DAIMLER TRUST LEASING LLC, as Seller, and MERCEDES-BENZ AUTO LEASE TRUST 2016-B, as Purchaser SECOND-TIER SALE AGREEMENT Dated as of October 1, 2016

 

DAIMLER TRUST LEASING LLC,
as Seller,

 

and

 

MERCEDES-BENZ AUTO LEASE TRUST 2016-B,
as Purchaser

 

________________________________

 

 

Dated as of October 1, 2016

_________________________________

 

 

TABLE OF CONTENTS

 

 

 

 

EXHIBITS

 

This SECOND-TIER SALE AGREEMENT, dated as of October 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is between DAIMLER TRUST LEASING LLC, a Delaware limited liability company, as seller (the “Seller”), and MERCEDES-BENZ AUTO LEASE TRUST 2016-B, a Delaware statutory trust, as purchaser (the “Purchaser” or the “Issuer”).

 

RECITALS

 

WHEREAS, pursuant to the Second Amended and Restated Trust Agreement, dated as of April 1, 2008 (the “Titling Trust Agreement”), among Mercedes-Benz Financial Services USA LLC (“MBFS USA”), as titling trust administrator, Daimler Trust Holdings LLC, as initial beneficiary, and BNY Mellon Trust of Delaware (f/k/a BNYM (Delaware)) (f/k/a The Bank of New York (Delaware)), Daimler Trust, a Delaware statutory trust (the “Titling Trust”), was created to hold title to leases, vehicles and certain related assets (the “Titling Trust Assets”);

 

WHEREAS, MBFS USA, as lender (in such capacity, the “Lender”) and as servicer (in such capacity, the “Servicer”), the Titling Trust, Daimler Title Co., as collateral agent (the “Collateral Agent”), and U.S. Bank Trust National Association, as administrative agent, have entered into an Amended and Restated Collateral Agency Agreement, dated as of March 1, 2009 (the “Basic Collateral Agency Agreement”), pursuant to which the Lender will make advances to the Titling Trust from time to time that the Titling Trust will use to acquire Titling Trust Assets;

 

WHEREAS, the parties to the Basic Collateral Agency Agreement have entered into the 2016-B Exchange Note Supplement, dated as of October 1, 2016 (the “2016-B Exchange Note Supplement”), pursuant to which an exchange note, having an aggregate initial outstanding principal balance of $1,170,888,158.55, bearing a fixed interest rate of 1.53% per annum and a stated maturity date of June 15, 2022 (the “2016-B Exchange Note”), was issued and delivered to the Lender;

 

WHEREAS, pursuant to the 2016-B Exchange Note Supplement, MBFS USA and the Titling Trust have also specified certain leases and vehicles to be allocated to a reference pool with respect to the 2016-B Exchange Note;

 

WHEREAS, MBFS USA has sold the 2016-B Exchange Note to the Seller pursuant to a First-Tier Sale Agreement, dated as of the date of this Agreement;

 

WHEREAS, the Issuer was formed pursuant to a trust agreement, dated as of September 8, 2016, as amended and restated as of October 1, 2016, between the Seller and Wilmington Trust, National Association, as owner trustee; and

 

WHEREAS, the parties hereto wish to enter into this Agreement pursuant to which the Seller will assign the 2016-B Exchange Note and certain related property and rights to the Purchaser.

 

NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE ONE

USAGE, DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.  Capitalized Terms; Rules of Usage.  Capitalized terms used herein that are not otherwise defined shall have the meaning ascribed thereto in Appendix 1 to the 2016-B Servicing Supplement or, if not defined therein, in Appendix A to the Basic Collateral Agency Agreement.  Appendix 1 also contains rules as to usage applicable to this Agreement.  Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Agreement:

 

“2016-B Servicing Supplement” means the 2016-B Servicing Supplement, dated as of October 1, 2016, to the Basic Servicing Agreement, among MBFS USA, as servicer and lender, Daimler Trust, as titling trust, and Daimler Title Co., as collateral agent.

