Document:

EXHIBIT 4.6

 

Execution Version

 

PURCHASE AND SALE AGREEMENT

 

by and among

 

Sharp Corporation,

 

Sharp US Holding Inc.,

 

Canadian Solar Energy Acquisition Co.

 

and

 

Canadian Solar Inc.

 

 

Dated as of February 3, 2015

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Article I.
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
1.01.
    	
Definitions
    	
1
    
	
1.02.
    	
Rules of   Construction
    	
14
    
	
 
    	
 
    	
 
    
	
Article II.
    	
PURCHASE   AND SALE OF COMPANY INTERESTS
    	
15
    
	
 
    	
 
    	
 
    
	
2.01.
    	
Purchase   and Sale of Company Interests
    	
15
    
	
2.02.
    	
Closing
    	
15
    
	
2.03.
    	
Total   Purchase Price
    	
15
    
	
2.04.
    	
Adjustments   to Base Purchase Price
    	
16
    
	
 
    	
 
    	
 
    
	
Article III.
    	
REPRESENTATIONS   AND WARRANTIES OF SELLER PARENT RELATING TO THE COMPANY and THE COMPANY   SUBSIDIARIES
    	
18
    
	
 
    	
 
    	
 
    
	
3.01.
    	
Organization;   Qualification
    	
18
    
	
3.02.
    	
Capitalization
    	
18
    
	
3.03.
    	
No   Conflicts; Consents and Approvals
    	
18
    
	
3.04.
    	
Subsidiaries
    	
19
    
	
3.05.
    	
Financial   Statements
    	
20
    
	
3.06.
    	
Liabilities
    	
20
    
	
3.07.
    	
Absence   of Certain Changes
    	
20
    
	
3.08.
    	
Legal   Proceedings
    	
20
    
	
3.09.
    	
Compliance   with Applicable Laws
    	
21
    
	
3.10.
    	
Company   Contracts
    	
21
    
	
3.11.
    	
Taxes
    	
23
    
	
3.12.
    	
Employee   Matters
    	
25
    
	
3.13.
    	
Insurance
    	
28
    
	
3.14.
    	
Environmental   Matters
    	
28
    
	
3.15.
    	
Intellectual   Property
    	
29
    
	
3.16.
    	
Property
    	
29
    
	
3.17.
    	
Condemnation
    	
31
    
	
3.18.
    	
Related   Party Transactions
    	
31
    
	
3.19.
    	
Brokers
    	
31
    
	
3.20.
    	
Governmental   Approvals
    	
32
    
	
3.21.
    	
Debt   Obligations
    	
32
    
	
3.22.
    	
Project   Interconnection
    	
32
    
	
3.23.
    	
Books   and Records
    	
33
    
	
3.24.
    	
Bank   Accounts
    	
33
    
	
3.25.
    	
Foreign   Corrupt Practices Act
    	
33
    
	
3.26.
    	
Hedging
    	
33
    
	
3.27.
    	
Project   Sales
    	
33
    
	
3.28.
    	
Environmental   Attributes
    	
33
    
	
3.29.
    	
Accuracy   of Information
    	
34
    
	
3.30.
    	
Confidential   Information Protection
    	
34
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Article IV.
    	
REPRESENTATIONS   AND WARRANTIES OF SELLER parent RELATING TO SELLER PARENT AND SELLER
    	
34
    
	
 
    	
 
    	
 
    
	
4.01.
    	
Organization;   Qualification
    	
34
    
	
4.02.
    	
Authority;   Enforceability
    	
34
    
	
4.03.
    	
No   Conflicts; Consents and Approvals
    	
35
    
	
4.04.
    	
Legal   Proceedings
    	
35
    
	
4.05.
    	
No   Other Representations or Warranties
    	
35
    
	
4.06.
    	
Solvency
    	
35
    
	
 
    	
 
    	
 
    
	
Article V.
    	
REPRESENTATIONS   AND WARRANTIES OF BUYER
    	
36
    
	
 
    	
 
    	
 
    
	
5.01.
    	
Organization;   Qualification
    	
36
    
	
5.02.
    	
Authority;   Enforceability
    	
36
    
	
5.03.
    	
No   Conflicts; Consents and Approvals
    	
36
    
	
5.04.
    	
Legal   Proceedings
    	
36
    
	
5.05.
    	
Investment   Representations
    	
37
    
	
5.06.
    	
Brokers
    	
37
    
	
5.07.
    	
Availability   of Funds
    	
37
    
	
5.08.
    	
Waiver   of Other Representations
    	
37
    
	
 
    	
 
    	
 
    
	
Article VI.
    	
COVENANTS   OF THE PARTIES
    	
38
    
	
 
    	
 
    	
 
    
	
6.01.
    	
Investigation   by Buyer
    	
38
    
	
6.02.
    	
Certain   Restrictions
    	
39
    
	
6.03.
    	
Reasonable   Best Efforts; Regulatory and Other Approvals
    	
42
    
	
6.04.
    	
Employees;   Employee Benefits
    	
43
    
	
6.05.
    	
Supplemental   Disclosure
    	
44
    
	
6.06.
    	
No   Negotiations
    	
44
    
	
6.07.
    	
Further   Assurances; Post-Closing Cooperation
    	
45
    
	
6.08.
    	
Release   of Guaranties, etc.
    	
45
    
	
6.09.
    	
Indemnification   of Directors and Officers; Directors’ and Officers’ Insurance
    	
45
    
	
6.10.
    	
Confidentiality,   Non-Solicitation and Non-Competition
    	
46
    
	
6.11.
    	
Use   of Name; Name Change
    	
48
    
	
6.12.
    	
Status   of Seller
    	
48
    
	
 
    	
 
    	
 
    
	
Article VII.
    	
CONDITIONS   TO OBLIGATIONS OF BUYER
    	
49
    
	
 
    	
 
    	
 
    
	
7.01.
    	
Representations   and Warranties
    	
49
    
	
7.02.
    	
Performance
    	
49
    
	
7.03.
    	
Officer’s   Certificates
    	
49
    
	
7.04.
    	
Orders   and Applicable Laws
    	
49
    
	
7.05.
    	
Approvals
    	
49
    
	
7.06.
    	
Resignations
    	
49
    
	
7.07.
    	
FIRPTA   Certificate
    	
49
    
	
7.08.
    	
General   Release
    	
49
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
7.09.
    	
Certificates
    	
50
    
	
7.10.
    	
Books   and Records
    	
50
    
	
7.11.
    	
Assignment   Agreement
    	
50
    
	
7.12.
    	
Material   Adverse Effect
    	
50
    
	
7.13.
    	
LLC   Agreement
    	
50
    
	
 
    	
 
    	
 
    
	
Article VIII.
    	
CONDITIONS   TO OBLIGATIONS OF SELLER PARENT AND SELLER
    	
50
    
	
 
    	
 
    	
 
    
	
8.01.
    	
Representations   and Warranties
    	
50
    
	
8.02.
    	
Performance
    	
50
    
	
8.03.
    	
Officer’s   Certificate
    	
51
    
	
8.04.
    	
Orders   and Applicable Laws
    	
51
    
	
8.05.
    	
Approvals
    	
51
    
	
8.06.
    	
Release   of Guaranties, etc.
    	
51
    
	
8.07.
    	
Certificates
    	
51
    
	
8.08.
    	
Sharp   Bridge Loans
    	
51
    
	
 
    	
 
    	
 
    
	
Article IX.
    	
NON-RECOURSE;   TRANSFER TAXES; TAX RETURNS
    	
51
    
	
 
    	
 
    	
 
    
	
9.01.
    	
Non-Recourse
    	
51
    
	
9.02.
    	
Transfer   Taxes
    	
52
    
	
9.03.
    	
Tax   Matters
    	
52
    
	
 
    	
 
    	
 
    
	
Article X.
    	
TERMINATION
    	
54
    
	
 
    	
 
    	
 
    
	
10.01.
    	
Termination
    	
54
    
	
10.02.
    	
Effect   of Termination
    	
55
    
	
 
    	
 
    	
 
    
	
Article XI.
    	
INDEMNIFICATION
    	
55
    
	
 
    	
 
    	
 
    
	
11.01.
    	
Survival
    	
55
    
	
11.02.
    	
Indemnification
    	
56
    
	
11.03.
    	
Third   Party Claims
    	
57
    
	
11.04.
    	
Limitations   on Indemnification
    	
58
    
	
11.05.
    	
No   Contribution
    	
59
    
	
11.06.
    	
Remedies   Exclusive
    	
59
    
	
11.07.
    	
Treatment   of Payment
    	
59
    
	
11.08.
    	
Set-Off
    	
59
    
	
 
    	
 
    	
 
    
	
Article XII.
    	
MISCELLANEOUS
    	
60
    
	
 
    	
 
    	
 
    
	
12.01.
    	
Entire   Agreement
    	
60
    
	
12.02.
    	
Expenses
    	
60
    
	
12.03.
    	
Confidentiality
    	
60
    
	
12.04.
    	
Announcements
    	
61
    
	
12.05.
    	
No   Waiver
    	
61
    
	
12.06.
    	
Amendments
    	
61
    
	
12.07.
    	
Addresses   for Notices
    	
61
    

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
12.08.
    	
Captions
    	
62
    
	
12.09.
    	
Severability
    	
62
    
	
12.10.
    	
Assignment
    	
63
    
	
12.11.
    	
Counterparts
    	
63
    
	
12.12.
    	
Disclosure
    	
63
    
	
12.13.
    	
Specific   Performance
    	
63
    
	
12.14.
    	
Governing   Applicable Law
    	
63
    
	
12.15.
    	
Arbitration
    	
64
    
	
12.16.
    	
Waiver   of Jury Trial
    	
64
    
	
12.17.
    	
Certain   Waivers
    	
64
    
	
12.18.
    	
Delivery   by Facsimile or PDF
    	
65
    
	
12.19.
    	
Obligations   of CSI
    	
65
    

 

iv

 

	
EXHIBITS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
 
    	
Form of   General Release
    
	
Exhibit B
    	
 
    	
Form of   Assignment Agreement
    
	
Exhibit C
    	
 
    	
Interim   Period Monthly Report
    
	
 
    	
 
    	
 
    
	
SCHEDULES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Schedule   1.01(a)
    	
 
    	
Pro   Forma Closing Date Net Asset Adjustment
    
	
Schedule   1.01(b)
    	
 
    	
Near   Term Projects
    
	
Schedule   1.01(c)
    	
 
    	
Permitted   Liens — Other
    
	
Schedule   1.01(d)
    	
 
    	
Project   Sales
    
	
Schedule   1.01(e)
    	
 
    	
Projects
    
	
Schedule   1.01(f)
    	
 
    	
Pre-Approved   Expenditures
    
	
Schedule   1.01(g)
    	
 
    	
Debt   Obligations
    
	
Schedule   1.01(h)
    	
 
    	
Effective   Date CIP Amount
    
	
Schedule   1.01(i)
    	
 
    	
Tier   1 Suppliers
    
	
Schedule   3.03
    	
 
    	
Company’s   Approvals
    
	
Schedule   3.04(a)
    	
 
    	
Subsidiaries
    
	
Schedule   3.04(b)
    	
 
    	
Outstanding   Obligations
    
	
Schedule   3.04(d)
    	
 
    	
Officers,   Directors and Managers
    
	
Schedule   3.06
    	
 
    	
Liabilities
    
	
Schedule   3.07
    	
 
    	
Absence   of Certain Changes
    
	
Schedule   3.08
    	
 
    	
Legal   Proceedings
    
	
Schedule   3.10(a)
    	
 
    	
Contracts
    
	
Schedule   3.10(b)
    	
 
    	
Contracts   — Not Posted
    
	
Schedule   3.10(j)
    	
 
    	
Change   in Control Payments
    
	
Schedule   3.11
    	
 
    	
Taxes
    
	
Schedule   3.11(a)(ii)
    	
 
    	
Taxes   — Withholdings
    
	
Schedule   3.11(a)(ix)
    	
 
    	
Tax   Classifications
    
	
Schedule   3.11(a)(x)
    	
 
    	
Taxes   — Cash Grant
    
	
Schedule   3.11(a)(xv)
    	
 
    	
Permanent   Establishments
    
	
Schedule   3.12(a)
    	
 
    	
Employee   Matters
    
	
Schedule   3.12(b)
    	
 
    	
Employee   Benefit Plans
    
	
Schedule   3.12(i)
    	
 
    	
Employee   Benefit Plans — Effect of Transaction
    
	
Schedule   3.12(m)(i)
    	
 
    	
Employee   Positions
    
	
Schedule   3.12(m)(ii)
    	
 
    	
Employee   Positions — Departures
    
	
Schedule   3.13
    	
 
    	
Insurance
    
	
Schedule   3.14
    	
 
    	
Environmental   Matters
    
	
Schedule   3.15
    	
 
    	
Intellectual   Property
    
	
Schedule   3.16(a)
    	
 
    	
Owned   Real Property
    
	
Schedule   3.16(b)
    	
 
    	
Leased   Real Property
    
	
Schedule   3.16(c)
    	
 
    	
Mineral   Rights & Site Status
    
	
Schedule   3.16(f)
    	
 
    	
Near-Term   Project Property
    
	
Schedule   3.17
    	
 
    	
Condemnation
    
	
Schedule   3.18
    	
 
    	
Related   Party Transactions
    
	
Schedule   3.20
    	
 
    	
Governmental   Approvals
    

 

v

 

	
Schedule   3.21
    	
 
    	
Debt   Obligations
    
	
Schedule   3.22
    	
 
    	
Project   Interconnection
    
	
Schedule   3.24
    	
 
    	
Bank   Accounts
    
	
Schedule   3.25
    	
 
    	
Foreign   Corrupt Practices Act
    
	
Schedule   3.26
    	
 
    	
Hedging
    
	
Schedule   3.28
    	
 
    	
Environmental   Attributes
    
	
Schedule   4.03
    	
 
    	
Seller   Parent and Seller’s Approvals
    
	
Schedule   5.03
    	
 
    	
Buyer’s   Approvals
    
	
Schedule   6.02(a)
    	
 
    	
Permitted   Actions
    
	
Schedule   6.04(a)
    	
 
    	
Terminated   Company Employee Benefit Plans
    
	
Schedule   6.08
    	
 
    	
Support   Obligations
    
	
Schedule   6.09
    	
 
    	
Director   and Officer Indemnification Agreements
    
	
Schedule   6.10
    	
 
    	
Key   Employees
    
	
Schedule   6.10(c)
    	
 
    	
Non-Compete
    
	
Schedule   7.06
    	
 
    	
Resignations
    

 

vi

 

PURCHASE AND SALE AGREEMENT

 

This PURCHASE AND SALE AGREEMENT is made as of February 3, 2015 (this “Agreement”), by and among Canadian Solar Energy Acquisition Co., a Delaware corporation (“Buyer”), and Sharp Corporation, a Japanese corporation (“Seller Parent”) and the sole stockholder of Sharp US Holding Inc., a Delaware corporation (“Seller”), which is the sole member of Recurrent Energy, LLC, a Delaware limited liability company (the “Company”) and Canadian Solar Inc., a Canadian corporation (“CSI”), solely for purposes of Section 12.19 and the other provisions in Article XII to extent related thereto.  Buyer, Seller, and Seller Parent are each referred to herein as a “Party” or, collectively, as the “Parties.”

 

RECITALS

 

WHEREAS, Seller Parent is the sole stockholder of Seller, which owns one hundred percent (100%) of the outstanding Equity Securities in the Company (the “Company Interests”).

 

WHEREAS, Seller desires to sell, assign, transfer, convey and deliver to Buyer, free and clear of all Liens other than Permitted Encumbrances, all of its right, title and interest in and to the Company Interests, and Buyer desires to purchase from Seller such right, title and interest, on the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I.
 DEFINITIONS

 

1.01.                     Definitions.  As used in this Agreement, the following defined terms have the meanings indicated below:

 

“409A Plan” has the meaning given to that term in Section 3.12(g).

 

“Acquisition Proposal” means any proposal or offer for a merger or consolidation involving the Company or any Company Subsidiary or any proposal or offer to acquire in any manner the business or Assets of the Company or any of the Company Subsidiaries (excluding excess spare equipment in the ordinary course of business and the sale of the Company Subsidiary that owns the real estate for the Company’s Tranquility project (on terms consistent with document 2.17.2.5.3 in the Data Room) and the Breen 2 land (provided that the purchase price is Two Hundred and Fifty Thousand U. S. Dollars ($250,000.00), plus or minus twenty percent (20%)), other than the transactions contemplated by this Agreement.

 

“Action” means any litigation, claim, arbitration, audit, hearing, suit, investigation or proceeding (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Authority or arbitrator or any other Person.

 

 

“Adjustment Amount” has the meaning given to that term in Section 2.04(b).

 

“Adjustment Statement” has the meaning given to that term in Section 2.04(b).

 

“Affiliate” means any Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person specified. For purposes of this definition, “control” of a Person means the power to direct or cause the direction of the management and policies of such Person whether through the ownership of voting securities or ownership interests, by Contract or otherwise.

 

“Agreement” has the meaning given to that term in the preamble to this Agreement, as the same may be amended from time to time.

 

“AJCA” has the meaning given to that term in Section 3.12(g).

 

“Applicable Laws” means all applicable laws, statutes, rules, regulations, treaties, orders, protocols, judgments, common law, decrees, directives, writs, ordinances and other pronouncements having the effect of law of the United States, any non-U.S. country or any state, county, city, province, territory or other political subdivision thereof or of any Governmental Authority.

 

“Assets” means, with respect to any Person, all right, title and interest of such Person in and to assets and rights of any kind, whether tangible or intangible, real or personal, including land and properties (or interests therein, including rights of way, leaseholds and easements), buildings, equipment, machinery, improvements, fixtures, Contracts, Environmental Attributes, solar data, reports, plans (including design and engineering plans) and studies (including those related to interconnection, environmental, cultural, resource and market matters), Governmental Approvals, intellectual property, inventory, books and records, proprietary rights, return and other rights under or pursuant to all warranties, representations and guarantees, cash, accounts receivable, deposits and prepaid expenses.

 

“Assignment Agreement” means an Assignment and Assumption Agreement, in the form attached hereto as Exhibit B, pursuant to which the Company Interests will be transferred from Seller to Buyer.

 

“Audited Financial Statements” has the meaning given to that term in Section 3.05.

 

“Balance Sheet” has the meaning given to that term in Section 3.05.

 

“Base Purchase Price” has the meaning given to that term in Section 2.03.

 

“Benefits Continuation Period” has the meaning given to that term in Section 6.04(c).

 

“Books and Records” means to the extent related the Company or the Projects and in Seller Parent’s, Seller’s or the Company’s possession or reasonably obtainable by Seller Parent, Seller or the Company, any and all files, documents, instruments, papers, books and records, data, reports, accounting records, ledgers, computer files and programs, correspondence, maps, surveys, engineering documents and other Project reports, and other business records relating to the ownership, business or condition of the Company, any Company Subsidiary or any Project, including such books and records that are generated or commissioned by Seller or any of its Affiliates prior to Closing, including, where applicable, financial statements and related work papers and letters from accountants, budgets, ledgers, journals, minute books, membership interest certificates and books, membership interest transfer ledgers, Contracts, Governmental Approvals, retrieval programs, operating data and plans and environmental studies and plans, if any.

 

2

 

“Business Day” means a day other than Saturday, Sunday or any day on which banks located in New York, New York or San Francisco, California are authorized or obligated to close.

 

“Buyer” has the meaning given to that term in the preamble to this Agreement.

 

“Buyer’s Approvals” has the meaning given to that term in Section 5.03(b).

 

“Buyer Confidential Information”  has the meaning given to that term in Section 6.10(b).

 

“Cap” has the meaning given to that term in Section 11.04(b).

 

“Change in Control Payments” means (a) any severance, retention, bonus, consent fee, profit sharing payment or other similar payment to any Person under any Contract or Company Employee Benefit Plan, including the Management Alignment Bonus Plan, except for any additional or enhanced severance, retention, bonus, consent fee, profit sharing payment or other similar payments agreed to by Buyer or an Affiliate thereof with any Person, and (b) any increase of any benefits otherwise payable by the Company or the Company Subsidiaries, in each case of the foregoing clauses (a) and (b), which become due and payable on the Closing Date or as result of the transactions contemplated by this Agreement; (c) any severance or other similar payment to any Person arising from a termination of employment (or notice of termination given) prior to the Closing Date; (d) any amounts owed to the Company’s Chief Executive Officer and Chief Financial Officer under any annual bonus incentive plan (including guaranteed payments thereunder); (e) any amounts due as a result of the termination of, or otherwise under, the Management Alignment Bonus Plan; and (f) all Company-paid payroll taxes related to any of the foregoing.

 

“CIP” means construction in progress costs capitalized in accordance with GAAP and the Company’s accounting policies set forth in, or otherwise used in the preparation of, the Audited Financial Statements.

 

“Claim” means any demand, claim or Action.

 

“Closing” means the consummation of the transactions to be taken on the Closing Date contemplated by this Agreement.

 

“Closing CIP Amount” means an amount equal to the Effective Date CIP Amount plus the Interim CIP Amount.

 

3

 

“Closing Consideration”  means the Base Purchase Price, minus Transaction Expenses, plus or minus the Estimated Closing Date Net Asset Adjustment, plus the Estimated CIP Amount, plus the Specified Operating Expenses.

 

“Closing Date” means (a) the second (2nd) Business Day following the date on which the last of the conditions set forth in Article VII and Article VIII (other than the Closing Date Conditions, but subject to the satisfaction or waiver thereof at the Closing) are satisfied or waived by the applicable Parties; provided that if all conditions set forth in Articles VII and Article VIII are satisfied or waived other than receipt of the consents listed as items #1, #2, #5 and #9 Schedule 3.03 and such consents are received on March 30, 2015, then March 31, 2015 or (b) such other date as the Parties mutually agreed upon in writing.

 

“Closing Date Conditions” means the conditions set forth in Article VII and Article VIII that by their nature are intended to be satisfied at the Closing.

 

“Closing Date Net Asset Adjustment” means the amount, calculated as of the Closing Date, equal to (a) the Specified Assets, less (b) the Specified Liabilities, less (c) the Target Net Asset Amount, calculated in a manner consistent with the pro forma calculation set forth in Schedule 1.01(a) and in accordance with GAAP and the Company’s accounting policies set forth in, or otherwise used in the preparation of, the Audited Financial Statements.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Company” has the meaning given to that term in the preamble to this Agreement.

 

“Company Contracts” has the meaning given to that term in Section 3.10(a).

 

“Company Employee” has the meaning given to that term in Section 6.04(b).

 

“Company Employee Benefit Plan” means any Employee Benefit Plan established or maintained by the Company or any Company Subsidiary, or to which the Company or any Company Subsidiary contributes or has an obligation to contribute, or with respect to which the Company or any Company Subsidiary has any actual or contingent material Liabilities (whether singly or collectively with any other Employee Benefit Plan), or in which any Company Employee participates and specifically includes all of the employment agreements and retention agreements to which the Company is a party.

 

“Company Interests” has the meaning given to that term in the preamble to this Agreement.

 

“Company IP” means all Intellectual Property owned by the Company or any Company Subsidiary, including all patent, copyright, trademark and service mark registrations and applications and domain names issued to, assigned to and filed by the Company or any Company Subsidiary.

 

“Company Securities” has the meaning given to that term in Section 3.02.

 

“Company Subsidiary” has the meaning given to that term in Section 3.04(a).

 

4

 

“Company’s Approvals” has the meaning given to that term in Section 3.03(b).

 

“Conclusive Adjustment Amount” has the meaning given to that term in Section 2.04(e).

 

“Conclusive Adjustment Statement” has the meaning given to that term in Section 2.04(d).

 

“Conclusive Statement” has the meaning given to that term in Section 2.04(d).

 

“Contract” means any legally binding contract, agreement, license, sublicense, assignment, purchase agreement, invoice, indenture, lease, sublease, easement, instrument of indebtedness, security agreement, guarantee, purchase order, sales order, offer to sell, option, right of first refusal, distribution agreement, right to discounts, maintenance agreement or undertaking or instrument of any kind, obligation or other arrangement or agreement, in each case whether oral or written, including any amendments and other modifications thereto.

 

“CSI” has the meaning given to that term in the preamble to this Agreement.

 

“D&O Tail Coverage” has the meaning given to that term in Section 6.09(b).

 

“Data Room” means all documents and materials posted to and not removed from the Firmex website in the folder named “Project Phoenix” with respect to the Projects, the Company and the Company Subsidiaries prior to the date hereof, and a copy of such Data Room as of the date hereof on CD-ROM will be delivered to Orrick on the Effective Date, to be held in trust for Buyer, and delivered to Buyer on the Closing Date (provided, however, that the folder entitled “Employee Information” shall be provided separately to the appropriate individual at Buyer).

 

“De Minimis Loss” has the meaning given to that term in Section 11.04(a).

 

“Debt Obligations” as applied to any Person, means, without duplication, (a) all indebtedness for borrowed money, including all indebtedness evidenced by a note, bond, debenture or similar instrument, (b) that portion of obligations with respect to capital leases that is classified as a liability on a balance sheet in conformity with GAAP, applied on a consistent basis with the financial statements of such Person, and (c) any obligation owed for all or any part of the deferred purchase price for the purchase of a business or assets that in accordance with GAAP would be included as liabilities on the balance sheet of such Person, (d) liabilities under any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement or other similar agreement designed to protect the Company or any Company Subsidiary against fluctuations in interest rates or other currency fluctuations, (e) all liabilities with respect to any commitment by which the Company or any Company Subsidiary assures a creditor against loss (including, without limitation, contingent reimbursement obligations of the Company or any Company Subsidiary with respect to letters of credit) other than indemnity and other obligations under Contracts not evidencing debt, (f) any obligations under capitalized leases, conditional sales contracts and other similar title retention instruments whether short term or long term, (g) any indebtedness secured by a Lien on any property or Assets of the Company or any Company Subsidiary and/or any off-balance sheet financings, (h) to the extent due and payable, all accrued interest, prepayment premiums, penalties, expenses or other amounts related to any of the foregoing, and (i) all liabilities with respect to the obligations of other Persons of the types described in clauses (a) - (h) above guaranteed in any manner by the Company or any Company Subsidiary.  For clarification, it is understood that the following shall not constitute “Debt Obligations” hereunder: operating leases, power purchase agreements, trade payables (including accrued interest thereon) and accrued expenses and prepaid or deferred revenue arising in the ordinary course of business.

 

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“Disclosure Schedule” means (a) with respect to Seller Parent, the lists, descriptions, exceptions and other information and materials prepared by Seller Parent and attached to this Agreement, and (b) with respect to Buyer, the lists, descriptions, exceptions and other information and materials prepared by Buyer and attached to this Agreement.

 

“Dispute” has the meaning given to that term in Section 12.15.

 

“Effective Date CIP Amount” means all CIP made by or on behalf of Seller, the Company, any Company Subsidiary for the period through December 31, 2014, as set forth on Schedule 1.01(h).

 

“Employee Benefit Plan” means any (a) nonqualified deferred compensation, (b) qualified defined contribution retirement plan, program or arrangement which is an Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan, program or arrangement which is an Employee Pension Benefit Plan (including any Multiemployer Plan), (d) Employee Welfare Benefit Plan or fringe benefit plan or program, or (e) profit sharing, bonus, incentive, profits interest or other equity, employment, change in control, or severance plan, program or agreement.

 

“Employee Pension Benefit Plan” means an “employee pension benefit plan” as defined in Section 3(2) of ERISA.

 

“Employee Welfare Benefit Plan” means an “employee welfare benefit plan” as defined in Section 3(1) of ERISA.

 

“Enforceability Exceptions” has the meaning given to that term in Section 3.10(c).

 

“Environmental Attributes” means any and all claims, credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, resulting from the avoidance of the emission of any gas, chemical, or other substance to the air, soil or water, related to the Projects.  Environmental Attributes include but are not limited to:  (a) any avoided emissions of pollutants to the air, soil, or water such as (subject to the foregoing) sulfur oxides (SOx), nitrogen oxides (NOX), carbon monoxide (CO), and other pollutants; and (b) any avoided emissions or carbon dioxide (CO2), methane (CH4), and other greenhouse gases (GHGs) that have been determined by the United States Intergovernmental Panel on Climate Change to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere.

 

“Environmental Condition” means the presence, release, threatened release, or disposal of any Hazardous Substance at, in, on or from the Real Property that requires investigation, reporting, remediation or other response action under any Environmental Law or any material violation of any Environmental Law with respect to the Company or any Company Subsidiary, including without limitation arising from any presence, release, threatened release, or disposal of any Hazardous Substance at, in, on, from or affecting the Projects.

 

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“Environmental Laws” means any and all Applicable Laws or Orders of any Governmental Authority regulating or imposing Liability concerning pollution and protection of the environment (including air, water, land, flora and fauna), natural resources or human health or the generation, use, handling, treatment, storage, disposal and transportation of Hazardous Substances.

 

“Environmental Liability” means any Liability (including any Liability for natural resource damages, costs of environmental remediation, fines, attorneys’ fees or penalties) arising under any Environmental Laws.

 

“Equity Securities” means with respect to any Person, any share, capital stock, partnership interest (whether general or limited), membership or similar interest or participation that confers the right to receive a share of the profits or losses of the issuing entity, or any other indicia of equity ownership (including any option, warrant, profits interest or similar right or security or right convertible, exchangeable or exercisable therefor or other instrument or right the value of which is based on any of the foregoing) in such Person.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” means a Person that is treated as a single employer with the Company for purposes of Section 414(b) or 414(c) of the Code.

 

“Estimated CIP Amount” has the meaning given to that term in Section 2.04(a).

 

“Estimated Closing Date Adjustment Amount” has the meaning given to that term in Section 2.04(a).

 

“Estimated Specified Operating Expenses” has the meaning given to that term in Section 2.04(a).

 

“Financial Statements” has the meaning given to that term in Section 3.05.

 

“Fundamental Representations” means (a) with respect to Seller Parent, the representations and warranties set forth in Sections 3.01, 3.02, 3.03(a), 3.04, 3.11, 3.19,  3.21, 3.27, 4.01, 4.02, 4.03(a) and 4.06, and (b) with respect to Buyer, the representations and warranties set forth in Sections 5.01, 5.02 and 5.03(a).

 

“GAAP” means generally accepted accounting principles in the United States, consistently applied throughout the specified periods.

 

“General Release” has the meaning given to that term in Section 7.08.

 

“Governmental Approval” means any authorization, consent, approval, license, permit, franchise, tariff, rate, certification, agreement, directive, waiver, exemption, variance or Order of any Governmental Authority.

 

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“Governmental Authority” means any governmental authority, agency, department, board, commission or instrumentality of the United States or any non-U.S. country, any state or local body of the United States or any non-U.S. country or any political subdivision of any of the foregoing, and any tribunal, court or arbitrator(s) of competent jurisdiction.

 

“Hazardous Substance” means any chemical, material, substance or waste that is regulated under or defined as hazardous or toxic under any Environmental Law or with respect to which liability or standards of conduct are imposed under any Environmental Law, including petroleum products and byproducts, asbestos and asbestos containing materials and polychlorinated biphenyls.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

 

“ICC Arbitration Rules” has the meaning given to that term in Section 12.15.

 

“Indemnified Director or Officer” and “Indemnified Directors and Officers” have the meanings given to those terms in Section 6.09(a).

 

“Indemnified Party” means, in the case of an indemnification claim pursuant to Section 11.02(a), Buyer, any Affiliate of Buyer or their respective officers, directors, employees, successors and permitted assigns and, in the case of an indemnification claim pursuant to Section 11.02(b), Seller Parent, any Affiliate of Seller Parent or their respective officers, directors, employees, successors and permitted assigns.

 

“Indemnifying Party” means, in the case of an indemnification claim pursuant to Section 11.02(a), Seller Parent and its successors and permitted assigns and, in the case of an indemnification claim pursuant to Section 11.02(b), Buyer and its successors and permitted assigns.

 

“Indemnity Threshold” has the meaning given to that term in Section 11.04(a).

 

“Intellectual Property” means all intellectual property, including: (a) patents, inventions, discoveries, processes, designs, techniques, developments, technology, and related improvements and know-how, whether or not patented or patentable; (b) copyrights and works of authorship in any media, including computer hardware, software, firmware, applications, files, systems, networks, databases and compilations, documentation and related textual works, graphics, advertising, marketing and promotional materials, photographs, artwork, drawings, articles, textual works, and Internet site content; (c) trademarks, service marks, trade names, brand names, corporate names, domain names, logos trade dress and other source indicators and the goodwill of any business symbolized thereby; and (d) trade secrets, drawings, blueprints and all non-public, confidential or proprietary information, documents, materials, analyses, and lists.

 

“Interim CIP Amount” means all CIP made by or on behalf of Seller Parent, Seller, the Company, any Company Subsidiary from January 1, 2015 until the Closing Date, as contemplated by the Pre-Approved Expenditures with respect to the Interim Period or otherwise consented to in writing by Buyer, less any reductions in any CIP made during the period between January 1, 2015 and the Closing Date, including by virtue of any write-offs.

 

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“Interim Period” has the meaning given to that term in Section 6.01.

 

“Key Employees” has the meaning given to that term in Section 6.10(a).

 

“Knowledge of Seller Parent” means the actual knowledge of Sam Yahiro, Steve Finno, Arno Harris, Michael Metzner, David Brochu, Stacy Colby-King, Hiroto Nakamura and Mitchell Randall where actual knowledge includes such facts or matters that a prudent individual could be expected to discover or otherwise become aware of in the course of conducting a reasonable good faith inquiry regarding the accuracy of any representation or warranty in this Agreement, which inquiry shall be limited to (i) interviews or discussions by such persons with the employees of Seller Parent, Seller and their Affiliates, the Company or any Company Subsidiary specifically responsible for the subject matter to which knowledge is pertinent, (ii) actual receipt of information by such persons that reasonably conveys the specific matter in respect of which knowledge is pertinent, or (iii) any information provided in the Data Room relevant to the subject matter to which knowledge is pertinent.

 

“Lease” has the meaning given in Section 3.16(b).

 

“Leased Real Property” has the meaning given in Section 3.16(b).

 

“Liabilities” means all Debt Obligations, other obligations and other liabilities of a Person (whether known or unknown, absolute, accrued or unaccrued, contingent, liquidated or unliquidated, fixed or otherwise, or whether due or to become due).

 

“Liens” means any mortgage, pledge, bailment (in the nature of a pledge or for purposes of security), deed of trust, the grant of power to confess judgment, conditional sale or title retention agreement (including any lease in the nature thereof), lien, charge, claim, option, equitable interest, security interest, assignment, hypothecation, power of sale, encumbrance, restriction on transfer, exclusive license, other agreement or arrangement that has the same or a similar effect to the granting of security or of any similar right of any kind (including any conditional sale or other title retention agreement) or any arrangement or obligation to create the foregoing.

 

“Losses” means all demands, losses, Claims, Actions or causes of action, assessments, damages, Liabilities, costs and expenses, obligations, damages, deficiencies, Taxes, penalties, fines or expenses, whether or not arising out of third party claims, including interest, penalties, reasonable attorneys’ fees, disbursements and expenses, and court costs.

 

“Management Alignment Bonus Plan” means that certain plan adopted by the Company on November 7, 2014 to motivate and compensate certain key employees of the Company in connection with a change of control.

 

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“Material Adverse Effect” means any state of facts, change, development, event, effect, condition or occurrence (“Effect”) that (x) is materially adverse to the Properties, Liabilities, the results of operations or financial condition of the Company and the Company Subsidiaries taken as a whole or (y) would, individually or in the aggregate, result in a material adverse effect on Seller Parent’s or Seller’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby, other than any Effect attributable to (a) any adoption, implementation, promulgation, repeal, modification, reinterpretation or proposal of any Applicable Law, (b) any change affecting the international, national, regional, state, provincial or local electric generating, transmission or distribution industry, (c) any change in international, national, regional, state, provincial or local wholesale or retail electric power prices, (d) any change or development in international, national, regional, state, provincial or local electric transmission or distribution systems, (e) any change in general regulatory or political conditions, including any engagement of hostilities, act of war or terrorist activity or any change imposed by a Governmental Authority associated with additional security, (f) any effect of weather, geological or meteorological events, (g) any change in GAAP (including the rules and principles related to accelerated depreciation), (h) the announcement, pendency or consummation of the transactions contemplated by this Agreement, (i) any change or development in any foreign exchange, financial, banking or securities market (including any increased interest rates or other costs for, or reduction in the availability of, financing or suspension of trading in, or limitation on prices for, securities on a securities market (including an over-the-counter market), exchange or trading platform) or the economy in general, or (j) any trade action, labor strike, request for representation, organizing campaign, work stoppage, slowdown, lockout or other labor dispute affecting third parties; except in the cases of clauses (a) through (j) above, to the extent the adverse effect on the Company or any Company Subsidiary would reasonably be expected to have a disproportionate impact on the Company or the Company Subsidiaries, taken as a whole, relative to other solar energy project development companies (in which case only the incremental disproportionate effect or effects may be deemed either alone or in combination to constitute, or taken into account in determining whether there has been a Material Adverse Effect); provided, however, that any loss or claim relating to any Material Adverse Effect that is cured prior to the Closing Date to Buyer’s reasonable satisfaction shall not be considered a Material Adverse Effect.

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 3(37) of ERISA.

 

“Near-Term Projects” means each of the Projects set forth in Schedule 1.01(b).

 

“Neutral Accounting Arbitrator” has the meaning given to that term in Section 2.04(d).

 

“Nondisclosure Agreement” means that certain Nondisclosure Agreement, dated as of September 14, 2014, by and between Canadian Solar Inc. and the Company, as modified by that certain Exclusivity Agreement, dated as of December 23, 2014, between Sharp Corporation and CSI.

 

“Obligations” has the meaning given to that term in Section 12.19.

 

“Option Agreements” has the meaning given to that term in Section 3.16(b).

 

“Optioned Real Property” has the meaning given to that term in Section 3.16(b).

 

“Order” means any writ, judgment, decree, injunction or similar order of any Governmental Authority (in each such case whether preliminary or final).

 

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“Organizational Documents” means, with respect to any Person, the articles or certificate of incorporation or organization and by-laws, the limited partnership agreement, the partnership agreement or the limited liability company agreement, or such other organizational documents of such Person.

 

“Owned Real Property” has the meaning given to that term in Section 3.16(a).

 

“Party” and “Parties” have the meanings given to those terms in the preamble to this Agreement.

 

“Permitted Encumbrances” means (a) those restrictions on transfer imposed by applicable securities laws, and (b) any Liens created by Buyer or its Representatives.

 

“Permitted Lien” means (a) any Lien for Taxes not yet delinquent or being contested in good faith by appropriate proceedings; (b) any Lien arising in the ordinary course of business by operation of Applicable Law, including statutory or common law Liens arising in the ordinary course of business in favor of carriers, warehousemen, mechanics and materialmen, and statutory or common law Liens arising in the ordinary course of business to secure claims for labor, materials or supplies, with respect to a Liability that is included in the Balance Sheet (or arising thereafter in the ordinary course of business) and is (1) not yet delinquent or (2) is being contested in good faith; (c) any Lien reflected in the Balance Sheet; (d) any purchase money Lien arising in the ordinary course of business; (e) imperfections or irregularities of title and other Liens that do not, in the aggregate, materially detract from the value of the affected Real Property or the suitability of the affected Real Property for development of the applicable Project; (f) zoning, planning, and other similar limitations and restrictions, and all rights of any Governmental Authority to regulate any Real Property that do not, in the aggregate, materially detract from the value of the affected Real Property or the suitability of the affected Real Property for development of the applicable Project; (g) all matters of record, that do not, in the aggregate, materially detract from the value of the affected Real Property or the suitability of the affected Real Property for development of the applicable Project; (h) the terms and conditions of the Company Contracts and the Governmental Approvals applicable to the Company or any Company Subsidiary; (i) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security Applicable Laws; (j) any Lien that is released on or prior to the Closing; (k)  all matters that are disclosed on any title insurance policy insuring any Real Property or in any title commitments, title reports or other title materials, or on any survey, in each case only to the extent delivered by Seller Parent or Seller to Buyer or otherwise made available to Buyer and which such matters, (x) to the Knowledge of Seller Parent would not have a material adverse impact on the Company, the Company Subsidiaries, or their respective ability to develop the Projects, or (y) Seller Parent reasonably believes will be resolved within a time period and with an associated cost or expense that would not have a material adverse impact on the Company, the Company Subsidiaries, or their respective ability to develop the Projects (collectively “Disclosed Title Matters”) and (l) the matters identified on Schedule 1.01(c).

 

“Person” means any individual, corporation, partnership, joint venture, trust, limited liability company, unincorporated organization, Governmental Authority or other entity.

 

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“Pre-Approved Expenditures”  means (i) those expenditures set forth on Schedule 1.01(f), plus (ii) an amount equal to five percent (5%) of the amounts set forth on Schedule 1.01(f).

 

“Pre-Closing Tax Returns” has the meaning given to that term in Section 9.03(a).

 

“Preliminary Statement” has the meaning given to that term in Section 2.04(a).

 

“Project Sale” means each of the projects sold by the Company and any Company Subsidiary as described further in Schedule 1.01(d).

