EXHIBIT 10.9
ISDA
International Swap Dealers Association, Inc.
SCHEDULE
to the
Master Agreement
dated as of _________________________
[Volkswagen Auto Loan Enhanced Trust 200[_] - [_]
between __________________ and [Volkswagen Auto Lease Trust 200[_] - [_]
("Party A") ("Party B")
Part 1. TERMINATION PROVISIONS.
(a) The following shall apply:
(i) TERMINATION BY PARTY A - EVENTS OF DEFAULT Notwithstanding the
provisions of Section 5(a), the only events which will constitute Events of
Default when they occur in relation to Party B will be those events
specified in Sections 5(a)(i) (Failure To Pay Or Deliver) and Section
5(a)(vii) (Bankruptcy), other than the events specified in Section
5(a)(vii)(2).
Accordingly, the provisions of Section 5(a)(ii) (Breach Of Agreement), the
provisions of Section 5(a)(iii) (Credit Support Default), the provisions of
Section 5(a)(iv) (Misrepresentation), the provisions of Section 5(a)(v)
(Default Under Specified Transaction), the provisions of Section 5(a)(vi)
(Cross Default), the provisions of Section 5(a)(vii)(2) (insolvency) and
the provisions of Section 5(a)(viii) (Merger Without Assumption) will in no
circumstances be regarded as having given rise to an Event of Default with
respect to Party B.
(ii) TERMINATION BY PARTY A - TERMINATION EVENTS Notwithstanding the
provisions of Section 5(b), and save as otherwise provided herein, the only
events which will constitute Termination Events when they occur in relation
to Party B will be those events specified in Section 5(b)(i) (Illegality)
and Section 5(b)(v) (Additional Termination Event). Accordingly, the
provisions of Section 5(b)(iv) (Credit Event Upon
Merger) will not be regarded as having given rise to a Termination Event
with respect to Party B and Party A may not designate an Early Termination
Date related to the provisions of Section 5(b)(ii) (Tax Event) or the
provisions of Section 5(iii) (Tax Event Upon Merger).
(iii) TERMINATION BY PARTY B - EVENTS OF DEFAULT AND TERMINATION EVENTS.
Save as otherwise provided herein, the provisions of Section 5 will apply
with respect to Party A without amendment save for Section 5(a)(vi) (Cross
Default) which will in no circumstances be regarded as having given rise to
an Event of Default with respect to Party A.
(b) "SPECIFIED ENTITY" none specified in relation to either Party A or Party B.
(c) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
this Agreement.
(d) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) of this
Agreement will not apply to Party A and Party B.
(e) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(f) "TERMINATION CURRENCY" means U.S. Dollars.
(g) ADDITIONAL TERMINATION EVENT will apply.
(i) The occurrence of any of the following events shall be an Additional
Termination Event:
(A) "▇▇▇▇▇'▇ Creditwatch Event": In the event ▇▇▇▇▇'▇ assigns (x) (i)
a long-term debt rating at or below A1 On Watch for Downgrade to [Party
A][Party A's Credit Support Provider], or (ii) a short-term debt rating at
or below Prime-1 On Watch for Downgrade to [Party A][Party A's Credit
Support Provider] (if [Party A][Party A's Credit Support Provider] has both
long-term and short-term debt ratings), or (y) a long-term debt rating at
or below Aa3 On Watch for Downgrade to [Party A][Party A's Credit Support
Provider] (if [Party A][Party A's Credit Support Provider] only has a
long-term
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debt rating) (either such event, a "Party A Creditwatch Event"), Party A
shall promptly, but in no event later than two (2) Local Business Days
following the date of such Party A Creditwatch Event, give Party B, the
Servicer and the Indenture Trustee written notice of the occurrence of such
Party A Creditwatch Event. In addition, not later than thirty (30) Local
Business Days after such Party A Creditwatch Event, Party A shall either
(i) obtain (at Party A's expense) an unconditional guarantee or other
similar assurance in respect of Party A's obligations under this Agreement
from a guarantor that has Rated Debt and which guarantee and guarantor
satisfy the Rating Agency Condition; or (ii) transfer from time to time to
Party B under the Credit Support Annex an amount of Eligible Collateral
having a value equal to Party B's Exposure (as defined in the printed form
of the Credit Support Annex) under the Affected Transactions. Once a Party
A Creditwatch Event ceases to exist, Party B shall return any such Eligible
Collateral to Party A as soon as reasonably practicable and to the extent
such Eligible Collateral has not already been applied in accordance with
this Agreement or the Credit Support Annex. Party B shall have the right to
terminate this Agreement if at any time Party A fails to comply with any of
its obligations under this paragraph in full and in a timely manner.
With respect to the foregoing Additional Termination Event Party A shall be
the sole Affected Party. In the event of an Early Termination Date in
respect of a Party A Creditwatch Event and the entering into by Party B of
alternative swap arrangements, Party A shall pay all reasonable
out-of-pocket expenses, including legal fees and stamp taxes, relating to
the entering into of such alternative swap arrangements.
