ASSET REPRESENTATIONS REVIEW AGREEMENT among FORD CREDIT AUTO LEASE TRUST 2024-A, as Issuer FORD MOTOR CREDIT COMPANY LLC, as Servicer and CLAYTON FIXED INCOME SERVICES LLC, as Asset Representations Reviewer Dated as of January 1, 2024
Exhibit 10.10
Execution Version
ASSET REPRESENTATIONS REVIEW AGREEMENT
among
FORD CREDIT AUTO LEASE TRUST 2024-A,
as Issuer
FORD MOTOR CREDIT COMPANY LLC,
as Servicer
and
XXXXXXX FIXED INCOME SERVICES LLC,
as Asset Representations Reviewer
Dated as of January 1, 2024
TABLE OF CONTENTS
ARTICLE I USAGE AND Definitions | 1 | ||
Section 1.1. | Usage and Definitions | 1 | |
Section 1.2. | Additional Definitions | 1 | |
Section 1.3. | Review Materials and Test Definitions | 2 | |
ARTICLE II Engagement of ASSET REPRESENTATIONS REVIEWER | 2 | ||
Section 2.1. | Engagement; Acceptance | 2 | |
Section 2.2. | Confirmation of Status | 2 | |
ARTICLE III Asset Representations Review PROCESS | 3 | ||
Section 3.1. | Review Notices | 3 | |
Section 3.2. | Identification of Review Leases | 3 | |
Section 3.3. | Review Materials | 3 | |
Section 3.4. | Performance of Reviews | 3 | |
Section 3.5. | Review Reports | 4 | |
Section 3.6. | Review Representatives | 5 | |
Section 3.7. | Dispute Resolution | 5 | |
Section 3.8. | Limitations on Review Obligations | 5 | |
ARTICLE IV Asset Representations Reviewer | 6 | ||
Section 4.1. | Representations and Warranties | 6 | |
Section 4.2. | Covenants | 7 | |
Section 4.3. | Fees and Expenses | 7 | |
Section 4.4. | Limitation on Liability | 8 | |
Section 4.5. | Indemnification by Asset Representations Reviewer | 8 | |
Section 4.6. | Indemnification of Asset Representations Reviewer | 9 | |
Section 4.7. | Review of Asset Representations Reviewer's Records | 9 | |
Section 4.8. | Delegation of Obligations | 10 | |
Section 4.9. | Confidential Information | 10 | |
Section 4.10. | Personally Identifiable Information | 11 | |
ARTICLE V RESIGNATION AND REMOVAL; SUCCESSOR ASSET REPRESENTATIONS REVIEWER | 13 | ||
Section 5.1. | Eligibility Requirements for Asset Representations Reviewer | 13 | |
Section 5.2. | Resignation and Removal of Asset Representations Reviewer | 13 | |
Section 5.3. | Successor Asset Representations Reviewer | 14 | |
Section 5.4. | Merger, Consolidation or Succession | 14 | |
ARTICLE VI OTHER AGREEMENTS | 15 | ||
Section 6.1. | Independence of Asset Representations Reviewer | 15 | |
Section 6.2. | No Petition | 15 | |
Section 6.3. | Limitation of Liability of Owner Trustee | 15 | |
Section 6.4. | Termination of Agreement | 15 | |
ARTICLE VII Miscellaneous Provisions | 15 | ||
Section 7.1. | Amendments | 15 | |
Section 7.2. | Assignment; Benefit of Agreement; Third Party Beneficiaries | 16 | |
Section 7.3. | Notices | 16 | |
Section 7.4. | GOVERNING LAW | 17 | |
Section 7.5. | Submission to Jurisdiction | 17 | |
Section 7.6. | WAIVER OF JURY TRIAL | 17 |
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Section 7.7. | No Waiver; Remedies | 17 | |
Section 7.8. | Severability | 17 | |
Section 7.9. | Headings | 17 | |
Section 7.10. | Counterparts | 17 | |
Schedule A – Review Materials | |||
Schedule B – Representations and Warranties and Tests |
ASSET REPRESENTATIONS REVIEW AGREEMENT, dated as of January 1, 2024 (this "Agreement"), among FORD CREDIT AUTO LEASE TRUST 2024-A, a Delaware statutory trust, as Issuer, FORD MOTOR CREDIT COMPANY LLC, a Delaware limited liability company, as Servicer, and XXXXXXX FIXED INCOME SERVICES LLC, a Delaware limited liability company, as Asset Representations Reviewer.
In the normal course of its business, the Titling Companies purchase leases and leased cars, light trucks and utility vehicles from motor vehicle dealers.
In connection with a securitization transaction sponsored by Ford Credit, the Titling Companies issued a 2024-A Exchange Note to Ford Credit that is secured by a 2024-A Reference Pool of Leases and Leased Vehicles. Ford Credit sold the 2024-A Exchange Note to the Depositor, who sold it to the Issuer.
The Issuer has granted a security interest in the 2024-A Exchange Note to the Indenture Trustee, for the benefit of the Secured Parties, as security for the Notes issued by the Issuer under the Indenture.
The Issuer has determined to engage the Asset Representations Reviewer to perform reviews of certain Leases for compliance with the representations and warranties made by Ford Credit and the Depositor about the Leases in the 2024-A Reference Pool.
The parties agree as follows.
