<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 30, 1997
REGISTRATION NO. 333-26717
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
ON
FORM S-3 (WITH RESPECT TO TOYOTA MOTOR CREDIT CORPORATION ONLY) AND FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------
TOYOTA AUTO LEASE TRUST 1997-A TOYOTA MOTOR CREDIT CORPORATION
(Issuer with respect to the Certificates) (Originator of Toyota Lease Trust,
transferor of SUBI to Transferor and
Issuer of TMCC Demand Notes)
TOYOTA LEASING, INC. TOYOTA LEASE TRUST
(Originator of, and Transferor of the (Issuer with respect to the SUBI)
SUBI to, the Toyota Auto Lease Trust 1997-A)
(Exact name of Registrants as specified in its charter)
CALIFORNIA 6146 Applied for
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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19001 SOUTH WESTERN AVENUE
TORRANCE, CALIFORNIA 90509
(310) 618-4000
(Address, including zip code, and telephone number, including area code,
of Originator's principal executive offices)
-----------------------
ALAN F. COHEN, ESQ.
GENERAL COUNSEL
TOYOTA MOTOR CREDIT CORPORATION
19001 SOUTH WESTERN AVENUE
TORRANCE, CALIFORNIA 90509
(310) 787-1310
(Name, address, including zip code, and telephone number, including area
code, of agent for service with respect to the Registrant)
COPIES TO:
DAVID J. JOHNSON, JR, ESQ. AND DANIEL F. PASSAGE, ESQ. RENWICK D. MARTIN, ESQ.
ANDREWS & KURTH L.L.P. BROWN & WOOD LLP
601 S. FIGUEROA, SUITE 4200 ONE WORLD TRADE CENTER,
LOS ANGELES, CALIFORNIA 90017 58TH FLOOR
NEW YORK, NEW YORK 10048
-----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to a dividend or interest reinvestment plan, please check the
following box.
If any of the securities being registered on this form are to be offered
on a delayed orcontinuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
134, please check the following box. / /
-----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Proposed Title of Securities Amount to Proposed Maximum Proposed Maximum Amount of
to be Registered Be Registered Offering Price Per Unit(1) Aggregate Offering Price(1) Registration Fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Automobile Lease Asset Backed
Certificates, Class A-1 $500,000 100% $500,000 $152.52(2)
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Automobile Lease Asset Backed
Certificates, Class A-2 $500,000 100% $500,000 $152.52(2)
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Automobile Lease Asset Backed
Certificates, Class A-3 $500,000 100% $500,000 $152.52
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Automobile Lease Asset Backed
Certificates, Class A-4 $500,000 100% $500,000 $152.52
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The Special Unit of Beneficial
Interest (3) (3) (3) (3)
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TMCC Demand Notes (4) (4) (4) (4)
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee on
the basis of the proposed maximum offering price per unit.
(2) Previously paid.
(3) The Special Unit of Beneficial Interest (the "SUBI") issued by Toyota
Lease Trust will constitute a beneficial interest in certain specified assets
of Toyota Lease Trust, including certain lease contracts and the automobile
and light-duty trucks relating to such lease contracts. The SUBI is not
being offered to investors hereunder but will be transferred by Toyota Motor
Credit Corporation (the originator of Toyota Lease Trust) to Toyota Leasing,
Inc. (the originator of Toyota Auto Lease Trust 1997-A), and from Toyota
Leasing, Inc. to Toyota Auto Lease Trust 1997-A.
(4) The TMCC Demand Notes represent investments by the Trust of Collections
in demand notes issued from time to time by TMCC.
-----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
ii
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This Prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction.
PROSPECTUS
SUBJECT TO COMPLETION, DATED -, 1997
TOYOTA AUTO LEASE TRUST 1997-A
$- -% AUTO LEASE ASSET BACKED CERTIFICATES, CLASS A-1
$- -% AUTO LEASE ASSET BACKED CERTIFICATES, CLASS A-2
$- -% AUTO LEASE ASSET BACKED CERTIFICATES, CLASS A-3
$- -% AUTO LEASE ASSET BACKED CERTIFICATES, CLASS A-4
TOYOTA LEASING, INC.
(TRANSFEROR)
TOYOTA MOTOR CREDIT CORPORATION
(SERVICER)
----------
The Auto Lease Asset Backed Certificates (the "Certificates") will
represent undivided interests in the Toyota Auto Lease Trust 1997-A (the
"Trust") formed pursuant to a securitization trust agreement (the
"Agreement") between Toyota Leasing, Inc. (the "Transferor") and FIRST BANK
NATIONAL ASSOCIATION, as trustee (the "Trustee"). The property of the Trust
will consist of a Special Unit of Beneficial Interest (the "SUBI"), which, in
turn, will evidence a beneficial interest in certain specified assets (the
"SUBI Assets") of Toyota Lease Trust, a Delaware business trust (the "Titling
Trust"), monies on deposit in the Reserve Fund and certain other accounts and
certain other assets described more fully herein under "The Trust and the
SUBI". The assets of the Titling Trust (the "Titling Trust Assets") will
consist primarily of retail closed-end lease contracts and the automobiles
and light duty trucks relating thereto and certain other assets described
more fully herein. Toyota Motor Credit Corporation ("TMCC") will service the
lease contracts included in the Titling Trust Assets. (CONTINUED ON NEXT PAGE)
FOR A DISCUSSION OF MATERIAL RISKS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE CLASS A CERTIFICATES, SEE "RISK FACTORS" ON PAGE 20 HEREIN.
THE CLASS A CERTIFICATES WILL REPRESENT BENEFICIAL INTERESTS IN THE TRUST AND
WILL NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF TOYOTA MOTOR CREDIT
CORPORATION, TOYOTA MOTOR SALES, U.S.A., INC., TOYOTA LEASING, INC.,
TOYOTA LEASE TRUST OR ANY OF THEIR RESPECTIVE AFFILIATES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
APPLICATION WILL BE MADE TO LIST THE CLASS A CERTIFICATES ON THE LUXEMBURG
STOCK EXCHANGE AND FOR LISTING AND PERMISSION TO DEAL IN THE CLASS A
CERTIFICATES ON THE STOCK EXCHANGE OF HONG KONG LIMITED.
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO THE
PRICE TO PUBLIC (1) DISCOUNTS SELLER (1)(2)
------------------- ------------ ---------------
<S> <C> <C> <C>
Per Class A-1 Certificate...... -% -% -%
Per Class A-2 Certificate...... -% -% -%
Per Class A-3 Certificate...... -% -% -%
Per Class A-4 Certificate...... -% -% -%
Total...................... $- $- $-
</TABLE>
(1) Plus accrued interest, if any, calculated at the related Certificate Rate
from the date of initial issuance.
(2) Before deducting expenses payable by the Transferor estimated to be $-.
----------
The Class A Certificates are offered subject to prior sale, when, as and
if issued to and accepted by the Underwriters and subject to their right to
reject orders in whole or in part. It is expected that delivery of the
Class A Certificates will be made in book-entry form only through the Same
Day Funds Settlement System of The Depository Trust Company in the United
States, and Cedel Bank, societe anonyme and the Euroclear System in Europe
and Asia, on or about -, 1997, against payment therefor in immediately
available funds.
----------
JOINT BOOKRUNNERS
MERRILL LYNCH & CO. LEHMAN BROTHERS MORGAN STANLEY DEAN WITTER
(GLOBAL COORDINATOR)
THE DATE OF THIS PROSPECTUS IS -, 1997.
<PAGE>
(CONTINUED FROM FRONT COVER)
From time to time until principal is first distributed to the holders of
Certificates ("Certificateholders"), as described below, Principal
Collections on or in respect of the SUBI Assets will be reinvested in
additional lease contracts originated as described herein and assigned to the
Titling Trust, together with the automobiles and light duty trucks relating
thereto, which at the time of reinvestment will become SUBI Assets. The SUBI
will not evidence a direct interest in the SUBI Assets, nor will it represent
a beneficial interest in any of the Titling Trust Assets other than the SUBI
Assets. Payments made on or in respect of the Titling Trust Assets not
represented by the SUBI will not be available to make payments on the
Certificates.
The Certificates will consist of four classes of senior certificates
(respectively, the "Class A-1 Certificates", the "Class A-2 Certificates",
the "Class A-3 Certificates" and the "Class A-4 Certificates", and
collectively, the "Class A Certificates") and one class of subordinated
certificates (the "Class B Certificates"). The Class A Certificates are the
only Certificates offered hereby. The Initial Certificate Balance of the
Class B Certificates will be $-, and the Class B Certificates will be
subordinated to the Class A Certificates to the extent described herein. The
Class A-1, Class A-2, Class A-3, Class A-4 and Class B Certificates will
initially evidence in the aggregate -%, -%,-%, -% and -% undivided interests
in the SUBI, respectively. The Transferor will own the undivided interest in
the Trust not represented by the Certificates (the "Transferor Interest").
The initial balance of the Transferor Interest will be $-. SEE "Description
of the Certificates".
Interest on the Class A Certificates will accrue at the respective per
annum interest rates specified above and, except upon the occurrence of a
Monthly Payment Event, if any, will be distributed to holders thereof
semiannually on March 25 and September 25 of each year (or, if such day is not
a Business Day, on the next succeeding Business Day), commencing on
March 25, 1998.
The Targeted Maturity Date for the Class A-1 Certificates will be -, for
the Class A-2 Certificates will be -, for the Class A-3 Certificates will be
- - and for the Class A-4 Certificates will be -. In general, the Class A
Certificates will be "sequential pay" certificates meaning that no principal
payments will be made on the Class A-2 Certificates until the Class A-1
Certificates have been paid in full, no principal payments will be made on
the Class A-3 Certificates until the Class A-2 Certificates have been paid in
full and no principal payments will be made on the Class A-4 Certificates
until the Class A-3 Certificates have been paid in full. Except upon the
occurrence of a Monthly Payment Event, principal in respect of a Class of
Class A Certificates will not be distributed until its respective Targeted
Maturity Date. Upon the occurrence of a Monthly Payment Event, if any, during
the Amortization Period, or in the event the full amount of principal of any
Class of Class A Certificates is not available on its Targeted Maturity Date,
principal will be distributed to holders of the related Class of Class A
Certificates to the extent and in the order of priority described herein on
Certificate Payment Dates which will thereafter be monthly on each Monthly
Allocation Date. A "Monthly Allocation Date" is the day on which
Collections in respect of the Contracts and Leased Vehicles represented by
the SUBI are allocated, and shall occur on the twenty-fifth day of each month
(or, if such day is not a Business Day, on the next succeeding Business Day)
commencing on September 25, 1997. Each Class of Class A Certificates will also
have a Stated Maturity Date on or before which payment in full is due.
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the Class A
Certificates. Such transactions may include stabilizing and the purchase of
Class A Certificates to cover syndicate short positions. For a description
of these activities, see "Underwriting".
UNTIL -, 1997, ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS A
CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. UPON RECEIPT OF A REQUEST BY AN
INVESTOR WHO HAS RECEIVED AN ELECTRONIC PROSPECTUS OR A REQUEST BY SUCH
INVESTOR'S REPRESENTATIVE WITHIN THE PERIOD DURING WHICH THERE IS A
PROSPECTUS DELIVERY OBLIGATION, THE TRANSFEROR OR THE UNDERWRITERS WILL
PROMPTLY DELIVER, OR CAUSE TO BE DELIVERED, WITHOUT CHARGE, A PAPER COPY OF
THE PROSPECTUS.
ii
<PAGE>
AVAILABLE INFORMATION
The Transferor, as originator of the Trust, has filed with the Securities
and Exchange Commission (the "Commission") on behalf of the Trust a
Registration Statement on Form S-1 (together with all amendments and exhibits
thereto, the "Registration Statement"), of which this Prospectus is a part,
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Class A Certificates. This Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of
which have been omitted in accordance with the rules and regulations of the
Commission. For further information, reference is made to the Registration
Statement, which is available for inspection without charge at the public
reference facilities of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and the regional offices of the Commission at
Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois
60661-2511 and Suite 1300, Seven World Trade Center, New York, New York
10048. Copies of such information can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. In addition, copies of the Registration Statement and
all of the documents incorporated by reference herein (including the Titling
Trust Agreement and the Agreement) may be obtained at no charge at the
offices of -, Luxembourg, and at the offices of -, Hong Kong. The Servicer,
on behalf of the Trust, will also file or cause to be filed with the
Commission such periodic reports as are required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission thereunder. Electronic filings made through
the Electronic Data Gathering Analysis and Retrieval System are publicly
available through the Commission's Website at http://www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
Certain documents with respect to Toyota Motor Credit Corporation
("TMCC") are incorporated herein. The documents incorporated by reference
herein relate solely to TMCC as a registrant on the Registration Statement on
Form S-3 with respect to the TMCC Demand Notes. The Certificates will
represent beneficial interests in the Trust and will not represent interests
in or obligations of TMCC or any of its affiliates.
TMCC is subject to the informational requirements of the United States
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the United
States Securities and Exchange Commission (the "Commission"). Such reports
and other information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of the
Commission: New York Regional Office, 7 World Trade Center, 13th Floor, New
York, New York 10048; and Chicago Regional Office, Citibank Center, Suite
1800, 500 West Madison Street, Chicago, Illinois 60611-2511. In addition,
certain of TMCC's securities are listed on the New York Stock Exchange and
the aforementioned material may also be inspected at the offices of such
exchange.
TMCC's Annual Report on Form 10-K for the year ended September 30, 1996
and TMCC's Quarterly Reports on Form 10-Q for the quarters ended December
31, 1996 and March 31, 1997 have been filed with the Commission and are made
a part of this Registration Statement. All reports filed by TMCC pursuant
to Sections 13(a) or 15(d) of the Exchange Act subsequent to the date of the
Registration Statement and prior to the termination of the offering of the
Certificates and all supplements to the Registration Statement filed from
time to time shall be deemed to be incorporated by reference into the
Registration Statement to be a part hereof from the date of filing such
documents.
iii
<PAGE>
Any statement contained herein or made a part hereof, or contained in
a document all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or superseded
for the purposes of the Registration Statement to the extent that a statement
contained therein (or in any subsequently filed document which is also
incorporated or deemed to be incorporated by reference herein) modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of the
Registration Statement.
REPORTS TO CERTIFICATEHOLDERS
First Bank National Association, as Trustee, will provide to
Certificateholders (which shall be Cede & Co. as the nominee of DTC unless
Definitive Certificates are issued under the limited circumstances described
herein) unaudited monthly and annual reports concerning the Contracts and
Leased Vehicles. SEE "Description of the Certificates--Reports to
Certificateholders". For so long as the Class A Certificates are outstanding,
each such report (including a statement of the Class Certificate Balance of
each Class of Certificates) also shall be delivered to the Luxembourg Stock
Exchange and The Stock Exchange of Hong Kong Limited on the related date for
delivery to Certificateholders. Copies of such reports may be obtained at no
charge at the offices of -, Luxembourg, and at the offices of -, Hong Kong.
iv
<PAGE>
OVERVIEW OF TRANSACTION
[Transaction Graph]
v
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
DETAILED INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. CERTAIN
CAPITALIZED TERMS USED HEREIN ARE DEFINED ELSEWHERE IN THIS PROSPECTUS ON THE
PAGES INDICATED IN THE "INDEX OF TERMS" BEGINNING ON PAGE 104 HEREOF.
OVERVIEW.................... Certain motor vehicle dealers ("Dealers") whose
dealerships are located in California, Florida,
Michigan, Pennsylvania and Ohio (the "Trust
States") have assigned and will assign closed-end
retail automobile and light-duty truck leases to
the Titling Trust pursuant to their dealer
agreements with the Titling Trust. The Titling
Trust was created in October 1996 to avoid the
administrative difficulty and expense associated
with retitling leased vehicles in connection with
the securitization of automobile and light duty
truck leases. The Titling Trust has issued to
TMCC an Undivided Trust Interest (the "UTI")
representing the entire beneficial interest in
the unallocated Titling Trust Assets. SEE "The
Trust and the SUBI--The Trust".
TMCC will instruct the trustee of the Titling
Trust to allocate a separate portfolio of leases
and leased vehicles from and among the Titling
Trust Assets represented by the UTI and create a
special unit of beneficial interest (the "SUBI")
which will represent the entire beneficial
interest in such portfolio. Titling Trust Assets
allocated to the SUBI will no longer be
represented by the UTI. TMCC will sell the SUBI
to the Transferor and the Transferor will
contribute substantially all of the SUBI to the
Trust. In return, the Trust will issue the
Class A Certificates offered hereby and the
Class B Certificates, and will create the
Transferor Interest for the benefit of the
Transferor. The "Transferor Interest" is the
undivided interest in the Trust not evidenced by
the Certificates and will be permanently retained
by the Transferor.
TMCC, from time to time in the future, may cause
the Titling Trust to allocate additional separate
portfolios of leases and leased vehicles and to
create additional special units of beneficial
interest similar to the SUBI relating to such
portfolios ("Other SUBIs") which may be sold to
the Transferor or one or more other entities.
The Trust and the Certificateholders will have no
interest in the UTI, any Other SUBI or any
Titling Trust Assets evidenced by the UTI or any
Other SUBI.
THE TRUST................... The Trust will be formed pursuant to the Agreement
between the Transferor and First Bank National
Association ("First Bank"), as Trustee. The
property of the Trust will consist primarily of
the SUBI and monies on deposit in certain
accounts established as described herein.
1
<PAGE>
THE TITLING TRUST........... The Titling Trust is a Delaware business
trust formed pursuant to the Titling Trust
Agreement. The primary business purpose of the
Titling Trust is to take assignments of and serve
as holder of title to substantially all of the
lease contracts and the related leased vehicles
originated by the Dealers beginning on dates
prior to the execution of the SUBI Supplement.
Pursuant to the Servicing Agreement, TMCC will
service the lease contracts included in the
Titling Trust Assets, including the Contracts.
SEE "Additional Document Provisions--The Trust
Agreement" and "--The Servicing Agreement" and
"Certain Legal Aspects of the Titling Trust--The
Titling Trust".
The Titling Trust is governed by an Amended and
Restated Trust and Servicing Agreement (the
"Titling Trust Agreement") among TMCC, as grantor,
initial beneficiary and Servicer, TMTT, Inc., as
trustee (the "Titling Trustee") and First Bank,
as trust agent (the "Trust Agent"). TMTT, Inc.
is a Delaware corporation and a wholly owned,
special purpose subsidiary of First Bank that
was organized solely for the purpose of acting as
Titling Trustee. TMTT, Inc. is not affiliated
with TMCC or any affiliate thereof. SEE "The
Titling Trust--The Titling Trustee".
TITLING TRUST ASSETS
ALLOCATED AS SUBI ASSETS.... The Titling Trust Assets consist primarily of
retail closed-end lease contracts and the
automobiles and light duty trucks relating
thereto. The SUBI will evidence a beneficial
interest in a specified portion of the Titling
Trust Assets allocated to the SUBI. Certain lease
contracts (the "Initial Contracts") originated by
the Dealers, the automobiles and light duty trucks
relating thereto (the "Initial Leased Vehicles")
and certain monies due under or payable in respect
of the Initial Contracts and the Initial Leased
Vehicles on or after -, 1997 (the "Cutoff Date")
will be allocated to the SUBI on the Closing Date.
During the Revolving Period, payments made on or
in respect of the SUBI Assets allocable to the
Discounted Principal Balance thereof will be
reinvested in additional retail closed-end lease
contracts (the "Subsequent Contracts" and,
together with the Initial Contracts, the
"Contracts") assigned to the Titling Trust by
Dealers and the related automobiles and light
duty trucks (the "Subsequent Leased Vehicles" and,
together with the Initial Leased Vehicles, the
"Leased Vehicles"). At the time of such
reinvestment, such Subsequent Contracts and
Subsequent Leased Vehicles will be allocated to
the SUBI and will no longer be UTI Assets.
All such assets, together with certain other
assets and rights, are the "SUBI Assets".
SEE "--Principal--The Revolving Period" and
"The Trust and the SUBI--The SUBI".
The SUBI will evidence an indirect beneficial
interest, rather than a direct legal interest,
in the SUBI Assets. The SUBI will not
2
<PAGE>
represent a beneficial interest in any Titling
Trust Assets other than the SUBI Assets.
Payments made on or in respect of the Titling
Trust Assets other than the SUBI Assets will
not be available to make payments on the
Certificates.
THE TRANSFEROR.............. Toyota Leasing, Inc. is a California corporation
which is a wholly owned, special purpose
subsidiary of TMCC. SEE "The Transferor".
TMCC........................ TMCC is a California corporation that has 34
branches in various locations in the United
States and one branch in the Commonwealth of
Puerto Rico. TMCC's primary business is
providing retail leasing, retail and wholesale
financing and certain other financial services
to authorized Toyota and Lexus vehicle and
Toyota industrial equipment dealers and their
customers in the United States (excluding Hawaii)
and Puerto Rico. TMCC is a wholly owned
subsidiary of Toyota Motor Sales, U.S.A., Inc.
("TMS"), which is primarily engaged in the
wholesale distribution of automobiles, light duty
trucks, industrial equipment and related
replacement parts and accessories throughout
the United States (excluding Hawaii). TMS is
a wholly-owned subsidiary of Toyota Motor North
America, Inc. ("TMA"). Substantially all of
TMS's products are either manufactured by its
affiliates or are purchased from Toyota Motor
Corporation ("TMC"), which wholly owns TMA, or
affiliates of TMC.
Pursuant to the Agreement and the Series 1997-A
SUBI Servicing Supplement to the Titling Trust
Agreement dated as of -, 1997 among TMCC, the
Titling Trustee and the Transferor (the
"Servicing Supplement" and together with the
Titling Trust Agreement, the "Servicing
Agreement"), TMCC will act as the initial
servicer of the Titling Trust Assets, including
the SUBI Assets (in such capacity, the
"Servicer"). Pursuant to the terms of the
Servicing Agreement, the Trustee is a third
party beneficiary thereof.
SECURITIES OFFERED
a. GENERAL................. The Certificates will represent fractional
undivided beneficial interests in the Trust.
The Certificates will consist of four classes
of senior certificates (the Class A-1, Class A-2,
Class A-3 and Class A-4 Certificates) and one
class of subordinated certificates (the Class B
Certificates). Only the Class A Certificates
are being offered hereby.
Each Certificate will represent the right to
receive semiannual payments of interest at the
related Certificate Rate and, to the extent
described herein, payments of principal during
the Amortization Period. It is expected that
3
<PAGE>
repayment of principal on each Class of
Class A Certificates will be made on the
related Targeted Maturity Date.
Payments on the Certificates will be
funded from payments received by the
Trust on or in respect of the SUBI and,
in certain circumstances, from monies on
deposit in the Reserve Fund, from
earnings in respect of monies, if any, on
deposit in the Certificateholders'
Account, and monies that otherwise would
be distributable in respect of the
Transferor Interest. Interests in the
assets of the Trust will be allocated
among the Class A-1 Certificateholders
(the "Class A-1 Interest"), the Class A-2
Certificateholders (the "Class A-2
Interest"), the Class A-3
Certificateholders (the "Class A-3
Interest"), the Class A-4
Certificateholders (the "Class A-4
Interest" and, together with the Class
A-1 Interest, the Class A-2 Interest and
the Class A-3 Interest, the "Class A
Interest"), the Class B
Certificateholders (the "Class B
Interest" and, together with the Class A
Interest, the "Investor Interest") and
the Transferor Interest.
In general, the Class A Certificates will
be "sequential pay" certificates, meaning
that no principal payments will be made
on the Class A-2 Certificates until the
Class A-1 Certificates have been paid in
full, no principal payments will be made
on the Class A-3 Certificates until the
Class A-2 Certificates have been paid in
full and no principal payments will be
made on the Class A-4 Certificates until
the Class A-3 Certificates have been paid
in full. The Class B Certificates will
be subordinated to the Class A
Certificates to the extent described
herein. SEE "Description of the
Certificates--Distributions on the
Certificates". The Transferor Interest
also will be subordinated to the
Certificates, as described herein.
Payments will be made to
Certificateholders of record as of the
day immediately preceding each relevant
Certificate Payment Date or, if
Definitive Certificates are issued, as of
the last Business Day of the preceding
month (each, a "Record Date"). A
"Business Day" is a day other than a
Saturday, a Sunday or a day on which
banking institutions in New York, New
York, Chicago, Illinois, or Los Angeles,
California are authorized or obligated by
law, regulation, executive order or
decree to be closed; provided that,
solely for purposes of identifying any
Certificate Payment Date with respect to
the making of payments on the
Certificates of any Class in Luxembourg
or Hong Kong by a paying agent there
located, "Business Day" shall also
exclude any day on which banking
institutions located in that jurisdiction
are authorized by law, regulation,
governmental order or decree to be
closed, whether or not payments are made
with respect to such
4
<PAGE>
Certificates in any other jurisdiction on
such date, but such definition shall not
be used for making any other calculation.
On the date of initial issuance of the
Certificates (the "Closing Date"), the
Trust will issue $- aggregate initial
Certificate Balance of Class A-1
Certificates (the "Initial Class A-1
Certificate Balance"), $- aggregate
initial Certificate Balance of Class A-2
Certificates (the "Initial Class A-2
Certificate Balance"), $- aggregate
initial Certificate Balance of Class A-3
Certificates (the "Initial Class A-3
Certificate Balance"), $- aggregate
initial Certificate Balance of Class A-4
Certificates (the "Initial Class A-4
Certificate Balance" and the sum of such
initial Certificate Balances, the
"Initial Class A Certificate Balance")
and $- aggregate initial Certificate
Balance of Class B Certificates (the
"Initial Class B Certificate Balance"
and, together with the Initial Class A
Certificate Balance, the "Initial
Certificate Balance"). Except as
described below, such Class Certificate
Balances will remain fixed at the
indicated Initial Certificate Balances
during the Revolving Period and until the
related Targeted Maturity Date except
that Certificate Balances will decline
during the Amortization Period in connection
with the allocation of Certificate Principal
Loss Amounts or commencing upon the
occurrence of a Monthly Payment Event, to
the extent described herein.
The "Class Certificate Balance" of any
Class of Certificates on any day will
equal the Initial Certificate Balance
thereof, reduced by the sum of all
distributions made in respect of
principal of such class (including
distributions in respect of Loss Amounts
and Certificate Principal Loss Amounts
allocable to such Class) on or prior to
such day and any unreimbursed Certificate
Principal Loss Amounts in respect of such
Class, as described herein. The "Class A
Certificate Balance" will mean the sum of
the Class A-1, the Class A-2, the Class
A-3 and Class A-4 Certificate Balances.
The "Certificate Balance" with respect to
the Certificates will mean the sum of the
Class A Certificate Balance and the Class
B Certificate Balance.
The Transferor Interest will represent
the interest in the Trust not represented
by the Investor Interest. The Transferor
Interest will initially equal $- ([-]% of
the Aggregate Net Investment Value as of
the Cutoff Date) and on any day will
equal the difference between the
Aggregate Net Investment Value and the
Certificate Balance, calculated as
described below, but may not exceed $-.
SEE "Summary--The SUBI--The Contracts".
As more fully described herein, the
Aggregate Net Investment Value can change
daily and the Transferor Interest can
decrease daily as the Aggregate Net
Investment Value decreases. The
Transferor Interest may increase on a
Monthly Allocation Date as the
5
<PAGE>
Certificate Balance declines. SEE
"Description of the
Certificates--General".
B. DISTRIBUTIONS................. INTEREST. Payments of interest on each
Class of Class A Certificates will be
made, to the extent funds are allocated
and are available therefor as described
herein, on each Monthly Allocation Date
in March and September, commencing in
March 1998, as well as on the Targeted
Maturity Date and any subsequent
Certificate Payment Date. After the
occurrence of any Monthly Payment Event,
payments of interest on each Class of
Class A Certificates will be made
monthly, to the extent funds are
allocated and are available therefor
as described herein, on each Monthly
Allocation Date (and each such
subsequent Monthly Allocation Date
will be a Certificate Payment Date).
PRINCIPAL. Principal of each Class of
Class A Certificates will be payable in
full on the related Targeted Maturity
Date. If Principal Collections during the
Collection Periods preceding such date (but
commencing after the end of the Revolving
Period) that are allocable to such Class
of Class A Certificates, together with
amounts allocated thereto through
subordination, from amounts on deposit in
the Reserve Fund or from any related
Maturity Advance, are insufficient to
make such payment in full, all such
amounts available will be paid to the
related Certificateholders on the related
Targeted Maturity Date and, thereafter,
payment of all Principal Collections in
respect of the related Collection Period
allocable to the Investor Interest,
will be paid on each related Certificate
Payment Date on a monthly basis until
such Class of Class A Certificates has
been paid in full. After the occurrence
of any Monthly Payment Event, payments of
principal of each Class of Class A
Certificates will be made monthly, to the
extent funds are allocated and are
available therefor as described herein, on
each Certificate Payment Date (and each
such subsequent Monthly Allocation Date
will be a Certificate Payment Date).
Each Monthly Allocation Date on which any
such distribution of interest or
principal is required to be made with
respect to any Class of Certificates is a
"Certificate Payment Date" with respect
to such Class.
The Targeted Maturity Date for each Class
of Class A Certificates is as follows:
CLASS TARGETED MATURITY DATE
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<PAGE>
Class A-1
Class A-2
Class A-3
Class A-4
The Stated Maturity Date for each Class of
Class A Certificates is as follows:
Class Stated Maturity Date
Class A-1
Class A-2
Class A-3
Class A-4
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<PAGE>
C. INTEREST...................... Interest will accrue on the Certificates
at the following rates (the "Certificate
Rates"): (i) Class A-1 Certificates, -%
per annum (the "Class A-1 Rate"), (ii)
Class A-2 Certificates, -% per annum (the
"Class A-2 Rate"), (iii) Class A-3
Certificates, -% per annum (the "Class
A-3 Rate"), (iv) Class A-4 Certificates,
-% per annum (the "Class A-4 Rate") and
(v) Class B Certificates -% per annum
(the "Class B Rate"). Interest will
accrue on the outstanding principal
amount of the Certificates of each Class
at the applicable Certificate Rate during
each Interest Period. The "Interest
Period" with respect to each related
Certificate Payment Date for a Class of
Certificates will be the period from and
including the preceding Certificate
Payment Date, to but excluding such
Certificate Payment Date. However, the
first Interest Period for any Class of
Certificates will be the period from and
including the Closing Date, to but
excluding the related first Certificate
Payment Date. Interest will be
calculated on the basis of a 360-day year
consisting of twelve 30-day months.
