EXHIBIT 10.1
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SALE AND SERVICING AGREEMENT
by and among
VOLKSWAGEN AUTO LOAN ENHANCED TRUST 20[__]-[__],
as Issuer
VOLKSWAGEN AUTO LEASE UNDERWRITTEN FUNDING, LLC,
as Seller
VW CREDIT, INC.,
as Servicer
and
[__________]
as Indenture Trustee
Dated as of [__________]
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20[__]-[__] Sale & Servicing Agreement
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND USAGE......................................... 1
SECTION 1.1 Definitions................................................ 1
SECTION 1.2 Other Interpretive Provisions.............................. 1
ARTICLE II CONVEYANCE OF TRANSFERRED ASSETS.............................. 2
SECTION 2.1 Conveyance of Transferred Assets........................... 2
SECTION 2.2 Representations and Warranties of the Seller as to each
Receivable................................................. 2
SECTION 2.3 Repurchase upon Breach..................................... 2
SECTION 2.4 Custody of Receivable Files................................ 3
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST
PROPERTY...................................................... 5
SECTION 3.1 Duties of Servicer......................................... 5
SECTION 3.2 Collection of Receivable Payments.......................... 6
SECTION 3.3 Realization Upon Receivables............................... 6
SECTION 3.4 Maintenance of Security Interests in Financed Vehicles..... 7
SECTION 3.5 Covenants of Servicer...................................... 7
SECTION 3.6 Purchase of Receivables Upon Breach........................ 7
SECTION 3.7 Servicing Fee.............................................. 7
SECTION 3.8 Servicer's Certificate..................................... 8
SECTION 3.9 Annual Officer's Certificate; Notice of Servicer
Replacement Event.......................................... 8
SECTION 3.10 Annual Servicing Report of Independent Public Accountants.. 8
SECTION 3.11 Servicer Expenses.......................................... 8
SECTION 3.12 1934 Act Filings........................................... 9
ARTICLE IV DISTRIBUTIONS; ACCOUNTS; STATEMENTS TO THE CERTIFICATEHOLDER
AND THE NOTEHOLDERS........................................... 9
SECTION 4.1 Establishment of Accounts.................................. 9
SECTION 4.2 Remittances................................................ 11
SECTION 4.3 Additional Deposits and Payments; Servicer Advances........ 11
SECTION 4.4 Distributions.............................................. 12
SECTION 4.5 Net Deposits............................................... 13
SECTION 4.6 Statements to Certificateholder and Noteholders............ 13
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TABLE OF CONTENTS
(continued)
SECTION 4.7 No Duty to Confirm......................................... 14
ARTICLE V THE SELLER.................................................... 14
SECTION 5.1 Representations and Warranties of Seller................... 14
SECTION 5.2 Liability of Seller; Indemnities........................... 15
SECTION 5.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller..................................... 16
SECTION 5.4 Limitation on Liability of Seller and Others............... 17
SECTION 5.5 Seller May Own Notes....................................... 17
SECTION 5.6 Xxxxxxxx-Xxxxx Act Requirements............................ 17
SECTION 5.7 Compliance with Organizational Documents................... 17
ARTICLE VI THE SERVICER.................................................. 18
SECTION 6.1 Representations of Servicer................................ 18
SECTION 6.2 Indemnities of Servicer.................................... 19
SECTION 6.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer................................... 20
SECTION 6.4 Limitation on Liability of Servicer and Others............. 20
SECTION 6.5 Delegation of Duties....................................... 21
SECTION 6.6 VCI Not to Resign as Servicer.............................. 21
SECTION 6.7 Servicer May Own Notes..................................... 21
ARTICLE VII REPLACEMENT OF SERVICER....................................... 22
SECTION 7.1 Replacement of Servicer.................................... 22
SECTION 7.2 Notification to Noteholders................................ 23
ARTICLE VIII OPTIONAL PURCHASE............................................. 23
SECTION 8.1 Optional Purchase of Trust Estate.......................... 23
ARTICLE IX MISCELLANEOUS PROVISIONS...................................... 23
SECTION 9.1 Amendment.................................................. 23
SECTION 9.2 Protection of Title........................................ 25
SECTION 9.3 Other Liens or Interests................................... 26
SECTION 9.4 Transfers Intended as Sale; Security Interest.............. 26
SECTION 9.5 Notices, Etc............................................... 27
SECTION 9.6 Choice of Law.............................................. 27
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TABLE OF CONTENTS
(continued)
SECTION 9.7 Headings................................................... 27
SECTION 9.8 Counterparts............................................... 27
SECTION 9.9 Waivers.................................................... 27
SECTION 9.10 Entire Agreement........................................... 28
SECTION 9.11 Severability of Provisions................................. 28
SECTION 9.12 Binding Effect............................................. 28
SECTION 9.13 Acknowledgment and Agreement............................... 28
SECTION 9.14 No Waiver; Cumulative Remedies............................. 28
SECTION 9.15 Nonpetition Covenant....................................... 28
SECTION 9.16 Submission to Jurisdiction; Waiver of Jury Trial........... 29
SECTION 9.17 Limitation of Liability.................................... 29
SECTION 9.18 Third-Party Beneficiaries.................................. 30
SECTION 9.19 Information Requests....................................... 30
SECTION 9.20 Regulation AB.............................................. 30
SECTION 9.21 Information to Be Provided by the Indenture Trustee........ 30
Appendix A Definitions
Schedule I Representations and Warranties With Respect to the Receivables
Schedule II Notice Addressees
Exhibit A Form of Assignment pursuant to Sale and Servicing Agreement
Exhibit B Perfection Representations, Warranties and Covenants
Exhibit C Servicing Criteria to be Addressed in Indenture Trustee's Assessment
of Compliance
Exhibit D Form of Indenture Trustee's Annual Certification
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SALE AND SERVICING AGREEMENT, dated as of [___________] (together with all
exhibits, schedules and appendices hereto and as from time to time amended,
supplemented or otherwise modified and in effect, this "Agreement"), by and
among VOLKSWAGEN AUTO LOAN ENHANCED TRUST 20[__]-[__] (the "Issuer"), a Delaware
statutory trust, VOLKSWAGEN AUTO LEASE UNDERWRITTEN FUNDING, LLC, a Delaware
limited liability company, as seller (the "Seller"), VW CREDIT, INC., a Delaware
corporation ("VCI"), as servicer (in such capacity, the "Servicer"), and
[_______________], a [national banking association], as indenture trustee (the
"Indenture Trustee").
WHEREAS, the Issuer desires to purchase from the Seller a portfolio of
motor vehicle receivables, including retail motor vehicle installment sales
contracts and/or installment loans that are secured by new and used automobiles
and light-duty trucks;
WHEREAS, the Seller is willing to sell such portfolio of motor vehicle
receivables and related property to the Issuer; and
WHEREAS, VCI is willing to service such motor vehicle receivables and
related property on behalf of the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
SECTION 1.1 Definitions. Except as otherwise specified herein or as the
context may otherwise require, capitalized terms used but not otherwise defined
herein are defined in Appendix A hereto, which also contains rules as to usage
that are applicable herein.
SECTION 1.2 Other Interpretive Provisions. For purposes of this Agreement,
unless the context otherwise requires: (a) accounting terms not otherwise
defined in this Agreement, and accounting terms partly defined in this Agreement
to the extent not defined, shall have the respective meanings given to them
under GAAP; (b) terms defined in Article 9 of the UCC as in effect in the
relevant jurisdiction and not otherwise defined in this Agreement are used as
defined in that Article; (c) the words "hereof," "herein" and "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular provision of this Agreement; (d) references to any Article, Section,
Schedule, Appendix or Exhibit are references to Articles, Sections, Schedules,
Appendices and Exhibits in or to this Agreement and references to any paragraph,
subsection, clause or other subdivision within any Section or definition refer
to such paragraph, subsection, clause or other subdivision of such Section or
definition; (e) the term "including" means "including without limitation"; (f)
except as otherwise expressly provided herein, references to any law or
regulation refer to that law or regulation as amended from time to time and
include any successor law or regulation; (g) references to any Person include
that Person's successors and assigns; and (h) headings are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
ARTICLE II
CONVEYANCE OF TRANSFERRED ASSETS
SECTION 2.1 Conveyance of Transferred Assets. In consideration of the
Issuer's sale and delivery to, or upon the order of, the Seller of all of the
Notes and the Certificate on the Closing Date, the Seller does hereby
irrevocably sell, transfer, assign and otherwise convey to the Issuer without
recourse (subject to the obligations herein) all right, title and interest of
the Seller, whether now owned or hereafter acquired, in and to the Transferred
Assets, described in an Assignment substantially in the form of Exhibit A
delivered on the Closing Date. The sale, transfer, assignment and conveyance
made hereunder will not constitute and is not intended to result in an
assumption by the Issuer of any obligation of the Seller or the applicable
Originator to the Obligors, the Dealers or any other Person in connection with
the Receivables or the other assets and properties conveyed hereunder or any
agreement, document or instrument related thereto.
SECTION 2.2 Representations and Warranties of the Seller as to each
Receivable. The Seller hereby makes the representations and warranties set forth
on Schedule I as to the Receivables sold, transferred, assigned, and otherwise
conveyed to the Issuer under this Agreement on which such representations and
warranties the Issuer relies in acquiring the Receivables. The representations
and warranties as to each Receivable shall survive the Grant of the Receivables
by the Issuer to the Indenture Trustee pursuant to the Indenture.
Notwithstanding any statement to the contrary contained herein or in any other
Transaction Document, the Seller shall not be required to notify any insurer
with respect to any Insurance Policy obtained by an Obligor or to notify any
Dealer about any aspect of the transaction contemplated by the Transaction
Documents.
SECTION 2.3 Repurchase upon Breach. Upon discovery by any party hereto of a
breach of any of the representations and warranties set forth in Section 2.2 at
the time such representations and warranties were made which materially and
adversely affects the interests of the Issuer or the Noteholders, the party
discovering such breach shall give prompt written notice thereof to the other
parties hereto; provided that delivery of the Servicer's Certificate shall be
deemed to constitute prompt notice by the Servicer and the Issuer of such
breach; provided, further, that the failure to give such notice shall not affect
any obligation of the Seller hereunder. If the Seller does not correct or cure
such breach prior to the end of the Collection Period which includes the 60th
day (or, if the Seller elects, an earlier date) after the date that the Seller
became aware or was notified of such breach, then the Seller shall purchase any
Receivable materially and adversely affected by such breach from the Issuer on
the Payment Date following the end of such Collection Period. Any such breach or
failure will not be deemed to have a material and adverse effect if such breach
or failure does not affect the ability of the Issuer to receive and retain
timely payment in full on such Receivable. Any such purchase by the Seller shall
be at a price equal to the Repurchase Price. In consideration for such
repurchase, the Seller shall make (or shall cause to be made) a payment to the
Issuer equal to the Repurchase Price by depositing such amount into the
Collection Account prior to 11:00 a.m., New York City time on such Payment Date.
Upon payment of such Repurchase Price by the Seller, the Issuer and the
Indenture Trustee shall release and shall execute and deliver such instruments
of release, transfer or assignment, in each case without recourse or
representation, as shall be reasonably requested
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of it to vest in the Seller or its designee any Receivable repurchased pursuant
hereto. It is understood and agreed that the right to cause the Seller to
purchase (or to enforce the obligations of VCI under the Purchase Agreement to
purchase) any Receivable as described above shall constitute the sole remedy
respecting such breach available to the Issuer and the Indenture Trustee.
Neither the Owner Trustee nor the Indenture Trustee will have any duty to
conduct an affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Receivable pursuant to this Section 2.3.
SECTION 2.4 Custody of Receivable Files.
(a) Custody. To assure uniform quality in servicing the Receivables and to
reduce administrative costs, the Issuer, upon the execution and delivery of this
Agreement, hereby revocably appoint the Servicer, and the Servicer hereby
accepts such appointment, to act as the agent of the Issuer and the Indenture
Trustee as custodian of the following documents or instruments, which are hereby
or will hereby be constructively delivered to the Indenture Trustee (or its
agent or designee), as pledgee of the Issuer pursuant to the Indenture with
respect to each Receivable (but only to the extent applicable to such Receivable
and only to the extent held in tangible paper form) (the "Receivable Files"):
(i) the fully executed original of the retail motor vehicle
installment sales contract or promissory note and security
agreement related to such Receivable, including any written
amendments or extensions thereto;
(ii) the original credit application or a photocopy thereof to the
extent held in paper form;
(iii) the original Certificate of Title or, if not yet received,
evidence that an application therefore has been submitted with
the appropriate authority, a guaranty of title from a Dealer or
such other document that the Servicer keeps on file, in
accordance with its Customary Servicing Practices, evidencing the
security interest of the applicable Originator in the Financed
Vehicle; provided, however, that in lieu of being held in the
Receivable File, the Certificate of Title may be held by a third
party service provider engaged by the Servicer to obtain or hold
Certificates of Title; and
(iv) any and all other documents that the Servicer or the Seller keeps
on file, in accordance with its Customary Servicing Practices,
relating to a Receivable, an Obligor or a Financed Vehicle.
The foregoing appointment of the Servicer is deemed to be made with due care.
(b) Safekeeping. The Servicer, in its capacity as custodian, shall hold the
Receivable Files for the benefit of the Issuer and the Indenture Trustee. In
performing its duties as custodian, the Servicer shall act in accordance with
its Customary Servicing Practices. In accordance with its Customary Servicing
Practices, the Servicer will conduct, or cause to be conducted, periodic reviews
of the Receivable Files held by it under this Agreement, and of the related
accounts, records, and computer systems, in such a manner as would enable the
Issuer or
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the Indenture Trustee to verify the accuracy of the Servicer's record keeping
(it being understood that the Indenture Trustee shall have no duty to verify
such records). The Servicer will promptly report to the Issuer and the Indenture
Trustee any failure on its part to hold a material portion of the Receivable
Files and maintain its accounts, records, and computer systems as herein
provided and promptly take appropriate action to remedy any such failure.
Nothing herein will be deemed to require an initial review or any periodic
review by the Issuer or the Indenture Trustee of the Receivable Files. The
Servicer may, in accordance with its Customary Servicing Practices: (i) maintain
all or a portion of the Receivable Files in electronic form and (ii) maintain
custody of all or any portion of the Receivable Files with one or more of its
agents or designees.
(c) Maintenance of and Access to Records. The Servicer will maintain each
Receivable File in the United States (it being understood that the Receivable
Files, or any part thereof, may be maintained at the offices of any Person to
whom the Servicer has delegated responsibilities in accordance with Section
6.5). The Servicer will make available to the Issuer and the Indenture Trustee
or their duly authorized representatives, attorneys or auditors a list of
locations of the Receivable Files upon request. The Servicer will provide access
to the Receivable Files, and the related accounts records, and computer systems
maintained by the Servicer at such times as the Issuer or the Indenture Trustee
direct, but only upon reasonable notice and during the normal business hours at
the respective offices of the Servicer.
(d) Release of Documents. Upon written instructions from the Indenture
Trustee, the Servicer will release or cause to be released any document in the
Receivable Files to the Indenture Trustee, the Indenture Trustee's agent or the
Indenture Trustee's designee, as the case may be, at such place or places as the
Indenture Trustee may designate, as soon thereafter as is practicable. Any
document so released will be handled by the Indenture Trustee with due care and
returned to the Servicer for safekeeping as soon as the Indenture Trustee or its
agent or designee, as the case may be, has no further need therefor.
(e) Instructions; Authority to Act. All instructions from the Indenture
Trustee will be in writing and signed by an Authorized Officer of the Indenture
Trustee, and the Servicer will be deemed to have received proper instructions
with respect to the Receivable Files upon its receipt of such written
instructions.
(f) Custodian's Indemnification. Subject to Section 6.2, the Servicer as
custodian will indemnify the Issuer and the Indenture Trustee for any and all
liabilities, obligations, losses, compensatory damages, payments, costs, or
expenses of any kind whatsoever that may be imposed on, incurred, or asserted
against the Issuer or the Indenture Trustee as the result of any improper act or
omission in any way relating to the maintenance and custody by the Servicer as
custodian of the Receivable Files; provided, however, that the Servicer will not
be liable (i) to the Issuer for any portion of any such amount resulting from
the willful misconduct, bad faith or negligence of the Indenture Trustee or the
Issuer or (ii) to the Indenture Trustee for any portion of any such amount
resulting from the failure of the Indenture Trustee, the Indenture Trustee's
agent or the Indenture Trustee's designee to handle with due care any
Certificate of Title or other document released to the Indenture Trustee or the
Indenture Trustee's agent or designee pursuant to Section 2.4(d).
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(g) Effective Period and Termination. The Servicer's appointment as
custodian will become effective as of the Cut-Off Date and will continue in full
force and effect until terminated pursuant to this Section. If VCI resigns as
Servicer in accordance with the provisions of this Agreement or if all of the
rights and obligations of the Servicer have been terminated under Section 7.1,
the appointment of the Servicer as custodian hereunder may be terminated by the
Indenture Trustee, or by the Noteholders of Notes evidencing not less than a
majority of the Outstanding Notes, in the same manner as the Indenture Trustee
or such Noteholders may terminate the rights and obligations of the Servicer
under Section 7.1. As soon as practicable after any termination of such
appointment, the Servicer will deliver to the Indenture Trustee or the Indenture
Trustee's agent the Receivable Files and the related accounts and records
maintained by the Servicer at such place or places as the Indenture Trustee may
reasonably designate.
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Servicer.
(a) The Servicer is hereby appointed by the Issuer and authorized to act as
agent for the Issuer and in such capacity shall manage, service, administer and
make collections on the Receivables in accordance with its Customary Servicing
Practices, using the degree of skill and attention that the Servicer exercises
with respect to all comparable motor vehicle receivables that it services for
itself or others. The Servicer's duties will include collection and posting of
all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending invoices or payment coupons to Obligors,
reporting any required tax information to Obligors, accounting for collections
and furnishing monthly and annual statements to the Indenture Trustee with
respect to distributions. The Servicer hereby accepts such appointment and
authorization and agrees to perform the duties of Servicer with respect to the
Receivables set forth herein.
