust Office.

 

Section 8.03.  Disbursement of Funds.

 

(a)           On each Payment Date prior to the acceleration of the Notes following the occurrence of an Event of Default, the Indenture Trustee will (based on the information contained in the related Monthly Investor Report) withdraw from the 2014-A Exchange Note Collection Account an amount equal to the 2014-A Available Funds and shall apply such amount in accordance with the following priorities:

 

(i)      to the Servicer, the 2014-A Reference Pool Servicing Fee and an amount equal to any Nonrecoverable Advances;

 

(ii)      pro rata, up to a maximum of $100,000 each calendar year, (A) to pay to the Collateral Agent any expenses or indemnified amounts due with respect to the 2014-

 

  

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A Exchange Note or the 2014-A Reference Pool under Section 3.01(c) of the Basic Collateral Agency Agreement or Article Eight of the Basic Collateral Agency Agreement to the extent not paid by the Borrower or the Titling Trust Administrator, (B) to pay to the Administrative Agent any expenses or indemnified amounts due with respect to the 2014-A Exchange Note or the 2014-A Reference Pool under Section 7.05 of the Basic Collateral Agency Agreement or Article Eight of the Basic Collateral Agency Agreement to the extent not paid by the Borrower or the Titling Trust Administrator, and (C) to the payment of all amounts, including indemnities, then due to the Trustees to the extent not paid by the Transferor or the Administrator;

 

(iii)      to the 2014-A Distribution Account, for payment to the Noteholders, on a pro rata basis, the Interest Distributable Amount for such Payment Date;

 

(iv)      to the 2014-A Distribution Account, for payment to the Noteholders, as payments of principal, an amount equal to the Priority Principal Distribution Amount for such Payment Date;

 

(v)       to the 2014-A Reserve Account, the amount necessary to cause the amount on deposit in the 2014-A Reserve Account to equal the Required Reserve Amount;

 

(vi)      to the 2014-A Distribution Account, for payment to the Noteholders, as payments of principal, an amount equal to the Regular Principal Distribution Amount for such Payment Date;

 

(vii)     if a Successor Servicer has been appointed pursuant to the 2014-A Servicing Agreement, to such Successor Servicer, any Transition Costs due in connection with such transfer of servicing and not paid pursuant to the 2014-A Servicing Agreement plus the Additional Servicing Fee, if any, for the related Collection Period;

 

(viii)    to the Indenture Trustee, the Owner Trustee, the Collateral Agent and the Administrative Agent, any accrued and unpaid expenses, indemnities and fees, in each case to the extent the fees, expenses and indemnities have not been previously paid above pursuant to clause (ii) above; and

 

(ix)       to the Certificateholder, any amounts remaining after the foregoing distributions.

 

(b)           On each Payment Date, the Indenture Trustee shall either directly or through the Note Paying Agent apply or cause to be applied the amount on deposit in the 2014-A Distribution Account on such Payment Date to make the following payments in the following order of priority:

 

(i)      from amounts deposited into the 2014-A Distribution Account pursuant to Section 8.03(a)(iii), to the Noteholders, on a pro rata basis, the Interest Distributable Amount for such Payment Date; and

 

  

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(ii)      from amounts deposited into the 2014-A Distribution Account pursuant to Sections 8.03(a)(iv) and (vi) (so long as the maturity of the Notes has not been accelerated pursuant to Section 5.02):

 

(A)          first, to the Class A-1 Noteholders (until the Class A-1 Note Balance has been reduced to zero);

 

(B)           second, to the Class A-2-A Noteholders and the Class A-2-B Noteholders pro rata (until the Class A-2-A Note Balance and the Class A-2-B Note Balance have been reduced to zero);

 

(C)           third, to the Class A-3 Noteholders (until the Class A-3 Note Balance has been reduced to zero); and

 

(D)           fourth, to the Class A-4 Noteholders (until the Class A-4 Note Balance has been reduced to zero).

 

(c)           Notwithstanding Section 8.03(a), following (i) the liquidation of all or part of the Trust Estate pursuant to Section 5.04(a)(iv), any proceeds of such liquidation of the Trust Estate collected during any Collection Period will be deposited into the 2014-A Exchange Note Collection Account on or prior to the related Payment Date and distributed in the manner set forth in Section 5.04(b) on such Payment Date and (ii) the acceleration of the Notes after the occurrence of an Event of Default, amounts on deposit in the 2014-A Exchange Note Collection Account will be distributed in the manner set forth in Section 5.04(b) on such Payment Date.

 

(d)           If on any Payment Date, after giving effect to all deposits to and withdrawals from the 2014-A Reserve Account, the amount on deposit in the 2014-A Reserve Account exceeds the Required Reserve Amount, the Indenture Trustee (in accordance with the Monthly Investor Report) shall distribute any such excess to or at the direction of the Certificateholder. Upon any such distributions to the Certificateholder, the Noteholders will have no further rights in, or claims to such amounts.

 

(e)           If the sum of the amounts on deposit in the 2014-A Exchange Note Collection Account and the 2014-A Reserve Account on any Payment Date equals or exceeds the Note Balance, accrued and unpaid interest thereon and all amounts due to the Servicer, the Collateral Agent, the Administrative Agent, the Owner Trustee and the Indenture Trustee, all such amounts will be applied up to the amount necessary to reduce the Note Balance to zero and discharge the Notes and pay such amounts due.

 

(f)           So long as the Class A-2-B Notes are Outstanding, the Indenture Trustee will determine the Class A-2-B Interest Rate for each Interest Period on the LIBOR Business Day for such Interest Period; provided, that for the initial Interest Period the Class A-2-B Interest Rate will be 0.33984%.  All determinations of the Class A-2-B Interest Rate by the Indenture Trustee, in the absence of manifest error, will be conclusive and binding on the Noteholders. Upon its determination of the Class A-2-B Interest Rate, the Indenture Trustee shall communicate the rate to the Servicer.

 

  

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Section 8.04.  2014-A Bank Accounts; General Provisions Regarding 2014-A Bank Accounts.

 

(a)           (i)           On or before the 2014-A Closing Date, the Issuer shall cause the Servicer to establish and maintain, at an Eligible Account, which shall initially be the Indenture Trustee, in the name of the Indenture Trustee, for the benefit of the Securityholders, the 2014-A Exchange Note Collection Account as provided in Section 4.01(a) of the 2014-A Servicing Supplement.  In accordance with Section 4.02(a) of the 2014-A Servicing Supplement, the Servicer shall deposit in the 2014-A Exchange Note Collection Account all amounts required to be deposited therein with respect to the preceding Collection Period.  On each Payment Date, the Servicer shall allocate the amount on deposit in the 2014-A Exchange Note Collection Account on such Payment Date in accordance with Section 5.01 of the Exchange Note Supplement (or following the sale or liquidation of any portion of the 2014-A Reference Pool, in accordance with Section 5.02 of the Exchange Note Supplement) and the Indenture Trustee will make distributions from the 2014-A Exchange Note Collection Account in accordance with Section 8.03 (or following the acceleration of the Notes after the occurrence of an Event of Default, in accordance with Section 5.04).

 

(ii)      On or before the 2014-A Closing Date, the Issuer shall cause the Servicer to establish and maintain, at an Eligible Institution, which shall initially be the Indenture Trustee, in the name of the Indenture Trustee, for the benefit of the Noteholders, the 2014-A Distribution Account as provided in Section 4.01(a) of the 2014-A Servicing Supplement.  On each Payment Date prior to the acceleration of the Notes after the occurrence of an Event of Default, the Indenture Trustee shall apply or cause to be applied the amount on deposit in the 2014-A Distribution Account on such Payment Date in accordance with Section 8.03.

 

(iii)     On or before the 2014-A Closing Date, the Issuer shall cause the Servicer to establish and maintain, at an Eligible Institution, which shall initially be the Indenture Trustee, in the name of the Indenture Trustee, for the benefit of the Noteholders, the 2014-A Reserve Account as provided in Sections 4.01(a) of the 2014-A Servicing Supplement.  On or before each Payment Date, the Indenture Trustee (in accordance with the Monthly Investor Report), directly or through the Note Paying Agent, shall withdraw or cause to be withdrawn from the 2014-A Reserve Account and deposit in the 2014-A Exchange Note Collection Account, the 2014-A Reserve Account Draw Amount, if any, for such Payment Date for distribution according to the priorities specified in Section 8.03(a)(i) through (iv).

 

(iv)     For so long as no Default or Event of Default has occurred and is continuing, the depository institution or trust company maintaining the 2014-A Bank Accounts (which initially is the Indenture Trustee) will invest, at the direction of the Servicer (which may be in the form of standing instructions), funds in such accounts in Permitted Investments as provided in Section 5.03(a) of the Basic Servicing Agreement. Investment earnings (net of losses and investment expenses) from amounts on deposit in the 2014-A Bank Accounts shall be treated as 2014-A Available Collections; provided, that the Servicer may direct the Indenture Trustee to hold amounts on deposit in the 2014-A Reserve Account and the 2014-A Exchange Note Collection Account uninvested 

 

  

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(which direction may be in the form of standing instructions) for so long as (A) U.S. Bank is the Indenture Trustee hereunder and (B) the Indenture Trustee is the entity maintaining the 2014-A Reserve Account and the 2014-A Exchange Note Collection Account.

 

(b)           Subject to Section 6.01(c), the Indenture Trustee will not be liable by reason of any insufficiency in any of the 2014-A Bank Accounts resulting from any loss on any Permitted Investment included in the 2014-A Bank Accounts, except for losses attributable to the Indenture Trustee’s failure to make payments on such Permitted Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee.

 

(c)           If the Indenture Trustee is the entity maintaining the 2014-A Bank Accounts and (i) the Servicer has failed to give investment directions for any funds on deposit in any 2014-A Bank Account to the Indenture Trustee by 2:00 p.m., New York City time (or such other time as may be agreed by the Issuer and the Indenture Trustee), on the Business Day preceding the day such investment will be made or (ii) to the knowledge of a Responsible Officer of the Indenture Trustee, a Default or Event of Default has occurred and is continuing with respect to the Notes, the Indenture Trustee will, to the fullest extent practicable, invest and reinvest funds in the 2014-A Bank Accounts, as the case may be, in the most recent investment direction on file with the Indenture Trustee.

 

(d)           The Indenture Trustee will notify the entity maintaining the 2014-A Bank Accounts (if not the Indenture Trustee) if a Responsible Officer has knowledge that a Default or Event of Default has occurred and is continuing with respect to the Notes.

 

(e)           For so long as no Event of Default resulting in the Notes having being declared immediately due and payable shall have occurred and be continuing, the Issuer shall retain the authority to institute, participate and join in any plan of reorganization, readjustment, merger or consolidation with respect to the issuer of any investments of funds in the Accounts, and, in general, to exercise each and every other power or right with respect to each such investment, including the power to exercise any voting rights in respect of such investments.

 

Section 8.05.  Release of Trust Estate.

 

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

 

(b)           The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums due to the Indenture Trustee pursuant to Section 6.07 and any other Issuer Obligations have been paid, release any remaining portion of the Trust Estate that secured the Notes from the Lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds then on deposit in the 2014-A Bank Accounts.  Such release shall include delivery to the Issuer 

 

  

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or its designee of the 2014-A Exchange Note and the Notes and the release of the Lien of this Indenture.  Upon the delivery of the 2014-A Exchange Note to the Issuer or its designee, the rights of the Indenture Trustee, as Registered Pledgee of the 2014-A Exchange Note shall terminate, and, pursuant to Section 3.01(d) of the 2014-A Exchange Note Supplement, the 2014-A Reference Pool shall be terminated, and the 2014-A Leases and 2014-A Vehicles shall be reallocated to the Revolving Pool.

 

(c)           The Indenture Trustee shall release property from the Lien of this Indenture pursuant to this Section only upon receipt of an Issuer Request accompanied by an Officer’s Certificate and an Opinion of Counsel and, if required by the TIA or Section 11.01, Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1), and otherwise in accordance with the applicable requirements of Section 11.01.

 

(d)           Upon receipt of an Issuer Request, the Indenture Trustee shall execute and deliver any termination statements for filing under the provisions of the UCC of any applicable jurisdiction in connection with the release of the Lien of this Indenture pursuant to this Section.

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE NINE

 

SUPPLEMENTAL INDENTURES

 

Section 9.01.  Supplemental Indentures Without Consent of Noteholders.

