Document:

Exhibit 4.4

 

DAIMLER TRUST,

as Borrower,

U.S. BANK TRUST NATIONAL ASSOCIATION,

as Administrative Agent,

DAIMLER TITLE CO.,

as Collateral Agent,

MERCEDES-BENZ FINANCIAL SERVICES USA LLC,

as Lender and as Servicer,

and

U.S. BANK NATIONAL ASSOCIATION,

as Indenture Trustee

 

 

2017-A EXCHANGE NOTE SUPPLEMENT

Dated as of April 1, 2017

 

	
TABLE OF CONTENTS

	 
	 	
Page

	 	 
	
ARTICLE ONE 

	 	 
	
USAGE, DEFINITIONS AND INCORPORATION BY REFERENCE 

	 	 
	
Section 1.01. Capitalized Terms; Rules of Usage

	
2

	
ARTICLE TWO 

	 	 
	
THE 2017-A EXCHANGE NOTE 

	 	 
	
Section 2.01. Creation and Designation

	
3

	
Section 2.02. Issuance of the 2017-A Exchange Note; Registered Pledge

	
3

	
Section 2.03. 2017-A Exchange Note Representations and Warranties

	
4

	
Section 2.04. 2017-A Exchange Note Interest Payments

	
4

	
Section 2.05. 2017-A Exchange Note Principal Payments

	
5

	
Section 2.06. 2017-A Reserve Account

	
5

	
Section 2.07. Additional Representations and Warranties

	
5

	
ARTICLE THREE 

	 	 
	
THE 2017-A REFERENCE POOL 

	 	 
	
Section 3.01. The 2017-A Reference Pool

	
7

	
ARTICLE FOUR 

	 	 
	
EXCHANGE NOTE DEFAULTS AND REMEDIES 

	 	 
	
Section 4.01. 2017-A Exchange Note Defaults

	
9

	
Section 4.02. Exchange Note Remedies

	
9

	
ARTICLE FIVE 

	 	 
	
APPLICATION OF COLLECTIONS ON THE 2017-A REFERENCE POOL 

	 	 
	
Section 5.01. Application of 2017-A Reference Pool Collections Prior to Facility Default and Exchange Note Default

	
11

	
Section 5.02. Application of 2017-A Reference Pool Collections Following a Liquidation

	
11

	 	 
	
ARTICLE SIX 

	 	 
	
SECURITY INTEREST 

	 	 
	
Section 6.01. Security Interest

	
13

 

	 	
Page

	 	 
	
ARTICLE SEVEN 

	 	 
	
EXCHANGE ACT REPORTING

	 	 
	
Section 7.01. Further Assurances

	
14

	
Section 7.02. Form 10-D Filings

	
14

	
Section 7.03. Form 8-K Filings

	
14

	
Section 7.04. Form 10-K Filings

	
15

	
Section 7.05. Report on Assessment of Compliance and Attestation

	
15

	
Section 7.06. Back-up Sarbanes-Oxley Certification.

	
16

	
Section 7.07. Representations and Warranties

	
16

	
Section 7.08. Indemnification.

	
16

	
ARTICLE EIGHT 

	 	 
	
MISCELLANEOUS 

	 	 
	
Section 8.01. Amendments

	
18

	
Section 8.02. 2017-A Exchange Noteholders Entitled to Benefits of this Exchange Note  Supplement

	
19

	
Section 8.03. Tax Characterization

	
19

	
Section 8.04. GOVERNING LAW; SUBMISSION TO JURISDICTION;  APPOINTMENT OF AGENT FOR SERVICE OF PROCESS

	
19

	
Section 8.05. Successors and Assigns

	
20

	
Section 8.06. Severability

	
20

	
Section 8.07. Counterparts

	
20

	
Section 8.08. Table of Contents and Headings

	
20

	
Section 8.09. No Petition

	
20

	
Section 8.10. No Recourse

	
20

	 	 
	
EXHIBITS 

	 	 
	
Exhibit A  –  Form of 2017-A Exchange Note

	
A-1

	
Exhibit B  –  Schedule of 2017-A Reference Pool Assets

	
B-1

	 	 
	
SCHEDULES 

	 	 
	
Schedule A  –  Item 1119 Parties

	
SA-1

	
Schedule B  –  Disclosure Items

	
SB-1

 

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This 2017-A EXCHANGE NOTE SUPPLEMENT, dated as of April 1, 2017 (as amended, restated, supplemented or otherwise modified from time to time, this “2017-A Exchange Note Supplement”), is among DAIMLER TRUST, a Delaware statutory trust (the “Titling Trust”), as borrower (the “Borrower”), MERCEDES-BENZ FINANCIAL SERVICES USA LLC, a Delaware limited liability company (“MBFS USA”), as lender (in such capacity, the “Lender”) and as servicer (in such capacity, the “Servicer”), U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, as administrative agent and not in its individual capacity (the “Administrative Agent”), DAIMLER TITLE CO., a Delaware corporation, as collateral agent (the “Collateral Agent”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as indenture trustee and not in its individual capacity (the “Indenture Trustee”).

RECITALS

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

WHEREAS, the Lender, the Servicer, the Titling Trust, the Collateral Agent and the Administrative Agent have entered into an Amended and Restated Collateral Agency Agreement, dated as of March 1, 2009 (the “Basic Collateral Agency Agreement”), pursuant to which the Lender will make advances to the Titling Trust from time to time to acquire Titling Trust Assets;

WHEREAS, the Basic Collateral Agency Agreement provides, among other things, that the parties thereto may from time to time enter into an exchange note supplement pursuant to which the Lender will assign its interest in a portion of its outstanding advances to be evidenced by an exchange note, payments in respect of which shall be made from collections in respect of a pool of specified Titling Trust Assets;

WHEREAS, the parties hereto wish to enter into this 2017-A Exchange Note Supplement to provide for the issuance of an exchange note to be known as the “2017-A Exchange Note” and the creation of a reference pool of leases and leased vehicles relating thereto;

WHEREAS, concurrently herewith, (i) MBFS USA and Daimler Trust Leasing LLC, a Delaware limited liability company (the “Transferor”), are entering into a First-Tier Sale Agreement  pursuant to which the Transferor will purchase the 2017-A Exchange Note from MBFS USA and (ii) the Transferor and Mercedes-Benz Auto Lease Trust 2017-A (the “Issuer”), are entering into a Second-Tier Sale Agreement, pursuant to which the Transferor will transfer the 2017-A Exchange Note to the Issuer;

WHEREAS, concurrently herewith, the Issuer is entering into an asset-backed financing transaction pursuant to, among other agreements, an Indenture, dated as of April 1, 2017 (the “Indenture”), between the Issuer and the Indenture Trustee, pursuant to which, among other

 

things, the Issuer will pledge certain of its assets and grant a security interest in such assets, including the 2017-A Exchange Note; and

WHEREAS, also concurrently herewith, the Titling Trust, the Servicer and the Collateral Agent are entering into a 2017-A Servicing Supplement to the Servicing Agreement, dated as of April 1, 2017 (as amended, modified or supplemented from time to time, the “2017-A Servicing Supplement”), pursuant to which, among other things, the terms of the Amended and Restated Servicing Agreement, dated as of March 1, 2009 (as modified, supplemented or amended from time to time, the “2017-A Servicing Agreement”) will be supplemented insofar as they apply to the 2017-A Leases and 2017-A Vehicles included in the 2017-A Reference Pool, providing more specific servicing obligations.

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

ARTICLE ONE

USAGE, DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.  Capitalized Terms; Rules of Usage.

(a)           Capitalized terms used in this 2017-A Exchange Note Supplement that are not otherwise defined shall have the meanings ascribed thereto in Appendix 1 to the 2017-A Servicing Supplement or, if not defined therein, in Appendix A to the Basic Collateral Agency Agreement, which Appendices are hereby incorporated into and made a part of this 2017-A Exchange Note Supplement.  Appendix 1 also contains rules as to usage applicable to this 2017-A Exchange Note Supplement.

(b)           Except as otherwise indicated by the context, all references herein to (i) “Leases” shall be to Collateral Leases and (ii) “Vehicles” shall be to Collateral Vehicles.

 

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ARTICLE TWO

THE 2017-A EXCHANGE NOTE

Section 2.01.  Creation and Designation.  There is hereby created an Exchange Note to be issued pursuant to the Basic Collateral Agency Agreement and this 2017-A Exchange Note Supplement to be known as the “2017-A Exchange Note”.  The terms of the 2017-A Exchange Note are as follows:

 

(a)          the 2017-A Exchange Note Issuance Date is the 2017-A Closing Date;

(b)          the Exchange Note Initial Principal Balance of the 2017-A Exchange Note is $2,232,241,333.50;

(c)          the 2017-A Cutoff Date for the 2017-A Reference Pool is the close of business on February 28, 2017;

(d)          the Exchange Note Interest Rate for the 2017-A Exchange Note will be a fixed rate equal to 2.02% per annum;

(e)          the 2017-A Exchange Note Final Scheduled Payment Date is January 17, 2023;

(f)          the 2017-A Exchange Note will be issued as a single class;

(g)          no Rating Agency will issue ratings in connection with the 2017-A Exchange Note;

(h)          the first Payment Date for the 2017-A Exchange Note is May 15, 2017, and thereafter, the 15th day of each calendar month or, if such day is not a Business Day, the next Business Day;

(i)           the 2017-A Exchange Note Interest Period with respect to the 2017-A Exchange Note shall be, with respect to any Payment Date, the related Collection Period; and

(j)           the initial Securitization Value of the 2017-A Leases and related 2017-A Vehicles included in the 2017-A Reference Pool is equal to $2,349,727,719.47.

Section 2.02.  Issuance of the 2017-A Exchange Note; Registered Pledge.

(a)           The 2017-A Exchange Note, together with the Administrative Agent’s certificate of authentication on such 2017-A Exchange Note, will be delivered in the form of a certificated note substantially in the form set forth as Exhibit A hereto and will satisfy the requirements of Sections 4.01 and 4.02 of the Basic Collateral Agency Agreement.  The 2017-A Exchange Note may be transferred (i) prior to the occurrence and continuance of an Event of Default, only in whole and not in part and (ii) subsequent to the occurrence and continuance of an Event of Default, either in whole or in part.

 

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(b)           The Borrower will deliver to the Administrative Agent (i) the executed 2017-A Exchange Note for authentication and (ii) this 2017-A Exchange Note Supplement, and following receipt thereof and satisfaction of the conditions set forth in Section 4.02(c) of the Basic Collateral Agency Agreement, the Administrative Agent will (A) execute this 2017-A Exchange Note Supplement and (B) authenticate and deliver the 2017-A Exchange Note in accordance with Section 4.02(d) of the Basic Collateral Agency Agreement.

(c)           The Lender agrees for the benefit of the 2017-A Exchange Noteholders that, with respect to the 2017-A Reference Pool, any claim that it may have against such assets will be subordinated in right to payment in full of the 2017-A Exchange Notes.

(d)           All of the Issuer’s right, title and interest with respect to the 2017-A Exchange Note has been assigned to the Indenture Trustee pursuant to the Indenture.  The Indenture Trustee shall be listed in the Exchange Note Register as the Registered Pledgee of the 2017-A Exchange Note until the Outstanding Amount of the Notes has been reduced to zero and all Issuer Obligations have been paid in full (at which time the rights of the Indenture Trustee as Registered Pledgee of the 2017-A Exchange Note shall terminate).  The Lender has caused the 2017-A Exchange Note to be delivered to the Indenture Trustee in New York, New York.  The Registered Pledgee shall have the rights granted to the 2017-A Exchange Noteholder as described in the Basic Collateral Agency Agreement.  As the Registered Pledgee, the Indenture Trustee shall be entitled to exercise any and all rights or powers of a holder hereunder and under the Basic Collateral Agency Agreement, to the extent set forth in Section 6.13 of the Indenture.

(e)           For so long as it is the Registered Pledgee, the Indenture Trustee shall be entitled to exercise the rights of the 2017-A Exchange Noteholder.  Following the return of the 2017-A Exchange Note to or upon the order of the Issuer pursuant to Section 8.05(b) of the Indenture, the Issuer shall be entitled to exercise all rights of the 2017-A Exchange Noteholder.

Section 2.03.  2017-A Exchange Note Representations and Warranties.

(a)           The Borrower represents and warrants that upon satisfaction of the conditions set forth in Sections 2.02(a) and (b), the 2017-A Exchange Note will have been duly authorized, executed and delivered under this 2017-A Exchange Note Supplement.

(b)           By acceptance of the 2017-A Exchange Note, the 2017-A Exchange Noteholder agrees with and makes, as of the 2017-A Closing Date, the representations and warranties set forth in Section 4.03(f) of the Basic Collateral Agency Agreement.

(c)           The Borrower hereby makes, as of the 2017-A Closing Date, the representations and warranties set forth in Schedule 1 to the Basic Collateral Agency Agreement on which the other parties hereto are relying, and any 2017-A Exchange Noteholder, in acquiring the related 2017-A Exchange Note, will rely.