Interest Period" with respect to each
related Certificate Payment Date for a
Class of Certificates will be the period
from and including the preceding
Certificate Payment Date, to but
excluding such Certificate Payment Date.
However, the first Interest Period for
any Class of Certificates will be the
period from and including the Closing
Date, to but excluding the related first
Certificate Payment Date. Interest will
be calculated on the basis of a 360-day
year consisting of twelve 30-day months.
Interest allocations and payments to all
Classes of Class A Certificates will have
the same priority. Under certain
circumstances, the amount available for
interest allocations or distributions
could be less than the amount of interest
allocable to or distributable on the
Certificates on any Monthly Allocation
Date, in which case each Class of
Certificates will be allocated or paid
its ratable share (based upon the
aggregate amount of interest due thereon)
of the aggregate amount available to be
allocated or paid in respect of interest
on the Certificates.
D. PRINCIPAL, REVOLVING PERIOD
AND AMORTIZATION PERIOD..... Unless a Monthly Payment Event has occurred,
principal will be paid to the holders of
each Class of Class A Certificates on
each applicable Targeted Maturity Date in
an amount equal to the lesser of (i) the
related Class Certificate Balance, and
(ii) the sum of (x) all amounts allocated
for distributions in respect of principal
of the Certificates then on deposit in
the Certificateholders' Account and (y)
any Maturity Advance. See "--Maturity
Advances".
To the extent the that the entire Class
Certificate Balance is not paid on the
related Targeted Maturity Date,
distributions of principal on a Class of
Class A Certificates will be made on each
Certificate Payment Date commencing in
the month immediately following such
Targeted Maturity Date, and shall
continue on a monthly basis until such
Class is paid in full. Interest at the
related Interest Rate will continue to
accrue on the outstanding Certificate
Balance of the related Class of Class A
Certificates and will be distributable on
each such Certificate Payment Date. See
"--Interest".
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<PAGE>
Failure to pay the entire Class
Certificate Balance of any Class of
Certificates on its Targeted Maturity
Date because Collections and other
amounts allocable thereto are
insufficient therefor will not constitute
an event of default or Event of Servicing
Termination. However, failure to make
any scheduled interest payment on or
within three Business Days of a relevant
Certificate Payment Date, or failure to pay
in full any Class of Class A Certificates
on or before its Stated Maturity Date, will
constitute an Event of Servicing
Termination. SEE "Additional Document
Provisions--The Servicing Agreement--Events
of Servicing Termination" and "--Rights Upon
Event of Servicing Termination."
THE REVOLVING PERIOD. No principal will
be allocable or distributable on the
Certificates until the Monthly Allocation
Date (the "First Principal Monthly
Allocation Date") in the month commencing
after the earlier to occur of -, 1998
(the "Amortization Date") or an Early
Amortization Event. Early Amortization
Events are described under "Description
of the Certificates--Early Amortization
Events". From the Closing Date and
through the Business Day preceding the
commencement of the Amortization Period
(I.E., the earlier of - 1, 1998 or the
date of an Early Amortization Event) (the
"Revolving Period"), all Principal
Collections and amounts otherwise
distributable to Certificateholders as
reimbursements of Loss Amounts will be
reinvested in Subsequent Contracts and
Subsequent Leased Vehicles so as to
maintain the Certificate Balance at a
constant level during the Revolving
Period; provided that during the
Revolving Period the Certificate Balance
of a Class of Certificates will decrease
to the extent Certificate Principal Loss
Amounts are allocated thereto and not
reimbursed. SEE "Description of the
Certificates--Distributions on the
Certificates--Distributions of Interest".
During the Revolving Period, on one or
more Business Days selected by the
Servicer (each, a "Transfer Date"), the
Servicer will direct the Titling Trustee
to reinvest Principal Collections and
certain reimbursed Loss Amounts in
Subsequent Contracts and Subsequent
Leased Vehicles. Upon such reinvestment,
such Subsequent Contracts and Subsequent
Leased Vehicles will become SUBI Assets.
If on the last Business Day of any month
during the Revolving Period the Servicer
determines that the amount of Principal
Collections not reinvested in Subsequent
Contracts and Subsequent Leased Vehicles
during the preceding calendar month
exceeds $-, an Early Amortization Event
will be deemed to have occurred, the
Revolving Period will terminate as of
such day and all Principal Collections
and reimbursed Loss Amounts not
reinvested as of such day will then be
allocable or distributable to
Certificateholders on the succeeding
Monthly Allocation Date. SEE
"Description of the
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<PAGE>
Certificates--Distributions on the
Certificates--Application and
Distributions of Principal--Revolving
Period".
During the Revolving Period, Subsequent
Contracts and Subsequent Leased Vehicles
will be selected from the Titling Trust's
portfolio of lease contracts and related
vehicles not allocated to any Other SUBI,
based on the criteria specified in the
Titling Trust Agreement and SUBI
Supplement as described under the "The
Contracts--Representations, Warranties
and Covenants". Reinvestment of Principal
Collections and reimbursed Loss Amounts
will be in the lease contracts having the
earliest origination dates and the
related vehicles and Titling Trust Assets
(excluding those previously allocated to
any Other SUBI). If any Other SUBI is
created and allocations are being made in
respect of such Other SUBI at the same
time out of the Titling Trust's general
pool of unallocated lease contracts,
reinvestment in respect of the SUBI will
be given priority. SEE "The Contracts".
"Principal Collections" will mean, with
respect to any Collection Period, all
Collections allocable to the principal
component of any Contract (including any
payment in respect of the related Leased
Vehicle, other than any payment as to
which a Loss Amount has been realized and
allocated during any prior Collection
Period), discounted to the extent
described below, less the principal
portions of Advances reimbursable to the
Servicer with respect to payments received
on the related Contracts. With respect to
any Monthly Allocation Date, the related
"Collection Period" will be the preceding
calendar month. For purposes of
determining Principal Collections, the
principal component of all payments made
on or in respect of a Contract (or the
related Leased Vehicle) with a Lease Rate
less than -% per annum (each, a
"Discounted Contract") will be discounted
at a per annum rate of -%, thereby
effectively reallocating a portion of the
payments received in respect of the
principal component of the Contracts to
Interest Collections and providing
additional credit enhancement for the
benefit of the Certificateholders. With
respect to any Collection Period,
"Collections" will include all net
collections received in respect of the
Contracts and Leased Vehicles during such
Collection Period, such as Monthly
Payments (including Payments Ahead that
represent Monthly Payments due during
such Collection Period), Prepayments,
Advances, Net Matured Leased Vehicle
Proceeds, Net Repossessed Vehicle
Proceeds and other Net Liquidation
Proceeds, less (i) amounts representing
Payments Ahead with respect to future
Collection Periods, (ii) amounts retained
by or paid to the Servicer in respect of
outstanding Advances and (iii) Additional
Loss Amounts in respect of such
Collection Period. In addition, for each
Collection Period during the Revolving
Period, amounts otherwise allocable or
distributable to the Certificateholders
on the related Monthly Allocation Date as
reimbursement of Loss Amounts allocable
to the Investor Interest will be treated
as Principal
10
<PAGE>
Collections and reinvested in Subsequent
Contracts and Subsequent Leased Vehicles.
SEE "Description of the
Certificates--Allocations and Distributions
on the Certificates--Distributions of
Collections".
With respect to any Collection Period
"Interest Collections" generally will
equal the amount by which Collections
exceed Principal Collections, less the
interest portions of Advances reimbursable
to the Servicer with respect to payments
received on the related Contracts. "Net
Repossessed Vehicle Proceeds" will equal
Repossessed Vehicle Proceeds net of
Repossessed Vehicle Expenses, and "Net
Liquidation Proceeds" will equal
Liquidation Proceeds net of Liquidation
Expenses.
AMORTIZATION PERIOD. The "Amortization
Period" shall commence on the earlier of
the Amortization Date or the day on which
an Early Amortization Event occurs, and
will end when (i) each Class of
Certificates has been paid in full and
all Certificate Principal Loss Amounts
and any Class B Certificate Principal
Carryover Shortfalls have been repaid in
full, together with accrued interest
thereon, or (ii) the Trust otherwise
terminates. During the Amortization
Period, Principal Collections and
reimbursed Loss Amounts will no longer be
reinvested in Subsequent Contracts and
Subsequent Leased Vehicles.
During the Amortization Period, the
amount of Principal Collections allocable
to the Investor Interest in respect of a
Collection Period (the "Principal
Allocation") generally will mean the
Principal Collections in respect of such
Collection Period allocable to the SUBI
Interest multiplied by the Investor
Percentage for such Principal
Collections. The "Investor Percentage"
for purposes of the Principal Allocation
will equal the percentage equivalent of a
fraction (not to exceed 100%), the
numerator of which is the Certificate
Balance and the denominator of which is
the Aggregate Net Investment Value,
calculated as of the last day of the
Collection Period (i) preceding the
Amortization Date or (ii) preceding the
month, if any, during which an Early
Amortization Event occurs. SEE
"Description of the
Certificates--Calculation of Investor
Percentage and Transferor Percentage."
Allocations based upon the Principal
Allocation may result in allocations or
distributions to Certificateholders of
Principal Collections with respect to
Collection Periods during the
Amortization Period in amounts that are
greater relative to the declining
Certificate Balances than would be the
case if no fixed Investor Percentage were
used. To the extent that on any Monthly
Allocation Date during the Amortization
Period any
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<PAGE>
portion of the Investor Percentage of
Interest Collections in respect of the
related Collection Period remains after
required distributions have been made, such
excess interest will be deposited into the
Reserve Fund until the amount on deposit
therein equals the Specified Reserve Fund
Balance. Any remaining excess interest, up
to but not exceeding the product of (i)
one-twelfth of [-]% and (ii) the Aggregate
Net Investment Value as of the last day of
such Collection Period will constitute
the "Accelerated Principal Distribution
Amount". The Accelerated Principal
Distribution Amount will be allocable or
distributable to the Certificateholders
in addition to (and in the same manner
and priority as) ordinary allocations and
distributions of principal in respect of
the Certificates. SEE "Description of
the Certificates-- Allocations and
Distributions on the
Certificates--Allocations and
Distributions of Collections" and "Assets
of the Trust--The Accounts;
Collections--The SUBI Collection
Account--Certain Withdrawals from the
SUBI Collection Account".
The "Aggregate Net Investment Value" as
of any date will equal the sum of (i) the
Discounted Principal Balance of all
Contracts other than Charged-off,
Liquidated, Matured and Additional Loss
Contracts, (ii) the aggregate Residual
Value of all Leased Vehicles to the
extent that the related Contracts have
reached their scheduled maturities (each,
a "Matured Contract") within the three
immediately preceding Collection Periods
but which Leased Vehicles as of the last
day of the most recent Collection Period
have remained unsold and not otherwise
disposed of by the Servicer for no more
than three full Collection Periods (the
"Matured Leased Vehicle Inventory") plus
certain related charges and (iii) during
the Revolving Period, the amount of
unreinvested Principal Collections and
reimbursed Loss Amounts. The "Discounted
Principal Balance" for each Contract with
a Lease Rate less than -% will be its
Outstanding Principal Balance discounted
by -% (each such Contract, a "Discounted
Contract"), and for each Contract with a
Lease Rate at least equal to -% will be
its Outstanding Principal Balance. As of
the Cutoff Date, the Aggregate Net
Investment Value equaled the aggregate
Discounted Principal Balance of the
Initial Contracts or $-.
E. INVESTMENT OF COLLECTIONS
PRIOR TO MONTHLY PAYMENT
EVENT....................... So long as a Monthly Payment Event has
not occurred, and so long as the
Certificates of any Class are
outstanding, amounts allocated to
interest on or principal of the
Certificates of such Class on a Monthly
Allocation Date that is not a relevant
Certificate Payment Date will be
deposited into the Certificateholders'
Account on such Monthly Allocation Date
and invested in Permitted Investments
maturing prior to the succeeding relevant
Certificate Payment Date or Targeted
Maturity Date, as appropriate. Such
Permitted Investments
12
<PAGE>
are expected to include one or more demand
obligations issued by TMCC (each a "TMCC Demand
Note") bearing a rate of interest satisfactory
to the Rating Agencies. From and after the
occurrence of a Monthly Payment Event, payments
of interest on and principal of each Class of
Certificates will instead be made monthly on
each subsequent relevant Certificate Payment
Date.
A "Monthly Payment Event" is (i) the downgrade
by Standard & Poor's of TMCC's short-term debt
to a rating less than A-1+, or (ii) the
downgrade by Moody's of TMCC's short term debt
to a rating less than P-1 or TMCC's long term
debt to a rating less than Aa3, unless within
ten days of such event alternative arrangements
satisfactory to the Rating Agencies are made
with respect to the investment of Collections
to be invested.
F. PRIORITY OF MONTHLY
ALLOCATIONS AND
DISTRIBUTIONS ..... On each Monthly Allocation Date, the
Trustee will make allocations, payments and
distributions with respect to the related Collection
Period in accordance with the priorities set forth
herein. SEE "Description of the Certificates--
Allocations and Distributions on the Certificates".
G. OPTIONAL PURCHASE.. The Transferor will have an option to purchase
the SUBI Certificate on any Monthly Allocation
Date if, either before or after giving effect
to any payment of principal required to be made
on the related Certificate Payment Date, the
Certificate Balance has been reduced to an amount
less than or equal to 10% of the Initial Certificate
Balance or amounts sufficient to effectively
reduce the Certificate Balance to such amount
have been deposited in the Collection Account
on such date. Such a purchase would result in the
retirement of the Certificates of each Class.
SEE "Description of the Certificates--Termination
of the Trust; Retirement of the Certificates".
H. FORM, DENOMINATIONS AND
REGISTRATION OF THE
CLASS A CERTIFICATES.. Except under limited circumstances, the Class A
Certificates will be available only in
book-entry form in minimum denominations of
$1,000. Persons acquiring beneficial ownership
interests in the Class A Certificates
("Certificate Owners") will hold their
Certificates through The Depository Trust
Company ("DTC"), in the United States, or Cedel
Bank, societe anonyme ("Cedel Bank") or the
Euroclear System ("Euroclear") in Europe or
Asia. SEE "Description of the
Certificates--Book-Entry Registration" and
"ANNEX I: Global Clearance, Settlement and Tax
Documentation Procedures".
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<PAGE>
I. LISTING........... Application will be made for listing of the
Class A Certificates on the Luxembourg
Stock Exchange and for listing of and
permission to deal in the Class A Certificates
on The Stock Exchange of Hong Kong Limited. The
Issuer has requested that such permission be
made effective on or before -, 1997.
THE SUBI.............. The SUBI will be evidenced by a certificate
(the "SUBI Certificate") evidencing a 100%
beneficial interest in the SUBI Assets
and will not evidence an interest in any
Titling Trust Assets other than the SUBI
Assets. Payments made on or in respect of any
other Titling Trust Assets will not be
available to make payments on the Certificates.
The Titling Trust Assets evidenced by the SUBI
will primarily include the Contracts and Leased
Vehicles allocated to the SUBI. SEE "The Trust
and the SUBI" and "The Titling Trust".
1. THE CONTRACTS.. The Contracts will consist of retail
closed-end lease contracts originated by the
Dealers having original terms of not more than
60 months. Each Contract will be a finance
lease for accounting purposes and will have
been written for a "capitalized cost" (which
may exceed the manufacturer's suggested retail
price and may include certain origination
fees), plus a lease charge which is based on an
imputed interest rate (the "Lease Rate"). Each
Contract will provide for equal monthly
payments (each, a "Monthly Payment") that when
allocated between principal and the lease
charge at the Lease Rate on a constant yield
basis, will be sufficient to amortize the
capitalized cost over the term of the lease to
an amount equal to the Residual Value. A
Residual Value is established at the
origination of the lease (based on
documentation provided to the Dealers by TMCC)
and represents the estimated wholesale market
value at the end of the lease term ("Residual
Value"). The amount to which the capitalized
cost of a Contract has been amortized at any
point in time is referred to herein as its
"Outstanding Principal Balance".
The Initial Contracts consist of - lease contracts.
As of the Cutoff Date, the Initial Contracts had
Lease Rates ranging from -% to -% and a weighted
average Lease Rate of -%. The aggregate of the
original principal balances of the Initial Contracts
as of their respective dates of origination
was $-. As of the Cutoff Date, the Initial
Contracts had an aggregate Outstanding Principal
Balance of $-, an aggregate Residual Value of
$-, an Aggregate Net Investment Value of $-, a
weighted average original term of - months and a
weighted average remaining term to scheduled maturity
of -months. SEE "The Contracts".
2. THE LEASED
VEHICLES...... The Leased Vehicles will be comprised
of automobiles and light duty trucks. As of
the times of origination of the Contracts, the
related Leased Vehicles will include new
vehicles, including dealer demonstrator
vehicles driven fewer than 20,000 miles,
14
<PAGE>
or used vehicles up to four model years old at the
time of origination of the related Contract,
including certified used vehicles and vehicles
previously sold under manufacturer's programs.
Certified used vehicles are Toyota or Lexus
vehicles that are purchased by dealers,
reconditioned and certified to meet certain
Toyota/Lexus required standards and sold or
leased with an extended warranty from the
manufacturer. Manufacturer's program vehicles
are Toyota or Lexus vehicles that have been
sold to rental car companies, repurchased by
the manufacturer and subsequently purchased by
the dealer to sell or lease as current year and
one year old used vehicles with 20,000 miles or
less. SEE "The Contracts--General".
The certificates of title to the Initial
Leased Vehicles are, and the certificates of
title to all Leased Vehicles will be, registered
at all times prior to liquidation in the name
of the Titling Trust. The certificates of title
will not reflect the indirect interest of the
Trustee in the Leased Vehicles by virtue of
its beneficial interest in the SUBI. Therefore,
if the Class A Certificates were recharacterized
as secured loans, the Trustee would have a
perfected security interest in the SUBI
Certificate, Contracts and Contract Rights but
not in the Leased Vehicles. SEE "Certain Legal
Aspects of the Titling Trust--Structural
Considerations" and "--Back-up Security Interests".
THE SUBI COLLECTION
ACCOUNT; COLLECTIONS.. The Titling Trustee will maintain the SUBI
Collection Account for the benefit of
the holders of interests in the SUBI. Except
under certain limited circumstances, the
Servicer will be permitted to deposit amounts
collected in respect of payments made on or in
respect of the Contracts or the Leased Vehicles
during each Collection Period into the SUBI
Collection Account on the Business Day
preceding the related Monthly Allocation Date
(the related "Deposit Date") rather than when
received. Such payments will include, but will
not be limited to, (i) Monthly Payments, not
including Monthly Payments determined by the
Servicer to be due in one or more future
Collection Periods, which will include all
partial payments (each, a "Payment Ahead")
until the Collection Period during which such
Payment Ahead is due, (ii) Prepayments, (iii)
proceeds from the sale or other disposition of
Leased Vehicles under Matured Contracts,
including payments for excess mileage and
excess wear and tear ("Matured Leased Vehicle
Proceeds"), (iv) proceeds received in
connection with the sale or other disposition
of Leased Vehicles that have been repossessed
("Repossessed Vehicle Proceeds") and (v) other
amounts received in connection with the
realization of the amounts due under any
Contract (together with Matured Leased
15
<PAGE>
Vehicle Proceeds and Repossessed Vehicle Proceeds,
"Liquidation Proceeds").
The Servicer will be entitled to reimbursement
for expenses incurred in connection with
the realization of Matured Leased Vehicle
Proceeds ("Matured Leased Vehicle Expenses"),
Repossessed Vehicle Proceeds ("Repossessed
Vehicle Expenses") and other Liquidation
Proceeds (such expenses, together with Matured
Leased Vehicle Expenses and Repossessed Vehicle
Expenses, "Liquidation Expenses"), to be netted
from proceeds or Collections in respect of
such payments (including other Liquidation
Proceeds), whether or not on deposit in the
SUBI Collection Account. The Servicer also
will be entitled to reimbursement of certain
payments made and expenses and charges incurred
by it in the ordinary course of servicing the
Contracts (including payments it makes on behalf
of the related lessees in connection with the
payment of taxes, vehicle registration, clearance
of parking tickets and similar items) from
Collections with respect to the related
Contracts, separate payment thereof by the
related lessees or from amounts realized upon
the final disposition of the related leased
vehicle. To the extent such amounts are
reimbursed prior to or at the final disposition
of the related leased vehicle but remain unpaid
by the related lessee, such unreimbursed
amounts (together with any unpaid Monthly
Payments under the related Contract) will be
treated as Matured Leased Vehicle Expenses or
Liquidation Expenses, as the case may be, and
will therefor reduce Net Matured Leased Vehicle
Proceeds or Liquidation proceeds, as the case
may be.
On each Deposit Date, the following additional
amounts also will be deposited into the SUBI
Collection Account: (i) Advances by the Servicer
and (ii) Reallocation Payments by TMCC (together
with, under certain circumstances during the
Amortization Period, Reallocation Deposit Amounts)
in respect of certain Contracts as to which an
uncured breach of certain representations and
warranties or certain servicing covenants
has occurred. In addition, to the extent set
forth above, amounts will be withdrawn from
the Reserve Fund and deposited into the SUBI
Collection Account on each Deposit Date to cover
certain shortfalls in Collections. Thereafter,
the Interest Collections (and, with respect to
the Deposit Date in any month following the
month during which the Amortization Period
commences, the Principal Collections) on deposit in
the SUBI Collection Account in respect of the
related Collection Period will be available for
allocation or distribution of required amounts
to Certificateholders and the Transferor. SEE
"Assets of the Trust--The Accounts;
Collections--The SUBI Collection Account".
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The Certificateholders and the Transferor (as
holder of the Transferor Interest) are entitled
on any Monthly Allocation Date to be allocated
or to receive Matured Leased Vehicle Proceeds
up to, but not in excess of, the aggregate of
the Residual Values of Leased Vehicles sold or
otherwise disposed of from Matured Leased
Vehicle Inventory during the related Collection
Period. It is possible that in any Collection
Period the Servicer could incur Matured Lease
Vehicle Expenses that, if reimbursed from
collections in respect of Matured Leased
Vehicle Proceeds, would result in Net Matured
Leased Vehicle Proceeds being less than the sum
of the Residual Values of all Leased Vehicles
so sold or otherwise disposed. Any such
shortfall will result in the realization of
Residual Value Loss Amounts. On each Deposit
Date on which Matured Leased Vehicle Proceeds
received during the related Collection Period
net of related Matured Leased Vehicle Expenses
incurred during such Collection Period ("Net
Matured Leased Vehicle Proceeds") exceed the
aggregate Residual Value of the related Leased
Vehicles (the "Residual Value Surplus"), such
excess will be released to the Transferor and
neither the Trust nor the Certificateholders
will have any further claim thereto or interest
therein.
THE RESERVE FUND...... A Reserve Fund will be maintained with the Trustee
for the benefit of the Certificateholders and
the Transferor. The Reserve Fund is designed
to provide additional funds for the benefit of
the Certificateholders in the event that on any
Monthly Allocation Date Interest and Principal
Collections allocable to the Investor Interest
for the related Collection Period are
insufficient to allocate for or make
distributions in respect of, among other
things, (i) accrued interest, (ii) overdue
interest (with interest thereon at the
applicable Interest Rate, to the extent lawful)
and (iii) Loss Amounts allocable to the
Investor Interest, together with interest
thereon at the applicable Certificate Rate (the
aggregate amount of such deficiency, the
"Required Amount"). Monies on deposit in the
Reserve Fund also will be available to
Certificateholders should Collections
ultimately be insufficient to pay in full any
Class of Certificates. The Reserve Fund will
not be an asset of the Trust. SEE "Assets of
the Trust--The Accounts; Collections--The
Reserve Fund".
The Reserve Fund will be created with an initial
deposit (the "Initial Deposit") by the Transferor of
$- (an amount equal to -% of the Aggregate Net
Investment Value as of the Cutoff Date). On each
Monthly Allocation Date, the Reserve Fund will be
supplemented by Interest Collections and Principal
Collections that would otherwise be released to the
Transferor after making all required allocations and
distributions to Certificateholders, until the
amount on deposit therein equals the applicable
Specified Reserve Fund Balance. After giving effect
to all payments from
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the Reserve Fund on a Monthly Allocation Date,
monies on deposit therein in excess of the
Specified Reserve Fund Balance will be paid to
the Transferor, free and clear of any interest
of the Trust. SEE "Description of the
Certificates--Allocations and Distributions on
the Certificates--Allocations and Distributions
of Collections" and "Assets of the Trust--The
Accounts; Collections--The Reserve Fund--The
Specified Reserve Fund Balance".
Under certain circumstances it is possible
that, as of any Monthly Allocation Date, the
amount of funds actually on deposit in the
Reserve Fund could be less than the Specified
Reserve Fund Balance. Moreover, pursuant to
the Agreement, the Specified Reserve Fund
Balance may, under certain circumstances, be
reduced on one or more Monthly Allocation Dates
to the extent approved by each Rating Agency.
SUBORDINATION......... The Class B Certificates will be subordinated
to the Class A Certificates so that on any
Certificate Payment Date (i) interest payments
generally will not be made in respect of the
Class B Certificates until interest in respect of
the Class A Certificates has been paid on such
Certificate Payment Date and (ii) principal payments
generally will not be made in respect of the
Class B Certificates until the Class A Certificates
have been paid in full.
To provide additional credit enhancement for
the Certificates, payments will not be made to
the Transferor in respect of the Transferor
Interest on any Monthly Allocation Date until
all payments required to be made to
Certificateholders on the related Certificate
Payment Date as described under "Description of
the Certificates--Allocations and Distributions
on the Certificates--Allocations and
Distributions of Collections" have been made
and the amount on deposit in the Reserve Fund
on such Monthly Allocation Date equals the
Specified Reserve Fund Balance. SEE
"Description of the Certificates--Certain
Payments to the Transferor".
ADVANCES............... On each Deposit Date, the Servicer will be
obligated to make an advance with respect to
each outstanding delinquent Contract and
certain Contracts as to which payments have
been deferred that have not been reallocated to
the UTI with an accompanying Reallocation
Payment as described herein, provided that the
Servicer will not be required to make any
Advance to the extent that it determines such
Advance may not be ultimately recoverable from
Net Liquidation Proceeds or otherwise.
Each such advance will be made by deposit
into the SUBI Collection Account of an amount
equal to the aggregate amount of Monthly
Payments due but not received during the
related Collection
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<PAGE>
Period (each, an "Advance"). SEE "Additional
Document Provisions--The Servicing
Agreement--Collections" and "--Advances".
MATURITY ADVANCES..... Pursuant to the Agreement, on the Targeted
Maturity Date for any Class of Class A Certificates
on which the aggregate of amounts available to be
paid as principal thereof (including any amount of
Interest Collections or net investment income
applied to cover such shortfall on such date) are
insufficient to pay in full the related Certificate
Principal Balance, The Transferor will make an
advance (a "Maturity Advance") in the amount of such
shortfall (any amount of Interest Collections
applied to cover such shortfall being deemed a
portion of such Maturity Advance); provided that the
amount of any Maturity Advance will not exceed the
aggregate of Excess Amounts released to the
Transferor during the period from and including the
preceding Targeted Maturity Date (or from the Cutoff
Date in the case of the first Targeted Maturity
Date) to such Targeted Maturity Date, together with
the aggregate amount of Interest Collections applied
to cover such shortfall on such date. All such
amounts advanced by The Transferor will be
reimbursable to The Transferor from the Investor
Percentage of Principal Collections on subsequent
Monthly Allocation Dates as described herein.
SERVICING COMPENSATION. The Servicer will be entitled to receive a monthly
fee with respect to the SUBI Assets (the
"Servicing Fee"), payable on each Monthly
Allocation Date, equal to one-twelfth of 1% of
the Aggregate Net Investment Value as of the
first day of the related Collection Period (or,
in the case of the first Monthly Allocation
Date, as of the Cutoff Date). The Servicer
also will be entitled to additional servicing
compensation in the form of, among other
things, late fees, Deferral Fees and other
administrative fees or similar charges under
the Contracts. SEE "Additional Document
Provisions--The Servicing Agreement-- Servicing
Compensation".
TAX STATUS............. Andrews & Kurth L.L.P., special federal income
tax counsel to the Transferor, is of the
opinion that the Class A Certificates will be
characterized as indebtedness for federal
income tax purposes. Each Class A
Certificateholder, by its acceptance of a Class
A Certificate, and each Certificate Owner by
its acquisition of an interest in the Class A
Certificates, will agree to treat the Class A
Certificates as indebtedness for federal, state
and local income tax purposes. SEE "Material
Federal Income Tax Considerations".
ERISA CONSIDERATIONS... Subject to considerations described below, each
Class of Class A Certificates are eligible for
purchase by employee benefit plan investors.
Under a regulation issued by the Department of
Labor,
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<PAGE>
the Trust's assets would not be deemed "plan
assets" of an employee benefit plan holding the
Class A Certificates if certain conditions are
met, including that the Class A Certificates
must be held, upon completion of the public
offering made hereby, by at least 100 investors
who are independent of the Transferor and of
one another. The Underwriters expect that the
Class A Certificates will be held by at least
100 independent investors at the conclusion of
the offering, although no assurance can be
given, and no monitoring or other measures will
be taken to ensure, that such condition will be
met. The Transferor anticipates that the other
conditions of the regulation will be met. If
the Trust's assets were deemed to be "plan
assets" of an employee benefit plan investor
(e.g., if the 100 independent investor
criterion is not satisfied), violations of the
"prohibited transaction" rules of the Employee
Retirement Income Security Act of 1974, as
amended ("ERISA"), could result and generate
excise tax and other liabilities under ERISA
and section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code"), unless
another statutory, regulatory or administrative
exemption is available. It is uncertain
whether existing exemptions from the
"prohibited transaction" rules of ERISA would
apply to all transactions involving the Trust's
assets if such assets were treated for ERISA
purposes as "plan assets" of employee benefit
plan investors. See "ERISA Considerations".
RATINGS................ It is a condition of issuance that each of
Moody's Investors Service, Inc. ("Moody's")
and Standard & Poor's Ratings Service, a
division of The McGraw-Hill Companies, Inc.
("Standard & Poor's" and, together with
Moody's, the "Rating Agencies") rate each Class
of Class A Certificates in its highest rating
category. The ratings of the Class A
Certificates should be evaluated independently
from similar ratings on other types of
securities. A security rating is not a
recommendation to buy, sell or hold a security.
The ratings of each Class of Class A
Certificates address the likelihood of the
payment of principal of and interest on such
Certificates in accordance with their terms and
may be subject to revision or withdrawal at any
time by the assigning Rating Agency. SEE
"Ratings of the Class A Certificates".