 

(a)           The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, without the consent of any Holders of any Notes but with prior written notice to the Rating Agencies, at any time and from time to time, enter into one or more indentures supplemental hereto, in form satisfactory to the Indenture Trustee, for any of the following purposes:

 

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

 

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

 

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

 

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

 

(v)     to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture or in any offering document used in connection with the initial offer and sale of the Notes or other 2014-A Basic Document;

 

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

 

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

 

(viii)  to add any provision to, or change in any manner or eliminate any of the provisions of, this Indenture or to modify in any manner the rights of the Holders of Notes under this Indenture;

 

provided, however, that no such supplemental indenture (i) may materially adversely affect the interests of any Noteholder and (ii) will be permitted unless an Opinion of Counsel is delivered 

 

  

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to the Indenture Trustee to the effect that such supplemental indenture will not (a) cause the Issuer to be classified as an association or a publicly traded partnership taxable as a corporation for federal income tax purposes, (b) cause the Notes to be characterized other than as indebtedness for federal income tax purposes and (c) cause the Notes to be deemed to have been exchanged for purposes of Section 1001 of the Code.  The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

 

(b)           A supplemental indenture shall be deemed not to materially adversely affect the interests of any Noteholder if the Person requesting such supplemental indenture (i) has satisfied the Rating Agency Condition or (ii) obtains and delivers to the Indenture Trustee an Opinion of Counsel or an Officer’s Certificate of the Issuer, in either case to the effect that the supplemental indenture would not materially adversely affect the interests of any Noteholder.

 

Section 9.02.  Supplemental Indentures With Consent of Noteholders.  The Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto, with prior written notice to the Rating Agencies, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or modifying in any manner the rights of the Noteholders; provided, that no such amendment may be made without the consent of the Majority Noteholders of the Controlling Class.  Notwithstanding the foregoing, the Issuer and the Indenture Trustee may not, without the consent of each Noteholder affected thereby, enter into any supplements for any of the following purposes:

 

(a)           change the Final Scheduled Payment Date of or the due date of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the Interest Rate thereon or the Note Redemption Price with respect thereto, change the provisions of this Indenture relating to the application of 2014-A Collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable;

 

(b)           reduce the percentage of Note Balance or the Note Balance of the Controlling Class, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

 

(c)           modify or alter (i) the provisions of the proviso to the definition of the term “Outstanding”, (ii) the definition of the term “Note Balance” or (iii) the definition of the term “Controlling Class”;

 

(d)           reduce the percentage of the Outstanding Amount required to direct the Indenture Trustee to sell or liquidate the Trust Estate pursuant to Section 5.04, if the proceeds of such sale or liquidation would be insufficient to pay the Outstanding Amount plus accrued but unpaid interest on the Notes;

 

  

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(e)           reduce the percentage of the Note Balance of the Controlling Class the consent of the Holders of Notes of which is required for any such supplemental indenture amending the provisions of this Indenture which specify the applicable percentage of the Note Balance of the Controlling Class the consent of which is required for such supplemental indenture or the amendment of any other 2014-A Basic Document;

 

(f)           modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the other 2014-A Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;

 

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

 

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

 

(i)           impair the right to institute suit for the enforcement of payment as provided in Section 5.07; or

 

(j)           modify the definitions of 2014-A Aggregate Securitization Value, Securitization Value or the Required Reserve Amount.

 

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

 

The Indenture Trustee may in its discretion determine whether or not any Notes would be affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder.  The Indenture Trustee shall not be liable for any such determination made in good faith.

 

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

 

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

 

  

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Section 9.03.  Execution of Supplemental Indentures.

 

(a)           In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and all the conditions precedent have been satisfied.  The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.  Any supplemental indenture, amendment or waiver that affects the rights, immunities, duties or liabilities of the Owner Trustee shall require the written consent of the Owner Trustee.

 

(b)           In connection with each supplemental indenture, the Issuer shall deliver an Opinion of Counsel to the Indenture Trustee to the effect that such action shall not (i) cause the Issuer to be classified as (A) an association or (B) a publicly traded partnership taxable as a corporation for federal income tax purposes, (ii) cause the Notes to be characterized other than as indebtedness for federal income tax purposes and (iii) cause the Notes to be deemed to have been exchanged for purposes of Section 1001 of the Code.

 

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

 

Section 9.05.  Conformity with Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA.

 

Section 9.06.  Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture.  If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

 

  

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ARTICLE TEN

 

REDEMPTION OF NOTES

 

Section 10.01.  Redemption.  Pursuant to Section 5.01(a) of the Servicing Supplement, on any Payment Date on which the Outstanding Amount is equal to or less than 10% of the Initial Note Balance, after giving effect to all principal payments on such Payment Date, the Servicer may cause the Notes to be redeemed in whole but not in part by purchasing the 2014-A Exchange Note.  If the Notes are to be redeemed pursuant to this Section, the Servicer or the Issuer will notify the Indenture Trustee of such election not less than ten days and not more than 30 days prior to the Redemption Date.  The Issuer will, or will cause the Servicer to, irrevocably deposit, by 2:00 p.m., New York City time, on the Business Day prior to the Redemption Date, in the 2014-A Exchange Note Collection Account an amount sufficient to pay the Note Redemption Price in full, which amounts shall be applied in accordance with Section 8.03.  Upon redemption of the Notes and the payment of the Note Redemption Price in full, the Indenture Trustee shall release the 2014-A Exchange Note and the related components of the Trust Estate from the Lien of this Indenture and shall deliver the 2014-A Exchange Note and all such other components to or upon the order of the Servicer.

 

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

 

All notices of redemption will state:

 

(a)           the Redemption Date;

 

(b)           the Note Redemption Price;

 

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

 

(d)           the applicable “CUSIP” number; and

 

(e)           that on the Redemption Date, the Note Redemption Price will become due and payable upon the Notes and that interest on the Notes will cease to accrue from and after the Redemption Date.

 

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

 

Section 10.03.  Notes Payable on Redemption Date.  The Notes to be redeemed shall, following notice of redemption as required by Section 10.02, on the Redemption Date become due and payable at the Note Redemption Price, and (unless the Issuer shall default in the 

 

  

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payment of the Note Redemption Price) no interest shall accrue on the Note Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Note Redemption Price.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE ELEVEN

 

MISCELLANEOUS

 

Section 11.01.  Compliance Certificates and Opinions, etc.

 

(a)           Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) if required by Section 11.01(b)(ii) or the TIA, an Independent Certificate, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)      Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the Issuer of the property or securities to be so deposited and of all other such securities made the basis of 

 

  

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any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates furnished pursuant to clause (i) above and this clause (ii), is 10% or more of the Note Balance, but such a certificate need not be furnished with respect to any property or securities so deposited, if the fair value thereof to the Issuer as set forth in the related Officer’s Certificate is less than $25,000 or less than 1% of the Note Balance.

 

(iii)       Other than with respect to any release described in clause (A) or (B) of Section 11.01(b)(v), whenever any property or securities are to be released from the Lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

 

(iv)       Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property (other than property described in clauses (A) or (B) of Section 11.01(b)(v)) released from the Lien of this Indenture since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10% or more of the Note Balance, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer’s Certificate is less than $25,000 or less than 1% of the Note Balance at the time of such release.

 

(v)      Notwithstanding Section 2.13 or any other provision of this Section, the Issuer may, without compliance with the requirements of the other provisions of this Section, (A) collect, liquidate, sell or otherwise dispose of the Trust Estate as and to the extent permitted or required by the 2014-A Basic Documents and (B) make cash payments out of the 2014-A Exchange Note Collection Account as and to the extent permitted or required by the 2014-A Basic Documents.

 

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

 

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

 

  

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

 

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

 

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

 

Section 11.03.  Acts of Noteholders.

 

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

 

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

 

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

 

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

 

Section 11.04.  Notices.  Unless otherwise specified in this Indenture, all notices, requests, demands, consents, waivers, Act of Noteholders or other communications to or from 

 

  

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the parties to this Indenture will be in writing.  Notices, requests, demands, consents and other communications will be deemed to have been given and made, (i) upon delivery or, in the case of a letter mailed via registered first class mail, postage prepaid, three days after deposit in the mail and (ii) in the case of (a) a facsimile, when receipt is confirmed by telephone or by reply e-mail or reply facsimile from the recipient, (b) an e-mail, when receipt is confirmed by telephone or by reply e-mail from the recipient and (c) an electronic posting to a password-protected website, upon printed confirmation of the recipient’s access to such password-protected website, or when notification of such electronic posting is confirmed in accordance with clauses (ii)(b) and (ii)(c) above.  Unless otherwise specified in this Indenture, any such notice, request, demand, consent or other communication will be delivered or addressed, in the case of (i) the Indenture Trustee by any Noteholder or by the Issuer at the Corporate Trust Office (e-mail: melissa.rosal@usbank.com, telecopier no. (312) 332-7996, (ii) the Issuer by the Indenture Trustee or by any Noteholder at Mercedes-Benz Auto Lease Trust 2014-A, c/o Wilmington Trust, National Association (telecopier no. (302) 636-4140), Attention: Corporate Trust Administration, (e-mail: yhowell@wilmingtontrust.com), with a copy to the Administrator at Mercedes-Benz Financial Services USA LLC, 36455 Corporate Drive, Farmington Hills, Michigan  48331 (telecopier no. (248) 991-6962), Attention: Steven C. Poling (e-mail steven.c.poling@daimler.com), (iii) to each Rating Agency, as applicable, by the Issuer, the Indenture Trustee or the Owner Trustee, in the case of (a) Moody’s, at Moody’s Investors Service, Inc., ABS Monitoring Department, 7 World Trade Center, 25th Floor, 250 Greenwich Street, New York, New York 10007 (e-mail: ServicerReports@Moodys.com) and (b) Standard & Poor’s, at Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, 55 Water Street, New York, New York 10041, Attention:  Asset Backed Surveillance Department (e-mail: Servicer_reports@sandp.com) and (iv) as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

 

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

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

 

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

 

  

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

 

Section 11.06.  Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

 

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

 

Section 11.07.  Alternate Payment and Notice Provisions.  Notwithstanding any provision of this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement with any Holder of a Note providing for a method of payment, or notice by the Indenture Trustee or any Note Paying Agent to such Holder, that is different from the methods provided for in this Indenture for such payments or notices. The Issuer will furnish to the Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with such agreements.

 

Section 11.08.  Effect of Headings and Table of Contents.  The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 11.09.  Successors and Assigns.  All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents.

 

Section 11.10.  Severability.  In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Indenture and the Notes shall not in any way be affected or impaired thereby.

 

Section 11.11.  Benefits of Indenture.  Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Owner Trustee, the Noteholders (and, with respect to Sections 5.04 and 8.03, the Certificateholders), any other party secured hereunder and any other Person with an ownership interest in any part of the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 11.12.  Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and, except as otherwise provided in the 2014-A Basic Documents, no interest shall accrue for the period from and after any such nominal date.

 

  

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Section 11.13.  GOVERNING LAW.

 

(a)           THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

(b)           Each party to this Indenture 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 purposes of all Proceedings arising out of or relating to this Agreement or the transactions contemplated by the 2014-A Basic Documents.  Each party to this Indenture irrevocably waives, to the fullest extent it may do so, any objection that it may now or hereafter have to the laying of the venue of any such Proceeding brought in such a court and any claim that any such Proceeding brought in such a court has been brought in an inconvenient forum.

 

Section 11.14.  WAIVER OF JURY TRIAL.  EACH PARTY TO THIS INDENTURE IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR ANY OTHER 2014-A BASIC DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS INDENTURE OR ANY SUCH OTHER 2014-A BASIC DOCUMENT.

 

Section 11.15.  Counterparts.  This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

Section 11.16.  Recording of Indenture.  If this Indenture is subject to recording in any appropriate public recording offices, such recording shall be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

 

Section 11.17.  Issuer Obligation.  No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner 

 

  

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Trustee have no such obligations in their individual capacities) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by Applicable Law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.  For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles Six, Seven and Eight of the Trust Agreement.

 

Section 11.18.  No Petition.  The Indenture Trustee, by entering into this Indenture, and each Noteholder or Note Owner accepting a Note or a beneficial interest therein, as the case may be, hereby covenants and agrees that for a period of one year and one day (or, if longer, any applicable preference period) after payment in full of the Exchange Notes, Notes and other Securities, it will not institute against the Titling Trust, the Transferor, the Issuer or the Initial Beneficiary, or join in any institution against the Titling Trust, the Transferor, the Issuer or the Initial Beneficiary of any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings or other Proceedings under any Insolvency Law in connection with any obligations relating to the Notes, the 2014-A Exchange Note or any 2014-A Basic Document and agrees that it will not cooperate with or encourage others to institute any such Proceeding.

 

Section 11.19.  No Recourse.  The Notes represent obligations of the Issuer only and do not represent an interest in or obligations of the Titling Trust, the Servicer, the Transferor or any of their respective Affiliates, and no recourse may be had against such parties or their assets, except as may be set forth in this Indenture and the other 2014-A Basic Documents.  Each Noteholder, by acceptance of a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Indenture Trustee or the Owner Trustee in its individual capacity or any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

 

Section 11.20.  Inspection.  The Issuer agrees that, on at least ten Business Days’ prior written notice, it will make available to any representative of the Indenture Trustee, during the Issuer’s normal business hours, all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested; provided, however, that so long as no Event of Default has occurred, no more than one such review shall be conducted in any calendar year.  The Indenture Trustee shall, and shall cause its representatives to, hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture 

 

  

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Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder.

 

Section 11.21.  Subordination.

