Document:

exv10w6

 

Exhibit
10.6

EXECUTION
COPY

AMENDED AND RESTATED

TRUST AGREEMENT

BETWEEN

VOLKSWAGEN DEALER FINANCE, LLC,

as Transferor

THE BANK OF NEW YORK (Delaware),

as Owner Trustee

AND

THE BANK OF NEW YORK (Delaware),

as Resigning Trustee

DATED AS OF AUGUST 11, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	1	 
	 

	 	SECTION 1.1.
	 	Definitions
	 	 	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.
	 	Resignation, Appointment and Acceptance
	 	 	3	 
	 

	 	SECTION 2.5.
	 	Initial Capital Contribution of Owner Trust Estate
	 	 	3	 
	 

	 	SECTION 2.6.
	 	Declaration of Trust
	 	 	4	 
	 

	 	SECTION 2.7.
	 	Liability of the Residual Interestholder
	 	 	4	 
	 

	 	SECTION 2.8.
	 	Title to Trust Property
	 	 	4	 
	 

	 	SECTION 2.9.
	 	Situs of Trust
	 	 	4	 
	 

	 	SECTION 2.10.
	 	Representations and Warranties of the Transferor
	 	 	4	 
	 

	 	SECTION 2.11.
	 	Federal Income Tax Allocations; Tax Treatment
	 	 	5	 
	ARTICLE III RESIDUAL INTEREST	 	 	6	 
	 

	 	SECTION 3.1.
	 	Ownership
	 	 	6	 
	 

	 	SECTION 3.2.
	 	Maintenance of Office or Agency
	 	 	6	 
	 

	 	SECTION 3.3.
	 	Appointment of Paying Agent
	 	 	6	 
	ARTICLE IV ACTIONS BY OWNER TRUSTEE	 	 	7	 
	 

	 	SECTION 4.1.
	 	Prior Notice to Residual Interestholder with Respect to Certain Matters
	 	 	7	 
	 

	 	SECTION 4.2.
	 	Action by Residual Interestholder with Respect to Certain Matters
	 	 	8	 
	 

	 	SECTION 4.3.
	 	Action by Residual Interestholder with Respect to Bankruptcy
	 	 	8	 
	 

	 	SECTION 4.4.
	 	Restrictions on Residual Interestholder’s Power
	 	 	8	 
	ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES	 	 	8	 
	 

	 	SECTION 5.1.
	 	Establishment of Residual Interest Distribution Account
	 	 	8	 
	 

	 	SECTION 5.2.
	 	Application of Trust Funds
	 	 	9	 
	 

	 	SECTION 5.3.
	 	Method of Payment
	 	 	10	 

i

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 

	 	SECTION 5.4.
	 	Accounting and Reports to the Residual Interestholder, the Internal Revenue Service and Others
	 	 	10	 
	 

	 	SECTION 5.5.
	 	Signature on Returns; Tax Matters Partner
	 	 	10	 
	 

	 	SECTION 5.6.
	 	Sarbanes-Oxley Act
	 	 	10	 
	ARTICLE VI THE OWNER TRUSTEE	 	 	10	 
	 

	 	SECTION 6.1.
	 	Duties of Owner Trustee
	 	 	10	 
	 

	 	SECTION 6.2.
	 	Rights of Owner Trustee
	 	 	11	 
	 

	 	SECTION 6.3.
	 	Acceptance of Trusts and Duties
	 	 	12	 
	 

	 	SECTION 6.4.
	 	Action upon Instruction by Residual Interestholder
	 	 	13	 
	 

	 	SECTION 6.5.
	 	Furnishing of Documents
	 	 	14	 
	 

	 	SECTION 6.6.
	 	Representations and Warranties of Owner Trustee
	 	 	14	 
	 

	 	SECTION 6.7.
	 	Reliance; Advice of Counsel
	 	 	14	 
	 

	 	SECTION 6.8.
	 	Owner Trustee May Own the Residual Interest and Notes
	 	 	15	 
	 

	 	SECTION 6.9.
	 	Compensation and Indemnity
	 	 	15	 
	 

	 	SECTION 6.10.
	 	Replacement of Owner Trustee
	 	 	15	 
	 

	 	SECTION 6.11.
	 	Merger or Consolidation of Owner Trustee
	 	 	17	 
	 

	 	SECTION 6.12.
	 	Appointment of Co-Trustee or Separate Trustee
	 	 	17	 
	 

	 	SECTION 6.13.
	 	Eligibility Requirements for Owner Trustee
	 	 	18	 
	ARTICLE VII TERMINATION OF TRUST AGREEMENT	 	 	18	 
	 

	 	SECTION 7.1.
	 	Termination of Trust Agreement
	 	 	18	 
	ARTICLE VIII AMENDMENTS	 	 	19	 
	 

	 	SECTION 8.1.
	 	Supplements and Amendments
	 	 	19	 
	ARTICLE IX MISCELLANEOUS	 	 	20	 
	 

	 	SECTION 9.1.
	 	No Legal Title to Owner Trust Estate
	 	 	20	 
	 

	 	SECTION 9.2.
	 	Limitations on Rights of Others
	 	 	20	 
	 

	 	SECTION 9.3.
	 	Notices
	 	 	20	 
	 

	 	SECTION 9.4.
	 	Severability of Provisions
	 	 	21	 
	 

	 	SECTION 9.5.
	 	Counterparts
	 	 	21	 
	 

	 	SECTION 9.6.
	 	Successors and Assigns
	 	 	21	 
	 

	 	SECTION 9.7.
	 	Nonpetition Covenant
	 	 	21	 

ii

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 

	 	SECTION 9.8.
	 	No Recourse
	 	 	21	 
	 

	 	SECTION 9.9.
	 	Headings
	 	 	22	 
	 

	 	SECTION 9.11.
	 	Indemnification by and Reimbursement of the Servicer
	 	 	22	 
	 

	 	SECTION 9.12.
	 	Third-Party Beneficiaries
	 	 	22	 
	 

	 	SECTION 9.13.
	 	Submission to Jurisdiction
	 	 	22	 
	 

	 	SECTION 9.14.
	 	Waiver
	 	 	22	 

iii

 

               THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of August 11, 2005 (as amended,
supplemented or modified from time to time, this “Agreement” or this “Trust
Agreement”), between VOLKSWAGEN DEALER FINANCE, LLC, a Delaware limited liability company, as
Transferor (the “Transferor”), THE BANK OF NEW YORK (Delaware), a Delaware banking
corporation, as Owner Trustee (not in its individual capacity but solely as Owner Trustee, the
“Owner Trustee”) and THE BANK OF NEW YORK, a New York banking corporation, as resigning
trustee (the “Resigning Trustee”).

W I T N E S S E T H :

               WHEREAS, the Transferor and the Resigning Trustee are parties to that certain Trust Agreement
dated as of August 3, 2000 (the “Existing Agreement”);

               WHEREAS, under the Existing Agreement, the parties thereto formed the Volkswagen Credit Auto
Master Owner Trust, a New York common law trust;

               WHEREAS, the Transferor and the Resigning Trustee wish to amend and restate the Existing
Agreement to, among other things, effect a change in the governing law of the Existing Agreement;

               WHEREAS, upon the execution of this Agreement, the Resigning Trustee will resign and the Owner
Trustee will be appointed the sole trustee of the Trust referred to below;

               WHEREAS, the Volkswagen Credit Auto Master Owner Trust has elected to become a Delaware
statutory trust (the “Trust”) pursuant to the Delaware Statutory Trust Act, 12 Del. C.
§3801, et seq. (the “Trust Statute”); and

               WHEREAS, this Agreement amends and restates as of the date hereof in its entirety the Existing
Agreement, and upon the effectiveness of this Agreement, the terms and provisions of the Existing
Agreement shall be superseded hereby in their entirety.

               NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained,
the Existing Agreement is hereby amended and restated in its entirety as follows:

ARTICLE
I

DEFINITIONS AND INCORPORATION BY REFERENCE

               SECTION 1.1. Definitions. Certain capitalized terms used in this Agreement shall
have the respective meanings assigned to them in Part I of Appendix A
to the Amended and Restated Trust Sale and Servicing Agreement dated as of August 11,
2005, among the Transferor, the Servicer and the Trust (the “Trust Sale and
Servicing Agreement”). All references herein to Articles, Sections and subsections
are to Articles, Sections and subsections of this Agreement unless otherwise specified.
The rules of construction set forth in Part II of Appendix A to the
Trust Sale and Servicing Agreement shall be applicable to this Agreement.