ARTICLE I
USAGE AND Definitions
Section 1.2. Additional Definitions. The following terms have the meanings given below:
"Confidential Information" has the meaning stated in Section 4.9(b).
"Contract" has the meaning stated in Schedule A.
"Information Recipient" has the meaning stated in Section 4.9(a).
"Indemnified Parties" has the meaning stated in Section 4.6(a).
"Issuer PII" has the meaning stated in Section 4.10(a).
"Personally Identifiable Information" or "PII" has the meaning stated in Section 4.10(a).
"Review" means the performance by the Asset Representations Reviewer of the testing procedures for each Test and each Review Lease according to Section 3.4.
"Review Fee" has the meaning stated in Section 4.3(b).
"Review Materials" means, for a Review and a Review Lease, the documents and other materials listed in Schedule A, as applicable.
"Review Report" means, for a Review, the report of the Asset Representations Reviewer as described in Section 3.5.
"Test" has the meaning stated in Section 3.4(a).
"Test Complete" has the meaning stated in Section 3.4(c).
"Test Fail" has the meaning stated in Section 3.4(a).
"Test Pass" has the meaning stated in Section 3.4(a).
ARTICLE II
Engagement of ASSET REPRESENTATIONS REVIEWER
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ARTICLE III
Asset Representations Review PROCESS
Section 3.1. Review Notices. On receipt of a Review Notice from the Indenture Trustee according to Section 7.2 of the Indenture, the Asset Representations Reviewer will start a Review. The Asset Representations Reviewer will not be obligated to start a Review until a Review Notice is received.
Section 3.2. Identification of Review Leases. Within ten Business Days after receipt of a Review Notice, the Servicer will deliver to the Asset Representations Reviewer and the Indenture Trustee a list of the Review Leases.
Section 3.3. Review Materials.
(a) Access to Review Materials. The Servicer will give the Asset Representations Reviewer access to the Review Materials for all of the Review Leases within 60 days after receipt of the Review Notice in one or more of the following ways: (i) by providing access to the Servicer's receivables systems, either remotely or at an office of the Servicer, (ii) by electronic posting to a password-protected website to which the Asset Representations Reviewer has access, (iii) by providing originals or photocopies at an office of the Servicer where the Lease Files are located or (iv) in another manner agreed by the Servicer and the Asset Representations Reviewer. The Servicer may redact or remove Personally Identifiable Information from the Review Materials without changing the meaning or usefulness of the Review Materials for the Review.
(b) Missing or Insufficient Review Materials. The Asset Representations Reviewer will review the Review Materials to determine if any Review Materials are missing or insufficient for the Asset Representations Reviewer to perform any Test. If the Asset Representations Reviewer determines any missing or insufficient Review Materials, the Asset Representations Reviewer will notify the Servicer promptly, and in any event no less than 20 days before completing the Review. The Servicer will have 15 days to give the Asset Representations Reviewer access to the missing Review Materials or other documents or information to correct the insufficiency. If the missing Review Materials or other documents have not been provided by the Servicer within 15 days, the related Review Receivable will have a Test Fail for the Test or Tests that require use of the missing or insufficient Review Materials. If the Contract for any Review Receivable is not provided or is illegible, the Asset Representations Reviewer will be unable to perform any Tests and the related Review Lease will have an overall Test Fail for all Tests. In either of these cases, the Test or Tests will be considered completed and the Review Report will report a Test Fail for the related Review Lease or applicable representation or warranty and the reason for the Test Fail.
Section 3.4. Performance of Reviews.
(a) Test Procedures. For a Review, the Asset Representations Reviewer will perform for each Review Lease the procedures listed under "Tests" in Schedule B for each representation and warranty (each, a "Test"), using the Review Materials necessary to perform the procedures as stated in the Test. For each Test and Review Lease, the Asset Representations Reviewer will determine if the Test has been satisfied (a "Test Pass") or if the Test has not been satisfied (a "Test Fail"). If a Test or part of a Test cannot be performed for a Review Lease because the Test circumstances do not apply to the Review Lease, the Test will be considered to be satisfied and will be reported as a Test Pass.
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(b) Review Period. The Asset Representations Reviewer will complete the Review of all of the Review Leases within 60 days after receiving access to the Review Materials under Section 3.3(a). However, if missing or additional Review Materials are provided to the Asset Representations Reviewer under Section 3.3(b), the Review period will be extended for an additional 30 days.
(c) Completion of Review for Certain Review Leases. Following the delivery of the list of the Review Leases and before the delivery of the Review Report by the Asset Representations Reviewer, the Servicer may notify the Asset Representations Reviewer if a Review Lease is paid in full by the Lessee or reallocated from the 2024-A Reference Pool by the Sponsor, the Depositor or the Servicer according to the Transaction Documents. If such a notice is received, the Asset Representations Reviewer will immediately terminate all Tests of such Lease and the Review of the Lease will be considered complete (a "Test Complete"). In this case, the Asset Representations Reviewer will report a Test Complete for the Lease on the Review Report and the related reason.
(d) Previously Reviewed Lease; Duplicative Tests. If a Review Lease was included in a prior Review, the Asset Representations Reviewer will not perform any Tests on it, but will report the results of the previous Tests in the Review Report for the current Review and note that the results relate to a prior Review. If the same Test is required for more than one representation or warranty listed on Schedule B, the Asset Representations Reviewer will only perform the Test once for each Review Lease but will report the results of the Test for each applicable representation and warranty on the Review Report.