 

(a)           The obligations of the Issuer under this Indenture are solely the obligations of the Issuer and will not represent any obligation or interest in any assets of the Transferor other than the Trust Estate, or any assets of the Holding Company other than the Titling Trust Assets that are allocated to the Daimler Retail Specified Interest that are designated as part of the 2014-A Reference Pool.  In furtherance of and not in derogation of the foregoing, the Indenture Trustee, by entering into this Indenture, and each Noteholder, acknowledge and agree that they will have no right, title or interest in or to any other assets of the Transferor or the Holding Company.  To the extent that, notwithstanding the preceding sentence, the Indenture Trustee or any Noteholder either (i) asserts an interest or claim to, or benefit from, other assets or (ii) is deemed to have any such interest, claim to, or benefit in or from other assets, whether by operation of law, legal process, pursuant to applicable provisions of Insolvency Laws or otherwise (including by virtue of Section 1111(b) of the Bankruptcy Code or any successor provision having similar effect under the Bankruptcy Code), then the Indenture Trustee or any Noteholder further acknowledges and agrees that any such 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 terms of the relevant documents relating to the securitization or conveyance of such other assets, are entitled to be paid from, entitled to the benefits of or otherwise secured by such other assets (whether or not any such 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 Transferor or the Holding Company, as applicable), including the payment of post-petition interest on such other obligations and liabilities.  This subordination agreement will be deemed a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code.  The Indenture Trustee or any Noteholder further acknowledge and agree that no adequate remedy at law exists for a breach of this Section and the terms of this Section may be enforced by an action for specific performance.

 

(b)           Each of the Indenture Trustee and any Noteholder irrevocably makes the election afforded to secured creditors by Section 1111(b)(1)(A)(i) of the Bankruptcy Code to receive the treatment afforded by Section 1111(b)(2) of the Bankruptcy Code with respect to any secured claim that the Indenture Trustee or any Noteholder may have against any other assets of the Transferor or the Issuer other than the Trust Estate or, in the case of the Holding Company, the Daimler Retail Specified Interest.

 

Section 11.22.  Termination of Collateral Agent’s Lien.  In connection with the final payment on the Notes and the termination of the Lien of the Indenture, whether pursuant to Section 4.01, Section 10.01 or otherwise, the Indenture Trustee shall, at the direction of the Borrower, the Lender or the Servicer, deliver to the Collateral Agent notices and other documents requested to (i) terminate the Lien of the Collateral Agent, if any, on the Certificates of Title to the 2014-A Vehicles and (ii) otherwise release the rights the Collateral Agent has to the 2014-A Vehicles by virtue of its Lien, if any, on the related Certificates of Title and the other components of the Trust Estate.

 

  

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Section 11.23.  Each Exchange Note Separate; Assignees of Exchange Note.  Each party hereto acknowledges and agrees (and each holder or pledgee of the 2014-A Exchange Note, by virtue of its acceptance of such Exchange Note or pledge thereof acknowledges and agrees) that (i) the Specified Interest is a separate series of the Titling Trust as provided in Section 3806(b)(2) of Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., (ii) the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to (a) the 2014-A Exchange Note or the related 2014-A Reference Pool shall be enforceable against such 2014-A Reference Pool only and not against any other Reference Pool or the Revolving Facility Pool and (b) any other Exchange Note, any other Reference Pool, or the Revolving Facility Pool shall be enforceable against such other Exchange Note, other Reference Pools, or the Revolving Facility Pool only, as applicable, and not against the 2014-A Exchange Note or any 2014-A Lease or 2014-A Vehicle included in the 2014-A Reference Pool, (iii) except to the extent required by law, the leases and the related leased vehicles included in the Revolving Facility Pool or leases and the related leased vehicles included in any other Reference Pool with respect to any other Exchange Note (other than the 2014-A Exchange Note transferred hereunder which is related to the 2014-A Reference Pool) shall not be subject to the claims, debts, liabilities, expenses or obligations arising from or with respect to the 2014-A Exchange Note in respect of such claim, (iv) no creditor or holder of a claim relating to (a) the 2014-A Exchange Note or the related 2014-A Reference Pool shall be entitled to maintain any action against or recover any assets allocated to any other Reference Pool, the Revolving Facility Pool or any other Exchange Note or the assets allocated thereto (except to the extent of amounts available to such Persons on a fully subordinated basis) and (b) any other Reference Pool, the Revolving Facility Pool or any other Exchange Note other than the 2014-A Exchange Note related to the 2014-A Reference Pool shall be entitled to maintain any action against or recover any assets allocated to the 2014-A Reference Pool and (v) any purchaser, assignee or pledgee of an interest in the 2014-A Reference Pool or, the 2014-A Exchange Note, must, prior to or contemporaneously with the grant of any such assignment, pledge or security interest, (a) give to the Titling Trust a non-petition covenant substantially similar to that set forth in Section 11.10 of the Titling Trust Agreement and (b) execute an agreement for the benefit of each holder, assignee or pledgee from time to time of any other Exchange Note to release all claims to the assets of the Titling Trust allocated to the Revolving Facility Pool and each other Reference Pool and, in the event that such release is not given effect, to fully subordinate all claims it may be deemed to have against the assets of the Titling Trust allocated to the Revolving Facility Pool and each other Reference Pool.

 

  

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

 

	 	MERCEDES-BENZ AUTO LEASE TRUST 2014-A	 
	 	 	 	 
	 	
By:

	
WILMINGTON TRUST, NATIONAL 

ASSOCIATION, not in its individual capacity but 

solely as Owner Trustee

	 
	 	 	 	 
	
 

	
By: 

	/s/ Yvette L. Howell	 
	 	 	Name:  Yvette L. Howell	 
	 	 	Title:    Assistant Vice President	 
	 	 	 	 

 

	 	
U.S. BANK NATIONAL ASSOCIATION, not in its 

individual capacity but solely as Indenture Trustee

	 
	 	 	 	 
	
 

	
By: 

	/s/ Melissa A. Rosal	 
	 	 	Name:  Melissa A. Rosal	 
	 	 	Title:    Vice President	 
	 	 	 	 

 

 

Indenture

  

  

  

 

EXHIBIT A

 

FORM OF CLASS [A-1] [A-2-A][A-2-B] [A-3] [A-4] NOTE

 

EACH PURCHASER AND TRANSFEREE (AND IF SUCH PURCHASER OR TRANSFEREE IS A “BENEFIT PLAN” (AS DEFINED BELOW), ITS FIDUCIARY) WILL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (1) IT IS NOT, AND IT IS NOT ACTING ON BEHALF OF OR USING THE ASSETS OF, AN “EMPLOYEE BENEFIT PLAN”, AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), A “PLAN”, AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF SUCH EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN THE ENTITY (WITHIN THE MEANING OF DEPARTMENT OF LABOR REGULATION SECTION 2510.3-101, AS MODIFIED BY SECTION 3(42) OF ERISA), OR ANY GOVERNMENTAL, CHURCH, NON-US, OR OTHER PLAN THAT IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (EACH, A ‘BENEFIT PLAN”) OR (2) IT’S ACQUISITION AND CONTINUED HOLDING OF THIS NOTE (OR INTEREST HEREIN) WILL NOT GIVE RISE TO A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A NON-EXEMPT VIOLATION OF ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SUBSTANTIALLY SIMILAR TO SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (“SIMILAR LAW”).  EACH BENEFICIAL OWNER OF THIS NOTE WILL BE DEEMED TO HAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET FORTH IN THE INDENTURE.

 

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

 

TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN.

 

  

A-1

  

THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANY PERSON ACQUIRING THIS NOTE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE INDENTURE TRUSTEE.

 

THE FAILURE TO PROVIDE THE ISSUING ENTITY AND THE INDENTURE TRUSTEE WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS (GENERALLY, AN INTERNAL REVENUE SERVICE FORM W-9 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE, OR AN APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE) MAY RESULT IN THE IMPOSITION OF FEDERAL BACK-UP WITHHOLDING UPON PAYMENTS TO THE HOLDER IN RESPECT OF THIS` NOTE.

 

[FOR CLASS A-2-A, A-2-B, A-3 AND A-4 NOTES] THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1 NOTES [THE CLASS A-2-A NOTES, THE CLASS A-2-B NOTES, THE CLASS A-3 NOTES] AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.]

 

 

	REGISTERED	 $___________
	No. R-______	 CUSIP NO. ___________

 

MERCEDES-BENZ AUTO LEASE TRUST 2014-A

_____% [LIBOR + __%] CLASS [A-1] [A-2-A][A-2-B] [A-3] [A-4] ASSET BACKED NOTE

 

Mercedes-Benz Auto Lease Trust 2014-A, a statutory trust organized and existing under the laws of the State of Delaware (including any permitted successors and assigns, the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or its registered assigns, the principal sum of ___________________ DOLLARS ($___________), payable on each Payment Date in an amount equal to the result obtained by multiplying (i) a fraction the numerator of which is $___________  [Denomination of Note] and the denominator of which is $___________ [Initial Note Balance of Class] by (ii) the aggregate amount in respect of principal of the Class [A-1] [A-2-A][A-2-B] [A-3] [A-4] Notes, if any, payable to the extent described in the Indenture referred to on the reverse hereof on each Payment Date; provided, however, that the entire unpaid principal amount of this Note shall be payable on the earlier of _______________, 20__ (the “Class [A-1] [A-2-A][A-2-B] [A-3] [A-4] Final Scheduled Payment Date”) and the Redemption Date, if any, selected pursuant to the Indenture.  Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Indenture, which also contains rules as to construction that shall be applicable herein.

 

The Issuer will pay interest on this Note at the rate per annum shown above on each Payment Date (to the extent that such rate does not exceed the maximum rate permitted by Applicable Law) until the principal of this Note is paid or made available for payment, on the 

 

  

A-2

  

 

principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on such preceding Payment Date), or on the Closing Date in the case of the first Payment Date or if no interest has yet been paid, subject to certain limitations contained in the Indenture.  Interest on this Note will accrue for each Payment Date from, and including, [For Class A-1, A-2-B Notes: the most recent Payment Date on which interest has been paid (or, in the case of the first Payment Date or if no interest has yet been paid, from and including the Closing Date), to but excluding such current Payment Date.  Interest will be computed on the basis of the actual number of days during the related Interest Period divided by 360.]  [For Class A-2-A, Class A-3 and Class A-4 Notes: the 15th day of the prior calendar month (or, in the case of the first Payment Data or if no interest has yet been paid, from and including the Closing Date), to but excluding the 15th day of the current calendar month.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.]  The Issuer shall pay interest on overdue installments of interest at the interest rate otherwise applicable thereto to the extent lawful.  Such principal and interest on this Note shall be paid in the manner specified on the reverse hereof.

 

The principal of and interest on this Note are payable in such coin or currency of the United States as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

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

 

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

 

 

 

 

 

  

A-3

  

 

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

 

	
Date:  April __, 2014

	
MERCEDES-BENZ AUTO LEASE TRUST 2014-A

	 
	 	 	 	 
	 	By:	
WILMINGTON TRUST, NATIONAL 

ASSOCIATION,

not in its individual capacity but solely as 

Owner Trustee

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	
Authorized Signatory

	 

 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
Date:  April __, 2014

	
U.S. BANK NATIONAL ASSOCIATION,

not in its individual capacity but solely as Indenture 

Trustee

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	
Authorized Signatory

	 

 

 

 

  

A-4

  

 

[REVERSE OF CLASS [A-1] [A-2-A][A-2-B] [A-3] [A-4] NOTE]

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its [_____%] Class [A-1] [A-2-A][A-2-B] [A-3] [A-4] Asset Backed Notes (the “Class [___] Notes”), all issued under the Indenture, dated as of April 1, 2014 (the “Indenture”), between the Issuer and U.S. Bank National Association, as trustee (the “Indenture Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Noteholders.  The Notes are subject to all terms of the Indenture.  All terms used in this Note are defined in Appendix 1 to the 2014-A Servicing Supplement and if not defined therein, in Appendix A to the Basic Collateral Agency Agreement.

 

The Class A-1 Notes, the Class A-2-A Notes, the Class A-2-B the Class A-3 Notes and the Class A-4 Notes (collectively, the “Notes”) are, except as otherwise provided in the Indenture, equally and ratably secured by the 2014-A Collateral pledged as security therefor as provided in the Indenture.  However, to the extent provided in the Indenture, each Class of Notes will receive principal payment sequentially so no principal payments shall be made in respect of the Class A-2-A Notes and the Class A-2-B Notes until the Class A-1 Notes have been paid in full, no principal payments shall be made in respect of the Class A-3 Notes until the Class A-1 Notes, the Class A-2-A Notes and the Class A-2-B Notes have been paid in full and no principal payments shall be made in respect of the Class A-4 Notes until the Class A-1 Notes, the Class A-2-A Notes, the Class A-2-B Notes and the Class A-3 Notes have been paid in full.