(B) "Downgrade Termination Event": In the event (i) S&P assigns (x) a
long-term debt rating equal to or lower than "A" to [Party A][Party A's
Credit Support Provider] without (y) assigning a short-term debt rating of
at least "A-1" to [Party A][Party A's Credit Support Provider], (ii) S&P
assigns a long-term debt rating lower than "A+" to [Party A][Party A's
Credit Support Provider] (if [Party A][Party A's Credit Support Provider]
only has a long-term debt rating), (iii) ▇▇▇▇▇'▇ assigns (x) a long-term
debt rating equal to or lower than "A3" to [Party A][Party A's Credit
Support Provider], or (y) a short-term debt rating lower than "Prime-2" to
[Party A][Party A's Credit Support Provider] (if [Party A][Party A's Credit
Support Provider] has both long-term and short-term debt ratings), (iv)
▇▇▇▇▇'▇ assigns a long-term debt rating equal to or lower than A2 to [Party
A][Party A's Credit Support Provider] (if [Party A][Party A's Credit
Support Provider] only has a long-term debt rating), (v) [Fitch assigns (x)
a long-term senior
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unsecured debt rating lower than "A" to [Party A][Party A's Credit Support
Provider] or (y) a short-term senior unsecured debt rating lower than "F1"
to [Party A][Party A's Credit Support Provider] or (vi)] either S&P,
▇▇▇▇▇'▇ [or Fitch] ceases to assign such ratings to [Party A][Party A's
Credit Support Provider], (each such event, a "Party A Rating Downgrade"),
Party A shall (i) promptly, but in no event later than two (2) Local
Business Days following the date of such Party A Rating Downgrade, give
Party B, the Servicer and the Indenture Trustee written notice of the
occurrence of such Party A Rating Downgrade, and (ii) use reasonable
efforts to find a Qualified Counterparty promptly and transfer, in
accordance with and subject to the limitations of Part 5(e), its rights and
obligations to Qualified Counterparty. Party A shall continue to perform
its obligations and use reasonable efforts to find a Qualified Counterparty
until a Qualified Counterparty is in place. The cost of finding and putting
into place a Qualified Counterparty shall be borne by Party A. Not later
than thirty (30) Local Business Days after such Party A Rating Downgrade,
if Party A has not transferred its obligations to a Qualified Counterparty
in accordance with the foregoing provisions, Party A shall either (i)
obtain (at Party A's expense) an unconditional guarantee or other similar
assurance in respect of Party A's obligations under this Agreement from a
guarantor that has Rated Debt and which guarantee and guarantor satisfy the
Rating Agency Condition; or (ii) transfer from time to time to Party B
under the Credit Support Annex the amount of Eligible Collateral required
under the Credit Support Annex. In the event Party A complies with the
requirements set forth in the preceding sentence and the Downgrade
Termination Event relates only to an action taken by S&P, Party A shall not
be required to find a replacement counterparty until the time at which S&P
assigns a long-term senior unsecured debt rating lower than BBB+ to [Party
A][Party A's Credit Support Provider], at which time Party A must
immediately find and put into place a Qualified Counterparty. Once a
Qualified Counterparty is in place, Party B shall return any such Eligible
Collateral to Party A as soon as reasonably practicable and to the extent
such Eligible Collateral has not already been applied in accordance with
this Agreement or the Credit Support Annex. Party B shall have the right to
terminate this Agreement if at any time Party A fails to comply with any of
its obligations under this paragraph in full and in a timely manner.
With respect to the foregoing Additional Termination Event Party A shall be
the sole Affected Party. In the event of an Early Termination Date in
respect of a Downgrade Termination Event and the entering into by Party B
of alternative swap arrangements,
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Party A shall pay all reasonable out-of-pocket expenses, including legal
fees and stamp taxes, relating to the entering into of such alternative
swap arrangements.
(C) Any acceleration of the Notes outstanding occurs following an
event of default under the Indenture.
With respect to the foregoing Additional Termination Event, Party B shall
be the sole Affected Party.
Part 2. TAX REPRESENTATIONS
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this Agreement,
Party A will make the following representation and Party B will make the
following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of this Agreement, provided that
it shall not be a breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or document under
Section 4(a)(iii) of this Agreement by reason of material prejudice to its
legal or commercial position.
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this Agreement,
Party A and Party B will make the representations in (i) and (ii) below.
(i) Party A represents that it is a [type of entity] organized under the
laws of _______.
(ii) Party B represents that it is created under and governed by the laws
of the State of Delaware and is a "United States person" as such term is
defined in Section 7701(a)(30) of the Code.
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Part 3. AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party A and Party B shall promptly deliver to the other party (or as
directed) any form or document accurately completed and in a manner
reasonably satisfactory to the other party that may be required or
reasonably requested in order to allow the other party to make a payment
under a Transaction without any deduction or withholding for or on account
of any Tax or with such deduction or withholding at a reduced rate,
promptly upon reasonable demand by the other party.
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(b) Other documents to be delivered are:
PARTY REQUIRED TO FORM/DOCUMENT/ COVERED BY SECTION 3(D)
DELIVER DOCUMENT CERTIFICATE DATE BY WHICH TO BE DELIVERED REPRESENTATION OF THIS AGREEMENT
----------------- -------------- ----------------------------- --------------------------------
Party A and Party B Evidence of the authority of the As soon as practicable after Yes
signatories of this Agreement execution of this Agreement and the
including specimen signatures of first Confirmation of a Transaction
such signatories. and, if requested, as soon as
practicable after execution of any
Confirmation of any other
Transaction.
Party A An opinion of counsel addressed to No
Party B in form and substance
reasonably acceptable to Party B.
Party B An opinion of Party B's counsel No
addressed to Party A in form and
substance reasonably acceptable to
Party A.
Party B A duly executed certificate of the Yes
secretary or assistant secretary of
the
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PARTY REQUIRED TO FORM/DOCUMENT/ COVERED BY SECTION 3(D)
DELIVER DOCUMENT CERTIFICATE DATE BY WHICH TO BE DELIVERED REPRESENTATION OF THIS AGREEMENT
----------------- -------------- ----------------------------- --------------------------------
Owner Trustee of Party B certifying
the name and true signature of each
person authorized to execute this
Agreement and enter into
Transactions for Party B.
Party B A duly executed copy of the Yes
Indenture.
Part 4. MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this Agreement:
Address for notices or communications to Party A:
Address: __________________________________________________________________
Attention: ________________________________________________________________
Telex No.: __________________________ Answerback: _________________________
Facsimile No.: ______________________ Telephone No.: ______________________
Electronic Messaging System Details: ______________________________________
Address for notices or communications to Party B:
Address: c/o [Owner Trustee]
Attention: ________________________________________________________________
Telex No.: Not applicable Answerback: Not applicable
Facsimile No.: ______________________ Telephone No.: ______________________
Electronic Messaging System Details: Not applicable
With a copy to:
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VW Credit, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:
Party A appoints as its Process Agent [_______________________]
Party B appoints as its Process Agent Not applicable
(c) NOTICES. Section 12(a) of the Agreement is amended by adding the words in
the third line thereof after the phrase "messaging system" and before the
")" the words "; provided, however, any such notice or other communication
may be given by facsimile transmission if telex is unavailable, no telex
number is supplied by the party providing notice, or if answer back
confirmation is not received from the party to whom the telex is sent."
