Document:

Amended and Restated Trust Agreement

 

EXHIBIT 4.2

EXECUTION COPY

VOLKSWAGEN AUTO LOAN ENHANCED TRUST 2003-1

AMENDED AND RESTATED

TRUST AGREEMENT

between

VOLKSWAGEN PUBLIC AUTO LOAN SECURITIZATION, LLC,

as the Depositor

and

DEUTSCHE BANK TRUST COMPANY DELAWARE,

as the Owner Trustee

Dated as of June 27, 2003

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 
	 	 	 	Page
	ARTICLE I                      DEFINITIONS
	 	 	1	 
	 	SECTION
1.1.   Capitalized Terms
	 	 	1	 
	 	SECTION
1.2.   Other Interpretive Provisions
	 	 	1	 
	ARTICLE II                    ORGANIZATION
	 	 	2	 
	 	SECTION
2.1.   Name
	 	 	2	 
	 	SECTION
2.2.   Office
	 	 	2	 
	 	SECTION
2.3.   Purposes and Powers
	 	 	2	 
	 	SECTION
2.4.   Appointment of the Owner Trustee
	 	 	3	 
	 	SECTION
2.5.   Initial Capital Contribution of Trust Estate
	 	 	3	 
	 	SECTION
2.6.   Declaration of Trust
	 	 	3	 
	 	SECTION
2.7.   Organizational Expenses; Liabilities of the Holders
	 	 	3	 
	 	SECTION
2.8.   Title to the Trust Estate
	 	 	4	 
	 	SECTION
2.9.   Representations and Warranties of the Seller
	 	 	4	 
	 	SECTION 2.10. Situs of Issuer
	 	 	5	 
	ARTICLE III                    CERTIFICATE AND TRANSFER OF CERTIFICATE
	 	 	5	 
	 	SECTION
3.1.   Initial Ownership
	 	 	5	 
	 	SECTION
3.2.   Authentication of Certificate
	 	 	5	 
	 	SECTION
3.3.   Form of the Certificate
	 	 	5	 
	 	SECTION
3.4.   Registration of Certificates
	 	 	6	 
	 	SECTION
3.5.   Transfer of Certificate
	 	 	6	 
	 	SECTION
3.6.   Lost, Stolen, Mutilated or Destroyed Certificates
	 	 	7	 
	ARTICLE IV                     ACTIONS BY OWNER TRUSTEE
	 	 	7	 
	 	SECTION
4.1.   Prior Notice to Certificateholder with Respect to Certain Matters
	 	 	7	 
	 	SECTION
4.2.   Action by Certificateholder with Respect to Certain Matters
	 	 	8	 
	 	SECTION
4.3.   Action by Certificateholder with Respect to Bankruptcy
	 	 	8	 
	 	SECTION
4.4.   Restrictions on Certificateholder’s Power
	 	 	8	 
	 	SECTION
4.5.   Majority Control
	 	 	8	 
	ARTICLE V                    APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
	 	 	8	 
	 	SECTION
5.1.   Application of Trust Funds
	 	 	8	 
	 	SECTION
5.2.   Method of Payment
	 	 	9	 
	 	SECTION
5.3.   Sarbanes-Oxley Act
	 	 	9	 
	 	SECTION
5.4.   Signature on Returns
	 	 	9	 
	ARTICLE
VI                     AUTHORITY AND DUTIES OF OWNER TRUSTEE
	 	 	9	 
	 	SECTION
6.1.   General Authority
	 	 	9	 
	 	SECTION
6.2.   General Duties
	 	 	9	 
	 	SECTION
6.3.   Action upon Instruction
	 	 	10	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	SECTION
6.4.     No Duties Except as Specified in this Agreement or in Instructions
	 	 	11	 
	 	 	SECTION
6.5.     No Action Except under Specified Documents or Instructions
	 	 	11	 
	 	 	SECTION
6.6.     Restrictions
	 	 	11	 
	ARTICLE VII       CONCERNING OWNER TRUSTEE
	 	 	12	 
	 	 	SECTION
7.1.     Acceptance of Trusts and Duties
	 	 	12	 
	 	 	SECTION
7.2.     Furnishing of Documents
	 	 	12	 
	 	 	SECTION
7.3.     Representations and Warranties
	 	 	12	 
	 	 	SECTION
7.4.     Reliance; Advice of Counsel
	 	 	13	 
	 	 	SECTION
7.5.     Not Acting in Individual Capacity
	 	 	14	 
	 	 	SECTION
7.6.     The Owner Trustee May Own Notes
	 	 	14	 
	ARTICLE VIII      COMPENSATION OF OWNER TRUSTEE
	 	 	14	 
	 	 	SECTION
8.1.     The Owner Trustee’s Compensation
	 	 	14	 
	 	 	SECTION
8.2.     Indemnification
	 	 	14	 
	 	 	SECTION
8.3.     Payments to the Owner Trustee
	 	 	15	 
	ARTICLE
IX        TERMINATION OF TRUST AGREEMENT
	 	 	15	 
	 	 	SECTION
9.1.     Termination of Trust Agreement
	 	 	15	 
	 	 	SECTION
9.2.     Dissolution of the Issuer
	 	 	15	 
	 	 	SECTION
9.3.     Limitations on Termination
	 	 	16	 
	ARTICLE
X         SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
	 	 	16	 
	 	 	SECTION 10.1.   Eligibility Requirements for the Owner Trustee
	 	 	16	 
	 	 	SECTION 10.2.   Resignation or Removal of the Owner Trustee
	 	 	16	 
	 	 	SECTION 10.3.   Successor Owner Trustee
	 	 	17	 
	 	 	SECTION 10.4.   Merger or Consolidation of the Owner Trustee
	 	 	17	 
	 	 	SECTION 10.5.   Appointment of Co-Trustee or Separate Trustee
	 	 	18	 
	ARTICLE
XI        MISCELLANEOUS
	 	 	19	 
	 	 	SECTION 11.1.   Amendments
	 	 	19	 
	 	 	SECTION 11.2.   No Legal Title to Trust Estate in Certificateholder
	 	 	20	 
	 	 	SECTION 11.3.   Limitations on Rights of Others
	 	 	20	 
	 	 	SECTION 11.4.   Notices
	 	 	20	 
	 	 	SECTION 11.5.   Severability
	 	 	21	 
	 	 	SECTION 11.6.   Separate Counterparts
	 	 	21	 
	 	 	SECTION 11.7.   Successors and Assigns
	 	 	21	 
	 	 	SECTION 11.8.   No Petition
	 	 	21	 
	 	 	SECTION 11.9.   Headings
	 	 	22	 
	 	 	SECTION 11.10. GOVERNING LAW
	 	 	22	 

-ii-

 

     This AMENDED AND RESTATED TRUST AGREEMENT is made as of June 27, 2003 (as
from time to time amended, supplemented or otherwise modified and in effect,
this “Agreement”) between VOLKSWAGEN PUBLIC AUTO LOAN SECURITIZATION, LLC, a
Delaware limited liability company, as the Depositor (the “Seller”), and
DEUTSCHE BANK TRUST COMPANY DELAWARE, a Delaware banking corporation (“Deutsche
Bank”), as the owner trustee (in such capacity, the “Owner Trustee”).

RECITALS

     WHEREAS, the Seller and the Owner Trustee entered into that certain Trust
Agreement dated as of May 20, 2003 (the “Original Trust Agreement”), pursuant
to which the Issuer (as defined below) was created; and

     WHEREAS, in connection with the issuance of the Notes, the parties have
agreed to amend and restate the Original Trust Agreement;

     NOW THEREFORE, IN CONSIDERATION of the mutual agreements herein contained,
and of other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:

ARTICLE I

DEFINITIONS

     SECTION 1.1. Capitalized Terms. Unless otherwise indicated, capitalized
terms used in this Agreement are defined in Appendix A to the Sale and
Servicing Agreement dated as of the date hereof (as from time to time amended,
supplemented or otherwise modified and in effect, the “Sale and Servicing
Agreement”) among the Issuer, the Seller, VW Credit, Inc, as servicer, and The
Bank of New York, as indenture trustee, as the same may be amended, modified or
supplemented from time to time.

     SECTION 1.2. Other Interpretive Provisions. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document delivered pursuant hereto unless otherwise defined therein. For
purposes of this Agreement and all such certificates and other documents,
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 State of Delaware 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 or Exhibit are references to Articles, Sections, Schedules 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)
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; and (g)
references to any Person include that Person’s successors and assigns.

 

 

ARTICLE II

ORGANIZATION

     SECTION 2.1. Name. The trust created under the Original Trust Agreement
shall be known as “Volkswagen Auto Loan Enhanced Trust 2003-1” (the “Issuer”),
in which name the Owner Trustee may conduct the business of such trust, make
and execute contracts and other instruments on behalf of such trust and sue and
be sued.

     SECTION 2.2. Office. The office of the Issuer shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholder, the
Seller and the Administrator.