 

Principal payable on the Class [A-1] [A-2-A][A-2-B] [A-3] [A-4] Notes will be paid on each Payment Date in the amount specified in the Indenture.  As described above, the entire unpaid principal amount of this Note will be payable on the earlier of the Class [A-1] [A-2-A][A-2-B] [A-3] [A-4] Final Scheduled Payment Date and the Redemption Date, if any, selected pursuant to the Indenture.  Notwithstanding the foregoing, under certain circumstances, the entire unpaid principal amount of the Class [A-1] [A-2-A][A-2-B] [A-3] [A-4] Notes shall be due and payable following the occurrence and continuance of an Event of Default, if the Indenture Trustee or the Majority Noteholders of Notes of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  In such an event, principal payments on the Class A-1 Notes shall be made first and until paid in full and principal payments on the remaining Classes of Notes shall be made pro rata to the Noteholders entitled thereto.  All principal payments on the Class [A-1] [A-2-A][A-2-B] [A-3] [A-4] Notes shall be made pro rata to the Class [A-1] [A-2-A][A-2-B] [A-3] [A-4] Noteholders entitled thereto.

 

Payments of principal and interest on this Note due and payable on each Payment Date or Redemption Date shall be made by check mailed to the Person whose name appears as the registered Noteholder (or one or more Predecessor Notes) on the Note Register as of the close of business on the related Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the 

 

  

A-5

  

 

principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date or Redemption Date shall be binding upon all future Noteholders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the remaining unpaid principal amount of this Note on a Payment Date or Redemption Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the registered Noteholder as of the Record Date preceding such Payment Date or Redemption Date by notice mailed within 30 days of such Payment Date or Redemption Date and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Corporate Trust Office of the Indenture Trustee or at the office of the Indenture Trustee’s agent appointed for such purposes located in The City of New York.

 

As provided in the Indenture, the Notes may be redeemed, in whole but not in part, in the manner and to the extent described in the Indenture, the 2014-A Servicing Agreement and the Trust Agreement.

 

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

 

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

 

The Notes represent obligations of the Issuer only and do not represent interests in, recourse to or obligations of the Titling Trust, the Transferor, the Initial Beneficiary, the Servicer or any of their respective Affiliates.

 

  

A-6

  

Any claim pursuant to any Note issued hereunder against the Titling Trust will be limited in recourse to the assets of the Daimler Retail Specified Interest that are designated as part of the 2014-A Reference Pool.  If, notwithstanding the preceding sentence, any Noteholder or any other Person having a claim under the Indenture will be deemed to have any claim against any Specified Interest of the Initial Beneficiary other than the Daimler Retail Specified Interest, or any assets allocated to any such other Specified Interest, such claim will be subordinate to the payment in full, including post-petition interest, of the claims of (i) the holders of any Securities relating to such other Specified Interest and (ii) parties to any undertaking, agreement, contract or other written obligation of the Holders of the Series relating to such other Specified Interest, the payments under which are derived in any material part from or collateralized by amounts received with respect to the related Specified Assets of such other Specified Interest.

 

Each Noteholder, by accepting a Note, irrevocably makes the election afforded to secured creditors by Section 1111(b)(1)(A)(i) of the Bankruptcy Code to receive the treatment afforded by Section 1111(b)(2) of the Bankruptcy Code with respect to any secured claim that the Noteholder may have at any time against the Titling Trust or any Series other than the Series in connection with which this Note was issued.

 

Each Noteholder or Note Owner, by accepting a Note or a beneficial interest therein, covenants and agrees that for a period of one year and one day (or, if longer, any applicable preference period) after payment in full of all outstanding Notes, it will not institute against the Titling Trust, the Transferor, the Issuer or the Initial Beneficiary, or join in any institution against the Titling Trust, the Transferor, the Issuer or the Initial Beneficiary of any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings or other Proceedings under any Insolvency Law in connection with any obligations relating to the Notes or any 2014-A Basic Document.

 

The Issuer has entered into the Indenture and this Note is issued with the intention that, for federal, State and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness secured by the Trust Estate.  Each Noteholder, by acceptance of a Note, agrees to treat the Notes for federal, State and local income, single business and franchise tax purposes as indebtedness.

 

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

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Noteholders under the Indenture at any time by the Issuer with the consent of Noteholders representing not less than a majority of the Outstanding Amount of the Controlling Class.  The Indenture also contains provisions permitting Noteholders representing specified percentages of the Note Balance of the Controlling Class, on behalf of all Noteholders, to waive compliance by the Issuer with certain provisions of the Indenture and certain past Defaults under the Indenture 

 

  

A-7

  

 

and their consequences.  Any such consent or waiver by the Noteholder of this Note (or any one of more Predecessor Notes) shall be conclusive and binding upon such Noteholder and upon all future Noteholders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Noteholders.

 

This Note, or any interest therein, may not be transferred to a person that is or is acting on behalf of, or using the assets of, a Benefit Plan, unless such transferee represents, warrants and covenants that its purchase and holding of this note will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or result in a non-exempt violation of any Similar Law.  By its acquisition of this Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

 

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

 

The Indenture permits the Issuer, under certain circumstances, to consolidate or merge with or into another Person, 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 provided in the Indenture, subject to certain limitations therein set forth.

 

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

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the 

 

  

A-8

  

 

principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the 2014-A Basic Documents, none of Wilmington Trust, National Association, in its individual capacity, U.S. Bank National Association, in its individual capacity, any owner of a beneficial interest in the Issuer or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the 2014-A Basic Documents, in the case of an Event of Default the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

 

 

 

 

 

 

 

 

 

 

 

  

A-9

  

 

ASSIGNMENT

 

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

 

 

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

 

(name and address of assignee)

 

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

 

attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises.

 

 

 

	Dated: __________________________	 	 __________________________ *
	 	 	 
	 	 	Signature Guaranteed:
	 	 	 
	 	 	  _________________________ *

 

 

 

 

	
*

	
NOTICE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the require­ments of the Note Registrar.

 

  

A-10

  

EXHIBIT B

 

ASSET REPURCHASE DEMAND ACTIVITY REPORT

 

Reporting Period:  [calendar month]

o  Check here if nothing to report.

 

	
Transaction

	
Lease

	
Activity During Period1

	
Date of Reputed Demand2

	
Party Making Reputed Demand

	
Date of Withdrawal of Reputed Demand

	
MBALT 2014-A

	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

 

 

1 Forward any applicable information or documentation relating to any reputed demands to the Servicer. See Item 11 in the ASF Rule 15Ga-1 Market Implementation Guide for a discussion of what constitutes activity.

  

2 See Item 23 in the ASF Rule 15Ga-1 Market Implementation Guide for a discussion of “demands.”

 

 

  

B-1

  

EXHIBIT C

 

PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS

 

In addition to the representations, warranties and covenants contained in the Indenture, dated as of April 1, 2014 (the “Indenture”), between Mercedes-Benz Auto Lease Trust 2014-A, as issuer (the “Issuer”), and U.S. Bank National Association, as trustee (the “Indenture Trustee”), the Issuer hereby further represents, warrants and covenants to the Indenture Trustee as follows on the 2014-A Closing Date:

 

	
  

	
1.

	
The Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the 2014-A Collateral in favor of the Indenture Trustee, which security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Issuer.

 

	
  

	
2.

	
The 2014-A Exchange Note constitutes a “general intangible”, “instrument”, “certificated security” or “tangible chattel paper”, within the meaning of the applicable UCC.  The 2014-A Bank Accounts and all subaccounts thereof constitute either “deposit accounts” or “securities accounts” within the meaning of the applicable UCC.

 

	
  

	
3.

	
All of the 2014-A Collateral that constitutes securities entitlements (other than the 2014-A Exchange Note to the extent the 2014-A Exchange Note constitutes a certificated security) has been or will have been credited to one of the 2014-A Bank Accounts.  The securities intermediary for each 2014-A Account has agreed to treat all assets credited to the 2014-A Accounts as “financial assets” within the meaning of the applicable UCC.

 

	
  

	
4.

	
The Issuer owns and has good and marketable title to the 2014-A Collateral free and clear of any Liens, claim or encumbrance of any Person, excepting only liens for taxes, assessments or similar governmental charges or levies incurred in the ordinary course of business that are not yet due and payable or as to which any applicable grace period shall not have expired, or that are being contested in good faith by proper proceedings and for which adequate reserves have been established, but only so long as foreclosure with respect to such a Lien is not imminent and the use and value of the property to which the Lien attaches is not impaired during the pendency of such proceeding.

 

	
  

	
5.

	
The Issuer has received all consents and approvals to the grant of the security interest in the 2014-A Collateral under the Indenture to the Indenture Trustee required by the terms of the 2014-A Collateral to the extent that it constitutes an instrument or a payment intangible.

 

	
  

	
6.

	
The Issuer has received all consents and approvals required by the terms of the 2014-A Collateral, to the extent that it constitutes a securities entitlement, certificated security or uncertificated security, to the transfer to the Indenture Trustee of its interest and rights in the 2014-A Collateral under the Indenture.

 

  

C-1

  

 

	
  

	
7.

	
The Issuer has caused or will have caused, within ten days after the 2014-A Closing Date, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the 2014-A Collateral granted to the Indenture Trustee under the Indenture.

 

	
  

	
8.

	
With respect to 2014-A Collateral that constitutes an instrument or tangible chattel paper, either:

 

	
  

	
a.

	
all original executed copies of each such instrument or tangible chattel paper have been delivered to the Indenture Trustee;

 

	
  

	
b.

	
such instruments or tangible chattel paper are in the possession of a custodian and the Indenture Trustee has received a written acknowledgment from such custodian that such custodian is holding such instruments or tangible chattel paper solely on behalf and for the benefit of the Indenture Trustee; or

 

	
  

	
c.

	
a custodian received possession of such instruments or tangible chattel paper after the Indenture Trustee received a written acknowledgment from such custodian that such custodian is acting solely as agent of the Indenture Trustee.

 

	
  

	
9.

	
With respect to the 2014-A Bank Accounts and all subaccounts thereof that constitute deposit accounts, either:

 

	
  

	
a.

	
the Issuer has delivered to the Indenture Trustee a fully executed agreement pursuant to which the bank maintaining the deposit accounts has agreed to comply with all instructions originated by the Indenture Trustee directing disposition of the funds in the 2014-A Bank Accounts without further consent by the Issuer; or

 

	
  

	
b.

	
the Issuer has taken all steps necessary to cause the Indenture Trustee to become the account holder of the 2014-A Bank Accounts.

 

	
  

	
10.

	
With respect to 2014-A Collateral or 2014-A Bank Accounts or subaccounts thereof that constitute securities accounts or securities entitlements, either:

 

	
  

	
a.

	
the Issuer has caused or will have caused, within ten days after the 2014-A Closing Date, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest granted in the 2014-A Collateral to the Indenture Trustee;

 

	
  

	
b.

	
the Issuer has delivered to the Indenture Trustee a fully executed agreement pursuant to which the securities intermediary has agreed to comply with all instructions originated by the Indenture Trustee relating to the 2014-A Bank Accounts without further consent by the Issuer; or

 

  

C-2

  

 

	
  

	
c.

	
the Issuer has taken all steps necessary to cause the securities intermediary to identify in its records the Indenture Trustee as the person having a security entitlement against the securities intermediary in the 2014-A Bank Accounts.

 

	
  

	
11.

	
With respect to 2014-A Collateral that constitutes certificated securities (other than securities entitlements), all original executed copies of each security certificate that constitutes or evidences the 2014-A Collateral have been delivered to the Indenture Trustee, and each such security certificate either (i) is in bearer form, (ii) has been endorsed by an effective endorsement to the Indenture Trustee or in blank or (iii) has been registered in the name of the Indenture Trustee.

 

	
  

	
12.

	
Other than the transfer of any 2014-A Collateral from Mercedes-Benz Financial Services USA LLC to Daimler Trust Leasing LLC under the First-Tier Sale Agreement, the transfer of any 2014-A Collateral from Daimler Trust Leasing LLC to the Issuer under the Second-Tier Sale Agreement, and the security interest in the 2014-A Collateral granted to the Indenture Trustee under the Indenture, none of Mercedes-Benz Financial Services USA LLC, Daimler Trust Leasing LLC or the Issuer has pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the 2014-A Collateral or the 2014-A Accounts or any subaccount thereof.

 

	
  

	
13.

	
The Issuer has not authorized the filing of, nor is aware of, any financing statements against the Issuer that include a description of collateral covering the 2014-A Collateral or the 2014-A Bank Accounts or any subaccount thereof other than any financing statement relating to any security interest granted pursuant to the 2014-A Basic Documents or that has been terminated.

 

	
  

	
14.

	
No instrument or tangible chattel paper that constitutes or evidences the 2014-A Collateral has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee.

 

	
  

	
15.

	
Neither the 2014-A Bank Accounts nor any subaccounts thereof are in the name of any person other than the Issuer or the Indenture Trustee.  The Issuer has not consented to the securities intermediary of any 2014-A Bank Account to comply with entitlement orders of any person other than the Indenture Trustee.

 

Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Indenture.

 

 

 

 

 

  

C-3EXHIBIT 4.2

 

INVESTOR RIGHTS AGREEMENT

 

THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made on August 29, 2007 (the “Effective Date”) by and among Cyrenaic Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the Investors listed on Schedule I hereto (the “Investors”).