 

 

ARTICLE
II

ORGANIZATION

               SECTION 2.1. Name. The Trust created under the Existing Trust Agreement, and
created as a Delaware statutory trust by the filing of the certificate of trust
pursuant to the Trust Statute, and continued hereby shall be known as “Volkswagen
Credit Auto Master Owner Trust” in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on behalf of
the Trust and sue and be sued on behalf of the Trust.

               SECTION 2.2. Office. The office of the Trust 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 Residual Interestholder and the Transferor.

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

               (a) to acquire, manage and hold the Receivables to
be transferred to the Trust from time to time pursuant to the Trust
Sale and Servicing Agreement;

               (b) to issue and sell the Notes pursuant to the
Indenture or to another indenture, note purchase agreement or similar
agreement and to sell, transfer or exchange the Notes;

               (c) to acquire property and assets from the
Transferor pursuant to the Trust Sale and Servicing Agreement, to make
payments or distributions on the Notes to the Noteholders and with
respect to the Residual Interest to the Residual Interestholder, to
make withdrawals from the accounts established pursuant to the Basic
Documents and to pay the organizational, start-up and transactional
expenses of the Trust;

               (d) to establish, acquire, hold and terminate
liquidity, credit and other enhancement arrangements, and perform its
obligations thereunder;

               (e) to assign, grant, transfer, pledge, mortgage
and convey the Trust Estate pursuant to the terms of the Indenture and
to hold, manage such Trust Estate and distribute funds to the Residual
Interestholder pursuant to the terms of this Agreement and the Trust
Sale and Servicing Agreement any portion of the Trust Estate released
from the lien of, and remitted to the Trust pursuant to, the Indenture;

               (f) to enter into and perform its obligations and
exercise its rights under the Basic Documents to which it is to be a
party;

               (g) 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;

               (h) subject to compliance with the Basic Documents,
to engage in such other activities as may be required in connection
with conservation of the Owner Trust Estate and the making of
distributions to the Noteholders and the Residual Interestholder; and

2

 

               (i) to the extent set forth in any Series
Supplement, hold derivatives, including derivatives inconsistent with
being a “QSPE” under the Statement of Financial Accounting Standards
No. 140.

The Trust shall not engage in any activity other than in connection with the foregoing or other
than as required or authorized by the terms of this Agreement, the other Basic Documents or the
Trust Statute.

               SECTION 2.4. Resignation, Appointment and Acceptance.

     (a) Upon execution of this Agreement, The Bank of New York (the
“Resigning Trustee”) shall resign as a trustee of the Trust. The
Administrator hereby appoints The Bank of New York (Delaware) as successor
Owner Trustee of the Trust effective as of the Resigning Trustee’s resignation,
to have all the rights, powers and duties set forth herein and under the Trust
Statute, and the Owner Trustee, pursuant to Section 6.10 of the Existing
Agreement and by its execution hereof, hereby accepts the appointment as Owner
Trustee, and accepts the rights, powers, trusts and duties of an Owner Trustee
with respect to the trust as provided in this Agreement.

     (b) The Administrator waives any prior written notice it may have
been entitled to receive pursuant to the Existing Agreement with respect to the
resignation of the Resigning Trustee. Each of the Resigning Trustee and the
Owner Trustee waives any prior written notice either may have been entitled to
receive pursuant to the Existing Agreement with respect to its resignation or
appointment, respectively.

     (c) As required pursuant to Section 6.10 of the Existing
Agreement, the Administrator shall provide notice of such resignation of the
Resigning Trustee and appointment of the Owner Trustee to each of the Rating
Agencies, the Indenture Trustee and the Residual Interestholders.

     (d) The Resigning Trustee acknowledges that all fees and expenses
due it have been paid.

     (e) The Resigning Trustee shall deliver to the Owner Trustee all
documents, computer files and statements and monies held by it as trustee under
the Existing Agreement. The Administrator and the Resigning 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
Owner Trustee all such rights, powers, duties and obligations it may have as
Owner Trustee.

               SECTION 2.5. Initial Capital Contribution of Owner Trust Estate. Pursuant to the
Trust Sale and Servicing Agreement, the Transferor has sold, assigned, transferred,
conveyed and set over to the Owner Trustee, the assets specified in the Trust Sale and
Servicing Agreement. The Owner Trustee has acknowledged receipt in trust from the
Transferor, as of August 3, 2000, of the foregoing contribution, which shall constitute
the initial Owner Trust Estate. The Transferor shall continue to pay organizational
expenses of the Trust as they may arise or shall, upon the request of the Owner
Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner
Trustee.

3

 

               SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares that it shall
hold the Owner Trust Estate in trust upon and subject to the conditions and obligations
set forth herein and in the Trust Sale and Servicing Agreement for the use and benefit
of the Residual Interestholder, subject to the obligations of the Trust under the Basic
Documents and under the Trust Statute. It is the intention of the parties hereto that
the Trust constitute a statutory trust under the Trust Statute, that this Agreement and
the certificate of trust filed in the State of Delaware constitute the governing
instruments of such trust. The Owner Trustee shall file the certificate of trust in
the Form Attached hereto as Exhibit A with the Secretary of State of the State
of Delaware.

               SECTION 2.7. Liability of the Residual Interestholder. The Residual Interestholder
shall not have any personal liability or obligation of the Trust.

               SECTION 2.8. Title to Trust Property. Legal title to all the Owner Trust Estate
shall be vested at all times in the Trust as a separate legal entity.

               SECTION 2.9. Situs of Trust. The Trust shall be located and administered in the
State of Delaware. All bank accounts maintained by the Owner Trustee on behalf of the
Trust shall be located in the State of New York or Delaware. The Trust 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 shall be received by the Trust only in the State of
Delaware or the State of New York, and payments and distributions shall be made by the
Trust only from the State of Delaware or the State of New York.

               SECTION 2.10. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Owner Trustee that, as of the date hereof:

     (a) Organization and Power. The Transferor is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware and has all power and authority required to carry
on its business as it is now conducted. The Transferor has obtained all
necessary licenses and approvals in all jurisdictions where the failure to do
so would materially and adversely affect the business, properties, financial
condition or results of operations of the Transferor, taken as a whole.

     (b) Authorization and No Contravention. The execution,
delivery and performance by the Transferor of each Basic Document to which it
is a party (i) have been duly authorized by all necessary limited liability
company action and (ii) do not violate or constitute a default under (A) any
applicable law, rule or regulation, (B) its organizational instruments or (C)
any agreement, contract, order or other instrument to which it is a party or
its property is subject.

     (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 Transferor of
any Basic Document other than UCC filings and other than approvals and
authorizations that have previously been obtained and filings which have
previously been made.

4

 

     (d) Binding Effect. Each Basic Document to which the
Transferor is a party constitutes the legal, valid and binding obligation of
the Transferor enforceable against the Transferor in accordance with its terms,
except as limited by bankruptcy, insolvency, 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 Transferor, threatened
against the Transferor 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 Transferor, or in any material
impairment of the right or ability of the Transferor to carry on its business
substantially as now conducted, or in any material liability on the part of the
Transferor, or which would render invalid this Agreement or the Receivables or
the obligations of the Transferor contemplated herein, or which would
materially impair the ability of the Transferor to perform under the terms of
this Agreement or any other Basic Document.

               SECTION 2.11. Federal Income Tax Allocations; Tax Treatment.

               (a) If the Residual Interest is held by more than
one Person or the Trust is recharacterized as a separate entity the net
income of the Trust for any month as determined for federal income tax
purposes (and each item of income, gain, loss and deduction entering
into the computation thereof) shall be allocated:

     (1) first, to the holder(s) of interests in the Residual Interest as of the close of business
on the last day of such month, in proportion to their interests in the Residual Interest, any
amounts of income payable in respect of the Residual Interest for such month; and

     (2) second, to the holder(s) of interests in the Residual Interest, and to other holders of
interests in the Reserve Account, to the extent of any remaining net income, in accordance with
their respective interest therein.