 

“Projects” means the projects set forth on Schedule 1.01(e).

 

“Properties” means, as to any Person, all Assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, and wherever situated) operated, owned or leased by such Person.

 

“Purchase Price Allocation” has the meaning given that term in Section 9.03(d).

 

“Real Property” has the meaning given to that term in Section 3.16(b).

 

“REC” means a tradable certificate, credit, allowance, green tag, or other transferable document conferring ownership, howsoever entitled, created pursuant to the requirements of a Governmental Authority, typically measured in one megawatt-hour increments.

 

“Recurrent Energy Marks” has the meaning given to that term in Section 6.11.

 

“Regulatory Filings” has the meaning given to that term in Section 6.03(c)(i).

 

“Representations Survival Period” shall have the meaning given to that term in Section 11.01(a).

 

“Representatives” means, as to any Person, its officers, directors, Affiliates, employees, partners, members, stockholders, counsel, accountants, financial advisers, engineers and consultants.

 

“Resolution Period” has the meaning given to that term in Section 2.04(c).

 

“Seller” has the meaning given to that term in the preamble to this Agreement.

 

“Seller Parent” has the meaning given to that term in the preamble to this Agreement.

 

“Seller Parent’s and Seller’s Approvals” has the meaning given to that term in Section 4.03(b).

 

“Seller’s Statement” has the meaning given to that term in Section 2.04(c).

 

“Sharp Bridge Loans”  means the documents listed under the heading “Sharp Bridge Loans” on Schedule 3.18.

 

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“Site” means the real property and improvements thereon forming a part of, or used or intended to be used in connection with, the Projects.  Any reference to a Site shall include, by definition, the surface and subsurface elements (although not necessarily the subsurface mineral rights), including the soils and groundwater present at the Site, and any reference to items “at the Site” shall include all items “at, on, in, upon, over, across, under and within” the Site.

 

“Specified Assets” means the assets listed in the pro forma Closing Date Net Asset Adjustment set forth in Schedule 1.01(a), the amount of which shall be determined in accordance with GAAP and the Company’s accounting policies set forth in, or otherwise used in the preparation of, the Audited Financial Statements; provided that the Specified Assets shall not include any CIP.

 

“Specified Liabilities” means the liabilities listed in the pro forma Closing Date Net Asset Adjustment set forth in Schedule 1.01(a), the amount of which shall be determined in accordance with GAAP and the Company’s accounting policies set forth in, or otherwise used in the preparation of, the Audited Financial Statements.  For the avoidance of doubt, Transaction Expenses shall not be included in the Specified Liabilities.

 

“Specified Operating Expenses” means up to Two Million Five Hundred Thousand U. S. Dollars ($2,500,000) of the documented, reasonable (a) third-party professional fees incurred by the Company or any of the Company Subsidiaries, in connection with the Projects for which there is no power purchase agreement in effect as of the Effective Date, and (b) transaction costs incurred by the Company or any of the Company Subsidiaries in connection with the Projects, in each case only to the extent consistent with the Pre-Approved Expenditures as set forth in Schedule 1.01(f).

 

“Statement” has the meaning given to that term in Section 2.04(b).

 

“Straddle Period” means any Tax period beginning on or before the Closing Date and ending after the Closing Date.

 

“Subsidiary” means, with respect to any Person, any other Person of which such Person (either alone or through or together with any other subsidiary) owns, directly or indirectly, fifty percent (50%) or more of the outstanding equity securities or securities carrying the voting power in the election of the board of directors or other governing body of such Person.

 

“Subsidiary Securities” has the meaning given to that term in Section 3.04(a).

 

“Support Obligations” has the meaning given to that term in Section 6.08.

 

“Target Group Confidential Information” has the meaning given to that term in Section 3.30.

 

“Target Net Asset Amount” means Thirty Six Million Four Hundred Forty Four Thousand Nine Hundred Sixty Three U. S. Dollars ($36,444,963.00), which is the amount set forth in the pro forma calculation of the Closing Date Net Asset Adjustment as of December 31, 2014 set forth in Schedule 1.01(a).

 

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“Tax” means any and all federal, state, local or foreign taxes (including any interest, fines, assessments, penalties or additions to tax imposed in connection therewith or with respect thereto), including (a) taxes imposed on, or measured by, income, franchise, profits or gross receipts, and (b) ad valorem, value added, capital gains, sales, goods and services, use, real or personal property, capital stock, license, branch, payroll, estimated, withholding, employment, social security (or similar), unemployment, compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits and transfer taxes.

 

“Tax Authority” means, with respect to any Tax, the Governmental Authority that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such Governmental Authority.

 

“Tax Return” means any return, report, information return, declaration, claim for refund, election or other document, together with all schedules, attachments, amendments and supplements thereto, supplied to or required to be supplied to any Tax Authority.

 

“Termination Date” has the meaning given to that term in Section 10.01(b)(i).

 

“Third Party Claim” has the meaning given to that term in Section 11.03.

 

“Tier 1 Supplier” means the suppliers set forth on Schedule 1.01(i).

 

“Total Purchase Price” has the meaning given to that term in Section 2.03.

 

“Transaction Documents” means, collectively, this Agreement, the Assignment Agreement, the General Release and all other agreements between the Parties or their Affiliates entered into pursuant to the terms hereof in order to carry out the Closing and the other transactions contemplated hereby.

 

“Transaction Expenses” means, in each case unless otherwise paid prior to the Closing Date, (a) any and all costs and expenses of the Company and any Company Subsidiaries incurred in connection with the preparation, execution and consummation of this Agreement (and the transactions contemplated hereby), including fees and disbursements of attorneys, investment bankers, accountants and other professional advisors by the Company or the Company Subsidiaries, and (b) any Change in Control Payments.

 

“U.S. Dollars” means the lawful currency of the United States.

 

1.02.                     Rules of Construction.

 

(a)                         All article, section, subsection, schedule and annex references used in this Agreement are to articles, sections, subsections, schedules and annexes to this Agreement unless otherwise specified. The annexes and schedules attached to this Agreement constitute a part of this Agreement and are incorporated in this Agreement for all purposes.

 

(b)                         If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb).  Unless the context of this Agreement clearly requires otherwise, words importing the masculine gender shall include the feminine and neutral genders and vice versa.  The words “includes” or “including” shall mean “including without limitation,” and the words “hereof,” “hereby,” “herein,” “hereunder” and similar terms in this Agreement shall refer to this Agreement as a whole and not any particular section or article in which such words appear.  Currency amounts referenced in this Agreement are in U.S. Dollars.  The singular includes the plural.

 

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(c)                          Time is of the essence in this Agreement.  Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified.  Whenever any action must be taken hereunder on or by a day that is not a Business Day, then such action may be validly taken on or by the next day that is a Business Day.

 

(d)                         Each Party acknowledges that it and its attorneys have been given an equal opportunity to negotiate the terms and conditions of this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party or any similar rule operating against the drafter of an agreement shall not be applicable to the construction or interpretation of this Agreement.

 

(e)                          All accounting terms used herein and not expressly defined herein shall have the respective meanings given such terms under GAAP.

 

ARTICLE II.
 PURCHASE AND SALE OF COMPANY INTERESTS

 

2.01.                     Purchase and Sale of Company Interests.  On the terms and subject to the conditions of this Agreement, Buyer agrees to purchase the Company Interests from Seller, and Seller agrees to sell and to transfer, the Company Interests to Buyer, free and clear of all Liens other than Permitted Encumbrances.

 

2.02.                     Closing.  The Closing will take place on the Closing Date at the offices of Orrick, Herrington & Sutcliffe LLP, at 405 Howard St., San Francisco, CA 94105, or at such other place as the Parties shall mutually agree in writing, at 9:00 a.m. Pacific time.  At the Closing, the Parties will satisfy each of the Closing Date Conditions unless waived in accordance with Article VII and Article VIII.

 

2.03.                     Total Purchase Price.  The aggregate purchase price for the Company Interests shall be the net sum of the following: (i) One Hundred Twenty Five Thousand U. S. Dollars ($125,000,000) (the “Base Purchase Price”), minus (ii) Transaction Expenses, plus or minus (iii) as applicable, the Closing Date Net Asset Adjustment, plus (iv) the Closing CIP Amount, plus (v) the Specified Operating Expenses (the Base Purchase Price, as adjusted for the foregoing clauses (ii), (iii), (iv) and (v), and further pursuant to Section 2.04(e), the “Total Purchase Price”).  At the Closing, Buyer shall pay (a) the Closing Consideration to Seller (or Seller Parent as contemplated by Section 6.12) in cash and (b) the Transaction Expenses to the payees of such Transaction Expenses in cash by wire transfer of immediately available funds to the accounts designated in writing by Seller; provided, however, that, to the extent the Closing Consideration exceeds Two Hundred Million U.S. Dollars ($200,000,000), then Buyer shall pay to Seller (or Seller Parent as contemplated by Section 6.12) such amount over Two Hundred Million U.S. Dollars ($200,000,000) within thirty (30) days after the Closing Date.

 

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2.04.                     Adjustments to Base Purchase Price.

 

(a)                         Seller shall, at least five (5) Business Days prior to the Closing Date, cause to be prepared and delivered to Buyer a statement (the “Preliminary Statement”) setting forth Seller’s good faith estimate of (i) the Closing Date Net Asset Adjustment, (ii) the Closing CIP Amount and (iii) the Specified Operating Expenses and the components and calculation of such amounts.  Prior to the Closing, Buyer may dispute in good faith in accordance with the terms of this Agreement, Seller’s estimate of the Closing Date Net Asset Adjustment, Closing CIP Amount or Specified Operating Expenses by delivering written notice of such dispute to Seller no later than 5:00 p.m. Pacific Time on the last Business Day before the Closing Date.  The portion of estimate of the Closing Date Net Asset Adjustment provided in the Preliminary Statement not disputed in good faith in accordance with the terms of this Agreement by Buyer in writing as provided in this Section 2.04(a) is referred to herein as the “Estimated Closing Date Adjustment Amount.”  The portion of estimate of the Closing CIP Amount provided in the Preliminary Statement not disputed in good faith in accordance with the terms of this Agreement by Buyer in writing as provided in this Section 2.04(a) is referred to herein as the “Estimated CIP Amount.”  The portion of the estimate of the Specified Operating Expenses provided in the Preliminary Statement not disputed in good faith in accordance with the terms of this Agreement by Buyer in writing as provided in this Section 2.04(a) is referred to herein as the “Estimated Specified Operating Expenses”.  In no event shall Buyer’s failure to dispute any of the items set forth on the Preliminary Statement in any way limit Buyer’s right to calculate the Closing Date Net Asset Adjustment, the Closing CIP Amount, the Specified Operating Expenses or to otherwise prepare the Adjustment Statement, including with respect to items in the Preliminary Statement that Buyer did not dispute.

 

(b)                         Within sixty (60) days after the Closing Date, Buyer shall cause to be prepared and delivered to Seller a statement (the “Statement”) setting forth Buyer’s calculation of the Closing Date Net Asset Adjustment, the Closing CIP Amount, the Specified Operating Expenses and the components and calculation of such amounts.  At the same time, Buyer shall also cause to be prepared and delivered to Seller a statement (the “Adjustment Statement”) setting forth the calculation (in each case whether a positive or negative number) of the amount of the Closing Date Net Asset Adjustment as shown on the Statement minus the Estimated Closing Date Adjustment Amount plus the amount of the Closing CIP Amount as shown on the Statement minus the Estimated CIP Amount plus the amount of the Specified Operating Expenses as shown on the Statement minus the Estimated Specified Operating Expenses (such aggregate amount, whether a positive or negative number, the “Adjustment Amount”).  Buyer shall provide Seller and its accountants with reasonable access to the relevant work papers, Books and Records and employees of Buyer, the Company and the Company Subsidiaries, in each case during normal business hours and upon prior written request, to the extent reasonably required in connection with their review of and any dispute with respect to the Statement and the Adjustment Statement and shall furnish Seller with any other information that might be relevant to the calculation of the Adjustment Amount, as reasonably requested by Seller.

 

(c)                          After receipt of the Statement and the Adjustment Statement, Seller will have thirty (30) days from receipt to review the Statement and the Adjustment Statement.  Unless Seller delivers to Buyer written notice setting forth in reasonable detail the specific items disputed by Seller and a written statement setting forth Seller’s calculation of each line item shown on the Statement or Adjustment Statement so disputed and the amount in dispute (the “Seller’s Statement”) on or prior to the thirtieth (30th) day after its receipt of the Statement and the Adjustment Statement, Seller will be deemed to have accepted and agreed to the Statement and the Adjustment Statement and such agreement will be final, binding and conclusive on the Parties.  Any items on the Statement or Adjustment Statement as to which Seller has not given notice of its objection and provided an alternative calculation will be deemed to have been agreed upon by the Parties.  If Seller so notifies Buyer of its objections to any of the Statement or the Adjustment Statement and provides Buyer with the Seller’s Statement in a timely manner, the Parties will, within thirty (30) calendar days following such delivery of notice (the “Resolution Period”), attempt to resolve their differences. Any resolution by the Parties during the Resolution Period as to any disputed amounts will be final, binding and conclusive on the Parties.

 

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(d)                         If the Parties do not resolve all disputed items by the end of the Resolution Period, then all items remaining in dispute will be submitted within thirty (30) days after the expiration of the Resolution Period to a national independent accounting firm mutually acceptable to the Parties (the “Neutral Accounting Arbitrator”).  The Neutral Accounting Arbitrator shall act as an arbitrator to determine only those items in dispute, and such determination shall be made in accordance with the terms and conditions of this Agreement. All fees and expenses relating to the work, if any, to be performed by the Neutral Accounting Arbitrator will be allocated between Buyer, on the one hand, and Seller, on the other hand, in inverse proportion as they shall prevail on the amounts of such disputed items so submitted (as finally determined by the Neutral Accounting Arbitrator). The Neutral Accounting Arbitrator will deliver to the Parties a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Neutral Accounting Arbitrator by the Parties) of the disputed items within thirty (30) days of receipt of the disputed items (or as soon as practicable thereafter), which determination will be final, binding and conclusive on the Parties.  The Neutral Accounting Arbitrator shall only resolve the disputed amounts by choosing the amounts submitted by a Party or amounts in between.  The final, binding and conclusive Statement and Adjustment Statement, which either are the Statement and Adjustment Statement from Buyer that are not timely disputed by Seller pursuant to Section 2.04(c), agreed upon (or deemed to have been agreed upon) by the Parties pursuant to Section 2.04(c) or are delivered by the Neutral Accounting Arbitrator in accordance with this Section 2.04(d), will be the “Conclusive Statement” and the “Conclusive Adjustment Statement,” respectively.  In the event that either Party fails to submit its statement regarding any items remaining in dispute within the time determined by the Neutral Accounting Arbitrator, then the Neutral Accounting Arbitrator shall render a decision based solely on the evidence timely submitted to the Neutral Accounting Arbitrator by the Parties.

 

(e)                          If the Adjustment Amount as shown on the Conclusive Adjustment Statement (the “Conclusive Adjustment Amount”) is a negative number, then the Total Purchase Price will be reduced by the amount of the Conclusive Adjustment Amount and Seller shall pay to Buyer in cash of such amount by wire transfer of immediately available funds to an account or accounts designated in writing by Buyer prior to the date when such payment is due.  If the Conclusive Adjustment Amount is a positive number, then the Total Purchase Price will be increased by the amount of the Conclusive Adjustment Amount and Buyer shall pay to Seller in cash of such amount by wire transfer of immediately available funds to an account or accounts designated in writing by Seller prior to the date when such payment is due.  All payments to be made pursuant to this Section 2.04(e) will be made on the fifth (5th) Business Day following the date on which the Parties agree to, or the Neutral Accounting Arbitrator delivers, the Conclusive Statement and the Conclusive Adjustment Statement.  If Seller assigns its rights to receive the Total Purchase Price per Section 6.12, all references to Seller in Section 2.04(a) through (e) shall refer to Seller Parent.

 

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ARTICLE III.
 REPRESENTATIONS AND WARRANTIES OF SELLER PARENT
 RELATING TO THE COMPANY AND THE COMPANY SUBSIDIARIES

 

Except as disclosed in Seller Parent’s Disclosure Schedule, Seller Parent hereby represents and warrants to Buyer as of the date of this Agreement and the Closing Date as follows:

 

3.01.                     Organization; Qualification.  The Company and each Company Subsidiary is duly formed, validly existing and in good standing under the Applicable Laws of its jurisdiction of organization, and has all requisite organizational power and authority to conduct its business as it is now being conducted and to own, lease and operate its Properties.  The Company and each Company Subsidiary is duly qualified or licensed to do business in each jurisdiction in which the ownership or operation of its Properties make such qualification or licensing necessary, except in those jurisdictions where the failure to be so duly qualified or licensed would not result in a Material Adverse Effect.

 

3.02.                     Capitalization.  The outstanding Equity Securities of the Company consist solely of the Company Interests held by Seller, which Company Interests are free and clear of all Liens other than Permitted Encumbrances.  Except as set forth in the first sentence of this Section 3.02, there are no (a) Equity Securities in the Company issued or outstanding, (b) securities convertible into or exchangeable or exercisable for Equity Securities in the Company, or (c) voting trusts or agreements, pledge agreements, buy-sell agreements, rights of first refusal, preemptive rights, “drag-along” or “tag-along” rights, stock appreciation rights, redemption or repurchase rights, anti-dilutive rights or proxy subscriptions, options, warrants, calls, rights, convertible securities or other Contracts of any character obligating the Company to issue, transfer or sell any of its Equity Securities (the items in clauses (a), (b), and (c), collectively, “Company Securities”).  All issued and outstanding Equity Securities of the Company are duly authorized, fully paid and non-assessable (to the extent applicable) and were issued in compliance with all applicable securities laws.  The Organizational Documents of the Company have been made available to Buyer.

 

3.03.                     No Conflicts; Consents and Approvals.  The execution and delivery by Seller Parent of this Agreement do not and the performance by Seller Parent of its obligations under this Agreement will not:

 

(a)                         conflict with or result in a violation or breach of any of the terms, conditions or provisions of the Organizational Documents of the Company or any of the Company Subsidiaries;

 

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(b)                         subject to the receipt or making of the filings, waivers, approvals, consents, authorizations and notices set forth on Schedule 3.03 (collectively, the “Company’s Approvals”), be in violation of or result in a breach of or default (or give rise to any right of termination, cancellation or acceleration) under (with or without the giving of notice, the lapse of time, or both) any material Contract to which the Company or any of the Company Subsidiaries is a party, except for (i) any such violations or defaults (or rights of termination, cancellation or acceleration) which would not have a material adverse impact on the Company, the Company Subsidiaries, their respective ability to develop the Projects, or the transactions contemplated hereby and (ii) approvals required as a result of the business activities of Buyer and its Affiliates; or

 

(c)                          (i) conflict with, violate or breach any term or provision of any Applicable Law applicable to the Company or any of the Company Subsidiaries, except as would not be material or (ii) require any consent or approval of any Governmental Authority, or notice to, or declaration, filing or registration with, any Governmental Authority, under any Applicable Law, other than (x) such consents, approvals, notices, declarations, filings or registrations which, if not made or obtained, would not have a material adverse impact on the Company, the Company Subsidiaries, their respective ability to develop the Projects, or the transactions contemplated hereby, (y) the Company Approvals and (z) such approvals required as a result of the business activities of Buyer and its Affiliates.

 

3.04.                     Subsidiaries.

 

(a)                         Schedule 3.04(a) sets forth the name, jurisdiction of incorporation or organization and the Company’s direct or indirect ownership percentage of each subsidiary of the Company (each, a “Company Subsidiary”). All outstanding Equity Securities of the Company Subsidiaries are validly issued, fully paid and nonassessable and were issued in compliance with all applicable securities laws and, except as set forth in Schedule 3.04(a), are owned by the Company or another Company Subsidiary free of preemptive (or similar) rights and free and clear of any Liens, except for Permitted Encumbrances.  Except as set forth in Schedule 3.04(a) (which schedule may be updated for any change in Subsidiary Securities permitted or consented to by Buyer in accordance with Section 6.02), there are no (i) Equity Securities of any Company Subsidiary issued or outstanding, (ii) securities convertible into or exchangeable or exercisable for Equity Securities of any Company Subsidiary, or (iii) subscriptions, options, warrants, calls, rights, convertible securities or other Contracts of any character obligating any Company Subsidiary to issue, transfer or sell any of its Equity Securities (the items in clauses (i), (ii) and (iii), collectively, “Subsidiary Securities”). The Organizational Documents of each Company Subsidiary of the date of this Agreement have been made available to Buyer.

 

(b)                         Except as provided herein or as set forth in Schedule 3.04(b), there are no (i) outstanding obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any Company Securities or Subsidiary Securities or (ii) outstanding obligations of the Company or any Company Subsidiary to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in the Company, any Company Subsidiary or any other Person.

 

(c)                          Except as set forth in the Seller Parent’s Disclosure Schedules, the Company has not engaged in any business, incurred any material capital expense or acquired any real or material personal property other than owning all of the membership interests of the Company Subsidiaries.

 

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(d)                         Schedule 3.04(d) lists all officers, directors and managers of the Company and each Company Subsidiary.

 

3.05.                     Financial Statements.  Seller Parent has delivered to Buyer true and complete copies of the following financial statements: (a) the audited consolidated balance sheet of the Company and the Company Subsidiaries as of March 31, 2014 and the related audited statement of comprehensive income and cash flows for the fiscal year then ended (the “Audited Financial Statements”); and (b) the unaudited consolidated balance sheet of the Company and the Company Subsidiaries as of December 31, 2014 (the “Balance Sheet”) and the related unaudited statements of operations and cash flows for the nine months then ended (clauses (a) and (b) collectively, the “Financial Statements”).  Except as set forth in the notes thereto, the Financial Statements were prepared in accordance with GAAP and fairly present in all material respects the financial condition and results of operations of the Company and the Company Subsidiaries as of the respective dates thereof and for the respective periods covered thereby, subject in the case of the interim financial statements to normal year-end adjustments and the absence of notes and other presentation items.

 

3.06.                     Liabilities.  Except for (a) the Transaction Expenses, (b) Liabilities incurred since the date of the Balance Sheet in the ordinary course of business, (c) Liabilities disclosed in Schedule 3.06, (d) Liabilities incurred pursuant to any Contract in the ordinary course of business (none of which involves a Liability that would constitute a breach of the representations set forth in Sections 3.08, 3.10(d), 3.14 or 3.15 or a Liability relating to a tort), and (e) Liabilities consented to by Buyer in accordance with Section 6.02 the Company and the Company Subsidiaries have no Liabilities that would be required to be reflected on the Balance Sheet prepared in accordance with GAAP which are not reflected or reserved against in the Balance Sheet.

 

3.07.                     Absence of Certain Changes.  Since the date of the Balance Sheet and until the date of this Agreement, except as disclosed in Schedule 3.07, (a) there has not occurred any circumstance, development, event or series of such occurrences that has had or would result in a Material Adverse Effect, (b) the Company and each Company Subsidiary has conducted their respective businesses only in the ordinary course of business and (c) neither the Company nor any Company Subsidiary has taken any action that, if taken after the date hereof, would require the prior written consent of Buyer pursuant to Section 6.02(a) (other than Section 6.02(a)(iii) and Section 6.02(a)(xiv)).

 

3.08.                     Legal Proceedings.  Except as set forth in Schedule 3.08, there are no Actions pending or, to the Knowledge of Seller Parent, threatened in writing against the Company or any Company Subsidiary, nor are there any outstanding Orders (other than Orders and requirements of Governmental Authorities in association with ordinary permitting, interconnection requests, module procurement and similar requirements for project development) that affect or bind the Company, any Company Subsidiary or any of their respective Properties and, in each case of this Section 3.08, would have a material adverse impact on the Company, the Company Subsidiaries, their respective ability to develop the Projects, or the transactions contemplated hereby.  In each place that “Action” is used in this Article III or Article IV, such term shall only include pending or threatened audits or investigations to the Knowledge of Seller Parent, and shall exclude review and approval of permit applications, certifications, reports and notices.

 

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3.09.                     Compliance with Applicable Laws.  Except as has been cured or otherwise resolved in all material respects, since January 1, 2010 and, to the Knowledge of Seller Parent prior to such date, the Company and the Company Subsidiaries have not violated and are in compliance with any Applicable Laws, except where any such violation would not be material.  The Company and each Company Subsidiary either is not a “holding company” under the Public utility Holding Company Act of 2005 or is a holding company that is entitled to the exemptions and waivers set forth at 18 C.F.R. § 366.3(a).  The Company and each Company Subsidiary is not a “public utility” under Section 201 of the Federal Power Act.  Each Company Subsidiary that owns generation facilities located within the United States either has obtained status as a qualifying small power producer pursuant to Section 3(17)(D) of the Federal Power Act and 18 C.F.R. Part 292 or as an exempt wholesale generator status pursuant to 18 C.F.R. § 366.7, and, if subject to and not exempt from Sections 205 and 206 of the Federal Power Act, has obtained market based rate authority pursuant to Section 205 of the Federal Power Act as necessary to conduct its business in compliance with all applicable Laws.

 

3.10.                     Company Contracts.

 

(a)                         Schedule 3.10(a) sets forth as of the date hereof a true and complete list of all of the following Contracts to which the Company or any Company Subsidiary is a party or by which it or its Assets may be bound, that is (i) Contracts pursuant to which the Company or any Company Subsidiary is obligated to pay or entitled to receive more than Two Hundred and Fifty Thousand U.S. Dollars ($250,000) over the life of the Contract, (ii) a Contract between the Company or any Company Subsidiary, on the one hand, and any Affiliate of the Company or any Company Subsidiary or any Representative, on the other hand, other than Company Employee Benefit Plans (including employment and retention agreements); (iii) any joint venture, teaming or similar agreement in connection with the development of any Project; (iv) any interconnection or transmission-related agreements or, to the extent an interconnection or transmission-related agreement has not be executed, any applications for interconnection or transmission of or from any Project, (v) any power purchase or sale agreement, hedge contract or REC contract, (vi) any agreements with any engineering, construction, design and/or procurement contractor, solar panel manufacturer or other material equipment supplier, utility, contractor or other third party; (vii) any Debt Obligation and material ancillary documents related thereto; (viii) any Contract that includes a “most favored pricing” or similar clause or other provision restricting the right of the Company or any Company Subsidiary to operate,  exclusivity agreement or other Contract which prohibits it from freely engaging in business anywhere in the world, including any exclusivity agreement with any construction contractor, solar panel manufacturer, supplier utility or contractor; (ix) any Contract respecting any partnership, joint venture, strategic alliance or other similar Contract or arrangement; (x) any Leases and Option Agreements (as defined below); (xi) provides for non-monetary obligations on the part of the Company or any Company Subsidiary, the non-performance of which obligations would reasonably be expected to have a Material Adverse Effect, other than Disclosed Title Matters; (xii) purchase and sale agreements and related material documents relating to the acquisition or sale by the Company or any Company Subsidiary of any solar project or substantially all of the assets relating to a solar project; (xiii) is a conciliation, settlement, or similar agreement with any Governmental Authority; (xiv) continuing grants any power of attorney; and (xv) each amendment, supplement and modification of any of the foregoing (collectively, the “Company Contracts”).

 

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(b)                         Seller Parent has provided Buyer with, or access to, true and complete copies of all Company Contracts except to the extent that providing a copy of such Company Contract would breach the confidentiality provisions set forth therein and each such Contract is set forth in Schedule 3.10(b), provided that Seller Parent has used commercially reasonable efforts to procure consent of the applicable counterparty thereto.

 

(c)                          Each of the Company Contracts constitutes a legal, valid and binding obligation of the Company or Company Subsidiary party thereto and, to the Knowledge of Seller Parent, of the other parties thereto, except (i) as limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, arrangement, moratorium or other similar Applicable Laws relating to or affecting the rights of creditors generally, or by general equitable principles (the “Enforceability Exceptions”), and (ii) in each case where the failure to constitute a legal, valid and binding obligation would not have a material adverse impact on the Company, the Company Subsidiaries, their respective ability to develop the Projects, or the transactions contemplated hereby.

 

(d)                         Neither Seller Parent, nor any of its Affiliates (which, for the avoidance of doubt, includes the Company and each Company Subsidiary) party to such Company Contract is in breach of or default of any material obligation under such Company Contract, and, to the Knowledge of Seller Parent, no event has occurred or otherwise exists that with notice or lapse of time would constitute a breach or default of any material obligation under such Company Contract by Seller, nor any of its Affiliates (which, for the avoidance of doubt, includes the Company and each Company Subsidiary) party to such Company Contract, or permit termination, modification, or acceleration of such Company Contract or any rights or obligations of Seller Parent or any such Affiliates of Seller Parent under such Company Contract.  Seller Parent has provided Buyer with, or access to, true and complete copies of all Company Contracts.

 

(e)                          To the Knowledge of Seller Parent, no party to any such Company Contract other than Seller Parent, nor any of its Affiliates (which, for the avoidance of doubt, includes the Company and each Company Subsidiary) is in breach of or default of any material obligation under such Company Contract by such other party, and, to the Knowledge of Seller Parent, no event has occurred or otherwise exists that with notice or lapse of time would constitute a breach or default by such other party, or permit termination, modification, or acceleration of such other party’s rights or obligations under such Company Contract.

 

(f)                           There are no amounts withheld or amounts for which a counterparty currently has a claim for offset against amounts otherwise due and payable under any Company Contract.

 

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(g)                          Neither the Company nor any Company Subsidiary has received from the applicable counterparty any written or, to the Knowledge of Seller Parent, oral notice of termination of, or intent to terminate, any Company Contract.

 

(h)                         Neither the Company nor any Company Subsidiary has received any written or, to the Knowledge of Seller Parent, oral notice from any other party to any of the Company Contracts that such other party is entitled to reduce in a material manner any amount to be paid by such party under such Company Contracts as a result of or in connection with any action taken or order issued by any Governmental Authority.

 

(i)                             Neither the Company nor any Company Subsidiary has a material outstanding claim or cause of action (including relating to availability), whether for liquidated damages or other monetary damages or otherwise, under any Company Contract (including a warranty agreement), and neither the Company nor any Company Subsidiary has received written, or to the Knowledge of Seller Parent, oral notice of any claim or cause of action (including relating to availability) against it, whether for liquidated damages or other monetary damages, under any Company Contract (including a power purchase or sale agreement).

 

(j)                            Schedule 3.10(j) sets forth the categories of Change in Control Payments.

 

3.11.                     Taxes.

 

(a)                         Except as set forth in Schedule 3.11:

 

(i)                                     All Tax Returns that were required to be filed by or with respect to the Company or the Company Subsidiaries have been timely filed (taking into account any extension of time within which to file) and all such Tax Returns are complete and accurate in all material respects.  None of the Company or any of the Company Subsidiaries is the beneficiary of any extension of time within which to file any Tax Return.

 

(ii)                                  All Taxes for which the Company or the Company Subsidiaries are liable have been timely paid (other than Taxes not yet due and payable).  Except as set forth on Schedule 3.11(a)(ii), the Company and the Company Subsidiaries have withheld and timely paid (including any withholding tax on payments made to Seller Parent or Seller) over to the appropriate Tax Authority all Taxes which they are required to withhold from amounts paid or owing to any employee, independent contractor, creditor or other third party.  The unpaid Taxes of the Company and the Company Subsidiaries do not exceed such reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) reflected on the face of the Balance Sheet as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of Seller Parent, Seller, the Company, and the Company Subsidiaries in filing Tax Returns.  Since the date of the Balance Sheet, neither the Company nor any Company Subsidiary has (i) changed a method of accounting for Tax purposes, (ii) surrendered any right to a Tax refund, (iii) changed an accounting period with respect to Taxes, (iv) filed an amended Tax Return, or (v) made, changed, or revoked any election with respect to Taxes.

 

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(iii)                               There are no Liens for Taxes (other than for current Taxes not yet delinquent) on any of the Company’s or any Company Subsidiary’s Properties, or on the membership interests in the Company.

 

(iv)                              No deficiencies for any Taxes have been proposed, asserted or assessed in writing against the Company or any Company Subsidiary that are still pending.

 

(v)                                 There are no outstanding agreements, waivers, arrangements or requests for such agreements, waivers or arrangements extending the statutory period of limitations applicable to any claim for, or period of collection or assessment of, Taxes of or with respect to the Company or any Company Subsidiary.

 

(vi)                              No written or, to the Knowledge of Seller Parent (based on personal contact with an agent of a Tax Authority), oral notice has been received by the Company or any Company Subsidiary indicating that any Tax Return of the Company or any Company Subsidiary is under current examination by any Tax Authority.

 

(vii)                           None of the Company or any Company Subsidiary has entered into any “listed transaction,” as defined in Treasury Regulation Section 1.6011-4(b)(2).

 

(viii)                        Other than with respect to Project Sales and any customary tax indemnification provisions in Company Contracts, none of the Company nor any Company Subsidiary (A) is a party to or has any liability under any tax sharing or tax indemnification agreement or (B) has any liability for Taxes of any other Person.

 

(ix)                              Each Company Subsidiary’s current classification for federal tax purposes is set forth on Schedule 3.11(a)(ix). The Company is currently classified as a disregarded entity for federal tax purposes and previously was classified as a partnership and a corporation for federal tax purposes.

 

(x)                                 Other than those Company Subsidiaries listed on Schedule 3.11(a)(x), no Company Subsidiary has received or applied for a cash grant in lieu of the available energy tax credit pursuant to Section 48 of the Code under the terms of Section 1603 of the American Recovery and Reinvestment Act of 2009, as amended, and any rules, regulations or other guidance promulgated thereunder.

 

(xi)                              Neither the Company nor any Company Subsidiary is or has been a “tax-exempt entity” within the meaning of Section 168(h)(2) of the Code (determined after application of Section 168(h)(2)(B) of the Code) or is a “tax-exempt controlled entity” within the meaning of Section 168(h)(6)(F)(iii) of the Code, unless such entity has made the election provided in Section 168(h)(6)(F)(ii) of the Code.

 

(xii)                           Except as set forth on Schedule 3.10(a), no power of attorney is currently in effect, and no Tax ruling has been requested of any Governmental Authority with respect to any Tax matter, relating to the Company or any Company Subsidiary.

 

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(xiii)                        The Company has not filed or been included as a member in a consolidated, unitary, or combined Tax Return with another Person, other than a group the common parent of which was the Company.

 

(xiv)                       No claim has ever been made by any Governmental Authority in a jurisdiction where the Company, any Company Subsidiary or Seller Parent does not file Tax Returns that the Company, any Company Subsidiary, or Seller Parent is or may be subject to Taxes assessed by such jurisdiction or that such Taxes may be assessed by such jurisdiction with respect to the Assets or activities of the Company or any Company Subsidiary.

 

(xv)                          Except as set forth on Schedule 3.11(a)(xv), neither the Company nor any Company Subsidiary has a permanent establishment in any country other than the United States or Canada.  Neither the Company nor any Company Subsidiary has participated in an international boycott, as defined in Section 999 of the Code.  Any intercompany transactions between or among the Company each Company Subsidiary or Seller Parent and its Affiliates (other than to the extent of any such transaction that for federal tax purposes is regarded as not having occurred) has used arm’s length prices and has satisfied all transfer pricing documentation requirements.

 

(xvi)                       No federal, state, local or other grant, financing, tax credit, or similar incentive, including any investment tax credit, production tax credit, or financing described in Section 45(b)(3) of the Code, has been applied for, claimed or received with respect to any Project or any of the Project Assets other than any operating Project or Project Assets of an operating Project.

 

(b)                         This Section 3.11 and Section 3.27 contain the sole and exclusive representations and warranties of Seller Parent with respect to Tax matters.

 

3.12.                     Employee Matters.

 

(a)                         Except as described in Schedule 3.12(a), (i) the Company and the Company Subsidiaries have not experienced any labor strikes or work stoppages by their employees due to labor disagreements in the last three (3) years and to the Knowledge of Seller Parent, none is currently pending; (ii) to the Knowledge of Seller Parent, the Company and the Company Subsidiaries are in compliance with all Applicable Laws respecting employment and employment practices, equal employment opportunity, occupational health and safety, terms and conditions of employment and wages and hours; (iii) the Company and the Company Subsidiaries have not received written notice from any Governmental Authority of any unfair labor practice charge, complaint or proceeding against the Company or any Company Subsidiary pending or threatened before the National Labor Relations Board or any other Governmental Authority with respect to their employees; and (iv) the Company and the Company Subsidiaries are not parties to any collective bargaining agreements.

 

(b)                         Schedule 3.12(b) contains a true and complete list of each Company Employee Benefit Plan.  With respect to each such Company Employee Benefit Plan, Seller Parent made available to Buyer a true and complete copy of all documents comprising such Company Employee Benefit Plan (or, to the extent no such copy exists, an accurate description) thereof, and, to the extent applicable, each of the following related thereto: (i) the most recent summary plan description and all summaries of material modifications, (ii) any related trust agreement, annuity contract, insurance contract or other funding instrument, (iii) any administrative service or other material agreements or documents related to the administration of such Company Employee Benefit Plan, (v) the most recent qualification letter, opinion letter or similar document issued by the Internal Revenue Service, (vi) the three most recent Form 5500 filings, with all schedules and attachments, and (vii) the annual discrimination testing report for the last three plan years.

 

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(c)                          Except as would not result in a Material Adverse Effect, no event has occurred and no condition exists with respect to any Company Employee Benefit Plan that would be reasonably likely to subject the Company or an ERISA Affiliate to any tax, fine, lien, penalty or other liability imposed by ERISA, the Code or other Applicable Law; and no Company Employee Benefit Plan is subject to Title IV of ERISA (including any Multiemployer Plan).  To the Knowledge of Seller Parent, no party to any such Company Employee Benefit Plan is in breach of or default of any material obligation under such Company Employee Benefit Plan, and, to the Knowledge of Seller Parent, no event has occurred or otherwise exists that with notice or lapse of time would constitute a breach or default by any party.  Neither the Company nor any Company Subsidiary has a material outstanding claim or cause of action, whether for liquidated damages or other monetary damages or otherwise, under any Company Employee Benefit Plan.

 

(d)                         The Internal Revenue Service has issued a currently effective favorable determination letter with respect to each Company Employee Benefit Plan that is intended to be a “qualified plan” within the meaning of Section 401 of the Code or the Company Employee Benefit Plan is in the form of a pre-approved master or prototype plan that is the subject of a favorable opinion letter, upon which the Company may rely, and each trust maintained pursuant thereto has been determined to be exempt from federal income taxation under Section 501 of the Code by the Internal Revenue Service. Each such Company Employee Benefit Plan has been timely amended since the date of the latest favorable determination letter or opinion letter in accordance with all Applicable Laws. Nothing has occurred with respect to the operation of any such Company Employee Benefit Plan that is reasonably likely to cause the loss of such qualification or exemption or the imposition of any liability, penalty or Tax under ERISA or the Code or the assertion of claims by “participants” (as that term is defined in Section 3(7) of ERISA) other than routine benefit claims.

 

(e)                          There are no claims (except claims for benefits payable in the ordinary course of business and proceedings with respect to qualified domestic relations orders), suits or proceedings pending or, to the Knowledge of Seller Parent, threatened against or involving any Company Employee Benefit Plan, asserting any rights or claims to benefits under any Company Employee Benefit Plan or asserting any claims against any administrator, fiduciary or sponsor thereof. There are no pending or, to the Knowledge of Seller Parent, threatened investigations by any Government Entity involving any Company Employee Benefit Plan. Neither the Company nor any ERISA Affiliate has any Liability or obligation, including under any Employee Benefit Plan, arising out of the hiring of individuals to provide services and treating such individuals as consultants or independent contractors and not employees for federal income tax or other purposes. There are no “leased employees” (as such term is defined in Section 414(n) of the Code) of the Company or any ERISA Affiliate.

 

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(f)                           All Company Employee Benefit Plans have been established, maintained and administered in accordance with their terms and with all provisions of Applicable Laws, including ERISA and the Code, except for instances of noncompliance where the costs associated with compliance or failing to comply, individually or in the aggregate, would reasonably not be expected to have a Material Adverse Effect on the Company or any ERISA Affiliate. All reports and information required to be filed with any Government Entity or provided to participants or their beneficiaries have been timely filed or disclosed and, when filed or disclosed, were accurate and complete. All contributions or premiums required to be made to, or benefit Liabilities arising under the terms of, each Company Employee Benefit Plan, including Liabilities for incurred, but not reported medical claims, for all periods have been made or adequately reserved for or have been accurately disclosed as Liabilities on the Financial Statements.

 

(g)                          Each Company Employee Benefit Plan that is a “non-qualified deferred compensation plan” (within the meaning of Section 409A(d)(1) of the Code) that is subject to Section 409A of the Code (“409A Plan”) has been operated in good faith compliance with Section 409A of the Code since January 1, 2005 and was, prior to January 1, 2009, amended to fully comply with the requirements of the final regulations promulgated under Section 409A of the Code. No Company Employee Benefit Plan that would be a 409A Plan but for the effective date provisions applicable to Section 409A of the Code as set forth in Section 885(d) of the American Jobs Creation Act of 2004, as amended (“AJCA”) has been “materially modified” within the meaning of section 885(d)(2)(B) of AJCA after October 3, 2004 or has been operated in violation of Section 409A. Neither the Company nor any ERISA Affiliate is required to provide any gross-up, make-whole, or other additional payment with respect to Taxes, interest or penalties imposed under any tax provisions, including Section 409A or Section 4999 of the Code.