(d) OFFICES. The provisions of Section 10(a) of this Agreement will apply to
this Agreement.
(e) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:
Party A [is] [is not] a Multibranch Party and, if so, may act through the
following offices: [PLEASE SPECIFY]
Party B is not a Multibranch Party.
(f) CALCULATION AGENT. The Calculation Agent is Party B, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(g) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:
With respect to Party A: The Credit Support Annex
With respect to Party B: Not applicable
(h) CREDIT SUPPORT PROVIDER. Credit Support Provider means in relation to
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Party A: [Not applicable].
Party B: Not applicable.
(i) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
choice of laws doctrine except Section 5-1401 and Section 5-1402 of the New
York General Obligation Law).
(j) NETTING OF PAYMENTS. The limitation set forth in Section 2(c)(ii) of this
Agreement will apply and therefore the netting in Section 2(c) of this
Agreement will be limited to the same Transaction.
(k) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
(l) NO GROSS UP. Section 2(d)(i)(4) is hereby deleted and replaced by the
following:
"(4) (A) If Party A is the party so required to deduct or withhold, then
Party A shall make such additional payment as is necessary to ensure that
the net amount actually received by Party B (free and clear of all Taxes,
whether assessed against it or Party B) will equal the full amount Party B
would have received had no such deduction or withholding been required; and
(B) if Party B is the party so required to deduct or withhold, then Party B
shall make the relevant payment subject to such deduction or withholding.
For the avoidance of doubt, the fact that any payment is made by Party B
subject to the provisions of (B) above shall at no time affect the
obligations of Party A under (A) above."
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Part 5. OTHER PROVISIONS.
(a) ISDA DEFINITIONS
The definitions and provisions contained in the 2000 ISDA Definitions (the
"2000 Definitions") as published by the International Swaps and Derivatives
Association, Inc., the 1998 FX and Currency Option Definitions (the "FX
Definitions"), as published by ISDA, the Emerging Markets Traders
Association and The Foreign Exchange Committee, the 1996 ISDA Equity
Derivatives Definitions (the "Equity Definitions") and the 1997 ISDA
Government Bond Option Definitions (the "Bond Definitions") as published by
the International Swaps and Derivatives Association, Inc., the 2000
Definitions, the FX Definitions, the Equity Definitions and the Bond
Definitions together known as the "Definitions", each are incorporated by
reference into this Agreement. The Agreement and each Transaction will be
governed by the Definitions as they may be officially amended and
supplemented from time to time by ISDA.
In the event of any inconsistency between the 2000 Definitions and the FX
Definitions, the FX Definitions shall prevail with respect to a FX
Transaction or a Currency Option Transaction as defined in the FX
Definitions.
In the event of any inconsistency between the 2000 Definitions and the
Equity Definitions, the Equity Definitions shall prevail with respect to a
Transaction as defined in the Equity Definitions.
In the event of any inconsistency between the 2000 Definitions and the Bond
Definitions, the Bond Definitions shall prevail with respect to a
Government Bond Option Transaction as defined in the Bond Definitions.
For the sake of clarity, unless otherwise specified in this Agreement, the
following documents shall govern in the order in which they are listed in
the event of any inconsistency between any of the documents:
(i) the Confirmation;
(ii) the Schedule;
(iii) the Equity Definitions (solely with respect to Transactions as
defined therein); and the Bond Definitions (solely with respect to
Government Bond Option Transactions
11
as defined therein); and the FX Definitions (solely with respect to FX and
Currency Option Transactions as defined therein);
(iv) the 2000 Definitions
(v) the printed form of ISDA Master Agreement.
(b) RELATIONSHIP BETWEEN PARTIES
Each party will be deemed to represent to the other party on the date on
which it enters into a Transaction that (absent a written agreement between
the parties that expressly imposes affirmative obligations to the contrary
for the Transaction):
(i) NON-RELIANCE. It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgement
and upon advice from such advisors as it has deemed necessary. It is not
relying on any communication (written or oral) of the other party as
investment advice or as a recommendation to enter into that Transaction; it
being understood that information and explanations related to the terms and
conditions of a Transaction shall not be considered investment advice or a
recommendation to enter into that Transaction. It has not received from the
other party any assurance or guarantee as to the expected results of that
Transaction.
(ii) ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits of
and understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks of
that Transaction. It is also capable of assuming, and assumes, the risks of
that Transaction.
(iii) STATUS OF PARTIES. Each party is acting as principal and not as agent
and the other party is not acting as a fiduciary for or as an advisor to it
in respect of that Transaction.
(iv) ELIGIBLE CONTRACT PARTICIPANT. It is an "eligible contract
participant" as defined in Section 1a(12) of the U.S. Commodity Exchange
Act, 7 U.S.C. Section 1a(12).
(v) FDIC REQUIREMENTS. If it is a bank subject to the requirements of 12
U.S.C. Section 1823(e), the necessary action to authorize referred to in
the representation in Section 3(a)(ii) includes all authorizations required
under the Federal Deposit Insurance Act as amended, including amendments
effected by the Financial Institutions Reform,
12
Recovery and Enforcement Act of 1989, and under any agreement, writ,
decree, or order entered into with such party's supervisory authorities. At
all times during the term of this Agreement, such party will continuously
include and maintain as part of its official written books and records this
Agreement, this Schedule and all other exhibits, supplements, and
attachments hereto and documents incorporated by reference herein, all
Confirmations, and evidence of all necessary authorizations.
(vi) ERISA. It continuously represents that it is not (i) an employee
benefit plan (an "ERISA PLAN") as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), subject to
Title 1 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended, (ii) a person or entity acting on behalf of an ERISA Plan or (iii)
a person or entity the assets of which constitute assets of an ERISA Plan."
It will provide notice to the other party in the event that it is aware
that it is in breach of any aspect of this representation or is aware that
with the passing of time, giving of notice or expiry of any applicable
grace period, it will breach this representation.
(c) WAIVER OF JURY TRIAL. Each party hereby irrevocably waives any and all
rights to trial by jury with respect to any legal proceeding arising out of
or relating to this Agreement or any Transaction contemplated hereby.
