Document:

Exhibit 10.5

	
 
    

 

SERVICING SUPPLEMENT

 

to the

 

AMENDED AND RESTATED SERVICING AGREEMENT

 

dated as of December 1, 2006

 

among

 

FORD MOTOR CREDIT COMPANY LLC,
 as Servicer with respect to the Collateral Specified Interests

and the 2013-B Reference Pool and as Lender,

 

CAB EAST HOLDINGS, LLC,
 CAB WEST HOLDINGS CORPORATION, and
 FCALM HOLDINGS CORPORATION,
 as Holders of the Collateral Specified Interest Certificates

 

and

 

HTD LEASING LLC,
 as Collateral Agent

 

Dated as of October 1, 2013

	
 
    

 

 

TABLE OF CONTENTS

 

	
ARTICLE I USAGE AND   DEFINITIONS
    	
1
    
	
Section 1.1.
    	
Usage and Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II DESIGNATION
    	
2
    
	
Section 2.1.
    	
Designation
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE III THE SERVICER
    	
2
    
	
Section 3.1.
    	
Appointment of Servicer
    	
2
    
	
Section 3.2.
    	
Representations of the Servicer
    	
2
    
	
Section 3.3.
    	
Representations and Warranties About the Leases and the   Leased Vehicles
    	
2
    
	
Section 3.4.
    	
Liability of the Servicer; Indemnities
    	
5
    
	
Section 3.5.
    	
Purchase Upon Breach
    	
5
    
	
Section 3.6.
    	
Collection of Payments
    	
6
    
	
Section 3.7.
    	
Servicer May Own Exchange Note and Notes
    	
7
    
	
Section 3.8.
    	
Fees and Expenses
    	
7
    
	
Section 3.9.
    	
Termination
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE IV ACCOUNTS,   COLLECTIONS AND APPLICATION OF FUNDS
    	
8
    
	
Section 4.1.
    	
Bank Accounts
    	
8
    
	
Section 4.2.
    	
Deposits and Payments
    	
9
    
	
Section 4.3.
    	
Advances.
    	
10
    
	
Section 4.4.
    	
Repayment of Advances
    	
11
    
	
Section 4.5.
    	
Trust Distribution Account
    	
11
    
	
Section 4.6.
    	
Reserve Deposits and Withdrawals
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE V TERMINATION
    	
11
    
	
Section 5.1.
    	
Clean-Up Call
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE VI REPORTS AND   NOTICES
    	
12
    
	
Section 6.1.
    	
Monthly Investor Reports
    	
12
    
	
Section 6.2.
    	
Notices and Certificates Received by or Delivered by the   Servicer Under the Servicing Agreement
    	
12
    
	
Section 6.3.
    	
Notice of Servicer Event of Default
    	
12
    
	
Section 6.4.
    	
Annual Statement as to Compliance
    	
12
    
	
Section 6.5.
    	
Compliance with Obligations under Sarbanes-Oxley Act
    	
13
    
	
Section 6.6.
    	
Report on Assessment of Compliance with Servicing Criteria   and Attestation
    	
13
    
	
Section 6.7.
    	
Delivery of Tax Related Information
    	
13
    
	
Section 6.8.
    	
Termination of Reporting Obligation
    	
13
    
	
Section 6.9.
    	
Authorized Persons of Servicer
    	
14
    
	
Section 6.10.
    	
Execution of Securities and Exchange Commission Filings
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE VII MISCELLANEOUS
    	
14
    
	
Section 7.1.
    	
Amendments
    	
14
    

 

i

 

	
Section 7.2.
    	
Third-Party Beneficiaries of the Servicing Agreement and   this Servicing Supplement
    	
14
    
	
Section 7.3.
    	
No Petition
    	
14
    
	
Section 7.4.
    	
GOVERNING LAW
    	
15
    
	
Section 7.5.
    	
Submission to Jurisdiction
    	
15
    
	
Section 7.6.
    	
WAIVER OF JURY TRIAL
    	
15
    
	
Section 7.7.
    	
Severability
    	
15
    
	
Section 7.8.
    	
Counterparts
    	
15
    
	
Section 7.9.
    	
Headings
    	
15
    
	
Section 7.10.
    	
Conflict with Servicing Agreement
    	
15
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
Schedule   of Collateral Leases and Collateral Leased Vehicles in 2013-B Reference Pool
    	
EA-1
    
	
Exhibit B
    	
Form of   Monthly Investor Report
    	
EB-1
    

 

ii

 

SERVICING SUPPLEMENT, dated as of October 1, 2013 (this “Servicing Supplement”), to the Amended and Restated Servicing Agreement, dated as of December 1, 2006 (the “Servicing Agreement”), among (i) FORD MOTOR CREDIT COMPANY LLC, a Delaware limited liability company (“Ford Credit”), as servicer with respect to the Collateral Specified Interests and the 2013-B Reference Pool (in such capacity, the “Servicer”) and as Lender under the Credit and Security Agreement (in such capacity, the “Lender”), (ii) CAB EAST HOLDINGS, LLC, a Delaware limited liability company, CAB WEST HOLDINGS CORPORATION, a Delaware corporation and FCALM HOLDINGS CORPORATION, a Delaware corporation (together, the “Holding Companies” and each, a “Holding Company”), as Holders of the Collateral Specified Interest Certificates and (iii) HTD Leasing LLC, as collateral agent (in such capacity, the “Collateral Agent”).

 

BACKGROUND

 

Section 2.3 of the Servicing Agreement provides that in connection with the issuance of an Exchange Note pursuant to the Credit and Security Agreement (as defined below) and the Exchange Note Supplement (as defined below), the Servicer, the Lender, the Collateral Agent and each Holding Company may enter into a supplement to the Servicing Agreement setting forth the specific rights and duties of the Servicer and the other agreements and undertakings with respect to the administration and servicing of the 2013-B Reference Pool and the 2013-B Exchange Note.

 

The Series 2013-B Exchange Note will be issued and the 2013-B Reference Pool will be designated, each pursuant to the Credit and Security Agreement and the Exchange Note Supplement.

 

The parties wish to enter into this Servicing Supplement to set forth the additional duties required of the Servicer with respect to the 2013-B Reference Pool and the 2013-B Exchange Note.

 

ARTICLE I
 USAGE AND DEFINITIONS

 

Section 1.1.                                 Usage and Definitions.  Capitalized terms used but not otherwise defined in this Servicing Supplement are defined in Appendix 1 to the Exchange Note Supplement to the Credit and Security Agreement (as defined below), dated as of October 1, 2013 (the “Exchange Note Supplement”), among CAB East LLC (“CAB East”), as a Borrower, CAB West LLC (“CAB West”), as a Borrower, and FCALM, LLC (“FCALM” and, together with CAB East and CAB West, the “Titling Companies”), as a Borrower, U.S. Bank National Association (“U.S. Bank”), as Administrative Agent, the Collateral Agent, and Ford Credit, as Lender and Servicer.  Capitalized terms used but not otherwise defined in this Servicing Supplement or in Appendix 1 to the Exchange Note Supplement are defined in Appendix A to the Amended and Restated Credit and Security Agreement, dated as of December 1, 2006 (the “Credit and Security Agreement”), among the Titling Companies, as Borrowers, U.S. Bank, as Administrative Agent, HTD, as Collateral Agent and Ford Credit, as Lender and Servicer, or, if not defined in Appendix A, are defined in the related Titling Company Agreement.  Appendix 1 and Appendix A also contain rules as to usage applicable to this Servicing Supplement and are incorporated by reference into this Servicing Supplement.

 

 

ARTICLE II
 DESIGNATION

 

Section 2.1.                                 Designation.  The parties designate the Collateral Leases and Collateral Leased Vehicles listed on Exhibit A to be the “2013-B Reference Pool” and each Collateral Lease and Collateral Leased Vehicle included in the 2013-B Reference Pool to be a “Lease” and a “Leased Vehicle,” respectively.

 

ARTICLE III
 THE SERVICER

 

Section 3.1.                                 Appointment of Servicer.  Each party acknowledges and agrees that the Servicer under the Servicing Agreement will also act as Servicer under this Servicing Supplement with respect to the 2013-B Reference Pool and the 2013-B Exchange Note and will also act as agent of any Holding Company, as Holder of the related Collateral Specified Interest Certificate in the management and control of the Leases and Leased Vehicles and for all other purposes set forth in this Servicing Supplement and the Servicing Agreement.  Ford Credit accepts such appointments.

 

Section 3.2.                                 Representations of the Servicer.  The Servicer has made the representations set forth in Section 3.2 of the Servicing Agreement on which the Lender, the Holding Companies and the Collateral Agent have relied, and the 2013-B Exchange Noteholder, in acquiring the 2013-B Exchange Note, will rely.  Such representations are remade as of the Exchange Note Issuance Date and will survive the sale, transfer, assignment and conveyance of the 2013-B Exchange Note to the 2013-B Exchange Noteholder, the Depositor and the Issuer and the pledge of the 2013-B Exchange Note to the Indenture Trustee pursuant to the Indenture.  The Servicer additionally represents and warrants to the Depositor and the Issuer as of the date of this Servicing Supplement that no selection procedures believed to be adverse to the 2013-B Exchange Noteholder have been utilized in selecting the Leases and Leased Vehicles included in the 2013-B Reference Pool from other leases and leased vehicles that meet the criteria specified in Section 3.3.