 

(h)                         None of the Company Employee Benefit Plans promises or provides retiree medical or other retiree welfare benefits to any Person except as required by Applicable Law and neither the Company nor any ERISA Affiliate has represented, promised, or contracted to provide such retiree benefits to any employee, former employee, director, consultant or other Person, except as required by Applicable Law.

 

(i)                             Except as set forth in Schedule 3.12(i) or as required by applicable Law with respect to any Company Employee Benefit Plan, neither the execution of this Agreement nor the consummation of the transactions contemplated hereby (either alone or in conjunction with any other event) will: (i) increase any benefits otherwise payable under any Company Employee Benefit Plan, (ii) result in the acceleration of the time of payment or vesting of any such benefits, (iii) limit or prohibit the ability to amend or terminate any Company Employee Benefit Plan, (iv) require the funding of any trust or other funding vehicle, (v) renew or extend the term of any agreement in respect of compensation for an employee of the Company or any ERISA Affiliate that would create any Liability for Buyer after the Closing or (vi) result in any payment or benefits for any current or former Company Employee that may be considered “excess parachute payments” under Section 280G of the Code.

 

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(j)                            For each month for which the provisions of Code Section 4980H apply to the Company and each Company Subsidiary, the Company and each Company Subsidiary has taken commercially reasonable steps necessary to ensure that no tax could become due under Code Section 4980H, and has maintained adequate records to permit the Company and each Company Subsidiary to comply with its reporting obligations under Sections 6055 and 6056 of the Code.

 

(k)                         No Company Employee Benefit Plan is subject to the Applicable Law of any jurisdiction other than the United States or the Province of Ontario, Canada.

 

(l)                             With respect to each insurance policy that insures any benefits under any Company Employee Benefit Plan, such policy is valid and binding, no material premiums due and payable thereunder by the Company or a Company Subsidiary are unpaid and neither the Company nor any Company Subsidiary has received any notice of cancellation or termination in respect of any such policy or is in non-curable default under any such policy.

 

(m)                     Seller has provided Buyer as Schedule 3.12(m)(i), a true, correct and complete list of each of the employees and individual service providers holding positions at the Company or the Company Subsidiaries showing each such person’s name, position, location of employment, status as exempt/non-exempt, salary and target bonuses for the current fiscal year. Except as contemplated by this Agreement and as set forth on Schedule 3.12(m)(ii), to the Knowledge of Seller Parent, no employee of the Company or any of the Company Subsidiaries has given written notice to the Company or any of the Company Subsidiaries that any such employee shall terminate his or her employment or service with the Company or any of the Company Subsidiaries.  The employment of each of the employees of the Company or any of the Company Subsidiaries is “at will” and neither the Company nor any of the Company Subsidiaries has any obligation to provide any particular form or period of notice prior to terminating the employment of any of their respective employees.

 

3.13.                     Insurance.  Schedule 3.13 contains a true and complete list of all insurance policies currently in effect as of the date hereof that insure the business, operations, employees or Properties of the Company and the Company Subsidiaries, including the Projects, or affect or relate to the ownership, use or operation of any of the Properties of the Company and the Company Subsidiaries, including the Projects, and that have been issued to the Company and the Company Subsidiaries.  Each such policy is valid and binding, no material premiums due under any such policies have not been paid and neither the Company nor any Company Subsidiary has received any notice of cancellation or termination in respect of any such policy or is in default under any such policy.  No outstanding claims have been made under such policies.

 

3.14.                     Environmental Matters.  Except as set forth in Schedule 3.14: (a) the Company, the Company Subsidiaries and the Projects are, and, to the Knowledge of Seller Parent, other than with respect to Project Sales which have not resulted in any claims for non-compliance, have been for the past five (5) years, in compliance in all material respects with all applicable Environmental Laws; (b) the Company and the Company Subsidiaries have not received any written, or, to the Knowledge of Seller Parent, oral notice of, any material violations of Environmental Law or Environmental Liability relating to the Company, the Company Subsidiaries or the Projects; (c) to the Knowledge of Seller Parent, there are no events, conditions or circumstances which have resulted or would result in an Environmental Condition that will result in the imposition of any material Environmental Liability on the Company, the Company Subsidiaries or the Projects; and (f) Seller Parent has made available to Buyer copies of all material reports, assessments and analyses in the Company’s or any Company Subsidiary’s possession relating to Environmental Conditions, Environmental Liabilities and Government Approvals.  This Section 3.14 and Section 3.20 contain the sole and exclusive representations and warranties of Seller with respect to environmental matters.

 

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3.15.                     Intellectual Property.  Except as set forth in Schedule 3.15: (a) the Company or a Company Subsidiary owns or has the valid right to use all the Intellectual Property necessary to conduct their respective businesses as currently conducted free and clear of all Liens other than Permitted Liens; (b) the use of the Company IP by the Company and the Company Subsidiaries does not materially infringe the Intellectual Property of any third party and, to the Knowledge of Seller Parent, no third-party is infringing the Company IP; (c) no Action or Order is outstanding or pending or, to the Knowledge of Seller Parent, threatened that seeks to cancel, limit or challenge the ownership, use, validity or enforceability of any Company IP; and (d) the Company and the Company Subsidiaries have taken all customary steps (including executing non-disclosure and intellectual property assignment agreements and filing for statutory protections) to protect and maintain the Company IP.  Section 3.15, and Section 3.30 contain the sole and exclusive representations and warranties of Seller with respect to the Company IP.

 

3.16.                     Property.

 

(a)                         The Company and the Company Subsidiaries own in fee simple the real property described in Schedule 3.16(a), in each case subject only to Permitted Liens (the “Owned Real Property”).

 

(b)                         All leases of real property (each, a “Lease”) to which the Company or any Company Subsidiary is a party, as lessee, are listed in Schedule 3.16(b) (the Company’s or applicable Company Subsidiary’s interest in property which is leased pursuant to the Leases is referred to herein as the “Leased Real Property”).  Such Leases have not been assigned nor have the premises demised thereunder been subleased, in whole or in part, except as set forth in Schedule 3.16(b).  All leases of real property to which the Company or any Company Subsidiary is a party, as lessor, are separately listed in Schedule 3.16(b).  All options to purchase, option to lease, options to obtain an easement or other form of option agreement relating to real property to which the Company or any Company subsidiary is a party are listed in Schedule 3.16(b) (the “Option Agreements”). The Company’s or applicable Company Subsidiary’s interest in properties which are the subject of the Option Agreements are referred to herein as the “Optioned Real Property”, and the Owned Real Property, the Leased Real Property and the Optioned Real Property, the Company’s or applicable Company Subsidiary’s interest in all easements, tenancies, subleases, licenses, rights-of-way, occupancies, co-tenancies or other rights of possession collectively, are referred to herein as the “Real Property”.  Except for the Real Property, to the Knowledge of Seller Parent, there are no other beneficial real property interests such as leases, easements, tenancies, subleases, licenses, rights-of-way, occupancies, co-tenancies or other rights of possession or use in effect, oral or written which benefits such Site or the Project or any options for any of the foregoing. The Company and each Company Subsidiary has good and valid title or leasehold title (as applicable) to all of its respective personal property Assets (tangible and intangible), free and clear of all Liens other than Permitted Liens.  All payments required to be made by the Company and each Company Subsidiary under each Lease as of the Closing shall have been made by the Company or such Company Subsidiary on or before Closing.  None of the Owned Real Property and, to the Knowledge of Seller Parent, none of the other Real Property is subject to any Liens or other rights of third-parties, other than the Permitted Liens.

 

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(c)                          A Company Subsidiary holds good and valid leasehold title in and to the Sites that are the subject of the Leases as lessee under the Leases in each case subject only to Permitted Liens.  The Leases and Option Agreements are in full force and effect, and constitute valid and binding legal obligations enforceable against the Company Subsidiary party thereto and, to the Knowledge of Seller Parent, each other party thereto in accordance with their terms, and will not be rendered invalid or unenforceable as a result of the transactions contemplated hereby, except, in each case, as such enforceability may be limited by the Enforceability Exceptions.  There are no understandings, amendments, modifications or changes, oral or written, between the applicable Company Subsidiary and any of the parties to the Leases or Option Agreements which in any material manner vary the obligations or rights of the parties thereunder.  Schedule 3.16(c) sets forth the current status of mineral rights and site control (including waivers of surface access with respect to mineral rights) with respect to all Real Property for the Near-Term Projects. Except as separately listed in Schedule 3.16(c), to Knowledge of Seller Parent based on current facts and circumstances, the Company or a Company Subsidiary has acquired sufficient mineral rights (or has acquired sufficient waivers of surface access with respect to mineral rights) to enable Stewart Title Guaranty Company, Fidelity National Title Company or another nationally recognized title insurance company to issue policies of title insurance with ALTA endorsement 35.3-06 with respect to all material Real Property necessary to develop, construct and operate the Near-Term Projects.  To the Knowledge of Seller Parent, the uses currently proposed to be made of the Real Property in connection with the Projects are or will be authorized under existing environmental, zoning, flood control and other land use regulations applicable to the relevant Real Property and Project.  To the Knowledge of Seller Parent, there are no zoning or other land use proceedings (including condemnation proceedings), either instituted or, planned to be instituted, that would preclude or materially and adversely affect the use, development and/or operation of the applicable Real Property for the applicable Project.

 

(d)                         To the Knowledge of Seller Parent, there is no writ, injunction, decree, order, award, ruling, stipulation or judgment outstanding, nor any Action pending or threatened relating to the ownership, lease, use, occupancy or operation of any Owned Real Property or, to the Knowledge of Seller Parent, any other Real Property, except as disclosed on Schedule 3.08.  None of Seller, the Company or any Company Subsidiary has received any written notice of any of the following, and, to the Knowledge of Seller Parent, none of the following events or conditions have occurred or currently exist: any written claims from any Governmental Authority having jurisdiction over the Projects or the real Property or from any Person who will provide utility service to the Real Property, that there are not sufficient easements and rights-of-way required for the operation of the Projects in the ordinary course, to provide ingress and egress to and from the Real Property, or for the applicable Company Subsidiary to satisfy its obligations under any Company Contracts.

 

(e)                          All Owned Real Property and, to the Knowledge of Seller Parent, all other Real Property is currently being maintained in all material respects in accordance with Applicable Laws, and none of Seller, the Company or any Company Subsidiary have received any notification that any Real Property is currently in violation of any Applicable Law with respect to such Real Property.  Except as set forth in the Leases and Option Agreements, there are no rents, royalties, fees or other amounts incurred, payable or receivable by any Company Subsidiary in connection with the Real Property other than Permitted Liens and Taxes.

 

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(f)                           Except as set forth on Schedule 3.16(f), to Knowledge of Seller Parent based on current facts and circumstances, (a) the Real Property constitutes all of the real property interests reasonably necessary to develop, construct, use and operate all of the Near-Term Projects and (b) such real property interests are sufficient in all material respects for the applicable Company Subsidiaries to access, develop, install, construct, own and operate all of the Near-Term Projects as contemplated by the Company Contracts and any other contracts or agreements to be entered into by the Company Subsidiaries in connection with the Near-Term Projects, including for the sale of electricity and Environmental Attributes generated by or associated with the Near-Term Projects.  Except as set forth on Schedule 3.16(a) and Schedule 3.16(b), none of the Company or any Company Subsidiary owns, leases, licenses or otherwise has interests (including option interests) in any other real property other than the Real Property.

 

(g)                          The Company and each Company Subsidiary has good and marketable title or leasehold interests, as applicable, to their respective personal property Assets, free and clear of any and all Liens (other than Permitted Liens).

 

3.17.                     Condemnation.  Except as set forth in Schedule 3.17, neither the Company nor any Company Subsidiary has received written notice from any Governmental Authority of any pending or threatened proceeding to condemn or take by power of eminent domain or otherwise, by any Governmental Authority, all or any material part of the Properties.

 

3.18.                     Related Party Transactions.  Except as set forth on Schedule 3.18, no officer, manager or director of the Company or any Company Subsidiary: (a) owns, directly or indirectly, any of the outstanding Equity Securities of any Person that furnished or sold, or furnishes or sells, material services, products, land or technology to the Company or any Company Subsidiary for use in the Projects, (b) owns, directly or indirectly, any outstanding Equity Securities of any Person that purchases from or sells or furnishes to the Company or any Company Subsidiary any material goods or services used in the Projects, or (c) is party to any material Contract with the Company or any Company Subsidiary (other than the Organizational Documents, Contracts with respect to Change in Control Payments, and employment, confidentiality and indemnification Contracts with Company Employees).

 

3.19.                     Brokers.  Neither the Company nor any Company Subsidiary has any Liability to pay fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

 

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3.20.                     Governmental Approvals.  True and correct copies of each material Governmental Approval that has been obtained by or for the benefit of the Company Subsidiaries for the Projects have been made available to Buyer.  All material Governmental Approvals necessary for the construction, development, ownership and operation of the Projects have been obtained, except for Governmental Approvals not yet required as of the date that this representation is made based on current stage of development of such Project.  All such material discretionary Governmental Approvals issued or to be issued in the Company’s or a Company Subsidiaries’ name necessary for the construction, development, ownership and operation to the Near-Term Projects are set forth on Part I of Schedule 3.20.  Each Governmental Approval required to be held currently by the Company or any Company Subsidiary based on the current stage of development of the relevant Project and held by the Company or any Company Subsidiary is in full force and effect and, to the Knowledge of Seller Parent, not subject to any current Action that could reasonably be expected to allow any material modification or revocation thereof.  If the Applicable Law pursuant to which a Governmental Approval was issued specified a period of limited administrative or judicial appeal, except as set forth on Part II of Schedule 3.20, all such appeal periods have expired with respect thereto, and, to the Knowledge of Seller Parent, neither the Company nor any such Company Subsidiary is in violation of any such Governmental Approvals which would not have a material adverse impact on the Company, the Company Subsidiaries, their respective ability to develop the Projects, or the transactions contemplated hereby. There are no Actions pending, or to the Knowledge of Seller Parent threatened, which might reasonably be expected to result in the revocation or termination of any such Governmental Approval currently held by the Company or any Company Subsidiary in respect of the applicable Project or the imposition of any material penalty or condition thereunder.  To the Knowledge of Seller Parent, no event has occurred and is continuing that constitutes, or after notice or lapse of time or both would constitute, any material violation of any such Governmental Approval, or could reasonably be expected to result in a material adverse modification, revocation, or termination of, or any other material adverse change in, any such Governmental Approval.  To the Knowledge of Seller Parent, there are no specific circumstances directly related to a Governmental Approval which is required, has been applied for and has not yet been issued that would give a reasonable person reason to believe that such Governmental Approval would not be issued in due course in a form substantially conforming to the form of Governmental Approval for which the Company or relevant Company Subsidiary applied, acknowledging that some Governmental Approvals may be discretionary.

 

3.21.                     Debt Obligations.  Except as set forth in Schedule 3.21, neither the Company nor any Company Subsidiary has any Debt Obligations.

 

3.22.                     Project Interconnection.  The interconnection queue positions held by the Company Subsidiaries and any Affiliate in respect of a Project, and all material written agreements, studies and reports in the Company or the Company Subsidiaries’ possession entered into or issued by the applicable interconnection or transmission provider in connection with such queue positions or the Projects, are as listed on Schedule 3.22.  Other than as disclosed in the documents listed on Schedule 3.22, neither the Company, Company Subsidiaries nor any Affiliate has received written notice (or, to the Knowledge of Seller Parent, any oral notice) from the applicable interconnection or transmission provider specific to a Project, that the such interconnection or transmission provider has taken or has determined to take any action with respect to termination of such queue positions or the rights under any agreements set forth on Schedule 3.22.  The Company, Company Subsidiaries or any Affiliates, as applicable, have timely made all material deposits and other payments, and filed all material reports and other information, required in order to maintain such interconnection queue positions and interconnection and transmission rights in the documents listed on Schedule 3.22.

 

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3.23.                     Books and Records.  The Books and Records have been kept and maintained in all material respects as required by Applicable Laws, and contain true, correct and complete copies of the governing documents, material meetings and consents in lieu of meetings of the members or managers of the Company and each Company Subsidiary, and such records accurately reflect in all material respects all transactions referred to in such minutes and consents.

 

3.24.                     Bank Accounts.  Schedule 3.24 contains a true and correct list of the names of all banks and other financial institutions in which the Company or any Company Subsidiary currently has an account, deposit or safe deposit box, along with the account numbers and the names of all Persons holding check signing or withdrawal power or access thereto or control thereunder.

 

3.25.                     Foreign Corrupt Practices Act.  Except as set forth on Schedule 3.25, Neither the Company nor any Company Subsidiary or any of their respective directors, officers, employees or, to the Knowledge of Seller Parent, any agents or any other Persons acting on their behalf has, in connection with the operation of their respective businesses, (a) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activity to foreign officials, candidates or members of any Governmental Authority or political party or organization, or established or maintained any unlawful or unrecorded funds in violation of Section 104 of the Foreign Corrupt Practices Act of 1977, as amended, or any other similar applicable Law, or (b) violated in any material respect or operated in material non-compliance with any export restrictions, anti-boycott regulations, embargo regulations or other similar Laws.

 

3.26.                     Hedging.  Except as set forth in Schedule 3.26, neither the Company nor any Company Subsidiary has executed any physical or financial electricity hedge contracts, currency or interest rate hedge contracts, exchange-traded futures or options transactions, over-the-counter transactions or derivatives thereof, interest rate swap agreements, trades or similar transactions.

 

3.27.                     Project Sales.  There are no outstanding indemnification claims or payments, purchase price payments or purchase price adjustments (including earn-outs and similar post-closing adjustments) to be made to or by any Person with respect to any of the Project Sales for which Seller Parent, Seller, the Company or Company Subsidiary is liable. There are no indemnification claims or indemnification payments, purchase price payments or purchase price adjustments (including earn-outs and similar post-closing adjustments) that will in the future be required to be made to or by any Person with respect to any of the Project Sales for which Seller Parent, Seller, the Company or Company Subsidiary is or will be liable.

 

3.28.                     Environmental Attributes.  Except as set forth in Schedule 3.28, and other than pursuant to the power purchase agreements listed on Schedule 3.10(a), (a) the Company Contracts do not convey any Environmental Attributes of the Projects to any Person and (b) the Projects retain full title to all Environmental Attributes associated with the Project Assets and (c) nothing in the Company Contracts, and nothing about the Project Assets, prevent the Projects from selling Environmental Attributes, including RECs.

 

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3.29.                     Accuracy of Information.  The representations and warranties given by Seller Parent in this Agreement or any certificate, document or other instrument delivered by Seller Parent or Seller hereunder, do not contain any untrue statement of material fact, nor to the Knowledge of Seller Parent, do they omit to state a material fact necessary to make the statements or facts contained herein or therein, in light of the circumstances under which they were made, not misleading, taken as a whole.  Except as set forth in the Schedules to this Agreement, to the Knowledge of Seller, there is no material fact with respect to the development, construction and operation of any Project that has not been disclosed to Buyer that could reasonably be expected to have a Material Adverse Effect.

 

3.30.                     Confidential Information Protection.  The Company and the Company Subsidiaries have taken all commercially reasonable steps to protect and preserve the confidentiality of all trade secrets and other confidential or non-public information of the Company and the Company Subsidiaries or provided by any third party to the Company or the Company Subsidiaries (“Target Group Confidential Information”).  All current and former employees and contractors of the Company and the Company Subsidiaries and third parties having access to Confidential Information have executed and delivered to the Company or the Company Subsidiaries a written legally binding agreement regarding the protection of such Target Group Confidential Information.  The Company and the Company Subsidiaries have implemented and maintain a reasonable security plan consistent with industry practices of companies offering similar products or services.  To the Knowledge of Seller Parent, the Company and the Company Subsidiaries have not experienced any breach of security or otherwise unauthorized access by third parties to the Target Group Confidential Information in the possession, custody or control of the Company and the Company Subsidiaries.

 

ARTICLE IV.
 REPRESENTATIONS AND WARRANTIES OF SELLER PARENT RELATING TO SELLER PARENT AND SELLER

 

Seller Parent represents and warrants to Buyer as of the date of this Agreement and the Closing Date as follows:

 

4.01.                     Organization; Qualification.  Each of Seller and Seller Parent is duly formed, validly existing and in good standing under the Applicable Laws of its jurisdiction of organization, and has all requisite organizational power and authority to conduct its business as it is now being conducted and to own, lease and operate its Properties.

 

4.02.                     Authority; Enforceability.  Each of Seller and Seller Parent has all requisite organizational power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery by Seller and Seller Parent of this Agreement and the performance by Seller and Seller Parent of its obligations hereunder have been duly and validly authorized by all necessary organizational action.  This Agreement has been duly and validly executed and delivered by Seller Parent and Seller and constitutes the legal, valid and binding obligation of Seller Parent and Seller enforceable against Seller Parent and Seller in accordance with its terms, except as limited by the Enforceability Exceptions.

 

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4.03.                     No Conflicts; Consents and Approvals.  The execution and delivery by Seller Parent and Seller of this Agreement does not, and the performance by Seller Parent and Seller of their respective obligations under this Agreement will not:

 

(a)                         conflict with or result in a violation or breach of any of the terms, conditions or provisions of the Organizational Documents of Seller Parent or Seller;

 

(b)                         subject to the receipt or making of the required filings, waivers, approvals, consents, authorizations and notices set forth on Schedule 4.03 (collectively, the “Seller Parent’s and Seller’s Approvals”), be in violation of or result in a breach of or default (or give rise to any right of termination, cancellation or acceleration) under (with or without the giving of notice, the lapse of time, or both) any material Contract to which Seller Parent or Seller is a party, except for any such violations or defaults (or rights of termination, cancellation or acceleration) which would not, individually or in the aggregate, result in a material adverse effect on Seller Parent’s or Seller’s ability to perform its obligations hereunder; or

 

(c)                          assuming all of the Seller Parent’s and Seller’s Approvals and other notifications provided in the ordinary course of business have been made, obtained or given (i) conflict with, violate or breach any term or provision of any Applicable Law applicable to Seller or Seller Parent, except as would not, individually or in the aggregate, result in a material adverse effect on Seller’s or Seller Parent’s ability to perform its obligations hereunder or (ii) require any consent or approval of any Governmental Authority, or notice to, or declaration, filing or registration with, any Governmental Authority, under any Applicable Law, other than such consents, approvals, notices, declarations, filings or registrations which, if not made or obtained, would not, individually or in the aggregate, result in a material adverse effect on Seller’s or Seller Parent’s ability to perform its obligations hereunder.

 

4.04.                     Legal Proceedings.  As of the date hereof, there are no Actions pending or, to the Knowledge of Seller Parent, threatened in writing against Seller Parent or Seller, nor are there any outstanding Orders that affect or bind Seller Parent, Seller or any of their Properties, that would result in the issuance of an Order restraining, enjoining or otherwise prohibiting or making illegal the performance by Seller Parent or Seller of its respective obligations under this Agreement.

 

4.05.                     No Other Representations or Warranties.  Except for the representations and warranties set forth in Article III and this Article IV, Seller Parent does not make any other express or implied representation or warranty.  Seller does not make any express or implied representation or warranty.

 

4.06.                     Solvency.  No petition or notice has been presented, no order has been made and no resolution has been passed for the bankruptcy, liquidation, winding-up or dissolution of Seller.  No receiver, trustee, custodian or similar fiduciary has been appointed over the whole or any part of Seller’s Assets or the income of Seller.  Seller has no plan or intention of, or has received any notice that any other Person has any plan or intention of, filing, making or obtaining any such petition, notice, order or resolution or of seeking the appointment of a receiver, trustee, custodian or similar fiduciary.

 

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ARTICLE V.
 REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer hereby represents and warrants to Seller Parent as of the date of this Agreement and the Closing Date as follows:

 

5.01.                     Organization; Qualification.  Buyer is an organization duly formed, validly existing and in good standing under the Applicable Laws of its jurisdiction of organization, and has all requisite organizational power and authority to conduct its business as it is now being conducted and to own, lease and operate its Properties.

 

5.02.                     Authority; Enforceability.  Buyer has all requisite organizational power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery by Buyer of this Agreement and the performance by Buyer of its obligations hereunder have been duly and validly authorized by all necessary organizational action.  This Agreement has been duly and validly executed and delivered by Buyer and constitutes the legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except as limited by the Enforceability Exceptions.

 

5.03.                     No Conflicts; Consents and Approvals.  The execution and delivery by Buyer of this Agreement do not, and the performance by Buyer of its obligations under this Agreement will not:

 

(a)                         conflict with or result in a violation or breach of any of the terms, conditions or provisions of the Organizational Documents of Buyer;

 

(b)                         assuming all required filings, waivers, approvals, consents, authorizations and notices set forth on Schedule 5.03 (collectively, the “Buyer’s Approvals”) have been obtained, be in violation of or result in a breach of or default (or give rise to any right of termination, cancellation or acceleration) under (with or without the giving of notice, the lapse of time, or both) any material Contract to which Buyer is a party, except for any such violations or defaults (or rights of termination, cancellation or acceleration) which would not, individually or in the aggregate, result in a material adverse effect on Buyer’s ability to perform its obligations hereunder; or

 

(c)                          assuming all of the Buyer’s Approvals and other notifications provided in the ordinary course of business have been made, obtained or given (i) conflict with, violate or breach any term or provision of any Applicable Law applicable to Buyer, except as would not, individually or in the aggregate, result in a material adverse effect on Buyer’s ability to perform its obligations hereunder or (ii) require any consent or approval of any Governmental Authority, or notice to, or declaration, filing or registration with, any Governmental Authority, under any Applicable Law, other than such consents, approvals, notices, declarations, filings or registrations which, if not made or obtained, would not, individually or in the aggregate, result in a material adverse effect on Buyer’s ability to perform its obligations hereunder.

 

5.04.                     Legal Proceedings.  As of the date hereof, there are no Actions pending or, to the knowledge of Buyer, threatened in writing against Buyer, nor are there any outstanding Orders that affect or bind Buyer or any of its Properties, that would result in the issuance of an Order restraining, enjoining or otherwise prohibiting or making illegal the performance by Buyer of its obligations under this Agreement.

 

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5.05.                     Investment Representations.  Buyer is an investor experienced (or owned or managed by Persons experienced) in evaluating investments and, in particular (either on its own or with advisors), power generation facilities and has the knowledge, experience and resources to enable it to evaluate and to bear the risks of the investment represented by the Shares.

 

5.06.                     Brokers.  Except for the fees due Credit Suisse (Hong Kong) Limited (which are payable by Buyer)], all negotiations relating to this Agreement have been carried out by Buyer directly with Seller Parent and Seller without the intervention of any Person on behalf of Buyer in such manner as to give rise to any valid claim by any Person against Seller Parent, Seller, the Company or any Company Subsidiary for a finder’s fee, brokerage commission or similar payment.

 

5.07.                     Availability of Funds.  Buyer has sufficient funds available to it to pay the Total Purchase Price and the fees and expenses of Buyer related to the transactions contemplated by this Agreement and to enable Buyer to perform all of its obligations under this Agreement.  Buyer knows of no circumstance or condition that could be reasonably expected to prevent the availability at the Closing of such cash.  Buyer acknowledges and agrees that notwithstanding anything to the contrary contained herein, its obligation to consummate the transactions contemplated hereby is not subject to any financing contingency or condition. Buyer has neither knowledge nor reason to suspect that the monies used to fund the purchase of the Company or the transactions contemplated hereby have been or will be derived from or related to any illegal activities, including money laundering activities.

 

5.08.                     Waiver of Other Representations.  EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLES III AND IV, THE COMPANY IS SOLD “AS IS, WHERE IS,” AND THE COMPANY, SELLER PARENT AND SELLER EXPRESSLY DISCLAIM ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE LIABILITIES, OPERATIONS, TITLE, CONDITION, VALUE OR QUALITY OF THE PROPERTIES OF THE COMPANY OR ANY COMPANY SUBSIDIARY OR THE PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND OTHER INCIDENTS OF OWNERSHIP OF THE COMPANY, THE COMPANY SUBSIDIARIES, THE PROJECTS, THE PROPERTIES OF THE COMPANY OR ANY COMPANY SUBSIDIARY AND THE BUSINESS OF THE COMPANY OR ANY COMPANY SUBSIDIARY, INCLUDING, WITH RESPECT TO THE ACTUAL OR RATED GENERATING CAPABILITY OF THE PROJECTS OR THE ABILITY OF SELLER PARENT OR SELLER TO SELL FROM THE PROJECTS ELECTRIC ENERGY, CAPACITY, RENEWABLE ATTRIBUTES OR OTHER PRODUCTS RECOGNIZED BY ANY INDEPENDENT MARKET ADMINISTRATOR FROM TIME TO TIME, AND THE COMPANY AND SELLER SPECIFICALLY DISCLAIM ANY REPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY, USAGE, OR SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE PROJECTS AND THE PROPERTIES OF THE COMPANY OR ANY COMPANY SUBSIDIARY, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS, OR AS TO THE CONDITION OF THE PROJECTS AND THE PROPERTIES OF THE COMPANY OR ANY COMPANY SUBSIDIARY, OR ANY PART THEREOF, IN EACH CASE EXCEPT AS SET FORTH IN THIS AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE COMPANY, SELLER PARENT AND SELLER EXPRESSLY DISCLAIM ANY REPRESENTATION OR WARRANTIES OF ANY KIND REGARDING THE SUITABILITY OF THE PROJECTS FOR OPERATION AS POWER PLANTS OR AS SITES FOR THE DEVELOPMENT OF GENERATION CAPACITY.  THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLES III AND IV CONSTITUTE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES OF SELLER PARENT IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY AND NO MATERIAL OR INFORMATION PROVIDED BY OR COMMUNICATIONS MADE BY THE COMPANY, SELLER PARENT, SELLER, ANY COMPANY SUBSIDIARY OR ANY BROKER OR INVESTMENT BANKER, INCLUDING INFORMATION IN THE DATA ROOM, AND ANY ORAL, WRITTEN OR ELECTRONIC RESPONSE TO ANY INFORMATION REQUEST PROVIDED TO SELLER PARENT OR SELLER WILL CAUSE OR CREATE ANY WARRANTY, EXPRESS OR IMPLIED.  BUYER HAS CONDUCTED ITS OWN INDEPENDENT REVIEW AND ANALYSIS OF THE BUSINESS, OPERATIONS, ASSETS, LIABILITIES, RESULTS OF OPERATIONS, FINANCIAL CONDITION, TECHNOLOGY AND PROSPECTS OF THE COMPANY AND THE COMPANY SUBSIDIARIES AND ACKNOWLEDGES THAT BUYER HAS BEEN PROVIDED ACCESS TO PERSONNEL, PROPERTIES, PREMISES AND RECORDS OF THE COMPANY AND THE COMPANY SUBSIDIARIES FOR SUCH PURPOSE.  IN ENTERING INTO THIS AGREEMENT, BUYER HAS RELIED UPON, AMONG OTHER THINGS, ITS DUE DILIGENCE INVESTIGATION AND ANALYSIS OF THE COMPANY, THE COMPANY SUBSIDIARIES AND EACH OF THEIR RESPECTIVE BUSINESSES.

 

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ARTICLE VI.
 COVENANTS OF THE PARTIES

 

6.01.                     Investigation by Buyer.  From and after the date hereof until the Closing Date or earlier termination of this Agreement (the “Interim Period”), Seller Parent will provide Buyer and its Representatives with reasonable access, upon reasonable prior notice and during normal business hours, to all officers and employees of the Company and the Company Subsidiaries and their respective Properties, Projects and Sites (provided, however, that Buyer shall not be entitled to collect any air, soil, surface water or ground water samples nor to perform any invasive or destructive sampling on the Sites) and the Books and Records relating to the Company and the Company Subsidiaries, but only to the extent that such access does not unreasonably interfere with the business and operations of the Company and the Company Subsidiaries; provided, however, that (a) Seller Parent shall have the right to (i) have a Representative present for any communication with employees or officers of the Company or any Company Subsidiary and (ii) impose reasonable restrictions and requirements for safety purposes and (b) Seller Parent shall not be required to provide access to any information that is (i) subject to attorney-client privilege to the extent doing so would cause such privilege to be waived, (ii) prohibited by Applicable Law or (iii) subject to contractual prohibitions against disclosure to the extent doing so would violate such prohibition (after Seller has used commercially reasonable efforts to obtain the consent of the other party to disclose such information and such consent has been denied).  In addition, upon reasonable advance request from Buyer for purposes of a smooth and efficient transfer and integration of the business the Company and the Company Subsidiaries and other reasonable purposes, Seller Parent shall use its commercially reasonable efforts to arrange meetings (whether telephonic or in person) with customers and suppliers of the Company and the Company Subsidiaries, provided that (i) Buyer shall consult with the Company regarding the topics for discussion at such meetings and Seller Parent shall have the right to have Representatives present at any such meetings, (ii) Seller Parent may reasonably limit the number of individuals and the number of meetings and (iii) Buyer shall coordinate all such meetings with one or more Persons designated by the Company or Seller Parent.  All such access and information obtained as a result of such access shall be subject to the terms and conditions of the Nondisclosure Agreement.  Except to the extent arising from or relating to the actions of Seller Parent, Seller, the Company, the Company Subsidiaries, their Affiliates and their Representatives, Buyer agrees to indemnify and hold harmless Seller Parent, Seller, the Company, the Company Subsidiaries, their Affiliates and their Representatives for any and all Losses to the extent arising out of the access rights under this Section 6.01, including any Losses by Seller Parent, Seller, the Company, the Company Subsidiaries, their Affiliates and their Representatives for any injuries or property damage while present at the Projects.

 

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6.02.                     Certain Restrictions.

 

(a)                         During the Interim Period, except as set forth in Schedule 6.02(a) or unless otherwise contemplated by this Agreement, Seller shall cause the Company and each Company Subsidiary to operate and maintain their Properties in the ordinary course consistent with past practice and the Pre-Approved Expenditures and will refrain from taking any of the following actions without Buyer’s consent (which consent shall not be unreasonably withheld, delayed or conditioned):

 

(i)                                     except as set forth in Section 7.13, amending its Organizational Documents or undertaking any recapitalization, reorganization, liquidation, dissolution or winding up (provided that this clause (i) shall not restrict the Company or any Company Subsidiary from dissolving or renaming any Company Subsidiary or transferring the Equity Interest of such Company Subsidiary to the Company or another Company Subsidiary in the ordinary course of business consistent with past practice);

 

(ii)                                  other than as permitted by the Pre-Approved Expenditures, acquiring any Properties or disposing of any Properties of the Company or any Company Subsidiary (other than acquisitions or dispositions of spare equipment not to exceed Five Hundred Thousand U.S. Dollars ($500,000.00) in the aggregate), or incurring any Liens or permitting any Liens to be imposed on any material Property of the Company or any Company Subsidiary other than Permitted Liens and Liens to support letters of credit or Debt Obligations permitted under Section 6.02(a)(iv);

 

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(iii)                               entering into any Contract that would be a Company Contract if in existence on the date hereof or amending, modifying or terminating (partially or completely) any material obligation or cost in any Company Contract; provided, however, that nothing in this clause shall inhibit the ability of the Company or any Company Subsidiary to (A) enter into any module supply agreement for any of the Near-Term Projects except for the RE Garland A LLC Project, RE Garland B LLC Project and RE Garland C Project (each as defined in Schedule 1.01(b) with a Tier 1 Supplier so long as (i) the cost of modules is less than or equal to the cost under, (ii) the terms of such module supply agreement (including module cost), taken as a whole, are not materially more adverse to the Company or Company Subsidiary than those set forth in, the module supply arrangement offered by CSI to the Company in an email from Thomas Koerner to Hendrick Lo on January 15, 2015 and (iii) the Tier 1 Supplier is not permitted to terminate such module supply agreement as a result of Buyer’s acquisition of the Company or (B) enter into, amend, modify or terminate Contracts (1) as required by a Governmental Authority, (2) as may be required by Applicable Law, or (3) in the ordinary course of business as permitted by the Pre-Approved Expenditures.

 

(iv)                              except as permitted by the Pre-Approved Expenditures, incurring Debt Obligations in an aggregate principal amount exceeding the amount set forth on Schedule 1.01(g);

 

(v)                                 merging or consolidating with any other Person;

 

(vi)                              other than as contemplated by this Agreement or undertaken in the ordinary course of business, canceling any debts owed to the Company or any Company Subsidiary, or waiving any claims or rights, having a value in the aggregate in excess of Five Hundred Thousand U. S. Dollars ($500,000) in the aggregate;

 

(vii)                           settling or compromising any material Tax or making any new, or changing any existing, material Tax election;

 

(viii)                        increasing the level of wages, overall compensation or other benefits of any Company Employees (except for previously communicated increases and spot bonuses that do not exceed the amount permitted by the Pre-Approved Expenditures);

 

(ix)                              establishing a 2015 Annual Incentive Plan (A) with goals that are materially easier to achieve than the goals historically established by the Company or (B) with terms and conditions that place any limitations on the Company, or that give any Company Employee a better right to payment, than the provisions that have historically been included in the Company’s annual incentive plans;

 

(x)                                 establishing, entering into or amending (other than amendments required by Applicable Law) any plan or contract that would be considered a Company Employee Benefit Plan that would materially increase the benefits thereunder or the costs to the Company or a Company Subsidiary;

 

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(xi)                              failing to maintain insurance coverage substantially equivalent to its existing insurance coverage of its Properties as in effect on the date hereof unless such insurance coverage is not available on commercially reasonable terms;

 

(xii)                           changing in any material respect the Company or any Company Subsidiary’s accounting methods or practices other than as required by GAAP;

 

(xiii)                        declaring or paying any dividends or distributions;

 

(xiv)                       making any expenditures, loans or advances that are not Pre-Approved Expenditures;

 

(xv)                          enter into any separation or similar agreement with any employee of the Company or any Company Subsidiary;

 

(xvi)                       in connection with any Debt Obligations between the Company or any Company Subsidiary, on the one hand, and Seller Parent or any other Affiliate of Seller Parent (other than the Company or any Company Subsidiary), on the other hand, charge the Company or any Company Subsidiary any interest or other expense that is not consistent with an arm’s length transaction; or

 

(xvii)                    agreeing or committing in writing to do or engage in any of the foregoing.

 

(b)                         Without limiting Seller Parent’s or Seller’s obligations under this Agreement, including this Section 6.02, nothing contained in this Agreement shall give Buyer, directly or indirectly, the right to control or direct the Company’s or any Company Subsidiary’s operations prior to the Closing.  Prior to the Closing and subject to Seller Parent’s and Seller’s obligations under this Agreement and Section 6.02, Seller shall cause the management of the Company Subsidiaries to exercise, consistent with and in accordance with the terms and conditions of this Agreement and as permitted by the Pre-Approved Expenditures, complete control and supervision over the operations of the Company and the Company Subsidiaries.

 

(c)                          During the Interim Period, Seller Parent shall provide Buyer with a weekly report with respect to the items identified on Exhibit C.

 

(d)                         During the Interim Period, without limiting the obligations of Seller Parent or Seller under this Section 6.02, Seller shall the Company and each Company Subsidiary to (i) use commercially reasonable efforts to take all actions reasonably necessary at the stage of development of each Project to further the development of such Project, (ii) use commercially reasonable efforts to maintain all existing relationships with the material agents, customers and vendors of the Company and each Company Subsidiary and any Government Approvals or interconnection or transmission rights or positions and (iii) pay all accounts payable and other obligations as they become due and payable in the ordinary course and consistent with past practice.

 

(e)                          During the Interim Period, Seller Parent shall promptly notify Buyer (in writing after Seller Parent or Seller has notice thereof), and Buyer shall promptly notify Seller Parent (in writing after Buyer has notice thereof), and keep such other Party advised, as to (i) any Action pending and known to such Party or, to its knowledge, threatened against such Party that challenges the transactions contemplated hereby, (ii) any notice or other communication from any Governmental Authority seeking information regarding the transactions contemplated by this Agreement; and (iii) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement.

 

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6.03.                     Reasonable Best Efforts; Regulatory and Other Approvals.  During the Interim Period:

 

(a)                         Each Party will, in order to consummate the transactions contemplated hereby, (i) take all steps necessary, and proceed diligently and in good faith and use its reasonable best efforts, as promptly as practicable to obtain the Company’s Approvals, Seller Parent’s and Seller’s Approvals and the Buyer’s Approvals, and (ii) provide such other information and communications to such Governmental Authorities or other Persons as such Governmental Authorities or other Persons may reasonably request in connection therewith.

 

(b)                         The Parties will provide prompt notification to each other when any such approval referred to in Section 6.03(a) is obtained, taken, made, given or denied, as applicable, and will advise each other of any material communications with any Governmental Authority or other Person regarding any of the transactions contemplated by this Agreement.