Section 2.04.  2017-A Exchange Note Interest Payments. For each Payment Date, the amount of interest due with respect to the 2017-A Exchange Note will be equal to the 2017-A Exchange Note Interest Distributable Amount.

 

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Section 2.05.  2017-A Exchange Note Principal Payments.  For each Payment Date, the amount of principal payable with respect to the 2017-A Exchange Note will be equal to the 2017-A Exchange Note Principal Distributable Amount.  The entire outstanding 2017-A Exchange Note Balance will become due and payable on the 2017-A Exchange Note Final Scheduled Payment Date.  Notwithstanding the foregoing, the entire unpaid 2017-A Exchange Note Balance will be due and payable on the date on which an Exchange Note Default with respect to the 2017-A Exchange Note has occurred and is continuing, and the 2017-A Exchange Noteholder has declared the 2017-A Exchange Note to be immediately due and payable in the manner provided in the Basic Collateral Agency Agreement.  For the avoidance of doubt, the 2017-A Exchange Note will be deemed to not be paid in full until all Issuer Obligations have been paid in full.

Section 2.06.  2017-A Reserve Account.

(a)           In connection with the issuance of the 2017-A Exchange Note, the Servicer will establish the 2017-A Reserve Account pursuant to Section 4.01(a)(iii) of the 2017-A Servicing Supplement.  On the 2017-A Closing Date, the Transferor will deposit, or cause to be deposited, the Reserve Initial Deposit into the 2017-A Reserve Account.

(b)           On each Payment Date, the Indenture Trustee will deposit into the 2017-A Reserve Account all amounts available in accordance with Section 8.03(a)(iv) of the Indenture until the amount on deposit in the 2017-A Reserve Account equals the Required Reserve Amount.

(c)           On or prior to each Determination Date, the Servicer will determine the 2017-A Available Funds Shortfall Amount, if any, for the related Payment Date.  If the 2017-A Available Funds Shortfall Amount for any Payment Date is greater than zero, the Indenture Trustee will withdraw, or cause to be withdrawn, from the 2017-A Reserve Account an amount equal to the 2017-A Reserve Account Draw Amount and transfer the 2017-A Reserve Account Draw Amount to the 2017-A Exchange Note Collection Account on or prior to the related Payment Date, which amount shall be applied towards making distributions on such Payment Date.  If the Note Balance and all other Issuer Obligations have been paid in full and the Issuer has been terminated, any remaining amounts on deposit in the 2017-A Reserve Account shall be distributed to the Owner.

Section 2.07.  Additional Representations and Warranties.  Each of the Borrower, the Collateral Agent, the Titling Trust and the Administrative Agent hereby makes the following representations and warranties as of the 2017-A Closing Date:

(a)          It is not in material default under any agreement, contract, instrument, or indenture of any nature whatsoever to which it or its affiliates is bound, and which default would have a material adverse effect on its ability to perform its obligations under this 2017-A Exchange Note Supplement.

(b)          No consent, approval, authorization or order of any Governmental Authority or body is required under federal or State law for the execution, delivery, and performance by it, or compliance by it with this 2017-A Exchange Note Supplement or

 

5

the consummation of the transactions contemplated hereby, or if required has been obtained or can be obtained prior to the execution of this 2017-A Exchange Note Supplement.

(c)          It does not have any reason or cause to believe that it cannot perform each and every covenant of such party contained in this 2017-A Exchange Note Supplement.

 

6

ARTICLE THREE

THE 2017-A REFERENCE POOL

Section 3.01.  The 2017-A Reference Pool.

(a)           Pursuant to Section 4.01 of the Basic Collateral Agency Agreement and Section 4.3(b) of the Titling Trust Agreement, the Initial Beneficiary will designate a portion of the Leases and related Vehicles included in the Revolving Facility Pool for allocation to a new reference pool, referred to as the “2017-A Reference Pool”.  The 2017-A Exchange Note will primarily be payable from 2017-A Collections on or in respect of the Collateral Assets included in the 2017-A Reference Pool in accordance with the priorities in Section 5.01.  For purposes of determining the 2017-A Collections that are applicable to the 2017-A Reference Pool, the 2017-A Leases and 2017-A Vehicles included in the 2017-A Reference Pool will be deemed to have been included in the 2017-A Reference Pool from and after the 2017-A Cutoff Date.  A Schedule of 2017-A Reference Pool Assets appears as Exhibit B hereto.

(b)           2017-A Leases and 2017-A Vehicles included in the 2017-A Reference Pool will not be included in the Revolving Facility Pool or in any other Reference Pool and no Leases or Vehicles included in the Revolving Facility Pool or leases or leased vehicles allocated to any other Reference Pool after the 2017-A Cutoff Date will be included in the 2017-A Reference Pool.  Notwithstanding the foregoing, 2017-A Leases and 2017-A Vehicles shall be reallocated from the 2017-A Reference Pool to the Revolving Facility Pool in connection with (i) purchases of 2017-A Leases and 2017-A Vehicles pursuant to Section 3.05 of the 2017-A Servicing Supplement, (ii) the optional redemption of the 2017-A Exchange Note pursuant to Section 5.01 of the 2017-A Servicing Supplement and 4.06 of the Basic Collateral Agency Agreement and (iii) following release of the Trust Estate pursuant to Section 8.05(b) of the Indenture.

(c)           Notwithstanding any other provision of this 2017-A Exchange Note Supplement or the Basic Servicing Agreement, in the event that any 2017-A Vehicle is sold or otherwise disposed of by the Servicer, each of the 2017-A Exchange Noteholder and the Registered Pledgee (i) for as long as no Event of Default has occurred and is continuing, will be deemed automatically to release, and immediately prior to such sale or other disposition, does hereby agree to release at such time, any and all Liens and other rights and interests it possesses or may possess from time to time, without further action of the parties, in, to and under such 2017-A Vehicle, the proceeds thereof (including pursuant to any Insurance Policy) with respect to or covering such 2017-A Vehicle and any contract or agreement for the sale or other disposition of such 2017-A Vehicle, and (ii) during the occurrence and continuance of an Event of Default, shall continue to have all rights and interests it possesses or may possess from time to time with respect to or covering such 2017-A Vehicle and any contract or agreement for the sale or other disposition of such 2017-A Vehicle, the proceeds thereof (including pursuant to any Insurance Policy) with respect to or covering such 2017-A Vehicle and any contract or agreement for the sale or other disposition of such Vehicle until the actual net proceeds of such sale or other disposition have been deposited into the 2017-A Exchange Note Collection Account.  Notwithstanding the foregoing, nothing herein shall otherwise constitute a release of any rights under the 2017-A Basic Documents to receive an amount equal to the proceeds of such sale or other disposition.

 

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(d)           Upon repayment in full of the 2017-A Exchange Note and all Issuer Obligations or following release of the Trust Estate pursuant to Section 8.05(b) of the Indenture, the 2017-A Reference Pool will be deemed to be terminated and the 2017-A Leases and 2017-A Vehicles included in the 2017-A Reference Pool will be reallocated to the Revolving Facility Pool.

 

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ARTICLE FOUR

EXCHANGE NOTE DEFAULTS AND REMEDIES

Section 4.01.  2017-A Exchange Note Defaults.  Notwithstanding Section 6.04 of the Basic Collateral Agency Agreement, only the following events or occurrences with respect to the 2017-A Exchange Note will constitute Exchange Note Defaults with respect to the 2017-A Exchange Note:

(a)          Failure to Pay Interest.  The Borrower fails to pay or cause to be paid any part of the 2017-A Exchange Note Interest Distributable Amount, as specified in the Exchange Note Supplement when due, and such failure continues for five Business Days after the due date;

(b)          Failure to Pay Principal.  The Borrower fails to pay or cause to be paid any principal of such Exchange Note on the 2017-A Exchange Note Final Scheduled Payment Date and, if such failure is due to an administrative omission, mistake or technical difficulty, that failure continues for five Business Days after the date when such principal became due;

(c)          Breach of Covenant.  There is a default in the observance or performance of any covenant or agreement of the Borrower made in the Basic Collateral Agency Agreement or this 2017-A Exchange Note Supplement (other than a covenant or agreement, a default in the observance or performance of which is specifically covered by another Exchange Note Default with respect to the 2017-A Exchange Note), the 2017-A Exchange Noteholders are materially and adversely affected by such default and such default is not cured on or before the 60th day after the Borrower has received a notice that states that it is a “Notice of Exchange Note Default” and specifies the default; and

(d)          Breach of Representation or Warranty.  Any representation or warranty of the Borrower made in the Basic Collateral Agency Agreement, this 2017-A Exchange Note Supplement or in any certificate or other document delivered in connection with the Basic Collateral Agency Agreement or this 2017-A Exchange Note Supplement proves to have been incorrect as of the time made, the 2017-A Exchange Noteholders are materially and adversely affected by such incorrectness and such incorrectness is not cured on or before the 60th day after the Borrower has received a notice from the 2017-A Exchange Noteholders that states that it is a “Notice of Exchange Note Default” and specifies the default.

Section 4.02.  Exchange Note Remedies.

(a)           If a Facility Default or an Exchange Note Default has occurred, the 2017-A Exchange Noteholder may take the actions set forth in Sections 6.04(c) or 6.05(a) of the Basic Collateral Agency Agreement; provided, that the Indenture Trustee, as the 2017-A Exchange Noteholder, will act at the direction of 66 2/3% of the Holders of the Notes of the Controlling Class then Outstanding.

 

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(b)           The proceeds of any liquidation or sale of the 2017-A Collateral pursuant to Section 6.05(a)(ii)(C) of the Basic Collateral Agency Agreement, to the extent received by the Indenture Trustee and upon receipt of instructions from the Administrator indicating the amounts to be applied by the Indenture Trustee, will be applied in accordance with Section 5.04(b) of the Indenture.

(c)           All amounts payable to the 2017-A Exchange Noteholder pursuant to this Section will be deposited by the Indenture Trustee into the 2017-A Exchange Note Collection Account.

 

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ARTICLE FIVE

APPLICATION OF COLLECTIONS ON THE 2017-A REFERENCE POOL

Section 5.01.  Application of 2017-A Reference Pool Collections Prior to Facility Default and Exchange Note Default.  On each Payment Date, the Servicer will, with respect to the 2017-A Reference Pool (based on the information contained in the related Monthly Exchange Note Report delivered pursuant to Section 6.01(a) of the 2017-A Servicing Supplement), allocate 2017-A Collections on deposit in the 2017-A Exchange Note Collection Account for such Payment Date in accordance with the following order of priority:

(a)          to the Servicer, the 2017-A Reference Pool Servicing Fee and an amount equal to any Nonrecoverable Advances;

(b)          to the 2017-A Exchange Noteholder, the 2017-A Exchange Note Interest Distributable Amount;

(c)          to the 2017-A Exchange Noteholder, the 2017-A Exchange Note Principal Distributable Amount, as a payment of principal of the 2017-A Exchange Note until the 2017-A Exchange Note Balance has been reduced to zero;

(d)          to the 2017-A Exchange Noteholder, the amount, if any, by which the sum of the amounts payable pursuant to Sections 8.03(a)(i) through (vii) of the Indenture (or, if applicable, pursuant to Sections 5.04(b)(i) through (v) of the Indenture) exceeds the sum of the amounts received by the 2017-A Exchange Noteholder pursuant to clauses (b) and (c), above;  and

(e)          all remaining funds, to the 2017-A Exchange Noteholder, for distribution on the Certificates.

Section 5.02.  Application of 2017-A Reference Pool Collections Following a Liquidation.  Notwithstanding the provisions of Section 5.01, following a sale or liquidation of any portion of the Collateral included in the 2017-A Reference Pool pursuant to Section 6.05(a)(ii)(C) of the Basic Collateral Agency Agreement, the proceeds of such sale or liquidation will be allocated in accordance with the following priorities:

(i)           to make payments to the Servicer, to the extent necessary to pay the 2017-A Reference Pool Servicing Fee and any Nonrecoverable Advances with respect to the 2017-A Leases;

(b)          to make payments to the 2017-A Exchange Noteholder, to the extent necessary to pay all accrued and unpaid interest on the 2017-A Exchange Note and any interest on such accrued and unpaid interest at the 2017-A Exchange Note Interest Rate;

(c)          to make payments to the 2017-A Exchange Noteholder, to the extent necessary to reduce the 2017-A Exchange Note Balance to zero;

 

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(d)          to make payments to the 2017-A Exchange Noteholder to the extent necessary, after giving effect to the distributions pursuant to clauses (a), (b) and (c) of this Section 5.02 to cover any shortfall in amounts payable under Sections 8.03(a)(i) through (vii) or Sections 5.04(b)(i) through (v) of the Indenture; and

(e)          all remaining funds, to the 2017-A Exchange Noteholder, for distribution on the Certificates.

 

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ARTICLE SIX

SECURITY INTEREST

Section 6.01.  Security Interest.  The Borrower hereby confirms its grant under the Basic Collateral Agency Agreement of a security interest in the Collateral to the Collateral Agent.  In addition, the Borrower hereby grants to the Collateral Agent on behalf of the Secured Parties a security interest in the Collateral.