(d) SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of the Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction
unless such severance shall substantially impair the benefits of the
remaining portions of this Agreement or changes the reciprocal obligations
of the parties. The parties hereto shall endeavour in good faith
negotiations to replace the prohibited or unenforceable provision with a
valid provision, the economic effect of which comes as close as possible to
that of the prohibited or unenforceable provision.
(e) TRANSFERS. Notwithstanding the provisions of Section 7:-
(i) No transfer by Party A of this Agreement or any interest or obligation
in or of Party A under this Agreement shall be effective unless:
(A) Party B consents to such transferee;
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(B) The Rating Agency Condition shall have been satisfied;
(C) Party A shall have given Party B, the Servicer and the Indenture
Trustee at least twenty days prior written notice of the proposed
transfer; and
(D) such transfer otherwise complies with the terms of the Indenture
and the other Transaction Agreements.
Upon the effectiveness of any transfer, each of Party A and Party B
shall be released (in each case to the extent of the obligations so
transferred) from its obligations as a party to this Agreement without any
further notification or other action.
(ii) Except to the extent contemplated by the Indenture, neither this
Agreement nor any interest in or under this Agreement may be transferred by
Party B to any other entity save with Party A's prior written consent (such
consent not to be unreasonably withheld or delayed).
(f) PERMITTED SECURITY INTEREST. For purposes of Section 7 of this Agreement,
Party A hereby consents to the Permitted Security Interest.
"PERMITTED SECURITY INTEREST" means the pledge and assignment by Party B of
the Swap Collateral to the Indenture Trustee pursuant to the Indenture, and
the granting to the Indenture Trustee of a security interest in the Swap
Collateral pursuant to the Indenture.
"SWAP COLLATERAL" means all right, title and interest of Party B in this
Agreement, each Transaction hereunder, and all present and future amounts
payable by Party A to Party B under or in connection with this Agreement or
any Transaction governed by this Agreement, including, without limitation,
any transfer or termination of any such Transaction.
"INDENTURE TRUSTEE" means ___________________ or any successor, acting as
Indenture Trustee pursuant to the Indenture.
(g) ABSENCE OF CERTAIN EVENTS. Section 3(b) of this Agreement is herby amended
by inserting the parenthetical "(with respect to Party A only)" immediately
after the phrase "No Event of Default or".
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(h) EVENTS OF DEFAULT. Section 5(a)(i) of this Agreement is hereby amended by
the deletion of the words "if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party" and the addition of the following at the end thereof:
", it being understood that amounts payable by Party B are not due except
to the extent set forth in Section 8.4(a) of the Indenture."
(i) PAYMENT ON EARLY TERMINATION. If an Early Termination Date occurs in
respect of which Party A is the Defaulting Party, Party B will not be
required to pay any amounts payable to Party A under Section 6(e) in
respect of such Early Termination Date, and Party A will not be permitted
to set-off in respect of such amounts, until payment in full of all amounts
outstanding under the Notes.
(j) NO SET-OFF. Except as set forth in clause (i) above, Party A and Party B
hereby waive any and all right of set-off with respect to any amounts due
under this Agreement or any Transaction, provided that nothing herein shall
be construed to waive or otherwise limit the netting provisions contained
in Sections 2(c) and 6(e) of this Agreement.
(k) INDENTURE. Party B hereby acknowledges that Party A is a secured party
under the Indenture with respect to this Agreement, and Party B agrees for
the benefit of Party A that it will not amend the Indenture in a manner
which materially and adversely affects the rights or obligations of Party A
under the Indenture unless Party A shall have consented in writing to such
action (and such consent shall be deemed to have been given if Party A does
not object in writing within ten (10) business days after receipt of a
written request for such consent).
(l) NO RECOURSE. The liability of Party B to Party A hereunder is limited in
recourse solely to the amounts payable to Party A from the Available Funds
on each Payment Date in accordance with the priority of payments set forth
in Section 8.4(a) of the Indenture.
(m) NO PETITION. Party A hereby covenants and agrees that prior to the date
which is one year and one day after payment in full of all obligations
under each Financing (i) it 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
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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 any party hereto or any
other creditor of such Bankruptcy Remote Party, and (ii) it shall not
commence or join with any 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.
As used above, "BANKRUPTCY REMOTE PARTY" means any of [Volkswagen Auto
Lease Underwritten Funding, LLC], [or] Party B[, the Origination Trust or
any special purpose entity (and the general partner of any special purpose
entity that is a partnership, or the managing member of any special purpose
entity that is a limited liability company) that holds a beneficial
interest in the Origination Trust]. "FINANCING" means[, collectively, (i)
any financing transaction of any sort undertaken by VW Credit, Inc. or any
affiliate of VW Credit, Inc. involving, directly or indirectly, Origination
Trust assets (including, without limitation, any financing undertaken in
connection with the issuance and assignment of any SUBI, (ii) any sale or
purchase by Volkswagen Auto Lease Underwritten Funding, LLC or any other
special purpose entity of any interest in one or more SUBIs and (iii) any
other asset securitization, synthetic lease, sale-leaseback, secured loan
or similar transaction involving assets (or a beneficial interest in
assets) of the Origination Trust.]
(n) CONFIRMATION. Each party acknowledges and agrees that the [two]
Confirmations executed as of the date hereof and designated as Party A
Global ID Nos. __ and ___ shall be the only Transactions governed by this
Agreement (it being understood that, in the event such Confirmations shall
be amended (in any respect), such amendment shall not constitute (for
purposes of this paragraph) a separate Transaction or a separate
Confirmation). Party A and Party B shall not enter into any additional
Confirmations or Transactions hereunder.
(o) POTENTIAL EVENTS OF DEFAULT. Section 2(a)(iii) is amended by the deletion
of the words "or Potential Event of Default".
(p) LIMITATION OF LIABILITY. Notwithstanding anything contained herein to the
contrary, in executing this Agreement (including the Schedule, Credit
Support Annex and each
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Confirmation) on behalf of Party B, ______________________ (the "Owner
Trustee") and the Indenture Trustee are acting solely in its capacity as
owner trustee of Party B and indenture trustee, respectively, and not in
its individual capacity, and in no event shall either one of them, in their
individual capacity, have any liability for the representations,
warranties, covenants, agreements or other obligations of Party B
hereunder, for which recourse shall be had solely to the assets of Party B,
except to the extent of its fraud, breach of trust or willful misconduct.
