Document:

Exhibit 10.1

 

LEASE AGREEMENT

 

by and between

 

INTERCONTINENTAL FUND III 117 KENDRICK STREET, LLC

 

as Landlord

 

and

 

VERASTEM, INC.

 

as Tenant

 

With respect to the property known as

 

Cutler Lake Corporate Center

 

117 Kendrick Street, Needham, Massachusetts

 

Dated as of

 

April 15, 2014

 

 

TABLE OF CONTENTS

 

	
SECTION
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
1.
    	
PREMISES
    	
2
    
	
2.
    	
LEASE TERM
    	
2
    
	
3.
    	
FIXED RENT
    	
3
    
	
4.
    	
ADDITIONAL RENT
    	
3
    
	
5.
    	
LETTER OF CREDIT
    	
3
    
	
6.
    	
USE OF PREMISES
    	
4
    
	
7.
    	
CONDITION OF PREMISES
    	
4
    
	
8.
    	
HAZARDOUS MATERIALS
    	
5
    
	
9.
    	
INDEMNIFICATIONS
    	
7
    
	
10.
    	
ALTERATIONS, IMPROVEMENT   ALLOWANCE, AND SKYLIGHT WORK
    	
7
    
	
11.
    	
COVENANTS OF LANDLORD
    	
11
    
	
12.
    	
COVENANTS OF TENANT
    	
12
    
	
13.
    	
ASSIGNMENT AND SUBLETTING
    	
13
    
	
14.
    	
EMINENT DOMAIN
    	
16
    
	
15.
    	
FIRE OR OTHER CASUALTY
    	
16
    
	
16.
    	
INSURANCE; WAIVER OF SUBROGATION
    	
17
    
	
17.
    	
INSPECTION; ACCESS; CHANGES IN   BUILDING FACILITIES
    	
19
    
	
18.
    	
DEFAULT
    	
19
    
	
19.
    	
LANDLORD’S RIGHTS AND REMEDIES
    	
20
    
	
20.
    	
LANDLORD’S RIGHT TO CURE TENANT’S   DEFAULT
    	
21
    
	
21.
    	
TENANT ESTOPPEL CERTIFICATE
    	
21
    
	
22.
    	
SUBORDINATION, NON-DISTURBANCE   AND ATTORNMENT AGREEMENT
    	
21
    
	
23.
    	
FINANCIAL STATEMENTS
    	
22
    
	
24.
    	
HOLDING OVER
    	
22
    
	
25.
    	
SURRENDER OF PREMISES
    	
23
    
	
26.
    	
TELECOMMUNICATIONS WIRES
    	
23
    
	
27.
    	
BROKERS
    	
23
    
	
28.
    	
NOTICES
    	
23
    
	
29.
    	
PARKING
    	
24
    
	
30.
    	
MISCELLANEOUS
    	
24
    
	
31.
    	
RELOCATION
    	
26
    
	
32.
    	
EXHIBITS AND ADDENDA
    	
26
    
	
 
    	
EXHIBIT “A” THE PREMISES
    	
A-1
    
	
 
    	
EXHIBIT “B” COMMENCEMENT   DATE CERTIFICATE
    	
B-1
    
	
 
    	
EXHIBIT “C” FIXED RENT
    	
C-1
    
	
 
    	
EXHIBIT “D” PROVISIONS   REGARDING ADDITIONAL RENT
    	
D-1
    
	
 
    	
EXHIBIT “E” BUILDING RULES   AND REGULATIONS
    	
E-1
    
	
 
    	
EXHIBIT “F” RENEWAL OPTION
    	
F-1
    
	
 
    	
EXHIBIT “G” RIGHT OF OFFER
    	
G-1
    
	
 
    	
EXHIBIT “H” ROOF RIGHTS AND ROOF EQUIPMENT
    	
H-1
    
				

 

1

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT (the “Lease”) dated as of the 15th day of April, 2014 (the “Effective Date”), by and between INTERCONTINENTAL FUND III 117 KENDRICK STREET, LLC, a Massachusetts limited liability company (the “Landlord”), and VERASTEM, INC., a Delaware corporation (the “Tenant”).

 

Intending to be legally bound, Landlord and Tenant agree as set forth below.

 

1.                                      PREMISES.  Landlord leases to Tenant and Tenant leases from Landlord the Premises, subject to the covenants and conditions set forth in this Lease, for the Lease Term commencing on the Lease Commencement Date and expiring on the Expiration Date, unless extended or terminated earlier as otherwise provided in this Lease, as all such terms are hereinafter defined. Tenant shall be entitled to possession of the Premises as of the Lease Commencement Date, and shall yield possession to the Landlord on the Expiration Date, except as otherwise expressly provided herein. For purposes of this Lease, the premises shall consist of a total of approximately 15,197 rentable square feet located on the first (1st) floor (the “Premises”) as more particularly outlined on Exhibit “A” attached hereto and made part of hereof in the building commonly known as Cutler Lake Corporate Center (the “Building”) erected on certain land (the “Land”) located at 117 Kendrick Street, Needham, Massachusetts, together with rights of ingress and egress thereto, and with the right in common with others to use, to the extent applicable, the common passageways, stairways and vestibules, lobbies, hallways, entrances, stairs, and any passageways thereto, toilets, refuse facilities and other areas or facilities within the Building for the general use, convenience and benefit of Tenant and other tenants and occupants of the Building and the common pipes, ducts, vents, laboratory infrastructure, conduits, wires, telephone and electrical closets, and appurtenant equipment serving the Premises or to serve the Premises upon completion of the Initial Improvements or later Alterations; the common walkways, sidewalks, landscaping, driveways and loading docks associated with the Building, and to pass over and park on that portion of the Land owned by Landlord and designated by Landlord on Exhibit “A” for Tenant’s parking.  Tenant acknowledges and accepts the rentable square feet as set forth in this Lease and Tenant shall not have the right to demand re-measurement or recalculation of the rentable square feet with respect to the Premises or the Building. Landlord hereby reserves the right to re-measure the Building from time to time upon which the rentable square feet as set forth herein and Tenant’s Proportionate Share (as defined in Exhibit D) shall be adjusted accordingly, but in no event shall Fixed Rent or Additional Rent increase from the amounts set forth herein as of the Effective Date.

 

2.                                      LEASE TERM.  The lease term for the Premises (the “Lease Term”) shall commence on the Effective Date (the “Lease Commencement Date”) and shall expire on the last day of the sixtieth (60th) full month following the Rent Commencement Date (the “Expiration Date”). Upon the Lease Commencement Date, Tenant shall have the right to access the Premises for the purposes of performing the Initial Improvements subject to all terms and condition of this Lease.

 

2.2                               Upon the Rent Commencement Date, Tenant shall, within ten (10) Business Days (as hereinafter defined) of receipt thereof, execute and deliver a Commencement Date Certificate to Landlord in the form attached hereto as Exhibit “B” confirming the Rent Commencement Date, schedule with respect to Fixed Rent and Expiration Date.  If Tenant fails to execute and return said Commencement Date Certificate within the ten (10) Business Day period, the Lease Commencement Date, Expiration Date and schedule with respect to Fixed Rent shall be those terms set forth on the Commencement Date Certificate as reasonably determined by Landlord.

 

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3.                                      FIXED RENT.

 

3.1                               Subject to any Tenant Delay (as defined in Section 10.6), Tenant shall pay fixed rent (the “Fixed Rent”) beginning on the earlier of: (a) December 1, 2014; or (b) the date upon which the Initial Improvements are Substantially Complete (as such terms are defined in Section 10.6) (the “Rent Commencement Date”), on the first day of each calendar month during the term hereof in monthly installments according to the schedule set forth on Exhibit “C” attached hereto and made a part hereof, without prior notice or demand, and without any setoff or deduction whatsoever, in advance, at such place as Landlord may direct. If the Lease Term shall commence or expire on other than the first or last day of a calendar month, such monthly installment of Fixed Rent and any applicable Additional Rent (as defined in Section 4), as set forth below, shall be prorated for each calendar day of such partial month and the first (1st) year of the Lease Term shall expire on the last day of the full twelfth (12th) calendar month following the Rent Commencement Date.

 

3.2                               If any portion of Fixed Rent, Additional Rent or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days after its due date, it shall bear interest at a rate equal to five percent (5%) per annum. In addition, Tenant shall pay a late charge equal to five percent (5%) of the late payment. If any payment tendered by Tenant shall fail collection on presentment, Tenant shall reimburse Landlord for all charges imposed by Landlord’s bank on account thereof and pay to Landlord a bad check fee equal to $100.00. In no event shall Landlord be deemed to contract for or receive charges by way of interest or otherwise in excess of those permitted by law and any sum paid in excess of that permitted by law shall be refunded or credited to Tenant.

 

4.                                      ADDITIONAL RENT.  In addition to Fixed Rent, and as more fully set forth on Exhibit “D” attached hereto and made a part hereof, Tenant shall pay to Landlord, without demand, deduction or setoff, as “Additional Rent” (which amounts along with any other amounts or charges which may become due or payable by Tenant to Landlord may collectively or separately be referred to as “Rent” hereunder): (a) Tenant’s Proportionate Share of Operating Expenses to the extent the Operating Expenses (on a per rentable square foot basis) exceed the Operating Expense Stop; and (b) Tenant’s Proportionate Share of Taxes to the extent the Taxes (on a per rentable square foot basis) exceed the Tax Expense Stop (as such terms are defined in Exhibit “D”).

 

5.                                      LETTER OF CREDIT.

 

5.1                               As of the Effective Date, Tenant has deposited with Landlord the sum of $202,626,67, subject to reduction as hereinafter set forth, as security in the form of a standby letter of credit (the “Letter of Credit”) for the faithful performance and observance by Tenant of the terms, covenants, conditions, agreements and provisions of this Lease.  In the event no Event of Default exists and the Landlord has not lawfully drawn on the Letter of Credit on the second anniversary of the Lease Commencement Date, Tenant may replace the Letter of Credit or have the Letter of Credit amended to provide that the face amount of the new or amended Letter of Credit is $162,101.33 and Landlord shall cooperate as necessary to effectuate such reduction in the amount of the Letter of Credit.  It is agreed that in the event Tenant is in an Event of Default in respect of any of the terms, covenants, conditions, agreements and provisions of this Lease, including, but not limited to, the payment of Fixed Rent and Additional Rent, Landlord may draw upon the whole or any part of the Letter of Credit to the extent required for the payment of any Fixed Rent, Additional Rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be reasonably required to expend by reason of Tenant’s default in respect of any of the terms, covenants, conditions, agreements and provisions of this Lease, including, but not limited to, any damages or deficiency in the reletting of the Premises, whether such damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord.

 

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In the event Landlord so draws upon the Letter of Credit, Tenant shall, within ten (10) Business Days following notice from Landlord, promptly restore the face amount of the Letter of Credit to its original amount.  In the event that Tenant shall fully and faithfully comply with all of the terms, covenants, conditions, agreements and provisions of this Lease, the Letter of Credit shall be returned to Tenant, within thirty (30) days after the Expiration Date (and Landlord agrees to promptly execute and deliver such documentation as the bank issuing the Letter of Credit reasonably requires to evidence the termination of the Letter of Credit).  In the event of a sale of the land and the Building, Landlord shall have the right to either:  (a) transfer the Letter of Credit to Tenant and Landlord shall thereupon be released by Tenant from all liability for the return of such Letter of Credit; or (b) transfer the Letter of Credit to the new Landlord in which case Tenant agrees to look to the new Landlord solely for the return of said Letter of Credit.  Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the Letter of Credit and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance.  In the event of any bankruptcy or other insolvency proceeding against Tenant, it is agreed that Landlord may draw upon the Letter of Credit and apply the proceeds to Rent and other charges due to Landlord for the last month of the Lease Term and each preceding month until such Letter of Credit is fully applied.

 

5.2                               The Letter of Credit at all times shall be in form and content reasonably satisfactory to Landlord.  The Letter of Credit shall be issued by a commercial bank, trust company or national banking association, which has outstanding, unsecured, uninsured and unguaranteed indebtedness, or shall have issued a letter of credit or other credit facility that constitutes the primary security for an outstanding indebtedness (which is otherwise uninsured and unguaranteed), that is then (and thereafter continues to be) rated, without regard to qualification of such rating by symbols such as “+” or “-” or numerical notation “A” or better by Moody’s Investment Service (or its successor) and “A” or better by Standard & Poor’s Ratings Service (or its successor) (and is not on credit-watch or similar credit review with negative implication), and has combined capital, surplus and undivided profits of not less than $1,000,000,000.00.  Landlord hereby approves Silicon Valley Bank as the issuing bank for the Letter of Credit.  In the event the issuer of the Letter of Credit is downgraded so that it no longer satisfies the rating requirements set forth in this Section 5.2, Landlord shall have the right to require Tenant to procure a replacement Letter of Credit from an issuer that satisfies the rating requirements of this Section 5.2 within fifteen (15) Business Days after Landlord notifies Tenant of such requirement; provided that Landlord shall cooperate with Tenant in exchanging the existing Letter of Credit for the new Letter of Credit so that Tenant is not required to have two Letters of Credit outstanding simultaneously.

 

6.                                      USE OF PREMISES.  Tenant covenants and agrees to use and occupy the Premises for general office use and laboratory purposes as permitted by law and for no other purpose without the prior written consent of Landlord, which shall not be unreasonably withheld, conditioned or delayed (the “Permitted Use”).  Tenant shall not use or permit any use of the Premises which creates any safety or environmental hazard, or which would: (a) be dangerous to the Premises, the Building or other tenants of the Building, or (b) be unreasonably disturbing to other tenants of the Building, or (c) cause any material increase in the premium cost for any insurance which Landlord may then have in effect with respect the Building generally. Except as set forth herein, Tenant shall be responsible, at its sole cost and expense, for obtaining any and all applicable permits necessary to occupy the Premises for the Permitted Use throughout the Lease Term.

 

7.                                      CONDITION OF PREMISES.

 

7.1                         EXCEPT FOR THE IMPROVEMENT ALLOWANCE AS DEFINED IN SECTION 10.5, OTHER SPECIFIC REQUIREMENTS OF THIS LEASE, AND SECTIONS 7.2-7.4 BELOW, LANDLORD SHALL NOT BE RESPONSIBLE FOR MAKING ANY IMPROVEMENTS OR

 

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CONTRIBUTING ANY ALLOWANCES TOWARDS THE PREMISES. LANDLORD MAKES NO REPRESENTATION OR WARRANTY THAT THE PREMISES ARE FIT OR ZONED FOR THE PERMITTED USE AND TENANT SHALL ACCEPT THE PREMISES UPON THE LEASE COMMENCEMENT DATE IN ITS “AS-IS” CONDITION.

 

7.2                               Notwithstanding any terms and conditions set forth herein to the contrary, as of the Lease Commencement Date, Landlord shall deliver the Premises to Tenant with all of the existing Building systems that serve more than just the Premises in good working order and not in violation of applicable laws including but not limited to the electrical, plumbing, HVAC, and life safety systems (collectively, the “Base Building Systems”).

 

7.3                               As of the Effective Date, Landlord, to the best of its actual knowledge, without due inquiry, hereby acknowledges that it has not received any notice that the Building and Premises are in violation of any applicable laws or building codes, including without limitation, the Americans with Disabilities Act.  Landlord shall ensure that the Building and Premises are not in violation of any applicable laws as of Effective Date and shall be responsible for any costs or work required to cure the same as of the Effective Date.

 

7.4                               Landlord at its sole cost and expense shall provide two (2) additional skylights and retrofit (but not relocate) existing skylights within the Premises for a total of four (4) skylights, subject to a mutually agreed upon design. Tenant shall have the right to add additional skylights at its sole cost and expense, subject to Landlord approval of size and location. Additionally, in the event Landlord requires Tenant’s deliveries not come through the Building common areas, Landlord shall install a paved walkway from the rear entry way to the existing paved walkway accessing the street for Tenant’s deliveries, subject to the Town of Needham approvals.

 

8.                                      HAZARDOUS MATERIALS.

 

8.1                               Limitations on Use.  Tenant shall not transport, use, store, maintain, handle, generate, manufacture, dispose, discharge or release any Hazardous Material (as defined below in Section 8.2) upon or about the Premises, or permit Tenant’s agents to engage in such activities upon or about the Property in violation of applicable laws and regulations. However, the foregoing provisions shall not prohibit the transportation to and from, and use, storage, maintenance and handling within the Premises of Hazardous Materials customarily used in the business or activity expressly permitted to be undertaken in the Premises under this Lease; provided: (a) such substances shall be used and maintained only in such quantities as are reasonably necessary for such permitted use of the Premises and the ordinary course of Tenant’s business therein, strictly in accordance with all applicable laws, and the manufacturers’ instructions therefor, (b) such substances shall not be disposed of, discharged or released in or about the Premises (except as may be permitted by applicable law), and shall be transported to and from the Premises in compliance with all applicable laws, (c)  as required by applicable law, Tenant shall make arrangements at Tenant’s sole cost and expense for the disposal of Hazardous Material directly with a qualified and licensed disposal company at a lawful disposal site and shall not use Landlord’s dumpsters for the disposal thereof; (d) any remaining such substances shall be completely, properly and lawfully removed from the Property upon expiration or earlier termination of this Lease, and (e) for purposes of removal and disposal of any such substances for which applicable law requires such a classification, Tenant shall be named as the owner and generator, obtain a waste generator identification number, and execute all applications, permits, manifests, waste characterization documents and any other required forms.

 

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8.2                               Notices Regarding Hazardous Materials. Tenant shall immediately notify Landlord in writing of: (a) any enforcement, cleanup or other regulatory action taken or threatened in writing by any governmental or regulatory authority with respect to the presence of any Hazardous Material on the Premises or the migration thereof to other property, to the extent caused by Tenant or its operation in the Premises, (b) any demands or claims made or threatened by any party relating to any loss or injury resulting from any Hazardous Material placed or introduced into the Premises by Tenant, (c) any discharge, release or non-routine, improper or unlawful disposal or transportation by Tenant of any Hazardous Material on or from the Premises or in violation of Section 8, and (d) any matters where Tenant is required by law to give a notice to any governmental or regulatory authority respecting any Hazardous Material on the Premises.  Landlord shall have the right (but not the obligation) to join and participate, as a party, in any legal proceedings or actions affecting the Premises initiated in connection with any environmental, health or safety law.  At such times as Landlord may reasonably request, but not more than once in any calendar year unless there is a Tenant Event of Default hereunder, Tenant shall provide Landlord with a written list, certified to be true and complete, identifying any Hazardous Material then used, stored, or maintained upon the Premises, the use and approximate quantity of each such material, a copy of any material safety data sheet (the “MSDS”) issued by the manufacturer or supplier therefore, and such other information as Landlord may reasonably require or as may be required by law.  The term “Hazardous Material” for purposes hereof shall mean any chemical, substance, material or waste or component thereof which is now or hereafter listed, defined or regulated as a hazardous or toxic chemical, substance, material or waste or component thereof by any federal, state or local governing or regulatory body having jurisdiction, or which would trigger any employee or community “right-to-know” requirements adopted by any such body, or for which any such body has adopted any requirements for the preparation or distribution of an MSDS.

 

8.3                               Indemnifications Regarding Hazardous Materials. Tenant shall hereby release, indemnify and defend Landlord from, and reimburse Landlord for, any cost, claim, loss, or liability suffered directly or from a third-party claim arising out of or related to any Hazardous Materials resulting from Tenant’s use of the Premises or Building as set forth in this Section 8.  Landlord shall hereby release, indemnify and defend Tenant from, and reimburse Tenant for, any cost, claim, loss, or liability suffered directly or from a third-party claim arising out of or related to any Hazardous Materials resulting from Landlord’s use of the Premises or Building. Tenant’s and Landlord’s obligations pursuant to this Section 8.3 shall survive the expiration or earlier termination of this Lease. As of the Effective Date, Landlord, to the best of its knowledge, hereby acknowledges that it is unaware of any Hazardous Materials in the Building.

 

8.4                               Indemnification and Remediation. If any Hazardous Material is released, discharged or disposed of by Tenant or Tenant’s agent on or about the Premises or Building in violation of Section 8, Tenant shall immediately, properly and in compliance with all applicable laws clean up and remove the Hazardous Material from the Property and any other affected property and clean or replace any affected personal property (whether or not owned by Landlord), at Tenant’s expense (without limiting Landlord’s other remedies therefore).  Such clean up and removal work shall be subject to Landlord’s prior written approval (except in emergencies), which shall not be unreasonably withheld, delayed or conditioned, and shall include, without limitation, any testing, investigation, and the preparation and implementation of any remedial action plan required by any court or governmental body having jurisdiction or reasonably required by Landlord.  If Landlord or any lender or governmental body arranges for any tests or studies and such tests or studies show with reasonable conclusion that Section 8 has been violated by Tenant, Tenant shall pay for the reasonable, actual costs of such tests.  Nothing in Section 8 shall be construed as preventing Tenant from obtaining additional testing at its own expense.  During the Lease Term, Landlord shall have the option to retain a consultant who will conduct an investigation to verify that no portion of the Building (including the Premises, to the extent Landlord has reasonable cause to believe that there is such a use) is being used for any activities involving, directly or indirectly, the unlawful use, storage,

 

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maintenance, handling, generation, manufacture, disposal, discharge or release of any Hazardous Material (except to the extent permitted hereunder) at no cost to Tenant unless Landlord had reasonable cause to believe Tenant was not in compliance with the terms of this Section 8. Subject to terms and conditions of this Lease regarding Landlord’s access, Tenant hereby grants to Landlord, its agents, employees, consultants and contractors the right to enter upon the Premises and to perform such tests on the Premises as are reasonably necessary to conduct any such investigation. Tenant’s obligations pursuant to this Section 8 shall survive the expiration or earlier termination of this Lease. In addition, Tenant shall hereby release, indemnify and defend Landlord and Landlord agents, and reimburse Landlord for any cost, claim, loss, or liability suffered directly or from a third-party claim arising out of or related to any Hazardous Materials resulting from Tenant’s use of the Premises or Building.

 

9.                                      INDEMNIFICATIONS.  Except to the extent caused by the negligence or willful misconduct of Landlord, Tenant covenants and agrees to exonerate, indemnify, defend, protect and save Landlord, Landlord’s managing agent and Landlord’s mortgagee (if any) (the “Landlord Parties”) harmless from and against any and all claims, demands, expenses, losses, suits and damages as may be occasioned by reason of: (a) any accident, injury or damage occurring in or about the Premises causing injury to persons or damage to property (including, without limitation, the Premises); and (b) the failure of Tenant to fully and faithfully perform the obligations and observe the conditions of this Lease. Except to the extent caused by the negligence or willful misconduct of Tenant, Landlord covenants and agrees to exonerate, indemnify, defend, protect and save Tenant, its managers and employees (if any) (the “Tenant Parties”) harmless from and against any and all claims, demands, expenses, losses, suits and damages as may be occasioned by reason of: (a) any accident, injury or damage occurring in or about any portion of the real property owned by Landlord (other than the Premises) on which the Premises are located causing injury to persons or damage to property (including, without limitation, the Premises); and (b) the failure of Landlord to fully and faithfully perform the obligations and observe the conditions of this Lease. Tenant’s and Landlord’s obligations pursuant to this Section 9 shall survive the expiration or earlier termination of this Lease.

 

10.                               ALTERATIONS, IMPROVEMENT ALLOWANCE, AND SKYLIGHT WORK

 

10.1                        Alterations by Tenant.  Tenant shall not make any alterations, additions, improvements or other changes in or to the Premises (other than the installation of typical office decorations, furniture and furnishings which are not affixed to the realty) (the “Alterations”), without Landlord’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed); provided, however, that if the proposed Alterations will adversely affect the exterior or structural components of the Building, or the Building systems (including, but not limited to, the electric, HVAC, plumbing, telecommunication and security systems), Landlord may withhold its consent to such Alterations in Landlord’s sole discretion.  Without limitation, it shall not be unreasonable for Landlord to withhold its consent to any Alterations which would impose on Landlord any special maintenance, repair or replacement obligations not within the scope of those expressly provided for herein, unless Tenant agrees, at the time of its request for approval or notice of such Alterations, to pay all costs associated with Landlord’s meeting the additional obligations.  In addition, all Alterations shall be subject to the provisions of Sections 10.2 — 10.6 below.  Notwithstanding the foregoing, nonstructural Alterations costing less than $75,000.00 in the aggregate in any given calendar year shall require only notice to Landlord and not Landlord consent.

 

10.2                        Quality and Performance of Work.  All construction work required or permitted by this Lease shall be done in a good and workmanlike manner by contractors reasonably approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed and in compliance with the Building Rules and Regulations, attached hereto as Exhibit “E”, all insurance requirements of this Lease, and all applicable laws, statutes, codes, ordinances, orders, rules, regulations, conditions of approval and

 

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requirements of all federal, state, county, municipal and other governmental authorities, including the requirements of the Americans with Disabilities Act (the “ADA”) (collectively, “Legal Requirements”).  In connection with any Alterations and the Initial Improvements (as defined below), Tenant acknowledges that it shall not take any action which would cause a work stoppage, picketing, labor disruption, or labor dispute (the “Labor Disruption”) and Tenant shall, at its sole cost and expense, take any and all actions reasonably necessary to resolve any Labor Disruption that may arise.

 

10.3                        Additional Covenants Regarding Alterations.

 

(a)                                 Except as otherwise set forth herein, all Alterations and Initial Improvements (as defined below) shall be: (i) at Tenant’s sole cost and expense; (ii) performed in accordance with plans and specifications approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed; (iii) performed and maintained in compliance with all Legal Requirements; (iv) performed by contractors approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed; and (v) performed and maintained in a good and workmanlike manner.  Where reasonably requested by Landlord, Tenant shall provide Landlord with as-built plans for any Alterations and Initial Improvements for which plans are used, regardless of whether the Alterations or Initial Improvements require Landlord’s consent hereunder.

 

(b)                                 Tenant shall keep the Premises and the Building free from any liens arising out of any work performed, materials ordered or obligations incurred by or on behalf of Tenant. Without limitation, Tenant shall be responsible for, and shall pay when due, all costs associated with the preparation of plans and the performance of Alterations, and the same shall be performed in a lien-free, good and workmanlike manner, and in compliance with all Legal Requirements.  In the event that Tenant shall fail to pay the costs associated with Alterations on a timely basis, and as a result of such failure, a statutory and/or common law lien is asserted against the Premises or the Building, and Tenant shall fail, within ten (10) Business Days after notice of such assertion, to cause (by payment, posting of a proper bond, or otherwise) such lien to be released of record, Landlord shall have the right (but not the obligation), at Tenant’s expense, to cause such lien to be bonded over or released of record.

 

(c)                                  Tenant shall ensure that all contractors and subcontractors performing Alterations and Initial Improvements are insured in amounts required by law.  If Landlord requests, certificates of such insurance shall be delivered to Landlord.  Tenant’s obligation to exonerate, indemnify, defend, protect and save Landlord Parties harmless, as set forth in Section 9, shall include without limitation all activities and work done by and on behalf of Tenant pursuant to Section 10 and shall commence on the date of execution hereof.

 

(d)                                 Tenant agrees that Landlord shall have the right to examine and inspect any Alterations and Initial Improvements; provided, however, that no such examination or inspection shall constitute an approval or warranty or give rise to any liability of Landlord with respect to any thereof.  In the performance of Alterations and Initial Improvements in accordance with this Lease, Tenant shall cause its contractors to use reasonable and diligent efforts not to interfere with ongoing operations on the Building and other areas outside of the Premises, to keep all construction areas clean and free of trash and debris, and otherwise to comply with any other reasonable rules and regulations established by Landlord with regard to construction activities.

 

(e)                                  Tenant shall provide copies of any warranties for Alterations and Initial Improvements and the materials and equipment which are incorporated into the Premises and the Building in connection therewith, and either assign to Landlord, or enforce on Landlord’s behalf, all such

 

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warranties to the extent repairs and/or maintenance on warranted items would be covered by such warranties and are otherwise Landlord’s responsibility under this Lease.

 

10.4                        Removal of Alterations.  Landlord shall notify Tenant in writing at the time of approval of (or within five (5) Business Days following Tenant notification of Landlord if approval is not required) any Alterations whether or not the proposed Alterations will be required to be removed by Tenant at the end of the Lease Term. Any Alterations of which Tenant is not notified by written notice to be removed upon expiration or earlier termination of the Lease shall not be required to be removed by Tenant upon expiration or earlier termination of the Lease.  Landlord shall not require removal of the Initial Improvements.

 

10.5                        Improvement Allowance.  Landlord shall provide to Tenant an allowance of $683,865.00 (the “Improvement Allowance”) to be used by Tenant solely toward “hard costs” associated with the initial build-out of the Premises (the “Initial Improvements”). Notwithstanding the foregoing, Tenant shall be permitted to apply up to $75,985.00 of the Improvement Allowance toward the application of “soft costs” including but not limited to the cost of furniture, fixtures, equipment, architectural and engineering fees.

 

10.6                        Initial Improvements.  The Initial Improvements: (a) shall be subject to the provisions of Sections 10.2, 10.3 and 10.4 above; (b) performed by contractor selected by Tenant and reasonably approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed provided that Landlord has preapproved The Richmond Group, Inc. as the potential general contractor for the Initial Improvements; and (c) based on plans and specifications approved by Landlord, which approval shall not be unreasonable withheld, conditioned or delayed (the “Initial Improvement Plans”); and (d) the following terms and conditions shall apply:

 

(i)                                Landlord shall pay Landlord’s Proportion (as hereinafter defined) of the cost shown on each requisition (as hereinafter defined) submitted by Tenant to Landlord within thirty (30) days of submission thereof until the entirety of the Improvement Allowance has been exhausted.  “Landlord’s Proportion” shall be a fraction, the numerator of which is the Improvement Allowance, and the denominator of which is the total contract price for the work. A “requisition” shall mean written documentation, including, without limitation, (i) invoices from Tenant’s contractors, vendors, service providers and consultants, and such other documentation as Landlord may reasonably request, showing in reasonable detail the cost of the items in question or improvements installed to date in the Premises, accompanied by certifications from Tenant that                         the amount of the requisition in question is true and correct and does not exceed the cost of the items or improvements covered by such requisition; and (ii) evidence that all of the Initial Improvements and other work done by or on behalf of Tenant which could give rise to any mechanic’s or materialman’s liens has been paid for in full and that any and all liens therefor that have been or may be filed have been satisfied of record or waived (the “Lien Waivers”) with respect to the prior month’s requisition. Landlord shall have the right, upon reasonable advance notice to Tenant, to inspect Tenant’s books and records relating to each requisition in order to verify the amount thereof.