(b) The Servicer will follow its Customary Servicing Practices and will
have full power and authority to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholder, or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed Vehicles
securing such Receivables. The Servicer is hereby authorized to commence, in its
own name or in the name of the Issuer, a legal proceeding (including a
bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a
Financed Vehicle. If the Servicer commences a legal proceeding to enforce a
Receivable, the Issuer will thereupon be deemed to have automatically assigned
such Receivable to the Servicer solely for purposes of commencing or
participating in any such proceeding as a party or claimant, and the Servicer is
authorized and empowered by the Issuer to execute and deliver in the Servicer's
name any notices, demands, claims, complaints, responses, affidavits or other
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documents or instruments in connection with any such proceeding. If in any
enforcement suit or legal proceeding it is held that the Servicer may not
enforce a Receivable on the ground that it is not a real party in interest or a
holder entitled to enforce the Receivable, the Issuer will, at the Servicer's
expense and direction, take steps to enforce the Receivable, including bringing
suit in its name or the name of the Indenture Trustee. The Issuer will furnish
the Servicer with any powers of attorney and other documents reasonably
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. The Servicer, at its expense, will obtain on
behalf of the Issuer all licenses, if any, required by the laws of any
jurisdiction to be held by the Issuer in connection with ownership of the
Receivables, and will make all filings and pay all fees as may be required in
connection therewith during the term hereof.
(c) The Servicer hereby agrees that upon its resignation and the
appointment of a successor Servicer hereunder, the Servicer will terminate its
activities as Servicer hereunder in accordance with Section 7.1, and, in any
case, in a manner which the Indenture Trustee reasonably determines will
facilitate the transition of the performance of such activities to such
successor Servicer, and the Servicer shall cooperate with and assist such
successor Servicer.
SECTION 3.2 Collection of Receivable Payments. The Servicer will make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same become due in accordance with
its Customary Servicing Practices. Subject to Section 3.5, the Servicer may
grant extensions, rebates, deferrals, amendments, modifications or adjustments
with respect to any Receivable in accordance with its Customary Servicing
Practices; provided, however, that if the Servicer (i) extends the date for
final payment by the Obligor of any Receivable beyond the last day of the
Collection Period prior to the Class A-4 Final Scheduled Payment Date or (ii)
reduces the Contract Rate or Outstanding Principal Balance with respect to any
Receivable other than as required by applicable law, it will promptly purchase
such Receivable in the manner provided in Section 3.6. The Servicer may in its
discretion waive any late payment charge or any other fees that may be collected
in the ordinary course of servicing a Receivable. Notwithstanding anything in
this Agreement to the contrary, the Servicer may refinance any Receivable by
accepting a new promissory note from the related Obligor and depositing the full
Outstanding Principal Balance of such Receivable into the Collection Account.
The receivable created by such refinancing shall not be property of the Issuer.
SECTION 3.3 Realization Upon Receivables. On behalf of the Issuer, the
Servicer will use commercially reasonable efforts, consistent with its Customary
Servicing Practices, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer had determined
eventual payment in full is unlikely unless it determines in its sole discretion
that repossession will not increase the Liquidation Proceeds by an amount
greater than the expense of such repossession or that the proceeds ultimately
recoverable with respect to such Receivable would be increased by forbearance.
The Servicer will follow such Customary Servicing Practices as it deems
necessary or advisable, which may include reasonable efforts to realize upon any
recourse to any Dealer and selling the Financed Vehicle at public or private
sale. The foregoing will be subject to the provision that, in any case in which
the Financed Vehicle has suffered damage, the Servicer shall not be required to
expend funds in connection with the repair or the repossession of such Financed
Vehicle unless it determines in
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its sole discretion that such repair and/or repossession will increase the
Liquidation Proceeds by an amount greater than the amount of such expenses.
SECTION 3.4 Maintenance of Security Interests in Financed Vehicles. The
Servicer will, in accordance with its Customary Servicing Practices, take such
steps as are necessary to maintain perfection of the security interest created
by each Receivable in the related Financed Vehicle. The Issuer hereby authorizes
the Servicer to take such steps as are necessary to re-perfect such security
interest on behalf of the Issuer and the Indenture Trustee in the event of the
relocation of a Financed Vehicle or for any other reason.
SECTION 3.5 Covenants of Servicer. The Servicer will not release the
Financed Vehicle securing each such Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by or on behalf of the Obligor thereunder or payment in full less a
deficiency which the Servicer would not attempt to collect in accordance with
its Customary Servicing Practices or in connection with repossession or except
as may be required by an insurer in order to receive proceeds from any Insurance
Policy covering such Financed Vehicle.
SECTION 3.6 Purchase of Receivables Upon Breach. Upon discovery by any
party hereto of a breach of any of the covenants set forth in Section 3.2, 3.3,
3.4 or 3.5 which materially and adversely affects the interests of the Issuer or
the Noteholders, the party discovering such breach shall give prompt written
notice thereof to the other parties hereto; provided that delivery of the
Servicer's Certificate shall be deemed to constitute prompt notice by the
Servicer and the Issuer of such breach; provided, further, that the failure to
give such notice shall not affect any obligation of the Servicer hereunder. If
the Servicer does not correct or cure such breach prior to the end of the
Collection Period which includes the 60th day (or, if the Servicer elects, an
earlier date) after the date that the Servicer became aware or was notified of
such breach, then the Servicer shall purchase any Receivable materially and
adversely affected by such breach from the Issuer on the Payment Date following
the end of such Collection Period. Any such breach or failure will not be deemed
to have a material and adverse effect if such breach or failure does not affect
the ability of the Issuer to receive and retain timely payment in full on such
Receivable. Any such purchase by the Servicer shall be at a price equal to the
Repurchase Price. In consideration for such repurchase, the Servicer shall make
(or shall cause to be made) a payment to the Issuer equal to the Repurchase
Price by depositing such amount into the Collection Account prior to 11:00 a.m.,
New York City time on such Payment Date. Upon payment of such Repurchase Price
by the Servicer, the Issuer and the Indenture Trustee shall release and shall
execute and deliver such instruments of release, transfer or assignment, in each
case without recourse or representation, as shall be reasonably necessary to
vest in the Servicer or its designee any Receivable repurchased pursuant hereto.
It is understood and agreed that the obligation of the Servicer to purchase any
Receivable as described above shall constitute the sole remedy respecting such
breach available to the Issuer and the Indenture Trustee.
SECTION 3.7 Servicing Fee. On each Payment Date, the Issuer shall pay to
the Servicer the Servicing Fee in accordance with Section 4.4 for the
immediately preceding Collection Period as compensation for its services. In
addition, the Servicer will be entitled to retain all Supplemental Servicing
Fees. The Servicer also will be entitled to receive investment
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earnings (net of investment losses and expenses) on funds deposited in the
Collection Account and the Principal Distribution Account during each Collection
Period.
SECTION 3.8 Servicer's Certificate. On or before the Determination Date
preceding each Payment Date, the Servicer shall deliver to the Indenture Trustee
and each Paying Agent, and the Indenture Trustee shall forward such copy to each
of the Rating Agencies, a Servicer's Certificate containing all information
necessary to make the payments, transfers and distributions pursuant to Sections
4.3 and 4.4 on such Payment Date, together with the written statements to be
furnished by the Indenture Trustee to the Noteholders pursuant to Section 4.6
hereof and Section 6.6 of the Indenture. At the sole option of the Servicer,
each Servicer's Certificate may be delivered in electronic or hard copy format.
SECTION 3.9 Annual Officer's Certificate; Notice of Servicer Replacement
Event. (a) The Servicer will deliver to the Rating Agencies, the Issuer and the
Indenture Trustee, on or before March 30 of each year, beginning on
[__________], an Officer's Certificate (with appropriate insertions) providing
such information as is required under Item 1123 of Regulation AB.
(b) The Servicer will deliver to the Issuer, the Indenture Trustee and each
Rating Agency promptly after having obtained knowledge thereof, written notice
in an Officer's Certificate of any event which with the giving of notice or
lapse of time, or both, would become a Servicer Replacement Event.
(c) The Servicer will deliver to the Issuer, on or before March 30 of each
year, beginning on [__________], a report regarding the Servicer's assessment of
compliance with the Servicing Criteria during the immediately preceding calendar
year, including disclosure of any material instance of non-compliance identified
by the Servicer, as required under paragraph (b) of Rule 13a-18, Rule 15d-18 of
the Exchange Act and Item 1122 of Regulation AB.
SECTION 3.10 Annual Servicing Report of Independent Public Accountants. On
or before the 90th day following the end of each fiscal year, beginning with the
fiscal year ending [__________], the Servicer shall cause a firm of independent
public accountants (who may also render other services to the Servicer, the
Seller or their respective Affiliates) to furnish to the Indenture Trustee, the
Servicer, the Seller and each Rating Agency each attestation report on
assessments of compliance with the Servicing Criteria with respect to the
Servicer or any affiliate thereof during the related fiscal year delivered by
such accountants pursuant to paragraph (c) of Rule 13a-18 or Rule 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. The certification required by this
paragraph may be replaced by any similar certification using other procedures or
attestation standards which are now or in the future in use by servicers of
comparable motor vehicle receivables, or which comply with any rule, regulation,
"no action" letter or similar guidance promulgated by the Commission.
SECTION 3.11 Servicer Expenses. The Servicer shall pay all expenses (other
than expenses described in the definition of Liquidation Proceeds) incurred by
it in connection with its activities hereunder, including fees, expenses,
indemnities and disbursements of the Indenture Trustee, the Owner Trustee (as
more fully described in Sections 8.1 and 8.2 of the Trust Agreement),
independent accountants, taxes imposed on the Servicer and expenses incurred in
connection with distributions and reports to the Noteholders and the
Certificateholder.
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SECTION 3.12 1934 Act Filings. The Issuer hereby authorizes the Servicer
and the Seller, or either of them, to prepare, sign, certify and file any and
all reports, statements and information respecting the Issuer and/or the Notes
required to be filed pursuant to the Securities and Exchange Act of 1934, as
amended, and the rules thereunder.
ARTICLE IV
DISTRIBUTIONS; ACCOUNTS;
STATEMENTS TO THE CERTIFICATEHOLDER
AND THE NOTEHOLDERS
SECTION 4.1 Establishment of Accounts. (a) The Servicer shall cause to be
established:
(i) For the benefit of the Noteholders, in the name of the Indenture
Trustee, an Eligible Account (the "Collection Account"), bearing
a designation clearly indicating that the funds deposited therein
are held for the benefit of the Noteholders, which Eligible
Account shall be established by and maintained with the Indenture
Trustee or its designee.
(ii) For the benefit of the Noteholders, in the name of the Indenture
Trustee, an Eligible Account (the "Principal Distribution
Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the
Noteholders, which Eligible Account shall be established by and
maintained with the Indenture Trustee or its designee.
(iii) For the benefit of the Noteholders, in the name of the Indenture
Trustee, an Eligible Account (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein
are held for the benefit of the Noteholders, which Eligible
Account shall be established by and maintained with the Indenture
Trustee or its designee.
(b) Funds on deposit in the Collection Account, the Reserve Account and the
Principal Distribution Account (collectively, the "Trust Accounts") shall be
invested by the Indenture Trustee in Permitted Investments selected in writing
by the Servicer and of which the Servicer provides notification (pursuant to
standing instructions or otherwise); provided that it is understood and agreed
that neither the Servicer, the Indenture Trustee nor the Issuer shall be liable
for any loss arising from such investment in Permitted Investments. All such
Permitted Investments shall be held by or on behalf of the Indenture Trustee as
secured party for the benefit of the Noteholders; provided that on each Payment
Date all interest and other investment income (net of losses and investment
expenses) on funds on deposit in the Collection Account and the Principal
Distribution Account shall be distributed to the Servicer and shall not be
available to pay the distributions provided for in Section 4.4. All investments
of funds on deposit in the Trust Accounts shall mature so that such funds will
be available on the next Payment Date. No Permitted Investment shall be sold or
otherwise disposed of prior to its scheduled maturity unless a default occurs
with respect to such Permitted Investment and the Servicer directs the Indenture
Trustee in writing to dispose of such Permitted Investment.
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(c) The Indenture Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Trust Accounts and in all proceeds
thereof and all such funds, investments and proceeds shall be part of the Trust
Estate. Except as otherwise provided herein, the Trust Accounts shall be under
the sole dominion and control of the Indenture Trustee for the benefit of the
Noteholders. If, at any time, any Trust Account ceases to be an Eligible
Account, the Servicer shall promptly notify the Indenture Trustee in writing
(unless such Trust Account is an account with the Indenture Trustee) and within
10 Business Days (or such longer period as to which each Rating Agency may
consent) after becoming aware of the fact, establish a new Trust Account as an
Eligible Account and shall direct the Indenture Trustee to transfer any cash
and/or any investments to such new Trust Account.
(d) With respect to the Trust Account Property, the parties hereto agree
that:
(i) any Trust Account Property that consists of uninvested funds
shall be held solely in Eligible Accounts and, except as
otherwise provided herein, each such Eligible Account shall be
subject to the exclusive custody and control of the Indenture
Trustee, and, except as otherwise provided in the Transaction
Documents, the Indenture Trustee or its designee shall have sole
signature authority with respect thereto;
(ii) any Trust Account Property that constitutes Physical Property
shall be delivered to the Indenture Trustee or its designee, in
accordance with paragraph (a) of the definition of "Delivery" and
shall be held, pending maturity or disposition, solely by the
Indenture Trustee or any such designee;
(iii) any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause
(iv) below shall be delivered to the Indenture Trustee or its
designee in accordance with paragraph (c) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee or
such designee, pending maturity or disposition, through continued
registration of the Indenture Trustee's (or its designee's)
ownership of such security on the books of the issuer thereof;
and
(iv) any Trust Account Property that is an uncertificated security
that is a "book-entry security" (as such term is defined in
Federal Reserve Bank Operating Circular No. 7) held in a
securities account at a Federal Reserve Bank and eligible for
transfer through the Fedwire(R) Securities Service operated by
the Federal Reserve System pursuant to Federal book-entry
regulations shall be delivered in accordance with paragraph (b)
of the definition of "Delivery" and shall be maintained by the
Indenture Trustee or its designee or a securities intermediary
(as such term is defined in Section 8-102(a)(14) of the UCC)
acting solely for the Indenture Trustee or such designee, pending
maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such
paragraph.
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SECTION 4.2 Remittances. The Servicer shall deposit an amount equal to all
Collections into the Collection Account within two Business Days after receipt;
provided, however, that if the Monthly Remittance Condition is satisfied, then
the Servicer shall not be required to deposit into the Collection Account an
amount equal to the Collections received during any Collection Period until
11:00 a.m., New York City time, on the following Payment Date. The "Monthly
Remittance Condition" shall be deemed to be satisfied if (i) VCI is the
Servicer, (ii) no Servicer Replacement Event has occurred and is continuing and
(iii)(x) Volkswagen AG has a short-term debt rating of at least "P-1" from
Moody's and "A-1" from Standard & Poor's, (y) both Moody's and Standard & Poor's
are then rating a debt issuance of Volkswagen of America, Inc. or VCI (and, in
the case of VCI, such debt issuance is guaranteed by Volkswagen AG) and (z) VCI
remains a direct or indirect wholly-owned subsidiary of Volkswagen AG.
Notwithstanding the foregoing, the Servicer may remit Collections to the
Collection Account on any other alternate remittance schedule (but not later
than the related Payment Date) if the Rating Agency Condition is satisfied with
respect to such alternate remittance schedule. Pending deposit into the
Collection Account, Collections may be commingled and used by the Servicer at
its own risk and are not required to be segregated from its own funds.
SECTION 4.3 Additional Deposits and Payments; Servicer Advances. (a) On
each Payment Date, the Servicer and the Seller will deposit into the Collection
Account the aggregate Repurchase Price with respect to Repurchased Receivables
purchased by the Servicer or the Seller, respectively, on such Payment Date and
the Servicer will deposit into the Collection Account all amounts, if any, to be
paid under Section 8.1 in connection with the Optional Purchase. All such
deposits with respect to a Payment Date will be made, in immediately available
funds by 11:00 a.m., New York City time, on such Payment Date related to such
Collection Period.
(b) The Indenture Trustee will, on each Payment Date, withdraw from the
Reserve Account the Reserve Account Excess Amount, if any, for such Payment Date
and deposit such amounts in the Collection Account.
(c) On each Payment Date, the Servicer shall deposit into the Collection
Account prior to 11:00 a.m., New York City time, an advance in an amount equal
to the lesser of (a) any shortfall in the amounts available to make the payments
in clauses first through fourth of Section 4.4(a) and (b) the aggregate
scheduled monthly payments due on Receivables but not received during and prior
to the related Collection Period (an "Advance"); provided, however, that the
Servicer will not be obligated to make an Advance if the Servicer reasonably
determines in its sole discretion that such Advance is not likely to be repaid
from future cash flows from the Receivables. No Advances will be made with
respect to Defaulted Receivables.
(d) The Indenture Trustee will, on the Payment Date relating to each
Collection Period, withdraw from the Reserve Account the Reserve Account Draw
Amount and deposit such amounts in the Collection Account.
(e) On the Closing Date the Seller will deposit, or cause to be deposited
from proceeds of the sale of the Notes, into the Reserve Account an amount equal
to the Initial Reserve Account Deposit Amount.
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SECTION 4.4 Distributions.