(e) Termination of Review. If a Review is in process and the Notes will be paid in full on the next Payment Date, the Servicer will notify the Asset Representations Reviewer and the Indenture Trustee no less than ten days before that Payment Date. On receipt of notice, the Asset Representations Reviewer will terminate the Review immediately and will not be obligated to deliver a Review Report.
Section 3.5. Review Reports. Within five days after the end of the Review period under Section 3.4(b), the Asset Representations Reviewer will deliver to the Sponsor, the Depositor, the Issuer, the Servicer and the Indenture Trustee a Review Report indicating for each Review Lease whether there was a Test Pass or a Test Fail for each Test, or whether the Review Lease was an overall Test Fail (for a missing or illegible Contract) or a Test Complete. For each Test Fail, overall Test Fail or Test Complete, the Review Report will indicate the related reason. The Review Report will contain a summary of the Review results to be included in the Issuer's Form 10-D report for the Collection Period in which the Review Report is received. The Asset Representations Reviewer will ensure that the Review Report does not contain any Issuer PII. On reasonable request of the Servicer, the Asset Representations Reviewer will provide additional detail on the Test results.
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Section 3.6. Review Representatives.
(a) Servicer Representative. The Servicer will designate one or more representatives who will be available to assist the Asset Representations Reviewer in performing the Review, including responding to requests and answering questions from the Asset Representations Reviewer about the Review Materials or Tests, access to Review Materials on the Servicer's originations, receivables or other systems, obtaining missing or insufficient Review Materials and/or providing clarification of any Review Materials or Tests.
(b) Asset Representations Reviewer Representative. The Asset Representations Reviewer will designate one or more representatives who will be available to the Issuer and the Servicer during the performance of a Review.
(c) Questions About Review. The Asset Representations Reviewer will make appropriate personnel available to respond in writing to written questions or requests for clarification of any Review Report from the Indenture Trustee or the Servicer until the earlier of (i) the payment in full of the Notes and (ii) one year after the delivery of the Review Report. The Asset Representations Reviewer will not be obligated to respond to questions or requests for clarification from a Noteholder or any other Person and will direct such Persons to submit written questions or requests to the Indenture Trustee.
Section 3.7. Dispute Resolution. If a Lease that was Reviewed by the Asset Representations Reviewer is the subject of a dispute resolution proceeding under Section 3.4 of the Exchange Note Sale Agreement, the Asset Representations Reviewer will participate in the dispute resolution proceeding on request of a party to the proceeding. The reasonable expenses of the Asset Representations Reviewer for its participation in any dispute resolution proceeding will be considered expenses of the requesting party for the dispute resolution and will be paid by a party to the dispute resolution as determined by the mediator or arbitrator for the dispute resolution according to Section 3.4 of the Exchange Note Sale Agreement. However, if such expenses are not paid by a party to the dispute resolution within 90 days after the end of the proceeding, the expenses will be paid by the Issuer according to Section 4.3(d).
Section 3.8. Limitations on Review Obligations.
(a) Review Process Limitations. The Asset Representations Reviewer is not obligated to:
(i) determine whether a Delinquency Trigger has occurred or whether the required percentage of the Noteholders has voted to direct a Review under the Indenture, and may rely on the information in any Review Notice delivered by the Indenture Trustee;
(ii) determine which Leases are subject to a Review, and may rely on the lists of Review Leases provided by the Servicer;
(iii) obtain or confirm the validity of the Review Materials, and may rely on the accuracy and completeness of the Review Materials and will have no liability for any errors in the Review Materials;
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(iv) obtain missing or insufficient Review Materials from any party or any other source; or
(v) take any action or cause any other party to take any action under any of the Transaction Documents or otherwise to enforce any remedies against any Person for breaches of representations or warranties about the Review Leases.
(b) Testing Procedure Limitations. The Asset Representations Reviewer will only be required to perform the testing procedures listed under "Tests" in Schedule A, and will not be obligated to perform additional procedures on any Review Lease or to provide any information other than a Review Report. However, the Asset Representations Reviewer may provide additional information in a Review Report about any Review Lease that it determines in good faith to be material to the Review.
ARTICLE IV
Asset Representations Reviewer
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Section 4.2. Covenants. The Asset Representations Reviewer covenants and agrees that:
Section 4.3. Fees and Expenses.
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Section 4.6. Indemnification of Asset Representations Reviewer.
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Section 4.9. Confidential Information.
(i) lists of Review Leases and any related Review Materials;
(ii) origination and servicing guidelines, policies and procedures, and form contracts; and
(iii) notes, analyses, compilations, studies or other documents or records prepared by the Servicer, which contain information supplied by or on behalf of the Servicer or its representatives.
However, Confidential Information will not include information that (A) is or becomes generally available to the public other than as a result of disclosure by an Information Recipient, (B) was available to, or becomes available to, an Information Recipient on a non-confidential basis from a Person or entity other than the Issuer or the Servicer before its disclosure to the Information Recipient who, to the knowledge of the Information Recipient is not bound by a confidentiality agreement with the Issuer or the Servicer and is not prohibited from transmitting the information to the Information Recipient, (C) is independently developed by an Information Recipient without the use of the Confidential Information, as shown by the Information Recipient's files and records or other evidence in its possession or (D) the Issuer or the Servicer gives permission to the Information Recipient to release.