 

“Basic Servicing Agreement” means the Amended and Restated Servicing Agreement, dated as of March 1, 2009, among MBFS USA, as lender and as servicer, Daimler Trust, as titling trust, and Daimler Title Co., as collateral agent.

 

 

ARTICLE TWO

SALE OF THE SECOND-TIER ASSETS

 

Section 2.01.  Sale of the Second-Tier Assets.

 

 

 

Section 2.02.  Closing; Further Assignments.

 

 

 

 

Section 2.03.  Intent; Savings Clause.  It is the intention of the parties hereto that (i) the sale pursuant to Section 2.01 constitute an absolute sale of the Second-Tier Assets, including all monies paid thereon and all monies due thereon on or after the 2016-B Cutoff Date, conveying good title to the Second-Tier Assets free and clear of any Lien other than Permitted Liens, from the Seller to the Purchaser and (ii) the Second-Tier Assets not be a part of the Seller’s estate in the event of a bankruptcy or insolvency of the Seller.  If, notwithstanding the intention of the parties hereto, such sale is deemed to be a pledge in connection with a financing or is otherwise deemed not to be a sale, the Seller grants, and the parties intend that the Seller grants, to the Purchaser a security interest in the Second-Tier Assets and the performance by the Seller of the obligation by the Seller to pay to the Purchaser all amounts received with respect to the 2016-B Exchange Note, and in such event, this Agreement will constitute a security agreement under applicable law and the Purchaser will have all of the rights and remedies of a secured party and creditor under the UCC.

 

ARTICLE THREE

REPRESENTATIONS AND WARRANTIES

 

Section 3.01.  Representations and Warranties of the Purchaser.  The Purchaser represents and warrants to the Seller as of the 2016-B Closing Date:

 

 

 

 

 

 

 

 

Section 3.02.  Representations and Warranties of the Seller.  The Seller represents and warrants to the Purchaser as of the 2016-B Closing Date:

 

 

 

 

 

 

 

 

 

 

 

 

Section 3.03.  Survival of Representations and Warranties.  The representations and warranties set forth in this Article shall survive the closing under Section 2.02 and the pledge of the Second-Tier Assets by the Issuer to the Indenture Trustee pursuant to the Indenture.  Upon discovery by the Seller, the Purchaser or the Indenture Trustee of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the others.

 

ARTICLE FOUR

CONDITIONS

 

Section 4.01.  Conditions to Obligation of the Purchaser.  The obligation of the Purchaser to accept the Second-Tier Assets as set forth in Section 2.01 is subject to the satisfaction of the following conditions:

 

 

 

 

 

Section 4.02.  Conditions to Obligation of the Seller.  The obligation of the Seller to sell the 2016-B Exchange Note to the Purchaser as set forth in Section 2.01 is subject to each representation and warranty of the Purchaser as set forth in Section 3.01 being true and correct on the 2016-B Closing Date, and each obligation to be performed by the Purchaser under this Agreement on or prior to the 2016-B Closing Date having been performed on or prior to the 2016-B Closing Date.

 

Section 4.03.  Deemed Satisfaction of Conditions.  Upon the transfer of the Second-Tier Assets to, and the acceptance of the Second-Tier Assets by the Purchaser, all of the conditions set forth in this Article will be deemed to have been satisfied.

 

ARTICLE FIVE

COVENANTS OF THE SELLER

 

Section 5.01.  Protection of Right, Title and Interest to the Second-Tier Assets.

 

 

 

 

 

 

 

Section 5.02.  Other Liens or Interests.  Except for the sales, transfers, assignments and conveyances under this Agreement, the Seller will not sell, contribute, pledge, assign, transfer or allow to be issued any Second-Tier Asset to any other Person, or grant, create, incur, assume or suffer to exist any Lien on any interest therein, and the Seller will defend the right, title, and interest of the Purchaser in, to and under the Second-Tier Assets against all claims of third parties claiming through or under the Seller.  However, the Seller’s obligations under this Section with respect to the 2016-B Exchange Note will terminate upon the payment in full of the 2016-B Exchange Note pursuant to the Basic Collateral Agency Agreement and the 2016-B Exchange Note Supplement.