     SECTION 2.3. Purposes and Powers. The purpose of the Issuer is, and the
Issuer shall have the power and authority, to engage in the following
activities:

		
	 	     (a) to issue the Notes pursuant to the Indenture and the Certificate
pursuant to this Agreement, and to sell, transfer and exchange the Notes
and the Certificate and to pay interest on and principal of the Notes and
distributions on the Certificate;

		
	 	     (b) to acquire the property and assets set forth in the Sale and
Servicing Agreement from the Seller pursuant to the terms thereof, to
make deposits to and withdrawals from the Collection Account, the
Principal Distribution Account and the Reserve Account and to pay the
organizational, start-up and transactional expenses of the Issuer;

		
	 	     (c) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute
to the Certificateholder any portion of the Trust Estate released from
the lien of, and remitted to the Issuer pursuant to, the Indenture;

		
	 	     (d) to enter into and perform its obligations under the Transaction
Documents to which it is a party;

		
	 	     (e) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and

		
	 	     (f) subject to compliance with the Transaction Documents, to engage
in such other activities as may be required in connection with
conservation of the Trust Estate and the making of distributions to the
Certificateholder and the Noteholders.

The Owner Trustee is hereby authorized to engage in the foregoing activities on
behalf of the Issuer. Neither the Issuer nor the Owner Trustee on behalf of
the Issuer shall engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the other Transaction Documents.

2

 

     SECTION 2.4. Appointment of the Owner Trustee. The Seller hereby appoints
the Owner Trustee as trustee of the Issuer effective as of the date hereof, to
have all the rights, powers and duties set forth herein.

     SECTION 2.5. Initial Capital Contribution of Trust Estate. As of the date
of the Original Trust Agreement, the Seller sold, assigned, transferred,
conveyed and set over to the Owner Trustee the sum of $1. The Owner Trustee
hereby acknowledges receipt in trust from the Seller, as of such date, of the
foregoing contribution, which shall constitute the initial Trust Estate and
shall be deposited in the Collection Account.

     SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares that
it will hold the Trust Estate in trust upon and subject to the conditions set
forth herein for the use and benefit of the Certificateholder, subject to the
obligations of the Issuer under the Transaction Documents. It is the intention
of the parties hereto that the Issuer constitute a statutory trust under the
Statutory Trust Statute and that this Agreement constitute the governing
instrument of such statutory trust. It is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Issuer will be
disregarded as an entity separate from the Seller, the Seller will be
disregarded as an entity separate from VCI and the Notes will be characterized
as debt. The parties agree that, unless otherwise required by appropriate tax
authorities, the Issuer will not file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the characterization
of the Issuer as an entity separate from its owner. In the event that the
Issuer is deemed to have more than one beneficial owner for federal income tax
purposes, the Issuer will file returns, reports and other forms consistent with
the characterization of the Issuer as a partnership, and this Agreement shall
be amended to include such provisions as may be required under Subchapter K of
the Internal Revenue Code of 1986, as amended. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and in the Statutory Trust Statute with respect to accomplishing the
purposes of the Issuer. The Owner Trustee filed the Certificate of Trust with
the Secretary of State of the State of Delaware as required by Section 3810(a)
of the Statutory Trust Statute. Notwithstanding anything herein or in the
Statutory Trust Statute to the contrary, it is the intention of the parties
hereto that the Issuer constitute a “business trust” within the meaning of
Section 101(9)(A)(v) of the Bankruptcy Code.

     SECTION 2.7. Organizational Expenses; Liabilities of the Holders.

		
	 	     (a) The Servicer shall pay organizational expenses of the Issuer as
they may arise.

		
	 	     (b) No Certificateholder (including the Seller) shall have any
personal liability for any liability or obligation of the Issuer.

     SECTION 2.8. Title to the Trust Estate. Legal title to all the Trust
Estate shall be vested at all times in the Issuer as a separate legal entity,
except where applicable law in any jurisdiction requires title to any part of
the Trust Estate to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.

3

 

           SECTION 2.9. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Owner Trustee that:

		
	 	     (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 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 under the Transaction Documents and
the Underwriting Agreement.

		
	 	     (b) Authorization and No Contravention. The execution, delivery and
performance by each Seller of each Transaction Document to which it is a
party (i) have been duly authorized by all necessary 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
instruments or (C) any material agreement, contract, order or other
instrument to which it is a party or its property is subject (other than
violations of such laws, rules, regulations, indenture or agreements
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 to which it is a party).

		
	 	     (c) No Consent Required. No approval, authorization or other action
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 UCC filings and other than approvals and
authorizations that have previously been obtained and filings which have
previously been made.

		
	 	     (d) Binding Effect. Each Transaction Document and the Underwriting
Agreement 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 or other similar laws of general application relating to or
affecting the enforcement of creditors’ rights generally and subject to
general principles of equity.

		
	 	     (e) No Proceedings. There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Seller, threatened
against the Seller which, either in any one instance or in the aggregate,
would result in any material adverse change in the business, operations,
financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on
the part of the Seller, or which would render invalid this Agreement or
the Receivables or the obligations of the Seller

4

 

		
	 	contemplated herein, or which would materially impair the ability of
the Seller to perform under the terms of this Agreement or any other
Transaction Document.

     SECTION 2.10. Situs of Issuer. The Issuer shall be located in the State
of Delaware and administered in the State of Delaware or the State of New York.
All bank accounts maintained by the Owner Trustee on behalf of the Issuer
shall be located in the State of Delaware or the State of New York. The Issuer
shall not have any employees in any state; provided, however, that nothing
herein shall restrict or prohibit the Owner Trustee from having employees
within or without the State of Delaware. Payments will be received by the
Issuer only in Delaware or New York and payments will be made by the Issuer
only from Delaware or New York.

ARTICLE III

CERTIFICATE AND TRANSFER OF CERTIFICATE

     SECTION 3.1. Initial Ownership. Upon the formation of the Issuer and
until the issuance of the Certificate, the Seller is the sole beneficiary of
the Issuer; and upon the issuance of the Certificate, the Seller will no longer
be a beneficiary of the Issuer, except to the extent that the Seller is the
Certificateholder.

     SECTION 3.2. Authentication of Certificate. Concurrently with the sale of
the Transferred Assets to the Issuer pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificate to be executed on
behalf of the Issuer, authenticated and delivered to or upon the written order
of the Seller, signed by its chairman of the board, its president, its chief
financial officer, its chief accounting officer, any vice president, its
secretary, any assistant secretary, its treasurer or any assistant treasurer,
without further corporate action by the Seller. The Certificate shall
represent 100% of the beneficial interest in the Issuer and shall be fully-paid
and nonassessable.

     SECTION 3.3. Form of the Certificate. The Certificate, upon original
issuance, will be issued in the form of a typewritten Certificate representing
a definitive Certificate and shall be registered in the name of “Volkswagen
Public Auto Loan Securitization, LLC” as the initial registered owner thereof.
The Owner Trustee shall execute and authenticate, or cause to be authenticated,
the definitive Certificate in accordance with the instructions of the Seller.

     SECTION 3.4. Registration of Certificates. The Owner Trustee shall
maintain at its office referred to in Section 2.2, or at the office of any
agent appointed by it and approved in writing by the Certificateholder at the
time of such appointment, a register for the registration and transfer of the
Certificate.

     SECTION
3.5. Transfer of Certificate. (a) The Certificateholder may assign,
convey or otherwise transfer all or any of its right, title and interest in the
Certificate; provided that (i) the Rating Agency Condition is satisfied, (ii)
the Owner Trustee and the Issuer receive an Opinion of Counsel stating that, in
the opinion of such counsel, such transfer (a) will not adversely affect the
tax characterization as debt of Notes of any outstanding Class that were
characterized as debt for federal income tax purposes at the time of their
issuance; (b) will not cause the Issuer to be deemed to be an association (or
publicly traded partnership) taxable as a corporation; and (c) will

5

 

not cause or constitute an event in which gain or loss would be recognized
by any Noteholder, and (iii) the Certificate may not be acquired by or for the
account of or with the assets of (a) an employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(b) a plan described in Section 4975 of the Code or (c) any entity whose
underlying assets include plan assets by reason of a plan’s investment in the
entity. By accepting and holding the Certificate, the holder thereof shall be
deemed to have represented and warranted that it is not a Benefit Plan and is
not purchasing on behalf of a Benefit Plan. The Owner Trustee shall have no
duty to independently determine that the requirement in (iii) above is met and
shall incur no liability to any person in the event the holder of the
Certificate does not comply with such restrictions. Subject to the transfer
restrictions contained herein and in the Certificate, the Certificateholder may
transfer all or any portion of the beneficial interest in the Issuer evidenced
by such Certificate upon surrender thereof to the Owner Trustee accompanied by
the documents required by this Section. Such transfer may be made by the
registered Certificateholder in person or by his attorney duly authorized in
writing upon surrender of the Certificate to the Owner Trustee accompanied by a
written instrument of transfer and with such signature guarantees and evidence
of authority of the Persons signing the instrument of transfer as the Owner
Trustee may reasonably require. Promptly upon the receipt of such documents
and receipt by the Owner Trustee of the transferor’s Certificate, the Owner
Trustee shall record the name of such transferee as a Certificateholder and its
percentage of beneficial interest in the Issuer in the Certificate register and
issue, execute and deliver to such Certificateholder a Certificate evidencing
such beneficial interest in the Issuer. In the event a transferor transfers
only a portion of its beneficial interest in the Issuer, the Owner Trustee
shall register and issue, to such transferor a new Certificate evidencing such
transferor’s new percentage of beneficial interest in the issuer. Subsequent
to a transfer and upon the issuance of the new Certificate or Certificates, the
Owner Trustee shall cancel and destroy the Certificate surrendered to it in
connection with such transfer. The Owner Trustee may treat the Person in whose
name any Certificate is registered as the sole owner of the beneficial interest
in the Issuer evidenced by such Certificate.