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Section 4.10. Personally Identifiable Information.
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(i) The Asset Representations Reviewer will not disclose Issuer PII to its personnel or allow its personnel access to Issuer PII except (A) for the Asset Representations Reviewer personnel who require Issuer PII to perform a Review, (B) with the consent of the Issuer or (C) as required by applicable law. When permitted, the disclosure of or access to Issuer PII will be limited to the specific information necessary for the individual to complete the assigned task. The Asset Representations Reviewer will inform personnel with access to Issuer PII of the confidentiality requirements in this Agreement and train its personnel with access to Issuer PII on the proper use and protection of Issuer PII.
(ii) The Asset Representations Reviewer will not sell, disclose, provide or exchange Issuer PII with or to any third party without the consent of the Issuer.
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ARTICLE V
RESIGNATION AND REMOVAL;
SUCCESSOR ASSET REPRESENTATIONS REVIEWER
Section 5.2. Resignation and Removal of Asset Representations Reviewer.
(i) the Asset Representations Reviewer no longer meets the eligibility requirements in Section 5.1;
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(ii) the Asset Representations Reviewer breaches of any of its representations, warranties, covenants or obligations in this Agreement; or
(iii) an Insolvency Event of the Asset Representations Reviewer occurs.
Section 5.3. Successor Asset Representations Reviewer .
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Section 6.3. Limitation of Liability of Owner Trustee . This Agreement has been signed on behalf of the Issuer by The Bank of New York Mellon not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer. In no event will The Bank of New York Mellon in its individual capacity or a beneficial owner of the Issuer be liable for the Issuer's obligations under this Agreement. For all purposes under this Agreement, the Owner Trustee will be subject to, and entitled to the benefits of, the Trust Agreement.
ARTICLE VII
Miscellaneous Provisions
(a) Amendments. The parties may amend this Agreement:
(i) to clarify an ambiguity, correct an error or correct or supplement any term of this Agreement that may be defective or inconsistent with the other terms of this Agreement or any prospectus or offering memorandum related to the Notes or to provide for, or facilitate the acceptance of this Agreement by, a successor Asset Representations Reviewer, in each case, without the consent of the Noteholders or any other Person;
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(ii) to add, change or eliminate terms of this Agreement, in each case, without the consent of the Noteholders or any other Person, if the Administrator delivers an Officer's Certificate to the Issuer, the Owner Trustee and the Indenture Trustee stating that the amendment will not have a material adverse effect on the Noteholders; or
(iii) to add, change or eliminate terms of this Agreement for which an Officer's Certificate is not or cannot be delivered under Section 7.1(a)(ii), with the consent of the Noteholders of a majority of the Note Balance of each Class of Notes Outstanding (with each affected Class voting separately, except that all Noteholders of Class A Notes will vote together as a single class).
Section 7.2. Assignment; Benefit of Agreement; Third Party Beneficiaries.
(i) for overnight mail, on delivery or, for registered first class mail, postage prepaid, three days after deposit in the mail properly addressed to the recipient;
(ii) for a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient;
(iii) for an email, when receipt is confirmed by telephone or reply email from the recipient; and
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(iv) for an electronic posting to a password-protected website to which the recipient has access, on delivery of an email (without the requirement of confirmation of receipt) stating that the electronic posting has been made.
Section 7.4. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF NEW YORK.
Section 7.5. Submission to Jurisdiction. Each party submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State Court sitting in New York, New York for legal proceedings relating to this Agreement. Each party irrevocably waives, to the fullest extent permitted by law, any objection that it may now or in the future have to the venue of a proceeding brought in such a court and any claim that the proceeding has been brought in an inconvenient forum.
[Remainder of Page Left Blank]
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EXECUTED BY: | |||
FORD CREDIT AUTO LEASE TRUST 2024-A, | |||
as Issuer | |||
By: | THE BANK OF NEW YORK MELLON, not in its individual capacity, but solely as Owner Trustee | ||
By: | /s/ Xxxxxx Xxxxxxx | ||
Name: | Xxxxxx Xxxxxxx | ||
Title: | Vice President | ||
FORD MOTOR CREDIT COMPANY LLC, | |||
as Servicer | |||
By: | /s/ Xxxx Xxxxxxxxxxx | ||
Name: | Xxxx Xxxxxxxxxxx | ||
Title: | Assistant Treasurer | ||
XXXXXXX FIXED INCOME SERVICES LLC, | |||
as Asset Representations Reviewer | |||
By: | /s/ Xxxxxxx Xxxxx | ||
Name: | Xxxxxxx Xxxxx | ||
Title: | Senior Vice President | ||
[Signature Page to Asset Representations Review Agreement]
Schedule A
Review Materials
1. | A copy of the Lease File that includes the following documents, if applicable: |
(a) | The motor vehicle lease agreement or similar document as amended that evidences the Lease. |
(b) | The following documents related to the Lease (collectively, the "Amendments"): |
(i) | Any correction notices to the Lease prior to the Cutoff Date, and |