 

Section 5.03.  Indemnification.  The Seller will be liable under this Agreement only to the extent of the obligations specifically undertaken by the Seller under this Agreement, and agrees to the following:

 

 

 

 

 

Section 5.04.  Reserve Initial Deposit.  On the 2016-B Closing Date, the Seller will deposit, or cause to be deposited, the Reserve Initial Deposit into the 2016-B Reserve Account from the net proceeds of the sale of the Notes.

 

ARTICLE SIX

MISCELLANEOUS PROVISIONS

 

Section 6.01.  Obligations of the Seller.  The obligations of the Seller under this Agreement will not be affected by reason of any invalidity, illegality or irregularity of the 2016-B Exchange Note or any 2016-B Lease or 2016-B Vehicle allocated to the 2016-B Reference Pool.

 

Section 6.02.  Amendment.

 

 

 

 

 

Section 6.03.  Waivers.  No failure or delay on the part of the Seller, the Purchaser or the Indenture Trustee in exercising any power, right or remedy under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any such power, right or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy.

 

Section 6.04.  Costs and Expenses.  The Seller will pay all expenses incidental to the performance of its obligations under this Agreement and the Seller agrees to pay all reasonable out-of-pocket costs and expenses of the Purchaser in connection with the perfection as against third parties of the Purchaser’s right, title and interest in and to the Second-Tier Assets and the other property and rights sold hereunder and the enforcement of any obligation of the Seller hereunder.

 

Section 6.05.  Notices.  Unless otherwise specified in this Agreement, all notices, requests, demands, consents, waivers or other communications to or from the parties to this Agreement will be in writing, including e‑mail.  Unless otherwise specified in this Agreement, any such notice, request, demand, consent or other communication will be delivered or addressed as set forth below or at such other address or facsimile number as any party may designate by notice to the other parties.

 

(i)

In the case of the Seller:

 

Daimler Trust Leasing LLC
c/o Mercedes-Benz Financial Services USA LLC
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:  ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
E-mail:  ▇▇▇▇▇▇.▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Facsimile:  (▇▇▇) ▇▇▇-▇▇▇▇

 

(ii)

In the case of the Purchaser:

 

Mercedes-Benz Auto Lease Trust 2016-B
c/o Wilmington Trust, National Association
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇  ▇▇▇▇▇
Attention:  Corporate Trust Administration
E-mail:  ▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Facsimile:  (▇▇▇) ▇▇▇-▇▇▇▇

 

Section 6.06.  Severability.  If any one or more of the covenants, agreements, provisions or terms of this Agreement is held invalid, illegal or unenforceable, then such covenants, agreements, provisions or terms will be deemed severable from the remaining covenants, agreements, provisions and terms of this Agreement and will in no way affect the validity, legality or enforceability of the other covenants, agreements, provisions and terms of this Agreement or of the Second-Tier Assets or the rights of the holders thereof.

 

Section 6.07.  Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be an original, and all of which will together constitute one and the same instrument.

 

Section 6.08.  Successors and Assigns.  All covenants and agreements contained herein will be binding upon, and inure to the benefit of, the parties hereto and their respective successors and permitted assigns, all as provided in this Agreement.  Any request, notice,

direction, consent, waiver or other instrument or action by a party to this Agreement will bind the successors and assigns of such party.  Except as otherwise provided in this Agreement, no other Person will have any right or obligation under this Agreement.