		
	 	     (b) As a condition precedent to any registration of transfer under
this Section 3.5, the Owner Trustee may require the payment of a sum
sufficient to cover the payment of any tax or taxes or other governmental
charges required to be paid in connection with such transfer.

		
	 	     (c) The Owner Trustee shall not be obligated to register any
transfer of a Certificate unless each of the transferor and the
transferee have certified to the Owner Trustee that such transfer does
not violate any of the transfer restrictions stated herein. The Owner
Trustee shall not be liable to any Person for registering any transfer
based on such certifications.

     SECTION 3.6. Lost, Stolen, Mutilated or Destroyed Certificates. If (i)
any mutilated Certificate is surrendered to the Owner Trustee, or (ii) the
Owner Trustee receives evidence to its satisfaction that any Certificate has
been destroyed, lost or stolen, and upon proof of ownership satisfactory to the
Owner Trustee together with such security or indemnity as may be requested by
the Owner Trustee to save it harmless, the Owner Trustee shall execute and
deliver a new Certificate for the same percentage of beneficial interest in the
Issuer as the Certificate so mutilated, destroyed, lost or stolen, of like
tenor and bearing a different issue number, with such

6

 

notations, if any, as the Owner Trustee shall determine. Upon the
issuance of any new Certificate under this Section 3.6, the Issuer or Owner
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of the Certificate and any other reasonable expenses (including the
reasonable fees and expenses of the Issuer and the Owner Trustee) connected
therewith. Any duplicate Certificate issued pursuant to this Section 3.6 shall
constitute complete and indefeasible evidence of ownership in the Issuer, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.

ARTICLE IV

ACTIONS BY OWNER TRUSTEE

     SECTION 4.1. Prior Notice to Certificateholder with Respect to Certain
Matters. With respect to the following matters, the Owner Trustee shall not
take action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Certificateholder in writing of the proposed
action and the Certificateholder shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that the
Certificateholder has withheld consent or provided alternative direction:

		
	 	     (a) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;

		
	 	     (b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and
such amendment materially adversely affects the interests of the
Certificateholder;

		
	 	     (c) the amendment, change or modification of the Sale and Servicing
Agreement, or the Administration Agreement, except to cure any ambiguity
or defect or to amend or supplement any provision in a manner that would
not materially adversely affect the interests of the Certificateholder;
or

		
	 	     (d) the appointment pursuant to the Indenture of a successor
Indenture Trustee or the consent to the assignment by the Note Registrar
or the Indenture Trustee of its obligations under the Indenture or this
Agreement, as applicable.

     SECTION 4.2. Action by Certificateholder with Respect to Certain Matters.
The Owner Trustee shall not have the power, except upon the direction of the
Certificateholder, to (a) except as expressly provided in the Transaction
Documents, sell the Collateral after the termination of the Indenture in
accordance with its terms, (b) remove the Administrator under the
Administration Agreement pursuant to Section 8 thereof or (c) appoint a
successor Administrator pursuant to Section 8 of the Administration Agreement.
The Owner Trustee shall take the actions referred to in the preceding sentence
only upon written instructions signed by the Certificateholder.

     SECTION 4.3. Action by Certificateholder with Respect to Bankruptcy. The
Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Issuer until one year and one day after the
Outstanding Amount of all the Notes has been

7

 

reduced to zero and without the prior written approval of the
Certificateholder and the delivery to the Owner Trustee by the
Certificateholder of a certificate certifying that the Certificateholder
reasonably believes that the Issuer is insolvent.

     SECTION 4.4. Restrictions on Certificateholder’s Power. The
Certificateholder shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any
obligation of the Issuer or the Owner Trustee under this Agreement or any of
the Transaction Documents or would be contrary to Section 2.3, nor shall the
Owner Trustee be obligated to follow any such direction, if given.

     SECTION 4.5. Majority Control. To the extent that there is more than one
Certificateholder, any action which may be taken or consent or instructions
which may be given by the Certificateholder under this Agreement may be taken
by Certificateholders holding in the aggregate a percentage of the beneficial
interest in the Issuer equal to more than 50% of the beneficial interest in the
Issuer at the time of such action.

ARTICLE V

APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

     SECTION 5.1. Application of Trust Funds. Distributions on the Certificate
shall be made in accordance with the provisions of the Indenture and the Sale
and Servicing Agreement. Subject to the Lien of the Indenture, the Owner
Trustee shall promptly distribute to the Certificateholder all other amounts
(if any) received by the Issuer or the Owner Trustee in respect of the Trust
Estate. After the termination of the Indenture in accordance with its terms,
the Owner Trustee shall distribute all amounts received (if any) by the Issuer
and the Owner Trustee in respect of the Trust Estate at the direction of the
Certificateholder.

     SECTION 5.2. Method of Payment. Subject to the Indenture, distributions
required to be made to the Certificateholder on any Payment Date and all
amounts received by the Issuer or the Owner Trustee on any other date that are
payable to the Certificateholder pursuant to this Agreement or any other
Transaction Document shall be made to the Certificateholder by wire transfer,
in immediately available funds, to the account of the Certificateholder
designated by the Certificateholder to the Owner Trustee and Indenture Trustee
in writing.

     SECTION 5.3. Sarbanes-Oxley Act. Notwithstanding anything to the contrary
herein or in any Transaction Document, the Owner Trustee shall not be required
to execute, deliver or certify in accordance with the provisions of the
Sarbanes-Oxley Act on behalf of the Issuer or any other Person, any periodic
reports filed pursuant to the Exchange Act, or any other documents pursuant to
the Sarbanes-Oxley Act.

     SECTION 5.4. Signature on Returns. Subject to Section 2.6, the
Certificateholder shall sign on behalf of the Issuer the tax returns of the
Issuer, unless applicable law requires the Owner Trustee to sign such
documents, in which case such documents shall be signed by the Owner Trustee at
the written direction of the Certificateholder.

8

 

ARTICLE VI

AUTHORITY AND DUTIES OF OWNER TRUSTEE

     SECTION 6.1. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Transaction Documents to which the Issuer
is named as a party, and each certificate or other document attached as an
exhibit to or contemplated by the Transaction Documents to which the Issuer or
the Owner Trustee is named as a party and any amendment thereto, in each case,
in such form as the Seller shall approve, as evidenced conclusively by the
Owner Trustee’s execution thereof, and at the written direction of the Seller,
to direct the Indenture Trustee to authenticate and deliver Class A-1 Notes in
the aggregate principal amount of $315,000,000, Class A-2 Notes in the
aggregate principal amount of $370,000,000, Class A-3 Notes in the aggregate
principal amount of $385,000,000, Class A-4 Notes in the aggregate principal
amount of $214,173,000 and Class B Notes in the aggregate principal amount of
$29,559,766. In addition to the foregoing, the Owner Trustee is authorized,
but shall not be obligated, to take all actions required of the Issuer pursuant
to the Transaction Documents. The Owner Trustee is further authorized from
time to time to take such action as the Seller or the Administrator recommends
or directs in writing with respect to the Transaction Documents, except to the
extent that this Agreement expressly requires the consent of the
Certificateholder for such action.

     SECTION 6.2. General Duties. It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the other Transaction Documents and to
administer the Issuer in the interest of the Certificateholder, subject to
Transaction Documents, and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Transaction
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Issuer or the
Owner Trustee hereunder or under any Transaction Document, and the Owner
Trustee shall not be liable for the default or failure of the Administrator to
carry out its obligations under the Administration Agreement and shall have no
duty to monitor the performance of the Administrator or any other Person under
the Administration Agreement or any other document. The Owner Trustee shall
have no obligation to administer, service or collect the Receivables or to
maintain, monitor or otherwise supervise the administration, servicing or
collection of the Receivables. The Owner Trustee shall not be required to
perform any of the obligations of the Issuer under any Transaction Document
that are required to be performed by the Servicer, the Seller, the
Administrator or the Indenture Trustee.

     SECTION
6.3. Action upon Instruction. (a) Subject to Article IV, and in
accordance with the Transaction Documents, the Certificateholder may, by
written instruction, direct the Owner Trustee in the management of the Issuer.
Such direction may be exercised at any time by written instruction of the
Certificateholder pursuant to Article IV.

		
	 	     (b) Subject to Section 7.1, the Owner Trustee shall not be required
to take any action hereunder or under any Transaction Document if the
Owner Trustee shall have reasonably determined or been advised by counsel
that such action is likely to result in

9

 

		
	 	liability on the part of the Owner Trustee or is contrary to the
terms hereof or of any Transaction Document or is otherwise contrary to
law.

		
	 	     (c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Transaction Document or is unsure as to the application
of any provision of this Agreement or any Transaction Document or any
such provision is ambiguous as to its application, or is, or appears to
be, in conflict with any other applicable provision, or in the event that
this Agreement permits any determination by the Owner Trustee or is
silent or is incomplete as to the course of action that the Owner Trustee
is required to take with respect to a particular set of facts, the Owner
Trustee shall promptly give notice (in such form as shall be appropriate
under the circumstances) to the Certificateholder requesting instruction
as to the course of action to be adopted or application of such
provision, and to the extent the Owner Trustee acts or refrains from
acting in good faith in accordance with any written instruction of the
Certificateholder received, the Owner Trustee shall not be liable on
account of such action or inaction to any Person. If the Owner Trustee
shall not have received appropriate instruction within ten days of such
notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it
may, but shall be under no duty to, take or refrain from taking such
action, not inconsistent with this Agreement or the Transaction
Documents, as it shall deem to be in the best interests of the
Certificateholder, and shall have no liability to any Person for such
action or inaction.