 

Section 3.3.                                 Representations and Warranties About the Leases and the Leased Vehicles.  The Servicer represents and warrants to the Depositor and the Issuer as of the date of this Servicing Supplement and the 2013-B Closing Date (except as otherwise specified), which representations and warranties (i) the 2013-B Exchange Noteholder, the Depositor and the Issuer have relied on in acquiring the 2013-B Exchange Note and (ii) will survive the sale of the 2013-B Exchange Note to the 2013-B Exchange Noteholder, the Depositor and the Issuer and the pledge of the 2013-B Exchange Note to the Indenture Trustee pursuant to the Indenture:

 

(a)                                 New Vehicle.  Each Leased Vehicle was a new car, light truck or utility vehicle at the beginning of the related Lease; provided, that a Leased Vehicle that has never been titled and has not been driven more than 6,000 miles will be deemed to be a new vehicle for purposes of this representation and warranty.

 

(b)                                 Certificate of Title.  Each Leased Vehicle was titled in accordance with the related Titling Company Agreement and in a manner acceptable to the relevant Governmental Authority, or the Servicer has commenced procedures that will result in such title.

 

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(c)                                  Security Interest in Lease and Leased Vehicle.  The Collateral Agent has a security interest in each Lease and Leased Vehicle which was validly created and is a perfected, first priority security interest, and is noted as lienholder on the certificate of title for each Leased Vehicle, or the Servicer has commenced procedures that will result in the perfection of a first priority security interest in the related Leased Vehicle, including by notation of the lien on the certificate of title.

 

(d)                                 Interest in Lease and Leased Vehicle.  Each Lease was entered into by a Dealer located in the United States, as lessor, and a Lessee with a garaging location in an Eligible State, as lessee, and all of the Dealer’s right, title and interest in such Lease and the related Leased Vehicle was validly assigned to a Titling Company qualified to hold such Leased Vehicle.

 

(e)                                  Origination of Leases.  Each Lease was originated by a Dealer in the ordinary course of its business and has been fully executed by the parties thereto and at the time of its origination, substantially complied with the Servicer’s Credit and Collection Policy.

 

(f)                                   Total Payments.  Each Lease (other than an Advance Payment Plan Lease) provides for Total Payments that include Base Payments.

 

(g)                                  Compliance with Law.  Each Lease complied in all material respects at the time it was originated, and as of the date of this Servicing Supplement will comply in all material respects, with all requirements of federal, State and local laws.

 

(h)                                 Consents, Licenses, Approvals and Authorizations.  All material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given by the Dealer that originated a Lease or the related Titling Company in connection with (i) the origination of such Lease, (ii) the execution, delivery and performance by such Dealer of such Lease and (iii) the acquisition and ownership by the related Titling Company of such Lease and the related Leased Vehicle, had been duly obtained, effected or given and were in full force and effect as of such date of origination or acquisition and remained in full force and effect.

 

(i)                                     Binding Obligation.  Each Lease is on a form contract that includes rights and remedies allowing the holder to enforce the obligation and realize on the Leased Vehicle and represents the legal, valid and binding payment obligation of the related Lessee, enforceable in all material respects by the holder of the Lease, except as may be limited by bankruptcy, insolvency, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles and consumer protection laws.

 

(j)                                    No Government Lessee.  No Lease is an obligation of the United States or any State or local government or from any agency, department, or instrumentality or political subdivision of the United States or any State or local government.

 

(k)                                 No Commercial Lease.  No Lease is a commercial lease contract, master lease contract or fleet vehicle lease contract; provided, that no Lease that is a retail lease contract will breach this representation solely because the related Lessee is a commercial lessee or the Leased Vehicle will be used for commercial purposes.

 

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(l)                                     Leases in Force.  As of the Cutoff Date, no Lease (i) is a Terminating Lease or a Closed Lease or (ii) has been satisfied, subordinated, rescinded, cancelled or terminated, in whole or in part.

 

(m)                             No Waiver or Amendments.  No material provision of a Lease (other than the assessment of a security deposit or a Payment Extension Fee or the payment of any other amount that, upon collection, would constitute an Additional Amount, or a default relating to failure by the related Lessee to pay any such amount) has been affirmatively waived or amended, except amendments and modifications that are contained in the Lease Files.

 

(n)                                 No Extensions.  As of the Cutoff Date, no extensions other than Payment Extensions not exceeding three months in the aggregate under any Lease have been granted.

 

(o)                                 No Defenses.  To the Servicer’s knowledge, no right of rescission, setoff, counterclaim or defense has been asserted or threatened with respect to any Lease.

 

(p)                                 No Delinquency or Default.  Except for payments that are not more than 30 days delinquent as of the Cutoff Date, no payment defaults (determined in accordance with the Credit and Collection Policy) exist.

 

(q)                                 Insurance.  Each Lease requires the lessee to obtain physical damage and liability insurance covering the related Leased Vehicle.

 

(r)                                    Title.  The applicable Titling Company has good title, or the Servicer has commenced procedures that will result in good title, to each Lease and each Leased Vehicle, free and clear of any Liens other than Permitted Liens.

 

(s)                                   Valid Assignment.  No Lease was originated in, or is subject to the laws of, any jurisdiction under which the sale and assignment of such Lease or the related Leased Vehicle to the Titling Company would be unlawful, void, or voidable.  Each Lease is fully assignable and no Dealer has entered into any agreement with any Lessee that prohibits, restricts or conditions the assignment of any portion of a Lease.

 

(t)                                    Chattel Paper.  Each Lease constitutes either “tangible chattel paper” or “electronic chattel paper” within the meaning of Section 9-102(a) of the UCC and there is only one original authenticated copy of each.

 

(u)                                 Maturity of Leases.  Each Lease has an original Scheduled Lease End Date of no greater than 48 months from its Lease Date.

 

(v)                                 Peace of Mind.  No Lease that is an Advance Payment Plan Lease has been identified by the Servicer as qualifying for the benefits of its “Peace of Mind” program for Lessees who were at least 62 years of age at Lease inception and who die during the term of the related Lease.

 

(w)                               No Bankruptcy Proceeding.  As of the Cutoff Date, the Servicer has not received actual notice that the Lessee on any Lease is a debtor in a bankruptcy proceeding.

 

4

 

(x)                                 No Allocation to Other Specified Interest.  No Lease or Leased Vehicle has been allocated to any Specified Interest other than a Collateral Specified Interest.

 

(y)                                 Valid Security Interest.  The Collateral Agent has a valid security interest, or the Servicer has commenced procedures that will result in a valid security interest, in the Collateral Leases and the Collateral Leased Vehicles and all proceeds thereof.

 

(z)                                  Information about Leases.  The information on the schedule of Collateral Leases and Collateral Leased Vehicles attached as Exhibit A is true and correct in all material respects as of the Cutoff Date.

 

Section 3.4.                                 Liability of the Servicer; Indemnities.

 

(a)                                 The Servicer will indemnify, defend and hold harmless each Titling Company, the Holders of the Collateral Specified Interest Certificates, the Administrative Agent, the Collateral Agent, the Lender, the Indenture Trustee and the 2013-B Exchange Noteholder (each, with respect to this Section 3.4(a), an “Indemnified Person”) in accordance with Section 3.3 of the Servicing Agreement as well as from and against any and all costs, expenses, losses, damages, claims and liabilities, arising out of the Servicer’s willful misconduct, bad faith or negligence.

 

(b)                                 The Servicer will indemnify, defend and hold harmless the Issuer, the Collateral Agent, the Administrative Agent, the Owner Trustee and the Indenture Trustee, as applicable, and their respective officers, directors, employees and agents (each, with respect to this Section 3.4(b), an “Indemnified Person”) from and against any and all costs, expenses, losses, damages, claims and liabilities arising out of, or incurred in connection with, the acceptance of or performance by the Servicer of the trusts and duties contained in this Servicing Supplement, except to the extent that such cost, expense, loss, damage, claim or liability:  (i) is due to the willful misconduct, bad faith or negligence of the Indemnified Person, (ii) in the case of the Owner Trustee, arises from the Owner Trustee’s breach of any of its representations or warranties set forth in the Trust Agreement or (iii) in the case of the Indenture Trustee, arises from the Indenture Trustee’s breach of any of its representations and warranties set forth in the Indenture.

 

(c)                                  In addition to the Indemnified Parties included in the Servicing Agreement, the Servicer will indemnify the Issuer, the Owner Trustee and the Indenture Trustee as “Indemnified Parties” pursuant to Sections 3.3(b), (c) and (d) of the Servicing Agreement.

 

Section 3.5.                                 Purchase Upon Breach.

 

(a)                                 Deposit of Administrative Reallocation Amount.

 

(i)             If a Responsible Person of the Servicer has actual knowledge, or receives notice from the 2013-B Exchange Noteholder or the Indenture Trustee, of a breach of (A) a representation or warranty set forth in Section 3.3 of this Servicing Supplement, (B) the covenant set forth in Section 3.8(b) of the Servicing Agreement, (C) the covenant set forth in Section 3.6 of this Servicing Supplement or (D) the covenant set forth in Section 6.7 of the Servicing Agreement, in each case, that materially and adversely affects any Lease and Leased Vehicle, the Servicer will deposit in the Exchange Note Collection Account an amount equal to the Administrative Reallocation Amount with respect to each such Lease

 

5

 

and Leased Vehicle as of the last day of the second Collection Period following the Collection Period in which the Servicer obtained actual knowledge, or was notified, of such breach (or, at the Servicer’s option, the end of the first Collection Period following the Collection Period in which the Servicer obtained actual knowledge, or was notified, of such breach) unless, by such last day such breach has been cured in all material respects.