 

(ii)                                  Tenant shall not submit requisitions, nor shall Landlord have any obligation to advance funds on account of the Improvement Allowance, more often than once per month.

 

(iii)                               If Tenant fails to pay the amounts paid by Landlord to Tenant in the prior month’s requisition to Tenant’s contractors, vendors, service providers and consultants, Landlord shall thereafter have the right to have the Improvement Allowance paid directly to Tenant’s contractors, vendors, service providers and consultants.

 

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(iv)                              Landlord shall have no obligation to pay any portion of the Improvement Allowance with respect to any requisition submitted twelve (12) months after the Lease Commencement Date (the “Outside Requisition Date”); provided, however, that if Tenant certifies to Landlord that it is engaged in a good faith dispute with a contractor, vendor, service provider or consultant, such Outside Requisition Date shall be extended while such dispute is ongoing, so long as Tenant is diligently pursuing the resolution of such dispute.  Tenant shall not be entitled to receive any portion of the Improvement Allowance except to the extent that it has submitted requisitions, and/or made demand therefor, on or before the Outside Requisition Date.  In the event Tenant has not utilized the Improvement Allowance on or before the Outside Requisition Date, Tenant shall be deemed to have forfeited any unused portion of said Improvement Allowance and shall have no rights thereto.

 

(v)                                 Upon written notice to Landlord prior to the Outside Requisition Date, Tenant shall be permitted to apply any unused portion of the Improvement Allowance toward Rent due under the Lease.

 

(vi)                              In addition to all other requirements hereof, Landlord’s obligation to pay the final requisition of the Improvement Allowance shall be subject to simultaneous delivery of all Lien Waivers in connection with the Initial Improvements.

 

(vii)                           Tenant acknowledges that if any of the Alterations or Initial Improvements must be completed beyond normal construction hours (Monday through Friday between the hours of 6:00 am to 3:30 pm) (the “Construction Hours”), Tenant shall pay to Landlord for cost of Landlord’s on-site supervisory personnel during such non-Construction Hours period at the rate of $35.00 per hour within thirty (30) days of invoice from Landlord.  In exercising any rights to limit or define the timing during which Tenant may undertake work related to any Alterations or Initial Improvements under this Lease or the Rules and Regulations of this Lease, Landlord, in its sole but reasonable discretion, shall only require that the most disruptive actions take place in off-hours and shall not unreasonably limit the general right of Tenant to have such construction activities take place during standard construction hours.

 

(viii)                        Landlord shall not be entitled to any construction management or other fees in connection with the Initial Improvements.

 

(ix)                              For purposes herein, “Substantial Completion” or “Substantially Complete” shall mean when: (a) the Initial Improvements have been completed in accordance with the Initial Improvement Plans subject to minor punch list items of a non-material nature that can be completed within thirty (30) days and do not interfere with Tenant’s ability to conduct business in the Premises as reasonably determined by Landlord; and (b) a certificate of occupancy from the applicable municipality has been obtained by Tenant, if necessary. For purposes hereof, a “Tenant Delay” shall be any act of omission of Tenant or its agents, employees, vendors or contractors that actually delays Substantial Completion of the Initial Improvements, including, without limitation: (i) changes requested by Tenant to the Initial Improvement Plans; or (ii) any other reasonable reason directly attributable to any act or omission or Tenant or its agents which causes a delay in the completion of the Initial Improvements. In the event of any Tenant Delay, the Rent Commencement Date shall be the date on which the Initial Improvements would have been Substantially Complete except for such Tenant Delay as reasonably determined by Landlord.

 

(x)                                 In-progress plans of the Initial Improvements are referenced in Exhibit “I” hereto (“Progress Plans”).  Landlord has approved the Progress Plans and will not disapprove any components of further advanced plans that is shown in and consistent with the Progress Plans.  Tenant’s use of the Premises for laboratory systems may require one or more of the following systems:  (i) ro/di water system; (ii) acid neutralization tank; (iii) Hazardous Waste Storage/Disposal Area; (iv) Autoclave glass

 

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washing system; (v) emergency generator system; (vi) laboratory vacuum system; (vii) Medical Air system; (viii) hot/cold rooms; (ix) specialized HVAC systems that supply the various specialized systems including the fume hoods throughout the Building installed by or on behalf of Tenant; (x) sinks;  and (xi) ice making machines (collectively, the “Laboratory Equipment”). To the extent any of these laboratory systems require use of common areas of the Property for access, venting or the like, Landlord shall reasonably accommodate Tenant in determining an appropriate location for such infrastructure and permitting Tenant, subject to all requirements of Section 10, to install, operate, service and maintain such infrastructure.  For purposes of confirmation herein, Tenant, at its sole cost and expense, shall be required to remove all Laboratory Equipment upon expiration or earlier termination of the Lease.

 

10.7                        Test Fit Allowance. Upon thirty (30) days of invoice from Tenant, Landlord agrees to reimburse Tenant’s architect for the cost of initial test fit plans in an amount not to exceed $1,519.70.

 

11.                               COVENANTS OF LANDLORD

 

11.1                        Landlord Services. Subject to reimbursement in accordance with Section 4 above, Landlord agrees to provide: (a) water and sewer services to the Building; (b) janitorial and cleaning services (to both the Premises and common areas of the Building on Business Days (as defined below)) provided, however, that Landlord shall not be required to provide janitorial or cleaning services to the portion of the Premises that is used by Tenant for laboratory services (the “Lab Area”); (c) landscaping services; and (d) snow removal services, all in amounts consistent with services provided in similar type buildings in the community, provided that: (i) Landlord shall not be liable for the failure to supply or interruption of any such service by reason of any cause beyond Landlord’s reasonable control; (ii) if Tenant requires installation of a separate or supplementary heating, cooling, ventilating and/or air conditioning system, Tenant shall pay all costs in connection with the furnishing, installation and operation thereof; and (iii) if Tenant requires janitorial and cleaning services beyond those provided by Landlord, Tenant shall arrange for such additional services through Landlord, and Tenant shall pay Landlord upon receipt of billing therefor.  Landlord shall also provide electricity services (in accordance with and subject to the terms and conditions of Section 12.1 below) and HVAC service to the Premises during Business Hours (in accordance with and subject to the terms and conditions of Section 12.1 below).  In addition, unless otherwise provided for in this Lease, and subject to Section 5, Landlord shall be responsible for the maintenance, repair and replacement of the Base Building Systems, exterior and structural repairs to the Building, and capital improvements to the Building, unless such repairs and replacements are necessitated by damage caused by the negligence or willful misconduct of Tenant or Tenant’s agents. For purposes herein, “Business Hours” shall mean 7:00 a.m. to 7:00 p.m. on Business Days, and 8:00 a.m. to 1:00 p.m. on Saturdays. For purposes herein, “Business Days” shall mean Monday through Friday, excluding Saturdays, Sundays, and federal or state holidays. Tenant acknowledges that the HVAC service supplied to the Premises operates via electricity, the costs of which will be separately metered to Tenant and paid by Tenant in accordance with Section 12.1 below.

 

11.2                        Cafeteria.

 

(a)                                 Landlord shall cause a cafeteria (the “Cafeteria”) to be located in the common area of the Building which shall be operated by an independent contractor (the “Independent Contractor”) for the use by Tenant and other tenants in the Building during regular breakfast and lunchtime hours. The net operating costs to Landlord of the Cafeteria shall constitute an Operating Expense pursuant to Exhibit “D” attached hereto. Landlord, in its sole and absolute discretion, hereby reserves the right to change the Independent Contractor from time to time, provided that throughout the Lease Term, the Cafeteria shall remain of similar size and quality as the Cafeteria that is operating as of the Effective Date.

 

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(b)                                 The foregoing notwithstanding, in the event that in Landlord’s reasonable opinion, if it becomes uneconomical for Landlord to operate the Cafeteria during the Lease Term, upon thirty (30) days written notice to Tenant, Landlord shall no longer be obligated to provide a Cafeteria in the Building and Tenant shall not longer be obligated to pay for its Cafeteria Share of Operating Expenses.

 

11.3                  Fitness Room. Throughout the Lease Term, Landlord shall cause a fitness center (the “Fitness Room”) to be located in the common area of the Building for the use by Tenant and other tenants in the Building which shall be accessible by tenants in the Building twenty-four (24) hours per day, seven (7) days per week via key card entry or other reasonable access. Landlord does not make any representation or warranty as to the condition of the particular equipment located in the Fitness Room. Accordingly, other than as arises due to Landlord’s gross negligence or willful misconduct, Tenant hereby assumes all risks or injury, illness or even possible death in using the Fitness Room. In addition, Tenant covenants and agrees to exonerate, indemnify, defend, protect and save Landlord, Landlord’s managing agent and Landlord’s mortgagee harmless from and against any and all claims, demands, expenses, losses, suits and damages as may be occasioned by Tenant’s use of the Fitness Room other than as arises due to Landlord’s negligence or willful misconduct. The obligations of Tenant pursuant to this Section 11.3 hereunder shall survive expiration or earlier termination of this Lease.

 

11.4                        Shuttle Service.             Throughout the Lease Term, and provided that the 128 Business Council is still in business and providing services which benefit the Building, Landlord shall continue as a member company in the 128 Business Council, and shall undertake reasonable efforts to perpetuate the ability of Tenant to utilize the Needham shuttle service run by such 128 Business Council.  In the event that the 128 Business Council is no longer in business or not providing any beneficial services to the Building, Landlord shall not be required to be a member in the 128 Business Council.

 

11.5                        Lobby Directory; Entry Signage.  Throughout the term of the Lease, Tenant shall have: (a) lobby directory rights equal to the spaces given to other Tenants of comparable size, and (b) subject to Landlord’s prior reasonable approval of plans and/or specifications relating to the same and so long as such signage is consistent with other signage in the Building, Tenant entry signage rights allowing Tenant to place signage on a common area wall adjacent to the primary entrance to the Premises from the common area in a location reasonably satisfactory to Landlord.

 

11.6                        Dumpster.  Landlord, at its sole cost, shall provide an adequately sized dumpster and or compactor at the loading dock for Tenant’s use for the disposal of non-Hazardous Materials.

 

12.                               COVENANTS OF TENANT.  Tenant, at Tenant’s sole cost and expense, will:

 

12.1                   Beginning on the Lease Commencement Date, in addition to paying Fixed Rent and Additional Rent, Tenant shall pay to Landlord within thirty (30) days of invoice from Landlord, the cost of all separately metered utilities, including but not limited to electricity for the operation of HVAC, VAV fans, lights and plugs for general office use;

 

12.2                  Keep the Premises in good order and repair, reasonable wear and tear and damage due to casualty or eminent domain excepted;

 

12.3                  Surrender the Premises at the end of this Lease in the same condition in which Tenant has agreed to keep it during the Lease Term;

 

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12.4                  Except as otherwise set forth herein, not place, erect, maintain or display any sign or other marking of any kind whatsoever on the windows, doors or exterior walls of the Premises and not place any blinds, curtains, drapes or coverings over the exterior windows or on the window surfaces which are visible from the outside of the Building;

 

12.5                  Other than the maintenance, repair and replacement responsibilities of Landlord under Section 11, be responsible for the maintenance of the Premises (including, but not limited to, any Alterations, improvements, fixtures, equipment and systems contained therein), whether installed by Landlord or by Tenant, and for the repair and replacement of any part of the Premises and the Building made necessary by reason of damage thereto caused by the negligence or willful misconduct of Tenant or Tenant’s employees, servants, agents or invitees.  In the event Tenant shall fail to perform such maintenance, repairs or replacements within sixty (60) days of the date such work becomes necessary, Landlord may, but shall not be required to, perform such work and charge the amount of the expense therefor, with interest accruing and payable thereon, all in accordance with Section 20 below;

 

12.6                        Comply with all laws, enactments and regulations of any governmental authority relating or applicable to Tenant’s occupancy of the Premises and any covenants, easements and restrictions governing the Land or Building where such compliance is not the obligation of Landlord hereunder, and indemnify, defend and hold Landlord harmless from all consequences from its failure to do so;

 

12.7                        Promptly notify Landlord upon becoming aware of any damage to or defects in the Premises, any notices of violation received by Tenant and of any injuries to persons or property which occur therein or claims relating thereto;

 

12.8                        Subject to Section 11, pay for any Alterations, improvements or additions to the Premises and any non-standard light bulbs, tubes and Building items installed by or for Tenant, and allow no lien to attach to the Building with respect to any of the foregoing;

 

12.9                        Without the prior written consent of Landlord, not place within the Premises or bring into the Building: (a) any machinery, equipment or other personalty other than customary office furnishings and small office machinery, or (b) other personalty having a weight in excess of the design capacity of the Building;

 

12.10                 Comply with all non-monetary rules and regulations which may hereafter be promulgated by Landlord and with all reasonable changes and additions thereto upon notice by Landlord to Tenant (such rules and regulations, together with all changes and additions thereto, are part of this Lease) to the extent such rules and regulations are consistent with the terms of this Lease; Landlord shall notify Tenant in writing upon the promulgation of such rules and regulations or changes thereto.  Landlord agrees to enforce such rules and regulations against all tenants in the Building in a non-discriminating fashion and to take reasonable action to cause a cessation of any violation of all rules that interfere with Tenant’s use and quiet enjoyment of the Premises; and

 

12.11                 Comply with all reasonable recommendations of Landlord’s or Tenant’s insurance carriers relating to layout, use, storage of materials and maintenance of the Premises.

 

13.                               ASSIGNMENT AND SUBLETTING

 

13.1                        Restrictions on Assignment and Subletting. Tenant shall not assign, pledge, mortgage or otherwise transfer or encumber this Lease, nor sublet all or any part of the Premises or permit the same to be occupied or used by anyone other than Tenant or its employees without Landlord’s prior written

 

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consent (such consent not to be unreasonably withheld, conditioned or delayed).  Any consent by Landlord hereunder shall not constitute a waiver of strict future compliance by Tenant of the provisions of this Section 13 or a release of Tenant from the full performance by Tenant of any of the terms, covenants, conditions, agreements or provisions of this Lease. Subject to the provisions of Section 13.6, any transfer or change in control of Tenant (or any subtenant, assignee or occupant) by operation of law or otherwise, shall be deemed an assignment hereunder, including, without limitation, any merger, consolidation, dissolution or any change in the controlling equity interests of Tenant or any subtenant, assignee or occupant (in a single transaction or series of related transactions), provided that a transfer of less than a controlling equity interest of Tenant (in a single transaction or series of related transactions) shall not be deemed to be an assignment for purposes hereof.  Any assignment or subletting in contravention of the provisions of this Section 13 shall be void.

 

13.2                        Proposed Subtenants and Assignees. In no event shall the proposed assignee or subtenant be: (a) prospective tenant (or its designee) who is discussing with Landlord (or Landlord’s agent) its need for space in the Building, or who has been engaged in active negotiations with regard to such need within the previous six (6) months as evidence by written correspondence involving a term sheet, a letter of intent, draft lease, or other similar written proposal provided that Landlord still has space in the Building reasonably equivalent to the Premises available to accommodate such prospective tenant; (b) a current tenant, subtenant, assignee or occupant of space in the Building or an Affiliate (as hereinafter defined) of a current tenant, subtenant, assignee or occupant of space in the Building except where such party directly abuts Tenant on the same floor or if Landlord does not have space reasonably equivalent to the Premises available in the Building to accommodate expansion by such party.  For purposes herein, an “Affiliate” shall mean a corporation or other business entity that directly or indirectly controls, is controlled by, or is under common control with such tenant, subtenant, assignee or occupant.

 

13.3                        Advertising. In no event shall Tenant advertise space using signage, online or other public marketing materials (on a per rentable square foot basis) at a lower rate than Landlord is then advertising space (on a per rentable square foot basis) in the Building. Notwithstanding the foregoing, Tenant may engage a broker to solicit subtenants or assignees to pay at a lower rate than Landlord is then advertising space in the Building, and Tenant and any such broker may prepare and submit letters of intent and other written proposals to prospective subtenants or assignees at such lower rates.

 

13.4                        Right to Share Profits.

 

(a)                                 If Landlord consents to the subletting of all or any part of the Premises other than a Permitted Transfer, Tenant shall in consideration thereof pay to Landlord, as Additional Rent, fifty percent (50%) of any Net Profits (as hereinafter defined) in connection with the subletting.  “Profits” on a subletting shall mean the difference between (i) the amounts paid as rent and additional rent by the subtenant to Tenant in and for each month of the sublease term and (ii) Fixed Rent and Additional Rent due and payable by Tenant to Landlord in and for each month of the sublease term, in each and every month when the former exceeds the latter, provided, however, that if a sublease involves less than the entire Premises, the amounts paid by Tenant to Landlord used in subpart (ii) above shall be prorated each month to reflect the portion of the Premises being sublet.  “Net Profits” on a subletting shall mean monthly Profits reduced by an amount equal to the quotient found by taking the total reasonable and customary attorneys’ fees, design and construction costs and real estate brokerage commissions paid and incurred by Tenant in connection with the subletting, and dividing by the number of months in the sublease term.

 

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(b)                                 If Landlord consents to the assignment of this Lease other than a Permitted Transfer, Tenant shall in consideration thereof pay to Landlord fifty percent (50%) of any Net Consideration (as hereinafter defined) in connection with the assignment.  “Consideration” for an assignment shall mean any sums paid to Tenant in consideration of the assignment (other than the amount of rent and additional rent assumed by the assignee).  “Net Consideration” for an assignment shall mean Consideration reduced by an amount equal to the total reasonable and customary attorneys’ fees, design and construction costs and real estate brokerage commissions paid and incurred by Tenant in connection with the assignment.

 

(c)                                  Upon request from Landlord, Landlord shall have the right at any time and from time to time upon reasonable prior notice to Tenant at Landlord’s sole expense to audit and inspect Tenant’s books, records, and accounts to verify the determination of Net Profits or Net Consideration hereunder.

 

13.5                        Legal and Administrative Costs.  Upon Tenant’s execution and delivery of Landlord’s consent under this Section 13 (or, if there is no such consent, within five (5) Business Days of receipt of Landlord’s invoice), Tenant shall pay Landlord’s reasonable legal and administrative costs and expenses incurred in processing each of Tenant’s subletting and assignment requests, which shall be paid whether or not Landlord consents to such subletting or assignment.

 

13.6                        Permitted Transfer.  Notwithstanding the foregoing, Landlord’s consent shall not be required for any of the following transfers (each of which shall be a “Permitted Transfer”): (1) a transfer to any person(s) or entity who controls, is controlled by or is under common control with tenant, (2) a transfer to any entity resulting from the merger, consolidation or other reorganization with Tenant, whether or not Tenant is the surviving entity or (3) a transfer to any person or legal entity which acquires all or substantially all of the assets or stock (or other ownership interests) of Tenant (each of the foregoing is hereinafter referred to as a “Permitted Transferee”); provided that before such assignment shall be effective, (a) said Permitted Transferee shall assume, in full, the obligations of Tenant under this Lease, (b) Landlord shall be given written notice of such assignment and assumption; (c) the use of the Premises by the Permitted Transferee shall be the same use as for Tenant under the Lease; and (d) said Permitted Transferee shall have a “net worth” equal to or greater than Tenant as measured as of the Effective Date.  For purposes of this paragraph, a public or private offering of Tenant stock is a Permitted Transfer and the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management, affairs and policies of anyone, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, Tenant shall remain primarily liable for its obligations under the Lease and shall produce documentation reasonably requested by Landlord evidencing the Permitted Transfer. Any other assignment or sublease shall be only upon the prior written consent of Landlord which consent shall not be unreasonably withheld, delayed or conditioned and shall be further governed by Section 13.1 — 13.6. Notwithstanding any provision of this Lease to the contrary, so long as Tenant’s shares are listed on a stock exchange or equivalent trading system, the sale, transfer, issuance, or other exchange of shares of ownership in Tenant whether resulting in a change of control or otherwise shall not constitute a transfer or assignment requiring Landlord consent or notification nor shall the provisions of this Section 13 relating to share of profits, right of recapture, notice to Landlord, consent of Landlord, or payment of costs of Landlord with respect to review of transfer, apply to such sale, transfer, issuance or other exchange of shares of ownership.

 

13.7                        Right to Recapture. Except in connection with a Permitted Transfer, in connection with all other subleasing and assignment requests from Tenant, Landlord shall have the right to recapture any space for which Landlord’s consent is required by notice to Tenant given within ten (10) Business Days of Tenant’s notice of its intention to transfer.

 

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14.                               EMINENT DOMAIN.  If the whole or a material portion of the Premises (or use or occupancy of the Premises) shall be taken or condemned by a governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), or if the owner elects to convey title to the condemnor by a deed in lieu of condemnation, or if all or any portion of the Land or Building are so taken, condemned or conveyed and as a result thereof, in Landlord’s sole but reasonable judgment, the Premises cannot be used for the Permitted Use as set forth herein, then this Lease shall cease and terminate as of the date when title vests in such governmental or quasi-governmental authority and Fixed Rent and Additional Rent shall be abated on the earlier of the date such title vests in such governmental or quasi-governmental authority or the date Tenant is no longer able to occupy the Premises.  For purposes hereof a “material portion” of the Premises shall be defined to be fifteen percent (15%) or more of the rentable square footage.  If less than a material portion of the Premises is taken or condemned by any governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), Fixed Rent and Additional Rent shall be equitably adjusted (on the basis of the number of square feet before and after such event) on the date when title vests in such governmental or quasi-governmental authority and this Lease shall otherwise continue in full force and effect. In any case, Tenant shall have no claim against Landlord for any portion of the amount that may be awarded as damages as a result of any governmental or quasi-governmental taking or condemnation (or sale under threat or such taking or condemnation); and all rights of Tenant to damages therefor are hereby assigned by Tenant to Landlord.  The foregoing shall not, however, deprive Tenant of any separate award for moving expenses, dislocation damages or for any other award which would not reduce the award payable to Landlord.

 

15.                               FIRE OR OTHER CASUALTY.

 

15.1                        In the event of damage to or destruction of the Premises caused by fire or other casualty, or any such damage to or destruction of the Building to an extent that prevents the provision of normal services and access to the Premises in accordance herewith (the “Event of Casualty”), Landlord, after receipt of written notice thereof from Tenant, shall undertake to make repairs and restorations with reasonable diligence, unless this Lease has been terminated by Landlord or Tenant as hereinafter provided or unless any mortgagee which is entitled to receive casualty insurance proceeds fails to make available to Landlord a sufficient amount of such proceeds to cover the cost of such repairs and restorations. If: (a) in Landlord’s reasonable judgment, the damage is of such nature or extent that more than one hundred eighty (180) days would be required (with normal work crews and normal work hours) to repair and restore the Premises or the Building, as the case may be; or (b) in Landlord’s sole but reasonable judgment, the damage is of such nature or extent that it is uneconomical to repair and restore the Premises or the Building, as the case may be; or (c) less than one (1) year remains on the then current Lease Term Landlord shall so advise Tenant within thirty (30) days after the Event of Casualty (the “Landlord’s Notice of Casualty”), and either party shall have ten (10) Business Days after receipt of Landlord’s Notice of Casualty to terminate this Lease by written notice to the other.  If either party elects to terminate this Lease in the case described in clauses (a), (b) or (c) above, then the Lease Term shall expire ten (10) Business Days after such notice is given, and Tenant shall vacate the Premises and surrender the same to Landlord in accordance with the terms of this Lease.

 

15.2                        In an Event of Casualty, provided this Lease is not terminated pursuant to the terms of Section 15.1 above and is otherwise in full force and effect, and sufficient casualty insurance proceeds are available for application to such repair and restoration, Landlord shall proceed diligently to repair and restore the Premises to substantially the same condition prior to the casualty occurrence. Landlord shall not be obligated to repair or restore any Alterations to the Premises or any Personal Property (as

 

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hereinafter defined) which Tenant may have installed (whether or not Tenant is required to remove or leave the same on the Premises as of the expiration or earlier termination of this Lease).

 

15.3                        Landlord shall not insure: (a) any Alterations; (b) Initial Improvements; or (c) any Personal Property of Tenant.  Tenant shall, at its sole cost and expense, insure the value of such Alterations, Improvements and Personal Property of Tenant for the purpose of providing funds to Landlord to repair and restore the Premises as set forth above.

 

15.4                        The validity and effect of this Lease shall not be impaired in any way by the failure of Landlord to complete the repair and restoration of the Premises or the Building within one hundred eighty (180) days after the commencement of work, even if Landlord had in good faith notified Tenant that the repair and restoration would be completed within such period, provided that Landlord proceeds diligently with such repair and restoration, but if such repair and restoration of the Premises is not completed within two hundred seventy (270) days from the date of the casualty, upon written notice to Landlord, Tenant shall have the right to terminate the Lease effective immediately. In the case of damage to the Premises which is of a nature or extent that Tenant’s continued occupancy is in the reasonable judgment of Landlord and Tenant substantially impaired, then Fixed Rent and Additional Rent otherwise payable by Tenant hereunder shall be equitably abated or adjusted for the duration of such impairment.

 

16.                               INSURANCE; WAIVER OF SUBROGATION.

 

16.1                        Insurance.

 

(a)                                 Personal Property.  Tenant agrees that all risks (including that of fire or other casualty, theft or other harm, damage or loss) to Tenant’s Personal Property, including the loss of use of the same, shall be borne solely by Tenant.  As used herein, “Personal Property” includes, but is not limited to, all tangible and intangible goods and accounts, inventory, merchandise, furniture, fixtures, equipment (including computer equipment and any data stored thereon) and systems.  Tenant shall purchase and maintain insurance in an amount adequate to repair or replace or otherwise cover its Personal Property (and the Personal Property of others held or leased by Tenant or otherwise in the Premises to the extent Tenant has an adequate insurable interest therein and such insurance is available at commercially reasonable rates), including: (i) any Alterations; and (ii) Initial Improvements.

 

(b)                                 Business Interruption.  Tenant shall maintain in full force and effect at all times, and at its own expense, business interruption insurance in amounts adequate to cover all Rent due under this Lease.

 

(c)                                  Commercial General Liability.  Tenant shall maintain in full force and effect at all times, and at its own expense, commercial general liability insurance (including contractual, host liquor and personal injury liability insurance) in an amount not less than $1,000,000.00 combined single limit bodily injury and property damage per occurrence and $2,000,000.00 annual aggregate limit per location.

 

(d)                                 Automobile Liability.  Tenant shall maintain in full force and effect at all times, and at its own expense, automobile liability insurance for owned, non-owned and hired vehicles in an amount not less than $500,000.00 combined single limit bodily injury and property damage per accident.

 

(e)                                  Workers’ Compensation and Employers’ Liability.  Tenant shall maintain in full force and effect at all times, and at its own expense, the statutory limits of workers’ compensation and employers’ liability insurance in amounts adequate to satisfy the umbrella underlying requirements.

 

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(f)                                   Excess/Umbrella Liability.  Tenant shall maintain in full force and effect at all times, and at its own expense, umbrella liability coverage in an amount not less than $2,000,000.00 per occurrence.  Umbrella liability coverage is to be in excess of the commercial general liability, automobile liability and employers’ liability requirements outlined in Sections 16.1 (b) and (c) above.

 

(g)                                  The liability coverage in the insurance policies required in Sections 16.1 (b), (c), and (e) and above shall name Landlord and its current lender as additional insureds on a primary non-contributing basis.  All insurance policies required in Sections 16.1 (a) — (e) above shall be issued by companies authorized to do business in Massachusetts with an A.M. Best’s financial rating of A- or better and a size class rating of X (10) or larger or otherwise acceptable to Landlord.  Prior to accessing the Premises, Tenant shall deposit with Landlord or evidence of insurance (in ACORD Form 28) or other proof satisfactory to Landlord for each of the insurance policies Tenant is required to carry in compliance with its obligations under this Lease.  Such insurance policies shall contain, if available at a commercially reasonable cost from each of Tenant’s insurers, a provision that the insurer will not cancel or refuse to renew the policy, or change in any material way the nature or extent of the coverage provided by such policy, without first giving at least thirty (30) days prior written notice to Landlord Parties.  Tenant’s failure to obtain and maintain the required insurance shall constitute an Event of Default under this Lease.  If Tenant shall fail to remedy such Event of Default within five (5) Business Days after written notice by Landlord, Tenant will be liable for any and all costs, liabilities, damages and penalties resulting to Landlord Parties from such termination, unless a written waiver of the specific insurance requirement(s) is provided to Tenant by Landlord Parties.

 

16.2                        Insurance During Construction.  In addition, during the performance of any construction by Tenant on the Premises, in addition to the above coverage required to be maintained by Tenant, Tenant shall cause the general contractor performing the work to carry: (a) commercial general liability insurance in an amount not less than $1,000,000.00 combined single limit bodily injury and property damage per occurrence and $2,000,000.00 annual aggregate limit per location (or such higher limits as may be determined by Landlord from time to time); (b) the statutory limits of workers’ compensation and employers’ liability insurance in amounts adequate to satisfy the umbrella underlying requirements; and (c) all risk installation floater insurance (on the complete value / full coverage form) to protect Landlord’s interest and that of Tenant, contractors and subcontractors during the course of the construction with a limit of not less than the total replacement cost of the completed improvements under construction.  Such contractor insurance policies shall name Landlord Parties as additional insureds on a primary non-contributing basis.

 

16.3                        Waiver of Subrogation.  Landlord and Tenant hereby release each other from any and all liability or responsibility to the other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property caused by fire or other casualty, even if such fire or other casualty shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible, provided, however, that this release shall be applicable and in full force and effect only to the extent permitted by law and only to the extent that the cost of repairing such damage is covered by insurance or would have been covered by insurance proceeds payable under any policy (including the deductible and/or uninsured portion thereof) required to be maintained under this Lease, but not so maintained. Each policy of such insurance shall, if obtainable from the insurer without additional expense, contain a waiver of subrogation by insurer against Landlord or Tenant, as the case may be. If the inclusion of such a provision would involve an additional expense, either party, at its expense, may require such a provision to be inserted in the other’s policy. In the event a party is unable to obtain such a waiver, it shall immediately notify the other of this inability, and in that event neither party shall be obligated to obtain such a waiver. In the absence of such notification, each party shall be deemed to have obtained such a waiver of subrogation.

 

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17.                               INSPECTION; ACCESS; CHANGES IN BUILDING FACILITIES.