		
	 	     (d) The Owner Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation, at the request, order or direction of
the Certificateholder or any other Person, unless such Certificateholder
or such Person has offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may
be incurred by the Owner Trustee (including, without limitation, the
reasonable fees and expenses of its counsel) therein or thereby,
including such advances as the Owner Trustee shall reasonably request.

     SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated
hereby to which the Issuer or the Owner Trustee is a party, except as expressly
provided by the terms of this Agreement or in any document or written
instruction received by the Owner Trustee pursuant to Section 6.3; and no
implied duties or obligations shall be read into this Agreement or any
Transaction Document against the Owner Trustee. The Owner Trustee shall have
no responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection of
any security interest or Lien granted to it hereunder or to prepare or file any
Commission filing for the Issuer or to record this Agreement or any Transaction
Document. Deutsche Bank nevertheless agrees that it will, at its own cost and
expense, promptly take all action as may be necessary to discharge any Liens on
any part of the Trust Estate that result from actions by, or claims against,
Deutsche Bank that are not related to the ownership or the administration of
the Trust Estate. The Owner Trustee shall have no

10

 

responsibility or liability for or with respect to the genuineness, value,
sufficiency or validity of the Trust Estate.

     SECTION 6.5. No Action Except under Specified Documents or Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Trust Estate except (i) in accordance with the powers
granted to and the authority conferred upon the Owner Trustee pursuant to this
Agreement, (ii) in accordance with the Transaction Documents and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 6.3.

     SECTION 6.6. Restrictions. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Issuer set forth in Section
2.3 or (b) that, to the actual knowledge of a Responsible Officer of the Owner
Trustee, would (i) affect the treatment of the Notes as indebtedness for
federal income, state and local income and franchise tax purposes, (ii) be
deemed to cause a taxable exchange of the Notes for federal income or state
income or franchise tax purposes or (iii) cause the Issuer or any portion
thereof to be treated as an association or publicly traded partnership taxable
as a corporation for federal income, state and local income or franchise tax
purposes. The Certificateholder shall not direct the Owner Trustee to take
action that would violate the provisions of this Section.

ARTICLE VII

CONCERNING OWNER TRUSTEE

     SECTION 7.1. Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Trust Estate upon the terms of the Transaction Documents and this
Agreement. The Owner Trustee shall not be personally liable or accountable
hereunder or under any Transaction Document under any circumstances
notwithstanding anything herein or in the Transaction Documents to the
contrary, except (i) for its own willful misconduct, bad faith or negligence,
(ii) in the case of the inaccuracy of any representation or warranty contained
in Section 7.3 expressly made by Deutsche Bank in its individual capacity,
(iii) for liabilities arising from the failure of Deutsche Bank to perform
obligations expressly undertaken by it in the last sentence of Section 6.4 or
(iv) for taxes, fees or other charges on, based on or measured by, any fees,
commissions or compensation received by the Owner Trustee. In particular, but
not by way of limitation of the foregoing:

		
	 	     (i) The Owner Trustee shall not be personally liable for any
error of judgment made in good faith by any of its officers or
employees unless it is proved that such persons were negligent in
ascertaining the pertinent facts;

		
	 	     (ii) No provision of this Agreement shall require the Owner
Trustee to expend or risk its personal funds or otherwise incur any
financial liability in the exercise of its rights or powers
hereunder;

11

 

		
	 	     (iii) Under no circumstances shall the Owner Trustee be
personally liable for any representation, warranty, covenant,
obligation or indebtedness of the Issuer, and

		
	 	     (iv) The Owner Trustee shall not be personally responsible for
or in respect of the validity or sufficiency of this Agreement or
for the due execution hereof by any Person other than the Owner
Trustee.

     SECTION 7.2. Furnishing of Documents. The Owner Trustee shall furnish to
the Certificateholder promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Transaction Documents.

     SECTION 7.3. Representations and Warranties. Deutsche Bank hereby
represents and warrants to the Seller for the benefit of the Certificateholder,
that:

		
	 	     (a) It is a banking corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware and
having an office within the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement.

		
	 	     (b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will
be executed and delivered by one of its officers who is duly authorized
to execute and deliver this Agreement on its behalf.

		
	 	     (c) This Agreement constitutes a legal, valid and binding obligation
of the Owner Trustee, enforceable against the Owner Trustee in accordance
with its terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation
and other similar laws affecting enforcement of the rights of creditors
of banks generally and to equitable limitations on the availability of
specific remedies.

		
	 	     (d) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will
contravene any federal or Delaware law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any
judgment or order binding on it, or constitute any default under its
charter documents or by-laws.

     SECTION
7.4. Reliance; Advice of Counsel. (a) The Owner Trustee shall incur
no personal liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other document or paper believed by it to be genuine and believed by it to
be signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of the determination of which is not
specifically prescribed herein, the Owner Trustee may for all

12

 

purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer, secretary or other Authorized Officers of the
relevant party, as to such fact or matter, and such certificate shall
constitute full protection to the Owner Trustee for any action taken or omitted
to be taken by it in good faith in reliance thereon.

		
	 	     (b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Transaction Documents, the Owner Trustee (i) may act directly or through
its agents or attorneys pursuant to agreements entered into with any of
them, but the Owner Trustee shall not be personally liable for the
conduct or misconduct of such agents, custodians, nominees (including
persons acting under a power of attorney) or attorneys selected with
reasonable care and (ii) may consult with counsel, accountants and other
skilled persons knowledgeable in the relevant area to be selected with
reasonable care and employed by it at the expense of the Issuer. The
Owner Trustee shall not be personally liable for anything done, suffered
or omitted in good faith by it in accordance with the written opinion or
advice of any such counsel, accountants or other such persons.

     SECTION 7.5. Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created, Deutsche Bank acts
solely as the Owner Trustee hereunder and not in its individual capacity and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any Transaction Document shall
look only to the Trust Estate for payment or satisfaction thereof.

     SECTION 7.6. The Owner Trustee May Own Notes. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of Notes. The
Owner Trustee may deal with the Seller, the Indenture Trustee, the
Administrator and their respective Affiliates in banking transactions with the
same rights as it would have if it were not the Owner Trustee, and the Seller,
the Indenture Trustee, the Administrator and their respective Affiliates may
maintain normal commercial banking relationships with the Owner Trustee and its
Affiliates.

ARTICLE VIII

COMPENSATION OF OWNER TRUSTEE

     SECTION 8.1. The Owner Trustee’s Compensation. The Issuer shall cause the
Servicer to pay to Deutsche Bank pursuant to Section 3.11 of the Sale and
Servicing Agreement from time to time compensation for all services rendered by
Deutsche Bank under this Agreement pursuant to a fee letter between the
Servicer and the Owner Trustee (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust). The Servicer, pursuant to Section 3.11 of the Sale and Servicing
Agreement and the fee letter between the Servicer and the Owner Trustee, shall
reimburse Deutsche Bank upon its request for all reasonable expenses,
disbursements and advances incurred or made by Deutsche Bank in accordance with
any provision of this Agreement (including the reasonable compensation,
expenses and disbursements of such agents, experts and counsel as Deutsche Bank
may employ in connection with the exercise and performance of its rights and
its duties hereunder), except any such expense may be attributable to its
willful misconduct, negligence (other than an error in judgment) or bad faith.
To the extent not paid by the Servicer, such fees

13

 

and reasonable expenses shall be paid in accordance with Section 4.4 of
the Sale and Servicing Agreement.

     SECTION 8.2. Indemnification. The Seller shall cause the Servicer to
indemnify Deutsche Bank in its individual capacity and as trustee and its
successors, assigns, directors, officers, employees and agents (the
“Indemnified Parties”) from and against, any and all loss, liability, expense,
tax, penalty or claim (including reasonable legal fees and expenses) of any
kind and nature whatsoever which may at any time be imposed on, incurred by, or
asserted against Deutsche Bank in its individual capacity and as trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
Transaction Documents, the Trust Estate, the administration of the Trust Estate
or the action or inaction of Deutsche Bank hereunder; provided, however, that
neither the Seller nor the Servicer shall be liable for or required to
indemnify Deutsche Bank from and against any of the foregoing expenses arising
or resulting from (i) Deutsche Bank’s own willful misconduct, bad faith or
negligence, (ii) the inaccuracy of any representation or warranty contained in
Section 7.3 expressly made by Deutsche Bank in its individual capacity, (iii)
liabilities arising from the failure of Deutsche Bank to perform obligations
expressly undertaken by it in the last sentence of Section 6.4 or (iv) taxes,
fees or other charges on, based on or measured by, any fees, commissions or
compensation received by the Owner Trustee. To the extent not paid by the
Servicer, such indemnification shall be paid in accordance with Section 4.4 of
the Sale and Servicing Agreement.

     SECTION 8.3. Payments to the Owner Trustee. Any amounts paid to the Owner
Trustee pursuant to this Article VIII and the Sale and Servicing Agreement
shall be deemed not to be a part of the Trust Estate immediately after such
payment.