 

(ii)          The Servicer may deposit in the Exchange Note Collection Account an amount equal to the Administrative Reallocation Amount with respect to any Lease and Leased Vehicle if the Servicer determines, in its sole discretion, that, as a result of a receivables systems error or receivables systems limitation or for any other reason, the Servicer is unable to service such Lease and Leased Vehicle in accordance with the terms of the Servicing Agreement or this Servicing Supplement.  The Servicer will deposit in the Exchange Note Collection Account an amount equal to the Administrative Reallocation Amount with respect to any Lease (and with the related Leased Vehicle) that is an Advance Payment Plan Lease if the Servicer determines that such Lease qualifies for the benefit of its “Peace of Mind” program.

 

(iii)       So long as Ford Credit remains the Servicer, the Servicer will deposit in the Exchange Note Collection Account an amount equal to the Administrative Reallocation Amount with respect to any Lease and Leased Vehicle if the Servicer is notified that the Leased Vehicle is no longer owned by a Titling Company.

 

(iv)      The Servicer will deposit the Administrative Reallocation Amount with respect to any Lease and related Leased Vehicle that the Servicer is removing from the 2013-B Reference Pool in accordance with this Section 3.5(a) in the Exchange Note Collection Account on the Business Day preceding the Payment Date (or, with satisfaction of the Rating Agency Condition, on the Payment Date) related to the Collection Period during which such purchase occurs.

 

(b)                                 Reallocation Sole Remedy for Breach.  Except as provided in Section 3.3, the sole remedy of the Collateral Agent, the 2013-B Exchange Noteholder, the Indenture Trustee and the holders of the Notes with respect to a breach of the representations and warranties contained in Section 3.3 is as set forth in Section 3.5(a).

 

(c)                                  Reallocation of Purchased Leases and Leased Vehicles.  Upon the deposit of the Administrative Reallocation Amount for any Lease and Leased Vehicle pursuant to Section 3.5(a), such Lease and Leased Vehicle will be reallocated to the Revolving Facility Pool at the direction of the Servicer and will no longer be included in the 2013-B Reference Pool.

 

Section 3.6.                                 Collection of Payments.  The Servicer may grant extensions, waivers, rebates, modifications or adjustments with respect to any Collateral Lease, except that if (a) after the Cutoff Date, the Servicer modifies the amount of the Base Payment due with respect to any Lease or (b) after the Cutoff Date, the Servicer grants a Payment Extension or Term Extension that extends any Lease past the Final Scheduled Payment Date for the most junior Class of Notes, the Servicer will reallocate such Lease and the related Leased Vehicle to the Revolving Facility Pool in accordance with Section 3.5, except, in either case, to the extent that any such modification is required by law or court order.

 

6

 

Section 3.7.                                 Servicer May Own Exchange Note and Notes.  The Servicer, and any Affiliate of the Servicer, may, in its individual or any other capacity, become the owner or pledgee of the 2013-B Exchange Note and/or the Notes with the same rights as it would have if it were not the Servicer or an Affiliate thereof, except as otherwise provided in the Servicing Agreement, this Servicing Supplement, the Credit and Security Agreement and the Indenture.  Except as set forth in the Servicing Agreement, this Servicing Supplement or in the other 2013-B Basic Documents, Notes so owned by or pledged to the Servicer or such Affiliate will have an equal and proportionate benefit under the Servicing Agreement and this Servicing Supplement.

 

Section 3.8.                                 Fees and Expenses.

 

(a)                                 Reference Pool Servicing Fee.

 

(i)             The “Reference Pool Servicing Fee” will, with respect to a Collection Period, be an amount equal to the sum of (A) the product of: (1) one-twelfth of 1.00%; times (2) the Pool Balance as of the last day of the preceding Collection Period (or the Cutoff Date for the first month) plus (B) the portion of the Reference Pool Servicing Fee for the immediately preceding Collection Period, if any, that was not paid on the related Payment Date.

 

(ii)          The Reference Pool Servicing Fee will be payable solely from, and the right of the Servicer to receive the Reference Pool Servicing Fee will be limited in recourse to, the Collections and other amounts applied to the payment of such fee pursuant to the Exchange Note Supplement.

 

(b)                                 Investment Earnings.  As provided in Section 4.2, the Servicer will be entitled to receive investment earnings on funds in the Bank Accounts as additional compensation for the performance of its duties under this Servicing Supplement, and losses, if any, and investment expenses resulting from the investment of funds in the Bank Accounts will be charged to the Servicer.

 

(c)                                  Additional Amounts.  As additional compensation for the performance of its duties under the Servicing Agreement and this Servicing Supplement and as reimbursement for expenses incurred in connection with such performance, the Servicer will be entitled to retain for its own account all Additional Amounts (or to withdraw and retain any Additional Amounts that nevertheless have been deposited into the Exchange Note Collection Account).  All Additional Amounts are the property of the Servicer.

 

Section 3.9.                                 Termination.  This Servicing Supplement will be terminated in the event that the Servicing Agreement is terminated in accordance therewith and may also be terminated at the option of the Servicer or the Holding Companies at any time following the payment in full of the 2013-B Exchange Note; provided, that the rights and obligations of the parties to this Servicing Supplement under Section 3.4 will survive any such termination.

 

7

 

ARTICLE IV
 ACCOUNTS, COLLECTIONS AND APPLICATION OF FUNDS

 

Section 4.1.                                 Bank Accounts

 

(a)                                 Establishment of Bank Accounts.  On or before the Exchange Note Issuance Date, the Servicer will establish four segregated trust accounts, each in the name of the Indenture Trustee at a Qualified Institution or a Qualified Trust Institution, to be designated as:

 

(i)                       “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit Auto Lease Trust 2013-B” that will be designated as the “Exchange Note Collection Account;”

 

(ii)                    “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit Auto Lease Trust 2013-B” that will be designated as the “Collection Account;”

 

(iii)                 “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit Auto Lease Trust 2013-B” that will be designated as the “Principal Payment Account;” and

 

(iv)                “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit Auto Lease Trust 2013-B” that will be designated as the “Reserve Account.”

 

Initially, the Exchange Note Collection Account will be account number 894242, the Collection Account will be account number 894241, the Principal Payment Account will be account number 894243 and the Reserve Account will be account number 894244 and each such account will include any successor or replacement accounts thereto.

 

(b)                                 Control of the Bank Accounts.  Each of the Bank Accounts with respect to the 2013-B Reference Pool will be under the sole dominion and control of the Indenture Trustee, as secured party for the benefit of the 2013-B Secured Parties, so long as the Bank Accounts remain subject to the Lien of the Indenture; provided, that, (i) following the payment in full of the Notes and the release of the Bank Accounts from the Lien of the Indenture, the Exchange Note Collection Account will be under the sole dominion and control of the Collateral Agent and (ii) following the payment in full of the 2013-B Exchange Note, the Exchange Note Collection Account will be under the sole dominion and control of the Borrowers.  However, the Servicer may make deposits to or request the Indenture Trustee (or, after the Note Balance of the Notes has been reduced to zero, the Collateral Agent, and following the payment in full of the 2013-B Exchange Note, the Borrowers) to make deposits to or withdrawals from the Exchange Note Collection Account in accordance with the Exchange Note Supplement, the Credit and Security Agreement, the Servicing Agreement and this Servicing Supplement.  All monies deposited in the Exchange Note Collection Account pursuant to the Exchange Note Supplement, the Credit and Security Agreement, the Servicing Agreement or this Servicing Supplement will be held (i) until the Note Balance of the Notes has been reduced to zero and the Bank Accounts have been released from the Lien under the Indenture, by the Indenture Trustee, (ii) until the payment in full of the 2013-B Exchange Note, by the Collateral Agent and (iii) following the payment in full of the 2013-B Exchange Note, by or on behalf of the Borrowers, and in each case will be applied only upon the terms and conditions of the 2013-B Basic Documents, as applicable.  The authority of the Servicer

 

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to make deposits to the Bank Accounts is revocable at any time (i) by the Indenture Trustee until the Note Balance of the Notes has been reduced to zero, (ii) then, by the Collateral Agent until the payment in full of the 2013-B Exchange Note and (iii) thereafter by the Borrowers.

 

(c)                                  Agreement with Depository Institution.  The Bank Accounts will only be established at a Qualified Institution or Qualified Trust Institution that complies with the requirements set forth in Section 5.2(d) of the Servicing Agreement.

 

Section 4.2.                                 Deposits and Payments.

 

(a)                                 If Ford Credit’s short term unsecured debt is rated at least “P-1” by Moody’s and “F1” by Fitch (this rating requirement, the “Monthly Remittance Required Ratings”), Ford Credit may remit 2013-B Collections on the Business Day preceding each Payment Date, or with satisfaction of the Rating Agency Condition, on each Payment Date.