(a) Prior to any acceleration of the Notes pursuant to Section 5.2 of the
Indenture, on each Payment Date, the Indenture Trustee (based on information
contained in, and as directed by, the Servicer's Certificate delivered on or
before the related Determination Date pursuant to Section 3.8) shall make the
following deposits and distributions, to the extent of Available Funds, Advances
made on such Payment Date pursuant to Section 4.3(c) and the Reserve Account
Draw Amount, on deposit in the Collection Account for such Payment Date, in the
following order of priority:
(i) first, to the Servicer (or any predecessor Servicer, if
applicable) for reimbursement of all outstanding Advances;
(ii) second, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees with respect to prior periods;
(iii) third, to the Noteholders, the Accrued Note Interest for the
related Interest Period; provided that if there are not
sufficient funds available to pay the entire amount of the
Accrued Note Interest, the amounts available will be applied to
the payment of such interest on the Notes on a pro rata basis;
(iv) fourth, to the Principal Distribution Account for distribution to
the Noteholders pursuant to Section 8.2(c) of the Indenture, the
Noteholders' Principal Distribution Amount;
(v) fifth, to the Reserve Account, any additional amounts required to
increase the amount in the Reserve Account up to the Specified
Reserve Account Balance;
(vi) sixth, to the Owner Trustee and the Indenture Trustee, fees and
expenses (including indemnification amounts) permitted under the
Trust Agreement and the Indenture, as applicable, which have not
been previously paid;
(vii) seventh, to the Certificateholder, to reduce the outstanding
principal amount of the Certificate, the Certificateholder's
Principal Distribution Amount, if any; and
(viii) eighth, to or at the direction of the Seller, any funds
remaining.
Notwithstanding any other provision of this Section 4.4, following the
occurrence and during the continuation of an Event of Default which has resulted
in an acceleration of the Notes, the Indenture Trustee shall apply all amounts
on deposit in the Collection Account pursuant to Section 5.4(b) of the
Indenture.
(b) After the payment in full of the Notes and all other amounts payable
under Section 4.4(a), all Collections shall be paid to or in accordance with the
instructions provided from time to time by the Certificateholder.
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(c) Notwithstanding any statement to the contrary contained in any of the
Transaction Documents, if the Class A-1 Notes remain outstanding at that time,
all payments, deposits and withdrawals required to be made on the Payment Date
in [_____] shall be made on the Class A-1 Final Scheduled Payment Date, except
that payments of interest and principal on the Class A-2 Notes, Class A-3 Notes
and Class A-4 Notes shall be paid on the applicable Payment Date in [_____].
SECTION 4.5 Net Deposits. If the Monthly Remittance Condition is satisfied,
the Servicer shall be permitted to deposit into the Collection Account only the
net amount distributable to Persons other than the Servicer and its Affiliates
on the Payment Date. The Servicer shall, however, account as if all of the
deposits and distributions described herein were made individually.
SECTION 4.6 Statements to Certificateholder and Noteholders. On or before
each Determination Date, the Servicer shall deliver to the Indenture Trustee and
each Paying Agent, and the Indenture Trustee shall forward such copy to each of
the Rating Agencies and to each Noteholder of record as of the most recent
Record Date, a statement setting forth for the Collection Period and Payment
Date relating to such Determination Date the following information (to the
extent applicable):
(a) the aggregate amount being paid on such Payment Date in respect of
interest on and principal of each Class of Notes;
(b) the Class A-1 Note Balance, the Class A-2 Note Balance, the Class A-3
Note Balance, the Class A-4 Note Balance and the Certificate Balance, in each
case after giving effect to payments on such Payment Date;
(c) (i) the amount on deposit in the Reserve Account and the Specified
Reserve Account Balance, each as of the beginning and end of the related
Collection Period, (ii) the amount deposited in the Reserve Account in respect
of such Payment Date, if any, (iii) the Reserve Account Draw Amount and the
Reserve Account Excess Amount, if any, to be withdrawn from the Reserve Account
on such Payment Date, (iv) the balance on deposit in the Reserve Account on such
Payment Date after giving effect to withdrawals therefrom and deposits thereto
in respect of such Payment Date and (v) the change in such balance from the
immediately preceding Payment Date;
(d) the Noteholders' Principal Distribution Amount and the
Certificateholders' Principal Distribution Amount, if any, for such Payment
Date;
(e) the Net Pool Balance and the Note Factor as of the close of business on
the last day of the preceding Collection Period;
(f) the amount of the Servicing Fee to be paid to the Servicer with respect
to the related Collection Period and the amount of any unpaid Servicing Fees;
(g) the amount of the Noteholders' Interest Carryover Shortfall, if any, on
such Payment Date and the change in such amounts from the preceding Payment
Date;
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(h) the aggregate Repurchase Price with respect to Repurchased Receivables
paid by (i) the Servicer and (ii) the Seller with respect to the related
Collection Period;
(i) the amount of Advances, if any, on such Payment Date; and
(j) the amount of Collections for the related Collection Period.
Each amount set forth pursuant to paragraph (a) or (g) above relating to the
Notes shall be expressed as a dollar amount per $1,000 of the Initial Note
Balance of the Notes (or Class thereof).
The Indenture Trustee will make available via the Indenture Trustee's
internet website all reports or notices required to be provided by the Indenture
Trustee under this Section 4.6. Any information that is disseminated in
accordance with the provisions of this Section 4.6 shall not be required to be
disseminated in any other form or manner; provided, however, any such
information that must be delivered to the Rating Agencies under this Section 4.6
shall be sent by electronic mail to each Rating Agency. The Indenture Trustee
will make no representation or warranties as to the accuracy or completeness of
such documents and will assume no responsibility therefor.
The Indenture Trustee's internet website shall be initially located at "[
]" or at such other address as shall be specified by the Indenture Trustee from
time to time in writing to the Noteholders, the Servicer, the Issuer or any
Paying Agent. In connection with providing access to the Indenture Trustee's
internet website, the Indenture Trustee may require registration and the
acceptance of a disclaimer. The Indenture Trustee shall not be liable for the
dissemination of information in accordance with this Agreement.
SECTION 4.7 No Duty to Confirm. The Indenture Trustee shall have no duty or
obligation to verify or confirm the accuracy of any of the information or
numbers set forth in the Servicer's Certificate delivered by the Servicer to the
Indenture Trustee, and the Indenture Trustee shall be fully protected in relying
upon such Servicer's Certificate.
ARTICLE V
THE SELLER
SECTION 5.1 Representations and Warranties of Seller. The Seller makes the
following representations and warranties as of the Closing Date on which the
Issuer will be deemed to have relied in acquiring the Transferred Assets. The
representations and warranties speak as of the execution and delivery of this
Agreement and will survive the conveyance of the Transferred Assets to the
Issuer and the pledge thereof by the Issuer to the Indenture Trustee pursuant to
the Indenture:
(a) Existence and Power. The Seller is a Delaware limited liability company
validly existing and in good standing under the laws of the State of Delaware
and has, in all material respects, all power and authority required to carry on
its business as it is now conducted. The Seller has obtained all necessary
licenses and approvals in each jurisdiction where the failure to do so would
materially and adversely affect the ability of the Seller to perform its
obligations
14
under the Transaction Documents or affect the enforceability or collectibility
of the Receivables or any other part of the Transferred Assets.
(b) Authorization and No Contravention. The execution, delivery and
performance by the Seller of each Transaction Document to which it is a party
(i) have been duly authorized by all necessary limited liability company action
on the part of the Seller and (ii) do not contravene or constitute a default
under (A) any applicable law, rule or regulation, (B) its organizational
documents or (C) any material agreement, contract, order or other instrument to
which it is a party or its property is subject (other than violations which do
not affect the legality, validity or enforceability of any of such agreements
and which, individually or in the aggregate, would not materially and adversely
affect the transactions contemplated by, or the Seller's ability to perform its
obligations under, the Transaction Documents).
(c) No Consent Required. No approval or authorization by, or filing with,
any Governmental Authority is required in connection with the execution,
delivery and performance by the Seller of any Transaction Document other than
(i) UCC filings, (ii) approvals and authorizations that have previously been
obtained and filings that have previously been made and (iii) approvals,
authorizations or filings which, if not obtained or made, would not have a
material adverse effect on the enforceability or collectibility of the
Receivables or any other part of the Transferred Assets or would not materially
and adversely affect the ability of the Seller to perform its obligations under
the Transaction Documents.
(d) Binding Effect. Each Transaction Document to which the Seller is a
party constitutes the legal, valid and binding obligation of the Seller
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship or other similar laws
affecting creditors' rights generally and, if applicable, the rights of
creditors of limited liability companies from time to time in effect or by
general principles of equity.
(e) Lien Filings. The Seller is not aware of any material judgment, ERISA
or tax lien filings against the Seller.
(f) No Proceedings. There are no actions, suits or proceedings pending or,
to the knowledge of the Seller, threatened against the Seller before or by any
Governmental Authority that (i) assert the invalidity or unenforceability of
this Agreement or any of the other Transaction Documents, (ii) seek to prevent
the issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the other Transaction Documents, (iii)
seek any determination or ruling that would materially and adversely affect the
performance by the Seller of its obligations under this Agreement or any of the
other Transaction Documents or the collectibility or enforceability of the
Receivables, or (iv) relate to the Seller that would materially and adversely
affect the federal or Applicable Tax State income, excise, franchise or similar
tax attributes of the Notes.
SECTION 5.2 Liability of Seller; Indemnities. The Seller shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement, and hereby agrees to the
following:
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(a) The Seller shall indemnify, defend, and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders and the Certificateholder
from and against any loss, liability or expense incurred by reason of the
Seller's violation of federal or State securities laws in connection with the
registration or the sale of the Notes.
(b) The Seller will pay any and all taxes levied or assessed upon the
Issuer or upon all or any part of the Trust Estate.
(c) Indemnification under this Section 5.2 will survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and will include, without limitation, reasonable fees and
expenses of counsel and expenses of litigation. If the Seller has made any
indemnity payments pursuant to this Section 5.2 and the Person to or on behalf
of whom such payments are made thereafter collects any of such amounts from
others, such Person will promptly repay such amounts to the Seller, without
interest.
(d) The Seller's obligations under this Section 5.2 are obligations solely
of the Seller and will not constitute a claim against the Seller to the extent
that the Seller does not have funds sufficient to make payment of such
obligations. In furtherance of and not in derogation of the foregoing, the
Issuer, the Servicer, the Indenture Trustee and the Owner Trustee, by entering
into or accepting this Agreement, acknowledge and agree that they have no right,
title or interest in or to the Other Assets of the Seller. To the extent that,
notwithstanding the agreements and provisions contained in the preceding
sentence, the Issuer, the Servicer, the Indenture Trustee or the Owner Trustee
either (i) asserts an interest or claim to, or benefit from, Other Assets, or
(ii) is deemed to have any such interest, claim to, or benefit in or from Other
Assets, whether by operation of law, legal process, pursuant to applicable
provisions of insolvency laws or otherwise (including by virtue of Section
1111(b) of the Bankruptcy Code or any successor provision having similar effect
under the Bankruptcy Code), then the Issuer, the Servicer, the Indenture Trustee
or the Owner Trustee further acknowledges and agrees that any such interest,
claim or benefit in or from Other Assets is and will be expressly subordinated
to the indefeasible payment in full, which, under the terms of the relevant
documents relating to the securitization or conveyance of such Other Assets, are
entitled to be paid from, entitled to the benefits of, or otherwise secured by
such Other Assets (whether or not any such entitlement or security interest is
legally perfected or otherwise entitled to a priority of distributions or
application under applicable law, including insolvency laws, and whether or not
asserted against the Seller), including the payment of post-petition interest on
such other obligations and liabilities. This subordination agreement will be
deemed a subordination agreement within the meaning of Section 510(a) of the
Bankruptcy Code. The Issuer, the Servicer, the Indenture Trustee and the Owner
Trustee each further acknowledges and agrees that no adequate remedy at law
exists for a breach of this Section 5.2(d) and the terms of this Section 5.2(d)
may be enforced by an action for specific performance. The provisions of this
Section 5.2(d) will be for the third party benefit of those entitled to rely
thereon and will survive the termination of this Agreement.
SECTION 5.3 Merger or Consolidation of, or Assumption of the Obligations
of, Seller. Any Person (i) into which the Seller may be merged or consolidated,
(ii) resulting from any merger, conversion, or consolidation to which the Seller
is a party, (iii) succeeding to the business of the Seller, or (iv) more than
50% of the voting stock or voting power and 50% or more of the economic equity
of which is owned directly or indirectly by Volkswagen AG, which
16
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Seller under this Agreement, will be the
successor to the Seller under this Agreement without the execution or filing of
any document or any further act on the part of any of the parties to this
Agreement. Notwithstanding the foregoing, if the Seller enters into any of the
foregoing transactions and is not the surviving entity, (x) the Seller shall
deliver to the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such merger, conversion, consolidation or succession
and such agreement of assumption comply with this Section 5.3 and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with and (y) the Seller will deliver to the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Issuer and the Indenture Trustee,
respectively, in the Receivables, and reciting the details of such filings, or
(B) stating that, in the opinion of such counsel, no such action is necessary to
preserve and protect such interest. The Seller will provide notice of any
merger, conversion, consolidation, or succession pursuant to this Section 5.3 to
the Rating Agencies. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(x) and (y) of this Section 5.3 will be conditions to the consummation of any of
the transactions referred to in clauses (i), (ii) or (iii) of this Section 5.3
in which the Seller is not the surviving entity.
SECTION 5.4 Limitation on Liability of Seller and Others. The Seller and
any officer or employee or agent of the Seller may rely in good faith on the
advice of counsel or on any document of any kind, prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The Seller
will not be under any obligation to appear in, prosecute, or defend any legal
action that is not incidental to its obligations under this Agreement, and that
in its opinion may involve it in any expense or liability.
SECTION 5.5 Seller May Own Notes. The Seller, and any Affiliate of the
Seller, may in its individual or any other capacity become the owner or pledgee
of Notes with the same rights as it would have if it were not the Seller or an
Affiliate thereof, except as otherwise expressly provided herein or in the other
Transaction Documents. Except as set forth herein or in the other Transaction
Documents, Notes so owned by the Seller or any such Affiliate will have an equal
and proportionate benefit under the provisions of this Agreement and the other
Transaction Documents, without preference, priority, or distinction as among all
of the Notes. Notes owned by the Issuer, Seller, Servicer, Administrator or any
of their respective Affiliates shall be disregarded with respect to the
determination of any request, demand, authorization, direction, notice, consent,
vote or waiver hereunder or under any other Transaction Document.
SECTION 5.6 Xxxxxxxx-Xxxxx Act Requirements. To the extent any documents
are required to be filed or any certification is required to be made with
respect to the Issuer or the Notes pursuant to the Xxxxxxxx-Xxxxx Act, the
Issuer hereby authorizes the Servicer and the Seller, or either of them, to
prepare, sign, certify and file any such documents or certifications on behalf
of the Issuer.
SECTION 5.7 Compliance with Organizational Documents. The Seller shall
comply with its limited liability company agreement and other organizational
documents.
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ARTICLE VI
THE SERVICER
SECTION 6.1 Representations of Servicer. The Servicer makes the following
representations and warranties as of the Closing Date on which the Issuer will
be deemed to have relied in acquiring the Transferred Assets. The
representations and warranties speak as of the execution and delivery of this
Agreement and will survive the conveyance of the Transferred Assets to the
Issuer and the pledge thereof by the Issuer to the Indenture Trustee pursuant to
the Indenture:
(a) Existence and Power. The Servicer is a Delaware corporation validly
existing and in good standing under the laws of Delaware and has, in all
material respects, all power and authority to carry on its business as it is now
conducted. The Servicer has obtained all necessary licenses and approvals in
each jurisdiction where the failure to do so would materially and adversely
affect the ability of the Servicer to perform its obligations under the
Transaction Documents or affect the enforceability or collectibility of the
Receivables or any other part of the Transferred Assets.
(b) Authorization and No Contravention. The execution, delivery and
performance by the Servicer of the Transaction Documents to which it is a party
(i) have been duly authorized by all necessary action on the part of the
Servicer and (ii) do not contravene or constitute a default under (A) any
applicable law, rule or regulation, (B) its organizational documents or (C) any
material agreement, contract, order or other instrument to which it is a party
or its property is subject (other than violations which do not affect the
legality, validity or enforceability of any of such agreements and which,
individually or in the aggregate, would not materially and adversely affect the
transactions contemplated by, or the Servicer's ability to perform its
obligations under, the Transaction Documents).
(c) No Consent Required. No approval or authorization by, or filing with,
any Governmental Authority is required in connection with the execution,
delivery and performance by the Servicer of any Transaction Document other than
(i) UCC filings, (ii) approvals and authorizations that have previously been
obtained and filings that have previously been made and (iii) approvals,
authorizations or filings which, if not obtained or made, would not have a
material adverse effect on the enforceability or collectibility of the
Receivables or would not materially and adversely affect the ability of the
Servicer to perform its obligations under the Transaction Documents.
(d) Binding Effect. Each Transaction Document to which the Servicer is a
party constitutes the legal, valid and binding obligation of the Servicer
enforceable against the Servicer in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship or other similar laws
affecting creditors' rights generally and, if applicable, the rights of
creditors of corporations from time to time in effect or by general principles
of equity.
(e) No Proceedings. There are no actions, suits or proceedings pending or,
to the knowledge of the Servicer, threatened against the Servicer before or by
any Governmental
18
Authority that (i) assert the invalidity or unenforceability of this Agreement
or any of the other Transaction Documents, (ii) seek to prevent the issuance of
the Notes or the consummation of any of the transactions contemplated by this
Agreement or any of the other Transaction Documents, (iii) seek any
determination or ruling that would materially and adversely affect the
performance by the Servicer of its obligations under this Agreement or any of
the other Transaction Documents, or (iv) relate to the Servicer that would
materially and adversely affect the federal or Applicable Tax State income,
excise, franchise or similar tax attributes of the Notes.
SECTION 6.2 Indemnities of Servicer. The Servicer will be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement, and hereby agrees to the
following:
(a) The Servicer will defend, indemnify and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders, the Certificateholder and
the Seller from and against any and all costs, expenses, losses, damages, claims
and liabilities, arising out of or resulting from the use, ownership or
operation by the Servicer or any Affiliate thereof of a Financed Vehicle.
