EXHIBIT 10.3
[EXECUTION COPY]
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VW CREDIT LEASING, LTD.
AND
VW CREDIT, INC.
AMENDED AND RESTATED SERVICING AGREEMENT
Dated As of December 21, 2000
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TABLE OF CONTENTS
PAGE
RECITALS ............................................................1
ARTICLE I DEFINITIONS
Section 1.1. Definitions..............................................1
ARTICLE II ADMINISTRATION AND SERVICING OF USER LEASES
Section 2.1. Servicer to Act as Servicer..............................5
Section 2.2. Collection of Monthly Lease Payments and Remittances;
Application of Proceeds..................................6
Section 2.3. Records..................................................7
Section 2.4. Collection and Application of Security Deposits..........7
Section 2.5. Servicing Compensation; Fees, Costs and Expenses.........8
Section 2.6. Enforcement of User Leases; Repossession and Sale
of Leased Vehicles.......................................8
Section 2.7. Servicer to Act on Behalf of Trust.......................9
Section 2.8. Third Party Claims.......................................9
Section 2.9. Insurance Policies......................................10
Section 2.10. Servicer Not to Resign; Assignment......................10
ARTICLE III SERVICER TERMINATION WITH RESPECT TO UTI
Section 3.1. Termination of Servicer By UTI Holder With Respect
to UTI..................................................11
ARTICLE IV MISCELLANEOUS
Section 4.1. Termination of Agreement................................11
Section 4.2. Amendment...............................................11
Section 4.3. Governing Law...........................................12
Section 4.4. Notices.................................................12
Section 4.5. Severability............................................12
Section 4.6. Binding Effect..........................................12
Section 4.7. Article and Section Headings............................13
Section 4.8. Execution in Counterparts...............................13
Section 4.9. Rights Cumulative.......................................13
Section 4.10. Further Assurances......................................13
Section 4.11. Third-Party Beneficiaries...............................13
Section 4.12. No Waiver...............................................13
Section 4.13. Non-Petition Covenant...................................14
Section 4.14. Series Liabilities......................................14
Section 4.15. Limitation of Liability.................................14
i
AMENDED AND RESTATED SERVICING AGREEMENT
AMENDED AND RESTATED SERVICING AGREEMENT, dated as of December 21, 2000 (as
it may be further amended, supplemented or modified, the "Agreement"), between
VW CREDIT LEASING, LTD., a Delaware business trust (the "Trust"), and VW CREDIT,
INC., a Delaware corporation (hereinafter, together with its successors and
assigns, "VCI" or, in its capacity as servicer hereunder, the "Servicer").
RECITALS
A. This Agreement is being entered into to amend and restate that certain
Servicing Agreement, dated as of June 22, 1999, between the Trust and VCI.
B. VCI, as Settlor and Initial Beneficiary (the "Settlor" and the "Initial
Beneficiary", respectively), U.S. Bank Trust National Association, a national
banking association with its principal place of business in Chicago, Illinois,
as UTI Trustee and Administrative Trustee (the "UTI Trustee" and the
"Administrative Trustee", respectively), and Wilmington Trust Company, as
Delaware Trustee (the "Delaware Trustee"), have entered into that certain Trust
Agreement dated as of June 2, 1999 (the same, as amended, supplemented or
modified and in effect from time to time, the "Trust Agreement"), pursuant to
which VCI and the Trustees formed the Trust for the purpose of taking
assignments and conveyances of and holding and dealing in various Trust Assets
in accordance with the Trust Agreement.
C. The Trustees, on behalf of the Trust and at the direction of VCI, which
also is the initial beneficiary of the Trust, intend to create and issue from
time to time to or upon the order of VCI various special units of beneficial
interest in the Trust ("SUBIs"), whose beneficiaries generally will be entitled
to certain specified components of the net cash flow arising from designated
portfolios of Trust Assets owned by the Trust, and which SUBIs may be used in
connection with various Financings (as defined in the Trust Agreement).
D. The parties desire to enter into this Agreement to provide for, among
other things, the servicing of the Trust Assets (including those evidenced by
the SUBIs) by the Servicer.
E. The parties acknowledge that, in connection with one or more Financings,
it may be necessary or desirable to enter into supplemental agreements hereto,
including one or more SUBI Servicing Agreement Supplements, providing for
further specific servicing obligations with respect to each Financing.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
Servicing Agreement
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, (a) unless otherwise defined herein,
all capitalized terms shall have the meanings attributed to them in the Trust
Agreement, (b) the capitalized terms defined in this Article have the meanings
assigned to them in this Article and include (i) all genders and (ii) the plural
as well as the singular, (c) all references to words such as "herein", "hereof"
and the like shall refer to this Agreement as whole and not to any particular
article or section within this Agreement, (d) the term "include" and all
variations thereon shall mean "include without limitation", (e) the term "or"
shall include "and/or", and (f) any reference herein to a "Trustee, acting on
behalf of the Trust," or words of similar import, shall be deemed to mean the
applicable Trustee, acting on behalf of the Trust and all applicable
beneficiaries of the Trust.
