Document:

exv10w8

Exhibit 10.8

SWAP TRANSACTION CONFIRMATION

 

	 	 	 
	Date:
	 	December 29, 2008
	 
	 	 
	To:
	 	Volkswagen Auto Loan Enhanced Trust 2008-2 (“Party B”)
	 
	 	c/o Deutsche Bank Trust Company Delaware, as Owner Trustee
	 
	 	1011 Centre Road, 2nd Floor
	 
	 	Wilmington, Delaware 19805

	 
	 	Attention:  Elizabeth Ferry
	 
	 	Facsimile:  (302) 636-3399
	 
	 	 
	From:
	 	HSBC Bank USA, N.A.
	 
	 	452 5th Avenue
	 
	 	New York, New York 10018
	 
	 	Attention:  Christian McGreevy
	 
	 	Telephone:  (212) 525-8710
	 
	 	Facsimile: (212) 525-5512
	 
	 	 
	Ref. No.
	 	514236HN

Dear Sir or Madam:

The purpose of this letter (this “Confirmation”) is to confirm the terms and conditions of the
Transaction entered into between us on the Trade Date specified below (the “Transaction”). This
Confirmation constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified
below.

1. The definitions and provisions contained in (i) the 2006 ISDA Definitions (the “ISDA
Definitions”), as published by the International Swaps and Derivatives Association, Inc., and (ii)
the Sale and Servicing Agreement dated as of December 29, 2008 (the “Sale and Servicing Agreement”)
between Party B, as issuer, VW Credit, Inc., as servicer, Volkswagen Auto Lease/Loan Underwritten
Funding, LLC, as seller and Citibank, N.A., as indenture trustee, relating to the issuance by Party
B of certain debt obligations, are incorporated into this Confirmation. In the event of any
inconsistency between the ISDA Definitions and this Confirmation, this Confirmation will govern.
References herein to a “Transaction” shall be deemed to be references to a “Swap Transaction” for
purposes of the ISDA Definitions. Capitalized terms used but not defined herein have the meanings
ascribed to them in the Sale and Servicing Agreement.

This Confirmation supplements, forms a part of, and is subject to, the 1992 ISDA Master Agreement
dated as of December 29, 2008 as amended and supplemented from time to time (the “Agreement”)
between you and us. All provisions contained in the Agreement govern this Confirmation except as
expressly modified herein.

2. The terms of the particular Transaction to which the Confirmation relates are as follows:

VALET 2008-2 Confirmation

(Front Swap: A-3-B)

1

 

	 	 	 
	Transaction Type:

	 	Interest Rate Swap
	 
	 	 
	Notional Amount:

	 	For the Initial Calculation Period, the
Notional Amount shall be equal to USD
$130,000,000. For each subsequent
Calculation Period, the Notional Amount
shall be equal to the aggregate
outstanding principal amount of the
Class A-3-B Notes on the first day of
such Calculation Period. With respect
to any Payment Date, the aggregate
outstanding principal amount of the
Class A-3-B Notes will be determined
using the Servicer Certificate issued on
the Determination Date immediately
preceding the Payment Date (giving
effect to any reductions of the
outstanding principal amount of the
Class A-3-B Notes reflected in such
Servicer Certificate).
	 
	 	 
	Trade Date:

	 	December 19, 2008
	 
	 	 
	Effective Date:

	 	December 29, 2008
	 
	 	 
	Termination Date:

	 	The earlier of (i) March 20, 2013 and
(ii) the date on which the outstanding
principal amount of the Class A-3-B
Notes is reduced to zero, in each case
subject to adjustment in accordance with
the Business Day Convention.
	 
	 	 
	Initial Calculation Period:

	 	From and including the Effective Date to
but excluding January 20, 2009.
	 
	 	 
	Business Day Convention:

	 	Following
	 
	 	 
	Business Day:

	 	New York, Delaware and Virginia
	 
	 	 
	Fixed Amounts:
	 	 
	 
	 	 
	Fixed Rate Payer:

	 	Party B
	 
	 	 
	Period End Dates:

	 	Monthly on the 20th of each month,
commencing January 20, 2009, through and
including the Termination Date, in each
case with No Adjustment.
	 