[(q) INTERSERIES WAIVER. Party A hereby covenants and agrees that (a) the
Transaction SUBI is a separate series of the Origination Trust as provided
in Section 3806(b)(2) of Chapter 38 of Title 12 of the Delaware Code, 12
Del.Code Section 3801 et seq., (b)(i) the debts, liabilities, obligations
and expenses incurred, contracted for or otherwise existing with respect to
the Transaction SUBI and the Transaction SUBI assets shall be enforceable
against the Transaction SUBI assets only, and not against any other SUBI
assets or the UTI assets and (ii) the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to any
other SUBI, any other SUBI assets, the UTI or the UTI assets shall be
enforceable against such other SUBI assets or the UTI assets only, as
applicable, and not against the Transaction SUBI or any other SUBI assets,
(c) except to the extent required by law, UTI assets or SUBI assets with
respect to any SUBI (other than the Transaction SUBI) shall not be subject
to the claims, debts, liabilities, expenses or obligations arising from or
with respect to the Transaction SUBI in respect of such claim, (d)(i) no
creditor or holder of a claim relating to the Transaction SUBI or the
Transaction SUBI assets shall be entitled to maintain any action against or
recover any assets allocated to the UTI or the UTI assets or any other SUBI
or the assets allocated thereto, and (ii) no creditor or holder of a claim
relating to the UTI, the UTI assets or any SUBI other than the Transaction
SUBI or any SUBI assets other than the Transaction SUBI assets shall be
entitled to maintain any action against or recover any assets allocated to
the Transaction SUBI, and (e) any purchaser, assignee or pledgee of an
interest in the Transaction SUBI or the certificate representing the
Transaction SUBI must, prior to or contemporaneously with the grant of any
such assignment, pledge or security interest, (i) give to the Origination
Trust a non-petition covenant, and (ii) execute an agreement for the
benefit of each holder, assignee or pledgee from time to time of the UTI or
UTI certificate and any other SUBI or other SUBI certificate, to release
all claims to the assets of the Origination Trust allocated to the UTI
assets and each other SUBI and in the event that such release is not given
effect, to fully subordinate all claims it may be deemed to
17
have against the assets of the Origination Trust allocated to the UTI and
each other SUBI. This section shall survive the termination of this
Agreement.]
(r) DEFINITIONS.
(i) As used herein:
"CREDIT SUPPORT ANNEX" means the 1994 ISDA Credit Support Annex between
Party A and Party B dated as of ____________.
"ELIGIBLE COLLATERAL" means cash, U.S. Treasury Bills and any other forms
of collateral which are reasonably acceptable to Party B, the Servicer and
the Indenture Trustee and have been approved by the Rating Agencies.
["FITCH" means Fitch, Inc. or its successor.]
"QUALIFIED COUNTERPARTY" means a counterparty that (a) has Rated Debt and
(b) becomes a party to this Agreement (or party to an agreement in form and
substance satisfactory to Party B, the Servicer and the Indenture Trustee)
in accordance with Part 5(e) of this Schedule and pursuant to documentation
which is not less favorable to Party B than this Agreement.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. or its successor.
"NOTES" mean the Class __ Notes issued by Party B under the Indenture.
["ORIGINATION TRUST" means VW Credit Leasing, Ltd., a Delaware statutory
trust.]
"RATED DEBT" means, with respect to a counterparty, (i) S&P assigns (x) a
long-term debt rating equal to or higher than "A" to the counterparty, and
(y) assigns a short-term debt rating equal to or higher than "A-1" to the
counterparty (if the counterparty has both long-term and short-term debt
ratings), (ii) S&P assigns a long-term debt rating equal to or higher than
"A+" to the counterparty (if the counterparty only has a long-term debt
rating), (iii) Moody's assigns (x) a long-term debt rating equal to or
higher than "A1" to the counterparty, and (y) a short-term debt rating
equal to or higher than "P1" to the counterparty (if the counterparty has
both long-term and short-term debt ratings), (iv) Moody's assigns a
long-term debt rating equal to or higher than Aa3 to the counterparty (if
the counterparty only has a long-term debt rating).
18
"RATING AGENCIES" means S&P, ▇▇▇▇▇'▇ [and ▇▇▇▇▇].
"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.
"S&P" means Standard & Poor's, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies Inc.
or its successor.
"SERVICER" means VW Credit, Inc. or its successor.
["SUBI" means a special unit of beneficial interest in the Origination
Trust.]
["TRANSACTION SUBI" means the SUBI held by Party B and pledged to the
Indenture Trustee under the Indenture.]
["UTI" means the undivided trust interest in the Origination Trust.]
Reference is made to that certain Indenture dated as of _______, _____ (the
"Indenture") among Party B as the Issuer thereunder and __________________, as
Indenture Trustee. Capitalized terms used but not defined in this Agreement or
this Schedule will have the meanings ascribed to them in the Indenture.
_______________ [VOLKSWAGEN AUTO LEASE TRUST 200[_]-[_]]
_______________ [VOLKSWAGEN AUTO LOAN ENHANCED TRUST 200[_]-[_ ]]
------------------------------------- ----------------------------------------
By: [Owner Trustee], not in its
individual capacity but solely as
owner trustee
19
ISDA(R)
INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA MASTER AGREEMENT
dated as of __________________________________
between
__________________________________ ("Party A")
and
[VOLKSWAGEN AUTO LEASE TRUST 200[_]-[_]] ("Party B")
[VOLKSWAGEN AUTO LOAN ENHANCED TRUST 200[_]-[_]]
This Annex supplements, forms part of, and is subject to, the ISDA Master
Agreement referred to above (this "Agreement"), is part of its Schedule and is a
Credit Support Document under this Agreement with respect to Party A.