20
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21
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RISK FACTORS
RISK OF LIMITED LIQUIDITY FOR THE CLASS A CERTIFICATES; ABSENCE OF
SECONDARY MARKET FOR THE CLASS A CERTIFICATES
There is currently no market for the Class A Certificates. The
Underwriters currently intend to make a market in each Class of Class A
Certificates but are under no obligation to do so. There can be no
assurance that a secondary market for either Class of Class A
Certificates will develop or, if one does develop, that it will provide
the related Certificateholders with liquidity of investment or will
continue for the life of the related Class A Certificates.
RISK OF ABSENCE OF FUNDS FOR REIMBURSEMENT OF CERTAIN LOSSES
In the event that Loss Amounts are incurred in respect of the
Contracts and the Leased Vehicles during a Collection Period relating to
a Monthly Allocation Date during the Revolving Period, an amount equal
to the Investor Percentage of such Loss Amounts, to the extent
reimbursed out of Collections available therefor or otherwise, will be
treated as Principal Collections received during the succeeding
Collection Period and will be available for reinvestment in Subsequent
Contracts and Subsequent Leased Vehicles. If the related Monthly
Allocation Date occurs during the Amortization Period, Loss Amounts will
be distributed or allocated to the Class A Certificateholders (pro rata,
based on their Certificate Principal Balances as of the last day of the
related Collection Period, in an amount equal to the Investor Percentage
of such Loss Amounts), as a distribution of principal from, to the
extent available therefor, amounts on deposit in the Reserve Fund,
Transferor Amounts, amounts otherwise payable as principal to the Class
B Certificateholders and then from the Investor Percentage of Interest
Collections remaining after certain other applications thereof.
Certificate Principal Loss Amounts will be allocated first to the Class
B Certificates and then to the Class A Certificates on a pro rata basis
as described above. Loss Amounts realized during the Amortization
Period may accelerate the rate of return of principal on the
Certificates. To the extent that Principal Collections and
reimbursements of Loss Amounts are reinvested in Subsequent Contracts
during the Revolving Period, the aggregate Residual Value of the Leased
Vehicles as a percentage of the Aggregate Net Investment Value may
increase thereby increasing the exposure of the Certificates of each
Class to the risk of being allocated Residual Value Loss Amounts.
Furthermore, to the extent that Loss Amounts (including Residual Value
Loss Amounts) ultimately exceed the sources available for repayment
thereof, such Loss Amounts will be allocated to the Certificates as
Certificate Principal Loss Amounts, temporarily or permanently reducing
the related Certificate Principal Balances of one or more Classes, such
that investors in the Class A Certificates may ultimately incur a loss
on their investment.
"Loss Amounts" will include Charged-off Amounts, Residual Value
Loss Amounts and Additional Loss Amounts. The "Residual Value Loss
Amount" for any Collection Period generally will represent the aggregate
net losses on dispositions of Matured Leased Vehicle Inventory, and will
be equal to the sum of (a) the aggregate of the Residual Values of all
those Leased Vehicles that were included in Matured Leased Vehicle
Inventory but that had remained unsold and not otherwise disposed of by
the Servicer for at least three full Collection Periods as of the last
day of such Collection Period and (b) the excess, if any, of (i) the
aggregate of the Residual Values of all Leased Vehicles previously
included in Matured Leased Vehicle Inventory that were sold or otherwise
disposed of during such Collection Period over (ii) Net Matured Vehicle
Proceeds for such Collection Period. SEE "TMCC--Delinquency,
Repossession and Loss Data". Residual Value Loss Amounts experienced
will depend on a variety of factors, including the effect of TMCC's
active encouragement of lessees under lease contracts with remaining
terms of less than one year to buy, trade in or refinance the related
vehicles, and the supply of, and demand for, vehicles similar to the
Leased Vehicles in the used car market. Uncollected payments for excess
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<PAGE>
mileage or excess wear and use also could affect the related proceeds.
No assurance can be given as to the likely Residual Value Loss Amounts
allocated to the Investor Interest over the life of the Certificates.
MATURITY AND PREPAYMENT CONSIDERATIONS
No principal will be paid to the Class A Certificateholders until
the first Certificate Payment Date that is a Targeted Maturity Date or,
following the occurrence of a Monthly Payment Event, a Certificate
Payment Date. During the Revolving Period, Principal Collections will
be reinvested in Subsequent Contracts and Subsequent Leased Vehicles.
The continuation of the Revolving Period will be dependent upon, among
other things, the continued origination and assignment to the Titling
Trust of lease contracts and leased vehicles meeting the eligibility
criteria described herein in amounts corresponding to Principal
Collections and reimbursed Loss Amounts to be reinvested. An
unexpectedly high rate of Principal Collections (including Prepayments)
received during any Collection Period or a significant decline in the
number of qualifying lease contracts available to be assigned to the
Titling Trust could result in the occurrence of an Early Amortization
Event and the commencement of the Amortization Period prior to the
Amortization Date. The retail automobile and light duty truck leasing
business in the United States or in one or more of the Trust States may
be affected by a variety of social, economic and geographic factors.
Economic factors include interest rates, unemployment levels, the rate
of inflation and consumer perception of economic conditions. However,
it is not possible to determine or predict whether or to what extent
economic, geographic or social factors will affect retail automobile and
light duty truck leasing in general, or that of the Dealers in
particular. As a result, there can be no assurance that the Revolving
Period will not terminate prior to the Amortization Date, possibly
shortening the final maturities and weighted average lives of and
affecting the yields on one or more Classes of Certificates. SEE
"Description of the Certificates--Early Amortization Events".
In the case of the Class B Certificates (which generally will receive
monthly distributions of Principal after the payment in full of all of the
Class A Certificates), or in the case of each Class of Certificates after the
occurrence of a Monthly Payment Event, if any, the rate of payment of
principal on the Certificates will depend on the rate of payments on or in
respect of the Contracts and the Leased Vehicles (including prepayments and
liquidations of the Contracts) and losses with respect thereto, which cannot
be predicted. If on any relevant Certificate Payment Date during the
Amortization Period the amount on deposit in the Reserve Fund is at least
equal to the Specified Reserve Fund Balance and the Investor Percentage of
Collections exceeds the aggregate of amounts required to be allocated or
distributed to Certificateholders as described herein, the related
Accelerated Principal Distribution Amount will be distributed as additional
principal to Certificateholders. SEE "Description of the
Certificates--Allocations and Distributions on the Certificates--Allocations
and Distributions of Collections". A substantial increase in the rate of
payments on or in respect of the Contracts and Leased Vehicles (including
prepayments and liquidations of the Contracts) during the Amortization Period
(and after the occurrence of a Monthly Payment Event) may shorten the final
maturity and weighted average lives of, and may significantly affect the
yields on, each then-outstanding Class of Class A Certificates. The rate of
payment of principal of the Class A Certificates may also be affected (i)
during such period by payment by TMCC of Reallocation Payments (and under
certain circumstances during the Amortization Period, Reallocation Deposit
Amounts) in respect of Contracts as to which an uncured breach of certain
representations and warranties or certain servicing covenants has occurred
and (ii) by the exercise by the Transferor of its right to purchase the SUBI
Interest under certain circumstances, thereby retiring the Certificates. SEE
"Description of the Certificates--Termination of the Trust; Retirement of the
Certificates", "The Contracts--Representations, Warranties and Covenants" and
"Additional Document Provisions--The Servicing Agreement--Collections".
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<PAGE>
Each of the Contracts may be prepaid by the related lessee without
penalty in full or in part at any time. TMCC actively encourages
lessees under lease contracts with remaining terms of less than one year
to either buy, trade in or refinance the related leased vehicles prior
to their scheduled maturities. TMCC estimates that during calendar years
1994, 1995 and 1996, approximately -%, -% and -% of the retail
automobile and light duty truck lease contracts in its portfolio
terminated prior to maturity. Such early terminations primarily were
due to voluntary prepayments. No assurance can be given that the
Contracts will experience the same rate of prepayment or default or any
greater or lesser rate than TMCC's historical rate for the retail
automobile and light duty truck lease contracts in its portfolio. SEE
"Maturity, Prepayment and Yield Considerations".
Because the Class A Certificates have Targeted Maturity Dates prior to
which principal thereof will not be paid unless a Monthly Payment Event
occurs, the weighted average life of any such Class of Certificates will not
be reduced by prepayments prior to the occurrence of a Monthly Payment Event.
Moreover, there can be no assurance as to whether a Maturity Advance will be
sufficient to pay in full the related Certificate Principal Balance on the
Targeted Maturity Date with respect to any Class of Class A Certificates and,
therefore, any such Class may mature significantly later than its Targeted
Maturity Date. In addition, earlier collections in respect of interest on, or
the Discounted Principal Balance of, the Contracts due to full or partial
prepayments may result in increased amounts of collections being held in the
Certificateholder's Account, and then invested in Permitted Investments at
any given time than would be the case in a securitization in which all
securities are entitled to monthly distributions of interest and principal.
Because it is anticipated that such investments will include one or more TMCC
Demand Notes, the effect of an increased rate of prepayment will be to expose
significant portions of the amounts allocable, payable and distributable to
Certificateholders to risk of default by TMCC on such obligations.
RISKS ASSOCIATED WITH SEQUENTIAL PAYMENT OF PRINCIPAL ON THE CLASS A
CERTIFICATES
In general, the Class A Certificates will be "sequential pay"
certificates meaning that no principal payments will be made on the
Class A-2 Certificates until the Class A-1 Certificates have been paid
in full, no principal payments will be made on the Class A-3
Certificates until the Class A-2 Certificates have been paid in full and
no principal payments will be made on the Class A-4 Certificates until
the Class A-3 Certificates have been paid in full. In general, no
principal payments will be made on the Class B Certificates until the
Class A-4 Certificates have been paid in full. On each Monthly
Allocation Date during the Amortization Period, all Principal
Collections for the related Collection Period that are allocable to the
Investor Interest will be allocated or distributed first to the Class
A-1 Certificateholders until amounts in respect of the Class A-1
Certificates have been allocated or paid in full, then to the Class A-2
Certificateholders until amounts in respect of the Class A-2
Certificates have been allocated or paid in full, then to the Class A-3
Certificateholders until amounts in respect of the Class A-3
Certificates have been allocated or paid in full, and then to the Class
A-4 Certificateholders until amounts in respect of the Class A-4
Certificates have been allocated or paid in full. Thereafter any such
remaining Principal Collections will be distributed as principal
payments to the Class B Certificateholders.
During the Amortization Period, Loss Amounts will be distributed or
allocated to the Class A Certificateholders (pro rata, based on their
Certificate Principal Balances as of the last day of the related
Collection Period, in an amount equal to the Investor Percentage of such
Loss Amounts), as a distribution of principal from, to the extent
available therefor, amounts on deposit in the Reserve Fund, Transferor
Amounts, amounts otherwise payable as principal to the Class B
Certificateholders and then from the Investor Percentage of Interest
Collections remaining after certain other applications thereof.
"Description of the Certificates--Allocations and Distributions on the
Certificates--Allocations and Distributions of Collections".
Certificate Principal Loss Amounts will be allocated first to the Class
B Certificates and then to the Class A Certificates on a pro rata basis
as described above. To the extent net proceeds of any sale or other
disposition of the SUBI Interest, the SUBI Certificate or other property
of the Trust constitute Principal
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<PAGE>
Collections, which may occur under certain circumstances involving an
Insolvency Event of the Transferor (as described under "Description of the
Certificates--Early Amortization Events"), they will be distributed first, on
a pro rata basis, to the Class A Certificateholders based on their respective
Class Certificate Balances until the Class A Certificates have been paid in
full, and second, to the Class B Certificateholders. Sequential payment of
the Certificates is also likely to cause Classes of Certificates that pay
later than other Classes to be outstanding during periods when an
increasingly large percentage of the Aggregate Net Investment Value will be
represented by Residual Values as opposed to unpaid Monthly Payments, thereby
increasing the exposure of such Certificates to the risk of being allocated
Residual Value Loss Amounts.
As a result, Class A Certificates that have lower sequential principal
payment priority may be allocated more Loss Amounts (including Residual Value
Loss Amounts) and Certificate Principal Loss Amounts than Class A
Certificates with higher payment priority as a relative percentage of their
respective Initial Certificate Balances, primarily because Loss Amounts and
Certificate Principal Loss Amounts will be allocated thereto on each Monthly
Allocation Date based on the outstanding Certificate Principal Balances
thereof as of the last day of the related Collection Period, which will be
relatively higher for such Classes as the Certificate Principal Balances of
the higher priority Class A Certificates decrease during the Amortization
Period.
However, any portion of Principal Collections comprised of the Investor
Percentage of the net proceeds of any sale or other disposition of the SUBI
Interest, the SUBI Certificate or other property of the Trust (which may
occur under certain circumstances involving an Insolvency Event with respect
to the Transferor as described under "Description of the Certificates--Early
Amortization Events") will not be distributed to the Class A
Certificateholders sequentially, but instead will be distributed to the
holders of each Class of Class A Certificates pro rata, based on the
respective Class A Certificate Balances, until all Class A Certificates have
been paid in full, and then to the Class B Certificateholders.
RISKS ASSOCIATED WITH GEOGRAPHIC, ECONOMIC AND OTHER FACTORS
The Dealers which originated and will originate the Contracts are located
in the Trust States and the Contracts and Leased Vehicles generally are and
will be located in the Trust States. However, a significant number of
lessees may live in or relocate to other states and may register, title
and/or operate Leased Vehicles in other states. For a breakdown of the
percentage of Initial Contracts originated in each of the Trust States, see
"The Contracts--Characteristics of Contracts--Distribution of the Initial
Contracts by State". Due to the geographic concentration of Contracts in the
Trust States, adverse economic conditions in one or more of the Trust States
may have a significant impact on the performance of the SUBI Assets.
Approximately 61% of the Initial Contracts, based on Cutoff Date Aggregate
Net Investment Value, were originated in the State of California. TMCC's
loss experience for retail automobile and light-duty truck lease contracts
originated by branches serving California has been an average of
approximately 50% higher than TMCC's loss experience with respect to its
entire lease contract portfolio considered as one pool over the past five
years. However, TMCC's loss experience for lease contracts originated
through branches serving all of the Trust States over the same period has
been only slightly higher than its loss experience with respect to its entire
lease contract portfolio. Branches serving each Trust State also serve other
states that are not Trust States, and therefore information available to the
Servicer and provided herein with respect to loss experience is influenced by
the inclusion of contracts originated in such other states (although
representing a relatively small percentage of total contracts serviced by
such branches).
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Historically, the number of Lexus leased vehicles returned to TMCC at the
termination of the related lease contracts has been significantly higher than
the return rates for Toyota leased vehicles. A higher rate of return at the
termination of a lease exposes the lessor to a higher risk of loss on such
vehicles since the related vehicle will not have been purchased by the lessee
and must be disposed of through methods that may result in a purchase price
which may be lower than the related residual value. Although approximately
33% of the leased vehicles in TMCC's entire portfolio as of December 31, 1996
were Lexus vehicles, only approximately 22% of the Initial Contracts, based
on Cutoff Date Aggregate Net Investment Value, relate to Lexus leased
vehicles.
Economic factors such as unemployment, interest rates, the rate of
inflation and consumer perceptions of the economy may affect the rate of
prepayment and defaults on the Contracts and the ability to sell or
otherwise dispose of Leased Vehicles relating to Matured Contracts for
an amount at least equal to their respective Residual Values. These
economic factors, as well as other factors such as consumer perceptions
of used vehicle values, also may affect the ability to realize the
Residual Values of Leased Vehicles upon sale.
RISKS ASSOCIATED WITH CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws, including the
federal Consumer Leasing Act of 1976 and Regulation M promulgated by the
Board of Governors of the Federal Reserve System, impose requirements on
retail lease contracts such as the Contracts. These laws apply to the
Titling Trust as the lessor under the Contracts and may also apply to
the Trust as owner of the SUBI Certificate. Failure by the Titling
Trust or the Servicer to comply with such requirements may give rise to
liabilities on the part of the Titling Trust, and enforcement of the
Contracts by the Titling Trust may be subject to set-off as a result of
such noncompliance. Many states, including certain of the Trust States,
have adopted Lemon Laws that provide vehicle users certain rights in
respect of substandard vehicles. A successful claim under a Lemon Law
could result in, among other things, the termination of the Contract
relating to a substandard Leased Vehicle and/or require the refunding of
a portion of payments previously paid thereon. TMCC will make
representations and warranties that each Contract complies with all
requirements of law in all material respects. If any such
representation and warranty proves incorrect, has certain material
adverse effects and is not timely cured, TMCC will be required to make a
Reallocation Payment (together with, under certain circumstances during
the Amortization Period, Reallocation Deposit Amounts) into the SUBI
Collection Account and reallocate the related Contract and Leased
Vehicle out of the SUBI, as described under "The
Contracts--Representations, Warranties and Covenants" and "Description
of the Certificates--Reallocation Payments and Reallocation Deposit
Amounts". SEE "Certain Legal Aspects of the Contracts and the Leased
Vehicles--Consumer Protection Laws".
RISKS ASSOCIATED WITH ERISA LIABILITIES
It is possible that the Titling Trust Assets, including the SUBI
Assets, could become subject to liens in favor of the Pension Benefit
Guaranty Corporation to satisfy unpaid ERISA obligations of any member
of an "affiliated group" that includes TMCC, TMS, Toyota Leasing, Inc.
and their respective affiliates. However, the Transferor believes that
the likelihood of any such liability being asserted against the Titling
Trust Assets, including the SUBI Assets, or being successfully pursued
is remote. In particular, the Transferor believes that the Titling
Trust should, as a legal matter, be treated as a distinct entity
separate and apart from such affiliated group, under ERISA's "common
control" provisions. All such plans maintained by such affiliated group
historically have had assets that significantly exceeded their
liabilities. However, no assurance can be given that any of these
conditions will continue in the future.
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RISKS ASSOCIATED WITH VICARIOUS TORT LIABILITY WITH RESPECT TO LEASED
VEHICLES
Although the Titling Trust will own the Leased Vehicles and the
Trust will have an interest therein, they will be controlled and
operated by the related lessees and their invitees. State laws differ
as to whether anyone suffering injury to person or property involving a
leased vehicle may bring an action against the owner of the vehicle
merely by virtue of that ownership. To the extent that applicable state
law permits such an action, the Titling Trust and the Titling Trust
Assets, including the SUBI Assets, may be subject to liability to such
an injured party. However, the laws of most States, including the Trust
States, either do not permit such suits or limit the lessor's liability
to the amount of any liability insurance that the lessee was required
and failed to maintain. Notwithstanding the foregoing, in the event
that vicarious liability is imposed on the Titling Trust as owner of a
Leased Vehicle and the coverage provided by the Contingent and Excess
Liability Insurance Policies is insufficient to cover such loss,
including in certain circumstances with respect to a leased vehicle that
is an Other SUBI Asset or a UTI Asset, investors in the Class A
Certificates could incur a loss on their investments. SEE "Certain
Legal Aspects of the Contracts and the Leased Vehicles--Vicarious Tort
Liability", "Certain Legal Aspects of the Titling Trust--Structural
Considerations--Allocation of Titling Trust Liabilities", "--Third-Party
Liens on SUBI Assets" and "Assets of the Trust--The Contingent and
Excess Liability Insurance Policies".
All of the Contracts will contain provisions requiring the lessees
to maintain levels of insurance satisfying applicable state law. Such
policies may lapse, be terminated or otherwise not be maintained
properly by a lessee. If a replacement primary insurance policy is not
put into place by the related lessee within - days of notice that no
such policy is in place, the Servicer promptly will attempt to repossess
the related leased vehicle and terminate the related lease contract.
Moreover, the policies issued with respect to a significant number of
the Initial Contracts name TMCC rather than the Titling Trust as
additional loss payee. If a primary insurer makes payment under such a
policy to TMCC, TMCC will apply such amounts or forward such amounts to
the Titling Trust for application as appropriate. If a primary insurer
failed to make payments under a policy to the lessee and also to TMCC
and the Titling Trust, losses could be experienced by the
Certificateholders. However, the Transferor has been advised by the
primary provider of the Contingent and Excess Liability Policies
described herein that such provider will not refuse any claim under the
Contingent and Excess Liability Policies solely because a primary policy
names TMCC or an approved TMCC affiliate, rather than the Titling Trust,
as additional loss payee (although under such circumstances a deductible
of $- (rather than the standard $- deductible) will be payable by TMCC
and as to which TMCC will indemnify the Trust).
Actions by third parties might exceed the limits of the policies
maintained by lessees or claims might arise based on legal theories
other than negligence, such as a product defect or improper vehicle
preparation prior to the origination of the related lease contract that
are not covered thereby. The Titling Trust will be the beneficiary of
the Contingent and Excess Liability Insurance Policies which will cover
certain claims in excess of the limits of the lessees' policies. Such
Contingent and Excess Liability Insurance Policy will be subject to
significant per occurrence deductibles in respect of which TMCC will
indemnify the Trust. SEE "Assets of the Trust--The Contingent and
Excess Liability Insurance Policies". Although the Titling Trust's
insurance coverage is for $100 million per claim, with an allowance for
multiple claims in any policy period, in the event that all such
insurance coverage were exhausted and/or TMCC did not satisfy its
indemnity obligations such that damages were assessed against the
Titling Trust, claims could be imposed against the Titling Trust Assets,
including the SUBI Assets. If any such claims are imposed against any
SUBI Assets or, in certain limited circumstances, any Other SUBI Assets
or UTI Assets, investors in the Class A Certificates could incur a loss
on their investment. SEE "Certain Legal Aspects of the Titling
Trust--Structural Considerations--Allocation of Titling Trust
Liabilities", "--Third-Party Liens on SUBI Assets" and "Certain Legal
Aspects of the Contracts and the Leased Vehicles--Vicarious Tort
Liability".
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RISKS ASSOCIATED WITH POSSIBLE FUTURE INSOLVENCY OF TMCC; SUBSTANTIVE
CONSOLIDATION WITH TMCC
The Transferor has taken steps in structuring the transactions
contemplated hereby intended to ensure that the voluntary or involuntary
application for relief under the United States Bankruptcy Code or
similar applicable state laws ("Insolvency Laws") by TMCC will not
result in the consolidation of the assets and liabilities of the
Transferor, the Titling Trust or the Trust with those of TMCC. With
respect to the Transferor, these steps include its creation as a
separate, special purpose finance subsidiary of TMCC pursuant to
articles of incorporation containing certain limitations (including the
requirement that it must have at all times at least one "independent
director" and restrictions on the nature of its businesses and on its
ability to commence a voluntary case or proceeding under any Insolvency
Law without the affirmative vote of a majority of its directors
including the independent director).
Reallocation Payments or deposits of Reallocation Deposit Amounts
made by TMCC and unreimbursed Advances made by TMCC, as Servicer, may be
recoverable by TMCC as debtor-in-possession or by a creditor or a
trustee in bankruptcy of TMCC as a preferential transfer from TMCC if
such payments were made within one year prior to the filing of a
bankruptcy case in respect of TMCC. In addition, the insolvency of TMCC
could result in the replacement of TMCC as Servicer, which could result
in a temporary interruption of payments on the Certificates.
If prior to the Amortization Date a conservator, receiver or
bankruptcy trustee were appointed by the Transferor, or if certain other
events relating to the bankruptcy or insolvency of the Transferor were
to occur (each, an "Insolvency Event"), the Amortization Period would
commence and the Trustee may, and upon receipt of written instructions
from holders of Certificates evidencing Voting Interests of not less
than 51% of the Class A Certificates (voting together as a single class)
or 51% of the Class A Certificates and the Class B Certificates (voting
together as a single class) will, attempt to sell the SUBI Interest, the
SUBI Certificate and the other property of the Trust. The consummation
of such sale would result in an early termination of the Trust and a pro
rata loss to the Class A Certificateholders if the Investor Percentage
of the net proceeds of such sale were insufficient to pay in full the
Class A Certificate Balances, together with any unreimbursed Certificate
Principal Loss Amounts, with accrued and unpaid interest thereon at the
related Certificate Rates, respectively.
On the Closing Date, Andrews & Kurth L.L.P., special counsel to the
Transferor and TMCC, will render an opinion based on a reasoned analysis
of analogous case law (although there is no precedent based on directly
similar facts) subject to certain facts, assumptions and qualifications
specified therein, that, under applicable statutes and precedent, if
TMCC were to become a debtor in a case under the Bankruptcy Code, it
would not be a proper exercise by a federal bankruptcy court of its
equitable discretion to disregard the separate legal forms so as to
substantively consolidate the assets and liabilities of the Transferor,
the Titling Trust or the Trust with those of TMCC. In addition, on the
Closing Date, Andrews & Kurth L.L.P. will render an opinion to the
effect that (i) the transfer of the SUBI Certificate by the Transferor
to the Trust constitutes a sale of the SUBI Certificate and the SUBI
Assets evidenced thereby, subject in each case to the rights of the
Transferor as the holder of the Transferor Interest, or (ii) if such
transfer does not constitute a sale, then the Agreement creates a valid
perfected security interest, for the benefit of Certificateholders, in
the Transferor's right, title and interest in the SUBI Certificate. SEE
"Certain Legal Aspects of the Titling Trust--Insolvency Related
Matters".
The Titling Trust may be subject to the Insolvency Laws, and claims
against the Titling Trust Assets could have priority over the beneficial
interest therein represented by the SUBI. In addition, claims of a
third party against the Titling Trust Assets, including the SUBI Assets,
to the extent such claims are not covered by insurance, would take
priority over the holders of beneficial interests in the Titling Trust,
such as the Trustee. SEE "Assets
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of the Trust--The Contingent and Excess Liability Insurance Policies" and
"Certain Legal Aspects of the Contracts and Leased Vehicles--Vicarious Tort
Liability".
RISKS ASSOCIATED WITH LEGAL PROCEEDINGS RELATING TO LEASED VEHICLES
The Transferor is not a party to any legal proceeding. Neither the
Titling Trust, nor the Titling Trustee on behalf of the Titling Trust,
has been named as a defendant in any legal proceeding. TMCC is a party
to, and is vigorously defending, several legal proceedings, all of which
it believes constitute ordinary routine litigation incidental to the
business and activities conducted by TMCC. As of the date of this
Prospectus, TMCC is a defendant in one lawsuit that was certified to
proceed as a class action alleging that certain technical provisions of
lease forms used by TMCC violate certain consumer protection laws.
Summary judgment has been granted in favor of TMCC on most of the claims
raised in that lawsuit. TMCC is vigorously defending the remaining
claims in that lawsuit, and the summary judgment is the subject of an
appeal. While there are uncertainties as to the final disposition of
this case, management of TMCC believes that an adverse final judgment in
this case would not have a material adverse effect on the Titling Trust
Assets, the SUBI or the Dealers' or Titling Trust's ability to originate
sufficient new leases to satisfy reinvestment obligations under the
Titling Trust Agreement, the SUBI Supplement and the Servicing
Supplement. However, there can be no assurance of this result.
THE TRUST AND THE SUBI
GENERAL
The Trust and the Certificateholders will have no interest in the
UTI, any Other SUBI or any Titling Trust Assets evidenced by the UTI or
any Other SUBI. Payments made on or in respect of the Titling Trust
Assets not represented by the SUBI will not be available to make
payments on the Certificates. SEE "The Titling Trust".
THE TRUST
Pursuant to the Agreement, the Transferor will establish the Trust
by transferring and assigning the SUBI Interest represented by the SUBI
Certificate, to the Trustee in exchange for the Certificates and a
certificate evidencing the Transferor Interest. The property of the
Trust will primarily include (i) the SUBI Interest, which evidences a
beneficial interest in certain specified Titling Trust Assets (i.e., the
SUBI Assets), (ii) such amounts as from time to time may be held in the
SUBI Collection Account and the Reserve Fund, and investments of amounts
on deposit in the SUBI Collection Account and (iii) the Trustee's rights
as a third-party beneficiary to the Servicing Agreement and the SUBI
Supplement. The Trust also will have a beneficial interest in such
amounts as from time to time may be held in the SUBI Collection Account
and investments of such amounts. Because of the administrative
difficulty and expense associated with retitling leased vehicles,
including federal and state regulatory requirements to obtain odometer
readings and to pay vehicle transfer fees and taxes, the Trust will
only have an interest in the portion of the SUBI transferred to it by
the Transferor, and will not have a direct ownership interest in any
Leased Vehicles.
Except for the protection provided to the Class A
Certificateholders by the Reserve Fund, the Class A Certificateholders
ultimately will have to look to payments made on or in respect of the
Contracts and the Leased Vehicles (including under certain related
insurance policies) to make distributions on the SUBI Certificate, which
in turn will be distributed to the Certificateholders. In such event,
certain factors, such as the fact that the Trust will not have a direct
ownership interest in the Contracts or the Leased Vehicles or a
perfected security interest in the Leased Vehicles (which will be titled
in the name of the Titling Trust) may limit the amount realized to less
than
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the amount due from the related lessees. Investors in the Class A
Certificates may thus be subject to delays in payment and may incur losses on
their investment in the Class A Certificates as a result of defaults or
delinquencies by lessees and because of depreciation in the value of the
related Leased Vehicles. SEE "Certain Legal Aspects of the Titling
Trust--Structural Considerations", "Assets of the Trust--The Accounts;
Collections--The Reserve Fund", "Additional Document Provisions--The
Servicing Agreement--Insurance on Leased Vehicles" and "Certain Legal Aspects
of the Contracts and the Leased Vehicles".
THE SUBI
The SUBI will be issued pursuant to the Series 1997-A Supplement to
the Titling Trust Agreement (the "SUBI Supplement") and will evidence a
beneficial interest in certain specified Titling Trust Assets allocated
to the SUBI consisting of (i) the Contracts, the Leased Vehicles and all
proceeds or payments related thereto received or due on or after the
related Cutoff Date; (ii) certain monies in the Reserve Fund, and (iii)
all other related Titling Trust Assets allocated to the SUBI, including
(A) the SUBI Collection Account, (B) the right to receive payments made
to TMCC, the Titling Trust or the Titling Trustee under certain
insurance policies relating to the Contracts, the related lessees or the
Leased Vehicles, (C) the right to receive the proceeds of any Dealer
repurchase obligations in respect of the Contracts or Leased Vehicles,
and (D) all proceeds of the foregoing. During the Revolving Period,
Principal Collections and reimbursement of Loss Amounts will be
reinvested in Subsequent Contracts and Subsequent Leased Vehicles which
will become SUBI Assets at the time of such reinvestment.