(b) The Servicer will indemnify, defend and hold harmless the Issuer, the
Owner Trustee and the Indenture Trustee from and against any taxes that may at
any time be asserted against any such Person with respect to the transactions
contemplated herein or in the other Transaction Documents, if any, including,
without limitation, any sales, gross receipts, general corporation, tangible
personal property, privilege, or license taxes (but, in the case of the Issuer,
not including any taxes asserted with respect to, and as of the date of, the
conveyance of the Receivables to the Issuer or the issuance and original sales
of the Notes, or asserted with respect to ownership of the Receivables, or
federal or other Applicable Tax State income taxes arising out of the
transactions contemplated by this Agreement and the other Transaction Documents)
and costs and expenses in defending against the same. For the avoidance of
doubt, the Servicer will not indemnify for any costs, expenses, losses, claims,
damages or liabilities due to the credit risk of the Obligor and for which
reimbursement would constitute recourse for uncollectible Receivables.
(c) The Servicer will indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders, the Certificateholder and
the Seller from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon any such Person through,
the negligence, willful misfeasance, or bad faith (other than errors in
judgment) of the Servicer in the performance of its duties under this Agreement
or any other Transaction Document to which it is a party, or by reason of its
failure to perform its obligations or of reckless disregard of its obligations
and duties under this Agreement or any other Transaction Document to which it is
a party; provided, however, that the Servicer will not indemnify for any costs,
expenses, losses, claims, damages or liabilities arising from its breach of any
covenant for which the repurchase of the affected Receivables is specified as
the sole remedy pursuant to Section 3.6.
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(d) The Servicer will compensate and indemnify the Owner Trustee to the
extent and subject to the conditions set forth in Sections 8.1 and 8.2 of the
Trust Agreement. The Servicer will compensate and indemnify the Indenture
Trustee to the extent and subject to the conditions set forth in Section 6.7 of
the Indenture, except to the extent that any cost, expense, loss, claim, damage
or liability arises out of or is incurred in connection with the performance by
the Indenture Trustee of the duties of a successor Servicer hereunder.
(e) Indemnification under this Section 6.2 by VCI (or any successor thereto
pursuant to Section 7.1) as Servicer, with respect to the period such Person was
the Servicer, will survive the termination of such Person as Servicer or a
resignation by such Person as Servicer as well as the termination of this
Agreement and the Trust Agreement or the resignation or removal of the Owner
Trustee or the Indenture Trustee and will include reasonable fees and expenses
of counsel and expenses of litigation. If the Servicer has made any indemnity
payments pursuant to this Section 6.2 and the Person to or on behalf of whom
such payments are made thereafter collects any of such amounts from others, such
Person will promptly repay such amounts to the Servicer, without interest.
SECTION 6.3 Merger or Consolidation of, or Assumption of the Obligations
of, Servicer. Any Person (i) into which the Servicer may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Servicer is a party, (iii) succeeding to the business of the Servicer,
or (iv) of which Volkswagen AG owns, directly or indirectly, more than 50% of
the voting stock or voting power and 50% or more of the economic equity, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Servicer under this Agreement, will be the
successor to the Servicer under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties to this
Agreement. Notwithstanding the foregoing, if the Servicer enters into any of the
foregoing transactions and is not the surviving entity, (x) the Servicer shall
deliver to the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such merger, conversion, consolidation, or succession
and such agreement of assumption comply with this Section 6.3 and that all
conditions precedent provided for in this Agreement relating to such transaction
have been complied with and (y) the Servicer will deliver to the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Issuer and the Indenture Trustee, respectively, in
the Receivables, and reciting the details of such filings, or (B) stating that,
in the opinion of such counsel, no such action is necessary to preserve and
protect such interests. The Servicer will provide notice of any merger,
conversion, consolidation or succession pursuant to this Section 6.3 to the
Rating Agencies. Notwithstanding anything herein to the contrary, the execution
of the foregoing agreement of assumption and compliance with clauses (x) and (y)
of this Section 6.3 will be conditions to the consummation of any of the
transactions referred to in clauses (i), (ii) or (iii) of this Section 6.3 in
which the Servicer is not the surviving entity.
SECTION 6.4 Limitation on Liability of Servicer and Others. (a) Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer will be under any liability to the Issuer, the Indenture Trustee, the
Owner Trustee, the Noteholders or the Certificateholder, except as provided
under this Agreement, for any action taken or for refraining
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from the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision will not protect the Servicer
or any such Person against any liability that would otherwise be imposed by
reason of willful misfeasance or bad faith in the performance of duties or by
reason of its failure to perform its obligations or of reckless disregard of
obligations and duties under this Agreement, or by reason of negligence in the
performance of its duties under this Agreement (except for errors in judgment).
The Servicer and any director, officer or employee or agent of the Servicer may
rely in good faith on any Opinion of Counsel or on any Officer's Certificate of
the Seller or certificate of auditors believed to be genuine and to have been
signed by the proper party in respect of any matters arising under this
Agreement.
(b) Except as provided in this Agreement, the Servicer will not be under
any obligation to appear in, prosecute, or defend any legal action that is not
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties to this Agreement and the interests of the Noteholders and
the Certificateholder under this Agreement. In such event, the legal expenses
and costs of such action and any liability resulting therefrom will be expenses,
costs and liabilities of the Servicer.
SECTION 6.5 Delegation of Duties. The Servicer may, at any time without
notice or consent, delegate (a) any or all of its duties (including, without
limitation, its duties as custodian) under the Transaction Documents to any of
its Affiliates or (b) specific duties to sub-contractors who are in the business
of performing such duties; provided 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 Issuer and the Indenture Trustee for
its duties hereunder as if the Servicer alone were performing such duties.
SECTION 6.6 VCI Not to Resign as Servicer. Subject to the provisions of
Sections 6.3 and 6.5, VCI will not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon determination that
the performance of its duties under this Agreement is no longer permissible
under applicable law. Notice of any such determination permitting the
resignation of VCI will be communicated to the Issuer and the Indenture Trustee
at the earliest practicable time (and, if such communication is not in writing,
will be confirmed in writing at the earliest practicable time) and any such
determination will be evidenced by an Opinion of Counsel to such effect
delivered to the Issuer and the Indenture Trustee concurrently with or promptly
after such notice. No such resignation will become effective until a successor
Servicer has assumed the responsibilities and obligations of VCI as Servicer.
SECTION 6.7 Servicer May Own Notes. The Servicer, and any Affiliate of the
Servicer, may, in its individual or any other capacity, become the owner or
pledgee of Notes with the same rights as it would have if it were not the
Servicer or an Affiliate thereof, except as otherwise expressly provided herein
or in the other Transaction Documents. Except as set forth herein or in the
other Transaction Documents, Notes so owned by or pledged to the Servicer or
such Affiliate will have an equal and proportionate benefit under the provisions
of this Agreement, without preference, priority or distinction as among all of
the Notes.
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ARTICLE VII
REPLACEMENT OF SERVICER
SECTION 7.1 Replacement of Servicer.
(a) If a Servicer Replacement Event shall have occurred and be continuing,
the Indenture Trustee shall, at the direction of 66-2/3% of the Noteholders, by
notice given to the Servicer, the Owner Trustee, the Issuer, the Administrator,
the Noteholders and each Rating Agency, terminate the rights and obligations of
the Servicer under this Agreement with respect to the Receivables. In the event
the Servicer is removed or resigns as Servicer with respect to servicing the
Receivables, the Indenture Trustee shall appoint a successor Servicer. Upon the
Servicer's receipt of notice of termination the predecessor Servicer will
continue to perform its functions as Servicer under this Agreement only until
the date specified in such termination notice or, if no such date is specified
in such termination notice, until receipt of such notice. If a successor
Servicer has not been appointed at the time when the predecessor Servicer ceases
to act as Servicer in accordance with this Section, the Indenture Trustee
without further action will automatically be appointed the successor Servicer.
Notwithstanding the above, the Indenture Trustee, if it is legally unable or is
unwilling to so act, will appoint, or petition a court of competent jurisdiction
to appoint a successor Servicer. Any successor Servicer shall be an established
institution having a net worth of not less than $100,000,000 and whose regular
business includes the servicing of comparable motor vehicle receivables having
an aggregate outstanding principal amount of not less than $50,000,000.
(b) Noteholders holding not less than a majority of the Outstanding Notes
may waive any Servicer Replacement Event. Upon any such waiver, such Servicer
Replacement Event shall cease to exist and be deemed to have been cured and not
to have occurred for every purpose of this Agreement, but no such waiver shall
extend to any prior, subsequent or other Servicer Replacement Event or impair
any right consequent thereto.
(c) If replaced, the Servicer agrees that it will use commercially
reasonable efforts to effect the orderly and efficient transfer of the servicing
of the Receivables to a successor Servicer. All reasonable costs and expenses
incurred in connection with transferring the Receivable Files to the successor
Servicer and all other reasonable costs and expenses incurred in connection with
the transfer to the successor Servicer related to the performance by the
Servicer hereunder will be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses.
(d) Upon the effectiveness of the assumption by the successor Servicer of
its duties pursuant to this Section 7.1, the successor Servicer shall be the
successor in all respects to the Servicer in its capacity as Servicer under this
Agreement with respect to the Receivables, and shall be subject to all the
responsibilities, duties and liabilities relating thereto, except with respect
to the obligations of the predecessor Servicer that survive its termination as
Servicer, including indemnification obligations as set forth in Section 6.2(e).
In such event, the Indenture Trustee and the Owner Trustee are hereby authorized
and empowered to execute and deliver, on behalf of the predecessor Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to
22
effect the purposes of such termination and replacement of the Servicer, whether
to complete the transfer and endorsement of the Receivables and related
documents, or otherwise. No Servicer shall resign or be relieved of its duties
under this Agreement, as Servicer of the Receivables, until a newly appointed
Servicer for the Receivables shall have assumed the responsibilities and
obligations of the resigning or terminated Servicer under this Agreement.
(e) In connection with such appointment, the Indenture Trustee may make
such arrangements for the compensation of the successor Servicer out of
Available Funds as it and such successor Servicer will agree; provided, however,
that no such compensation will be in excess of the amount paid to the
predecessor Servicer under this Agreement.
(f) The predecessor Servicer shall be entitled to receive reimbursement for
any outstanding Advances made with respect to the Receivables to the extent
funds are available therefore in accordance with Section 4.4.
SECTION 7.2 Notification to Noteholders. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VII, the
Indenture Trustee will give prompt written notice thereof to the Owner Trustee,
the Issuer, the Administrator, each Rating Agency and to the Noteholders at
their respective addresses of record.
ARTICLE VIII
OPTIONAL PURCHASE
SECTION 8.1 Optional Purchase of Trust Estate. If VCI is the Servicer, then
VCI shall have the right at its option (the "Optional Purchase") to purchase the
Trust Estate (other than the Reserve Account) from the Issuer on any Payment
Date if, either before or after giving effect to any payment of principal
required to be made on such Payment Date, the aggregate Net Pool Balance is less
than or equal to 10% of the initial Net Pool Balance. The purchase price for the
Trust Estate shall equal the greater of (a) the unpaid principal amount of the
Notes plus accrued and unpaid interest thereon at the applicable Interest Rate
up to but excluding the Redemption Date and (b) the fair market value of the
Trust Estate (other than the Reserve Account) (the "Optional Purchase Price"),
which amount shall be deposited by the Servicer into the Collection Account on
the Redemption Date. If VCI, as Servicer, exercises the Optional Purchase, the
Notes shall be redeemed and in each case in whole but not in part on the related
Payment Date for the Redemption Price.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Amendment.
(a) Any term or provision of this Agreement may be amended by the Seller
and the Servicer without the consent of the Indenture Trustee, any Noteholder,
the Issuer, or the Owner Trustee or any other Person; provided that such
amendment shall not, as evidenced by an Opinion of Counsel delivered to the
Indenture Trustee and the Owner Trustee materially and adversely affect the
interests of the Noteholders, the Indenture Trustee or the Owner Trustee.
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For greater clarity, except as otherwise expressly provided herein, the consent
of a Person shall not be required for any amendment if the interests of such
Person are not materially and adversely affected.
(b) Any term or provision of this Agreement may be amended by the Seller
and the Servicer but without the consent of the Indenture Trustee, any
Noteholder, the Issuer, the Owner Trustee or any other Person to add, modify or
eliminate any provisions as may be necessary or advisable in order to enable the
Seller, the Servicer or any of their Affiliates to comply with or obtain more
favorable treatment under any law or regulation or any accounting rule or
principle, it being a condition to any such amendment that the Rating Agency
Condition shall have been satisfied.
(c) This Agreement (including Appendix A) may also be amended from time to
time by Seller, Servicer and the Indenture Trustee, with the consent of the
Noteholders evidencing not less than a majority of the aggregate outstanding
principal amount of the Outstanding Notes, voting as a single class, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Noteholders; provided that no such amendment shall (i) reduce the interest
rate or principal amount of any Note, change the timing of distributions on any
Note or delay the Final Scheduled Payment Date of any Note without the consent
of the Holder of such Note, (ii) reduce the percentage of the aggregate
outstanding principal amount of the Outstanding Notes, the Holders of which are
required to consent to any matter without the consent of the Holders of at least
the percentage of the aggregate outstanding principal amount of the Outstanding
Notes which were required to consent to such matter before giving effect to such
amendment; provided, further, that the Indenture Trustee may not agree to any
amendment to this Agreement if such amendment failed to comply with the
requirements of Section 9.2 of the Indenture. It will not be necessary for the
consent of Noteholders to approve the particular form of any proposed amendment
or consent, but it will be sufficient if such consent approves the substance
thereof. The manner of obtaining such consents (and any other consents of
Noteholders provided for in this Agreement) and of evidencing the authorization
of the execution thereof by Noteholders will be subject to such reasonable
requirements as the Indenture Trustee may prescribe, including the establishment
of record dates pursuant to the Note Depository Agreement.
(d) Prior to the execution of any such amendment, the Servicer shall
provide written notification of the substance of such amendment to each Rating
Agency; and promptly after the execution of any such amendment or consent, the
Servicer shall furnish a copy of such amendment or consent to each Rating Agency
and the Indenture Trustee.
(e) Prior to the execution of any amendment to this Agreement, the Seller,
the Owner Trustee and the Indenture Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent to the execution and delivery of such amendment have been satisfied.
The Owner Trustee and the Indenture Trustee may, but shall not be obligated to,
enter into or execute on behalf of the Issuer any such amendment which adversely
affects the Owner Trustee's or the Indenture Trustee's, as applicable, own
rights, duties or immunities under this Agreement.
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SECTION 9.2 Protection of Title.
(a) The Seller shall authorize and file such financing statements and cause
to be authorized and filed such continuation and other statements, all in such
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of the Issuer and the Indenture Trustee under this
Agreement in the Receivables. The Seller shall deliver (or cause to be
delivered) to the Issuer file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
(b) None of the Issuer, the Seller nor the Servicer shall change its name,
identity, organizational structure or jurisdiction of organization in any manner
that would make any financing statement or continuation statement filed by the
Seller in accordance with paragraph (a) above "seriously misleading" within the
meaning of Sections 9-506, 9-507 or 9-508 of the UCC, unless it shall have given
the Issuer and the Indenture Trustee at least five days' prior written notice
thereof and, to the extent necessary, has promptly filed amendments to
previously filed financing statements or continuation statements described in
paragraph (a) above.
(c) The Seller shall give the Issuer and the Indenture Trustee at least
five days' prior written notice of any change of location of the Seller for
purposes of Section 9-307 of the UCC and shall have taken all action prior to
making such change (or shall have made arrangements to take such action
substantially simultaneously with such change, if it is not possible to take
such action in advance) reasonably necessary or advisable to amend all
previously filed financing statements or continuation statements described in
paragraph (a) above.
(d) The Servicer shall maintain (or shall cause its Sub-Servicer to
maintain) accounts and records as to each Receivable accurately and in
sufficient detail to permit (i) the reader thereof to know at any time the
status of such Receivable, including payments and recoveries made and payments
owing (and the nature of each) and (ii) reconciliation between payments or
recoveries on (or with respect to) each Receivable and the amounts from time to
time deposited in the Collection Account in respect of such Receivable.
(e) The Servicer shall maintain (or shall cause its Sub-Servicer to
maintain) its computer systems so that, from time to time after the conveyance
under this Agreement of the Receivables, the master computer records (including
any backup archives) that refer to a Receivable shall indicate clearly the
interest of the Issuer in such Receivable and that such Receivable is owned by
the Issuer and has been pledged to the Indenture Trustee pursuant to the
Indenture. Indication of the Issuer's interest in a Receivable shall not be
deleted from or modified on such computer systems until, and only until, the
related Receivable shall have been paid in full or repurchased.
(f) If at any time the Servicer shall propose to sell, grant a security
interest in or otherwise transfer any interest in motor vehicle receivables to
any prospective purchaser, lender or other transferee, the Servicer shall give
to such prospective purchaser, lender or other transferee computer tapes,
records or printouts (including any restored from backup archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate clearly
that such Receivable has been sold and is owned by the Issuer and has been
pledged to the Indenture Trustee.
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(g) The Servicer, upon receipt of reasonable prior notice, shall permit the
Indenture Trustee, the Owner Trustee and their respective agents at any time
during normal business hours to inspect, audit and, to the extent permitted by
applicable law, make copies of and abstracts from Servicer's (or any
Sub-Servicer's) records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Issuer or to the
Indenture Trustee, within thirty Business Days, a list of all Receivables (by
contract number and name of Obligor) then owned by the Issuer, together with a
reconciliation of such list to each of the Servicer's Certificates furnished
before such request indicating removal of Receivables from the Issuer.
SECTION 9.3 Other Liens or Interests. Except for the conveyances and grants
of security interests pursuant to this Agreement and the other Transaction
Documents, the Seller shall not sell, pledge, assign or transfer the Receivables
or other property transferred to the Issuer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien (other than Permitted Liens)
on any interest therein, and the Seller shall defend the right, title and
interest of the Issuer in, to and under such Receivables and other property
transferred to the Issuer against all claims of third parties claiming through
or under the Seller.