 

(c)                          In furtherance of the foregoing covenants:

 

(i)                                     Each Party shall prepare, as soon as is practical following the execution of this Agreement, all necessary filings in connection with the transactions contemplated by this Agreement that may be required to be filed by such Party under the HSR Act, the Exon-Florio amendment to the Defense Production Act of 1950, 50 U.S.C. app. 2170 (if compelled to file), the Canadian Competition Act or any other federal, state, local or foreign Applicable Laws (the “Regulatory Filings”). Each Party shall submit such Regulatory Filings as soon as practicable, but in no event later than five (5) Business Days (subject to extension by mutual agreement) after the execution hereof. The Parties shall request expedited treatment of any such Regulatory Filing (if applicable), shall promptly furnish each other with copies of any notices, correspondence or other written communication from the relevant Governmental Authority, shall promptly make any appropriate or necessary subsequent or supplemental filings and shall cooperate in the preparation of such filings as is reasonably necessary and appropriate.  Each Party shall have the right to review in advance all information related to Seller Parent, Seller, the Company, any Company Subsidiary or Buyer, as applicable, and the transactions contemplated by this Agreement with respect to any Regulatory Filings.

 

(ii)                                  Each Party shall promptly respond to and comply with any additional requests for information relating to or arising in connection with any Regulatory Filing, including requests for production of documents and production of witnesses for interviews or depositions related thereto.  Each Party shall cooperate in good faith with any Governmental Authority related to the foregoing and shall undertake promptly any and all commercially reasonable action required to complete lawfully the transactions contemplated by this Agreement.  The Parties shall each be responsible for one-half of all filing and similar fees relating to the Regulatory Filings.

 

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(iii)                               Each Party shall cooperate in good faith with all Governmental Authorities, shall not take any action that could adversely affect the approval of any Governmental Authority of any of the aforementioned Regulatory Filings, and shall undertake promptly any and all commercially reasonable action required to complete lawfully the transactions contemplated by this Agreement prior to the Termination Date.

 

6.04.                     Employees; Employee Benefits.

 

(a)                         Prior to the Closing, Seller shall cause the Company to terminate the Company Employee Benefit Plans listed on Schedule 6.04(a).  Prior to the Closing Date, all spot bonuses awarded or communicated to any individual shall be paid in cash in full.

 

(b)                         From and after the Closing Date, Buyer shall or shall cause the Company to honor, pay, perform and satisfy any and all Liabilities and responsibilities to or in respect of all current and former employees, directors and consultants (including those individuals who are full-time, part-time, temporary, on vacation or on a paid or unpaid leave of absence) (or any dependent or beneficiary thereof) of the Company and any Company Subsidiary (collectively, the “Company Employees”) arising under the terms of each Company Employee Benefit Plan, as in effect immediately prior to the Closing Date or subsequently amended, for as long as such Company Employee Benefit Plan is in effect, including with respect to any payments, benefits or rights arising as a result of the transactions contemplated by this Agreement (either alone or in combination with any other event).  The foregoing shall not limit in any way the right of the Company to amend or terminate any Company Employee Benefit Plan at any time, subject to any limitations under such Company Employee Benefit Plan on the ability to effect an amendment or termination that adversely affects the participants thereunder.

 

(c)                          During the period commencing on the Closing Date and ending on December 31, 2015 (the “Benefits Continuation Period”), Buyer shall provide (i) each Company Employee with his or her base salary or hourly rate and annual target bonus opportunity amount (which may be payable in cash, equity or a combination thereof, as determined in the sole discretion of Buyer) that is at least equal to the amount of such compensation of such Company Employee immediately prior to the Closing Date and (ii) benefits that are not less favorable in the aggregate than the aggregate benefits provided to similarly situated employees at Buyer as of the Closing Date.

 

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(d)                         From and after the Closing Date, Buyer shall cause each Company Employee’s service prior to the Closing Date with the Company, any Company Subsidiary, or any predecessor thereof, to be treated as service with Buyer and its Affiliates for all purposes (including to determine eligibility to participate, level of benefits, accrual rate and vesting) under any employee benefit plans, programs or arrangements of Buyer and its Affiliates in which Company Employees may be eligible to participate from and after the Closing Date (including, without limitation, with respect to any vacation, paid time off and severance benefits), to the same extent such service was recognized by Seller Parent and/or its Affiliates for the same or similar purpose immediately prior to the Closing Date; provided, however, that such service need not be recognized to the extent that such recognition would result in any duplication of benefits or under any Employee Pension Benefit Plan that is subject to Title IV of ERISA; and provided, however, that Buyer may choose, for purposes of determining an employee’s status as a full-time employee or eligibility for participation in a health plan during a stability period under Code Section 4980H, to either continue to apply Seller Parent’s rules or to apply any reasonable transition method it determines.  With respect to any welfare benefit plans maintained by Buyer or its Affiliates for the benefit of Company Employees (and any dependents or beneficiaries thereof) from and after the Closing Date, Buyer shall cause such plans to (i) waive any preexisting condition limitations, exclusions, actively-at-work requirements, waiting periods, evidence of insurability requirements and other similar restrictions with respect to the Company Employees (or any dependents or beneficiaries thereof) and (ii) recognize all co-payments, deductibles and other similar expenses incurred by the Company Employees (or any dependents or beneficiaries thereof) during the calendar year in which the Closing Date occurs, to the extent such expenses were recognized immediately prior to the Closing Date, subject in the case of such plan that is provided through insurance, to the consent of the applicable insurance carrier, which the Company shall use its commercially reasonable efforts to obtain.

 

(e)                          The Parties acknowledge and agree that all provisions contained in this Section 6.04 are included for the sole benefit of the Parties, and that nothing in this Agreement, whether express or implied, shall be treated as an amendment or other modification of any Company Employee Benefit Plan or other benefit plan, agreement or other arrangement, or shall create any third party beneficiary or other right (i) in any other Person, including any Company Employee or any participant in any Company Employee Benefit Plan or other benefit plan, agreement or other arrangement (or any dependent or beneficiary thereof), or (ii) to continued employment with Buyer, the Company or any of their respective Affiliates.

 

6.05.                     Supplemental Disclosure.  Seller Parent shall have the right from time to time prior to the Closing Date to supplement or amend Seller Parent’s Disclosure Schedule with respect to any matter hereafter arising or discovered which if existing or known at the date of this Agreement would have been required to be set forth or described in Seller Parent’s Disclosure Schedule.  Any such supplemental or amended disclosure shall be deemed to not have cured any such breach of representation or warranty made in this Agreement unless related to an item consented to by Buyer in accordance with Section 6.02.

 

6.06.                     No Negotiations.  During the Interim Period, Seller Parent, Seller, the Company and each Company Subsidiary shall not, and shall cause their Affiliates and Representatives not to, initiate or solicit, directly or indirectly, any inquiries or the making of any proposal with respect to, engage in negotiations concerning, provide any confidential information or data to any Person with respect to, have any discussions with any Person (except with Buyer) or enter into any letter of intent or similar document or any agreement or commitment relating to, an Acquisition Proposal and shall immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Persons conducted prior to the date hereof with respect to any of the foregoing.  If Seller Parent, Seller, the Company or any Company Subsidiary, or its respective Representatives, as applicable, receives, prior to the Closing, any Acquisition Proposal, the Company will immediately suspend any discussions with such offeror or Person with regard to such Acquisition Proposal and notify Buyer thereof.

 

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6.07.                     Further Assurances; Post-Closing Cooperation.

 

(a)                             Upon the terms and subject to the conditions of this Agreement, at any time or from time to time after the Closing, each of the Parties hereto shall execute and deliver such other documents and instruments, provide such materials and information and take such other actions as may reasonably be necessary, proper or advisable, to the extent permitted by Applicable Law, to fulfill its obligations under this Agreement.

 

(b)                             If, in order to properly prepare its Tax Returns, other documents or reports required to be filed with Governmental Authorities or its financial statements or to fulfill its obligations hereunder, it is necessary that Seller Parent or Seller be furnished with additional information, documents or records relating to the business or financial or operating condition of the Company and the Company Subsidiaries, and such information, documents or records are in the possession or control of Buyer, Buyer agrees to use its reasonable best efforts to furnish or make available such information, documents or records (or copies thereof) at Seller Parent’s or Seller’s request. Buyer agrees for a period of seven (7) years after the Closing Date, or such longer period as the Books and Records and other data relating to the business or financial or operating condition of the Company and the Company Subsidiaries in Buyer’s possession with respect to periods prior to the Closing Date remain relevant to open Tax years, not to destroy or otherwise dispose of any such books, records and other data unless Buyer shall first offer by notice to Seller Parent and Seller to surrender such books, records and other data and Seller Parent and Seller shall not agree in writing to take possession thereof, at its cost and expense, during the ten (10) day period after such offer is made.

 

6.08.                     Release of Guaranties, etc.  With respect to each guaranty, letter of credit, indemnity, performance or surety bond, agreement to provide capital or other credit support arrangement issued by or for the account of Seller Parent, Seller or any of their respective Affiliates (other than the Company or a Company Subsidiary) in relation to the Company, any Company Subsidiary or the business the Company and the Company Subsidiaries, including all such items shown on Schedule 6.08 (collectively, the “Support Obligations”), Buyer shall use reasonable best efforts to provide or obtain, prior to the Closing, substitute agreements and credit support arrangements in replacement for the Support Obligations (including posting cash collateral if necessary to obtain such replacement arrangement), and shall procure that Seller Parent, Seller and their respective Affiliates, and, where applicable, its sureties or letter of credit issuers, be fully and unconditionally released from its respective obligations under the Support Obligations, in each case in form and substance reasonably satisfactory to Seller Parent or Seller, as applicable.  Seller Parent and Seller will cooperate reasonably with Buyer with respect to the foregoing.

 

6.09.                     Indemnification of Directors and Officers; Directors’ and Officers’ Insurance.

 

(a)                         From and after the Closing, Buyer shall indemnify and hold harmless each individual who served as a manager, director or officer of the Company or the Company Subsidiaries prior to the Closing (each an “Indemnified Director or Officer” and collectively, the “Indemnified Directors and Officers”) to the fullest extent authorized or permitted by Applicable Law, as now or hereafter in effect, on the same basis as such Indemnified Directors and Officers are currently covered, including pursuant to any terms and conditions of (i) any agreement in effect as of the date of this Agreement between or among the Company or any of the Company Subsidiaries and any Indemnified Director or Officer providing for the indemnification or exculpation of, or advancement of expenses to, such Indemnified Director or Officer and set forth in Schedule 6.09 and (ii) the Company’s and Company Subsidiaries’ Organizational Documents as in effect as of the date of this Agreement.  For six (6) years after the Closing Date, Buyer shall cause to be maintained in effect provisions of the Company’s and the Company Subsidiaries’ respective Organizational Documents (or in such documents of any successor to the business of the Company or the Company Subsidiaries) regarding exculpation or elimination of liability of directors, indemnification of managers, officers, directors and employees and advancement of expenses that are no less advantageous to the intended beneficiaries than the corresponding provisions in existence on the date of this Agreement.

 

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(b)                         On or before the Closing Date, Seller Parent shall arrange and pay the premium for, tail or extended reporting coverage from the directors’ and officers’ liability insurance policy or policies and the fiduciary liability insurance policies providing the Company and each of the Company Subsidiaries, as well as each individual currently covered by the Company Subsidiaries’ or Seller’s directors’ and officers’ liability insurance coverage for events occurring at or prior to the Closing (including acts or omissions relating to the approval of this Agreement and consummation of the transactions contemplated hereby) that contains terms, conditions, payment priorities, retentions and limits of liability no less favorable in the aggregate than such existing policy, from an insurance carrier with the same or better credit rating as the Company’s current insurance carrier with respect to such policies (the “D&O Tail Coverage”).  The D&O Tail Coverage shall be non-cancellable and shall remain in full force and effect for a period of six (6) years after the Closing Date.

 

(c)                          The provisions of this Section 6.09 shall survive the Closing and (i) are intended to be for the benefit of, and shall be enforceable by, each Indemnified Director or Officer and his or her heirs, executors and representatives and (ii) are in addition to, and not in substitution for, any other rights to indemnification or contribution that any such Person may have by contract or otherwise.  The obligations of Buyer under this Section 6.09 shall not be terminated or modified in such a manner as to adversely affect the rights of any Indemnified Director or Officer under this Section 6.09 without the consent of such affected Indemnified Director or Officer.

 

6.10.                     Confidentiality, Non-Solicitation and Non-Competition.

 

(a)                         For a period of one (1) year following the Closing Date, Seller Parent shall and shall cause each of its Affiliates not, to directly or indirectly, as an employee, agent, consultant, stockholder, director, co-partner or in any other individual or representative capacity, hire, solicit, cause, induce or encourage to leave the employment or other service of the Company or any Company Subsidiary or hire, employ or otherwise engage any such individual, any person on Schedule 6.10 (such persons, the “Key Employees”); provided that nothing contained in this Section 6.10(a) shall (i) prohibit Seller Parent from hiring any such individual in the event that such individual shall have responded to a general solicitation for employment not otherwise aimed or targeted at the employees of the Company or any Company Subsidiary or (ii) apply with respect to any such employee who ceases to be employed by the Company, any Company Subsidiary or Buyer at least one (1) year prior to any direct or indirect solicitation by Seller Parent or its Affiliates.

 

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(b)                         For a period of two (2) years following the Closing Date (except with respect to any Buyer Confidential Information that constitutes a trade secret for which the obligations set forth herein shall survive for a period of five (5) years following the Closing Date), except as may be approved in writing by the Buyer, or as may be necessary for the proper discharge by Seller Parent or Seller of its duties or exercise of its rights under this Agreement, or as may be necessary to be disclosed to counsel, Taxing Authorities and accountants preparing Seller’s or Seller Parent’s tax reports and filings, or as may be required under Applicable Law, Seller Parent and Seller shall, and shall cause their respective Representatives to, keep all documents, materials, records and other information that it has or has obtained prior to or after the Closing regarding Buyer, or any member of the Company or any Company Subsidiary (“Buyer Confidential Information”) strictly confidential and will not disclose such information without Buyer’s prior written consent.  “Buyer Confidential Information” shall not include information that (i) is or becomes publicly available (other than as a result of a disclosure by Seller Parent, Seller or their respective Representatives in violation of this Section 6.10), (ii) is or becomes available to it from a source that, to the Knowledge of Seller Parent, is not prohibited from disclosing such information to it by a legal, contractual or fiduciary obligation or (iii) has been independently developed by it (other than by or with respect to the Company or any of the Company Subsidiaries) or its respective Representatives without reference to confidential information.

 

(c)                          Except for minority investments in the ordinary course of business (including in connection with module sales), neither Seller Parent nor any business or entity directly or indirectly majority owned or managed by Seller Parent shall, for a period beginning on the Closing Date and ending on the date that is one (1) year after the Closing Date, without Buyer’s prior written consent, directly own, invest in or control any business, whether in corporate, proprietorship or partnership form or otherwise, that is developing solar plants 5MW or greater having the same point of interconnection as any Project listed on Schedule 6.10(c).  This Section 6.10(c) shall terminate and be of no further force and effect upon the merger, sale or combination of Seller with or into any other Person; provided that such merger, sale or combination is not entered into to avoid Seller Parent’s obligations under this Section 6.10(c).

 

(d)                         Notwithstanding anything to the contrary, in the case of breach of the covenants in this Section 6.10, (i) the Parties acknowledge that any such breach may result in serious and irreparable injury to Buyer, and therefore each Party acknowledges and agrees that in the event of such a breach Buyer shall be entitled, in addition to any other remedy at law or in equity to which Buyer may be entitled, to equitable relief, including specific performance and an injunction to restrain such breaching party from such breach and to compel compliance with the obligations of such breaching party hereunder in protecting or enforcing Buyer’s rights and remedies, without necessity of posting bond or other surety, and (ii) the claiming of damages for any losses incurred by Buyer due to actions prohibited by the aforesaid covenants under Article XI shall remain unaffected.

 

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(e)                          The Parties acknowledge that the covenants set forth in this Section 6.10 are an essential element to this Agreement and that, but for these covenants, the Parties would not have entered into this Agreement.  The Parties specifically acknowledge and agree that each Party has received adequate consideration in exchange for entering into these covenants, the foregoing restrictions are reasonable and necessary to protect the legitimate interest of Buyer following the Closing, including the goodwill that Buyer shall be purchasing from Seller pursuant to the transactions contemplated hereby.

 

(f)                           The Parties acknowledge that this Section 6.10 constitutes an independent covenant and shall not be affected by performance or nonperformance of any other provisions of any of the Transaction Documents or any other document contemplated thereby.

 

(g)                          It is the intention of the Parties hereto that if any of the restrictions or covenants contained in this Section 6.10 is held to cover a geographic area or to be for length of time which is not permitted by Applicable Law, or in any way construed to be too broad or to any extent invalid, such restrictions or covenants shall not be construed to be null, void and of no effect, but to the extent such restrictions or covenants would be valid or enforceable under Applicable Law, a court of competent jurisdiction shall construe and interpret or reform this Section 6.10 to provide for a covenant having the maximum enforceable geographic area, time period and other provisions (not greater than those contained in this Section 6.10) that would be valid and enforceable under law.

 

6.11.                     Use of Name; Name Change.  Seller Parent agrees that upon the Closing, Buyer, the Company and the Company Subsidiaries shall have the sole right to the use of the names “Recurrent” and “Recurrent Energy” or similar names and any service marks, trademarks, trade names, d/b/a names, fictitious names, identifying symbols, logos, emblems, signs or insignia related thereto or containing or comprising the foregoing, including any name or mark confusingly similar thereto (collectively, the “Recurrent Energy Marks”).  Except as may be necessary to be disclosed to counsel, Taxing Authorities and accountants preparing Seller Parent’s or Seller’s tax reports and filings, or as may be required under Applicable Law, Seller Parent shall not, and shall not permit its Affiliates to, use such name or any variation or simulation thereof or any of the Recurrent Energy Marks.  In furtherance of the foregoing, within twenty (20) Business Days after the Closing Date, Seller Parent shall, and shall cause any of its Affiliates, to change its name to a name that does not include “Recurrent” or “Recurrent Energy” and to provide evidence of the effectiveness of the filing with the Secretary of State of the State of Delaware of an amendment to its certificate of formation consistent with the foregoing.

 

6.12.                     Status of Seller.  Buyer acknowledges and agrees that Seller may assign its right to receive any payments under this Agreement to Seller Parent and, thereafter, Seller Parent may either sell or dissolve Seller.  After such assignment, Buyer shall have no recourse against Seller for any obligations under this Agreement or in connection with the transactions contemplated hereby and Buyer shall make all assigned payments with respect to the Total Purchase Price directly to Seller Parent.  Buyer shall cooperate, at no out-of-pocket cost or Liability to Buyer or its Affiliates, as and to the extent reasonably requested by Seller Parent as appropriate in connection with this Section 6.12, including with respect to (a) the audit of Seller’s financial statements for the period from April 1, 2014 through Closing and (b) Seller’s Tax filings for the period from April 1, 2014 through Closing.

 

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ARTICLE VII.
 CONDITIONS TO OBLIGATIONS OF BUYER

 

The obligations of Buyer to consummate the Closing are subject to the fulfillment, at or before the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by Buyer in its sole discretion):

 

7.01.                     Representations and Warranties.  The representations and warranties made by Seller Parent in Article III and Article IV which are qualified by the words “material” or “Material Adverse Effect” or similar qualification shall be true and accurate in all respects on and as of the Closing Date as though made on and as of the Closing Date, and the representations and warranties made by Seller Parent which are not so qualified shall be true and accurate in all material respects on and as of the Closing Date as though made on and as of the Closing Date, except for (i) changes permitted or contemplated hereby and (ii) representations and warranties which are made as of a specific date, which shall be true and accurate, or true and accurate in all material respects, as applicable, as of such date.

 

7.02.                     Performance.  Seller Parent and Seller shall have performed and complied in all material respects with the agreements, covenants and obligations required by this Agreement to be so performed or complied with by them at or before the Closing.

 

7.03.                     Officer’s Certificates.  Seller Parent shall have delivered to Buyer at the Closing a certificate of an officer of Seller Parent, dated as of the Closing Date, as to the applicable matters set forth in Sections 7.01 and 7.02.

 

7.04.                     Orders and Applicable Laws.  There shall not be in effect on the Closing Date any Order or Applicable Law restraining, threatening, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement.

 

7.05.                     Approvals.  The Buyer’s Approvals, the Seller Parent’s and Seller’s Approvals and the Company’s Approvals shall have been duly obtained, made or given and shall be in full force and effect in form and substance reasonably acceptable to Buyer, and all terminations or expirations of waiting periods imposed by any Governmental Authority shall have occurred.

 

7.06.                     Resignations.  Seller shall have caused the resignation of all members of the Board of Directors of the Company and the Company Subsidiaries and the individuals set forth in Schedule 7.06.

 

7.07.                     FIRPTA Certificate.  Seller shall have delivered to Buyer a properly executed certificate in form reasonably acceptable to Buyer for purposes of satisfying Buyer’s obligations under Treasury Regulations Section 1.1445-2(b)(2), to the effect that Seller is not a foreign person within the meaning of Section 1445(b)(2) of the Code.

 

7.08.                     General Release.  Buyer shall have received a general release (the “General Release”) from Seller Parent substantially in the form attached hereto as Exhibit A.

 

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7.09.                     Certificates.  Seller Parent shall have furnished Buyer with, in form and substance reasonably satisfactory to Buyer, a certificate executed by an authorized officer or manager of Seller Parent or Seller, as the case may be and as applicable, certifying as of the Closing Date (a) a true and correct copy of the certificate of incorporation of Seller, as amended; (b) a certified copy of the commercial register of Seller Parent as of the Closing Date; (c) the minutes of the board of director’s meeting of Seller Parent authorizing the execution of this Agreement; (d) a true and correct copy of the corporate action of Seller authorizing the execution, delivery and performance of the Agreement, and the consummation of the transactions contemplated hereby and thereby, as applicable; (e) the authority and incumbency of the Representatives of Seller executing this Agreement and the Transactions Documents, as applicable; (f) true and correct copies of each of Seller Parent, Seller, the Company and each Company Subsidiary’s Organizational Documents and (g) a good standing certificate for Seller, the Company and each Company Subsidiary (to the extent applicable in the relevant jurisdiction) issued by the jurisdiction of its incorporation or formation, respectively, in each case dated no earlier than ten (10) Business Days prior to the Closing Date.

 

7.10.                     Books and Records.  Buyer shall have received copies of all material Books and Records of the Company and each Company Subsidiary.

 

7.11.                     Assignment Agreement.  Buyer shall have received the Assignment Agreement, duly executed by Seller.

 

7.12.                     Material Adverse Effect.  No Material Adverse Effect shall have occurred.

 

7.13.                     LLC Agreement.  The LLC Agreement of the Company and each Company Subsidiary shall have been amended and restated in form provided by Buyer.

 

ARTICLE VIII.
 CONDITIONS TO OBLIGATIONS OF SELLER PARENT AND SELLER

 

The obligation of Seller Parent and Seller to consummate the Closing is subject to the fulfillment, at or before the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by Seller Parent and Seller in their sole discretion):

 

8.01.                     Representations and Warranties.  The representations and warranties made by Buyer in Article V which are qualified by the words “material” or “Material Adverse Effect” or similar qualification shall be true and accurate in all respects on and as of the Closing Date as though made on and as of the Closing Date, and the representations and warranties made by Buyer which are not so qualified shall be true and accurate in all material respects on and as of the Closing Date as though made on and as of the Closing Date, except for (i) changes permitted or contemplated hereby and (ii) representations and warranties which are made as of a specific date, which shall be true and accurate, or true and accurate in all material respects, as applicable, as of such date.

 

8.02.                     Performance.  Buyer shall have performed and complied in all material respects with all agreements, covenants and obligations required by this Agreement to be so performed or complied with by it at or before the Closing.

 

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8.03.                     Officer’s Certificate.  Buyer shall have delivered to Seller Parent at the Closing a certificate of an officer of Buyer, dated as of the Closing Date, as to the matters set forth in Sections 8.01 and 8.02.

 

8.04.                     Orders and Applicable Laws.  There shall not be in effect on the Closing Date any Order or Applicable Law restraining, threatening, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement.

 

8.05.                     Approvals.  The Buyer’s Approvals, the Seller Parent’s and Seller’s Approvals and the Company’s Approvals shall have been duly obtained, made or given and shall be in full force and effect in form and substance reasonable acceptable to Seller Parent, and all terminations or expirations of waiting periods imposed by any Governmental Authority shall have occurred.

 

8.06.                     Release of Guaranties, etc.  Buyer shall have provided or obtained substitute agreements and credit support arrangements in replacement for the Support Obligations, and shall have procured that Seller Parent, Seller and their respective Affiliates (other than the Company and the Company Subsidiaries), and, where applicable, its sureties or letter of credit issuers, have been fully and unconditionally released from their respective obligations under the Support Obligations, in each case in form and substance reasonably satisfactory to Seller Parent or Seller, as applicable.

 

8.07.                     Certificates.  Buyer shall have furnished Seller Parent with, in form and substance reasonably satisfactory to Seller Parent, a certificate executed by an authorized officer or manager of Buyer certifying as of the Closing Date (a) a true and correct copy of the certificate of incorporation of Buyer, as amended; (b) a true and correct copy of the corporate action of Buyer authorizing the execution, delivery and performance of the Agreement, and the consummation of the transactions contemplated hereby and thereby; (c) the authority and incumbency of the Representatives of Buyer executing this Agreement; (d) true and correct copies of the Buyer’s Organizational Documents and (e) a good standing certificate for Buyer issued by the Secretary of State of the State of Delaware, dated no earlier than ten (10) Business Days prior to the Closing Date.

 

8.08.                     Sharp Bridge Loans.  All outstanding amounts under the Sharp Bridge Loans shall have been repaid.

 

ARTICLE IX.
 NON-RECOURSE; TRANSFER TAXES; TAX RETURNS

 

9.01.                     Non-Recourse.  No Party shall have recourse whatsoever under this Agreement against any of the officers, directors, employees, counsel, accountants, financial advisors, engineers, or consultants of the other Parties (including for such purposes, such representatives of any Affiliate of a Party).  Without limiting the generality of the foregoing, Buyer, on behalf of itself and its Affiliates, and Seller Parent, on behalf of itself and its Affiliates, each hereby fully and irrevocably waives any right, claim or entitlement whatsoever against such representatives relating to any and all Liabilities suffered or incurred by any of them arising from, based upon, related to, or associated with this Agreement or the transactions contemplated hereby (including any breach, termination or failure to consummate such transactions) in each case whether based on contract, tort, strict liability other laws or otherwise and whether by piercing of the corporate veil, by claim on behalf of or by a Party hereto or other Person or otherwise.

 

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9.02.                     Transfer Taxes.  All transfer, documentary, sales, use, stamp, registration and other such Taxes incurred in connection with this Agreement and the transactions contemplated hereby, if any, shall be shared equally by the Parties when due, and Buyer shall file all necessary Tax Returns and other documentation with respect to any such transfer, documentary, sales, use, stamp, registration and other Taxes and, if required by Applicable Law, Seller Parent will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation and will cooperate with Buyer to take such commercially reasonable actions as will minimize or reduce the amount of such Taxes.

 

9.03.                     Tax Matters.

 

(a)                         Seller Parent shall prepare, or cause to be prepared, at the expense of Seller Parent, and shall timely file, or cause to be timely filed, all Tax Returns for the Company and the Company Subsidiaries for any Tax period ending on or prior to the Closing Date that are required to be filed after the Closing Date (“Pre-Closing Tax Returns”).  Such Pre-Closing Tax Returns shall be prepared in a manner consistent with past practices, and subject to the right of indemnification pursuant to this Agreement, Buyer shall timely pay all Taxes reflected on such Pre-Closing Tax Returns.  Seller Parent shall deliver or cause to be delivered to Buyer copies of each such Pre-Closing Tax Returns at least fifteen (15) days prior to the due date for filing such Pre-Closing Tax Returns, and Seller Parent shall consider in good faith any revisions to such Pre-Closing Tax Returns as are reasonably requested by Buyer.  Except with respect to Pre-Closing Tax Returns prepared by Seller Parent pursuant to this Section 9.03, Buyer shall prepare and file, or cause to be prepared and filed, at Buyer’s expense, all other Tax Returns for the Company and Company Subsidiaries required to be filed after the Closing Date.

 

(b)                         For purposes of this Agreement, the portion of the Tax liability of the Company or a Company Subsidiary for a Straddle Period that is attributable to the portion of the Straddle Period that ends on the Closing Date shall be calculated as though the taxable year of the Company (or Company Subsidiary, as the case may be) terminated as of the close of business on the Closing Date (with exemptions, allowances, or deductions that are calculated on an annual basis, including depreciation and amortization deductions, being allocated between the two short periods in proportion to the number of days in each such short period); provided, however, that in the case of ad valorem Taxes, real property Taxes, and personal property Taxes, and similar obligations, the amount of Taxes attributable to the portion of the Straddle Period that ends on the Closing Date shall be equal to the amount of Tax for the Straddle Period (other than to the extent a Tax is increased as a result of the transactions contemplated by this Agreement) multiplied by a fraction, the numerator of which shall be the number of days from the beginning of the Straddle Period through the Closing Date and the denominator of which shall be the number of days in the Straddle Period.

 

(c)                          To the extent that the Tax Returns prepared by Buyer could form the basis for an indemnity claim against Seller Parent or Seller pursuant to this Agreement, such Tax Returns shall be prepared in a manner consistent with past practices (except to the extent that Buyer determines that such Tax Returns cannot be so prepared and filed without being subject to penalties).  Buyer shall deliver or cause to be delivered to Seller Parent copies of such Tax Returns at least fifteen (15) days prior to the due date for filing such Tax Returns, and Buyer shall consider in good faith any revisions to such Tax Returns as are reasonably requested by Seller Parent.  Buyer shall not, and shall not cause or permit the Company or the Company Subsidiaries to, amend any previously filed Tax Return of the Company or the Company Subsidiaries, or make or change any Tax election with respect to the Company or the Company Subsidiaries, with respect to a Tax period (or portion thereof) that ends on or prior to the Closing Date, without the prior written consent of Seller Parent, which shall not be unreasonably withheld, conditioned or delayed.

 

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(d)                         Within thirty (30) days after the determination of the Total Purchase Price pursuant to Section 2.03, Buyer shall prepare and deliver to Seller a draft of a statement setting forth a proposed allocation (the “Purchase Price Allocation”) of the Total Purchase Price (as well as liabilities assumed or deemed assumed for U.S. federal income tax purposes, to the extent relevant) in a manner consistent with Section 1060 of the Code, together with reasonable supporting information and calculations.  Seller shall inform Buyer in writing within forty-five (45) days of the receipt of such draft of any objection by the Seller to the Purchase Price Allocation.  To the extent that any such objection is received, Buyer and Seller shall attempt in good faith to resolve any dispute within thirty (30) days the following the receipt of such objection but shall have no obligation to resolve any disagreement.  In the event that the Buyer and the Seller agree on the Purchase Price Allocation, the Purchase Price Allocation shall be binding on Buyer and Seller, who shall file all Tax Returns in a manner consistent with the Purchase Price Allocation.  If Buyer and Seller are unable to agree on the Purchase Price Allocation,, then such disagreement shall be immediately submitted to the Neutral Accounting Arbitrator, which shall be instructed to resolve such disagreement within thirty (30) days after such disagreement is submitted to it for resolution and shall notify Buyer and Seller in writing of its resolution.  The Neutral Accounting Arbitrator’s resolution of the disagreement shall be final and binding on Buyer and Seller.  Buyer and Seller shall file all Tax Returns in a manner consistent with the final Purchase Price Allocation and neither Buyer nor Seller shall take any position (whether in Tax proceedings, on Tax Returns, or otherwise) that is inconsistent with such Purchase Price Allocation except as may be adjusted by subsequent agreement following an audit by a Tax Authority or by court decision.

 

(e)                          Any Tax refunds that are received by Buyer or the Company and any Company Subsidiary, and any amounts credited against Tax to which Buyer or the Company and any Company Subsidiary become entitled, that relate to Tax periods or portions thereof of the Company or any Company Subsidiary ending on or before the Closing Date shall be for the account of Seller Parent and Buyer shall pay over to Seller Parent any such refund or the amount of any such credits (net of any Taxes of Buyer, the Company or any Company Subsidiary attributable to such refund or credit) within fifteen (15) days after receipt or entitlement thereto; provided, however, Buyer shall not be required to pay over to Seller Parent any such refund or the amount of any such credit up to the amount of any Tax asset (excluding any deferred Tax asset established to reflect timing differences between book and Tax income) set forth on the face of the Balance Sheet (rather than in any notes thereto).

 

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(f)                           Each Party shall cooperate, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns of the Company or any Company Subsidiary relating to any Tax period beginning on or before the Closing Date, and any refund claim, audit, investigation, or other proceeding with respect to Taxes for any such Tax period; provided that any refund actually received with respect to any Tax period prior to Closing Date shall be held in escrow by Buyer and promptly refunded to Seller Parent upon receipt.  Such cooperation shall include the retention and (upon the other Party’s request) the provision of relevant records and making employees available on a mutually convenient basis to provide additional information, explanation and testimony of any material provided hereunder.

 

(g)                          Buyer shall not, and shall cause the Company and the Company Subsidiaries not to, on the Closing Date but after the Closing, take any action outside the ordinary course of business that would increase Tax liability of Seller or Seller Parent, including making tax elections, liquidating or making any distributions from the Company or any Company Subsidiary.

 

(h)                         Buyer shall be entitled to deduct and withhold from any amount otherwise payable pursuant to this Agreement such amounts as Buyer is required to deduct and withhold under any provision of applicable Law related to foreign Taxes. Any such withheld foreign taxes shall be treated for all purposes of this Agreement as having been paid to the Person in respect of whom such deduction and withholding was made. Buyer and Seller do not anticipate any withholding required by applicable Law at Closing.  If Buyer believes that withholding is required, Buyer will provide timely notice to Seller regarding same and Buyer and Seller will work together in good faith to determine the minimum necessary withholding amount under applicable Law and cause such amount to be timely and properly remitted to the applicable Taxing Authority.

 

ARTICLE X.
 TERMINATION

 

10.01.              Termination.  This Agreement may be terminated, and the transactions contemplated by this Agreement may be abandoned, at any time by notice from any Party to the other Parties (except that no notice need be given if termination is pursuant to Section 10.01(a)):

 

(a)                         by mutual written consent of the Parties;

 

(b)                         by any Party:

 

(i)                                     if the Closing has not occurred on or before March 31, 2015 (the “Termination Date”) and the failure to consummate is not caused by a breach of this Agreement by the terminating Party; or

 

(ii)                                  if any court of competent jurisdiction or other Governmental Authority shall have issued a final Order or taken any other final action restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement and such Order or other action is or shall have become final and non-appealable; provided, however, that the Party seeking to terminate this Agreement pursuant to this Section 10.01(b)(ii) shall have used its reasonable best efforts to prevent the entry of and to remove such Order or final action;

 

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(c)                          by Buyer, subject to Section 6.05, if there has been a material breach by Seller Parent or Seller of any representation, warranty, covenant or agreement contained in this Agreement which (x) would result in a failure of a condition set forth in Section 7.01 or 7.02 and (y) cannot be cured prior to the Termination Date; and

 

(d)                         by Seller Parent or Seller if (i) Buyer has breached its obligation to pay the Total Purchase Price pursuant to Section 2.01, or (ii) there has been a material breach by Buyer of any other representation, warranty, covenant or agreement contained in this Agreement which (x) would result in a failure of a condition set forth in Section 8.01 or 8.02 and (y) cannot be cured prior to the Termination Date.

 

10.02.              Effect of Termination.  If this Agreement is validly terminated pursuant to Section 10.01, this Agreement will forthwith become null and void, and there will be no Liability on the part of any Party (or any of their respective Representatives or Affiliates) in respect of this Agreement, except as provided in this Section 10.02, and except that the provisions with respect to expenses in Section 12.02 and confidentiality in Sections 6.01 and 12.03 will continue to apply following any termination; provided, however, that nothing in this Section 10.02 shall release any Party from Liability for any willful and material breach of this Agreement by such Party prior to the termination of this Agreement.

 

ARTICLE XI.
 INDEMNIFICATION

 

11.01.              Survival.

 

(a)                         Except in the case of fraud (but excluding negligent misrepresentation), intentional misrepresentation, willful misconduct (with respect to any covenant or agreement), Section 3.12 (but only to the extent related to ERISA or a Tax Liability) or in the case of the Fundamental Representations, in which case a claim may be made at any time prior to the expiration of the applicable statute of limitations (including any extensions thereto to the extent that such statute of limitations may be tolled), the representations and warranties of the Parties contained in or made pursuant to this Agreement shall survive until the fifteen (15) month anniversary following the Closing Date (such survival period, the “Representations Survival Period”).  For the avoidance of doubt, the Parties hereby agree and acknowledge that the Representations Survival Period is a contractual statute of limitations and any claim brought by any Party pursuant to this Article XI must be brought or filed prior to the expiration of the Representations Survival Period.

 

(b)                         Except for fraud (but excluding negligent misrepresentation), intentional misrepresentation, or willful misconduct (with respect to any covenant or agreement), this Article XI shall survive the Closing and shall remain in effect (i) with respect to Sections 11.02(a)(i) and 11.02(b)(i), so long as the relevant representations and warranties survive, and (ii) with respect to Sections 11.02(a)(ii) and 11.02(b)(ii), to the extent those sections relate to the covenants requiring performance (A) prior to the Closing, such covenants and agreements shall survive until the eighteen (18) month anniversary following the Closing Date or (B) after the Closing, such covenants and agreements shall survive until fully performed.

 

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(c)                          Notice of any assertion by any Indemnified Party that the Indemnifying Party is liable to it pursuant to Section 11.02 must be given to the Indemnifying Party on or prior to the time of expiration of the relevant representation, warranty or covenant as set forth in this Section 11.01 or such claim will be forever barred.

 

11.02.              Indemnification.

 

(a)                         Subject to the limitations set forth in this Article XI, subsequent to the Closing Date, Seller Parent shall indemnify and hold harmless Buyer, any Affiliate of Buyer, the Company and Company Subsidiary,  or their respective current or future officers, directors and employees, successors and permitted assigns against any Losses that any of the foregoing suffers by reason of, relating to or arising out of:

 

(i)                                     any breach of the representations and warranties of Seller Parent set forth in Article III or Article IV or any certificate delivered hereunder;

 

(ii)                                  any breach by Seller Parent or Seller of any of the covenants or agreements of Seller or Seller Parent set forth in this Agreement or any certificate delivered hereunder;

 

(iii)                               any and all Transaction Expenses, including any such Transaction Expenses not paid at Closing pursuant to Section 2.03;

 

(iv)                              any Liability for Taxes imposed on or relating to the Company or any Company Subsidiary with respect to any Tax period ending on or prior to the Closing Date, or with respect to the portion of any Straddle Period that ends on the Closing Date, except to the extent that such Taxes are included in the Specified Liabilities; or

 

(v)                                 any Liability for Taxes of Seller Parent or Seller imposed on Buyer as a successor or transferee or under Treasury Regulation Section 1.1502-6

 

(b)                         Subject to the limitations set forth in this Article XI, subsequent to the Closing Date, Buyer shall indemnify and hold harmless Seller Parent, any Affiliate of Seller Parent or their respective current or future officers, directors and employees, successors and permitted assigns against any Loss that any of the foregoing suffers as a result of:

 

(i)                                     any breach of the representations and warranties of Buyer set forth in Article V; or

 

(ii)                                  any breach by Buyer of any of the covenants or agreements of Buyer set forth in this Agreement.

 

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11.03.              Third Party Claims.  The obligations and liabilities of an Indemnifying Party with respect to Losses resulting from the assertion of liability by third parties (each, a “Third Party Claim”) shall be subject to the following terms and conditions:

 

(a)                         The Indemnified Parties shall promptly give written notice to the Indemnifying Parties of any Third Party Claim that might give rise to any Loss by the Indemnified Parties, stating the nature and basis of such Third Party Claim, and the amount thereof to the extent known; provided, however, that no delay on the part of the Indemnified Party in so notifying the Indemnifying Party shall affect the Indemnified Party’s right to indemnification hereunder, except and only to the extent that the Indemnifying Party is actually and materially prejudiced by such failure.  Such notice shall be accompanied by copies of all relevant documentation with respect to such Third Party Claim, including any summons, complaint or other pleading which may have been served, any written demand or any other document or instrument.

 

(b)                         From and after receipt of notice of a Third Party Claim pursuant to Section 11.03(a), the Indemnifying Parties shall have the right, upon notice to the Indemnified Parties, to assume and conduct, at their own expense, the defense against the Third Party Claim in their own names or in the names of the Indemnified Parties.  If the Indemnifying Party assumes the defense of any Third Party Claim, the Indemnifying Party shall (i) select counsel reasonably acceptable to the Indemnified Party, (ii) take all steps necessary in the defense or settlement thereof and (iii) keep the Indemnified Party apprised of all significant developments with respect thereto; provided, however, that the Indemnifying Party shall not enter into any settlement, compromise or consent to judgment with respect to any Third Party Claim without the prior consent of the Indemnified Parties, such consent not to be unreasonably withheld, conditioned or delayed; provided, however, that the Indemnifying Party shall be entitled to settle, compromise or consent to a judgment without the consent of the Indemnified Party with respect to a Third Party Claim if such judgment will not have a material adverse impact on the business of the applicable Person going forward. The Indemnified Parties shall have the right to employ separate counsel in any such Third Party Claim and/or to participate in the defense thereof, but the fees and expenses of such counsel shall not be included as part of any Loss incurred by the Indemnified Party and shall not be payable by the Indemnifying Parties.  The Indemnified Party shall provide all information and assistance that is reasonably available and necessary for the defense of the Third Party Claim as the Indemnifying Party may reasonably request and shall cooperate with the Indemnifying Party in such defense.  Seller Parent shall be entitled to exercise any rights of Seller with respect to Third Party Claims under this Section 11.03.