 

WHEREAS, the Company proposes to issue and sell an aggregate of up to 35,000,000 shares of Common Stock, par value $.0001 per share, to certain Investors (the “New Investors”) pursuant to that certain Stock Purchase Agreement of even date herewith (the “Purchase Agreement”); and

 

WHEREAS, as a condition to entering into the Purchase Agreement, the New Investors have requested that the Company enter into this Agreement in order to provide for certain rights and covenants as set forth herein.

 

NOW, THEREFORE, in consideration of the covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

 

1.             GENERAL PROVISIONS

 

1.1          Shares Subject to this Investor Rights Agreement.  The Investors expressly agree that the terms and restrictions of this Agreement shall apply to all shares of capital stock of the Company which any of them now owns or hereafter acquires by any means, including, without limitation, by purchase, assignment or operation of law, or as a result of any stock dividend, stock split, reorganization, reclassification, whether voluntary or involuntary, or other similar transaction, and to any shares of capital stock of any successor in interest of the Company, whether by sale, merger, consolidation or other similar transaction, or by purchase, assignment or operation of law (the “Shares”).

 

1.2          No Partnership Relationship.  Notwithstanding, but not in limitation of, any other provision of this Agreement, the parties hereto understand and agree that the creation, management and operation of the Company shall not create or imply a general partnership between or among the Investors and shall not make any Investor the agent or partner of any other Investor for any purpose.

 

1.3          Certain Definitions.  As used in this Agreement, the following terms shall have the following respective meanings:

 

“Affiliate” means, with respect to any person or entity, any other person or entity which controls, or is controlled by, or is under common control with the subject referenced, any successor entities, and any investment funds managed by or advisor of such person or entity or an affiliate of such manager or advisor; and, for the purposes hereof, the term “control” (including the terms “controlling”, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities or by contract or otherwise.

 

“Commission” shall mean the U.S. Securities and Exchange Commission and any successor agency of the Federal government administering the Securities Act and the Exchange Act.

 

“Common Stock” shall mean (i) the common stock, $.0001 par value per share, of the Company, (ii) any other capital stock of the Company, however designated, authorized on or after the

 

 

date hereof, which shall neither be limited to a fixed sum or percentage of par value in respect of the rights of the holders thereof to participate in dividends nor entitled to a preference in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Company; and (iii) any other securities into which or for which any of the securities described in (i) or (ii) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, consolidation, sale of assets or other similar transaction.

 

“Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended, and any similar or successor Federal statute, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time.

 

“Federal” shall mean with respect to any executive, legislative or judicial branch of government or other agency or organ of government, a branch or other agency or organ of the government of the United States.

 

“Person” shall mean an individual, corporation, partnership, joint venture, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

 

“Qualified IPO” shall mean an underwritten public offering of Common Stock of the Company, offered on a firm commitment basis, pursuant to a registration statement filed with the Commission under the Securities Act on Form S-1 or its then equivalent, in which (i) the public offering price per share (before underwriters’ commissions and expenses) is not less than $2.00, being two times the original purchase price of a share of Common Stock (such dollar amount being subject to equitable adjustment in the event of any stock dividend, reorganization, recapitalization or similar event involving a change in the Common Stock) and (ii) the aggregate net proceeds to the Company equals or exceeds $40,000,000.

 

The terms “register,” “registered” and “registration” shall mean a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement, or, as the context may require, under the Exchange Act or applicable state securities laws.

 

“Registrable Securities” shall mean shares of Common Stock, excluding any securities which have been (a) registered under the Securities Act pursuant to an effective registration statement filed thereunder and disposed of in accordance with the registration statement covering them or (b) publicly sold pursuant to Rule 144 under the Securities Act.

 

“Registration Expenses” shall mean the expenses so described in Section 4.5.

 

“Securities Act” shall mean the U.S. Securities Act of 1933, as amended, and any similar or successor Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

 

“Selling Expenses” shall mean the expenses so described in Section 4.5.

 

“Subsidiary” or “Subsidiaries” shall mean any corporation, partnership, trust or other entity of which the Company and/or any of its other Subsidiaries directly or indirectly owns at the time a majority of the outstanding shares of any class of equity security of such corporation, partnership, trust or other entity.

 

2

 

2.             PERCENTAGE MAINTENANCE RIGHTS

 

2.1          Right of First Offer.  Except with respect to “Exempt Issuances” as defined in Section 2.3, in the event that the Company proposes to issue (the “New Issuance”) any (i) shares of Common Stock, (ii) warrants, options or other rights to purchase Common Stock (collectively, “Rights”), or (iii) any debentures or other securities convertible into or exchangeable for shares of Common Stock (collectively, “Convertible Securities”), the Company will first offer (the “Offer”) to sell such securities to the holders of Common Stock who own at least ten percent (10%) of the Common Stock then outstanding (each, a “Major Investor”) and deliver a notice to the Major Investors (the “Offer Notice”) of such Offer, stating the price (or, to the extent the consideration is other than cash, the fair market value of the consideration to be paid to the Company, as determined by the Board of Directors of the Company (the “Board”) and other terms and conditions thereof.

 

2.2          Right to Purchase Shares, Rights or Convertible Securities.

 

(a)           Each Major Investor which, at the time of the New Issuance, is either (i) an “accredited investor” (as that term is defined in Rule 501 of the Regulation D promulgated under the Securities Act) or (ii) not a “U.S. person” (as that term is defined in Rule 902 promulgated under the Securities Act) and may purchase such securities from the Company pursuant to Regulation S promulgated under the Securities Act, shall have the right to purchase up to such number of shares of Common Stock, Rights or Convertible Securities, as applicable, of the New Issuance at the price and on the terms stated in the Offer Notice, such price to be paid in full in cash or by check at the time of issuance of such securities to the Major Investor so that, after giving effect to the New Issuance, each Major Investor who exercises such right in full will continue to maintain its same proportionate ownership of Common Stock as of the date immediately preceding the Offer, treating each Major Investor for the purpose of such computation, as the holder of the number of shares of Common Stock which would be issuable to it upon conversion, exercise and exchange of all Rights and Convertible Securities held by it on the date immediately preceding the Offer and assuming the like conversion, exercise and exchange of all such securities held by other persons.  The rights set forth in this Section 2 shall be exercised by the Major Investors, if at all, by written notice (the “Acceptance Notice”) to the Company delivered not later than twenty (20) days after the receipt by the Major Investors of the Offer Notice in accordance with the terms and conditions stated therein, and such right shall expire at the end of the twentieth day after the day of the receipt by the Major Investors of the Offer Notice.  The rights provided in this Section 2.2 shall be assignable to any Affiliate of an Investor.

 

(b)           If any Major Investor fails to exercise its right hereunder to purchase its proportionate ownership interest (“Equity Percentage”) of the New Issuance (or fails to pay the purchase price in respect of such New Issuance in full at the proposed time of closing) (a “Nonparticipating Major Investor”), the Company shall so notify the other Major Investors in a written notice (the “Excess Securities Notice”).  The Excess Securities Notice shall be given by the Company promptly after it learns of the intention of any Major Investor not to purchase any or all of its Equity Percentage of the New Issuance or the failure of any Major Investor to pay such purchase price, but in no event later than fifteen (15) days after the expiration of the 20-day period.  The Major Investors who or which have agreed to purchase their Equity Percentage of the New Issuance (each, a “Participating Major Investor”) shall have the right to purchase a portion of the securities not purchased by such Nonparticipating Major Investor (the “Excess Securities”), determined by dividing such Participating Major Investor’s Equity Percentage by the sum of all Participating Major Investors’ Equity Percentages.  If a Participating Major Investor desires to exercise such right, it must provide notice of its intention to exercise such right to the Company within ten (10) days after receipt of the Excess Securities Notice from the Company (an “Excess Securities Acceptance Notice”).  The twenty-five (25) day period during which (i) the Company must give the Excess Securities Notice to the other Major Investors, and (ii) each of the Participating Major Investors must give the Company an Excess Securities Acceptance Notice, is hereinafter referred to as the “Excess Securities Period.”

 

3

 

(c)           To the extent that an Acceptance Notice or Excess Securities Acceptance Notice has not been given by the Investors with respect to any portion of the New Issuance which the Investors are entitled to purchase pursuant to this Section 2, the Company shall have 120 days from the expiration of the foregoing 25-day period to sell all or any part of such portion of the New Issuance to any other person or persons, but only upon terms and conditions in all material respects, including, without limitation, unit price and interest rates, which are no more favorable to such other person or persons and no less favorable to the Company than those set forth in the Offer.

 

2.3          Exempt Issuances.  The term “Exempt Issuances” referred to in Section 2.1 which will not give the Major Investors the rights described in Section 2.2 to any of the following equity securities:

 

(a)           shares of Common Stock (and/or options, warrants or other Common Stock purchase rights issued pursuant to such options, warrants or other rights) issued or to be issued to employees, officers or directors of, or consultants or advisors to the Company or any Subsidiary, pursuant to compensation plans, compensation agreements, or other compensation arrangements that are approved by the Board;

 

(b)           shares of Common Stock issuable pursuant to the Purchase Agreement;

 

(c)           any equity securities issued for consideration other than cash pursuant to a merger, consolidation, acquisition or similar business combination that is approved by the Board;

 

(d)           shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization by the Company;

 

(e)           any equity securities issued pursuant to any equipment leasing arrangement, or debt financing from a bank or similar financial institution; provided, such equipment leasing arrangement, or debt financing is approved by the Board and, if such issuances exceed in the aggregate 1,000,000 shares, the consent of the holders of at least a majority of the Common Stock;

 

(f)            any Equity Securities issued in connection with strategic transactions involving the Company and other entities, including (i) joint ventures, manufacturing, marketing or distribution arrangements or (ii) technology transfer or development arrangements; provided that such strategic transactions and the issuance of shares therein has been approved by the Board and, if such issuances exceed in the aggregate 1,000,000 shares, the consent of the holders of at least a majority of the Common Stock; and

 

(g)           any equity securities issued in connection with the Company’s Qualified IPO;

 

2.4          Termination.  The respective rights and obligations of the parties under this Section 2 shall terminate upon the closing of, and shall not apply to the offer and sale of securities in connection with, the Company’s Qualified IPO.

 

3.             TRANSFER OF REGISTRABLE SECURITIES

 

3.1          Restrictive Legend.  Each certificate representing Registrable Securities shall, except as otherwise provided in this Section 3.1 or in Section 3.2, be stamped or otherwise imprinted with

 

4

 

a legend substantially in the following form (in addition to any legend required under applicable state securities laws):

 

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any other securities laws.  These securities have been acquired for investment and not with a view to distribution or resale.  Such securities may not be offered for sale, sold, delivered after sale, transferred, pledged or hypothecated in the absence of an effective registration statement covering such securities under the Securities Act and any other applicable securities laws, unless the holder shall have obtained an opinion of counsel reasonably satisfactory to the corporation that such registration is not required.”

 

Upon the request of a holder of such a certificate, the Company shall remove the foregoing legend from the certificate or issue to such holder a new certificate therefor free of any transfer legend, if (i) there is an effective registration statement covering the securities represented by such certificate, (ii) with such request, the Company shall have received either the opinion referred to in Section 3.2(a)(i) or the “no-action” letter referred to in Section 3.2(a)(ii), or (iii) the request is made in connection with a proposed transfer in accordance with the provisions of Rule 144 (or any other rule permitting public sale without registration under the Securities Act).

 

3.2          Notice of Proposed Transfer.

 

(a)           Prior to any proposed sale, pledge, hypothecation or other transfer of any Registrable Securities (other than under the circumstances described in Section 4.1, 4.2 or 4.3), the holder thereof shall give written notice to the Company of its intention to effect such sale, pledge, hypothecation or other transfer.  Each such notice shall describe the manner of the proposed sale, pledge, hypothecation or other transfer and, if requested by the Company shall be accompanied by either (i) an opinion of counsel reasonably satisfactory to the Company to the effect that the proposed sale, pledge, hypothecation or other transfer may be effected without registration under the Securities Act or (ii) a “no action” letter from the Commission to the effect that the distribution of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the holder of such stock shall be entitled to transfer such stock in accordance with the terms of its notice; provided, however, that no such opinion of counsel or “no action” letter shall be required (A) for a distribution to one or more partners or members of the transferor (in the case of a transferor that is a partnership or limited liability company) in each case in respect of the beneficial interest of such partner or member or (B) for transfers made in accordance with the provisions of Rule 144 (or any rule permitting public sale without registration under the Securities Act) including Rule 144(k).  Each certificate for Registrable Securities transferred as above provided shall bear the appropriate restrictive legend set forth in Section 3.1, except that such certificate shall not bear such legend if (Y) such transfer is in accordance with the provisions of Rule 144 (or any other rule permitting public sale without registration under the Securities Act) or (Z) the opinion of counsel or “no-action” letter referred to above is to the further effect that the transferee and any subsequent transferee (other than an Affiliate of the Company) would be entitled to transfer such securities in a public sale without registration under the Securities Act or that such legend is not required to establish compliance with any provisions of the Securities Act.  Notwithstanding any other provision hereof, the restrictions provided for in this Section 3.2 shall not apply to securities which are not required to bear the legend prescribed by Section 3.1 in accordance with the provisions of that Section.