(ii) | Any modification agreements completed by the parties to the Lease prior to the Cutoff Date; |
(c) | The certificate of title, motor vehicle lien statement, application for title, application for registration for motor vehicle, certificate of origin or manufacturer statement of origin for a vehicle, or other evidence (including eAtlas reporting for electronic titling states) showing the security interest in the Leased Vehicle (collectively, the "Title Documents"); |
(d) | Proof of insurance; |
(e) | Any ancillary documents for credit insurance, service contracts or other products and services (collectively, the "Ancillary Documents"); |
(f) | Military orders; and |
(g) | State specific documents related to the Lease. |
2. | Copies of applicable Ford Credit procedures, as of the date of the Lease, including: |
(a) | Ford Credit's procedure listing approved lease forms as of the date of the Lease (the "List of Approved Contract Forms"); |
(b) | Ford Credit's procedure listing acceptable name variations of Ford Credit, Lincoln Automotive Financial Services, CAB East LLC, CAB West LLC, CABT and HTD Leasing LLC (the "List of Acceptable Name Variations"); and |
(c) | Ford Credit's procedure listing approved providers and form numbers for credit insurance, service contracts and other products and services (the "List of Approved Products"). |
SA-1 |
3. | A copy of the Red Carpet Lease Assignment with the Dealer that originated the Lease (the "Dealer Assignment"). |
4. | Applicable screen prints from Ford Credit's receivables systems. |
SA-2 |
Schedule B
Representations and Warranties and Tests
Representation
and Warranty (Section references are to the Exchange Note Purchase Agreement) |
Tests |
Section 3.3(a) – Origination of Leases. The Lease was originated by a Dealer in the United States and has a garaging location in an Eligible State. The Lease was originated by a Dealer for the retail lease of a Leased Vehicle in the ordinary course of the Dealer's business. The Lease was signed by the parties to the Lease. The Lease was purchased by a Titling Company qualified to hold the Lease and the related Leased Vehicle and was validly assigned by the Dealer to that Titling Company. | Test 3.3(a) – 1: Dealer Address Observe the address of the Dealer on the Lease and confirm it is in the United States.
Test 3.3(a) – 2: Garaging Location Observe the Lease account in Ford Credit's receivables systems and confirm the state in the garaging address on the date of the Lease corresponds to the correct Titling Company as stated in the applicable Ford Credit procedure.
Test 3.3(a) – 3: Lease Signed Observe the Lease and confirm signatures are present for the Dealer and the Lessee.
Test 3.3(a) – 4: Lease Form Observe the form number and revision date on the Lease and confirm they are on the List of Approved Contract Forms.
Test 3.3(a) – 5: Qualified Titling Company Observe the Lease and confirm the Titling Company identified as the Holder is qualified to do business in the state of the Dealer's address.
Test 3.3(a) – 6: Valid Assignment Observe the Lease and confirm the Dealer's signature is present to assign the lease to a Titling Company.
Test 3.3(a) – 7: Dealer Confirmation Observe the Dealer name on the Lease and confirm it matches the Dealer name on the Dealer Assignment. |
Section 3.3(b) – New Vehicle. The Leased Vehicle was a new car, light truck or utility vehicle according to the Underwriting Procedures at the beginning of the related Lease. | Test 3.3(b) – 1: New Vehicle Observe the Lease account in Ford Credit's receivables systems and confirm that the Leased Vehicle is identified as "new" or "demo." |
Section 3.3(c) – Monthly Payments. The Lease (if not an Advance Payment Plan Lease) provides for monthly payments in U.S. dollars in an amount equal to the sum of (i) a level scheduled payment that provides a fixed internal rate of return and amortizes the Adjusted Capitalized Cost stated in the Lease to the Contract Residual Value of the related Leased Vehicle over the term of the Lease, plus (ii) other fees and taxes on the Lease. | Test 3.3(c) – 1: Monthly Payments Observe the Lease and confirm it reflects monthly payments.
Test 3.3(c) – 2: U.S. Dollars Observe the Lease and confirm it is payable in U.S. dollars.
Test 3.3(c) – 3: Level Monthly Payments Observe the Lease and confirm it reflects a level scheduled payment.
Test 3.3(c) – 4: Rate of Return Observe the Lease and confirm the sum of "Depreciation and other Amortized Amounts" and "Rent Charge" divided by "Lease Payments" equals "Base Payment."
Test 3.3(c) – 5: Amortization Observe the Lease and confirm "Adjusted Capitalized Cost" minus the product of "Lease Payments" multiplied by "Base Payment" minus "Rent Charge" equals "Residual Value."
|
SB-1 |
Representation
and Warranty (Section references are to the Exchange Note Purchase Agreement) |
Tests |
Test 3.3(c) – 6: Total Payment Observe the Lease and confirm "Base Payment" plus other fees and taxes equals "Total Payment." | |
Section 3.3(d) – Certificate of Title. The Leased Vehicle was titled, or the Servicer has started procedures that will result in the Leased Vehicle being titled in a manner acceptable to the relevant governmental authority. | Test 3.3(d) – 1: Garaging Location Observe the Lease account in Ford Credit's receivables systems and confirm the state in the garaging address on the date of the Lease matches the state on the Title Documents.
Observe the Title Documents and confirm they reflect the Titling Company as stated in the applicable Ford Credit procedure, using a name included in the List of Acceptable Name Variations, as the Owner.
Test 3.3(d) – 2: Title Verification Observe the Holder on the Lease and confirm it matches the Owner on the Title Documents.