 

(c)                          If the Indemnifying Party does not assume the defense of a Third Party Claim within ten (10) Business Days after receiving notice thereof, (i) the Indemnified Party may defend against such Third Party Claim in such manner as it may deem reasonably appropriate; provided, that the Indemnified Party shall not consent to a settlement, compromise or consent to judgment with respect to any Third Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed, and (ii) the Indemnifying Party shall provide to the Indemnified Party all information and assistance that is reasonably available and necessary for the defense of the Third Party Claim as the Indemnified Party may reasonably request and shall reasonably cooperate with the Indemnified Party in such defense.

 

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11.04.              Limitations on Indemnification.

 

(a)                         Except for fraud (but excluding negligent misrepresentation), intentional misrepresentation, willful misconduct (with respect to any covenant or agreement) and the Fundamental Representations, as to any claim for indemnification pursuant to Sections 11.02(a)(i), or 11.02(b)(i), the Indemnified Party shall not be entitled to indemnification (i) with respect to any Loss of less than Fifteen Thousand U.S. Dollars ($15,000) (a “De Minimis Loss”) or (ii) any Losses until all Losses (including any De Minimis Loss) exceed, in the aggregate, an amount equal to one percent (1%) of the Total Purchase Price actually paid to it or paid by it, as the case may be, pursuant to Article II (the “Indemnity Threshold”), in which case such Indemnified Party shall be entitled to indemnification for all such Losses (including any De Minimis Loss), but only to the extent such Losses (including any De Minimis Loss) exceed the Indemnity Threshold; provided, however, that any materiality or Material Adverse Effect qualifier will not be taken into account in determining the magnitude of the damages occasioned by the breach of any representation or warranty for purposes of calculating the Indemnity Threshold (once a breach of any representation or warranty has occurred after giving effect to the applicable materiality or Material Adverse Effect qualifiers).

 

(b)                         Except for fraud (but excluding negligent misrepresentation), intentional misrepresentation or willful misconduct (with respect to any covenant or agreement) or if such liability arises under Sections 11.02(a)(iii), 11.02(a)(iv) or 11.02(a)(v), Seller’s maximum aggregate liability for an indemnification of Losses pursuant to Section 11.02(a) shall not exceed twelve and one-half percent (12.5%) of the Total Purchase Price (the “Cap”), and the liability of Seller Parent shall not exceed the Total Purchase Price if such liability arises from breach of any of the Fundamental Representations, if such liability arises under Section 11.02(a)(ii), or if such liability arises under Sections 11.02(a)(iv) or 11.02(a)(v).  Except for fraud, intentional misrepresentation (but excluding negligent misrepresentation) or willful misconduct (with respect to any covenant or agreement),  Buyer’s maximum aggregate liability for an indemnification of Losses pursuant to Section 11.02(b) shall not exceed twelve and one-half percent (12.5%) of the Total Purchase Price (the “Cap”), and the liability of Buyer shall not exceed the Total Purchase Price if such liability arises from breach of any of the Fundamental Representations, or if such liability arises under Section 11.02(b)(ii).

 

(c)                          The Parties, on behalf of each of their respective Indemnified Parties, waives any right to recover incidental, indirect, special, exemplary, punitive or consequential damages, unless such incidental, indirect, special, exemplary, punitive or consequential damages are awarded to a Person in an indemnifiable Third Party Claim.

 

(d)                         Each Person entitled to indemnification hereunder or otherwise to reimbursement for Losses in connection with the transactions contemplated in this Agreement shall use commercially reasonable efforts to mitigate all Losses.

 

(e)                          Any indemnifiable claim with respect to any breach or nonperformance by a Party of a representation, warranty, covenant or agreement shall be net of any insurance proceeds or third party recoveries actually received the Indemnified Party (net of any costs of collection, deductible, retroactive premium adjustment, reasonably foreseeable premium increases, reimbursement obligation or other cost directly related to the insurance claim in respect of Losses).  Except as may be permitted by any insurance policy, if the Indemnifying Party makes any payments on any claim pursuant to Section 11.02, the Indemnifying Party shall be subrogated, to the extent of such payment, to all rights and remedies of the Indemnified Party to any insurance benefits or other claims of the Indemnified Party with respect to such claim.

 

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(f)                           Notwithstanding anything to the contrary contained in this Article XI, there shall be no recovery for any Loss or alleged Loss by Buyer under this Article XI, and the Loss shall not be included in meeting the stated thresholds hereunder, to the extent such item has been included in the calculation of the Closing Date Net Asset Adjustment as determined pursuant to Section 2.04 hereof.

 

11.05.              No Contribution.  No Indemnifying Party or its employees or agents shall have any right of contribution, right of indemnity or other right or remedy against Company or any Company Subsidiary in connection with any indemnification obligation or any other liability to which she, he or it may become subject under or in connection with this Agreement.

 

11.06.              Remedies Exclusive.  Except for fraud (but excluding negligent misrepresentation), intentional misrepresentation or willful misconduct (with respect to any covenant or agreement), the indemnification rights of the Parties under this Article XI are the exclusive remedies after the Closing available to the Parties with respect to any claims or disputes arising between the Parties with respect to the transactions contemplated by this Agreement or the business of the Company and the Company Subsidiaries or the Properties; provided, however, that nothing contained herein shall affect the rights of the Parties under Section 12.13.

 

11.07.              Treatment of Payment.  The Parties shall treat all payments made by Seller or Seller Parent, as applicable, to or for the benefit of Buyer and all payments by Buyer to or for the benefit of Seller of Seller Parent, as applicable, under Article XI, and under any other indemnity provision of this Agreement, as adjustments to the Total Purchase Price.

 

11.08.              Set-Off .  In addition to all other remedies provided herein, each Party shall have the sole and absolute right to set off any Losses that are or may be owed by such party to the other Party’s Indemnified Party under this Article XI against any Liability owed by such party or its Affiliates to the other Party or its Affiliates; provided, however, that if any such amount set off pursuant hereto is subsequently mutually agreed by the Parties or determined by a court of competent jurisdiction on a final and non-appealable basis to be owed to a Party, the applicable Party shall pay such amount to the applicable Party within ten (10) Business Days after such agreement or determination.

 

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ARTICLE XII.
 MISCELLANEOUS

 

12.01.              Entire Agreement.  This Agreement supersedes all prior discussions and agreements among the Parties with respect to the subject matter hereof, excluding the Nondisclosure Agreement, and contains the sole and entire agreement among the Parties hereto with respect to the subject matter hereof.

 

12.02.              Expenses.  Except as otherwise provided in this Agreement, whether or not the transactions contemplated by this Agreement are consummated, each Party will pay its own costs and expenses incurred in connection with the negotiation, execution and consummation of the transaction contemplated by this Agreement.

 

12.03.              Confidentiality.  Unless and until the Closing occurs, Buyer will abide by the provisions of the Nondisclosure Agreement.  If the Closing occurs, from and after the Closing Date, Seller Parent and Seller will hold, and will use its reasonable efforts to cause its Affiliates and Representatives to hold, in strict confidence from any other Person all information and documents relating to the Projects, the Company and the Company Subsidiaries, provided that nothing in this sentence shall limit the disclosure by any Party of any information (a) to the extent required by Applicable Law or judicial process (provided that if permitted by Applicable Law, each Party agrees to give the other Party prior notice of such disclosure in sufficient time to permit such other Party to obtain a protective order should they so determine), (b) in connection with any litigation to which any Party is a party (provided that such Party has taken all reasonable actions to limit the scope and degree of disclosure in any such litigation), (c) in an Action brought by a Party in pursuit of its rights or in the exercise of its remedies under this Agreement, (d) to the extent that such documents or information can be shown to have come within the public domain through no action or omission of the disclosing Party or its Affiliates, and (e) to its Affiliates for one of the reasons permitted under clause (a), (b) or (c) (in which case such Affiliates shall be bound by the foregoing obligations, but the Party disclosing such information or documentation to such Affiliates shall be liable for any breach by its Affiliates of the foregoing obligations).  In the event this Agreement is terminated under Section 10.01, upon the request of a Party, the other Party will, and will cause its Affiliates and their respective Representatives to, promptly (and in no event later than five (5) Business Days after such request) redeliver or destroy, or cause to be redelivered or destroyed, all copies of confidential documents and information furnished by such other Party in connection with this Agreement and destroy or cause to be destroyed all notes, memoranda, summaries, analyses, compilations and other writings related to or based on such information or documents prepared by the Party furnished with such documents and information or its Representatives.  In case of a conflict between the Nondisclosure Agreement and this Section 12.03 with respect to Buyer’s use of Seller Parent’s or Seller’s information or documents prior to the Closing, the Nondisclosure Agreement shall govern.  Effective as of the Closing, all of the restrictions and obligations of Buyer in the Nondisclosure Agreement shall automatically terminate in their entirety (including, for the avoidance of doubt, any such provisions that purport to survive termination of the Nondisclosure Agreement).

 

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12.04.              Announcements.  No press or other public announcement, or public statement or comment in response to any inquiry, relating to the transactions contemplated by this Agreement or the terms hereof shall be issued or made by any Party without the approval of the other Party; provided that a press release or other public announcement, regulatory filing, statement or comment made without such approval shall not be in violation of this Section 12.04 if it is made in order for the disclosing Party or any of its Affiliates to comply with Applicable Laws or stock exchange rules and in the reasonable judgment of the Party making such release or announcement, based upon advice of counsel, prior review and joint approval, despite reasonable efforts to obtain the same, would prevent dissemination of such release or announcement in a sufficiently timely fashion to comply with such Applicable Laws or rules; and provided  further that in all instances prompt notice from one Party to the other shall be given with respect to any such release, announcement, statement or comment.  Each Party shall inform its Affiliates that may be involved in the transactions contemplated by this Agreement of the requirements set forth in this Section 12.04 and shall make reasonable efforts to obtain compliance with the provisions of this Section 12.04 from such Affiliates.

 

12.05.              No Waiver.  No failure on the part of any Party to exercise and no delay in exercising, and no course of dealing with respect to, any right, remedy, power or privilege under this Agreement shall operate as a waiver of such right, remedy, power or privilege, nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement preclude any other or further exercise of any such right, remedy, power or privilege or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges provided in this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Applicable Law.

 

12.06.              Amendments.  Any provision of this Agreement may be amended, modified, supplemented or waived only by an instrument in writing duly executed by each Party.  Any such amendment, modification, supplement or waiver shall be for such period and subject to such conditions as shall be specified in the instrument effecting the same and shall be binding upon the Parties, and any such waiver shall be effective only in the specific instance and for the purposes for which given.

 

12.07.              Addresses for Notices.  All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date delivered or sent if delivered personally or sent by facsimile (providing confirmation of transmission), on the next Business Day if sent by prepaid overnight carrier (providing proof of delivery), on the fifth (5th) Business Day following the date of mailing if delivered by registered or certified mail (postage prepaid, return receipt requested) or on the date delivered if sent by email (providing confirmation of receipt) to the Parties at the following addresses, facsimile numbers or email addresses (or at such other addresses, facsimile numbers or email addresses as shall be specified by the Parties by like notice):

 

If to Seller or Seller Parent:

 

Sharp Corporation

282-1, Hajikami, Katsuragi

Nara, 639-2198, Japan

Attn: Shinichiro Yahiro

Facsimile No.: 81-(0)745-63-3192

Email: yahiro.shinichiroh@sharp.co.jp

 

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with a copy to (which shall not constitute notice):

 

Orrick, Herrington & Sutcliffe LLP
 405 Howard Street 
 San Francisco, California 94105
 Attn: John Cook
 Facsimile No.: (415) 773-5759
 Email: jcook@orrick.com

 

If to Buyer or CSI:

 

c/o Canadian Solar (USA) Inc.
 2420 Camino Ramon , Suite 125 
 San Ramon, CA 94583
 Attn: Allen Wang, Director, Legal Affairs
 Facsimile No.: (925) 866-2704
 Email: Allen.Wang@canadiansolar.com

 

with a copy to (which shall not constitute notice):

 

Jeffery R. Atkin

Foley & Lardner LLP

555 South Flower Street, Suite 3500

Los Angeles, CA 90071

Facsimile No.: (213) 486-0065

Email:jatkin@foley.com; and

 

Jason W. Allen

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, WI 53202

Facsimile No.:  (414) 297-4900

Email:jallen@foley.com

 

12.08.              Captions.  The captions and section headings appearing in this Agreement are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.

 

12.09.              Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction, and in lieu of such prohibited or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such prohibited or unenforceable provision as may be possible.

 

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12.10.              Assignment.  The obligations of each Party under this Agreement and the other Transaction Documents are not assignable without the prior written consent of the other Party, which such Party may withhold in its discretion; provided, however, that Buyer and its permitted assigns may at any time after Closing: (a) assign, in whole or in part, its rights and obligations under this Agreement to one or more of its Affiliates; and (b) assign its rights under this Agreement for collateral security purposes to any Person providing financing to Buyer or its permitted assigns or any of its or their Affiliates (including the Company or any Company Subsidiary); provided further that such assignment shall not relieve Buyer of its Liabilities hereunder.

 

12.11.              Counterparts.  This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the Parties may execute this Agreement by signing any such counterpart.

 

12.12.              Disclosure.  Seller Parent may, at its option, include in Seller Parent’s Disclosure Schedule any items that are not material in order to avoid any misunderstanding, and any such inclusion, or any references to dollar amounts, shall not be deemed to be an acknowledgment or representation that such items are material, to establish any standard of materiality or to define further the meaning of such terms for purposes of this Agreement.  Each Disclosure Schedule shall be arranged, for purposes of convenience only, as separately titled Schedules corresponding to the certain sections of this Agreement.  Information disclosed in any Schedule shall constitute a disclosure for purposes of all other Schedules of the same Disclosure Schedule notwithstanding the lack of specific cross-reference thereto, but only to the extent the applicability of such disclosure to such other Schedule is reasonably apparent on its face.  In no event shall the inclusion of any matter in a Disclosure Schedule be deemed or interpreted to broaden the representations, warranties, covenants or agreements contained in this Agreement of the Party to which such Disclosure Schedule relates.  The mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission by the Party to which such Disclosure Schedule relates that such item represents a material exception or fact, event, or circumstance or that such item would be reasonably likely to result in a Material Adverse Effect.  The information contained in each Disclosure Schedule is disclosed solely for the purposes of this Agreement, and no information contained therein shall be deemed to be an admission by any Party hereto to any third party of any matter whatsoever, including of any violation of law or breach of any agreement.

 

12.13.              Specific Performance.  The Parties agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, money damages may not be a sufficient remedy and that the Parties shall be entitled to specific performance of the terms of this Agreement and immediate injunctive relief, without the necessity of proving the inadequacy of money damages as a remedy, in addition to any other remedy at law or in equity.

 

12.14.              Governing Applicable Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE.

 

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12.15.              Arbitration.  In the event of a dispute, controversy, or claim (“Dispute”) under or in any manner related to or arising out of this Agreement, the Parties agree to negotiate in good faith to attempt to resolve the matter  through informal negotiation between their respective senior management.  If the Parties are unable to informally resolve the Dispute within thirty (45) days after one party notifies the other disputing party(ies) of the Dispute, such Dispute shall be referred to and finally resolved by binding arbitration under the Rules of Arbitration of the International Chamber of Commerce (the “ICC Arbitration Rules”) in force at the time of the Dispute.  The arbitral tribunal shall consist of a sole arbitrator appointed in accordance with the ICC Arbitration Rules, the language for the arbitration shall be English, and the arbitration will take place in New York, New York, United States of America.  The Parties agree that the sole arbitrator shall have the power to award any remedies available under applicable law.  The decision of the arbitrator shall be in writing.  The arbitrator shall apply the substantive law of the State of New York without giving effect to any principles of conflict of laws under the laws of the State of New York.  Any monetary award by the arbitrator shall be in United States Dollars only.  All awards of the arbitration are binding, final, non-appealable, and conclusive.  Judgment upon any award rendered by the arbitral tribunal may be entered and enforced in any court having jurisdiction.  Any Party may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any equitable, interim, or provisional relief necessary to protect the rights or property of that party or to preserve the subject matter of the Dispute, pending the arbitrator’s issuance of an award.  A request by a party to a court for such injunctive relief shall not be deemed a waiver or violation of the obligation to arbitrate. No Party nor the arbitrator may disclose the existence, content, or results of any arbitration under this Section 12.15 without the prior written consent of all of the disputing parties or unless required to do so by Law or order of a court..

 

12.16.              Waiver of Jury Trial.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY LEGAL ACTION TO ENFORCE OR INTERPRET THE PROVISIONS OF THIS AGREEMENT OR THAT OTHERWISE RELATES TO THIS AGREEMENT.

 

12.17.              Certain Waivers.  It is acknowledged by each of the Parties hereto that Seller, Seller Parent and the Company have retained Orrick, Herrington & Sutcliffe LLP (“Orrick”) to act as their counsel in connection with the transactions contemplated by this Agreement.  The Parties acknowledge and agree that Orrick shall be permitted, without need for any additional conflict waiver or other consent from Buyer or the Company, to represent Seller Parent and/or Seller in any post-Closing matter solely to the extent related to the transactions contemplated by this Agreement and will not seek to disqualify Orrick.  The Parties further acknowledge and agree that in connection with (a) any actual or potential dispute following the Closing between Buyer or its related Indemnified Party, on the one hand, and Seller Parent or its related Indemnifying Party or representative of Seller Parent or such related Indemnifying Party, on the other hand, or (b) any other actual or potential dispute to which buyer or its related Indemnified Party is a party and in which Seller Parent or its related Indemnifying Party or representative of Seller Parent or such related Indemnifying Party is in any way involved, in each case solely to the extent related to the transactions contemplated hereby, Seller Parent or its related Indemnifying Party and the representative of Seller Parent or such related Indemnifying Party shall have the sole right to invoke or waive or cause Buyer to invoke or waive any (i) attorney-client privilege or (ii) rights and obligations of confidentiality, in each case, attaching to any pre-Closing communications between the Company and its attorneys, including Orrick, solely to the extent related to the transactions contemplated hereby, notwithstanding the transfer of any record of such communications to Buyer or related Indemnified Party.

 

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12.18.              Delivery by Facsimile or PDF.  This Agreement, the other Transaction Documents and any amendments hereto or, to the extent signed and delivered by means of a facsimile machine or electronic transmission in portable document format (pdf), shall be treated in all manner and respects as an original Contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person.  At the request of any Party, each other Party shall re-execute original forms thereof and deliver them to the other Party.  No Party shall raise the use of a facsimile machine or electronic transmission in pdf to deliver a signature or the fact that any signature was transmitted or communicated through such means as a defense to the formation of a Contract and each Party forever waives any such defense.

 

12.19.              Obligations of CSI .  CSI agrees to be liable for the performance by Buyer of all of Buyer’s payment obligations under Sections 2.03 and Section 2.04(e) (the “Obligations”). The foregoing obligation of CSI under this Section 12.19 is absolute and unconditional. If Buyer fails to pay or perform the Obligations, CSI will, promptly on written demand thereof by Seller or Seller Parent, as applicable, pay or perform same.  CSI hereby waives any and all rights and remedies that it may have as a guarantor or surety or to otherwise seek to take defenses outside of this Agreement (that are not otherwise available to Buyer) that may limit or delay Seller’s or Seller Parent’s recovery hereunder.  CSI represents and warrants to Seller, as of the date hereof and as of the Closing Date, as follows: (a) CSI is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; (b) this Agreement has been duly executed by CSI; (c) this Agreement constitutes (assuming the due execution and delivery by each other party hereto) a valid and legally binding obligation of CSI, enforceable against CSI in accordance with its terms, except as limited by the Enforceability Exceptions; and (d) this Agreement does not conflict with, violate or breach, or require any consent or notice under, any Applicable Law or Contract applicable to CSI or require any consent or approval of any Governmental Authority, except as would not have a material adverse effect on CSI’s ability to perform its obligations hereunder.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officer of each Party as of the date first above written.

 

	
 
    	
Sharp   US Holding Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Shinichiro Yahiro
    
	
 
    	
Name:
    	
Shinichiro   Yahiro
    
	
 
    	
Title:
    	
President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Sharp   Corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tetsuo Onishi
    
	
 
    	
Name:
    	
Tetsuo   Onishi
    
	
 
    	
Title:
    	
Representative   Director,
    
	
 
    	
 
    	
Executive   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Canadian   Solar Energy Acquisition Co.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael G. Potter
    
	
 
    	
Name:
    	
Michael   G. Potter
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Canadian   Solar Inc., solely for purposes of Section 12.19
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Shawn Qu
    
	
 
    	
Name:
    	
Shawn   Qu
    
	
 
    	
Title:   
    	
CEO,   Chairman, President
    

 

SIGNATURE PAGE (PSA)

 

 

EXHIBIT A TO PURCHASE AND SALE AGREEMENT

 

GENERAL RELEASE

 

This General Release (this “Release”), dated as of [                  ], 2015, is made by Sharp Corporation, a Japanese corporation (“Sharp”), and Sharp US Holding Inc., a Delaware corporation (“SUH”, and together with Sharp, each a “Releasing Party” and collectively the “Releasing Parties”), in favor of Recurrent Energy, LLC (the “Company”).  Capitalized terms used but not defined herein shall have the meaning given to such terms in the Purchase Agreement (as defined below).

 

Recitals

 

WHEREAS Sharp is the sole stockholder of SUH, which, in turn, is the sole member of the Company.

 

WHEREAS, on February 3, 2015, Releasing Parties entered into that certain Purchase and Sale Agreement (the “Purchase Agreement”) with Canadian Solar Energy Acquisition Co., a Delaware corporation (“Buyer”) and, solely for purposes of Section 12.19 and the other provisions of Article XII related thereto, Canadian Solar Inc., a Canadian corporation, pursuant to which SUH agreed to sell, and Buyer agreed to purchase, 100% of the issued and outstanding limited liability company interests in the Company.

 

WHEREAS, pursuant to Section 7.09 of the Purchase Agreement, Releasing Parties desire to release the Company from all known and unknown claims, as more particularly described below.

 

WHEREAS, the parties hereto are desirous in entering into this Release.

 

Agreement

 

NOW, THEREFORE, in reliance on the foregoing facts, and in consideration of the mutual release set forth herein, the parties hereto hereby agree as follows:

 

1.   Release.

 

(a)                                 The Releasing Parties on behalf of Releasing Parties and their Affiliates hereby fully, irrevocably, and unconditionally releases, acquits, satisfies and forever discharges the Company and each Company Subsidiary as well as the Company’s and each Company Subsidiary’s employees, personal representatives, administrators, executors, successors, heirs and assigns (collectively, the “Released Parties”), from and against any and all claims, demands, accounts, rights, sums of money, charges, contracts, agreements, promises, covenants, causes of action, including, but not limited to, negligence and all other tort actions, suits, controversies, judgments, damages, debts, obligations, equities, statutory claims or liabilities, trespasses, losses, expenses and liabilities, of whatever kind or nature whether in law or in equity, including, without limitation, all matters related to the Company’s and each Company Subsidiary’s obligations under any Contract of any nature and kind whatsoever between any Releasing Party and the Company and each Company Subsidiary, as applicable (collectively, the “Claims”) that a Releasing Party may have against the Released Parties prior to the date hereof and each Releasing Party agrees that it will forever waive any right to make any claim or seek any recourse against the Released Parties related thereto.

 

 

(b)                                 The parties understand the facts in respect of which the release set forth in this Release may hereinafter turn out to be other than or different from the facts now known or believed by each party to be true; and each party hereby accepts and assumes the risk of the facts turning out to be different and agrees that this instrument shall be and remain in all respects effective and not subject to termination or rescission by virtue of any such differences in facts.

 

(c)                                  This is a full and final release, applying to all known or unknown, foreseen or unforeseen, anticipated or unanticipated, suspected or unsuspected, asserted or unasserted, liquidated or unliquidated, existing or contingent, direct or derivative Claims that existed, may have existed or may hereafter arise in any manner or degree from facts and circumstances whether known, or in addition to or different from those now believed to be true, occurring prior to the date of this Release.  Each Releasing Party understands that it may have Claims which have not been manifested or presently known or have not been identified as of the date of this Release, but such Releasing Party nevertheless intends to and does deliberately release all of its possible future Claims that occurred through the date of this Release.

 

(d)                                 The release set forth in Section 1(a) above expressly covers all claims or possible claims by any Releasing Party, whether the same are known, unknown, or hereafter discovered or ascertained but which exist as of the date hereof.

 

(e)                                  Each Releasing Party agrees that it will forever refrain and forebear from instituting, commencing, or prosecuting any litigation, action or other proceeding of any kind whatsoever, by way of action, claim, defense, set-off, cross-complaint, counterclaim or third party action, against the Released Parties based on, or arising out of or in connection with any Claim.

 

(f)                                   Releasing Parties hereby waive, to the fullest extent permitted by Applicable Law, the benefits of Applicable Law that may limit the scope of the covenants and releases granted herein.

 

(g)                                  The parties hereto agree that the release set forth in this Release is the result of a compromise and shall at no time or for any purpose be considered an admission of the truth of any allegations, claims or contentions of any party against any other party hereto.  Any agreements, undertakings or exchanges provided herewith are solely for the purposes of settlement and compromise.

 

(h)                                 Each Releasing Party acknowledges that the terms hereof are contractual and not a mere recital.  Each Releasing Party further acknowledges that it (i) has not been influenced in any manner in making this Release by any representations or statements made by or on behalf of the Released Parties, (ii) has received the advice of counsel in connection with the effect of the execution and delivery of this Release, (iii) has carefully read and fully understand the contents of this Release, and (iv) has duly executed this Release freely and voluntarily, intending and agreeing to be fully bound by the terms hereof.

 

2

 

(i)                                     Each Releasing Party represents and warrants with respect to the Claims released hereby that neither such Releasing Party nor its Affiliates has in any manner assigned, pledged or otherwise voluntarily or involuntarily disposed of or transferred to any party an interest in any Claims released hereby, and that each Claim of such Releasing Party or its Affiliates against the Released Parties is fully and finally discharged, settled and satisfied.  Each Releasing Party further represents and warrants with respect to the Claims released hereby that neither such Releasing Party nor its Affiliates has filed any complaint or claim against the Released Parties with any Governmental Authority.

 

2.                                      Attorneys’ Fees. Should suit be commenced concerning any provisions of this Release and relative to the subject manner hereof, the prevailing party in such litigation shall be entitled to receive, in addition to any other sums, its costs and reasonable attorneys’ fees as determined by a court of competent jurisdiction.

 

3.                                      Choice of Law. This Release, and any instrument or agreement required hereunder (to the extent not otherwise expressly provided for therein), shall be governed by, and construed under, the laws of the State of New York, without reference to conflicts of laws rules.

 

4.                                      Confidentiality of Agreement. The parties hereto agree to keep this Release and the contents thereof confidential and not to disclose it or its terms to any person, except as required by Law, by court order or by written consent of the non-disclosing party.

 

5.                                      Entire Agreement; Amendments.     This Release constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, of the parties hereto with respect to the subject matter hereof.  No oral representations or modifications concerning this instrument nor any course of dealing between or among any persons having any interest in this Release shall be of any force or effect unless contained in a subsequent written modification signed by the party hereto to be charged.  This Release may be amended, modified or waived only by a written instrument executed by the parties hereto.

 

6.                                      Severability.  Releasing Parties agree that any provision of this Release that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.  Releasing Parties further agree that this Release shall be construed as a whole according to its fair meaning.

 

7.                                      Counterparts.   This Release may be executed in one or more counterparts, each of which shall constitute an original but all of which, taken together, shall constitute but one agreement. Facsimile or PDF signatures shall be deemed original.

 

[SIGNATURE PAGE FOLLOWS]

 

3

 

IN WITNESS WHEREOF, this General Release has been duly executed as of the date first written above.

 

 

	
 
    	
Sharp   Corporation,
    
	
 
    	
a   Japanese corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Sharp   US Holding Inc.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted   and Agreed To:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Recurrent   Energy, LLC,
    	
 
    	
 
    
	
a   Delaware limited liability company
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    

 

[SIGNATURE PAGE GENERAL RELEASE (RECURRENT ENERGY, LLC)]

 

 

EXHIBIT B TO PURCHASE AND SALE AGREEMENT

 

ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This Assignment and Assumption Agreement (this “Assignment Agreement”), dated as [                  ], 2015, is made by and between Sharp US Holding Inc., a Delaware corporation (the “Assignor”), and Canadian Solar Energy Acquisition Co., a Delaware corporation (the “Assignee”).  Capitalized terms used but not defined herein shall have the meaning given to such terms in the Purchase Agreement (as defined below).

 

RECITALS

 

A.                                          The Assignor owns 100% of the Company Interests in Recurrent Energy, LLC, a Delaware limited liability company (the “Company”).

 

B.                                   Sharp Corporation, a Japanese corporation, the Assignor, the Assignee, and solely for purposes of Section 12.19 and the other provisions of Article XII related thereto, Canadian Solar Inc., a Canadian corporation, have entered into a Purchase and Sale Agreement, dated as of February 3, 2015 (as may be amended from time to time, the “Purchase Agreement”), pursuant to which the Assignor agreed to sell, and the Assignee agreed to buy, all of the Assignor’s right, title and interest in and to the Company Interests free and clear of all Liens, other than Permitted Encumbrances.  The Company Interests constitute all of the right, title and interest of the Assignor as a member of the Company.

 

D.                                   Subject to the terms and the conditions of the Purchase Agreement, the Assignor wishes to assign to the Assignee, and the Assignee wishes to accept from the Assignor, all of the Assignor’s right, title and interest in and to the Company Interests free and clear of all Liens, other than Permitted Encumbrances.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

AGREEMENT

 

1.                                      Assignment and Assumption.   The Assignor hereby transfers, assigns, conveys and delivers to the Assignee all of the Assignor’s right, title and interest in and to the Company Interests, free and clear of all Liens, other than Permitted Encumbrances, subject to and in accordance with the terms and conditions of the Purchase Agreement.  The Assignee hereby accepts all of the Assignor’s right, title and interest in and to the Company Interests free and clear of all Liens, other than Permitted Encumbrances.  The Assignee expressly agrees that, notwithstanding this Assignment, RE Rosamond One LLC, RE Rosamond Two LLC, RE Columbia LLC, RE Columbia Two LLC, RE Columbia 3 LLC, RE Rio Grande LLC, RE Great Lakes LLC, and RE Barren Ridge 1 LLC (collectively “Project Companies”) shall continue to perform all of their obligations under that certain Environmental Settlement Agreement, dated as of December 16, 2011, by and among Project Companies, RE Tehachapi Solar LLC, RE Tehachapi Solar 2 LLC, and Kern County Citizens for Responsible Solar, as modified by that certain Letter, dated as of January 27, 2014, by Project Companies and acknowledged and agreed by IBEW, Local 428, Kern County Citizens for Responsible Solar, California Union for Reliable Energy, Wesley Simpson, Don Shultz, and Ron Derbyshire.

 

1

 

2.                                      Counterparts.  This Assignment Agreement may be executed in one or more counterparts, each of which shall constitute an original but all of which, taken together, shall constitute but one agreement.   Facsimile or PDF signatures shall be deemed original.

 

3.                                      Governing Law.  This Assignment Agreement, and any instrument or agreement required hereunder (to the extent not otherwise expressly provided for therein), shall be governed by, and construed under, the laws of the State of New York, without reference to conflicts of laws rules.

 

4.                                      Further Assurances.  Each of the parties hereto covenants and agrees, at its own expense, to execute and deliver such further documents and to perform such other acts as may be reasonably necessary or proper and usual to effect this Assignment Agreement.

 

5.                                      Amendments.  No provision of this Assignment Agreement may be amended, modified or waived except by written agreement duly executed by each of the parties.

 

6.                                      Headings.  The section headings used in this Assignment Agreement are for convenience of reference only and shall not be used or construed to define, interpret, expand or limit any provision hereof.

 

7.                                      Successors and Assigns.  This Assignment Agreement shall be binding upon and shall inure to the benefit of the parties and their respective personal representatives, heirs, successors and assigns.

 

8.                                      No Conflict.  This Assignment Agreement is being delivered pursuant to the Purchase Agreement and will be construed consistently with the Purchase Agreement.  This Assignment Agreement is not intended to, and does not, in any manner enhance, diminish or otherwise modify the rights and obligations of the parties under the Purchase Agreement.  To the extent that any provision of this Assignment Agreement conflicts or is inconsistent with the terms of the Purchase Agreement, the terms of the Purchase Agreement will govern.

 

[Signature page follows.]

 

2

 

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

 

 

	
ASSIGNOR:
    	
 
    
	
 
    	
 
    
	
Sharp US Holding Inc.,
    	
 
    
	
a Delaware corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
ASSIGNEE:
    	
 
    
	
 
    	
 
    
	
Canadian Solar Energy Acquisition   Co.,
    	
 
    
	
a Delaware corporation
    	
 
    
	
 
    	
 
    
	
By: 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
					

 

[Signature Page to Assignment and Assumption Agreement (Recurrent Energy, LLC)]

 

 

EXHIBIT C TO PURCHASE AND SALE AGREEMENT

 

INTERIM PERIOD WEEKLY REPORT

 

1.                               Weekly cash flow update with respect to the Company and the Company Subsidiaries.

 

2.                               A summary of Project changes as result of any Capital Committee or risk review meetings of the Company that have occurred.

 

 

Execution Version

 

SELLER PARENT’S DISCLOSURE SCHEDULEEXHIBIT 4.1

 

 

INDENTURE

 

between

 

FORD CREDIT AUTO LEASE TRUST 2015-A,
 as Issuer

 

and

 

THE BANK OF NEW YORK MELLON,
 as Indenture Trustee

 

Dated as of April 1, 2015

 

 

 

TABLE OF CONTENTS

 

	
ARTICLE I USAGE AND   DEFINITIONS
    	
1
    
	
Section 1.1.
    	
Usage and Definitions
    	
1
    
	
Section 1.2.
    	
Incorporation by Reference of Trust Indenture Act
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE II THE NOTES
    	
2
    
	
Section 2.1.
    	
Form
    	
2
    
	
Section 2.2.
    	
Execution, Authentication and Delivery
    	
2
    
	
Section 2.3.
    	
Tax Treatment
    	
3
    
	
Section 2.4.
    	
Registration; Registration of Transfer and Exchange
    	
3
    
	
Section 2.5.
    	
Mutilated, Destroyed, Lost or Stolen Notes
    	
6
    
	
Section 2.6.
    	
Persons Deemed Owners
    	
7
    
	
Section 2.7.
    	
Payment of Principal and Interest
    	
7
    
	
Section 2.8.
    	
Cancellation
    	
8
    
	
Section 2.9.
    	
Release of 2015-A Collateral
    	
8
    
	
Section 2.10.
    	
Book-Entry Notes
    	
8
    
	
Section 2.11.
    	
Definitive Notes
    	
9
    
	
Section 2.12.
    	
Authenticating Agents
    	
9
    
	
Section 2.13.
    	
Note Paying Agents
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE III COVENANTS AND   REPRESENTATIONS
    	
10
    
	
Section 3.1.
    	
Payment of Principal and Interest
    	
10
    
	
Section 3.2.
    	
Maintenance of Office or Agency
    	
10
    
	
Section 3.3.
    	
Money for Payments To Be Held in Trust
    	
11
    
	
Section 3.4.
    	
Existence
    	
12
    
	
Section 3.5.
    	
Protection of 2015-A Collateral
    	
12
    
	
Section 3.6.
    	
Performance of Obligations; Servicing of Receivables
    	
13
    
	
Section 3.7.
    	
Negative Covenants
    	
14
    
	
Section 3.8.
    	
Opinions on 2015-A Collateral
    	
14
    
	
Section 3.9.
    	
Annual Statement of Compliance
    	
15
    
	
Section 3.10.
    	
Consolidation and Merger; Sale of Assets
    	
15
    
	
Section 3.11.
    	
Successor or Transferee
    	
16
    
	
Section 3.12.
    	
No Other Activities
    	
16
    
	
Section 3.13.
    	
Further Instruments and Acts
    	
16
    
	
Section 3.14.
    	
Restricted Payments
    	
16
    
	
Section 3.15.
    	
Notice of Events of Default
    	
17
    
	
Section 3.16.
    	
Representations and Warranties of the Issuer regarding   Security Interest
    	
17
    
	
Section 3.17.
    	
Audits of the Issuer
    	
18
    
	
Section 3.18.
    	
Representations and Warranties of the Issuer
    	
18
    
	
Section 3.19.
    	
Calculation Agent
    	
19
    
	
Section 3.20.
    	
No Offer to Employee Benefit Plans
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE IV SATISFACTION AND   DISCHARGE
    	
20
    
	
Section 4.1.
    	
Satisfaction and Discharge of Indenture
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE V REMEDIES
    	
20
    

 

i

 

	
Section 5.1.
    	
Events of Default
    	
20
    
	
Section 5.2.
    	
Acceleration of Maturity; Rescission
    	
21
    
	
Section 5.3.
    	
Collection of Indebtedness by the Indenture Trustee
    	
22
    
	
Section 5.4.
    	
Trustee May File Proofs of Claim
    	
22
    
	
Section 5.5.
    	
Trustee May Enforce Claims Without Possession of Notes
    	
23
    
	
Section 5.6.
    	
Remedies; Priorities
    	
23
    
	
Section 5.7.
    	
Optional Preservation of the 2015-A Collateral
    	
25
    
	
Section 5.8.
    	
Limitation on Suits
    	
25
    
	
Section 5.9.
    	
Unconditional Rights of Noteholders to Receive Principal   and Interest
    	
26
    
	
Section 5.10.
    	
Restoration of Rights and Remedies
    	
26
    
	
Section 5.11.
    	
Rights and Remedies Cumulative
    	
26
    
	
Section 5.12.
    	
Delay or Omission Not a Waiver
    	
26
    
	
Section 5.13.
    	
Control by Noteholders
    	
27
    
	
Section 5.14.
    	
Waiver of Defaults and Events of Default
    	
27
    
	
Section 5.15.
    	
Undertaking for Costs
    	
27
    
	
Section 5.16.
    	
Waiver of Stay or Extension Laws
    	
28
    
	
Section 5.17.
    	
Performance and Enforcement of Certain Obligations
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE VI THE INDENTURE   TRUSTEE
    	
29
    
	
Section 6.1.
    	
Duties of Indenture Trustee
    	
29
    
	
Section 6.2.
    	
Rights of Indenture Trustee
    	
30
    
	
Section 6.3.
    	
Individual Rights of Indenture Trustee
    	
31
    
	
Section 6.4.
    	
Indenture Trustee’s Disclaimer
    	
31
    
	
Section 6.5.
    	
Notice of Defaults
    	
31
    
	
Section 6.6.
    	
Reports by Indenture Trustee
    	
31
    
	
Section 6.7.
    	
Compensation and Indemnity
    	
33
    
	
Section 6.8.
    	
Replacement of Indenture Trustee
    	
34
    
	
Section 6.9.
    	
Successor Indenture Trustee by Merger
    	
35
    
	
Section 6.10.
    	
Appointment of Separate Indenture Trustee or Co-Indenture   Trustee
    	
35
    
	
Section 6.11.
    	
Eligibility; Disqualification
    	
36
    
	
Section 6.12.
    	
Preferential Collection of Claims Against Issuer
    	
37
    
	
Section 6.13.
    	
Audits of the Indenture Trustee
    	
37
    
	
Section 6.14.
    	
Representations and Warranties of the Indenture Trustee
    	
38
    
	
Section 6.15.
    	
Duty to Update Disclosure
    	
39
    
	
Section 6.16.
    	
Covenants for Reporting of Reallocations of Leases and   Leased Vehicles due to Breaches of Representations and Warranties
    	
39
    
	
 
    	
 
    	
 
    
	
ARTICLE VII NOTEHOLDERS’   LISTS AND REPORTS
    	
40
    
	
Section 7.1.
    	
Names and Addresses of Noteholders
    	
40
    
	
Section 7.2.
    	
Preservation of Information; Communications to Noteholders
    	
40
    
	
Section 7.3.
    	
Reports by Issuer
    	
40
    
	
Section 7.4.
    	
Reports by Indenture Trustee
    	
41
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII ACCOUNTS,   DISBURSEMENTS AND RELEASES
    	
41
    
	
Section 8.1.
    	
Collection of Money
    	
41
    
	
Section 8.2.
    	
Bank Accounts; Distributions and Disbursements
    	
42
    

 

ii

 

	
Section 8.3.
    	