Pursuant to the SUBI Supplement, on the Closing Date the Titling
Trustee will issue the SUBI Certificate, which will evidence the SUBI
Interest, to the Transferor, and the Transferor will transfer and assign
the SUBI Certificate, to the Trustee pursuant to the Agreement.
THE TITLING TRUST
GENERAL
The Titling Trust is a Delaware business trust formed pursuant to
the Titling Trust Agreement. The primary business purpose of the
Titling Trust is to take assignments of and serve as holder of title to
substantially all of the lease contracts and the related leased vehicles
originated by the Dealers beginning on dates prior to the execution of
the SUBI Supplement. Pursuant to the Servicing Agreement, TMCC will
service the lease contracts included in the Titling Trust Assets,
including the Contracts. SEE "Additional Document Provisions--The Trust
Agreement" and "--The Servicing Agreement" and "Certain Legal Aspects of
the Titling Trust--The Titling Trust".
Except as otherwise described under "Additional Document Provisions--The
Titling Trust Agreement", pursuant to the Titling Trust Agreement the Titling
Trust has not and will not (i) issue interests therein or securities thereof
other than the SUBI Interest, the SUBI Certificate, Other SUBIs representing
divided interests in Other SUBI Assets and certificates (the "Other SUBI
Certificates") representing Other SUBIs or portions thereof, and one or more
certificates (the "UTI Certificates") representing the UTI or portions
thereof; (ii) borrow money (except from TMCC or as described in (vi) below)
in connection with funds used to acquire lease contracts and the related
leased vehicles; (iii) make loans; (iv) invest in or underwrite securities,
other than Permitted Investments or as otherwise permitted by the Titling
Trust Agreement or the SUBI Supplement; (v) offer securities in exchange for
property (other than the SUBI Certificate, the Other SUBI Certificates and
the UTI Certificates); or (vi) repurchase or otherwise reacquire its
securities except in connection with financing or refinancing the acquisition
of lease contracts and the related leased vehicles or as otherwise permitted
by each such financing or refinancing. The Titling Trust will not be
permitted to acquire lease contracts other than through the Dealers. The
Titling Trust
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Agreement will permit the Titling Trust, in the course of its activities, to
incur certain liabilities relating to its assets other than the SUBI Assets,
or relating to its assets generally, and to which, in certain circumstances,
the SUBI Assets may be subject. SEE "Certain Legal Aspects of the Titling
Trust--Structural Considerations--Allocation of Titling Trust Liabilities"
and "--Third-Party Liens on SUBI Assets". However, the Titling Trust
Agreement will require the holders of Other SUBI Certificates and UTI
Certificates to waive any claim that they might otherwise have with respect
to the SUBI Assets and to fully subordinate any claims to the SUBI Assets in
the event that this waiver is not given effect. Similarly, by virtue of
holding Certificates or a beneficial interest in the Certificates,
Certificateholders and Certificate Owners will be deemed to have waived any
claim that they might otherwise have with respect to Other SUBI Assets and
the UTI Assets and to subordinate their interests therein.
ALLOCATION OF TITLING TRUST LIABILITIES
The Titling Trust Assets may be comprised of several portfolios of
assets other than the SUBI Assets, including portfolios of Other SUBI
Assets and the remaining portfolio of UTI Assets. The Titling Trust
Agreement permits the Titling Trust, in the course of its activities, to
incur certain liabilities relating to its assets other than the SUBI
Assets, or relating to its assets generally, and to which, in certain
circumstances, the SUBI Assets may be subject. Pursuant to the Titling
Trust Agreement, as among the beneficiaries of the Titling Trust,
liabilities relating to a particular Titling Trust Asset will be
allocated to and charged against the allocated portfolio of Titling
Trust Assets to which it belongs. Titling Trust liabilities that are
incurred with respect to the Titling Trust Assets generally will be
borne pro rata among all portfolios of Titling Trust Assets in
proportion to the value of the lease contracts and vehicles in each
portfolio. The Titling Trustee and the beneficiaries of the Titling
Trust (including the Trustee and the Certificateholders) will be bound
by this allocation. In particular, the Titling Trust Agreement will
require the holders from time to time of Other SUBI Certificates and any
UTI Certificates to waive any claim that they might otherwise have with
respect to the SUBI Assets and to fully subordinate any claims to the
SUBI Assets in the event that this waiver is not given effect.
Similarly, by virtue of holding Certificates or a beneficial interest in
the Certificates, Certificateholders and Certificate Owners will be
bound by this allocation. Similarly, by virtue of holding Certificates
or a beneficial interest in the Certificates, Certificateholders and
Certificate Owners will be deemed to have waived any claim that they
might otherwise have with respect to Other SUBI Assets and the UTI
Assets.
THE TITLING TRUSTEE
The Titling Trustee is a wholly owned, special purpose subsidiary
of First Bank that was organized in 1996 solely for the purpose of
acting as Titling Trustee. First Bank, as Trust Agent, serves as agent
for the Titling Trustee to perform certain functions of the Titling
Trustee pursuant to the Titling Trust Agreement. The Titling Trust
Agreement provides that in the event that First Bank no longer can be
the Trust Agent, a designee of TMCC (which may not be TMCC or any
affiliate thereof) will have the option to purchase the stock of the
Titling Trustee for a nominal amount. If TMCC's designee does not
timely exercise this option, then the Titling Trustee will appoint a new
trust agent, and that new trust agent (or its designee) will next have
the option to purchase the stock of the Titling Trustee. If none of
these options is timely exercised, First Bank may sell the stock of the
Titling Trustee to another party.
PROPERTY OF THE TITLING TRUST
The property of the Titling Trust consists of (i) fixed rate retail
closed-end lease contracts originated in the Trust States and assigned
to the Titling Trust by the Dealers since November 1996, all rights
thereunder including the right to receive proceeds of Dealer repurchase
obligations under the related Dealer agreement, and all monies due from
lessees thereunder; (ii) the automobiles and light duty trucks leased
pursuant thereto and all proceeds
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thereof; (iii) the rights to proceeds from physical damage, credit life,
disability and all other insurance policies, if any (excluding the residual
value insurance policy described herein), covering the lease contracts, the
related lessees or the leased vehicles, including, but not limited to, the
Contingent and Excess Liability Insurance Policies; (v) all security deposits
with respect to such lease contracts (to the extent applied to cover excess
wear and tear charges or treated as Liquidation Proceeds as described herein
and as provided in the contracts), and (vi) all proceeds of the foregoing
(collectively, the "Titling Trust Assets"). From time to time after the date
of this Prospectus, TMCC will cause Dealers to originate additional retail
closed-end lease contracts and assign them to the Titling Trust and, as
described below, title the related leased vehicles in the name of the Titling
Trust.
CONTRACT ORIGINATION; TITLING OF LEASED VEHICLES
All lease contracts originated by the Dealers and assigned to the Titling
Trust have been, or will be, underwritten by TMCC personnel using the
underwriting criteria described under "TMCC--Lease Contract Underwriting
Procedures". In connection with the origination of each lease contract, the
Titling Trust will be listed as the owner of the related leased vehicle on
the related certificate of title. Liens will not be placed on such
certificates of title, and new certificates of title will not be issued, to
reflect the interest of the Trustee, as holder of the SUBI Certificate, in
the Leased Vehicles.
Pursuant to agreements between the Titling Trust and the Dealers, each
Dealer is obligated, after origination of lease contracts of the Titling
Trust, to repurchase such lease contracts which do not meet certain
representations and warranties made by such Dealer. These representations
and warranties relate primarily to the origination of the lease contracts and
the titling of the related leased vehicles, and do not typically relate to
the creditworthiness of the related lessees or the collectibility of such
lease contracts. The Dealer agreements do not generally provide for recourse
to the Dealer for unpaid amounts in respect of a defaulted lease contract,
other than in connection with the breach of such representations and
warranties. The rights of the Titling Trust to receive proceeds of such
Dealer repurchase obligations will constitute Titling Trust Assets (and SUBI
Assets, to the extent they relate to the Contracts and Leased Vehicles),
although the related Dealer agreements will not constitute Titling Trust
Assets.
USE OF PROCEEDS
The net proceeds from the sale of the Class A Certificates (i.e., the
proceeds of the public offering of the Class A Certificates minus expenses
relating thereto) will be applied by the Transferor to purchase the SUBI
Certificate and to make the Initial Deposit into the Reserve Fund.
THE TRANSFEROR
The Transferor is a wholly owned, special purpose finance subsidiary of
TMCC and was incorporated under the laws of California in April 1997. TMCC
may not transfer its ownership interest in the Transferor except to an
affiliate of TMCC so long as any financings involving interests in the
Titling Trust (including the transaction described herein) are outstanding.
TMCC is the sole shareholder of the Transferor. The principal office of the
Transferor is located at 19001 South Western Avenue, Torrance, California
90509 and its telephone number is (310) 787-1310.
The Transferor was organized solely for the purpose of acquiring
interests in the SUBI and the Other SUBIs, causing the issuance of
certificates similar to the Certificates and engaging in related
transactions. The
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certificate of incorporation of the Transferor limits its activities to the
foregoing purposes and to any activities incidental to and necessary for such
purposes.
TMCC
Toyota Motor Credit Corporation ("TMCC") was incorporated in California
on October 4, 1982, and commenced operations in May 1983. At December 31,
1996, TMCC had 34 branches in various locations in the United States and one
branch in the Commonwealth of Puerto Rico. In addition to the Transferor,
TMCC has four wholly owned subsidiaries engaged in the insurance business, a
wholly owned subsidiary that provides retail and wholesale financing and
certain other financial services to authorized Toyota and Lexus vehicle
dealers and their customers in Puerto Rico and a wholly owned subsidiary
through which TMCC securitizes retail installment sales contracts.
TMCC's primary business is providing retail leasing, retail and wholesale
financing and certain other financial services to authorized Toyota and Lexus
vehicle and Toyota industrial equipment dealers and their customers in the
United States (excluding Hawaii) and Puerto Rico. TMCC is a wholly owned
subsidiary of TMS, which is primarily engaged in the wholesale distribution
of automobiles, light duty trucks, industrial equipment and related
replacement parts and accessories throughout the United States (excluding
Hawaii). Substantially all of TMS's products are either manufactured by its
affiliates or are purchased from TMC or its affiliates.
As of September 30, 1996, September 30, 1995 and September 30, 1994, TMCC
had approximately 624,000, 438,000 and 387,000 retail lease contracts
outstanding (including retail lease contracts that were assigned to the
Titling Trust and are still being serviced by TMCC), respectively. Aggregate
net outstanding principal balances of retail lease contracts at such dates,
were approximately $12.0 billion, $9.4 billion and $7.6 billion,
respectively.
The principal executive offices of TMCC are located at 19001 South
Western Avenue, Torrance, California and its telephone number is (310)
787-1310.
TMCC'S LEASING OPERATIONS
LEASE CONTRACT UNDERWRITING PROCEDURES
TMCC's underwriting standards are intended to evaluate a prospective
lessee's credit standing and ability to make payments. Each prospective
lessee is required by the Dealer to complete a credit application on a form
prepared or approved by TMCC. As part of the description of the applicant's
financial condition, the applicant is required to provide information
demonstrating, among other things, employment history, residential status,
bank account information, annual income and credit references. The Dealer
then transmits the completed application to the appropriate branch office.
Upon receipt, income and employment data generally are verified by a credit
investigator within the branch office and certain data is obtained through an
independent credit bureau report that is combined with data from the
application and certain calculations made by a credit analyst within the
branch office. Such data is entered into a centralized computer network
(owned and maintained by TMCC) and weighted by a statistically validated
credit scoring process which "scores" the application with the use of a
scorecard. The scorecard enables TMCC to review an application and establish
the probability that the proposed lease contract will be paid in accordance
with its terms. The credit scores rank-order applications according to
credit risk, which is the likelihood that the lessee will make all payments
when due. TMCC actively monitors and regulates the volume
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of lease contracts that it acquires of any given credit grade in its efforts
to maintain a portfolio it deems to contain an appropriate mix.
INSURANCE
Each lease contract requires the lessee to maintain automobile bodily
injury and property damage liability insurance which must name TMCC or, with
respect to the Contracts, the Titling Trust, as an additional insured. Each
lease contract further requires the lessee to maintain (all risks)
comprehensive and collision insurance covering damage to the leased vehicle
and naming TMCC or, with respect to the Contracts, the Titling Trust, as loss
payee.
COLLECTION, REPOSSESSION AND DISPOSITION PROCEDURES
Collection efforts are performed through the applicable branch office.
TMCC considers a lease to be past due when a borrower fails to make at least
90% of a scheduled monthly payment by the due date. TMCC automatically
reviews all past due accounts for action every three working days. Automated
collection efforts begin on the date a scheduled monthly payment is 11 days
past due (commencing on such date with the mailing of a notice letter). The
account is placed in an on-line collection system for branch office follow up
(prioritized by degree of delinquency) if payment is not received by the date
such payment is 26 days past due.
Occasionally, situations occur in the collection process when a lessee
has become delinquent and is willing but unable to bring the related account
current (i.e., where a deferred payment is deemed reasonably likely to be
followed by subsequent performance). In this situation, at the discretion of
collection department management, but subject to extensive guidelines, one or
more payments under the lease contract may be deferred, provided that the
lessee pays a deferral fee (each, a "Deferral Fee"). Deferral Fees relating
to the Contracts will not be deposited into the SUBI Collection Account, but
will be treated as additional servicing compensation. The Servicing
Agreement will provide that a Contract may not be deferred more than - times
in the aggregate, and that the Servicer will be required to make Advances
with respect to the related Contracts as set forth herein. Deferral of
payments has the practical effect of extending the maturity date of a lease
contract.
Occasionally a lessee requests an extension of a lease contract for
one or more months during the period of time between the original
specified maturity of such lease and the time such lessee negotiates a
new lease contract or sales contract with respect to a different
vehicle. Any such extension is effected by the modification of the
related lease contract to provide for an additional number of Monthly
Payments with a continuation of the appropriate lease charge and a
corresponding reduction in the related Residual Value to reflect receipt
of additional amortizing payments. The Servicing Agreement will require
that Contracts not be extended by more than - months in the aggregate or
to a date later than the last day of the month immediately preceding the
month in which the Final Scheduled Certificate Payment Date occurs. The
Servicing Agreement will provide that Advances be made with respect to
Contracts as to which payments are deferred to the extent such deferrals
would diminish the amount of Collections received in connection
therewith relative to the originally scheduled Monthly Payments. The
Servicing Agreement will also provide for the reallocation to the UTI
from the SUBI (accompanied by an appropriate Reallocation Payment by
TMCC) of each Contract as to which more than - deferrals are made or as
to which, through deferrals or extensions, the maturity date is extended
beyond the last day of the Collection Period relating to the Final
Scheduled Certificate Payment Date. Upon any such reallocation, such
Contract and the related Leased Vehicle and other related assets and
rights will be UTI Assets and will no longer constitute SUBI Assets.
SEE "Additional Document Provisions--The Servicing
Agreement--Collections".
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Generally, TMCC collectors make every effort to preserve a lease as a
performing lease. However, if a delinquency cannot be satisfactorily
resolved through deferrals or otherwise, the decision to repossess a leased
vehicle will be made before a payment is more than 60 days past due. Lessees
are typically notified on the day of or within two days after repossession
of any right they may have under applicable state law to redeem their
vehicles. TMCC attempts to sell all repossessed vehicles within 30 days of
repossession. TMCC disposes of off-lease and repossessed vehicles not
purchased by the related lessee or the dealer to whom the vehicle is returned
through regional automobile auctions.
DELINQUENCY, REPOSSESSION AND LOSS DATA
The following tables set forth certain delinquency, repossession and loss
data with respect to TMCC's entire retail automobile and light duty truck
lease contract portfolio, including those Contracts originated in the Trust
States during the periods shown, as of and for the periods shown.
The data presented in the following tables are for illustrative purposes
only. Delinquency, repossession and loss experience may be influenced by a
variety of economic, social, geographic and other factors. There is no
assurance that the Trust's delinquency, repossession and loss experience with
respect to its retail automobile and light duty truck lease contracts and the
related leased vehicles in the future, or the experience with respect to the
Contracts and the Leased Vehicles, will be similar to that set forth below.
ENTIRE PORTFOLIO
RETAIL VEHICLE LEASE CONTRACT DELINQUENCY EXPERIENCE
(DOLLARS IN THOUSANDS)
At At September 30
December 31,
1997 1996 1995 1994 1993 1992
----- ---- ---- ---- ---- ----
Dollar Amount of Lease Contracts (1)
Ending Number of Lease Contracts
Number and Percentage of Delinquent
Lease Contracts (2)(3)(4)
31-60 Days
61-90 Days
91 Days or More
TOTAL ......................
- -------------------------
(1) Based on the sum of all principal amounts outstanding under lease
contracts originated by TMCC in the United States (inclusive of the
residual values of the related leased vehicles).
(2) Excludes lease contracts the related lessees of which are bankrupt or
have commenced bankruptcy proceedings. As of -, approximately -lease
contracts involving bankrupt lessees were delinquent for at least 61 days.
(3) The period of delinquency is based on the number of days payments are
contractually past due.
(4) As a percentage of the total number of lease contracts at period end.
35
<PAGE>
36
<PAGE>
<TABLE>
<CAPTION>
ENTIRE PORTFOLIO
RETAIL VEHICLE LEASE CONTRACT REPOSSESSION AND LOSS EXPERIENCE
(DOLLARS IN THOUSANDS)
At At September 30
December 31,
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Dollar Amount of Lease Contracts (1)
Ending Number of Lease Contracts
Average Lease Contracts Outstanding
Repossessions:
Number of Repossessions
Number of Repossessions as a Percentage
of Lease Contracts Outstanding %(4) %(4)
Average Lease Contracts Outstanding %(4) %(4)
Losses:
Average Net Receivables Outstanding
Net Repossession Losses (2)
Average Net Repossession Loss per
Liquidated Contract (1)(3)
Net Repossession Losses as a Percentage of %(4) %(4) %(4) %(4) %(4) %(4)
Average Net Receivables
</TABLE>
- -------------------------
(1) Based on the sum of all principal amounts outstanding under lease
contracts originated by TMCC in the United States (inclusive of the residual
values of the related leased vehicles).
(2) Includes losses on charged-off accounts, but does not include expenses
incurred to dispose of vehicles.
(3) Dollars not in thousands.
(4) Annualized.
37
<PAGE>
38
<PAGE>
ENTIRE PORTFOLIO
RESIDUAL VALUE LOSS EXPERIENCE
(DOLLARS IN THOUSANDS, EXCEPT AS NOTED)
<TABLE>
<CAPTION>
At At
December 31, September 30
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Total Number of Leased Vehicles
Scheduled to Terminate. . . . . . . . .
Number of Leased Vehicles Returned to
and Sold by TMCC. . . . . . . . . . . .
Full Term Ratio (2) . . . . . . . . . .
Total Losses/(Gains) on Vehicles that
Reached Scheduled Term. . . . . . . . .
Average Loss/(Gain)(3). . . . . . . . .
_____________________________
(1) Because the terms of the retail closed-end lease contracts originated
by TMCC have gradually shifted from five years to three years since
1991, the residual value loss experience for the periods in the table
may not be fully comparable.
(2) The ratio of line 2 over line 1 expressed as a percentage.
(3) Dollars not in thousands.
</TABLE>
THE CONTRACTS
GENERAL
The Initial Contracts will consist of a pool of - closed-end retail
lease contracts, having an aggregate Outstanding Principal Balance as of the
Cutoff Date of $-, and an aggregate Discounted Principal Balance as of such
date of $-, selected from the Titling Trust's portfolio of retail closed-end
automobile and light duty truck lease contracts. During the Revolving Period,
Principal Collections (and reimbursements of Loss Amounts) will be reinvested
in Subsequent Contracts and Subsequent Leased Vehicles, which at the time of
such reinvestment will become SUBI Assets. SEE "Description of the
Certificates--Distributions on the Certificates--Application and
Distributions of Principal--Revolving Period". The Initial Contracts were,
and the Subsequent Contracts will be, originated by the Dealers in the Trust
States and assigned to the Titling Trust in accordance with TMCC's
underwriting procedures and underwriting criteria. The Initial Contracts
have been selected, and the Subsequent Contracts will be selected, based
upon the criteria specified in the Titling Trust Agreement and SUBI
Supplement. SEE "The Contracts--Characteristics of the Contracts--General"
and "--Representations, Warranties and Covenants". Subsequent Contracts may
be originated by TMCC using different underwriting criteria than those which
were applied to the Initial Contracts (but which criteria will be those that
TMCC then applies to the origination of lease contracts for its own account)
which may cause the characteristics of the Subsequent Contracts to vary from
those of the Initial Contracts, and will be selected from among Titling Trust
Assets not allocated or reserved for allocation to any Other SUBI. Principal
Collections (and reimbursements of Loss Amounts) will first be reinvested in
the eligible lease contract with the earliest origination date, then with the
eligible lease contract with the next earliest origination date and so forth.
To the extent that reinvestment of such amounts from the SUBI are being made
out of the Titling Trust's general pool of available lease contracts at any
39
<PAGE>
time after the creation of one or more Other SUBIs, such reinvestment will
first be made with respect to the SUBI. TMCC will represent and warrant that
no adverse selection procedures were employed or will be employed in
selecting the Initial Contracts or the Subsequent Contracts for inclusion in
the SUBI Assets and that it is not aware of any bias in the selection of such
Contracts that would cause the delinquencies or losses on such Contracts to
be worse than other retail closed-end automobile and light duty truck lease
contracts held in the Titling Trust's portfolio, although there can be no
assurance in this regard.
Each Contract will have been written for an original term of not more
than 60 months, and will have been written for a "capitalized cost" (which
may exceed the manufacturer's suggested retail price), plus a lease charge
which is based on the imputed Lease Rate. Each Contract will provide for
equal monthly payments that when allocated between principal and the lease
charge at the Lease Rate on a constant yield basis, will be sufficient to
amortize the capitalized cost over the term of the lease to an amount equal
to the Residual Value. Each Residual Value is established at the origination
of the lease (based on documentation provided to the Dealers by TMCC) and
represents the estimated wholesale market value at the end of the lease term.
At the times of origination of the related Contracts, the Leased
Vehicles were, in the case of the Initial Contracts, or will be, in the case
of the Subsequent Contracts, new vehicles, including dealer demonstrator
vehicles driven fewer than 20,000 miles, or used vehicles up to four model
years old at the time of origination of the related Contract, including
certified used vehicles and vehicles previously sold under manufacturer's
programs. Certified used vehicles are Toyota or Lexus vehicles that are
purchased by dealers, reconditioned and certified to meet certain
Toyota/Lexus required standards and sold or leased with an extended warranty
from the manufacturer. Manufacturer's program vehicles are Toyota or Lexus
vehicles that have been sold to rental car companies, repurchased by the
manufacturer and subsequently purchased by the dealer to sell or lease as
current year and one year old used vehicles with 20,000 miles or less.
All of the Contracts will be closed-end leases. Under a "closed-end
lease", at the end of its term, if the lessee does not elect to purchase the
related leased vehicle by exercise of the purchase option contained in such
lease contract, the lessee is required to return the leased vehicle to or
upon the order of the lessor, at which time the lessee will then owe only
incidental charges for excess mileage, excessive wear and use and other items
as may be due under such lease. In contrast, under an "open-end lease", the
lessee is also obligated to pay at the end of the lease term any deficit
between the fair market value of the leased vehicle at that time and the
residual value established at the time of origination of such lease.
Each lessee will be permitted to purchase the Leased Vehicle at the end
of the term of the related Contract. The purchase price will be a fixed
dollar amount equal to the Residual Value plus any applicable taxes and all
other incidental charges which may be due under the Contract. In addition,
each Contract will allow the related lessee voluntarily to terminate such
Contract by paying certain miscellaneous charges and the Payoff Amount
described below.
Each Contract will provide that the lessor may terminate such Contract
and repossess the Leased Vehicle in the event of a default by the lessee.
Events of default under the Contracts will include, but will not be limited
to, failure to make payment when due, certain events of bankruptcy or
insolvency, failure to maintain the insurance required by the Contract,
failure to maintain or repair the Leased Vehicle as required or to comply
with any other term or condition of the Contract and the making of a material
misrepresentation by the lessee in the lease application. TMCC regularly
tracks lessees' compliance with their payment obligations and monitors the
related leases for noncompliance. SEE "TMCC--Insurance" and "--Collection,
Repossession and Disposition Procedures".
40
<PAGE>
In the forms of contract used to originate Contracts, upon termination
at or before maturity where the lessee is not in default and does not
exercise its option to purchase the Leased Vehicle, the amount owed by the
lessee (the "Payoff Amount") will be determined by adding (i) unpaid Monthly
Payments and any incidental charges owing under the Contract, less unearned
lease charges and (ii) the Residual Value, subtracting the "Realized Value"
(as described below), from the sale or other disposition of the related
Leased Vehicle and applying the Security Deposit, if any, to reduce any
deficiency. In calculating the amount of unearned lease charges under clause
(i) above, the Contracts will provide that the constant yield method will be
used, in which lease charges are earned on a daily basis through the payment
date immediately following the date of early termination. If, instead, there
is an early termination and the lessee is in default, the amount owed by a
lessee in default will be determined by adding (i) the Payoff Amount, (ii)
payments accrued under the Contract through the date of termination, (iii)
collection, repossession, storage, preparation and sale expenses and (iv)
attorneys' fees and disbursements incurred after default.
The "Realized Value" of a Leased Vehicle is the actual wholesale price
or the wholesale price otherwise determined by TMCC in a commercially
reasonable manner. However, each Contract provides that the lessee has the
right to obtain from an independent third party acceptable to the lessor a
professional appraisal of the wholesale value of the Leased Vehicle that
could be realized at sale. This appraised value then would be used as the
wholesale value for purposes of calculating sums due from the lessee.
In the event of early termination of a Contract where the lessee is in
default, the amounts collected with respect to such Contract and the related
Leased Vehicle (after deducting the costs and other sums retained by the
Servicer in connection therewith) may be less than the Outstanding Principal
Balance (and therefore less than the outstanding Discounted Principal
Balance) of such Contract. In the event that a Contract reaches the date on
which the last Monthly Payment is due, as such date may have been extended
(the "Maturity Date"), but the related Leased Vehicle cannot be sold or
otherwise disposed of for a net amount at least equal to its Residual Value,
there may be an additional shortfall in amounts otherwise expected to be
received in respect of the SUBI Interest. In the event that any such
shortfalls allocable to the Certificates are not covered by the Investor
Percentage of certain excess Interest Collections, available monies on
deposit in the Reserve Fund, Net Insurance Proceeds or Net Liquidation
Proceeds, amounts otherwise payable to the Transferor in respect of the
Transferor Interest (or as Excess Amounts) and the subordination of interest
payments otherwise payable to the Class B Certificateholders, in each case to
the extent described herein, investors in the Class A Certificates could
suffer a loss on their investments.
CHARACTERISTICS OF THE CONTRACTS
GENERAL
The Initial Contracts were, and the Subsequent Contracts will be,
selected by reference to several criteria, including, as of the related
Cutoff Date, that each Contract (i) is written with respect to a Leased
Vehicle that was at the time of the origination of the related lease contract
a new or used vehicle, (ii) was originated in the United States, after -,
1996 in the case of the Initial Contracts, and on or before -, 1997 in the
case of the Subsequent Contracts; (iii) has a Maturity Date on or after - and
no later than - in the case of the Initial Contracts, and on or after - and
no later than - in the case of the Subsequent Contracts; (iv) fully amortizes
to an amount equal to the Residual Value of the related Leased Vehicle based
on a fixed Lease Rate calculated on a constant yield basis and provides for
level payments over its term (except for payment of the Residual Value); (v)
was not more than 60 days past due as of the Cutoff Date or the related
Transfer Date, as the case may be; and (vi) has not been deferred more than
- -times or extended by more than - months in the aggregate.
41
<PAGE>
42
<PAGE>
COMPOSITION OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
<S> <C>
Aggregate Outstanding Principal Balance as of Initial
Cutoff Date. . . . . . . . . . . . . . . . . . . . . . . . $-
Aggregate Discounted Principal Balance as of Initial
Cutoff Date. . . . . . . . . . . . . . . . . . . . . . . . $-
Aggregate Net Investment Value as of Cutoff
Date . . . . . . . . . . . . . . . . . . . . . . . . . . . $-
Number of Initial Contracts . . . . . . . . . . . . . . . . -
Average Outstanding Principal Balance as of Initial
Cutoff Date. . . . . . . . . . . . . . . . . . . . . . . . $-
Average Discounted Principal Balance as of Initial
Cutoff Date. . . . . . . . . . . . . . . . . . . . . . . . $-
Range of Original Principal Balances of Initial Contracts. $- to $-
Weighted Average Lease Rate(1). . . . . . . . . . . . . . . -%
Range of Lease Rates(2). . . . . . . . . . . . . . . . . . -% to -%
Weighted Average Original Number of Monthly
Payments (1) . . . . . . . . . . . . . . . . . . . . . . . - months
Range of Original Number of Monthly Payments . . . . . . . - months to - months
Weighted Average Remaining Number of Monthly. . . . . . . .
Payments(1) . . . . . . . . . . . . . . . . . . . . . . . . - months
Range of Remaining Number of Monthly Payments - months to - months
Weighted Average Original Residual Value(2) . . . . . . . . $-
Range of Original Residual Values(2) . . . . . . . . . . . $- to $-
Aggregate of Residual Values as a Percentage of Aggregate .
Net Investment Value as of Cutoff Date . . . . . . . . . . -%
Percentage of Lease Contracts for New Vehicles
(by Outstanding Principal Balance)(2). . . . . . . . . . . -%
Percentage of Lease Contracts for Used Vehicles
(by Outstanding Principal Balance)(2). . . . . . . . . . . -%
</TABLE>
____________
(1) Weighted by Outstanding Principal Balance as of the Cutoff Date.
(2) Without giving effect to discounting for calculation of Discounted
Principal Balances.
43
<PAGE>
INITIAL CONTRACTS
<TABLE>
<CAPTION>
AVERAGE MINIMUM MAXIMUM
------- ------- -------
<S> <C> <C> <C>
Original Principal Balance $ $ $
Outstanding Principal Balance(1) $ $ $
------- -------- -------
------- -------- -------
Residual Value
Lease Rate(1)(2)
Seasoning (months)(1)(3)
Remaining Term (months)(1)
_________________
(1) As of the Initial Cutoff Date.
(2) Without giving effect to discounting for calculation of Discounted
Principal Balances.
(3) Weighted by Outstanding Principal Balance as of the Cutoff Date.