	 	 
	Payment Dates:

	 	Monthly on the 20th of each
month, commencing January 20, 2009,
through and including the Termination
Date, in each case subject to adjustment
in accordance with the Business Day
Convention.
	 
	 	 
	Fixed Rate:

	 	 1.635%
	 
	 	 
	Fixed Rate Day Count
Fraction:

	 	 30/360

2

 

	 	 	 
	Floating Amounts:
	 	 
	 
	 	 
	Floating Rate Payer:

	 	Party A
	 
	 	 
	Period End Dates:

	 	Monthly on the 20th of each month,
commencing January 20, 2009, through and
including the Termination Date, subject
to adjustment in accordance with the
Business Day Convention.
	 
	 	 
	Payment Dates:

	 	Monthly on the 20th of each
month, commencing January 20, 2009,
through and including the Termination
Date, in each case subject to adjustment
in accordance with the Business Day
Convention.
	 
	 	 
	Floating Rate for
initial Calculation
Period

	 	 0.47125%
	 
	 	 
	Floating Rate Option:

	 	USD-LIBOR-BBA
	 
	 	 
	Designated Maturity:

	 	 1 Month
	 
	 	 
	Floating Rate Day
Count Fraction:

	 	Actual/360
	 
	 	 
	Reset Dates:

	 	The first day of each Calculation Period.
	 
	 	 
	3. The additional provisions of this Confirmation are as follows:
	 
	 	 
	Calculation Agent:

	 	As specified in the Agreement
	 
	 	 
	Payments to Party A:

	 	HSBC Bank USA, N.A. 

ABA : 021-001-088

Swift: MRMDUS33

Account Number: 000049298
	 
	 	 
	Payments to Party B:

	 	Volkswagen Auto Loan Enhanced Trust 2008-2

Collection Account, AC # 107770

3

 

	 	 	 
	 

	 	Deposits to the Collection Account shall be made via
fed 
wire in accordance with the instructions
below:
	 
	 	 
	 

	 	Citibank, N.A. 

ABA: 021-000-089

Account: 3617-2242

Ref: VALET 2008-2 Collection Account
	 
	 	 
	 

	 	[signature page follows]

4

 

Unless otherwise provided in the Agreement, this Confirmation is governed by the laws of the State
of New York.

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a
copy of this Confirmation and returning it to us.

Very truly yours,

HSBC BANK USA, N.A.

	 	 	 	 	 
	By:  	/s/ Charleen Collins, /s/ Dennis J. Nevins
 	 
	 	Name:  	Charleen Collins, Dennis J. Nevins 	 
	 	Title:  	Vice President, ID# 15564, Assistant Vice President, ID# 15157 	 
	 	 
	Accepted and confirmed as of the date first above written:

VOLKSWAGEN AUTO LOAN ENHANCED TRUST 2008-2 	 
	By:  	Deutsche Bank Trust Company Delaware, not in its
 	 
	individual capacity but solely as Owner Trustee 	 
	 	 
	By:  	/s/ Michele HY Voon
 	 
	 	Name:  	Michele HY Voon 	 
	 	Title:  	Attorney-in-Fact 	 
	 	 
	By:  	/s/ Mark DiGiacomo
 	 
	 	Name:  	Mark DiGiacomo 	 
	 	Title:  	Attorney-in-Fact 	 
	 

5exv10w9

Exhibit 10.9

International Swaps and Derivatives Association, Inc.

CREDIT SUPPORT ANNEX

to the Schedule to the

ISDA MASTER AGREEMENT

dated as of December 29, 2008

between

HSBC Bank USA, N.A. (“Party A”)

and

Volkswagen Auto Loan Enhanced Trust 2008-2 (“Party B”)

This Annex supplements, forms part of, and is subject to, the ISDA Master Agreement referred to
above (this “Agreement”), is part of its Schedule and is a Credit Support Document under this
Agreement with respect to Party A.