"Administrative Trustee" has the meaning set forth in the Recitals.
"Business Trust Statute" has the meaning set forth in the Trust Agreement.
"Certificate of Title" has the meaning set forth in the Trust Agreement.
"Charged-off Lease" means a User Lease which has been written off by the
Servicer in accordance with its Customary Servicing Practices for writing off
lease contracts.
"Collections" means all monthly lease payments on any User Lease,
Liquidation Proceeds in respect of any Vehicle and any other payments, receipts
or Recoveries (including any residual value insurance proceeds and other
insurance proceeds) by or on behalf of any End User or otherwise with respect to
any User Lease or Leased Vehicle other than (i) Supplemental Servicing Fees,
(ii) payments allocable to sales, use or other taxes (which shall be collected
by the Servicer and remitted to the applicable governmental authority or used to
reimburse the Servicer for payment of such amounts in accordance with Customary
Servicing Practices), (iii) payments allocable to premiums for force-placed
insurance policies purchased by the Servicer on behalf of any End User (which
shall be collected by the Servicer and remitted to the applicable insurance
company (or if such amounts were paid by the Servicer, to the Servicer) in
accordance with the Customary Servicing Practices), (iv) payments allocable to
fines for parking violations incurred by any End User but assessed to the Trust
as the owner of the related Leased Vehicle (which shall be collected by the
Servicer and remitted to the applicable governmental authority (or if such
amounts were paid by the Servicer, to the Servicer) in accordance with Customary
Servicing Practices), and (v) rebates of insurance premiums with respect to the
cancellation of any insurance policy.
"Customary Servicing Practices" means the customary practices of the
Servicer with respect to Leased Vehicles and User Leases held by the Origination
Trust, without regard to whether such Leased Vehicles and User Leases have been
identified and allocated into a SUBI Portfolio, as such practices may be amended
from time to time.
"Dealer" has the meaning set forth in the Trust Agreement.
2 Servicing Agreement
"Dealer Agreement" means a Dealer Agreement as amended, modified or
supplemented from time to time, entered into between VCI or the Trust and a
Dealer providing for the Dealer, (i) to arrange retail vehicle leases that will
be entered into by the Trustee, or (ii) acting as the originator of retail
vehicle leases that will be acquired by the Trust, and in accordance with which,
the title to the related leased vehicles will in either case be acquired by the
Trust at prices determined as provided for in such agreement.
"Delaware Trustee" has the meaning set forth in the Recitals.
"End User" means each Person who is the lessee under a User Lease.
"Filings" has the meaning set forth in Section 2.7.
"Financing" has the meaning set forth in the Trust Agreement.
"Initial Beneficiary" has the meaning set forth in the Recitals.
"Leased Vehicles" has the meaning set forth in the Trust Agreement.
"Liquidation Proceeds" means, with respect to any Leased Vehicle, the
proceeds received by the Servicer in connection with the sale or other
disposition of such Leased Vehicle, net of any and all out-of-pocket costs and
expenses incurred by the Servicer in connection with such sale or other
disposition, including without limitation, all repossession, auction, painting,
repair, legal and any and all other similar liquidation, collection and
refurbishment costs and expenses.
"Maturity Date" means, with respect to any User Lease, the date on which
such User Lease is scheduled to terminate, as such date may be extended pursuant
to Section 2.2(b)(ii).
"Obligee" means each Person who is the lessor under a User Lease or the
assignee thereof, including the Trust.
"Person" has the meaning set forth in the Trust Agreement.
"Purchase Price" means, for any Leased Vehicle and related User Lease, the
amount paid by or on behalf of the Trust for such Leased Vehicle and related
User Lease.
"Recoveries" means, with respect to any User Lease or Leased Vehicle, the
proceeds (other than Liquidation Proceeds) received by the Servicer after any
default under the related User Lease, net of any and all out-of-pocket costs and
expenses incurred by the Servicer in connection with such defaulted User Lease,
including without limitation, all repossession, auction, painting, repair,
legal, bankruptcy and any and all other similar liquidation, collection and
refurbishment costs and expenses.
"Registrar of Titles" has the meaning set forth in the Trust Agreement.