General Provisions Regarding Bank Accounts
    	
44
    
	
Section 8.4.
    	
Release of 2015-A Collateral
    	
45
    
	
 
    	
 
    	
 
    
	
ARTICLE IX SUPPLEMENTAL INDENTURES
    	
46
    
	
Section 9.1.
    	
Supplemental Indentures Without Consent of Noteholders
    	
46
    
	
Section 9.2.
    	
Supplemental Indentures with Consent of Noteholders
    	
47
    
	
Section 9.3.
    	
Execution of Supplemental Indentures
    	
48
    
	
Section 9.4.
    	
Effect of Supplemental Indenture
    	
48
    
	
Section 9.5.
    	
Conformity with Trust Indenture Act
    	
49
    
	
Section 9.6.
    	
Reference in Notes to Supplemental Indentures
    	
49
    
	
 
    	
 
    	
 
    
	
ARTICLE X REDEMPTION OF   NOTES
    	
49
    
	
Section 10.1.
    	
Redemption
    	
49
    
	
 
    	
 
    	
 
    
	
ARTICLE XI MISCELLANEOUS
    	
50
    
	
Section 11.1.
    	
Compliance Certificates and Opinions, etc.
    	
50
    
	
Section 11.2.
    	
Form of Documents Delivered to Indenture Trustee
    	
52
    
	
Section 11.3.
    	
Acts of Noteholders
    	
52
    
	
Section 11.4.
    	
Notices to Indenture Trustee, Issuer and Rating   Agencies
    	
53
    
	
Section 11.5.
    	
Notices to Noteholders; Waiver
    	
53
    
	
Section 11.6.
    	
Conflict with Trust Indenture Act
    	
54
    
	
Section 11.7.
    	
Benefits of Indenture
    	
54
    
	
Section 11.8.
    	
GOVERNING LAW
    	
54
    
	
Section 11.9.
    	
Submission to Jurisdiction
    	
54
    
	
Section 11.10.
    	
WAIVER OF JURY TRIAL
    	
54
    
	
Section 11.11.
    	
Severability
    	
55
    
	
Section 11.12.
    	
Headings
    	
55
    
	
Section 11.13.
    	
Issuer Obligation
    	
55
    
	
Section 11.14.
    	
Subordination of Claims against the Depositor
    	
55
    
	
Section 11.15.
    	
No Petition
    	
56
    
	
Section 11.16.
    	
Rights Limited to Collateral Specified Interest
    	
56
    
	
Section 11.17.
    	
Counterparts
    	
57
    
	
 
    	
 
    
	
Schedule   A
    	
Notice   Addresses
    	
SA-1
    
	
Exhibit A
    	
Form of   Class A/B/C Note
    	
EA-1
    
				

 

iii

 

INDENTURE, dated as of April 1, 2015 (this “Indenture”), between FORD CREDIT AUTO LEASE TRUST 2015-A, a Delaware statutory trust, as Issuer, and THE BANK OF NEW YORK MELLON, a New York banking corporation, as Indenture Trustee for the benefit of the 2015-A Secured Parties.

 

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the 2015-A Secured Parties.

 

GRANTING CLAUSE

 

The Issuer Grants to the Indenture Trustee at the 2015-A Closing Date, as Indenture Trustee for the benefit of the 2015-A Secured Parties, all of the Issuer’s right, title and interest in, to and under, whether now owned or later acquired, the 2015-A Collateral.  The foregoing Grant is made in trust to secure (a) the payment of principal of, interest on and any other amounts owing in respect of the Notes as provided in this Indenture and (b) compliance by the Issuer with the provisions of this Indenture for the benefit of the 2015-A Secured Parties.

 

The Titling Companies hereby jointly and severally Grant to the Indenture Trustee at the 2015-A Closing Date, as Indenture Trustee for the benefit of the 2015-A Secured Parties, all of the Titling Companies’ right, title and interest in, to and under, whether now owned or existing or later acquired or arising in, the Titling Company Collateral Accounts.  The foregoing Grant is made in trust to secure (a) the payment of principal of and interest on, and any other amounts owing in respect of, the 2015-A Exchange Note as provided in the Exchange Note Supplement and (b) compliance by the Titling Companies with the provisions of the Exchange Note Supplement for the benefit of the 2015-A Secured Parties.

 

The Indenture Trustee acknowledges these Grants, accepts the trusts under this Indenture in accordance with this Indenture and agrees to perform the duties required in this Indenture and the Exchange Note Supplement so that the interests of the 2015-A Secured Parties may be adequately and effectively protected.

 

ARTICLE I
 USAGE AND DEFINITIONS

 

Section 1.1.                                 Usage and Definitions.  Capitalized terms used but not otherwise defined in this Indenture are defined in Appendix 1 to the Exchange Note Supplement to the Credit and Security Agreement (as defined below), dated as of April 1, 2015 (the “Exchange Note Supplement”), among CAB East LLC (“CAB East”), as a Borrower, CAB West LLC (“CAB West”), as a Borrower, FCALM, LLC (“FCALM” and, together with CAB East and CAB West, the “Titling Companies”), as a Borrower, U.S. Bank National Association (“U.S. Bank”), as Administrative Agent, HTD Leasing LLC (“HTD”), as Collateral Agent, and Ford Motor Credit Company LLC (“Ford Credit”), as Lender and Servicer.  Capitalized terms used but not otherwise defined in this Indenture or in Appendix 1 to the Exchange Note Supplement are defined in Appendix A to the Amended and Restated Credit and Security Agreement, dated as of December 1, 2006 (the “Credit and Security Agreement”), among the Titling Companies, as Borrowers, U.S. Bank, as Administrative Agent, HTD, as Collateral Agent and Ford Credit, as

 

 

Lender and Servicer.  Appendix 1 and Appendix A also contain rules of usage applicable to this Indenture and are incorporated by reference into this Indenture.

 

Section 1.2.                                 Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the TIA, the 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; and

 

“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 Securities and Exchange Commission rule have the meaning assigned to them by those definitions.

 

ARTICLE II
 THE NOTES

 

Section 2.1.                                 Form.

 

(a)                                 Each Class of Notes, together with the Indenture Trustee’s certificates of authentication, will be in substantially the form set forth in Exhibit A with any variations required or permitted by this Indenture.  The Notes may have any marks of identification and legends or endorsements placed on them determined to be reasonably required, consistent with this Indenture, by the Responsible Person of the Issuer executing the Notes, as evidenced by their execution of the Notes.  The physical Notes will be produced by any method as determined by the Responsible Person of the Issuer executing the Notes, as evidenced by their execution of the Notes.

 

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

 

Section 2.2.                                 Execution, Authentication and Delivery.

 

(a)                                 A Responsible Person of the Issuer will execute the Notes on behalf of the Issuer.  The signature of the Responsible Person on the Notes may be manual or facsimile.  Notes bearing the manual or facsimile signature of an individual who was a Responsible Person of the Issuer will bind the Issuer, notwithstanding that the individual has ceased to hold that office before the authentication and delivery of the Notes or did not hold that office at the date of issuance of the Notes.

 

2

 

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

 

	
Class
    	
 
    	
Note Interest Rate
    	
 
    	
Initial Note Balance
    	
 
    
	
Class A-1 Notes
    	
 
    	
0.32000%
    	
 
    	
$
    	
160,000,000
    	
 
    
	
Class A-2a Notes
    	
 
    	
0.79%
    	
 
    	
$
    	
185,000,000
    	
 
    
	
Class A-2b Notes
    	
 
    	
LIBOR + 0.28%
    	
 
    	
$
    	
202,000,000
    	
 
    
	
Class A-3 Notes
    	
 
    	
1.13%
    	
 
    	
$
    	
247,000,000
    	
 
    
	
Class A-4 Notes
    	
 
    	
1.31%
    	
 
    	
$
    	
108,000,000
    	
 
    
	
Class B Notes
    	
 
    	
1.59%
    	
 
    	
$
    	
50,700,000
    	
 
    
	
Class C Notes
    	
 
    	
1.78%
    	
 
    	
$
    	
47,300,000
    	
 
    

 

(c)                                  The Notes will initially be issued as Book-Entry Notes.  The Class A-1 Notes will be issuable in minimum denominations of $100,000 and in multiples of $1,000 in excess of $100,000.  The Notes (other than the Class A-1 Notes) will be issuable in minimum denominations of $1,000 and in multiples of $1,000 in excess of $1,000.  Notwithstanding the foregoing, one Note of each Class may fail to be in the applicable minimum denomination due to the difference between that minimum denomination requirement and the initial Note Balance of the Notes.

 

(d)                                 No Note will be entitled to any benefit under this Indenture or be valid for any purpose, unless it bears a certificate of authentication substantially in the form provided for in this Indenture executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and the certificate of authentication on any Note will be conclusive evidence, and the only evidence, that the Note has been duly authenticated and delivered under this Indenture.

 

Section 2.3.                                 Tax Treatment.  The Issuer intends that Notes that are owned or beneficially owned by a Person other than Ford Credit or its Affiliates will be indebtedness of the Issuer, secured by the 2015-A Collateral, for U.S. federal, State and local income and franchise tax purposes.  The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner by its acceptance of an interest in the applicable Book-Entry Note), agree to treat the Notes for U.S. federal, State and local income and franchise tax purposes as indebtedness of the Issuer.

 

Section 2.4.                                 Registration; Registration of Transfer and Exchange.

 

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

 

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(b)                                 On surrender for registration of transfer of any Note at the office or agency of the Issuer maintained under Section 3.2, if the requirements of Section 8-401(a) of the UCC are met, the Issuer will execute, the Indenture Trustee will authenticate and the Noteholder will 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 denomination, in the same aggregate principal amount.

 

(c)                                  A Noteholder may exchange Notes for other Notes of the same Class, in any authorized denominations, in the same aggregate principal amount, by surrendering the Notes to be exchanged at the office or agency of the Issuer maintained under Section 3.2.  If the requirements of Section 8-401(a) of the UCC are met, the Issuer will execute, the Indenture Trustee will authenticate and the Noteholder will obtain from the Indenture Trustee the Notes that the Noteholder making the exchange is entitled to receive.

 

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

 

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

 

(f)                                   None of the Issuer, the Note Registrar or the Indenture Trustee will impose a service charge on a Noteholder for any registration of transfer or exchange of Notes.  The Issuer, the Note Registrar or the Indenture Trustee may require the Noteholder to pay an amount sufficient to cover any tax or other governmental charge that may be imposed in connection with the registration of transfer or exchange of the Notes.

 

(g)                                  Neither the Issuer nor the Note Registrar will be required to register transfers or exchanges of Notes selected for redemption or Notes whose next Payment Date is not more than 15 days after the requested date of the transfer or exchange.

 

(h)                                 The Class A-1 Notes, the Class B Notes and the Class C Notes (the “Rule 144A Notes”) have not been registered under the Securities Act or any State securities law.  None of the Issuer, the Note Registrar or the Indenture Trustee is obligated to register the Rule 144A Notes under the Securities Act or any State securities or “blue sky” laws or to take any other action not otherwise required under this Indenture or the Trust Agreement to permit the transfer of any Rule 144A Note without registration.  The Issuer, at the direction of the Depositor or the Indenture Administrator, may elect to register, or cause the registration of, the Rule 144A Notes under the Securities Act and any applicable State securities law, in which case the Issuer will

 

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deliver, or cause to be delivered, to the Indenture Trustee and the Registrar any Opinions of Counsel, Officer’s Certificates and other information determined by the Depositor to be necessary to effect the registration.

 

(i)                                     Until the Rule 144A Notes have been registered under the Securities Act and any applicable State securities law under Section 2.4(h), no Rule 144A Note may be sold, transferred, assigned, participated, pledged, or otherwise disposed of (any such act, a “Rule 144A Note Transfer”) to any Person except in accordance with the provisions of this Section 2.4, and any purported Rule 144A Note Transfer in violation of this Section 2.4 will be null and void (a “Void Rule 144A Note Transfer”).

 

(j)                                    Each Rule 144A Note will bear the legend contained in Exhibit A unless determined otherwise by the Indenture Administrator (as certified to the Indenture Trustee in an Officer’s Certificate) consistent with applicable law.

 

As a condition to the registration of any Rule 144A Note Transfer, the prospective transferee of the Rule 144A Note will be deemed to represent to the Indenture Trustee, the Note Registrar and the Issuer the following:

 

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

 

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

 

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

 

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

 

(k)                                 By acceptance of any Rule 144A Note, the related Rule 144A Noteholder specifically agrees with and represents to the Depositor, the Issuer and the Note Registrar, that no Rule 144A Note Transfer will be made unless (i) the registration requirements of the Securities Act and any applicable State securities laws have been complied with in respect of the Rule 144A Note in accordance with Section 2.4(h), (ii) the Rule 144A Note Transfer is to the Depositor or its Affiliates or (iii) the Rule 144A Note Transfer is exempt from the registration requirements under the Securities Act because the Rule 144A Note Transfer is in compliance with Rule 144A, to a transferee who the transferor reasonably believes is a QIB that is

 

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purchasing for its own account or for the account of a QIB and to whom notice is given that the Rule 144A Note Transfer is being made in reliance on Rule 144A.

 

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

 

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

 

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

 

(iii)                               other information reasonably available to the Indenture Administrator in order to comply with requests for information under Rule 144A.

 

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

 

Section 2.5.                                 Mutilated, Destroyed, Lost or Stolen Notes.

 

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

 

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(b)                                 On the issuance of any replacement Note under Section 2.5(a), the Issuer may require the Noteholder of the Note to pay an amount sufficient to cover any tax or other governmental charge imposed and any other reasonable expenses incurred in connection with the replacement Note.

 

(c)                                  Each replacement Note issued under Section 2.5(a) will constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note will be enforceable by anyone and, except as otherwise provided in this Indenture, will be entitled to all the benefits of this Indenture equally and proportionately with all other Notes of the same Class duly issued under this Indenture.

 

(d)                                 This Section 2.5 is exclusive and precludes (to the extent lawful) all other rights and remedies for the replacement or payment of mutilated, destroyed, lost or stolen Notes.

 

Section 2.6.                                 Persons Deemed Owners.  On any date, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name any Note is registered as of that date as the owner of the Note for the purpose of receiving payments of principal of and any interest on the Note and for all other purposes, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee will be affected by notice to the contrary.

 

Section 2.7.                                 Payment of Principal and Interest.

 

(a)                                 Each Class of Notes will accrue interest at the applicable Note Interest Rate.  Interest on each Note will be due and payable on each Payment Date as specified in the Note.  Interest on the Class A-1 Notes and the Class A-2b Notes will be computed on the basis of actual number of days elapsed and a 360-day year.  Interest on the Notes (other than the Class A-1 Notes and the Class A-2b Notes) will be computed on the basis of a 360-day year consisting of twelve 30-day months.

 

(b)                                 Interest and principal payments on each Class of Notes will be made ratably to the Noteholders of the Class entitled to those payments.  On each Payment Date, distributions to be made of interest on and principal of the Book-Entry Notes will be paid to the Registered Noteholder by wire transfer in immediately available funds to the account designated by the nominee of the Clearing Agency (initially, the nominee will be Cede & Co.).  Distributions to be made of interest on and principal of the Definitive Notes will be paid to the Registered Noteholder (i) if the Noteholder has provided to the Note Registrar appropriate instructions at least five Business Days before that Payment Date and the aggregate original principal amount of the Noteholder’s Notes is at least $1,000,000, by wire transfer in immediately available funds to the account of the Noteholder or (ii) by check mailed first class mail, postage prepaid, to the Registered Noteholder’s address as it appears on the Note Register on the related Record Date.  However, the final installment of principal (whether payable by wire transfer or check) of each Note on a Payment Date, the Redemption Date or the applicable Final Scheduled Payment Date will be payable only on presentation and surrender of the Note.  The Indenture Trustee will notify each Registered Noteholder of the date on which the Issuer expects that the final installment of principal of and interest on the Registered Noteholder’s Notes will be paid not later than five days before that date.  The notice will specify the place where the Notes may be

 

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presented and surrendered for payment of that installment.  All funds paid by wire transfers or checks that are returned undelivered will be held in accordance with Section 3.3.

 

(c)                                  The principal of each Note will be payable in installments on each Payment Date as specified in the Note.  The entire unpaid Note Balance of each Class of Notes will be due and payable on the earlier of its applicable Final Scheduled Payment Date and the Redemption Date.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes will be due and payable on the date on which the Notes are declared to be immediately due and payable in the manner provided in Section 5.2(a).

 

Section 2.8.                                 Cancellation.  Any Person that receives a Note surrendered for payment, registration of transfer, exchange or redemption will deliver the Note to the Indenture Trustee.  The Indenture Trustee will promptly cancel all Notes it receives that have been surrendered for payment, registration of transfer or exchange, or redemption.  The Issuer may deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered under this Indenture which the Issuer may have acquired in any manner, and the Indenture Trustee will promptly cancel the Notes.  No Notes will be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section 2.8.  The Indenture Trustee may hold or dispose of all cancelled Notes in accordance with its standard retention or disposal policy unless the Issuer directs, by Issuer Order, that they be destroyed or returned to it (so long as the Notes have not been disposed of previously by the Indenture Trustee).

 

Section 2.9.                                 Release of 2015-A Collateral.  The Indenture Trustee will release property from the Lien of this Indenture only in accordance with Sections 8.4 and 10.1.

 

Section 2.10.                          Book-Entry Notes.  The Class A-1 Notes, Class A-2a Notes, Class A-2b Notes, Class A-3 Notes, Class A-4 Notes, Class B Notes and Class C Notes will be issued as Book-Entry Notes on the 2015-A Closing Date.  The Book-Entry Notes, on original issuance, will be issued in the form of typewritten Notes representing the Book-Entry Notes and delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer.  The Book-Entry Notes will be registered initially on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner will receive a Definitive Note representing the Note Owner’s interest in the Note, except as provided in Section 2.11.  Unless and until definitive, fully registered Notes (the “Definitive Notes”) have been issued to Note Owners under Section 2.11:

 

(a)                                 for Book-Entry Notes, the Note Registrar and the Indenture Trustee will be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of principal of and interest on the Book-Entry Notes and the giving of notices, instructions or directions under this Indenture) as the sole Noteholder of the Book-Entry Notes, and will have no obligation to the Note Owners;

 

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

 

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(c)                                  to the extent that this Section 2.10 conflicts with any other provisions of this Indenture, this Section 2.10 will control;

 

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

 

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

 

Section 2.11.                          Definitive Notes.  For any Class or Classes of Book-Entry Notes, if (a) the Indenture Administrator notifies the Indenture Trustee that the Clearing Agency is no longer willing or able to properly discharge its responsibilities as depository for the Book-Entry Notes and the Indenture Administrator is unable to reach an agreement on satisfactory terms with a qualified successor, (b) the Indenture Administrator notifies the Indenture Trustee that it elects to terminate the book-entry system through the Clearing Agency or (c) after the occurrence of an Event of Default or a Servicer Event of Default, so long as any Book-Entry Notes are Outstanding, Note Owners of a majority of the Note Balance of the Controlling Class notify the Indenture Trustee and the Clearing Agency that they elect to terminate the book-entry system through the Clearing Agency, then the Clearing Agency will notify all Note Owners and the Indenture Trustee of the occurrence of their election and of the availability of Definitive Notes to the Note Owners.  After the Clearing Agency has surrendered the typewritten Notes representing the Book-Entry Notes and delivered the registration instructions to the Indenture Trustee, the Issuer will execute and the Indenture Trustee, on Issuer Request, will authenticate the Definitive Notes in accordance with the instructions of the Clearing Agency.  None of the Issuer, the Note Registrar or the Indenture Trustee will be liable for any delay in delivery of the instructions and may conclusively rely, and will be protected in relying, on the instructions.  On the issuance of Definitive Notes to Note Owners, the Indenture Trustee will recognize the holders of the Definitive Notes as Noteholders.

 

Section 2.12.                          Authenticating Agents.

 

(a)                                 The Indenture Trustee may appoint one or more Persons (each, an “Authenticating Agent”) with the power to act on its behalf and subject to its direction in the authentication of Notes in connection with issuances, transfers and exchanges under Sections 2.2, 2.4, 2.5 and 9.6, as though each such Authenticating Agent had been expressly authorized by those Sections to authenticate the Notes.  For all purposes of this Indenture, the authentication of Notes by an Authenticating Agent under this Section 2.12 is deemed to be the authentication of Notes “by the Indenture Trustee.”

 

(b)                                 Any Person into which an Authenticating Agent may be merged or converted or with which it may be consolidated, any Person resulting from any merger or consolidation or

 

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conversion to which an Authenticating Agent is a party, or any Person succeeding to all or substantially all of the corporate trust business of an Authenticating Agent, will be the successor of the Authenticating Agent under this Indenture without the execution or filing of any document or any further act.

 

(c)                                  An Authenticating Agent may resign by giving notice of resignation to the Indenture Trustee and the Owner Trustee.  The Indenture Trustee may terminate the agency of an Authenticating Agent by giving notice of termination to the Authenticating Agent and the Owner Trustee.  On receiving the notice of resignation or on a termination, the Indenture Trustee may appoint a successor Authenticating Agent and will notify the Owner Trustee of any such appointment.

 

(d)                                 Sections 2.8 and 6.4 will apply to each Authenticating Agent.

 

Section 2.13.                          Note Paying Agents.

 

(a)                                 The Indenture Trustee may appoint one or more Note Paying Agents that meet the eligibility standards for the Indenture Trustee specified in Section 6.11(a).  The Note Paying Agents will have the power to make distributions from the Bank Accounts.

 

(b)                                 Any Person into which a Note Paying Agent may be merged or converted or with which it may be consolidated, any Person resulting from any merger or consolidation or conversion to which a Note Paying Agent is a party or any Person succeeding to all or substantially all of the corporate trust business of a Note Paying Agent, will be the successor of the Note Paying Agent under this Indenture without the execution or filing of any document or any further act.

 

(c)                                  A Note Paying Agent may resign by giving notice of resignation to the Indenture Trustee, the Indenture Administrator and the Issuer.  The Indenture Trustee may terminate the agency of a Note Paying Agent by giving notice of termination to the Note Paying Agent, the Indenture Administrator and the Issuer.  On receiving the notice of resignation or on a termination, the Indenture Trustee may appoint a successor Note Paying Agent and will notify the Indenture Administrator and the Issuer of any such appointment.

 

(d)                                 Sections 2.8 and 6.4 will apply to each Note Paying Agent.

 

ARTICLE III
 COVENANTS AND REPRESENTATIONS

 

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

 

Section 3.2.                                 Maintenance of Office or Agency.  The Issuer will maintain an office or agency in the Borough of Manhattan, The City of New York, where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or on the Issuer in respect of the Notes and this Indenture may be served.  The Issuer initially appoints the Indenture

 

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Trustee to serve as its agent for those purposes.  The Issuer will promptly notify the Indenture Trustee of any change in the location of the office or agency.  If the Issuer fails to maintain any such office or agency or fails to furnish the Indenture Trustee with the address of the office or agency, those surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer appoints the Indenture Trustee as its agent to receive all surrenders, notices and demands.

 

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

 

(a)                                 All payments of amounts on any Notes that are to be made from amounts withdrawn from the Bank Accounts will be made on behalf of the Issuer by the Indenture Trustee or by another Note Paying Agent, and no amounts so withdrawn for payments on the Notes may be paid over to or at the direction of the Issuer, except as provided in this Section 3.3.

 

(b)                                 The Indenture Trustee (including, if applicable, in its capacity as Note Paying Agent) will, and will cause each Note Paying Agent (other than the Indenture Trustee itself) to, execute and deliver to the Indenture Trustee, an instrument in which the Note Paying Agent agrees with the Indenture Trustee to:

 

(i)                                     hold all sums held by it for the payment of amounts on the Notes in trust for the benefit of the Persons entitled to those sums until those sums are paid to those Persons or otherwise disposed of as provided in this Indenture and pay those sums to those Persons as provided in this Indenture;

 

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

 

(iii)                               during the continuance of any such default, on the request of the Indenture Trustee, immediately pay to the Indenture Trustee all sums held in trust by the Note Paying Agent;

 

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

 

(v)                                 comply with all requirements of the Code and any State or local tax law for withholding and reporting requirements in connection with payments on the Notes.

 

(c)                                  The Issuer may by Issuer Order, direct any Note Paying Agent to pay to the Indenture Trustee all sums held in trust by the Note Paying Agent, those sums to be held by the Indenture Trustee on the same terms as those on which the sums were held by the Note Paying Agent.  On a Note Paying Agent’s payment of all sums held in trust to the Indenture Trustee, the Note Paying Agent will be released from all further liability for that money.

 

(d)                                 Subject to laws regarding escheat of funds, any money held by the Indenture Trustee or any Note Paying Agent in trust for the payment of any amount due on any Note and remaining unclaimed for two years after that amount has become due and payable will be discharged from the trust and paid to the Issuer on Issuer Request.  After the discharge and

 

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payment, the Noteholder of the Note will, as an unsecured general creditor, look only to the Issuer for payment of the amount due and unclaimed (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or the Note Paying Agent for the trust money will then cease.  However, the Indenture Trustee or the Note Paying Agent, before making any such repayment, will publish once, at the expense and direction of the Issuer, in a newspaper customarily published on each Business Day in the English language and of general circulation in The City of New York, notice that the money remains unclaimed and that after a date specified in the notice, which must be at least 30 days from the date of publication, any unclaimed balance of the money then remaining will be repaid to the Issuer.  The Indenture Trustee will also adopt and employ, at the expense of the Indenture Administrator and direction of the Issuer, any other reasonable means of notification of the repayment (including notifying Noteholders 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 of the repayment, at the last address of record for each such Noteholder).

 

Section 3.4.                                 Existence.  The Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the Delaware Statutory Trust Act (unless it becomes, or any successor Issuer under this Indenture 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 that other jurisdiction) and will obtain and preserve its qualification in each jurisdiction in which the qualification is or will be necessary to protect the validity and enforceability of this Indenture, the Notes, the 2015-A Collateral and each other instrument or agreement included in the 2015-A Collateral.

 

Section 3.5.                                 Protection of 2015-A Collateral.

 

(a)                                 The Issuer will (i) execute and deliver any supplements and amendments to this Indenture and instruments of further assurance and other instruments, (ii) file or authorize and cause to be filed any financing statements and amendments and continuations of such financing statements and (iii) take any other action, in each case, necessary or advisable to:

 

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

 

(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 2015-A Collateral; or

 

(D)                               preserve and defend title to the 2015-A Collateral and the rights of the Indenture Trustee and the 2015-A Secured Parties in the 2015-A Collateral against the claims of all Persons.

 

(b)                                 The Issuer authorizes the Indenture Administrator and the Indenture Trustee to file any financing or continuation statements, and amendments to those statements, in all jurisdictions and with all filing offices as are necessary or advisable to preserve, maintain and

 

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protect the interest of the Indenture Trustee in the 2015-A Collateral.  The financing and continuation statements may describe the 2015-A Collateral in any manner as the Indenture Administrator or the Indenture Trustee may reasonably determine to ensure the perfection of the interest of the Indenture Trustee in the 2015-A Collateral (including describing the 2015-A Collateral as “all assets” of the Issuer).  The Indenture Administrator or the Indenture Trustee, as applicable, will deliver to the Issuer file-stamped copies of, or filing receipts for, any such financing statement and continuation statement promptly on the document becoming available following filing.

 

(c)                                  The Indenture Trustee is under no obligation (i) to make any determination of whether any such financing or continuation statements, and amendments to those statements, are required to be filed under this Section 3.5 or (ii) to file any such financing or continuation statements, or amendment to the statements, and will not be liable for failure to do so.

 

Section 3.6.                                 Performance of Obligations; Servicing of Receivables.

 

(a)                                 No Release of Material Covenants or Obligations.  The Issuer will not take any action, and will use its commercially reasonable efforts to prevent any action from being taken by others, that would release any Person from any material covenants or obligations under any instrument or agreement included in the 2015-A Collateral 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 provided in any 2015-A Basic Document.

 

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

 

(c)                                  Performance of Obligations.  The Issuer will punctually perform and observe all of its obligations and agreements contained in the 2015-A Basic Documents and in the instruments and agreements included in the 2015-A Collateral.

 

(d)                                 Servicer Event of Default.  If the Issuer has actual knowledge of the occurrence of a Facility Servicer Event of Default or Exchange Note Servicer Event of Default, the Issuer will promptly notify the Indenture Trustee and the Rating Agencies of the occurrence and specify in the notice any action the Issuer is taking in respect of the event.  If an Exchange Note Servicer Event of Default arises from the failure of the Servicer to perform any of its duties and obligations under the Servicing Agreement for the 2015-A Collateral, the Issuer will take all reasonable steps available to cause the Servicer to remedy the failure.

 

(e)                                  Servicer Termination; Successor Servicer.  Within two Business Days after any termination of the Servicer’s rights and powers under Sections 8.1 or 8.3 of the Servicing Agreement or resignation of the Servicer under Section 3.6 of the Servicing Agreement, the Issuer will notify the Indenture Trustee.  As soon as a successor Servicer is appointed under Section 8.4 of the Servicing Agreement, the Issuer will notify the Indenture Trustee of the

 

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appointment, specifying in the notice the name and address of the successor Servicer.  The Issuer will deliver to the Rating Agencies a copy of any notice of the appointment of a successor Servicer that is received by the Indenture Trustee under this Section 3.6(e), within ten days after the date on which the Indenture Trustee receives the notice.

 

Section 3.7.                                 Negative Covenants.  So long as any Notes are Outstanding, the Issuer will not:

 

(a)                                 except as permitted by any 2015-A Basic Document, sell, transfer, exchange or otherwise dispose of any portion of the 2015-A Collateral unless directed to do so by the Indenture Trustee;

 

(b)                                 claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts withheld from those payments under the Code or any State or local tax law) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed on the Issuer or the 2015-A Collateral;

 

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

 

(d)                                 permit (i) 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 for the Notes under this Indenture except in each case as permitted by this Indenture, (ii) any Lien other than Permitted Liens to be created on or extend to or otherwise arise on or burden the 2015-A Collateral or (iii) the Lien of this Indenture not to constitute a valid first priority security interest in the 2015-A Collateral (other than for Permitted Liens); or

 

(e)                                  except as otherwise provided in any 2015-A Basic Document, amend, modify, waive, supplement, terminate or surrender any 2015-A Collateral or any of the 2015-A Basic Documents without the consent of the Indenture Trustee or the Noteholders of a majority of the Note Balance of the Notes Outstanding and on notice by the Issuer to the Rating Agencies.

 

Section 3.8.                                 Opinions on 2015-A Collateral.

 

(a)                                 If this Indenture is subject to recording in any appropriate public recording offices, the Issuer, at its expense, will effect the recording and deliver an Opinion of Counsel to the Indenture Trustee (which may be counsel to the Issuer or any other counsel reasonably acceptable to the Indenture Trustee) stating that the recording is necessary either for the protection of the 2015-A Secured Parties or any other Person secured under this Indenture or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

 

(b)                                 On the 2015-A Closing Date, the Issuer will furnish to the Indenture Trustee an Opinion of Counsel stating that this Indenture and all financing statements have been properly recorded and filed to make effective the Lien intended to be created by this Indenture, and reciting the details of the action or stating that in the opinion of that counsel no such action is necessary to make the Lien effective.

 

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(c)                                  On or before April 30 of each year, beginning in the year after the 2015-A Closing Date, the Issuer will furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of that counsel, all necessary action has been taken for the recording, filing, re-recording and refiling of this Indenture and all financing statements and continuation statements to maintain the Lien of this Indenture, and reciting the details of the action or stating that in the opinion of that counsel no such action is necessary to maintain the Lien.

 

Section 3.9.                                 Annual Statement of Compliance.  The Issuer will deliver to the Indenture Trustee within 90 days after the end of each year, beginning in the year after the 2015-A Closing Date, an Officer’s Certificate signed by a Responsible Person of the Issuer, stating that (a) a review of the Issuer’s activities and of its performance under this Indenture during the preceding year has been made under that Responsible Person’s supervision and (b) to the Responsible Person’s knowledge, based on the review, the Issuer has complied in all material respects with all of its conditions and covenants under this Indenture throughout the preceding year or, if there has been a failure to comply in any material respect, specifying each such failure known to the Responsible Person and the nature and status of the failure.  A copy of the Officer’s Certificate referred to in this Section 3.9 may be obtained by any Noteholder or Person certifying it is a Note Owner by a request in writing to the Indenture Trustee at its Corporate Trust Office.  The Issuer’s obligation to deliver an Officer’s Certificate under this Section 3.9 will terminate on the payment in full of the Notes, including by redemption in whole under Section 10.1.

 

Section 3.10.                          Consolidation and Merger; Sale of Assets.  The Issuer will not consolidate or merge with or into any other Person or convey or transfer all or substantially all of the assets included in the 2015-A Collateral to any Person, unless:

 

(a)                                 the Person (if other than the Issuer) formed by or surviving the consolidation or merger, or that acquires those assets, (i) is organized and existing under the laws of the United States or any State and (ii) assumes, by an indenture supplemental to this Indenture, executed and delivered to the Indenture Trustee, in form reasonably satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture to be performed or observed by the Issuer, all as provided in this Indenture;

 

(b)                                 for a conveyance or transfer of all or substantially all of the assets included in the 2015-A Collateral, the Person that acquires those assets agrees by means of the supplemental indenture executed and delivered under clause (a) above that (i) all right, title and interest so conveyed or transferred will be subject and subordinate to the rights of the Noteholders, (ii) unless otherwise provided in the supplemental indenture, that Person will indemnify, defend and hold harmless the Issuer from and against any costs, expenses, losses, damages, claims and liabilities (including attorneys’ fees) arising under or related to this Indenture and the Notes and (iii) that Person will make all filings with the Securities and Exchange Commission (and any other appropriate Person) required by the Exchange Act in connection with the Notes;

 

(c)                                  immediately after giving effect to the consolidation, merger or sale, no Default or Event of Default will have occurred and be continuing;

 

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

 

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

 

(f)                                   any action that is necessary to maintain the Lien and security interest created by this Indenture has been taken; and

 

(g)                                  the Issuer has delivered to the Depositor, the Servicer, the Owner Trustee and the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that the consolidation, merger or sale and the supplemental indenture comply with this Article III and that all conditions precedent in this Indenture relating to the consolidation, merger or sale have been complied with (including any filing required by the Exchange Act).

 

Section 3.11.                          Successor or Transferee.

 

(a)                                 On any consolidation or merger of the Issuer in accordance with Section 3.10, the Person formed by or surviving the consolidation or merger (if other than the Issuer) will 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 that Person had been named as the Issuer in this Indenture.

 

(b)                                 On a conveyance or sale of all or substantially all of the assets of the Issuer under Section 3.10, the Issuer will be released from every covenant and agreement of this Indenture to be performed or observed by the Issuer for the Notes immediately on the delivery of notice to the Indenture Trustee stating that the Issuer is to be so released.

 

Section 3.12.                          No Other Activities.  The Issuer will not engage in any activities other than financing, acquiring, owning and pledging the 2015-A Collateral in the manner contemplated by the 2015-A Basic Documents and activities incidental to those activities.

 

Section 3.13.                          Further Instruments and Acts.  On request of the Indenture Trustee, the Issuer will execute and deliver any further instruments and do any further acts reasonably necessary or proper to carry out the purpose of this Indenture.

 

Section 3.14.                          Restricted Payments.

 

(a)                                 The Issuer will not, directly or indirectly, (i) make any distribution (by reduction of capital or otherwise) to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise for any ownership or equity interest or security in or of the Issuer or to the Servicer or the Indenture Administrator, (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.

 

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(b)                                 Notwithstanding Section 3.14(a), the Issuer may make payments to the Servicer, the Indenture Administrator, the Owner Trustee, the Indenture Trustee, the Noteholders, the Depositor and the holders of the Residual Interest to the extent contemplated by the 2015-A Basic Documents.

 

(c)                                  The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account or the Principal Payment Account except in accordance with the 2015-A Basic Documents.

 

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

 

Section 3.16.                          Representations and Warranties of the Issuer regarding Security Interest.  The Issuer represents and warrants to the Indenture Trustee as of the 2015-A Closing Date:

 

(a)                                 This Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the 2015-A Collateral in favor of the Indenture Trustee which security interest is prior to all other Liens, and is enforceable as such against creditors of and purchasers from the Issuer.

 

(b)                                 All of the Permitted Investments have been and will be credited to a Securities Account.  The securities intermediary for each Securities Account has agreed to treat all assets credited to the Securities Accounts as “financial assets” within the meaning of the applicable UCC.  The 2015-A Collateral (other than those Permitted Investments which have been credited to a Securities Account) constitutes “instruments” or “general intangibles” within the meaning of the applicable UCC.

 

(c)                                  The Issuer owns and has good and marketable title to the 2015-A Collateral free and clear of any Lien other than Permitted Liens.  The executed 2015-A Exchange Note has been delivered to the Indenture Trustee.  The Issuer has received all consents and approvals required by the 2015-A Exchange Note to Grant to the Indenture Trustee all of its interest and rights in the 2015-A Exchange Note, except to the extent that any requirement for consent or approval is rendered ineffective under the applicable UCC.

 

(d)                                 The Issuer has caused, or will cause within ten days after the 2015-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 2015-A Collateral to the Indenture Trustee.

 

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

 

(f)                                   Other than the security interest Granted to the Indenture Trustee under this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any portion of the 2015-A Collateral.  The Issuer has not authorized the filing of and is not aware of any financing statements against the Issuer that include a description of collateral

 

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covering any portion of the 2015-A Collateral, other than any financing statements relating to the security interest Granted to the Indenture Trustee.  The Issuer is not aware of any judgment or tax Lien filings against it.

 

(g)                                  The Securities Accounts are not 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 Securities Account complying with entitlement orders of any Person other than the Indenture Trustee.

 

(h)                                 All financing statements filed or to be filed against the Issuer, or any assignor of which the Issuer is the assignee, in favor of the Indenture Trustee in connection with this Indenture describing the 2015-A Collateral contain a statement substantially to the following effect:  “The purchase of or grant of a security interest in any collateral described in this financing statement will violate the rights of the 2015-A Secured Parties.”

 

The representations and warranties in this Section 3.16, (i) will survive the termination of this Indenture and (ii) may not be waived by the Indenture Trustee.

 

Section 3.17.                          Audits of the Issuer.  The Issuer agrees that, with reasonable prior notice, it will permit any authorized representative of the Indenture Trustee, the Servicer or the Indenture Administrator, during the Issuer’s normal business hours, to examine and audit the books of account, records, reports and other documents and materials of the Issuer relating to the performance of the Issuer’s obligations under this Indenture.  In addition, the Issuer will permit those representatives to make copies and extracts of any such books and records and to discuss the same with the Issuer’s officers and registered public accountants.  Each of the Indenture Trustee, the Servicer and the Indenture Administrator will, and will cause its authorized representatives to, hold in confidence all that information except to the extent (a) disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) or (b) that the Indenture Trustee, the Servicer or the Indenture Administrator, as the case may be, reasonably determines that the disclosure is consistent with its obligations under this Indenture.

 

Section 3.18.                          Representations and Warranties of the Issuer.  The Issuer represents and warrants to the Indenture Trustee as of the 2015-A Closing Date:

 

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

 

(b)                                 Power, Authorization and Enforceability.  The Issuer has the power and authority to execute, deliver and perform under this Indenture.  The Issuer has authorized the execution, delivery and performance 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 Delaware State law, governmental rule or regulation applicable to the Issuer or any judgment or decree binding on it

 

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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 of the State of Delaware: (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, (iii) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on the 2015-A Collateral or the Issuer’s ability to perform its obligations under, or the validity or enforceability of this Indenture or the Notes or (iv) that would reasonably be expected to (A) affect the treatment of the Notes as indebtedness for U.S. federal income tax purposes, (B) be deemed to cause a taxable exchange of the Notes for U.S. federal income tax purposes or (C) cause the Issuer to be treated as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, in each case, other than proceedings that, to the Issuer’s knowledge, would not reasonably be expected to have a material adverse effect on the Issuer, materially and adversely affect the performance by the Issuer of its obligations under, or the validity and enforceability of, this Indenture or the Notes or materially and adversely affect the tax treatment of the Issuer or the Notes.

 

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

 

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

 

Section 3.19.                          Calculation Agent.  The Issuer agrees that for so long as any of the Notes are Outstanding there will at all times be an agent appointed to calculate LIBOR in respect of each Interest Period (the “Calculation Agent”).  The Issuer appoints The Bank of New York Mellon as Calculation Agent only for the purposes of determining LIBOR for each Interest Period and The Bank of New York Mellon accepts the appointment.  The Calculation Agent may be removed by the Issuer at any time.  If the Calculation Agent is unable or unwilling to act as Calculation Agent or is removed by the Issuer, the Issuer will promptly appoint as a replacement Calculation Agent a leading bank which is engaged in transactions in Eurodollar deposits in the international Eurodollar market and which does not control or is not controlled by or under common control with the Issuer or its Affiliates.  The Calculation Agent may not resign its duties without a successor having been duly appointed.

 

Section 3.20.                          No Offer to Employee Benefit Plans.  The Issuer will not offer any Notes to any of its or its Affiliates’ participant-directed employee benefit plans.