 

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ARTICLE SEVEN

EXCHANGE ACT REPORTING

Section 7.01.  Further Assurances.  The Indenture Trustee and the Servicer shall reasonably cooperate with the Transferor in connection with the satisfaction of the Transferor’s reporting requirements under the Exchange Act with respect to the Issuer.  The Transferor shall not exercise its right to request delivery of information or other performance under these provisions other than in good faith.  In addition to the other information specified in this Article, if so requested by the Transferor for the purpose of satisfying its reporting obligation under the Exchange Act, the Indenture Trustee and the Servicer shall provide the Transferor with (i) such information which is available to such Person without unreasonable effort or expense and within such timeframe as may be reasonably requested by the Transferor to comply with the Transferor’s reporting obligations under the Exchange Act and (ii) to the extent such Person is a party (and the Transferor is not a party) to any agreement or amendment required to be filed, copies of such agreement or amendment in EDGAR-compatible form.  Each of the Servicer and the Indenture Trustee acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with reasonable requests made by the Transferor in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB.

Section 7.02.  Form 10-D Filings.  So long as the Transferor is required to file Exchange Act Reports with respect to the Issuer, no later than each Determination Date, each of the Indenture Trustee and the Servicer shall notify (and the Servicer shall cause any subservicer to notify) the Transferor of any Form 10-D Disclosure Item with respect to such Person (or in the case of the Indenture Trustee, a Responsible Officer of such Person), together with a description of any such Form 10-D Disclosure Item in form and substance reasonably acceptable to the Transferor.  In addition to such information as the Servicer is obligated to provide pursuant to other provisions of this 2017-A Exchange Note Supplement and the 2017-A Servicing Agreement, if so requested by the Transferor, the Servicer shall provide such information which is available to it without unreasonable effort or expense regarding the performance or servicing of the 2017-A Leases and 2017-A Vehicles as is reasonably required to facilitate preparation of distribution reports in accordance with Item 1121 of Regulation AB.  Such information shall be provided concurrently with the statements to Securityholders pursuant to Section 6.05 of the 2017-A Servicing Supplement, commencing with the first such report due not less than five Business Days following such request.

Section 7.03.  Form 8-K Filings.  So long as the Transferor is required to file Exchange Act Reports with respect to the Issuer, each of the Indenture Trustee and the Servicer shall promptly notify the Transferor, but in no event later than two Business Days after its occurrence, of any Reportable Event of which such Person (or in the case of the Indenture Trustee, a Responsible Officer of such Person) has actual knowledge.  Each Person shall be deemed to have actual knowledge of any such event to the extent that it relates to such Person or any action or failure to act by such Person.

 

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Section 7.04.  Form 10-K Filings.  So long as the Transferor is required to file Exchange Act Reports, (i) if the Item 1119 Parties listed on Schedule A have changed since the 2017-A Closing Date, no later than February 1 of each year, commencing in 2018, the Transferor shall provide each of the Indenture Trustee and the Servicer with an updated Schedule A setting forth the Item 1119 Parties and (ii) no later than March 15th  of each year, commencing in 2018, the Indenture Trustee and the Servicer shall notify the Transferor of any Form 10-K Disclosure Item, together with a description of any such Form 10-K Disclosure Item in form and substance reasonably acceptable to the Transferor.

Section 7.05.  Report on Assessment of Compliance and Attestation.  So long as the Transferor is required to file Exchange Act Reports, on or before March 15 of each calendar year, commencing in 2018:

(a)          The Indenture Trustee shall deliver to the Transferor and the Servicer the Servicing Criteria Assessment.  Such report shall be signed by an Authorized Officer of the Indenture Trustee and shall at a minimum address each of the Servicing Criteria specified with respect to the Indenture Trustee in Exhibit E to the 2017-A Servicing Supplement (provided that such certification may be revised after the date of this 2017-A Exchange Note Supplement as agreed by the Transferor and the Indenture Trustee to reflect any guidance with respect to such criteria from the Commission).  To the extent any of the Servicing Criteria are not applicable to the Indenture Trustee, with respect to asset-backed securities transactions taken as a whole involving the Indenture Trustee and that are backed by the same asset type backing the Notes, such report shall include such a statement to that effect.  The Indenture Trustee acknowledges and agrees that the Transferor and the Servicer with respect to its duties as the Certifying Person, and each of their respective officers and directors shall be entitled to rely upon each such Servicing Criteria Assessment and the attestation delivered pursuant to Section 7.05(b).

(b)          The Indenture Trustee shall deliver to the Transferor and the Servicer a report of a registered public accounting firm that attests to, and reports on, the assessment of compliance made by the Indenture Trustee and delivered pursuant to Section 7.05(a).  Such attestation shall be in accordance with Rules 13a‐18 and 15d-18 of the Exchange Act (or any successor provisions), Rules 1-02(a)(3) and 2-02(g) of Regulation S-X (or any successor provisions) under the Securities Act and the Exchange Act, including, that, in the event that an overall opinion cannot be expressed, such registered public accounting firm shall state in such report why it was unable to express such an opinion.  Such report must be available for general use and not contain restricted use language.

(c)          In the event the Indenture Trustee is terminated or resigns during the term of this 2017-A Exchange Note Supplement, such Person shall provide the documents and information pursuant to this 2017-A Exchange Note Supplement with respect to the period of time it was subject to this 2017-A Exchange Note Supplement or provided services with respect to the Issuer or the 2017-A Reference Pool.

 

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Section 7.06.  Back-up Sarbanes-Oxley Certification.

(a)           No later than March 15th of each year, beginning in 2018, the Servicer shall provide the Performance Certification to the Certifying Person, substantially in the form of  Exhibit D to the 2017-A Servicing Supplement (in the case of the Servicer), in each case on which the Certification Parties can reasonably rely; provided that so long as the Servicer is an Affiliate of the Transferor, the Servicer may, but is not required to deliver the Performance Certificate.

(b)           The Transferor will not request delivery of a certification under this clause unless the Transferor is required under the Exchange Act to file an annual report on Form 10-K with respect to the Issuer.  In the event that prior to the filing date of the Form 10-K in March of each year, the Servicer has actual knowledge of information material to the Sarbanes-Oxley Certification, the Servicer shall promptly notify the Transferor.

Section 7.07.  Representations and Warranties.  As of the 2017-A Closing Date, the Indenture Trustee represents that:

(i)           there are no affiliations relating to the Indenture Trustee with respect to any Item 1119 Party;

(ii)          there are no relationships or transactions with respect to any Item 1119 Party and the Indenture Trustee that are outside the ordinary course of business or on terms other than would be obtained in an arm’s-length transaction with an unrelated third party, apart from the transactions contemplated under the Basic Documents, and that are material to the investors’ understanding of the Notes; and

(iii)         there are no legal Proceedings pending, or known by a Responsible Officer of the Indenture Trustee to be contemplated by Governmental Authorities, against the Indenture Trustee, or of which the property of the Indenture Trustee is subject, that is material to the Noteholders.

Section 7.08.  Indemnification.

(a)           Each of the Indenture Trustee and the Servicer (if the Servicer is not MBFS USA) shall indemnify the Transferor, the Servicer with respect to its duties as Certifying Person or each Person who controls any of such parties (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and the respective present and former directors, officers, employees and agents of each of the foregoing, and shall hold each of them harmless from and against any losses, damages, penalties, fines, forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and expenses that any of them may sustain arising out of or based upon:

(i)           (A) any untrue statement of a material fact contained or alleged to be contained in the Provided Information or (B) the omission or alleged omission to state in the Provided Information a material fact required to be stated in the Provided Information, or necessary in order to make the statements therein, in the light of the

 

16

circumstances under which they were made, not misleading; provided, by way of clarification, that clause (B) shall be construed solely by reference to the related Provided Information and not to any other information communicated in connection with a sale or purchase of securities, without regard to whether the Provided Information or any portion thereof is presented together with or separately from such other information; or

(ii)          with respect to the Indenture Trustee, any failure by the Indenture Trustee to deliver any Servicing Criteria Assessment when and as required under this Article and with respect to the Servicer, any failure by the Servicer to deliver any information, report, certification, accountant’s letter or other material when and as required under Sections 6.03 or 6.04 of the 2017-A Servicing Supplement or this Article, as applicable.

(b)           In the case of any failure of performance described in Section 7.08(a)(ii), each of the Indenture Trustee and the Servicer shall promptly reimburse the Transferor for all costs reasonably incurred by each such party in order to obtain the information, report, certification, accountants’ letter or other material not delivered as required by the Indenture Trustee or the Servicer, as applicable.

(c)           Notwithstanding anything to the contrary contained herein, in no event shall the Indenture Trustee be liable for special, punitive, indirect or consequential damages of any kind whatsoever, including but not limited to lost profits, even if the Indenture Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

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ARTICLE EIGHT

MISCELLANEOUS

Section 8.01.  Amendments.

(a)           Notwithstanding the provisions of Section 9.01 of the Basic Collateral Agency Agreement, this 2017-A Exchange Note Supplement and the Basic Collateral Agency Agreement, as supplemented by this 2017-A Exchange Note Supplement, may be amended, supplemented or otherwise modified from time to time by a writing executed by the parties hereto, without the consent of any Securityholder, to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein or to add, change or eliminate any other provision with respect to matters or questions arising under this 2017-A Exchange Note Supplement that are not inconsistent with the provisions of this 2017-A Exchange Note Supplement; provided, that, (i) the Lender shall have delivered to the Indenture Trustee an Opinion of Counsel or an Officer’s Certificate of the Issuer to the effect that such action will not materially adversely affect the interests of any Noteholders or (ii) the Rating Agency Condition shall have been satisfied with respect to such amendment.

(b)           Each amendment, supplement or other modification of this 2017-A Exchange Note Supplement other than those provided for in Section 8.01(a) requires the consent of the Majority Noteholders of the Controlling Class (or if the Notes are no longer Outstanding, holders of Certificates evidencing not less than a majority of the aggregate Certificate Percentage Interests); provided, however, that no such amendment may (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, or change the allocation or priority of, collections of payments on or in respect of the 2017-A Leases and 2017-A Vehicles or distributions that are required to be made for the benefit of the Securityholders, change the Interest Rate applicable to any class of Notes or the Required Reserve Amount for the 2017-A Reserve Account, without the consent of all Holders of Notes then Outstanding; or (ii) reduce the percentage of the Note Balance of the Notes or of the Controlling Class the consent of the Holders of which is required for any amendment to this 2017-A Exchange Note Supplement without the consent of all Holders of Notes or of the Controlling Class then Outstanding

(c)           No amendment to this 2017-A Exchange Note Supplement shall reduce the 2017-A Exchange Note Interest Rate or the 2017-A Exchange Note Principal Distributable Amount or delay the Final Scheduled Payment Date of the 2017-A Exchange Note, or materially and adversely affect the interests of the 2017-A Exchange Noteholder, without the consent of the 2017-A Exchange Noteholder (which shall be the Indenture Trustee, acting at the direction of the Majority Noteholders of the Controlling Class).

(d)           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.

(e)           Promptly upon the execution of any such amendment, (i) the Servicer will send a copy of such amendment to the Indenture Trustee and the Rating Agencies and (ii) the Indenture Trustee will notify each holder of a Note of the substance of such amendment.

 

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Section 8.02.  2017-A Exchange Noteholders Entitled to Benefits of this 2017-A Exchange Note Supplement.  MBFS USA will be the initial 2017-A Exchange Noteholder.  Any subsequent 2017-A Exchange Noteholder, by accepting the 2017-A Exchange Note, will be deemed to have agreed to the terms and conditions of the Basic Collateral Agency Agreement, as supplemented by this 2017-A Exchange Note Supplement, and will be entitled to the benefits of the Basic Collateral Agency Agreement, as supplemented by this 2017-A Exchange Note Supplement, with the same effect as if such 2017-A Exchange Noteholder had been a party thereto or hereto.

Section 8.03.  Tax Characterization.  Neither the 2017-A Exchange Noteholder or any party to this 2017-A Exchange Note Supplement will elect or permit an election to be made to treat the Titling Trust or any Specified Interest as an association taxable as a corporation for U.S. federal income tax purposes pursuant to Treasury Regulation Section 301.7701-3.

Section 8.04.  GOVERNING LAW; SUBMISSION TO JURISDICTION;  APPOINTMENT OF AGENT FOR SERVICE OF PROCESS; WAIVER OF JURY TRIAL.

(a)           THIS 2017-A EXCHANGE NOTE SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.  THE PARTIES HERETO HEREBY DECLARE THAT IT IS THEIR INTENTION THAT THIS 2017-A EXCHANGE NOTE SUPPLEMENT SHALL BE REGARDED AS MADE UNDER THE LAWS OF THE STATE OF DELAWARE AND THAT THE LAWS OF SAID STATE SHALL BE APPLIED IN INTERPRETING ITS PROVISIONS IN ALL CASES WHERE LEGAL INTERPRETATION SHALL BE REQUIRED.  EACH OF THE PARTIES HERETO AGREES (A) THAT THIS 2017-A EXCHANGE NOTE SUPPLEMENT INVOLVES AT LEAST $100,000.00 AND (B) THAT THIS 2017-A EXCHANGE NOTE SUPPLEMENT HAS BEEN ENTERED INTO BY THE PARTIES HERETO IN EXPRESS RELIANCE UPON 6 DEL.  C. § 2708.