Accordingly, the parties agree as follows:

Paragraphs 1 — 12. Incorporation

Paragraphs 1 through 12 inclusive of the ISDA Credit Support Annex (Bilateral Form)
(ISDA Agreements Subject to New York Law Only) published in 1994 by the
International Swaps and Derivatives Association, Inc. are incorporated herein by
reference and made a part hereof:

Paragraph 13. Elections and Variables

	(a)	 	Security Interest for “Obligations”. The term “Obligations” as used in this Annex includes
no additional obligations of Secured Party and, for purposes of the definition of Obligations
in Paragraph 12, includes no additional obligations of Pledgor.
	 
	(b)	 	Credit Support Obligations.

(A) “Delivery Amount” has the meaning specified in Paragraph 3(a) as amended (I) by deleting
the words “upon a demand made by the Secured Party on or promptly following a Valuation
Date” and inserting in lieu thereof the words “not later than the close of business on each
Valuation Date” and (II) by deleting in its entirety the sentence beginning “Unless
otherwise specified in Paragraph 13” and ending “(ii) the Value as of that Valuation Date of
all Posted Crdit Support held by the Secured Party,” and inserting in lieu thereof the
following:

1

 

The “Delivery Amount” applicable to the Pledgor for any Valuation Date will equal
the greatest of

	 	(A)	 	the amount by which (a) the S&P Credit Support Amount for such
Valuation Date exceeds (b) the S&P Value as such Valuation Date of all Posted
Credit Support held by the Secured Party,
	 
	 	(B)	 	the amount by which (a) the Moody’s First Trigger Credit
Support Amount for such Valuation Date exceeds (b) the Value (as determined
using the Moody’s Valuation Percentages) as of such Valuation Date of all
Posted Credit Support held by the Secured Party, and
	 
	 	(C)	 	the amount by which (a) the Moody’s Second Trigger Credit
Support Amount for such Valuation Date exceeds (b) the Value (as determined
using the Moody’s Valuation Percentages) as of such Valuation Date of all
Posted Credit Support held by the Secured Party.

“Return Amount” has the meaning specified in Paragraph 3(b) as amended by deleting
in its entirety the sentence beginning “Unless otherwise specified in Paragraph
13” and ending “(ii) the Credit Support Amount,” and inserting in lieu thereof the
following:

The “Return Amount” applicable to the Secured Party for any Valuation Date will
equal the least of:

	 	(A)	 	the amount by which (a) the S&P Value as of such Valuation Date
of all Posted Credit Support held by the Secured Party exceeds (b) the S&P
Credit Support Amount for such Valuation Date,
	 
	 	(B)	 	the amount by which (a) the Value (as determined using the
Moody’s Valuation Percentages) as of such Valuation Date of all Posted Credit
Support held by the Secured Party exceeds (b) Moody’s First Trigger Credit
Support Amount for such Valuation Date, and
	 
	 	(C)	 	the amount by which (a) the Value (as determined using the
Moody’s Valuation Percentages) as of such Valuation Date of all Posted Credit
Support held by the Secured Party exceeds (b) the Moody’s Second Trigger Credit
Support Amount for such Valuation Date.

(ii) “Credit Support Amount” means the greater of the S&P Credit Support Amount or the
Moody’s Credit Support Amount, in each case as calculated on a daily basis by the Valuation
Agent. The Credit Support Amount shall be calculated by reference to the provisions set
forth in this Annex which would result in Party A transferring the greatest amount of
Eligible Credit Support to Party B or, if applicable, which would result in Party B
returning the least amount of Posted Credit Support. In circumstances where more than one
of the Ratings Criteria or S&P Ratings Downgrade apply, the Credit Support Amount shall be
calculated by reference to the Ratings Criteria or S&P Ratings Downgrade which would result
in Party A transferring the
greatest amount of Eligible Credit Support or, if applicable, which would result in Party B
returning the least amount of Posted Credit Support.