 

17.1                        Landlord, its agents, employees and contractors may enter the Premises at any time in response to an emergency and at other reasonable times: (a) to examine, inspect and protect the Premises and the Building; (b) to make such repairs, replacements and improvements as Landlord may deem necessary and reasonably desirable to the Premises and the Building; (c) during the last ten (10) months of the Lease Term, or any extension or renewal thereof, to show it to prospective tenants; and (d) at any time upon reasonable notice to show the Premises to prospective purchasers and its current or prospective mortgagee(s). Landlord may, at any time, affix to any suitable part of the exterior of the Building in which the Premises is located a notice for letting the Premises or the Building or selling the Building.  Landlord shall in all instances provide reasonable notice to Tenant prior to entering the Premises (including in an emergency such notice as is reasonable given the nature of the emergency), identify the names and affiliations of all individuals that will enter the Premises, and provide Tenant with the opportunity to have a representative accompany such individuals while they are in the Premises.

 

17.2                        Landlord shall have access to and use of all areas in the Premises (including exterior Building walls, core corridor walls and doors and any core corridor entrances), any roofs adjacent to the Premises, and any space in or adjacent to the Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or other Building facilities, as well as access to and through the Premises for the purpose of operation, maintenance, decoration and repair, provided, however, that except in emergencies such access shall not be exercised so as to interfere unreasonably with Tenant’s use of the Premises.  Tenant shall permit Landlord to install, use and maintain pipes, ducts and conduits within the demising walls, bearing columns and ceilings of the Premises, provided that the installation work is performed at such times and by such methods as will not materially interfere with Tenant’s use of the Premises, materially reduce the floor area thereof or materially and adversely affect Tenant’s layout, and further provided that Landlord performs all work with due diligence and care so as to not damage Tenant’s Personal Property or the Premises.  Landlord and Tenant shall cooperate with each other in the location of Landlord’s and Tenant’s facilities requiring such access.

 

17.3                        Landlord reserves the right at any time, without incurring any liability to Tenant therefor, to make such changes in or to the Building and the fixtures and equipment thereof, as well as in or to the street entrances, halls, foyers, passages, elevators, if any, and stairways thereof, and garages as it may deem necessary or desirable.

 

17.4                        Tenant shall have access to: (a) the Land, the Building, the Premises and the Fitness Center twenty-four (24) hours per day, seven (7) days per week via Building security cards or other reasonable means; and (b) the Cafeteria during its hours of operation.

 

18.                               DEFAULT.  Any other provisions of this Lease notwithstanding, it shall be an event of default (“Event of Default”) under this Lease if: (a) Tenant fails to pay any installment of Fixed Rent, Additional Rent or other sum payable by Tenant hereunder when due and such failure continues for a period of five (5) days after written notice from Landlord (provided, however, that Landlord shall only be required to provide such written notice of Tenant’s failure to pay Fixed Rent or Additional Rent when due once per each calendar year period of the Lease Term after which Tenant’s failure to pay Fixed Rent or Additional Rent within five (5) days following the day when due shall automatically constitute an Event of Default without the requirement of written notice having to be provided by Landlord)  or (b) Tenant fails to perform or observe any other covenant, condition or agreement of this Lease and such failure continues after written notice given by or on behalf of Landlord to Tenant for more than thirty (30) days, or if the covenant, condition or agreement is not performable or observable within such thirty (30) days,

 

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such longer period as is reasonably required (provided that Tenant undertakes such performance or observance within a reasonable time, and prosecutes such performance or observance with reasonable dispatch); or (c) Tenant uses or occupies the Premises other than for the Permitted Use; or (d) Tenant abandons the Premises without Landlord’s prior written consent such that the Premises is not adequately secured, maintained, or otherwise protected as required under this Lease; or (e) Tenant files a petition commencing a voluntary case, or has filed against it a petition commencing an involuntary case, under the Federal Bankruptcy Code (Title 11 of the United States Code), as now or hereafter in effect, or under any similar law, or files or has filed against it a petition or answer in bankruptcy or for reorganization or for an arrangement pursuant to any state bankruptcy or insolvency law or any similar state law, and, in the case of any such involuntary action, such action shall not be dismissed, discharged or denied within ninety (90) days after the filing thereof, or Tenant consents to or acquiesces in the filing thereof; or (f) if Tenant is a banking organization, Tenant files an application for protection, voluntary liquidation or dissolution applicable to banking organizations; or (g) a custodian, receiver, trustee or liquidator of Tenant or of all or substantially all of Tenant’s Personal Property or of the Premises shall be appointed in any proceedings brought by or against Tenant and, in the latter case, such entity shall not be discharged within ninety (90) days after the appointment thereof, or Tenant consents to or acquiesces in the appointment thereof; or (h) Tenant shall make an assignment of Tenant’s lease obligations for the benefit of or enter into an agreement with its creditors; or (i)  Landlord shall determine that any financial or other information provided to Landlord by Tenant or Guarantor shall be or have been materially false or misleading, or (j) Tenant is in violation of Section 16.1(f), 21 or 22 of the Lease.

 

19.                               LANDLORD’S RIGHTS AND REMEDIES.

 

19.1                        Landlord’s Remedies.  In addition to all other rights and remedies of Landlord, if an Event of Default shall occur, Landlord may, at its option, at any time thereafter exercise any one or more of the following remedies:

 

(a)                                 Termination of Lease.  Landlord may terminate this Lease, by written notice to Tenant, without any right by Tenant to reinstate its rights by payment of rent due or other performance of the terms and conditions hereof.  Upon such termination Tenant shall immediately surrender possession of the Premises to Landlord, and Landlord shall immediately become entitled to receive from Tenant an amount equal to the difference between the aggregate of all Fixed Rent and Additional Rent reserved under this Lease for the balance of the Lease Term, and the fair rental value of the Premises for that period, determined as of the date of such termination, discounted to a present value using a discount rate of eight percent (8%) per annum.

 

(b)                                 Reletting.  With or without terminating this Lease, as Landlord may elect, Landlord may re-enter and repossess in accordance with law the Premises, or any part thereof, and lease them to any other person upon such terms as Landlord shall deem reasonable for a term within or beyond the term of this Lease; provided, that any such reletting prior to termination shall be for the account of Tenant, and Tenant shall remain liable for (i) all Fixed Rent, Additional Rent and other sums which would be payable under this Lease by Tenant in the absence of such expiration, termination or repossession, less (ii) the net proceeds, if any, of any reletting effected for the account of Tenant after deducting from such proceeds all of Landlord’s expenses, including employees’ expenses, attorneys’ fees, real estate brokerage commissions and alteration expenses (if any), incurred as a result of Tenant’s breach of this Lease.  Landlord shall use reasonable efforts to relet the Premises.  If the Premises are at the time of default sublet or leased by Tenant to others, Landlord may, as Tenant’s agent, collect rents due from any subtenant or other tenant and apply such rents to the rent and other amounts due hereunder without in any way affecting Tenant’s obligation to Landlord hereunder.  Such agency, being given for security, is hereby declared to be irrevocable.

 

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(c)                                  Removal of Contents by Landlord.  With respect to any portion of the Premises which is abandoned by Tenant, Landlord may remove all property therefrom, and store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby.

 

19.2                        Injunction.  In the event of any use of the Premises in breach by Tenant of any provision of this Lease, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity in addition to other remedies provided for herein.

 

19.3                        Waiver of Redemption.  Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future law in the event this Lease is terminated, or in the event of Landlord obtaining possession of the Premises, or in the event Tenant is evicted or dispossessed for any cause, by reason of violation by Tenant of any of the provisions of this Lease.

 

19.4                        Not Exclusive Right.  No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be cumulative and in addition to every other right or remedy given herein or now or hereafter existing at law or in equity by or by statute.

 

19.5                        Expenses.  In the event that Landlord commences suit for the repossession of the Premises, for the recovery of Fixed Rent or Additional Rent or any other amount due under the provisions of this Lease, or because of the breach of any other covenant or provision herein contained on the part of Tenant to be kept or performed, and a breach shall be established, Tenant shall pay to Landlord all expenses incurred in connection therewith, including reasonable attorneys’ fees, through all appeals and in any bankruptcy proceedings.

 

20.                               LANDLORD’S RIGHT TO CURE TENANT’S DEFAULT.  If Tenant defaults after any applicable notice and the expiration of any applicable grace or cure period in the making of any payment or in the doing of any act herein required to be made or done by Tenant, then Landlord may, but shall not be required to, make such payment or do such act, and charge the amount of Landlord’s expense to Tenant.  Such payment shall constitute Additional Rent hereunder due and payable with the next monthly installment of Fixed Rent; but the making of such payment or the taking of such action by Landlord shall not operate to cure such default by Tenant or to estop Landlord from the pursuit of any remedy to which Landlord would otherwise be entitled.

 

21.                               TENANT ESTOPPEL CERTIFICATE.  Upon request, and within ten (10) days written notice given by or on behalf of Landlord, Tenant shall execute and deliver to Landlord, a Tenant estoppel certificate reasonably requested by Landlord for the benefit of a potential or existing mortgage lender or potential buyer with respect to the Property it being intended that any such statement delivered pursuant hereto may be relied upon by such parties with whom Landlord may be dealing. Tenant’s failure to execute and deliver the Tenant estoppel certificate within ten (10) days’ notice shall: (a) constitute an Event of Default and (b) serve to irrevocably appoint Landlord as Tenant’s attorney-in-fact to execute and deliver such certificate for and on behalf of Tenant.

 

22.                               SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT.

 

22.1                        This Lease and the estate, interest and rights hereby created are subordinate to any mortgage now in place upon the Building or the Land or any estate or interest therein, including, without limitation, any mortgage on any leasehold estate, and to all renewals, modifications, consolidations,

 

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replacements and extensions of the same as well as any substitutions therefor.  Tenant agrees that in the event any person, firm, corporation or other entity acquires the right to possession of the Building or the Land, including any mortgagee or holder of any estate or interest having priority over this Lease, Tenant shall, if requested by such person, firm, corporation or other entity, attorn to and become the tenant of such person, firm, corporation or other entity, upon the same terms and conditions as are set forth herein for the balance of the Lease Term.  Notwithstanding the foregoing, any mortgagee may, at any time, subordinate its mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such mortgage without regard to their respective dates of execution and delivery, and in that event, such mortgagee shall have the same rights with respect to this Lease as though it had been executed prior to the execution and delivery of the mortgage.

 

22.2                        Notwithstanding the foregoing, with respect to any existing or future first lien mortgages, deeds of trust, or other liens entered into by and between Landlord and any such mortgagee or other such lien granted by Landlord, within thirty (30) days of the execution hereof, as a condition precedent to Tenant’s obligations under this Lease, Landlord shall deliver to Tenant notarized nondisturbance agreements (“Nondisturbance Agreements”) in writing from all current (and within thirty (30) days of Tenant’s request for all future) lessors under all ground leases or underlying leases, from all beneficiaries under all deeds of trust and all mortgagees under all mortgages affecting the Building, in form and content reasonably acceptable to Tenant, stating that so long as Tenant is not in default under any of the terms, covenants, conditions, or agreements of this Lease, this Lease and all of the terms, provisions, and conditions of this Lease, shall remain in full force and effect, and neither this Lease, nor Tenant’s rights nor Tenant’s possession of the Premises will be disturbed during the Term of this Lease or any extension thereof. Provided the foregoing provisions are satisfied, Tenant agrees to execute within ten (10) Business Days after written request of Landlord, any commercially reasonable statements or instruments necessary to effectuate the provisions of this Section.

 

22.3     In connection with this Lease, Landlord and Tenant shall enter into a Subordination, Non-Disturbance and Attornment Agreement in a form mutually agreed to by Landlord and Tenant which shall confirm the terms and obligations set forth in Section 22.1 and Section 22.2.

 

23.                               FINANCIAL STATEMENTS.  If Tenant is: (a) in an Event of Default; (b) seeking relief from Landlord under the Lease; or (c) if requested by Landlord’s mortgagee or a prospective purchaser of the Building, within ten (10) days written notice given by or on behalf of Landlord, Tenant shall furnish Landlord with: (i) current financial statements (including, without limitation, its most recent balance sheet, year-to-date operating statement and profit and loss statement) reflecting Tenant’s current financial condition, and (ii) written evidence of ownership and management of Tenant.  Landlord agrees to keep all such information confidential and shall not disclose such information except to those parties in a “need to know” capacity.  Tenant shall not be required to provide financial statements nor written evidence of ownership and management of Tenant under this Section 23 at any time that Tenant’s shares are listed on public stock exchange or equivalent trading system and Tenant’s financial information is generally available to the public in accordance with public company disclosure laws.

 

24.                               HOLDING OVER.  If Tenant retains possession of the Premises or any part thereof after the termination of this Lease or expiration of the Lease Term or otherwise in the absence of any written agreement between Landlord and Tenant concerning any such continuance of the term, Tenant shall pay Landlord in lieu of monthly Fixed Rent, but in addition to Additional Rent (a) as liquidated damages for such holding over alone, an amount, calculated on a per diem basis for each day of such unlawful retention, equal to one hundred fifty percent (150%) of the Fixed Rent, for the time Tenant thus remains in possession as a hold-over tenant, plus in each case, all other sums payable hereunder; and (b) all other damages, costs and expenses sustained by Landlord by reason of Tenant’s holding over, excluding

 

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consequential damages. Without limiting any rights and remedies of Landlord resulting by reason of the wrongful holding over by Tenant, or creating any right in Tenant to continue in possession of the Premises, all Tenant’s obligations with respect to the use, occupancy and maintenance of the Premises shall continue during such period of unlawful retention.

 

25.                               SURRENDER OF PREMISES.  Subject to the terms and conditions of Section 10.4, Tenant shall, at the end of the Lease Term, or any extension thereof, promptly surrender the Premises in good broom clean condition have removed all equipment and personal property and in conformity with the applicable provisions of this Lease, excepting only reasonable wear and tear and damage by casualty and eminent domain excepted. For purposes of confirmation herein, Tenant, at its sole cost and expense, shall be required to remove the Laboratory Equipment as part of its surrender obligations.  Upon the expiration or earlier termination of this Lease, and prior to Tenant vacating the Premises, Landlord and Tenant shall jointly inspect the Premises and Tenant shall pay to Landlord the amount estimated by Landlord as necessary to put the Premises in such order and condition. Any work required to be done by Tenant prior to its vacating of the Premises which has not been completed upon such vacating of the Premises, shall be completed by Landlord and billed to Tenant. Tenant shall also, prior to vacating the Premises, pay to Landlord the amount, as reasonably estimated by Landlord, of Tenant’s obligation hereunder of Additional Rent. All such amounts shall be used and held by Landlord for payment of such obligations of Tenant hereunder, with Tenant being liable for any additional costs therefor upon demand by Landlord, or with any excess to be returned to Tenant after all such obligations have been determined and satisfied, as the case may be. Any Security Deposit held by Landlord shall be credited against the amount payable by Tenant under this Section 25 to the extent determined prior to the date that Landlord is required to return the Security Deposit to Tenant. If Tenant abandons or surrenders the Premises, or is dispossessed by process of law or otherwise, Tenant shall remove its Personal Property from the Premises. If Tenant fails to remove its Personal Property, Landlord, may (without liability to Tenant for loss thereof), at Tenant’s sole cost and expense and in addition to Landlord’s other rights and remedies under this Lease, at law or in equity remove and store such items; and/or upon fifteen (15) days prior written notice to Tenant, sell such items at private or public sale for such price as Landlord at its discretion may obtain. Landlord shall apply the proceeds of any such sale to any amounts due to Landlord under this Lease from Tenant (including Landlord’s attorneys’ fees and other costs incurred in the removal, storage and/or sale of such items), with any remainder to be paid to Tenant.

 

26.                               TELECOMMUNICATIONS WIRES.  Prior to the expiration or earlier termination of this Lease, unless otherwise notified by Landlord, Tenant, at its sole cost and expense shall remove all wires, cables and similar installations appurtenant thereto installed by Tenant within the Premises, in which event the same shall be left in good safe working order and condition, properly bundled, labeled, capped or sealed at each end, and in each telecommunication closet and junction box.

 

27.                               BROKERS.  Each party represents and warrants to the other that they have not made any agreement or taken any action which may cause anyone to become entitled to a commission as a result of the transactions contemplated by this Lease, and each will indemnify and defend the other from any and all claims, actual or threatened, for compensation by any such third person by reason of such party’s breach of their representation or warranty contained in this Section 27 except for Cushman & Wakefield, representing Landlord exclusively (the “Landlord’s Broker”), and Transwestern RBJ, representing Tenant exclusively (the “Tenant’s Broker”). Landlord will pay any commission due to Landlord’s Broker and Tenant’s Broker pursuant to its separate agreement with Landlord’s Broker and subject to the full execution and delivery of this Lease.

 

28.                               NOTICES. All notices or other communications hereunder shall be in writing and shall be deemed to have been given: (a) if by messenger or by an express delivery service (FedEx, UPS, DHL,

 

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etc.), then if and when delivered (or if delivery is refused, when refused) to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby), or (b) if mailed, then on the third Business Day following the date on which such communication is deposited in the United States mails, by first class registered or certified mail, return receipt requested, postage prepaid, and addressed to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby).  All notices and communications to Tenant may also be given by leaving the same at the Premises during Business Hours.  Notice by counsel to a party shall be deemed notice from such party.

 

	
28.1
    	
 
    	
If   to Landlord:
    	
 
    	
Intercontinental   Fund III 117 Kendrick Street, LLC
    
	
 
    	
 
    	
 
    	
 
    	
c/o   Intercontinental Real Estate Corporation
    
	
 
    	
 
    	
 
    	
 
    	
1270   Soldiers Field Road
    
	
 
    	
 
    	
 
    	
 
    	
Boston,   MA 02135
    
	
 
    	
 
    	
 
    	
 
    	
ATTN:   Scott Kelly, Regional Asset Manager
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
28.2
    	
 
    	
With   a copy to:
    	
 
    	
Andrea   Salvi, Esq.
    
	
 
    	
 
    	
 
    	
 
    	
Bradley &   Associates
    
	
 
    	
 
    	
 
    	
 
    	
1270   Soldiers Field Road
    
	
 
    	
 
    	
 
    	
 
    	
Boston,   MA 02135
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
28.3
    	
 
    	
If   to Tenant to:
    	
 
    	
Verastem, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
Attention:   Monica Singh, Esq.
    
	
 
    	
 
    	
 
    	
 
    	
General   Counsel
    
	
 
    	
 
    	
 
    	
 
    	
Until   the Rent Commencement Date:
    
	
 
    	
 
    	
 
    	
 
    	
215   First Street, Suite 440
    
	
 
    	
 
    	
 
    	
 
    	
Cambridge,   Massachusetts 02142
    
	
 
    	
 
    	
 
    	
 
    	
Thereafter   at the Premises
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
28.4
    	
 
    	
With   a copy to:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Paul   C. Bauer, Esq.
    
	
 
    	
 
    	
 
    	
 
    	
Bowditch &   Dewey, LLP
    
	
 
    	
 
    	
 
    	
 
    	
175   Crossing Boulevard, Suite 500
    
	
 
    	
 
    	
 
    	
 
    	
Framingham,   MA 01702
    

 

29.                               PARKING.  Pursuant to all covenants, conditions and agreements of this Lease, Landlord hereby authorizes for use by Tenant, at no additional charge to Tenant, parking in the surface parking areas up to 3.3 non-reserved parking spaces per 1,000 rentable square feet of the Premises leased hereunder, which results in a total of fifty (50) non-reserved parking spaces. Landlord reserves the right to rearrange the configuration of any parking spaces, and otherwise change or alter the surface parking areas in any manner whatsoever, so long as Tenant is not deprived of the use of fifty (50) spaces in the surface parking areas.  Landlord does not assume any responsibility for, and shall not be liable for, any damage, loss or theft (of any nature whatsoever) to or of any automobiles or other vehicles, or any contents or other Personal Property located therein, while in or about the surface parking areas.

 

30.                               MISCELLANEOUS.

 

30.1                        Authority.  Tenant represents and warrants that it is duly formed and in good standing, and has full corporate power and authority, as the case may be, to enter into this Lease and has taken all

 

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corporate action, as the case may be, necessary to carry out the transaction contemplated herein, so that when executed, this Lease constitutes a valid and binding obligation enforceable in accordance with its terms.  Landlord represents and warrants that it is duly formed and in good standing, and has full limited liability company power and authority, as the case may be, to enter into this Lease and has taken all limited liability company action, as the case may be, necessary to carry out the transaction contemplated herein, so that when executed, this Lease constitutes a valid and binding obligation enforceable in accordance with its terms.

 

30.2                        Successors and Assigns.  The obligations of this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that Landlord and each successive owner of the Building shall be liable only for obligations accruing during the period of its ownership or interest in the Building, and from and after the transfer by Landlord or such successive owner of its ownership or other interest in the Building, Tenant shall look solely to the successors in title for the performance of Landlord’s obligations hereunder arising thereafter.30.3

 

30.4                        Waivers.  No delay or forbearance by Landlord in exercising any right or remedy hereunder or in undertaking or performing any act or matter which is not expressly required to be undertaken by Landlord shall be construed, respectively, to be a waiver of Landlord’s rights or to represent any agreement by Landlord to undertake or perform such act or matter thereafter.

 

30.5                        Waiver of Trial by Jury.  Tenant hereby consents to the exclusive jurisdiction of the courts of the state where the Premises are located in any and all actions or proceedings arising under this Lease. Landlord and Tenant agree to waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use of or occupancy of the Premises and/or any claim of injury or damage and any emergency or any other statutory remedy.

 

30.5                        Limitation of Landlord’s Liabilities.  Tenant shall look solely to the Property and Landlord’s insurance proceeds for enforcement of any obligation hereunder or by law assumed or enforceable against Landlord, and no other property or other assets of Landlord shall be subjected to levy, execution or other enforcement procedure for the satisfaction of Tenant’s remedies or with respect to this Lease, the relationship of landlord and tenant hereunder or Tenant’s use and occupancy of the Premises.

 

30.6                        Time of the Essence.  All times, wherever specified herein for the performance by Landlord or Tenant of their respective obligations hereunder, are of the essence of this Lease.

 

30.7                        Severability.  If any provision in this Lease or the application thereof shall to any extent be invalid, illegal or otherwise unenforceable, the remainder of this Lease, and the application of such provision other than as invalid, illegal or unenforceable, shall not be affected thereby; and such provisions of this Lease shall be valid and enforceable to the fullest extent permitted by law.

 

30.8                  Headings and Terms.  The title and headings of this Lease are for convenience of reference only and shall not in any way be utilized to construe or interpret the agreement of the parties as otherwise set forth herein.  The term “Landlord” and term “Tenant” as used herein shall mean, where appropriate, all persons acting by or on behalf of the respective parties, except as to any required approval, consents or amendments, modifications or supplements hereunder when such terms shall only mean the parties originally named on the first page of this Lease as Landlord and Tenant, respectively, and their agents so authorized in writing.

 

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30.9.               Lease Not Binding Until Executed and Delivered.  This Lease shall not bind either party unless and until it has been signed and delivered by both parties.

 

30.10.          Counterparts.  This Lease may be executed in three (3) counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same lease agreement.

 

30.11             Amendment and Modification. This Lease, including all Exhibits and Addenda attached hereto, each of which is incorporated in this Lease, contains the entire agreement between the parties hereto, and shall not be amended, modified or supplemented unless by agreement in writing signed by both Landlord and Tenant.

 

30.12           Governing Law.  This Lease shall be governed by and construed in accordance with the laws of the State of Massachusetts.

 

30.13           Public Disclosure.  The parties acknowledge that Tenant will be required to include this Lease in one or more public filings required of a public company under Federal securities laws and such filings shall not constitute a default or Event of Default under this Lease.

 

31.                               RELOCATION. Intentionally Deleted.

 

32.                               EXHIBITS AND ADDENDA.  Additional terms to this Lease, if any, are set forth in the Exhibits and Addenda attached hereto, which are incorporated herein by reference as follows:

 

A.                                    Premises

B.                                    Commencement Date Certificate

C.                                    Fixed Rent

D.                                    Provisions Regarding Additional Rent

E.                                     Building Rules and Regulations

F.                                      Renewal Option

G.                                    Right of Offer

H.                                   Roof Rights and Roof Equipment

I.                                        Progress Plans

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the Effective Date set forth above.

 

LANDLORD:

 

	
INTERCONTINENTAL FUND III 117   KENDRICK STREET, LLC
    
	
a Massachusetts limited liability company
    
	
 
    	
 
    	
 
    
	
BY:
    	
INTERCONTINENTAL   REAL ESTATE FUND III, LLC
    
	
 
    	
a   Massachusetts limited liability company, its Manager
    	
 
    
	
 
    	
 
    	
 
    
	
BY:
    	
INTERCONTINENTAL   REAL ESTATE CORPORATION
    
	
 
    	
a   Massachusetts corporation, its Manager
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Peter Palandjian
    	
 
    
	
Name:
    	
Peter   Palandjian
    	
 
    
	
Title:
    	
President &   Treasurer
    	
 
    

 

TENANT:

 

VERASTEM, INC.

 

 

	
By:
    	
/s/   John B. Green
    	
 
    
	
Name:
    	
John   B. Green
    	
 
    
	
Title:
    	
Chief   Financial Officer
    	
 
    

 

27

 

EXHIBIT “A”

 

THE PREMISES

 

ATTACHED HERETO CONSISTING OF ONE (1) PAGE.

 

A-1

 

EXHIBIT “B”

 

COMMENCEMENT DATE CERTIFICATE

 

RE:                           Lease Agreement between INTERCONTINENTAL FUND III 117 KENDRICK STREET, LLC (the “Landlord”) and VERASTEM, INC. (the “Tenant”) dated                                            , 2014 (the “Lease”) for premises consisting of approximately 15,197 rentable square feet (the “Premises”) in the Building commonly known as Cutler Lake Corporate Center (the “Building”) erected on certain land located at 117 Kendrick Street, Needham, Massachusetts 02494

 

Dear Tenant:

 

This letter shall constitute the Commencement Dates Certificate referenced in Section 2.2 of the Lease. Unless otherwise defined herein, all capitalized terms shall have the same meaning ascribed to them in the Lease.

 

1.                                      The Lease Commencement Date shall be                                                             .

 

2.                                      The Rent Commencement Date shall be                                                             .

 

3.                                      The Expiration Date shall be deemed to be                                                           .

 

4.                                      Fixed Rent shall be paid in accordance with the following schedule:

 

BASED ON 15,197 RENTABLE SQUARE FEET

 

	
Period
    	
 
    	
Annual Fixed
   Rent
    	
 
    	
Monthly Fixed Rent
    	
 
    	
Per RSF
    	
 
    
	
Rent   Commencement Date —Month 12
    	
 
    	
$
    	
492,838.71
    	
 
    	
$
    	
41,069.89
    	
 
    	
$
    	
32.43
    	
 
    
	
Month   13 —Month 24
    	
 
    	
$
    	
508,035.71
    	
 
    	
$
    	
42,336.31
    	
 
    	
$
    	
33.43
    	
 
    
	
Month   25 —Month 36
    	
 
    	
$
    	
523,232.71
    	
 
    	
$
    	
43,602.73
    	
 
    	
$
    	
34.43
    	
 
    
	
Month   37 —Month 48
    	
 
    	
$
    	
538,429.71
    	
 
    	
$
    	
44,869.14
    	
 
    	
$
    	
35.43
    	
 
    
	
Month   49 —Month 60
    	
 
    	
$
    	
553,626.71
    	
 
    	
$
    	
46,135.56
    	
 
    	
$
    	
36.43
    	
 
    

 

B-1

 

5.                                      Section 2.2 of the Lease requires that Tenant execute and return to Landlord a signed counterpart of this original Commencement Date Certificate within ten (10) Business Days of Tenant’s receipt thereof.  Accordingly, please sign this original Commencement Date Certificate and return it to Landlord. Tenant’s failure to return said Commencement Date Certificate within the ten (10) Business Day period shall be deemed to be Tenant’s acceptance of this Commencement Date Certificate, including, but not limited to, the dates set forth herein.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

[SIGNATURE PAGE TO FOLLOW]

 

B-2

 

Landlord and Tenant have executed this Commencement Date Certificate as of the           day of                                     , 2014.

 

	
LANDLORD:
    
	
 
    
	
INTERCONTINENTAL   FUND III 117 KENDRICK STREET, LLC
    
	
a   Massachusetts limited liability company
    
	
 
    
	
BY:
    	
INTERCONTINENTAL   REAL ESTATE INVESTMENT FUND III, LLC
    
	
 
    	
a   Massachusetts limited liability company,
   its Manager
    
	
 
    	
 
    
	
BY:
    	
INTERCONTINENTAL   REAL ESTATE CORPORATION
    
	
 
    	
a   Massachusetts corporation,
   its Manager
    
	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
Peter   Palandjian
    	
 
    
	
Title:
    	
President &   Treasurer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
TENANT:
    	
 
    
	
 
    	
 
    
	
VERASTEM, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
				

 

B-3

 

EXHIBIT “C”

 

FIXED RENT

 

BASED ON 15,197 RENTABLE SQUARE FEET

 

	
Period
    	
 
    	
Annual Fixed
   Rent
    	
 
    	
Monthly Fixed Rent
    	
 
    	
Per RSF
    	
 
    
	
Rent   Commencement Date —Month 12
    	
 
    	
$
    	
492,838.71
    	
 
    	
$
    	
41,069.89
    	
 
    	
$
    	
32.43
    	
 
    
	
Month   13 —Month 24
    	
 
    	
$
    	
508,035.71
    	
 
    	
$
    	
42,336.31
    	
 
    	
$
    	
33.43
    	
 
    
	
Month   25 —Month 36
    	
 
    	
$
    	
523,232.71
    	
 
    	
$
    	
43,602.73
    	
 
    	
$
    	
34.43
    	
 
    
	
Month   37 —Month 48
    	
 
    	
$
    	
538,429.71
    	
 
    	
$
    	
44,869.14
    	
 
    	
$
    	
35.43
    	
 
    
	
Month   49 —Month 60
    	
 
    	
$
    	
553,626.71
    	
 
    	
$
    	
46,135.56
    	
 
    	
$
    	
36.43
    	
 
    

 

C-1

 

EXHIBIT “D”

 

PROVISIONS REGARDING ADDITIONAL RENT

 

1.                                      DEFINITIONS.

 

1.1                               “Tenant’s Proportionate Share” shall be 7.14%, which is based on 15,197 rentable square feet in the Premises divided by 212,759 rentable square feet in the Building.