SECTION 9.4 Transfers Intended as Sale; Security Interest.
(a) Each of the parties hereto expressly intends and agrees that the
transfers contemplated and effected under this Agreement are complete and
absolute sales and transfers rather than pledges or assignments of only a
security interest and shall be given effect as such for all purposes. It is
further the intention of the parties hereto that the Receivables and related
Transferred Assets shall not be part of the Seller's estate in the event of a
bankruptcy or insolvency of the Seller. The sales and transfers by the Seller of
Receivables and related Transferred Assets hereunder are and shall be without
recourse to, or representation or warranty (express or implied) by, the Seller,
except as otherwise specifically provided herein. The limited rights of recourse
specified herein against the Seller are intended to provide a remedy for breach
of representations and warranties relating to the condition of the property
sold, rather than to the collectibility of the Receivables.
(b) Notwithstanding the foregoing, in the event that the Receivables and
other Transferred Assets are held to be property of the Seller, or if for any
reason this Agreement is held or deemed to create indebtedness or a security
interest in the Receivables and other Transferred Assets, then it is intended
that:
(i) This Agreement shall be deemed to be a security agreement within
the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction;
(ii) The conveyance provided for in Section 2.1 shall be deemed to be
a grant by the Seller, and the Seller hereby grants, to the
Issuer of a security interest in all of its right (including the
power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the Receivables and other
Transferred Assets, to secure such indebtedness and the
performance of the obligations of the Seller hereunder;
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(iii) The possession by the Issuer, or the Servicer as the Issuer's
agent, of the Receivables Files and any other property as
constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" or
possession by the purchaser or a person designated by such
purchaser, for purposes of perfecting the security interest
pursuant to the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction; and
(iv) Notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed to be notifications to, or
acknowledgments, receipts or confirmations from, bailees or
agents (as applicable) of the Issuer for the purpose of
perfecting such security interest under applicable law.
SECTION 9.5 Notices, Etc. 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, prepaid courier
service, or by facsimile, and addressed in each case as set forth on Schedule II
hereto or at such other address as shall be designated in a written notice to
the other parties hereto. Any notice required or permitted to be mailed to a
Noteholder shall be given by first class mail, postage prepaid, at the address
of such Noteholder as shown in the Note Register. Delivery shall occur only upon
receipt or reported tender of such communication by an officer of the recipient
entitled to receive such notices located at the address of such recipient for
notices hereunder; provided, however, that any notice to a Noteholder mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Noteholder shall receive such notice.
SECTION 9.6 Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL, SUBSTANTIVE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW, OTHER
THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 9.7 Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
SECTION 9.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
SECTION 9.9 Waivers. No failure or delay on the part of the Servicer, the
Seller, the Issuer or the Indenture Trustee in exercising any power or right
hereunder (to the extent such Person has any power or right hereunder) shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. No notice to or demand on any party hereto
in any case
27
shall entitle it to any notice or demand in similar or other circumstances. No
waiver or approval by any party hereto under this Agreement shall, except as may
otherwise be stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval under this Agreement shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 9.10 Entire Agreement. The Transaction Documents contain a final
and complete integration of all prior expressions by the parties hereto with
respect to the subject matter thereof and shall constitute the entire agreement
among the parties hereto with respect to the subject matter thereof, superseding
all prior oral or written understandings. There are no unwritten agreements
among the parties.
SECTION 9.11 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
SECTION 9.12 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such time as the parties hereto shall agree.
SECTION 9.13 Acknowledgment and Agreement. By execution below, the Seller
expressly acknowledges and consents to the pledge, assignment and grant of a
security interest in the Receivables and the other Transferred Assets by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholders. In addition, the Seller hereby acknowledges and agrees that for so
long as the Notes are outstanding, the Indenture Trustee will have the right to
exercise all powers, privileges and claims of the Issuer under this Agreement.
SECTION 9.14 No Waiver; Cumulative Remedies. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
SECTION 9.15 Nonpetition Covenant. Each party hereto agrees that, prior to
the date which is one year and one day after payment in full of all obligations
of each Bankruptcy Remote Party in respect of all securities issued by any
Bankruptcy Remote Party (i) such party shall not authorize any Bankruptcy Remote
Party to commence a voluntary winding-up or other voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
such Bankruptcy Remote Party or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect in any jurisdiction or seeking the
appointment of an administrator, a trustee, receiver, liquidator, custodian or
other similar official with respect to such Bankruptcy Remote Party or any
substantial part of its property or to consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against such Bankruptcy Remote Party, or to make a
general assignment for the benefit of, its creditors generally, any party hereto
or any other creditor of such Bankruptcy Remote Party, and (ii) none of the
parties hereto shall commence or join with any
28
other Person in commencing any proceeding against such Bankruptcy Remote Party
under any bankruptcy, reorganization, liquidation or insolvency law or statute
now or hereafter in effect in any jurisdiction. This Section shall survive the
termination of this Agreement.
SECTION 9.16 Submission to Jurisdiction; Waiver of Jury Trial. Each of the
parties hereto hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement or any documents executed and delivered in connection
herewith, or for recognition and enforcement of any judgment in respect thereof,
to the nonexclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New York
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its
address determined in accordance with Section 9.5;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction; and
(e) to the extent permitted by applicable law, each party hereto
irrevocably waives all right of trial by jury in any action, proceeding or
counterclaim based on, or arising out of, under or in connection with this
Agreement, any other Transaction Document, or any matter arising hereunder or
thereunder.
SECTION 9.17 Limitation of Liability.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed and delivered by [_____], not in its individual
capacity but solely as Owner Trustee, and in no event shall it have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or under the Notes or any of the other
Transaction Documents or in any of the certificates, notices or agreements
delivered pursuant thereto, as to all of which recourse shall be had solely to
the assets of the Issuer. Under no circumstances shall the Owner Trustee be
personally liable for the payment of any indebtedness or expense of the Issuer
or be liable for the breach or failure of any obligations, representation,
warranty or covenant made or undertaken by the Issuer under the Transaction
Documents. For the purposes of this Agreement, in the performance of its duties
or obligations hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed and delivered by [_____], not in its individual
capacity but solely as Indenture Trustee, and in no event shall it have any
liability for the representations, warranties, covenants,
29
agreements or other obligations of the Issuer under the Notes or any of the
other Transaction Documents or in any of the certificates, notices or agreements
delivered pursuant thereto, as to all of which recourse shall be had solely to
the assets of the Issuer. Under no circumstances shall the Indenture Trustee be
personally liable for the payment of any indebtedness or expense of the Issuer
or be liable for the breach or failure of any obligations, representation,
warranty or covenant made or undertaken by the Issuer under the Transaction
Documents. For the purposes of this Agreement, in the performance of its duties
or obligations hereunder, the Indenture Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Article VI of the
Indenture.
SECTION 9.18 Third-Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, the Noteholders and the
Certificateholder and their respective successors and permitted assigns and the
Owner Trustee shall be an express third party beneficiary hereof and may enforce
the provisions hereof as if it were a party hereto. Except as otherwise provided
in this Section, no other Person will have any right hereunder.
SECTION 9.19 Information Requests. The parties hereto shall provide any
information reasonably requested by the Servicer, the Issuer, the Seller or any
of their Affiliates, in order to comply with or obtain more favorable treatment
under any current or future law, rule, regulation, accounting rule or principle.
SECTION 9.20 Regulation AB. The Servicer shall cooperate fully with the
Seller and the Issuer to deliver to the Seller and the Issuer (including any of
its assignees or designees) any and all statements, reports, certifications,
records and any other information necessary in the good faith determination of
the Seller or the Issuer to permit the Seller to comply with the provisions of
Regulation AB, together with such disclosures relating to the Servicer and the
Receivables, or the servicing of the Receivables, reasonably believed by the
Seller to be necessary in order to effect such compliance.
SECTION 9.21 Information to Be Provided by the Indenture Trustee. (a) For
so long as the Issuer is required to report under the Exchange Act, the
Indenture Trustee shall (i) on or before the fifth Business Day of each month,
provide to the Seller, in writing, such information regarding the Indenture
Trustee as is requested by the Seller (if any) for the purpose of compliance
with Item 1117 of Regulation AB; provided, however, that the Indenture Trustee
shall not be required to provide such information in the event that there has
been no change to the information previously provided by the Indenture Trustee
to Seller, and (ii) as promptly as practicable following notice to or discovery
by a Responsible Officer of the Indenture Trustee of any changes to such
information, provide to the Seller, in writing, such updated information.
(b) As soon as available but no later than March 15 of each calendar year
for so long as the Issuer is required to report under the Exchange Act,
commencing in [_____], the Indenture Trustee shall:
(i) deliver to the Seller a report regarding the Indenture
Trustee's assessment of compliance with the Servicing Criteria during
the immediately preceding calendar year, as required under paragraph
(b) of Rule 13a-18, Rule 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be
30
signed by an authorized officer of the Indenture Trustee, and shall
address each of the Servicing Criteria specified in Exhibit C or such
criteria as mutually agreed upon by the Seller and the Indenture
Trustee;
(ii) deliver to the Seller a report of a registered public
accounting firm that attests to, and reports on, the assessment of
compliance made by the Indenture Trustee and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities
Act and the Exchange Act; and
(iii) deliver to the Seller and any other Person that will be
responsible for signing the certification (a "Sarbanes Certification")
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act
(pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on behalf
of the Issuer or the Seller substantially in the form attached hereto
as Exhibit D or such form as mutually agreed upon by the Seller and
the Indenture Trustee.
The Indenture Trustee acknowledges that the parties identified in
clause (iii) above may rely on the certification provided by the
Indenture Trustee pursuant to such clause in signing a Sarbanes
Certification and filing such with the Commission.
31
IN WITNESS WHEREOF, the parties have caused this Sale and Servicing
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
VOLKSWAGEN AUTO LEASE UNDERWRITTEN
FUNDING, LLC, as Seller
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
VW CREDIT, INC., as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-1
VOLKSWAGEN AUTO LOAN ENHANCED
TRUST 20[__]-[__], as Issuer
By:
------------------------------------
By:
------------------------------------
S-2
[_______________], not in its individual
capacity but solely as Indenture Trustee
By:
------------------------------------
S-3
SCHEDULE I
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE RECEIVABLES
(a) Characteristics of Receivables. Each Receivable:
(i) has been fully and properly executed by the Obligor thereto;
(ii) has either (A) been originated by a Dealer in the ordinary course
of such Dealer's business to finance the retail sale by a Dealer of the
related Financed Vehicle and has been purchased by the applicable
Originator in the ordinary course of its respective business or (B) has
been originated or acquired directly by the applicable Originator in
accordance with its customary practices;
(iii) as of the Closing Date is secured by a first priority validly
perfected security interest in the Financed Vehicle in favor of the
applicable Originator, as secured party, or all necessary actions have been
commenced that would result in a first priority security interest in the
Financed Vehicle in favor of the applicable Originator, as secured party,
which security interest, in either case, is assignable and has been so
assigned (x) by VW Bank to VCI, if such Receivable was originated by VW
Bank, (y) by VCI to the Seller and (z) by the Seller to the Issuer;
(iv) contains customary and enforceable provisions such that the
rights and remedies of the holder thereof are adequate for realization
against the collateral of the benefits of the security;
(v) provides, at origination, for level monthly payments which fully
amortize the initial Outstanding Principal Balance over the original term;
provided that the amount of the first or last payment may be different but
in no event more than three times the level monthly payment;
(vi) provides for interest at the Contract Rate specified in the
Schedule of Receivables; and
(vii) was originated in the United States.
(b) Individual Characteristics. Each Receivable has the following
individual characteristics as of the Cut-Off Date:
(i) each Receivable is secured by a new or used automobile or
light-duty truck;
(ii) each Receivable has a Contract Rate of no less than [_____]% and
not more than [_____]%;
Schedule I to the
Sale and Servicing Agreement
I-1
(iii) each Receivable had an original term to maturity of not more
than [_____] months and not less than [_____] months and each Receivable
has a remaining term to maturity, as of the Cut-Off Date, of [_____] months
or more;
(iv) each Receivable had an original Outstanding Principal Balance
less than or equal to $[_____];
(v) each Receivable has an Outstanding Principal Balance as of the
Cut-Off Date of greater than or equal to $[_____];
(vi) no Receivable has a scheduled maturity date later than [_____];
(vii) no Receivable was more than 30 days past due as of the Cut-Off
Date;
(viii) as of the Cut-off Date, no Receivable was noted in the records
of VCI or the Servicer as being the subject of any pending bankruptcy or
insolvency proceeding;
(ix) no Receivable is subject to a force-placed Insurance Policy on
the related Financed Vehicle;
(x) each Receivable is a Simple Interest Receivable;
(xi) each of the Receivables were selected using selection procedures
that were not known or intended by VCI or the Servicer to be adverse to the
Issuer; and
(xii) the Dealer of the Financed Vehicle has no participation in, or
other right to receive, any proceeds of such Receivable.
(c) Schedule of Receivables. The information with respect to a Receivable
transferred on the Closing Date set forth in the Schedule of Receivables was
true and correct in all material respects as of the Cut-Off Date.
(d) Compliance with Law. The Receivable complied at the time it was
originated or made, in all material respects with all requirements of applicable
federal, state and local laws, and regulations thereunder, including, to the
extent applicable, usury laws, the Federal Truth in Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Reporting Act, the Federal Trade
Commission Act, the Fair Debt Collection Practices Act, the Fair Credit Billing
Act, the Xxxxxxxx-Xxxx Warranty Act, Federal Reserve Board Regulations B and Z,
Servicemembers Civil Relief Act, state adaptations of the National Consumer Act
and of the Uniform Consumer Credit Code and any other consumer credit, equal
opportunity and disclosure laws applicable to that Receivable.
(e) Binding Obligation. The Receivable constitutes the legal, valid and
binding payment obligation in writing of the Obligor, enforceable in all
respects by the holder thereof in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization, liquidation
or other similar laws and equitable principles relating to or affecting the
enforcement of creditors' rights generally.
I-2
(f) Receivable in Force. The Receivable has not been satisfied,
subordinated or rescinded nor has the related Financed Vehicle been released
from the lien granted by the Receivable in whole or in part.
(g) No Waiver. As of the Cut-Off Date, no provision of a Receivable has
been waived.
(h) No Default. Except for payment delinquencies continuing for a period of
not more than 30 days as of the Cut-Off Date, the records of the Servicer did
not disclose that any default, breach, violation or event permitting
acceleration under the terms of the Receivable existed as of the Cut-Off Date or
that any continuing condition that with notice or lapse of time, or both, would
constitute a default, breach, violation or event permitting acceleration under
the terms of the Receivable had arisen as of the Cut-Off Date.
(i) Insurance. The Receivable requires the Obligor thereunder to insure the
Financed Vehicle under a physical damage insurance policy.
(j) No Government Obligor. The Obligor on the Receivable is not the United
States of America or any state thereof or any local government, or any agency,
department, political subdivision or instrumentality of the United States of
America or any state thereof or any local government.
(k) Assignment. No Receivable has been originated in, or is subject to the
laws of, any jurisdiction under which the sale, transfer, assignment, conveyance
or pledge of such Receivable would be unlawful, void, or voidable. The Seller
has not entered into any agreement with any Obligor that prohibits, restricts or
conditions the assignment of the related Receivable.
(l) Good Title. It is the intention of the Seller that the sale, transfer,
assignment and conveyance herein contemplated constitute an absolute sale,
transfer, assignment and conveyance of the Receivables and that the Receivables
not be part of the Seller's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy law. No Receivable has
been sold, transferred, assigned, conveyed or pledged to any Person other than
pursuant to the Transaction Documents. As of the Closing Date and immediately
prior to the sale and transfer herein contemplated, the Seller had good and
marketable title to Receivable free and clear of all Liens, and, immediately
upon the sale and transfer thereof, the Issuer will have good and marketable
title to each Receivable, free and clear of all Liens (other than Permitted
Liens).
(m) Filings. All filings (including, without limitation, UCC filings)
necessary in any jurisdiction to give the Issuer a first priority, validly
perfected ownership interest in the Receivables (other than the Related Security
with respect thereto), and to give the Indenture Trustee a first priority
perfected security interest therein, will be made within ten days of the Closing
Date.
(n) Priority. The Receivable is not pledged, assigned, sold, subject to a
security interest, or otherwise conveyed other than pursuant to the Transaction
Documents. The Seller has not authorized the filing of and is not aware of any
financing statements against VCI or the Seller that include a description of
collateral covering the Receivables other than any financing
I-3
statement relating to security interests granted under the Transaction Documents
or that have been terminated. The Sale and Servicing Agreement creates a valid
and continuing security interest in the Receivable (other than the Related
Security with respect thereto) in favor of the Issuer which security interest is
prior to all other Liens (other than Permitted Liens) and is enforceable as such
against all other creditors of and purchasers and assignees from the Seller.
(o) Characterization of Receivables. Each Receivable constitutes either
"tangible chattel paper", an "account", a "promissory note" or a "payment
intangible", each as defined in the UCC.
(p) One Original. There is only one original executed copy of each
Receivable in existence. The Servicer (or its agent) has possession of such
original. If such original has been marked, then such original does not have any
marks or notations indicating that it has been pledged, assigned or otherwise
conveyed to any Person other than to a party to the Transaction Documents.
(q) No Defenses. The Seller has no knowledge either of any facts which
would give rise to any right of rescission, set-off, counterclaim or defense, or
of the same being asserted or threatened, with respect to any Receivable.
(r) No Repossession. As of the Cut-Off Date, no Financed Vehicle shall have
been repossessed.
I-4
SCHEDULE II
NOTICE ADDRESSES
If to the Issuer:
with copies to the Administrator, VW Credit, Inc., the Indenture Trustee
If to the Owner Trustee:
with a copy to:
If to the Indenture Trustee:
If to Purchaser:
0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
(telecopier no. (000) 000-0000)
Attention: Treasurer
If to the Servicer:
0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
(telecopier no. (000) 000-0000)
Attention: Treasurer
with a copy to VW Credit, Inc.