Observe the vehicle identification number on the Lease and confirm it matches the vehicle identification number on the Title Documents. |
Section 3.3(e) – No Government Lessee. The Lease is not an obligation of the United States or a State or local government or any agency, department, instrumentality or political subdivision of the United States or a State or local government. | Test 3.3(e) – 1: No Government Lessee Observe the Lease and confirm the Leased Vehicle is leased for personal use or, if not, confirm the Lessee is not a government Lessee. If the name of the Lessee contains a word indicating it may be a government Lessee, use online sources to confirm the Lessee is a commercial business and not a government Lessee. |
Section 3.3(f) – No Commercial Lessee. The Lease is not a commercial lease contract, master lease contract or fleet vehicle lease contract, but the Lease may have been entered by a business entity and the Leased Vehicle may be used for commercial purposes. | Test 3.3(f) – 1: Lease Form Observe the form number and revision date on the Lease and confirm they are on the List of Approved Contract Forms. |
Section 3.3(g) – Insurance. The Lease requires the Lessee to have physical damage insurance covering the Leased Vehicle. | Test 3.3(g) – 1: Insurance Observe the Lease and confirm it contains an agreement from the Lessee to insure against loss of or risk to the Leased Vehicle. |
Section 3.3(h) – Compliance with Underwriting Procedures. The Lease was underwritten according to the Underwriting Procedures in effect at the time in all material respects. | Test 3.3(h) – 1: Lease Form Observe the form number and revision date on the Lease and confirm they are on the List of Approved Contract Forms.
Test 3.3(h) – 2: Leased Vehicle Description Observe the Lease and confirm the description of the Leased Vehicle, including the vehicle identification number, year, make and model, new, used or demo, matches the vehicle information for the Lease account in Ford Credit's receivables systems.
Observe each Ancillary Document, if any, and confirm any information describing the Leased Vehicle matches the corresponding information on the Lease.
Test 3.3(h) – 3: Fees and Additional Products Observe the fees, if any, included in the "Amounts Due At Lease Signing or Delivery" section of the Lease and confirm they do not exceed the limits stated in the applicable Ford Credit procedure. |
SB-2 |
Representation
and Warranty (Section references are to the Exchange Note Purchase Agreement) |
Tests |
Observe the Lease and confirm the amount the acquisition fee is the amount required by Ford Credit procedure and, if it is an advance payment lease, confirm the acquisition fee is listed in the "Amounts Due At Lease Signing or Delivery" section.
Observe the amount for each additional product, if any, included in the "Itemization of Gross Capitalized Cost" section of the Lease and confirm each amount does not exceed the advance cap amount stated in the applicable Ford Credit procedure.
Test 3.3(h) – 4: Lease Signed Observe the Lease and confirm signatures are present for the Dealer and the Lessee.
Test 3.3(h) – 5: Insurance Observe the insurance section of the Lease and confirm the minimum limits meet the requirements as stated in the applicable Ford Credit procedure.
Confirm the Lease File contains proof of insurance as stated in the applicable Ford Credit procedure.
Test 3.3(h) – 6: Dealer Confirmation Observe the Lease and confirm that the Dealer name matches the Dealer name on the Red Carpet Lease Assignment.
Test 3.3(h) – 7: Additional Document Requirements Observe the Lease account in Ford Credit's receivables systems and confirm that no additional document requirements are indicated for origination or, if so, confirm all required documents are in the Lease File.
Test 3.3(h) – 8: Notice to Co-Signer Observe the Lease and confirm the "Vehicle Use" is personal and if so, confirm if a "Notice to Cosigner" document is required by the applicable Ford Credit procedure and if so, confirm a signed and dated "Notice to Cosigner" document is in the Lease File.
Test 3.3(h) – 9: Odometer Disclosure Statement Observe the Odometer Disclosure Statement and confirm it is completed and signed as stated in the applicable Ford Credit procedure.
Test 3.3(h) – 10: Finance Company and Holder
Observe the Lease and confirm the "Finance Company" and "Holder" section is completed as stated in the applicable Ford Credit procedure. | |
Section 3.3(i) – Valid Assignment. The Lease was originated in, and is subject to the laws of, a jurisdiction which permits the sale and assignment of the Lease and the related Leased Vehicle to the Titling Company. The terms of the Lease do not limit the right of the owner of the Lease to sell the Lease. | Test 3.3(i) – 1: Lease Form Observe the form number and revision date on the Contract and confirm they are on the List of Approved Contract Forms. |
Section 3.3(j) – Compliance with Law. At the time it was originated, the Lease complied in all material respects with all requirements of law in effect at the time. | Test 3.3(j) – 1: Lease Form Observe the form number and revision date on the Lease and confirm they are on the List of Approved Contract Forms. |
SB-3 |
Representation
and Warranty (Section references are to the Exchange Note Purchase Agreement) |
Tests |
Test 3.3(j) – 2: Legibility of Lease Observe the Lease and confirm all printed sections are legible and aligned on the correct line.
Test 3.3(j) – 3: Additional Product Provider and Form Observe the provider name, form number and revision date on each Ancillary Document, if any, and confirm they are on the List of Approved Products.
Test 3.3(j) – 4: Lease Signed Observe the Lease and confirm signatures are present for the Dealer and the Lessee.
Test 3.3(j) – 5: Total of Payments Observe the "Total of Payments" on the Lease. Calculate the "Total of Payments" using the "Amount Due at Lease Signing or Delivery" plus "The total of Your monthly payment is" minus "Your first monthly payment of" and confirm it matches "Total of Payments."