 

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ARTICLE IV
 SATISFACTION AND DISCHARGE

 

Section 4.1.                                 Satisfaction and Discharge of Indenture.

 

(a)                                 Subject to Section 4.1(b), this Indenture will cease to be of further effect for the Notes, and the Indenture Trustee, on receipt of an Issuer Order and at the expense of the Issuer, will execute proper instruments, in form and substance reasonably satisfactory to the Indenture Trustee, acknowledging satisfaction and discharge of this Indenture, if:

 

(i)                                     Either (A) all Notes that have been authenticated and delivered (other than (1) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.5 and (2) Notes for which payment money has been deposited in trust or segregated and held in trust by the Issuer and subsequently repaid to the Issuer or discharged from the trust, as provided in Section 3.3) have been delivered to the Indenture Trustee for cancellation or (B) all Notes not delivered to the Indenture Trustee for cancellation have become due and payable and the Issuer has deposited or caused to be deposited with the Indenture Trustee funds in trust in an amount sufficient to pay and discharge the outstanding principal amount of the Notes and interest accrued on the Notes on the Redemption Date;

 

(ii)                                  the Issuer has paid or caused to be paid all other sums payable by it under the 2015-A Basic Documents; and

 

(iii)                               the Issuer has delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel meeting the requirements of Section 11.1.

 

(b)                                 After the satisfaction and discharge of this Indenture under Section 4.1(a), this Indenture will continue to the extent relating to (i) rights of registration of transfer and exchange, (ii) replacement of mutilated, destroyed, lost or stolen Notes, (iii) the rights of Noteholders to receive payments of principal of and interest on the Notes, (iv) the obligations of the Indenture Trustee and the Note Paying Agent under Section 3.3, (v) the rights, obligations and immunities of the Indenture Trustee under this Indenture and (vi) the rights of the 2015-A Secured Parties as beneficiaries of this Indenture to the property deposited with the Indenture Trustee payable to all or any of them for a period of two years following the satisfaction and discharge.

 

(c)                                  On the satisfaction and discharge of the Indenture under this Section 4.1, at the request of the Owner Trustee, the Indenture Trustee will deliver to the Owner Trustee a certificate of a Responsible Person stating that all Noteholders have been paid in full.

 

ARTICLE V
 REMEDIES

 

Section 5.1.                                 Events of Default.

 

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

 

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(i)                                     failure to pay interest due on any Note of the Controlling Class when the same becomes payable on each Payment Date, and the failure continues for a period of five days or more;

 

(ii)                                  failure to pay the principal of any Note at its Final Scheduled Payment Date or Redemption Date, if any;

 

(iii)                               failure to observe or perform any material covenant or agreement of the Issuer made in this Indenture (other than covenants and agreements for which the failure to observe or perform is specifically covered elsewhere in this Section 5.1) or any representation or warranty of the Issuer made in this Indenture or in any Officer’s Certificate or other document delivered under or in connection with this Indenture proves to have been incorrect in any material respect as of the time made and, in each case, the failure or incorrectness continues for a period of 60 days after notice was given to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Noteholders of at least 25% of the Note Balance of the Controlling Class specifying the failure or incorrectness, requiring it to be remedied and stating that the notice is a “Notice of Default”; or

 

(iv)                              the occurrence of an Insolvency Event of the Issuer.

 

(b)                                 The Issuer will notify the Indenture Trustee within five Business Days after a Responsible Person of the Issuer has actual knowledge of the occurrence of an event set forth in Section 5.1(a)(iii) which with the giving of notice and the lapse of time would become an Event of Default, which notice will describe the Default, the status of the Default and what action the Issuer is taking or proposes to take regarding the Default.  The Issuer will deliver a copy of the notice to each Qualified Institution (if not the Indenture Trustee) or Qualified Trust Institution maintaining a Bank Account.

 

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

 

Section 5.2.                                 Acceleration of Maturity; Rescission.

 

(a)                                 If an Event of Default occurs and is continuing, the Indenture Trustee or the Noteholders of a majority of the Note Balance of the Controlling Class may declare all of the Notes to be immediately due and payable, by notice to the Issuer (and to the Indenture Trustee if given by the Noteholders).  On any such declaration, the unpaid Note Balance of the Notes, together with accrued and unpaid interest through the date of acceleration, will become immediately due and payable.  If an Event of Default described in Section 5.1(a)(iv) occurs, all unpaid principal of and accrued and unpaid interest on the Notes, and all other amounts payable under this Indenture, will automatically become due and payable without any declaration or other act on the part of the Indenture Trustee or any Noteholder.  On any such declaration or automatic acceleration, the Indenture Trustee will promptly notify each Noteholder and each Qualified Institution (if not the Indenture Trustee) or Qualified Trust Institution maintaining a Bank Account.

 

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

 

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

 

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

 

No rescission will affect any subsequent default or impair any right resulting from the rescission.

 

Section 5.3.                                 Collection of Indebtedness by the Indenture Trustee.

 

(a)                                 The Issuer covenants that if an Event of Default under Section 5.1(a)(i) or (ii) occurs and continues, the Issuer, on demand of the Indenture Trustee, will pay to the Indenture Trustee for the benefit of the Noteholders, the overdue amount with interest on any overdue principal at the applicable Note Interest Rate and, to the extent lawful, with interest on any overdue interest at the applicable Note Interest Rate.  In addition, the Issuer covenants to pay, or to cause the Indenture Administrator to pay, the costs and expenses of collection, including all amounts owed to the Indenture Trustee under Section 6.7.

 

(b)                                 If the Issuer fails to pay those amounts on demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute the Proceeding to final judgment, and may enforce the same against the Issuer and collect the monies adjudged to be payable in the manner provided by law out of the 2015-A Collateral.

 

Section 5.4.                                 Trustee May File Proofs of Claim.

 

(a)                                 If there is pending, relative to the Issuer, Proceedings under the Bankruptcy Code or any other federal or State bankruptcy, insolvency or other similar law, or in case a trustee, liquidator, receiver or similar official has been appointed for or taken possession of the Issuer or its property, the Indenture Trustee, irrespective of whether the Indenture Trustee has made any demand under Section 5.3, may:

 

(i)                                     file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and file any other papers or documents necessary or advisable in order to have the claims of the Indenture Trustee on behalf of the 2015-A Secured Parties allowed in the Proceedings (including any amounts due to the Indenture Trustee under Section 6.7);

 

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(ii)                                  unless prohibited by Applicable Law, vote on behalf of the 2015-A Secured Parties in any election of a trustee, a standby trustee or a Person performing similar functions in any such Proceedings;

 

(iii)                               collect and receive any monies or other property payable or deliverable on any such claims and pay all amounts received on the claims of the 2015-A Secured Parties, including the claims asserted by the Indenture Trustee on their behalf; and

 

(iv)                              file any proofs of claim and other papers or documents necessary or advisable in order to have the claims of the Indenture Trustee and any 2015-A Secured Parties allowed in any judicial proceedings relative to the Issuer, its creditors and its property.

 

Any trustee, liquidator, receiver or similar official in any such Proceeding is authorized by each Noteholder to make payments to the Indenture Trustee and, if the Indenture Trustee consents to the making of payments directly to the Noteholders, to pay to the Indenture Trustee an amount sufficient to cover all amounts owed to the Indenture Trustee under Section 6.7.

 

(b)                                 Except as provided in Section 5.4(a)(ii), this Indenture does not 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 Noteholder to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such Proceeding.

 

Section 5.5.                                 Trustee May Enforce Claims Without Possession of Notes.

 

(a)                                 All rights of action and 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 of any of the Notes in any Proceeding relative to any of the Notes, and any such Proceeding instituted by the Indenture Trustee will be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the amounts owed to the Indenture Trustee under Section 6.7, will be for the benefit of the 2015-A Secured Parties in respect of which the judgment has been recovered.

 

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

 

Section 5.6.                                 Remedies; Priorities.

 

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

 

(i)                                     institute a Proceeding in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with

 

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respect to the Notes, enforce any judgment obtained and collect from the Issuer monies adjudged due;

 

(ii)                                  institute a Proceeding for the complete or partial foreclosure of this Indenture on the 2015-A Collateral;

 

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

 

(iv)                              sell or otherwise liquidate all or any portion of the 2015-A Collateral or rights or interest in the 2015-A Collateral at one or more public or private sales called and conducted in any manner permitted by law.

 

The Indenture Trustee will notify each Noteholder and the Depositor of any sale or liquidation under Section 5.6(a)(iv) at least 15 days before the sale or liquidation.  Any Noteholder, the Depositor or the Servicer may submit a bid for the sale or liquidation.

 

(b)                                 Notwithstanding Section 5.6(a), the Indenture Trustee is prohibited from selling or otherwise liquidating the 2015-A Collateral unless:

 

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

 

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

 

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

 

(B)                               the proceeds of the sale or liquidation are expected to be sufficient to pay in full all amounts owed by the Issuer to the 2015-A Secured Parties including all principal of and accrued interest on the Notes Outstanding;

 

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

 

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

 

(B)                               the proceeds of the sale or liquidation are expected to be sufficient to pay in full all amounts owed by the Issuer to the 2015-A Secured Parties including all principal of and accrued interest on the Notes Outstanding; or

 

(C)                               the Indenture Trustee (1) determines (but will have no obligation to make the determination) that the 2015-A Collateral will not continue to provide sufficient funds for the payment of all amounts owed to the 2015-A Secured Parties, as those payments would have become due if the Notes had not been declared due and

 

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payable and (2) obtains the consent of Noteholders of at least 66-2/3% of the Note Balance of the Controlling Class.

 

In determining whether the condition specified in clause (ii)(B), (iii)(B) or (iii)(C) (1) above has been satisfied, the Indenture Trustee may, but need not, obtain and rely on an opinion of a nationally-recognized Independent investment banking firm or firm of certified public accountants on the expected proceeds or on the sufficiency of the 2015-A Collateral for that purpose.

 

(c)                                  Any money or property collected by the Indenture Trustee following the sale or other liquidation of the 2015-A Collateral under Section 5.6(a)(iv) will be deposited in the Collection Account for distribution in accordance with Section 8.2(d) on the Payment Date following the Collection Period during which those amounts are collected.  In all other circumstances, Section 8.2(b) will continue to apply after an Event of Default.

 

Section 5.7.                                 Optional Preservation of the 2015-A Collateral.  If the Notes have been accelerated under Section 5.2(a) and the declaration has not been rescinded in accordance with Section 5.2(b), the Indenture Trustee may elect to maintain possession of the 2015-A Collateral.  It is the intention of the parties to this Indenture and the Noteholders that there at all times be sufficient funds derived from the 2015-A Collateral for the payment of principal of and interest on the Notes.  The Indenture Trustee will take that intention into account when determining whether or not to maintain possession of all or any portion of the 2015-A Collateral.  In determining whether to maintain possession of all or any portion of the 2015-A Collateral, the Indenture Trustee may obtain and rely on an opinion of a nationally-recognized Independent investment banking firm or firm of certified public accountants on the feasibility of the proposed action and on the sufficiency of the 2015-A Collateral for that purpose.

 

Section 5.8.                                 Limitation on Suits.

 

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

 

(i)                                     the Noteholder has given notice to the Indenture Trustee of a continuing Event of Default;

 

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

 

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

 

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

 

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

 

(b)                                 No Noteholder has any right to affect, disturb or prejudice the rights of any other Noteholder or to obtain or to seek to obtain priority or preference over any other Noteholder or to enforce any right under this Indenture, except in the manner provided in this Indenture.

 

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

 

Section 5.9.                                 Unconditional Rights of Noteholders to Receive Principal and Interest.  Notwithstanding any other provision in this Indenture, each Noteholder has an absolute and unconditional right to receive payment of the principal of and any interest on its Note on or after the respective due dates expressed in the Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) in accordance with the provisions of this Indenture and of the other 2015-A Basic Documents and to institute a Proceeding for the enforcement of any such payment in accordance with Section 5.8.  Those rights may not be impaired or affected without the consent of the Noteholder.

 

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

 

Section 5.11.                          Rights and Remedies Cumulative.  No right or remedy conferred on or reserved to the Indenture Trustee or to the Noteholders in this Indenture is intended to be exclusive of any other right or remedy, and every right and remedy, to the extent permitted by law, will be cumulative and in addition to every other right and remedy given under this Indenture or now or in the future existing at law or in equity or otherwise.  The assertion or employment of any right or remedy under this Indenture, or otherwise, will not prevent the concurrent assertion or employment of any other appropriate right or remedy.  The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture will not be affected by the seeking, obtaining or application of any other relief under this Indenture.  Neither the Lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders will be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under the judgment on any of the 2015-A Collateral.

 

Section 5.12.                          Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee or any Noteholder to exercise any right or remedy accruing on any Default or Event of Default will impair any such right or remedy, or constitute a waiver of any such Default or Event

 

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of Default.  Every right and remedy conferred by this Article V or by law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

 

Section 5.13.                          Control by Noteholders.  The Noteholders of a majority of the Note Balance of the Controlling Class have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee regarding the Notes or exercising any trust or power conferred on the Indenture Trustee; provided, that:

 

(a)                                 the direction does not conflict with any law or with this Indenture;

 

(b)                                 except as provided in Section 5.6(b), any direction to the Indenture Trustee to sell or liquidate the 2015-A Collateral must be made by the Noteholders of 100% of the Note Balance of the Controlling Class;

 

(c)                                  if the Indenture Trustee elects to retain the 2015-A Collateral under Section 5.7, then any direction to the Indenture Trustee by Noteholders of less than 100% of the Note Balance of the Controlling Class to sell or liquidate the 2015-A Collateral will 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 the direction from the Noteholders of a majority of the Note Balance of the Controlling Class.

 

Notwithstanding the rights of Noteholders set forth in this Section 5.13, the Indenture Trustee need not take any action that it determines might materially adversely affect the rights of any Noteholders not consenting to the action.

 

Section 5.14.                          Waiver of Defaults and Events of Default.

 

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

 

(b)                                 On any such waiver, the Default or Event of Default will be deemed not to have occurred for every purpose of this Indenture.  No such waiver will extend to any other Default or Event of Default or impair any right relating to any other Default or Event of Default.

 

Section 5.15.                          Undertaking for Costs.  The parties to this Indenture agree, and each Noteholder by the Noteholder’s acceptance of a Note will be deemed to have agreed, that a court may in its discretion require, in any Proceeding for the enforcement of any right or remedy under this Indenture, or in any Proceeding against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in the Proceeding of an undertaking to pay the costs of the Proceeding, and that the court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the

 

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Proceeding.  This Section 5.15 will not apply to (a) any Proceeding instituted by the Indenture Trustee, (b) any Proceeding instituted by any Noteholder or group of Noteholders holding more than 10% of the Note Balance of the Notes Outstanding (or in the case of a Proceeding for the enforcement of any right or remedy under this Indenture that is instituted by the Controlling Class, holding more than 10% of the Note Balance of the Controlling Class) or (c) any Proceeding instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in the Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).

 

Section 5.16.                          Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not insist on, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension that may affect the covenants or the performance of this Indenture, and the Issuer (to the extent that it may lawfully do so) waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power in this Indenture 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 5.17.                          Performance and Enforcement of Certain Obligations.

 

(a)                                 At the Indenture Administrator’s expense, the Issuer will promptly take any lawful action that the Indenture Trustee may request to (i) compel the performance by (A) the Servicer and the Titling Companies of their respective obligations to the Issuer under the Credit and Security Agreement, the Exchange Note Supplement, the Servicing Agreement or the Servicing Supplement or (B) the Depositor and Ford Credit of their obligations under the First-Tier Sale Agreement and the Second-Tier Sale Agreement and (ii) exercise any and all rights, remedies, powers, privileges and claims lawfully available to the Issuer under those agreements to the extent and in the manner directed by the Indenture Trustee.

 

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

 

(c)                                  The Indenture Trustee, acting at the direction of the holders of a majority of the Note Balance of the Controlling Class, will be entitled to exercise all rights and remedies of the Issuer as holder of the 2015-A Exchange Note.

 

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ARTICLE VI
 THE INDENTURE TRUSTEE

 

Section 6.1.                                 Duties of Indenture Trustee.

 

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

 

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

 

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

 

(ii)                                  in the absence of bad faith or negligence on its part, the Indenture Trustee may conclusively rely, regarding the truth of the statements and the correctness of the opinions furnished to it, on any certificates or opinions furnished to it and, if required by this Indenture, conforming to the requirements of this Indenture; provided, that the Indenture Trustee will examine any such certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

 

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

 

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

 

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

 

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

 

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

 

(e)                                  Money held in trust by the Indenture Trustee need not be segregated from other funds except to the extent required by law, this Indenture, the Exchange Note Supplement or the Servicing Supplement.

 

(f)                                   Every provision of this Indenture relating to the conduct of, affecting the liability of or affording protection to the Indenture Trustee is subject to this Section 6.1 and to the TIA.

 

(g)                                  The Indenture Trustee will not be charged with knowledge of any Default or any Event of Default unless either (i) a Responsible Person of the Indenture Trustee has actual

 

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knowledge of the Default or Event of Default or (ii) notice of the Default or Event of Default has been given to the Indenture Trustee in accordance with this Indenture.

 

(h)                                 The rights, privileges, protections, immunities and benefits given to the Indenture Trustee, including its right to be indemnified, are extended to, and will be enforceable by, the Indenture Trustee in each of its capacities under this Indenture and the other Transaction Documents.

 

Section 6.2.                                 Rights of Indenture Trustee.

 

(a)                                 The Indenture Trustee may rely and will be protected in acting or refraining from acting on any certificate, instrument, opinion, report, notice, request, direction, consent or other document believed by it to be genuine and which appears on its face to be properly executed and signed or presented by the proper Person.  The Indenture Trustee need not investigate any fact or matters stated in any such document.

 

(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 will 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 exercise any of its rights or powers under this Indenture or perform any duties under this Indenture either directly or by or through agents or attorneys or a custodian or nominee, and the Indenture Trustee will not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, counsel, custodian or nominee appointed with due care by it under this Indenture.

 

(d)                                 The Indenture Trustee will 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 if the action or omission by the Indenture Trustee does not constitute negligence.

 

(e)                                  The Indenture Trustee may consult with counsel, and the advice or opinion of counsel on legal matters relating to this Indenture and the Notes will be full and complete authorization and protection from liability for any action taken or not taken by the Indenture Trustee under this Indenture in good faith and in accordance with the advice or opinion of that counsel.

 

(f)                                   The Indenture Trustee is under no obligation to (i) exercise any of the rights or powers vested in it by this Indenture or to expend or risk its own funds or otherwise incur financial liability in the performance of its duties under this Indenture if it has reasonable grounds to believe that repayment of funds advanced by it or adequate indemnity satisfactory to it against that risk or liability is not reasonably assured to it or (ii) honor the request or direction of any of the Noteholders under this Indenture unless the Noteholders have offered to the Indenture Trustee reasonable security or indemnity satisfactory to it from and against the reasonable costs, expenses, disbursements, advances and liabilities that might be incurred by the Indenture Trustee, or its agents, counsel, accountants and experts, in complying with the request or direction.

 

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

 

(h)                                 The Indenture Trustee will not be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including loss of profit) irrespective of whether the Indenture Trustee has been advised of the likelihood of the loss or damage and regardless of the form of action.

 

Section 6.3.                                 Individual Rights of Indenture Trustee.  The Indenture Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any of its Affiliates with the same rights it would have if it were not Indenture Trustee.  Any Note Paying Agent, Note Registrar, Authenticating Agent, co-registrar or co-paying agent under this Indenture may do the same with like rights.

 

Section 6.4.                                 Indenture Trustee’s Disclaimer.  The Indenture Trustee (a) will not be responsible for, and makes no representation or warranty regarding, the validity or adequacy of this Indenture or the Notes and (b) will not be accountable for the Issuer’s use of the proceeds from the Notes, or responsible for any statement of the Issuer in this 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 6.5.                                 Notice of Defaults.  Within 90 days of a Responsible Person of the Indenture Trustee obtaining actual knowledge of, or receiving notice of, any Default under this Indenture, the Indenture Trustee will mail as described in Section 313(c) of the TIA to each Noteholder, notice of the Default, unless the Default has been cured or waived; provided, that (a) except in the case of a Default in the payment of principal of or interest on any Note, the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Persons in good faith determines that the withholding of the notice is in the interests of the Noteholders and (b) in the case of any Default specified in Section 5.1(a)(iii), the Indenture Trustee will not give notice to the Noteholders until at least 30 days after a Responsible Person of the Indenture Trustee has obtained actual knowledge of, or has received notice of, the Default.

 

Section 6.6.                                 Reports by Indenture Trustee.

 

(a)                                 On delivery to the Indenture Trustee by the Servicer of the information prepared by the Servicer under Section 6.1(a) of the Servicing Supplement to enable each Noteholder to prepare its federal and State income tax returns, the Indenture Trustee will deliver the relevant portions of that information to each Noteholder of record as of the most recent Record Date (which delivery may be made by making the information available to the Noteholders through the Indenture Trustee’s website, which initially is located at https://gctinvestorreporting.bnymellon.com).

 

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

 

(c)                                  If required by Regulation AB and requested by the Depositor or the Servicer, the Indenture Trustee will deliver to the Administrator, the Issuer, and the Servicer on or before March 1 of each year, beginning in the year after the 2015-A Closing Date, an Officer’s Certificate signed by a Responsible Person of the Indenture Trustee (i) stating that (A) a review of the Indenture Trustee’s activities during the preceding year and of its performance under this Indenture has been made under the Responsible Person’s supervision and (B) to the Responsible Person’s knowledge, based on the review, the Indenture Trustee has fulfilled in all material respects all of its obligations under this Indenture throughout the preceding year, or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to the Responsible Person and the nature and status of the failure and (ii) certifying to matters related to the Indenture Trustee as required under Form 10-K under the Exchange Act.

 

(d)                                 If required under Regulation AB, the Indenture Trustee will:

 

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

 

(ii)                                  cause a firm of registered public accountants that is qualified and independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act to deliver to the Indenture Administrator, the Issuer and the Servicer an attestation report that satisfies the requirements of Rule 13a-18 or Rule 15d-18 under the Exchange Act, as applicable, on the assessment of compliance with the Applicable Servicing Criteria for the prior year.  The attestation report will be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.  The firm may render other services to the Indenture Trustee, but the firm must indicate in each attestation report that it is qualified and independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act.

 

The reports referred to in this Section 6.6(d) will be delivered on or before March 1 of each year, beginning in the year after the 2015-A Closing Date, in a format suitable for filing with the Securities and Exchange Commission on EDGAR, beginning in the year after the 2015-A Closing Date.

 

(e)                                  Each of the parties agrees that (i) the obligations of the parties under Sections 6.6(c) and (d) will be interpreted in a manner that will accomplish compliance with Regulation

 

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AB and (ii) the parties’ obligations under Sections 6.6(c) and (d) will be deemed to be supplemented and modified as necessary to be consistent with any such amendments, interpretive guidance provided by the Securities and Exchange Commission or its staff or established market practice among participants in the asset-backed securities markets in respect of the requirements of Regulation AB, and the parties will comply with reasonable requests made by the Depositor, the Servicer or the Indenture Trustee in good faith for delivery of additional or different information required to comply with the provisions of Regulation AB.

 

If the parties to this Indenture determine to further clarify or amend Sections 6.6(c) or (d), this Indenture may be amended to reflect the new agreement between the parties covering matters in Sections 6.6(c) or (d) under Section 9.1(a), which amendment will not require the delivery of any Opinions of Counsel or satisfaction of the Rating Agency Condition.

 

Section 6.7.                                 Compensation and Indemnity.

 

(a)                                 The Issuer will, or will cause the Indenture Administrator to, pay the Indenture Trustee as compensation for the Indenture Trustee’s services under this Indenture all fees separately agreed to on the date of this Indenture between the Issuer and the Indenture Trustee.  The Indenture Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust.  The Issuer will reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by the Indenture Trustee, including costs of collection, and the reasonable compensation, expenses and disbursements of the Indenture Trustee’s agents, counsel, accountants and experts, but excluding any expenses incurred by the Indenture Trustee through the Indenture Trustee’s willful misconduct, bad faith or negligence (except for errors in judgment).

 

(b)                                 The Issuer will, or will cause the Indenture Administrator to, indemnify, defend and hold harmless the Indenture Trustee, and its officers, directors, employees and agents, from and against any and all costs, expenses, losses, damages, claims and liabilities (including the reasonable compensation, expenses and disbursements of the Indenture Trustee’s agents, counsel, accountants and experts) incurred by it in connection with the administration of and the performance of its duties under this Indenture, including the costs and expenses of defending itself against any loss, damage, claim or liability incurred by it in connection with the exercise or performance of any of its powers or duties under this Indenture, but excluding any cost, expense, loss, damage, claim or liability (i) incurred by the Indenture Trustee through the Indenture Trustee’s willful misconduct, bad faith or negligence (except for errors in judgment) or (ii) arising out of the Indenture Trustee’s breach of any of its representations or warranties set forth in this Indenture.

 

(c)                                  Promptly on receipt by the Indenture Trustee, or any of its officers, directors, employees and agents (each, an “Indemnified Person”), of notice of the commencement of any Proceeding against any such Indemnified Person, that Indemnified Person will, if a claim in respect of the Proceeding is to be made under Section 6.7(b), notify the Issuer and the Indenture Administrator of the commencement of the Proceeding.  Failure by the Indenture Trustee to so notify the Issuer and the Indenture Administrator will not relieve the Issuer or the Indenture Administrator of its obligations under this Section 6.7; provided, that neither the Issuer nor the Indenture Administrator has been materially prejudiced by the failure to so notify and notice is

 

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given within 180 days of a Responsible Person of the Indenture Trustee learning of the Proceeding.  The Issuer, or, if Issuer so causes, the Indenture Administrator, may participate in and assume the defense and settlement of any such Proceeding at its expense, and no settlement of the Proceeding may be made without the approval of the Issuer or the Indenture Administrator, as applicable, and the Indemnified Person, which approvals will not be unreasonably withheld, delayed or conditioned.  After notice from the Issuer or the Indenture Administrator, as applicable, to the Indemnified Person of the intention of the Issuer or the Indenture Administrator, as applicable, to assume the defense of the Proceeding with counsel reasonably satisfactory to the Indemnified Person, and so long as the Issuer or the Indenture Administrator, as applicable, so assumes the defense of the Proceeding in a manner reasonably satisfactory to the Indemnified Person, neither the Issuer nor the Indenture Administrator will be liable for any legal expenses of counsel to the Indemnified Person unless there is a conflict between the interests of the Issuer or the Indenture Administrator, as applicable, on one hand, and an Indemnified Person, on the other hand, in which case the Issuer or the Indenture Administrator, will pay for the separate counsel to the Indemnified Person.

 

(d)                                 The obligations of the Issuer and the Indenture Administrator to the Indenture Trustee under this Section 6.7 will survive the resignation or removal of the Indenture Trustee and the discharge of this Indenture.  Expenses incurred by the Indenture Trustee after the occurrence of a Default specified in Section 5.1(a)(iv) are intended to constitute expenses of administration under the Bankruptcy Code or any other applicable federal or State bankruptcy, insolvency or similar law.

 

Section 6.8.                                 Replacement of Indenture Trustee.

 

(a)                                 No resignation or removal of the Indenture Trustee, and no appointment of a successor Indenture Trustee, will become effective until the acceptance of appointment by the successor Indenture Trustee under this Section 6.8.  Subject to the preceding sentence, the Indenture Trustee may resign by notifying the Issuer.  The Noteholders of a majority of the Note Balance of the Controlling Class may remove the Indenture Trustee without cause by notifying the Indenture Trustee and the Issuer and may appoint a successor Indenture Trustee.

 

(b)                                 The Issuer must remove the Indenture Trustee if:

 

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

 

(ii)                                  an Insolvency Event occurs for the Indenture Trustee; or

 

(iii)                               the Indenture Trustee becomes legally unable to act or otherwise incapable of acting as Indenture Trustee.

 

(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 Issuer must appoint a successor Indenture Trustee promptly.

 

(d)                                 Any successor Indenture Trustee will deliver a written acceptance of its appointment to the retiring Indenture Trustee, the Issuer and the Indenture Administrator.  On delivery of the acceptance, the resignation or removal of the retiring Indenture Trustee will

 

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become effective, and the successor Indenture Trustee will have all the rights, powers, duties and obligations of the Indenture Trustee under this Indenture.  The Issuer will continue to pay all amounts owed to the retiring Indenture Trustee in accordance with Sections 6.7 and 8.2 following the retiring Indenture Trustee’s resignation or removal until all those amounts are paid.  The successor Indenture Trustee will deliver a notice of its succession to the 2015-A Secured Parties.  The retiring Indenture Trustee will promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

 

(e)                                  If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee tenders its resignation or is removed, the retiring Indenture Trustee, the Issuer or the Noteholders of a majority of the Note Balance of the Controlling Class may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

 

(f)                                   Notwithstanding the replacement of the retiring Indenture Trustee under this Section 6.8, any obligations of the Issuer and the Indenture Administrator owing to the retiring Indenture Trustee under Section 6.7 will continue for the benefit of the retiring Indenture Trustee.

 

Section 6.9.                                 Successor Indenture Trustee by Merger.

 

(a)                                 If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business or assets to, another Person, the resulting, surviving or transferee Person will be the successor Indenture Trustee so long as that Person is otherwise qualified and eligible under Section 6.11.  The Indenture Trustee will promptly notify the Servicer and the Issuer (who will notify the Rating Agencies) of any such transaction.

 

(b)                                 If, at the time any such successor by merger, conversion or consolidation to the Indenture Trustee succeeds to the trusts created by this Indenture, any of the Notes have been authenticated but not delivered, the successor may adopt the certificate of authentication of any predecessor Indenture Trustee and deliver the Notes so authenticated.  If at that time any of the Notes has not been authenticated, any successor to the Indenture Trustee may authenticate the Notes either in the name of any predecessor Indenture Trustee or in the name of the successor Indenture Trustee.  In all those cases, the certificates will have the same force and effect provided for anywhere in the Notes or in this Indenture as the certificate of the predecessor Indenture Trustee.

 

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

 

(a)                                 For the purpose of meeting any legal requirement of any jurisdiction in which any portion of the 2015-A Collateral may at the time be located, after delivering notice to the Issuer and the Servicer, the Indenture Trustee may appoint one or more Persons to act as a separate trustee or separate trustees, or co-trustee or co-trustees, of all or any portion of the 2015-A Collateral, and to vest in those Persons, in such capacity and for the benefit of the 2015-A Secured Parties, any title to all or any portion of the 2015-A Collateral, and, subject to this Section 6.10, any rights, powers, duties and obligations the Indenture Trustee may consider necessary or desirable.  No separate trustee or co-trustee will be required to be eligible as a

 

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successor trustee under Section 6.11 and no notice to the 2015-A Secured Parties of the appointment of any separate trustee or co-trustee will be required under Section 6.8.

 

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

 

(i)                                     all rights, powers, duties and obligations conferred or imposed on the Indenture Trustee will be conferred or imposed on and exercised or performed by the Indenture Trustee, or the Indenture Trustee and the separate trustee or co-trustee jointly (it being understood that the separate trustee or co-trustee will not be authorized to act separately without the Indenture Trustee joining in the act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee will be incompetent or unqualified to perform those act or acts, in which event those rights, powers, duties and obligations (including the holding of title to all or any portion of the 2015-A Collateral in any such jurisdiction) will be exercised and performed singly by the separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;

 

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

 

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

 

(c)                                  Any notice, request or other writing given to the Indenture Trustee will be deemed to have been given to each appointed separate trustee and co-trustee, as effectively as if given to each of them.  Every instrument appointing any separate trustee or co-trustee will refer to this Indenture and the conditions of this Section 6.10.  Each separate trustee and co-trustee, on its acceptance of the trusts conferred, will 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 in the instrument of appointment, subject to this Indenture.  Every such instrument will be filed with the Indenture Trustee.

 

(d)                                 Any separate trustee or co-trustee may appoint the Indenture Trustee as its agent or attorney-in-fact with 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 dies, becomes incapable of acting, resigns or is removed, all of its estates, properties, rights, remedies and trusts will 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.

 

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

 

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Section 6.11(a) or ceases to be a Qualified Institution, the Indenture Trustee will notify the Issuer and the Servicer of the failure.

 

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

 

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

 

(i)                                     provisions by which the successor Indenture Trustee accepts its appointment;

 

(ii)                                  provisions necessary or desirable to transfer and confirm to, and to vest in, the successor Indenture Trustee all the rights, powers, duties and obligations of the retiring Indenture Trustee for the Notes to which the appointment of the successor Indenture Trustee relates;

 

(iii)                               if the retiring Indenture Trustee is not retiring as Indenture Trustee for all of the Notes, provisions necessary or desirable to confirm that all the rights, powers, duties and obligations of the retiring Indenture Trustee for the Notes for which the retiring Indenture Trustee is not retiring continue to be vested in the Indenture Trustee; and

 

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

 

Nothing in this Indenture or in the supplemental indenture will constitute the Indenture Trustees co-trustees of the same trust and each such Indenture Trustee will be a trustee of a trust or trusts under this Indenture separate and apart from any trust or trusts under this Indenture administered by any other Indenture Trustee.  The indenture supplement will become effective on the removal of the retiring Indenture Trustee.

 

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

 

Section 6.13.                          Audits of the Indenture Trustee.  The Indenture Trustee agrees that, with reasonable prior notice, it will permit any authorized representative of the Issuer, the Servicer or the Indenture Administrator, during the Indenture Trustee’s normal business hours, to examine

 

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and audit the books of account, records, reports and other documents and materials of the Indenture Trustee relating to (a) the performance of the Indenture Trustee’s obligations under this Indenture, (b) any payments of fees and expenses of the Indenture Trustee in connection with its performance and (c) any claim made by the Indenture Trustee under this Indenture.  In addition, the Indenture Trustee will permit those representatives to make copies and extracts of any such books and records and to discuss the same with the Indenture Trustee’s officers and employees.  Each of the Issuer, the Servicer and the Indenture Administrator will, and will cause its authorized representatives to, hold in confidence all that 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 Issuer, the Servicer or the Indenture Administrator, as the case may be, may reasonably determine that the disclosure is consistent with its obligations under this Indenture.  The Indenture Trustee will maintain all those pertinent books, records, reports and other documents and materials for a period of two years after the termination of its obligations under this Indenture.

 

Section 6.14.                          Representations and Warranties of the Indenture Trustee.  The Indenture Trustee represents and warrants to the Issuer as of the 2015-A Closing Date:

 

(a)                                 Organization and Qualification.  The Indenture Trustee is a banking corporation duly organized, validly existing and in good standing under the laws of the State of New York.  The Indenture Trustee is qualified as a foreign banking corporation in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its properties or the conduct of its activities requires the qualification, license or approval, unless the failure to obtain the qualifications, licenses or approvals would not reasonably be expected to have a material adverse effect on the Indenture Trustee’s ability to perform its obligations under this Indenture or the other 2015-A Basic Documents to which it is a party.

 

(b)                                 Power, Authorization and Enforceability.  The Indenture Trustee has the power and authority to execute deliver and perform under this Indenture.  The Indenture Trustee has authorized the execution, delivery and performance of this Indenture.  This Indenture is the legal, valid and binding obligation of the Indenture Trustee enforceable against the Indenture Trustee, except as may be limited by insolvency, bankruptcy, reorganization or other laws relating to or affecting the enforcement of creditors’ rights or by general equitable principles.

 

(c)                                  No Conflicts and No Violation.  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 federal or New York State law, governmental rule or regulation governing the banking or trust powers of the Indenture Trustee or any judgment or order 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 its charter documents or by-laws or any indenture, mortgage, deed of trust, loan agreement, guarantee or similar agreement or instrument under which the Indenture Trustee is a debtor or guarantor or (iii) violate any law or, to the Indenture Trustee’s knowledge, any order, rule, or regulation applicable to the Indenture Trustee of any court or of any federal or State regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Indenture Trustee or its properties, in each case which conflict, breach, default, Lien, or

 

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violation would reasonably be expected to have a material adverse effect on the Indenture Trustee’s ability to perform its obligations under this Indenture.

 

(d)                                 No Proceedings.  To the Indenture Trustee’s knowledge, there are no proceedings or investigations pending or overtly threatened in writing, before any court, regulatory body, administrative agency, or other governmental instrumentality having jurisdiction over the Indenture Trustee or its properties: (i) asserting the invalidity of any of this Indenture or any of the other 2015-A Basic Documents to which it is a party, (ii) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by any of the 2015-A Basic Documents to which it is a party 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, this Indenture.

 

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

 

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

 

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

 

Section 6.16.                          Covenants for Reporting of Reallocations of Leases and Leased Vehicles due to Breaches of Representations and Warranties.  The Indenture Trustee will (a) notify the Sponsor, the Depositor and the Servicer, as soon as practicable and in any event within five Business Days, of all demands or requests received by a Responsible Person of the Indenture

 

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Trustee for the removal of any Lease and related Leased Vehicle from the 2015-A Reference Pool and reallocation of the Lease and Leased Vehicle to the Revolving Facility Pool under Section 3.5 of the Servicing Supplement, (b) promptly on request by the Sponsor, the Depositor or the Servicer, provide to them any other information reasonably requested to facilitate compliance by them with Rule 15Ga-1 under the Exchange Act, and Items 1104(e) and 1121(c) of Regulation AB and (c) if requested by the Sponsor, the Depositor or the Servicer, provide a written certification no later than 15 days following the end of any quarter or year that the Indenture Trustee has not received any repurchase demands for that period, or if repurchase demands have been received during that period, that the Indenture Trustee has provided all the information reasonably requested under clause (b) above.  In no event will the Indenture Trustee or the Issuer have any responsibility or liability in connection with any filing required to be made by a securitizer under the Exchange Act or Regulation AB.

 

ARTICLE VII
 NOTEHOLDERS’ LISTS AND REPORTS

 

Section 7.1.                                 Names and Addresses of Noteholders.  If the Indenture Trustee is not the Note Registrar, the Issuer will furnish a list of the names and addresses of the Noteholders of any Definitive Notes to the Indenture Trustee (a) not more than five days after each Record Date, as of that Record Date and (b) not more than 30 days after receipt by the Issuer of a request from the Indenture Trustee, as of a date not more than ten days before the time the list is furnished.  If the Indenture Trustee is the Note Registrar, the Indenture Trustee, on the request of the Owner Trustee, will furnish within ten days to the Owner Trustee a list of Noteholders of all Book-Entry Notes as of the date specified by the Owner Trustee.

 

Section 7.2.                                 Preservation of Information; Communications to Noteholders.

 

(a)                                 The Indenture Trustee will preserve, in as current a form as is reasonably practicable, the names and addresses of the Noteholders contained in the most recent list furnished to the Indenture Trustee under Section 7.1 and the names and addresses of Noteholders received by the Indenture Trustee in its capacity as Note Registrar.  The Indenture Trustee may destroy any list furnished to it under Section 7.1 on receipt of a new list.

 

(b)                                 Noteholders may communicate under Section 312(b) of the TIA with other Noteholders about their rights under this Indenture or under the Notes.

 

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

 

Section 7.3.                                 Reports by Issuer.

 

(a)                                 The Issuer will:

 

(i)                                     file with the Indenture Trustee, within 15 days after the Issuer is required to file the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents and other reports (or copies of any portions of any of the foregoing that the Securities and Exchange Commission may prescribe) that

 

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the Issuer is required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the Exchange Act;

 

(ii)                                  file with the Indenture Trustee and the Securities and Exchange Commission the additional information, documents and reports about compliance by the Issuer with the conditions and covenants of this Indenture, as may be prescribed by the Securities and Exchange Commission; and

 

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

 

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

 

(c)                                  Unless the Issuer otherwise determines, the fiscal year of the Issuer will be the calendar year.

 

Section 7.4.                                 Reports by Indenture Trustee.

 

(a)                                 Within 90 days after each April 15, beginning in the year after the 2015-A Closing Date, the Indenture Trustee will prepare and mail to each Noteholder a report dated as of April 15 of the applicable year that complies with Section 313(a) of the TIA, but only if the report is required pursuant Section 313(a) of the TIA.  The Indenture Trustee will also prepare and mail to Noteholders any report required under Section 313(b) of the TIA.  Any report mailed to the Noteholders under this Section 7.4(a) will be mailed in compliance with Section 313(c) of the TIA.

 

(b)                                 The Indenture Trustee will file with the Securities and Exchange Commission and any stock exchange on which the Notes are listed a copy of each report delivered under Section 7.4(a) at the time of its mailing to Noteholders.  The Issuer will notify the Indenture Trustee if and when the Notes are listed on any stock exchange.

 

ARTICLE VIII
 ACCOUNTS, DISBURSEMENTS AND RELEASES

 

Section 8.1.                                 Collection of Money.  Except as otherwise provided in this Indenture, the Indenture Trustee may demand payment or delivery of, and will 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 under this Indenture, the Exchange Note Supplement and the Servicing Supplement.  The Indenture Trustee will apply all such money received by it, and will make deposits to, and distributions from, the Bank Accounts, as provided in this Indenture, the Exchange Note Supplement and the Servicing Supplement.

 

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Section 8.2.                                 Bank Accounts; Distributions and Disbursements.