 

1.2                               Operating Expenses.

 

(a)                                 “Essential Capital Improvements” shall mean: (a) any labor saving device, energy saving device or other installation, improvement or replacement which is intended to reduce Operating Expenses, whether or not voluntary or required by governmental mandate, or (b) any installation or improvement which is intended to improve the safety of tenants in the Building generally, whether or not voluntary or required by governmental mandate, or (c) any installation or improvement required by reason of any Legal Requirement which did not exist on the date of the execution of this Lease.

 

(b)                                 “Operating Expenses” shall mean any and all of Landlord’s operating costs and expenses of any kind or nature paid or incurred in the operation, maintenance and management of the Building, the Land, and the sidewalks, roadways and parking areas located thereon, all computed on an accrual basis and in accordance with the terms of this Lease, including but not limited to the following:

 

(i)                                     Electricity, gas, fuel, steam, water, sewer and any other utility charges (including surcharges) of whatever nature (excluding the use of utilities for tenant spaces which are separately metered to the tenants in the Building);

 

(ii)                                  Any insurance premiums and deductibles paid by Landlord;

 

(iii)                               Building personnel costs, including but not limited to salaries, wages, fringe benefits, taxes, insurance and other direct and indirect costs;

 

(iv)                              The cost of all service and maintenance contracts, including but not limited to security services, janitorial and cleaning services, interior and exterior landscaping services, sidewalk and roadway maintenance, and snow removal;

 

(v)                                 All other service, maintenance and repair expenses (excluding those expenses paid by proceeds of insurance or by Tenant or by other third parties, and those solely attributable to tenants of the Building other than Tenant) and the cost of all materials and supplies therefor;

 

(vi)                              Any other costs and expenses (other than capital improvements) incurred by Landlord in operating the Building including but not limited to maintaining and operating the Cafeteria and Fitness Room;

 

(vii)                           The cost of any additional services not provided to the Building on the Lease Commencement Date but thereafter provided by Landlord in the prudent management of the Building;

 

D-1

 

(viii)                        The annual amortization of any Essential Capital Improvement which is made by Landlord based on the useful life of the improvement;

 

(ix)                              Landlord’s central office administrative costs and overhead applicable to the Building;

 

(x)                                 Net Operation costs and repair and maintenance costs of the Cafeteria;

 

(xi)                              Accounting fees for preparing the Operating Expense Statement and Tax Statement; and

 

(xii)                           Management fees payable to the managing agent.

 

(c)                                  Operating Expenses shall not include:

 

(i)                                     Rent or other charges payable under any ground or underlying lease;

 

(ii)                                  Any expenditures on account of Landlord’s acquisition of air or similar development rights;

 

(iii)                               Costs of repositioning, selling or syndicating Landlord’s interest in the Property;

 

(iv)                              Costs with respect to any financing or refinancing of the Property, including debt service, amortization, points and commissions in connection therewith;

 

(v)                                 The cost of making leasehold improvements to any leasable space to prepare the same for occupancy by a tenant thereof, or thereafter for the benefit of a particular tenant or tenants;

 

(vi)                              Services performed for or provided to any tenant to the extent such services are exclusive to such tenant;

 

(vii)                           Advertising and promotional expenditures, contributions or gifts;

 

(viii)                        Brokerage fees or commissions;

 

(ix)                              Legal fees incurred in connection with Landlord’s preparation, negotiation and enforcement of leases;

 

(x)                                 Salaries for any agents or employees of Landlord above those attributable to the operation, maintenance and management of the Building;

 

(xi)                              Any costs which have been previously included in Operating Expenses or Taxes (whether under the same or a different category);

 

(xii)                           . repairs, alterations, additions, improvements or replacements made to rectify or correct any defect in the design, materials or workmanship of the Building or common areas or to comply with any requirements of any governmental authority in effect as of the date of this Lease;

 

D-2

 

(xiii)                        costs of a capital nature, other than Essential Capital Improvements to the extent included above;

 

(xiv)                        rentals and other related expenses incurred in leasing systems, or other equipment ordinarily considered to be of a capital nature, except equipment or similar services and equipment that is used on a temporary basis to restore Building services;

 

(xv)                          costs of repairs, restoration, replacements or other work occasioned by (i) fire, windstorm or other casualty and either (aa) payable (whether paid or not) by insurance required to be carried by Landlord under this Lease, or (bb) otherwise paid by insurance then in effect obtained by Landlord, (ii) the exercise by governmental authorities of the right of eminent domain, whether such taking be total or partial, to the extent that Landlord is compensated by such governmental authority for such repairs, restoration, replacements or other work, (iii) the adjudicated negligence or adjudicated intentional tort of Landlord, or any representative, employee or agent of Landlord (including the costs of any deductibles paid by Landlord, (iv) the act of any other tenant in the Building, or any other tenant’s agents, employees, licensees or invitees to the extent the applicable cost is, in the Landlord’s reasonable judgement, practically recoverable from such person;

 

(xvi)                       costs incurred (less costs of recovery) for any items to the extent such amounts are, in Landlords reasonable judgment, recoverable by Landlord under a manufacturer’s, materialman’s, vendor’s or contractor’s warranty;

 

(xvii)                    wages, salaries benefits, perquisites and compensation paid or given to (i) executives, shareholders, officers, directors or partners of Landlord, (ii) any principal or partner of the entity from time to time comprising Landlord, or (iii) off-site employees and employees at the Building above the level of Building manager;

 

(xviii)                 Landlord’s general overhead and administrative expenses not related to the Building ;

 

(xix)                        non-cash items, such as deductions for depreciation and amortization of the Building and the Building equipment, or interest on capital invested;

 

(xx)                          legal fees, accountants’ fees and other expenses incurred in connection with disputes with Tenant or other tenants or occupants of the Building or associated with the enforcement of any lease or defense of Landlord’s title to or interest in the Building or any part thereof;

 

(xxi)                       costs incurred due to violation by Landlord or any other tenant in the Building of the terms and conditions of any lease;

 

(xxii)                    the cost of any service provided to Tenant or other occupants of the Building for which Landlord is entitled to be reimbursed;

 

(xxiii)                 property management fees of any property management firm in excess of four percent (4%) of the gross revenues of the Building and all other fees for management of the Building outside of the established management contract;

 

(xxiv)                the rent, operating expenses and real estate taxes applicable to Landlord’s on-site management or leasing office, or any other offices or spaces of Landlord or any related

 

D-3

 

entity or rental for any space in the Building set aside for conference facilities, storage facilities or exercise facilities;

 

(xxv)                   reserves for repairs, maintenance and replacements.  Expenses shall be determined by Landlord in accordance with generally accepted accounting principles, consistently applied from one year to the next.

 

Notwithstanding anything to the contrary herein, any Operating Expenses attributable to a period which falls only partially within the Term shall be prorated so that Tenant shall pay only that portion thereof which the part of such period within the Term bears to the entire period.

 

(d)                                 “Operating Year” shall mean each calendar year or such other period of twelve (12) months as hereafter may be adopted by Landlord as its fiscal year, occurring during the Lease Term.

 

(e)                                  “Operating Statement” shall mean a statement in writing signed by Landlord setting forth the Operating Expenses payable by Tenant for a specified Operating Year pursuant to this Section 1.2.

 

1.3                               Taxes.

 

(a)                                 “Taxes” shall mean all taxes, assessments and governmental charges, whether federal, state, county or municipal, and whether general or special, ordinary or extraordinary, foreseen or unforeseen, imposed upon the Building, the Land, and the sidewalks, roadways and parking areas located thereon, or due to the operation thereof, whether or not directly paid by Landlord.  Taxes shall not include income taxes, excess profit taxes, franchise taxes or other taxes imposed or measured on or by the income of Landlord from the operation of the Building or the Land; provided, however, that if, due to a future change in the method of taxation or assessment, any income, excess profit, franchise or other tax, however designated, shall be imposed in substitution, in whole or in part, for (or in lieu of) any tax, assessment or charge which would otherwise be included within the definition of Taxes, such other tax shall be deemed to be included within Taxes as defined herein to the extent of such substitution.  Taxes shall further not include (i) any net income, capital, stock, succession, transfer, franchise, gift, estate or inheritance tax, except to the extent that such tax shall be imposed in lieu of any portion of Taxes; (ii) any item to the extent otherwise included in Operating Expenses; (iii) any environmental assessments, charges or liens arising in connection with the remediation of Hazardous Materials from the Premises or Building, the causation of which arose prior to the Lease Commencement Date of this Lease, or to the extent caused by Landlord, its agents, employees or contractors or any tenant of the Building (other than Tenant or its sublessees or assignees); (iv) costs or fees payable to public authorities in connection with any future construction, renovation and/or improvements to the Premises or Building other than the Initial Improvements, including fees for transit, housing, schools, open space, child care, arts programs, traffic mitigation measures, environmental impact reports, traffic studies, and transportation system management plans; (v) reserves for future Taxes; (vi) any personal property taxes attributable to sculptures, paintings or other objects of art, except for objects of art installed in the Common Areas pursuant to requirements of public authority; (vii) any increase in Taxes resulting from a change in ownership of the Building; and (viii) any increase in Taxes resulting from improvements to the Building or common areas that do not provide a direct benefit to Tenant.  Additionally, interest and penalties incurred as a result of Landlord’s late payment shall not be included in the definition of Taxes. If Landlord incurs any expenses (including, but not limited to, reasonable attorneys’ fees) in connection with its efforts to reduce or minimize increases in the Taxes and/or the assessed value of the Building, any and all such expenses shall be added to, and made a part of, the Taxes for the Operating Year to which they relate.  If Landlord secures an abatement or refund of any Taxes, Tenant shall receive its proportionate share of the amount of such

 

D-4

 

abatement or refund (i.e., the net amount remaining after paying all reasonable costs and expenses of securing the abatement or refund, including reasonable attorneys’ fees) as a credit to be applied by Landlord against Rent next becoming due (or, if no further Rent is due from Tenant, by a cash payment by Landlord to Tenant).  Tenant shall pay to the appropriate governmental authority any use and occupancy tax.  In the event that Landlord is required by law to collect such tax, Tenant shall pay such use and occupancy tax to Landlord as Additional Rent upon demand and Landlord shall remit any amounts so paid to Landlord to the appropriate governmental authority.

 

(b)                                 “Tax Year” shall mean Operating Year as defined above.

 

(c)                                  “Tax Statement” shall mean a statement in writing signed by Landlord setting forth the Taxes payable by Tenant for a specified Operating Year pursuant to this Section 1.3.

 

1.4                               “Operating Expense Stop” shall mean an amount equal to the actual Operating Expenses (on a per rentable square foot basis) for the calendar year 2015 (“Operating Expense Base Year”), subject to adjustment under Section 3 below.

 

1.5                               “Tax Expense Stop” shall mean an amount equal to the actual Taxes (on a per rentable square foot basis) for the fiscal year 2015 (“Tax Expense Base Year”), subject to adjustment under Section 3 below.

 

2.                                      ADDITIONAL RENT FOR OPERATING EXPENSES AND TAXES.

 

2.1                               In addition to Fixed Rent, Tenant shall pay to Landlord for each month of each Operating Year, without demand, deduction or setoff, as Additional Rent: (a) beginning on January 1, 2016, Tenant’s Proportionate Share of Operating Expenses to the extent the Operating Expenses (on a per rentable square foot basis) exceed the Operating Expense Stop; and (b) beginning on July 1, 2015, Tenant’s Proportionate Share of Taxes to the extent the Taxes (on a per rentable square foot basis) exceed the Tax Expense Stop, in accordance with the procedures set forth below.

 

2.2                               As soon as available in each Operating Year during the Lease Term, Landlord shall provide Tenant with a written statement setting forth a projection of Tenant’s Proportionate Share of Operating Expenses and Taxes for such year. Commencing on the first day of the first month following receipt of such statement and continuing until receipt by Tenant of Landlord’s statement of the next projection, Tenant shall pay to Landlord with each monthly installment of Fixed Rent an amount equal to: (a) one-twelfth (1/12th) of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Stop and (b) one-twelfth (1/12th) of such projected Tenant’s Proportionate Share of Taxes over the Tax Expense Stop.

 

2.3                               Landlord shall use commercially reasonable efforts to provide to Tenant, not later than April 30 of the following year, a statement of the actual Operating Expenses and Taxes for such period.  Any underpayment by Tenant during such Operating Year due to the fact that projected Operating Expenses and Taxes were less than actual Operating Expenses and Taxes shall be paid to Landlord within thirty (30) days after Tenant’s receipt of a statement for such deficiency.  Any overpayment by Tenant during such Operating Year due to the fact that projected Operating Expenses and Taxes were greater than actual Operating Expenses and Taxes shall be, at Landlord’s option, (a) applied to any other amounts of Rent then due from Tenant to Landlord, (b) credited to the next payment of Rent coming due from Tenant to Landlord, or (c) refunded to Tenant if no Rent is then due or coming due.

 

D-5

 

3.                                      ADJUSTMENT FOR VACANCIES.  In determining Operating Expenses for any Operating Year including the Operating Expense Base Year, if the Building was less than fully occupied during such entire year, or was less than fully operational during such entire year, then Operating Expenses shall be adjusted by Landlord to reflect the amount that such expenses would normally be expected to have been, in the reasonable opinion of Landlord, had the Building been ninety-five percent (95%) occupied and fully operational throughout such year, except that in no event shall such adjustment result in an amount less than the actual Operating Expenses. In determining the Operating Expense Stop under Section 1.4 above, if the Building was less than fully occupied during such entire calendar or fiscal year, or was less than fully operational during such entire calendar or fiscal year, then (a) the Operating Expense Stop shall be adjusted by Landlord to reflect the amount that such expenses would normally be expected to have been, in the reasonable opinion of Landlord, had the Building been ninety-five percent (95%) occupied and fully operational throughout such calendar year. Any such annualization shall be explained in Landlord’s Operating Statement under Section 2.3 above.

 

4.                                      MINIMUMS.  Notwithstanding anything contained herein to the contrary, in no event shall Tenant be entitled to any credit or other payment in the event that Tenant’s Proportionate Share of Operating Expenses or Tenant’s Proportionate Share of Taxes for any Operating Year be less than the Operating Expense Stop and the Tax Expense Stop, respectively.

 

5.                                      PRO-RATIONS.  If this Lease shall commence or terminate at any time other than the first day of an Operating Year, Tenant shall be liable only for that portion of the Operating Expenses and Taxes with respect to such Operating Year as represented by a fraction, the numerator of which is the number of days of the Lease Term which fall within the Operating Year and the denominator of which is three hundred sixty-five (365).

 

6.                                      AUDIT.  Within one hundred (120) days after the end of each Operating Year, Landlord shall provide to Tenant a statement setting forth the actual Operating Expenses and Taxes with respect to such Operating Year.  Tenant shall have the right to examine, audit and photocopy Landlord’s books and records relating to Tenant’s Proportionate Share of Operating Expenses and Taxes for any Operating Year for a period of three (3) months following the date that Tenant receives the statement of actual Operating Expenses and Taxes; provided, however, that (a) Tenant may exercise such right only once per twelve (12) month period; and (b) Tenant signs a confidentiality agreement in form reasonably satisfactory to Landlord.  Tenant shall give Landlord not less than thirty (30) days’ prior written notice of its intention to examine and audit such books and records, and such examination and audit shall take place at the property management office in the Building maintained by Landlord or its management company. All costs of the examination and audit shall be performed by a certified public accountant and shall be borne by Tenant; provided, however, that if such examination and audit establishes that Tenant’s Proportionate Share of Operating Expenses and Taxes for the year in question are less than the amount set forth on the Operating Statement and Tax Statement by at least five percent (5%), then Landlord shall pay the reasonable costs of such examination and audit as well as Landlord’s actual out of pocket costs in connection with such examination and audit, if any. If the payments made by Tenant for such year are more than Tenant’s required payment on account thereof for such Operating Year, Landlord shall promptly refund such overpayment.  If the payments made by Tenant for such year are less than Tenant’s required payment on account thereof for such Operating Year, Tenant shall pay the deficiency to Landlord within thirty (30) days after conclusion of the examination and audit.  The obligation to make such refund or payment for any period within the Lease Term shall survive expiration of the Lease Term.  If Tenant does not elect to exercise its right to examine and audit Landlord’s books and records for any Operating Year within the time period provided for by this Section 6, Tenant shall have no further right to challenge Landlord’s Operating Statement and Tax Statement.

 

D-6

 

7.                                      PERSONAL PROPERTY TAXES.  Tenant will be responsible for ad valorem taxes on its Personal Property and on the value of any Alterations to the Premises in excess of the Initial Improvements.

 

8.                                      SURVIVAL.  If, upon the expiration or earlier termination of this Lease, the amount of any Additional Rent due hereunder has not yet been determined, an appropriate payment from Tenant to Landlord or refund from Landlord to Tenant shall be made promptly after such determination, which determination Landlord shall use commercially reasonable efforts to make no later than April 30 of the year following the year in which this Lease expired or terminated.

 

D-7

 

EXHIBIT “E”

 

BUILDING RULES AND REGULATIONS

 

The following Building Rules and Regulations, hereby accepted by Tenant, are prescribed by Landlord to enable Landlord to provide, maintain and operate, to the best of Landlord’s ability, clean, orderly and desirable Premises, Building and parking areas for Tenant therein at as economical a cost and in as efficient a manner as reasonably possible, to assure for the security and protection of Tenant so far as reasonably possible, and to regulate conduct in and use of said Premises, Building and parking areas in such manner as to minimize interference by others in the proper use of same by Tenant.

 

1.                                      Landlord shall provide Tenant 85 access cards or keys free of charge.  Tenant shall pay, in an amount fixed by Landlord, for each additional card or key issued by Landlord for the Premises.  Upon termination of this Lease, all cards or keys shall be returned by Tenant to Landlord.  No additional locks or similar devices shall be placed by Tenant on any door without the prior written consent of Landlord and without providing keys or access codes, as applicable, to Landlord.

 

2.                                      Except at otherwise approved by Landlord, no curtains, blinds, shades, screens or signs other than those furnished by Landlord shall be attached to, hung in or used in connection with any window or door of the Premises without the prior written consent of Landlord.  Tenant shall not remove the standard blinds installed in the Premises.

 

3.                                      Tenant will refer all contractors, contractors’ representatives and technicians rendering any service to Tenant to Landlord for Landlord’s approval and supervision before performance of any contractual service. Such supervisory action by Landlord shall not render Landlord responsible for any work performed by Tenant. This provision shall apply to all work performed in the Building including but not limited to the installation of telephone and computer wiring, cabling and equipment, telegraph equipment, electrical devices, attachments, and installations of any nature affecting any portion of the Building. Tenant shall be solely responsible for complying with all applicable codes and ordinances pursuant to which said shall be performed.

 

4.                                      Tenant shall carry out Tenant’s maintenance, repairs, replacements, alterations, additions and improvements in the Premises only during times reasonably agreed to in advance by Landlord and in a manner which will not interfere materially with the rights of other tenants in the Building.

 

5.                                      Movement in or out of the Building of furniture or office equipment, or dispatch or receipt by Tenant of any merchandise or materials which require the use of elevators, stairways, lobby areas or loading dock areas, shall be restricted to hours reasonably designated by Landlord.  Tenant must seek Landlord’s prior approval by providing in writing a detailed listing of any such activity.  Such activity shall be under the supervision of Landlord and performed in the manner stated by Landlord.  Tenant is to assume all risk for damage to articles moved and injury to any persons resulting from such activity other than as arises from Landlord negligence or willful misconduct.  If any property or personnel of Landlord is damaged or injured as a result of or in connection with such activity, Tenant shall be solely liable for any and all damage or loss resulting therefrom other than as arises from Landlord negligence or willful misconduct.

 

6.                                      No part of the Building shall be defaced by Tenant. Notwithstanding the foregoing, Tenant shall be permitted to hang pictures or the like in the Premises so long as any damage to the walls of the Premises is repaired upon expiration or earlier termination of the Lease.

 

E-1

 

7.                                      Tenant shall not place, install or operate in any part of the Premises or the Building any engine or machinery, except for Tenant’s normal office and laboratory equipment, including computers, copiers, facsimile machines, laboratory equipment and the like.  Nor shall Tenant keep, maintain or use any flammable, explosive or hazardous material in any part of the Premises or the Building without the prior written consent of Landlord, except in accordance with the provisions of paragraph 9 of the Lease.

 

8.                                      Reserved and handicap parking spaces should be honored.

 

9.                                      Intentionally Omitted.

 

10.                               Landlord shall not be responsible for any lost or stolen Personal Property, money or jewelry from the Premises, Building or parking areas, regardless of whether loss occurs when such area is locked against entry or not.

 

11.                               No animals, with the exception of seeing-eye dogs or the like, shall be brought into, kept in or about the Building.

 

12.                               Bicycles and other vehicles are not permitted inside the Building, or on the walkways outside the Building, except in those areas specifically designated by Landlord for such purposes.

 

13.                               Employees of Landlord shall not receive or carry messages to or for Tenant, nor shall such employees contract with or render free or paid services to Tenant’s employees, servants, agents or invitees .

 

14.                               Entries, passages, doors, elevators, elevator lobbies, hallways and stairways shall not be blocked or obstructed at any time.  No rubbish, litter, trash, or material of any nature shall be placed, emptied, or thrown in these areas.  Such areas shall not be used at any time except for ingress or egress to or from the Premises.  At no time shall Tenant permit or shall Tenant’s employees loiter in common areas or elsewhere in the Building.

 

15.                               No lighted or fluorescent signs or machinery, including but not limited to soft drink and snack machines, shall be placed anywhere in the Building.

 

16.                               Landlord shall have the right to install or provide such security measures as the Landlord shall deem reasonable and prudent.  After hours and weekend access to the Building may be obtained only through entrances designated by the Landlord and, if Landlord has provided security services, Tenant, their licensees and invitees shall identify themselves at the guard desk of the Building prior to proceeding into the Building or any Leased Premises therein.  Tenant shall comply with all security measures from time to time established by Landlord for the Building.

 

17.                               Plumbing fixtures and appliances shall be used only for purposes for which constructed.  No sweepings, rubbish, rags, coffee grounds, oil, or other unsuitable material shall be thrown or placed therein.  Damage, resulting to any such fixtures or appliances or to other tenant’s premises and/or similar, caused by Tenant shall be repaired and replaced at Tenant’s sole cost and expense.

 

18.                               Tenant shall not interfere with or obstruct the right of, or otherwise injure or annoy, other tenants. Tenant will not do anything in conflict with valid and pertinent laws, rules, or regulations of any governmental authority.

 

19.                               All corridor doors, when not in use, shall be kept closed.

 

E-2

 

20.                               The work of the janitor or cleaning personnel shall not be hindered by Tenant after 5:30 p.m., and such cleaning work may be done at any time when the offices are vacant.  Windows, doors, and fixtures may be cleaned at any time. Tenant shall provide adequate waste and rubbish receptacles, cabinets, bookcases, map cases, etc. necessary to prevent unreasonable hardship to Landlord regarding cleaning service.

 

21.                               Landlord shall have the right to determine and prescribe the weight and proper position of any unusually heavy equipment, including safes, large files, etc., that are to be placed in the Premises.  Only those items which do not exceed acceptable floor loading and will not, with reasonable probability, do damage to the floors, structure, and/or elevator may be moved into the Building.  Any damage occasioned in connection with the moving or installing of such items or the existence of same shall be paid by Tenant.

 

22.                               Landlord shall have the right to prohibit the use of the name of the Building or any other publicity by Tenant, which in Landlord’s opinion, may tend to impair the reputation of the Building or its desirability for the offices of Landlord or of other tenants.  Upon written notice from Landlord, Tenant will refrain from and/or discontinue such publicity immediately.

 

23.                               At its sole discretion, Landlord may place directories in any reasonable location in the Building.

 

24.                               Neither the Premises nor any portion of the Building shall be used for lodging, sleeping, cooking, or for any immoral or illegal purpose, or for any purpose that will damage the Premises or the reputation thereof.

 

25.                               Canvassing, soliciting, and peddling in the Building is prohibited.  Tenant shall cooperate and use its best efforts to prevent the same.

 

26.                               At no time shall Tenant permit or shall Tenant’s employees, guests, and invitees smoke in any common area of the Building unless such common area has been declared a designated smoking area by Landlord.

 

27.                               Landlord shall have the right, exercisable without notice and without liability to Tenant or any other tenant, to change the name and street address of the Building and the project.

 

28.                               Landlord shall have the right, at its sole discretion, to implement a maintenance request program for the Building.  Tenant agrees to comply with the policies and procedures of such a program as long as the policies and procedures of such program do not conflict with any other provisions of this Lease.

 

29.                               The Landlord reserves the right to rescind any of these rules and to make such other and further rules and regulations as, in Landlord’s judgment, may from time to time be needed for safety, care, maintenance, operation and cleanliness of the Building and for the preservation of good order therein, which, when so made and notice thereof shall have been given to any Tenant, shall have the same force and effect as if originally made part of the foregoing Lease, and such other and further rules shall not, however, be inconsistent with the proper and rightful enjoyment by the Tenant under the Lease of the Premises.  .

 

E-3

 

EXHIBIT “F”

 

RENEWAL OPTION

 

1.                                      Subject to: (a) Tenant not being in an Event of Default upon commencement of the Renewal Term or upon providing Tenant’s Notice; (b) Tenant not having assigned the Lease or subleased more than 25% of the Premises, Tenant shall have the option to renew the Lease Term (the “Renewal Option”) for one (1) additional period of five (5) years (the “Renewal Term”). The Renewal Term shall be upon the same terms and conditions of this Lease except that Fixed Rent shall be equal to 100% of the Market Rent (as determined below). Tenant shall notify Landlord, in writing, of its desire to exercise the Renewal Option at least ten (10) months prior to the expiration of the Lease Term (the “Tenant’s Notice”). Failure of Tenant to provide written notice within the time period required herein shall render Tenant’s option hereunder null and void and of no further force and effect.

 

2.                                       “Market Rent” shall be determined in accordance with the procedure set forth hereinafter:

 

A.           The parties shall have thirty (30) days after Landlord receives Tenant’s Notice in which to agree on the Market Rent for the Renewal Term. If the parties agree on the Market Rent during such thirty (30) day period, Landlord and Tenant shall promptly execute an amendment to this Lease setting forth the Market Rent for the Renewal Term.

 

B.           If the parties are unable to agree on the Market Rent within the thirty (30) day period, then, within ten (10) days after the expiration of that period, each party, at its cost and by giving notice to the other party, shall appoint a qualified licensed commercial real estate broker with at least ten (10) years full time commercial brokerage experience in the Route 128 West market to set the Market Rent for the Premises.  If a party does not appoint such a broker, the single broker appointed shall be the sole broker and shall set the Market Rent for the Premises.  The two brokers appointed by the parties as stated in this paragraph shall meet promptly and attempt to establish the Market Rent for the Premises.  If they are unable to agree within thirty (30) days after the second broker has been appointed, they shall attempt to select a third broker meeting the qualifications stated in this paragraph within ten (10) days after the last day the two brokers are given to set the Market Rent.  If they are unable to agree on the third (3rd) broker, either of the parties, by giving ten (10) days’ notice to the other party, can appeal to the nearest real estate board for the selection of a third broker who meets the qualifications stated in this paragraph.  Each of the parties shall bear one-half (1/2) of the cost of appointing the third broker and of paying the third broker’s fee. The third broker, however selected, shall be a person who has not previously acted in any capacity for either party.

 

C.           Within thirty (30) days after the selection of the third broker, a majority of the brokers shall set the Market Rent for the Premises.  If a majority of the brokers are unable to set the Market Rent within the stipulated period of time, the three valuations shall be added together and their total divided by three; the resulting quotient shall be the Market Rent for the Premises.

 

D.           If, however, the low valuation and/or high valuation are more than five percent (5%) lower and/or higher than the middle valuation, such low valuation and/or high valuation shall be disregarded.  If only one valuation is disregarded, the remaining two valuations shall be added together and their total divided by two; the resulting quotient shall be the Market Rent for the Premises.  If both the low valuation and the high valuation are disregarded the middle valuation shall be the Market Rent of the Premises.

 

F-1

 

EXHIBIT “G”

 

RIGHT OF OFFER

 

1.                                      Subject to: (a) any preexisting rights of other tenants in the Building as of the Effective Date; (b) Tenant not having assigned the Lease or subleased more than 25% of the Premises except to a Permitted Transferee; and (c) so long as Tenant is not in an Event of Default, when any space in the Building becomes available and Landlord intends to lease such space (the “Right of Offer Space”), Landlord shall have the on-going obligation to notify Tenant in writing (the “Right of Offer Notice”) setting forth all material terms upon which Landlord desires to enter into a lease with respect to the Right of Offer Space (the “Right of Offer”). Tenant shall have a period of ten (10) days after receipt of the Right of Offer Notice in which to advise Landlord by written notice to Landlord that Tenant desires to lease said Right of Offer Space on the terms and conditions set forth in the Right of Offer Notice.

 

2.                                      In the event Tenant exercises its rights to lease such Right of First Offer Space, Landlord and Tenant shall promptly enter into an amendment to this Lease evidencing the same. Failure of: (a) Tenant to timely notify Landlord of its desire to lease the Right of First Offer Space within the time period set forth above; or (b) failure of Tenant to enter into an amendment evidencing the same within thirty (30) days after receipt of such amendment from Landlord, shall be deemed a waiver of Tenant’s rights to the Right of First Offer Space hereunder and Landlord shall for twelve (12) months thereafter be free to enter into a mutually agreeable lease with any other party for the Right of First Offer Space so long as such terms and conditions are not materially more generous to the other third party which shall be deemed to permit Landlord to lease the Right of Offer Space for not less than ninety percent (90%) of the net effective rental rate. If no such lease is entered into within such twelve (12) month period, Landlord shall again offer the Right of First Offer Space to Tenant as set forth herein.  For purposes herein, the “net effective rental rate” shall be the net present value of the rent and additional rent payable under such offer, taking into account any allowances and the fair market value of any work to be performed by Landlord at its expense in connection with any such proposed transaction.