ARTICLE IX

TERMINATION OF TRUST AGREEMENT

     SECTION 9.1. Termination of Trust Agreement. The Issuer shall dissolve
upon the later of (a) the final distribution by the Owner Trustee of all moneys
or other property or proceeds of the Trust Estate in accordance with the terms
of the Indenture, the Sale and Servicing Agreement and Article V and (b) the
discharge of the Indenture in accordance with Article IV of the Indenture. The
bankruptcy, liquidation, dissolution, death or incapacity of the
Certificateholder shall not (x) operate to terminate this Agreement or the
Issuer, nor (y) entitle the Certificateholder’s legal representatives or heirs
to claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Issuer or Trust Estate nor
(z) otherwise affect the rights, obligations and liabilities of the parties
hereto.

     SECTION 9.2. Dissolution of the Issuer. Upon dissolution of the Issuer,
the Administrator on behalf of the Owner Trustee shall wind up the business and
affairs of the Issuer as required by Section 3808 of the Statutory Trust
Statute. Upon the satisfaction and discharge of the Indenture, and receipt of
a certificate from the Indenture Trustee stating that all Noteholders have been
paid in full and that the Indenture Trustee is aware of no claims remaining
against the Issuer in respect of the Indenture and the Notes, the Owner
Trustee, in the absence of actual knowledge of any other claim against the
Issuer and at the written direction of the Certificateholder, shall be deemed
to have made reasonable provision to pay all claims and

14

 

obligations (including conditional, contingent or unmatured obligations)
for purposes of Section 3808(e) of the Statutory Trust Statute and shall cause
the Certificate of Trust to be cancelled by filing a certificate of
cancellation with the Delaware Secretary of State in accordance with the
provisions of Section 3810 of the Statutory Trust Statute, at which time the
Issuer shall terminate and this Agreement (other than Article VIII) shall be of
no further force or effect.

     SECTION 9.3. Limitations on Termination. Except as provided in Section
9.1, neither the Seller nor the Certificateholder shall be entitled to revoke
or terminate the Issuer.

ARTICLE X

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL

OWNER TRUSTEES

     SECTION 10.1. Eligibility Requirements for the Owner Trustee. The Owner
Trustee shall at all times be a bank (i) authorized to exercise corporate trust
powers, (ii) having a combined capital and surplus of at least $50,000,000 and
(iii) subject to supervision or examination by Federal or state authorities.
If such bank shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. The Owner Trustee shall
at all times be an institution satisfying the provisions of Section 3807(a) of
the Statutory Trust Statute. In case at any time the Owner Trustee shall cease
to be eligible in accordance with the provisions of this Section, the Owner
Trustee shall resign immediately in the manner and with the effect specified in
Section 10.2.

     SECTION 10.2. Resignation or Removal of the Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Seller, the Administrator, the
Servicer, the Indenture Trustee and the Certificateholder. Upon receiving such
notice of resignation, the Seller and the Administrator, acting jointly, shall
promptly appoint a successor Owner Trustee which satisfies the eligibility
requirements set forth in Section 10.1 by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Owner Trustee and
one copy to the successor Owner Trustee. If no successor Owner Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Owner Trustee may petition
any court of competent jurisdiction for the appointment of a successor Owner
Trustee; provided, however, that such right to appoint or to petition for the
appointment of any such successor shall in no event relieve the resigning Owner
Trustee from any obligations otherwise imposed on it under the Transaction
Documents until such successor has in fact assumed such appointment.

     If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 10.1 and shall fail to resign after written
request therefor by the Seller or the Administrator, or if at any time the
Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Seller or

15

 

the Administrator may remove the Owner Trustee. If the Seller or the
Administrator shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Seller and the Administrator, acting
jointly, shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the outgoing Owner Trustee so removed and one copy to the successor Owner
Trustee and shall pay all fees owed to the outgoing Owner Trustee.

     Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Seller shall provide (or shall cause to be
provided) notice of such resignation or removal of the Owner Trustee to each of
the Rating Agencies.

     SECTION 10.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to
the Seller, the Administrator and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations
of its predecessor under this Agreement, with like effect as if originally
named as the Owner Trustee. The predecessor Owner Trustee shall upon payment
of its fees and expenses deliver to the successor Owner Trustee all documents
and statements and monies held by it under this Agreement; and the Seller and
the predecessor Owner Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly vesting
and confirming in the successor Owner Trustee all such rights, powers, duties
and obligations.

     No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.

     Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Seller shall mail (or shall cause to be mailed) notice of the
successor of such Owner Trustee to the Certificateholder, Indenture Trustee,
the Noteholders and each of the Rating Agencies. If the Seller shall fail to
mail (or cause to be mailed) such notice within 10 days after acceptance of
appointment by the successor Owner Trustee, the successor Owner Trustee shall
cause such notice to be mailed at the expense of the Seller.

     SECTION 10.4. Merger or Consolidation of the Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall, without the execution or filing of any
instrument or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, be the successor of the Owner
Trustee hereunder; provided that such corporation shall be eligible pursuant to
Section 10.1; and provided further that the Owner

16

 

Trustee shall mail notice of such merger or consolidation to the Seller,
the Administrator and the Rating Agencies.

     SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Estate may at the time be located, the Seller and the Owner
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Owner Trustee to act
as co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Estate, and to vest in such Person,
in such capacity, such title to the Issuer, or any part thereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Seller and the Owner Trustee may consider necessary or
desirable. If the Seller shall not have joined in such appointment within 15
days after the receipt by it of a request so to do, the Owner Trustee alone
shall have the power to make such appointment. No co-trustee or separate
trustee under this Agreement shall be required to meet the terms of eligibility
as a successor trustee pursuant to Section 10.1 and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 10.3.

     Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

		
	 	     (i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee and such separate
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Owner Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Owner Trustee shall
be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the
holding of title to the Issuer or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Owner Trustee;

		
	 	     (ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and

		
	 	     (iii) the Seller and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee
or co-trustee.

     Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording

17

 

protection to, the Owner Trustee. Each such instrument shall be filed
with the Owner Trustee and copies thereof given to the Seller and the
Administrator.

     Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee. The Owner Trustee shall have no obligation to determine
whether a co-trustee or separate trustee is legally required in any
jurisdiction in which any part of the Trust Estate may be located.

ARTICLE XI

MISCELLANEOUS

     SECTION 11.1. Amendments.

		
	 	     (a) Any term or provision of this Agreement may be amended by the
Seller and the Owner Trustee without the consent of the Indenture
Trustee, any Noteholder or the Issuer; provided that such amendment shall
not, as evidenced by an Opinion of Counsel delivered to the Indenture
Trustee materially and adversely affect the interests of the Noteholders.

		
	 	     (b) Any term or provision of this Agreement may be amended by the
Seller and the Owner Trustee, without the consent of the Indenture
Trustee, any Noteholder, the Issuer 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 may also be amended from time to time by the
Seller and the Owner Trustee, with the consent of the Holders of Notes
evidencing not less than a majority of the aggregate 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. 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 Seller shall
provide written notification of the substance of such amendment to each
Rating Agency and the Owner Trustee; and promptly after the execution of
any such amendment or consent, the Seller

18

 

		
	 	shall furnish a copy of such amendment or consent to each Rating
Agency, the Owner Trustee and the Indenture Trustee.

		
	 	     (e) Prior to the execution of any amendment to this Agreement, the
Owner 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 may, but shall not be obligated to, enter
into any such amendment which affects the Owner Trustee’s own rights,
duties or immunities under this Agreement.

     SECTION 11.2. No Legal Title to Trust Estate in Certificateholder. The
Certificateholder shall not have legal title to any part of the Trust Estate.
The Certificateholder shall be entitled to receive distributions with respect
to its undivided beneficial interest therein only in accordance with Articles V
and IX. No transfer, by operation of law or otherwise, of any right, title or
interest of the Certificateholder to and in its ownership interest in the Trust
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Estate.

     SECTION 11.3. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Seller, the
Administrator, the Certificateholder and, to the extent expressly provided
herein, the Indenture Trustee and the Noteholders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Trust Estate or
under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.

     SECTION
11.4. Notices. (a) Unless otherwise expressly specified or permitted
by the terms hereof, all notices shall be in writing and shall be deemed given
by telecopy with receipt acknowledged by the recipient thereof or upon receipt
personally delivered, delivered by overnight courier or mailed certified mail,
return receipt requested, if to the Owner Trustee, addressed to Deutsche Bank
Trust Company Delaware, 1011 Centre Road, Suite 200, Wilmington, Delaware
19805, Attention: Elizabeth Ferry (Tel: (302) 636-3305; Fax: (302) 636-3222),
with a copy to the Corporate Trust Office; if to the Seller, addressed to 3800
Hamlin Road, Auburn Hills, Michigan 48326 (Tel: (248) 754-5360; Fax: (248)
754-5360), Attention: Treasurer, with a copy to 3800 Hamlin Road, Auburn Hills,
Michigan 48326 (Tel: (248) 754-5360; Fax: (248) 754-5360), Attention: General
Counsel; if to the Administrator, addressed to 3800 Hamlin Road, Auburn Hills,
Michigan 48326 (Tel: (248) 754-5360; Fax: (248) 754-5360), Attention: Treasurer
with a copy to 3800 Hamlin Road, Auburn Hills, Michigan 48326 (Tel: (248)
754-5360; Fax: (248) 754-5360), Attention: General Counsel; or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party.

		
	 	     (b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at
the address of such Certificateholder as shall be designated by such
party in a written notice to each other party. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder
receives such notice.

19

 

     SECTION 11.5. Severability. Any provision of this Agreement that 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     SECTION 11.6. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

     SECTION 11.7. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Seller, the Owner Trustee and its successors and the Certificateholder and its
successors and permitted assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by the
Certificateholder shall bind the successors and assigns of the
Certificateholder.