"Security Deposit" means, with respect to any User Lease, the refundable
security deposit (if any) specified in such User Lease.
3 Servicing Agreement
"Servicer" has the meaning set forth in the preamble.
"Servicing Fee" has the meaning specified in Section 2.5.
"Settlor" has the meaning set forth in the Recitals.
"SUBI" has the meaning set forth in the Recitals.
"SUBI Asset" has the meaning set forth in the Trust Agreement.
"SUBI Portfolio" has the meaning set forth in the Trust Agreement.
"SUBI Servicing Agreement Supplement" means any supplement or amendment to
this Agreement entered into from time to time to accommodate the creation and
issuance of a particular SUBI and to specify any special responsibilities or
obligations that the Servicer may be required to undertake in connection
therewith.
"SUBI Supplement" means any supplement or amendment to the Trust Agreement
executed from time to time in connection with the creation and issuance of a
particular SUBI.
"SUBI Trustee" means, as to each SUBI, the separate trustee appointed by
the Initial Beneficiary for each SUBI.
"Supplemental Servicing Fees" means any late fees, NSF check fees,
disposition fees, purchase option fees and other administration fees or similar
charges (including any fees payable in connection with or pursuant to an
extension agreement) paid by any End User pursuant to a User Lease.
"Trust" has the meaning set forth in the preamble.
"Trust Agreement" has the meaning set forth in the Recitals.
"Trust Asset" means any asset of any type owned by the Trust.
"Trustees" means the Delaware Trustee, the UTI Trustee, the Administrative
Trustee and any SUBI Trustee.
"User Lease" has the meaning set forth in the Trust Agreement.
"UTI" means the undivided trust interest in the Trust created pursuant to
the Trust Agreement.
"UTI Certificate" has the meaning set forth in the Trust Agreement.
"UTI Holder" means initially, VCI and any other registered holder of the
UTI Certificate.
"UTI Portfolio" means, as to the UTI, that collection of User Leases,
Leased Vehicles and other associated Trust Assets allocated to the UTI from time
to time.
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"UTI Trustee" has the meaning set forth in the Recitals.
"VCI" has the meaning set forth in the preamble.
ARTICLE II
ADMINISTRATION AND SERVICING OF USER LEASES
SECTION 2.1. SERVICER TO ACT AS SERVICER.
(a) As agent for and subject to the supervision, direction and control of
the Trust as set forth in the Trust Agreement, the Servicer shall manage the
Trust and shall service, administer and collect under the User Leases and the
other Trust Assets in accordance with the terms of this Agreement, and shall
have full power and authority, acting alone and subject only to the specific
requirements and prohibitions of this Agreement, to do any and all things in
connection with such servicing, administering and collecting that it may
reasonably deem necessary or desirable. The duties of the Servicer shall
include, among other things, acquiring vehicles and originating leases on behalf
of the Trust, collecting and posting payments, responding to inquiries of End
Users on the User Leases, investigating delinquencies, sending payment
statements and reporting required tax information (if any) to End Users,
disposing of returned vehicles, paying costs of disposition of Leased Vehicles
related to Charged-off Leases, administering the User Leases, including, but not
limited to, executing powers of attorney to be delivered to End Users for the
limited purpose of obtaining license plates and fulfilling other state
requirements for registration of the Leased Vehicles, obtaining a new
Certificate of Title to a Leased Vehicle in another jurisdiction to the extent
required by law, making other modifications to the User Leases (in accordance
with Customary Servicing Practices), approving repairs to Leased Vehicles and
endorsing the related insurance settlement checks for repair work, accounting
for collections and preparing and filing all required tax returns (if any) of
the Trust.
Without limiting the generality of the foregoing, the Servicer hereby
expressly agrees to perform and carry out on behalf of the Trust, all of the
obligations on the part of the Obligee under the User Leases and is hereby
authorized and empowered by the Trust to execute and deliver, in its own name or
on behalf of the Trust, or both of them, as the case may be, any and all
instruments of satisfaction, extension or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
User Leases or the Leased Vehicles.
The Servicer shall cause the Trust to (i) apply for and maintain (or cause
to be applied for and maintained) all licenses, permits, authorizations and
other governmental items necessary and appropriate for the Trust to acquire,
hold and manage Trust Assets as contemplated by the Trust Agreement in each
jurisdiction where the ownership of its assets or the nature of its operations
would require it to maintain such licenses, permits, authorizations or other
governmental items, (ii) file (or cause to be filed) all notices, reports and
other required filings in each jurisdiction where the location of its assets or
the nature of its operations would require the Trust to make such filing, and
(iii) pay or cause to be paid all applicable taxes and fees properly due and
owing in connection with the Trust's activities.