 

(b)                                 If Ford Credit’s short term unsecured debt is not rated at least equal to the Monthly Remittance Required Ratings or a Servicer Event of Default occurs, the Servicer will remit to the Exchange Note Collection Account:

 

(i)                       on the Exchange Note Issuance Date, an amount equal to the sum of (A) the Cutoff Date Payahead Amount and (B) all Active Lease Proceeds, Terminating Lease Proceeds and Closed Lease Proceeds (in each case excluding Recoveries) that are Posted during the period from and including the Cutoff Date to and including the second Business Day preceding the 2013-B Closing Date;

 

(ii)                    following the Exchange Note Issuance Date, an amount equal to all Active Lease Proceeds, Terminating Lease Proceeds and Closed Lease Proceeds (in each case excluding Recoveries) within two Business Days after the Posting Date for such amounts (including any such amounts Posted on the Business Day preceding the Exchange Note Issuance Date and on the Exchange Note Issuance Date); and

 

(iii)                 all Administrative Reallocation Amounts, Active Lease Advances, Payment Extension Fees and Recoveries with respect to any Collection Period no later than the Business Day preceding the following Payment Date or, with satisfaction of the Rating Agency Condition, the following Payment Date.

 

(c)                                  Pending deposit in the Exchange Note Collection Account, the Servicer is not required to segregate 2013-B Collections or Payaheads from its own funds.

 

(d)                                 So long as Ford Credit remains the Servicer, Ford Credit, as Servicer, may make the deposits required by Section 4.2(a) net of:

 

(i)                       Reference Pool Servicing Fees to be distributed pursuant to Section 3.8(a) to the Servicer with respect to such Collection Period; and

 

(ii)                    Advance Reimbursement Amounts that the Servicer is permitted to retain pursuant to Section 4.3(b).

 

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Section 4.3.                                 Advances.

 

(a)                                 Advances by the Servicer.  The Servicer will make an advance for each Active Lease other than an Advance Payment Plan Lease and each Collection Period if, for such Lease and such Collection Period, the scheduled Base Payment exceeds the sum of (A) Active Lease Proceeds (which may be positive or negative) plus (B) the Payahead Draw, by depositing the amount of such excess (equal to the Active Lease Advance) into the Exchange Note Collection Account on the Business Day preceding the Payment Date immediately following such Collection Period or, with satisfaction of the Rating Agency Condition, on such Payment Date.  However, the Servicer will be required to make Active Lease Advances only to the extent that the Servicer, in its sole discretion, determines that such advances will be recoverable from subsequent 2013-B Collections (whether relating to such Lease and Leased Vehicle or any other Lease or Leased Vehicle) in the manner described in Section 4.3(b).

 

(b)                                 Reimbursement for Outstanding Advances.  During each Collection Period, the Servicer will be reimbursed for any outstanding Advance Balance with respect to a Lease for the preceding Collection Period (or, with respect to the first Collection Period, as of the Cutoff Date) by retaining the following amounts in the following order of priority (the amount so due with respect to any Lease and any Collection Period, the “Advance Reimbursement Amount”):

 

(i)                       first, if such Lease is an Active Lease during such Collection Period, an amount equal to the lesser of (A) the sum of (1) Active Lease Proceeds, plus (2) the Administrative Reallocation Amount (if any), minus (3) the scheduled Base Payment, in each case with respect to such Lease and such Collection Period and (B) such Advance Balance;

 

(ii)                    second, if such Lease is a Terminating Lease or a Closed Lease during such Collection Period, an amount equal to the lesser of (A) the sum of (1) the Terminating Lease Proceeds, plus (2) the Closed Lease Proceeds, plus (3) the Administrative Reallocation Amount (if any), in each case with respect to such Lease and such Collection Period and (B) such Advance Balance; and

 

(iii)                 third, on and after the Collection Period that includes the Closed Date with respect to such Lease, an amount equal to the lesser of:

 

(A)                               the sum of all Active Lease Proceeds, Terminating Lease Proceeds, Closed Lease Proceeds and Administrative Reallocation Amounts (in each case not relating to such Lease) for such Collection Period; and

 

(B)                               the excess, if any, of (1) such Advance Balance over (2) the amount retained by the Servicer pursuant to Section 4.3(b)(ii) for the current Collection Period.

 

The Servicer may instruct the Indenture Trustee, for so long as the Notes are Outstanding, and thereafter, the Collateral Agent, to withdraw from the Exchange Note Collection Account and pay to the Servicer any amounts that the Servicer is entitled to retain pursuant to this Section 4.3(b) to the extent such amounts have been deposited in the Exchange Note Collection Account.  The Indenture Trustee or the Collateral Agent, as applicable, may, but is not required to, request from

 

10

 

the Servicer reasonable documentation (which may be provided by reference to the Servicer’s books and records) in connection with any such withdrawal instruction.

 

Section 4.4.                                 Repayment of Advances.  If a successor Servicer is appointed pursuant to the Servicing Agreement, the predecessor Servicer will be entitled to receive reimbursement for the Advance Balances outstanding on the date of termination of such predecessor Servicer in the manner specified in Section 4.3(b).  Any Advance Reimbursement Amount for any Lease will be applied (a) first to the Advance Balances outstanding on the date of termination of such predecessor Servicer and (b) second, to the remaining portion, if any, of the Advance Balances.

 

Section 4.5.                                 Trust Distribution Account.  The Depositor may cause the Owner Trustee to establish and maintain a segregated trust account in the name “U.S. Bank Trust National Association as Owner Trustee,” that is designated as the “Trust Distribution Account” and will promptly notify the Owner Trustee and the Indenture Trustee after the establishment of the Trust Distribution Account.  The Trust Distribution Account will be under the sole dominion and control of the Owner Trustee, except that the Indenture Trustee may make deposits to the Trust Distribution Account in accordance with the 2013-B Basic Documents.  All deposits to and withdrawals from the Trust Distribution Account will be made in accordance with the Indenture and the Trust Agreement.

 

Section 4.6.                                 Reserve Deposits and Withdrawals.

 

(a)                                 On the 2013-B Closing Date, the Depositor will deposit, or cause to be deposited, the Required Reserve Amount in the Reserve Account from the net proceeds of the sale of the Notes.

 

(b)                                 At least two Business Days before each Payment Date, the Servicer will calculate the Reserve Account Draw Amount for such Payment Date and will instruct the Indenture Trustee to withdraw such amount from the Reserve Account and apply it in accordance with Section 5.1 of the Exchange Note Supplement.

 

(c)                                  At least two Business Days before each Payment Date, the Servicer will instruct the Indenture Trustee (based on the most recent Monthly Investor Report) to make the withdrawals, deposits, distributions and payments required to be made on such Payment Date pursuant to Section 5.1 of the Exchange Note Supplement and Section 8.2 of the Indenture.

 

ARTICLE V
 TERMINATION

 

Section 5.1.                                 Clean-Up Call.

 

(a)                                 If the Note Balance is equal to or less than 5% of the initial aggregate Note Balance on the last day of any Collection Period, the Servicer has the option to purchase the 2013-B Exchange Note in whole but not in part.  The Servicer may exercise its option to purchase the 2013-B Exchange Note by (i) notifying the Collateral Agent, the Borrowers, the Owner Trustee, the Administrative Agent, the Indenture Trustee and the Rating Agencies at least ten days prior to the Payment Date related to such Collection Period (which Payment Date will be the Exchange Note Purchase Date) and (ii) depositing in the Exchange Note Collection Account an amount equal

 

11

 

to the Exchange Note Purchase Price in immediately available funds by 10:00 a.m. (New York City time) on the Business Day preceding the Exchange Note Purchase Date (or, with satisfaction of the Rating Agency Condition, on the Exchange Note Purchase Date).  Notwithstanding the foregoing, the Servicer will not be permitted to purchase the 2013-B Exchange Note unless the Exchange Note Purchase Price, together with amounts in the Collection Account, is greater than or equal to the sum of (A) the Note Redemption Price for the Notes and (B) all fees and expenses of the Issuer, including all amounts due to the Indenture Trustee under the Indenture.

 

(b)                                 For so long as the Servicer and the Lender under the Credit and Security Agreement are the same entity, upon purchase of the 2013-B Exchange Note by the Servicer pursuant to Section 5.1(a), the Servicer may, by notice to the Borrowers, the Lender, the Collateral Agent and the Administrative Agent, request that the 2013-B Exchange Note be cancelled and the Leases and related Leased Vehicles be reallocated to the Revolving Facility Pool.

 

ARTICLE VI
 REPORTS AND NOTICES

 

Section 6.1.                                 Monthly Investor Reports.  At least two Business Days before each Payment Date, the Servicer will deliver to the Owner Trustee, the Indenture Trustee, the Note Paying Agent, the Depositor and, if requested, the Rating Agencies, a servicing report substantially in the form of Exhibit B (the “Monthly Investor Report”) for the preceding Collection Period and such Payment Date.  A Responsible Person of the Servicer will certify that the information in the Monthly Investor Report is accurate in all material respects.

 

Section 6.2.                                 Notices and Certificates Received by or Delivered by the Servicer Under the Servicing Agreement.  The Servicer will deliver any notice or certificate received by it or delivered by it under the Servicing Agreement to the Owner Trustee and the Indenture Trustee within five Business Days of such receipt or delivery by the Servicer.