     SECTION 11.8. No Petition.

		
	 	     (a) Each of the Owner Trustee (in its individual capacity and as the
Owner Trustee), by entering into this Agreement, the Seller, the
Certificateholder, by accepting the Certificate, and the Indenture
Trustee and each Noteholder or Note Owner by accepting the benefits of
this Agreement, hereby covenants and 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 the
Bankruptcy Remote Parties (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) such party shall not commence, join or
institute against, with any other Person, any proceeding against such
Bankruptcy Remote Party under any bankruptcy, reorganization,
arrangement, liquidation or insolvency law or statute now or hereafter in
effect in any jurisdiction.

		
	 	     (b) The Seller’s obligations under this Agreement 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, each of the Owner Trustee (in its individual capacity and
as the Owner Trustee), by entering into or accepting this agreement, the
Certificateholder, by accepting the Certificate, and the Indenture
Trustee and each Noteholder or Note Owner, by accepting the benefits of
this Agreement, hereby acknowledges and agrees that such Person has no
right, title or interest in or to the Other Assets of the Seller. To

20

 

		
	 	the extent that, notwithstanding the agreements and provisions
contained in the preceding sentence, each of the Owner Trustee, the
Indenture Trustee, each Noteholder or Note Owner and the
Certificateholder 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 such Person 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. Each of the Owner Trustee (in its
individual capacity and as the Owner Trustee), by entering into or
accepting this agreement, the Certificateholder, by accepting the
Certificate, and the Indenture Trustee and each Noteholder or Note Owner,
by accepting the benefits of this Agreement, hereby further acknowledges
and agrees that no adequate remedy at law exists for a breach of this
Section and the terms of this Section may be enforced by an action for
specific performance. The provisions of this Section will be for the
third party benefit of those entitled to rely thereon and will survive
the termination of this Agreement.

     SECTION 11.9. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.

     SECTION 11.10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

[Remainder of Page Intentionally Left Blank]

21

 

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

	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST COMPANY DELAWARE
	 	 	 	 	 
	 	 	
By:  
	/s/ Elizabeth B. Ferry

	 	 	Name: Elizabeth B. Ferry
	 	 	Title: Assistant Vice President

Trust Agreement

S-1

 

	 	 	 	 	 
	 	 	VOLKSWAGEN PUBLIC AUTO LOAN
 SECURITIZATION, LLC
	 	 	 	 	 
	 	 	
By:  
	/s/ Peter Schupp

	 	 	Name: Peter Schupp
	 	 	Title: President
	 	 	 	 	 
	 	 	
By:  	/s/ LeSha A. Thorpe

	 	 	Name: LeSha A. Thorpe
	 	 	Title: Assistant Treasurer

Trust Agreement

S-2

 

EXHIBIT A

FORM OF CERTIFICATE

	 	 	 
	NUMBER	 	
100% BENEFICIAL INTEREST
	R-1	 	 

VOLKSWAGEN AUTO LOAN ENHANCED TRUST 2003-1

CERTIFICATE

     Evidencing the 100% beneficial interest in all of the assets of the Issuer
(as defined below), which consist primarily of motor vehicle receivables,
including motor vehicle retail installment sales contracts and/or installment
loans that are secured by new and used automobiles and light-duty trucks.

     (This Certificate does not represent an interest in or obligation of
Volkswagen Public Auto Loan Securitization, LLC, VW Credit, Inc. or any of
their respective Affiliates, except to the extent described below.)

     THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY
OTHER APPLICABLE SECURITIES OR “BLUE SKY” LAWS OF ANY STATE OR OTHER
JURISDICTION, AND MAY NOT BE RESOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OR ANY OTHER APPLICABLE SECURITIES OR “BLUE SKY” LAWS, PURSUANT TO AN EXEMPTION
THEREFROM OR IN A TRANSACTION NOT SUBJECT THERETO.

     NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE ACQUIRED OR HELD
(IN THE INITIAL ACQUISITION OR THROUGH A TRANSFER) BY OR FOR THE ACCOUNT OF OR
WITH THE ASSETS OF (A) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT
IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (B) A PLAN DESCRIBED IN
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED OR (C) ANY ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN’S INVESTMENT IN
THE ENTITY.

     THIS
CERTIFIES THAT [                ] is the registered
owner of a 100% nonassessable, fully-paid, beneficial interest in the Trust
Estate of VOLKSWAGEN AUTO LOAN ENHANCED TRUST 2003-1, a Delaware statutory
trust (the “Issuer”) formed by Volkswagen Public Auto Loan Securitization, LLC,
a Delaware limited liability company, as depositor (the “Seller”).

     The Issuer was created pursuant to a Trust Agreement dated as of May 20,
2003 (as amended and restated as of June 27, 2003, the “Trust Agreement”),
between the Seller and Deutsche Bank Trust Company Delaware, as owner trustee
(the “Owner Trustee”), a summary of

A-1

 

certain of the pertinent provisions of which is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Sale and Servicing Agreement, dated as of June
27, 2003, among the Seller, the Issuer, The Bank of New York, as indenture
trustee, and VW Credit, Inc., as servicer, as the same may be amended or
supplemented from time to time.

     This Certificate is issued under and is subject to the terms, provisions
and conditions of the Trust Agreement, to which Trust Agreement the holder of
this Certificate by virtue of the acceptance hereof assents and by which such
holder is bound. The provisions and conditions of the Trust Agreement are
hereby incorporated by reference as though set forth in their entirety herein.

     The holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Indenture, the Sale and Servicing
Agreement and the Trust Agreement, as applicable.

     THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.

     By accepting this Certificate, the Certificateholder hereby covenants and
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 the Bankruptcy Remote Parties (i) such Person shall not
authorize such 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 any
party hereto or any other creditor of such Bankruptcy Remote Party, and (ii)
such Person 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 Certificate may not be acquired by or for the account of or with the
assets of (a) an employee benefit plan (as defined in Section 3(3) of ERISA)
that is subject to the provisions of Title I of ERISA, (b) a plan described in
Section 4975 of the Code or (c) any entity whose underlying assets include plan
assets by reason of a plan’s investment in the entity (each, a “Benefit Plan”).
By accepting and holding this Certificate, the holder hereof shall be deemed
to have represented and warranted that it is not a Benefit Plan and is not
purchasing on behalf of a Benefit Plan.

A-2

 

     It is the intention of the parties to the Trust Agreement that, solely for
income and franchise tax purposes, the Issuer will be disregarded as an entity
separate from the Seller, the Seller will be disregarded as an entity separate
from VCI and the Notes will be characterized as debt. By accepting this
Certificate, the Certificateholder agrees to take no action inconsistent with
the foregoing intended tax treatment.

     By accepting this Certificate, the Certificateholder acknowledges that
this Certificate represents a beneficial interest in the Issuer only and does
not represent interests in or obligations of the Seller, the Servicer, the
Administrator, the Owner Trustee, the Indenture Trustee or any of their
respective Affiliates and no recourse may be had against such parties or their
assets, except as expressly set forth or contemplated in this Certificate, the
Trust Agreement or any other Transaction Document.

A-3

 

     IN WITNESS WHEREOF, the Issuer has caused this Certificate to be duly
executed.

	 	 	 
	 	 	
VOLKSWAGEN AUTO LOAN ENHANCED TRUST 2003-1
	 	 	 
	 	 	
By: Deutsche Bank Trust Company Delaware, not

in its individual capacity, but solely as Owner

Trustee

	 	 	 	 	 
	Dated:	

	 	By:
	

A-4

 

OWNER TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     This is the Certificate referred to in the within-mentioned Trust
Agreement.

	 	 	 
	 	 	
Deutsche Bank Trust Company Delaware, not in its

individual capacity but solely as Owner Trustee
	 	 	 
	 	 	
By: 

        Authenticating Agent
	 	 	 
	 	 	
By: 

        Authorized Signatory

A-5Purchase Agreement

 

EXHIBIT 10.1

EXECUTION COPY

PURCHASE AGREEMENT

dated as of June 27, 2003

between

VW CREDIT, INC.

and

VOLKSWAGEN PUBLIC AUTO LOAN SECURITIZATION, LLC

Purchase Agreement

 

TABLE OF CONTENTS

	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	 	 	 
	ARTICLE
I   DEFINITIONS AND USAGE

	 	 	1	 
	 	SECTION 1.1     Definitions
	 	 	1	 
	 	SECTION 1.2     Other Interpretive Provisions
	 	 	1	 
	ARTICLE II  PURCHASE
	 	 	2	 
	 	SECTION 2.1     Agreement to Sell and Contribute on the Closing Date
	 	 	2	 
	 	SECTION 2.2     Consideration and Payment
	 	 	2	 
	ARTICLE III  REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	2	 
	 	SECTION 3.1     Representations and Warranties of VCI
	 	 	2	 
	 	SECTION 3.2     Representations and Warranties of VCI as to each Receivable
	 	 	3	 
	 	SECTION 3.3     Repurchase upon Breach
	 	 	4	 
	 	SECTION 3.4     Protection of Title
	 	 	4	 
	 	SECTION 3.5     Other Liens or Interests
	 	 	5	 
	ARTICLE IV  MISCELLANEOUS
	 	 	5	 
	 	SECTION 4.1     Transfers Intended as Sale; Security Interest
	 	 	5	 
	 	SECTION 4.2     Notices, Etc.
	 	 	6	 
	 	SECTION 4.3     Choice of Law
	 	 	7	 
	 	SECTION 4.4     Headings
	 	 	7	 
	 	SECTION 4.5     Counterparts
	 	 	7	 
	 	SECTION 4.6     Amendment
	 	 	7	 
	 	SECTION 4.7     Waivers
	 	 	8	 
	 	SECTION 4.8     Entire Agreement
	 	 	8	 
	 	SECTION 4.9     Severability of Provisions
	 	 	9	 
	 	SECTION 4.10     Binding Effect; Assignability
	 	 	9	 
	 	SECTION 4.11     Acknowledgment and Agreement
	 	 	9	 
	 	SECTION 4.12     No Waiver; Cumulative Remedies
	 	 	9	 
	 	SECTION 4.13     Nonpetition Covenant
	 	 	9	 
	 	SECTION 4.14     Submission to Jurisdiction
	 	 	10	 