If the Servicer shall commence a legal proceeding to enforce a User Lease,
the Trust shall thereupon be deemed to have automatically assigned, solely for
the purpose of collection on
5 Servicing Agreement
behalf of the Trust, its interest in such User Lease and the related Leased
Vehicle to the Servicer to the extent necessary for the purposes of
participating in such proceeding. If in any enforcement suit or legal proceeding
it is held that the Servicer may not enforce a User Lease on the grounds that it
is not the real party in interest or a holder entitled to enforce such User
Lease, the Trust shall, at the expense and direction of the Servicer, take steps
to enforce the User Lease, including bringing suit in the Trust's name. The
Trust shall furnish the Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
The Servicer shall acquire or enter into on behalf of the Trust, in its
ordinary course of business, User Leases with End Users approved by the
Servicer. The Servicer agrees that its origination, underwriting and servicing
of the User Leases for the benefit of the Trust shall be carried out in
accordance with Customary Servicing Practices with respect to similar types of
vehicles.
(b) (i) The Servicer shall continue to maintain or enter into on behalf of
the Trust, in the ordinary course of its business, Dealer Agreements with
Dealers selected by the Servicer from time to time in its reasonable discretion
(together with such supplemental agreements as shall be necessary to permit the
Trust to enforce any rights against the Dealers). The Servicer shall execute on
behalf of the Trust all approved User Leases arranged by the Dealer. The
Servicer shall take such action as is necessary for each Certificate of Title
for each Leased Vehicle to show the owner of such Leased Vehicle as "VW Credit
Leasing, Ltd." or the name of a Trustee (other than the Delaware Trustee) using
the quoted phrase or such other similar phrase as will satisfy the Registrar of
Titles in each relevant jurisdiction, or such other designation(s) as the
Servicer shall determine. The obligations of the Servicer pursuant to this
Section 2.1(b)(i) shall survive any partial or complete termination of the
Servicer pursuant hereto for any User Lease entered into prior to the
termination of this Agreement.
(ii) Upon the satisfaction by the Dealer of any requirements entitling the
Dealer to payment with respect to the Leased Vehicle (and the related User
Lease, if originated by the Dealer)(including without limitation the execution
and delivery thereby of all instruments of assignment of such User Lease and
Leased Vehicle to the Trust), the Servicer shall remit to such Dealer the
Purchase Price.
Any payment by VCI to a Dealer to acquire a Leased Vehicle or a related
User Lease shall constitute a contribution by VCI to the Trust in respect of
VCI's ownership interest in the UTI followed by the purchase by the Trust of
each Leased Vehicle, related User Lease and the related Trust Assets from the
Dealer, and the UTI shall immediately thereafter be deemed to represent the
entire beneficial interest in such Leased Vehicle, the related User Lease and
any related Trust Assets (whether such User Lease was originated by a Dealer or
by the Trust).
SECTION 2.2. COLLECTION OF MONTHLY LEASE PAYMENTS
AND REMITTANCES; APPLICATION OF PROCEEDS.
(a) The Servicer shall use commercially reasonable efforts to (i) collect
all payments required under the terms and provisions of each User Lease; and
(ii) cause each End User to
6 Servicing Agreement
make all payments in respect of the User Lease to which such End User is a party
or otherwise obligated.
(b) Consistent with the foregoing, the Servicer may in its discretion (i)
waive any late payment charge or other charge that would constitute a
Supplemental Servicing Fee, and (ii) extend the Maturity Date of any User Lease
consistent with Customary Servicing Practices.
(c) As to any other funds received by the Servicer with respect to any
Trust Asset:
(i) With respect to any such funds relating to a SUBI Asset, the
Servicer shall deposit such funds as set forth in the appropriate SUBI
Servicing Agreement Supplement; and
(ii) With respect to any such funds relating to any Trust Asset other
than a SUBI Asset, the Servicer shall pay such funds as directed by the UTI
Holder.
(d) The Servicer shall, on behalf of the UTI Trustee and at the direction
of the Initial Beneficiary, from time to time, in accordance with the Trust
Agreement or the applicable SUBI Supplement thereto, identify and allocate on
the books and records of the Trust certain User Leases and/or Leased Vehicles
into one or more SUBI Portfolios, either upon the initial creation of such SUBI
or periodically following its creation.
(e) The Servicer shall account to the applicable Trustee for the UTI
Portfolio and each SUBI Portfolio of Trust Assets separately and in accordance
with any supplement or amendment to this Agreement entered into with respect to
such UTI Portfolio or SUBI Portfolio, as the case may be.