Accordingly, the parties agree as follows:
PARAGRAPHS 1 - 12. INCORPORATION
Paragraphs 1 through 12 inclusive of the ISDA Credit Support Annex
(Bilateral Form) (ISDA Agreements Subject to New York Law Only)
published in 1994 by the International Swaps and Derivatives
Association, Inc. are incorporated herein by reference and made a part
hereof:
PARAGRAPH 13. ELECTIONS AND VARIABLES
(a) SECURITY INTEREST FOR "OBLIGATIONS". The term "OBLIGATIONS" as used in this
Annex includes no additional obligations of Secured Party and, for purposes
of the definition of Obligations in Paragraph 12, includes no additional
obligations of Pledgor.
(b) CREDIT SUPPORT OBLIGATIONS.
(i) DELIVERY AMOUNT, RETURN AMOUNT AND CREDIT SUPPORT AMOUNT.
(A) "DELIVERY AMOUNT" has the meaning specified in Paragraph 3(a).
(B) "RETURN AMOUNT" has the meaning specified in Paragraph 3(b).
(C) "CREDIT SUPPORT AMOUNT" means, for any Valuation Date, an amount
equal to (x) the Amount required under Paragraph 13(p) (in the
case of a Downgrade Termination Event relating to an action taken
by S&P); or (y) Party B's Exposure under the Agreement to which
this Annex relates (in the case of a Downgrade Termination Event
relating to an action taken by Moody's or in the case of a
Moody's Creditwatch Event), in each case as calculated on a
monthly basis by the Valuation Agent. The Credit Support Amount
shall be calculated by reference to the provisions set forth in
this Annex which would result in Party A transferring the
greatest amount of Eligible Credit Support to Party B.
(ii) ELIGIBLE COLLATERAL. The following items will qualify as "ELIGIBLE
COLLATERAL":
Valuation
Percentage:* Moody's S&P
------------ ---------- ----------
(A) Cash: US Dollars in depository account form. [___]% [___]%
(B) U.S. Treasury Securities: negotiable debt [___]% [___]%
obligations issued by the U.S. Treasury
Department ("Treasuries") having a remaining
maturity of up to and not more than 1 year.
(C) Treasuries having a remaining maturity of [___]% [___]%
greater than 1 year but not more than 5
years.
(D) Treasuries having a remaining maturity of [___]% [___]%
greater than 5 years but not more than 10
years.
(E) Treasuries having a remaining maturity of [___]% [___]%
greater than 10 years but not more than 20
years.
(F) Treasuries having a remaining maturity of [___]% [___]%
greater than 20 years but not more than 30
years.
(G) Agency Securities: negotiable debt [___]% [___]%
obligations of the Federal National Mortgage
Association (FNMA), Federal Home Loan
Mortgage Corporation (FHLMC), Federal Home
Loan Banks (FHLB), Federal Farm Credit Banks
(FFCB), Student Loan Marketing Association
(SLMA), Tennessee Valley Authority (TVA)
(collectively, "Agency Securities") having a
remaining maturity of not more than 1 year.
2
(H) Agency Securities having a remaining [___]% [___]%
maturity of greater than 1 year but not more
than 5 years.
(I) Agency Securities having a remaining [___]% [___]%
maturity of greater than 5 years but not
more than 10 years.
(J) Agency Securities having a remaining [___]% [___]%
maturity of greater than 10 years but not
more than 20 years.
(K) Agency Securities having a remaining [___]% [___]%
maturity of greater than 20 years but not
more than 30 years.
(L) FHLMC Certificates. Mortgage participation [___]% [___]%
certificates issued by FHLMC evidencing
undivided interests or participations in
pools of first lien conventional or FHA/VA
residential mortgages or deeds of trust,
guaranteed by FHLMC, and having a remaining
maturity of not more than 30 years.
(M) FNMA Certificates. Mortgage-backed [___]% [___]%
pass-through certificates issued by FNMA
evidencing undivided interests in pools of
first lien mortgages or deeds of trust on
residential properties, guaranteed by FNMA,
having a remaining maturity of not more than
30 years.
(N) GNMA Certificates. Mortgage-backed [___]% [___]%
pass-through certificates issued by private
entities, evidencing undivided interests in
pools of first lien mortgages or deeds of
trust on single family residences,
guaranteed by the Government National
Mortgage Association (GNMA) with the full
faith and credit of the United States, and
having a remaining maturity of not more than
30 years.
(O) Commercial Paper. Commercial Paper with a [___]% [___]%
rating of at least P-1 by Moody's, at least
F-1 by Fitch and at least A-1+ by S&P and
having a remaining maturity of not more than
30 days.
(P) Other. Other items of Credit Support % to be % to be
approved by each applicable rating agency determined determined
with such valuation percentages as
determined by each applicable rating agency.
3
----------
* The Valuation Percentage shall equal the percentage specified under such
Rating Agency's name above. If the Class ____ Notes are rated by more than
one Rating Agency specified above, the Valuation Percentage shall equal the
lowest of the applicable percentages specified above.
(iii) OTHER ELIGIBLE SUPPORT. Not applicable.
(iv) THRESHOLDS.
(A) "INDEPENDENT AMOUNT" means for Pledgor: zero.
"INDEPENDENT AMOUNT" means for Secured Party: zero
(B) "THRESHOLD" means for Pledgor: zero in the event Party A fails to
assign all of its rights and obligations under the Agreement on
or before the thirtieth (30) day after the date of a Downgrade
Termination Event (as described in Part 1(g)(i)(B) of the
Schedule) or a Moody's Creditwatch Event (as described in Part
1(g)(i)(A) of the Schedule) continues to exist; otherwise, the
Threshold shall be infinite.
(C) "MINIMUM TRANSFER AMOUNT" is $___________ for any Delivery Amount
of Pledgor, unless the Pledgor is a Defaulting Party, in which
case it is zero, and $__________ for any Return Amount of the
Secured Party, unless the Secured Party is a Defaulting Party, in
which case it is zero.
(D) ROUNDING: The Delivery Amount will be rounded up to the nearest
integral multiple of $10,000, and the Return Amount will be
rounded down to the nearest integral multiple of $10,000.
(c) VALUATION AND TIMING.
(i) "VALUATION AGENT" means the Pledgor; provided, however, that if an
Event of Default has occurred and is continuing with respect to the
Pledgor, then the Secured Party shall be the Valuation Agent. The
Value of Posted Credit Support other than Cash or of any Transfer of
Eligible Credit Support or Posted Credit Support (other than Cash), as
the case may be, will be calculated by the Valuation Agent in
accordance with standard market practice using third party sources
(such as, by way of example only, Bloomberg or Reuters).