If the net income of the Trust for any month is insufficient for the allocations described in
subclause (a)(1), subsequent net income shall first be allocated to make up such shortfall before
being allocated as provided in the preceding sentence. Net losses of the Trust, if any, for any
month as determined for federal income tax purposes (and each item of income, gain, loss and
deduction entering into the computation thereof) shall be allocated to the Transferor or other
holders of interests in the Reserve Account to the extent the Transferor or other holders of
interests in the Reserve Account are reasonably expected to bear the economic burden of such net
losses, and any remaining net losses shall be allocated to any other holder of an interest in the
Residual Interest as of the close of business on the last day of such month in proportion to such
Person’s interest in the Residual Interest on such day. The Transferor is authorized to modify the
allocations in this paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the Transferor or other holders
of interests in the Reserve Account, or as otherwise required by the Code.

               (b) All “excess nonrecourse liabilities”
represented by all outstanding Notes issued by the Trust, as well as
the deductions attributable thereto, shall be allocated one hundred

5

 

percent to the Transferor in accordance with Treasury Regulations
section 1.752-3(a)(3). Notwithstanding any other provision of this
Agreement, if the Residual Interest is held solely by one Person or the
Trust has not been recharacterized as a separate entity, the
application of clause (a) and this clause (b) shall be disregarded.

               (c) It is the intent of the parties hereto that,
solely for purposes of Federal income taxes, state and local income,
franchise, single business taxes and/or value added taxes and any other
taxes imposed on or measured in whole or in part by income, until the
Residual Interest is held by more than one owner (as determined for
Federal income tax purposes) or the Trust is otherwise recharacterized
as a separate entity, the Trust will be disregarded as an entity
separate from its beneficial owner and the Notes will be treated as
debt. If the Residual Interest is held by more than one owner (as
determined for Federal income tax purposes) or the Trust is otherwise
recharacterized as a separate entity, it is the intention of the
parties hereto that, solely for purposes of Federal income taxes, state
and local income, franchise, single business tax and/or value added
taxes and any other taxes imposed on or measured in whole or in part by
income, the Trust shall be treated as a partnership and the Residual
Interestholder(s) and the Transferor shall be treated as partners in
that partnership with the assets of the partnership being the
Receivables and other assets held by the Trust, and the Notes being
debt of that partnership. The parties agree that, unless otherwise
required by appropriate tax authorities, the Trust shall file or cause
to be filed annual or other
necessary returns, reports and other forms consistent with the
characterization of the Trust as a partnership for such tax purposes.

ARTICLE
III

RESIDUAL INTEREST

               SECTION 3.1. Ownership. The Residual Interest shall represent an undivided
ownership interest in the Trust. The Transferor shall be the only holder of the
Residual Interest. The Residual Interest shall not be certificated, shall not have a
principal balance and shall not bear interest. The Transferor shall not sell, assign,
pledge or otherwise transfer the Residual Interest. Any amendment to this Agreement
which would change the foregoing shall be subject to the condition that the Transferor
shall retain at least 1/10th of 1% of the Residual Interest. The Residual Interest may
not be acquired by or held on behalf of a Benefit Plan.

               SECTION 3.2. Maintenance of Office or Agency. The Owner Trustee shall maintain an
office or offices or agency or agencies in New York where notices and demands to or
upon the Owner Trustee in respect of the Residual Interest and the Basic Documents may
be served. The Owner Trustee initially designates the Corporate Trust Office of the
Owner Trustee as its office for such purposes. The Owner Trustee shall give prompt
written notice to the Transferor, the Servicer and the Indenture Trustee of any change
in the location of any such office or agency.

               SECTION 3.3. Appointment of Paying Agent. The Owner Trustee may appoint a Paying
Agent. If so appointed, such Paying Agent shall make distributions to Residual
Interestholder from the Residual Interest Distribution Account pursuant to Section
5.2 and shall report the amounts of such distributions to the Owner Trustee and the
Servicer; provided that no such reports shall be required so long as the Transferor is
the sole Residual Interestholder. For so long as the Indenture is in effect,
notwithstanding anything in this Agreement to the contrary, all amounts to be
distributed to the Residual Interestholder or the Residual Interest Distribution
Account shall be distributed by the Indenture Trustee as required by the Series
Supplement. Any

6

 

Paying Agent shall have the revocable power to withdraw funds from the
Residual Interest Distribution Account for the purpose of making the distributions
referred to above. The Owner Trustee may revoke such power and remove any Paying Agent
appointed by it. Any Paying Agent shall be permitted to resign as Paying Agent upon 30
days’ written notice to the Owner Trustee, whereupon the Owner Trustee may appoint a
successor to act as the Paying Agent (which shall be a bank or trust company). The
Owner Trustee shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Owner Trustee to execute and deliver to the Owner Trustee an
instrument in which such successor Paying Agent or additional Paying Agent shall agree
with the Owner Trustee that as Paying Agent, such successor Paying Agent or additional
Paying Agent shall hold all sums, if any, held by it for distribution to the Residual
Interestholder in trust for the benefit of the Residual Interestholder until such sum
shall be paid to the Residual Interestholder. The Paying Agent shall return all
unclaimed funds to the Owner Trustee and upon the removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to the Owner Trustee. The
provisions of Sections 6.3, 6.6, 6.7 and 6.9
shall apply to the Owner Trustee also in its role as Paying Agent, for so long as
the Owner Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.

ARTICLE
IV

ACTIONS BY OWNER TRUSTEE

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

               (a) the initiation of any claim or lawsuit by the
Trust (other than an action to collect on a Receivable or an action by
the Indenture Trustee pursuant to the Indenture) and the compromise of
any action, claim or lawsuit brought by or against the Trust (other
than an action to collect on a Receivable or an action by the Indenture
Trustee pursuant to the Indenture);

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

               (c) 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 interest of the Residual Interestholder;

               (d) the amendment, change or modification of the
Administration Agreement, except to cure any ambiguity or to amend or
supplement any provision in a manner that would not materially
adversely affect the interests of the Residual Interestholder; or

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

7

 

               SECTION 4.2. Action by Residual Interestholder with Respect to Certain Matters. The
Owner Trustee shall not have the power, except upon the written direction of the
Residual Interestholder, as described in the last sentence of this Section 4.2,
to (a) remove the Administrator under the Administration Agreement pursuant to
Section 10 thereof, (b) appoint a successor Administrator pursuant to
Section 10 of the Administration Agreement, (c) remove the Servicer under the
Trust Sale and Servicing Agreement pursuant to Section 7.2 thereof or (d) except as
expressly provided in the Basic Documents, sell the Receivables transferred to the
Trust pursuant to the Trust Sale and Servicing Agreement or any interest therein
after the termination of the Indenture. The Owner Trustee shall take the actions
referred to in the preceding sentence only upon the affirmative vote of, or a
written consent signed by, the Residual Interestholder upon at least 30 days prior
notice thereof.

               SECTION 4.3. Action by Residual Interestholder with Respect to Bankruptcy. The
Owner Trustee shall not have the power to commence a voluntary proceeding in bankruptcy
relating to the Trust without the prior approval of the Residual Interestholder and the
delivery to the Owner Trustee by the Residual Interestholder of a certificate
certifying that such Residual Interestholder reasonably believes that the Trust is
insolvent. The Transferor agrees that it, at any time that it is the Residual
Interestholder, shall not approve or be deemed to have approved the commencement of a
voluntary proceeding in bankruptcy relating to the Trust for purposes of this
Section 4.3 unless such commencement is approved by the affirmative vote of all
of the members of the Transferor’s board of directors.

               SECTION 4.4. Restrictions on Residual Interestholder’s Power. The Residual
Interestholder 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 Trust or
the Owner Trustee under this Agreement or any of the Basic Documents or would be
contrary to Section 2.3, nor shall the Owner Trustee be obligated to follow any
such direction, if given.

ARTICLE
V

APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

               SECTION 5.1. Establishment of Residual Interest Distribution Account.

               (a) The Servicer, for the benefit of the Residual
Interestholder and at the request of the Residual Interestholder, shall
cause to be established and maintained in the name of the Trust an
Eligible Deposit Account known as the Volkswagen Credit Auto Master
Owner Trust Residual Interest Distribution Account (the “Residual
Interest Distribution Account”), bearing an additional designation
clearly indicating that the funds deposited therein are held for the
benefit of the Residual Interestholder. The Residual Interest
Distribution Account shall initially be established with the Owner
Trustee.