If to VCI:
0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
(telecopier no. (000) 000-0000)
Attention: Treasurer
If to VW Credit, Inc.:
0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
(telecopier no. (000) 000-0000)
Attention: General Counsel
Schedule II to the
Sale and Servicing Agreement
II-1
If to Moody's:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(telecopier no. (000) 000-0000)
Attention: ABS Monitoring Group
If to Standard & Poor's:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(telecopier no. (000) 000-0000)
Attention: Asset Backed Surveillance Group
II-2
EXHIBIT A
FORM OF ASSIGNMENT PURSUANT TO
SALE AND SERVICING AGREEMENT
For value received, in accordance with the Sale and Servicing Agreement
(the "Agreement"), dated as of [_____], between Volkswagen Auto Loan Enhanced
Trust 20[_____]-[_____], a Delaware statutory trust (the "Issuer"), Volkswagen
Auto Lease Underwritten Funding, LLC, a Delaware limited liability company (the
"Seller"), VW Credit, Inc., a Delaware corporation ("VCI"), and [_____], a
national banking association (the "Indenture Trustee"), on the terms and subject
to the conditions set forth in the Agreement, the Seller does hereby transfer,
assign, set over, sell and otherwise convey to the Issuer on [_____], all of its
right, title and interest in, to and under the Receivables set forth on the
schedule of Receivables delivered by the Seller to the Issuer on the date hereof
(such schedule, the "Schedule of Receivables"), and the Collections after the
Cut-Off Date and the Related Security relating thereto, which sale shall be
effective as of the Cut-Off Date.
The foregoing sale does not constitute and is not intended to result in any
assumption by the Issuer of any obligation of the undersigned to the Obligors,
insurers or any other Person in connection with the Receivables, or the other
assets and properties conveyed hereunder or any agreement, document or
instrument related thereto.
This assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Agreement and is governed by the Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Agreement.
IN WITNESS HEREOF, the undersigned has caused this assignment to be duly
executed as of [_____].
VOLKSWAGEN AUTO LEASE UNDERWRITTEN
FUNDING, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit A to the
Sale and Servicing Agreement
A-1
EXHIBIT B
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained in the
Agreement, the Seller hereby represents, warrants and covenants to the Issuer
and the Indenture Trustee as follows on the Closing Date:
GENERAL
1. This Agreement creates a valid and continuing security interest (as defined
in the applicable UCC) in the Receivables and the other Transferred Assets in
favor of the Issuer, which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and purchasers from the Seller.
2. The Receivables constitute "tangible chattel paper," "accounts,"
"instruments" or "general intangibles," within the meaning of the UCC.
3. Each Receivable is secured by a first priority validly perfected security
interest in the related Financed Vehicle in favor of the applicable Originator,
as secured party, or all necessary actions with respect to such Receivable have
been taken or will be taken to perfect a first priority security interest in the
related Financed Vehicle in favor of the applicable Originator, as secured
party.
CREATION
4. Immediately prior to the sale, transfer, assignment and conveyance of a
Receivable by the Seller to the Issuer, the Seller owned and had good and
marketable title to such Receivable free and clear of any Lien and immediately
after the sale, transfer, assignment and conveyance of such Receivable to the
Issuer, the Issuer will have good and marketable title to such Receivable free
and clear of any Lien.
5. The related Originator has received all consents and approvals to the sale of
the Receivables hereunder to the Issuer required by the terms of the Receivables
that constitute instruments.
PERFECTION
6. The Seller has caused or will have caused, within ten days after the
effective date of this Agreement, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the sale of the Receivables from the Seller
to Issuer, and the security interest in the Receivables granted to the Issuer
hereunder; and the Servicer, in its capacity as custodian, has in its possession
the original copies of such instruments or tangible chattel paper that
constitute or evidence the Receivables, and all financing statements referred to
in this paragraph contain a statement that: "A purchase of or security interest
in any collateral described in this financing statement will violate the rights
of the Secured Party/Purchaser".
Exhibit B to the
Sale and Servicing Agreement
B-1
7. With respect to Receivables that constitute instruments or tangible chattel
paper, either:
(i) All original executed copies of each such instrument or tangible chattel
paper have been delivered to the Indenture Trustee; or
(ii) Such instruments or tangible chattel paper are in the possession of the
Servicer and the Indenture Trustee has received a written acknowledgment from
the Servicer that the Servicer, in its capacity as custodian, is holding such
instruments or tangible chattel paper solely on behalf and for the benefit of
the Indenture Trustee; or
(iii) The Servicer received possession of such instruments or tangible chattel
paper after the Indenture Trustee received a written acknowledgment from the
Servicer that the Servicer is acting solely as agent of the Indenture Trustee.
PRIORITY
8. Neither the Seller nor VCI has authorized the filing of, or is aware of, any
financing statements against either the Seller or VCI that include a description
of collateral covering the Receivables other than any financing statement (i)
relating to the conveyance of the Receivables by VCI to the Seller under the
Purchase Agreement, (ii) relating to the security interest granted to Issuer
hereunder or (iii) that has been terminated.
9. Neither the Seller nor VCI is aware of any material judgment, ERISA or tax
lien filings against either the Seller or VCI.
10. None of the instruments or tangible chattel paper that constitutes or
evidences the Receivables has any marks or notations indicating that they have
been pledged, assigned or otherwise conveyed to any Person other than the
Seller, the Issuer or the Indenture Trustee.
SURVIVAL OF PERFECTION REPRESENTATIONS
11. Notwithstanding any other provision of the Sale and Servicing Agreement or
any other Transaction Document, the perfection representations, warranties and
covenants contained in this Exhibit B shall be continuing, and remain in full
force and effect until such time as all obligations under the Transaction
Documents and the Notes have been finally and fully paid and performed.
NO WAIVER
12. The parties to the Sale and Servicing Agreement shall provide the Rating
Agencies with prompt written notice of any breach of the perfection
representations, warranties and covenants contained in this Exhibit D, and shall
not, without satisfying the Rating Agency Condition, waive a breach of any of
such perfection representations, warranties or covenants.
SERVICER TO MAINTAIN PERFECTION AND PRIORITY
13. The Servicer covenants that, in order to evidence the interests of the
Seller and Issuer under the Sale and Servicing Agreement and the Indenture
Trustee under the Indenture,
B-2
Servicer shall take such action, or execute and deliver such instruments as may
be necessary or advisable (including, without limitation, such actions as are
requested by the Indenture Trustee) to maintain and perfect, as a first priority
perfected security interest, the Indenture Trustee's security interest in the
Receivables. The Servicer shall, from time to time and within the time limits
established by law, prepare and file, all financing statements, amendments,
continuations, initial financing statements in lieu of a continuation statement,
terminations, partial terminations, releases or partial releases, or any other
filings necessary or advisable to continue, maintain and perfect the Indenture
Trustee's security interest in the Receivables as a first-priority perfected
security interest (each a "Filing").
B-3
EXHIBIT C
SERVICING CRITERIA TO BE ADDRESSED IN
INDENTURE TRUSTEE'S ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Indenture Trustee shall
address, at a minimum, the criteria identified as below as "Applicable Servicing
Criteria":
[To be inserted]
Exhibit C to the
Sale and Servicing Agreement
C-1
EXHIBIT D
FORM OF INDENTURE TRUSTEE'S ANNUAL CERTIFICATION
RE: VOLKSWAGEN AUTO LOAN ENHANCED TRUST 20[_____]-[_____]
[_____], not in its individual capacity but solely as indenture
trustee (the "Indenture Trustee"), certifies to Volkswagen Auto Lease
Underwritten Funding (the "Seller"), and its officers, with the knowledge and
intent that they will rely upon this certification, that:
(1) It has reviewed the report on assessment of the Indenture
Trustee's compliance provided in accordance with Rules 13a-18 and 15d-18
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and Item 1122 of Regulation AB (the "Servicing Assessment"), and the
registered public accounting firm's attestation report provided in
accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section
1122(b) of Regulation AB (the "Attestation Report") that were delivered by
the Indenture Trustee to the Seller pursuant to the Sale and Servicing
Agreement (the "Agreement"), dated as of [_____], by and between VW Credit,
Inc., the Seller, the Indenture Trustee and Volkswagen Auto Loan Enhanced
Trust 20[_____]-[_____] (collectively, the "Indenture Trustee
Information");
(2) To the best of its knowledge, the Indenture Trustee Information,
taken as a whole, does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in
the light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Indenture
Trustee Information;
(3) To the best of its knowledge, all of the Indenture Trustee
Information required to be provided by the Indenture Trustee under the
Agreement has been provided to the Seller; and
(4) To the best of its knowledge, except as disclosed in the Servicing
Assessment or the Attestation Report, the Indenture Trustee has fulfilled
its obligations under the Agreement.
[_____], not in its individual capacity
but solely as Indenture Trustee
Date: _________________________
Exhibit D to the
Sale and Servicing Agreement
D-1
APPENDIX A
DEFINITIONS
The following terms have the meanings set forth, or referred to, below:
"Accrued Note Interest" means, with respect to any Payment Date, the sum of
the Noteholders' Monthly Accrued Interest for such Payment Date and the
Noteholders' Interest Carryover Shortfall for such Payment Date.
"Act" has the meaning set forth in Section 11.3(a) of the Indenture.
"Adjusted Pool Balance" means, as of any Payment Date, an amount equal to
(a) the Net Pool Balance at the end of the Collection Period preceding such
Payment Date (or, in the case of the first Payment Date, the Net Pool Balance as
of the Cut-Off Date) minus (b) the Yield Supplement Overcollateralization Amount
for such Payment Date.
"Administration Agreement" means the Administration Agreement, dated as of
the Closing Date, among the Administrator, the Issuer and the Indenture Trustee,
as the same may be amended and supplemented from time to time.
"Administrator" means VCI, or any successor Administrator under the
Administration Agreement.
"Advance" has the meaning set forth in Section 4.3(c) of the Sale and
Servicing Agreement.
"Affiliate" means, for any specified Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such specified Person and "affiliated" has a meaning correlative to the
foregoing. For purposes of this definition, "control" means the power, directly
or indirectly, to cause the direction of the management and policies of a
Person.
"Applicable Tax State" means, as of any date, each State as to which any of
the following is then applicable: (a) a State in which the Owner Trustee
maintains its Corporate Trust Office, (b) a State in which the Owner Trustee
maintains its principal executive offices, and (c) the State of Michigan or the
State of Illinois.
"Authenticating Agent" means any Person authorized by the Indenture Trustee
to act on behalf of the Indenture Trustee to authenticate and deliver the Notes.
"Authorized Newspaper" means a newspaper of general circulation in The City
of New York, printed in the English language and customarily published on each
Business Day, whether or not published on Saturdays, Sundays and holidays.
"Authorized Officer" means (a) with respect to the Issuer, (i) 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 or
(ii) so long as the Administration Agreement is in effect, any
Appendix A to the Sale and Servicing
Agreement
officer of the Administrator who is authorized to act for the Administrator in
matters relating to the Issuer pursuant to the Administration Agreement and who
is identified on the list of Authorized Officers delivered by the Administrator
to the Owner Trustee and the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter) and (b) with
respect to the Owner Trustee, the Indenture Trustee and the Servicer, any
officer of the Owner Trustee, the Indenture Trustee or the Servicer, as
applicable, who is authorized to act for the Owner Trustee, the Indenture
Trustee or the Servicer, as applicable, in matters relating to the Owner
Trustee, the Indenture Trustee or the Servicer and who is identified on the list
of Authorized Officers delivered by each of the Owner Trustee, the Indenture
Trustee and the Servicer to the Indenture Trustee on the Closing Date (as such
list may be modified or supplemented from time to time thereafter).
"Available Funds" means, for any Payment Date and the related Collection
Period, an amount equal to the sum of the following amounts: (i) all Collections
received by the Servicer during such Collection Period, (ii) the sum of the
Repurchase Prices with respect to each Receivable that is to become a
Repurchased Receivable on such Payment Date and (iii) the Reserve Account Excess
Amount for such Payment Date.
"Available Funds Shortfall Amount" means, as of any Payment Date, the
amount by which the amounts required to be paid pursuant to clauses first
through fourth of Section 4.4(a) of the Sale and Servicing Agreement exceeds the
sum of (i) Available Funds for such Payment Date and (ii) Advances made by the
Servicer on such Payment Date.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C. 101 et
seq., as amended.
"Bankruptcy Event" means, with respect to any Person, (i) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person 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 such Person, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 90 consecutive days or (ii) the commencement by such
Person 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
such Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of such Person, or the making by such Person of any general assignment
for the benefit of creditors, or the failure by such Person generally to pay its
debts as such debts become due, or the taking of action by such Person in
furtherance of any of the foregoing.
"Bankruptcy Remote Party" means each of the Seller, the Issuer, any other
trust created by the Seller or any limited liability company or corporation
wholly-owned by the Seller.
"Benefit Plan" means (i) any "employee benefit plan" as defined in Section
3(3) of ERISA whether or not subject to ERISA, (ii) a "plan" described by
Section 4975(e)(1) of the
3
Code or (iii) any entity deemed to hold the assets of any of the foregoing by
reason of an employee benefit plan's or other plan's investment in such entity.
"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 2.10 of the Indenture.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in the states of Delaware, Michigan or New York, or
in the state in which the Corporate Trust Office of the Indenture Trustee is
located, are authorized or obligated by law, executive order or government
decree to be closed.
"Certificate" means a certificate evidencing the beneficial interest of the
Certificateholder in the Issuer, substantially in the form of Exhibit A to the
Trust Agreement.
"Certificate Balance" means, at any time, the Initial Certificate Balance
reduced by all payments of principal made prior to such time on the
Certificates.
"Certificate of Title" means, with respect to any Financed Vehicle, the
certificate of title or other documentary evidence of ownership of such Financed
Vehicle as issued by the department, agency or official of the jurisdiction
(whether in paper or electronic form) in which such Financed Vehicle is titled
responsible for accepting applications for, and maintaining records regarding,
certificates of title and liens thereon.
"Certificate of Trust" means the certificate of trust for the Issuer filed
by the Owner Trustee pursuant to the Statutory Trust Statute.
"Certificateholder" means initially, [_____], and any other Holder of the
Certificate.
"Certificateholders' Percentage" will mean (a) until the Payment Date on
which the principal amount of the Notes has been paid in full, zero, and (b)
with respect to any Payment Date on or after the principal amount of the Notes
has been paid in full, 100%.
"Certificateholders' Principal Distribution Amount" will mean, with respect
to any Payment Date, an amount equal to the Certificateholders' Percentage of
the Principal Distribution Amount as of the end of the related Collection
Period.
"Class" means a group of Notes whose form is identical except for variation
in denomination, principal amount or owner, and references to "each Class" thus
mean each of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes.
"Class A-1 Final Scheduled Payment Date" means [_____].
"Class A-1 Interest Rate" means [_____]% per annum (computed on the basis
of the actual number of days elapsed during the applicable Interest Period, but
assuming a 360-day year).
"Class A-1 Note Balance" means, at any time, the Initial Class A-1 Note
Balance reduced by all payments of principal made prior to such time on the
Class A-1 Notes.
4
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note is
registered on the Note Register.
"Class A-1 Notes" means the Class of auto loan asset backed notes
designated as Class A-1 Notes, issued in accordance with the Indenture.
"Class A-2 Final Scheduled Payment Date" means[_____].
"Class A-2 Interest Rate" means [_____]% per annum (computed on the basis
of a 360-day year of twelve 30-day months).
"Class A-2 Note Balance" means, at any time, the Initial Class A-2 Note
Balance reduced by all payments of principal made prior to such time on the
Class A-2 Notes.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note is
registered on the Note Register.
"Class A-2 Notes" means the Class of auto loan asset backed notes
designated as Class A-2 Notes, issued in accordance with the Indenture.
"Class A-3 Final Scheduled Payment Date" means[_____].
"Class A-3 Interest Rate" means [_____]% per annum (computed on the basis
of a 360-day year of twelve 30-day months).
"Class A-3 Note Balance" means, at any time, the Initial Class A-3 Note
Balance reduced by all payments of principal made prior to such time on the
Class A-3 Notes.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note is
registered on the Note Register.
"Class A-3 Notes" means the Class of auto loan asset backed notes
designated as Class A-3 Notes, issued in accordance with the Indenture.
"Class A-4 Final Scheduled Payment Date" means[_____].
"Class A-4 Interest Rate" means [_____]% per annum (computed on the basis
of a 360-day year of twelve 30-day months).
"Class A-4 Note Balance" means, at any time, the Initial Class A-4 Note
Balance reduced by all payments of principal made prior to such time on the
Class A-4 Notes.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note is
registered on the Note Register.
"Class A-4 Notes" means the Class of auto loan asset backed notes
designated as Class A-4 Notes, issued in accordance with the Indenture.
5
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act and shall initially be DTC.
"Clearing Agency Participant" means a broker, dealer, bank or other
financial institution or other Person for which from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means [_____].
"Code" means the Internal Revenue Code of 1986, as amended, modified or
supplemented from time to time, and any successor law thereto, all the
regulations promulgated and the rulings issued thereunder.
"Collateral" has the meaning set forth in the Granting Clause of the
Indenture.
"Collection Account" means the trust account established and maintained
pursuant to Section 4.1 of the Sale and Servicing Agreement.
"Collection Period" means the period commencing on the first day of each
fiscal month of the Servicer and ending on the last day of such fiscal month
(or, in the case of the initial Collection Period, the period commencing on the
close of business on the Cut-Off Date and ending on [_____]). As used herein,
the "related" Collection Period with respect to a Payment Date shall be deemed
to be the Collection Period which precedes such Payment Date.