(b)           EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES (A) TO BE SUBJECT TO THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND OF THE FEDERAL COURTS SITTING IN THE STATE OF DELAWARE AND (B)(1)  TO THE EXTENT SUCH PARTY IS NOT OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF DELAWARE, TO APPOINT AND MAINTAIN AN AGENT IN THE STATE OF DELAWARE AS SUCH PARTY’S AGENT FOR ACCEPTANCE OF LEGAL PROCESS, AND (2) THAT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SERVICE OF PROCESS MAY ALSO BE MADE ON SUCH PARTY BY PREPAID CERTIFIED MAIL WITH A PROOF OF MAILING RECEIPT VALIDATED BY THE UNITED STATES POSTAL SERVICE CONSTITUTING EVIDENCE OF VALID SERVICE, AND THAT SERVICE MADE PURSUANT TO (B)(1)  OR (2) ABOVE SHALL, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HAVE

 

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THE SAME LEGAL FORCE AND EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE STATE OF DELAWARE.

(c)           EACH PARTY TO THIS 2017-A EXCHANGE NOTE SUPPLEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY 2017-A BASIC DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY ANY 2017-A BASIC DOCUMENT.

Section 8.05.  Successors and Assigns.  All covenants and agreements contained in this 2017-A Exchange Note Supplement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns, whether so expressed or not.  Any request, notice, direction, consent, waiver or other instrument or action by the parties hereto shall bind their respective successors and assigns.

Section 8.06.  Severability.  If any one or more of the covenants, agreements, provisions or terms of this 2017-A Exchange Note Supplement or the 2017-A Exchange Note is held invalid, illegal or unenforceable, then such covenants, agreements, provisions and terms will be deemed severable from the remaining covenants, agreements, provisions and terms of this 2017-A Exchange Note Supplement and the 2017-A Exchange Note and will in no way affect the validity, legality or enforceability of the other covenants, agreements, provisions and terms of this 2017-A Exchange Note Supplement and the 2017-A Exchange Note.

Section 8.07.  Counterparts.  This 2017-A Exchange Note Supplement may be executed in any number of counterparts, each of which counterparts will be an original, and all of which counterparts will together constitute one and the same instrument.

Section 8.08.  Table of Contents and Headings.  The Table of Contents and the various headings in this 2017-A Exchange Note Supplement are included for convenience only and will not affect the meaning or interpretation of any provision of this 2017-A Exchange Note Supplement.

Section 8.09.  No Petition.  The Administrative Agent, the Collateral Agent and the Lender, by entering into this 2017-A Exchange Note Supplement, and the 2017-A Exchange Noteholder, by taking delivery of the 2017-A Exchange Note, covenants and agrees that for a period of one year and one day (or, if longer, any applicable preference period) after payment in full of all obligations under the Basic Collateral Agency Agreement, this 2017-A Exchange Note Supplement, the Exchange Notes, the Notes and all outstanding Securities, it will not institute against, or join any Person in instituting against, the Titling Trust, the Initial Beneficiary or the Transferor any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings, or other Proceedings under any Insolvency Law in connection with any obligations relating to the Notes, the 2017-A Exchange Note or the 2017-A Basic Documents and agrees that it will not cooperate with or encourage others to institute any such Proceeding.

Section 8.10.  No Recourse.  It is expressly understood and agreed by the parties that (i) this document is executed and delivered by BNYM, not individually or personally, but solely

 

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as Titling Trustee, in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Titling Trust is made and intended not as personal representations, undertakings and agreements by BNYM but is made and intended for the purpose for binding only the Titling Trust, (iii) nothing herein contained shall be construed as creating any liability on BNYM, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any person claiming by, through or under the parties hereto and (iv) under no circumstances shall BNYM be personally liable for the payment of any indebtedness or expenses of the Titling Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Titling Trust under this document or any other related documents.

 

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IN WITNESS WHEREOF, the parties hereto have caused this 2017-A Exchange Note Supplement to be duly executed by their respective officers duly authorized, as of the day and year first above written.

 

	 	
DAIMLER TRUST

	 	 
	 	
By:

	
BNY MELLON TRUST OF DELAWARE 

(f/k/a BNYM (Delaware)) (f/k/a The Bank of 

New York (Delaware)), not in its individual 

capacity but solely as Titling Trustee

	 	 	 
	 	
By:

	
	 	 	
Name:

	 	 	
Title:

	 	 	 
	 	
MERCEDES-BENZ FINANCIAL SERVICES

	 	 	USA LLC, as Lender
	 	 	 
	 	
By:

	 
	 	 	
Name:

	 	 	
Title:

	 	 	 
	 	
MERCEDES-BENZ FINANCIAL SERVICES 

	 	 	USA LLC, as Servicer
	 	 	 
	 	
By:

	 
	 	 	
Name:

	 	 	
Title:

	 	 	 
	 	
DAIMLER TITLE CO.,

	 	
as Collateral Agent

	 	 
	 	
By:

	 
	 	 	
Name:

	 	 	
Title:

 

	 	
U.S. BANK NATIONAL ASSOCIATION, as 

	 	 	Indenture Trustee
	 	 	 
	 	
By:

	
	 	 	
Name:

	 	 	
Title:

	 	 	 
	 	
U.S. BANK TRUST  NATIONAL

	 	 	ASSOCIATION, as Administrative Agent
	 	 	 
	 	
By:

	
	 	 	
Name:

	 	 	
Title:

 

EXHIBIT A

FORM OF 2017-A EXCHANGE NOTE

THIS 2017-A EXCHANGE NOTE MAY BE TRANSFERRED PRIOR TO THE OCCURRENCE AND CONTINUANCE OF AN EVENT OF DEFAULT, ONLY IN WHOLE AND NOT IN PART AND SUBSEQUENT TO THE OCCURRENCE AND CONTINUANCE OF AN EVENT OF DEFAULT, EITHER IN WHOLE OR IN PART.  ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID FROM THE BEGINNING, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE PURCHASER OR TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE LENDER, THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY INTERMEDIARY.

A HOLDER OF THIS 2017-A EXCHANGE NOTE WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT IT IS NOT, AND IS NOT ACTING ON BEHALF OF, OR USING THE ASSETS OF (A) AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO TITLE I OF ERISA, (B) A “PLAN”, AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (C) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF SUCH EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN THE ENTITY (WITHIN THE MEANING OF DEPARTMENT OF LABOR REGULATION 29 C.F.R. SECTION 2510.3-101, AS MODIFIED BY SECTION 3(42) OF ERISA) OR (D) A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN THAT IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.

THE PURCHASER UNDERSTANDS AND AGREES THAT ANY PURPORTED TRANSFER OF THIS 2017-A EXCHANGE NOTE OR ANY INTEREST HEREIN IN CONTRAVENTION OF ANY OF THE RESTRICTIONS AND CONDITIONS CONTAINED IN SECTION 4.03 OF THE BASIC COLLATERAL AGENCY AGREEMENT SHALL BE VOID AND OF NO EFFECT.

THE PRINCIPAL OF THIS 2017-A EXCHANGE NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS 2017-A EXCHANGE NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

Registered $____________ No.  __

2017-A EXCHANGE NOTE

 

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DAIMLER TRUST, as Borrower (the “Borrower”), for value received, hereby promises to pay to MERCEDES-BENZ FINANCIAL SERVICES USA LLC, as 2017-A Exchange Noteholder (the “2017-A Exchange Noteholder”), for its benefit and the benefit of the other Transferees from time to time acquiring interests herein pursuant to the 2017-A Exchange Note Supplement, dated as of April 1, 2017 (the “Exchange Note Supplement”), among the Borrower, Mercedes-Benz Financial Services USA LLC, as Lender (in such capacity, the “Lender”) and Servicer (in such capacity, the “Servicer”), U.S. Bank Trust National Association, as Administrative Agent (the “Administrative Agent”), Daimler Title Co., as Collateral Agent (the “Collateral Agent”), and U.S. Bank National Association, as Indenture Trustee (the “Indenture Trustee”), to the Amended and Restated Collateral Agency Agreement, dated as of March 1, 2009 (the “Basic Collateral Agency Agreement”), among the Borrower, the Lender, the Servicer, the Administrative Agent and the Collateral Agent, and other transferees or registered assigns, the principal sum of _________________________________________ DOLLARS AND __________ CENTS ($__________) payable on each Payment Date in an amount described in Sections 5.01 and 5.02 of the Exchange Note Supplement; provided, however, that (i) the entire unpaid principal amount of this Note will be due and payable on the __________, 201_ Payment Date (the “2017-A Exchange Note Final Scheduled Payment Date”) and (ii) the 2017-A Exchange Note may be redeemed earlier than the 2017-A Exchange Note Final Scheduled Payment Date pursuant to Section 5.01 of the 2017-A Servicing Supplement, dated as of April 1, 2017 (the “2017-A Servicing Supplement”), among Mercedes-Benz Financial Services USA LLC, as Lender and Servicer, the Borrower and Daimler Title Co., as Collateral Agent.  Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in Appendix 1 to the 2017-A Servicing Supplement or, if not defined therein, in Appendix A to the Basic Collateral Agency Agreement.  Appendix 1 also contains rules as to usage applicable to this 2017-A Exchange Note.

The Borrower will pay interest on this 2017-A Exchange Note in an amount equal to the 2017-A Exchange Note Interest Distributable Amount, and principal on this 2017-A Exchange Note in an amount equal to the 2017-A Exchange Note Principal Distributable Amount, in each case, until the principal of this 2017-A Exchange Note is paid or made available for payment.  Such principal of and interest on this 2017-A Exchange Note will be paid in the manner specified on the reverse hereof.

The principal of and interest on this 2017-A Exchange Note are payable in such coin or currency of the United States as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Borrower with respect to this 2017-A Exchange Note will be applied to interest on and principal of this 2017-A Exchange Note in the manner set forth in the Exchange Note Supplement.

This 2017-A Exchange Note is a security governed by Article 8 of the Uniform Commercial Code.

Reference is made to the further provisions of this 2017-A Exchange Note set forth on the reverse hereof, which will have the same effect as though fully set forth on the face of this 2017-A Exchange Note.

 

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Unless the certificate of authentication hereon has been executed by the Administrative Agent whose name appears below by manual or facsimile signature, this 2017-A Exchange Note will not be entitled to any benefit under the Basic Collateral Agency Agreement or the Exchange Note Supplement referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

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IN WITNESS WHEREOF, the Borrower has caused this 2017-A Exchange Note to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

 

	 	
Date:   April __, 2017

	DAIMLER TRUST
	 	 	 	 
	 	 	
By:

	
BNY MELLON TRUST OF DELAWARE

	 	 	 	
(f/k/a BNYM (Delaware)) (f/k/a The Bank of

New York (Delaware)), not in its individual

capacity but solely as Titling Trustee

	 	 	 	 
	 	 	
By:

	
	 	 	 	
Name:

	 	 	 	
Title:

 

ADMINISTRATIVE AGENT’S CERTIFICATE OF AUTHENTICATION

This is the 2017-A Exchange Note designated above and referred to in the within-mentioned Basic Collateral Agency Agreement and Exchange Note Supplement.

 

	 	
Date:April __, 2017

	U.S. BANK TRUST NATIONAL ASSOCIATION, 
	 	 	 	
not in its individual capacity but solely as 

Administrative Agent

	 	 	 	 
	 	 	
By:

	
	 	 	 	
Authorized Officer

 

A-4

REVERSE OF 2017-A EXCHANGE NOTE

This 2017-A Exchange Note is one of the duly authorized issue of Exchange Notes, which may be issued under the Basic Collateral Agency Agreement, to which Basic Collateral Agency Agreement and all Exchange Note Supplements that are supplemental thereto reference is made for a statement of the respective rights and obligations thereunder of the Borrower, the Lender, the Servicer, the Administrative Agent, the Collateral Agent and the Exchange Noteholders.  The 2017-A Exchange Note is subject to all terms of the Basic Collateral Agency Agreement and the Exchange Note Supplement.  In the event of a conflict between the terms of this 2017-A Exchange Note, the Basic Collateral Agency Agreement and the Exchange Note Supplement, the terms of the Exchange Note Supplement will prevail.  The 2017-A Exchange Noteholder, by accepting this 2017-A Exchange Note, will be deemed to have agreed to the terms and conditions of the Basic Collateral Agency Agreement and the Exchange Note Supplement with the same effect as if such 2017-A Exchange Noteholder had been a party to the Basic Collateral Agency Agreement and the 2017-A Exchange Note Supplement.

Interest on and principal of the 2017-A Exchange Note will be payable in accordance with the priority of payments set forth in Sections 5.01 and 5.02 of the Exchange Note Supplement.  Principal of the 2017-A Exchange Note will be payable on each Payment Date in an amount equal to the 2017-A Exchange Note Principal Distributable Amount for such Payment Date.  “Payment Date” means the 15th day of each calendar month or, if any such day is not a Business Day, the next Business Day, commencing May 15, 2017.