 

3.                                      For purposes of confirmation herein, if Landlord plans on leasing the Right of Offer Space on terms and conditions that are materially more generous to the other third party, prior to leasing such space to the third party, Landlord shall again be required to notify Tenant pursuant to the Right of Offer Notice and the terms and conditions pursuant to Section 1 of this Exhibit G set forth above. If Tenant fails to lease such Right of Offer Space due to the reasons set forth in Section 2(a) and Section 2(b) above and the Right of Offer Space later becomes available for lease and Landlord intends to lease such space, Landlord shall again be required to notify Tenant pursuant to the Right of Offer Notice in Section 1 of this Exhibit G. Furthermore, if Tenant fails to lease the Right of Offer Space due to the reasons set forth in Section 2(a) and Section 2(b) above and Landlord does not enter into a lease for the Right of Offer Space within twelve (12) months from the date of such failure, Landlord shall again be required to notify Tenant pursuant to the Right of Offer Notice in Section 1 of this Exhibit G.

 

G-1

 

EXHIBIT “H”

 

ROOF RIGHTS AND ROOF EQUIPMENT

 

1.                                      Location. Subject to the prior approval of Landlord’s structural engineer, , which shall not be unreasonably withheld, conditioned or delayed, Tenant shall have the right to install, operate, and maintain, at no additional cost to Tenant, an emergency generator, HVAC equipment, antennas, satellite dishes and similar equipment (collectively, the “Roof Equipment”) on the roof of the Building in an area designated by Landlord (such area to be known as the “Roof Equipment Area”) and subject to plans and specifications reasonably approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. Landlord, at its sole discretion, may require Tenant to relocate the Roof Equipment at any time to another area on the roof of the Building and for any reason provided, however, that Landlord pays for the reasonable cost of such relocation.

 

2.                                      Condition of Roof Equipment Area. The Roof Equipment Area shall be provided to Tenant in its “as-is, where is” condition. Landlord makes no representation or warranty that the Roof Equipment Area or Building is fit for Tenant’s intended use or permitted by law.

 

3.                                      Cost of Installation. Tenant, at its sole cost and expense, shall pay for any and all expenses in connection with preparation of the Roof Equipment Area or installation of the Roof Equipment. Tenant, at its sole cost and expense, shall obtain and maintain any municipal, state or federal permits and/or licenses required for the installation and operation of the Roof Equipment. Tenant, at its sole cost and expense, shall comply with all Legal Requirements with respect to the Roof Equipment and Roof Equipment Area.

 

4.                                      Roof Penetration and Warranty. Tenant shall not use the Roof Equipment Area or Roof Equipment in such a manner that would jeopardize or invalidate Landlord’s existing roof warranty. In addition, Tenant shall use Landlord’s designated roof contractor with respect to roof penetrations and monitoring when installing the Roof Equipment and Tenant shall be responsible for maintaining the Roof Equipment in a manner in which to preserve Landlord’s roof warranty. Any roof penetrations necessary in connection with the installation, maintenance or repair of the Roof Equipment are to be made by Landlord’s roof contractor, at Tenant’s sole cost and expense.

 

5.                                      Maintenance of Roof Equipment. Tenant, at its sole cost and expense, shall keep the Roof Equipment Area, Roof Equipment and all related equipment in good condition and repair and shall be responsible for all maintenance and repair in connection with the Roof Equipment Area and the Roof Equipment.

 

6.                                      Access to Roof and Roof Equipment Area. Tenant and any of its agents or contractors shall not have access to the roof of the Building unless Tenant has: (a) given Landlord at least twenty four (24) hours advance notice; and (b) Tenant is accompanied by Landlord or its agent; and (c) such access occurs during Business Days during Business Hours.

 

7.                                      Interference. Landlord shall use reasonable efforts to accommodate Tenant, however, the Roof Equipment shall not be installed so as to interfere with the use or operation of any communications equipment previously installed on the roof of the Building or the operations of any Tenant in the Building as of the Effective Date. Landlord shall not be responsible for any signal interference or signal straying in connection with the Roof Equipment.  In any future leases, Landlord shall provide that tenants shall not install communications equipment that interferes with existing Roof Equipment.

 

H-1

 

8.                                      Not Assignable. Tenant’s rights pursuant to this Exhibit H are personal to Tenant and may not be assigned or transferred to any other party without the prior written consent of Landlord.

 

9.                                      No Further Collocation. Tenant shall not permit any other party to locate equipment in the Roof Equipment Area or collocate on the Roof Equipment without the prior written consent of Landlord.

 

10.                               Changes to Roof Equipment Area. Any changes to the Roof Equipment deviating from those originally approved by Landlord must be reapproved by Landlord.

 

11.                               Removal of Roof Equipment. Upon the expiration or earlier termination of the Lease, Tenant, at its sole cost and expense, shall remove the Roof Equipment and all related equipment leaving the Roof Equipment Area in the same condition existing on the Effective Date, reasonable wear and tear excepted. Tenant shall be responsible for the cost of repairing any and all damage to the Roof Equipment Area, the roof of the Building, or any other areas of the Building in connection the installation, maintenance, repair, and/or operation of the Roof Equipment. Landlord may request that Tenant leave any or all of the Roof Equipment.

 

H-2

 

EXHIBIT “I”

 

PROGRESS PLANS

 

I-1Exhibit 4.1

	
 
    

 

Execution Copy

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2014-1,

as Issuer,

 

and

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Indenture Trustee

 

 

INDENTURE

 

Dated as of April 1, 2014

 

 

Motorcycle Contract Backed Notes

	
 
    

 

 

CROSS-REFERENCE TABLE**

 

 

	
TIA
    	
 
    	
Indenture
    
	
Section
    	
 
    	
Section
    
	
310(a)(1)
    	
 
    	
6.11
    
	
(a)(2)
    	
 
    	
6.11
    
	
(a)(3)
    	
 
    	
6.10
    
	
(a)(4)
    	
 
    	
N.A.
    
	
(a)(5)
    	
 
    	
6.11
    
	
(b)
    	
 
    	
6.08; 6.11; 11.04
    
	
311(a)
    	
 
    	
6.13
    
	
(b)
    	
 
    	
6.13
    
	
312(a)
    	
 
    	
7.01; 7.02
    
	
(b)
    	
 
    	
7.02
    
	
(c)
    	
 
    	
7.02
    
	
313(a)
    	
 
    	
7.04
    
	
(b)
    	
 
    	
7.04
    
	
(c)
    	
 
    	
7.04
    
	
(d)
    	
 
    	
7.04
    
	
314(a)
    	
 
    	
7.03
    
	
(b)
    	
 
    	
3.06
    
	
(c)(1)
    	
 
    	
2.02; 6.02; 11.01
    
	
(c)(2)
    	
 
    	
11.01
    
	
(c)(3)
    	
 
    	
11.01
    
	
(d)
    	
 
    	
11.01
    
	
(e)
    	
 
    	
11.01
    
	
(f)
    	
 
    	
N.A.
    
	
315(a)
    	
 
    	
6.01
    
	
(b)
    	
 
    	
6.05
    
	
(c)
    	
 
    	
6.01
    
	
(d)
    	
 
    	
5.12; 6.01
    
	
(e)
    	
 
    	
5.14
    
	
316(a)(1)(A)
    	
 
    	
5.12
    
	
(a)(1)(B)
    	
 
    	
5.02
    
	
(a)(2)
    	
 
    	
N.A.*
    
	
(b)
    	
 
    	
5.08
    
	
(c)
    	
 
    	
N.A.
    
	
317(a)
    	
 
    	
5.03; 5.04
    
	
(b)
    	
 
    	
3.03
    
	
318(a)
    	
 
    	
11.18
    

 

*                 N.A. means Not Applicable

**          This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture.

 

i

 

TABLE OF CONTENTS

 

	
ARTICLE ONE DEFINITIONS AND   INCORPORATION BY REFERENCE
    	
2
    
	
 
    	
 
    
	
SECTION 1.01.
    	
DEFINITIONS
    	
2
    
	
SECTION 1.02.
    	
INCORPORATION BY REFERENCE OF   TRUST INDENTURE ACT
    	
8
    
	
SECTION 1.03.
    	
RULES OF CONSTRUCTION
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE TWO THE NOTES
    	
9
    
	
 
    	
 
    
	
SECTION 2.01.
    	
FORM
    	
9
    
	
SECTION 2.02.
    	
EXECUTION, AUTHENTICATION AND   DELIVERY
    	
10
    
	
SECTION 2.03.
    	
TEMPORARY NOTES
    	
10
    
	
SECTION 2.04.
    	
REGISTRATION; REGISTRATION OF   TRANSFER AND EXCHANGE
    	
11
    
	
SECTION 2.05.
    	
MUTILATED, DESTROYED, LOST OR   STOLEN NOTES
    	
12
    
	
SECTION 2.06.
    	
PERSONS DEEMED OWNER
    	
13
    
	
SECTION 2.07.
    	
PAYMENT OF PRINCIPAL AND   INTEREST; DEFAULTED INTEREST
    	
13
    
	
SECTION 2.08.
    	
CANCELLATION
    	
14
    
	
SECTION 2.09.
    	
BOOK-ENTRY NOTES
    	
14
    
	
SECTION 2.10.
    	
NOTICES TO CLEARING AGENCY
    	
15
    
	
SECTION 2.11.
    	
DEFINITIVE NOTES
    	
15
    
	
SECTION 2.12.
    	
RELEASE OF COLLATERAL
    	
16
    
	
SECTION 2.13.
    	
TAX TREATMENT
    	
16
    
	
SECTION 2.14.
    	
CALCULATION OF CLASS A-2B   RATE
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE THREE COVENANTS
    	
16
    
	
 
    	
 
    
	
SECTION 3.01.
    	
PAYMENT OF PRINCIPAL AND   INTEREST
    	
16
    
	
SECTION 3.02.
    	
MAINTENANCE OF OFFICE OR AGENCY
    	
17
    
	
SECTION 3.03.
    	
MONEY FOR PAYMENTS TO BE HELD IN   TRUST
    	
17
    
	
SECTION 3.04.
    	
EXISTENCE
    	
18
    
	
SECTION 3.05.
    	
PROTECTION OF COLLATERAL
    	
18
    
	
SECTION 3.06.
    	
OPINIONS AS TO COLLATERAL
    	
19
    
	
SECTION 3.07.
    	
PERFORMANCE OF OBLIGATIONS;   SERVICING OF CONTRACTS
    	
19
    
	
SECTION 3.08.
    	
NEGATIVE COVENANTS
    	
20
    
	
SECTION 3.09.
    	
ANNUAL STATEMENT AS TO   COMPLIANCE
    	
21
    
	
SECTION 3.10.
    	
ISSUER   MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS
    	
21
    
	
SECTION 3.11.
    	
SUCCESSOR OR TRANSFEREE
    	
22
    
	
SECTION 3.12.
    	
NO OTHER BUSINESS
    	
23
    
	
SECTION 3.13.
    	
NO BORROWING
    	
23
    
	
SECTION 3.14.
    	
SERVICER’S OBLIGATIONS
    	
23
    
	
SECTION 3.15.
    	
GUARANTEES, LOANS ADVANCES, AND   OTHER LIABILITIES
    	
23
    
	
SECTION 3.16.
    	
CAPITAL EXPENDITURES
    	
23
    
	
SECTION 3.17.
    	
RESTRICTED PAYMENTS
    	
23
    
	
SECTION 3.18.
    	
NOTICE OF EVENTS OF DEFAULT
    	
24
    
	
SECTION 3.19.
    	
FURTHER INSTRUMENTS AND ACTS
    	
24
    
	
SECTION 3.20.
    	
COMPLIANCE WITH LAWS
    	
24
    
	
SECTION 3.21.
    	
AMENDMENTS OF SALE AND SERVICING   AGREEMENT AND TRUST AGREEMENT
    	
24
    

 

i

 

	
SECTION 3.22.
    	
REMOVAL OF ADMINISTRATOR
    	
24
    
	
SECTION 3.23.
    	
CREATION OF A VALID SECURITY   INTEREST
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE FOUR SATISFACTION   AND DISCHARGE
    	
24
    
	
 
    	
 
    
	
SECTION 4.01.
    	
SATISFACTION AND DISCHARGE OF   INDENTURE
    	
24
    
	
SECTION 4.02.
    	
APPLICATION OF TRUST MONEY
    	
25
    
	
SECTION 4.03.
    	
REPAYMENT OF MONEYS HELD BY   PAYING AGENT
    	
26
    
	
SECTION 4.04.
    	
RELEASE OF COLLATERAL
    	
26
    
	
 
    	
 
    	
 
    
	
ARTICLE FIVE REMEDIES
    	
26
    
	
 
    	
 
    
	
SECTION 5.01.
    	
EVENTS OF DEFAULT
    	
26
    
	
SECTION 5.02.
    	
RIGHTS UPON EVENT OF DEFAULT
    	
27
    
	
SECTION 5.03.
    	
COLLECTION OF INDEBTEDNESS AND   SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE; AUTHORITY OF INDENTURE TRUSTEE
    	
27
    
	
SECTION 5.04.
    	
REMEDIES
    	
29
    
	
SECTION 5.05.
    	
OPTIONAL PRESERVATION OF THE   CONTRACTS
    	
30
    
	
SECTION 5.06.
    	
PRIORITIES
    	
30
    
	
SECTION 5.07.
    	
LIMITATION OF SUITS
    	
30
    
	
SECTION 5.08.
    	
UNCONDITIONAL RIGHTS OF   NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST
    	
31
    
	
SECTION 5.09.
    	
RESTORATION OF RIGHTS AND   REMEDIES
    	
31
    
	
SECTION 5.10.
    	
RIGHTS AND REMEDIES CUMULATIVE
    	
31
    
	
SECTION 5.11.
    	
DELAY OR OMISSION NOT A WAIVER
    	
31
    
	
SECTION 5.12.
    	
CONTROL BY NOTEHOLDERS
    	
31
    
	
SECTION 5.13.
    	
WAIVER OF PAST DEFAULTS
    	
32
    
	
SECTION 5.14.
    	
UNDERTAKING FOR COSTS
    	
32
    
	
SECTION 5.15.
    	
WAIVER OF STAY OR EXTENSION LAWS
    	
32
    
	
SECTION 5.16.
    	
ACTION ON NOTES
    	
33
    
	
SECTION 5.17.
    	
PERFORMANCE AND ENFORCEMENT OF   CERTAIN OBLIGATIONS
    	
33
    
	
 
    	
 
    	
 
    
	
ARTICLE SIX THE INDENTURE   TRUSTEE
    	
34
    
	
 
    	
 
    
	
SECTION 6.01.
    	
DUTIES OF INDENTURE TRUSTEE
    	
34
    
	
SECTION 6.02.
    	
RIGHTS OF INDENTURE TRUSTEE
    	
35
    
	
SECTION 6.03.
    	
INDIVIDUAL RIGHTS OF INDENTURE   TRUSTEE
    	
36
    
	
SECTION 6.04.
    	
INDENTURE TRUSTEE’S DISCLAIMER
    	
36
    
	
SECTION 6.05.
    	
NOTICE OF DEFAULTS
    	
36
    
	
SECTION 6.06.
    	
REPORTS BY INDENTURE TRUSTEE TO   HOLDERS
    	
36
    
	
SECTION 6.07.
    	
COMPENSATION AND INDEMNITY
    	
36
    
	
SECTION 6.08.
    	
REPLACEMENT OF INDENTURE TRUSTEE
    	
37
    
	
SECTION 6.09.
    	
SUCCESSOR INDENTURE TRUSTEE BY   MERGER
    	
38
    
	
SECTION 6.10.
    	
APPOINTMENT OF CO-INDENTURE   TRUSTEE OR SEPARATE INDENTURE TRUSTEE
    	
38
    
	
SECTION 6.11.
    	
ELIGIBILITY
    	
40
    
	
SECTION 6.12.
    	
PENNSYLVANIA MOTOR VEHICLE SALES   FINANCE ACT LICENSES
    	
40
    
	
SECTION 6.13.
    	
PREFERENTIAL COLLECTION OF   CLAIMS AGAINST ISSUER
    	
40
    
	
SECTION 6.14.
    	
REPRESENTATIONS AND WARRANTIES   OF INDENTURE TRUSTEE
    	
40
    

 

ii

 

	
ARTICLE SEVEN NOTEHOLDERS’   LISTS AND REPORTS
    	
41
    
	
 
    	
 
    
	
SECTION 7.01.
    	
ISSUER TO FURNISH INDENTURE   TRUSTEE NAMES AND ADDRESSES OF NOTEHOLDERS
    	
41
    
	
SECTION 7.02.
    	
PRESERVATION OF INFORMATION:   COMMUNICATION TO NOTEHOLDERS
    	
42
    
	
SECTION 7.03.
    	
REPORTS BY ISSUER
    	
42
    
	
SECTION 7.04.
    	
REPORTS BY INDENTURE TRUSTEE
    	
42
    
	
 
    	
 
    	
 
    
	
ARTICLE EIGHT ACCOUNTS,   DISBURSEMENTS AND RELEASES
    	
43
    
	
 
    	
 
    
	
SECTION 8.01.
    	
COLLECTION OF MONEY
    	
43
    
	
SECTION 8.02.
    	
TRUST ACCOUNTS
    	
43
    
	
SECTION 8.03.
    	
GENERAL PROVISIONS REGARDING   ACCOUNTS
    	
43
    
	
SECTION 8.04.
    	
RELEASE OF COLLATERAL
    	
44
    
	
SECTION 8.05.
    	
OPINION OF COUNSEL
    	
44
    
	
 
    	
 
    	
 
    
	
ARTICLE NINE SUPPLEMENTAL   INDENTURES
    	
45
    
	
 
    	
 
    
	
SECTION 9.01.
    	
SUPPLEMENTAL INDENTURES WITHOUT   CONSENT OF NOTEHOLDERS
    	
45
    
	
SECTION 9.02.
    	
SUPPLEMENTAL INDENTURES WITH   CONSENT OF NOTEHOLDERS
    	
46
    
	
SECTION 9.03.
    	
EXECUTION OF SUPPLEMENTAL   INDENTURES
    	
47
    
	
SECTION 9.04.
    	
EFFECT OF SUPPLEMENTAL INDENTURE
    	
47
    
	
SECTION 9.05.
    	
CONFORMITY WITH TRUST INDENTURE   ACT
    	
47
    
	
SECTION 9.06.
    	
REFERENCE IN NOTES TO   SUPPLEMENTAL INDENTURES
    	
47
    
	
 
    	
 
    
	
ARTICLE TEN REDEMPTION OF   NOTES
    	
48
    
	
 
    	
 
    	
 
    
	
SECTION 10.01.
    	
REDEMPTION
    	
48
    
	
SECTION 10.02.
    	
FORM OF REDEMPTION NOTICE
    	
48
    
	
SECTION 10.03.
    	
NOTES PAYABLE ON REDEMPTION DATE
    	
49
    
	
 
    	
 
    	
 
    
	
ARTICLE ELEVEN MISCELLANEOUS
    	
49
    
	
 
    	
 
    
	
SECTION 11.01.
    	
COMPLIANCE CERTIFICATES AND   OPINIONS, ETC
    	
49
    
	
SECTION 11.02.
    	
FORM OF DOCUMENTS DELIVERED   TO INDENTURE TRUSTEE
    	
50
    
	
SECTION 11.03.
    	
ACTS OF NOTEHOLDERS
    	
51
    
	
SECTION 11.04.
    	
NOTICES
    	
52
    
	
SECTION 11.05.
    	
NOTICES TO NOTEHOLDERS; WAIVER
    	
52
    
	
SECTION 11.06.
    	
ALTERNATE PAYMENT AND NOTICE   PROVISIONS
    	
53
    
	
SECTION 11.07.
    	
EFFECT OF HEADINGS AND TABLE OF   CONTENTS
    	
53
    
	
SECTION 11.08.
    	
SUCCESSORS AND ASSIGNS
    	
53
    
	
SECTION 11.09.
    	
SEPARABILITY
    	
53
    
	
SECTION 11.10.
    	
BENEFITS OF INDENTURE
    	
53
    
	
SECTION 11.11.
    	
LEGAL HOLIDAYS
    	
53
    
	
SECTION 11.12.
    	
GOVERNING LAW
    	
53
    
	
SECTION 11.13.
    	
WAIVER OF JURY TRIAL
    	
53
    
	
SECTION 11.14.
    	
COUNTERPARTS
    	
53
    
	
SECTION 11.15.
    	
RECORDING OF INDENTURE
    	
53
    
	
SECTION 11.16.
    	
TRUST OBLIGATION
    	
54
    
	
SECTION 11.17.
    	
NO PETITION
    	
54
    
	
SECTION 11.18.
    	
INSPECTION
    	
54
    
	
SECTION 11.19.
    	
CONFLICT WITH TRUST INDENTURE   ACT
    	
54
    

 

iii

 

	
SECTION 11.20.
    	
DISCLAIMER AND SUBORDINATION
    	
55
    
	
SECTION 11.21.
    	
COMMUNICATIONS WITH RATING   AGENCIES
    	
55
    

 

	
EXHIBITS
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Exhibit A-1
    	
Form of   Class A-1 Note
    	
A-1-1
    
	
Exhibit A-2a
    	
Form of   Class A-2a Note
    	
A-2a-1
    
	
Exhibit A-2b
    	
Form of   Class A-2b Note
    	
A-2b-1
    
	
Exhibit A-3
    	
Form of   Class A-3 Note
    	
A-3-1
    
	
Exhibit A-4
    	
Form of   Class A-4 Note
    	
A-4-1
    
	
Exhibit B
    	
Form of   Note Depository Agreement
    	
B-1
    

 

iv

 

INDENTURE

 

THIS INDENTURE, dated as of April 1, 2014 (this “Indenture”), is entered into by and between Harley-Davidson Motorcycle Trust 2014-1, a Delaware statutory trust (the “Issuer”), and The Bank of New York Mellon Trust Company, N.A., as indenture trustee (the “Indenture Trustee”).

 

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

 

GRANTING CLAUSE

 

The Issuer hereby grants, transfers, assigns and otherwise conveys to the Indenture Trustee on the Closing Date, on behalf of and for the benefit of the Holders of the Notes, without recourse, all of the Issuer’s right, title and interest (exclusive of the amount, if any, allocable to any rebatable insurance premium financed by any Contract) in, to and under: (i) the Contracts secured by the Motorcycles (which Contracts shall be listed in the List of Contracts); (ii) all payments of principal and interest under the Contracts received after the Cutoff Date and all other proceeds received on or in respect of such Contracts (other than payments of principal and interest received on or prior to the Cutoff Date); (iii) security interests in the Motorcycles; (iv) amounts on deposit in the Collection Account, the Note Distribution Account and the Reserve Fund, including all Eligible Investments therein and all income from the investment of funds therein and all proceeds therefrom; (v) proceeds from claims under any theft, physical damage, credit life, disability or other individual insurance policies, debt insurance policies or debt cancellation agreements in respect of individual Motorcycles or obligors under the Contracts; (vi) the Sale and Servicing Agreement; (vii) the protective security interest in certain of the above-described property granted by the Trust Depositor in favor of the Issuer; (viii) rebates of premiums and other amounts relating to insurance policies, debt cancellation agreements, extended service contracts or other repair agreements and other items financed under such Contracts; (ix) all present and future claims, demands, causes of and choses in action in respect of any or all of the foregoing; and (x) all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, into cash of other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing (as each such defined term is defined in Section 1.01) (collectively, the “Collateral”).

 

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority or distinction, except as expressly provided herein with respect to distinctions among Classes of Notes, and all other sums owing by the Issuer hereunder or under any other Transaction Document, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

 

The Indenture Trustee, as Indenture Trustee on behalf of the Holders of the Notes, acknowledges such Grant, accepts the trust under this Indenture in accordance with the provisions of this Indenture and agrees to perform its duties required in this Indenture in accordance with its terms and the terms of the other Transaction Documents to which it is a party.

 

 

ARTICLE ONE

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.                         Definitions.

 

Except as otherwise specified herein or as the context may otherwise require, capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Sale and Servicing Agreement and the following terms have the respective meanings set forth below for all purposes of this Indenture.

 

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

 

“Administration Agreement” means the Administration Agreement, dated as of the date hereof, among the Administrator, the Issuer, the Trust Depositor and the Indenture Trustee.

 

“Administrator” means Harley-Davidson Credit or any successor Administrator under the Administration Agreement.

 

“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Authorized Officer” means, with respect to the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and, so long as the Administration Agreement is in effect, any Vice President or more senior officer of the Administrator who is authorized to act for the Administrator in matters relating to the Issuer and to be acted upon by the Administrator pursuant to the Administration Agreement and who is identified on the list of Authorized Officers delivered by the Administrator to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter).

 

“Book-Entry Notes” means a beneficial interest in the Notes, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.09.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which banking institutions in  the cities of Chicago, Illinois, Wilmington, Delaware, or New York, New York are authorized or obligated by law, executive order or governmental decree to be closed.

 

“Class” means all Notes whose form is identical except for variation in denomination, principal amount or owner.

 

“Class A-1 Final Distribution Date” has the meaning set forth in the Sale and Servicing Agreement.

 

“Class A-1 Notes” means the Class A-1 Notes, substantially in the form of Exhibit A-1.

 

“Class A-1 Rate” has the meaning set forth in the Sale and Servicing Agreement.

 

2

 

“Class A-2 Final Distribution Date” has the meaning set forth in the Sale and Servicing Agreement.

 

“Class A-2 Notes” means the Class A-2a Notes and the Class A-2b Notes.

 

“Class A-2a Notes” means the Class A-2a Notes, substantially in the form of Exhibit A-2a.

 

“Class A-2a Rate” has the meaning set forth in the Sale and Servicing Agreement.

 

“Class A-2b Notes” means the Class A-2b Notes, substantially in the form of Exhibit A-2b.

 

“Class A-2b Rate” has the meaning set forth in the Sale and Servicing Agreement.

 

“Class A-3 Final Distribution Date” has the meaning set forth in the Sale and Servicing Agreement.

 

“Class A-3 Notes” means the Class A-3 Notes, substantially in the form of Exhibit A-3.

 

“Class A-3 Rate” has the meaning set forth in the Sale and Servicing Agreement.

 

“Class A-4 Final Distribution Date” has the meaning set forth in the Sale and Servicing Agreement.

 

“Class A-4 Notes” means the Class A-4 Notes, substantially in the form of Exhibit A-4.

 

“Class A-4 Rate” has the meaning set forth in the Sale and Servicing Agreement.

 

“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

 

“Clearing Agency Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

 

“Closing Date” has the meaning set forth in the Sale and Servicing Agreement.

 

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

 

“Collateral” means the Collateral Granted to the Indenture Trustee under this Indenture, including all proceeds thereof.

 

“Commission” means the Securities and Exchange Commission.

 

“Corporate Trust Office” means the office of the Indenture Trustee at which at any particular time its activities under this Indenture shall be administered, which office at date of the execution of this Indenture is located at 2 North LaSalle Street, Suite 1020, Chicago, Illinois  60602, Attention: Corporate Trust Administration; or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders and the Issuer, or the designated corporate trust office of any successor Indenture Trustee (the address of which the successor Indenture Trustee will notify the Noteholders and the Issuer).

 

3

 

“Default” means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

 

“Definitive Notes” shall have the meaning specified in Section 2.09.

 

“Distribution Date” has the meaning set forth in the Sale and Servicing Agreement.

 

“DTC” means The Depository Trust Company, and its successors and assigns.

 

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

 

“Event of Default” shall have the meaning specified in Section 5.01.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Executive Officer” means, with respect to any corporation or limited liability company, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, Executive Vice President, any Vice President, the Secretary or the Treasurer of such corporation or limited liability company; and with respect to any partnership, any general partner thereof.

 

“Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to this Indenture.  A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

 

“Harley-Davidson Credit” means Harley-Davidson Credit Corp., and its successors and assigns.

 

“Holder” or “Noteholder” or “Note Owner” means, with respect to a Book-Entry Note, the Person who is the owner of such Book-Entry Note, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency) and with respect to a Definitive Note, the Person in whose name a Note is registered on the Note Register.

 

“Indebtedness” means, with respect to any Person at any time, (i) indebtedness or liability of such Person for borrowed money whether or not evidenced by bonds, debentures, notes or other instruments, or for the deferred purchase price of property or services (including trade obligations); (ii) obligations of such Person as lessee under leases which should have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases; (iii) current liabilities of such Person in respect of unfunded vested benefits under plans covered by Title IV of ERISA; (iv) obligations issued for or liabilities incurred on the account of such Person; (v) obligations or liabilities of such Person arising under acceptance facilities; (vi) obligations of such Person under any guaranties, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to

 

4

 

supply funds to invest in any Person or otherwise to assure a creditor against loss; (vii) obligations secured by any lien on property or assets of such Person, whether or not the obligations have been assumed by such Person; or (viii) obligations of such Person under any interest rate or currency exchange agreement.

 

“Indenture” means this Indenture, as amended or supplemented from time to time.

 

“Indenture Trustee” means The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee under this Indenture, or any successor Indenture Trustee under this Indenture.

 

“Independent” means, when used with respect to any specified Person, that the Person (i) is in fact independent of the Issuer, any other obligor upon the Notes, the Trust Depositor, the Seller and any of their respective Affiliates, (ii) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Trust Depositor, the Seller or any of their respective Affiliates, and (iii) is not connected with the Issuer, any such other obligor, the Seller or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

 

“Independent Certificate” means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01, made by an Independent appraiser or other expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of “Independent” in this Indenture and that the signer is Independent within the meaning thereof.

 

“Interest Rate” means the Class A-1 Rate, the Class A-2a Rate, the Class A-2b Rate, the Class A-3 Rate, and/or the Class A-4 Rate, as applicable.

 

“Issuer” means Harley-Davidson Motorcycle Trust 2014-1 until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the Notes.

 

“Issuer Order” and “Issuer Request” means a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto that is a nationally recognized statistical rating organization.

 

“Note Depository Agreement” means one or more agreements dated as of the Closing Date, between the Issuer and DTC, as the initial Clearing Agency, relating to the Notes, substantially in the form of Exhibit B hereto.

 

“Note Register” and “Note Registrar” have the respective meanings specified in Section 2.04.

 

“Notes” means, collectively, the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.

 

“Officer’s Certificate” means a certificate signed by any Authorized Officer of the Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01, and delivered to, the Indenture Trustee.  Unless otherwise specified, any reference in

 

5

 

this Indenture to an Officer’s Certificate shall be to an Officer’s Certificate of any Authorized Officer of the Issuer.

 

“Opinion of Counsel” means one or more written opinions of counsel who may, except as otherwise expressly provided in this Indenture, be employees of or counsel to the Issuer and who shall be satisfactory to the Indenture Trustee, which shall comply with any applicable requirements of Section 11.01 and shall be in form and substance satisfactory to the Indenture Trustee.