"Collections" means, with respect to any Receivable and to the extent
received by the Servicer after the Cut-Off Date, (i) any monthly payment by or
on behalf of the Obligor thereunder, (ii) any full or partial prepayment of such
Receivable, (iii) all Liquidation Proceeds and (iv) any other amounts received
by the Servicer which, in accordance with the Customary Servicing Practices,
would customarily be applied to the payment of accrued interest or to reduce the
Outstanding Principal Balance of such Receivable; provided, however, that the
term "Collections" in no event will include (1) for any Payment Date, any
amounts in respect of any Receivable the Repurchase Price of which has been
included in the Available Funds on such Payment Date or a prior Payment Date,
(2) any Supplemental Servicing Fees or (3) rebates of premiums with respect to
the cancellation or termination of any Insurance Policy, extended warranty or
service contract.
"Commission" means the U.S. Securities and Exchange Commission.
"Contract Rate" means, with respect to a Receivable, the rate per annum at
which interest accrues under the retail motor vehicle installment sales contract
or installment loan evidencing such Receivable. Such rate may be less than the
"Annual Percentage Rate" disclosed in the Receivable.
"Corporate Trust Office" means:
(s) as used with respect to Indenture Trustee, the principal office of the
Indenture Trustee at which at any particular time its corporate trust business
shall be administered which office at date of the execution of the Indenture is
located at [_____], Attention: Administrator, or at
6
such other address as the Indenture Trustee may designate from time to time by
notice to the Noteholders, the Administrator, the Servicer and the Issuer, or
the principal corporate trust office of any successor Indenture Trustee (the
address of which the successor Indenture Trustee will notify the Noteholders,
the Administrator, the Servicer and the Owner Trustee); and
(t) as used with respect to Owner Trustee, the corporate trust office of
the Owner, Trustee, [_____] or at such other address as the Owner Trustee may
designate by notice to the Certificateholder and the Seller, or the principal
corporate trust office of any successor Owner Trustee (the address of which the
successor Owner Trustee will notify the Certificateholder and the Seller).
"Customary Servicing Practices" means the customary servicing practices of
the Servicer or any Sub-Servicer with respect to all comparable motor vehicle
receivables that the Servicer or such Sub-Servicer, as applicable, services for
itself and others, as such practices may be changed from time to time, it being
understood that the Servicer and the Sub-Servicers may not have the same
"Customary Servicing Practices".
"Cut-Off Date" means[_____].
"Dealer" means a motor vehicle dealership.
"Default" means any occurrence that is, or with notice or lapse of time or
both would become, an Event of Default.
"Defaulted Receivable" means, with respect to any Collection Period and any
Receivable, the earlier of (a) the date on which any payment is past due 90 or
more days or (b) the date on which the related Financed Vehicle has been
repossessed whichever occurs first. The Outstanding Principal Balance of any
Receivable that becomes a "Defaulted Receivable" will be deemed to be zero as of
the date it becomes a "Defaulted Receivable".
"Definitive Note" means a definitive fully registered Note issued pursuant
to Section 2.12 of the Indenture.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to (I) bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments" as
defined in Section 9-102(47) of the UCC and are susceptible of physical
delivery, transfer of actual possession thereof to the Indenture Trustee or its
nominee or custodian by physical delivery to the Indenture Trustee or its
nominee or custodian endorsed to, or registered in the name of, the Indenture
Trustee or its nominee or custodian or endorsed in blank, and (II) with respect
to a "certificated security" (as defined in Section 8-102(a)(4) of the UCC)
transfer of actual possession thereof (i) by physical delivery of such
certificated security to the Indenture Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Indenture Trustee or its nominee
or custodian or endorsed in blank, or to another person, other than a
"securities intermediary" (as defined in Section 8-102(a)(14) of the UCC), who
acquires possession of the certificated security on behalf of the Indenture
Trustee or its nominee or custodian or, having previously acquired possession of
the certificate, acknowledges that it holds for the Indenture Trustee or its
nominee or custodian
7
or (ii) by delivery thereof to a "securities intermediary", endorsed to or
registered in the name of the Indenture Trustee or its nominee or custodian, or
endorsed in blank, and the making by such "securities intermediary" of entries
on its books and records identifying such certificated securities as belonging
to the Indenture Trustee or its nominee or custodian and the sending by such
"securities intermediary" of a confirmation of the purchase of such certificated
security by the Indenture Trustee or its nominee or custodian (all of the
foregoing, "Physical Property"), and, in any event, any such Physical Property
in registered form shall be in the name of the Indenture Trustee or its nominee
or custodian; and such additional or alternative procedures as may hereafter
become appropriate to effect the complete transfer of ownership of any such
Trust Account Property to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the interpretation
thereof;
(b) with respect to any securities issued by the U.S. Treasury, the Federal
Home Loan Mortgage Corporation, the Federal National Mortgage Association or the
other government agencies, instrumentalities and establishments of the United
States identified in Appendix A to Federal Reserve Bank Operating Circular No. 7
as in effect from time to time that is a "book-entry security" (as such term is
defined in Federal Reserve Bank Operating Circular No. 7) held in a securities
account and eligible for transfer through the Fedwire(R) Securities Service
operated by the Federal Reserve System pursuant to Federal book-entry
regulations, the following procedures, all in accordance with applicable law,
including applicable Federal regulations and Articles 8 and 9 of the UCC:
book-entry registration of such Trust Account Property to an appropriate
securities account maintained with a Federal Reserve Bank by a "participant" (as
such term is defined in Federal Reserve Bank Operating Circular No. 7) that is a
"depository institution" (as defined in Section 19(B)(1)(A) of the Federal
Reserve Act) pursuant to applicable Federal regulations, and issuance by such
depository institution of a deposit advice or other written confirmation of such
book-entry registration to the Indenture Trustee or its nominee or custodian of
the purchase by the Indenture Trustee or its nominee or custodian of such
book-entry securities; the making by such depository institution of entries in
its books and records identifying such book entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations or a security
entitlement thereto as belonging to the Indenture Trustee or its nominee or
custodian and indicating that such depository institution holds such Trust
Account Property solely as agent for the Indenture Trustee or its nominee or
custodian; and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is an
uncertificated security (as defined in Section 8-102(a)(18) of the UCC) and that
is not governed by clause (b) above, (i) registration on the books and records
of the issuer thereof in the name of the Indenture Trustee or its nominee or
custodian, or (ii) registration on the books and records of the issuer thereof
in the name of another person, other than a securities intermediary, who
acknowledges that it holds such uncertificated security for the benefit of the
Indenture Trustee or its nominee or custodian.
"Depositor" means the Seller in its capacity as Depositor under the Trust
Agreement.
8
"Determination Date" means the second Business Day preceding the related
Payment Date, beginning [_____];
"Dollar" and "$" mean lawful currency of the United States of America.
"DTC" means The Depository Trust Company, and its successors.
"Eligible Account" means either (a) a segregated account with an Eligible
Institution or (b) a segregated trust account with the corporate trust
department of a depository institution acting in its fiduciary capacity
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited
in such account, so long as the long-term unsecured debt of such depository
institution shall have a credit rating from each Rating Agency in one of its
generic rating categories which signifies investment grade. Any such trust
account may be maintained with the Owner Trustee, the Indenture Trustee or any
of their respective Affiliates, if such accounts meet the requirements described
in clause (b) of the preceding sentence.
"Eligible Institution" means a depository institution or trust company
(which may be the Owner Trustee, the Indenture Trustee or any of their
respective Affiliates) organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia (or any domestic
branch of a foreign bank) (a) which at all times has either (A) a long-term
senior unsecured debt rating of "Aa2" or better by Moody's and "AA-" or better
by Standard & Poor's or such other rating that is acceptable to each Rating
Agency, as evidenced by a letter from such Rating Agency to the Issuer or the
Indenture Trustee, (B) a certificate of deposit rating of "P-1" by Moody's and
"A-1+" by Standard & Poor's or (C) such other rating that is acceptable to each
Rating Agency, as evidenced by a letter from such Rating Agency to the Issuer or
the Indenture Trustee and (b) whose deposits are insured by the Federal Deposit
Insurance Corporation.
"Eligible Receivable" means a Receivable meeting all of the criteria set
forth on Schedule I of each of the Purchase Agreement and the Sale and Servicing
Agreement as of the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" has the meaning set forth in Section 5.1 of the
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Final Scheduled Payment Date" means, with respect to (i) the Class A-1
Notes, the Class A-1 Final Scheduled Payment Date, (ii) the Class A-2 Notes, the
Class A-2 Final Scheduled Payment Date, (iii) the Class A-3 Notes, the Class A-3
Final Scheduled Payment Date and (iv) the Class A-4 Notes, the Class A-4 Final
Scheduled Payment Date.
"Financed Vehicle" means an automobile or light-duty truck, together with
all accessions thereto, securing an Obligor's indebtedness under the applicable
Receivable.
9
"GAAP" means generally accepted accounting principles in the USA, applied
on a materially consistent basis.
"Governmental Authority" means any (a) Federal, state, municipal, foreign
or other governmental entity, board, bureau, agency or instrumentality, (b)
administrative or regulatory authority (including any central bank or similar
authority) or (c) court or judicial authority.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the 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. Other forms of the verb "to Grant"
shall have correlative meanings.
"Holder" means, as the context may require, the Certificateholder or a
Noteholder or both.
"Indenture" means the Indenture, dated as of the Closing Date, between the
Issuer and Indenture Trustee, as the same may be amended and supplemented from
time to time.
"Indenture Trustee" means [_____], a [national banking association], not in
its individual capacity but as indenture trustee under the Indenture, or any
successor trustee under the Indenture.
"Independent" means, when used with respect to any specified Person, that
such Person (i) is in fact independent of the Issuer, any other obligor upon the
Notes, the Administrator and any Affiliate of any of the foregoing Persons, (ii)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Administrator or any
Affiliate of any of the foregoing Persons and (iii) is not connected with the
Issuer, any such other obligor, the Administrator 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 11.1 of the Indenture,
made by an independent appraiser or other expert appointed by an Issuer Order,
and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Appendix A and that the signer is
Independent within the meaning thereof.
"Initial Certificate Balance" means $[_____].
"Initial Class A-1 Note Balance" means $[_____].
10
"Initial Class A-2 Note Balance" means $[_____].
"Initial Class A-3 Note Balance" means $[_____].
"Initial Class A-4 Note Balance" means $[_____].
"Initial Note Balance" means, for any Class, the Initial Class A-1 Note
Balance, the Initial Class A-2 Note Balance, the Initial Class A-3 Note Balance
or the Initial Class A-4 Note Balance, as applicable, or with respect to the
Notes generally, the sum of the foregoing.
"Initial Reserve Account Deposit Amount" means an amount equal to $[_____].
"Insurance Policy" means (i) any theft and physical damage insurance policy
maintained by the Obligor under a Receivable, providing coverage against loss or
damage to or theft of the related Financed Vehicle, and (ii) any credit life or
credit disability insurance maintained by an Obligor in connection with any
Receivable.
"Interest Period" means, with respect to any Payment Date, from and
including the Closing Date (in the case of the first Payment Date) or from and
including the most recent Payment Date to but excluding that Payment Date.
"Interest Rate" means (a) with respect to the Class A-1 Notes, the Class
A-1 Interest Rate, (b) with respect to the Class A-2 Notes, the Class A-2
Interest Rate, (c) with respect to the Class A-3 Notes, the Class A-3 Interest
Rate or (d) with respect to the Class A-4 Notes, the Class A-4 Interest Rate.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto, and the regulations promulgated
and the rulings issued thereunder.
"Issuer" means Volkswagen Auto Loan Enhanced Trust 20[_____]-[_____], a
Delaware statutory trust established pursuant to the Trust Agreement and the
filing of the Certificate of Trust, until a successor replaces it and,
thereafter, means such successor.
"Issuer Order" and "Issuer Request" means a written order or request of the
Issuer signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"Lien" means, for any asset or property of a Person, a lien, security
interest, mortgage, pledge or encumbrance in, of or on such asset or property in
favor of any other Person, except any Permitted Lien.
"Liquidation Proceeds" means, with respect to any Receivable, (a) insurance
proceeds received by the Servicer with respect to the Insurance Policies, (b)
amounts received by the Servicer in connection with such Receivable pursuant to
the exercise of rights under such Receivable and (c) the monies collected by the
Servicer (from whatever source, including proceeds of a sale of a Financed
Vehicle, a deficiency balance recovered from the Obligor after the charge-off of
such Receivable or as a result of any recourse against the related Dealer, if
any)
11
on such Receivable, in the case of each of the foregoing clauses (a) through
(c), net of any expenses (including, without limitation, any auction, painting,
repair or refurbishment expenses in respect of the related Financed Vehicle)
incurred by the Servicer in connection therewith and any payments required by
law to be remitted to the Obligor; provided, however, that the Repurchase Price
for any Receivable shall not constitute "Liquidation Proceeds".
"Monthly Remittance Condition" has the meaning set forth in Section 4.2 of
the Sale and Servicing Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor that is a
nationally recognized statistical rating organization.
"Net Pool Balance" means, as of any date, the aggregate Outstanding
Principal Balance of all Receivables (other than Defaulted Receivables) of the
Issuer on such date.
"Note" means a Class A-1 Note, Class A-2 Note, Class A-3 Note or Class A-4
Note, in each case substantially in the form of Exhibit A to the Indenture.
"Note Balance" means, with respect to any date of determination, for any
Class, the Class A-1 Note Balance, the Class A-2 Note Balance, the Class A-3
Note Balance or the Class A-4 Note Balance, as applicable, or with respect to
the Notes generally, the sum of all of the foregoing.
"Note Depository Agreement" means the agreement, dated as of the Closing
Date, between the Issuer and DTC, as the initial Clearing Agency relating to the
Notes, as the same may be amended or supplemented from time to time.
"Note Factor" means, with respect to the Notes or any Class of Notes on any
Payment Date, a six-digit decimal figure equal to the Note Balance of the Notes
or such Class of Notes, as applicable, as of the end of the preceding Collection
Period divided by the Note Balance of the Notes or such Class of Notes, as
applicable, as of the Closing Date. The Note Factor will be 1.000000 as of the
Closing Date; thereafter, the Note Factor will decline to reflect reductions in
the Note Balance of the Notes or such Class of Notes, as applicable.
"Noteholder" means, as the context requires, all of the Class A-1
Noteholders, the Class A-2 Noteholders, the Class A-3 Noteholders and the Class
A-4 Noteholders, or any of the Class A-1 Noteholders, the Class A-2 Noteholders,
the Class A-3 Noteholders or the Class A-4 Noteholders.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Payment Date, the excess of the Noteholders' Monthly Accrued Interest for the
preceding Payment Date and any outstanding Noteholders' Interest Carryover
Shortfall on such preceding Payment Date, over the amount in respect of interest
that is actually paid to Noteholders on such preceding Payment Date, plus
interest on the amount of interest due but not paid to Noteholders on the
preceding Payment Date, to the extent permitted by law, at the respective
Interest Rates borne by such Notes for the related Interest Period.
12
"Noteholders' Monthly Accrued Interest" means, with respect to any Payment
Date, the aggregate interest accrued for the related Interest Period on the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes at the respective Interest Rate for such Class on the Note Balance of the
Notes of each such Class on the immediately preceding Payment Date or the
Closing Date, as the case may be, after giving effect to all payments of
principal to the Noteholders of the Notes of such Class on or prior to such
preceding Payment Date.
"Noteholders' Percentage " means 100% until the Notes are paid in full.
"Noteholders' Principal Distribution Amount" means, an amount equal to
Noteholders' Percentage of the Principal Distribution Amount; provided, however,
that (a) the Noteholders' Principal Distribution Amount on the Class A-1 Final
Scheduled Payment Date shall not be less than the amount that is necessary to
reduce the outstanding principal amount of the Class A-1 Notes to zero; (b) the
Noteholders' Principal Distribution Amount on the Class A-2 Final Scheduled
Payment Date shall not be less than the amount that is necessary to reduce the
outstanding principal amount of the Class A-2 Notes to zero; (c) the
Noteholders' Principal Distribution Amount on the Class A-3 Final Scheduled
Payment Date shall not be less than the amount that is necessary to reduce the
outstanding principal amount of the Class A-3 Notes to zero; and (d) the
Noteholders' Principal Distribution Amount on the Class A-4 Final Scheduled
Payment Date shall not be less than the amount that is necessary to reduce the
outstanding principal amount of the Class A-4 Notes to zero.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or 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).
"Note Register" and "Note Registrar" have the respective meanings set forth
in Section 2.4 of the Indenture.
"Noteholder" means, as of any date, the Person in whose name a Note is
registered on the Note Register on such date.
"Obligor" means, for any Receivable, each Person obligated to pay such
Receivable.
"Officer's Certificate" means (i) with respect to the Issuer, a certificate
signed by any Authorized Officer of the Issuer and (ii) with respect to the
Seller or the Servicer, a certificate signed by the chairman of the board, the
president, any executive vice president, any vice president, the treasurer, any
assistant treasurer or the controller of the Seller or the Servicer, as
applicable.
"Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in the Indenture or any other applicable
Transaction Document, be employees of or counsel to the Issuer, the Servicer,
the Seller or the Administrator, and which opinion or opinions comply with any
applicable requirements of the Transaction Documents and are in form and
substance reasonably satisfactory to the recipient(s). Opinions of Counsel need
13
address matters of law only and may be based upon stated assumptions as to
relevant matters of fact.
"Optional Purchase" has the meaning set forth in Section 8.1 of the Sale
and Servicing Agreement.
"Optional Purchase Price" has the meaning set forth in Section 8.1 of the
Sale and Servicing Agreement.
"Originator" means, with respect to any Receivable, either VCI or VW Bank,
and "Originators" means, together, VCI and VW Bank.
"Other Assets" means any assets (or interests therein) (other than the
Trust Estate) conveyed or purported to be conveyed by the Seller to another
Person or Persons other than the Issuer, whether by way of a sale, capital
contribution or by virtue of the granting of a lien.