               (b) The Trust shall possess all right, title and
interest in and to all funds on deposit from time to time in the
Residual Interest Distribution Account and in all proceeds thereof for
the benefit of the Residual Interestholder. Except as otherwise
provided herein or in the Trust Sale and Servicing Agreement, the
Residual Interest Distribution Account shall be under the sole dominion
and control of the Trust for the benefit of the Residual Interestholder. If, at
any time, any Residual Interest Distribution Account ceases to be an
Eligible Deposit Account, the Servicer, within 10 days of determining
that such Residual Interest Distribution Account is no longer an
Eligible Deposit

8

 

Account, shall establish a substitute Eligible
Deposit Account as such Residual Interest Distribution Account,
instruct the Owner Trustee in writing to transfer any cash and/or any
Eligible Investments to such new Residual Interest Distribution
Account and, from the date any such substitute account is
established, such account shall be the Residual Interest Distribution
Account.

               All Eligible Investments shall be held by the Trust as applicable, for the benefit of the
Residual Interestholder. Funds on deposit in the Residual Interest Distribution Account shall at
the written direction of the Servicer be invested by the Owner Trustee, solely in Eligible
Investments that will mature so that such funds will be available at the close of business on the
next Business Day. All interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Residual Interest Distribution Account shall be credited to
the Residual Interest Distribution Account when received. In the absence of timely and specific
written investment direction from the Servicer, the Owner Trustee shall invest any cash held by the
Trust in Eligible Investments specified in clause (h) of the definition thereof. In no event shall
the Owner Trustee be liable for the selection of investments or for investment losses incurred
thereon. The Owner Trustee shall have no liability in respect of losses incurred as a result of
the liquidation of any investment prior to its stated maturity or the failure of the Servicer to
provide timely written investment direction.

               SECTION 5.2. Application of Trust Funds.

               (a) On each Payment Date, the Owner Trustee shall
distribute to the Residual Interestholder the amounts deposited in the
Residual Interest Distribution Account as set forth in the applicable
Series Supplement. Notwithstanding the foregoing or anything else to
the contrary in this Agreement or the other Basic Documents, so long as
Transferor is the Residual Interestholder, (i) no Residual
Interestholder Distribution Account shall be required to be established
or maintained and (ii) all distributions and payments on the Residual
Interest required hereunder or under the Indenture or the applicable
Series Supplement shall be made directly to the Transferor by the Owner
Trustee (whether or not the Indenture or the applicable Series
Supplement otherwise contemplates deposit into the Residual Interest
Distribution Account) and the Indenture Trustee and the Owner Trustee
shall have no duty or liability to see to such distribution.

               (b) On each Payment Date, the Owner Trustee shall
send to the Residual Interestholder any statement provided to the Owner
Trustee by the Servicer pursuant to Section 3.4 of the Trust
Sale and Servicing Agreement on such Payment Date.

               (c) If the Owner Trustee determines, whether as a
result of advice from the Administrator or otherwise, that any
withholding tax is imposed on the Trust’s distribution (or allocations
of income) to the Residual Interestholder, such tax shall reduce the
amount otherwise distributable to the Residual Interestholder in
accordance with this Section 5.2; provided that the
Owner Trustee shall not have an obligation to withhold any such amount
so long as the Transferor is the Residual Interestholder. The Owner
Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Residual Interestholder sufficient funds
for the payment of any tax that is legally owed by the Trust (but such
authorization shall not prevent the Owner Trustee (without any
obligation to do so) from contesting any such tax in appropriate
proceedings and withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings). The amount of any
withholding tax imposed with respect to the Residual Interestholder
shall be treated as cash distributed to such Residual Interestholder at
the time it is

9

 

withheld by the Trust and remitted to the appropriate
taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a
non-U.S. Residual Interestholder), the Owner Trustee may in its sole
discretion (but shall not be required to) withhold such amounts in
accordance with this Section 5.2(c). If the Residual
Interestholder wishes to apply for a refund of any such withholding
tax, the Owner Trustee shall reasonably cooperate with such Residual
Interestholder in making such claim so long as such Residual
Interestholder agrees to reimburse the Owner Trustee for any
out-of-pocket expenses incurred.

               SECTION 5.3. Method of Payment. Distributions required to be made to the Residual
Interestholder on any Payment Date shall be made to the Residual Interestholder either
by wire transfer, in immediately available funds, to the account of such Residual
Interestholder at a bank or other entity having appropriate facilities therefor, if the
Residual Interestholder shall have provided to the Owner Trustee appropriate written
instructions at least five Business Days prior to such Payment Date or, if not, by
check mailed to the Residual Interestholder at the address of the Residual
Interestholder determined in accordance with Section 9.3.

               SECTION 5.4. Accounting and Reports to the Residual Interestholder, the Internal Revenue
Service and Others. The Administrator on behalf of the Owner Trustee shall (a)
maintain (or cause to be maintained) the books of the Trust on a calendar year basis on
the cash method of accounting, (b) deliver to the Residual Interestholder, as may be
required by the Code and applicable Treasury Regulations or otherwise, such information
provided to it as may be required to enable the Residual Interestholder to prepare its
federal income tax return, (c) file such tax returns relating to the Trust and make
such elections as may from time to time be required or appropriate under any applicable
state or federal statute or rule or regulation thereunder so as to maintain the Trust’s
characterization as, for so
long as the Transferor is the Residual Interestholder, a division or branch of the
Transferor and, if not, as determined by the Transferor for federal income tax
purposes, in all such cases on forms prepared by the Administrator, (d) cause such
tax returns to be signed in the manner required by law and (e) collect or cause to
be collected any withholding tax required to be withheld by the Owner Trustee in
accordance with Section 5.2(c) with respect to income or distributions to
the Residual Interestholder.

               SECTION 5.5. Signature on Returns; Tax Matters Partner. Subject to Section
2.11, the Owner Trustee shall sign on behalf of the Trust any and all tax returns
of the Trust that are prepared and delivered to it for execution by the Administrator,
unless applicable law requires a Residual Interestholder to sign such documents, in
which case such documents shall be signed by the Transferor. The Transferor shall be
the “tax matters partner” of the Trust pursuant to the Code.

               SECTION 5.6. Sarbanes-Oxley Act. Notwithstanding anything to the contrary herein or
in any Basic 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
Trust or any other Person, any periodic reports filed pursuant to the Exchange Act, or
any other documents pursuant to the Sarbanes-Oxley Act, as amended.

ARTICLE
VI

THE OWNER TRUSTEE

               SECTION 6.1. Duties of Owner Trustee.

10

 

               (a) The Owner Trustee undertakes to perform such
duties, and only such duties, as are specifically set forth in this
Agreement and the other Basic Documents, including the administration
of the Trust in the interest of the Residual Interestholder, subject to
the Basic Documents and in accordance with the provisions of this
Agreement. No implied covenants or obligations shall be read into this
Agreement.

               (b) Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Basic Documents to the extent
the Administrator has agreed in the Administration Agreement to perform
any act or to discharge any duty of the Owner Trustee hereunder or
under any Basic 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 Administrator.

               (c) The Owner Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting on any
document (whether in its original or facsimile form) believed by it to
be genuine and to have been signed or presented by the proper Person.
The Owner Trustee shall not be bound to make any investigation into
any fact or matter stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document.

               (d) The Owner Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to
act or its own willful misconduct, except that:

     (i) this Section 6.1(d) shall not limit the effect of Section 6.1(a) or
(b);

     (ii) the Owner Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer unless it is proved that the Owner Trustee was negligent in ascertaining the
pertinent facts; and

     (iii) the Owner Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 4.1, 4.2
or 6.4.

               (e) Subject to Sections 5.1 and
5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law or the
Trust Sale and Servicing Agreement and may be deposited under such
general conditions as may be prescribed by law, and the Owner Trustee
shall not be liable for any interest thereon.

               (f) The Owner Trustee shall not take any action
that (i) is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (ii) would, to the actual knowledge of a
Responsible Officer of the Owner Trustee, result in the Trust’s
becoming taxable as a corporation for federal income tax purposes.