SECTION 2.3. RECORDS.
The Servicer shall maintain or cause to be maintained such computer and/or
manual records with respect to Trust Assets and all Collections relating thereto
in accordance with Customary Servicing Practices with respect to similar types
of vehicles.
SECTION 2.4. COLLECTION AND APPLICATION OF SECURITY DEPOSITS.
The Servicer shall retain any Security Deposit remitted to it or the Trust
as agent and bailee for the Trust, and shall apply the proceeds of such Security
Deposits in accordance with applicable law, its Customary Servicing Practices
and the User Leases, including but not limited to using the Security Deposit in
respect of any User Lease for the payment of any amount resulting from the
related End User's default or failure to pay all amounts required to be paid
under such User Lease or resulting from excess mileage or excess wear and tear
to the related Leased Vehicle. In the event that any User Lease becomes a
Charged-off Lease or, if earlier, the related Leased Vehicle is repossessed,
then the related Security Deposit, to the extent permitted by such User Lease
and applicable law, shall thereby become a Collection. Each Security Deposit,
after deduction for amounts applied towards the payment of any amount resulting
from the related End User's default or failure to pay any amounts required to be
paid under such User Lease or damage to the related Leased Vehicle, shall be
returned to the related End User by the
7 Servicing Agreement
Servicer; provided, however, that the Servicer may retain a Security Deposit
(including any interest thereon) until the End User has repaid all other charges
owed under such User Lease.
SECTION 2.5. SERVICING COMPENSATION; FEES, COSTS AND EXPENSES.
(a) As compensation for the performance of its obligations under this
Agreement and subject to the terms of this Section and the terms of any
applicable SUBI Servicing Agreement Supplement, the Servicer shall be entitled
to receive from the Trust, a fee (the "Servicing Fee") equal to:
(i) With respect to each SUBI Portfolio, the amount set forth in the
related SUBI Servicing Agreement Supplement.
(ii) With respect to the UTI Portfolio, such amount as shall be agreed
from time to time between the holder of the UTI and the Servicer.
(iii) In addition to the foregoing, the Servicer shall be entitled to
retain as additional compensation, for each UTI Portfolio or SUBI
Portfolio, all Supplemental Servicing Fees.
The Servicer shall pay all expenses of the Trust and all expenses incurred
by it in connection with its servicing activities hereunder, including the costs
of any Trustee, any separate trustee or co-trustee appointed by a Trustee
pursuant to Section 6.6 of the Trust Agreement, and shall not be entitled to
reimbursement of such expenses. Notwithstanding anything contained in the
foregoing sentence to the contrary, the Servicer shall not be liable to pay
losses with respect to Trust Assets.
(b) As additional servicing compensation, the Servicer also shall be
entitled to the earnings from the investment of Security Deposits retained as
and to the extent permitted by applicable law and the applicable User Leases and
to the extent not required to be paid to the End Users.
SECTION 2.6. ENFORCEMENT OF USER LEASES;
REPOSSESSION AND SALE OF LEASED VEHICLES.
The Servicer shall use commercially reasonable efforts (consistent with its
Customary Servicing Practices with respect to similar types of vehicles) to
enforce the provisions of the User Leases and to repossess or otherwise take
possession of the Leased Vehicle related to any User Lease that shall have
terminated or expired or that the Servicer shall have determined (in accordance
with its Customary Servicing Practices) to be in default.
The Servicer shall, in accordance with the standards set forth in the
immediately preceding paragraph:
(a) follow such practices and procedures as it shall deem necessary or
advisable in accordance with its Customary Servicing Practices in its servicing
of leases for automobiles, sports utility vehicles, light-duty trucks and other
vehicles, which may include reasonable efforts
8 Servicing Agreement
to realize upon any recourse to Dealers, consigning a Leased Vehicle to a motor
vehicle dealer for resale or selling a Leased Vehicle at public or private sale;
and
(b) sell or otherwise dispose of each Leased Vehicle that is so repossessed
and, if the User Lease is in default, shall commence and prosecute any legal
proceedings in respect of such User Lease (and the related Leased Vehicle) in
its own name or in the name of the Trust.
SECTION 2.7. SERVICER TO ACT ON BEHALF OF TRUST.
(a) In order to facilitate the servicing of the User Leases by the
Servicer, the Trust hereby appoints the Servicer as its agent and bailee to
retain possession of the User Leases, Certificates of Title and any other
related items that from time to time come into possession of the Servicer, and
the Servicer hereby accepts such appointment.