2

 

(iii) Eligible Collateral. The following items will qualify as “Eligible Collateral”:

VALUATION PERCENTAGE:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Moody’s	 	 
	 	 	 	 	Moody’s First	 	Second	 	S&P Ratings
	 	 	 	 	Trigger	 	Trigger	 	Downgrade
	(A)

	 	Cash: US
	 	 	100	%	 	 	100	%	 	 	80	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(B)

	 	U.S. Treasury
Securities:
	 	 	100	%	 	 	100	%	 	 	79.1	%
	 

	 	negotiable debt
obligations issued
by the U.S.
Treasury Department
(“Treasuries”)
having a remaining
maturity of up to
and not more than 1
year.	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(C)

	 	Treasuries having a
remaining maturity
of greater than 1
year but not more
than 10 years.
	 	 	100	%	 	97% (1-5yr)

	 	78.43% (1-5yr)

74.07% (5-10yr)

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(D)

	 	Treasuries having a
remaining maturity
of greater than 10
years
	 	 	100	%	 	94% (5-10 yr)
90% (10-20yr)

88% (>20yr)
	 	72.90% (10-20yr)

70.90%(>20yr)

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(E)

	 	Agency Securities:
Debenture
obligations of the
Federal National
Mortgage
Association (FNMA),
Federal Home Loan
Mortgage
Corporation
(FHLMC),
(collectively,
“Agency
Securities”) having
a remaining
maturity of not
more than 1 year.
	 	 	100	%	 	 	99	%	 	 	78.8	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(F)

	 	Agency Securities
having a remaining
maturity of greater
than 1 year but not
more than 5 years.
	 	 	100	%	 	98% (1-2yr)

97% (2-3yr)

96% (3-5yr)
	 	 	78.43	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(G)

	 	Agency Securities
having a remaining
maturity of greater
than 5 years but
not more than 10
years.
	 	 	100	%	 	94% (5-7yr)

93% (7-10yr)
	 	 	74.07	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(H)

	 	Agency Securities
having a remaining
maturity of greater
than 10 years but
not more than 20
years.
	 	 	100	%	 	 	89	%	 	 	70.20	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(I)

	 	Agency Securities
having a remaining
maturity of greater
than 20 years but
not more than 30
years.
	 	 	100	%	 	 	87	%	 	 	67.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(J)

	 	FHLMC Certificates.
Mortgage
participation
certificates issued
by FHLMC evidencing
undivided interests
or participations
in pools of first
lien conventional
or FHA/VA
residential
mortgages or deeds
of trust,
guaranteed by
FHLMC, and having a
remaining maturity
of not more than 30
years.
	 	to be 
determined
	 	to be 
determined
	 	 	69.12	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 

3

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Moody’s	 	 
	 	 	 	 	Moody’s First	 	Second	 	S&P Ratings
	 	 	 	 	Trigger	 	Trigger	 	Downgrade
	(K)

	 	FNMA Certificates.
Mortgage-backed
pass-through
certificates issued
by FNMA evidencing
undivided interests
in pools of first
lien mortgages or
deeds of trust on
residential
properties,
guaranteed by FNMA,
having a remaining
maturity of not
more than 30 years.	 	 	to be
 determined	 	 	 	to be
determined	 	 	to be determined 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(L)

	 	GNMA Certificates.
Mortgage-backed
pass-through
certificates issued
by private
entities,
evidencing
undivided interests
in pools of first
lien mortgages or
deeds of trust on
single family
residences,
guaranteed by the
Government National
Mortgage
Association (GNMA)
with the full faith
and credit of the
United States, and
having a remaining
maturity of not
more than 30 years.
	 	to be 
determined
	    	to be 
determined
	    	to be determined

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(M)

	 	Other. Other items
of Credit Support
approved in writing
by each applicable
rating agency with
such valuation
percentages as
determined by each
applicable rating
agency.
	 	% to be 
determined
	 	% to be 
determined
	 	% to be 
determined

 

			
	*	 	The Valuation Percentage shall equal the percentage specified under such Rating Agency’s name
above. If Party A is rated by more than one Rating Agency specified above, the Valuation
Percentage shall equal the lowest of the applicable percentages specified above.
	 
	**	 	A parenthetical in the form of (a-b yr) means a security having a remaining maturity greater
than or equal to a years and less than b years.
	 