Purchase Agreement

i

 

EXHIBITS

	 	 	 	 	 
	 	 	
Exhibit A
	 	Form of Assignment
	 	 	 	 	 
	 	 	
Schedule I
	 	Representations and Warranties

Purchase Agreement

ii

 

     THIS PURCHASE AGREEMENT is made and entered into as of June 27, 2003 (as
amended from time to time, this “Agreement”) by VW CREDIT, INC., a Delaware
corporation (“VCI”), and VOLKSWAGEN PUBLIC AUTO LOAN SECURITIZATION, LLC, a
Delaware limited liability company (the “Purchaser”).

WITNESSETH:

     WHEREAS, the Purchaser desires to purchase from VCI 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; and

     WHEREAS, VCI is willing to sell such portfolio of motor vehicle
receivables and related property to the Purchaser on the terms and conditions
set forth in this Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND USAGE

     SECTION 1.1 Definitions. Except as otherwise defined herein or as the
context may otherwise require, capitalized terms used but not otherwise defined
herein are defined in Appendix A to the Sale and Servicing Agreement dated as
of the date hereof (as from time to time amended, supplemented or otherwise
modified and in effect, the “Sale and Servicing Agreement”) among Volkswagen
Auto Loan Enhanced Trust 2003-1, VCI, as servicer, the Purchaser, as seller,
and The Bank of New York, as indenture trustee, 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.

Purchase Agreement

 

ARTICLE II

PURCHASE

     SECTION 2.1 Agreement to Sell and Contribute on the Closing Date. On the
terms and subject to the conditions set forth in this Agreement, VCI agrees to
transfer, assign, set over, sell and otherwise convey to the Purchaser without
recourse (subject to the obligations herein) on the Closing Date all of its
right, title and interest in, to and under the Receivables, the Collections
after the Cut-Off Date and the Related Security relating thereto, described in
an Assignment in the form of Exhibit A delivered on the Closing Date (the
“Purchased Assets”) having a Net Pool Balance as of the Cut-Off Date equal to
$1,334,414,493.82, which sale shall be effective as of the Cut-Off Date. The
transfer, assignment and conveyance made hereunder will not constitute and is
not intended to result in an assumption by the Purchaser of any obligation of
the applicable Originator to the Obligors, the Dealers or any other Person in
connection with the Receivables and the other assets and properties conveyed
hereunder or any agreement, document or instrument related thereto.

     SECTION 2.2 Consideration and Payment. In consideration of the transfer
of the Purchased Assets conveyed to the Purchaser on the Closing Date, the
Purchaser shall pay in cash to VCI on such date an amount equal to
$1,275,572,926.50, and VCI elects to contribute to the Purchaser such Purchased
Assets as had an Outstanding Principal Balance equal to $58,841,567.32.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS

     SECTION 3.1 Representations and Warranties of VCI. VCI makes the
following representations and warranties as of the Closing Date on which the
Purchaser will be deemed to have relied in acquiring the Purchased Assets. The
representations and warranties speak as of the execution and delivery of this
Agreement and will survive the conveyance of the Purchased Assets to the
Purchaser, the conveyance of the Purchased Assets to the Issuer pursuant to the
Sale and Servicing Agreement and the Grant thereof by the Issuer to the
Indenture Trustee pursuant to the Indenture:

     (a)     Existence and Power. VCI is a corporation validly existing and in
good standing under the laws of its state of organization and has, in all
material respects, all power and authority required to carry on its business as
now conducted. VCI has obtained all necessary licenses and approvals in each
jurisdiction where the failure to do so would materially and adversely affect
the ability of VCI to perform its obligations under the Transaction Documents
or affect the enforceability or collectibility of the Receivables or any other
part of the Purchased Assets.

     (b)     Authorization and No Contravention. The execution, delivery and
performance by VCI of each Transaction Document to which it is a party (i) have
been duly authorized by all necessary action on the part of VCI 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

Purchase Agreement

-2-

 

agreement, contract, order or other instrument to which it is a party or
its property is subject (other than violations of 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 VCI’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 VCI 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 Purchased Assets or would not materially and adversely affect the
ability of VCI to perform its obligations under the Transaction Documents.

     (d)     Binding Effect. Each Transaction Document to which VCI is a party
constitutes the legal, valid and binding obligation of VCI enforceable against
VCI 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)     No Proceedings. There are no actions, suits or proceedings pending
or, to the knowledge of VCI, threatened against VCI before or by any
Governmental Authority that (i) assert the invalidity or unenforceability of
this Agreement or any of the other Transaction Documents, (ii) seeking 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) seeking any determination or ruling that would materially and
adversely affect the performance by VCI of its obligations under this Agreement
or any of the other Transaction Documents, or (iv) relating to VCI that would
materially and adversely affect the federal or Applicable Tax State income,
excise, franchise or similar tax attributes of the Notes.

     (f)     Lien Filings. VCI is not aware of any material judgment, ERISA or tax
lien filings against VCI.

     SECTION 3.2 Representations and Warranties of VCI as to each Receivable.
VCI hereby makes the representations and warranties set forth on Schedule I as
to the Receivables transferred, assigned, set over, sold and otherwise conveyed
to the Purchaser on which such representations and warranties the Purchaser
relies in acquiring the Receivables. Such representations and warranties
speak, with respect to any Receivable, as of the Cut-Off Date, but shall
survive the sale of such Receivables to the Issuer under the Sale and Servicing
Agreement, and 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, VCI 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.

Purchase Agreement

-3-

 

     SECTION 3.3 Repurchase upon Breach. Upon discovery by or notice to the
Purchaser or VCI of a breach of any of the representations and warranties set
forth in Section 3.2 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 or receiving such notice shall
give prompt written notice thereof to the other party; provided that the
failure to give such notice shall not affect any obligation of VCI hereunder.
If VCI does not correct or cure such breach prior to the end of the Collection
Period which includes the 60th day (or, if VCI elects, an earlier date) after
the date that VCI became aware or was notified of such breach, then VCI shall
purchase any Receivable materially and adversely affected by such breach from
the Purchaser 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 Purchaser
(or its assignee) to receive and retain timely payment in full on such
Receivable. Any such purchase by VCI shall be at a price equal to the
Repurchase Price. In consideration for such repurchase, VCI shall make (or
shall cause to be made) a payment to the Purchaser equal to the Repurchase
Price by depositing such amount into the Collection Account prior to 11:00 am,
New York City time on such Payment Date. Upon payment of such Repurchase Price
by VCI, the Purchaser 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 VCI or its
designee any Receivable repurchased pursuant hereto. It is understood and
agreed that the obligation of VCI to purchase any Receivable as described above
shall constitute the sole remedy respecting such breach available to the
Purchaser.

     SECTION 3.4 Protection of Title.

     (a)     VCI 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 Purchaser under this Agreement in the Receivables.
VCI shall deliver (or cause to be delivered) to the Purchaser file-stamped
copies of, or filing receipts for, any document filed as provided above, as
soon as available following such filing.

     (b)     VCI shall not change its name, identity, corporate structure or
jurisdiction of organization in any manner that would make any financing
statement or continuation statement filed by VCI 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 Purchaser at least five days’
prior written notice thereof and, to the extent necessary, shall have promptly
filed amendments to previously filed financing statements or continuation
statements described in paragraph (a) above.

     (c)     VCI shall give the Purchaser at least thirty days’ prior written
notice of any change of location of VCI 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 in the opinion of the Purchaser to amend all previously
filed financing statements or continuation statements described in paragraph
(a) above.

Purchase Agreement

-4-

 

     (d)     VCI 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 payment 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)     VCI 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
Purchaser (or any subsequent assignee of the Purchaser) in such Receivable and
that such Receivable is owned by such Person. Indication of such Person’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 VCI 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, VCI 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 Purchaser (or any subsequent
assignee of the Purchaser).

     SECTION 3.5 Other Liens or Interests. Except for the conveyances and
grants of security interests pursuant to this Agreement and the other
Transaction Documents, VCI shall not sell, pledge, assign or transfer the
Receivables or other property transferred to the Purchaser to any other Person,
or grant, create, incur, assume or suffer to exist any Lien (other than
Permitted Liens) on any interest therein, and VCI shall defend the right, title
and interest of the Purchaser in, to and under such Receivables or other
property transferred to the Purchaser against all claims of third parties
claiming through or under VCI.

ARTICLE IV

MISCELLANEOUS

     SECTION 4.1 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
Purchased Assets shall not be part of VCI’s estate in the event of a bankruptcy
or insolvency of VCI. The sales and transfers by VCI of the Receivables and
related Purchased Assets hereunder are and shall be without recourse to, or
representation or warranty (express or implied) by, VCI, except as otherwise
specifically provided herein. The limited rights of recourse specified herein
against VCI 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.