Test 3.3(j) – 6: Payment Schedule Observe the scheduled due date on the Lease and confirm it follows the payment due date requirements in the applicable Ford Credit procedure.
Test 3.3(j) – 7: Tax Disclosure Observe the Lease and confirm the tax on capitalized cost reduction, if any, is disclosed as required by Ford Credit procedure.
Test 3.3(j) – 8: Gross Capitalized Cost Observe the "Gross capitalized cost" in the "Your payment is determined as shown below" section of the Lease and confirm that it equals the "Total Gross Capitalized Cost" in the "Itemization of Gross Capitalized Cost" section.
Test 3.3(j) – 9: Adjusted Capitalized Cost Observe the "Your payment is determined as shown below" section of the Lease and confirm that "Gross capitalized cost" minus "Capitalized cost reduction" equals "Adjusted capitalized cost."
Test 3.3(j) – 10: Term Observe the "Payments" box on the Lease and confirm it matches the "Lease payments" in the "Your payment is determined as shown below" section.
Test 3.3(j) – 11: Total Miles Allowed Observe the "Excess Wear and Use" section of the Lease and confirm the price per mile and the mileage lines are completed according to applicable Ford Credit procedure.
Test 3.3(j) – 12: Warranty Disclosure Observe the "Warranty" disclosure box on the Lease and confirm it has been completed according to applicable Ford Credit procedure.
Test 3.3(j) – 13: Official Fees and Taxes Disclosure Observe the "Official Fees and Taxes" disclosure box on the Lease and confirm it has been competed according to applicable Ford Credit procedure.
Test 3.3(j) – 14: Equal Credit Opportunity Act - Origination Observe the Lease account in Ford Credit's receivables systems and confirm any comments at origination do not conflict with the prohibited practices described in the applicable Ford Credit procedure. |
SB-4 |
Representation
and Warranty (Section references are to the Exchange Note Purchase Agreement) |
Tests |
Test 3.3(j) – 15: State Disclosures; Contract Complete Observe the Lease and confirm all lines on the Lease are completed or properly left blank.
Test 3.3(j) – 16: State-Specific Underwriting Requirements Observe the state in the address of the Dealer on the Lease. If the state is listed below, perform the tests for the specific state.
California Observe the Lease and confirm that it indicates it was negotiated primarily in English or, if it indicates one of the other languages, confirm a completed translation of the Lease in that language is in the Lease File.
Florida Confirm a signed "Customer-Dealer Registration Agreement" or a document identifying that the Dealer used the actual registration amount is in the Lease file.
Illinois Illinois-1-Sales Tax Form Confirm a completed sales tax form is in the Lease File. Illinois-2-Translation Confirm there is no translation acknowledgment form in the Lease File or, if so, confirm the form is completed and signed.
Kansas Observe the Lease and confirm that no credit insurance was purchased or, if so, confirm the "Credit Insurance Premium Refund Notice" is in the Lease File and the date of the form is within ten days of the Lease purchase date.
New Jersey Observe the Lease and confirm the date the Lessee signed the Lease is at least one business day after the date of the Lease or, if the dates are the same, confirm a waiver signed by the Lessee is in the Lease File.
Confirm there is no translation acknowledgment form in the Lease File or, if so, confirm the form is completed and signed.
Ohio Observe the Lease and confirm that no credit insurance was purchased or, if so, confirm a completed and signed "Notice of Optional Credit Insurance" is in the Lease File. |
SB-5 |
Representation
and Warranty (Section references are to the Exchange Note Purchase Agreement) |
Tests |
Section 3.3(k) – Binding Obligation. The Lease is on a form contract that includes rights and remedies allowing the holder to enforce the obligation and realize on the Leased Vehicle and represents the legal, valid and binding payment obligation of the Lessee, enforceable in all material respects by the holder of the Lease, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws relating to the enforcement of creditors' rights or by general equitable principles and consumer financial protection laws. | Test 3.3(k) – 1: Lease Form Observe the form number and revision date on the Contract and confirm they are on the List of Approved Contract Forms. |
Section 3.3(l) – Security Interest in Leased Vehicle. The Collateral Agent has, or the Servicer has started procedures that will result in the Collateral Agent having, a perfected, first-priority security interest in the Leased Vehicle, which security interest was validly created. | Test 3.3(l) – 1: Security Interest in Lease Vehicle Observe the Title Documents and confirm they show HTD Leasing LLC, using a name included in the List of Acceptable Name Variations, as the first lienholder.
Observe the vehicle identification number on the Lease and confirm it matches the vehicle identification number on the Title Documents. |
Section 3.3(m) – Good Title to Lease and Leased Vehicle. The applicable Titling Company has good title, or the Servicer has started procedures that will result in good title, to the Lease and Leased Vehicle, free and clear of Liens other than Permitted Liens. | Test 3.3(m) – 1: Garaging Location Observe the Lease account in Ford Credit's receivables systems and confirm the state in the garaging address on the date of the Lease matches the state on the Title Documents.
Observe the Title Documents and confirm they reflect the Titling Company as stated in the applicable Ford Credit procedure, using a name included in the List of Acceptable Name Variations, as the Owner.