 

“Outstanding” means, as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture except:

 

(I)                                    Notes theretofore cancelled by the Note Registrar or delivered to the Note Registrar for cancellation;

 

(II)                                Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Notes (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision for such notice has been made, satisfactory to the Indenture Trustee, has been made); and

 

(III)                            Notes in exchange for or in lieu of other Notes which have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a protected purchaser, within the meaning of § 8-303 of the UCC;

 

provided, however, that in determining whether the Holders of the requisite Outstanding Amount have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any other Transaction Document, Notes owned by the Issuer, any other obligor upon the Notes, the Trust Depositor, Harley-Davidson Credit or any of their respective Affiliates shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that the Indenture Trustee knows to be so owned shall be so disregarded.  Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the Trust Depositor, Harley-Davidson Credit or any of their respective Affiliates.

 

“Outstanding Amount” means the aggregate principal amount of all Notes of one or more Classes, as the case may be, Outstanding at the date of determination.

 

“Owner Trustee” means Wilmington Trust, National Association, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, or any successor trustee under the Trust Agreement.

 

“Paying Agent” means the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 and is authorized by the Issuer to make the distributions from the Note Distribution Account, including payment of principal of or interest on the Notes on behalf of the Issuer.

 

6

 

“Permitted Lien” means, any tax lien, mechanics’ lien and other lien that arises by operation of law, in each case on a Motorcycle and arising solely as a result of an action or omission of the related Obligor.

 

“Person” means any individual, corporation, estate, partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

 

“Plan” means an employee benefit plan, as defined in Section 3(3) of ERISA, that is subject to Title I of ERISA or a plan, as defined in Section 4975(e)(1) of the Code.

 

“Predecessor Note” means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and for the purpose of this definition, any Note authenticated and delivered under Section 2.05 in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

 

“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.

 

“Rating Agency” means each of Moody’s and Standard & Poor’s, so long as such Persons maintain a rating on the Notes; and if either Moody’s or Standard & Poor’s no longer maintains a rating on the Notes, such other nationally recognized statistical rating organization selected by the Trust Depositor.

 

“Record Date” means, with respect to any Distribution Date, the close of business on the Business Day immediately preceding such Distribution Date.

 

“Redemption Date” means, in the case of a redemption of the Notes pursuant to Section 10.01(a) or a payment to Noteholders pursuant to Section 10.01(b), the Distribution Date specified by the Servicer or the Issuer pursuant to Section 10.01(a) or 10.01(b), as the case may be.

 

“Redemption Date Amount” means (i) in the case of a redemption of the Notes pursuant to Section 10.01(a), an amount equal to the unpaid principal amount of the Notes redeemed plus accrued and unpaid interest thereon at the applicable Interest Rate for each Class of Notes being so redeemed to but excluding the Redemption Date, or (ii) in the case of a payment made to Noteholders pursuant to Section 10.01(b), the amount on deposit in the Note Distribution Account, after prior applications pursuant to Section 5.06(a), but not in excess of the amount specified in clause (i) above.

 

“Registered Holder” means the Person in whose name a Note is registered on the Note Register on the applicable Record Date.

 

“Responsible Officer” means, with respect to the Indenture Trustee, any officer within the Corporate Trust Office (or any successor group of the Indenture Trustee), including any Vice President, assistant secretary or other officer or assistant officer of the Indenture Trustee customarily performing functions similar to those performed by the people who at such time shall be officers, respectively, or to whom any corporate trust matter is referred at the Corporate Trust Office of the Indenture Trustee because of his knowledge of and familiarity with the particular subject.

 

7

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of the date hereof, among the Issuer, the Trust Depositor, the Indenture Trustee and the Servicer.

 

“Seller” means Harley-Davidson Credit, in its capacity as Seller under the Transfer and Sale Agreement, and any successors and assigns.

 

“Servicer” means Harley-Davidson Credit, in its capacity as Servicer under the Sale and Servicing Agreement, and any Successor Servicer thereunder.

 

“Similar Law” means any foreign, federal, state or local law with provisions substantially similar to Title I of ERISA or Section 4975 of the Code.

 

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or any successor thereto that is a nationally recognized statistical rating organization.

 

“State” means any one of the 50 states of the United States or any of its territories, or the District of Columbia.

 

“Termination Date” means the date on which the Indenture Trustee shall have received payment and performance of all amounts and obligations which the Issuer may owe to or on behalf of the Indenture Trustee for the benefit of the Noteholders under this Indenture or the Notes.

 

“Trust Depositor” shall mean Harley-Davidson Customer Funding Corp., in its capacity as trust depositor under the Sale and Servicing Agreement.

 

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

 

“UCC” means the Uniform Commercial Code as in effect on the date hereof and from time to time in the State of Illinois, provided, that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection or priority of the security interests in any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect on or after the date hereof in any other jurisdiction, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or priority or availability of such remedy.

 

“United States” means the United States of America.

 

Section 1.02.                         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:

 

“Commission” means the Securities and Exchange Commission.

 

“indenture securities” means the Notes.

 

“indenture security holder” means a Noteholder.

 

“indenture to be qualified” means this Indenture.

 

8

 

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

 

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

 

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

 

Section 1.03.                         Rules of Construction.  Unless the context otherwise requires:

 

(i)                                     a term has the meaning assigned to it;

 

(ii)                                  an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time;

 

(iii)                               “or” is not exclusive;

 

(iv)                              “including” means including without limitation;

 

(v)                                 words in the singular include the plural and words in the plural include the singular;

 

(vi)                              any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns; and

 

(vii)                           the words “hereof”, “herein” and “hereunder” and words of similar import when used in this Indenture shall refer to this Indenture as a whole and not to any particular provision of this Indenture; Section and subsection references contained in this Indenture are references to Sections and subsections in or to this Indenture unless otherwise specified.

 

ARTICLE TWO

 

THE NOTES

 

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

 

The terms of the Notes set forth in Exhibits hereto are part of the terms of this Indenture.

 

9

 

Section 2.02.                         Execution, Authentication and Delivery.  The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers.  The signature of any such Authorized Officer on the Notes may be manual or facsimile.  Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes.

 

The Indenture Trustee shall, upon receipt of an Issuer Order, authenticate and deliver the Notes for original issue in the Classes and aggregate principal amounts as set forth below:

 

	
Class
    	
 
    	
Aggregate Principal Amount
    	
 
    
	
Class A-1
    	
 
    	
$
    	
126,000,000
    	
 
    
	
Class A-2a
    	
 
    	
$
    	
170,000,000
    	
 
    
	
Class A-2b
    	
 
    	
$
    	
253,000,000
    	
 
    
	
Class A-3
    	
 
    	
$
    	
216,000,000
    	
 
    
	
Class A-4
    	
 
    	
$
    	
85,000,000
    	
 
    

 

The aggregate principal amount of such Classes of Notes Outstanding at any time may not exceed such respective amounts, except as otherwise provided in Section 2.05.

 

Each Note shall be dated the date of its authentication.  The Notes shall initially be issuable as registered Notes in the minimum denomination of $100,000 and in multiples of $1,000 in excess thereof.

 

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

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

 

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

 

10

 

Section 2.04.                         Registration; Registration of Transfer and Exchange.  The Issuer shall cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall provide for the registration of Notes and the registration of transfers of Notes.  The Indenture Trustee shall be “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar.

 

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

 

Upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained as provided in Section 3.02, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Notes of the same Class in any authorized denominations, of a like aggregate principal amount.

 

At the option of the Holder, Notes may be exchanged for other Notes of the same Class in any authorized denominations, of a like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency.  Whenever any Notes are so surrendered for exchange, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes which the Noteholder making the exchange is entitled to receive.

 

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

 

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

 

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

 

Each Person that acquires a Note or a beneficial interest in a Note shall be required to represent, or in the case of a Book-Entry Note, will be deemed to represent by its acceptance of the Note, that (i) it is not, and is not acquiring and will not hold the Note or a beneficial interest in the Note on behalf of or with “plan assets” (as determined under Department of Labor Regulations Section 2510.3-101 or otherwise) of a Plan, or any employee benefit plan subject to Similar Law, or (ii) its acquisition, holding and disposition of the Note or a beneficial interest in the Note do not give rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any Similar Law.  Any transfer with respect to which the representation in clause (i) or (ii) above is not true shall be void ab initio.

 

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The preceding provisions of this Section notwithstanding, the Issuer shall not be required to make and the Note Registrar need not register transfers or exchanges of Notes selected for redemption or of any Note for a period of 15 days preceding the due date for any payment with respect to the Note.

 

(i)                                     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 Notes and the giving of instructions or directions hereunder) as the sole holder of the Notes, and shall have no obligation to the Noteholders;

 

(ii)                                  the rights of Noteholders will be exercised only through the Clearing Agency and will be limited to those established by law and agreements between such Noteholders and the Clearing Agency and/or the Clearing Agency Participants pursuant to the Depository Agreement;

 

(iii)                               whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Notes evidencing a specified percentage of the Outstanding Amount of the Notes, the Clearing Agency will be deemed to represent such percentage only to the extent that it has received instructions to such effect from Noteholders and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes and has delivered such instructions to the Indenture Trustee; and

 

(iv)                              without the consent of the Issuer and the Indenture Trustee, no Note may be transferred by the Clearing Agency except to a successor Clearing Agency that agrees to hold such Note for the account of the Owners or except upon the election of the Owner thereof or a subsequent transferee to hold such Note in physical form.

 

Neither the Indenture Trustee nor the Registrar shall have any responsibility to monitor or restrict the transfer of beneficial ownership in any Note an interest in which is transferable through the facilities of the Clearing Agency.

 

Section 2.05.                         Mutilated, Destroyed, Lost or Stolen Notes.  If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by them to hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Note Registrar or the Indenture Trustee that such Note has been acquired by a protected purchaser, within the meaning of § 8-303 of the UCC, the Issuer shall execute and upon its request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of the same Class and denomination; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof.  If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a protected purchaser, within the meaning of § 8-303 of the UCC, of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a protected purchaser, within the meaning of § 8-303 of the UCC, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.

 

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

 

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

 

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

 

Section 2.06.                         Persons Deemed Owner.  Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee, and any of their respective agents may treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee nor any of their respective agents shall be affected by notice to the contrary.

 

Section 2.07.                         Payment of Principal and Interest; Defaulted Interest.

 

(a)                                 Each Class of Notes shall accrue interest at the related Interest Rate, and such interest shall be payable on each Distribution Date, as specified therein, subject to Section 3.01.  Any installment of interest or principal, if any, payable on any Note which is punctually paid or duly provided for by the Issuer on the applicable Distribution Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date, by wire transfer in immediately available funds to the account designated by such Person and except for the final installment of principal payable with respect to such Note on a Distribution Date or on the related Final Distribution Date, as the case may be (and except for the Redemption Price for any Note called for redemption pursuant to Section 10.01), which shall be payable as provided below.

 

(b)                                 The principal of each Note shall be payable on each Distribution Date to the extent provided in the form of the related Class of Notes set forth as an Exhibit hereto.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable, if not previously paid, on the date on which the maturity of the Notes has been accelerated in the manner provided in Section 5.02.  All principal payments on each Class of Notes shall be made pro rata to the Noteholders of such Class entitled thereto.  The Indenture Trustee shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Distribution Date on which the Issuer expects that the final installment of principal of and interest on such Note will be paid.  Such notice shall be mailed within five Business Days of receipt of notice of termination of the Trust pursuant to Section 9.01(c) of the Trust Agreement and shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment.  Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.02.

 

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(c)                                  If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) at the applicable Interest Rate in any lawful manner.  The Issuer may pay such defaulted interest to the Persons who are Noteholders on a subsequent special record date, which date shall be at least five Business Days prior to the related payment date.  The Issuer shall fix or cause to be fixed any such special record date and payment date and, at least 15 days before any such special record date, the Issuer shall mail to the Indenture Trustee and each Noteholder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

 

Section 2.08.                         Cancellation.  All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture Trustee.  The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.  No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section, except as expressly permitted by this Indenture.  All cancelled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it; provided that such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee.

 

Section 2.09.                         Book-Entry Notes.

 

The Notes, upon original issuance, will be issued in the form of a printed Note or Notes representing the Book-Entry Notes, to be delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Issuer (or held by the Indenture Trustee as custodian for DTC).  Such Notes shall initially be registered on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Noteholder will receive a Definitive Note representing such Noteholder’s interest in such Note, except as provided in Section 2.11.  Unless and until definitive fully registered Notes (the “Definitive Notes”) have been issued to Noteholders pursuant to Section 2.11:

 

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

 

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

 

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

 

(iv)                              the rights of Noteholders shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Noteholders and the Clearing Agency and/or the Clearing Agency Participants;

 

(v)                                 whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Noteholders evidencing a specified percentage of the Outstanding Amount, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Noteholders and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes and has delivered such instructions to the Indenture Trustee; and

 

(vi)                              Pursuant to the Note Depository Agreement, unless and until Definitive Notes are issued pursuant to Section 2.11, the Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of principal of and interest on the Notes to such Clearing Agency Participants.

 

Section 2.10.                         Notices to Clearing Agency.  Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to Noteholders pursuant to Section 2.11, the Indenture Trustee shall give all such notices and communications specified herein to be given to Noteholders of the Notes to the Clearing Agency, and shall have no obligation to the Noteholders.

 

Section 2.11.                         Definitive Notes.  If (i)(A) the Administrator advises the Indenture Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities as described in the applicable Note Depository Agreement, and (B) the Indenture Trustee or the Administrator is unable to locate a qualified successor, (ii) the Administrator or the Owner Trustee, as applicable, notifies the Clearing Agency of its intent to terminate the book-entry system through the Clearing Agency and requests a withdrawal of the Book-Entry Notes held by the Clearing Agency, and after receipt by the Clearing Agency Participants of a notice issued by the Clearing Agency notifying the Clearing Agency Participants of such withdrawal request, the Clearing Agency Participants holding beneficial interests in the Book-Entry Notes agree to initiate such termination, or (iii) after the occurrence of an Event of Default, the Required Holders advise the Indenture Trustee and the Clearing Agency through the Clearing Agency Participants in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of the related Noteholders, then the Indenture Trustee shall notify all Noteholders of the related Class or Classes of Notes, through the Clearing Agency, of the occurrence of any such event and of the availability of Definitive Notes of the related Class of Notes to Noteholders requesting the same.  Upon surrender to the Indenture Trustee of the Note or Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuer shall execute and the Indenture Trustee shall authenticate the Definitive Notes in accordance with the instructions of the Clearing Agency.  None of the Issuer, the Note Registrar or the Indenture Trustee shall be liable for any delay in delivery of such instructions and all such persons may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of Definitive Notes of a Class, the Indenture Trustee shall recognize the Noteholders of the Definitive Notes as Noteholders hereunder.

 

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The Indenture Trustee shall not be liable for any failure by the Indenture Trustee or the Administrator to locate a qualified successor Clearing Agency.  The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing such Notes, as evidenced by their execution of such Notes.

 

Section 2.12.                         Release of Collateral.  Subject to Sections 4.04, 8.04 and 11.01 and the terms of the Transaction Documents, the Indenture Trustee shall release property from the lien of this Indenture only upon receipt of an Issuer Request accompanied by an Officer’s Certificate.

 

Section 2.13.                         Tax Treatment.  The Issuer and the purchasers of the Notes intend, and will act at all times in a manner consistent with the intention, that the Notes be treated as indebtedness for all federal, state, local, and foreign income and franchise tax purposes.  The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance of its Note agree to treat the Notes held by persons other than the Trust Depositor or one of its affiliates for federal, state and local income, single business and franchise tax purposes as indebtedness of the Issuer or the Trust Depositor.

 

Section 2.14.                         Calculation of Class A-2b Rate.  On each LIBOR Determination Date, the Indenture Trustee will calculate the Class A-2b Rate for the related Interest Period and notify the Servicer of the results of such calculation.  All determinations of the Class A-2b Rate by the Indenture Trustee shall, in the absence of manifest error, be conclusive for all purposes and binding on the Noteholders.

 

ARTICLE THREE

 

COVENANTS

 

Section 3.01.                         Payment of Principal and Interest.  The Issuer will duly and punctually pay the principal of and interest, if any, on the Notes in accordance with the terms of the Notes and this Indenture.  Without limiting the foregoing, subject to Section 8.02(c), the Issuer and the Indenture Trustee will cause to be deposited into the Note Distribution Account amounts allocated pursuant to Section 7.05 of the Sale and Servicing Agreement, and cause to be distributed all such amounts on a Distribution Date as deposited therein (i) for the benefit of the Class A-1 Notes, to the Registered Holders of the Class A-1 Notes, (ii) for the benefit of the Class A-2 Notes, to the Registered Holders of the Class A-2 Notes, (iii) for the benefit of the Class A-3 Notes, to the Registered Holders of the Class A-3 Notes, and (iv) for the benefit of the Class A-4 Notes, to the Registered Holders of the Class A-4 Notes.  Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.

 

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

 

Section 3.03.                         Money for Payments to be Held in Trust.  As provided in Section 8.02, all payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Collection Account, the Reserve Fund, or the Note Distribution Account pursuant to Section 8.02(b) and 8.03 shall be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from such accounts for payments of Notes shall be paid over to the Issuer except as provided in this Section.

 

On or before the Business Day immediately preceding each Distribution Date and Redemption Date, the Issuer shall deposit or cause to be deposited in the Note Distribution Account an aggregate sum sufficient to pay the amounts then becoming due under the Notes, such sum to be held in trust for the benefit of the Persons entitled thereto and (unless the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee of its action or failure so to act.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and upon receipt of an Issuer Request shall be deposited by the Indenture Trustee in the Collection Account; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof, and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that if such money or any portion thereof had been previously deposited by the Issuer with the Indenture Trustee for the payment of principal or interest on the Notes; and provided, further, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to or for the account of the Issuer.  The Indenture Trustee may also adopt and employ, at the expense of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but not have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).

 

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

 

Section 3.05.                         Protection of Collateral.  The Issuer intends the security interest Granted pursuant to this Indenture in favor of the Indenture Trustee on behalf of the Noteholders to be prior to all other liens in respect of the Collateral, and the Issuer shall take all actions necessary to obtain and maintain, for the benefit of the Indenture Trustee on behalf of the Noteholders, a first lien on and a first priority, perfected security interest in the Collateral.  The Issuer will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, all as prepared by the Servicer and delivered to the Issuer, and will take such other action necessary or advisable to:

 

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(i)                                     Grant more effectively all or any portion of the Collateral;

 

(ii)                                  maintain or preserve the lien and security interest (and the priority thereof) created by this Indenture or carry out more effectively the purposes hereof;

 

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

 

(iv)                              enforce any of the Collateral;

 

(v)                                 preserve and defend title to the Collateral and the rights of the Indenture Trustee and the Noteholders in such Collateral against the claims of all persons and parties; and

 

(vi)                              pay all taxes or assessments levied or assessed upon the Collateral when due.

 

The Issuer shall file the financing statements on Form UCC-1.  All financing statements filed or to be filed against the Issuer in favor of the Indenture Trustee in connection herewith describing the Collateral shall contain a statement to the following effect:  “A purchase of or security interest in any collateral described in this financing statement, except as permitted in the Indenture, will violate the rights of the Secured Party.”  The Issuer hereby authorizes the Indenture Trustee to file all continuation statements or other instruments required to be executed pursuant to this Section and hereby designates the Indenture Trustee its agent and attorney-in-fact for such purpose; provided, however, that the Indenture Trustee shall have no obligation to monitor or file any financing statements, continuation statements, financing statement amendments or any other instrument.

 

The Issuer authorizes the Indenture Trustee and its counsel to file UCC financing statements in form and substance satisfactory to the Indenture Trustee, describing the collateral as “all assets of the Issuer, whether now owned or existing or hereafter acquired or arising and wheresoever located, and all proceeds and products thereof” or words to that effect, and any limitations on such collateral description, notwithstanding that such collateral description may be broader in scope than the Collateral described in this Indenture.

 

Section 3.06.                         Opinions as to Collateral.  On the Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel to the effect that, in the opinion of such counsel, either (i) all financing statements have been filed that are necessary to perfect the Indenture Trustee’s security interest in the Collateral for the benefit of the Noteholders, and reciting the details of such filings or (ii) no such action shall be necessary to perfect such security interest.

 

Section 3.07.                         Performance of Obligations; Servicing of Contracts.

 

(a)                                 The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any such Person’s material covenants or obligations under any instrument or agreement included in the Collateral or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the 

 

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validity or effectiveness of, any such instrument or agreement, except as expressly provided in the Transaction Documents or such other instrument or agreement.

 

(b)                                 The Issuer may contract with other Persons to assist it in performing its duties and obligations under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate shall be deemed to be action taken by the Issuer.  The Indenture Trustee shall not be responsible for the action or inaction of the Servicer or the Administrator.  Initially, the Issuer has contracted with the Servicer and the Administrator to assist the Issuer in performing its duties under this Indenture.

 

(c)                                  The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, in the other Transaction Documents and in the instruments and agreements included in the Collateral, including but not limited to filing or causing to be filed all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the Sale and Servicing Agreement in accordance with and within the time periods provided for herein and therein.  Except as otherwise expressly provided therein, the Issuer shall not waive, amend, modify, supplement or terminate any Transaction Document or any provision thereof without the consent of the Indenture Trustee or the Required Holders.

 

(d)                                 If the Issuer shall have knowledge of the occurrence of an Event of Termination, the Issuer shall promptly notify the Indenture Trustee and each Rating Agency thereof.  Upon any termination of the Servicer’s rights and powers pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee.  As soon as a Successor Servicer is appointed, the Issuer shall notify the Indenture Trustee and the Rating Agencies of such appointment, specifying in such notice the name and address of such Successor Servicer.

 

(e)                                  The Issuer agrees that it will not waive timely performance or observance by the Servicer or the Seller of their respective duties under the Transaction Documents if such waiver would adversely affect the Holders of the Notes.

 

Section 3.08.                         Negative Covenants.  Until the Termination Date, the Issuer shall not:

 

(i)                                     except as expressly permitted by the Transaction Documents, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Collateral, unless directed to do so by the Indenture Trustee;

 

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

 

(iii)                               except as may be expressly permitted hereby or by the other Transaction Documents, (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien created by this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenant; or obligations with respect to the Notes under this Indenture, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Collateral or any part thereof or any interest therein or the proceeds thereof (other than Permitted Liens), (C) permit the lien created by this Indenture not to constitute a valid first priority (other than with respect to any Permitted Liens) security interest in the Collateral, or (D) amend, modify or fail to comply with the provisions of the Transaction Documents without the prior 

 

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written consent of the Indenture Trustee, except where the Transaction Documents allow for amendment or modification without the consent or approval of the Indenture Trustee;

 

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

 

(v)                                 except in connection with a transaction under Section 3.10(a), change its name or state of formation.

 

Section 3.09.                         Annual Statement as to Compliance.  The Issuer will deliver to the Indenture Trustee, on or before March 31 of each year commencing March 31, 2015, an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:

 

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

 

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

 

Section 3.10.                         Issuer May Consolidate, etc. Only on Certain Terms.

 

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

 

(i)                                     the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States or any State and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form and substance 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 and each other Transaction Document on the part of the Issuer to be performed or observed, all as provided herein;

 

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

 

(iii)                               the Rating Agency Condition shall have been satisfied with respect to such transaction;

 

(iv)                              the Issuer shall have received an Opinion of Counsel which shall be delivered to and shall be satisfactory to the Indenture Trustee to the effect that such transaction will not have any material adverse tax consequence to the Trust or any Noteholder;

 

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

 

(vi)                              the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel (which shall describe the actions taken as required by clause (v) above or that no such actions will be taken) each stating that such consolidation or merger and such supplemental indenture comply with this Article Three and that all conditions precedent herein provided for relating to such transaction have been complied with; and

 

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(vii)                           the Person (if other than the Issuer) formed by or surviving such consolidation or merger has a net worth, immediately after such consolidation or merger, that is (A) greater than zero and (B) not less than the net worth of the Issuer immediately prior to giving effect to such consolidation or merger.

 

(b)                                 The Issuer shall not convey or transfer all or substantially all of its properties or assets, including those included in the Collateral, to any Person (except as expressly permitted by the Transaction Documents), unless:

 

(i)                                     the Person that acquires by conveyance or transfer the properties and assets of the Issuer shall (A) be a United States citizen or a Person organized and existing under the laws of the United States or any State, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form and substance 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 and each other Transaction Document on the part of the Issuer to be performed or observed, all as provided herein and therein, (C) expressly agree by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Holders of the Notes, and (D) unless otherwise provided in such supplemental indenture, expressly agree to indemnify, defend and hold harmless the Issuer against and from any loss, liability or expense arising under or related to this Indenture and the Notes.

 

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

 

(iii)                               the Rating Agency Condition shall have been satisfied with respect to such transaction;

 

(iv)                              the Issuer shall have received an Opinion of Counsel which shall be delivered to and shall be satisfactory to the Indenture Trustee to the effect that such transaction will not have any material adverse tax consequence to the Trust or any Noteholder;

 

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

 

(vi)                              the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel (which shall describe the actions taken as required by clause (v) above or that no such actions will be taken) each stating that such conveyance or transfer and such supplemental indenture comply with this Article Three and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filings required by Exchange Act); and

 

(vii)                           such Person has a net worth, immediately after such conveyance or transfer, that is (A) greater than zero and (B) not less than the net worth of the Issuer immediately prior to giving effect to such conveyance or transfer.

 

Section 3.11.                         Successor or Transferee.

 

(a)                                 Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall

 

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succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with same effect as if such Person has been named as the Issuer herein.

 

(b)                                 Upon a conveyance or transfer of all or substantially all the assets or properties of the Issuer pursuant to Section 3.10(b), the Issuer will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of written notice to the Indenture Trustee stating that the Issuer is to be so released.

 

Section 3.12.                         No Other Business.  The Issuer shall not engage in any business other than financing, purchasing, owning, selling and managing the Contracts in the manner contemplated by this Indenture and the other Transaction Documents and activities incidental thereto.

 

Section 3.13.                         No Borrowing.  The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any Indebtedness except for (i) the Notes and (ii) any other Indebtedness permitted by or arising under the other Transaction Documents.  The proceeds of the Notes shall be used exclusively to fund the Issuer’s purchase of the Contracts and the other assets specified in the Sale and Servicing Agreement, to fund the Reserve Fund, and to pay the transactional expenses of the Issuer.

 

Section 3.14.                         Servicer’s Obligations.  The Issuer shall cause the Servicer to comply with its obligations under Article Five and Article Nine of the Sale and Servicing Agreement.

 

Section 3.15.                         Guarantees, Loans Advances, and Other Liabilities.  Except as otherwise contemplated by the Transaction Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuming another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, any other interest in, or make any capital contribution to, any other Person.

 

Section 3.16.                         Capital Expenditures.  The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).

 

Section 3.17.                         Restricted Payments.  Except as permitted by the Transaction Documents, the Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security, or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, (A) distributions to the Servicer, the Owner Trustee and the Certificateholder as contemplated by, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement or the Trust Agreement and (B) payments to the Indenture Trustee and

 

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 the Owner Trustee pursuant to Section 1(a)(ii) of the Administration Agreement.  The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with this Indenture and the other Transaction Documents.

 

Section 3.18.                         Notice of Events of Default.  The Issuer agrees to give the Indenture Trustee and each Rating Agency prompt written notice of each Event of Default hereunder and an Event of Termination under the Sale and Servicing Agreement.

 

Section 3.19.                         Further Instruments and Acts.  Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

Section 3.20.                         Compliance with Laws.  The Issuer shall comply with the requirements of all applicable laws, the non-compliance with which would, individually or in the aggregate, materially and adversely affect the ability of the Issuer to perform its obligations under the Notes, this Indenture or any other Transaction Document.

 

Section 3.21.                         Amendments of Sale and Servicing Agreement and Trust Agreement.  The Issuer shall not agree to any amendment to Section 11.01 of the Trust Agreement to eliminate the requirements thereunder that the Indenture Trustee or the Holders of the Notes consent to amendments thereto as provided therein.  Prior to the execution of an amendment pursuant to Section 11.01 of the Sale and Servicing Agreement, the Issuer shall give written notice of such proposed amendment to the Rating Agencies.

 

Section 3.22.                         Removal of Administrator.  So long as any Notes are issued and outstanding, the Issuer shall not remove the Administrator without cause unless the Rating Agency Condition shall have been satisfied in connection with such removal.

 

Section 3.23.                         Creation of a Valid Security Interest.  The Issuer covenants and agrees that the Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Contracts and the other Collateral in favor of the Indenture Trustee, which security interest is prior to all other Liens (other than Permitted Liens) and is enforceable as such against creditors of and purchasers from the Issuer.

 

ARTICLE FOUR

 

SATISFACTION AND DISCHARGE

 

Section 4.01.                         Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further effect with respect to the Notes except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of  principal thereof and interest thereon, (iv) Sections 3.01, 3.03, 3.04, 3.05, 3.07, 3.08, 3.10, 3.11, 3.12, 3.13 and 3.20, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so

 

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deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when

 

(A)                               either

 

(1)                                 all Notes therefore authenticated and delivered (other than (i) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.05 and (ii) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.03) have been delivered to the Indenture Trustee for cancellation; or

 

(2)                                 all Notes not theretofore delivered to the Indenture Trustee for cancellation:

 

(i)                                     have become due and payable, or

 

(ii)                                  will become due and payable at their respective final Distribution Dates within one year, or

 

(iii)                               are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuer,

 

provided, however, that all outstanding Class A-2b Notes must become so due and payable or be so called for redemption on the next succeeding Distribution Date; and provided, further, that the Issuer, in the case of (i), (ii) or (iii) above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States (which will mature prior to the date such amounts are payable), in trust in an Eligible Account for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Note not theretofore delivered to the Indenture Trustee for cancellation when due to the final scheduled Distribution Date;

 

(B)                               the Issuer has paid or performed or caused to be paid or performed all amounts and obligations which the Issuer may owe to or on behalf of the Indenture Trustee for the benefit of the Noteholders under this Indenture or the Notes; and

 

(C)                               the Issuer has delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel and (if required by the TIA or the Indenture Trustee) an Independent Certificate from a firm of certified public accountants, each meeting the applicable requirements of Section 11.01(a) and, subject to Section 11.02, stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with and the Rating Agency Condition has been satisfied.