               (g) The Residual Interestholder shall not direct
the Owner Trustee to take action that would violate the provisions of
this Section 6.1.

               SECTION 6.2. Rights of Owner Trustee. The Owner Trustee is authorized and directed
to execute and deliver the Basic Documents and each certificate or other document

11

 

attached as an exhibit to or contemplated by the Basic Documents to which the Trust is
to be a party, in such form as the Transferor shall approve as evidenced conclusively
by the Owner Trustee’s execution thereof. In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents. The Owner Trustee is further authorized from
time to time to take such action as the Administrator recommends with respect to the
Basic Documents.

               SECTION 6.3. Acceptance of Trusts and Duties. (a) Except as otherwise provided in
this Article VI, in accepting the trusts hereby created, The Bank of New York
(Delaware) acts solely as 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 Basic Document shall look only to
the Owner Trust Estate for payment or satisfaction thereof. 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 monies actually received by it constituting part of the
Owner Trust Estate upon the terms of the Basic Documents and this Agreement. The
Owner Trustee shall not be liable or accountable hereunder or under any Basic
Document under any circumstances, except (i) for its own negligent action, its own
negligent failure to act or its own willful misconduct or (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 6.6 and
expressly made by the Owner Trustee. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):

               (b) the Owner Trustee shall at no time have any
responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable held by the Trust, or the
perfection and priority of any security interest created by any such
Receivable in any Vehicle or the maintenance of any such perfection and
priority, or for or with respect to the sufficiency of the Owner Trust
Estate or its ability to generate the distributions and payments to be
made to Residual Interestholder under this Agreement or to Noteholders
under the Indenture, including, without limitation: the existence and
contents of any such Receivable on any computer or other record
thereof; the validity of the assignment of any such Receivable to the
Trust or of any intervening assignment; the completeness of any such
Receivable; the performance or enforcement of any such Receivable; the
compliance by the Transferor or the Servicer with any warranty or
representation made under any Basic Document or in any related document
or the accuracy of any such warranty or representation or any action of
the Administrator, the Indenture Trustee or the Servicer or any
subservicer taken in the name of the Owner Trustee;

               (c) the Owner Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in accordance
with the instructions of the Servicer, the Administrator or any
Residual Interestholder;

               (d) no provision of this Agreement or any Basic
Document shall require the Owner Trustee to expend or risk funds or
otherwise incur any financial liability in the performance of any of
its rights or powers hereunder or under any Basic Document;

               (e) under no circumstances shall the Owner Trustee
be liable for indebtedness evidenced by or arising under any of the
Basic
Documents, including the principal of and interest on the Notes or
any amounts payable with respect to the Residual Interest;

12

 

               (f) the Owner Trustee shall not be responsible for
or in respect of and makes no representation as to the validity or
sufficiency of any provision of this Agreement or for the due execution
hereof by the Transferor or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate or for
or in respect of the validity or sufficiency of the Basic Documents,
the Notes or of any Receivables held by the Trust or any related
documents, and the Owner Trustee shall in no event assume or incur any
liability, duty or obligation to any Noteholder or to any Residual
Interestholder, other than as expressly provided for herein and in the
Basic Documents;

               (g) the Owner Trustee shall not be liable for the
default or misconduct of the Administrator, the Indenture Trustee, the
Transferor or the Servicer under any of the Basic Documents or
otherwise, and the Owner Trustee shall have no obligation or liability
to perform the obligations of the Trust under this Agreement or the
Basic Documents that are required to be performed by the Administrator
under the Administration Agreement, the Indenture Trustee under the
Indenture or the Servicer under the Trust Sale and Servicing Agreement;
and

               (h) 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 under this Agreement
or otherwise or in relation to this Agreement or any Basic Document, at
the request, order or direction of any of the Residual Interestholder,
unless such Residual Interestholder have 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 therein or
thereby. The right of the Owner Trustee to perform any discretionary
act enumerated in this Agreement or in any Basic Document shall not be
construed as a duty, and the Owner Trustee shall not be answerable for
other than its negligence or wilful misconduct in the performance of
any such act.

               SECTION 6.4. Action upon Instruction by Residual Interestholder.

               (a) Subject to Section 4.4, the Residual
Interestholder may by written instruction direct the Owner Trustee in
the management of the Trust.

               (b) Notwithstanding the foregoing, the Owner
Trustee shall not be required to take any action hereunder or under any
Basic Document if the Owner Trustee shall have reasonably determined,
or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary
to the terms hereof or of any Basic 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 Basic Document, or is unsure as to the
application, intent, interpretation or meaning of any provision of this
Agreement or the Basic Documents, the Owner Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances)
to the Residual Interestholder requesting instruction as to the course
of action to be adopted, and, to the extent the Owner Trustee acts in
good faith in accordance with any such instruction received, the Owner
Trustee shall not be liable on account of such action to any Person.
If the Owner Trustee shall not have received appropriate instructions
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, and the Owner Trustee shall have no
liability to any Person for any such action or inaction.

13

 

               SECTION 6.5. Furnishing of Documents. The Owner Trustee shall furnish (a) to the
Residual Interestholder, 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
Basic Documents and (b) to the Noteholders and the Residual Interestholder, promptly
upon receipt of a written request therefor, copies of the Receivables Purchase
Agreement, the Trust Sale and Servicing Agreement, the Administration Agreement, and
this Agreement.

               SECTION 6.6. Representations and Warranties of Owner Trustee. The Owner Trustee
hereby represents and warrants to the Transferor, for the benefit of the Residual
Interestholder, that:

               (a) It is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.

               (b) It has full power, authority and legal right to
execute, deliver and perform this Agreement, and has taken all
necessary action to authorize the execution, delivery and performance
by it of this Agreement. The eligibility requirements set forth in
Section 6.13 are satisfied with respect to it.

               (c) The execution, delivery and performance by it
of this Agreement (i) shall not violate any provision of any law or
regulation governing the banking and trust powers of the Owner Trustee
or to the best of its knowledge without independent investigation any
order, writ, judgment or decree of any court, arbitrator or
governmental authority applicable to the Owner Trustee or any of its
assets, (ii) shall not violate any provision of the corporate charter
or by-laws of the Owner Trustee and (iii) shall not to the best of
its knowledge without independent investigation violate any provision
of, or constitute, with or without notice or lapse of time, a default
under, or result in the creation or imposition of any lien on any
properties included in the Trust pursuant to the provisions of any
mortgage, indenture, contract, agreement or other undertaking to
which it is a party, which violation, default or lien could
reasonably be expected to have a materially adverse effect on the
Owner Trustee’s performance or ability to perform its duties as Owner
Trustee under this Agreement or on the transactions contemplated in
this Agreement.

               (d) The execution, delivery and performance by the
Owner Trustee of this Agreement shall not require the authorization,
consent or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action in respect of, any
Governmental Authority regulating the banking and corporate trust
activities of banks or trust companies in the jurisdiction in which the
Trust was formed.

               (e) This Agreement has been duly executed and
delivered by the Owner Trustee and constitutes the legal, valid and
binding agreement of the Owner Trustee, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the
enforcement of creditors’ rights in general and by general principles
of equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.

               SECTION 6.7. Reliance; Advice of Counsel.

14

 

     (a) The Owner Trustee shall incur no liability to
anyone in acting upon any signature, instrument, notice, resolution,
request, consent, order, certificate, report, opinion, bond or other
document or paper (whether in its original or facsimile form) believed
by it to be genuine and believed by it to be signed by the proper party
or parties and need not investigate any fact or matter in any such
document. 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 purposes hereof rely, without any inquiry or investigation into the
factual matters addressed therein, on a certificate, signed by the
president or any vice president or by the treasurer 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 Basic Documents, the Owner Trustee: (i) may act
directly or through its agents, attorneys, custodians or nominees
pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such
agents, attorneys, custodians or nominees if such agents, attorneys,
custodians or nominees shall have been selected by the Owner Trustee
with reasonable care; and (ii) may consult with counsel, accountants
and other skilled professionals to be selected with reasonable care and
employed by it. The Owner Trustee shall not be liable for anything
done, suffered or omitted in good faith by it in accordance with the
opinion or advice of any such counsel, accountants or other such
Persons.