</TABLE>
44
<PAGE>
DISTRIBUTION OF THE INITIAL CONTRACTS BY LEASE RATE
The distribution of the Initial Contracts as of the Cutoff Date by
Lease Rate was as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF INITIAL CUTOFF DATE PERCENTAGE OF AGGREGATE
NUMBER OF NUMBER OF OUTSTANDING CUTOFF DATE OUTSTANDING
LEASE RATE RANGE INITIAL CONTRACTS INITIAL CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ---------------- ----------------- ----------------- ------------------- ------------------------
<S> <C> <C> <C> <C>
- --------------- ----------- - -----------------
less than 2.00% % $ %
2.00% to 2.99% % $ %
3.00% to 3.99% % $ %
4.00% to 4.99% % $ %
5.00% to 5.99% % $ %
6.00% to 6.99% % $ %
7.00% to 7.99% % $ %
8.00% to 8.99% % $ %
9.00% to 99.99% % $ %
- --------------- ------------- ----------- - -----------------
10.00% to 10.99% % $ %
12.00% to 12.99% % $ %
- ----------------
13.00% to 13.99% % $ %
- ---------------- ------------- ----------- - -----------------
Total..... 100.00% $ 100.00%
- --------------- ------------- ----------- - -----------------
- --------------- ------------- ----------- - -----------------
</TABLE>
DISTRIBUTION OF THE INITIAL CONTRACTS BY MATURITY
The distribution of the Initial Contracts as of the Cutoff Date by
year of maturity was as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF CUTOFF DATE PERCENTAGE OF AGGREGATE
NUMBER OF NUMBER OF OUTSTANDING CUTOFF DATE OUTSTANDING
YEARS OF MATURITY INITIAL CONTRACTS INITIAL CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ----------------- ----------------- ----------------- ----------------- -------------------------
<S> <C> <C> <C> <C>
1998 % $ %
---- -------------- -------------------
1999 % $ %
2000 % $ %
2001 % $ %
2002 % $ %
--------------- -------------- ------------ -------------------
Total..... 100.00% $ %
-------
-------
</TABLE>
45
<PAGE>
DISTRIBUTION OF THE INITIAL CONTRACTS BY STATE
<TABLE>
<CAPTION>
PERCENTAGE OF AGGREGATE
PERCENTAGE OF INITIAL CUTOFF DATE INITIAL CUTOFF DATE
STATE OF NUMBER OF NUMBER OF OUTSTANDING OUTSTANDING
ORIGINATION(1) INITIAL CONTRACTS INITIAL CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- -------------- ----------------- ----------------- ------------------- -----------------------
<S> <C> <C> <C> <C>
California % $ %
Ohio % $ %
- ---- -------------- -------------- - ------------------
Pennsylvania % $ %
- ------------
Michigan % $ %
Florida % $ %
- ------- -------------- -------------- -------------- ------------------
Total = 100.00% $ %
----- --------------
----- --------------
- -------------
(1) by Dealer location.
</TABLE>
REPRESENTATIONS, WARRANTIES AND COVENANTS
The Initial Contracts and Initial Leased Vehicles will be described
in a schedule appearing as an exhibit to the SUBI Supplement, which
schedule will be amended from time to time as Subsequent Contracts and
Subsequent Leased Vehicles become SUBI Assets during the Revolving
Period (collectively, the "Schedule of Contracts and Leased Vehicles").
The Schedule of Contracts and Leased Vehicles will identify each
Contract by identification number, will identify each Leased Vehicle by
its vehicle identification number and will set forth as to each such
Contract, among other things, its: (i) date of origination; (ii)
Maturity Date; (iii) Monthly Payment; (iv) original capitalized cost;
(v) Outstanding Principal Balance and Discounted Principal Balance as of
the related Cutoff Date; and (vi) Residual Value. In the Servicing
Agreement, representations and warranties will be made with respect to
each Contract and Leased Vehicle to the effect described under "The
Contracts--Characteristics of the Contracts--General", and that, among
other things, each such Contract, and, to the extent applicable, the
related Leased Vehicle or lessee: (a) was originated by a Dealer located
in the United States in the ordinary course of its business and in
compliance with TMCC's normal credit and underwriting policies and
practices; (b) is owned by the Titling Trust, free of all liens,
encumbrances or rights of others; (c) was originated in compliance with,
and complies with, all material applicable legal requirements; (d) 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 originator of such Contract and
the Titling Trustee in connection with (i) the origination of such
Contract, (ii) the execution, delivery and performance by such
originator of the Contract and (iii) the acquisition by the Titling
Trust of such Contract and Leased Vehicle, have been duly obtained,
effected or given and are in full force and effect as of such date of
creation or acquisition; (e) is the legal, valid and binding obligation
of the lessee; (f) to the knowledge of TMCC, is not subject to any right
of rescission, setoff, counterclaim or any other defense of the related
lessee to pay the Outstanding Principal Balance due under such Contract
and no such right of rescission, setoff, counterclaim or other defense
has been asserted or threatened; (g) the related Dealer, the Servicer
and the Titling Trust have each satisfied all obligations required to be
fulfilled on its part with respect thereto; (h) is payable solely in
United States dollars in the United States; (i) the lessee thereunder is
located in the United States and is not TMCC, the Transferor or any of
their respective affiliates; (j) requires the lessee to maintain
insurance against loss or damage to the related Leased Vehicle under an
insurance policy that names the Titling Trust as loss payee; (k) the
related certificate of title is registered in the name of the Titling
Trust (or a properly completed application for such title has been
submitted to the appropriate titling authority); (l) is a closed-end
lease that requires equal monthly payments to be
46
<PAGE>
made within 60 months of the date of origination of such Contract; (m) is
fully assignable and does not require the consent of the lessee as a
condition to any transfer, sale or assignment of the rights of the
originator; (n) has a Residual Value that does not exceed an amount
reasonably established by the Servicer consistent with its policies and
practices; (o) has not been deferred more than - times or extended by more
than - months in the aggregate or otherwise modified except in accordance
with TMCC's normal credit and collection policies and practices; (p) is not
an Other SUBI Asset; (q) to the knowledge of TMCC, the lessee thereunder is
not bankrupt or currently the subject of a bankruptcy proceeding; (r) is not
more than 60 days past due; (s) is a finance lease for accounting purposes;
and (t) is a "true lease" for applicable state law purposes relating to the
perfection of security interests.
The Servicing Agreement will provide that the reinvestment of Principal
Collections (and Loss Amounts otherwise reimbursable to Certificateholders)
in Subsequent Contracts and Subsequent Leased Vehicles during the Revolving
Period will be subject to the satisfaction of certain conditions precedent
including, among other things, that after giving effect to such reinvestment,
(i) each Subsequent Contract will be allocated as a SUBI Asset based upon its
Discounted Principal Balance as of the relevant Cutoff Date, (ii) the
weighted average remaining term of the Contracts (including the Subsequent
Contracts) is not greater than - months and (iii) the weighted average
Residual Value of the Leased Vehicles relating to the Contracts (including
the Subsequent Contracts), as a percentage of the aggregate Outstanding
Principal Balance of the Contracts (including the Subsequent Contracts), in
each case as of the related dates of origination, is not greater than -%.
The foregoing criteria may be changed without the consent of any
Certificateholder if the Trustee receives notice from each Rating Agency to
the effect that the use of such changed criteria will not result in the
reduction, withdrawal or qualification of its then current rating of any
Certificates.
The Servicing Agreement will provide that upon the discovery by the
Titling Trustee, TMCC, the Trustee or the Transferor of a breach of any
representation, warranty or covenant referred to in the second preceding
paragraph that materially and adversely affects the owners of interests in
the SUBI or the Certificateholders in the related Contract or Leased Vehicle,
which breach is not cured in all material respects within 60 days after TMCC
discovers such breach or is given notice thereof, such Contract and Leased
Vehicle (and the related SUBI Assets) will be reallocated to the UTI and TMCC
will be required to deposit (or cause to be deposited) into the SUBI
Collection Account an amount (the "Reallocation Payment") equal to the
Discounted Principal Balance of such Contract as of the last day of the
Collection Period during which the related cure period ended, plus an amount
equal to any imputed lease charge on such Contract at the related Lease Rate
that was delinquent as of the end of such Collection Period. The foregoing
payment obligation will survive any termination of TMCC as Servicer under the
Servicing Agreement.
MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS
All of the Contracts will be prepayable, in whole or in part, at any time
without penalty. The prepayment experience with respect to the Contracts
will affect the weighted average lives of the Class B Certificates, and may
affect the weighted average lives of each Class of Certificates then
outstanding if a Monthly Payment Event occurs, and will affect the weighted
average life of any Class of Class A Certificates, if any, as to which a
Maturity Advance is insufficient to pay in full the related Certificate
Principal Balance.
In general, the rate of prepayments on the Contracts may be
influenced by a variety of economic, social, geographic and other
factors. The Titling Trust was formed and began to accept assignments
of lease contracts in November 1996. All of the lease contracts
assigned to the Titling Trust since that time have been, and all of the
lease contracts to be assigned to the Titling Trust will be, assigned by
Dealers using TMCC's underwriting standards. TMCC actively encourages
lessees under lease contracts with remaining terms of less than one year
to
47
<PAGE>
either buy, trade in or refinance the related leased vehicles prior to the
related scheduled maturities of such lease contracts. TMCC estimates that
during its fiscal years 1994, 1995 and 1996 approximately -%, -% and -% of
the retail automobile and light duty truck lease contracts scheduled to
mature during such years were terminated prior to maturity, either because of
voluntary prepayments or repossession of the leased vehicles due to default
by the lessees under the related lease contracts. No assurance can be given
that the Contracts will experience the same rate of prepayment or default or
any greater or lesser rate than TMCC's historical rate, or that the Residual
Value experience of Leased Vehicles related to Contracts that have reached
their Maturity Dates will be the same as or higher or lower than from TMCC's
historical residual value loss experience with respect to lease contracts in
its portfolio. Moreover, there can be no assurance as to whether a Maturity
Advance will be sufficient to pay in full the related Certificate Principal
Balance on the Targeted Maturity Date with respect to any Class of Class A
Certificates and, therefore, any such Class may mature significantly later
than its Targeted Maturity Date.
The effective yield on, and weighted average life of, each Class of Class
A Certificates will depend upon, among other things, whether or not an Early
Amortization Event occurs, whether or not a Monthly Payment Event occurs,
whether or not the related Maturity Advance is sufficient to pay in full the
related Certificate Principal Balance, the amount of scheduled and
unscheduled payments on or in respect of the Contracts and the Leased
Vehicles and the rate at which such payments are paid through to the Class A
Certificateholders pursuant to the payment priorities described herein. In
the event of prepayments of the Contracts (including liquidations of the
Contracts and payment of the Residual Value of the related Leased Vehicles)
or payment of any Accelerated Principal Distribution Amount during the
Amortization Period, Class A Certificateholders who receive such amounts may
not be able to reinvest the related payments of principal received on the
Class A Certificates at yields as high as the related Certificate Rate. The
timing of changes in the rate of prepayments on the Contracts and payments in
respect of the Leased Vehicles may also affect significantly an investor's
actual yield to maturity and the weighted average life of the related Class
of Class A Certificates. A substantial increase in the rate of payments on
or in respect of the Contracts and Leased Vehicles during the Amortization
Period may shorten the final maturity and weighted average lives of the Class
A Certificates. In the case of Class A Certificates purchased at a discount
to their principal amounts, a slower than anticipated rate of principal
payments is likely to result in a lower than anticipated yield to the
investor. In the case of Certificates purchased at a premium to their
principal amounts, a faster than anticipated rate of principal payments is
likely to result in a lower than anticipated yield to the investor.
Additionally, although monies on deposit in the Accounts and
Principal Collections (and reimbursed Loss Amounts) that have not been
reinvested in Subsequent Contracts and Subsequent Leased Vehicles during
the Revolving Period will be invested in Permitted Investments, and all
gain or other income from such investments will be available for making
distributions on the Certificates, no assurance can be made as to the
rate of return that will be realized on such Permitted Investments. Any
reinvestment risk resulting from the rate of prepayment of the Contracts
(and payment of the Residual Value of the related Leased Vehicles) and
the making of the foregoing investments will be borne by the Class A
Certificateholders.
The Investor Percentage of Loss Amounts as to which no funds are
available for reimbursement on any Monthly Allocation Date during the
Amortization Period (I.E. Certificate Principal Loss Amounts) will be
allocated first to the Class B Certificates and then among the
Certificateholders on a pro rata basis, based on the outstanding Class
Certificate Balances thereof as of the last day of the related Collection
Period, and then reimbursed out of funds available therefor in the amounts
and order of priority described in "Description of the
Certificates--Allocations and Distributions on the Certificates--Allocations
and Distributions of collections". In addition, the Investor Percentage of
the net proceeds of any sale or other disposition of the SUBI Interest, the
SUBI Certificate and other property of the Trust, which may occur under
certain circumstances involving an Insolvency Event with respect to the
Transferor, to the extent constituting Principal Collections, will be
distributed first, on a pro rata basis, to the Class A Certificateholders
based on their respective Class Certificate Balances until the Class A
Certificates have been paid in full, and second, to the Class B
Certificateholders.
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CLASS A CERTIFICATE FACTORS AND TRADING INFORMATION;
REPORTS TO CLASS A CERTIFICATEHOLDERS
The "Certificate Factor" for each Class of Certificates will be a
seven-digit decimal that the Servicer will compute each month indicating the
related Class Certificate Balance, as the case may be, as of the close of
business on the Monthly Allocation Date in such month as a fraction of the
Initial Certificate Balance of the related Class of Class A Certificates.
Each Certificate Factor will initially be 1.0000000 and will remain unchanged
during the Revolving Period, except in certain limited circumstances where
there are unreimbursed Certificate Principal Loss Amounts allocated to such
Class. During the Amortization Period, if a Monthly Payment Event has
occurred, each Certificate Factor will decline to reflect reductions in the
related Certificate Balance resulting from distributions of principal and
such previously unreimbursed Certificate Principal Loss Amounts, if any. The
portion of the Class A Certificate Balance for a given month allocable to a
Class A Certificateholder can be determined by multiplying the original
denomination of the holder's Class A Certificate by the related Certificate
Factor for that month.
Pursuant to the Agreement, First Bank, as Trustee, will provide to the
Class A Certificateholders (which shall be Cede & Co. as the nominee of DTC
unless Definitive Certificates are issued under the limited circumstances
described herein) unaudited monthly reports concerning payments received on
or in respect of the Contracts and the Leased Vehicles, the Aggregate Net
Investment Value, the Investor Percentage, the Certificate Factors for each
Class and various other items of information. Certificate Owners may obtain
copies of such reports upon a request in writing to the Trustee. In
addition, Class A Certificateholders during each calendar year will be
furnished information for tax reporting purposes not later than the latest
date permitted by law. SEE "Description of the Certificates--Statements to
Certificateholders" and "--Book-Entry Registration".
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued pursuant to the Agreement which, together
with the Titling Trust Agreement, the SUBI Supplement and the Servicing
Supplement, have been filed as an exhibit to the Registration Statement of
which this Prospectus is a part. The following summaries of material
provisions of the foregoing documents as well as the summaries included
elsewhere in this Prospectus do not purport to be complete and are subject
to, and qualified in their entirety by reference to, the actual provisions of
such documents.
GENERAL
The Class A Certificates will be issued in minimum denominations of
$1,000 and integral multiples thereof in book-entry form. The Class A
Certificates will initially be represented by global certificates registered
in the name of Cede & Co., the nominee of DTC. No Certificate Owner will be
entitled to receive a certificate representing such owner's Certificate,
except as set forth below. Unless and until Definitive Class A Certificates
are issued under the limited circumstances described below, all references
herein to distributions, notices, reports and statements to Class A
Certificateholders will refer to the same actions made with respect to DTC
or Cede &
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Co., as the case may be, for the benefit of Certificate Owners in accordance
with DTC procedures. SEE "Description of the Certificates--Book-Entry
Registration" and "--Definitive Certificates".
The Class Certificate Balance of each Class of Certificates at any time
will be equal to the initial Class Certificate Balance of such Class of
Certificates, less the sum of (i) all payments made to the holders thereof on
or prior to such date allocable to principal, (ii) Certificate Principal Loss
Amounts allocated to such Class of Certificates and not reimbursed as
described herein and (iii) in the case of the Class B Certificates, any
unreimbursed Class B Certificate Principal Carryover Shortfall. SEE
"Description of the Certificates--Distributions on the Certificates". Each
Certificate will represent the right to receive semi-annual payments of
interest at the related Interest Rate and, to the extent described herein,
payments in respect of principal thereof during the Amortization Period
funded from the Investor Percentage of distributions to the Trust of Interest
Collections and Principal Collections allocable to the SUBI Interest and
Accelerated Principal Distribution Amounts allocable to Certificates of the
related Class, amounts on deposit in the Reserve Fund and amounts otherwise
payable to the Transferor in respect of the Transferor Interest, in each case
to the extent described herein. Distributions of interest and principal on
the Class B Certificates will be subordinated to the right of the Class A
Certificates to receive such payments to the extent provided herein. SEE
"Description of the Certificates--Distributions on the Certificates".
The Transferor will permanently retain the Transferor Interest, which
will represent the interest in the Trust not represented by the Certificates,
including the right to receive the Transferor Percentage of Interest
Collections and Principal Collections. SEE "Description of the
Certificates--Calculation of Investor Percentage and Transferor Percentage".
The Transferor Interest will be subordinated to the Certificates to the
extent described herein, and on any day will equal the difference between the
Aggregate Net Investment Value and the Certificate Balance. SEE "Description
of the Certificates--Certain Payments to the Transferor".
During the Revolving Period, the Certificate Balance will remain constant
except to the extent there are unreimbursed Certificate Principal Loss
Amounts. During the Amortization Period, the Certificate Balance will
decline, to the extent described herein, as the Investor Percentage of
Principal Collections allocable to the SUBI Interest and Accelerated
Principal Distribution Amounts are distributed to the Certificateholders and
as Certificate Principal Loss Amounts are incurred and not reimbursed.
TRANSFER OF THE SUBI INTEREST
On the Closing Date, the Transferor will deliver the SUBI Certificate to
the Trustee and transfer and assign to the Trustee, without recourse, all of
its right, title and interest in and to the SUBI Interest (excluding the
right to proceeds of any residual value insurance policy represented
thereby). Concurrently therewith, the Trustee will execute, authenticate and
deliver the Certificates to or upon the order of the Transferor. Pursuant to
the Agreement, the Transferor will represent and warrant that, immediately
prior to the transfer and assignment of the SUBI Certificate to the Trustee,
it had good title to and was the sole legal and beneficial owner of the SUBI
Certificate, free and clear of liens and claims.
REALLOCATION PAYMENTS AND REALLOCATION DEPOSIT AMOUNTS
Under certain circumstances TMCC will be required to make Reallocation
Payments in respect of certain Contracts (and the related Leased Vehicles)
discovered not to be in compliance with TMCC's representations or warranties
or Contracts as to which certain servicing procedures have not been followed,
in either case that materially and adversely affects the interests of the
Transferor or the Certificateholders in the related Contract or Leased
Vehicle. Upon any such payment during the Amortization Period (but not
during the Revolving Period), the Aggregate Net Investment Value will decline
by an amount equal to the Discounted Principal Balance of such
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Contract, thereby reducing the amount of the Transferor Interest by the same
amount, and such Contract and the related Leased Vehicle will no longer
constitute SUBI Assets as they will be reallocated and become UTI Assets. If
such deduction would cause the Transferor Interest to become less than zero,
TMCC will be required to deposit (or cause to be deposited) in the SUBI
Collection Account the amount (the "Reallocation Deposit Amount") by which
the Transferor Interest would be reduced to less than zero. Notwithstanding
the foregoing, in the event a Reallocation Deposit Amount is required to be
made, reallocation of the related Contract (and the related Leased Vehicle)
will not be considered to have occurred unless such deposit is actually made.
SEE "The Contracts--Representations, Warranties and Covenants" and
"Additional Document Provisions--The Servicing Agreement--Collections"
CALCULATION OF INVESTOR PERCENTAGE AND TRANSFEROR PERCENTAGE
Pursuant to the Servicing Agreement, to the extent allocable to the SUBI
Interest, the Servicer will allocate between the Investor Interest and the
Transferor Interest, based on the applicable Investor Percentage and the
Transferor Percentage for the related Collection Period, all Interest
Collections and (during the Amortization Period) Principal Collections
collected or received in respect of the related Collection Period. In
addition, similar allocations will be made by the Servicer at the end of each
Collection Period in respect of (i) an amount equal to the Discounted
Principal Balance of any Contract that became a Charged-off Contract during
such Collection Period (the aggregate of such amounts in any Collection
Period, the "Charged-off Amount"), (ii) the Residual Value Loss Amount for
such Collection Period and (iii) any Additional Loss Amounts incurred during
such Collection Period. A "Charged-off Contract" will be a Contract (a) with
respect to which the related Leased Vehicle has been repossessed and sold or
otherwise disposed of or (b) which has been written off by the Servicer in
accordance with its normal policies for writing off lease contracts other
than with respect to repossession.
The Investor Percentage in respect of any Collection Period will mean,
with respect to (i) Charged-off Amounts, Residual Value Loss Amounts and
Additional Loss Amounts (collectively, "Loss Amounts") and Interest
Collections, in each case that are allocable to the SUBI Interest, the
percentage equivalent of a fraction (not to exceed 100%) the numerator of
which is the Certificate Balance on the last day of the immediately preceding
Collection Period (or, in the case of the first Collection Period, the
Initial Certificate Balance) and the denominator of which is the Aggregate
Net Investment Value on the last day of the immediately preceding Collection
Period (or, in the case of the first Collection Period, as of the Cutoff
Date) and (ii) Principal Collections during the Amortization Period, the
percentage equivalent of a fraction (not to exceed 100%) the numerator of
which is the Certificate Balance and the denominator of which is the
Aggregate Net Investment Value, in each case as of the last day of the last
Collection Period preceding (a) the Amortization Date or (b) the date on
which an Early Amortization Event occurs. The "Transferor Percentage" will
in all cases, be equal to 100% minus the applicable Investor Percentage.
As a result of the calculations described above, Interest Collections
allocable to the SUBI Interest in each Collection Period will be allocated to
the Certificateholders based on the relationship of the Certificate Balance
to the Aggregate Net Investment Value (which may change from Collection
Period to Collection Period). As described above, the Investor Percentage
applied when allocating Principal Collections allocable to the SUBI Interest
may vary monthly during the Revolving Period, because the Certificate Balance
as a percentage of the Aggregate Net Investment Value may fluctuate monthly.
During the Amortization Period, however, the Principal Allocation will be
determined by reference to a fixed percentage which will equal the Investor
Percentage with respect to Principal Collections allocable to the SUBI
Interest as of the last day of the Revolving Period.
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CERTAIN PAYMENTS TO THE TRANSFEROR
On each Monthly Allocation Date, the Trustee will pay to the Transferor,
from amounts on deposit in the SUBI Collection Account in respect of the
related Collection Period that are allocable to the SUBI Interest, the
following amounts (the "Transferor Amounts"): (i) if such Monthly Allocation
Date is prior to the First Principal Monthly Allocation Date, the Transferor
Percentage of Interest Collections and (ii) if such Monthly Allocation Date
is on or after the First Principal Monthly Allocation Date, the Transferor
Percentage of Interest Collections and, to the extent that the Transferor
Interest is equal to or greater than zero, the Transferor Percentage of
Principal Collections. Any Principal Collections not paid to the Transferor
because the Transferor Interest is less than or equal to zero ("Unallocated
Principal Collections") will be retained in the SUBI Collection Account for
payment to Certificateholders.
Notwithstanding the foregoing, no Transferor Amounts will be paid to the
Transferor on a Monthly Allocation Date unless (i) the amounts required to be
allocated or distributed to Certificateholders as described under
"Description of the Certificates--Allocations" have been allocated or
distributed in full and (ii) the amount on deposit in the Reserve Fund, after
giving effect to all withdrawals therefrom and other deposits thereto on such
Monthly Allocation Date, is at least equal to the Specified Reserve Fund
Balance.
ALLOCATIONS AND DISTRIBUTIONS ON THE CERTIFICATES
GENERAL
On the second Business Day prior to each Monthly Allocation Date (each, a
"Determination Date"), the Servicer will inform the Trustee of, among other
things, the amount of Interest Collections and Principal Collections
allocable to the SUBI Interest, the Investor Percentage, the Transferor
Percentage, the Certificate Factor for each Class, the amount of Advances to
be made by the Servicer, the Required Amount, if any, to be withdrawn from
the Reserve Fund and the Servicing Fee and other servicing compensation
payable to the Servicer with respect to the related Collection Period. On or
prior to each Determination Date, the Servicer shall also determine the
Specified Reserve Fund Balance and the amounts to be distributed to the
Certificateholders and to the Transferor in respect of the Transferor
Interest and in respect of other amounts released from the Trust.
ALLOCATIONS AND DISTRIBUTIONS OF COLLECTIONS
On each Monthly Allocation Date, the Trustee will make the following
allocations, payments and distributions with respect to the related
Collection Period in accordance with the following priorities:
A. FROM THE INVESTOR PERCENTAGE OF INTEREST COLLECTIONS, PLUS THE AMOUNT
OF NET INVESTMENT INCOME (OR LESS THE AMOUNT OF NET INVESTMENT LOSSES) ON
PERMITTED INVESTMENTS OF AMOUNTS HELD IN THE CERTIFICATEHOLDERS' ACCOUNT
DURING SUCH COLLECTION PERIOD (TO THE EXTENT SUFFICIENT THEREFOR):
(1) in the event of an Early Amortization Event involving an Insolvency
Event as a result of the Trustee having received written instructions from
holders of Certificates evidencing Voting Interests of not less than 51% of
the Class A Certificates (voting together as a single class) or 51% of the
Class A Certificates and Class B Certificates (voting together as a single
class) to sell or dispose of the SUBI Interest, to the Trustee, the Investor
Percentage of Capped Trust Administrative Expenses;
(2) to the Certificateholders' Account, an amount equal to the
difference between (a) the sum of (i) the amount of interest accrued on all
Certificates during the period from and including the immediately preceding
Monthly Allocation Date to but excluding the related Monthly Allocation Date,
and (ii) any Interest Carryover Shortfall
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over (b) any amount of net investment income earned on amounts deposited into
the Certificateholders' Account on the prior Monthly Allocation Date from
such date through the current Monthly Allocation Date; provided that if a
Monthly Payment Event has occurred, then such amount will be distributed
first to the Holders of Class A Certificates (pro rata, based on the interest
accrued thereon during the related Interest Period) and then the Holders of
Class B Certificates rather than being allocated thereto and deposited into
the Certificateholders' Account; and provided further that if such Monthly
Allocation Date is on or after a Targeted Maturity Date with respect to any
Class of Class A Certificates, then the portion of such amounts allocable to
such Class (i.e., the lesser of the amount of interest accrued thereon during
the related Interest Period or such Class' pro rata portion of the aggregate
amount of Interest Collections allocable or distributable to all Class A
Certificates, based on the interest accrued thereon during the related
Interest Period) will be distributed to Holders of Such Class of Certificates
rather than being allocated thereto and deposited into the
Certificateholders' Account
(3) to the Servicer, (i) the aggregate amount of Advances made in
respect of due and unpaid interest payments on Contracts that have become
Nonrecoverable Advances and have not yet been reimbursed to the Servicer and
(ii) the Investor Percentage of Capped Contingent and Excess Liability
Premiums that have not yet been reimbursed to the Servicer;
(4) to the Titling Trustee, the Investor Percentage of Capped Titling
Trust Administration Expenses;
(5) in circumstances other than as set forth in clause (1) above, to the
Trustee the Investor Percentage of Capped Trust Administration Expenses;
(6) to the Servicer, the Investor Percentage of the Servicing Fee for
such Collection Period and the aggregate of any accrued but unpaid Servicing
Fees in respect of prior Collection Periods;
(7) to the extent that the any portion of the Investor Percentage of
Loss Amounts remain uncovered on any Monthly Allocation Date after
application of amounts withdrawn from the Reserve Fund and deposited in the
Collection Account and Transferor Amounts as described below, then, to the
Certificateholders' Account (or with respect to any Monthly Allocation Date
that is on or after the related Targeted Maturity Date or that follows a
Monthly Payment Event, to the related Certificateholders), an amount
sufficient to cover such Loss Amounts with any remaining such uncovered Loss
Amounts being allocated first to the Class B Certificates until the
Certificate Principal Balance thereof has been reduced to zero and then to
the Class A Certificates pro rata, based on their outstanding Certificate
Principal Balances as of the end of the related Collection period;
(8) to the extent any Certificate Principal Loss Amounts have been
allocated to Certificates on one or more prior Monthly Allocation Dates and
remain unreimbursed after application of amounts withdrawn from the Reserve
Fund and deposited in the Collection Account and Transferor Amounts as
described below, then, to the Certificateholders' Account (or with respect to
any Monthly Allocation Date that is on or after the related Targeted Maturity
Date or that follows a Monthly Payment Event, to the related
Certificateholders), an amount sufficient to reimburse such Certificate
Principal Loss Amounts, any such deposit to be in reimbursement of
Certificate Principal Loss Amounts on all Classes of Class A Certificates pro
rata, based on the amount of unreimbursed Certificate Principal Loss Amounts
previously allocated thereto, and then to the Class B Certificates;
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(9) to the extent the Class A-1, Class A-2, Class A-3 or Class A-4
Certificates have reached their Targeted Maturity Date and the Certificate
Principal Balance thereof has not been paid in full thereon after application
of the Investor Percentage of Principal Collections, then, to the related
Certificateholders (sequentially, if more than one Targeted Maturity Date has
occurred), an amount sufficient to reduce the Certificate Principal Balance
thereof to zero (such distribution to be deemed a distribution in respect
of principal and the amount so distributed to be deemed a Maturity Advance);
(10) to the extent the Class A-1, Class A-2, Class A-3 or Class A-4
Certificates have reached their Stated Maturity Date and the Certificate
Principal Balance thereof has not been paid in full thereon after application
of the Investor Percentage of Principal Collections, amounts withdrawn from
the Reserve Fund and deposited in the Collection Account and Transferor
Amounts as described below, then, to the related Certificateholders, an
amount sufficient to reduce the Certificate Principal Balance thereof to zero
(such distribution to be deemed a distribution of in respect of principal and
the amount so distributed to be deemed a Maturity Advance);
(11) from and after a Monthly Payment Event, to the Class A Certificates,
sequentially, until the Class Certificate Balances thereof have been reduced
to zero, an amount equal to the excess, if any, of (i) the sum of the
Investors' Principal Allocation and any Principal Carryover Shortfall over
(ii) the aggregate amount distributable in respect thereof from the Investor
Percentage of Principal Collections, amounts withdrawn from the Reserve Fund
and deposited in the Collection Account and Transferor Amounts;
(12) to the Reserve Fund, until the amount on deposit therein
equals the Specified Reserve Fund Balance; and
(13) to the Transferor, all remaining Interest Collections (such
amounts "Excess Amounts") which shall for all purposes thereupon be
deemed to have been released from the lien of the Trust.