 

Section 6.09.  No Petition.  Each of the Seller and the Purchaser covenants that for a period of one year and one day (or, if longer, any applicable preference period) after payment in full of all Exchange Notes, Notes and other Securities it will not institute against, or join any Person in instituting against, the Initial Beneficiary, the Titling Trust, the Transferor, the Issuer or the 2016-B Exchange Noteholder any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings, or other Proceedings under any Insolvency Law in connection with any obligations relating to the 2016-B Exchange Note, any Notes or any 2016-B Basic Document and agrees that it will not cooperate with or encourage others to institute any such Proceeding.

 

Section 6.10.  Table of Contents and Headings.  The table of contents and the various headings in this Agreement are included for convenience only and will not affect the meaning or interpretation of any provision of this Agreement.

 

Section 6.11.  GOVERNING LAW; SUBMISSION TO JURISDICTION.

 

 

 

Section 6.12.  WAIVER OF JURY TRIAL.  EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER 2016-B BASIC DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY SUCH OTHER 2016-B BASIC DOCUMENT.

 

Section 6.13.  Limited Recourse.  The Seller and the Purchaser agree that any claim that the Seller or the Purchaser may seek to enforce against each other is limited to the Second-Tier Assets only and does not represent a claim against the assets of the Seller or the Purchaser as a whole or any assets other than the Second-Tier Assets.

 

Section 6.14.  Subordination.

 

 

 

 

Section 6.15.  Issuer Obligation.  It is expressly understood and agreed by the parties hereto that (i) this Agreement is executed and delivered by the Owner Trustee, not individually or personally but solely as Owner Trustee, in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by the Owner Trustee but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein contained shall be construed as creating any liability on the Owner Trustee, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (iv) the Owner Trustee has not verified and has made no investigation as to the accuracy or completeness of any representations and warranties made by the Issuer in this Agreement and (v) under no circumstances shall the Owner Trustee be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Agreement or any other related documents.

 

Section 6.16.  Each Exchange Note Separate; Assignees of Exchange Note.  Each party hereto acknowledges and agrees (and each holder or pledgee of the 2016-B Exchange Note, by virtue of its acceptance of such Exchange Note or pledge thereof acknowledges and agrees) that (i) the Specified Interest is a separate series of the Titling 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., (ii) the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to (a) the 2016-B Exchange Note or the related 2016-B Reference Pool shall be enforceable against such 2016-B Reference Pool only and not against any other Reference Pool or the Revolving Facility Pool and (b) any other Exchange Note, any other Reference Pool, or the Revolving Facility Pool shall be enforceable against such other Exchange Note, other Reference Pools, or

the Revolving Facility Pool only, as applicable, and not against the 2016-B Exchange Note or any 2016-B Lease or 2016-B Vehicle included in the 2016-B Reference Pool, (iii) except to the extent required by law, the leases and the related leased vehicles included in the Revolving Facility Pool or leases and the related leased vehicles included in any other Reference Pool with respect to any other Exchange Note (other than the 2016-B Exchange Note transferred hereunder which is related to the 2016-B Reference Pool) shall not be subject to the claims, debts, liabilities, expenses or obligations arising from or with respect to the 2016-B Exchange Note in respect of such claim, (iv) no creditor or holder of a claim relating to (a) the 2016-B Exchange Note or the related 2016-B Reference Pool shall be entitled to maintain any action against or recover any assets allocated to any other Reference Pool, the Revolving Facility Pool or any other Exchange Note or the assets allocated thereto (except to the extent of amounts available to such Persons on a fully subordinated basis) and (b) any other Reference Pool, the Revolving Facility Pool or any other Exchange Note other than the 2016-B Exchange Note related to the 2016-B Reference Pool shall be entitled to maintain any action against or recover any assets allocated to the 2016-B Reference Pool and (v) any purchaser, assignee or pledgee of an interest in the 2016-B Reference Pool or, the 2016-B Exchange Note, must, prior to or contemporaneously with the grant of any such assignment, pledge or security interest, (a) give to the Titling Trust a non-petition covenant substantially similar to that set forth in Section 11.10 of the Titling Trust Agreement and (b) execute an agreement for the benefit of each holder, assignee or pledgee from time to time of any other Exchange Note to release all claims to the assets of the Titling Trust allocated to the Revolving Facility Pool and each other Reference Pool and, in the event that such release is not given effect, to fully subordinate all claims it may be deemed to have against the assets of the Titling Trust allocated to the Revolving Facility Pool and each other Reference Pool.