     SECTION 6.8. Owner Trustee May Own the Residual Interest and Notes. The Owner
Trustee in its individual or any other capacity may become the owner or pledgee of the
Residual Interest or Notes and may deal with the Transferor, the Administrator, the
Indenture Trustee and the Servicer in transactions in the same manner as it would have
if it were not the Owner Trustee.

     SECTION 6.9. Compensation and Indemnity. The Owner Trustee shall receive as
compensation for its services hereunder such fees as have been separately agreed upon
before the date hereof between the Transferor and the Owner Trustee, and the Owner
Trustee shall be entitled to be reimbursed by the Servicer for its other expenses
hereunder, including the reasonable compensation, expenses and disbursements of such
agents, custodians, nominees, representatives, experts and counsel as the Owner Trustee
may employ in connection with the exercise and performance of its rights and its duties
hereunder. The Servicer shall indemnify the Owner Trustee and its successors, assigns,
agents and servants in accordance with the provisions of Section 6.4 of the
Trust Sale and Servicing Agreement. The indemnities contained in this Section
6.9 shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement. Any amounts paid to the Owner Trustee pursuant to this
Section 6.9 shall be deemed not to be a part of the Owner Trust Estate
immediately after such payment.

     SECTION 6.10. Replacement of Owner Trustee.

     (a) The Owner Trustee may at any time give notice
of its intent to resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrator;
provided that no such resignation shall become effective, and
the Owner Trustee

15

 

shall not resign, prior to the time set forth in
Section 6.10(c). The Administrator may appoint a successor
Owner Trustee by delivering written instrument, in duplicate, to the
resigning Owner
Trustee and the successor Owner Trustee. If no successor Owner
Trustee shall have been appointed and have accepted appointment
within 30 days after the giving of such notice, the resigning Owner
Trustee giving such notice may petition at the expense of the
Servicer any court of competent jurisdiction for the appointment of a
successor Owner Trustee. The Administrator shall remove the Owner
Trustee if:

     (i) the Owner Trustee shall cease to be eligible in accordance with the provisions of
Section 6.13 and shall fail to resign after written request therefor by the Administrator;

     (ii) the Owner Trustee shall be adjudged bankrupt or insolvent;

     (iii) a receiver or other public officer shall be appointed or take charge or control of the
Owner Trustee or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation; or

     (iv) the Owner Trustee shall otherwise be incapable of acting.

               (b) If the Owner Trustee resigns or is removed or
if a vacancy exists in the office of Owner Trustee for any reason the
Administrator 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.

               (c) Any resignation or removal of the Owner Trustee
and appointment of a successor Owner Trustee pursuant to any of the
provisions of this Section 6.10 shall not become effective, and
no such resignation shall be deemed to have occurred, until a written
acceptance of appointment is delivered by the successor Owner Trustee
to the outgoing Owner Trustee and the Administrator, and all fees and
expenses due to the outgoing Owner Trustee are paid. Any successor
Owner Trustee appointed pursuant to this Section 6.10 shall be
eligible to act in such capacity in accordance with Section
6.13 and, following compliance with the preceding sentence, 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 Owner Trustee. The Administrator shall provide
notice of such resignation or removal of the Owner Trustee to each of
the Rating Agencies.

               (d) The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee
all documents, computer files and statements and monies held by it
under this
Agreement. The Administrator 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.

               (e) Upon acceptance of appointment by a successor
Owner Trustee pursuant to this Section 6.10, the Administrator
shall mail notice of the successor of such Owner Trustee to all
Residual Interestholders, the Indenture Trustee and the Rating
Agencies.

16

 

               SECTION 6.11. Merger or Consolidation of Owner Trustee. Any Person 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 Person succeeding to all or substantially all of the
corporate trust business of the Owner Trustee, shall be the successor of the Owner
Trustee hereunder, provided such Person shall be eligible pursuant to Section
6.13, and without the execution or filing of any instrument or any further act on
the part of any of the parties hereto; provided, however, that the
Owner Trustee shall mail notice of such merger or consolidation to the Rating Agencies.

               SECTION 6.12. Appointment of Co-Trustee or Separate Trustee.

               (a) Notwithstanding any other provisions of this
Agreement, at any time, for the purpose of meeting any legal
requirement of any jurisdiction in which any part of the Owner Trust
Estate or any of the Dealers may at the time be located, the
Administrator 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 as separate trustee or trustees, of all or
any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Trust, or any part thereof, and, subject to
the other provisions of this Section 6.12, such powers, duties,
obligations, rights and trusts as the Administrator and the Owner
Trustee may consider necessary or desirable. If the Administrator
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 6.13 and no notice
of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 6.10.

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

               (c) 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

17

 

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

               (d) Any separate trustee or co-trustee may at any
time appoint the Owner Trustee as 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 die, 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.

               SECTION 6.13. Eligibility Requirements for Owner Trustee. The Owner Trustee shall
at all times satisfy the requirements of Section 26(a)(1) of the Investment Company
Act. The Owner Trustee shall at all times: (a) be authorized to exercise corporate
trust powers; (b) have an aggregate capital, surplus and undivided profits of at least
$50,000,000 and be subject to supervision or examination by federal or state
authorities; and (c) have (or have a parent which has) a long-term
unsecured debt rating of at least BBB- by Standard & Poor’s and at least Baa3 by
Moody’s. If such corporation 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 6.13, the aggregate capital,
surplus and undivided profits of such corporation shall be deemed to be its
aggregate capital, surplus and undivided profits as set forth in its most recent
report of condition so published. If at any time the Owner Trustee shall cease to
be eligible in accordance with the provisions of this Section 6.13, the
Owner Trustee shall resign immediately in the manner and with the effect specified
in Section 6.10. Notwithstanding any other term or provision of this
Agreement, the Owner Trustee shall comply at all times with subsection (a)(4)(i) of
Rule 3a-7 of the Investment Company Act. At all times, at least one trustee of the
Trust shall satisfy the requirements of Section 3807(a) of the Trust Statute.

ARTICLE
VII

TERMINATION OF TRUST AGREEMENT

               SECTION 7.1. Termination of Trust Agreement.

               (a) This Agreement (other than Article VI)
and the Trust shall terminate and be of no further force or effect on
the date (the “Trust Termination Date”) upon which occurs the final
distribution by the Owner Trustee of all moneys or other property or
proceeds of the Owner Trust Estate in accordance with the terms of the
Indenture, the Transfer and Servicing Agreement and Article V.
The bankruptcy, liquidation, dissolution, death or incapacity of the
Residual Interestholder shall not (x) operate to terminate this
Agreement or the Trust or (y) entitle the Residual Interestholder’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

18

 

Trust or Owner Trust Estate or (z) otherwise affect
the rights, obligations and liabilities of the parties hereto.

               (b) Upon dissolution of the Issuer, the
Administrator shall wind up the business and affairs of the Issuer as

required by Section 3808 of the 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
Administrator, in the absence of actual knowledge of any other claim
against the Issuer, shall be deemed to have made reasonable provision
to pay all claims and obligations (including conditional, contingent or
unmatured obligations) for purposes of Section 3808(e) of the Trust
Statute and upon the written direction of the Residual Interestholder
the Owner Trustee 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 Trust
Statute, at which time the Issuer shall
terminate and this Agreement (other than Section 6.9) shall
be of no further force or effect.

               (c) Except as provided in Section 6.3(a),
none of the Transferor or the Residual Interestholder shall be entitled
to revoke or terminate the Trust.

ARTICLE
VIII

AMENDMENTS

               SECTION 8.1. Supplements and Amendments.

               (a) Any term or provision of this Agreement may be
amended by the Transferor, without the consent of the Indenture
Trustee, any Noteholder, the Administrator, any Enhancement Provider or
any other Person; provided that (i) with respect to each Outstanding
Series, either (A) any amendment that materially and adversely affects
the interests of the Noteholders of such Outstanding Series shall
require the consent of Noteholders evidencing not less than a majority
of the aggregate outstanding principal amount of the Notes of such
Outstanding Series or (B) such amendment shall not, as evidenced by an
Officer’s Certificate of the Transferor delivered to the Indenture
Trustee and the Owner Trustee, materially and adversely affect the
interests of the Noteholders of such Outstanding Series and (ii) any
amendment that materially and adversely affects the interests of the
Administrator, the Residual Interestholder, any Enhancement Provider,
the Indenture Trustee or the Owner Trustee shall require the prior
written consent of the Persons whose interests are materially and
adversely affected. The consent of the Administrator, the Residual
Interestholder, any Enhancement Provider or the Indenture Trustee shall
be deemed to have been given if the Transferor does not receive a
written objection from such Person within 10 Business Days after a
written request for such consent shall have been given.