(ii) "VALUATION DATE" means the first Local Business Day of each week.
(iii) "VALUATION TIME" means the close of business in the city in which the
Valuation Agent is located on the Local Business Day before the
Valuation Date or date of calculation, as applicable; provided that
the calculations of Value and Exposure will be made as of
approximately the same time on the same date.
(iv) "NOTIFICATION TIME" means 11:00 a.m., New York time, on a Local
Business Day.
4
(d) CONDITIONS PRECEDENT AND SECURED PARTY'S RIGHTS AND REMEDIES. No Specified
Conditions apply.
(e) SUBSTITUTION.
(i) "SUBSTITUTION DATE" has the meaning specified in Paragraph 4(d)(ii).
(ii) CONSENT. The Pledgor must obtain the Secured Party's prior consent to
any substitution pursuant to Paragraph 4(d) and shall give Secured
Party not less than two (2) Local Business Day's notice thereof
specifying the items of Posted Credit Support intended for
substitution.
(f) DISPUTE RESOLUTION.
(i) "RESOLUTION TIME" means 1:00 p.m., New York time, on the Local
Business Day following the date on which the notice is given that
gives rise to a dispute under Paragraph 5.
(ii) VALUE. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of
Posted Credit Support other than Cash will be calculated based upon
the mid-point between the bid and offered purchase rates or prices for
that Posted Credit Support as reported on the Bloomberg electronic
service as of the Resolution Time, or if unavailable, as quoted to the
Valuation Agent as of the Resolution Time by a dealer in that Posted
Credit Support of recognized standing selected in good faith by the
Valuation Agent, which calculation shall include any unpaid interest
on that Posted Credit Support to the extent it is the established
practice in the relevant market.
(iii) ALTERNATIVE. The provisions of Paragraph 5 will apply.
(g) HOLDING AND USING POSTED COLLATERAL.
(i) ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS. Secured Party will
not be entitled to hold Posted Collateral itself, and instead the
Secured Party will be entitled to hold Posted Collateral through the
Indenture Trustee which Posted Collateral (i) shall not be commingled
or used with any other asset held by the Indenture Trustee but shall
be held in a separate account for this purpose only and (ii) shall not
be transferred to any other person or entity but Party A pursuant to
the provisions herein except (x) in any case contemplated by Paragraph
8(a) of this Annex with respect to Party A or (y) as directed by Party
A.
(ii) USE OF POSTED COLLATERAL. The provisions of Paragraph 6(c) will not
apply to Secured Party and without prejudice to Secured Party's rights
under Paragraph 8 of the Credit Support Annex, Secured Party will not
take any action specified in such Section 6(c).
(h) INTEREST AMOUNT.
(i) INTEREST RATE. The "INTEREST RATE" means, for any day, the rate set
forth for that day opposite the caption "Federal Funds (Effective)" in
the weekly statistical
5
release designated "H.15(519)", or any successor publication,
published by the Board of Governors of the Federal Reserve System.
(ii) TRANSFER OF INTEREST AMOUNT. The Transfer of the Interest Amount, if
any, will be made on the first Local Business Day of each calendar
month and on any Local Business Day that Posted Collateral in the form
of Cash is Transferred to the Pledgor pursuant to Paragraph 3(b). Any
Interest Amount paid by Party B to Party A hereunder with respect to
cash collateral posted by Party A shall not exceed the actual amount
of interest received by Party B with respect thereto.
(iii) ALTERNATIVE TO INTEREST AMOUNT. The provisions of Paragraph 6(d)(ii)
will apply.
(i) ADDITIONAL REPRESENTATION(S). Not applicable.
(j) OTHER ELIGIBLE SUPPORT AND OTHER POSTED SUPPORT. Not applicable.
(k) DEMANDS AND NOTICES. All demands, specifications and notices under this
Annex will be made to a party as follows unless otherwise specified from
time to time by that party for purposes of this Annex in a written notice
given to the other party:
TO PLEDGOR:
TO SECURED PARTY:
(l) ADDRESSES FOR TRANSFERS.
(i) For each Transfer hereunder to Pledgor:
(ii) For each Transfer hereunder to Secured Party:
(m) AGREEMENT AS TO SINGLE SECURED PARTY AND PLEDGOR. Party A and Party B agree
that, notwithstanding anything to the contrary in the recital of this
Annex, Paragraph 1(b) or Paragraph 2 of the definitions in Paragraph 12,
(a) the term "Secured Party" as used in this Annex means only Party B, (b)
the term "Pledgor" as used in this Annex means only Party A, (c) only Party
A makes the pledge and grant in Paragraph 2, the acknowledgment in the
final sentence of Paragraph 8(a) and the representations in ▇▇▇▇▇▇▇▇▇ ▇,
(▇) only Party A shall be required to post Eligible Credit Support
hereunder and (e) the Events of Default set forth in Paragraph 7(i) will
not apply to Party B. Party A also agrees that it shall pay all costs of
transferring Eligible Credit Support required to be delivered by Party A
hereunder.
(n) NO GROSS UP. The Secured Party will have no obligation to pay any
additional amount of the kind specified in Section 2(d)(i)(4) of the
Agreement with respect to any Interest Amounts or Distributions.
(o) ELIMINATION OF DEMAND REQUIREMENTS. The parties agree that the phrase "upon
a demand made by the Secured Party" shall be deleted from Paragraph 3(a) of
this Credit Support Annex.
6
(p) S&P CREDIT SUPPORT AMOUNT. With respect to a Party A Downgrade relating to
an action taken by S&P, the "CREDIT SUPPORT AMOUNT" shall mean with respect
to a Pledgor on a Valuation Date the sum of :
(i) the greater of MTM and $0, plus
(ii) VB
Where:
"MTM" means Secured Party's Exposure;
"VB" means the Notional Amount (as defined in the Confirmation for each
outstanding Transaction under this Agreement) times the relevant percentage
set out in Table A below:
TABLE A
VOLATILITY BUFFER
Less than 10 years, but more than Greater than 10 years to
Less than 5 years to Termination 5 years to Termination Date of the Termination Date of the
Counterparty Date of the Transaction. Transaction. Transaction.