 

IN WITNESS WHEREOF, the parties hereto have caused this Second-Tier Agreement to be duly executed by their respective officers duly authorized as of the day and year first above written.

 

	DAIMLER TRUST LEASING LLC, as Seller
	By:	/s/
		Name
		Title

 

	MERCEDES-BENZ AUTO LEASE TRUST 2016-B, as Purchaser
	By:	WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee
	By:	/s/
		Name
		Title

 

 

 

EXHIBIT A

 

PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS

 

In addition to the representations, warranties and covenants contained in the Second-Tier Sale Agreement, dated as of October 1, 2016 (the “Second-Tier Sale Agreement”), between Daimler Trust Leasing LLC, as seller (the “Seller”), and Mercedes-Benz Auto Lease Trust 2016-B, as purchaser (the “Purchaser”), the Seller hereby further represents, warrants and covenants to the Purchaser as follows on the 2016-B Closing Date:

 

1.

The Second-Tier Sale Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the 2016-B Exchange Note in favor of the Purchaser, 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 2016-B Exchange Note constitutes a “general intangible”, “instrument,” “certificated security”, or “tangible chattel paper”, within the meaning of the applicable UCC.

 

3.

The Seller owns and has good and marketable title to the 2016-B Exchange Note free and clear of any Liens, claim or encumbrance of any Person, excepting only liens for taxes, assessments or similar governmental charges or levies incurred in the ordinary course of business that are not yet due and payable or as to which any applicable grace period shall not have expired, or that are being contested in good faith by proper proceedings and for which adequate reserves have been established, but only so long as foreclosure with respect to such a Lien is not imminent and the use and value of the property to which the Lien attaches is not impaired during the pendency of such proceeding.

 

4.

The Seller has received all consents and approvals to the sale of the 2016-B Exchange Note under the Second-Tier Sale Agreement to the Purchaser required by the terms of the 2016-B Exchange Note to the extent that it constitutes an instrument or a payment intangible.

 

5.

The Seller has received all consents and approvals required by the terms of the 2016-B Exchange Note, to the extent that it constitutes a securities entitlement, certificated security or uncertificated security, to the transfer to the Purchaser of its interest and rights in the 2016-B Exchange Note under the Second-Tier Sale Agreement.

 

6.

The Seller has caused or will have caused, within ten days after the 2016-B Closing Date, 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 2016-B Exchange Note from the Seller to the Purchaser and the security interest in the 2016-B Exchange Note granted under the Second-Tier Sale Agreement.

 

 

7.

To the extent that the 2016-B Exchange Note constitutes an instrument or tangible chattel paper, all original executed copies of each such instrument or tangible chattel paper have been delivered to the Purchaser.

 

8.

Other than the transfer of the 2016-B Exchange Note from Mercedes-Benz Financial Services USA LLC to the Seller under the First-Tier Sale Agreement and from the Seller to the Purchaser under the Second-Tier Sale Agreement and the security interest granted to the Indenture Trustee pursuant to the Indenture, the Seller has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed the 2016-B Exchange Note.

 

9.

The Seller has not authorized the filing of, nor is aware of, any financing statements against the Seller that include a description of collateral covering the 2016-B Exchange Note other than any financing statement relating to any security interest granted pursuant to the 2016-B Basic Documents or that has been terminated.

 

10.

No instrument or tangible chattel paper that constitutes or evidences the 2016-B Exchange Note has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee.

 

Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Second-Tier Sale Agreement.