As described on the face hereof, the entire unpaid principal amount of this 2017-A Exchange Note will be due and payable on the 2017-A Exchange Note Final Scheduled Payment Date.  Notwithstanding the foregoing, the entire unpaid principal amount of this 2017-A Exchange Note will be due and payable on the date on which an Exchange Note Default with respect to the 2017-A Exchange Note has occurred and is continuing and the 2017-A Exchange Noteholder has declared the 2017-A Exchange Note to be immediately due and payable in the manner provided in the Basic Collateral Agency Agreement.

Payments of interest on this 2017-A Exchange Note on each Payment Date, together with the installment of principal to the extent not in full payment of this 2017-A Exchange Note, will be made to the account of the 2017-A Exchange Noteholder either by wire transfer in immediately available funds, to the account of such 2017-A Exchange Noteholder or an account designated by the 2017-A Exchange Noteholder at a bank or other entity having appropriate facilities therefor if such 2017-A Exchange Noteholder has provided to the Exchange Note Registrar appropriate written instructions at least five Business Days prior to such Payment Date or, if not, by check mailed first-class mail postage prepaid to the 2017-A Exchange Noteholder’s address as it appears on the Exchange Note Register prior to such Payment Date, except that the final installment of principal payable on this 2017-A Exchange Note on a Payment Date or the 2017-A Exchange Note Final Scheduled Payment Date will be payable only upon the presentation and surrender of this 2017-A Exchange Note in the manner set forth in Section 4.05 of the Basic Collateral Agency Agreement.  Such payments will be made without requiring that this 2017-A Exchange Note be submitted for notation of payment.  Any reduction in the principal amount of this 2017-A Exchange Note effected by any payments made on any Payment Date will be binding upon all future 2017-A Exchange Noteholders of this 2017-A Exchange

 

A-5

Note and of any 2017-A Exchange Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Exchange Note Supplement and the Basic Collateral Agency Agreement, for payment in full of the then remaining unpaid principal amount of this 2017-A Exchange Note on a Payment Date, then the Administrative Agent will notify the 2017-A Exchange Noteholder of the date on which the Borrower expects that the final installment of principal of and interest on the 2017-A Exchange Note will be paid not later than 15 days prior to such date.  Such notice will specify that such final installment will be payable only upon presentation and surrender of the 2017-A Exchange Note and will specify the place where the 2017-A Exchange Note may be presented and surrendered for payment of such installment.

As provided in the 2017-A Servicing Supplement, the 2017-A Exchange Note may be purchased by the Servicer, in whole but not in part, in the manner and to the extent described in Section 5.01 of the 2017-A Servicing Supplement.

The transfer of this 2017-A Exchange Note is subject to the restrictions on transfer specified on the face hereof and to the other limitations set forth in the Basic Collateral Agency Agreement and the Exchange Note Supplement.  Subject to the satisfaction of such restrictions and limitations, the transfer of this 2017-A Exchange Note may be registered on the Exchange Note Register upon surrender of this 2017-A Exchange Note for registration of transfer at the office or agency designated by the Borrower pursuant to the Basic Collateral Agency Agreement, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Administrative Agent duly executed by, the 2017-A Exchange Noteholder hereof or the 2017-A Exchange Noteholder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Exchange Note Registrar, and thereupon a new 2017-A Exchange Note in the same aggregate principal amount will be issued to the designated transferee.  No service charge will be charged for any registration of transfer or exchange of this 2017-A Exchange Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

The 2017-A Exchange Noteholder, by accepting this 2017-A Exchange Note, acknowledges and agrees that (i) if an Insolvency Event occurs with respect to the Borrower, any claim that the 2017-A Exchange Noteholder may seek to enforce at any time against the Borrower will be limited in recourse to the 2017-A Reference Pool, (ii) if, notwithstanding clause (i) above, the 2017-A Exchange Noteholder is deemed to have any claim against the assets of the Borrower other than the assets included in the 2017-A Reference Pool, whether by operation of law, legal process, pursuant to Insolvency Laws or otherwise (including by virtue of Section 1111(b) of the Bankruptcy Code), such claim will be subordinate to the payment in full, including post-petition interest, of the claims of the Lender and to the holders of (a) all other Exchange Notes and (b) in the case of assets allocated to a Specified Interest other than the Daimler Retail Specified Interest, all other asset-backed securities, the payments on which are derived primarily from collections on designated assets of the Borrower and all related hedging arrangements and (iii) the 2017-A Exchange Noteholder irrevocably makes the election afforded to secured creditors by Section 1111(b)(I)(A)(i) of the Bankruptcy Code to receive the treatment afforded by Section 1111(b)(2) of the Bankruptcy Code with respect to any secured claim that

 

A-6

such holder or party, as the case may be, may have against the Titling Trust or against any Series other than the Series in connection with which this 2017-A Exchange Note is issued.

THE RECITATION SET FORTH IN THE PRECEDING PARAGRAPH WILL BE DEEMED TO CONSTITUTE AN ENFORCEABLE SUBORDINATION AGREEMENT WITHIN THE MEANING OF SECTION 510(a) OF THE BANKRUPTCY CODE.

In addition, the 2017-A Exchange Noteholder, by accepting this 2017-A Exchange Note, (i) consents to the Administrative Agent’s delegation under the Administration Agreement to the Collateral Agent Administrator of certain of the duties that the Administrative Agent is required to perform on behalf of the Collateral Agent pursuant to the Basic Collateral Agency Agreement and (ii) agrees that, in the event that any 2017-A Vehicle is sold or otherwise disposed of by the Servicer pursuant to the 2017-A Servicing Agreement, it will be deemed automatically to release, and immediately prior to such sale or other disposition, does hereby agree to release at such time, any and all Liens and other rights and interests it possesses or may possess from time to time, without further action of the parties, in, to and under such 2017-A Vehicle, the proceeds thereof (including pursuant to any Insurance Policy) with respect to or covering such 2017-A Vehicle and any contract or agreement for the sale or other disposition of such 2017-A Vehicle.  Notwithstanding the foregoing, nothing herein shall constitute a release of any rights under the 2017-A Basic Documents to receive an amount equal to the proceeds of such sale or other disposition.

The 2017-A Exchange Noteholder, by accepting the 2017-A Exchange Note, covenants and agrees that for a period of one year and one day (or, if longer, any applicable preference period) after payment in full of all Secured Obligations under the Basic Collateral Agency Agreement, the Exchange Note Supplement, the Exchange Notes, the outstanding Certificates and the outstanding Securities, it will not institute against the Titling Trust, the Initial Beneficiary or the Transferor, or join in any institution against the Titling Trust, the Initial Beneficiary or the Transferor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings, or other Proceedings under any Insolvency Law in connection with any obligations relating to the 2017-A Exchange Note, the Basic Collateral Agency Agreement, the Exchange Note Supplement or any of the other 2017-A Basic Documents.

The Borrower has entered into the Exchange Note Supplement and this 2017-A Exchange Note is issued with the intention that, for U.S. federal, State and local income, single business and franchise tax purposes, this 2017-A Exchange Note will represent ownership of the 2017-A Reference Pool.  The 2017-A Exchange Noteholder, by its acceptance of this 2017-A Exchange Note, will be deemed to agree to treat this 2017-A Exchange Note for U.S. federal, State and local income, single business and franchise tax purposes in accordance with such treatment unless otherwise required by law.

Prior to the due presentment for registration of transfer of this 2017-A Exchange Note, the Borrower and the Administrative Agent and any agent of the Borrower or the Administrative Agent may treat the Person in whose name this 2017-A Exchange Note (as of the day of determination or as of such other date as may be specified in the Exchange Note Supplement) is registered as the owner hereof for all purposes, whether or not this 2017-A Exchange Note be

 

A-7

overdue, and none of the Borrower, the Administrative Agent or any such agent will be affected by notice to the contrary.

The Basic Collateral Agency Agreement permits the amendment thereof (in any manner and for any purpose) by the parties thereto so long as each Exchange Noteholder of an Outstanding Exchange Note has consented to such amendment.  The Basic Collateral Agency Agreement also permits the amendment thereof to amend or waive certain terms and conditions set forth therein without the consent of the Exchange Noteholders; provided certain conditions are satisfied.  Any such consent by the 2017-A Exchange Noteholder will be conclusive and binding upon the 2017-A Exchange Noteholder and upon all future holders of this 2017-A Exchange Note and of any 2017-A Exchange Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this 2017-A Exchange Note.

THIS 2017-A EXCHANGE NOTE, THE BASIC COLLATERAL AGENCY AGREEMENT AND THE EXCHANGE NOTE SUPPLEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.

No reference herein to the Basic Collateral Agency Agreement or the Exchange Note Supplement, and no provision of this 2017-A Exchange Note or of the Basic Collateral Agency Agreement, will alter or impair the obligation of the Borrower, which is absolute and unconditional, to pay the principal of and interest on this 2017-A Exchange Note at the times, place and rate, and in the coin or currency herein prescribed.

Anything herein to the contrary notwithstanding, except as expressly provided in the 2017-A Basic Documents, none of U.S. Bank Trust, in its individual capacity, or Daimler Title Co., in its individual capacity, or any of their respective affiliates, partners, beneficiaries, agents, officers, directors, employees or successors or assigns, will be personally liable for, nor will recourse be had to any of them for, the payment of principal of or interest on this 2017-A Exchange Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Basic Collateral Agency Agreement or the Exchange Note Supplement.  The 2017-A Exchange Noteholder, by its acceptance hereof, agrees that, except as expressly provided in the 2017-A Basic Documents, in the case of an Exchange Note Default under the Basic Collateral Agency Agreement or the Exchange Note Supplement, the 2017-A Exchange Noteholder will have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided,  however, that nothing contained herein will be taken to prevent recourse to, and enforcement against, the assets of the Borrower for any and all liabilities, obligations and undertakings contained in the Basic Collateral Agency Agreement, the Exchange Note Supplement or in this 2017-A Exchange Note.

 

A-8

ASSIGNMENT

Social Security or taxpayer I.D.  or other identifying number of assignee.

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers without recourse unto ______________________________________________________________________

(name and address of assignee)

the within 2017-A Exchange Note and all rights thereunder, and hereby irrevocably constitutes and appoints, attorney, to transfer said 2017-A Exchange Note on the books kept for registration thereof, with full power of substitution in the premises.

 

	
Date:

	
 

	 	 
	 	 
	
Signature Guaranteed:*

	 

* Note: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within 2017-A Exchange Note in every particular, without alteration, enlargement or any change whatsoever.

 

A-9

EXHIBIT B

SCHEDULE OF 2017-A REFERENCE POOL ASSETS

(On file with the Collateral Agent)

 

B-1

SCHEDULE A

ITEM 1119 PARTIES

Transferor

Seller

Servicer

Indenture Trustee

Owner Trustee

Collateral Agent

Titling Trust

Asset Representations Reviewer

 

SA-1

SCHEDULE B

DISCLOSURE ITEMS

 

Part II - Form 10-D Disclosure Items

 

	FORM 10-D DISCLOSURE ITEMS
	 	
Item on Form 10-D

	 	
Responsible Party

	 	
Item 1: Distribution and Pool Performance Information

 

 

	 	 
	 	
Information included in the Monthly Investor Report

	 	
Servicer

Administrator

	 	
Any information required by Item 1121(a) and (b) which is NOT included on the Monthly Investor Report

	 	
Depositor

	 	
Item 1A. Asset-Level Information.

	 	 
	 	
Information required by Item 1111 and Item 1125; Schedule AL – Asset-level information.

	 	
Servicer

	 	
Item 1B. Asset Representations Reviewer and Investor Communication.

	 	 
	 	
Item 1121(d) – Asset Review

	 	
Servicer

	 	
Item 1121(e) – Investor Communication

	 	
Indenture Trustee

Servicer

	 	
Item 2: Legal Proceedings

 

·      Any legal Proceeding pending against the following entities or their respective property, that is material to Certificateholders, including any Proceeding known to be contemplated by governmental authorities:

	 	 
	 	
·      Issuing Entity (Trust Fund)

	 	
Depositor

	 	
·      Sponsor (Seller)

	 	
Seller (if a party to the Sales and Servicing Agreement) or Depositor

	 	
·      Depositor

	 	
Depositor

	 	
·      Indenture Trustee

	 	
Indenture Trustee

	 	
·      Administrator

	 	
Administrator

	 	
·      Servicer

	 	
Servicer

	 	
·      Owner Trustee

	 	
Owner Trustee

	 	
·      1110(b) Originator

	 	
Depositor

	 	
·      Any 1108(a)(2) Servicer (other than the Servicer or Administrator)

	 	
Depositor

	 	
·      Any other party contemplated by 1100(d)(1)

	 	
Depositor

 

SB-1

	FORM 10-D DISCLOSURE ITEMS
	 	
Item on Form 10-D

	 	
Responsible Party

	 	
Item 3: Sale of Securities and Use of Proceeds

 

Information from Item 2(a) of Part II of Form 10-Q

 

With respect to any sale of securities by the sponsor, depositor or issuing entity, that are backed by the same asset pool or are otherwise issued by the issuing entity, whether or not registered, provide the sales and use of proceeds information in Item 701 of Regulation S-K.  Pricing information can be omitted if securities were not registered.