To the extent such Interest Collections and net investment income are
insufficient therefor, the amount of any deficiency pursuant to clause A(2)
will be covered first from amounts withdrawn from the Reserve Fund and
deposited in the Collection Account and, second, from Transferor Amounts, in
each case with the allocation or distribution to be made as described in
clause A(2).
Notwithstanding the foregoing, amounts otherwise payable to
Certificateholders pursuant to clauses (7) and (8) above on a Monthly
Allocation Date that is during the Revolving Period will be being
treated as Principal Collections for the Collection Period in which such
Distribution Date occurs and, unless an Early Amortization Event happens
prior to the related Transfer Date, are to be available to be reinvested
in Subsequent Contracts and Subsequent Leased Vehicles.
B. FROM THE INVESTOR PERCENTAGE OF PRINCIPAL COLLECTIONS (TO THE
EXTENT SUFFICIENT THEREFOR):
(1) to the Servicer, the aggregate amount of Advances made in respect of
due and unpaid or principal payments on Contracts that have become
Nonrecoverable Advances and have not yet been reimbursed to the Servicer;
(2) to The Transferor;
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the aggregate amount of unreimbursed Maturity
Advances (such reimbursement to be deemed a distribution of Excess
Amounts for all other purposes);
(3) to the Certificateholders' Account (or with respect to any Monthly
Allocation Date that is on or after the related Targeted Maturity Date or
that follows a Monthly Payment Event, to the related Class A
Certificateholders sequentially, and then to the Class B Certificateholders,
in each case until the related Class Certificate Balance has been reduced to
zero), an amount equal to the sum of the Investors' Principal Allocation and
any Principal Carryover Shortfall;
[(4) to the Certificateholders' Account (or with respect to any Monthly
Allocation Date that is on or after the related Targeted Maturity Date or
that follows a Monthly Payment Event, to the related Class A
Certificateholders sequentially, and then to the Class B Certificateholders,
in each case until the related Class Certificate Balance has been reduced to
zero), an amount equal to the excess, if any, of (i) the amounts allocable or
distributable pursuant to clause A(2) above over (ii) the amount of Interest
Collections and net investment income available therefor, amounts withdrawn
from the Reserve Fund and deposited in the Collection Account with respect
thereto and Transferor Amounts available therefor;]
(5) to the Reserve Fund, until the amount on deposit therein equals the
Specified Reserve Fund Balance; and
(6) to the Transferor, all remaining Principal Collections which
shall for all purposes thereupon be deemed to have been released from
the lien of the Trust.
To the extent the Investor Percentage of Principal Collections is
insufficient therefor, the amount of any deficiency pursuant to clause B(3)
will be covered first from amounts withdrawn from the Reserve Fund and
deposited in the Collection Account, second, from Transferor Amounts and,
third, from any portion of the Investor Percentage of Interest Collections
available therefor pursuant to clause A(11) above, in each case to the extent
such amounts are sufficient therefor, and in each case such amounts to be
allocated or distributed as described in clause B(3).
On or after the First Principal Monthly Allocation Date, an amount equal
to the related Accelerated Principal Distribution Amount will be also be
allocated or distributed to Certificateholders in addition to the amounts set
forth above. Any Accelerated Principal Distribution Amount will be allocated
or distributed to the Class A Certificateholders sequentially, until the
related Class Certificate Balances thereof have been paid in full (or amounts
sufficient to pay them in full have been deposited into the
Certificateholders' Account), and thereafter the Class B Percentage of any
remaining amount will be allocated or distributed
On each Monthly Allocation Date that coincides with a Certificate Payment
Date on which a semiannual interest payment is due with respect to any Class
of Certificates or with a Targeted Maturity Date, the Trustee will make the
following distributions from amounts on deposit in the Certificateholders'
Account (whether from Collections or from net investment earnings, but in
each case only to the extent allocable for the following purposes) and from
amounts available as Maturity Advances (to the extent amounts distributed as
described above and from the Certificateholders' Account are insufficient
therefor, and only with respect to the Class A Certificates);
(1) to the Class A Certificateholders pro rata, based on their
outstanding Certificate Principal Balances as of the last day of the related
Collection Period, an amount equal to the sum of (1) the amount of interest
accrued thereon during the related Interest Period, and (ii) any Interest
Carryover Shortfall, in each case to the extent not already distributed in
respect thereof pursuant to clause A(2) above;
(2) on the related Targeted Maturity Date only, an amount
sufficient to pay the outstanding Certificate Principal Balance of any Class
of Class A Certificates plus any outstanding unreimbursed Certificate
Principal Loss Amounts allocated thereto; and
(3) on or after the date on which the Class A-4 Certificates have
been paid in full, an amount sufficient to reduce the Class B Certificate
Principal Balance to zero.
"Excess Amounts" with respect to any Monthly Allocation Date are the sum
of the Interest Collections distributable to the Transferor pursuant to
clause A(12) and Principal Collections distributable to the Transferor
pursuant to clause B(8) on such Monthly Allocation Date.
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The "Interest Carryover Shortfall" with respect to any Monthly Allocation
Date will equal the excess, if any, of (x) the aggregate amount of interest
accrued on the Certificates of all Classes at the related Certificate Rates
during the period from and including the immediately preceding Monthly
Allocation Date to but excluding the related Monthly Allocation Date, plus
any outstanding Interest Carryover Shortfall from the immediately preceding
Monthly Allocation Date, plus interest on such outstanding Interest Carryover
Shortfall, to the extent permitted by law, at the weighted average of the
Certificate Rates on the Certificates for such period, over (y) the sum of
the amount of interest allocated to the Certificates and deposited in the
Certificateholders' Account and/or distributed to Certificateholders in
respect of interest on such Monthly Allocation Date plus net investment
earnings on amounts on deposit in the Certificateholders' Account as of the
preceding Monthly Allocation Date during the period from such date through
the current Monthly Allocation Date.
The "Principal Carryover Shortfall" with respect to any Monthly
Allocation Date on or prior to that on which (a) the Class B Certificates are
paid in full or (b) the aggregate of amounts allocated in respect of
principal of the Certificates then on deposit in the Certificateholders'
Account equals the aggregate principal amount of all Certificates outstanding
on such Monthly Allocation Date will be an amount equal the excess of (i) the
Investors' Principal Allocation plus any outstanding Principal Carryover
Shortfall over (ii) the amount actually allocated in respect of principal of
the Certificates and deposited into the Certificateholders' Account or
distributed to Certificateholders in respect of principal on such Monthly
Allocation Date.
The "Investors' Principal Allocation" with respect to any Monthly
Allocation Date will be an amount equal to (i) the Investor Percentage of
(a) the amount of scheduled payments due during the related Collection Period
and allocable to principal (giving effect to the discounting described
herein) plus (b) the aggregate amount of the portion allocable to principal
of all prepayments in full received during such Collection Period, plus (c)
an amount equal to the portion of Loss Amounts with respect to the related
Collection Period allocable to principal, less (ii) the amount of Principal
Collections used to reimburse Maturity Advances on such Monthly Allocation
Date.
"Capped Titling Trust Administrative Expenses" with respect to any
Monthly Allocation Date will equal one twelfth of the aggregate amounts
sufficient to pay specified administrative costs and expenses of the Titling
Trust that are allocable to the SUBI Interest up to but not exceeding $- in
any calendar year. "Capped Trust Administrative Expenses" will equal the
amounts sufficient to pay specified administrative costs and expenses
associated with the Certificates such as the Trustee's compensation, the
reasonable fees and disbursements of the Transferor's accountants and
attorneys up to but not exceeding $- in any calendar year (or $- in a
calendar year in which an Early Amortization Event occurs with respect to
which the Trustee sells or otherwise disposes of the SUBI Interest).
"Capped Contingent and Excess Liability Premiums" with respect to any
Monthly Allocation Date will equal the amounts sufficient to pay or reserve
for payment one-twelfth of the portion of the annual premium payable on the
Contingent and Excess Liability Insurance Policies allocable to the SUBI
Interest, up to but not exceeding $- in any calendar year.
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A "Certificate Principal Loss Amount" with respect to any Monthly
Allocation Date will equal the sum of all Loss Amounts allocated to each
Class of Certificateholders and will represent a loss of principal in
respect of Loss Amounts allocable to the Investor Interest and will
arise when amounts on deposit in the Reserve Fund available to cover
Loss Amounts, Transferor Amounts, amounts otherwise payable in respect
of principal to the Class B Certificateholders and the amount of
Investor Percentage of Interest Collections available to cover such Loss
Amounts are not sufficient to cover such loss. As described under
"Description of the Certificates--General", any Certificate Principal
Loss Amounts allocable to a Class of Class A Certificates which are not
reimbursed as provided herein will reduce the Certificate Balance of
such Class of Class A Certificates.
The amount of funds to be withdrawn from the Reserve Fund on a
Monthly Allocation Date and applied to payments to be made as described
above will equal the lesser of (i) the amount on deposit in the Reserve
Fund on the related Deposit Date and (ii) the amount, if any, by which
(a) the full amount allocable or distributable to the Certificateholders
on such Monthly Allocation Date in respect of current or overdue
interest or Loss Amounts allocable thereto pursuant to the foregoing
exceeds (b) the Investor Percentage of Collections allocable to the SUBI
Interest for the related Collection Period. SEE "Summary--Assets of the
Trust--The Reserve Fund" and "Assets of the Trust--The Accounts;
Collections--The Reserve Fund".
REVOLVING PERIOD
No principal will be allocable or distributable on the
Certificates until the First Principal Monthly Allocation Date. On each
Transfer Date, the Servicer will identify lease contracts and the
related leased vehicles of the Titling Trust that meet the eligibility
criteria described under "The Contracts" and are not evidenced by the
SUBI or any Other SUBI and, on behalf of the Titling Trustee, will
allocate lease contracts and related leased vehicles having an aggregate
Discounted Principal Balance as of the related Transfer Date
approximately equal to, but not greater than, all Principal Collections
collected or received since the Cutoff Date (including Loss Amounts
otherwise reimbursable to the Certificateholders) that have not yet been
reinvested. Upon such allocation, the related lease contracts and
leased vehicles will become Subsequent Contracts and Subsequent Leased
Vehicles and accordingly will become SUBI Assets. No partial interest
in lease contracts (and the related leased vehicles) will be so
allocated. Coincident with such allocation, the Servicer, acting on
behalf of the Titling Trustee, will transfer from the SUBI Collection
Account (or from its own funds if the Servicer is not then subject to
the requirement to make deposits therein prior to the Deposit Date) an
amount of unreinvested Principal Collections and reimbursed Loss Amounts
equal to the aggregate Discounted Principal Balance of such Subsequent
Contracts to an account maintained by the Titling Trustee to hold
collections with respect to the Titling Trust Assets that are not SUBI
Assets.
Principal Collections (including Loss Amounts otherwise reimbursable
to the Certificateholders) not so reinvested may be reinvested in additional
Subsequent Contracts and Subsequent Leased Vehicles on one or more subsequent
Transfer Dates prior to the end of the Revolving Period. During the
Revolving Period, if the Servicer determines on the last day of any calendar
month that the amount of Principal Collections that have not been reinvested
in Subsequent Contracts and Subsequent Leased Vehicles as of the last day of
the preceding calendar month exceeds $-, an Early Amortization Event will
occur, the Revolving Period will terminate and all unreinvested Principal
Collections and reimbursed Loss Amounts will be ALLOCATED OR distributed as
principal to
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the Trust and then to Certificateholders on succeeding Certificate Payment
Dates to the extent and as described above.
AMORTIZATION PERIOD. On each Monthly Allocation Date beginning
with the First Principal Monthly Allocation Date and ending on the
Monthly Allocation Date on which the Class A-4 Certificates have been
paid in full (or monies sufficient to pay the Class Certificate Balances
of the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates in
full have been allocated as principal of the Certificates and deposited
into the Certificateholders' Account), the Trustee will allocate an
amount equal to the Investor Percentage of all Principal Collections
collected or received in respect of the related Collection Period
allocable to the Investor Interest as principal to the Class A-1, Class
A-2, Class A-3 and Class A-4 Certificateholders sequentially, in that
order, and thereafter any remaining Principal Collections will be
allocated or distributed as principal to the Class B Certificateholders.
The Trustee will also allocate to Class A Certificateholders on the
First Principal Monthly Allocation Date, in the same order of priority,
the Class A Percentage of the Investor Percentage of the sum of (i) any
Principal Collections and reimbursed Loss Amounts allocable to the SUBI
Interest that were not reinvested in Subsequent Contracts and Subsequent
Leased Vehicles as of the end of the Revolving Period and (ii) any
Unallocated Principal Collections on deposit in the SUBI Collection
Account at the time the Amortization Period commences. The aggregate
distributions of principal to the Class A Certificateholders will not
exceed the Initial Certificate Balances of the related Class of
Certificates.
Payments of interest on each Class of Class A Certificates will be
made, to the extent funds are allocated and are available therefor as
described above, on each Monthly Allocation Date in March and September,
commencing in March 1998, as well as on the Targeted Maturity Date and
any subsequent Certificate Payment Date. After the occurrence of any
Monthly Payment Event, payments of interest on each Class of Class A
Certificates will be made monthly, to the extent funds are allocated and
are available therefor as described above, on each Monthly Allocation
Date (and each such subsequent Monthly Allocation Date will be a
Certificate Payment Date).
Principal of each Class of Class A Certificates will be payable in
full on the related Targeted Maturity Date. If Principal Collections
(including investment earnings with respect thereto) during the
Collection Periods preceding such date (but commencing after the end of
the Revolving Period) that are allocable to such Class of Class A
Certificates, together with amounts allocated thereto through
subordination, from amounts on deposit in the Reserve Fund or from any
related Maturity Advance, are insufficient to make such payment in full,
all such amounts available will be paid to the related
Certificateholders on the related Targeted Maturity Date and,
thereafter, payment of all Principal Collections in respect of the
related Collection Period allocable to the Investor Interest, together
with interest thereon at the related Certificate Rate will be paid on
each related Certificate Payment Date on a monthly basis until such
Class of Class A Certificates has been paid in full. After the
occurrence of any Monthly Payment Event, payments of principal of each
Class of Class A Certificates will be made monthly (sequentially, if more than
one Targeted Maturity Date has occurred), to the extent funds
are allocated and are available therefor as described above, on each
Certificate Payment Date (and each such subsequent Monthly Allocation
Date will be a Certificate Payment Date).
Loss Amounts will not be allocated or reimbursed to any
Certificateholder once the related Certificates have been paid in full.
In addition, the Investor Percentage of the net proceeds of any sale or
other disposition of the SUBI Interest, the SUBI Certificate or other
property of the Trust, to the extent such net proceeds constitute
Principal Collections, will be distributed on a pro rata basis, first,
to the Class A Certificateholders based on their respective Class
Certificate Balances until the Class A Certificates have been paid in
full and, second, to the Class B Certificateholders.
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INVESTMENT OF AVAILABLE AMOUNTS
So long as a Monthly Payment Event has not occurred, and so long as
the Certificates of any Class are outstanding, amounts allocated to
interest on or principal of the Certificates of such Class on a Monthly
Allocation Date that is not a relevant Certificate Payment Date will be
deposited into the Certificateholders' Account on such Monthly
Allocation Date and invested in Permitted Investments maturing prior to
the succeeding relevant Certificate Payment Date or Targeted Maturity
Date, as appropriate. Such Permitted Investments are expected to include
one or more TMCC Demand Notes. TMCC Demand Notes will be unsecured
general obligations of TMCC and will rank pari passu with all other
unsecured and unsubordinated indebtedness of TMCC outstanding from time
to time. Each TMCC Demand Note will bear a rate of interest
satisfactory to the Rating Agencies and will mature on the earlier of
the Deposit Date prior to the next succeeding Certificate Payment Date
or Targeted Maturity Date, as the case may be, and the Certificate
Payment Date following the occurrence of a Monthly Payment Event.
Pursuant to the terms of the TMCC Demand Notes, the Trustee will be
entitled to demand payment of all or any portion of the principal amount
of the TMCC Demand Notes, together with accrued interest thereon, on any
Deposit Date.
EARLY AMORTIZATION EVENTS
As described above, the Amortization Period will commence on the
earlier of the Amortization Date or the occurrence of an Early
Amortization Event and continue until the earlier of the payment in full
of the Certificates and the termination of the Trust. An "Early
Amortization Event" will mean any of the following events:
(i) failure by the Servicer (a) to make any payment or
deposit required with respect to the SUBI, the SUBI Interest or the
Certificates under the Agreement or the Servicing Agreement, within five
Business Days after the date the payment or deposit is required to be
made, or (b) to deliver a Servicer's Certificate within ten Business
Days after any Determination Date which failure continues unremedied for
three Business Days;
(ii) failure by the Transferor or the Servicer duly to observe
or perform in any material respect any other of its covenants or
agreements in the Agreement (other than those described in clause (i)
above) or the Servicing Agreement, which failure materially and
adversely affects the rights of holders of the SUBI Interest or
Certificateholders and which continues unremedied for 60 days after the
giving of written notice of such failure (a) to the Transferor or the
Servicer, as the case may be, by the Trustee or the Titling Trustee or
(b) to the Transferor or the Servicer, as the case may be, and to the
Trustee by holders of Certificates evidencing not less than 25% of the
Voting Interests of the Class A Certificates and the Class B
Certificates, voting together as a single class;
(iii) failure to cure the inaccuracy of certain
representations, warranties and certificates of the Transferor or the
Servicer in the Agreement or the Servicing Agreement, which failure
materially and adversely affects the rights of holders of the Transferor
or Certificateholders and which continues uncured for 60 days after
notice is given as described in clause (ii) above; provided that an
Early Amortization Event pursuant to this subparagraph (iii) will not be
deemed to occur if a related Reallocation Payment is due in connection
with such breach and has been paid by the Servicer in accordance with
the Servicing Agreement;
(iv) the occurrence of certain Insolvency Events relating to
the Transferor;
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(v) creation of any lien or encumbrance not otherwise
permitted by the Agreement or the Servicing Agreement on the SUBI
Assets, which lien or encumbrance is not released within 60 days of its
creation;
(vi) the Transferor, the Trust or the Titling Trust becomes
subject to registration as an "investment company" for purposes of the
Investment Company Act of 1940, as amended;
(vii) if the Servicer determines on the last day of any
calendar month that the amount of Principal Collections and reimbursed
Loss Amounts that have not been reinvested in Subsequent Contracts and
Subsequent Leased Vehicles as of the last day of the preceding
Collection Period exceeds $-;
(viii) an Event of Servicing Termination occurs; or
(ix) if on any Monthly Allocation Date the aggregate amount
withdrawn from the Reserve Fund and deposited into the SUBI Collection
Account on or prior to such Monthly Allocation Date (without giving
effect to any deposits into the Reserve Fund) exceeds $- (i.e., -% of
the Aggregate Net Investment Value as of the Cutoff Date).
If, because of the occurrence of an Early Amortization Event, the
Amortization Period begins earlier than the Amortization Date, Class A
Certificateholders may (and if a Monthly Payment Event occurs, will)
begin receiving distributions of principal earlier than they would
otherwise have under the Agreement, which may shorten the final maturity
and the weighted average life of any such Class of Certificates.
In addition, if an Insolvency Event with respect to the Transferor
were to occur during the Revolving Period, the Agreement will require
the Transferor promptly to give notice of such Insolvency Event to the
Trustee. Pursuant to the Agreement, within 15 days of such notice, the
Trustee may, and upon receipt of written instructions from holders of
Certificates evidencing Voting Interests of not less than 51% of the
Class A Certificates (voting together as a single class) or 51% of the
Class A Certificates and Class B Certificates (voting together as a
single class) shall, publish a notice of the Insolvency Event stating
that the Trustee intends to sell or dispose of the SUBI Interest and the
SUBI Certificate and the other property of the Trust in a commercially
reasonable manner. Following such publication, unless otherwise
prohibited by applicable law, the Trustee will sell or otherwise dispose
of the SUBI Interest, the SUBI Certificate and such other property in a
commercially reasonable manner and on commercially reasonable terms;
provided that such sale shall not be made without the consent of all the
Certificateholders if a net loss would be realized as a result of such
sale. The net sale or disposition proceeds of the SUBI Interest, the
SUBI Certificate and such other property will be deposited into the SUBI
Collection Account and treated as Collections on or in respect of the
SUBI Assets. The interest portion of the Investor Percentage of such
proceeds will be distributed to the Certificateholders in the priority
provided for herein, and the principal portion of the Investor
Percentage of such proceeds will be distributed first, on a pro rata
basis, to the Class A Certificateholders based on their respective Class
Certificate Balances until each such Class of Certificates has been
paid in full, and second, to the Class B Certificateholders. If such
proceeds, together with all amounts on deposit in the Accounts and the
Reserve Fund, amounts otherwise payable to the Transferor in respect of
the Transferor Interest and certain amounts otherwise distributable in
respect of the Class B Certificates, are insufficient to pay the
Certificate Balance of a Class of Class A Certificates, any unreimbursed
Certificate Principal Loss Amount in respect of such Class of Class A
Certificates and any accrued and unpaid interest thereon in full, the
related Class A Certificateholders will suffer a corresponding loss.
The "Voting Interests" of the (i) Class A Certificates will be
allocated among the Class A Certificateholders or Certificate Owners, as
the case may be, in accordance with their respective Class Certificate
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Balances, and (ii) Class B Certificates will be allocated among the
Class B Certificateholders in accordance with the Class B Certificate
Balance represented thereby. Notwithstanding the foregoing, in certain
circumstances, any Class A Certificates or Class B Certificates held or
beneficially owned by the Transferor, TMCC or any of their respective
affiliates shall be excluded from such determination.
STATEMENTS TO CERTIFICATEHOLDERS
On each Monthly Allocation Date, the Trustee will include with each
distribution to each Certificateholder a statement, setting forth with
respect to such Monthly Allocation Date or the related Collection
Period, among other things, the following:
(i) the Investor Percentage and Transferor Percentage in
effect with respect to the related Collection Period;
(ii) the amount being allocated or distributed to each Class
of Certificateholders (the "Certificate Distribution Amount");
(iii) the amount of the Certificate Distribution Amount
allocable to interest on and principal of each Class of Certificates,
separately identifying any Maturity Advances;
(iv) the amount of the Certificate Distribution Amount
allocable to any Interest Carryover Shortfall;
(v) the amount, if any, of any unpaid Interest Carryover
hortfall, after giving effect to distribution of the Certificate
Distribution Amount;
(vi) the Certificate Balance, the Class Certificate Balance of
each Class and the Certificate Factor with respect to each Class
with respect to each Class, in each case as of such Monthly Allocation
Date and after giving effect to the allocation and/or distribution of the
Certificate Distribution Amount;
(vii) the aggregate amount, if any, of the reimbursement
of Loss Amounts included in distribution of the Certificate Distribution
Amount and the amount thereof allocated to each Class of
Certificateholders;
(viii) the amount of the Certificate Distribution Amount
allocable to reimbursement of previous Certificate Principal Loss
Amounts for each Class, in each case together with the amount of accrued
interest thereon included in such distribution;
(ix) the amount, if any, of the aggregate unreimbursed
Certificate Principal Loss Amounts for each Class, after giving effect
to distribution of the Certificate Distribution Amount;
(x) the amount of any unreimbursed Certificate Principal
Carryover Shortfall;
(xi) the Investor Percentage of the Servicing Fee;
(xii) the amount of any Required Amount included in the
Certificate Distribution Amount, the balance on deposit in the Reserve
Fund on such Monthly Allocation Date, after giving effect to
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withdrawals therefrom and deposits thereto on such Monthly Allocation
Date, the change in such balance from the immediately preceding Monthly
Allocation Date and the Specified Reserve Fund Balance;
(xiii) the amount of Transferor Amounts, if any, included
in the Certificate Distribution Amount;
(xiv) the Aggregate Net Investment Value as of the end of
such Collection Period;
(xv) the aggregate amount of Payments Ahead received by the
Servicer and being held thereby or on deposit in the SUBI Collection
Account in respect of future Collection Periods and the change in such
amount from the immediately preceding Monthly Allocation Date;
(xvi) the amount of Advances made in respect of such
Collection Period and the amount of unreimbursed Advances on such
Monthly Allocation Date; and
(xvii) certain information used in determining the Specified
Reserve Fund Balance.
Copies of such statements may be obtained by Certificateholders or
Certificate Owners by a request in writing addressed to the Trustee. In
addition, within the prescribed period of time for tax reporting purposes
after the end of each calendar year during the term of the Agreement, the
Trustee will mail to each person who at any time during such calendar year
shall have been a Class A or Class B Certificateholder or a Certificate
Owner, a statement containing the sum of the amounts described in clauses
(ii) through (xi) above for the purpose of preparing such person's federal
income tax return.
TERMINATION OF THE TRUST; RETIREMENT OF THE CERTIFICATES
The respective obligations and responsibilities of the Transferor
and the Trustee created by the Agreement will terminate upon the
earliest to occur of (i) the maturity, sale or other liquidation, as the
case may be, of the last outstanding Contract and Leased Vehicle
evidenced by the SUBI and the distribution of all proceeds thereof,
together with all amounts on deposit in the Accounts and the Reserve
Fund, in the manner to be prescribed in the Agreement, (ii) the day
following the Monthly Allocation Date on which the Certificates have
been paid in full and after which there is no unreimbursed Certificate
Principal Loss Amount or Principal Carryover Shortfall (together with
accrued interest thereon) and (iii) the Transferor's optional repurchase
of the SUBI Certificate as described below. In order to avoid excessive
administrative expenses, the Transferor will be permitted at its option
to purchase the SUBI Certificate from the Trust on any Monthly
Allocation Date if, either before or after giving effect to any payment
of principal required to be made on such Monthly Allocation Date, the
Certificate Balance is less than or equal to 10% of the Initial
Certificate Balance or amounts sufficient to effectively reduce the
Certificate Balance to such amount have been deposited in the Collection
Account on such date. The purchase price will be equal to the greater
of (i) the sum of the Class A Certificate Balance and the Class B
Certificate Balance, in each case plus accrued and unpaid interest
thereon at the related Certificate Rate, plus certain other accrued and
unpaid amounts, if any, due to the Investor Certificateholders or the
Servicer, and (ii) the Aggregate Net Investment Value as of the last day
of the preceding Collection Period. The Trustee will give written
notice of termination of the Trust to each Certificateholder. In
connection with any such termination, except as otherwise provided in
the Agreement, the Transferor will be deemed to relinquish all claims it
may have against the assets of the Trust in respect of Transferor
Amounts that were not paid to the Transferor.
The final distribution to any Certificateholder will be made only
upon surrender and cancellation of such Certificateholder's Certificate
at an office or agency of the Trustee specified in the notice of
termination.
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PRESCRIPTION
In the event that any Certificateholder shall not surrender its
Certificates for retirement within six months after the date specified in
written notice given by the Trustee of the date for final payment thereof,
the Trustee shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for retirement and receive
the final distribution with respect thereto. If within one year after such
second notice any Certificates shall not have been surrendered, the Trustee
may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Certificateholders concerning surrender of
their Certificates, and the cost thereof shall be paid out of the funds and
other assets that remain subject to this Agreement. Any funds remaining in
the Trust after exhaustion of such remedies shall be distributed by the
Trustee to a charity specified in the Agreement.
BOOK-ENTRY REGISTRATION
Unless and until Definitive Certificates are issued with respect to the
Certificates or any Class of Certificates, each Class of Certificates offered
hereby will be represented by one or more certificates registered in the name
of Cede & Co., as nominee of DTC. Until then, Certificate Owners will hold
beneficial interests in Certificates through DTC (in the United States) or
Cedel Bank or Euroclear (in Europe or Asia) directly if they are participants
of such systems, or indirectly through organizations which are participants
in such systems. All references herein to actions by Certificateholders
shall refer to actions taken by DTC upon instructions from DTC Participants,
and all references herein to distributions, notices, reports and statements
to Certificateholders shall refer to distributions, notices, reports and
statements to Cede & Co., as the registered holder of the Securities, for
distribution to Certificateholders in accordance with DTC procedures. As
such, it is anticipated that the only Certificateholder will be Cede & Co.,
as nominee of DTC. Certificate Owners will not be recognized by the Trustee
as Certificateholders as such term is used in the Agreement or Servicing
Supplement, and Certificate Owners will only be permitted to exercise their
rights as such indirectly through DTC and DTC Participants, as further
described below.
Cedel Bank and Euroclear will hold omnibus positions on behalf of
their participants through customers' securities accounts in their
respective names on the books of their respective Depositaries which in
turn will hold such positions in customers' securities accounts in the
Depositaries' names on the books of DTC.
Transfers between DTC Participants will occur in accordance with
DTC rules. Transfers between Cedel Bank Participants and Euroclear
Participants will occur in accordance with their applicable rules and
operating procedures.
Cross-market transfers between persons holding directly or
indirectly through DTC, on the one hand, and directly or indirectly
through Cedel Bank or Euroclear Participants, on the other, will be
effected in DTC in accordance with DTC rules on behalf of the relevant
international clearing system by its Depositary. However, each such
cross-market transaction will require delivery of instructions to the
relevant international clearing system by the counterparty in such
system in accordance with its rules and procedures and within its
established deadlines. The relevant international clearing system will,
if the transaction meets its settlement requirements, deliver
instructions to its Depositary to take action to effect final settlement
on its behalf by delivering or receiving securities in DTC, and making
or receiving payment in accordance with normal procedures for same-day
funds settlement applicable to DTC. Cedel Bank Participants and
Euroclear Participants may not deliver instructions directly to the
Depositaries.
Because of time-zone differences, credits of Certificates received
in Cedel Bank or Euroclear as a result of a transaction with a DTC
Participant will be made during subsequent securities settlement
processing and dated
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the Business Day following the DTC settlement date.
Such credits or any transactions in such Certificates settled during
such processing will be reported to the relevant Euroclear or Cedel Bank
Participant on such Business Day. Cash received in Cedel Bank or
Euroclear as a result of sales of Certificates by or through a Cedel
Bank Participant or a Euroclear Participant to a DTC Participant will be
received with value on the DTC settlement date but will be available in
the relevant Cedel Bank or Euroclear cash account only as of the
Business Day following settlement in DTC. As used in this paragraph,
"Business Day" means a Business Day on which Cedel Bank and Euroclear
are also transacting settlements in securities.