 

Section 6.3.                                 Notice of Servicer Event of Default.  The Servicer will notify the Depositor, the Owner Trustee, the Indenture Trustee and each Rating Agency of any Facility Servicer Event of Default or Exchange Note Servicer Event of Default or any event that with the giving of notice or lapse of time, or both, would become a Facility Servicer Event of Default or Exchange Note Servicer Event of Default, no later than five Business Days after a Responsible Person of the Servicer obtains actual knowledge of such event.

 

Section 6.4.                                 Annual Statement as to Compliance.  To the extent required by Regulation AB, the Servicer will deliver to the Depositor, the Owner Trustee, the Indenture Trustee and each Rating Agency within 90 days after the end of each year beginning with the year after the 2013-B Closing Date, an Officer’s Certificate, dated as of December 31 of the preceding year, signed by a Responsible Person of the Servicer to the effect that (i) a review of the Servicer’s activities during the preceding year (or, in the case of the first certificate, the portion of the preceding year since the 2013-B Closing Date) and of its performance under this Agreement has been made under such Responsible Person’s supervision and (ii) to such Responsible Person’s knowledge, based on such review, the Servicer has fulfilled in all material respects all of its obligations under this Agreement throughout such year (or applicable portion of such year), or, if there has been a failure to fulfill any such obligation in any material respect, specifically identifying each such failure known to

 

12

 

such Responsible Person and the nature and status of such failure.  The Officer’s Certificate referred to in this Section 6.4 is deemed to be the Officer’s Certificate required under Section 9.3 of the Servicing Agreement.  A copy of the Officer’s Certificate referred to in this Section 6.4 may be obtained by any Noteholder or Person certifying it is a Note Owner by a request in writing to the Indenture Trustee at its Corporate Trust Office.

 

Section 6.5.                                 Compliance with Obligations under Sarbanes-Oxley Act.  If directed by the Indenture Administrator, the Servicer will prepare, execute and deliver all certificates or other documents required to be delivered by the Issuer pursuant to the Sarbanes-Oxley Act of 2002.

 

Section 6.6.                                 Report on Assessment of Compliance with Servicing Criteria and Attestation.  The Servicer will:

 

(i)                       deliver to the Depositor, the Owner Trustee, the Indenture Trustee and each Rating Agency, a report, dated as of December 31 of the preceding year, on its assessment of compliance with the minimum servicing criteria during the preceding year, including disclosure of any identified material instance of non-compliance identified by the Servicer, as specified by Rule 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB under the Securities Act; and

 

(ii)                    cause a firm of registered public accountants that is qualified and independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act to deliver an attestation report that satisfies the requirements of Rule 13a-18 or Rule 15d-18 under the Exchange Act and Item 1122 of Regulation AB, as applicable, on the assessment of compliance with servicing criteria with respect to the prior year.  Such attestation report will be addressed to the board of directors of the Servicer and the Servicer will deliver copies to the Issuer, the Owner Trustee, the Depositor and the Indenture Trustee.  Such attestation will be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.  The firm may render other services to the Servicer, the Depositor or Ford Credit, but the firm must indicate in each attestation report that it is qualified and independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act.

 

The reports referred to in this Section 6.6 will be delivered within 90 days after the end of each year, beginning in the year after the 2013-B Closing Date.  A copy of the reports referred to in this Section 6.6 may be obtained by any Noteholder or Person certifying it is a Note Owner by a request in writing to the Indenture Trustee at its Corporate Trust Office.

 

Section 6.7.                                 Delivery of Tax Related Information.  To the extent required by law, the Servicer will deliver to the Owner Trustee for distribution to the holder of the Residual Interest information for the preparation of such holder’s federal and State income tax returns.

 

Section 6.8.                                 Termination of Reporting Obligation.  The Servicer’s obligation to deliver or cause the delivery of reports under this Article VI, other than tax reports under Section 6.7, will terminate upon the payment in full of the Notes, including by redemption in whole as contemplated by Section 10.1 of the Indenture.

 

13

 

Section 6.9.                                 Authorized Persons of Servicer.  On or prior to the 2013-B Closing Date, the Servicer will provide notice to the Indenture Trustee and the Owner Trustee specifying (a) each Person who will be authorized to provide instructions and directions to the Indenture Trustee and the Owner Trustee on behalf of the Servicer and (b) each Person who is a Responsible Person with respect to the Servicer, which Persons may be changed from time to time by notice to the Indenture Trustee and the Owner Trustee.

 

Section 6.10.                          Execution of Securities and Exchange Commission Filings.  To the extent permitted by law, the Servicer is authorized to execute and, upon the request of the Issuer (or the Administrator on its behalf), will execute, on behalf of the Issuer, any Securities and Exchange Commission filings required to be filed by the Issuer pursuant to Section 7.3 of the Indenture.

 

ARTICLE VII
 MISCELLANEOUS

 

Section 7.1.                                 Amendments.

 

(a)                                 This Servicing Supplement may be amended in accordance with Section 10.1 of the Servicing Agreement; provided, however, that the Indenture Trustee will provide or withhold consent with respect to any proposed amendment to this Servicing Supplement or the Servicing Agreement that materially affects the rights or obligations of the Servicer with respect to the Collateral Specified Interests and the 2013-B Reference Pool, only as directed by the Noteholders of Notes evidencing not less than a majority of the Note Balance of the Controlling Class.

 

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

 

Section 7.2.                                 Third-Party Beneficiaries of the Servicing Agreement and this Servicing Supplement.  The Servicing Agreement and this Servicing Supplement will inure to the benefit of and be binding upon the parties to this Servicing Supplement and their assigns (including the Holders of the Collateral Specified Interest Certificates as assignees of the Holding Companies) as well as any 2013-B Exchange Noteholder, the Owner Trustee and the Indenture Trustee.

 

Section 7.3.                                 No Petition.  Each party to this Servicing Supplement covenants that for a period of one year and one day (or, if longer, any applicable preference period) after payment in full of the Notes, all Exchange Notes, and all distributions to all Holders of Certificates and all holders of any other Securities (as defined in the related Titling Company Agreement) the payments on which are derived in any material part from amounts received with respect to any Titling Company Assets (as defined in the applicable Titling Company Agreements), it will not institute against, or join any Person in instituting against, the Issuer, the Depositor, any Holding Company, any Titling Company, or the Holders of the Collateral Specified Interest Certificates any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the 2013-B Exchange Note, the Notes, this Servicing Supplement or any of the other 2013-B Basic Documents and agrees it will not cooperate with or encourage others

 

14

 

to file a bankruptcy petition against the Issuer, the Depositor, any Holding Company, any Titling Company or the Holders of the Collateral Specified Interest Certificates during the same period.

 

Section 7.4.                                 GOVERNING LAW.  THIS SERVICING SUPPLEMENT WILL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATION LAWS OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 

Section 7.5.                                 Submission to Jurisdiction.  Each party to this Servicing Supplement 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 Servicing Supplement or the transactions contemplated by this Servicing Supplement or by the other 2013-B Basic Documents.  Each party to this Servicing Supplement 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 7.6.                                 WAIVER OF JURY TRIAL.  EACH PARTY TO THIS SERVICING 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 THIS SERVICING SUPPLEMENT, THE INDENTURE OR ANY OTHER 2013-B BASIC DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS SERVICING SUPPLEMENT, THE INDENTURE OR ANY SUCH OTHER 2013-B BASIC DOCUMENT.

 

Section 7.7.                                 Severability.  If any one or more of the covenants, agreements, provisions or terms of this Servicing Supplement is held invalid, illegal or unenforceable, then such covenants, agreements, provisions or terms will be deemed severable from the remaining covenants, agreements, provisions or terms of this Servicing Supplement and will in no way affect the validity, legality or enforceability of the other provisions of this Servicing Supplement.

 

Section 7.8.                                 Counterparts.  This Servicing Supplement may be executed in any number of counterparts, each of which will be an original, and all of which will together constitute one and the same instrument.

 

Section 7.9.                                 Headings.  The various headings in this Servicing Supplement are included for convenience only and will not affect the meaning or interpretation of any provision of this Servicing Supplement.

 

Section 7.10.                          Conflict with Servicing Agreement.  In the event of any conflict between this Servicing Supplement (or any portion thereof) and the Servicing Agreement, the terms of this Servicing Supplement will prevail.