	+	 	Subject to Rating Agency Condition with respect to S&P.

(iv) There shall be no “Other Eligible Support” for Party A for purposes of this Annex.

(v) Thresholds.

	 	(A)	 	“Independent Amount” means with respect to Party A: Not
Applicable.
	 
	 	 	 	“Independent Amount” means with respect to Party B: Not Applicable.
	 
	 	(B)	 	“Threshold” means with respect to Party A: Infinity;
provided that for (a) so long as the Moody’s First Ratings Trigger
Requirements apply and either (i) the Moody’s First Ratings Trigger
Requirements have applied since this Annex was executed or (ii) at least 30
Local Business Days have elapsed since the last time the Moody’s First Ratings
Trigger Requirements did not apply, the Threshold shall be zero; or (b) so long
as a S&P Ratings Downgrade has occurred and has

4

 

	 	 	 	been continuing for at least 10 Local Business Days or since this Credit
Support Annex was executed, the Threshold shall be zero.
	 
	 	 	 	“Threshold” means with respect to Party B: Not Applicable.
	 
	 	(C)	 	“Minimum Transfer Amount” means with respect to Party A,
$50,000.
	 
	 	 	 	“Minimum Transfer Amount” means with respect to Party B, $50,000.
	 
	 	(D)	 	Rounding. The Delivery Amount will be rounded up and the
Return Amount will be rounded down to the nearest integral multiple of
$10,000.00, respectively.

	(c)	 	Valuation and Timing.

	 	(i)	 	“Valuation Agent” means Party A; provided, however, that if an Event of Default
shall have occurred with respect to which Party A is the Defaulting Party, Party B
shall have the right to designate as Valuation Agent an independent party, reasonably
acceptable to Party A, the cost for which shall be borne by Party A. All calculations
by the Valuation Agent must be made in accordance with standard market practice,
including, in the event of a dispute as to the Value of any Eligible Credit Support or
Posted Credit Support, by making reference to quotations received by the Valuation
Agent from one or more pricing sources.
	 
	 	(ii)	 	“Valuation Date” means: each Local Business Day on which the Credit Support
Amount would be greater than zero.
	 
	 	(iii)	 	“Valuation Time” means the close of business on the Local Business Day before
the Valuation Date or date of calculation; as applicable; provided that the calculation
of Value and Exposure will be made as of approximately the same time on the same date.
	 
	 	(iv)	 	“Notification Time” means 1:00 p.m., New York time, on a Local Business Day.

	(d)	 	Conditions Precedent. No event, other than the Additional Termination Event listed in Part
1.(r)(iii) of the Schedule (which shall constitute a “Specified Condition” with respect to
Party A), shall constitute a “Specified Condition”.

	(e)	 	Substitution.

	 	(i)	 	“Substitution Date” means the Local Business Day in New York on which the
Secured Party is able to confirm irrevocable receipt of the Substitute Credit Support,
provided that (x) such receipt is confirmed before 3:00 p.m. (New York time) on such
Local Business Day in New York and (y) the Secured Party has received, before 1:00 p.m.
(New York time) on the immediately preceding Local Business Day in New York, the notice
of substitution described in Paragraph 4(d)(i).
	 
	 	(ii)	 	Consent. The Pledgor is not required to obtain the Secured Party’s consent for any
substitution pursuant to Paragraph 4(d).

	(f)	 	Dispute Resolution.

5

 

	 	(i)	 	“Resolution Time” means 1:00 p.m., New York time, on the Local Business Day
following the date on which a notice is given that gives rise to a dispute under
Paragraph 5.
	 
	 	(ii)	 	Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of Posted Credit
Support will be calculated as follows: for Cash, the U.S. dollar value thereof (except
as modified), and for each item of Eligible Collateral (except for Cash), an amount in
U.S. dollars equal to the product of (i) either (A) the bid price for such security
quoted on such day by a principal market-maker for such security selected in good faith
by the Secured Party or (B) the most recent publicly available bid price for such
security as reported by a quotation service or in a medium selected in good faith and in
a commercially reasonable manner by Secured Party, multiplied by (ii) the percentage
figure listed in Paragraph 13(b)(iii) hereof with respect to such security.
	 