DTC is a limited purpose trust company organized under the laws of
the State of New York, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York UCC and a
"clearing agency" registered pursuant to Section 17A of the Exchange
Act. DTC was created to hold securities for its participating members
("DTC Participants") and to facilitate the clearance and settlement of
securities transactions between DTC Participants through electronic
book-entries, thereby eliminating the need for physical movement of
certificates. DTC Participants include securities brokers and dealers,
banks, trust companies and clearing corporations which may include
underwriters, agents or dealers with respect to the Certificates of any
class or series. Indirect access to the DTC system also is available to
others such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a DTC Participant,
either directly or indirectly (the "Indirect DTC Participants"). The
rules applicable to DTC and DTC Participants are on file with the
Commission.
Certificate Owners that are not DTC Participants or Indirect DTC
Participants but desire to purchase, sell or otherwise transfer
ownership of, or other interests in, Certificates may do so only through
DTC Participants and Indirect DTC Participants. DTC Participants will
receive a credit for the Certificates on DTC's records. The ownership
interest of each Certificate Owner will in turn be recorded on
respective records of the DTC Participants and Indirect DTC
Participants. Certificate Owners will not receive written confirmation
from DTC of their purchase, but Certificate Owners are expected to
receive written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the DTC Participant
or Indirect DTC Participant through which the Certificate Owner entered
into the transaction. Transfers of ownership interests in the
Certificates of any Class will be accomplished by entries made on the
books of DTC Participants acting on behalf of Certificate Owners.
The deposit of Certificates with DTC and their registration in the
name of Cede & Co. will effect no change in Certificate ownership. DTC
will have no knowledge of the identities of Certificate Owners and its
records will reflect only the identity of the DTC Participants to whose
accounts such Certificates are credited, which may or may not be the
Certificate Owners. DTC Participants and Indirect DTC Participants will
remain responsible for keeping account of their holdings on behalf of
their customers. While the Certificates are held in book-entry form,
Certificate Owners will not have access to the list of Certificate
Owners, which may impede the ability of Certificate Owners to
communicate with each other.
Conveyance of notices and other communications by DTC to DTC
Participants, by DTC Participants to Indirect DTC Participants and by
DTC Participants and Indirect DTC Participants to Certificate Owners
will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Under the rules, regulations and procedures creating and affecting DTC
and its operations, DTC is required to make book-entry transfers among DTC
Participants on whose behalf it acts with respect to the Certificates and is
required to receive and transmit distributions of principal of and interest
on the Certificates. DTC Participants and Indirect DTC Participants with
which Certificate Owners have accounts with respect to the Certificates
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similarly are required to make book-entry transfers and receive and transmit
such payments on behalf of their respective Certificate Owners.
DTC's practice is to credit DTC Participants' accounts on each
Certificate Payment Date in accordance with their respective holdings
shown on its records, unless DTC has reason to believe that it will not
receive payment on such Certificate Payment Date. Payments by DTC
Participants and Indirect DTC Participants to Certificate Owners will be
governed by standing instructions and customary practices, as is the
case with securities held for the accounts of customers in bearer form
or registered in "street name", and will be the responsibility of such
DTC Participant and not of DTC, the Trustee or Titling Trustee (or any
paying agent appointed thereby), the Transferor or the Servicer, subject
to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal of and interest on each class of
Certificates to DTC will be the responsibility of the Trustee,
disbursement of such payments to DTC Participants will be the
responsibility of DTC and disbursement of such payments to the related
Certificate Owners will be the responsibility of DTC Participants and
Indirect DTC Participants. As a result, under the book-entry format,
Certificate Owners may experience some delay in their receipt of
payments. DTC will forward such payments to its DTC Participants which
thereafter will forward them to Indirect DTC Participants or Certificate
Owners.
The ability of a Certificate Owner to pledge Certificates to
persons or entities that do not participate in the DTC system, or
otherwise take actions with respect to such Certificates, may be limited
due to the lack of a physical certificate for such Certificates.
DTC has advised the Transferor that it will take any action
permitted to be taken by a Certificateholder only at the direction of
one or more DTC Participants to whose account with DTC the Certificates
are credited. Additionally, DTC has advised the Transferor that it will
take such actions with respect to specified percentages of the
Certificateholders' interest only at the direction of and on behalf of
DTC Participants whose holdings include undivided interests that satisfy
such specified percentages. DTC may take conflicting actions with
respect to other undivided interests to the extent that such actions are
taken on behalf of DTC Participants whose holdings include such
undivided interests.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Certificates. Under its usual procedures, DTC will mail an "Omnibus
Proxy" to the Trustee as soon as possible after any applicable Record
Date for such a consent or vote. The Omnibus Proxy will assign Cede &
Co.'s consenting or voting rights to those DTC Participants to whose
accounts the related Certificates are credited on that record date
(which record date will be identified in a listing attached to the
Omnibus Proxy).
Cedel Bank is incorporated under the laws of Luxembourg as a professional
depository. Cedel Bank holds securities for its participating organizations
("Cedel Bank Participants") and facilitates the clearance and settlement of
securities transactions between Cedel Bank Participants through electronic
book entry changes in accounts of Cedel Bank Participants, thereby
eliminating the need for physical movement of certificates. Transactions may
be settled in Cedel Bank in any of 28 currencies, including United States
dollars. Cedel Bank provides to Cedel Bank Participants, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing. Cedel
Bank interfaces with domestic markets in several countries. As a professional
depository, Cedel Bank is subject to regulation by the Luxembourg Monetary
Institute. Cedel Bank Participants are recognized financial institutions
around the world including underwriters, securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations
and may include any underwriters, agents or dealers with respect to any Class
A Certificates offered hereby. Indirect access to Cedel Bank is also
available to others, such as banks,
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brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Cedel Bank Participant, either directly or
indirectly.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ("Euroclear Participants") and to
clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby
eliminating the need for physical movement of certificates and any risk
from lack of simultaneous transfers of securities and cash.
Transactions may now be settled in any of 27 currencies, including
United States dollars. The Euroclear System includes various other
services, including securities lending and borrowing, and interfaces
with domestic markets in several countries generally similar to the
arrangements for cross-market transfers with DTC described above. The
Euroclear System is operated by Morgan Guaranty Trust Company of New
York, Brussels, Belgium office (the "Euroclear Operator"), under
contract with Euroclear Clearance System S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the
Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator, not
the Cooperative. The Cooperative establishes policy for the Euroclear
System on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers
and other professional financial intermediaries and may include any
underwriters, agents or dealers with respect to any Class A Certificates
offered hereby. Indirect access to the Euroclear System is also
available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or
indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member Bank of the Federal Reserve System. As
such, it is regulated and examined by the Board of Governors of the
Federal Reserve System and the New York State Banking Department, as
well as the Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of
Euroclear and the related Operating Procedures of the Euroclear System
and applicable Belgian law (collectively, the "Terms and Conditions").
The Terms and Conditions govern transfers of securities and cash within
the Euroclear System, withdrawals of securities and cash from the
Euroclear System and receipts of payments with respect to securities in
the Euroclear System. All securities in the Euroclear System are held
on a fungible basis without attribution of specific certificates to
specific securities clearance accounts. The Euroclear Operator acts
under the Terms and Conditions only on behalf of Euroclear Participants,
and has no record of or relationship with persons holding through
Euroclear Participants.
Distributions with respect to Certificates held through Cedel Bank
or Euroclear will be credited to the cash accounts of Cedel Bank
Participants or Euroclear Participants in accordance with the relevant
system's rules and procedures, to the extent received by its Depositary.
Such distributions will be subject to tax withholding in accordance with
relevant United States tax laws and regulations. SEE "Certain Income Tax
Considerations" and "Annex I--Global Clearance, Settlement and Tax
Documentation Procedures--Certain U.S. Federal Tax Documentation
Requirements". Cedel Bank or the Euroclear Operator, as the case may
be, will take any other action permitted to be taken by a
Certificateholder on behalf of a Cedel Bank Participant or Euroclear
Participant only in accordance with its relevant rules and procedures
and subject to its Depositary's ability to effect such actions on its
behalf through DTC.
Although DTC, Cedel Bank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Certificates among
participants of DTC, Cedel Bank and Euroclear, they are under no
obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time.
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DEFINITIVE CERTIFICATES
Definitive Certificates will be issued to Certificate Owners rather than
to DTC only if (i) DTC is no longer willing or able to discharge its
responsibilities with respect to the Class A Certificates, and neither the
Trustee nor the Transferor is able to locate a qualified successor, (ii) the
Transferor, at its option, elects to terminate the book-entry system through
DTC or (iii) after an Early Amortization Event, Certificate Owners
representing in the aggregate not less than 51% of the Voting Interests of
the Class A Certificates (voting together as a single class) advise the
Trustee through DTC or its successor in writing that the continuation of a
book-entry system through DTC or its successor is no longer in the best
interest of Certificate Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Trustee will be required to notify all Certificate
Owners, through Participants, of the availability through DTC of Definitive
Certificates. Upon surrender by DTC of the certificates representing the
related Class A Certificates and the receipt of instructions for
re-registration, the Trustee will issue Definitive Certificates to
Certificate Owners, who thereupon will become Certificateholders for all
purposes of the Agreement.
Payments on the related Class A Certificates will thereafter be made by
the Trustee directly to holders of such Class A Certificates in accordance
with the procedures set forth herein and to be set forth in the Agreement.
Interest payments and any principal payments on the Definitive Certificates
on each Certificate Payment Date will be made to holders in whose names the
Definitive Certificates were registered at the close of business on the
related Record Date. Payments will be made by check mailed to the address of
such holders as they appear on the Certificate Register or, under the
circumstances to be provided by the Agreement, by wire transfer to a bank or
depository institution located in the United States and having appropriate
facilities therefor. The final payment on any Class A Certificates, however,
will be made only upon presentation and surrender of such Definitive
Certificates or global certificates at the office or agency specified in the
notice of final distribution to Class A Certificateholders.
Definitive Certificates will be transferable and exchangeable at the
offices of the Trustee or the Certificate Registrar to be set forth in the
Agreement. No service charge will be imposed for any registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge imposed in connection
therewith.
ASSETS OF THE TRUST
GENERAL
The property of the Trust will primarily consist of the SUBI
Interest evidenced by the SUBI Certificate. The property of the Trust
will also include such amounts as from time to time are held in the SUBI
Collection Account. The Trust will also have the collateral benefit of
the Contingent and Excess Liability Insurance Policies described below
(and indemnification by TMCC of the related deductibles) and the
Trustee's rights as a third-party beneficiary of the Servicing
Supplement and SUBI Supplement.
As registered holder of the SUBI Certificate, the Trustee will be
deemed to have ownership of the SUBI Certificate and, through such
ownership, an indirect beneficial ownership interest in the Contracts
and Leased Vehicles. If a court of competent jurisdiction
recharacterizes the transfer of the SUBI Interest to the Trust as a
transfer for security, the Trustee may instead be deemed to have a
perfected security interest in the SUBI Certificate, the Contracts and
Contract Rights susceptible of perfection under the UCC, but in no event
will the
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Trustee be deemed to have a perfected security interest in the
Leased Vehicles. SEE "Material Legal Aspects of the Titling
Trust--Structural Considerations".
THE ACCOUNTS; COLLECTIONS
THE SUBI COLLECTION ACCOUNT
On or prior to the Closing Date, the Titling Trustee will establish
an account maintained at the Trust Agent in the name of the Titling
Trustee as the SUBI Collection Account (the "SUBI Collection Account"
and, together with the Certificateholders' Account and the Reserve Fund,
the "Accounts") as a trust account for the exclusive benefit of the
holders of interests in the SUBI into which collections on or in respect
of the Contracts and the Leased Vehicles with respect to each Collection
Period generally will be deposited on the Deposit Date.
DEPOSITS INTO THE SUBI COLLECTION ACCOUNT. Deposits into the SUBI
Collection Account will include, but will not be limited to, the
following payments made in respect of the SUBI Assets: (i) Monthly
Payments; (ii) early payments in full of the Discounted Principal
Balance of a Contract, including an amount equal to the Residual Value
of the related Leased Vehicle (each, a "Prepayment"); (iii) Matured
Leased Vehicle Proceeds, Repossessed Vehicle Proceeds and other
Liquidation Proceeds; (iv) Payments Ahead; (v) Advances made by the
Servicer; and (vi) Reallocation Payments by TMCC (together with, under
certain circumstances during the Amortization Period, Reallocation
Deposit Amounts) in respect of certain Contracts as to which an uncured
breach of certain representations and warranties or certain servicing
covenants has occurred. Pursuant to the Agreement and the Servicing
Agreement, in the event that TMCC, as Servicer, ceases to satisfy
certain tests with respect to its credit ratings, the Servicer will
thereafter be required to commence depositing Interest and Principal
Collections and other proceeds in respect of the Contracts and Leased
Vehicles into the SUBI Collection Account within two Business Days of
receipt thereof, and will cease to have the right, described below, to
make such deposits net of amounts payable, reimbursable or distributable
to TMCC, as Servicer. SEE "Assets of the Trust--The Accounts;
Collections". Deposits also will be made to the SUBI Collection Account
from, among other sources, (i) monies on deposit in the Reserve Fund and
(ii) the Transferor, in the event it purchases the SUBI Certificate when
the Certificate Balance is less than or equal to 10% of the Initial
Certificate Balance or amounts sufficient to effectively reduce the
Certificate Balance to such amount have been deposited in the Collection
Account on such date.
"Net Insurance Proceeds" will include recoveries pursuant to the
Contingent and Excess Liability Insurance Policies and the
comprehensive, collision, public liability and property damage insurance
policy required to be obtained and maintained by the lessee pursuant to
each Contract (or payment by TMCC of the deductibles as to which it has
indemnified the Trust as described in "Additional Document
Provisions--The Servicing Agreement--Insurance on Leased Vehicles"), and
amounts paid by any insurer under any other insurance policies relating
to the Contracts, the related lessees or the Leased Vehicles (excluding
any Residual Value insurance policy the proceeds of which may be a SUBI
Asset not transferred by the Transferor to the Trust), in each case net
of certain sums applied to the repair of the related Leased Vehicles.
NET DEPOSITS. So long as TMCC is the Servicer, the Servicer will
be permitted to deposit in the SUBI Collection Account only the net
amount distributable to the Trustee, as holder of the SUBI Certificate,
and the Transferor on the related Deposit Date. The Servicer, however,
will account to the Trustee, the Titling Trustee, the Certificateholders
and the Transferor as if all of the deposits and distributions described
herein were made individually. This "net deposit" provision will be for
the administrative convenience of the parties involved and will not
affect amounts required to be deposited into the Accounts.
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CERTAIN WITHDRAWALS FROM THE SUBI COLLECTION ACCOUNT. To the
extent not already netted against Collections, Matured Leased Vehicle
Proceeds or Liquidation Proceeds, as the case may be, the Titling
Trustee shall remit to the Servicer, without interest and prior to any
other distribution from the SUBI Collection Account on such date, monies
from the SUBI Collection Account representing (i) unreimbursed Matured
Leased Vehicle Expenses, Repossessed Vehicle Expenses and other
Liquidation Expenses; (ii) delinquent Monthly Payments with respect to
which the Servicer has made an unreimbursed Advance; and (iii) an amount
equal to any unreimbursed Advances that the Servicer has concluded are
Nonrecoverable Advances. SEE "Additional Document Provisions--The
Servicing Agreement--Advances" regarding "Nonrecoverable Advances".
THE CERTIFICATEHOLDERS' ACCOUNT
On or prior to the Closing Date, the Trustee will establish an
account maintained at the Trust Agent in the name of the Trustee as the
Certificateholders' account (the "Certificateholders' Account") as a
trust account for the exclusive benefit of the Certificateholders into
which the Investor Percentage of Interest Collections and Principal
Collections will be deposited on each monthly Allocation Date to the
extent allocated for distribution on subsequent Certificate Payment
Dates in the amounts described above under "Description of the
Certificates--Allocations and Distributions". Amounts so deposited will
be invested in Permitted Investments (which are expected to include one
or more TMCC Demand Notes) meeting the criteria and bearing a rate of
interest satisfactory to the Rating Agencies that mature on or before
the next relevant Certificate Payment Date. Upon the occurrence of a
Monthly Payment Event, however, no further deposits will be made to the
Certificateholders' Account, but instead all such investments will be
liquidated and amounts on deposit therein will be withdrawn and
deposited into the Collection Account on or before the next Deposit Date
for distribution to Certificateholders on the next Monthly Allocation
Date (which will be a relevant certificate payment date with respect to
interest on all Classes of Certificates and with respect to principal on
the outstanding Classes of Certificates to the extent described above
under "Description of the Certificates--Allocations and Distributions").
Thereafter, Collections will simply be deposited into the Collection
Account for distribution to Certificateholders on a monthly basis on
each Certificate Payment Date.
THE RESERVE FUND
On or prior to the Closing Date, pursuant to the Agreement, the
Transferor will establish the Reserve Fund as a trust account with the
Trustee for the benefit of the Certificateholders and the Transferor.
The Reserve Fund will not be an asset of the Trust. On each Monthly
Allocation Date, to the extent described herein, monies on deposit in
the Reserve Fund will be applied to pay certain shortfalls in respect of
amounts collected with respect to the related Collection Period. In
addition, to the extent not otherwise required to make any of the
payments described under "Description of the Certificates--Allocations
and Distributions on the Certificates--Allocations and Distributions of
Collections", monies on deposit in the Reserve Fund will be available to
make payments to the Certificateholders should Collections ultimately be
insufficient to reduce the Class A Certificate Balances or the Class B
Certificate Balance to zero.
THE SPECIFIED RESERVE FUND BALANCE. The Reserve Fund will be
created on or prior to the Closing Date with the deposit by the
Transferor of the Initial Deposit. On each Monthly Allocation Date, the
Reserve Fund will be supplemented by certain Collections in excess of
those amounts required to be allocated or distributed to the
Certificateholders and certain monies that otherwise would be
distributed as Transferor Amounts, until the amount on deposit therein
equals the applicable Specified Reserve Fund Balance. Except as
described below, the "Specified Reserve Fund Balance" with respect to
any Monthly Allocation Date will equal $-, except that, if on any
Monthly Allocation Date (i) the average of the Charge-off Rates for the
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three preceding Collection Periods exceeds -% or (ii) the average of the
Delinquency Percentages for the three preceding Collection Periods
exceeds -%, then the Specified Reserve Fund Balance will be an amount
equal to the greater of (a) $- and (b) -% of the outstanding Class
Certificate Balance of each Class of Certificates (after giving effect
to distributions of principal to be made on such Monthly Allocation
Date); provided, however, that the Specified Reserve Fund Balance shall
in no event be more than the sum of the outstanding principal amounts of
each Class of Certificates.
The "Charge-off Rate" with respect to a Collection Period will
equal the Aggregate Net Losses with respect to the Contracts expressed,
on an annualized basis, as a percentage of the average of (i) the
Aggregate Net Investment Value on the last day of the immediately
preceding Collection Period and (ii) the Aggregate Net Investment Value
on the last day of such Collection Period. The "Aggregate Net Losses"
with respect to a Collection Period will equal the Discounted Principal
Balance of all Contracts newly designated during such Collection Period
as Charged-off Contracts minus the sum of (x) Net Liquidation Proceeds
collected during such Collection Period with respect to all Charged-off
Contracts and (y) the portion of amounts subsequently received in
respect of Contracts liquidated in prior Collection Periods specified in
the SUBI Supplement. The "Delinquency Percentage" with respect to a
Collection Period will equal (a) the number of all outstanding Contracts
61 days or more delinquent (after taking into account permitted
Deferrals) as of the last day of such Collection Period, determined in
accordance with the Servicer's normal practices, plus (b) the number of
repossessed Leased Vehicles that have not been liquidated (to the extent
the related Contract is not otherwise reflected in clause (a) above),
expressed as a percentage of the aggregate number of Current Contracts
on the last day of such Collection Period.
A "Current Contract" will be a Contract that is not a Charged-off
Contract, a Liquidated Contract, a Matured Contract or an Additional
Loss Contract. A "Liquidated Contract" will be a Contract that has
been the subject of a Prepayment in full or otherwise has been paid in
full or, in the case of a Charged-off Contract, a Contract as to which
the Servicer has determined that the final amounts in respect thereof
have been paid. An "Additional Loss Contract" will be a Contract as to
which the related SUBI Assets have been sold or otherwise disposed of by
the Servicer, acting on behalf of the Titling Trust, to pay an
Additional Loss Amount.
The Transferor may, from time to time after the date of this
Prospectus, request each Rating Agency to (a) approve a formula for
determining the Specified Reserve Fund Balance that is different from
the one described above that would result in a decrease in the amount of
the Specified Reserve Fund Balance or (b) a change in the manner by
which the Reserve Fund is funded or to meet the Specified Reserve Fund
Balance. If each Rating Agency delivers a letter to the Trustee to the
effect that the use of any such new formula or change will not result in
a qualification, reduction or withdrawal of its then-current rating of
any Class of Certificates, then such new formula or change will be
implemented and, to the extent necessary, the Agreement will be amended,
without the consent of any Certificateholder or Certificate Owner.
WITHDRAWALS FROM THE RESERVE FUND. On each Deposit Date the
Trustee shall withdraw from the Reserve Fund, to the extent available,
and deposit in the SUBI Collection Account an amount equal to the
Required Amount. Amounts on deposit in the Reserve Fund will also be
available to make certain other payments to Certificateholders and the
Transferor. SEE "Assets of the Trust--The Accounts; Collections--The
Reserve Fund". Monies on deposit in the Reserve Fund on a Monthly
Allocation Date in excess of the Specified Reserve Fund Balance will be
released to the Transferor. Income on investment of amounts held in the
Reserve Fund will belong to the Transferor and will be distributed
thereto on each Monthly Allocation Date. Any such amounts received by
the Transferor shall be free of any claim of the Trust, the Trustee or
the Investor Certificateholders and shall not be available to the
Trustee or the Trust for the purpose of making deposits to the Reserve
Fund or making payments to the Investor Certificateholders, nor shall
the Transferor be required to refund any amount properly received by it.
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MAINTENANCE OF THE ACCOUNTS
The Accounts will be maintained with the Trustee so long as either
(i) the short-term unsecured debt obligations of the Trustee are rated
at least P-1 by Moody's and A-1+ by Standard & Poor's or (ii) the
Trustee is a depository institution or trust company having a long-term
unsecured debt rating from Moody's of at least Baa3 and corporate trust
powers and the related Account is maintained in a segregated trust
account in the corporate trust department of the Trustee. If the
Trustee at any time does not qualify under either of these criteria, the
Servicer shall, with the assistance of the Trustee, as necessary, cause
the related Account to be moved to a depository institution organized
under the laws of the United States or any state thereof that does so
qualify, or moved to a segregated trust account located in a corporate
trust department of a depository institution or trust company as
described above.
PERMITTED INVESTMENTS
At the direction of the Servicer, the Trustee or the Trust Agent,
as the case may be, shall invest funds on deposit in the Collection
Account and the Reserve Fund in one or more Permitted Investments
maturing no later than the Deposit Date succeeding the date of such
investment. at the direction of the Servicer, the Trustee or the Trust
Agent, as the case may be, shall invest funds on deposit in the
Certificateholders' Account in one or more Permitted Investments
maturing no later than the Deposit Date preceding the next relevant
Certificate Payment Date or the Target Maturity Date, as appropriate.
Notwithstanding the foregoing, (a) investments on which the entity at
which the related Account is located is the obligor may mature on the
related Deposit Date or Monthly Allocation Date, as the case may be, and
(b) investments during the Revolving Period of Principal Collections on
deposit in the SUBI Collection Account may mature on such dates as in
the Servicer's discretion will maintain sufficient cash to acquire
Subsequent Contracts and Subsequent Leased Vehicles on the related
Transfer Dates.
All income or other gain from the foregoing investments generally
shall be retained in the related Account with such gain in respect of
funds in the SUBI Collection Account generally being treated as Interest
Collections received in respect of the related Collection Period. Any
loss resulting from such investments shall be charged to the related
Account. "Permitted Investments" will be specified in the SUBI
Supplement and will be limited to investments that meet the criteria of
each Rating Agency from time to time as being consistent with its
then-current rating of each Class of Certificates outstanding.
THE CONTINGENT AND EXCESS LIABILITY INSURANCE POLICIES
In addition to the physical damage and liability insurance coverage
required to be obtained and maintained by the lessees pursuant to the
Contracts, and as additional protection in the event that any lessee
fails to maintain all such required insurance, TMCC maintains contingent
liability insurance with third party insurers for bodily injury and
property damage suffered by third persons caused by any vehicle owned by
any insured. TMCC also maintains with such insurers substantial amounts
of excess insurance coverage for which the Titling Trust is an
additional named insured (together with the aforementioned primary
contingent liability insurance policy, the "Contingent and Excess
Liability Insurance Policies"). These insurance policies collectively
provide insurance coverage of $100 million per occurrence, and permit
multiple claims in any policy period (with no annual or aggregate cap on
the number of claims thereunder). Such Contingent and Excess Liability
Insurance Policies are subject to significant per occurrence deductibles
(generally $-, but $- if the related lessees primary insurance policy
has lapsed or the related insurer denies coverage on the basis that TMCC
or an approved TMCC affiliate is named as loss payee instead of the
Titling Trust) in respect of which TMCC will indemnify the Trust.
However, in the event that all such insurance coverage were exhausted
and/or TMCC did not satisfy its indemnity obligations
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such that damages were assessed against the Titling Trust, claims could be
imposed against the Titling Trust Assets, including the SUBI Assets. In such
event, investors in the Class A Certificates could incur a loss on their
investment. However, the Titling Trust will be an additional named insured
under the Contingent and Excess Liability Insurance Policies and payments
made thereunder in respect of Leased Vehicles comprising SUBI Assets, and
indemnity payments made by TMCC in respect of related deductibles, will
constitute SUBI Assets. To the extent that payments under the Contingent and
Excess Liability Insurance Policies are made to third party claimants, they
will reduce the Additional Loss Amounts that otherwise would be required to
be paid out of the SUBI Assets. SEE "Risk Factors--Risks Associated with
Vicarious Tort Liability with Respect to Leased Vehicles", "--Structural
Considerations--Allocation of Titling Trust Liabilities" and "--Third-Party
Liens on SUBI Assets" and "Certain Legal Aspects of the Contracts and the
Leased Vehicles--Vicarious Tort Liability".
The Servicing Agreement will provide that so long as any Certificates are
outstanding, neither the Titling Trustee nor TMCC may terminate or cause the
termination of any Contingent and Excess Liability Insurance Policy unless a
replacement insurance policy or binder is obtained and each Rating Agency has
delivered notice to the Trustee to the effect that the obtaining of any such
replacement insurance will not cause it to qualify, reduce or withdraw its
then-current rating of any Class of Certificates. The foregoing obligations
of TMCC will survive any termination of TMCC as Servicer under the Servicing
Agreement.
SUBORDINATION
The rights of the Class B Certificateholders will be subordinated to
the rights of the Class A Certificateholders to the extent described herein.
This subordination is intended to enhance the likelihood of timely receipt by
Class A Certificateholders of the full amount of interest and principal
required to be paid to them, and to afford such Certificateholders limited
protection against losses in respect of the Contracts.
The Class B Certificateholders will not receive any distributions of
interest with respect to a Certificate Payment Date until the full amount of
interest on the Class A Certificates relating to such Certificate Payment
Date has been distributed to the Class A Certificateholders. The Class B
Certificateholders will not receive any distributions of principal with
respect to such Certificate Payment Date until the full amount of interest on
and principal of the Class A Certificates relating to such Certificate
Payment Date has been distributed to the Class A Certificateholders.
Distributions of interest on the Class B Certificates, to the extent of
collections on Contracts allocable to interest and the amount on deposit in
the Reserve Fund, will not be subordinated to the payment of principal on the
Class A Certificates.
In addition, the rights of the Certificateholders to receive
distributions with respect to the Contracts will be subordinated to the
rights of the Servicer (to the extent that the Servicer is paid the Servicing
Fee with respect to the related Collection Period, including any unpaid
Servicing Fees with respect to one or more prior Collection Periods and any
additional servicing compensation as described herein, and to the extent the
Servicer is reimbursed for certain unreimbursed Advances).
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ADDITIONAL DOCUMENT PROVISIONS
ADDITIONAL AGREEMENT PROVISIONS
Certain additional provisions of the Agreement are summarized below.
NO PETITION
The Trustee will agree not to institute, or join in, any bankruptcy or
similar proceeding against the Transferor, TMCC, the Titling Trust or the
Titling Trustee until one year and one day after the later of (i) payment of
the Certificates in full and (ii) final payment of all other financings
involving interests in the Titling Trust (including the transaction described
herein and all other transactions involving the UTI and each Other SUBI).
AMENDMENT
The Agreement may be amended by the Transferor and the Trustee, without
the consent of the Certificateholders, to cure any ambiguity, to correct or
supplement any provision therein which may be inconsistent with any other
provision therein, to add any other provisions with respect to matters or
questions arising under the Agreement which are not inconsistent with the
provisions of the Agreement or to add or amend any provision therein in
connection with permitting transfers of the Class B Certificates; provided
that any such action will not, in the good faith judgment of the parties,
materially and adversely affect the interest of any Certificateholder and the
Trustee shall have been furnished with an opinion of counsel to the effect
that such amendment will not materially and adversely affect the interest of
any Certificateholder.
The Agreement may also be amended from time to time by the Transferor and
the Trustee (including with respect to changing the formula for determining
the Specified Reserve Fund Balance, the manner in which the Reserve Fund is
funded, changing the remittance schedule for collection deposits in the SUBI
Collection Account or changing the definition of Permitted Investments) if
(a) the Trustee has been furnished with a letter from each Rating Agency to
the effect that such amendment would not cause its then-current rating on any
Class of Certificates to be qualified, reduced or withdrawn or (b) the
Trustee has received the consent of the holders of Certificates evidencing
not less than 51% of the Voting Interests of the Class A Certificates and the
Class B Certificates, voting together as a single class, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of each
Class of Certificateholders; provided, however, that no such amendment shall
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on the SUBI or the SUBI Certificate or
distributions that shall be required to be made on any Class of Certificates
or the applicable Certificate Rate and no amendment of any type shall reduce
the percentage of the aggregate Voting Interests of the Certificates of any
Class required to consent to any such amendment, in each case without the
consent of all Certificateholders and Certificate Owners.