 

[Remainder of Page Intentionally Left Blank]

 

15

 

EXECUTED BY:

 

	
 
    	
FORD   MOTOR CREDIT COMPANY LLC,
    
	
 
    	
 
    	
as   Servicer with respect to the Collateral Specified Interests and the 2013-B   Reference Pool and as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Samuel P. Smith
    
	
 
    	
 
    	
Title:   Assistant Treasurer
    
	
 
    	
 
    
	
 
    	
CAB   EAST HOLDINGS, LLC,
    
	
 
    	
 
    	
acting   with respect to its Series of limited liability company interests   designated as the “Collateral Series,” as Holder of a Collateral Specified   Interest Certificate
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Susan J. Thomas
    
	
 
    	
 
    	
Title:   Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CAB   WEST HOLDINGS CORPORATION,
    
	
 
    	
 
    	
acting   with respect to its Series of limited liability company interests   designated as the “Collateral Series,” as Holder of a Collateral Specified   Interest Certificate
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Susan J. Thomas
    
	
 
    	
 
    	
Title:   Secretary
    

 

[Signature Page to Servicing Supplement]

 

 

	
 
    	
FCALM   HOLDINGS CORPORATION,
    
	
 
    	
 
    	
acting   with respect to its Series of limited liability company interests   designated as the “Collateral Series,” as Holder of a Collateral Specified   Interest Certificate
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Susan J. Thomas
    
	
 
    	
 
    	
Title:   Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HTD   LEASING LLC,
    
	
 
    	
 
    	
as Collateral Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
AGREED   AND ACCEPTED BY:
    	
 
    
	
 
    	
 
    
	
U.S.   BANK NATIONAL ASSOCIATION,
    	
 
    
	
 
    	
as   Titling Company Registrar with
    	
 
    
	
 
    	
respect   to each of the Titling Companies,
    	
 
    
	
 
    	
on   behalf of the Titling Companies
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
					

 

[Signature Page to Servicing Supplement]

 

 

	
AGREED   AND ACCEPTED FOR
    	
 
    
	
 
    	
PURPOSES OF SECTION 7.1(a) BY:
    	
 
    
	
 
    	
 
    
	
FORD   CREDIT AUTO LEASE TRUST 2013-B
    	
 
    
	
 
    	
 
    
	
By:
    	
U.S.   Bank Trust National Association,
    	
 
    
	
 
    	
not   in its individual capacity but solely as
    	
 
    
	
 
    	
Owner   Trustee of Ford Credit Auto Lease
    	
 
    
	
 
    	
Trust   2013-B
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
THE   BANK OF NEW YORK MELLON,
    	
 
    
	
 
    	
not   in its individual capacity but solely as
    	
 
    
	
 
    	
Indenture   Trustee
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Signature Page to the Servicing Supplement]

 

 

Exhibit A

 

Schedule of Collateral Leases and Collateral Leased Vehicles in 2013-B Reference Pool

 

(On File with Collateral Agent)

 

EA-1

 

Exhibit B

 

Form Of Monthly Investor Report

 

EB-1Exhibit 10.1

 

JONES ENERGY, LLC 
 EXECUTIVE DEFERRAL PLAN
 Effective as of October 1, 2013

 

Preamble

 

Jones Energy, LLC (the “Company”) hereby establishes the Jones Energy, LLC Executive Deferral Plan (the “Plan”), effective as of October 1, 2013.

 

The purpose of the Plan is to permit designated executives of the Company to accumulate additional retirement income through deferrals of compensation under a nonqualified deferred compensation plan.  This Plan is intended to be unfunded and maintained by the Company primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of §§ 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.

 

ARTICLE 1

 

Definitions

 

As used in this Plan, the following capitalized words and phrases have the meanings indicated, unless the context requires a different meaning.

 

1.1                               “Account” means with respect to a Participant or Beneficiary, the total dollar amount or value evidenced by the last balance posted in accordance with the terms of the Plan to the account record established for such Participant or Beneficiary.  Separate sub-accounts may be maintained within each Account as deemed necessary by the Committee, including, but not limited to, Base Salary Deferral Accounts and Bonus Deferral Accounts.

 

1.2                               “Beneficiary” means the person or persons designated by a Participant, or otherwise entitled, to receive any amount credited to his Account that remains undistributed at his death.

 

1.3                               “Base Salary” means the Participant’s base salary or wages paid to him by the Company for a Plan Year (before any Deferral Contributions or Elective Deferrals). The Base Salary of a Participant as reflected on the books and records of the Company shall be conclusive.

 

1.4                               “Bonus” means the annual cash bonus (if any) paid to a Participant under the Company’s annual short-term bonus or incentive plan or program for a Plan Year (before any Deferral Contributions or Elective Deferrals); provided, however, that the term “Bonus” shall not include any other bonuses paid to the Participant, including, but not limited to, sign-on, retention, other special or discretionary bonuses or commissions paid to the Participant.

 

1.5                               “Business Day” means any day other than a Saturday, Sunday or any day other than days on which the New York Stock Exchange is closed for business.

 

1.6                               “Code” means the Internal Revenue Code of 1986 as amended.

 

1

 

1.7                               “Committee” means the committee appointed in accordance with Section 8.1 to administer the Plan.

 

1.8                               “Company” means Jones Energy, LLC, a Texas limited liability corporation, and any successor thereto.

 

1.9                               “Compensation” means a Participant’s Base Salary and Bonus for a Plan Year.

 

1.10                        “Compensation Committee” means the compensation committee of the board of directors of Jones Energy, Inc., which is the parent company of the Company.

 

1.11                        “Deferral Contributions” means, for each Plan Year, that portion of a Participant’s Base Salary and/or Bonus deferred under the Plan pursuant to Sections 4.1 and 4.2.

 

1.12                        “Disability” or “Disabled” means a physical or mental impairment that (i) entitles a Participant to benefits under the Company’s long-term disability plan and (ii) qualifies as a “Disability” under § 409A(a)(2)(C) of the Code, as determined by the Committee, in its sole discretion, but consistent with Treasury Regulation § 1.409A-3(i)(4) (or any successor regulations or guidance thereto).

 

1.13                        “Effective Date” means October 1, 2013, the date on which this Plan went into effect.

 

1.14                        “Elective Deferrals” means, for each Plan Year, a Participant’s pre-tax, elective deferrals to the Qualified Plan.

 

1.15                        “Eligible Employee” means for a Plan Year, an employee of the Company who (i) is a U.S. citizen (including an expatriate) or U.S. resident, (ii) is within a select group of key management or highly compensated employees and (iii) is selected for participation in the Plan by the Committee.

 

1.16                        “Employee” means an Employee of the Company.

 

1.17                        “Participant” means any Eligible Employee who satisfies the conditions for participation in the Plan set forth in Section 2.1.

 

1.18                        “Plan” means the Jones Energy, LLC Executive Deferral Plan, as set forth herein and as from time to time amended.

 

1.19                        “Plan Year” means the calendar year.

 

1.20                        “Qualified Plan” means the Jones Energy, Ltd. Profit Sharing Plan, which is a tax-qualified savings plan under § 401(a) of the Code, with a cash or deferral arrangement under § 401(k) of the Code.

 

1.21                        “Termination of Employment” means a Participant’s or former Participant’s separation from the service of the Company (including all affiliates of the Company) by reason of his resignation, retirement, discharge or death and which is a “separation from service” within

 

2

 

the meaning of § 409A(a)(2)(A)(i) of the Code and Treasury Regulation § 1.409A-1(h) (or any successor regulations or guidance thereto).

 

1.22                        “Trust” or “Trust Fund” means a grantor rabbi trust established to hold amounts set aside by the Company in accordance with Section 4.4.

 

1.23                        “Trustee” means the trustee appointed by the Compensation Committee and any additional or successor trustee of the Trust Fund.

 

1.24                        “Valuation Date” means each Business Day; provided, however, that the value of an Account on a day other than a Business Day shall be the value determined for the immediately preceding Business Day.

 

ARTICLE 2

 

Eligibility and Participation in the Plan

 

2.1                               Eligibility

 

2.1.1                     Annual Participation.  An Eligible Employee’s participation shall become effective as of the first day of the Plan Year, provided he satisfies the procedures for participation in the Plan described in Section 2.2.

 

2.1.2                     Interim Plan Year Participation.  Each individual who becomes employed with the Company during the Plan Year and who is designated as an Eligible Employee shall be eligible to participate in the Plan for a portion of such Plan Year by electing to make Deferral Contributions; provided, however, that such individual is not otherwise eligible for, or a participant in, a “plan” which is aggregated with this Plan for purposes of Section 409A. Such individual’s participation shall become effective as soon as administratively practicable after the date he satisfies the procedures for participation in the Plan described in Section 2.2 and such election shall only apply to Compensation earned after the effective date of his election.  Such procedures must be satisfied within 30 days following the date he becomes an Eligible Employee.  For the Plan’s initial partial Plan Year (commencing on the Effective Date (October 1, 2014) and ending on December 31, 2013, Eligible Employees may make a partial-year election with respect to Base Salary as described in Section 2.1.2 with respect to interim Plan Year elections, but may not make a partial Plan Year election with respect to his Bonus.

 

2.2                               Procedure for Participation.  Each Participant shall complete such forms and provide such data in a timely manner as required by the Committee. Such forms and data may include, without limitation, a Deferral Election, the Eligible Employee’s acceptance of the terms and conditions of the Plan, and the designation in accordance with the terms of the Plan of a Beneficiary to receive any death benefits payable hereunder. A Participant must timely submit a new Deferral Election for each Plan Year for which the Participant elects to make Deferral Contributions. The Deferral Election of a Participant who is an Eligible Employee for a portion of a Plan Year (pursuant to Section 2.1.2) shall be effective only with respect to Compensation paid for services to be performed after the Deferral Election is made.

 

3

 

2.3                               Cessation of Active Participation.  Unless otherwise designated by the Committee, in its sole discretion, each Participant who ceases to be an active employee of the Company shall cease to be eligible to receive or make any contributions under the Plan as of such cessation of employment date. The Committee may remove an employee from active Participant status for any subsequent Plan Year at any time prior to the first day of such Plan Year. If a Participant’s active participation in the Plan ends, such Participant shall remain an inactive Participant in the Plan until the earlier of (i) the date the full amount of his benefit is distributed from the Plan, or (ii) the date he again becomes an Eligible Employee and recommences participation in the Plan. During the period of time that a person is an inactive Participant in the Plan, his Account shall continue to be credited with earnings, gains and losses as provided in Section 4.4.