 

(b)           No such opinion of counsel or “no action” letter from the Commission, as set forth in Section 3.2(a) above, shall be required in the event of a sale, pledge, hypothecation or other

 

5

 

transfer of any Registrable Securities to (i) any Affiliate of an Investor, including, without limitation, any venture capital limited partnership now existing or hereafter formed which controls, is controlled by or is under common control with such Investor; and (ii) any successors or permitted assigns of any of the foregoing persons, provided that the transferee agrees in writing to be subject to this Agreement to the same extent as if such transferee were originally a signatory.

 

4.             REGISTRATION

 

4.1          Required Registration.

 

(a)           At any time after the expiration of any lock-up period under Section 4.9 below following the Company’s initial public offering, one or more of the Investors who own more than twenty percent (20%) of the Common Stock of the Company then outstanding may request that the Company register for sale under the Securities Act all or a part of the Registrable Securities held by such Investor(s) in the manner specified in such notice.

 

(b)           Following receipt of any notice under Section 4.1(a), the Company shall immediately notify in writing all holders of Registrable Securities from whom notice has not been received and such holders shall then be entitled within thirty (30) days after receipt of such notice from the Company to request the Company to include in the requested registration all or any portion of their shares of Registrable Securities.  The Company shall use its best efforts to register under the Securities Act for public sale in accordance with the method of disposition specified in the notice from requesting holders described in paragraph (a) above, within one hundred eighty (180) days of its receipt of such notice, the number of shares of Registrable Securities specified in such notice (and in all notices received by the Company from other holders within thirty (30) days after the receipt of such notice by such holders).  The Company shall be obligated to register the Registrable Securities pursuant to this Section 4.1 on two (2) occasions only, provided, however, that the Company shall be obligated to effect two (2) additional registrations pursuant to this Section 4.1 to the extent that the holders of Registrable Securities were unable to include such Registrable Securities in the first registration as a result of a reduction by the managing underwriter, if any, pursuant to Section 4.1(d)).  Notwithstanding anything to the contrary contained herein, no request may be made under this Section 4.1 after the effective date of a registration statement filed by the Company covering a firm commitment underwritten public offering and prior to the later to occur of the completion of the period of distribution for such offering or ninety (90) days after the effective date of such registration statement.

 

(c)           If the holders requesting such registration intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 4.1 and the Company shall include such information in the written notice referred to in paragraph (b) above.  The right of any holder to registration pursuant to this Section 4.1 shall be conditioned upon such holder’s agreeing to participate in such underwriting and to permit inclusion of such holder’s Registrable Securities in the underwriting.  The Board shall designate the managing underwriter of such offering.  A holder may elect to include in such underwriting all or a part of the Registrable Securities it holds.

 

(d)           A registration statement filed pursuant to this Section 4.1 may, subject to the following provisions, include (i) shares of Common Stock for sale by the Company for its own account, (ii) shares of Common Stock held by officers or directors of the Company, and (iii) shares of Common Stock held by certain employees and consultants of the Company who by virtue of currently existing agreements with the Company granting them “piggy-back” registration rights are entitled to include such shares in such registration (the “Other Shareholders”), in each case for sale in accordance with the method of disposition specified by the requesting holders; provided, however, that if the number

 

6

 

of shares so included pursuant to clauses (i) and (ii) above exceeds the number of Registrable Securities presented by the holders requesting registration thereof, then such registration shall be deemed to be a registration in accordance with Section 4.2 and not this Section 4.1.  If such registration shall be underwritten, the Company and such officers and directors and Other Shareholders proposing to distribute their shares through such underwriting shall enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting on terms no less favorable to such officers, directors or Other Shareholders than the terms afforded the holders of Registrable Securities.  If and to the extent that the managing underwriter determines that marketing factors require a limitation on the number of shares to be included in such registration, such exclusion, to the extent required by the managing underwriter, shall be applied in the following order:  first, to the shares held by the directors and officers and the Other Shareholders, second, to the shares of Common Stock of the Company to be included for its own account.  If the managing underwriter determines that marketing factors require a limitation of the number of Registrable Securities to be registered under this Section 4.1, then Registrable Securities shall be excluded in such manner that the securities to be sold shall be allocated among the selling holders pro rata based on their ownership of Registrable Securities.  In any event all securities to be sold other than Registrable Securities will be excluded prior to any exclusion of Registrable Securities.  No Registrable Securities or any other security excluded from the underwriting by reason of the underwriter’s marketing limitation shall be included in such registration.  If any holder of Registrable Securities, officer, director or Other Shareholder who has requested inclusion in such registration as provided above, disapproves of the terms of the underwriting, such holder of securities may elect to withdraw therefrom by written notice to the Company and the managing underwriter.  The securities so withdrawn shall also be withdrawn from registration.  Except for registration statements on Form S-4, S-8 or any comparable form or successor thereto, the Company will not file with the Commission any other registration statement with respect to its Common Stock, whether for its own account or that of other stockholders, from the date of receipt of a notice from requesting holders pursuant to this Section 4.1 until the completion of the period of distribution of the registration contemplated thereby or one hundred twenty (120) days after the effective date of such registration, whichever is later.

 

4.2          Incidental Registration.  If the Company at any time (other than pursuant to Section 4.1 or Section 4.3) proposes to register any of its securities under the Securities Act for sale to the public, whether for its own account or for the account of other security holders or both (except with respect to registration statements on Forms S-4, S-8 or any successor to such forms or another form not available for registering the Registrable Securities for sale to the public), each such time it will promptly give written notice to all holders of the Registrable Securities of its intention so to do.  Upon the written request of any such holder received by the Company within thirty (30) days after the giving of any such notice by the Company (provided that at least one Major Investor elects to register any or all of its Registrable Securities), to register any or all of its Registrable Securities, the Company will use its best efforts to cause the Registrable Securities as to which registration shall have been so requested to be included in the securities to be covered by the registration statement proposed to be filed by the Company, all to the extent requisite to permit the sale or other disposition by the holder (in accordance with its written request) of such Registrable Securities so registered.  If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the holders of Registrable Securities as a part of the written notice given pursuant to this Section 4.2.  In such event the right of any holder of Registrable Securities to registration pursuant to this Section 4.2 shall be conditioned upon such holder’s participation in such underwriting to the extent provided herein.  All holders of Registrable Securities proposing to distribute their securities through such underwriting shall (together with the Company and the Other Shareholders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for underwriting by the Company.  Notwithstanding any other provision of this Section 4.2, if the underwriter determines that marketing factors require a limitation on the number of

 

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shares to be underwritten, the Company shall so advise all holders of securities requesting registration of any limitations on the number of shares to be underwritten, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated (i) first to the Company with respect to shares of Common Stock being sold for its own account; (ii) second, to holders of Registrable Securities requesting registration in proportion, as nearly as practicable, to the respective amounts of securities owned by them and (iii) then, to the Other Shareholders requesting registration in proportion, as nearly as practicable, to the respective amounts of securities owned by them.  Notwithstanding the foregoing provisions, the Company may withdraw any registration statement referred to in this Section 4.2 without thereby incurring any liability to the holders of Registrable Securities.  If any holder of Registrable Securities disapproves of the terms of any such underwriting, it may elect to withdraw therefrom by written notice to the Company and the underwriter.  Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.

 

4.3          Registration on Form S-3.  In addition to the rights provided in Sections 4.1 and 4.2, if at any time (i) any Investor who owns more than twenty percent (20%) of the Common Stock of the Company requests that the Company file a registration statement on Form S-3 or any comparable or successor form thereto for a public offering of all or any portion of the shares of Registrable Securities held by such requesting holder or holders, the reasonably anticipated aggregate offering price to the public of which would exceed $5,000,000, and (ii) the Company is a registrant entitled to use Form S-3 or any comparable or successor form thereto to register such shares, then the Company shall use its best efforts to register under the Securities Act on Form S-3 or any comparable or successor form thereto, for public sale in accordance with the method of disposition specified in such notice, the number of shares of Registrable Securities specified in such notice.  Whenever the Company is required by this Section 4.3 to use its best efforts to effect the registration of Registrable Securities, each of the procedures and requirements of Sections 4.1 and 4.4, including, but not limited to, the requirement that the Company notify all holders of Registrable Securities from whom notice has not been received and provide them with the opportunity to participate in the offering, shall apply to such registration, provided, however, that the Company shall not be obligated to effect more than two (2) registrations pursuant to this Section 4.3 in any twelve (12) month period.

 

4.4          Registration Procedures.  If and whenever the Company is required by the provisions of Section 4.1, 4.2 or 4.3 to use its best efforts to effect the registration of any Registrable Securities under the Securities Act, the Company will, as expeditiously as possible:

 

(a)           prepare and file with the Commission a registration statement (which, in the case of an underwritten public offering pursuant to Section 4.1, shall be on Form S-1 or other form of general applicability satisfactory to the managing underwriter selected as therein provided) with respect to such securities including executing an undertaking to file post-effective amendments and use its best efforts to cause such registration statement to become and remain effective for the period of the distribution contemplated thereby; provided, that before filing a registration statement or prospectus, the Company shall furnish to the counsel selected by the holders of a majority of the Registrable Securities covered by such registration statement copies of all such documents proposed to be filed, which documents shall be subject to review and comment of such counsel;

 

(b)           prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for the period specified herein and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement in accordance with the sellers’ intended method of disposition set forth in such registration statement for such period; provided, that before filing any such amendment or supplement, the Company shall furnish to the counsel selected by the holders of a majority of the Registrable

 

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Securities covered by such amendment or supplement copies of all such documents proposed to be filed, which documents shall be subject to review and comment of such counsel;

 

(c)           furnish to each seller of Registrable Securities and to each underwriter such number of copies of the registration statement and each such amendment and supplement thereto (in each case including all exhibits) and the prospectus included therein (including each preliminary prospectus) as such persons reasonably may request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such registration statement;

 

(d)           use its best efforts to register or qualify the Registrable Securities covered by such registration statement under the securities or “blue sky” laws of such jurisdictions as the sellers of Registrable Securities or, in the case of an underwritten public offering, the managing underwriter reasonably shall request, provided, however, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction, unless the Company is already subject to service in such jurisdiction;

 

(e)           use its best efforts to list the Registrable Securities covered by such registration statement with any securities exchange on which the Common Stock of the Company is then listed and, if not so listed, to be listed on the NASD automated quotation system and, if listed on the NASD automated quotation system, use its best efforts to secure designation of all such Registrable Securities covered by such registration statements as a NADSAQ “national market system security” within the meaning of Rule 11Aa2-1 of the Exchange Act or, failing that, to secure NASDAQ authorization for such Registrable Securities;

 

(f)            comply with all applicable rules and regulations under the Securities Act and Exchange Act;

 

(g)           provide a transfer agent and registrar for all such Registrable Securities and a CUSIP number for all such Registrable Securities in each case not later than the effective date of such registration statement;

 

(h)           immediately notify each seller of Registrable Securities and each underwriter under such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event of which the Company has knowledge as a result of which the prospectus contained in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly prepare and furnish to such seller a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

 

(i)            if the offering is underwritten and at the request of any seller of Registrable Securities, use its best efforts to furnish on the date that Registrable Securities are delivered to the underwriters for sale pursuant to such registration: (i) an opinion dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters to such effects as reasonably may be requested by counsel for the underwriters, and (ii) a letter dated such date from the independent public accountants retained by the Company, addressed to the underwriters stating that they are independent public accountants within the meaning of the Securities Act and that, in the

 

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opinion of such accountants, the financial statements of the Company included in the registration statement or the prospectus, or any amendment or supplement thereof, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and such letter shall additionally cover such other financial matters (including information as to the period ending no more than five (5) business days prior to the date of such letter) with respect to such registration as such underwriters reasonably may request;

 

(j)            make available for inspection by each seller of Registrable Securities, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such seller or underwriter, reasonable access to all financial and other records, pertinent corporate documents and properties of the Company, as such parties may reasonably request, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement;

 

(k)           cooperate with the selling holders of Registrable Securities and the managing underwriter, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, such certificates to be in such denominations and registered in such names as such holders or the managing underwriter may request at least two (2) business days prior to any sale of Registrable Securities;

 

(l)            permit any holder of Registrable Securities which holder, in the sole and exclusive judgment, exercised in good faith, of such holder, might be deemed to be a controlling person of the Company, to participate in good faith in the preparation of such registration or comparable statement and to require the insertion therein of material, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel should be included;

 

(m)          in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any common stock included in such registration statement for sale in any jurisdiction, the Company shall use its best efforts promptly to obtain the withdrawal of such order;

 

(n)           use its best efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities; and

 

(o)           in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering and take all such other actions as the underwriters reasonably request in order to expedite or facilitate the disposition of Registrable Securities.