 

Section 4.02.                         Application of Trust Money.  All moneys deposited with the Indenture Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Registered Holders of the

 

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particular Notes for the payment or redemption of which such moneys have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest; but such moneys need not be segregated from other funds except to the extent required herein or in the Sale and Servicing Agreement or required by law.

 

Section 4.03.                         Repayment of Moneys Held by Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.03 and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

 

Section 4.04.                         Release of Collateral.  Subject to Section 11.01 and the terms of the Transaction Documents, the Indenture Trustee shall release property from the lien of this Indenture only upon receipt of an Issuer Request accompanied by an Officer’s Certificate and an Opinion of Counsel and Independent Certificates in accordance with TIA §§314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates.

 

ARTICLE FIVE

 

REMEDIES

 

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

 

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

 

(ii)                                  default in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable;

 

(iii)                               default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture (other than a covenant or agreement a default in the observance or performance of which is elsewhere in this Section specifically dealt with) which default has a material adverse effect on the Noteholders, or any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or by the Holders of at least 25% of the Outstanding Amount of the Notes a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

 

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(iv)                              the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Collateral in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Collateral, or ordering the winding-up or liquidation of the Issuer’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

 

(v)                                 the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Collateral, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of action by the Issuer in furtherance of any of the foregoing.

 

The Issuer shall deliver to the Indenture Trustee within five days after obtaining knowledge of the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which with the giving of notice and the lapse of time would become an Event of Default under clause (iii) above, its status and what action the Issuer is taking or proposes to take with respect thereto.

 

Section 5.02.                         Rights Upon Event of Default.  If an Event of Default, other than an Event of Default described in Section 5.01(iv) or (v) above, shall have occurred and be continuing the Indenture Trustee or the Required Holders may declare the principal amount of the Notes immediately due and payable at par.  At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article Five provided, the Required Holders may rescind such declaration if (i) the Issuer has made all payments of principal of and interest on all Notes that have become due and payable (other than by reason of acceleration of the Notes) and (ii) the Issuer has paid all amounts due and payable to the Indenture Trustee.  If an Event of Default described in Section 5.01(iv) or (v) shall have occurred and be continuing, the principal amount of the Notes shall become immediately due and payable.

 

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

 

(a)                                 The Issuer covenants that if the Notes are accelerated following the occurrence of an Event of Default, the Issuer will, upon demand of the Indenture Trustee, pay to it, for the benefit of the Holders of the Notes, the whole amount then due and payable on such Notes for principal and interest, with interest upon the overdue principal, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest, at the applicable Interest Rate and in addition thereto such further amount as shall be sufficient to cover costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.

 

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(b)                                 The Indenture Trustee, following the occurrence of an Event of Default, shall have full right, power and authority to take, or refrain from taking, any and all acts with respect to the administration, maintenance or disposition of the Collateral.

 

(c)                                  If an Event of Default occurs and is continuing, the Indenture Trustee may in its discretion (except as provided in Section 5.03(d)), proceed to protect and enforce its rights and the rights of the Noteholders by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

 

(d)                                 Notwithstanding anything to the contrary contained in this Indenture, if an Event of Default shall have occurred and be continuing and if the Issuer fails to perform its obligations under Section 10.01(b) when and as due, the Indenture Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Noteholders by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for specific performance of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law; provided that the Indenture Trustee shall only be entitled to take any such actions to the extent such actions (i) are taken only to enforce the Issuer’s obligations to redeem the principal amount of Notes, and (ii) are taken only against the Collateral.

 

(e)                                  In case there shall be pending, relative to the Issuer or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Collateral, Proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial Proceedings relative to the Issuer or other obligor upon the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such Proceedings or otherwise:

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)                                  All rights of action and of asserting claims under this Indenture or under any of the Notes may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any trial or other Proceedings relative thereto, and any such action or Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the benefit of the Holders of the Notes as provided in Section 5.06.

 

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

 

Section 5.04.                         Remedies.  If an Event of Default shall have occurred and be continuing, the Indenture Trustee (subject to Section 5.12) may, and shall if so directed by the Required Holders in writing:

 

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

 

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

 

(iii)                               exercise any remedies of a secured party under the UCC and any other remedy available to the Indenture Trustee and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee on behalf of the Noteholders under this Indenture or the Notes; and

 

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(iv)                              sell the Collateral or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law; provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Collateral following an Event of Default, unless (A) the Holders of 100% of the Outstanding Amount of the Notes consent thereto, (B) the proceeds of such sale or liquidation distributable to the Noteholders are sufficient to discharge in full all amounts then due and unpaid upon such Notes for principal and interest or (C) there has been an Event of Default described in Section 5.01(i) or (ii) and the Indenture Trustee determines that the Collateral will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared due and payable, and the Indenture Trustee provides prior written notice to the Administrator and obtains the consent of the Required Holders, and the Administrator provides written notice to each Rating Agency.  In determining such sufficiency or insufficiency with respect to clauses (B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Collateral for such purpose.

 

Section 5.05.                         Optional Preservation of the Contracts.  Following an Event of Default and if such Event of Default has not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of the Collateral.  It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Collateral.  In determining whether to maintain possession of the Collateral, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Collateral for such purpose.

 

Section 5.06.                         Priorities.

 

(a)                                 If the Indenture Trustee collects any money or property pursuant to this Article Five, it shall pay out the money or property in the order and priority set forth in Section 7.05(a) or (b), as applicable, of the Sale and Servicing Agreement.

 

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

 

Section 5.07.                         Limitation of Suits.  No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (and in all events subject to Section 11.17 hereof):

 

(i)                                     such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

 

(ii)                                  the Holders of not less than 25% of the Outstanding Amount of the Notes have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

 

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(iii)                               such Holder or Holders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in complying with such request;

 

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

 

(v)                                 no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Required Holders.

 

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

 

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

 

Section 5.08.                         Unconditional Rights of Noteholders to Receive Principal and Interest.  Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

 

Section 5.09.                         Restoration of Rights and Remedies.  If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.

 

Section 5.10.                         Rights and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 5.11.                         Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee or any Holder of any Note to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein.  Every right and remedy

 

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given by this Article Five 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 (subject to Section 5.07) by the Noteholders, as the case may be.

 

Section 5.12.                         Control by Noteholders.  The Required Holders shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided that:

 

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

 

(ii)                                  any direction to the Indenture Trustee to sell or liquidate the Collateral shall be subject to the terms of Section 5.04;

 

(iii)                               if the Indenture Trustee elects to retain the Collateral pursuant to Section 5.05, then any direction to the Indenture Trustee by Holders of Notes representing less than 100% of the Outstanding Amount of the Notes to sell or liquidate the Collateral shall be of no force and effect; and

 

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

 

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

 

Section 5.13.                         Waiver of Past Defaults.  Prior to the time a judgment or decree for payment of money due has been obtained as described in Section 5.03, the Required Holders may waive any past Default or Event of Default and its consequences, except a Default (i) in payment of principal or interest on any of the Notes or (ii) in respect of a covenant or provision hereof that cannot be modified or amended without the consent of all Noteholders.  In the case of any waiver of an Event of Default, the Issuer, the Indenture Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereto.  Upon any such waiver, such Event of Default shall cease to exist and be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

 

Section 5.14.                         Undertaking for Costs.  All parties to this Indenture agree, and each Holder of any Note by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to (i) any suit instituted 

 

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by the Indenture Trustee, (ii) any suit instituted by any Noteholder, or group of Noteholders, in each case holding in the aggregate more than 10% of the Outstanding Amount of the Notes or (iii) any suit 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 such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).

 

Section 5.15.                         Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantages of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

Section 5.16.                         Action on Notes.  The Indenture Trustee’s right to seek and recover judgment on the Notes under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture.  Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Collateral or upon any of the assets of the Issuer.  Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.06.

 

Section 5.17.                         Performance and Enforcement of Certain Obligations.

 

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

 

(b)                                 If an Event of Default has occurred and is continuing, the Indenture Trustee may, and at the direction (which direction shall be in writing, including facsimile) of the Required Holders shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Trust Depositor, or the Servicer under or in connection with the Sale and Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Trust Depositor or the Servicer of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement, and any right of the Issuer to take such action shall be suspended.

 

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ARTICLE SIX

 

THE INDENTURE TRUSTEE

 

Section 6.01.                         Duties of Indenture Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iii)                               the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.12.

 

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

 

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

 

(f)                                   Money held in trust by the Indenture Trustee need not be segregated from other funds except to the extent required by law or the terms of this Indenture or the Sale and Servicing Agreement.

 

(g)                                  No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that

 

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repayments of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

 

(h)                                 The Indenture Trustee shall have no discretionary duties other than performing those ministerial acts set forth above necessary to accomplish the purpose of this Indenture.

 

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

 

Section 6.02.                         Rights of Indenture Trustee.

 

(a)                                 The Indenture Trustee may rely on any document reasonably believed by it to be genuine and to have been signed or presented by the proper person. The Indenture Trustee need not investigate any fact or matter stated in the document.

 

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

 

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

 

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

 

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

 

(f)                                   The Indenture Trustee shall be under no obligation to institute, conduct or defend any litigation under this Indenture or in relation to this Indenture, at the request, order or direction of any of the Holders of Notes, pursuant to the provisions of this Indenture, unless such Holders of Notes shall have offered to the Indenture Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; provided, however, that the Indenture Trustee shall, upon the occurrence of an Event of Default (that has not been cured), exercise the rights and powers vested in it by this Indenture in a manner consistent with Section 6.01.

 

(g)                                  The Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless so requested by the Holders of Notes evidencing not less than 25% of the Outstanding Amount of the Notes; provided, however, that if the payment within a reasonable time to the Indenture Trustee of the costs, expenses  or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Indenture Trustee, not reasonably assured to the Indenture Trustee by the security afforded to it by 

 

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the terms of this Indenture or the Sale and Servicing Agreement, the Indenture Trustee may require reasonable indemnity against such cost, expense or liability as a condition to so proceeding; the reasonable expense of every such examination shall be paid by the Person making such request, or, if paid by the Indenture Trustee, shall be reimbursed by the Person making such request upon demand.

 

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

 

Section 6.04.                         Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Collateral, or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes, and it shall not be 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 6.05.                         Notice of Defaults.  If a Default occurs and is continuing and if it is known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail to each Noteholder notice of the Default within 90 days after it occurs.  Except in the case of a Default in payment of principal of or interest on any Note (including payments pursuant to the redemption of such Notes), the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Noteholders.

 

Section 6.06.                         Reports by Indenture Trustee to Holders.  Within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of this Indenture, the Indenture Trustee shall deliver to each Noteholder such information, including without limitation, IRS Form 1099, as may be required by applicable law to enable such holder to prepare its federal and state income tax returns.

 

Section 6.07.                         Compensation and Indemnity.  The Issuer shall pay or shall cause the Administrator to pay to the Indenture Trustee from time to time reasonable compensation for its services.  The Indenture Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Issuer shall or shall cause the Administrator to reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services.  Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts.  The Issuer shall indemnify or shall cause the Administrator to indemnify the Indenture Trustee against any and all loss, liability or expense (including attorneys’ fees) incurred by it in connection with the administration of this trust and the performance of its duties hereunder.  The Indenture Trustee shall notify the Issuer and the Administrator promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee to so notify the Issuer and the Administrator shall not relieve the Issuer or the Administrator of

 

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its obligations hereunder.  The Issuer shall defend or shall cause the Administrator to defend any such claim, and the Indenture Trustee may have separate counsel and the Issuer shall pay or shall cause the Administrator to pay the fees and expenses of such counsel.  Neither the Issuer nor the Administrator need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith.

 

The Issuer’s payment obligations and indemnification to the Indenture Trustee pursuant to this Section shall survive the resignation or removal of the Indenture Trustee and the termination and discharge of this Indenture; provided that the Indenture Trustee shall be entitled only to compensation for its services for the period prior to the date of such resignation or removal of the Indenture Trustee.  When the Indenture Trustee incurs expenses after the occurrence of an Event of Default specified in Section 5.01(iv) or (v) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or similar law.

 

Section 6.08.                         Replacement of Indenture Trustee.  The Indenture Trustee may resign at any time by so notifying the Issuer and the Servicer.  The Issuer shall remove the Indenture Trustee if:

 

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

 

(ii)                                  a court or banking regulator having jurisdiction in the premises in respect of the Indenture Trustee in an involuntary case or proceeding under federal or state banking or bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency, receivership, conservatorship or other similar law, shall have entered a decree or order granting relief or appointing a receiver, liquidator, assignee, custodian, trustee, conservator, sequestrator (or similar official) for the Indenture Trustee or for any substantial part of the Indenture Trustee’s property, or ordering the winding-up or liquidation of the Indenture Trustee’s affairs, provided any such decree or order shall have continued unstayed and in effect for a period of 30 consecutive days;

 

(iii)                               the Indenture Trustee commences a voluntary case under any federal or state banking or bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency, receivership, conservatorship or other similar law, or consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, conservator, sequestrator or other similar official for the Indenture Trustee or for any substantial part of the Indenture Trustee’s property, or makes any assignment for the benefit of creditors or fails generally to pay its debts as such debts become due or takes any corporate action in furtherance of any of the foregoing; or

 

(iv)                              the Indenture Trustee otherwise becomes incapable of acting.

 

If the Indenture Trustee resigns or is removed, the Issuer shall promptly appoint a successor Indenture Trustee.  A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee and to the Issuer.  Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture.  The Issuer or the successor Indenture Trustee shall mail a notice of its succession to Noteholders.  The retiring

 

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Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

 

If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the Notes may appoint or petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

 

If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

 

Any resignation or removal of the Indenture Trustee and appointment of a successor Indenture Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Indenture Trustee pursuant to this Section and payment of all fees and expenses owed to the outgoing Indenture Trustee.  Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the retiring Indenture Trustee shall be entitled to payment or reimbursement of such amounts as such Person is entitled pursuant to Section 6.07.

 

Section 6.09.                         Successor Indenture Trustee by Merger.  If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11.  The Indenture Trustee shall provide the Administrator with prompt written notice of any such transaction and the Administrator shall provide each Rating Agency prompt notice thereof.

 

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

 

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

 

(a)                                 Notwithstanding any other provision of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Collateral may at the time be located, the Indenture Trustee and the Issuer acting jointly shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-Indenture Trustee or co-Indenture Trustees, jointly with the Indenture Trustee, or separate Indenture Trustee or separate Indenture Trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the Collateral, or any part hereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee and the Administrator may consider necessary or desirable.  If the Administrator shall not have joined in such appointment within 15 days after the receipt by it of a 

 

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request so to do, the Indenture Trustee alone shall have the power to make such appointment.  No co-Indenture Trustee or separate Indenture Trustee hereunder shall be required to meet the terms of eligibility of a successor Indenture Trustee under Section 6.11 and no notice to Noteholders of the appointment of any co-Indenture Trustee or separate Indenture Trustee shall be required under Section 6.08.

 

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

 

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

 

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

 

(iii)                               the Indenture Trustee and the Issuer may at any time accept the resignation of or remove, with or without cause, any separate Indenture Trustee or co-Indenture Trustee.

 

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

 

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

 

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Section 6.11.                         Eligibility.

 

(a)                                 The Indenture Trustee shall at all times satisfy the requirements of TIA §310(a).  The Indenture Trustee hereunder shall at all times be a financial institution organized and doing business under the laws of the United States of America or any state, authorized under such laws to exercise corporate trust powers.  The Indenture Trustee or its parent shall have a long term unsecured debt rating of at least Baa3 by Moody’s shall have a combined capital and surplus of at least $50,000,000 and the Indenture Trustee shall be subject to supervision or examination by federal or state authority; provided that the Indenture Trustee’s separate capital and surplus shall at all times be at least the amount required by Section 310(a)(2) of the TIA.  If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of a supervising or examining authority, then for the purposes of this Section 6.11, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

 

(b)                                 [Reserved.]

 

(c)                                  In the case of an appointment hereunder of a successor Indenture Trustee with respect to any Class of Notes, the Issuer, the retiring Indenture Trustee and the successor Indenture Trustee with respect to such Class of Notes shall execute and deliver an indenture supplement hereto wherein the successor Indenture Trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, the successor Indenture Trustee all rights, powers, trusts and duties of the retiring Indenture Trustee with respect to the Notes of such Class as to which the appointment of such Indenture Trustee relates, (ii) if the retiring Indenture Trustee is not retiring with respect to all Classes of Notes, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Indenture Trustee with respect to the Notes of each Class as to which the retiring Indenture Trustee is not retiring shall continue to be vested in the retiring Indenture Trustee and (iii) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Indenture Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Indenture Trustees co-trustees of the same trust and that each such Indenture Trustee; and upon execution and delivery of such supplemental indenture the resignation or removal of the retiring Indenture Trustee shall become effective to the extent provided therein.

 

(d)                                 In case at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section 6.11, the Indenture Trustee shall resign immediately in the manner and with the effect specified in Section 6.08.  The Indenture Trustee shall comply with TIA §310(b); provided, however, that there shall be excluded from the operation of TIA §310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA §310(b)(1) are met.

 

Section 6.12.                         Pennsylvania Motor Vehicle Sales Finance Act Licenses.  The Indenture Trustee shall use its best efforts to maintain the effectiveness of all licenses required under the Pennsylvania Motor Vehicle Sales Finance Act in connection with this Indenture and the transactions contemplated hereby until the lien and security interest of this Indenture shall no longer be in effect in accordance with the terms hereof.

 

Section 6.13.                         Preferential Collection of Claims Against Issuer.  The Indenture Trustee shall comply with TIA §311(a), excluding any creditor relationship listed in TIA §311(b).  An Indenture Trustee who has resigned or been removed shall be subject to TIA §311(a) to the extent indicated.

 

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Section 6.14.                         Representations and Warranties of Indenture Trustee.  The Indenture Trustee hereby represents and warrants to the Issuer as follows:

 

(a)                                 Organization. It has been duly organized and is validly existing as a national banking association organized under the laws of the United States and has the power to conduct its business and affairs as a trustee.

 

(b)                                 Authorization; Binding Obligations. It has the corporate power and authority to perform the duties and obligations of Indenture Trustee under this Indenture. It has taken all necessary corporate action to authorize the execution, delivery and performance of each Transaction Document to which it is a party, and all of the documents required to be executed by it pursuant hereto and thereto. Upon execution and delivery by the Issuer, this Indenture will constitute the legal, valid and binding obligation of it enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium, and similar laws affecting the rights of creditors and subject to equitable principles (whether enforcement is sought in a legal or equitable proceeding).

 

(c)                                  No Conflict. Neither the execution, delivery and performance of any Transaction Document to which it is a party, nor the consummation of the transactions contemplated thereby, (i) is prohibited by, or requires it to obtain any consent, authorization, approval or registration under, any law, statute, rule, regulation, judgment, order, writ, injunction or decree that is binding upon it or any of its properties or assets or (ii) will violate any provision of, result in any default or acceleration of any obligations under, result in the creation or imposition of any lien pursuant to, or require any consent under, any agreement to which it is a party or by which it or any of its property is bound.

 

(d)                                 No Proceedings. There are no Proceedings pending, or to the best of its knowledge, threatened against it before any federal, state, provincial or other governmental agency, authority, administrator or regulatory body, arbitrator, court or other tribunal, foreign or domestic, that could reasonably be expected to have a material adverse effect on the Collateral or the Noteholders or any action taken or to be taken by it under any Transaction Document to which it is a party.

 

(e)                                  Eligible Trustee. It is an eligible trustee under the TIA as of the Closing Date.

 

ARTICLE SEVEN

 

NOTEHOLDERS’ LISTS AND REPORTS

 

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

 

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Section 7.02.                         Preservation of Information: Communication to Noteholders.

 

(a)                                 The Indenture Trustee shall 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 as provided in Section 7.01 and the names and addresses of Noteholders received by the Indenture Trustee in its capacity as Note Registrar and shall otherwise comply with TIA §312(a).  The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.

 

(b)                                 Noteholders may communicate pursuant to TIA § 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes.

 

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

 

Section 7.03.                         Reports by Issuer.

 

(a)                                 The Issuer shall:

 

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

 

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

 

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

 

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

 

Section 7.04.                         Reports by Indenture Trustee.  If required by TIA §313(a), within 60 days after each January 31st beginning with January 31, 2015, the Indenture Trustee shall mail to each Noteholder as required by TIA §313(c) a brief report dated as of such date that complies with TIA §313(a).  The Indenture Trustee also shall comply with TIA §313(b).

 

A copy of each report at the time of its mailing to Noteholders shall be filed by the Indenture Trustee with the Commission and each stock exchange, if any, on which the Notes are listed.  The Issuer shall notify the Indenture Trustee if and when the Notes are listed on any stock exchange.

 

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ARTICLE EIGHT

 

ACCOUNTS, DISBURSEMENTS AND RELEASES

 

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

 

Section 8.02.                         Trust Accounts.

 

(a)                                 On or prior to the Closing Date, the Issuer shall cause the Servicer to establish and maintain, in the name of the Indenture Trustee, for the benefit of the Noteholders and the Certificateholders, the Trust Accounts as provided in Section 5.05 of the Sale and Servicing Agreement.

 

(b)                                 All Available Monies will be deposited in the Collection Account as provided in Section 5.05 of the Sale and Servicing Agreement.  On or before each Distribution Date, all amounts required to be deposited in the Note Distribution Account with respect to the related Due Period pursuant to Section 7.05 of the Sale and Servicing Agreement will be transferred from the Collection Account and/or the Reserve Fund to the Note Distribution Account.

 

(c)                                  On each Distribution Date, the Indenture Trustee shall distribute all amounts on deposit in the Note Distribution Account to Noteholders in respect of the Notes to the extent of amounts due and unpaid on the Notes for principal and interest in the order and priority set forth in Section 7.05 of the Sale and Servicing Agreement.

 

Section 8.03.                         General Provisions Regarding Accounts.

 

(a)                                 So long as no Default or Event of Default shall have occurred and be continuing, all or a portion of the funds in the Trust Accounts shall be invested in accordance with the provisions of Section 5.05 of the Sale and Servicing Agreement.  Except as otherwise provided in Section 5.05 of the Sale and Servicing Agreement, all income or other gain from investments of moneys deposited in such Trust Accounts (other than the Reserve Fund) shall be deposited by the Indenture Trustee in the Collection Account, and any loss resulting from such investments shall be charged to the related Trust Account, as applicable.  The Issuer will not direct the Indenture Trustee to make any investment of any funds or to sell any investment held in any of the Trust Accounts unless the security interest granted and perfected in such account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Indenture Trustee to make any such investment or sale, if

 

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requested by the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.

 

(b)                                 Subject to Section 6.01(c), the Indenture Trustee shall not in any way be held liable by reason of any insufficiency in any of the  Trust Accounts resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustee’s failure to make payments on such Eligible Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as Indenture Trustee, in accordance with their terms.

 

(c)                                  If (i) the Issuer shall have failed to give investment directions for any funds on deposit in the Trust Accounts to the Indenture Trustee by 11:00 a.m., New York City time (or such other time as may be agreed by the Issuer and Indenture Trustee), on any Business Day or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Notes but the Notes shall not have been declared due and payable pursuant to Section 5.02 or (iii) such Notes shall have been declared due and payable following an Event of Default, but amounts collected or receivable from the Collateral are being applied in accordance with Section 5.05 as if there had not been such a declaration, then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in the Trust Accounts in one or more Eligible Investments satisfying the requirements of clause (d) of the definition thereof.

 

Section 8.04.                         Release of Collateral.

 

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

 

(b)                                 The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have been paid, release any remaining portion of the Collateral that secured the Notes from the lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds then on deposit in the Trust Accounts.  The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA as so stated in the Opinion of Counsel) Independent Certificates in accordance with TIA §§314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01.

 

Section 8.05.                         Opinion of Counsel.  The Indenture Trustee shall receive at least seven days’ notice when requested by the Issuer to take any action pursuant to Section 8.04(a), accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, as a condition to such action, an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders in contravention of the provisions for this Indenture; provided, however, that such Opinion of Counsel shall

 

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not be required to express an opinion as to the fair value of the Collateral.  Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.

 

ARTICLE NINE

 

SUPPLEMENTAL INDENTURES

 

Section 9.01.                         Supplemental Indentures Without Consent of Noteholders.

 

(a)                                 Without the consent of the Holders of any Notes and with prior notice by the Issuer to each Rating Agency, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, and the other parties hereto at any time from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:

 

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

 

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

 

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

 

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

 

(v)                                 to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture which may be inconsistent with any other provision herein, in any supplemental indenture, in the Transaction Documents or in the Prospectus or to add any other provisions with respect to matters or questions arising under this Indenture, in any supplemental indenture, in the Transaction Documents or in the Prospectus; provided that such action shall not adversely affect the interests of the Holders of the Notes;

 

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

 

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

 

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

 

(b)                                 The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Notes and with prior notice by the Issuer to each Rating Agency, enter into an indenture or indentures supplemental hereto 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 the rights of the Holders of the Notes under this Indenture; provided, however, that such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of any Noteholder.

 

Section 9.02.                         Supplemental Indentures With Consent of Noteholders.

 

(a)                                 The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, with prior notice by the Issuer to each Rating Agency and with the consent of the Required Holders, by Act of such Required Holders delivered to the Issuer and the Indenture Trustee, enter into an indenture or indentures supplemental hereto 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 the rights of the Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:

 

(i)                                     change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the interest rate thereon or the Redemption Date Amount with respect thereto, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Collateral to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article Five, to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);

 

(ii)                                  reduce the percentage of the Outstanding Amount of the Notes, the consent of the Holders of which is required for any such supplemental indenture or any amendment to the other Transaction Documents, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

 

(iii)                               modify or alter the provisions of the second proviso to the definition of the term “Outstanding”;

 

(iv)                              reduce the percentage of the Outstanding Amount of the Notes, the consent of the Holders of which is required to direct the Indenture Trustee to sell or liquidate the Collateral pursuant to Section 5.04;

 

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

 

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(vi)                              permit the creation of any lien ranking prior to or on a parity with the lien created by this Indenture with respect to any part of the Collateral or, except as otherwise permitted or contemplated herein, terminate the lien created by this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security provided by the lien created by this Indenture.

 

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

 

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

 

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

 

Section 9.03.                         Execution of Supplemental Indentures.  In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02 shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.

 

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

 

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

 

Section 9.06.                         Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture

 

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Trustee as to any matter provided for in such supplemental indenture.  If the Issuer or the Indenture Trustee shall so determine, new notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

 

ARTICLE TEN

 

REDEMPTION OF NOTES

 

Section 10.01.                  Redemption.

 

(a)                                 In the event that the Servicer purchases all outstanding Contracts and the related Contract Assets pursuant to Section 7.10 of the Sale and Servicing Agreement, the Notes are subject to redemption in whole, but not in part, on the Distribution Date on which such purchase occurs, for a purchase price equal to the outstanding principal, and accrued interest on the Notes; provided, however, that the Issuer has available funds sufficient to pay such amounts.  The Servicer or the Issuer shall furnish each Rating Agency notice of such redemption.  If the Notes are to be redeemed pursuant to this Section 10.01(a), the Servicer or the Issuer shall furnish notice of such election to the Indenture Trustee not later than 20 days prior to the Redemption Date and the Issuer shall deposit with the Indenture Trustee in the Note Distribution Account the Redemption Date Amount to be redeemed whereupon all such Notes shall be due and payable on the Redemption Date upon the furnishing of a notice complying with Section 10.02 to each Holder of the Notes.

 

(b)                                 In the event that the assets of the Trust are sold pursuant to Article Five of this Indenture, the proceeds of such sale shall be distributed as provided in Section 5.06.  If amounts are to be paid to Noteholders pursuant to this Section 10.01(b), the Servicer or the Issuer shall, to the extent practicable, furnish notice of such event to the Indenture Trustee not later than 20 days prior to the Redemption Date whereupon all such amounts shall be payable on the Redemption Date.

 

Section 10.02.                  Form of Redemption Notice.

 

(a)                                 Notice of redemption under Section 10.01(a) shall be given by the Indenture Trustee by first-class mail, postage prepaid, mailed not less than five days prior to the applicable Redemption Date to each Holder of Notes, as of the close of business on the Record Date preceding the applicable Redemption Date, at such Holder’s address appearing in the Note Register.

 

All notices of redemption shall state:

 

(i)                                     the Redemption Date;

 

(ii)                                  the Redemption Date Amount; and

 

(iii)                               the place where such Notes are to be surrendered for payment of the Redemption Date Amount (which shall be the office or agency of the Issuer to be maintained as provided in Section 3.02).

 

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

 

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(b)                                 Prior notice of redemption under Section 10.01(b) is not required to be given to Noteholders.

 

Section 10.03.                  Notes Payable on Redemption Date.  The Notes or portions thereof to be redeemed shall, following notice of redemption (if any) as required by Section 10.02, on the Redemption Date become due and payable at the Redemption Date Amount and (unless the Issuer shall default in the payment of the Redemption Date Amount) no interest shall accrue on the Redemption Date Amount for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Date Amount.

 

ARTICLE ELEVEN

 

MISCELLANEOUS

 

Section 11.01.                  Compliance Certificates and Opinions, etc.

 

(a)                                 Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, and (iii) (if required by the TIA as so stated in the Opinion of Counsel) an Independent Certificate from a firm of certified public accountants meeting the applicable requirements of this Section and TIA §314(c), except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.  No additional certificate or opinion need be furnished.

 

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

 

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

 

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

 

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

 

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

 

(b)                                 (i)                                     Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for authentication and delivery of the Notes or the release of any property subject to the lien created by this Indenture, the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture

 

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Trustee an Officer’s Certificate certifying or stating the opinion of the signer thereof as to the fair value (within 90 days of such deposit) of the Collateral or other property or securities to be so deposited.

 

(ii)                                  Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate as to the named matters, if the fair value to the Issuer of the property to be so deposited and of all other such property made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or more of the Outstanding Amount of the Notes, but such a certificate need not be furnished with respect to any property so deposited, if the fair value thereof to the Issuer as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the Outstanding Amount of the Notes.

 

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

 

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

 

(v)                                 Notwithstanding any other provision of this Section, the Issuer may, without compliance with the other provisions of this Section, (A) collect, liquidate, sell or otherwise dispose of the Contracts as and to the extent permitted or required by the Transaction Documents, and (B) make cash payments out of the Trust Accounts as and to the extent permitted or required by the Transaction Documents, so long as the Issuer shall deliver to the Indenture Trustee every six months, commencing December 31, 2014, an Officer’s Certificate stating that all the dispositions of Collateral described in clauses (A) or (B) that occurred during the preceding six calendar months were in the ordinary course of the Issuer’s business and that the proceeds thereof were applied in accordance with the Transaction Documents.