	 	
Depositor

	 	
Item 4: Defaults Upon Senior Securities

 

Information from Item 3 of Part II of Form 10-Q

 

Report the occurrence of any Event of Default (after expiration of any grace period and provision of any required notice)

	 	
Administrator

 

 

	 	
Item 5: Submission of Matters to a Vote of Security Holders

 

Information from Item 4 of Part II of Form 10-Q

	 	
Administrator

 

Indenture Trustee

	 	
Item 6: Significant Obligors of Pool Assets

 

Item 1112(b) – Significant Obligor Financial Information*

	 	
Depositor

	 	
*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Item.

	 	 
	 	
Item 7. Change in Sponsor Interest in the Securities.

	 	 
	 	
Item 1124 – Sponsor Interest in the Securities, with respect to the reporting period covered by this report

	 	
Sponsor

Servicer

	 	
Item 8: Significant Enhancement Provider Information

 

Item 1114(b)(2) – Credit Enhancement Provider Financial Information*

	 	 
	 	
·      Determining applicable disclosure threshold

	 	
Depositor

	 	
·      Requesting required financial information (including any required accountants’ consent to the use thereof) or effecting incorporation by reference

	 	
Depositor

 

 

	 	
Item 1115(b) – Derivative Counterparty Financial Information*

	 	 
	 	
·      Determining current maximum probable exposure

	 	
Depositor

	 	
·      Determining current significance percentage

	 	
Depositor

 

SB-2

	FORM 10-D DISCLOSURE ITEMS
	 	
Item on Form 10-D

	 	
Responsible Party

	 	
·      Requesting required financial information (including any required accountants’ consent to the use thereof) or effecting incorporation by reference

	 	
Depositor

 

	 	
*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Items.

	 	 
	 	
Item 9: Other Information

 

Disclose any information required to be reported on Form 8-K during the period covered by the Form 10-D but not reported

	   	
Any party responsible for the applicable Form 8-K Disclosure item

	 	
Item 10: Exhibits

	 	 
	 	
 

 

Monthly Statement to Noteholders

	 	
Administrator

	 	
Exhibits required by Item 601 of Regulation S-K, such as material agreements

	 	
Depositor

 

SB-3

Part III - Form 10-K Disclosure Items

 

	FORM 10-K DISCLOSURE ITEMS
	 	
Item on Form 10-K

	 	
Responsible Party

	 	
Item 1B: Unresolved Staff Comments

 

 

	 	
Depositor

	 	
Item 9B: Other Information

	 	
Any party responsible for disclosure items on Form 8-K

	 	
Item 15: Exhibits, Financial Statement Schedules

	 	
Depositor

	 	
Additional Item:

 

Disclosure per Item 1117 of Reg AB

	 	
(i) All parties to the Sale and Servicing Agreement (as to themselves), (ii) the Depositor as to the issuing entity, (iii) the Depositor as to the sponsor, any 1106(b) originator, any 1100(d)(1) party

	 	
Additional Item:

 

Disclosure per Item 1119 of Reg AB

	 	
(i) All parties to the Sale and Servicing Agreement (as to themselves), (ii) the Depositor as to he sponsor, originator, significant obligor, enhancement or support provider

	 	
Additional Item:

 

Disclosure per Item 1112(b) of Reg AB

	 	
Depositor/ Servicer

	 	
Additional Item:

 

Disclosure per Items 1114(b) and 1115(b) of Reg AB

	 	
Depositor

 

SB-4

Part IV - Form 8-K Disclosure (Reportable Events)

 

	FORM 8-K DISCLOSURE (REPORTABLE EVENTS)
	 	
Item on Form 8-K

	 	
Responsible Party

	 	
Item 1.01- Entry into a Material Definitive Agreement

 

Disclosure is required regarding entry into or amendment of any definitive agreement that is material to the securitization, even if depositor is not a party.

 

Examples: servicing agreement, custodial agreement.

 

Note: disclosure not required as to definitive agreements that are fully disclosed in the prospectus.

	 	
All parties as to themselves

	 	
Item 1.02- Termination of a Material Definitive Agreement

 

Disclosure is required regarding termination of any definitive agreement that is material to the securitization (other than expiration in accordance with its terms), even if depositor is not a party.

 

Examples: servicing agreement, custodial agreement.

	 	
All parties as to themselves

	 	
Item 1.03- Bankruptcy or Receivership

 

Disclosure is required regarding the bankruptcy or receivership, with respect to any of the following:

	 	
Depositor

	 	
·      Sponsor (Seller)

	 	
Depositor/Sponsor (Seller)

	 	
·      Depositor

	 	
Depositor

	 	
        Servicer

	 	
Servicer

	 	
·      Affiliated Servicer

	 	
Servicer

	 	
·      Other Servicer servicing 20% or more of the pool assets at the time of the report

	 	
Servicer

	 	
·      Other material servicers

	 	
Servicer

	 	
·      Indenture Trustee

	 	
Indenture Trustee

	 	
·      Administrator

	 	
Administrator

	 	
·      Significant Obligor

	 	
Depositor

	 	
·      Credit Enhancer (10% or more)

	 	
Depositor

	 	
·      Derivative Counterparty

	 	
Depositor

	 	
·      Owner Trustee

	 	
Owner Trustee

 

SB-5

	FORM 8-K DISCLOSURE (REPORTABLE EVENTS)
	 	
Item on Form 8-K

	 	
Responsible Party

	 	
Item 2.04- Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

 

Includes an early amortization, performance trigger or other event, including event of default, that would materially alter the payment priority/distribution of cash flows/amortization schedule.

 

Disclosure will be made of events other than waterfall triggers which are disclosed in the monthly statements to the certificateholders.

	 	
Depositor

 

Servicer

 

Administrator

	 	
Item 3.03- Material Modification to Rights of Security Holders

 

Disclosure is required of any material modification to documents defining the rights of Certificateholders, including the Pooling and Servicing Agreement.

	 	
Administrator

 

Indenture Trustee

 

Depositor

	 	
Item 5.03- Amendments of Articles of Incorporation or Bylaws; Change of Fiscal Year

 

Disclosure is required of any amendment “to the governing documents of the issuing entity”.

	 	
Depositor

	 	
Item 6.01- ABS Informational and Computational Material

	 	
Depositor

	 	
Item 6.02- Change of Servicer or Administrator

 

Requires disclosure of any removal, replacement, substitution or addition of any Servicer, affiliated servicer, and other servicer servicing 10% or more of pool assets at time of report, other material servicers or Indenture Trustee.

	 	
A change of both – Depositor

 

A change of Servicer or Administrator - Servicer/Administrator/Depositor/

 

	 	
Reg AB disclosure about any new servicer or Servicer is also required.

	 	
Servicer/Depositor

	 	
Reg AB disclosure about any new Indenture Trustee is also required.

	 	
New Indenture Trustee

	 	
Item 6.03- Change in Credit Enhancement or External Support

 

Covers termination of any enhancement in manner other than by its terms, the addition of an enhancement, or a material change in the enhancement provided.  Applies to external credit enhancements as well as derivatives.

	 	
N/A

	 	
Reg AB disclosure about any new enhancement provider is also required.

	 	
Depositor

	 	
Item 6.04- Failure to Make a Required Distribution

 

	 	
Servicer

Indenture Trustee

 

SB-6

	FORM 8-K DISCLOSURE (REPORTABLE EVENTS)
	 	
Item on Form 8-K

	 	
Responsible Party

	 	
Item 6.05- Securities Act Updating Disclosure

 

If any material pool characteristic differs by 5% or more at the time of issuance of the securities from the description in the final prospectus, provide updated Reg AB disclosure about the actual asset pool.

	 	
Depositor

	 	
If there are any new servicers or originators required to be disclosed under Regulation AB as a result of the foregoing, provide the information called for in Items 1108 and 1110 respectively.

	 	
Depositor

	 	
Item 7.01- Reg FD Disclosure

	 	
Depositor

	 	
Item 8.01- Other Events

 

Any event, with respect to which information is not otherwise called for in Form 8-K, that the registrant deems of importance to certificateholders.

	 	
Depositor

	 	
Item 9.01- Financial Statements and Exhibits

	 	
Responsible party, as applicable, for reporting/disclosing the financial statement or exhibit

 

 

SB-7Exhibit 10.1

 

MERCEDES-BENZ FINANCIAL SERVICES USA LLC,

as Seller,

and

DAIMLER TRUST LEASING LLC,

as Purchaser

 

FIRST-TIER SALE AGREEMENT

Dated as of April 1, 2017

 

TABLE OF CONTENTS

 

	 	
Page

	 	 
	
ARTICLE ONE

	 	 
	
USAGE, DEFINITIONS AND INCORPORATION BY REFERENCE 

	 	 
	
Section 1.01. Capitalized Terms; Rules of Usage

	
1

	 	 
	
ARTICLE TWO  

	 	 
	
SALE OF THE FIRST-TIER ASSETS 

	 	 
	
Section 2.01. Sale of the First-Tier Assets

	
3

	
Section 2.02. Closing; Further Assignments

	
3

	
Section 2.03. Intent; Savings Clause

	
3

	 	 
	
ARTICLE THREE 

	 	  
	
REPRESENTATIONS AND WARRANTIES 

	 	 
	
Section 3.01. Representations and Warranties of the Purchaser

	
4

	
Section 3.02. Representations and Warranties of the Seller

	
5

	
Section 3.03. Survival of Representations and Warranties

	
7

	 	 
	
ARTICLE FOUR 

	 	 
	
CONDITIONS 

	 	 
	
Section 4.01. Conditions to Obligation of the Purchaser

	
8

	
Section 4.02. Conditions to Obligation of the Seller

	
8

	
Section 4.03. Deemed Satisfaction of Conditions

	
8

	 	 
	
ARTICLE FIVE 

	 	 
	
COVENANTS OF THE SELLER 

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

	
9

	
Section 5.02. Other Liens or Interests

	
10

	
Section 5.03. Indemnification

	
10

	 	 
	
ARTICLE SIX 

	 	 
	
MISCELLANEOUS PROVISIONS 

	 	 
	
Section 6.01. Obligations of the Seller

	
12

	
Section 6.02. Amendment

	
12

 

i

	 	
Page

	 	 
	
Section 6.03. Waivers

	
12

	
Section 6.04. Costs and Expenses

	
13

	
Section 6.05. Notices

	
13

	
Section 6.06. Severability

	
13

	
Section 6.07. Counterparts

	
13

	
Section 6.08. Successors and Assigns

	
13

	
Section 6.09. No Petition

	
14

	
Section 6.10. Table of Contents and Headings

	
14

	
Section 6.11. GOVERNING LAW; SUBMISSION TO JURISDICTION

	
14

	
Section 6.12. WAIVER OF JURY TRIAL

	
14

	
Section 6.13. Limited Recourse

	
14

	
Section 6.14. Each Exchange Note Separate; Assignees of Exchange Note

	
15

	 
	
EXHIBITS

	 
	
Exhibit A –  Perfection Representations, Warranties and Covenants

	
A-1

 

ii

This FIRST-TIER SALE AGREEMENT, dated as of April 1, 2017 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is between MERCEDES-BENZ FINANCIAL SERVICES USA LLC, a Delaware limited liability company (“MBFS USA”), as seller (the “Seller”), and DAIMLER TRUST LEASING LLC, a Delaware limited liability company, as purchaser (the “Purchaser”).

RECITALS

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

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

WHEREAS, the parties to the Basic Collateral Agency Agreement have entered into the 2017-A Exchange Note Supplement, dated as of April 1, 2017 (the “2017-A Exchange Note Supplement”), pursuant to which an exchange note, having an aggregate initial outstanding principal balance of $2,232,241,333.50, bearing a fixed interest rate of 2.02% per annum and a stated maturity date of January 17, 2023 (the “2017-A Exchange Note”), was issued and delivered to the Lender;

WHEREAS, pursuant to the 2017-A Exchange Note Supplement, the Seller and the Titling Trust have also specified certain leases and vehicles to be allocated to a reference pool with respect to the 2017-A Exchange Note; and

WHEREAS, the parties hereto wish to enter into this Agreement pursuant to which the Seller will sell, transfer and assign the 2017-A Exchange Note and certain related property and rights to the Purchaser.

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

ARTICLE ONE

USAGE, DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.  Capitalized Terms; Rules of Usage . Capitalized terms used herein that are not otherwise defined shall have the meaning ascribed thereto in Appendix 1 to the 2017-A Servicing Supplement or, if not defined therein, in Appendix A to the Basic Collateral Agency

 

Agreement.  Appendix 1 also contains rules as to usage applicable to this Agreement.  Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Agreement:

“2017-A Servicing Supplement” means the 2017-A Servicing Supplement, dated as of April 1, 2017, to the Basic Servicing Agreement, among MBFS USA, as servicer and lender, Daimler Trust, as titling trust, and Daimler Title Co., as collateral agent.