	 	(iii)	 	Alternative. The provisions of Paragraph 5 will apply.

	(g)	 	Holding and Using Posted Collateral.

	 	(i)	 	Eligibility to Hold Posted Collateral; Custodians. Secured Party will not be
entitled to hold Posted Collateral itself, and instead the Secured Party will be entitled
to hold Posted Collateral through the Indenture Trustee (the “Custodian”) which Posted
Collateral (i) shall not be commingled or used with any other asset held by the Indenture
Trustee but shall be held in a separate trust account for this purpose only and (ii)
shall not be transferred to any other person or entity but Party A pursuant to the
provisions herein except (x) in any case contemplated by Paragraph 8(a) of this Annex
with respect to Party A or (y) as directed by Party A; provided, however, that if the
Custodian does not have a short-term debt rating of at least “A-1” by S&P, then, within
60 days, a third party custodian with a short-term debt rating of at least “A-1” by S&P
must hold such Posted Collateral.
	 
	 	(ii)	 	Use of Posted Collateral. The provisions of Paragraph 6(c) will not apply to
Secured Party and without prejudice to Secured Party’s rights under Paragraph 8 of the
Credit Support Annex, Secured Party will not take any action specified in such Section
6(c).

	(h)	 	Distributions and Interest Amount.

	 	(i)	 	The “Interest Rate”, with respect to Eligible Collateral in the form of Cash,
for any day, will be the lesser of (x) the rate opposite the caption “Federal funds
(effective)” for such day as published by the Federal Reserve Publication H.15 (519) or
any successor publication as published by the Board of Governors of the Federal Reserve
System and (y) the rate of interest actually received on such Cash.
	 
	 	(ii)	 	The “Transfer of Interest Amount” will be made within 3 Local Business Days
after the last Local Business Day of each calendar month in an amount not to exceed the
interest actually received.
	 
	 	(iii)	 	Alternative Interest Amount. The provisions of Paragraph 6(d)(ii) will apply.

	(i)	 	Additional Representations. None.

6

 

	(j)	 	Other Eligible Support and Other Posted Support. Not Applicable.
	 
	(k)	 	Demands and Notices. All demands, specifications and notices made by a party to this Annex
will be made to the following:

	 	Party A:	 	As set forth in the Schedule.
	 
	 	Party B:	 	As set forth in the Schedule.

	(l)	 	Addresses for Transfers.

	 	Party A:	 	To be provided in written instructions at time of request for Transfer.
	 
	 	Party B:	 	Contact Indenture Trustee in the event Transfers are required.

	(m)	 	Other Provisions.

	 	(i)	 	This Credit Support Annex is a Security Agreement under the New York UCC.
	 
	 	(ii)	 	Paragraph 1(b) of this Annex is amended by deleting it and restating it in full as
follows: “(b) Secured Party and Pledgor. All references in this Annex to the “Secured
Party” mean Party B, and all references in this Annex to the “Pledgor” mean Party A;
provided, however, that if Other Posted Support is held by Party B, all references
herein to the Secured Party with respect to that Other Posted Support will be to
Party B as the beneficiary thereof and will not subject that support or Party B as
the beneficiary thereof to provisions of law generally relating to security
interests and secured parties.”
	 
	 	(iii)	 	Paragraph 2 of this Annex is amended by deleting the first sentence thereof
and restating that sentence in full as follows:
	 
	 	 	 	“Party A, as the Pledgor, hereby pledges to Party B, as the Secured Party, as
security for the Pledgor’s Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against all
Posted Collateral Transferred to or received by the Secured Party hereunder.”
	 
	 	(iv)	 	Only Party A makes the representations contained in Paragraph 9 of this Annex.
	 
	 	(v)	 	Paragraph 12 of this Annex is amended by deleting the definitions of “Pledgor”
and “Secured Party” and replacing them with the following:
	 
	 	 	 	“‘Secured Party’ means Party B.

‘Pledgor’ means Party A.”
	 