(b) The Servicer shall identify from time to time all (i) periodic sales
and use tax or property (real or personal) tax reports, (ii) periodic renewals
of licenses and permits, (iii) periodic renewals of qualification to act as a
trust and a business trust and (iv) other governmental filings, registrations or
approvals (collectively, "Filings") arising with respect to or required of the
Trust, including such licenses, permits, and other Filings as are required for
the Trust to originate and accept assignments of User Leases and to be
identified as the owner of Leased Vehicles on their Certificates of Title, as
contemplated by Section 2.1(a)(i). The Servicer shall also identify any surety
bonds or other ancillary undertakings required of the Trust in respect of any
Filing. The Servicer shall timely prepare and file, or cause to be filed, with
the cooperation of the Trustees, on behalf of the Trust with the appropriate
Person each Filing and each such ancillary undertaking. In connection with this
Section 2.7(b), the Trust grants to the Servicer the authority to, and will,
from time to time, execute and deliver to the Servicer any necessary power of
attorney as the Servicer may require in order to effect each such Filing and
ancillary undertaking. Should the Servicer at any time receive notice, or have
actual knowledge, of any non-compliance with any Filing requirement, it shall
promptly take all required action to rectify such noncompliance.
(c) The Servicer agrees to indemnify, defend and hold harmless the Trust,
the Trustees and their respective agents (including without limitation any Trust
Agent) for (i) any and all liabilities, losses, damages and expenses that may be
incurred as a result of any negligent act or omission by the Servicer in
connection with any Trust Asset or this Agreement, and (ii) any claims by third
parties against the Trust. The obligations set forth in this Section 2.7(c)
shall survive the termination of this Agreement and the Trust Agreement or the
resignation or removal of the Servicer or any Trustee; provided, however, that
the provisions of this Section 2.7(c) shall not require any successor Servicer
appointed hereunder to indemnify any Person except with respect to the
negligence or misconduct of such successor Servicer in performing its duties
hereunder or the breach by such successor Servicer of this Agreement.
SECTION 2.8. THIRD PARTY CLAIMS.
The Servicer shall promptly notify VCI (in the event that VCI is not acting
as the Servicer hereunder) and the Trustees, on behalf of the Trust, upon its
learning that a claim of whatever kind that would be indemnified under Section
2.7.
9 Servicing Agreement
SECTION 2.9. INSURANCE POLICIES.
(a) The Servicer shall at all times have in effect, maintain and keep in
force for the benefit of the Trust, or cause the Trust to have in effect,
maintain and keep in force, insurance policies (which may be blanket policies
covering the Servicer, the Trust and some or all Affiliates of the Servicer)
with respect to the Trust Assets against such hazards, in such form and in such
amounts as follows:
(i) Contingent and excess automobile liability insurance policies with
a nationally recognized insurance company with a rating of at least A- by
A.M. Best, with limits of no less than $1,000,000 per occurrence, covering
losses in the event that an End User's primary insurance policy is not
collectible at the time of loss or that a liability claim exceeds the
policy limit of the End User's primary insurance.
(ii) Interim automobile liability insurance coverage with a nationally
recognized insurance company with a rating of at least A- by A.M. Best,
with limits of no less than $1,000,000 per occurrence, covering losses (i)
prior to the time that an End User's primary insurance becomes effective
and (ii) after a User Lease has terminated.
(iii) Umbrella excess liability insurance of not less than $25,000,000
with an insurer that has a rating of at least A- by A.M. Best. Such
coverage shall be on a per occurrence basis and over and above the coverage
provided by the policies described in paragraphs (i) and (ii) above. The
coverages of the umbrella excess liability policies shall be at least as
broad as the coverages as set forth in paragraphs (i) and (ii) above.
(iv) All policies of insurance required to be maintained pursuant to
this section shall name the Trust as an additional insured (the "Additional
Insured"). Each policy shall expressly provide that all provisions thereof,
except liability for premiums (which shall be solely a liability of the
Servicer) and the limits of the insurer's liability under the policy, shall
operate in the same manner as if there were a separate policy covering the
Additional Insured.
SECTION 2.10. SERVICER NOT TO RESIGN; ASSIGNMENT.
(a) Except as provided in Section 4.1(b), the Servicer shall not resign
from the duties and obligations hereby imposed on it as Servicer except upon
determination by its board of directors that by reason of change in applicable
legal requirements the continued performance by the Servicer of its duties as
Servicer under this Agreement would cause it to be in violation of such legal
requirements in a manner that would result in a material adverse effect on the
Servicer or its financial condition, said determination to be evidenced by
resolutions of the board of directors to such effect accompanied by an opinion
of counsel reasonably satisfactory to the Trustees, to such effect. No such
resignation shall become effective unless and until a new servicer is willing to
service the User Leases and enters into a servicing agreement with the Trust,
such agreement to have substantially the same provisions as this Agreement. The
Trust shall not unreasonably fail to consent to such a servicing agreement.