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

 

2

ARTICLE TWO

 

SALE OF THE FIRST-TIER ASSETS

Section 2.01.  Sale of the First-Tier Assets

 

(a)           Effective as of the 2017-A Closing Date, the Seller sells, transfers, assigns and otherwise conveys to the Purchaser, without recourse, all right, title and interest of the Seller, whether now owned or hereafter acquired, in, to and under the 2017-A Exchange Note and all of the Seller’s rights under the 2017-A Basic Documents, including all monies paid thereon and all monies due thereon after the 2017-A Cutoff Date (collectively, the “First-Tier Assets”).

(b)           The Purchaser accepts the sales, transfers, assignments and conveyances made pursuant to Section 2.01(a) and pays to the Seller, as payment for the 2017-A Exchange Note, the “Exchange Note Purchase Price” which is equal to the net proceeds of the sale of the 2017-A ABS Notes.  The First-Tier Assets will become the property and rights of the Purchaser.

Section 2.02.  Closing; Further Assignments.

(a)           The sale, transfer, assignment and conveyance of the First-Tier Assets will take place on the 2017-A Closing Date concurrently with the closings under the Second-Tier Sale Agreement and the Indenture.

(b)           The Seller acknowledges that, pursuant to the (i) Second-Tier Sale Agreement, the Purchaser will sell, transfer, assign and convey the First-Tier Assets to the Issuer and assign its rights under this Agreement to the Issuer and (ii) the Indenture, the Issuer will assign and pledge the First-Tier Assets and certain other property and rights to the Indenture Trustee for the benefit of the 2017-A Secured Parties.  The Seller consents to such sale, transfer, assignments, pledge and conveyance.

(c)           The sale, transfer, assignment and conveyance of the First-Tier Assets pursuant to this Agreement is without recourse, and the Seller does not guarantee payment on the First-Tier Assets or collection of any Collateral Asset included in the 2017-A Reference Pool.

Section 2.03.  Intent; Savings Clause.  It is the intention of the parties hereto that (i) the sale pursuant to Section 2.01 constitute an absolute sale of the First-Tier Assets, including all monies paid thereon and all monies due thereon on or after the 2017-A Cutoff Date, conveying good title to the First-Tier Assets free and clear of any Lien other than Permitted Liens, from the Seller to the Purchaser and (ii) the First-Tier Assets not be a part of the Seller’s estate in the event of a bankruptcy or insolvency of the Seller.  If, notwithstanding the intention of the parties hereto, such sale is deemed to be a pledge in connection with a financing or is otherwise deemed not to be a sale, the Seller grants, and the parties intend that the Seller grants, to the Purchaser a security interest in the First-Tier Assets and the performance by the Seller of the obligation by the Seller to pay to the Purchaser all amounts received with respect to the 2017-A Exchange Note, and in such event, this Agreement will constitute a security agreement under applicable law and the Purchaser will have all of the rights and remedies of a secured party and creditor under the UCC.

 

3

ARTICLE THREE

 

REPRESENTATIONS AND WARRANTIES

 

Section 3.01.  Representations and Warranties of the Purchaser.  The Purchaser represents and warrants to the Seller as of the 2017-A Closing Date:

(a)          Organization and Good Standing; Qualification.  The Purchaser has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, with the power and authority to own or lease its properties and to conduct its activities as such properties are currently owned or leased and such activities are currently conducted.

(b)          Due Qualification.  The Purchaser is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its activities requires such qualification, license or approval, unless the failure to obtain such qualifications, licenses or approvals would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to perform its obligations under this Agreement.

(c)          Power and Authority; Authorization; Execution and Delivery; Binding Obligation.  The Purchaser has the power and authority to execute, deliver and perform its obligations under this Agreement.  This Agreement has been duly authorized, executed and delivered by the Purchaser and constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as such enforceability may be limited by insolvency, bankruptcy, reorganization or other laws relating to or affecting the enforcement of creditors’ rights and by general equitable principles.

(d)          No Violation.  The consummation of the transactions contemplated by, and the fulfillment of the terms of, this Agreement will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under its limited liability company agreement, any material indenture, mortgage, deed of trust, loan agreement, guarantee, lease financing agreement or similar agreement or instrument under which the Purchaser is a party or by which the Purchaser is bound, (ii) result in the creation or imposition of any Lien upon any of the Purchaser’s properties pursuant to the terms of any such agreement or instrument (other than Permitted Liens or Liens contemplated by the 2017-A Basic Documents), (iii) violate the certificate of formation of the Purchaser or the limited liability company agreement of the Purchaser or (iv) violate or contravene any law or, to the Purchaser’s knowledge, any order, rule or regulation applicable to the Purchaser of any Governmental Authority having jurisdiction over the Purchaser or its properties, the failure to comply with which would reasonably be expected to have a material adverse effect on the Purchaser’s ability to perform its obligations under this Agreement.

 

4

(e)          No Proceedings.  There are no proceedings pending, or, to the Purchaser’s knowledge, threatened, and to the Purchaser’s knowledge there are no investigations pending or threatened, against or affecting the Purchaser or its property before any Governmental Authority (i) asserting the invalidity or unenforceability of the 2017-A Exchange Note, the 2017-A ABS Notes or this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on the ability of the Purchaser to perform its obligations under this Agreement.

(f)           No Material Default.  Neither the Purchaser nor its affiliates is in material default under any agreement, contract, instrument, or indenture of any nature whatsoever to which the Purchaser or its affiliates is bound, and which default would have a material adverse effect on the ability of the Purchaser to perform its obligations under this Agreement.

(g)          No Consent.  No consent, approval, authorization, or order of any court or governmental agency or body is required under federal or state law for the execution, delivery, and performance by the Purchaser, or compliance by it with this Agreement or the consummation of the transactions contemplated hereby, or if required has been obtained or can be obtained prior to the execution of this Agreement.

Section 3.02.  Representations and Warranties of the Seller.  The Seller represents and warrants to the Purchaser as of the 2017-A Closing Date:

(a)          Organization and Good Standing; Qualification.  The Seller has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, with the power and authority to own or lease its properties and to conduct its activities as such properties are currently owned or leased and such activities are currently conducted.

(b)          Due Qualification.  The Seller is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its activities requires such qualification, license or approval, unless the failure to obtain such qualifications, licenses or approvals would not reasonably be expected to have a material adverse effect on the Seller’s ability to perform its obligations under this Agreement.

(c)          Power and Authority; Authorization; Execution and Delivery; Binding Obligation.  The Seller has the power and authority to execute, deliver and perform its obligations under this Agreement.  This Agreement has been duly authorized, executed and delivered by the Seller and constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as such enforceability may be limited by insolvency, bankruptcy, reorganization or other laws relating to or affecting the enforcement of creditors’ rights and by general equitable principles.

 

5

(d)          No Violation.  The consummation of the transactions contemplated by, and the fulfillment of the terms of, this Agreement will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under its limited liability company agreement, any material indenture, mortgage, deed of trust, loan agreement, guarantee, lease financing agreement or similar agreement or instrument under which the Seller is a party or by which the Seller is bound, (ii) result in the creation or imposition of any Lien upon any of the Seller’s properties pursuant to the terms of any such agreement or instrument (other than Permitted Liens or Liens contemplated by the 2017-A Basic Documents to which the Seller is a party), (iii) violate the certificate of formation of the Seller or the limited liability company agreement of the Seller or (iv) violate or contravene any law or, to the Seller’s knowledge, any order rule or regulation applicable to the Seller of any Governmental Authority having jurisdiction over the Seller or its properties, the failure to comply with which would reasonably be expected to have a material adverse effect on the Seller’s ability to perform its obligations under this Agreement.

(e)          No Proceedings.  There are no proceedings pending, or, to the Seller’s knowledge, threatened, and to the Seller’s knowledge there are no investigations pending or threatened, against or affecting the Seller or its property before any Governmental Authority (i) asserting the invalidity or unenforceability of the 2017-A Exchange Note, the 2017-A ABS Notes or this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on the ability of the Seller to perform its obligations under this Agreement.

(f)          Ownership and Transfer of 2017-A Exchange Note. Immediately preceding its sale of the 2017-A Exchange Note to the Purchaser, the Seller was the owner of the 2017-A Exchange Note, free and clear of any claims, and after such sale of the 2017-A Exchange Note to the Purchaser, the Purchaser shall be entitled to all of the rights and benefits of a holder of the 2017-A Exchange Note under the Basic Collateral Agency Agreement and the 2017-A Exchange Note Supplement.

(g)          No Material Default.  Neither the Seller nor its affiliates is in material default under any agreement, contract, instrument, or indenture of any nature whatsoever to which the Seller or its affiliates is bound, and which default would have a material adverse effect on the ability of the Seller to perform its obligations under this Agreement.

(h)          No Consent.  No consent, approval, authorization, or order of any court or governmental agency or body is required under federal or state law for the execution, delivery, and performance by the Seller, or compliance by it with this Agreement or the consummation of the transactions contemplated hereby, or if required has been obtained or can be obtained prior to the execution of this Agreement.

(i)           Ability to Perform.  The Seller does not have any reason or cause to believe that it cannot perform each and every covenant of such party contained in this Agreement.

 

6

(j)          Solvency; Fair Value.  Both before and after giving effect to the sale, transfer, assignment and conveyance of the First-Tier Assets pursuant to this Agreement, the Seller is solvent and the transfer of the 2017-A Exchange Note pursuant hereto is not being made with the intent to hinder, delay or defraud the creditors of the Seller or any affiliate thereof.  The Seller is receiving from the Purchaser reasonably equivalent value in exchange for the transfer of 2017-A Exchange Note.

(k)          Perfection Representations.  The Seller makes the representations and warranties set forth on Exhibit A.

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

 

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ARTICLE FOUR

 

CONDITIONS

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

(a)          Representations and Warranties True.  The representations and warranties of the Seller contained in Section 3.02 and in the other 2017-A Basic Documents will be true and correct on the 2017-A Closing Date, and the Seller will have performed on or prior to the 2017-A Closing Date all obligations to be performed by the Seller under this Agreement on or prior to the 2017-A Closing Date.

(b)          Delivery of 2017-A Exchange Note.  The Seller has delivered to the Purchaser the 2017-A Exchange Note, registered in the name of “Daimler Trust Leasing LLC” or its assignee or endorsed in blank by an effective endorsement.

(c)          Documents to be Delivered by the Seller.  On the 2017-A Closing Date, the Seller will deliver such other documents as the Purchaser may reasonably request.

(d)          Other Transactions.  The transactions contemplated by the 2017-A Basic Documents will be consummated on or prior to the 2017-A Closing Date.

Section 4.02.  Conditions to Obligation of the Seller.  The obligation of the Seller to sell the 2017-A Exchange Note to the Purchaser as set forth in Section 2.01 is subject to each representation and warranty of the Purchaser as set forth in Section 3.01 and the other 2017-A Basic Documents being true and correct on the 2017-A Closing Date, and each obligation to be performed by the Purchaser under this Agreement on or prior to the 2017-A Closing Date having been performed on or prior to the 2017-A Closing Date.

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

 

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ARTICLE FIVE

 

COVENANTS OF THE SELLER

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

 

(a)           Within ten days after the 2017-A Closing Date, the Seller, as debtor, will record and file, at its own expense, an initial financing statement in each jurisdiction in which such financing statement is required by Applicable Law, naming the Seller, as debtor, and the Purchaser, as secured party, in such manner as is necessary, under the laws of each such jurisdiction, to perfect the sale, transfer, assignment and conveyance of the First-Tier Assets to the Purchaser (to the extent that such sale, transfer, assignment and conveyance may be perfected by such filing).  The Seller will deliver to the Purchaser file-stamped copies of, or filing receipts for, any such document filed promptly upon such document becoming available following such filing.

(b)           The Seller will authorize and file such financing statements and cause to be authorized and filed such amendments and continuation statements, all in such manner and in such places as may be required by law fully to preserve, maintain and protect the interest of the Purchaser in the First-Tier Assets and in the proceeds thereof.  The Seller will deliver to the Purchaser file-stamped copies of, or filing receipts for, any such document filed promptly upon such document becoming available following such filing.

(c)           The Seller authorizes the Purchaser to file any financing or continuation statements, and amendments to such statements, in all jurisdictions and with all filing offices as the Purchaser may determine, in its sole discretion, are necessary or advisable fully to preserve, maintain and protect the interest of the Purchaser in the First-Tier Assets and the proceeds thereof.  Such financing and continuation statements may describe the First-Tier Assets in any manner as the Purchaser may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the Purchaser’s interest in the First-Tier Assets.  The Purchaser will deliver to the Seller file-stamped copies of, or filing receipts for, any such document filed promptly upon such document becoming available following such filing.

(d)           The Seller agrees to do and perform any and all acts and to execute any and all further instruments required or reasonably requested by the Purchaser or by the Owner Trustee or the Indenture Trustee to more fully effect the purposes of this Agreement, including the execution of any financing statements or continuation statements relating to the First-Tier Assets for filing under the UCC of any applicable jurisdiction.

(e)           The Seller will give the Purchaser at least 30 days’ prior notice of any change in its jurisdiction of organization and will promptly file (and hereby authorizes the Purchaser and any assignee of the Purchaser hereunder to file) all amendments of any previously filed financing or continuation statement and any new financing statements as may be necessary to continue the perfection of the Purchaser’s interest in the First-Tier Assets.  The Seller will cause the Servicer to maintain its jurisdiction of organization (for purpose of Section 9-307 of the UCC) in only one state within the United States.