               (b) It shall not be necessary for the consent of
any Person pursuant to this Section for such Person to approve the
particular form of any proposed amendment, but it shall be sufficient
if such Person consents to the substance thereof.

               (c) Notwithstanding the foregoing, no amendment
shall (i) reduce the interest rate or principal amount of any Note, or
change the due date of any installment of principal of or interest on
any Note, or the Redemption Price with respect thereto, without the
consent of the Holder of such Note, or (ii) reduce the percentage of
the aggregate outstanding principal amount

19

 

of the Outstanding Notes,
the Holders of which are required to consent to any matter without the
consent of the Holders of at least the percentage of the aggregate
outstanding principal amount of the Outstanding Notes
which were required to consent to such matter before giving effect to
such amendment.

               (d) Notwithstanding anything herein to the
contrary, any term or provision of this Agreement may be amended by the
parties hereto without the consent of any of the Noteholders of any
Outstanding Series or any other Person to add, modify or eliminate any
provisions as may be necessary or advisable in order to comply with or
obtain more favorable treatment under or with respect to any law or
regulation or any accounting rule or principle (whether now or in the
future in effect); it being a condition to any such amendment that the
Rating Agency Condition shall have been satisfied.

               (e) Prior to the execution of any amendment to this
Agreement, the Transferor shall provide each Rating Agency with written
notice of the substance of such amendment. No later than 10 Business
Days after the execution of any amendment to this Agreement, the
Transferor shall furnish a copy of such amendment to each Rating
Agency, any Enhancement Provider, the Owner Trustee and the Indenture
Trustee.

               (f) Prior to the execution of any amendment to this
Agreement, the Owner Trustee shall be entitled to receive and 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 or otherwise.

ARTICLE
IX

MISCELLANEOUS

               SECTION 9.1. No Legal Title to Owner Trust Estate. The Residual Interestholder
shall not have legal title to any part of the Owner Trust Estate. The Residual
Interestholder shall be entitled to receive distributions with respect to their
undivided ownership interest therein only in accordance with Articles V and
VII. No transfer, by operation of law or otherwise, of any right, title, and
interest of the Residual Interestholder to and in their ownership interest in the Owner
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 Owner Trust Estate.

               SECTION 9.2. Limitations on Rights of Others. The provisions of this Agreement are
solely for the benefit of the Owner Trustee, the Transferor, the Residual
Interestholder, the Administrator 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 Owner Trust Estate or under or in respect of
this Agreement or any covenants, conditions or provisions contained herein.

               SECTION 9.3. Notices. All demands, notices and communications upon or to the
Transferor, the Servicer, the Administrator, the Indenture Trustee, the Owner Trustee
or the

20

 

Rating Agencies or Residual Interestholder under this Agreement shall be
delivered as specified in Appendix B to the Trust Sale and Servicing Agreement.

               SECTION 9.4. 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
enforceable to the fullest extent permitted, and if not so permitted, 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 or the rights of the Residual Interestholder.

               SECTION 9.5. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which shall
be an original, but all of which together shall constitute one and the same instrument.

               SECTION 9.6. Successors and Assigns. All covenants and agreements contained herein
shall be binding upon, and inure to the benefit of, the Transferor, the Owner Trustee
and Residual Interestholder and their respective successors and permitted assigns, all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by the Residual Interestholder shall bind the successors and
assigns of such Residual Interestholder.

               SECTION 9.7. Nonpetition Covenant. The Owner Trustee, by entering into this
Agreement, and each Noteholder, Note Owner and the Residual Interestholder, by
accepting the benefits of this Agreement, hereby covenant and agree that prior to the
date which is one year and one day after payment in full of all obligations under each
Financing (i) no party hereto shall 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 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. Each of
the parties hereto agrees that, prior to the date which is one year and one day
after the payment in full of all obligations under each Financing, it will not
institute against, or join any other Person in instituting against, any Bankruptcy
Remote Party an action in bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or similar proceeding under the laws of the United States or
any State of the United States.

               SECTION 9.8. No Recourse. The Residual Interestholder acknowledges that the
Residual Interest represents an undivided ownership interest in the Trust only and does
not represent interests in or obligations of the Transferor, the Servicer, the
Administrator, the Owner Trustee, the Indenture Trustee or any Affiliate thereof and no
recourse, either directly or indirectly, may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this Agreement or the
Basic Documents.

21

 

               SECTION 9.9. Headings. The headings herein are for purposes of reference only and
shall not affect the meaning or interpretation of any provision hereof.

               SECTION 9.10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO THE PRINCIPLES OF
CONFLICTS OF LAW THEREOF OR OF ANY OTHER JURISDICTION, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

               SECTION 9.11. Indemnification by and Reimbursement of the Servicer. The Owner
Trustee further acknowledges and accepts the conditions and limitations with respect to
the Servicer’s obligation to indemnify, defend and hold the Owner Trustee harmless as
set forth in Section 6.4 of the Trust Sale and Servicing Agreement.

               SECTION 9.12. Third-Party Beneficiaries. This Agreement will inure to the benefit
of and be binding upon the parties hereto, the Noteholders, the Residual
Interestholder, the Enhancement Providers, the Indenture Trustee and their respective
successors and permitted assigns. Except as otherwise expressly provided in this
Agreement, no other Person will have any right or obligation hereunder.

               SECTION 9.13. 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, any documents
executed and delivered in connection herewith or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the courts of the State of New York, the courts
of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

               (b) consents that any such action or proceeding may
be brought in such courts and waives any objection that it may now or
hereafter have to the venue of such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;

               (c) agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of
mail), postage prepaid, to such Person at its address determined in
accordance with Appendix B to the Trust Sale and Servicing Agreement;
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.

               SECTION 9.14. Waiver. The Owner Trustee waives any prior written consent that it
was entitled to receive pursuant to the Administration Agreement, dated as of August
10, 2000, among the Trust, VW Credit, as Administrator, and the Indenture Trustee, with
respect to the amendment thereof pursuant to the Amended and Restated Administration
Agreement and the Omnibus Amendment, each dated as of the Closing Date.

22

 

               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.

	 	 	 	 	 
	 	 	THE BANK OF NEW YORK (Delaware),

as Owner Trustee
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kristine K. Gullo
	 

	 	 	 	 
	 

	 	 	 	  Name: Kristine K. Gullo
	 

	 	 	 	  Title: Vice President
	 
	 	 	 	 
	 	 	VOLKSWAGEN DEALER FINANCE, LLC, as Transferor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David Schulz
	 

	 	 	 	 
	 

	 	 	 	  Name: David Schulz
	 

	 	 	 	  Title: President and Treasurer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ LeSha Thorpe
	 

	 	 	 	 
	 

	 	 	 	  Name: LeSha Thorpe
	 

	 	 	 	  Title: Assistant Treasurer
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK, as Resigning Trustee
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John Bobko
	 

	 	 	 	 
	 

	 	 	 	  Name: John Bobko
	 

	 	 	 	  Title: Vice President

	 	 	 	 	 
	Acknowledged and Accepted:	 	 
	 
	 	 	 	 
	VW CREDIT, INC.,
as Servicer and Administrator	 	 
	 
	 	 	 	 
	By:

	 	/s/ David Schulz
 

Name: David Schulz
	 	 
	 

	 	Title: Treasurer	 	 
	 
	 	 	 	 
	By:

	 	/s/ LeSha Thorpe	 	 
	 

	 	 	 	 
	 

	 	Name: LeSha Thorpe	 	 
	 

	 	Title: Assistant Treasurer	 	 

Amended and Restated Trust Agreement

23

 

EXHIBIT A

FORM OF

Certificate of Trust

of

VOLKSWAGEN CREDIT AUTO MASTER OWNER TRUST

THIS CERTIFICATE OF TRUST OF VOLKSWAGEN CREDIT AUTO MASTER OWNER TRUST (the “Trust”), is being duly
executed and filed by The Bank of New York (Delaware), a Delaware banking corporation, as trustee,
to form a statutory trust under the Delaware Statutory Trust Act (12 Del. C. §3801,
et seq.).