 

ARTICLE 3

 

Accounts Under the Plan

 

3.1                               Establishment of Accounts.  The Accounts specified in this Section 3.1 are established under the Plan to record the liability of the Company to Participants.  All Accounts may be maintained on the books of the Company, and the Company is under no obligation to segregate any assets to provide for these liabilities.  Should the Company elect to segregate assets into a trust fund pursuant to Section 4.4 of the Plan, the accounts specified in this Section 3.1 may be maintained on the books of such fund.

 

3.1.1                     Base Salary Deferral Accounts.  A Base Salary Deferral Accounts is maintained for each Participant for the purpose of recording the value of his deferrals of Base Salary.

 

3.1.2                     Bonus Deferral Accounts.  A Bonus Deferral Accounts is maintained for each Participant for the purpose of recording the current value of his deferrals of Bonus.

 

3.2                               Method of Valuing Accounts.  The value of an Account as of any Valuation Date is equal to the sum of —

 

(a)                                 the fair market value of the Account’s interest in the Trust Fund, plus

 

(b)                                 any benefits accrued under Article 4 with respect to which the Company has not made contributions to the Trust Fund, with interest thereon at the rate established by the Committee in accordance with Section 4.6.

 

ARTICLE 4

 

Deferrals; Accrual of Benefits

 

4.1                               Deferrals of Base Salary.  Each Participant who is eligible to participate in the Plan as of the first day of a Plan Year, and each Participant who becomes eligible to participate in the Plan for a portion of a Plan Year pursuant to Section 2.1.2, may elect to have Deferral Contributions of his Base Salary made on his behalf for such Plan Year (or portion thereof) by completing and delivering to the Committee a Deferral Election setting forth the terms of his

 

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election. Subject to the terms and conditions set forth in Section 4.3, a Deferral Election shall provide for the reduction of a Participant’s Base Salary payable in certain regular paychecks paid during the Plan Year for which the Deferral Election is in effect. A Participant may elect to defer up to a maximum of 50% of his Base Salary for the pay period (less any required tax or other withholdings). The Committee, in its sole discretion, may change the maximum percentage set forth in this Section 4.1 from time to time prior to the beginning of any Plan Year.

 

4.2                               Deferrals of Bonus.  Each Participant who is eligible to participate in the Plan as of the first day of a Plan Year, and each Participant who becomes eligible to participate in the Plan for a portion of a Plan Year pursuant to Section 2.1.2, may elect to have a Deferral Contribution from his Bonus made on his behalf for such Plan Year (or portion thereof) by completing and delivering to the Committee a Deferral Election setting forth the terms of his election. Subject to the terms and conditions set forth in Section 4.3, a Deferral Election shall provide for the reduction of a Participant’s Bonus attributable to the Plan Year for which the Deferral Election is in effect. A Participant may elect to defer up to a maximum of 100% of his Bonus (less any required tax or other withholdings). The Committee, in its sole discretion, may change from time to time the maximum percentage set forth in this Section 4.2 from time to time prior to any Plan Year.

 

4.3                               Procedures for Elections.  Subject to any modifications, additions or exceptions that the Committee, in its sole discretion, deems necessary, appropriate or helpful, the following terms shall apply to such elections:

 

4.3.1                     Time of Election.  To be effective, a Participant’s Deferral Election must be made within the time period prescribed by the Committee (the “Election Period”). The Election Period shall end, and the Participant’s Deferral Election shall be irrevocable, on or, if designated by the Committee, a date before, the last day of the Plan Year immediately preceding the Plan Year for which Deferral Contributions will be made; except that, with respect to those employees who become eligible to participate in the Plan for a portion of a Plan Year pursuant to Section 2.1.2 with respect to Deferral Contributions, such Election Period shall begin on the date such individual’s participation becomes effective and extend for 30 days thereafter. If a Participant fails to submit a Deferral Election in a timely manner, he shall be deemed to have elected not to participate in the Plan for that Plan Year with respect to his deferred Compensation.

 

4.3.2                     Term.  Each Participant’s Deferral Election shall become effective (i) on the first day of the Plan Year next following the date on which the Participant makes the Deferral Election or (ii) with respect to those employees who become eligible to participate in the Plan for a portion of a Plan Year pursuant to Section 2.1.2, as soon as practicable after receipt by the Committee of his Deferral Election. Each Participant’s Deferral Election shall remain in effect for Base Salary and/or Bonus paid solely during the Plan Year for which it applies.

 

4.3.3                     Revocation.  A Participant may not change or revoke his Deferral Election, once it becomes irrevocable as provided in Section 4.3.1.

 

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4.3.4                     Crediting of Deferral Elections.  For each Plan Year that a Participant has a Deferral Election in effect, the Committee shall credit the amount of such Participant’s Deferral Contributions to his Account as of the Valuation Date which coincides with or immediately follows the date on which such amount would have been paid to him but for his Deferral Election, or as soon as administratively practicable thereafter.

 

4.4                               Contributions to Trust Fund.  The Company may establish a Trust Fund and make contributions to it corresponding to any or all amounts deferred under Sections 4.1 and 4.2. These contributions are credited with income, expense, gains and losses in accordance with the investments held in the Qualified Plan, as allocated by the Participant.  Alternatively, at the Committee’s election, the Committee may direct the Trustee to establish investment funds within the Trust Fund and to permit Participants to direct the allocation of their Account balances among these funds in accordance with rules prescribed by the Committee.  The Committee may alter the available funds or the procedures for allocating Account balances among them at any time.

 

4.5                               Status of the Trust Fund.  Notwithstanding any other provision of this Plan, all assets of the Trust Fund remain the property of the Company and are subject to the claims of its creditors.  No Participant has any priority claim on Trust assets or any security interest or other right in or to them superior to the rights of general creditors of the Company.

 

4.6                               Interest on Benefit Accruals.  Any benefit accruals under the Plan with respect to which the Company does not make contributions to the Trust Fund in accordance with Section 4.4 are credited with interest.  Interest is credited during each Plan Year at a rate equal to the average interest rate on thirty-year United States Treasury bonds for the calendar month preceding the first day of the Plan Year.  Interest accrues from the date of accrual specified in Section 4.3.4 through the date on which the Company makes a corresponding contribution to the Trust Fund or the benefit is distributed to the Participant or his Beneficiary.  No interest will be credited on any benefit accrual attributable to an Account to the extent the Company makes a corresponding deposit to the Trust Fund with respect to such benefit accrual prior to the 15th business day of the month following the month in which the benefit accrual would otherwise have been payable to the participant in cash.

 

4.7                               Nonalienability.  A Participant’s rights under this Plan may not be voluntarily or involuntarily assigned or alienated.  If a Participant attempts to assign his rights or enters into bankruptcy proceedings, his right to receive payments personally under the Plan will terminate, and the Committee may apply them in such manner as will, in its judgment, serve the best interests of the Participant.

 

ARTICLE 5

 

Vesting

 

5.1                               Vesting of Participant’s Interest.  A Participant’s interest in his Base Salary Deferral Account and Bonus Deferral Account is fully (100%) vested at all times.

 

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ARTICLE 6

 

Distributions to Participants

 

6.1                               Manner of Distribution.  All distributions to a Participant or Beneficiary will be in the form of a single lump-sum payment.

 

6.2                               Type of Property to be Distributed.  All distributions from the Plan to Participants and Beneficiaries are made in cash, unless the Committee determines that other property should be distributed.

 

6.3                               Manner of Distribution to Minors or Incompetents.  If at any time any distributee is, in the judgment of the Committee, legally, physically or mentally incapable of receiving any distribution due to him, the distribution will be made to the guardian or legal representative of the distributee, or, if none exists, to any other person or institution that, in the Committee’s judgment, will apply the distribution in the best interests of the intended distributee.

 

6.4                               Election of Beneficiary

 

6.4.1                     Designation or Change of Beneficiary by Participant.  When an Eligible Employee qualifies for participation in the Plan, the Committee will send him a Beneficiary designation form, on which he may designate one or more Beneficiaries and successor Beneficiaries.  A Participant may change his Beneficiary designation at any time by filing the prescribed form with the Committee.  The consent of the Participant’s current Beneficiary is not required for a change of Beneficiary and no Beneficiary has any rights under this Plan except as are provided by its terms.  The rights of a Beneficiary who predeceases the Participant who designated him shall immediately terminate, unless the Participant has specified otherwise.

 

6.4.2                     Beneficiary if No Election Is Made.  Unless a different Beneficiary has been elected in accordance with Section 6.4.1, the Beneficiary of any Participant who is lawfully married on the date of his death is his surviving spouse.  The Beneficiary of any other Participant who dies without having designated a Beneficiary is his estate.

 

6.5                               Date of Distribution.  Distribution of the benefits accrued under the Plan shall occur upon the earlier of the 30th day following the date of:

 

(a)                                 A Participant’s Termination of Employment for any reason; or

 

(b)                                 A Participant’s death or Disability.