 

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(f)            The Seller will not change its name, form of organization, or corporate structure in any manner that would or could make any financing statement or continuation statement filed by the Seller in accordance with Section 5.01(a) seriously misleading within the meaning of Section 9-506 of the UCC, unless it has given the Purchaser at least 30 days’ prior notice thereof and promptly files appropriate amendments to all previously filed financing statements or continuation statements.

Section 5.02.  Other Liens or Interests.  Except for the sales, transfers, assignments and conveyances under this Agreement, the Seller will not sell, contribute, pledge, assign, transfer or allow to be issued any First-Tier Asset to any other Person, or grant, create, incur, assume or suffer to exist any Lien on any interest therein, and the Seller will defend the right, title, and interest of the Purchaser in, to and under the First-Tier Assets against all claims of third parties claiming through or under the Seller.  However, the Seller’s obligations under this Section with respect to the First-Tier Assets will terminate upon the payment in full of the 2017-A Exchange Note pursuant to the Basic Collateral Agency Agreement and the 2017-A Exchange Note Supplement.

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

(a)          The Seller will indemnify, defend and hold harmless the Purchaser, and its officers, directors, employees and agents, from and against any and all costs, expenses, losses, damages, claims and liabilities arising out of, or imposed upon the Purchaser through, the willful misconduct, negligence or bad faith of the Seller in the performance of its duties under this Agreement or by reason of reckless disregard of the Seller’s obligations and duties under this Agreement.

(b)         Promptly upon receipt by the Purchaser, or any of its officers, directors, employees and agents, of notice of the commencement of any suit, action, claim, proceeding or governmental investigation against it, the Purchaser will, if a claim in respect of such suit, action, claim, proceeding or investigation is to be made against the Seller under this Section, notify the Seller of the commencement of such suit, action, claim, proceeding or investigation.  The Seller may participate in and assume the defense and settlement of any such suit, action, claim, proceeding or investigation at its expense, and no settlement of such suit, action, claim, proceeding or investigation may be made without the approval of the Seller and the Purchaser, which approvals will not be unreasonably withheld or delayed.  The Seller’s obligations under this Section will include reasonable fees and expenses of counsel and expenses of litigation.  After notice from the Seller to the Purchaser of the Seller’s intention to assume the defense of such suit, action, claim, proceeding or investigation with counsel reasonably satisfactory to the Purchaser, and so long as the Seller so assumes the defense of such suit, action, claim, proceeding or investigation in a manner reasonably satisfactory to the Purchaser, the Seller will not be liable for any expenses of counsel to the Purchaser unless there is a conflict between the interests of the Seller and the Purchaser, in which case the Seller will pay for the separate counsel to the Purchaser.

 

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(c)          If the Seller makes any indemnity payments pursuant to this Section and the Purchaser thereafter collects any of such amounts from others, the Purchaser will promptly repay such amounts to the Seller, without interest.

(d)         The indemnity obligations set forth in Section 5.03(a) will be in addition to any obligation that the Seller may otherwise have and will survive the termination of this Agreement.

 

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ARTICLE SIX

 

MISCELLANEOUS PROVISIONS

 

Section 6.01.  Obligations of the Seller.  The obligations of the Seller under this Agreement will not be affected by reason of any invalidity, illegality or irregularity of the 2017-A Exchange Note or any 2017-A Lease or 2017-A Vehicle allocated to the 2017-A Reference Pool.

Section 6.02.  Amendment

 

(a)           This Agreement may be amended, supplemented or otherwise modified from time to time by a writing executed by the parties hereto, without the consent of any Securityholder, to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein or to add, change or eliminate any other provision with respect to matters or questions arising under this Agreement that are not inconsistent with the provisions of this Agreement; provided, that, (i) the Seller shall have delivered to the Indenture Trustee an Opinion of Counsel or an Officer’s Certificate of the Issuer to the effect that such action will not materially adversely affect the interests of any Noteholders or (ii) the Rating Agency Condition shall have been satisfied with respect to such amendment.

(b)           Each amendment, supplement or other modification of this Agreement other than those provided for in Section 6.02(a) requires the consent of the Majority Noteholders of the Controlling Class (or if the Notes are no longer Outstanding, Holders of Certificates evidencing not less than a majority of the aggregate Certificate Percentage Interests); provided, however, that no such amendment may (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, or change the allocation or priority of, collections of payments on or in respect of the 2017-A Leases and 2017-A Vehicles or distributions that are required to be made for the benefit of the Securityholders, change the Interest Rate applicable to any class of Notes or the Required Reserve Amount for the 2017-A Reserve Account, without the consent of all holders of Notes then Outstanding or (ii) reduce the percentage of the Note Balance of the Notes or of the Controlling Class the consent of the Holders of which is required for any amendment to this Agreement without the consent of all Holders of Notes or of the Controlling Class then Outstanding.

(c)           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.

(d)          Promptly after the execution of any such amendment, the Seller shall furnish written notification of the substance of such amendment to the Owner Trustee, the Indenture Trustee and the Rating Agencies.

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

 

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or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy.

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

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

		(i)	
In the case of the Seller:

 

Mercedes-Benz Financial Services USA LLC

36455 Corporate Drive

Farmington Hills, Michigan  48331

Attention:  Steven C. Poling

E-mail:  steven.c.poling@daimler.com

Facsimile:  (248) 991-6962

 

		(ii)	
In the case of the Purchaser:

 

Daimler Trust Leasing LLC

c/o Mercedes-Benz Financial Services USA LLC

36455 Corporate Drive

Farmington Hills, Michigan  48331

Attention:  Michelle D. Spreitzer

E-mail:  michelle.d.spreitzer@daimler.com

Facsimile:  (248) 991-6962

 

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

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

 

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Section 6.08.  Successors and Assigns .  All covenants and agreements contained herein will be binding upon, and inure to the benefit of, the parties hereto and their respective successors and permitted assigns, all as provided in this Agreement.  Any request, notice, direction, consent, waiver or other instrument or action by a party to this Agreement will bind the successors and assigns of such party.  Except as otherwise provided in this Agreement, no other Person will have any right or obligation under this Agreement.

Section 6.09.  No Petition .  Each of the Seller and the Purchaser covenants that for a period of one year and one day (or, if longer, any applicable preference period) after payment in full of all Exchange Notes, Notes and other Securities it will not institute against, or join any Person in instituting against the Initial Beneficiary, the Titling Trust, the Transferor, the Issuer or the 2017-A Exchange Noteholder any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings, or other Proceedings under any Insolvency Law in connection with any obligations relating to the 2017-A Exchange Note, any 2017-A Notes or any 2017-A Basic Document and agrees that it will not cooperate with or encourage others to institute any such Proceeding.

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

Section 6.11.  GOVERNING LAW; SUBMISSION TO JURISDICTION

 

(a)           THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

(b)           Each party to this Agreement submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State Court sitting in New York, New York for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated by the 2017-A Basic Documents.  Each party to this Agreement irrevocably waives, to the fullest extent it may do so, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

Section 6.12.  WAIVER OF JURY TRIAL .  EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER 2017-A BASIC DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY SUCH OTHER 2017-A BASIC DOCUMENT.

 

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

Section 6.14.  Each Exchange Note Separate; Assignees of Exchange Note. Each party hereto acknowledges and agrees (and each holder or pledgee of the 2017-A Exchange Note, by virtue of its acceptance of such Exchange Note or pledge thereof acknowledges and agrees) that (i) the Specified Interest is a separate series of the Titling Trust as provided in Section 3806(b)(2) of Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., (ii) the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to (a) the 2017-A Exchange Note or the related 2017-A Reference Pool shall be enforceable against such 2017-A Reference Pool only and not against any other Reference Pool or the Revolving Facility Pool and (b) any other Exchange Note, any other Reference Pool, or the Revolving Facility Pool shall be enforceable against such other Exchange Note, other Reference Pools, or the Revolving Facility Pool only, as applicable, and not against the 2017-A Exchange Note or any 2017-A Lease or 2017-A Vehicle included in the 2017-A Reference Pool, (iii) except to the extent required by law, the leases and the related leased vehicles included in the Revolving Facility Pool or leases and the related leased vehicles included in any other Reference Pool with respect to any other Exchange Note (other than the 2017-A Exchange Note transferred hereunder which is related to the 2017-A Reference Pool) shall not be subject to the claims, debts, liabilities, expenses or obligations arising from or with respect to the 2017-A Exchange Note in respect of such claim, (iv) no creditor or holder of a claim relating to (a) the 2017-A Exchange Note or the related 2017-A Reference Pool shall be entitled to maintain any action against or recover any assets allocated to any other Reference Pool, the Revolving Facility Pool or any other Exchange Note or the assets allocated thereto (except to the extent of amounts available to such Persons on a fully subordinated basis) and (b) any other Reference Pool, the Revolving Facility Pool or any other Exchange Note other than the 2017-A Exchange Note related to the 2017-A Reference Pool shall be entitled to maintain any action against or recover any assets allocated to the 2017-A Reference Pool and (v) any purchaser, assignee or pledgee of an interest in the 2017-A Reference Pool or, the 2017-A Exchange Note, must, prior to or contemporaneously with the grant of any such assignment, pledge or security interest, (a) give to the Titling Trust a non-petition covenant substantially similar to that set forth in Section 11.10 of the Titling Trust Agreement and (b) execute an agreement for the benefit of each holder, assignee or pledgee from time to time of any other Exchange Note to release all claims to the assets of the Titling Trust allocated to the Revolving Facility Pool and each other Reference Pool and, in the event that such release is not given effect, to fully subordinate all claims it may be deemed to have against the assets of the Titling Trust allocated to the Revolving Facility Pool and each other Reference Pool.

 

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

	 	
MERCEDES-BENZ FINANCIAL SERVICES USA LLC,

as Seller

	 	 	 
	 	
By:

	 
	 		
Name:

	 		Title:
	 	 
	 	
DAIMLER TRUST LEASING LLC,

	 	
as Purchaser

	 	 	 
	 	
By:

	
	 		
Name:

	 	 	Title:

 

First-Tier Sale Agreement

 

EXHIBIT A

PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS

In addition to the representations, warranties and covenants contained in the First-Tier Sale Agreement, dated as of April 1, 2017 (the “First-Tier Sale Agreement”), between Mercedes-Benz Financial Services USA LLC, as seller (the “Seller”), and Daimler Trust Leasing LLC, as purchaser (the “Purchaser”), the Seller hereby further represents, warrants and covenants to the Purchaser as follows on the 2017-A Closing Date:

		1.	
The First-Tier Sale Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the 2017-A Exchange Note in favor of the Purchaser, which security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Seller.

		2.	
The 2017-A Exchange Note constitutes a “general intangible”, “instrument”, “certificated security”, or “tangible chattel paper”, within the meaning of the applicable UCC.

		3.	
The Seller owns and has good and marketable title to the 2017-A Exchange Note free and clear of any Liens, claim or encumbrance of any Person, excepting only liens for taxes, assessments or similar governmental charges or levies incurred in the ordinary course of business that are not yet due and payable or as to which any applicable grace period shall not have expired, or that are being contested in good faith by proper proceedings and for which adequate reserves have been established, but only so long as foreclosure with respect to such a Lien is not imminent and the use and value of the property to which the Lien attaches is not impaired during the pendency of such proceeding.

		4.	
The Seller has received all consents and approvals to the sale of the 2017-A Exchange Note under the First-Tier Sale Agreement to the Purchaser required by the terms of the 2017-A Exchange Note to the extent that it constitutes an instrument or a payment intangible.

		5.	
The Seller has received all consents and approvals required by the terms of the 2017-A Exchange Note, to the extent that it constitutes a securities entitlement, certificated security or uncertificated security, to the transfer to the Purchaser of its interest and rights in the 2017-A Exchange Note under the First-Tier Sale Agreement.

		6.	
The Seller has caused or will have caused, within ten days after the 2017-A Closing Date, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the sale of the 2017-A Exchange Note from the Seller to the Purchaser and the security interest in the 2017-A Exchange Note granted under the First-Tier Sale Agreement.

 

A-1

		7.	
To the extent that the 2017-A Exchange Note constitutes an instrument or tangible chattel paper, all original executed copies of each such instrument or tangible chattel paper have been delivered to the Purchaser.

		8.	
Other than the transfer of the 2017-A Exchange Note from the Seller to the Purchaser under the First-Tier Sale Agreement and from the Purchaser to the Issuer under the Second-Tier Sale Agreement and the security interest granted to the Indenture Trustee pursuant to the Indenture, the Seller has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed the 2017-A Exchange Note.

		9.	
The Seller has not authorized the filing of, nor is aware of, any financing statements against the Seller that include a description of collateral covering the 2017-A Exchange Note other than any financing statement relating to any security interest granted pursuant to the 2017-A Basic Documents or that has been terminated.

		10.	
No instrument or tangible chattel paper that constitutes or evidences the 2017-A Exchange Note has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee.

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

 

 

A-2

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