 

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

 

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other such Person as to other matters, and any such Person may certify or given an opinion as to such matters in one or several documents.

 

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

 

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

 

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

 

Section 11.03.                  Acts of Noteholders.

 

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

 

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

 

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

 

(d)                                 Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration

 

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thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

 

Section 11.04.                  Notices.  All notices, demands, certificates, requests and communications hereunder (“notices”) shall be in writing and shall be effective (a) upon receipt when sent through the U.S. mail, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, or (b) upon receipt when sent through an overnight courier, or (c) on the date personally delivered to an Authorized Officer of the party to which sent, or (d) on the date transmitted by legible telecopier or electronic mail transmission with a confirmation of receipt, in all cases addressed to the recipient at the address specified in the Sale and Servicing Agreement for such recipient.  Each party hereto may, by notice given in accordance herewith to each of the other parties hereto, designate any further or different address to which subsequent notices shall be sent.

 

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

 

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

 

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

 

Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, (except in cases where notice to the Rating Agencies is required to satisfy the Rating Agency Condition) and shall not under any circumstance constitute a Default or Event of Default.

 

Section 11.06.                  Alternate Payment and Notice Provisions.  Notwithstanding any provisions of this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement with any Holder of a Note providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to such Holder, that is different from the methods provided for in this Indenture for such payments or notices.  The Issuer will furnish to the

 

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Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with such agreements.

 

Section 11.07.                  Effect of Headings and Table of Contents.  The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 11.08.                  Successors and Assigns.  All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-Indenture Trustees, separate Indenture Trustees and agents.

 

Section 11.09.                  Separability.  In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 11.10.                  Benefits of Indenture.  Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Noteholders and any other party secured hereunder, and any other Person with an ownership interest in any part of the Collateral, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 11.11.                  Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.

 

Section 11.12.                  Governing Law.  THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 11.13.                  Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS INDENTURE OR ANY OTHER RELATED DOCUMENT OR FOR ANY COUNTERCLAIM THEREIN OR RELATING THERETO.

 

Section 11.14.                  Counterparts.  This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

 

Section 11.15.                  Recording of Indenture.  If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect

 

53

 

that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

 

Section 11.16.                  Trust Obligation.  No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficiary interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.  For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles Six, Seven and Eight of the Trust Agreement.

 

Section 11.17.                  No Petition.  The parties hereto, by entering into this Indenture, and each Noteholder, by accepting a Note or a beneficial interest in a Note, hereby covenant and agree that they will not at any time institute against the Trust Depositor or the Issuer, or join in any institution against the Trust Depositor or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the other Transaction Documents.

 

Section 11.18.                  Inspection.  The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees and independent certified public accountants, all at such reasonable times and as often as may be reasonably requested.  The Indenture Trustee shall and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder.

 

Section 11.19.                  Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

 

54

 

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

 

Section 11.20.                  Disclaimer and Subordination.  Each Noteholder by accepting a Note or a beneficial interest in a Note acknowledges and agrees that such Note represents a debt obligation of the Issuer only and does not represent an interest in any assets of the Trust Depositor (including by virtue of any deficiency claim in respect of obligations not paid or otherwise satisfied from the Trust Estate and proceeds thereof).  In furtherance of and not in derogation of the foregoing, each Noteholder by accepting a Note or a beneficial interest therein acknowledges and agrees that it shall have no right, title or interest in or to any assets (or interests therein) conveyed or purported to be conveyed by the Trust Depositor to another securitization trust (i.e., other than the Issuer) or other Person or Persons in connection therewith (whether by way of a sale, capital contribution or by virtue of the granting of a Lien) (“Other Assets”).  To the extent that, notwithstanding the agreements and provisions contained in the preceding sentences of this Section 11.20, any Noteholder either (i) asserts an interest in or claim to, or benefit from, Other Assets, whether asserted against or through the Trust Depositor or any other Person owned by the Trust Depositor, or (ii) is deemed to have any such interest, claim or benefit in or from Other Assets, whether by operation of law, legal process, pursuant to applicable provisions of any applicable insolvency laws or otherwise (including without limitation by virtue of Section 1111(b) of the federal Bankruptcy Code or any successor provision having similar effect under the Bankruptcy Code or any successor provision having similar effect under the Bankruptcy Code), and whether deemed asserted against or through the Trust Depositor or any other Person owned by the Trust Depositor, then each Noteholder by accepting a Note or beneficial interest in a Note further acknowledges and agrees that any such interest, claim or benefit in or from Other Assets is and shall be expressly subordinated to the indefeasible payment in full of all obligations and liabilities of the Trust Depositor which, under the terms of the relevant documents relating to the securitization of such Other Assets, are entitled to be paid from, entitled to the benefits of, or otherwise secured by such Other Assets (whether or not any such entitlement or security interest is legally perfected or otherwise entitled to a priority of distribution or application under applicable law, including any applicable insolvency laws, and whether asserted against the Trust Depositor or any other Person owned by the Depositor), including, without limitation, the payment of post-petition interest on such other obligations and liabilities.  This subordination agreement shall be deemed a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code.  Each Noteholder further acknowledges and agrees that no adequate remedy at law exists for a breach of this Section 11.20 and that the terms and provisions of this Section 11.20 may be enforced by an action for specific performance.

 

Section 11.21.                  Communications with Rating Agencies.  If the Indenture Trustee shall receive any written or oral communication from any Rating Agency (or any of their respective officers, directors or employees) with respect to the transactions contemplated hereby or under the Transaction Documents or in any way relating to the Notes, the Indenture Trustee agrees to refrain from communicating with such Rating Agency and to promptly (and, in any event, within one Business Day) notify the Administrator of such communication.  The Indenture Trustee agrees to act at the direction of the Administrator

 

55

 

with respect to any communication to a Rating Agency and further agrees that in no event shall the Indenture Trustee engage in any oral communication with respect to the transactions contemplated hereby or under the Transaction Documents or in any way relating to the Notes with any Rating Agency (or any of their respective officers, directors or employees) without the participation of the Administrator.

 

[signature page follows]

 

56

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed and delivered as of the day and year first above written.

 

	
 
    	
HARLEY-DAVIDSON   MOTORCYCLE TRUST 2014-1
    
	
 
    	
 
    
	
 
    	
By:
    	
Wilmington   Trust, National Association, not in its individual capacity but solely on   behalf of the Issuer as Owner Trustee under the Trust Agreement
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeanne M. Oller
    
	
 
    	
 
    	
Printed   Name: Jeanne M. Oller
    
	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David H. Hill
    
	
 
    	
 
    	
Printed   Name: David H. Hill
    
	
 
    	
 
    	
Title:   Vice President
    
				

 

Signature Page to Indenture

 

 

	
STATE   OF ILLINOIS
    	
)
    	
 
    
	
 
    	
)
    	
SS
    
	
COUNTY   OF COOK
    	
)
    	
 
    

 

	
On
    	
 
    	
April   10, 2014
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
[insert date]
    	
 
    	
 
    

 

	
before   me,
    	
Colleen   Sketch
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
[Insert name and title of notary]
    	
 
    

 

	
personally   appeared
    	
David   H. Hill
    	
,
    	
 
    	
 
    

 

x                                  personally known to me, or

 

o                                    proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument,

 

and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which such person(s) acted, executed the instrument.

 

WITNESS my hand and official seal.

 

 

	
Signature
    	
 
    	
[Seal]
    
	
/s/   Colleen Sketch
    	
 
    	
 
    
	
COLLEEN   SKETCH
    	
 
    	
 
    
	
NOTARY   PUBLIC–STATE OF ILLINOIS
    	
 
    	
 
    
	
MY   COMMISSION EXPIRES MAY 20, 2017
    	
 
    	
 
    

 

 

	
STATE   OF DELAWARE
    	
)
    	
 
    
	
 
    	
)
    	
SS
    
	
COUNTY   OF NEW CASTLE
    	
)
    	
 
    

 

	
On
    	
 
    	
4/10/14
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
[insert date]
    	
 
    
	
 
    	
 
    	
 
    
	
before   me,
    	
Jacqueline   Solone
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[Insert name and title of notary]
    	
 
    

 

	
personally   appeared
    	
Jeanne   M. Oller
    	
,
    	
 
    

 

x                                  personally known to me, or

 

o                                    proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument,

 

and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which such person(s) acted, executed the instrument.

 

WITNESS my hand and official seal.

 

 

	
Signature
    	
 
    	
[Seal]
    
	
/s/   Jacqueline Solone
    	
 
    	
 
    
	
JACQUELINE   SOLONE
    	
 
    	
 
    
	
NOTARY   PUBLIC–STATE OF DELAWARE
    	
 
    	
 
    
	
MY   COMM. EXPIRES MARCH 9, 2015
    	
 
    	
 
    

 

 

EXHIBIT A-1

 

FORM OF CLASS A-1 NOTE

 

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

 

THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2014-1

 

0.20000% MOTORCYCLE CONTRACT BACKED NOTES, CLASS A-1

 

	
REGISTERED
    	
 
    	
$126,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
No. R-
    	
 
    	
CUSIP No. 41284A AA6
    	
 
    

 

Harley-Davidson Motorcycle Trust 2014-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of ONE HUNDRED TWENTY-SIX MILLION DOLLARS ($126,000,000) payable on the earlier of the Distribution Date occurring in April 2015 (the “Class A-1 Final Distribution Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture referred to herein.  Any capitalized term utilized but not defined herein shall have the meaning set forth in the Indenture (as hereinafter defined)

 

The Issuer will pay interest on this Note at the rate per annum shown above on each Distribution 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 Distribution Date (after giving effect to all payments of principal made on the preceding Distribution Date), subject to certain limitations contained in Section 3.01 of the Indenture.  Interest on this Note will accrue for each Distribution Date during the related Interest Period and will be computed for the actual number of days elapsed in the related Interest Period based on a 360-day year.  Such principal of and interest on this Note shall be paid in the manner specified herein.

 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

A-1-1

 

All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 0.20000% Motorcycle Contract Backed Notes, Class A-1 (the “Class A-1 Notes”), all issued under an Indenture, dated as of April 1, 2014 (the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-1 Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture or the Sale and Servicing Agreement, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture or the Sale and Servicing Agreement, as the case may be, as so supplemented or amended.

 

The Class A-1 Notes and the other Classes of Notes described in the Indenture (collectively, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture subject to the priorities of allocations as to interest and principal payments as described in the Sale and Servicing Agreement.

 

Principal of the Class A-1 Notes will be payable on the earlier of the Class A-1 Final Distribution Date and the Redemption Date, if any, established pursuant to Section 10.01(a) or 10.01(b) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Class A-1 Notes shall be due and payable on the date on which the maturity of the Notes shall have been accelerated following the occurrence of an Event of Default in the manner provided in the Indenture.  All principal payments on the Class A-1 Notes shall be made pro rata to the Class A-1 Noteholders entitled thereto.

 

Payments of interest on this Note due and payable on each Distribution Date shall be made by wire transfer to the account of the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on the related Record Date except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) affected by any payments made on any Distribution Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Distribution Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Distribution Date by notice mailed within five days before such Distribution Date and the amount then due and payable shall be payable only upon 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 such purposes located in the City of Wilmington, Delaware.

 

The Issuer shall pay interest on overdue installments of interest at the Class A-1 Rate to the extent lawful.

 

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.01(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Distribution Date on or after the date on which the Pool Balance is less than 10% of the Pool Balance as of the Cutoff Date.

 

A-1-2

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an eligible guarantor institution which is a participant in the Securities Transfer Agent’s Medallion Program (STAMP) or similar signature guarantee program, and such other documents as the Indenture Trustee may require, and thereupon one or more new Class A-1 Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

 

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

 

Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, covenants and agrees that by accepting the benefits of the Indenture and such Note that such Noteholder will not at any time institute against the Trust Depositor or the Issuer, or join in any institution against the Trust Depositor or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Transaction Documents.

 

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

 

Prior to the due presentment for registration of transfer of this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer and the Indenture Trustee, with the consent of the

 

A-1-3

 

Required Holders.  The Indenture also contains provisions permitting the Holders of the Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one of more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

 

Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, is deemed to represent that (i) it is not, and is not acquiring and will not hold a Note or a beneficial interest in a Note on behalf of or with “plan assets” (as determined under Department of Labor Regulations Section 2510.3-101 or otherwise) of a Plan, or any employee benefit plan subject to Similar Law, or (ii) its acquisition, holding and disposition of a Note or a beneficial interest in a Note do not give rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any Similar Law.  Each Noteholder, by acceptance of a Note or a beneficial interest in a Note is deemed to make one of the foregoing representations.

 

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of Illinois, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

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

 

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

 

A-1-4

 

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

 

 

	
Date:   April 16, 2014
    	
 
    	
HARLEY-DAVIDSON   MOTORCYCLE TRUST 2014-1
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Wilmington   Trust, National Association, not in its individual capacity but solely on   behalf of the Issuer as Owner Trustee, under the Trust Agreement
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Printed   Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
						

 

A-1-5

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
 
    	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., not in its individual capacity but   solely as Indenture Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

A-1-6

 

EXHIBIT A-2a

 

FORM OF CLASS A-2a NOTE

 

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

 

THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2014-1

 

0.49% MOTORCYCLE CONTRACT BACKED NOTES, CLASS A-2a

 

	
REGISTERED
    	
 
    	
$170,000,000
    
	
 
    	
 
    	
 
    
	
No. R-
    	
 
    	
CUSIP No. 41284A AB4
    

 

Harley-Davidson Motorcycle Trust 2014-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of ONE HUNDRED SEVENTY MILLION DOLLARS ($170,000,000) payable on the earlier of the Distribution Date occurring in April 2018 (the “Class A-2a Final Distribution Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture referred to herein.  No payments of principal of the Class A-2a Notes shall be made until the principal of the Class A-1 Notes has been paid in full.  Any capitalized term utilized but not defined herein shall have the meaning set forth in the Indenture (as hereinafter defined)

 

The Issuer will pay interest on this Note at the rate per annum shown above on each Distribution 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 Distribution Date (after giving effect to all payments of principal made on the preceding Distribution Date), subject to certain limitations contained in Section 3.01 of the Indenture.  Interest on this Note will accrue for each Distribution Date during the related Interest Period and will be computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified herein.

 

A-2a-1

 

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

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 0.49% Motorcycle Contract Backed Notes, Class A-2a (the “Class A-2a Notes”), all issued under an Indenture, dated as of April 1, 2014 (the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-2a Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture or the Sale and Servicing Agreement, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture or the Sale and Servicing Agreement, as the case may be, as so supplemented or amended.

 

The Class A-2a Notes and the other Classes of Notes described in the Indenture (collectively, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture subject to the priorities of allocations as to interest and principal payments as described in the Sale and Servicing Agreement.

 

Principal of the Class A-2a Notes will be payable on the earlier of the Class A-2a Final Distribution Date and the Redemption Date, if any, established pursuant to Section 10.01(a) or 10.01(b) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Class A-2a Notes shall be due and payable on the date on which the maturity of the Notes shall have been accelerated following the occurrence of an Event of Default in the manner provided in the Indenture.  All principal payments on the Class A-2a Notes shall be made pro rata to the Class A-2a Noteholders entitled thereto.

 

Payments of interest on this Note due and payable on each Distribution Date shall be made by wire transfer to the account of the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on the related Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) affected by any payments made on any Distribution Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Distribution Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Distribution Date by notice mailed within five days before such Distribution Date and the amount then due and payable shall be payable only upon 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 such purposes located in the City of Wilmington, Delaware.

 

The Issuer shall pay interest on overdue installments of interest at the Class A-2a Rate to the extent lawful.

 

A-2a-2

 

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.01(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Distribution Date on or after the date on which the Pool Balance is less than 10% of the Pool Balance as of the Cutoff Date.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an eligible guarantor institution which is a participant in the Securities Transfer Agent’s Medallion Program (STAMP) or similar signature guarantee program and such other documents as the Indenture Trustee may require, and thereupon one or more new Class A-2a Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

 

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

 

Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, covenants and agrees that by accepting the benefits of the Indenture and such Note that such Noteholder will not at any time institute against the Trust Depositor or the Issuer, or join in any institution against the Trust Depositor or the Issuer of any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Transaction Documents.

 

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

 

Prior to the due presentment for registration of transfer of this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

 

A-2a-3

 

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

 

Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, is deemed to represent that (i) it is not, and is not acquiring and will not hold a Note or a beneficial interest in a Note on behalf of or with “plan assets” (as determined under Department of Labor Regulations Section 2510.3-101 or otherwise) of a Plan, or any employee benefit plan subject to Similar Law, or (ii) its acquisition, holding and disposition of a Note or a beneficial interest in a Note do not give rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any Similar Law.  Each Noteholder, by acceptance of a Note or a beneficial interest in a Note is deemed to make one of the foregoing representations.

 

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of Illinois, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

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

 

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

 

A-2a-4

 

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

 

	
Date:   April 16, 2014
    	
 
    	
HARLEY-DAVIDSON   MOTORCYCLE TRUST 2014-1
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Wilmington   Trust, National Association, not in its individual capacity but solely on   behalf of the Issuer as Owner Trustee, under the Trust Agreement
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Printed   Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
						

 

A-2a-5

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
 
    	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., not in its individual capacity   but solely as Indenture Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

A-2a-6

 

EXHIBIT A-2b

 

FORM OF CLASS A-2b NOTE

 

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

 

THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2014-1

 

FLOATING RATE MOTORCYCLE CONTRACT BACKED NOTES, CLASS A-2b

 

	
REGISTERED
    	
$253,000,000     
    
	
 
    	
 
    
	
No. R-
    	
CUSIP No. 41284A AC2     
    

 

Harley-Davidson Motorcycle Trust 2014-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of TWO HUNDRED FIFTY-THREE MILLION DOLLARS ($253,000,000) payable on the earlier of the Distribution Date occurring in April 2018 (the “Class A-2b Final Distribution Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture referred to herein.  No payments of principal of the Class A-2b Notes shall be made until the principal of the Class A-1 Notes has been paid in full.  Any capitalized term utilized but not defined herein shall have the meaning set forth in the Indenture (as hereinafter defined).

 

The Issuer will pay interest on this Note at a rate equal, for each Interest Period, to LIBOR determined in accordance with the terms of the Indenture on the related LIBOR Determination Date plus 0.17% per annum until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Distribution Date (after giving effect to all payments of principal made on the preceding Distribution Date), subject to certain limitations contained in Section 3.01 of the Indenture.  Interest on this Note will accrue for each Distribution Date during the related Interest Period and will be computed for the actual number of days elapsed in the related Interest Period based on a 360-day year.  Such principal of and interest on this Note shall be paid in the manner specified herein.

 

A-2b-1

 

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

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Floating Rate Motorcycle Contract Backed Notes, Class A-2b (the “Class A-2b Notes”), all issued under an Indenture, dated as of April 1, 2014 (the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-2b Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture or the Sale and Servicing Agreement, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture or the Sale and Servicing Agreement, as the case may be, as so supplemented or amended.

 

The Class A-2b Notes and the other Classes of Notes described in the Indenture (collectively, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture subject to the priorities of allocations as to interest and principal payments as described in the Sale and Servicing Agreement.

 

Principal of the Class A-2b Notes will be payable on the earlier of the Class A-2b Final Distribution Date and the Redemption Date, if any, established pursuant to Section 10.01(a) or 10.01(b) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Class A-2b Notes shall be due and payable on the date on which the maturity of the Notes shall have been accelerated following the occurrence of an Event of Default in the manner provided in the Indenture.  All principal payments on the Class A-2b Notes shall be made pro rata to the Class A-2b Noteholders entitled thereto.

 

Payments of interest on this Note due and payable on each Distribution Date shall be made by wire transfer to the account of the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on the related Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) affected by any payments made on any Distribution Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Distribution Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Distribution Date by notice mailed within five days before such Distribution Date and the amount then due and payable shall be payable only upon 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 such purposes located in the City of Wilmington, Delaware.

 

The Issuer shall pay interest on overdue installments of interest at the Class A-2b Rate to the extent lawful.

 

A-2b-2

 

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.01(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Distribution Date on or after the date on which the Pool Balance is less than 10% of the Pool Balance as of the Cutoff Date.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an eligible guarantor institution which is a participant in the Securities Transfer Agent’s Medallion Program (STAMP) or similar signature guarantee program and such other documents as the Indenture Trustee may require, and thereupon one or more new Class A-2b Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

 

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

 

Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, covenants and agrees that by accepting the benefits of the Indenture and such Note that such Noteholder will not at any time institute against the Trust Depositor or the Issuer, or join in any institution against the Trust Depositor or the Issuer of any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Transaction Documents.

 

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

 

Prior to the due presentment for registration of transfer of this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

 

A-2b-3

 

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

 

Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, is deemed to represent that (i) it is not, and is not acquiring and will not hold a Note or a beneficial interest in a Note on behalf of or with “plan assets” (as determined under Department of Labor Regulations Section 2510.3-101 or otherwise) of a Plan, or any employee benefit plan subject to Similar Law, or (ii) its acquisition, holding and disposition of a Note or a beneficial interest in a Note do not give rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any Similar Law.  Each Noteholder, by acceptance of a Note or a beneficial interest in a Note is deemed to make one of the foregoing representations.

 

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of Illinois, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

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

 

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

 

A-2b-4

 

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

 

	
Date:   April 16, 2014
    	
HARLEY-DAVIDSON   MOTORCYCLE TRUST 2014-1
    
	
 
    	
 
    
	
 
    	
By:
    	
Wilmington   Trust, National Association, not in its individual capacity but solely on   behalf of the Issuer as Owner Trustee, under the Trust Agreement
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Printed   Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

A-2b-5

 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., not in its individual capacity   but solely as Indenture Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Authorized   Signatory
    

 

A-2b-6

 

EXHIBIT A-3

 

FORM OF CLASS A-3 NOTE

 

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

 

THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2014-1

 

1.10% MOTORCYCLE CONTRACT BACKED NOTES, CLASS A-3

 

	
REGISTERED
    	
$216,000,000     
    
	
 
    	
 
    
	
No. R-
    	
CUSIP No. 41284A AD0     
    

 

Harley-Davidson Motorcycle Trust 2014-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of TWO HUNDRED SIXTEEN MILLION DOLLARS ($216,000,000) payable on the earlier of the Distribution Date occurring in September 2019 (the “Class A-3 Final Distribution Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture referred to herein.  No payments of principal of the Class A-3 Notes shall be made until the principal of the Class A-1 Notes has been paid in full.  Any capitalized term utilized but not defined herein shall have the meaning set forth in the Indenture (as hereinafter defined)

 

The Issuer will pay interest on this Note at the rate per annum shown above on each Distribution 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 Distribution Date (after giving effect to all payments of principal made on the preceding Distribution Date), subject to certain limitations contained in Section 3.01 of the Indenture.  Interest on this Note will accrue for each Distribution Date during the related Interest Period and will be computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified herein.

 

A-3-1

 

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

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 1.10% Motorcycle Contract Backed Notes, Class A-3 (the “Class A-3 Notes”), all issued under an Indenture, dated as of April 1, 2014 (the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-3 Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture or the Sale and Servicing Agreement, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture or the Sale and Servicing Agreement, as the case may be, as so supplemented or amended.

 

The Class A-3 Notes and the other Classes of Notes described in the Indenture (collectively, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture subject to the priorities of allocations as to interest and principal payments as described in the Sale and Servicing Agreement.

 

Principal of the Class A-3 Notes will be payable on the earlier of the Class A-3 Final Distribution Date and the Redemption Date, if any, established pursuant to Section 10.01(a) or 10.01(b) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Class A-3 Notes shall be due and payable on the date on which the maturity of the Notes shall have been accelerated following the occurrence of an Event of Default in the manner provided in the Indenture.  All principal payments on the Class A-3 Notes shall be made pro rata to the Class A-3 Noteholders entitled thereto.

 

Payments of interest on this Note due and payable on each Distribution Date shall be made by wire transfer to the account of the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on the related Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) affected by any payments made on any Distribution Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Distribution Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Distribution Date by notice mailed within five days before such Distribution Date and the amount then due and payable shall be payable only upon 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 such purposes located in the City of Wilmington, Delaware.

 

The Issuer shall pay interest on overdue installments of interest at the Class A-3 Rate to the extent lawful.

 

A-3-2

 

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.01(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Distribution Date on or after the date on which the Pool Balance is less than 10% of the Pool Balance as of the Cutoff Date.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an eligible guarantor institution which is a participant in the Securities Transfer Agent’s Medallion Program (STAMP) or similar signature guarantee program, and such other documents as the Indenture Trustee may require, and thereupon one or more new Class A-3 Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

 

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

 

Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, covenants and agrees that by accepting the benefits of the Indenture and such Note that such Noteholder will not at any time institute against the Trust Depositor or the Issuer, or join in any institution against the Trust Depositor or the Issuer of any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Transaction Documents.

 

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

 

Prior to the due presentment for registration of transfer of this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

 

A-3-3

 

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

 

Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, is deemed to represent that (i) it is not, and is not acquiring and will not hold a Note or a beneficial interest in a Note on behalf of or with “plan assets” (as determined under Department of Labor Regulations Section 2510.3-101 or otherwise) of a Plan, or any employee benefit plan subject to Similar Law, or (ii) its acquisition, holding and disposition of a Note or a beneficial interest in a Note do not give rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any Similar Law.  Each Noteholder, by acceptance of a Note or a beneficial interest in a Note is deemed to make one of the foregoing representations.

 

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of Illinois, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

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

 

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

 

A-3-4

 

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

 

	
Date:   April 16, 2014
    	
HARLEY-DAVIDSON   MOTORCYCLE TRUST 2014-1
    
	
 
    	
 
    
	
 
    	
By:
    	
Wilmington   Trust, National Association, not in its individual capacity but solely on   behalf of the Issuer as Owner Trustee, under the Trust Agreement
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Printed   Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

A-3-5

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., not in its individual capacity   but solely as Indenture Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Authorized   Signatory
    

 

A-3-6

 

EXHIBIT A-4

 

FORM OF CLASS A-4 NOTE

 

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

 

THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2014-1

 

1.55% MOTORCYCLE CONTRACT BACKED NOTES,

CLASS A-4

 

	
REGISTERED
    	
 
    	
$85,000,000
    
	
 
    	
 
    	
 
    
	
No. R-
    	
 
    	
CUSIP No. 41284A AE8
    

 

Harley-Davidson Motorcycle Trust 2014-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of EIGHTY-FIVE MILLION DOLLARS ($85,000,000) payable on the earlier of the Distribution Date occurring in October 2021 (the “Class A-4 Final Distribution Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture referred to herein.  No payments of principal of the Class A-4 Notes shall be made until the principal of the Class A-1 Notes has been paid in full.  Any capitalized term utilized but not defined herein shall have the meaning set forth in the Indenture (as hereinafter defined)

 

The Issuer will pay interest on this Note at the rate per annum shown above on each Distribution 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 Distribution Date (after giving effect to all payments of principal made on the preceding Distribution Date), subject to certain limitations contained in Section 3.01 of the Indenture.  Interest on this Note will accrue for each Distribution Date during the related Interest Period and will be computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified herein.

 

A-4-1

 

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

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 1.55% Motorcycle Contract Backed Notes, Class A-4 (the “Class A-4 Notes”), all issued under an Indenture, dated as of April 1, 2014 (the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-4 Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture or the Sale and Servicing Agreement, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture or the Sale and Servicing Agreement, as the case may be, as so supplemented or amended.

 

The Class A-4 Notes and the other Classes of Notes described in the Indenture (collectively, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture subject to the priorities of allocations as to interest and principal payments as described in the Sale and Servicing Agreement.

 

Principal of the Class A-4 Notes will be payable on the earlier of the Class A-4 Final Distribution Date and the Redemption Date, if any, established pursuant to Section 10.01(a) or 10.01(b) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Class A-4 Notes shall be due and payable on the date on which the maturity of the Notes shall have been accelerated following the occurrence of an Event of Default in the manner provided in the Indenture.  All principal payments on the Class A-4 Notes shall be made pro rata to the Class A-4 Noteholders entitled thereto.

 

Payments of interest on this Note due and payable on each Distribution Date shall be made by wire transfer to the account of the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on the related Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) affected by any payments made on any Distribution Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Distribution Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Distribution Date by notice mailed within five days before such Distribution Date and the amount then due and payable shall be payable only upon 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 such purposes located in the City of Wilmington, Delaware.

 

The Issuer shall pay interest on overdue installments of interest at the Class A-4 Rate to the extent lawful.

 

A-4-2

 

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.01(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Distribution Date on or after the date on which the Pool Balance is less than 10% of the Pool Balance as of the Cutoff Date.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an eligible guarantor institution which is a participant in the Securities Transfer Agent’s Medallion Program (STAMP) or similar signature guarantee program, and such other documents as the Indenture Trustee may require, and thereupon one or more new Class A-4 Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

 

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

 

Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, covenants and agrees that by accepting the benefits of the Indenture and such Note that such Noteholder will not at any time institute against the Trust Depositor or the Issuer, or join in any institution against the Trust Depositor or the Issuer of any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Transaction Documents.

 

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

 

Prior to the due presentment for registration of transfer of this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

 

A-4-3

 

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

 

Each Noteholder, by acceptance of a Note or a beneficial interest in a Note, is deemed to represent that (i) it is not, and is not acquiring and will not hold a Note or a beneficial interest in a Note on behalf of or with “plan assets” (as determined under Department of Labor Regulations Section 2510.3-101 or otherwise) of a Plan, or any employee benefit plan subject to Similar Law, or (ii) its acquisition, holding and disposition of a Note or a beneficial interest in a Note do not give rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any Similar Law.  Each Noteholder, by acceptance of a Note or a beneficial interest in a Note is deemed to make one of the foregoing representations.

 

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of Illinois, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

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

 

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

 

A-4-4

 

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

 

	
Date:   April 16, 2014
    	
HARLEY-DAVIDSON   MOTORCYCLE TRUST 2014-1
    
	
 
    	
 
    
	
 
    	
By:
    	
Wilmington   Trust, National Association, not in its individual capacity but solely on   behalf of the Issuer as Owner Trustee, under the Trust Agreement
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Printed   Name:
    	
 
    
	
 
    	
Title:
    	
 
    
					

 

A-4-5

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., not in its individual capacity   but solely as Indenture Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Authorized   Signatory
    

 

A-4-6

 

EXHIBIT B

 

FORM OF NOTE DEPOSITORY AGREEMENT

 

B-1

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