 

6.6                               Delay of Date of Distribution to Specified Employees.  Notwithstanding Section 6.5 or any Plan provision to the contrary, in the case of a Participant who has been identified by the Company as a “specified employee” within the meaning of § 409A(a)(2)(B)(i) of the Code as of the date of his Termination of Employment, a distribution paid under the Plan by reason of the Participant’s Termination of Employment, other than termination by reason of death, shall be delayed until the date that is the earlier of (i) the date six months and one day after the date of the Participant Termination of Employment or (ii) the date of the Participant’s death

 

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(occurring after his Termination of Employment).  Payments delayed pursuant to this Section 6.6 shall be paid without interest for such delay in payment.

 

ARTICLE 7

 

Amendment or Termination of the Plan

 

7.1                               Company’s Right to Amend Plan.  The Compensation Committee may, at any time and from time to time, amend, in whole or in part, any of the provisions of this Plan or may terminate it as a whole or with respect to any Participant or group of Participants.  Any such amendment is binding upon all Participants and their Beneficiaries, the Trustee, the Committee and all other parties in interest.  Any action to amend or terminate the Plan shall be taken by the Compensation Committee in the form of a written Plan amendment executed by a duly authorized officer of the Company.  In the event of a termination of the Plan, unpaid benefits shall continue to be an obligation of the Company and, unless otherwise expressly provided by resolution of the Compensation Committee, shall be paid as scheduled and in all events in a manner consistent with the requirements of § 409A of the Code.  If the Plan is terminated and the Compensation Committee expressly provides for each Participant’s Account to be distributed, such amounts shall be paid in a single sum as soon as practicable after the date the Plan is terminated.  The amount of any such distribution shall be determined as of the Valuation Date immediately preceding the date any such termination distribution is to be processed.  Termination of the Plan shall be binding on all Participants and Beneficiaries.

 

7.2                               When Amendments Take Effect.  A resolution amending or terminating the Plan becomes effective as of the date specified therein.

 

7.3                               Restriction on Retroactive Amendments.  No amendment may be made that retroactively deprives a Participant of any benefit accrued before the date of the amendment.

 

ARTICLE 8

 

Plan Administration

 

8.1                               The Administrative Committee.  The Plan is administered by a Committee consisting of one or more persons appointed by the Compensation Committee.  If the Compensation Committee fails to appoint a Committee, the Compensation Committee will be the administrator of the Plan.  The Compensation Committee may remove any member of the Committee at any time, with or without cause, and may fill any vacancy.  If a vacancy occurs, the remaining member or members of the Committee have full authority to act.  The Compensation Committee is responsible for transmitting to the Trustee the names and authorized signatures of the members of the Committee and, as changes take place in membership, the names and signatures of new members.  Any member of the Committee may resign by delivering his written resignation to the Compensation Committee, the Trustee and the Committee. Any such resignation becomes effective upon its receipt by the Compensation Committee or on such other date as is agreed to by the Compensation Committee and the resigning member.  The Committee acts by a majority of its members at the time in office and may take action either by vote at a meeting or by consent in writing without a meeting.  The Committee may adopt such

 

8

 

rules and appoint such subcommittees as it deems desirable for the conduct of its affairs and the administration of the Plan. Pending an appointment of the Committee by the Compensation Committee, Ashley A. Reed, Human Resources Manager for Jones Energy, Inc., will serve as the Committee.

 

8.2                               Powers of the Committee.  In carrying out its duties with respect to the general administration of the Plan, the Committee has, in addition to any other powers conferred by the Plan or by law, the following final and absolute powers:

 

(a)                                 to determine all questions relating to eligibility to participate in the Plan;

 

(b)                                 to compute and certify to the Trustee the amount and kind of distributions payable to Participants and their Beneficiaries;

 

(c)                                  to maintain all records necessary for the administration of the Plan that are not maintained by the Company or the Trustee;

 

(d)                                 to interpret the provisions of the Plan and to make and publish such rules for the administration of the Plan as are not inconsistent with the terms thereof;

 

(e)                                  to establish and modify the method of accounting for the Plan or the Trust;

 

(f)                                   to employ counsel, accountants and other consultants to aid in exercising its powers and carrying out its duties hereunder; and

 

(g)                                  to perform any other acts necessary and proper for the administration of the Plan, except those that are to be performed by the Trustee.

 

8.3                               Indemnification

 

8.3.1                     Indemnification of Members of the Committee by the Company.  The Company agrees to indemnify and hold harmless each member of the Committee against any and all expenses and liabilities arising out of his action or failure to act in such capacity, excepting only expenses and liabilities arising out of his own willful misconduct.  This right of indemnification is in addition to any other rights to which any member of the Committee may be entitled.

 

8.3.2                     Liabilities for Which Members of the Committee Are Indemnified.  Liabilities and expenses against which a member of the Committee is indemnified hereunder include, without limitation, the amount of any settlement or judgment, costs, counsel fees and related charges reasonably incurred in connection with a claim asserted or a proceeding brought against him or the settlement thereof.

 

8.3.3                     Company’s Right to Settle Claims.  The Company may, at its own expense, settle any claim asserted or proceeding brought against any member of the Committee when such settlement appears to be in the best interests of the Company.

 

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8.4                               Claims Procedures.  If a dispute arises between the Committee and a Participant or Beneficiary over the amount of benefits payable under the Plan, the Participant or Beneficiary may file a claim for benefits by notifying the Committee in writing of his claim.  The Committee will review and adjudicate the claim.  If the claimant and the Committee are unable to reach a mutually satisfactory resolution of the dispute, it will be submitted to arbitration under the rules of the American Arbitration Association.  Each Participant agrees, by the execution of a Deferral Election, that arbitration will be the sole means of resolving disputes arising under the Plan and waives, on behalf of himself and his Beneficiary, any right to litigate any such dispute in a court of law.

 

8.5                               Expenses of the Committee.  The members of the Committee shall serve without compensation for services as such.  All expenses of the Committee are paid by the Company.

 

8.6                               Expenses of the Plan.  The expenses of administering the Plan shall be paid by the Company.

 

ARTICLE 9

 

Miscellaneous

 

9.1                               Plan not a contract of employment.  The adoption and maintenance of the Plan does not constitute a contract between the Company and any Participant and is not a consideration for the employment of any person.  Nothing herein contained gives any Participant the right to be retained in the employ of the Company or derogates from the right of the Company to discharge any Participant at any time without regard to the effect of such discharge upon his rights as a Participant in the Plan.

 

9.2                               No rights under Plan except as set forth herein.  Nothing in this Plan, express or implied, is intended, or shall be construed, to confer upon or give to any person, firm, association, or corporation, other than the parties hereto and their successors in interest, any right, remedy, or claim under or by reason of this Plan or any covenant, condition, or stipulation hereof, and all covenants, conditions and stipulations in this Plan, by or on behalf of any party, are for the sole and exclusive benefit of the parties hereto.

 

9.3                               Taxation.  It is the intention of the Company that the benefits payable hereunder shall not be deductible by the Company or taxable for federal income tax purposes to Participants or Beneficiaries until such benefits are paid by the Company, or the Trust, as the case may be, to such Participants or Beneficiaries.  The provisions of the Plan shall be construed and interpreted and the Plan shall be operated in a manner consistent with the requirements of § 409A of the Code and the accompanying treasury regulations and guidance issued by the Internal Revenue Service.  Specifically, no provision of the Plan that would provide for a distribution that is subject to the additional tax under § 409A of the Code shall be permitted and any provision of the Plan which would result in a failure to meet the requirements of § 409A of the Code shall be deemed null and void.

 

9.4                               Withholding. If the whole or any part of any Participant’s or Beneficiary’s benefit hereunder shall become subject to any estate, inheritance, income, employment or other tax

 

10

 

which the Company shall be required to pay or withhold, the Company shall have the full power and authority to withhold and pay such tax out of any monies or other property held for the account of the Participant or Beneficiary whose interests hereunder are so affected (including, without limitation, by reducing and offsetting the Participant’s or Beneficiary’s Account balance). Prior to making any payment, the Company may require such releases or other documents from any lawful taxing authority as it shall deem necessary.

 

9.5                               Governing Law.  The construction and operation of this Plan and Trust are governed by the laws of Texas to the extent not preempted by ERISA.

 

9.6                               Undefined Terms.  Unless the context clearly requires another meaning, any term not specifically defined in this Plan is used in the sense given to it by the Qualified Plan.

 

9.7                               Headings.  The headings of Articles, Sections and Subsections are for reference only and are not to be utilized in construing the Plan.

 

9.8                               Gender.  Unless clearly inappropriate, all pronouns of whatever gender refer indifferently to persons or objects of any gender.

 

9.9                               Singular and Plural.  Unless clearly inappropriate, singular terms refer also to the plural number and vice versa.

 

9.10                        Severability.  If any provision of this Plan is held illegal or invalid for any reason, the remaining provisions are to remain in full force and effect and to be construed and enforced in accordance with the purposes of the Plan as if the illegal or invalid provision did not exist.

 

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IN WITNESS WHEREOF, the Company has caused these presents to be executed by its duly authorized officer and its corporate seal to be, hereunto affixed by authority of its Company, this 18th, day of September, 2013.

 

	
 
    	
Company
    
	
 
    	
 
    
	
 
    	
[Corporate   Seal]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Jonny Jones
    

 

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