(b) Subject to paragraph (c) of this Section, the Servicer may not assign
this Agreement or any of its rights, powers, duties or obligations hereunder;
provided, however, that
10 Servicing Agreement
the Servicer may assign this Agreement in connection with a consolidation,
merger, conveyance or transfer of substantially all of its assets without the
consent of any Person.
(c) The Servicer may, at any time without notice or consent, delegate (i)
any or all duties under this Agreement to any Person more than 50% of the voting
securities of which are owned, directly or indirectly, by Volkswagen AG or any
successor thereto, or (ii) specific duties to sub-contractors who are in the
business of performing such duties; provided, however, that no such delegation
shall relieve the Servicer of its responsibility with respect to such duties and
the Servicer shall remain obligated and liable to the Trustees and the holders
of the UTI and the SUBIs for servicing and administering the Trust Assets in
accordance with this Agreement as if the Servicer alone were performing such
duties.
ARTICLE III
SERVICER TERMINATION WITH RESPECT TO UTI
SECTION 3.1. TERMINATION OF SERVICER BY UTI HOLDER WITH RESPECT TO UTI.
The UTI Holder may, upon written notice to the Servicer, terminate all or a
portion of the rights and powers of the Servicer with respect to the UTI under
this Agreement.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. TERMINATION OF AGREEMENT.
This Agreement shall, except as otherwise provided herein, terminate upon
the earliest of (a) the termination of the Trust; (b) the discharge of the
Servicer in accordance with the terms hereof; or (c) the mutual written
determination of the parties hereto. Upon termination of this Agreement, the
Servicer shall pay over to the Trust, or any other Person entitled thereto, all
monies held by the Servicer on behalf of the Trust pursuant to this Agreement.
SECTION 4.2. AMENDMENT.
(a) This Agreement may be amended from time to time in a writing signed by
the Trustees, on behalf of the Trust, and the Servicer. Any amendment affecting
particular Trust Assets allocated to a SUBI Portfolio need not be signed by any
Trustee which does not administer such particular Trust Assets. The consent of
the holders or pledgees of any SUBI Certificate shall not be required to amend
this Agreement except to the extent the interests of such holder or pledgee
would be adversely affected.
(b) In particular, but without limiting the foregoing, this Agreement may
be amended by means of one or more SUBI Servicing Agreement Supplements in
connection with any Financings. Such supplemental agreements may provide, among
other things, for further specific servicing obligations relating to SUBI Assets
for the particular benefit of holders of related SUBIs. Such supplemental
agreements may permit the termination of this Agreement insofar as it applies to
such SUBI Assets upon the terms and conditions set forth therein; however, no
such supplemental agreement shall permit the termination of this Agreement
insofar as it applies to other Trust Assets except as provided herein.
11 Servicing Agreement
(c) Any amendment or modification effected contrary to the provisions of
this Section shall be void.
SECTION 4.3. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE
PRINCIPLES OF CONFLICT OF LAWS.
SECTION 4.4. NOTICES.
All demands, notices and communications hereunder shall be in writing and
shall be delivered or mailed by registered or certified first-class United
States mail, postage prepaid, hand delivery, any prepaid courier service, or by
telecopier, and addressed in each case as follows: (a) if to the Servicer, VW
Credit, Inc., 0000 Xxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000, Attention:
Secretary; Facsimile: (000) 000-0000 and Attention: Treasurer; Facsimile (298)
340-5360, with copies to Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx; Facsimile: (000) 000-0000
(Confirmation Number: (000) 000-0000); (b) if to the UTI Trustee or
Administrative Trustee, U.S. Bank Trust National Association, One Illinois
Center, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 Attention:
Corporate Trust Department; Facsimile: (000) 000-0000 (Confirmation Number:
(000) 000-0000); or (c) if to the Delaware Trustee, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 Attention: Corporate Trust Administration; Facsimile:
(000) 000-0000. The Servicer or any Trustee may change its address for notices
hereunder by giving notice of such change to the other parties hereto and to the
parties to the Trust Agreement. All notices and demands shall be deemed to have
been given upon delivery or tender of delivery thereof to any officer of the
Person entitled to receive such notices and demands at the address of such
Person for notices hereunder.
SECTION 4.5. SEVERABILITY.