     Name. The name of the statutory trust being formed hereby is VOLKSWAGEN CREDIT
AUTO MASTER OWNER TRUST.

     Delaware Trustee. The name and business address of the trustee of the Trust in
the State of Delaware is The Bank of New York (Delaware), 502 White Clay Center, Route 273, Newark,
Delaware 19711.

     Effective Date. This Certificate of Trust shall be effective as of August 11,
2005.

[signature page follows]

A-1

 

     IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust, has executed this
Certificate of Trust in accordance with Section 3811(a)(1) of the Act.

	 	 	 	 	 	 	 	 	 
	 	 	The Bank of New York (Delaware),

not in its individual capacity, but solely as owner
trustee	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	Title:	 	 

A-2exv10w1

 

Exhibit 10.1

SECOND SUPPLEMENTAL INDENTURE

     SECOND SUPPLEMENTAL INDENTURE (this “Second Supplemental Indenture”) dated as of June 10,
2005, between THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a corporation duly organized and existing
under the laws of the State of Missouri, and the successor by merger to each of Gateway Western
Railway Company, KCS Transportation Company, Mid-South Microwave, Inc., and Rice-Carden Corporation
(the “Company”), KANSAS CITY SOUTHERN (formerly known as Kansas City Southern Industries, Inc.,
(the “Parent”), and GATEWAY EASTERN RAILWAY COMPANY, PABTEX, L.P., SOUTHERN DEVELOPMENT COMPANY,
SOUTHERN INDUSTRIAL SERVICES, INC., and TRANS-SERVE, INC. (together with the Parent, the “Note
Guarantors”), and THE BANK OF NEW YORK, a New York banking corporation, as trustee under the
indenture referred to below (the “Trustee”).

W I T N E S S E T H :

     WHEREAS, the Company and the Note Guarantors have heretofore executed and delivered to the
Trustee an Indenture (the “Indenture”) dated as of September 27, 2000 and supplemented by a
Supplemental Indenture (the “First Supplemental Indenture”) dated as of January 29, 2001, providing
for the issuance of an aggregate principal amount of up to $300,000,000 of 91/2% Senior Notes due
2008 (the “Securities”); and

     WHEREAS, Section 9.02 of the Indenture provides that, with the written consent of the Holders
of a majority in aggregate principal amount of the outstanding Securities (the “Requisite
Consents”), the Company, the Note Guarantors and the Trustee may amend the Indenture;

     WHEREAS, the Company has completed a consent solicitation (the “Consent Solicitation”) whereby
the Company has obtained the Requisite Consents to amend certain sections of the Indenture (the
“Amendments”);

     WHEREAS, in connection with the Consent Solicitation, Holders that delivered a valid consent
on a timely basis (the “Consenting Holders”) are entitled to receive a cash fee (the “Cash Fee”)
with respect to the Securities in respect of which they have validly consented if the conditions to
the Consent Solicitation are met;

     WHEREAS, the Company, the Note Guarantors, and the Trustee are entering into this Second
Supplemental Indenture in order to set forth the Amendments; and

     WHEREAS, this Second Supplemental Indenture has been duly authorized by all necessary
corporate action on the part of the Company, the Note Guarantors and the Trustee.

     NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Company, the Note Guarantors and
the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the
Securities as follows:

 

 

ARTICLE 1

AMENDMENT OF THE INDENTURE

     Section 1.01. Amendment to Section 1.01 of the Indenture. The Company, the Note Guarantors
and the Trustee hereby agree to amend Section 1.01, and Section 1.01 is hereby amended by

     (a) adding the following definitions to Section 1.01 in the appropriate alphabetical order:

          “Mexico” means the Estadaos Unidos Mexicanos (the United Mexican States) and any branch of
power, ministry, department, authority or statutory corporation or other entity (including a
trust), owned or controlled directly or indirectly by the Estados Unidos Mexicanos or any of the
foregoing created by law as a public entity; and

          “VAT Claim” means TFM’s claim for a refund, credit or other payment of amounts of value added
tax previously paid by TFM to Mexico.

     (b) deleting the word “and” at the end of sub-section (c)(v) of the definition of “Asset
Disposition” in Section 1.01 and adding the following paragraph to the end of such definition of
“Asset Disposition”:

          ; and

     (vii) sales or other dispositions of the VAT Claim if and to
the extent (y) there are no cash proceeds thereof or (z) such cash
proceeds are used to finance (or set aside in a reserve to finance)
the repurchase of the Capital Stock of TFM from Mexico and the
satisfaction of obligations relating to the settlement thereof.

     Section 1.03 Amendment to Section 4.04 of the Indenture. The Company, the Note Guarantors and
the Trustee hereby agree to amend Section 4.04, and Section 4.04 is hereby amended by deleting the
word “or” at the end of sub-section (b)(vi) and adding the following paragraph following
sub-section (b)(vii) thereof:

     ; or

     (viii) the repurchase by TFM of, or the declaration and payment of dividends
by TFM to Grupo TFM to allow Grupo TFM to repurchase, the Capital Stock of TFM from
Mexico:

         (y) if, after giving effect to such repurchase and any Indebtedness Incurred
to fund such repurchase, the Consolidated Coverage Ratio would be greater than
2.0:1; or

         (z) to the extent that the consideration paid to Mexico to repurchase the
Capital Stock of TFM consists of a surrender or reduction of the

-2-

 

VAT Claim or any portion thereof, or if and to the extent cash has been
realized in respect to the VAT Claim, the consideration paid pursuant to this
Section 4.04(b)(viii)(z) does not exceed the amount of such cash, or any combination
of such surrender or reduction or such cash realized.

ARTICLE 2

MISCELLANEOUS

     2.01. Ratification of Indenture, Supplemental Indentures Part of Indenture. Except as
expressly amended hereby, the Indenture and the First Supplemental Indenture are in all respects
ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full
force and effect. Upon the execution and delivery of this Second Supplemental Indenture by the
Company, the Note Guarantors and the Trustee, the Indenture shall be supplemented in accordance
herewith, this Second Supplemental Indenture shall form a part of the Indenture for all purposes,
and every Holder of Securities heretofore or hereafter authenticated and delivered shall be bound
hereby.

     Notwithstanding the foregoing, the Amendments set forth herein will have no effect, and this
Second Supplemental Indenture shall be null and void, if the Cash Fee is not paid to the Consenting
Holders in accordance with the terms and conditions of the Consent Solicitation.

     2.02. Governing Law. THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

     2.03. Trustee Makes No Representation. The Trustee makes no representation as to the validity
or sufficiency of this Second Supplemental Indenture. The recitals and statements herein are
deemed to be those of the Company and the Note Guarantors and not of the Trustee.

     2.04. Severability Clause. In case any provision of this Second Supplemental Indenture shall
be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

     2.04. Counterparts. The parties may sign any number of copies of this Second Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.

     2.05. Definitions, Effect of Headings. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Indenture. The section headings herein are for
convenience only and shall not effect the construction thereof.

     IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be
duly executed as of the date first above written.

-3-

 

THE KANSAS CITY SOUTHERN RAILWAY COMPANY

/s/ Ronald G. Russ

Executive Vice-President and Chief Financial Officer

KANSAS CITY SOUTHERN

/s/ Ronald G. Russ

Executive Vice-President and Chief Financial Officer

GATEWAY EASTERN RAILWAY COMPANY

/s/ Paul J. Weyandt

Vice-President and Treasurer

-4-

 

	 	 	 	 	 	 	 
	 
	 	PABTEX, L.P.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Southern Industrial Services, Inc., its general partner
	 
	 	 	 	 	 	 
	 

	 	 	 	 	/s/ Ronald G. Russ

Vice-President and Treasurer

SOUTHERN DEVELOPMENT COMPANY

/s/ Ronald G. Russ

Vice-President and Treasurer

SOUTHERN INDUSTRIAL SERVICES, INC.

/s/ Ronald G. Russ

Vice-President and Treasurer

TRANS-SERVE, INC.

/s/ Ronald G. Russ

Vice-President and Treasurer

THE BANK OF NEW YORK

/s/ Stanislav Pertsev

Assistant Treasurer

-5-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]