	 	(vi)	 	Paragraph 12 is hereby amended by adding, in alphabetical order, the following:
	 
	 	 	 	“Moody’s” means Moody’s Investor Services, Inc., or any successor to the rating
business of such entity.”
	 
	 	 	 	“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor to the rating business of such entity.”

7

 

	 	(vii)	 	Notwithstanding anything to the contrary in Paragraph 10, the Pledgor will be
responsible for, and will reimburse the Secured Party for all transfer and other taxes
and other costs and for maintenance involved in any Transfer of Eligible Collateral.
	 
	 	(viii)	 	The provisions of Paragraph 7(iii) shall not apply to Party B.

	(n)	 	S&P Criteria
	 
	 	 	“S&P Credit Support Amount” means, if the Threshold is zero for any Valuation Date, (a) if a
S&P Ratings Downgrade has occurred and has continued for 10 Local Business Days, an amount
equal to 125% of the Secured Party’s Exposure or (b) if the Threshold is Infinity, zero.
	 
	 	 	“S&P Ratings Downgrade” means, with respect to a Relevant Entity, its short-term unsecured
and unsubordinated debt rating is downgraded below “A-1” by S&P (or if its short-term rating
is not available by S&P, its long-term unsecured and unsubordinated debt rating is
downgraded below “A+” by S&P).
	 
	 	 	“S&P Value” means, on any date and with respect to any Eligible Collateral, the product of
(A) the bid price (or face value with respect to Cash) obtained by the Valuation Agent for
such Eligible Collateral and (B)(i) if the S&P Ratings Downgrade has occurred and been
continuing for at least 10 Local Business Days or since this Annex was executed, the S&P
Ratings Downgrade Valuation Percentage for such Eligible Collateral set forth in Paragraph
13(b)(iii). For purposes here, for Cash: the amount thereof: multiplied, in the case of
the S&P Value, by the S&P Ratings Downgrade Valuation Percentage set forth in paragraph
13(b)(iii) above.

	(o)	 	Moody’s Criteria.
	 
	 	 	“Moody’s First Trigger Event” means that no Relevant Entity has credit ratings from Moody’s
at least equal to the Moody’s First Trigger Ratings Threshold.
	 
	 	 	“Moody’s First Trigger Ratings Threshold” means, with respect to Party A, the guarantor
under an Eligible Guarantee or an Eligible Replacement, (i) if such entity has a short-term
unsecured and unsubordinated debt rating from Moody’s, a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody’s of “A2” and a short-term
unsecured and unsubordinated debt rating from Moody’s of “Prime-1”, or (ii) if such entity
does not have a short-term unsecured and unsubordinated debt rating or counterparty rating
from Moody’s, a long-term unsecured and unsubordinated debt rating or counterparty rating
from Moody’s of “A1”.
	 
	 	 	“Moody’s Second Trigger Event” means that no Relevant Entity has credit ratings from Moody’s
at least equal to the Moody’s Second Trigger Ratings Threshold.
	 
	 	 	“Moody’s Second Trigger Ratings Threshold” means, with respect to Party A, the guarantor
under an Eligible Guarantee or an Eligible Replacement, (i) if such entity has a short-term
unsecured and unsubordinated debt rating from Moody’s, a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody’s of “A3” and a short-term
unsecured and unsubordinated debt rating from Moody’s of “Prime-2”, or (ii) if such entity
does not have a short-term unsecured and unsubordinated debt rating from Moody’s, a
long-term unsecured and unsubordinated debt rating or counterparty rating from Moody’s of
“A3”.

8

 

	 	 	Moody’s Credit Support Amount. With respect to a Moody’s First Trigger Event or a Moody’s
Second Trigger Event relating to an action taken by Moody’s, the “Credit Support Amount”
shall mean with respect to a Pledgor on a Valuation Date the sum of:

	 	(i)	 	With respect to a Moody’s First Trigger Event:

	 	A.	 	the greater of the Secured Party’s Exposure and $0, plus
	 
	 	B.	 	Notional Amount times the relevant percentage set out in Table B below.

	 	(ii)	 	With respect to a Moody’s Second Trigger Event:

	 	A.	 	the greater of the Secured Party’s Exposure, $0 or the amount owed by Party
A on the next Payment Date (as such term is defined in the Confirmation for each
outstanding Transaction under this Agreement) , plus
	 
	 	B.	 	Notional Amount times the relevant percentage set out in Table B below,

 

			
	*	 	To the extent that more than one of the Moody’s Credit Support Amount and the
S&P Credit Support Amount apply, the greater of the three amounts shall be the
Credit Support Amount.