Test 3.3(m) – 2: Valid Assignment Observe the Lease and confirm the Dealer signature is present to assign the lease to the applicable Titling Company. |
Section 3.3(n) – Chattel Paper. The Lease is either "tangible chattel paper" or "electronic chattel paper" within the meaning of the applicable UCC and there is only one original authenticated copy of the Lease. | Test 3.3(n) – 1: Lease Signed Observe the Lease and confirm signatures are present for the Dealer and Xxxxxx.
Test 3.3(n) – 2: Lease Form Observe the form number and revision date on the Lease and confirm they are on the List of Approved Contract Forms.
Test 3.3(n) – 3: One Original Observe the Lease and confirm it is an electronic contract or, if not, confirm it states "original" above the ply description line. |
SB-6 |
Representation
and Warranty (Section references are to the Exchange Note Purchase Agreement) |
Tests |
Section 3.3(o) – Servicing. The Lease was serviced in compliance with law and the Servicing Procedures in all material respects from the time it was originated to the Cutoff Date. | Test 3.3(o) – 1: Credit Bureau Reporting Observe the Lease account in Ford Credit's receivables systems and confirm the number of days, if any, the Lease account was past due for each month preceding the Cutoff Date matches the information reported to the credit bureaus for the Lease account.
Test 3.3(o) – 2: Lessee Complaints Observe the Lease account in Ford Credit's receivables systems and confirm that "Complaints/Feedback" is not indicated for the Lease account as of the Cutoff Date or, if so, confirm that the documentation indicated in Ford Credit's receivables systems related to the complaint follows the applicable Ford Credit procedures.
Test 3.3(o) – 3: Equal Credit Opportunity Act - Servicing Observe the customer service notes, if any, for the Lease account in Ford Credit's receivables systems and confirm any comments do not conflict with the prohibited practices described in the applicable Ford Credit procedure.
Test 3.3(o) – 4: Servicemembers Civil Relief Act Observe the Lease account in Ford Credit's receivables systems and confirm that Servicemembers Civil Relief Act is not indicated for the Lease account as of the Cutoff Date or, if so and if military orders are in the Lease File, confirm the lease factor for the Lease account indicated in Ford Credit's receivables systems is less than or equal to 4.25%. |
Section 3.3(p) – No Bankruptcy. As of the Cutoff Date, the Sponsor's receivables systems do not indicate that the Lessee on the Lease is a debtor in a bankruptcy proceeding. | Test 3.3(p) – 1: No Bankruptcy Observe the Lease account in Ford Credit's receivables systems as of the Cutoff Date and confirm the "Bankrupt" field is blank. |
Section 3.3(q) – Leases in Force. As of the Cutoff Date, neither the Sponsor's receivables systems nor the Lease File indicate that the Lease (i) was a Terminating Lease or a Closed Lease or (ii) was satisfied, subordinated, rescinded, cancelled or terminated. | Test 3.3(q) – 1: Terminating Lease or Closed Lease Observe the Lease account in Ford Credit's receivables systems and confirm it was not a Terminating Lease or a Closed Lease.
Test 3.3(q) – 2: Leases in Force Observe the Lease account in Ford Credit's receivables systems and confirm it was an active account on the Cutoff Date. |
Section 3.3(r) – No Amendments or Modifications. No material term of the Lease has been affirmatively amended or modified (other than the assessment of a security deposit or a Payment Extension Fee or the payment of any other amount that would be a Lease Administration Amount, or a default relating to failure by the related Lessee to pay any such amount), except amendments and modifications indicated in the Sponsor's receivables systems or in the Lease File. | Test 3.3(r) – 1: No Amendments Observe the Lease account in Ford Credit's receivables systems and confirm a "Substitution Agreement" and/or "Transfer of Lease" account message is not indicated or, if so, confirm a substitution agreement and/or transfer agreement is in the Lease File. |
SB-7 |
Representation
and Warranty (Section references are to the Exchange Note Purchase Agreement) |
Tests |
Section 3.3(s) – No Extensions. As of the Cutoff Date, the Lease was not amended to extend the due date for any payment, other than Payment Extensions totaling no more than three months, as recorded in the Sponsor's receivables systems and in the Lease File. | Test 3.3(s) – 1: No Extensions Observe the Lease account in Ford Credit's receivables systems and confirm the Lease was not extended more than three months as of the Cutoff Date. |
Section 3.3(t) – No Defenses. There is no right of rescission, setoff, counterclaim or defense asserted or threatened against the Lease indicated in the Sponsor's receivables systems or in the Lease File. | Test 3.3(t) – 1: No Defenses Observe the Lease account in Ford Credit's receivables systems and confirm there are no "Litigation Pending," "Attorney Representation" and/or "Second Lien" account messages or, if so, confirm the account message(s) were not present as of the Cutoff Date. |
Section 3.3(u) – No Payment Default. Except for a payment that is not more than 30 days Delinquent as of the Cutoff Date, no payment default exists on the Lease. | Test 3.3(u) – 1: No Payment Default Observe the Lease account in Ford Credit's receivables systems and confirm the Lease was not more than 30 days Delinquent as of the Cutoff Date. |
Section 3.3(v) – Maturity of Leases. The Lease has a Scheduled Lease End Date of not greater than 48 months from the date of the Lease. | Test 3.3(v) – 1: Maturity of Leases Observe the "Lease Term in Months" on the Lease and confirm it is not greater than 48. |
SB-8 |