 

For purposes of this Agreement, the period of distribution of Registrable Securities in a firm commitment underwritten public offering shall be deemed to extend until each underwriter has completed the distribution of all securities purchased by it, and the period of distribution of Registrable Securities in any other registration shall be deemed to extend until the earlier of the sale of all Registrable Securities covered thereby or one hundred eighty (180) days after the effective date thereof, provided, however, in the case of any registration of Registrable Securities on Form S-3 or a comparable or successor form which are intended to be offered on a continuous or delayed basis, such one hundred eighty (180) day period shall be extended, if necessary, to keep the registration statement effective until

 

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all such Registrable Securities are sold, provided that Rule 415, or any successor rule under the Securities Act, permits an offering on a continuous or delayed basis, and provided further that applicable rules under the Securities Act governing the obligation to file a post-effective amendment, permit, in lieu of filing a post-effective amendment which (y) includes any prospectus required by Section 10(a)(3) of the Securities Act or (z) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the incorporation by reference of information required to be included in (y) and (z) above contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration statement.

 

In connection with each registration hereunder, the sellers of Registrable Securities will furnish to the Company, in writing, such information requested by the Company with respect to themselves and the proposed distribution by them as shall be reasonably necessary in order to assure compliance with Federal and applicable state securities laws.

 

4.5          Expenses.

 

(a)           All expenses other than Selling Expenses incurred by the Company in complying with Sections 4.1, 4.2 and 4.3, are called “Registration Expenses” and shall include, without limitation, (i) all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars, costs of any insurance which might be obtained by the Company with respect to the offering by the Company, and (ii) reasonable attorneys fees and disbursements of one counsel for the holders of Registrable Securities in an amount not to exceed an aggregate of $50,000, such counsel to be selected by the holders of at least a majority of the Registrable Securities being sold.  All underwriting discounts and selling commissions applicable to the sale of Registrable Securities are called “Selling Expenses.”

 

(b)           The Company shall pay all Registration Expenses in connection with each registration statement under Section 4.1, 4.2 and 4.3; provided, that, in the event of a registration pursuant to Section 4.1 hereof which is withdrawn at the request of the Investors other than (i) as a result of the Company’s failure to perform its obligations hereunder, (ii) as a result of a cutback by the underwriter of such registration in the amount of Registrable Securities which may be included in such registration by more than twenty percent (20%) or (iii) as a result of information concerning a materially adverse change in the Company’s business or financial condition that is made known to the Investors after the date on which such registration was requested, each Investor shall pay a percentage portion of the Registration Expenses with respect to such withdrawn registration statement equal to the number of Registrable Securities of such Investor proposed to be included in such registration divided by the number of Registrable Securities of all Investors proposed to be included in such registration.  In the event that a registration pursuant to Section 4.1 hereof is withdrawn pursuant to clauses (i), (ii) or (iii) of this Section 4.5(b), the Investors shall, immediately following such withdrawal, be entitled to that number of registration requests pursuant to Section 4.1 hereof to which they would have been entitled not taking into account the withdrawn request.  All Selling Expenses in connection with each registration statement under Section 4.1, 4.2 or 4.3 shall be borne by the participating sellers in proportion to the number of shares registered by each, or by such participating sellers other than the Company (except to the extent the Company shall be a seller) as they may agree.

 

4.6          Indemnification and Contribution.

 

(a)           In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to Section 4.1, 4.2 or 4.3, the Company will indemnify and hold harmless

 

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each holder of Registrable Securities, its officers, directors, managers, members and partners, each underwriter of such Registrable Securities thereunder and each other person, if any, who controls such holder or underwriter within the meaning of the Securities Act (each, an “Indemnitee”), against any losses, claims, damages or liabilities, joint or several, to which such Indemnitee may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any prospectus, offering circular or other document incident to such registration (including any related notification, registration statement under which such Registrable Securities were registered under the Securities Act pursuant to Section 4.1, 4.2 or 4.3, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof), (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”), (iii) any omission or alleged omission to state in any such registration statement, prospectus, amendment or supplement or in any Blue Sky Applications executed or filed by the Company, a material fact required to be stated therein or necessary to make the statements therein not misleading, (iv) any violation by the Company or its agents of the Securities Act or any rule or regulation promulgated under the Securities Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection with such registration, or (v) any failure to register or qualify the Registrable Securities in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company (the undertaking of any underwriter chosen by the Company being attributed to the Company) will undertake such registration or qualification and will reimburse each Indemnitee for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, promptly after being so incurred, provided, however, that the Company will not be liable to an Indemnitee if, and to the extent that, any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with written information furnished by such Indemnitee, in writing specifically stated to be for use in such registration statement or prospectus.

 

(b)           In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to Section 4.1, 4.2 or 4.3, each seller of such Registrable Securities thereunder, severally and not jointly, will indemnify and hold harmless the Company, each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the registration statement, each director of the Company, each other seller of Registrable Securities, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, other seller, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any prospectus offering circular or other document incident to such registration (including any related notification, registration statement under which such Registrable Securities were registered under the Securities Act pursuant to Section 4.1, 4.2 or 4.3, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof), or any Blue Sky Application or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, other seller, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, expense, liability or action, promptly after being so incurred, provided, however, that such seller will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage, expense or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or

 

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alleged omission made in reliance upon and in conformity with information pertaining to such seller, as such, furnished in writing to the Company by such seller specifically for use in such registration statement or prospectus; and provided further, however, that the liability of each seller hereunder shall be limited to the proportion of any such loss, claim, damage, liability or expense which is equal to the proportion that the public offering price of the securities sold by such seller under such registration statement bears to the total public offering price of all securities sold thereunder, but not in any event to exceed the net proceeds received by such seller from the sale of Registrable Securities covered by such registration statement.  Not in limitation of the foregoing, it is understood and agreed that the indemnification obligations of any seller hereunder pursuant to any underwriting agreement entered into in connection herewith shall be limited to the obligations contained in this Section 4.6(b), absent any fraud on the part of such seller.

 

(c)           Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified party other than under this Section 4.6 and shall only relieve it from any liability which it may have to such indemnified party under this Section 4.6 if, and to the extent, the indemnifying party is prejudiced by such omission.  In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 4.6 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected, provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or that the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select a separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred.  No indemnifying party, in the defense of any such claim or action, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or action.  Each indemnified party shall furnish such information regarding itself or the claim in question as an indemnifying party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

 

(d)           In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any holder of Registrable Securities exercising rights under this Agreement, or any controlling person of any such holder, makes a claim for indemnification pursuant to this Section 4.6 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 4.6 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any such selling holder or any such controlling person in circumstances for which indemnification is provided under this Section 4.6; then, and in each such case, the Company and such holder will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that such holder is

 

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responsible for the portion represented by the percentage that the public offering price of its Registrable Securities offered by the registration statement bears to the public offering price of all securities offered by such registration statement, and the Company is responsible for the remaining portion, provided, however, that, in any such case, (A) no such holder of Registrable Securities will be required to contribute any amount in excess of the proceeds received from the sale of all such Registrable Securities offered by it pursuant to such registration statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

 

(e)           The indemnities and obligations provided in this Section 4.6 shall survive the transfer of any Registrable Securities by such holder.

 

4.7          Changes in Common Stock.  If, and as often as, there is any change in the Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Common Stock as so changed.

 

4.8          Rule 144 and 144A Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, except as provided in paragraph (c) below, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, the Company agrees to:

 

(a)           use its best efforts to comply with all of the reporting requirements of the Exchange Act (whether or not it shall be required to do so) and shall comply with all other public information reporting requirements of the Commission as a condition to the availability of an exemption from the Securities Act for the sale of any of the Registrable Securities by any holder of Registrable Securities (including any such exemption pursuant to Rule 144 or Rule 144A thereof, as amended form time to time, or any successor rule thereto or otherwise);

 

(b)           cooperate with each holder of Registrable Securities in supplying such information as may be necessary for such holder of Registrable Securities to complete and file any information reporting forms presently or hereafter required by the Commission as a condition to the availability of an exemption from the Securities Act (under Rule 144 or Rule 144A thereunder or otherwise) for the sale of any of the Registrable Securities by any holder of Registrable Securities; and

 

(c)           furnish to each holder of Registrable Securities forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of such Rule 144 or Rule 144A (or any successor rule) and, at any time after it has become subject to such reporting requirements, of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as such holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such holder to sell any Registrable Securities without registration.

 

4.9          “Market Stand-Off” Agreement.  Each of the Investors agrees, severally and not jointly, that, if requested by the Company and an underwriter of Common Stock (or other securities) of the Company, not to sell or otherwise transfer or dispose of any Common Stock (or other securities) of the Company held by such Investor during a period not to exceed one hundred and eighty (180) days following the effective date of the first registration statement of the Company filed under the Securities Act, and to enter into an agreement to such effect, to the extent such Investor is not participating in the

 

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offering to which the registration statement relates, in each case so long as all of the Company’s officers, directors and holders of at least one-half of one percent (0.5%) of the outstanding Common Stock (or securities convertible into such Common Stock) also enter into agreements to such effect.

 

The Company may impose stop-transfer instructions with respect to the shares (or securities) subject to the foregoing restriction until the end of said period.

 

4.10        Assignment of Registration Rights.  The rights to cause the Company to register Registrable Securities pursuant to this Section 4 may be assigned (but only with all related obligations) by a holder of Registrable Securities to a transferee or assignee of such securities who is not engaged in a business activity competitive with the Company (as reasonably determined by the Board), provided that the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; and provided, further, that such assignment shall be effective only if (i) immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act and (ii) the transferee or assignee shall acknowledge in writing that the transferred or assigned Registrable Securities shall remain subject to this Agreement.

 

4.11        Other Registration Rights.  Other than the registration rights granted to the Investors under this Section 4, the Company shall not grant to a holder of capital stock or other equity securities of the Company any registration rights that are superior to or on parity with the registration rights granted to the Investors under this Section 4.

 

4.12        Termination.  The respective rights and obligations of the parties under this Section 4 shall terminate upon the earlier of (i) the fifth (5th) anniversary of the closing of the Company’s Qualified IPO and (ii) with respect to a particular holder, when such holder can sell all of such holder’s shares under Rule 144 promulgated under the Securities Act without regard to volume limitations.

 

5.             BOARD OF DIRECTORS

 

5.1          Election of Directors.  The Company shall take or cause to be taken such actions as may be required from time to time to establish and maintain the number of persons comprising the Board at four (4), and the Investors shall take or cause to be taken such actions as may be required from time to time to elect as directors (i) two (2) directors designated by Care Capital LLC (“Care Capital”), who shall initially be Jerry Karabelas and Lorenzo Pellegrini and (ii) two (2) directors designated by Index Ventures III (Delaware) L.P. (“Index”) who shall initially be Michele Ollier and Francesco de Rubertis.  Without limiting the generality of the foregoing, at each annual meeting of the stockholders, and at each special meeting of the stockholders called in accordance with the provisions of the By-Laws for the purpose of electing directors of the Company, and at any time at which the stockholders have the right to, or shall, elect directors of the Company, then, and in each event, the Investors shall vote all Shares owned by them (or shall consent in writing in lieu of a meeting of stockholders, as the case may be) to set the number of, and to elect persons as, directors of the Company in accordance with this Section.  Each Investor with a right to so designate a director of the Company shall have the right to remove any such director and appoint one (1) natural person as an alternate member for each director appointed by such Investor.

 

5.2          Board Observers and Committees.

 

(a)           Remy Luthringer, along with one or more individuals appointed by each of Care Capital and Index, shall be entitled to observe at all meetings of the Board and each meeting of all committees of such Board and to participate in all discussions during each such meeting; provided, that

 

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the Board (or committee of the Board, as the case may be) shall have the right to exclude such observers from all or any portion of a meeting (and to exclude such observers from receiving any related materials) to the extent the Board (or such committee), in its sole discretion, deems reasonably necessary to: (i) preserve the attorney-client privilege; or (ii) avoid any conflicts of interest.  The Company shall send to each such observers the notice of the time and place of such meeting (with such notice being given no later than to any other outside director), the agenda and any other materials to be discussed at the meeting and shall give each such observers notice of each such meeting in the form and manner such notice is given to the Company’s directors.  The Company shall also provide to each such observers, in a timely manner, copies of all notices, reports, minutes and consents at the time and in the manner as they are provided to the Board or committee, except for information reasonably designated as proprietary information by the Board.

 

(b)           In the event that the Company creates any committee of its Board, Care Capital and Index shall each have the right to have the directors of the Board designated by them appointed to such committee and such directors shall continue to serve on such committee until removed by the Investor who appointed such director.

 

5.3          Expenses.  The Company shall reimburse directors and observers (but, in the case of observers, only if, and to the extent, such observer is attending a meeting in lieu of a director) for all out-of-pocket expenses incurred in attending meetings of the Board and, if applicable, committees of the Board, and shall provide customary compensation including, but not limited to, the right to receive options, fees and equity interests in accordance with the Company’s policies as they may be amended from time to time.

 

5.4          Removal of Directors; Filling of Vacancies.  Each Investor shall take all action necessary to remove forthwith any director when such removal is requested for any reason, with or without cause, by the Investor that designated such director for election.  In the case of the death, resignation or removal as herein provided of a director, each Investor shall vote all Shares owned by him, her or it to elect another person designated by the same Investor that designated the deceased, resigning or removed director if, at the time such vacancy occurs, such Investor shall have the right to have a person designated by him, her or it elected as a director pursuant to Section 5.1.  The Company and each Investor agrees to use his, her or its best efforts to prevent any action from being taken by the Board during the pendency of any vacancy due to the death, resignation or removal of a director unless the party entitled to have a person designated by him to fill such vacancy shall have failed for a period (10) days after written notice of such vacancy to designate a replacement.