Purchase Agreement

-5-

 

     (b)     Notwithstanding the foregoing, in the event that the Receivables and
other Purchased Assets are held to be property of VCI, or if for any reason
this Agreement is held or deemed to create indebtedness or a security interest
in the Receivables and other Purchased 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 conveyances provided for in Section 2.1 shall be deemed to
be a grant by VCI of, and VCI hereby grants to the Purchaser, 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 Purchased Assets, to secure such
indebtedness and the performance of the obligations of VCI hereunder;
	 
	 	     (iii)    The possession by the Purchaser or its agent of the Receivable
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
Purchaser for the purpose of perfecting such security interest under
applicable law.

     SECTION 4.2 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, and addressed in each case as follows: (i) if to the
Issuer, c/o Deutsche Bank Trust Company Americas, 60 Wall Street, 26th Floor,
Mail Stop NYC60-2606, New York, New York 10005, Attention: Corporate Trust and
Agency Services, with a copy to the Administrator, at 3800 Hamlin Road, Auburn
Hills, Michigan 48326 (telecopier no. (248) 754-5360), Attention: General
Counsel, with a copy to VW Credit, Inc., at 3800 Hamlin Road, Auburn Hills,
Michigan 48326 (telecopier no. (248) 754-5360), Attention: Treasurer, with a
copy to the Indenture Trustee, at 101 Barclay Street, Floor 8 West, New York,
New York 10286 (telecopier no. (212) 815-2493), Attention: Asset Backed
Securities Unit; (ii) if to the Indenture Trustee, at 101 Barclay Street, Floor
8 West, New York, New York 10286 (telecopier no. (212) 815-2493), Attention:
Asset Backed Securities Unit; (iii) if to the Purchaser, at 3800 Hamlin Road,
Auburn Hills, Michigan 48326 (telecopier no. (248) 754-5360), Attention:
Treasurer; (iv) if to the Servicer, at 3800 Hamlin Road, Auburn Hills, Michigan
48326 (telecopier no. (248) 754-5360), Attention: Treasurer, with a copy to VW
Credit, Inc., at 3800 Hamlin Road, Auburn Hills, Michigan 48326 (telecopier no.
(248) 754-5360), Attention: Treasurer; (v) if to VCI, at 3800 Hamlin Road,
Auburn Hills, Michigan 48326 (telecopier no. (248) 754-5360), Attention:
Treasurer, with a copy to VW Credit, Inc., at 3800 Hamlin Road, Auburn Hills,
Michigan 48326 (telecopier no.

Purchase Agreement

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(248)  754-5360), Attention: General Counsel; (vi) if to Moody’s, to Moody’s Investors Service, Inc.,
99 Church Street, New York, New York 10007 (telecopier no. (212) 298-7139),
Attention: ABS Monitoring Group; (vii) if to S&P, to Standard & Poor’s Ratings
Services, 55 Water Street, New York, New York 10041 (telecopier no. (212)
438-2664), Attention: Asset Backed Surveillance Group; or (viii) at such other
address as shall be designated by any of the foregoing 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 4.3 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 AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     SECTION 4.4 Headings. The section headings hereof have been inserted for
convenience only and shall not be construed to affect the meaning, construction
or effect of this Agreement.

     SECTION 4.5 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 4.6 Amendment.

     (a)    Any term or provision of this Agreement may be amended by VCI and the
Purchaser without the consent of the Indenture Trustee, any Noteholder, the
Issuer or the Owner Trustee; provided that such amendment shall not, as
evidenced by an Opinion of Counsel delivered to the Indenture Trustee
materially and adversely affect the interests of the Noteholders.

     (b)    Any term or provision of this Agreement may be amended by VCI and the
Purchaser 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 VCI, the
Purchaser 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 may also be amended from time to time by VCI and the
Purchaser, with the consent of the Holders of Notes evidencing not less than a
majority of the aggregate principal amount of the Outstanding Notes, voting as
a single class, for the purpose of

Purchase Agreement

-7-

 

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. 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, VCI 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, VCI 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
Purchaser, 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 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.

     SECTION 4.7 Waivers. No failure or delay on the part of the Purchaser,
the Servicer, VCI, 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 the Purchaser
or VCI in any case shall entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by the Purchaser 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 4.8 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 4.9 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 4.10    Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted

Purchase Agreement

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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 4.11    Acknowledgment and Agreement. By execution below, VCI
expressly acknowledges and consents to the sale of the Purchased Assets and the
assignment of all rights and obligations of VCI related thereto by the
Purchaser to the Issuer pursuant to the Sale and Servicing Agreement and the
Grant of a security interest in the Receivables and the other Purchased Assets
by the Issuer to the Indenture Trustee pursuant to the Indenture for the
benefit of the Noteholders. In addition, VCI 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 Purchaser under
this Agreement.

     SECTION 4.12    No Waiver; Cumulative Remedies. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.

     SECTION 4.13    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 hereto 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
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 4.14    Submission to Jurisdiction. 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;

Purchase Agreement

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     (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 4.2; and

     (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 sue in
any other jurisdiction.

[Remainder of Page Intentionally Left Blank]

Purchase Agreement

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.

	 	 	 	 	 
	 	 	VW CREDIT, INC.
	 	 	 	 	 
	 	 	
By: /s/ Kevin Kelly

	 	 
	 	 	
Name: Kevin Kelly

Title: President	 	 
	 	 	 	 	 
	 	 	By: Allen L. Strang

	 	 	
Name: Allen L. Strang

Title: Secretary	 	 
	 	 	 	 	 
	 	 	
VOLKSWAGEN PUBLIC AUTO LOAN SECURITIZATION, LLC	 	 
	 	 	 	 	 
	 	 	By: Peter Schupp

	 	 	
Name: Peter Schupp

Title: President	 	 
	 	 	 	 	 
	 	 	By: LeSha A. Thorpe

	 	 	
Name: LeSha A. Thorpe

Title: Assistant Treasurer	 	 

Purchase Agreement

S-1

 

EXHIBIT A

FORM OF

ASSIGNMENT PURSUANT TO PURCHASE AGREEMENT

     For value received, in accordance with the Purchase Agreement dated as of
June 27, 2003, between VW Credit, Inc., a Delaware corporation (“VCI”), and
Volkswagen Public Auto Loan Securitization, LLC, a Delaware limited liability
company (the “Purchaser”) (the “Agreement”), on the terms and subject to the
conditions set forth in the Agreement, VCI agrees to transfer, assign, set
over, sell and otherwise convey to the Purchaser on the Closing Date, all of
its right, title and interest in, to and under the Receivables set forth on the
schedule of Receivables delivered by VCI to the Purchaser 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 Purchaser of any obligation of the undersigned to the
Obligors, insurers or any other Person in connection with the Receivables, any
insurance policies or any agreement or instrument relating to any of them.

     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.

[Remainder of page intentionally left blank]

Purchase Agreement

A-1

 

     IN WITNESS HEREOF, the undersigned has caused this assignment to be duly
executed as of June 27, 2003.

	 	 	 	 	 
	 	 	
VW CREDIT, INC.
	 	 	 	 	 
	 	 	By:
	
	 

	 	 	
Name:	 	 
	 	 	
Title:	 	 
	 	 	 	 	 
	 	 	By:
	
	 
	 	 	
Name:	 	 
	 	 	
Title:	 	 

Purchase Agreement

A-2

 

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
Purchaser and (z) by the Purchaser 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 0.000%
and not more than 20.481%;

Schedule I to the Purchase Agreement

Schedule I-1

 

	 	 	 	 	 
	 	 	
(iii)
	 	each Receivable had an original term to maturity of not more
than 72 months and not less than 12 months and each Receivable has a
remaining term to maturity, as of the Cut-Off Date, of 4 months or
more;
	 	 	 	 	 
	 	 	
(iv)
	 	each Receivable had an original Outstanding Principal Balance
less than or equal to $125,000;
	 	 	 	 	 
	 	 	
(v)
	 	each Receivable has an Outstanding Principal Balance as of
the Cut-Off Date of greater than or equal to $2,000;
	 	 	 	 	 
	 	 	
(vi)
	 	no Receivable has a scheduled maturity date later than April
20, 2009;
	 	 	 	 	 
	 	 	
(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 Purchaser; 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 Magnuson-Moss Warranty Act, Federal
Reserve Board Regulations B and Z, the Soldiers’ and Sailors’ Civil Relief
Act of 1940, 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.

Schedule I to the Purchase
Agreement

Schedule 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. VCI 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 VCI 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 VCI’s estate in the event of the filing of a
bankruptcy petition by or against the Purchaser 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, VCI had good and marketable title to Receivable free and
clear of all Liens, and, immediately upon the sale and transfer thereof,
the Purchaser 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. VCI has not authorized the filing of and is not
aware of any financing statements against VCI or the

	 	 	 

Schedule I to the Purchase
Agreement

Schedule I-3

 

	 	 	 
	 	 	
Purchaser that include a description of collateral covering the
Receivables other than any financing statement relating to security
interests granted under the Transaction Documents or that have been
terminated. The Purchase Agreement creates a valid and continuing
security interest in the Receivable (other than the Related Security with
respect thereto) in favor of the Purchaser 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 Purchaser.
	 	 	 
	(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. VCI 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.

Schedule I to the Purchase
Agreement

Schedule I-4

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