"Outstanding" means, as of any date, all Notes (or all Notes of an
applicable Class) theretofore authenticated and delivered under the Indenture
except:
(i) Notes (or Notes of an applicable Class) theretofore cancelled by the
Note Registrar or delivered to the Note Registrar for cancellation;
(ii) Notes (or Notes of an applicable Class) 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 related
Noteholders (provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to the Indenture or provision
therefor, satisfactory to the Indenture Trustee, has been made); and
(iii) Notes (or Notes of an applicable Class) in exchange for or in lieu of
other Notes (or Notes of such Class) that have been authenticated and delivered
pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a bona fide purchaser; provided that
in determining whether Noteholders holding the requisite aggregate principal
amount of Outstanding Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Transaction
Document, Notes owned by the Issuer, the Seller, the Servicer, the Administrator
or any of their respective Affiliates shall be disregarded and deemed not to be
Outstanding unless all of the Notes are then owned by the Issuer, the Seller,
the Servicer, the Administrator or any of the their respective Affiliates,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice,
consent, vote or waiver, only Notes that a Responsible Officer of 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 thereof
establishes to the satisfaction of the Indenture Trustee such pledgee's right so
to act with respect to such Notes and that such pledgee is not the Issuer, the
Seller, the Servicer, the Administrator or any of their respective Affiliates.
"Outstanding Principal Balance" means, with respect to any Receivable as of
any date, the outstanding principal balance of such Receivable calculated in
accordance with the Customary Servicing Practices.
14
"Owner Trustee" means [_____], a [Delaware banking corporation], not in its
individual capacity but solely as owner trustee under the Trust Agreement, and
any successor Owner Trustee thereunder.
"Paying Agent" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee set forth in Section 6.11 of
the Indenture and is authorized by the Issuer to make the payments to and
distributions from the Principal Distribution Account, including the payment of
principal of or interest on the Notes on behalf of the Issuer.
"Payment Date" means the 20th day of each calendar month beginning [_____];
provided, however, whenever a Payment Date would otherwise be a day that is not
a Business Day, the Payment Date shall be the next Business Day. As used herein,
the "related" Payment Date with respect to a Collection Period shall be deemed
to be the Payment Date which follows such Collection Period.
"Payment Default" has the meaning set forth in Section 5.4(a) of the
Indenture.
"Permitted Investments" means (a) evidences of indebtedness, maturing
within thirty (30) days after the date of loan thereof, issued by, or guaranteed
by the full faith and credit of, the federal government of the USA, (b)
repurchase agreements with banking institutions or broker-dealers registered
under the Exchange Act which are fully secured by obligations of the kind
specified in clause (a), (c) money market funds (i) rated not lower than the
highest rating category from Moody's and "AAA m" or "AAAm-g" from Standard &
Poor's or (ii) which are otherwise acceptable to each Rating Agency, as
evidenced by a letter from such Rating Agency to the Issuer or the Indenture
Trustee, (d) commercial paper (including commercial paper of any Affiliate of
the Seller, the Servicer, the Indenture Trustee or the Owner Trustee) rated, at
the time of the investment or contractual commitment to invest therein, at least
"A-1+" (or the equivalent) by Standard & Poor's and at least "P-1" (or the
equivalent) by Moody's or (e) such other investments acceptable to each Rating
Agency, as evidenced by a letter from such Rating Agency to the Issuer or the
Indenture Trustee.
"Permitted Liens" means (a) the interest of the parties under the
Transaction Documents, (b) any liens for taxes not due and payable or the amount
of which is being contested in good faith by appropriate proceedings and (c) any
liens of mechanics, suppliers, vendors, materialmen, laborers, employees,
repairmen and other like liens securing obligations which are not due and
payable or the amount or validity of which is being contested in good faith by
appropriate proceedings.
"Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Physical Property" has the meaning specified in the definition of
"Delivery" above.
"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; provided, however, for the purpose of this definition, any
Note authenticated and delivered under
15
Section 2.5 of the Indenture in lieu of a mutilated, destroyed, lost or stolen
Note shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Note.
"Principal Distribution Account" means the account by that name established
and maintained pursuant to Section 4.1 of the Sale and Servicing Agreement.
"Principal Distribution Amount" will mean, for any Payment Date, an amount
equal to the excess, if any, of (a) the Adjusted Pool Balance as of the end of
the Collection Period preceding the related Collection Period, or as of the
Cut-Off Date, in the case of the first Collection Period, over (b) the Adjusted
Pool Balance as of the end of the related Collection Period, together with any
portion of the Principal Distribution Amount that was to be distributed as such
on any prior Payment Date but was not because sufficient funds were not
available to make such distribution; provided, that if the Servicer specifies in
the Servicer's Certificate that amounts on deposit in the Reserve Account will
be included in the Reserve Account Draw Amount on any Payment Date in accordance
with the provisions set forth in the second sentence of the definition of
Reserve Account Draw Amount, then, the Principal Distribution Amount for such
Payment Date will mean an amount equal to the aggregate unpaid Note Balance of
all of the outstanding classes of Notes.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Agreement" means the Purchase Agreement dated as of the Closing
Date between VCI and the Seller, as amended, modified or supplemented from time
to time.
"Purchased Assets" has the meaning set forth in Section 2.1 of the Purchase
Agreement.
"Rating Agency" means either or each of Moody's and Standard & Poor's, as
indicated by the context.
"Rating Agency Condition" means, with respect to any event or circumstance
and each Rating Agency, either (a) written confirmation by such Rating Agency
that the occurrence of such event or circumstance will not cause it to
downgrade, qualify or withdraw its rating assigned to any of the Notes or (b)
that such Rating Agency shall have been given notice of such event or
circumstance at least ten days prior to the occurrence of such event or
circumstance (or, if ten days' advance notice is impracticable, as much advance
notice as is practicable) and such Rating Agency shall not have issued any
written notice that the occurrence of such event or circumstance will cause it
to downgrade, qualify or withdraw its rating assigned to the Notes.
"Receivable" means any retail motor vehicle installment sales contract or
installment loan with respect to a new or used automobile or light-duty truck
which shall appear on the Schedule of Receivables and all Related Security in
connection therewith which has not been released from the lien of the Indenture.
"Receivable Files" is defined in Section 2.4(a) of the Sale and Servicing
Agreement.
"Record Date" means, unless otherwise specified in any Transaction
Document, with respect to any Payment Date or Redemption Date, (i) for any
Definitive Notes and for the
16
Certificates, the close of business on the last Business Day of the calendar
month immediately preceding the calendar month in which such Payment Date or
Redemption Date occurs and (ii) for any Book-Entry Notes, the close of business
on the Business Day immediately preceding such Payment Date or Redemption Date.
"Records" means, for any Receivable, all contracts, books, records and
other documents or information (including computer programs, tapes, disks,
software and related property and rights, to the extent legally transferable)
relating to such Receivable or the related Obligor.
"Redemption Date" means, in the case of a redemption of the Notes pursuant
to Section 10.1 of the Indenture, the Payment Date specified by the
Administrator or the Issuer pursuant to Section 10.1 of the Indenture.
"Redemption Price" means an amount equal to the unpaid principal amount of
the Notes redeemed plus accrued and unpaid interest thereon at the applicable
Interest Rate for the Notes being so redeemed, up to but excluding the
Redemption Date.
"Registered Holder" means the Person in whose name a Note is registered on
the Note Register on the related Record Date.
"Regulation AB" means Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. Sections 229.110-229.1123, as such regulation may be
amended from time to time and subject to such clarification and interpretation
as have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(January 7, 2005)) or by the staff of the Commission, or as may be provided in
writing by the Commission or its staff from time to time.
"Related Security" means, for any Receivable, (i) the security interest in
the related Financed Vehicle, (ii) any proceeds from claims on any Insurance
Policy (if such Receivable became a Defaulted Receivable after the Cut-Off
Date), (iii) any other property securing the Receivables, (iv) all rights of the
applicable Originator against the related Dealer and (v) all proceeds of the
foregoing.
"Repurchase Price" means, with respect to any Repurchased Receivable, a
price equal to the Outstanding Principal Balance of such Receivable plus any
unpaid accrued interest related to such Receivable accrued to and including the
end of the Collection Period preceding the date that such Repurchased Receivable
was purchased by VCI, the Servicer or the Seller, as applicable.
"Repurchased Receivable" means a Receivable purchased by VCI pursuant to
Section 3.3 of the Purchase Agreement, by the Servicer pursuant to Section 3.6
of the Sale and Servicing Agreement or by the Seller pursuant to Section 2.3 of
the Sale and Servicing Agreement.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 4.1 of the Sale and Servicing Agreement.
"Reserve Account Draw Amount" means, for any Payment Date, the amount
withdrawn from the Reserve Account, equal to the lesser of (a) the Available
Funds Shortfall Amount, if any, or (b) the amount on deposit in the Reserve
Account on such Payment Date. In addition, if
17
the sum of the amounts in the Reserve Account and the remaining Available Funds
after the payments under clauses first through fourth of Section 4.4(a) of the
Sale and Servicing Agreement would be sufficient to pay in full the aggregate
unpaid Note Balance of all of the outstanding Classes of Notes, then the Reserve
Account Draw Amount will, if so specified by the Servicer in the Servicer's
Certificate, include such additional amount as may be necessary to pay all
Outstanding Notes in full.
"Reserve Account Excess Amount" means, with respect to any Payment Date,
means an amount equal to the excess, if any, of (a) the amount of cash or other
immediately available funds in the Reserve Account on that Payment Date, after
giving effect to all deposits to and withdrawals from the Reserve Account
relating to that Payment Date, over (b) the Specified Reserve Account Balance
with respect to that Payment Date.
"Responsible Officer" means, (a) with respect to the Indenture Trustee, any
officer within the corporate trust department of the Indenture Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Indenture Trustee
who customarily performs functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who, in each case, shall have direct responsibility
for the administration of the Indenture, (b) with respect to the Owner Trustee,
any officer within the Corporate Trust Office of the Owner Trustee and having
direct responsibility for the administration of the Issuer, including any
Managing Director, Director, Vice President, Assistant Vice President, Assistant
Treasurer, Assistant Secretary or Associate, or any other officer customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject and (c) with respect to the Servicer or
Seller, any officer of such Person having direct responsibility for the
transactions contemplated by the Transaction Documents, including the President,
Treasurer or Secretary or any Vice President, Controller, Assistant Vice
President, Assistant Treasurer, Assistant Secretary, or any other officer
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of the Closing Date, among the Seller, the Issuer, the Servicer and the
Indenture Trustee, as the same may be amended, modified or supplemented from
time to time.
"Sarbanes Certification" has the meaning sete forth in Section 9.22(b) of
the Sale and Servicing Agreement.
"Xxxxxxxx-Xxxxx Act" means the Xxxxxxxx-Xxxxx Act of 2002, as amended,
modified or supplemented from time to time, and any successor law thereto.
"Schedule of Receivables" means the schedule of Receivables transferred to
the Issuer on the Closing Date.
18
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means Volkswagen Auto Lease Underwritten Funding, LLC, a Delaware
limited liability company.
"Servicer" means VCI, initially, and any replacement Servicer appointed
pursuant to the Sale and Servicing Agreement.
"Servicer Replacement Event" means any one or more of the following that
shall have occurred and be continuing:
(a) any failure by the Servicer to deliver or cause to be delivered any
required payment to the Indenture Trustee for distribution to the Noteholders,
which failure continues unremedied for ten business days after discovery thereof
by a Responsible Officer of the Servicer or receipt by the Servicer of written
notice thereof from the Indenture Trustee or Noteholders evidencing a majority
of the aggregate principal amount of the Outstanding Notes, voting together as a
single Class;
(b) any failure by the Servicer to duly observe or perform in any material
respect any other of its covenants or agreements in the Sale and Servicing
Agreement, which failure materially and adversely affects the rights of the
Issuer or the Noteholders, and which continues unremedied for 90 days after
discovery thereof by a Responsible Officer of the Servicer or receipt by the
Servicer of written notice thereof from the Indenture Trustee or Noteholders
evidencing a majority of the aggregate principal amount of the Outstanding
Notes, voting together as a single Class;
(c) any representation or warranty of the Servicer made in any Transaction
Document to which the Servicer is a party or by which it is bound or any
certificate delivered pursuant to the Sale and Servicing Agreement proves to
have been incorrect in any material respect when made, which failure materially
and adversely affects the rights of the Issuer or the Noteholders, and which
failure continues unremedied for 90 days after discovery thereof by a
Responsible Officer of the Servicer or receipt by the Servicer of written notice
thereof from the Indenture Trustee or Noteholders evidencing a majority of the
aggregate principal amount of the Outstanding Notes, voting together as a single
Class (it being understood that any repurchase of a Receivable by VCI pursuant
to Section 3.3 of the Purchase Agreement, by the Seller pursuant to Section 2.3
of the Sale and Servicing Agreement or by the Servicer pursuant to Section 3.6
of the Sale and Servicing Agreement shall be deemed to remedy any incorrect
representation or warranty with respect to such Receivable); or
(d) the Servicer suffers a Bankruptcy Event;
provided, however, that a delay or failure of performance referred to under
clauses (a), (b) or (c) above for a period of 120 days will not constitute a
Servicer Replacement Event if such delay or failure was caused by force majeure
or other similar occurrence.
"Servicer's Certificate" means the certificate delivered pursuant to
Section 3.8 of the Sale and Servicing Agreement.
19
"Servicing Criteria" shall mean the "servicing criteria" set forth in Item
1122(d) of Regulation AB.
"Servicing Fee" means, for any Payment Date, the product of (A) one-twelfth
(or, in the case of the first Payment Date, a fraction, the numerator of which
is the number of days from but not including the Cut-Off Date to and including
the last day of the first Collection Period and the denominator of which is
360), (B) the Servicing Fee Rate and (C) the Net Pool Balance as of the first
day of the related Collection Period (or, in the case of the first Payment Date,
as of the Cut-Off Date). The Servicing Fee for the first Payment Date shall be
$[_____].
"Servicing Fee Rate" means 1.00% per annum.
"Simple Interest Method" means the method of calculating interest due on a
motor vehicle receivable on a daily basis based on the actual outstanding
principal balance of the receivable on that date.
"Simple Interest Receivable" means any motor vehicle receivable pursuant to
which the payments due from the Obligors during any month are allocated between
interest, principal and other charges based on the actual date on which a
payment is received and for which interest is calculated using the Simple
Interest Method.
"Specified Reserve Account Balance" means, for any Payment Date, the lesser
of $9,469,474.91 and the aggregate outstanding principal balance of the Notes
after giving effect to all payments of principal on such Payment Date.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., or any successor that is a nationally
recognized statistical rating organization.
"Statutory Trust Statute" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq.
"Sub-Servicer" means any Affiliate of the Servicer or any sub-contractor to
whom any or all duties of the Servicer (including, without limitation, its
duties as custodian) under the Transaction Documents have been delegated in
accordance with Section 6.5 of the Sale and Servicing Agreement.
"Supplemental Servicing Fees" means any and all (i) late fees, (ii)
extension fees, (iii) non-sufficient funds charges and (iv) any and all other
administrative fees or similar charges allowed by applicable law with respect to
any Receivable.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended and as in force on the date hereof, unless otherwise specifically
provided.
"Transaction Documents" means the Indenture, the Notes, the Note Depository
Agreement, the Sale and Servicing Agreement, the Purchase Agreement, the
Administration Agreement and the Trust Agreement, as the same may be amended or
modified from time to time.
20
"Transferred Assets" means (a) the Purchased Assets, (b) all of the
Seller's rights under the Purchase Agreement and (c) all proceeds of the
foregoing.
"Trust Accounts" has the meaning set forth in Section 4.1 of the Sale and
Servicing Agreement.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Agreement" means the Trust Agreement, dated as of[_____], as amended
and restated by the Amended and Restated Trust Agreement, dated as of the
Closing Date, between the Seller and the Owner Trustee, as the same may be
amended and supplemented from time to time.
"Trust Estate" means all money, accounts, chattel paper, general
intangibles, goods, instruments, investment property and other property of the
Issuer, including without limitation (i) the Receivables acquired by the Issuer
under the Sale and Servicing Agreement and the Related Security relating
thereto, (ii) the security interests in the Financed Vehicles, (iii) any
proceeds from claims on any Insurance Policy or refunds in connection with
extended service agreements relating to Receivables which became Defaulted
Receivables after the Cut-Off Date, (iv) any other property securing the
Receivables, (v) the rights of the applicable Originator under agreements with
Dealers relating to Receivables, (vi) the rights of the Issuer to the funds on
deposit from time to time in the Trust Accounts and any other account or
accounts established pursuant to the Indenture or Sale and Servicing Agreement
and all cash, investment property and other property from time to time credited
thereto and all proceeds thereof (including investment earnings, net of losses
and investment expenses, on amounts on deposit therein), (vii) the rights of the
Seller, as buyer, under the Purchase Agreement, (viii) the rights of the Seller
under the Sale and Servicing Agreement and (ix) all proceeds of the foregoing.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code as in effect in the relevant jurisdiction, as amended from time to time.
"United States" or "USA" means the United States of America (including all
states, the District of Columbia and political subdivisions thereof).
"VCI" means VW Credit, Inc., a Delaware corporation, and its successors and
assigns.
"VW Bank" means Volkswagen Bank USA, a Utah industrial loan company, and
its successors and assigns.
"Yield Supplement Overcollateralization Amount" means, with respect to any
Payment Date, the dollar amount set forth next to such Payment Date on Schedule
X hereto.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Unless otherwise inconsistent with the
terms of this Agreement, all accounting terms used herein shall be interpreted,
and all accounting determinations hereunder
21
shall be made, in accordance with GAAP. Amounts to be calculated hereunder shall
be continuously recalculated at the time any information relevant to such
calculation changes.
22
SCHEDULE X
YIELD SUPPLEMENT OVERCOLLATERALIZATION AMOUNT
YIELD SUPPLEMENT
PAYMENT DATE OVERCOLLATERALIZATION AMOUNT
------------ ----------------------------
Closing Date $[__________]
X-1