TABLE B

	 	 	 	 	 	 	 	 	 
	Weighted Average Life of	 	Moody’s First Trigger	 	Moody’s Second Trigger Event
	Hedge in Years	 	Event has Occurred	 	has Occurred
	1

	 	 	0.15	%	 	 	0.50	%
	2

	 	 	0.30	%	 	 	1.00	%
	3

	 	 	0.40	%	 	 	1.50	%
	4

	 	 	0.60	%	 	 	1.90	%
	5

	 	 	0.70	%	 	 	2.40	%
	6

	 	 	0.80	%	 	 	2.80	%
	7

	 	 	1.00	%	 	 	3.20	%
	8

	 	 	1.10	%	 	 	3.60	%
	9

	 	 	1.20	%	 	 	4.00	%
	10

	 	 	1.30	%	 	 	4.40	%
	11

	 	 	1.40	%	 	 	4.70	%
	12

	 	 	1.50	%	 	 	5.00	%
	13

	 	 	1.60	%	 	 	5.40	%
	14

	 	 	1.70	%	 	 	5.70	%
	15

	 	 	1.80	%	 	 	6.00	%
	16

	 	 	1.90	%	 	 	6.30	%
	17

	 	 	2.00	%	 	 	6.60	%
	18

	 	 	2.00	%	 	 	6.90	%
	19

	 	 	2.00	%	 	 	7.20	%
	20

	 	 	2.00	%	 	 	7.50	%
	21

	 	 	2.00	%	 	 	7.80	%
	22

	 	 	2.00	%	 	 	8.00	%
	23

	 	 	2.00	%	 	 	8.00	%

9

 

	 	 	 	 	 	 	 	 	 
	Weighted Average Life of	 	Moody’s First Trigger	 	Moody’s Second Trigger Event
	Hedge in Years	 	Event has Occurred	 	has Occurred
	24

	 	 	2.00	%	 	 	8.00	%
	25

	 	 	2.00	%	 	 	8.00	%
	26

	 	 	2.00	%	 	 	8.00	%
	27

	 	 	2.00	%	 	 	8.00	%
	28

	 	 	2.00	%	 	 	8.00	%
	29

	 	 	2.00	%	 	 	8.00	%
	30

	 	 	2.00	%	 	 	8.00	%

[signature page follows]

10

 

Accepted and agreed:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	HSBC BANK USA, N.A.	 	 	 	VOLKSWAGEN AUTO LOAN ENHANCED 
TRUST 2008-2
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Sandra Nicotra	 	 	 	By: DEUTSCHE BANK TRUST COMPANY DELAWARE, not in its
individual capacity but solely in its capacity as Owner Trustee
	 	 	 	 	 	 
	 	 	Name:	 	Sandra Nicotra	 	 	 
	 

	 	Title:
	 	Senior Vice President	 	 	 
	 
	Date:	 	December 29, 2008	 	 	 	By:	 	/s/ Michele HY Voon	 	 
	 

	 	 	 	 	 	 	 	 	 	Name:
	 	Michele HY Voon	 	 
	 

	 	 	 	 	 	 	 	 	 	Title:
	 	Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 	 	 	Date:	 	December 29, 2008	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	/s/ Mark DiGiacomo	 	 
	 

	 	 	 	 	 	 	 	 	 	Name:
	 	Mark DiGiacomo	 	 
	 

	 	 	 	 	 	 	 	 	 	Title:
	 	Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 	 	 	Date:	 	December 29, 2008	 	 

					
	 	 	 	 	 
	 
	 	S-1	 	VALET 2008-2

Credit Support Annex

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