------------ -------------------------------- ---------------------------------- ------------------------
The rating by S&P of Party A's [___]% [___]% [___]%
long-term unsecured, unsubordinated
obligations is at least equal to
"A-2"
The rating by S&P of Party A's [___]% [___]% [___]%
long-term unsecured, unsubordinated
obligations is equal to "A-3"
The rating by S&P of Party A's [___]% [___]% [___]%
long-term unsecured, unsubordinated
obligations is equal to or less than
"BB+"
EXPOSURE.
The Parties agree that in the event of a Downgrade Termination Event relating to
an action taken by S&P, the Valuation Agent shall verify its calculation of the
Secured Party's Exposure on a monthly basis by seeking two quotations from
Reference Market-makers at the end of each
7
month. If 2 Reference Market-makers are not available to provide a quotation,
then fewer than 2 Reference Market-makers may be used for such purpose. If no
Reference Market-makers are available, then the Valuation Agent's estimates at
mid-market will be used. The Valuation Agent may not obtain the quotations
referred to above from the same person in excess of four times during any 12
month period. Where more than 1 quotation is obtained, the quotation
representing the greatest amount of Exposure shall be used by the Valuation
Agent. In the event the verification procedures set forth above indicate that
there is a deficiency in the amount of Eligible Collateral that has been posted
to the Secured Party, the Pledgor shall post the amount of Eligible Collateral
necessary to cure such deficiency to the Secured Party within three Local
Business Days.
8
IN WITNESS WHEREOF the parties have executed this Credit Support Annex as of the
date hereof.
-------------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-------------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
9
SWAP TRANSACTION CONFIRMATION
DATE: ____________, 200[_]
TO: [Volkswagen Auto Loan Enhanced Trust 200[_]-[_]]
[Volkswagen Auto Lease Trust 200[_]-[_]] ("Party B")
c/o _____________________________, as Owner Trustee
_________________________________
_________________________________
_________________________________
Attention: ______________________
Telephone: ______________________
Facsimile: ______________________
_____________________ ("Party A")
FROM: _______________________________
REF. NO. ___________
Dear Sir or Madam:
The purpose of this letter (this "Confirmation") is to confirm the terms and
conditions of the Transaction entered into between us on the Trade Date
specified below (the "Transaction"). This Confirmation constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.
1. The definitions and provisions contained in (i) the 2000 ISDA Definitions
(the "ISDA Definitions"), as published by the International Swaps and
Derivatives Association, Inc, and (ii) the Indenture dated as of
__________________ (the "Indenture") between Party B and ___________________
relating to the issuance by Party B of certain debt obligations, are
incorporated into this Confirmation. In the event of any inconsistency between
the ISDA Definitions and this Confirmation, this Confirmation will govern.
References herein to a "Transaction" shall be deemed to be references to a "Swap
Transaction" for purposes of the ISDA Definitions. Capitalized terms used but
not defined herein have the meanings ascribed to them in the Indenture.
2. The terms of the particular Transaction to which the Confirmation relates are
as follows:
Transaction Type: Interest Rate Swap
Currency for Payments: U.S. Dollars
Notional Amount: For the Initial Calculation Period, the
Notional Amount shall be equal to USD
___________. For each subsequent Calculation
Period, the Notional Amount shall be equal to
the aggregate Note Balance of the Class ___
Notes on the first day of such Calculation
Period. With respect to any Payment Date, the
aggregate Note Balance of the Class ___ Notes
will be determined using the Servicer
Certificate issued on the Determination Date
immediately preceding the Payment Date (giving
effect to any reductions of the Note Balance of
the Class ___ Notes reflected in such Servicer
Certificate).
Initial Calculation Period: _______, 200[_] to but excluding _______, 200_.
Term:
Trade Date: ____________, 200[_]
Effective Date: ____________, 200[_]
Termination Date: The earlier of (i) [insert legal final maturity
date of the Class ___ Notes] and (ii) the date
on which the Note Balance of the Class ___
Notes is reduced to zero.
Fixed Amounts:
Fixed Rate Payer: Party B
Calculation Period End Monthly on the ____ of each month, commencing
Dates: ___________, 200[_], through and including the
Termination Date; No Adjustment.
Payment Dates: Monthly on the [20th] of each month, commencing
___________, 200[_], through and including the
Termination Date.
Business Day Convention: Following
Business Day: [London,] New York, Delaware, Illinois and
Michigan
Fixed Rate: _____%
Fixed Rate Day Count Basis: 30/360
Floating Amounts:
Floating Rate Payer: Party A
Calculation Period End Monthly on the ____ of each month, commencing
Dates: ___________, 200[_], through and including the
Termination Date, subject to adjustment in
accordance with the Following Business Day
Convention.
Payment Dates: Monthly on the [20th] of each month, commencing
___________, 200[_], through and including the
Termination Date.
Business Day Convention:
Business Day: Following
For Payment Dates:
For Reset Dates: [London,] New York, Delaware, Illinois and
Michigan
Floating Rate Option: London
Designated Maturity: USD-LIBOR-BBA
Spread: 1 Month
Floating Rate Day Count: _________________________
Basis: _________________________
Reset Dates:
Compounding: Actual/360
The first day of each Calculation Period.
Inapplicable
3. The additional provisions of this Confirmation are as follows:
Calculation Agent: Party [B]
Payments to Party A:
Payments to Party B:
4. Documentation
This Confirmation supplements, forms a part of, and is subject to, the 1992 ISDA
Master Agreement dated as of _____________, ________ (including the Schedule
thereto) as amended and supplemented from time to time (the "Agreement") between
you and us. All provisions contained in the Agreement govern this Confirmation
except as expressly modified herein.
Unless otherwise provided in the Agreement, this Confirmation is governed by the
laws of the State of New York.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing a copy of this Confirmation and returning it to us.
Very truly yours,
----------------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted and confirmed as of the date first above written:
[VOLKSWAGEN AUTO LEASE TRUST 200[_]-[_]]
[VOLKSWAGEN AUTO LOAN ENHANCED TRUST 200[_]-[_]]
BY: [OWNER TRUSTEE]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------