 

5.5          Termination.  The provisions set forth in this Section 5 shall be of no further force and effect upon the closing of the Company’s Qualified IPO.

 

5.6           Quorum and Casting Vote.  Notwithstanding anything to the contrary in the bylaws of the Company, (a) the chairman of the Board shall not have a casting vote and (b) a quorum of the Board must include at least one director designated by Care Capital and at least one director designated by Index.

 

6.             AFFIRMATIVE COVENANTS OF THE COMPANY

 

The Company covenants and agrees that, from the date of the First Closing under the Purchase Agreement and thereafter so long as any Investor owns at least twenty percent (20%) of the Common Stock then outstanding (each, a “Rights Holder”), it will perform and observe the following covenants and provisions.

 

16

 

6.1          Financial Statements; Other Reports.  The Company shall maintain proper books of account and records in accordance with generally accepted accounting principles applied on a consistent basis, and shall deliver to each Rights Holder:

 

(a)           as soon as available and in any event within thirty (30) days after the end of each of the first three quarters of each fiscal year of the Company, a consolidated balance sheet of the Company and its Subsidiaries, if any, as of the end of such quarter and the related statements of income and stockholders’ equity and of cash flows of the Company for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the corresponding period of the preceding fiscal year, if applicable, and the budget for such current year, all in reasonable detail and prepared in accordance with generally accepted accounting principles consistently applied, and duly certified (subject to year-end audit adjustments) by the chief financial officer (or if there is no chief financial officer, the chief executive officer) of the Company.

 

(b)           as soon as available and in any event within ninety (90) days after the end of each fiscal year of the Company, a copy of the financial statements for such year for the Company, prepared in accordance with generally accepted accounting principles, including therein a consolidated balance sheet of the Company and its Subsidiaries, if any, as of the end of such fiscal year and statements of income and stockholders’ equity and of cash flows of the Company for such fiscal year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, all duly certified by the chief financial officer (or if there is no chief financial officer, the chief executive officer) of the Company;

 

(c)           promptly after receipt thereof, notice of all material actions, suits and proceedings before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Company; and

 

(d)           within thirty (30) days after the last day of each month (or such other calendar period as is approved by the Board), financial statements, including a balance sheet as of the last date of such month, a statement of income (or monthly operating expenses) for such month, together with a cumulative statement of income from the first day of the current year to the last day of such month, which statements shall be prepared from the books and records of the Company, and a comparison between the actual monthly operating expenses and the projected figures for such month and the comparable figures for the prior year.

 

Neither the foregoing provisions of this Section 6.1 nor any other provision of this Agreement shall be in limitation of any rights which an Investor may have with respect to the books and records of the Company, or to inspect their properties or discuss their affairs, finances and accounts, under the laws of the jurisdictions in which they are incorporated.

 

6.2          Inspection and Other Information.  Each Rights Holder and such agents, advisors and counsel as such Rights Holder may designate, may, at its expense, visit and inspect any of the properties of the Company, examine the books of account of the Company, take extracts therefrom and discuss the affairs, finances and accounts of the Company with its officers and employees and public accountants (and by this provision the Company hereby authorizes said accountants to discuss with such Rights Holder and such persons its finances and accounts), at reasonable times and with reasonable prior notice during normal business hours.  All such visits and inspections shall be conducted in a manner which will not unreasonably interfere with the normal business operations of the Company.  The Company shall furnish to each such Rights Holder such other information as it from time to time may reasonably request.

 

17

 

6.3          Directors and Officers Insurance.  Within thirty (30) days of the Effective Date, the Company shall have in place directors’ and officers’ liability insurance policy on the directors and officers of the Company with a financially sound and reputable company or association in an amount mutually acceptable to the Company and the New Investors.  So long as any New Investor owns any Common Stock, the Company shall maintain such insurance at the same or higher coverage level.

 

6.4          Termination of Affirmative Covenants.  The covenants set forth in this Article 6 shall be of no further force or effect upon the closing of the Company’s Qualified IPO.

 

7.             MISCELLANEOUS

 

7.1          Notices.  All notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving party’s address set forth below or to such other address as a party may designate by notice hereunder, and shall be either (i) delivered by hand, (ii) made by telecopy or facsimile transmission with receipt confirmed, (ii) sent by electronic mail with return receipt and no response was received back from the mail server indicating a problem delivering such electronic mail, (iv) sent by a nationally recognized (or substantially equivalent international) overnight courier, or (v) sent by registered or certified mail, return receipt requested, postage prepaid; provided, however, that certified mail shall not be used to effectuate any such notice, request, consent or other communication to addresses outside the United States.

 

	
If   to the Company:
    	
Cyrenaic   Pharmaceuticals, Inc.
    
	
 
    	
47   Hulfish Street, Suite 310
    
	
 
    	
Princeton,   NJ 08542
    
	
 
    	
Attn:   Lorenzo Pelligrini
    
	
 
    	
Tel:   609.683.3677
    
	
 
    	
Fax:   609.683.5787
    
	
 
    	
 
    
	
With   a copy to:
    	
Morgan,   Lewis & Bockius LLP
    
	
 
    	
502   Carnegie Center
    
	
 
    	
Princeton,   New Jersey 08540
    
	
 
    	
Attn:   Denis Segota, Esq.
    
	
 
    	
Tel:   609.919.6622
    
	
 
    	
Fax:   609.919.6639
    
	
 
    	
 
    
	
If   to the Investors:
    	
To   the addresses set forth on Schedule I.
    
	
 
    	
 
    
	
 
    	
With   a copy (which shall not constitute notice) to:
    
	
 
    	
 
    
	
 
    	
[                                      ]
    
	
 
    	
[                                      ]
    
	
 
    	
[                                      ]
    
	
 
    	
Attn:   [                            ]
    
	
 
    	
Tel:   [                              ]
    
	
 
    	
Fax:   [                              ]
    

 

All notices, requests, consents and other communications hereunder shall be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if made by telecopy or facsimile transmission, at the time that receipt thereof has been acknowledged by electronic confirmation or otherwise, (iii) if sent by overnight

 

18

 

courier, on the next business day following the day such notice is delivered to the courier service, or (iv) if sent by registered or certified mail, on the seventh business day following the day such mailing is made.

 

7.2          Entire Agreement.  This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof (including without limitation the Original Agreement).  No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

 

7.3          Modifications and Amendments.  This Agreement may not be amended or modified, and no provision hereof may be waived, without the written consent of the Company and the holders of at least seventy-seven percent (77%) of the outstanding shares of Common Stock; provided, however, that any amendment or modification to Sections 5.1 or 5.2 above that adversely impacts the rights of any Investor thereunder shall not be made without the written consent of such Investor.  Any waiver or consent hereunder shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

 

7.4          Benefit.  All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto.

 

7.5          Governing Law.  This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the State of Delaware, without giving effect to the conflict of law principles thereof.

 

7.6          Severability.  In the event that it is determined that any provision, or any portion thereof, contained in this Agreement shall be unenforceable in any respect, then such provision shall be deemed limited to the extent that it shall be deemed enforceable and as so limited, shall remain in full force and effect.  In the event that any such provision, or portion thereof, is deemed wholly unenforceable, the remaining provisions of this Agreement, nevertheless, shall remain in full force and effect.

 

7.7          Headings and Captions.  The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.

 

7.8          Enforcement.  Each of the parties hereto acknowledges and agrees that the rights acquired by each party hereunder are unique and that irreparable damage would occur in the event that any of the provisions of this Agreement to be performed by the other parties were not performed in accordance with their specific terms or were otherwise breached.  Accordingly, in addition to any other remedy to which the parties hereto are entitled at law or in equity, each party hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by any other party.

 

7.9          Waiver of Jury Trial.  THE COMPANY AND EACH INVESTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

7.10        No Waiver of Rights, Powers and Remedies.  No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing among

 

19

 

the parties hereto, shall operate as a waiver of any such right, power or remedy of the party.  No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder.  The election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies.  No notice to or demand on a party not expressly required under this Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.

 

7.11        Counterparts.  This Agreement may be executed in two or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may be executed and delivered via facsimile, which facsimile transmission shall be deemed an original for all purposes.

 

7.12        Right to Conduct Activities.  The Company and each Investor hereby acknowledge that some or all of the Investors are professional investment funds and, as such, invest in numerous portfolio companies, some or which may be competitive with the Company’s business.  No such Investor shall be liable to the Company or to any other Investor for any claim to the extent it arises out of, or is based upon, (a) the investment by the Investor in any entity competitive to the Company, or (b) actions taken by any partner, officer or other representative of such Investor to assist any such competitive entity, whether or not such action was taken as a board member of such competitive entity or otherwise, and whether or not such action has a detrimental effect on the Company (except for any detrimental effect as a consequence of any fraudulent act or willful misconduct), so long as (i) no confidential information of the Company is used or disclosed by such Investor in connection with any such competitive activities, and (ii) the provisions hereof shall not excuse or eliminate the liability of any Investor or its directors, officers, employees or Affiliates, for the breach of any agreement with or legal obligation to the Company (it being understood that the acts identified above shall not, in and of themselves, be deemed to be a breach of any such legal obligation).

 

20

 

IN WITNESS WHEREOF, the parties hereto have executed this Second Agreement or caused this Second Agreement to be executed by their duly authorized representatives as of the date first written above.

 

 

	
 
    	
CYRENAIC   PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Daniel J. Cabo
    
	
 
    	
Name:   
    	
Daniel   J. Cabo
    
	
 
    	
Title:   
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
INVESTORS:
    
	
 
    	
 
    
	
 
    	
CARE   CAPITAL INVESTMENTS III, LP
    
	
 
    	
 
    
	
 
    	
By:   Care Capital III LLC, its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   David R. Ramsay
    
	
 
    	
Title:
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CARE   CAPITAL OFFSHORE INVESTMENTS III, LP
    
	
 
    	
 
    
	
 
    	
By:   Care Capital III LLC, its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   David R. Ramsay
    
	
 
    	
Name:
    	
David   R. Ramsay
    
	
 
    	
Title:
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
INDEX   VENTURES III (JERSEY) L.P.
    
	
 
    	
 
    
	
 
    	
BY   ITS GENERAL PARTNER, INDEX VENTURE ASSOCIATES III LIMITED
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Gerard Gardner
    
	
 
    	
 
    	
Name:   Gerard Gardner
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    	
Address:
    
						

 

 

	
 
    	
INDEX   VENTURES III (DELAWARE) L.P.
    
	
 
    	
 
    
	
 
    	
BY   ITS GENERAL PARTNER, INDEX VENTURE ASSOCIATES III LIMITED
    
	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/   Gerard Gardner
    
	
 
    	
 
    	
Name:   Gerard Gardner
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
INDEX   VENTURES III PARALLEL ENTREPRENEUR FUND (JERSEY) L.P.
    
	
 
    	
 
    
	
 
    	
BY   ITS GENERAL PARTNER, INDEX VENTURE ASSOCIATES III LIMITED
    
	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/   Gerard Gardner
    
	
 
    	
 
    	
Name:   Gerard Gardner
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
YUCCA   PARTNERS LP JERSEY BRANCH
    
	
 
    	
 
    
	
 
    	
By:   OGIER EMPLOYEE BENEFIT SERVICES LIMITED as Authorised Signatory of Yucca   Partners LP Jersey Branch in its Capacity of Administrator of The Index   Co-Investment Scheme
    
	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/   Peter George Le Breton
    
	
 
    	
 
    	
Name:   Peter George Le Breton
    
	
 
    	
 
    	
Title:   Authorised Signatory
    
	
 
    	
 
    	
Address:
    

 

 

SCHEDULE I

 

Schedule of Investors

 

	
Name
    	
 
    	
Number of Shares
   of
   Common Stock
   Owned
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Care   Capital Investments III LP
   47 Hulfish Street, Suite 310
   Princeton, NJ 08542
    	
 
    	
49,277
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Care   Capital Offshore Investments III, LP
   47 Hulfish Street, Suite 310
   Princeton, NJ 08542
    	
 
    	
823
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Index   Ventures III (Jersey) L.P.
   P.O. Box 641, No. 1 Seaton Place
   St. Helier, Jersey JE4 8YJ
   Channel Islands
    	
 
    	
16,039
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Index   Ventures III (Delaware) L.P.
   P.O. Box 641, No. 1 Seaton Place
   St. Helier, Jersey JE4 8YJ
   Channel Islands
    	
 
    	
32,581
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Index   Ventures III Parallel Entrepreneur Fund (Jersey) L.P.
   P.O. Box 641, No. 1 Seaton Place
   St. Helier, Jersey JE4 8YJ
   Channel Islands
    	
 
    	
580
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Yucca   Partners LP Jersey Branch
   P.O. Box 641, No. 1 Seaton Place
   St. Helier, Jersey JE4 8YJ
   Channel Islands
    	
 
    	
800

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