If one or more of the provisions of this Agreement shall be for any reason
whatever held invalid or unenforceable, such provisions shall be deemed
severable from the remaining covenants, agreements and provisions of this
Agreement, and such invalidity or unenforceability shall in no way affect the
validity or enforceability of such remaining covenants, agreements and
provisions, or the rights of any parties hereto. To the extent permitted by law,
the parties hereto waive any provision of law that renders any provision of this
Agreement invalid or unenforceable in any respect.
SECTION 4.6. BINDING EFFECT.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and permitted assigns of the parties
hereto, and all such provisions shall inure to the benefit of the Trust.
12 Servicing Agreement
SECTION 4.7. ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
SECTION 4.8. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
so executed and delivered shall be deemed to be an original, but all of which
counterparts shall together constitute but one and the same instrument.
SECTION 4.9. RIGHTS CUMULATIVE.
All rights and remedies from time to time conferred upon or reserved to the
Trust, the Trustees (or any of them), on behalf of the Trust, or the Servicer or
to any or all of the foregoing are cumulative, and none is intended to be
exclusive of another. No delay or omission in insisting upon the strict
observance or performance of any provision of this Agreement, or in exercising
any right or remedy, shall be construed as a waiver or relinquishment of such
provision, nor shall it impair such right or remedy. Every right and remedy may
be exercised from time to time and as often as deemed expedient.
SECTION 4.10. FURTHER ASSURANCES.
Each party will do such acts, and execute and deliver to any other party
such additional documents or instruments as may be reasonably requested in order
to effect the purposes of this Agreement and to better assure and confirm unto
the requesting party its rights, powers and remedies hereunder.
SECTION 4.11. THIRD-PARTY BENEFICIARIES.
This Agreement will inure to the benefit of and be binding upon the parties
hereto and each of the beneficiaries of the Trust (including each pledgee or
assignee of the UTI), who shall be considered to be third-party beneficiaries
hereof. Except as otherwise provided in this Agreement, no other Person will
have any right or obligation hereunder.
SECTION 4.12. NO WAIVER.
No waiver by any party hereto of any one or more defaults by any other
party or parties in the performance of any of the provisions of this Agreement
shall operate or be construed as a waiver of any future default or defaults,
whether of a like or different nature. No failure or delay on the part of any
party in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to any
party hereto at law, in equity or otherwise.
13 Servicing Agreement
SECTION 4.13. NON-PETITION COVENANT.
The Servicer covenants and agrees that prior to the date which is one year
and one day after the date upon which all obligations under each Financing has
been paid in full, the Servicer will not institute against, or join any other
person in instituting against the Trust, any Special Purpose Entity or any
general partner of a Special Purpose Entity that is a partnership, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceedings under any federal or state bankruptcy or similar law. This
Section shall survive the termination of this Agreement or the resignation or
removal of the Servicer under this Agreement.
SECTION 4.14. SERIES LIABILITIES.
It is expressly understood and agreed by the Servicer, and all persons
claiming through the Servicer, that the Trust is a series trust pursuant to
Sections 3804 and 3806(b)(2) of the Business Trust Statute. As such, separate
and distinct records shall be maintained for the UTI Portfolio and each SUBI
Portfolio and the Trust Assets associated with the UTI Portfolio and each SUBI
Portfolio shall be held and accounted for separately from the other assets of
the Trust. The debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to the UTI and each SUBI shall be
enforceable against the UTI Portfolio or the related SUBI Portfolio only, and
not against the Trust Assets generally or the assets of any other SUBI
Portfolio.
SECTION 4.15. LIMITATION OF LIABILITY.
It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by U.S. Bank Trust, National Association,
not individually or personally but solely as Administrative Trustee and UTI
Trustee of the Trust under the Trust Agreement, in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of either the Administrative
Trustee, the UTI Trustee or the Trust is made and intended not as personal
representations, undertakings and agreements by U.S. Bank Trust National
Association but is made and intended for the purpose of binding only the Trust,
(c) nothing herein contained shall be construed as creating any liability on
U.S. Bank Trust, National Association, individually or personally, to perform
any covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the parties hereto and by any Person claiming
by, through or under the parties hereto and (d) under no circumstances shall
U.S. Bank Trust, National Association be personally liable for the payment of
any indebtedness or expenses of the Trust or be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken by
the Administrative Trustee, UTI Trustee or the Trust under this Agreement.
14 Servicing Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers duly authorized as of the day and
year first above written.
VW CREDIT, INC.,
as Servicer
By: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: Treasurer
By: /s/ Xxxxx Xxxxx
-----------------------------
Name: Xxxxx Xxxxx
Title: President
VW CREDIT LEASING, LTD.
By: U.S. Bank Trust National Association,
as Administrative Trustee and UTI Trustee
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
S-1 Servicing Agreement