 

(a)                                 On or before the 2015-A Closing Date, the Indenture Trustee will establish, and on and after the 2015-A Closing Date will maintain, the Bank Accounts as provided in Section 4.1 of the Servicing Supplement.

 

(b)                                 On each Payment Date, the Indenture Trustee will (based on the information contained in the most recent Monthly Investor Report) withdraw from the Collection Account an amount equal to all amounts received in respect of the 2015-A Exchange Note under the Exchange Note Supplement plus any amounts deposited by the Servicer under Section 5.1 of the Servicing Supplement on that Payment Date and apply those amounts in the following order of priority (pro rata to the Persons within each priority level based on the amounts due except as otherwise specified):

 

(i)                                     first, to the payment of all amounts, including indemnities, then due to the Indenture Trustee and the Owner Trustee and any expenses of the Issuer incurred in accordance with the 2015-A Basic Documents, in each case, to the extent not paid by the Depositor or Indenture Administrator, up to a maximum of $150,000 per year;

 

(ii)                                  second, to the Servicer, the Administration Fee;

 

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

 

(iv)                              fourth, to the Principal Payment Account, the First Priority Principal Payment;

 

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

 

(vi)                              sixth, to the Principal Payment Account, the Second Priority Principal Payment;

 

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

 

(viii)                        eighth, to the Reserve Account, the amount, if any, required for the amount in the Reserve Account to equal the Required Reserve Amount after taking into account any deposit made to the Reserve Account on that Payment Date under Section 5.1(d) of the Exchange Note Supplement;

 

(ix)                              ninth, to the Principal Payment Account, the Regular Principal Payment;

 

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

 

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(xi)                              eleventh, to the Trust Distribution Account (or if the Trust Distribution Account has not been established, to the holder of the Residual Interest), any funds remaining in the Collection Account for the Collection Period preceding that Payment Date.

 

(c)                                  On each Payment Date, the Indenture Trustee (based on the information contained in the most recent Monthly Investor Report) will withdraw the funds in the Principal Payment Account and make deposits and payments in the following order of priority, in each case, applied ratably in accordance with the Note Balance of the Notes of that Class:

 

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

 

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

 

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

 

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

 

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

 

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

 

(vii)                           seventh, to the Trust Distribution Account (or if the Trust Distribution Account has not been established, to the holder of the Residual Interest), any funds remaining in the Principal Payment Account.

 

(d)                                 Notwithstanding anything in this Indenture to the contrary, if the Notes are accelerated following an Event of Default, then on the Payment Date relating to the Collection Period in which the 2015-A Collateral was sold or otherwise liquidated, the Indenture Trustee (based on the information contained in the most recent Monthly Investor Report) will apply all money and property collected from the sale or other liquidation of the 2015-A Collateral and all amounts in the Reserve Account in the following order of priority (pro rata to the Persons within each priority level based on the amounts due except as otherwise specified):

 

(i)                                     first, to the payment of all amounts, including indemnities, due to the Indenture Trustee, the Owner Trustee and any expenses of the Issuer incurred in accordance with the 2015-A Basic Documents;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ix)                              ninth, to the Trust Distribution Account (or if the Trust Distribution Account has not been established, to the holder of the Residual Interest), any remaining money or property.

 

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

 

Section 8.3.                                 General Provisions Regarding Bank Accounts.

 

(a)                                 Subject to Section 6.1(c), the Indenture Trustee will not be liable by reason of any insufficiency in any of the Bank Accounts resulting from any loss on any Permitted Investment included in the Bank Accounts, except for losses attributable to the Indenture Trustee’s failure to make payments on the Permitted Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee.  In addition, the Indenture Trustee has no duty to monitor the activities of any Qualified Institution or Qualified Trust Institution (unless the Qualified Institution or Qualified Trust Institution is also the Indenture Trustee) and will not be liable for the actions or inactions of any Qualified Institution or Qualified Trust Institution (unless the Qualified Institution or Qualified Trust Institution is also the Indenture Trustee).

 

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

 

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Section 8.4.                                 Release of 2015-A Collateral.

 

(a)                                 The Indenture Trustee may, and when required by this Indenture will, release property from the Lien of this Indenture, in each case, in accordance with this Indenture.  Except as otherwise set forth in Sections 8.4(b), 8.4(c) and 10.1(c), the Indenture Trustee will release property from the Lien of this Indenture only on receipt of an Issuer Request accompanied by an Officer’s Certificate and an Opinion of Counsel and (if required by the TIA) Independent Certificates in accordance with Sections 314(c) and 314(d)(1) of the TIA meeting the requirements of Section 11.1.

 

(b)                                 The Issuer and the Indenture Trustee intend that the property in which a security interest is granted under this Indenture will be limited to the 2015-A Exchange Note and the proceeds thereof, and the other 2015-A Collateral as specified in the “GRANTING CLAUSE” of this Indenture, and the security interest will not include any direct rights in the Collateral Leases or Collateral Leased Vehicles or proceeds thereof (other than to the extent constituting proceeds of the 2015-A Exchange Note) or other property of the Titling Companies.  To facilitate the Servicer’s servicing of the 2015-A Reference Pool under the Servicing Supplement, the Indenture Trustee will be deemed to release, and does release, and each Noteholder or Note Owner by its acceptance of a Note or an interest or participation in a Note respectively acknowledges that the Indenture Trustee will release any and all Liens and other rights and interests it possesses or may possess from time to time, without further action of the parties, in, to and under:

 

(i)                                     each Lease and Leased Vehicle and all proceeds thereof (and the proceeds of the 2015-A Exchange Note, to the extent consisting of the proceeds of the Lease or Leased Vehicle), effective on the date on which an Administrative Reallocation Amount for the Lease and Leased Vehicle is deposited in the Exchange Note Collection Account; and

 

(ii)                                  each Leased Vehicle and the proceeds thereof (and the proceeds of the 2015-A Exchange Note, to the extent consisting of the proceeds of the Leased Vehicle) and the rights of the Titling Company and/or Ford Credit (individually or as Servicer) under any contract or agreement for the sale or other disposition of the Leased Vehicle (including in connection with the realization of the proceeds of any insurance policy on or covering the Leased Vehicle), effective immediately prior to the date on which the contract or agreement arises (provided, that the Servicer will receive and apply all proceeds of the Leased Vehicles in accordance with Section 6.1(a) of the Servicing Agreement).

 

(c)                                  The Indenture Trustee, when there are no Notes Outstanding and all sums due from the Issuer to the Indenture Trustee under Section 6.7 have been paid in full, or as otherwise contemplated in Section 10.1, will release the 2015-A Collateral from the Lien of this Indenture and release to the Issuer or any other Person entitled to those funds, the funds then in the Bank Accounts under this Indenture.  The Indenture Trustee will release property from the Lien of this Indenture under this Section 8.4(c) only on receipt of an Issuer Request accompanied by an Officer’s Certificate and an Opinion of Counsel meeting the requirements of Section 11.1

 

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(d)                                 On receipt of an Issuer Request accompanied by an Officer’s Certificate and an Opinion of Counsel meeting the requirements of Section 11.1, the Indenture Trustee will execute any and all instruments reasonably requested of it and authorize the filing of termination statements to release property from the Lien of this Indenture, or convey the Indenture Trustee’s interest in the same, to effect the release of the 2015-A Collateral permitted by this Section 8.4 and Section 10.1.  No party relying on an instrument or authorization executed by the Indenture Trustee as provided in this Article VIII is required to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or require evidence of the application of any monies.

 

ARTICLE IX
 SUPPLEMENTAL INDENTURES

 

Section 9.1.                                 Supplemental Indentures Without Consent of Noteholders.

 

(a)                                 The Issuer and the Indenture Trustee, when directed by Issuer Order, may enter, without the consent of the Noteholders but with prior notice by the Issuer to the Rating Agencies, into one or more indentures supplemental to this Indenture (which will conform to the provisions of the TIA as in force at the date of the execution of any such indenture supplemental to this Indenture) for any of the following purposes:

 

(i)                                     to correct or expand the description of any property 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 additional property to the Lien of this Indenture;

 

(ii)                                  to evidence the succession, in compliance with this Indenture, of another Person to the Issuer, and the assumption by any such successor of the covenants of the Issuer in this Indenture and in the Notes;

 

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

 

(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 in this Indenture or in any supplemental indenture that may be inconsistent with any other provision in this Indenture or in any supplemental indenture or to add provisions not inconsistent with the provisions of this Indenture so long as the action does not materially adversely affect the interests of the Noteholders;

 

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

 

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(vii)                           to modify, eliminate or add to the provisions of this Indenture as necessary to effect the qualification of this Indenture under the TIA and to add to this Indenture any other provisions required by the TIA.

 

All supplemental indentures under this Section 9.1(a) will be in form reasonably satisfactory to the Indenture Trustee.  The Indenture Trustee is authorized to join in the execution of any such supplemental indenture and to make any further reasonably appropriate agreements and stipulations that may be contained in the supplemental indenture.

 

(b)                                 The Issuer and the Indenture Trustee, when directed by Issuer Order, may enter, without the consent of any of the Noteholders, into an indenture or indentures supplemental to this Indenture for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner (other than the modifications set forth in Section 9.2) the rights of the Noteholders under this Indenture or for the purpose of issuing additional securities in exchange for all or a portion of the Residual Interest, subject to the following conditions:

 

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

 

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

 

(iii)                               the Rating Agency Condition has been satisfied for the amendment; and

 

(iv)                              for the issuance of additional securities only, (A) payments of interest and principal on those additional securities on each Payment Date will be subordinate to payments of interest and principal on the Notes and (B) either (1) the additional securities are registered under the Securities Act or (2) the Issuer delivers an Opinion of Counsel to the Indenture Trustee stating that the offer, sale and delivery of the additional securities do not require registration under the Securities Act.

 

Section 9.2.                                 Supplemental Indentures with Consent of Noteholders.

 

(a)                                 The Issuer and the Indenture Trustee, when directed by Issuer Order, may enter, with the consent of the Noteholders of a majority of the Note Balance of the Controlling Class and with prior notice by the Issuer to the Rating Agencies, into an indenture or indentures supplemental to this Indenture for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or modifying in any manner the rights of the Noteholders under this Indenture if the Issuer delivers an Opinion of Counsel to the Indenture Trustee stating that the amendment will not (i) cause any Note to be deemed sold or exchanged for purposes of Section 1001 of the Code or (ii) cause the Issuer or any Titling Company to be treated as an association or publicly traded partnership taxable as a corporation

 

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for U.S. federal income tax purposes; provided, however, that no such supplemental indenture, without the consent of each Noteholder of each Outstanding Note adversely affected by the supplemental indenture, will:

 

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

 

(B)                               change (1) the Final Scheduled Payment Date or the date of payment of any installment of principal of or interest on any Note, (2) the principal amount of or interest rate on any Note, (3) the Note Redemption Price, (4) the provisions of this Indenture relating to the priority of payments on the Notes or relating to the application of collections on, or the proceeds of the sale of, the 2015-A Collateral 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 on any Note is payable or (5) the right of Noteholders to institute Proceedings to enforce this Indenture;

 

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

 

(D)                               modify or alter (1) the second proviso to the definition of “Outstanding” or (2) the definition of “Controlling Class”;

 

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

 

(F)                                 permit the creation of any Lien ranking prior or equal to the Lien of this Indenture on any portion of the 2015-A Collateral other than Permitted Liens or, except as permitted by this Indenture or the other 2015-A Basic Documents, release the Lien of this Indenture on any portion of the 2015-A Collateral.

 

(b)                                 It will not be necessary for any Act of Noteholders under this Section 9.2 to approve the particular form of any proposed supplemental indenture, but it will be sufficient if the Act of Noteholders approves the substance of the proposed supplemental indenture.

 

Section 9.3.                                 Execution of Supplemental Indentures.  In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modification of the trusts created by this Indenture, the Indenture Trustee will be entitled to receive, and subject to Sections 6.1 and 6.2, will be fully protected in relying on, an Opinion of Counsel stating that the execution of the supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent to the execution and delivery of the supplemental indenture have been satisfied.  The Indenture Trustee may, but is not obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, powers, duties, obligations, liabilities or immunities under this Indenture or otherwise.

 

Section 9.4.                                 Effect of Supplemental Indenture.  On the execution of any supplemental indenture under this Article IX, this Indenture will be modified and amended in accordance with the supplemental indenture, and the supplemental indenture will be part of this Indenture for any and all purposes.  Every Noteholder of Notes authenticated and delivered before or after the supplemental indenture will be bound by the supplemental indenture.

 

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Section 9.5.                                 Conformity with Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed under this Article IX will conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture is qualified under the Trust Indenture Act.

 

Section 9.6.                                 Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture under this Article IX may, and if required by the Indenture Trustee will, bear a notation in form approved by the Indenture Trustee for any matter provided for in the supplemental indenture.  If the Issuer or the Indenture Trustee so determine, new Notes modified 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.

 

ARTICLE X
 REDEMPTION OF NOTES

 

Section 10.1.                          Redemption.

 

(a)                                 The Notes are subject to redemption in whole, but not in part, on the redemption of the 2015-A Exchange Note under Section 5.1 of the Servicing Supplement on any Payment Date on which the Servicer exercises its option to purchase the 2015-A Exchange Note under Section 5.1 of the Servicing Supplement.  The purchase price required to be paid by the Servicer for the 2015-A Exchange Note under Section 5.1 of the Servicing Supplement (which amount, together with amounts in the Collection Account, will be sufficient to in turn pay the Note Redemption Price on the Notes) will be treated as 2015-A Collections and applied in accordance with Section 8.2.  If the Notes are to be redeemed under this Section 10.1, the Servicer or the Issuer will notify the Indenture Trustee by Issuer Request and the Rating Agencies of that election at least ten days prior to the Redemption Date.  The Issuer will, or will cause the Servicer to, deposit, by 10:00 a.m. (New York City time) on the Redemption Date, in the Exchange Note Collection Account an amount sufficient to pay the Note Redemption Price in accordance with Section 8.2.  After the Servicer or the Issuer notifies the Indenture Trustee that the Notes are to be redeemed in accordance with this Section 10.1, the Indenture Trustee will promptly notify the Noteholders:

 

(i)                                     of the Redemption Date;

 

(ii)                                  of the Note Redemption Price;

 

(iii)                               of the outstanding Note Balance of each Class of the Notes to be prepaid as of the most recent Payment Date and that the Notes plus accrued and unpaid interest on the Notes at the applicable Note Interest Rate to the Redemption Date will be paid in full;

 

(iv)                              of the place where the Notes are to be surrendered for final payment (which will be the office or agency of the Issuer maintained as provided in Section 3.2); and

 

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(v)                                 that on the Redemption Date, the Note Redemption Price will become due and payable on the Notes and that interest on the Notes will cease to accrue from and after the Redemption Date, unless the Issuer defaults in the payment of the Notes on the Redemption Date.

 

(b)                                 The Issuer will cause the Servicer to deposit by 10:00 a.m. (New York City time) on the Business Day preceding the Redemption Date (or, with satisfaction of the Rating Agency Condition, on the Redemption Date) in the Collection Account the amount required under Section 5.1 of the Servicing Supplement, at which time all such Notes will be paid in full on the Redemption Date.

 

(c)                                  On the Redemption Date, the Note Redemption Price will be due and payable and interest on the Notes will cease to accrue from and after the Redemption Date, unless the Issuer defaults in the payment of the Notes on the Redemption Date.  On redemption, the Indenture Trustee will release the 2015-A Collateral from the Lien of this Indenture and release to the Issuer or any other Person entitled to any funds then in the Bank Accounts under this Indenture in accordance with Section 8.4(c).

 

ARTICLE XI
 MISCELLANEOUS

 

Section 11.1.                          Compliance Certificates and Opinions, etc.

 

(a)                                 In connection with any order or request by the Issuer to the Indenture Trustee to take any action under this Indenture, the Issuer will deliver the following documents to the Indenture Trustee (such documents, collectively, an “Issuer Order” or “Issuer Request”, as applicable): (i) a written order or a written request, respectively, signed in the name of the Issuer by any one of its Responsible Persons and delivered to the Indenture Trustee, (ii) an Officer’s Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with, (iii) to the extent required by the TIA or on the request of the Indenture Trustee, an Opinion of Counsel stating that in the opinion of that counsel all those conditions precedent have been complied with and (iv) (if required by the TIA) an Independent Certificate from a firm of certified public accountants of national reputation selected by the Issuer.  However, in the case of any such order or request for which the furnishing of the documents is specifically required by this Indenture, no additional certificate or opinion need be furnished.

 

(b)                                 Every certificate or opinion on compliance with a condition or covenant provided for in this Indenture will include:

 

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

 

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

 

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

 

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

 

(c)                                  (i)                                     Before depositing any cash or property with the Indenture Trustee that is to be made the basis for the release of any property subject to the Lien of this Indenture, the Issuer will, furnish to the Indenture Trustee (A) an Officer’s Certificate stating the opinion of each Responsible Person signing the certificate regarding the fair value (within 90 days of the deposit) to the Issuer of the cash or property to be so deposited and (B) an Independent Certificate regarding the same matters, if the fair value to the Issuer of the securities to be so deposited and of all other of those securities made the basis of any such withdrawal or release since the commencement of the then-current year, as set forth in the certificates delivered under Section 11.1(c)(i)(A), is 10% or more of the Note Balance of the Notes Outstanding, but a certificate need not be furnished for any property or securities so deposited, if the fair value of the property or securities 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 of the Notes Outstanding.

 

(ii)                                  Whenever any property or securities are to be released from the Lien of this Indenture, the Issuer will furnish to the Indenture Trustee (A) an Officer’s Certificate certifying or stating the opinion of each Responsible Person signing the certificate regarding the fair value (within 90 days of the release) of the property or securities proposed to be released and stating that in the opinion of that Responsible Person the proposed release will not impair the security under this Indenture in contravention of the provisions of this Indenture and (B) an Independent Certificate regarding the same matters, if the fair value of the property or securities and of all other property, other than property as contemplated by Section 11.1(d), or securities released from the Lien of this Indenture since the commencement of the then-current year, as set forth in the certificates required by Section 11.1(c)(ii)(A) and this Section 11.1(c)(ii)(B), equals 10% or more of the Note Balance of the Notes Outstanding, but the certificate need not be furnished in the case of any release of property or securities, if the fair value of the property or securities as set forth in the related Officer’s Certificate is less than $25,000 or less than 1% of the Note Balance of the Notes Outstanding.

 

(d)                                 Notwithstanding Sections 2.9, 8.4 or 10.1 or any other provisions of this Section 11.1, the Issuer may, without compliance with the requirements of the other provisions of this Section 11.1, (i) collect, liquidate, sell or otherwise dispose of (or, as Holder of the 2015-A Exchange Note, cause the Titling Companies to collect, liquidate, sell, remove or otherwise dispose of) Leases and Leased Vehicles in the ordinary course of its business; provided, that all Collections, Recoveries and related amounts and proceeds of the dispositions are applied in accordance with the provisions of this Indenture and (ii) make cash payments out of the Bank Accounts, in each case, as and to the extent permitted or required by the 2015-A Basic Documents.

 

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

 

Section 11.2.                          Form of Documents Delivered to Indenture Trustee.

 

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

 

(b)                                 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 those matters be certified by, or covered by the opinion of, only one specified Person, or that they be certified or covered by only one document, but one specified Person may certify or give an opinion on some matters and one or more other specified Persons on other matters, and any such Person may certify or give an opinion on those matters in one or several documents.

 

Section 11.3.                          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 the Noteholders or a specified percentage of Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by the Noteholders in person or by agents duly appointed in writing.  Except as otherwise provided in this Indenture the action will become effective when the instrument or instruments are delivered to the Indenture Trustee, and, if required, to the Issuer.  The instrument or instruments (and the action embodied in the instrument or instruments and evidenced by the instrument or instruments) are sometimes referred to in this Indenture as the “Act of Noteholders” signing the instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent will be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section 11.3.  The Issuer by entering into this Indenture, and each Noteholder, by its acceptance of a Note, directs the Indenture Trustee to execute and deliver the Control Agreement and the Joinder Agreement for the Indenture Trustee.

 

(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.

 

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(c)                                  Any Act of Noteholders will bind the Noteholder of every Note issued on the registration of the Note or in exchange for the Note or in lieu of the Note, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance on the Note, whether or not notation of the action is made on the Note.

 

Section 11.4.                          Notices to Indenture Trustee, Issuer and Rating Agencies.

 

(a)                                 Unless otherwise specified in this Indenture, all notices, requests, demands, consents, waivers or other communications to or from the parties to this Indenture must be in writing and will be deemed to have been given and made:

 

(i)                                     on delivery or, in the case of a letter mailed by registered first class mail, postage prepaid, three days after deposit in the mail;

 

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

 

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

 

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

 

Unless otherwise specified in this Indenture, any such notice, request, demand, consent or other communication must be delivered or addressed as set forth on Schedule A or at another address that any party may designate by notice to the other parties.

 

(b)                                 Any notice required or permitted to be mailed to a Noteholder (i) in the case of Definitive Notes, must be sent by overnight delivery, mailed by registered first class mail, postage prepaid, or sent by fax, to the address of that Person as shown in the Note Register or (ii) in the case of Book-Entry Notes, must be delivered under the applicable procedures of the Clearing Agency.  Any notice so mailed within the time prescribed in this Indenture will be conclusively presumed to have been duly given, whether or not the Noteholder receives the notice.

 

Section 11.5.                          Notices to Noteholders; Waiver.

 

(a)                                 Any notice to Noteholders will be sufficiently given (unless otherwise provided in this Indenture) if in writing and (i) in the case of Definitive Notes, sent by overnight delivery, mailed by registered first class mail, postage prepaid, or sent by fax, to each Noteholder adversely affected by the event, at its address or fax number as it appears on the Note Register or (ii) in the case of Book-Entry Notes, delivered under the applicable procedures of the Clearing Agency, in each case, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of the notice.  In any case where notice to Noteholders is given by mail, neither the failure to mail the notice nor any defect in any notice so mailed to any particular Noteholder will affect the sufficiency of the notice to other Noteholders, and any notice that is

 

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mailed in the manner provided in this Indenture will conclusively be presumed to have been duly given.

 

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

 

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

 

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

 

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

 

Section 11.7.                          Benefits of Indenture.  Nothing in this Indenture or in the Notes, express or implied, will give to any Person, other than the parties to this Indenture and their successors under this Indenture, and the 2015-A Secured Parties and any other party with rights to payments or distributions under this Indenture, and any other Person with an ownership interest in any portion of the 2015-A Collateral, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 11.8.                          GOVERNING LAW.  THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 11.9.                          Submission to Jurisdiction.  The parties submit 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 legal proceedings arising out of or relating to this Indenture.  The parties irrevocably waive, to the fullest extent they may do so, any objection that they may now or in the future have to the laying of the venue of any legal proceedings arising out of or relating to this Indenture brought in one of those courts and any claim that one of those courts is an inconvenient forum.

 

Section 11.10.                   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

 

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PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE TRANSACTIONS CONTEMPLATED BY THIS INDENTURE.

 

Section 11.11.                   Severability.  If any of the covenants, agreements or terms of this Indenture is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining covenants, agreements or terms of this Indenture and will in no way affect the validity, legality or enforceability of the remaining Indenture or of the Notes or the rights of the Noteholders.

 

Section 11.12.                   Headings.  The headings in this Indenture are included for convenience only and will not affect the meaning or interpretation of this Indenture.

 

Section 11.13.                   Issuer Obligation.  No recourse may be taken, directly or indirectly, for the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection with this Indenture or the Notes, against (a) the Indenture Trustee or the Owner Trustee each in its individual capacity, (b) any holder of a beneficial interest in the Issuer, (c) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee, each in its individual capacity or (d) any holder of a beneficial interest in the Owner Trustee or the Indenture Trustee, each in its individual capacity, except as any such Person may have agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacities).  For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer under this Indenture, the Owner Trustee will be subject to, and entitled to the benefits of, Articles V, VI and VII of the Trust Agreement.

 

Section 11.14.                   Subordination of Claims against the Depositor.

 

(a)                                 The obligations of the Issuer under this Indenture are solely the obligations of the Issuer and do not represent any obligation or interest in any assets of the Depositor.  The Indenture Trustee, by entering into this Indenture, and each Noteholder and Note Owner, by accepting a Note or an interest or participation in a Note, acknowledge and agree that they have no right, title or interest in or to any Other Assets of the Depositor.  Notwithstanding the preceding sentence, if the Indenture Trustee, Noteholder or Note Owner either (i) asserts an interest or claim to, or benefit from, the Other Assets or (ii) is deemed to have any such interest, claim to, or benefit in or from the Other Assets, whether by operation of law, legal process, under insolvency laws or otherwise (including by virtue of Section 1111(b) of the Bankruptcy Code), then the Indenture Trustee, Noteholder or Note Owner further acknowledges and agrees that any such interest, claim or benefit in or from the Other Assets is expressly subordinated to the indefeasible payment in full of the other obligations and liabilities, which, under the relevant documents relating to the securitization or conveyance of those Other Assets, are entitled to be paid from, entitled to the benefits of, or otherwise secured by, those 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 Depositor), including the payment of post-petition interest on those other obligations and liabilities.  This subordination agreement is deemed a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code.  The Indenture Trustee, each Noteholder and each Note Owner further acknowledges and agrees that no adequate remedy at

 

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law exists for a breach of this Section 11.14 and this Section 11.14 may be enforced by an action for specific performance.

 

(b)                                 This Section 11.14 is for the third party benefit of those entitled to rely on this Section 11.14 and will survive the termination of this Indenture.

 

Section 11.15.                   No Petition.  The Indenture Trustee, each Noteholder or Note Owner, by accepting a Note or an interest or participation in a Note, each covenants and agrees that, before the date that is one year and one day (or, if longer, any applicable preference period) after payment in full of the Notes, all Exchange Notes, and all distributions to all Holders of Certificates and all holders of any other Securities (as defined in the related Titling Company Agreement) the payments on which are derived in any material part from amounts received on any Titling Company Assets (as defined in the applicable Titling Company Agreements), it will not institute against, or join any other Person in instituting against, the Issuer, the Depositor, any Holding Company, any Titling Company, or the Holders of the Collateral Specified Interest Certificates any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any federal or State bankruptcy or similar law and agrees it will not file, cooperate with or encourage others to file a bankruptcy petition against the Issuer, the Depositor, any Holding Company, any Titling Company or the Holders of the Collateral Specified Interest Certificates during the same period.  This Section 11.15 will survive the resignation or removal of the Indenture Trustee under this Indenture and the termination of this Indenture.

 

Section 11.16.                   Rights Limited to Collateral Specified Interest.

 

(a)                                 Any claim under this Indenture or any Note issued under this Indenture against any of the Titling Companies will be limited in recourse to the Collateral Assets.  If, notwithstanding the preceding sentence, any Noteholder or any other Person having a claim under this Indenture will be deemed to have any claim against any Specified Interest of any Titling Company other than the Collateral Specified Interest, or any Titling Company Interests allocated to any such other Specified Interest, the 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 the other Specified Interest or (ii) parties to any undertaking, agreement, contract or other written obligation of the Holders of the Series relating to the other Specified Interest, the payments under which are derived in any material part from or collateralized by amounts received on the related Specified Assets (as defined in the related Titling Company Agreement) of the other Specified Interest.  This subordination agreement is deemed a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code.  The Indenture Trustee and each Noteholder further acknowledges and agrees that no adequate remedy at law exists for a breach of this Section 11.16 and this Section 11.16 may be enforced by an action for specific performance.

 

(b)                                 Each Noteholder, and each other Person having a claim under this Indenture, by taking delivery or accepting the benefits hereof or thereof, and the Indenture Trustee on behalf of itself and each such Person, 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 for any secured claim that the Noteholder or other Person, as

 

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the case may be, may have at any time against any Titling Company or against any Specified Interest of any Titling Company other than the Collateral Specified Interest.

 

(c)                                  This Section 11.16 is for the third party benefit of the holders, pledgees or other beneficiaries of any Securities or parties to or other beneficiaries of any agreement, contract or other written obligation of the type referred to in Section 11.16(a)(ii) which relates to any Specified Interest of any Titling Company other than the Collateral Specified Interest and will survive the termination of this Indenture.

 

Section 11.17.                   Counterparts.  This Indenture may be executed in any number of counterparts.  Each counterpart will be an original, and all counterparts will together constitute one and the same instrument.

 

[Remainder of Page Intentionally Left Blank]

 

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EXECUTED BY:
    	
 
    
	
 
    	
 
    
	
 
    	
FORD CREDIT AUTO LEASE TRUST 2015-A,
    
	
 
    	
 
    	
as Issuer
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
U.S.   BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as   Owner Trustee of Ford Credit Auto Lease Trust 2015-A
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE BANK OF NEW YORK MELLON,
    
	
 
    	
 
    	
not   in its individual capacity but solely as Indenture Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Indenture]

 

 

	
Agreed and Acknowledged for purposes
    	
 
    
	
 
    	
of the Granting Clause:
    	
 
    
	
 
    	
 
    	
 
    
	
CAB EAST LLC
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Susan J. Thomas
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CAB WEST LLC
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Susan J. Thomas
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
FCALM, LLC
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Susan J. Thomas
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    
					

 

[Signature Page to Indenture]

 

 

Schedule A

 

Notice Addresses

 

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

 

Ford Motor Credit Company LLC
 c/o Ford Motor Company
 World Headquarters, Suite 800-B3
 One American Road 
 Dearborn, Michigan 48126
 Attention:  Securitization Operations Supervisor
 Telephone:  (313) 206-5899
 Fax:  (313) 390-4133

 

With a copy to:

 

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

 

2.                                      If to the Depositor:

 

Ford Motor Credit Company LLC
 c/o Ford Motor Company
 World Headquarters, Suite 800-B3
 One American Road 
 Dearborn, Michigan 48126
 Attention:  Ford Credit SPE Management Office
 Telephone:  (313) 594-3495
 Fax:  (313) 390-4133

 

With a copy to:

 

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

 

SA-1

 

3.                                      If to the Issuer:

 

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

 

With copies to:

 

Ford Motor Credit Company LLC
 c/o Ford Motor Company
 World Headquarters, Suite 800-B3
 One American Road 
 Dearborn, Michigan 48126
 Attention:  Ford Credit SPE Management Office
 Telephone:  (313) 594-3495
 Fax:  (313) 390-4133

 

and

 

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

 

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

 

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

 

6.                                      If to Moody’s Investor Service:

 

Moody’s Investors Service.
 7 World Trade Center
 250 Greenwich Street
 New York, New York 10007
 Attention:  ABS/RMBS Monitoring Department
 Telephone:  (212) 553-1111
 Fax:  (212) 298-7139

 

7.                                      If to Standards & Poor’s:

 

Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC

business

55 Water Street, 40th Floor

New York, New York 10041

Attention:  Asset Backed Surveillance Department

Telephone:  (212) 438-1000

Fax:  (212) 438-2649

 

SA-2

 

Exhibit A

 

Form of Class [A-[     ][   ]/B/C] Note

 

Ford Credit Auto Lease Trust 2015-A

 

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

 

[Class A-1 Notes, Class B Notes and Class C Notes Only: THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE OF THE UNITED STATES.  THE HOLDER OF THIS NOTE (OR OF AN INTEREST OR PARTICIPATION IN THIS NOTE), BY PURCHASING THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE), AGREES FOR THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE) MAY BE SOLD, TRANSFERRED, ASSIGNED, PARTICIPATED, PLEDGED OR OTHERWISE DISPOSED OF ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS, AND ONLY (I) UNDER AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (II) UNDER RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (III) TO THE DEPOSITOR OR ITS AFFILIATES, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND SECURITIES AND BLUE SKY LAWS OF THE STATES OF THE UNITED STATES.]

 

EACH HOLDER OF THIS NOTE (OR OF AN INTEREST OR PARTICIPATION IN THIS NOTE) THAT IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW OR REGULATION THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A “SIMILAR LAW”), BY ACCEPTING THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE), IS DEEMED TO REPRESENT THAT ITS PURCHASE, HOLDING AND DISPOSITION OF THIS NOTE (OR AN INTEREST OR PARTICIPATION

 

EA-1

 

IN THIS NOTE) DOES NOT CONSTITUTE AND WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE DUE TO THE APPLICABILITY OF A STATUTORY OR ADMINISTRATIVE EXEMPTION FROM THE PROHIBITED TRANSACTION RULES (OR, IF THE HOLDER IS SUBJECT TO ANY SIMILAR LAW, ITS PURCHASE, HOLDING AND DISPOSITION DOES NOT CONSTITUTE AND WILL NOT RESULT IN A VIOLATION OF SIMILAR LAW).

 

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

 

EA-2

 

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

 

FORD CREDIT AUTO LEASE TRUST 2015-A

 

CLASS [A-[     ][   ]/B/C] [     ]% ASSET BACKED NOTES

 

Ford Credit Auto Lease Trust 2015-A, a statutory trust organized under the laws of the State of Delaware (the “Issuer”), for value received, promises to pay to CEDE & CO., or registered assigns, the principal sum of [                                ] DOLLARS payable on the fifteenth day of each month, or, if any such day is not a Business Day, the next succeeding Business Day, commencing in May 2015 (each, a “Payment Date”) in an amount equal to the aggregate amount payable to Noteholders of Class [A-[    ][  ]/B/C] Notes on that Payment Date from the Principal Payment Account in respect of principal on the Class [A-[    ][  ]/B/C] Notes under Section 3.1 of the Indenture, dated as of April 1, 2015 (the “Indenture”), between the Issuer and The Bank of New York Mellon, as Indenture Trustee (the “Indenture Trustee”).  However, the entire unpaid principal amount of this Note will be due and payable on the earlier of the [                    ] Payment Date (the “Class [A-[    ][  ]/B/C] Final Scheduled Payment Date”) or the Redemption Date under Section 10.1 of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes will be due and payable on the date on which the Notes are declared to be immediately due and payable in the manner provided in Section 5.2(a) of the Indenture.  All principal payments on the Class [A-[    ][  ]/B/C] Notes will be made ratably to the Noteholders entitled to those principal payments. Capitalized terms used but not otherwise defined in this Note are defined in Article I of the Indenture, which also contains rules of usage applicable to this Note.

 

The Issuer will pay interest on this Note at the rate per annum shown above on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.1 of the Indenture.  Interest on this Note will accrue for each Payment Date from and including the [15th day of the month preceding each Payment Date] [previous Payment Date on which interest has been paid] (or, in the case of the initial Payment Date, from and including the 2015-A Closing Date) to but excluding [the 15th day of the month in which that Payment Date occurs] [that Payment Date].  Interest will be computed on the basis of [actual days elapsed and] a 360-day year [of twelve 30 day months].

 

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

 

This Note is one of a duly authorized issue of Class [A-[    ][  ]/B/C] [    ]% Asset Backed Notes (the “Class [A-[    ][  ]/B/C] Notes”) of the Issuer.  Also authorized under the Indenture are [the Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes].  The Indenture and all indentures supplemental to the Indenture set forth the respective rights and obligations of the Issuer, the

 

EA-3

 

Indenture Trustee and the Noteholders under the Indenture.  The Notes are subject to all terms of the Indenture.

 

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

 

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

 

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

 

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

 

The transfer of this Note is subject to the restrictions on transfer specified on the face of this Note and to the other limitations set forth in the Indenture.  Subject to the satisfaction of those restrictions and limitations, the transfer of this Note may be registered on the Note Register on surrender of this Note for registration of transfer at the office or agency designated by the Issuer under the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Noteholder of this Note or the Noteholder’s attorney duly authorized in writing, with the signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, and then one or more new

 

EA-4

 

Notes of the same Class in authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay an amount 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 its acceptance of a Note or, in the case of a Note Owner, an interest or participation in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, for the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection with the Notes and the Indenture, against (i) the Indenture Trustee or the Owner Trustee, each in its individual capacity, (ii) any holder of a beneficial interest in the Issuer, (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee, each in its individual capacity or (iv) any holder of a beneficial interest in the Owner Trustee or the Indenture Trustee, each in its individual capacity, except as any such Person may have agreed.

 

The obligations of the Issuer under the Indenture are solely the obligations of the Issuer and do not represent any obligation or interest in any assets of the Depositor.  Each Noteholder and Note Owner, by its acceptance of a Note or an interest or participation in a Note, acknowledges and agrees that it has no right, title or interest in or to any Other Assets of the Depositor.  Notwithstanding the preceding sentence, if the Noteholder or Note Owner either (i) asserts an interest or claim to, or benefit from, Other Assets or (ii) is deemed to have any such interest, claim to, or benefit in or from Other Assets, whether by operation of law, legal process, under insolvency laws or otherwise (including by virtue of Section 1111(b) of the Bankruptcy Code), then the Noteholder or Note Owner further acknowledges and agrees that any 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 relevant documents relating to the securitization or conveyance of those Other Assets, are entitled to be paid from, entitled to the benefits of, or otherwise secured by those 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 Depositor), including the payment of post-petition interest on those other obligations and liabilities.

 

Any claim under any Note issued under the Indenture against any of the Titling Companies will be limited in recourse to the Collateral Assets.  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 any Titling Company other than the Collateral Specified Interest, or any Titling Company Interests allocated to any such other Specified Interest, the 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 the other Specified Interest and (ii) parties to any undertaking, agreement, contract or other written obligation of the Holders of the Series relating to the other Specified Interest, the payments under which are derived in any material part from or collateralized by amounts received on the related Specified Assets (as defined in the related Titling Company Agreement) of the other Specified Interest.

 

EA-5

 

THIS SUBORDINATION AGREEMENT WILL BE DEEMED A SUBORDINATION AGREEMENT WITHIN THE MEANING OF SECTION 510(a) OF THE BANKRUPTCY CODE.

 

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, an interest or participation in a Note, covenants and agrees by accepting the benefits of the Indenture that before the date that is one year and one day (or, if longer, any applicable preference period) after payment in full of the Notes, all Exchange Notes, and all distributions to all Holders of Certificates and all holders of any other Securities (as defined in the related Titling Company Agreement) the payments on which are derived in any material part from amounts received on any Titling Company Assets (as defined in the applicable Titling Company Agreements), it will not institute against, or join any other Person in instituting against, the Issuer, the Depositor, any Holding Company, any Titling Company, or the Holders of the Collateral Specified Interest Certificates any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any federal or State bankruptcy or similar law in connection with any obligations relating to the 2015-A Exchange Note, the Notes, the Indenture or any of the other 2015-A Basic Documents and agrees it will not cooperate with or encourage others to file a bankruptcy petition against the Issuer, the Depositor, any Holding Company, any Titling Company or the Holders of the Collateral Specified Interest Certificates during the same period.

 

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

 

For any date of determination, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note is registered as of that date as the owner of the Note for the purpose of receiving payments of principal of and any interest on the Note and for all other purposes, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee will recognize notice to the contrary.

 

The Indenture permits, with certain exceptions requiring the consent of all adversely affected Noteholders as provided in the Indenture, the amendment of the Indenture and the modification of the rights and obligations of the Issuer and the rights of the Noteholders under the Indenture by the Issuer with the consent of the Noteholders of Notes evidencing not less than a majority of the Note Balance of the Controlling Class.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Noteholders provided certain conditions are satisfied.  In addition, the Indenture contains provisions permitting the Noteholders of Notes evidencing specified percentages of the Note Balance of the Notes Outstanding or of the Controlling Class, on behalf of all Noteholders, to waive compliance by the Issuer with certain provisions of the Indenture and certain defaults under the Indenture and their consequences.  Any such consent or waiver by the Noteholder of this Note will be conclusive and binding on the Noteholder and on all future Noteholders of this Note and of any Note issued on the registration of transfer of this Note or in

 

EA-6

 

exchange of this Note or in lieu of this Note whether or not notation of the consent or waiver is made on this Note.

 

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

 

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

 

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations set forth in the Indenture.

 

THIS NOTE AND THE INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

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

 

Anything in this Note to the contrary notwithstanding, except as provided in the 2015-A Basic Documents, none of The Bank of New York Mellon, in its individual capacity, U.S. Bank Trust 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 will be personally liable for, nor will recourse be had to any of them for, the payment of principal or of interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Noteholder of this Note, by its acceptance of this Note, agrees that, except as provided in the 2015-A Basic Documents, in the case of an Event of Default under the Indenture, the Noteholder has no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained in this Note will 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.

 

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

 

[Remainder of This Page Intentionally Left Blank]

 

EA-7

 

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

 

	
Date: April     , 2015
    	
 
    
	
 
    	
 
    
	
 
    	
FORD CREDIT AUTO LEASE TRUST 2015-A
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
U.S.   BANK TRUST NATIONAL ASSOCIATION,

not   in its individual capacity but solely as Owner Trustee of Ford Credit Auto   Lease Trust 2015-A
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Responsible Person
    

 

EA-8

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
Date:   April     , 2015
    	
 
    
	
 
    	
 
    
	
 
    	
THE   BANK OF NEW YORK MELLON,
    
	
 
    	
 
    	
not   in its individual capacity but solely as Indenture Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Responsible   Person
    

 

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

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    	
*/
    
	
 
    	
 
    	
 
    	
Signature   Guaranteed*/
    	
 
    

 

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

 

EA-10

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