Any amendment eliminating the Reserve Fund or reducing the Specified
Reserve Fund Balance shall also require the Transferor to deliver to the
Trustee an opinion of counsel to the effect that after such amendment, for
federal income tax purposes, the Trust will not be treated as an association
taxable as a corporation, and the Class A Certificates will, and the Class B
Certificates should, properly be characterized as indebtedness that is
secured by the assets of the Trust.
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LIST OF CERTIFICATEHOLDERS
Upon a written request of the Servicer, the Trustee, as Certificate
Registrar, will provide to the Servicer within 15 days after receipt thereof
a list of the names and addresses of all Certificateholders. In addition,
three or more Certificateholders or holders of Certificates evidencing not
less than 25% of the Voting Interests of any Class of Certificates, upon
compliance by such Certificateholders with certain provisions of the
Agreement, may request that the Trustee, as Certificate Registrar, afford
such Certificateholders access during business hours to the current list of
Certificateholders for purposes of communicating with other
Certificateholders with respect to their rights under the Agreement. SEE
"Description of the Certificates--Book-Entry Registration" and "--Definitive
Certificates".
The Agreement will not provide for the holding of any annual or other
meetings of Certificateholders.
THE TRUSTEE
First Bank will be the Trustee under the Agreement. The Corporate Trust
Office of the Trustee is located at One Illinois Center, 111 E. Wacker Drive,
Suite 3000, Chicago, Illinois 60601. First Bank is not affiliated with TMCC,
although it does act as a service provider to TMCC.
The Trustee may resign at any time, in which event the Transferor will be
obligated to appoint a successor Trustee. The Transferor may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Agreement, becomes legally unable to act or becomes insolvent. In such
circumstances, the Transferor will be obligated to appoint a successor
Trustee. Any resignation or removal of the Trustee and appointment of a
successor Trustee will not become effective until acceptance of the
appointment by such successor Trustee.
The Trustee must be a bank or trust company organized under the laws of
the United States, any state of the United States, the District of Columbia
or the Commonwealth of Puerto Rico, authorized to exercise corporate trust
powers under those laws, and subject to supervision or examination by federal
or state laws, with a combined capital and surplus of at least $50,000,000
and a long-term deposit rating no lower than Baa3 by Moody's, or must be
otherwise acceptable to each Rating Agency. A co-trustee or separate trustee
appointed as described above need not meet these eligibility requirements.
Holders of Certificates evidencing not less than 25% of the Voting
Interests of the Class A Certificates and the Class B Certificates, voting
together as a single class, generally will have the power to direct any
proceeding for any remedy available to the Trustee under the Agreement, and
the exercise of any trust or power conferred on the Trustee by the Agreement
(including actions by the Trustee in its capacity as a party to, or a
third-party beneficiary of, the SUBI Supplement or the Servicing Supplement).
However, the Trustee will not be required to follow such a direction if,
after being advised by counsel, it concludes that the action is unlawful, or
if it in good faith determines that the proceedings directed would be
illegal, would subject it to personal liability or would be unduly
prejudicial to the rights of other Certificateholders.
A Certificateholder may institute proceedings under the Agreement, but
only if (i) such holder previously has given to the Trustee written notice of
default, (ii) holders of Certificates evidencing not less than 25% of the
Voting Interests of the Class A Certificates and the Class B Certificates,
voting together as a single class, have made written request upon the Trustee
to institute such proceeding in its own name as Trustee and have offered to
the Trustee reasonable indemnity and (iii) the Trustee for 30 days has
neglected or refused to institute any such proceeding. The Trustee will be
under no obligation to exercise any of the trusts or powers vested in it by
the Agreement or to make any investigation of matters arising thereunder or
to institute, conduct or defend any
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litigation thereunder or in relation thereto at the request, order or
direction of any of the Certificateholders, unless such holders have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby. Certificateholders
will have no express right to institute a proceeding directly under the
Titling Trust Agreement or the Servicing Agreement.
GOVERNING LAW
The Agreement will be governed by the laws of the State of
California.
THE TITLING TRUST AGREEMENT
THE SUBI, THE OTHER SUBIS AND THE UTI
TMCC is the grantor and (as holder of the UTI) a beneficiary of the
Titling Trust. In its capacity as grantor, TMCC will from time to time
assign, transfer, grant and convey (or cause to be assigned,
transferred, granted and conveyed) to the Titling Trustee in trust the
Titling Trust Assets. TMCC will hold the UTI, which represents a
beneficial interest in all Titling Trust Assets other than the SUBI
Assets and the Other SUBI Assets. TMCC may pledge the UTI as security
for obligations to third-party lenders and may create and sell or pledge
Other SUBIs in connection with financings similar to the transaction
described herein. Each holder or pledgee of the UTI and any Other SUBI
will be required expressly to disclaim any interest in the Titling Trust
Assets other than the UTI Assets or the Other SUBI Assets, respectively,
and to subordinate fully any claims to such other Titling Trust Assets
in the event that this disclaimer is not given effect. Except under the
limited circumstances described under "Certain Legal Aspects of the
Titling Trust--Structural Considerations--Allocation of Titling Trust
Liabilities", the SUBI Assets will not be available to make payments in
respect of, or pay expenses relating to, the UTI or any Other SUBIs, and
the Other SUBI Assets evidenced by any Other SUBIs will not be available
to make payments on, or pay expenses relating to, the SUBI, the UTI or
any other SUBI.
Each Other SUBI will be created pursuant to a supplement to the
Titling Trust Agreement (each, an "Other SUBI Supplement") which will
amend the Titling Trust Agreement only with respect to the Other SUBI to
which it relates. The SUBI Supplement will amend the Titling Trust
Agreement only as it relates to the SUBI, and no Other SUBI Supplement
will amend the Titling Trust Agreement as it relates to the SUBI.
All Titling Trust Assets, including the SUBI Assets, will be owned
by the Titling Trust on behalf of the beneficiaries of the Titling
Trust. The SUBI Assets will be segregated from the rest of the Titling
Trust Assets on the books and records of the Titling Trustee and the
Servicer and the holders of other beneficial interests in the Titling
Trust (including the UTI and any Other SUBIs) will have no rights to the
SUBI Assets. Liabilities of the Titling Trust shall be allocated to the
SUBI Assets, the UTI Assets or Other SUBI Assets, respectively, if
incurred with respect thereto, or will be allocated pro rata among all
Titling Trust Assets if incurred with respect to the Titling Trust
Assets generally.
TMCC has obtained an insurance policy naming the Titling Trust as
an additional loss payee and providing coverage with respect to
shortfalls in amounts collected in respect of the Residual Values of
lease contracts and related leased vehicles that are Titling Trust
Assets and that are or become SUBI Assets. The proceeds of such policy
with respect to Contracts and Leased Vehicles that are SUBI Assets will
also be SUBI Assets, but will be retained by the Transferor and not
transferred to the Trust with the SUBI Certificate and will therefore
not be available as Collections, Net Insurance Proceeds or otherwise for
the benefit of the Certificateholders.
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Additional Loss Amounts will be incurred in the event that any uninsured
liability to third parties (i.e., litigation risk) on the part of the Titling
Trust is ultimately borne by the SUBI Assets, whether such liability is
incurred (i) with respect to the SUBI Assets and is therefore allocated to
the SUBI Assets pursuant to the SUBI Supplement, (ii) with respect to the
Titling Trust Assets generally and a pro rata portion of such liability is
allocated to the SUBI Assets pursuant to the Titling Trust Agreement or (iii)
with respect to UTI Assets or Other SUBI Assets if such UTI Assets or Other
SUBI Assets are insufficient to pay such liability. SEE "Certain Legal
Aspects of the Titling Trust--Structural Considerations--Allocation of
Titling Trust Liabilities" and " --Third-Party Liens on SUBI Assets". For
purposes of making calculations with respect to distributions on the
Certificates, "Additional Loss Amounts" will include both losses incurred
with respect to the foregoing uninsured liabilities and monies reserved
within the SUBI Collection Account against future losses in respect of such
liabilities by the Servicer on behalf of the Trustee.
SPECIAL OBLIGATIONS OF TMCC AS BENEFICIARY AND GRANTOR
TMCC, as grantor and holder of the UTI Certificate, will be liable for
all debts and obligations arising with respect to the Titling Trust Assets or
the operation of the Titling Trust; provided, however, that its liability to
any holder, assignee or pledgee of the SUBI or the SUBI Certificate will be
governed by the SUBI Supplement, the Agreement and the agreement pursuant to
which TMCC transfers the SUBI to the Transferor, and its liability with
respect to any transfer, pledge or other financing of the UTI or any UTI
Certificate, or any Other SUBI or Other SUBI Certificate shall be as set
forth in the documents relating thereto. To the extent that TMCC shall pay
or suffer any liability or expense with respect to the Titling Trust Assets
or the operation of the Titling Trust (including reasonable attorneys' fees
and expenses, but excluding all obligations with respect to making Advances,
Reallocation Payments and Reallocation Deposits), TMCC shall be indemnified,
defended and held harmless out of the Titling Trust Assets.
TITLING TRUSTEE DUTIES AND POWERS; FEES AND EXPENSES
Pursuant to the Titling Trust Agreement, the Titling Trustee will be
required to, among other things, (i) apply for and maintain, or cause to be
applied for and maintained, all licenses, permits and authorizations
necessary and appropriate to accept assignments of the Contracts and the
Leased Vehicles and to carry out its duties as Titling Trustee, including
motor vehicle dealer licenses, and (ii) file, or cause to be filed,
applications for certificates of title as are necessary and appropriate so as
to cause the Titling Trust to be recorded as the holder of legal title of
record to the Leased Vehicles.
The Titling Trustee may be replaced by TMCC only if it ceases to be
qualified in accordance with the terms of the Titling Trust Agreement and
shall be removed if certain representations and warranties made by the
Titling Trustee therein prove to have been materially incorrect when made, or
in certain events of bankruptcy or insolvency thereof. The Trustee, as
holder of the SUBI Certificate, on behalf of the Certificateholders may, or
at the direction of holders of Certificates evidencing not less than 51% of
the Voting Interests of the Class A Certificates and the Class B Certificates
voting together as a single class will, exercise its powers under the Titling
Trust Agreement to cause the Trustee to be removed or replaced for a material
breach of its obligations.
The Titling Trustee will make no representations as to the validity or
sufficiency of the SUBI or the SUBI Certificate (other than as to the
execution and authentication of the SUBI Certificate), or of any Contract,
Leased Vehicle or related document, will not be responsible for performing
any of the duties of TMCC or the Servicer and will not be accountable for the
use or application by any owners of beneficial interests in the Titling Trust
Assets of any funds paid in respect of the Titling Trust Assets, or the
investment of any of such monies before such monies are deposited into the
accounts relating to the SUBI, the Other SUBIs and the UTI. The Titling
Trustee will not
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independently verify the Contracts or the Leased Vehicles. The duties of the
Titling Trustee will generally be limited to the holding and liquidation of
lease contracts, the titling of the related leased vehicles in the name of
the Titling Trust, the creation of the SUBI, the Other SUBIs and the UTI, the
maintenance of the SUBI Collection Account and accounts relating to the Other
SUBIs and the UTI and the receipt of the various certificates, reports or
other instruments required to be furnished to the Titling Trustee under the
Titling Trust Agreement, in which case it will only be required to examine
them to determine whether they conform to the requirements of the Titling
Trust Agreement.
The Titling Trustee will be under no obligation to exercise any of the
rights or powers vested in it by the Titling Trust Agreement or to make any
investigation of matters arising thereunder or to institute, conduct or
defend any litigation thereunder or in relation thereto at the request, order
or direction of the Servicer, the UTI Beneficiary or by the holders of a
majority in interest in the SUBI, unless such party or parties have offered
to the Titling Trustee reasonable security or indemnity against the costs,
expenses and liabilities that may be incurred therein or thereby. The
reasonable expenses of every such exercise of rights or powers or examination
shall be paid by the party or parties requesting such exercise or examination
or, if paid by the Titling Trustee, shall be a reimbursable expense of the
Titling Trustee.
The Titling Trustee may enter from time to time into one or more agency
agreements (each, an "Agency Agreement") with such person or persons,
including without limitation any affiliate of the Titling Trustee (each, a
"Trust Agent"), as are by experience and expertise qualified to act in a
trustee capacity and otherwise acceptable to TMCC. The Titling Trustee has
engaged First Bank as the Trust Agent. Pursuant to the Agency Agreement, the
Trust Agent shall perform each and every obligation of the Titling Trustee
under the Titling Trust Agreement.
The Titling Trustee shall be paid out of Titling Trust Assets reasonable
compensation and reimbursement of all reasonable expenses (including
reasonable attorneys' fees). However, with regard to the SUBI Assets
allocable to the SUBI Interest, this requirement is subject to provisions
regarding Capped Titling Trust Administrative Expenses. SEE "Description of
the Certificates--Allocations and Distributions on the
Certificates--Allocations and Distributions of Collections".
INDEMNITY OF TITLING TRUSTEE AND TRUST AGENTS
The Titling Trustee and each Trust Agent will be indemnified and
held harmless out of and to the extent of the Titling Trust Assets with
respect to any loss, liability or expense, including reasonable
attorneys' fees and expenses (collectively "Claims"), arising out of or
incurred in connection with (i) any of the Titling Trust Assets
(including without limitation any Claims relating to lease contracts or
leased vehicles of the Titling Trust, any personal injury or property
damage claims arising with respect to any such leased vehicle or any
claim with respect to any tax arising with respect to any Titling Trust
Asset) or (ii) the Titling Trustee's or the Trust Agent's acceptance or
performance of the trusts and duties contained in the Agreement or any
Agency Agreement. Notwithstanding the foregoing, neither the Titling
Trustee nor any Trust Agent will be indemnified or held harmless out of
the Titling Trust Assets as to any Claim (i) which TMCC shall have
satisfied because of its liability therefor pursuant to the Servicing
Agreement, (ii) incurred by reason of the Titling Trustee's or such
Trust Agent's willful misfeasance, bad faith or negligence or (iii)
incurred by reason of the Titling Trustee's or Trust Agent's breach of
its respective representations and warranties pursuant to the Titling
Trust Agreement or the Servicing Supplement. Such indemnities may
result in Additional Loss Amounts to the extent payable in respect of
the SUBI Assets or allocated to the SUBI.
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TERMINATION
The Titling Trust and the respective obligations and responsibilities of
TMCC and the Titling Trustee shall terminate upon the last to occur of (i)
the payment to TMCC and each permitted purchaser, assignee and pledgee of any
of TMCC's interests in the Titling Trust (including the Trustee, with respect
to the SUBI Interest) of all amounts and obligations required to be paid to
them, and the expiration or termination of all financings secured by the
Titling Trust Assets by their respective terms and (ii) the maturity or
liquidation and the disposition of all Titling Trust Assets and the
disposition to or upon the order of TMCC or any permitted purchaser, assignee
or pledgee of all net proceeds thereof.
NO PETITION
The Titling Trustee and the Trust Agent will agree not to institute, or
join in, any bankruptcy or similar proceeding against the Transferor or TMCC
until one year and one day after final payment of all financings involving
interests in the Titling Trust. Each pledgee or assignee of any UTI or other
SUBI must give a similar non-petition covenant.
AMENDMENT
The Titling Trust Agreement may be amended by written agreement between
TMCC and the Titling Trustee, with the approval of the Trustee (which may be
given in the circumstances described under "Additional Document
Provisions--Additional Agreement Provisions--Amendment"). To the extent that
any such amendment relates to or affects the UTI or any Other SUBI in
addition to the SUBI, the SUBI Certificate or the SUBI Assets, such amendment
may require certain other approvals.
GOVERNING LAW
The Titling Trust Agreement will be governed by the laws of the State of
California.
TRUSTEE AS THIRD-PARTY BENEFICIARY
As the holder of the SUBI Interest, the Trustee will be a third-party
beneficiary of the Titling Trust Agreement. Therefore, the Trustee may, and,
upon the direction of Certificateholders representing at least 51% of the
Voting Interests of the Class A Certificates and the Class B Certificates
(voting together as a single class) will, exercise any right conferred by the
Titling Trust Agreement upon a holder of any interest in the SUBI.
THE SERVICING AGREEMENT
Pursuant to the Servicing Agreement, the Servicer will perform on behalf
of the Titling Trustee all of the obligations of the Trust as lessor under
the Contracts, including, but not limited to, collecting and posting
payments, responding to inquiries of the lessees, investigating
delinquencies, sending payment statements to the lessees, collecting and
remitting certain sales and use and other taxes to state and local
governments and agencies, advancing certain licensing fees, payments of fines
for citations and costs of disposition of Leased Vehicles related to
Charged-off Contracts, Matured Contracts and Additional Loss Contracts and
policing the Contracts, commencing legal proceedings to enforce a Contract on
behalf of the Titling Trust, administering the Contracts, including
accounting for collections and furnishing monthly and annual statements to
the Titling Trustee with respect to distributions and generating federal
income tax information. The Titling Trustee will furnish the Servicer with
all powers of attorney and other documents necessary or appropriate to enable
the Servicer to carry out such
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servicing and administrative duties under the Servicing Agreement. The
Trustee will be a third-party beneficiary of the Servicing Agreement.
CUSTODY OF CONTRACT DOCUMENTS AND CERTIFICATES OF TITLE
To assure uniform quality in servicing the Contracts and TMCC's own
portfolio of automobile and light duty truck lease contracts and to reduce
administrative costs, the Titling Trustee will appoint TMCC, as Servicer, to
be its agent, bailee and custodian of the Contracts, the certificates of
title relating to the Leased Vehicles and insurance policies and other
documents relating to the Contracts, the related lessees and the Leased
Vehicles. Such documents will not be physically segregated from other
automobile and light duty truck lease contracts, certificates of title and
insurance policies and other documents relating to such lease contracts and
leased vehicles of TMCC, or those which TMCC services for others, including
those leased vehicles constituting Titling Trust Assets that are not
evidenced by the SUBI. The accounting records and computer systems of TMCC
will reflect the interests of the holders of interest in the SUBI in the
Initial Contracts, the Subsequent Contracts, the Initial Leased Vehicles, the
Subsequent Leased Vehicles and all related Contract Rights, and "protective"
UCC financing statements reflecting certain interests in the Contracts and
the Contract Rights will be filed. SEE "Material Legal Aspects of the
Titling Trust--Structural Considerations--Back-up Security Interest in
Certain SUBI Assets" and "Certain Legal Aspects of the Contracts and Leased
Vehicles--Back-up Security Interests". The Servicer will be responsible for
filing all periodic sales and use tax or property (real or personal) tax
reports, periodic renewals of licenses and permits, periodic renewals of
qualification to act as a trust and a business trust and other periodic
governmental filings, registration or approvals arising with respect to or
required of the Titling Trustee or the Titling Trust.
COLLECTIONS
The Servicer will service, administer and collect all amounts due on or
in respect of the Contracts. The Servicer will make reasonable efforts to
collect all such amounts and, in a manner consistent with the Servicing
Agreement, will be obligated to service the Contracts generally in accordance
with its customary and usual procedures in respect of lease contracts
serviced by it for its own account.
Consistent with its usual procedures, the Servicer may, in its
discretion, defer one or more payments (having the practical effect of
extending the Maturity Date of any Contract) by up to - months in the
aggregate, provided that no Contract may be extended more than - times and
that the new Maturity Date of any such Contract must not be later than the
last day of the Collection Period with respect to the Final Scheduled
Certificate Payment Date occurs. The amount of any Deferral Fee received by
the Servicer in connection with the deferral of a Contract will be treated as
additional servicing compensation and will not be deposited into the SUBI
Collection Account. The Servicing Agreement will provide that Advances be
made with respect to Contracts as to which deferrals of payments are made
that result in any diminution of the amount of Collections received in
connection therewith relative to the originally scheduled Monthly Payments.
The Servicing Agreement will also provide for the reallocation to the UTI
from the SUBI (accompanied by an appropriate Reallocation Payment by TMCC) of
each Contract as to which more than - deferrals are made or as to which,
through deferrals or extensions, the maturity date is extended beyond the
last day of the Collection Period relating to the Final Scheduled Certificate
Payment Date. Upon any such reallocation, such Contract and the related
Leased Vehicle and other related assets and rights will be UTI Assets and
will no longer constitute SUBI Assets.
NOTIFICATION OF LIENS AND CLAIMS
The Servicer will be required to notify the Transferor (in the event that
TMCC is not acting as the Servicer), the Trustee and the Titling Trustee as
soon as practicable of all liens or claims of whatever kind made by a third
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party that would materially adversely affect the interests of, among others,
the Transferor, the Titling Trust, the Trust or any Certificateholder in or
with respect to the Contracts or Leased Vehicles. Following its learning of
any such lien or claim with respect to the Contracts or Leased Vehicles, the
Servicer will take whatever actions it deems reasonably necessary to cause
such lien or claim to be removed. SEE "Certain Legal Aspects of the Titling
Trust--Structural Considerations".
ADVANCES
On each Deposit Date, the Servicer will be obligated to make, by deposit
into the SUBI Collection Account, an advance with respect to delinquent
Contracts and Contracts as to which it has deferred payments as described
above under "Collections" in an amount equal to the aggregate amount of
Monthly Payments due thereon but not received during the related Collection
Period.
Notwithstanding the foregoing, the Servicer will not be required to make
an Advance to the extent that such Advance would constitute a Nonrecoverable
Advance. A "Nonrecoverable Advance" will be any Advance that, in the
reasonable judgment of the Servicer, may not be ultimately recoverable by the
Servicer from Net Liquidation Proceeds or otherwise. In making Advances, the
Servicer will assist in maintaining a regular flow of scheduled principal and
interest payments on such delinquent or deferred Contracts, rather than to
guarantee or insure against losses. Accordingly, all Advances shall be
reimbursable to the Servicer, without interest, if and when a payment
relating to a Contract with respect to which an Advance has previously been
made is subsequently received. In addition, the Servicer will be reimbursed
for all Nonrecoverable Advances from collections on or in respect of the
Contracts and Leased Vehicles in general.
SECURITY DEPOSITS
The Contract Rights will include all rights under the Contracts to the
security deposits paid by the lessees at the time of origination of the
Contracts (the "Security Deposits") to the extent applied to cover excess
wear and tear charges or treated as Liquidation Proceeds as described below.
As part of its general servicing obligations, the Servicer will retain
possession of each Security Deposit remitted by the lessees as an agent for
the Titling Trust and will apply the proceeds of Security Deposits in
accordance with the terms of the Contracts, its customary and usual servicing
procedures and applicable law. However, in the event that any Contract
becomes a Charged-off Contract or the related Leased Vehicle is repossessed,
the related Security Deposit will, to the extent provided by applicable law
and such Contract, constitute Liquidation Proceeds. The Titling Trustee may
not have an interest in the Security Deposits that is enforceable against
third parties until such time as they are deposited into the SUBI Collection
Account. The Servicer will not be required to segregate Security Deposits
from its own funds, and any income earned from any investment thereof by the
Servicer shall be for the account of the Servicer as additional servicing
compensation.
INSURANCE ON LEASED VEHICLES
The terms of the Contracts require each lessee to maintain in full force
and effect during the term of a Contract a comprehensive collision and
physical damage insurance policy covering the actual cash value of the
related Leased Vehicle and naming the Titling Trust as loss payee. The terms
of the Contracts also require each lessee to maintain bodily injury and
property damage liability insurance in amounts equal to the greater of the
amount prescribed by applicable state law or industry standards as set forth
in the Contract and naming the Titling Trust as an additional insured. Since
lessees may choose their own insurers to provide the required coverage, the
specific terms and conditions of their policies vary. If a lessee fails to
obtain or maintain the required insurance, the related Contract will be in
default. It is the practice of TMCC not to obtain insurance on behalf of
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and at the expense of the related lessee but rather to attempt to repossess
the related Leased Vehicle if the related lessee does not obtain a
replacement policy within - days of being notified by TMCC of such default.
The policies issued with respect to a significant number of the
Contracts may name TMCC rather than the Titling Trust as additional loss
payee. If a primary insurer makes payment under such a policy to TMCC, TMCC
will apply such amounts or forward such amounts to the Titling Trust for
application as a portion of Net Insurance Proceeds. If a primary insurer
failed to make payments under a policy to the lessee and also to TMCC and the
Titling Trust, losses could be experienced by the Certificateholders.
However, the Transferor has been advised by the primary provider of the
Contingent and Excess Liability Policies described herein that such provider
will not refuse any claim under the Contingent and Excess Liability Policies
solely because a primary policy names TMCC or an approved TMCC affiliate,
rather than the Titling Trust, as additional loss payee (although under such
circumstances, if the primary insurer denies a claim on such basis, a
deductible of $- (rather than the standard deductible of $-) will be payable
by TMCC, as to which TMCC will indemnify the Trust).
TMCC does not require lessees to carry credit disability, credit life or
credit health insurance or other similar insurance coverage which provides
for payments to be made on the Contracts on behalf of such lessees in the
event of disability or death. To the extent that such insurance coverage is
obtained by a lessee, payments received in respect of such coverage may be
applied to payments on the related Contract to the extent that the lessee's
beneficiary chooses to do so.
REALIZATION UPON CHARGED-OFF CONTRACTS
The Servicer will use commercially reasonable efforts to repossess and
liquidate the Leased Vehicle relating to a Contract that comes into and
continues in default and for which no satisfactory arrangements can be made
for collection of delinquent payments. Such liquidation may be through
repossession of such Leased Vehicle and disposition at a public or private
sale, or the Servicer may take any other action permitted by applicable law.
The Servicer may enforce all rights under any such Contract, sell the Leased
Vehicle in accordance with the Contract and commence and prosecute any
proceedings in connection with the Contract. In connection with any such
repossession, the Servicer will follow its usual and customary practices and
procedures in respect of lease contracts serviced by it for its own account,
and in any event will act in compliance with all applicable laws. The
Servicer will be required to repair the Leased Vehicle if it reasonably
determines that such repairs will increase the related Net Repossessed
Vehicle Proceeds. The Servicer will be responsible for all costs and
expenses incurred in connection with the sale or other disposition of Leased
Vehicles related to Charged-off Contracts and other Contracts as to which a
lessee has defaulted, but will be entitled to reimbursement to the extent
that such costs constitute Repossessed Vehicle Expenses or other Liquidation
Expenses or expenses recoverable under an applicable insurance policy.
Proceeds from the sale or other disposition of repossessed Leased Vehicles
will constitute Repossessed Vehicle Proceeds and will be deposited into the
SUBI Collection Account. The Servicer will be entitled to reimbursement of
all related Repossessed Vehicle Expenses, and Principal Collections in
respect of a Collection Period will include all Net Repossessed Vehicle
Proceeds collected during such Collection Period.
MATURED LEASED VEHICLE INVENTORY
Upon the scheduled maturity of a Contract, the related lessee has the
option to acquire the related Leased Vehicle for an amount equal to its
Residual Value plus any applicable taxes and all other incidental charges
which may be due under such Contract. If the lessee chooses not to exercise
this option but instead returns the Leased Vehicle, the dealer to whom such
vehicle is returned will have the option to purchase such vehicle for the
same price. TMCC disposes of off-lease and repossessed vehicles not purchased
by the related lessee or dealer to whom
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the vehicle is returned through regional automobile auctions. Off-lease and
repossessed vehicles not yet disposed of constitute Matured Leased Vehicle
Inventory.
Principal Collections in respect of a Collection Period will include all
Net Matured Leased Vehicle Proceeds collected during such Collection Period.
The Servicer also will be entitled to reimbursement of certain payments made
and expenses and charges incurred by it in the ordinary course of servicing
the Contracts (including payments it makes on behalf of the related lessees
in connection with the payment of taxes, vehicle registration, clearance of
parking tickets and similar items) from Collections with respect to the
related Contracts, separate payment thereof by the related lessees or from
amounts realized upon the final disposition of the related Leased Vehicle.
To the extent such amounts are reimbursed prior to or at the final
disposition of the related leased vehicle but remain unpaid by the related
lessee, such unreimbursed amounts (together with any unpaid Monthly Payments
under the related Contract) will be treated as Matured Leased Vehicle
Expenses or Liquidation Expenses, as the case may be, and will therefor
reduce Net Matured Leased Vehicle Proceeds or Liquidation proceeds, as the
case may be. Related Matured Leased Vehicle Expenses may be retained by the
Servicer or released from amounts on deposit in the SUBI Collection Account
upon request therefor presented to the Trustee by the Servicer together with
any supporting documentation reasonably requested by the Trustee. Any
Residual Value Surplus for a Collection Period will be released to the
Transferor on the related Monthly Allocation Date, and thereafter neither the
Trust nor any Certificateholder will have a claim to or interest in such
amounts.
RECORDS, SERVICER DETERMINATIONS AND REPORTS
The Servicer will retain or cause to be retained all data (including,
without limitation, computerized records, operating software and related
documentation) relating directly to or maintained in connection with the
servicing of the Contracts for at least 2 years after the termination of the
Trust. Upon the occurrence and continuance of an Event of Servicing
Termination and termination of the Servicer's obligations under the Servicing
Agreement, the Servicer will use commercially reasonable efforts to effect
the orderly and efficient transfer of the servicing of the Contracts,
including all such records to the extent necessary, to a successor servicer.
The Servicer will perform certain monitoring and reporting functions on
behalf of the Transferor, the Trustee, the Titling Trustee and
Certificateholders, including the preparation and delivery to the Trustee,
the Titling Trustee and each Rating Agency of a monthly certificate, on or
before each Determination Date, setting forth all information necessary to
make all distributions required in respect of the related Collection Period
(the "Servicer's Certificate"), and the preparation and delivery of (i)
monthly statements setting forth information described under "Description of
the Certificates--Statements to Certificateholders" and (ii) an annual
officer's certificate specifying, among other things, the occurrence and
status of any Event of Servicing Termination.
EVIDENCE AS TO COMPLIANCE
The Servicing Agreement will provide that a firm of nationally recognized
independent public accountants will furnish to the Trustee annually,
commencing in 1998, a statement as to compliance by the Servicer during the
preceding twelve months (or since the Closing Date in the case of the first
such statement) with certain standards relating to the servicing of the
Contracts. The Servicing Agreement will also provide for delivery to the
Trustee, substantially simultaneously with the delivery of such accountants'
statement, of a certificate signed by an officer of the Servicer stating that
the Servicer has fulfilled its obligations under the Servicing Agreement
throughout the preceding twelve months (or since the Closing Date in the case
of the first such certificate) or, if there has been a default in the
fulfillment of any such obligation, describing each such default.
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Copies of such statements and certificates may be obtained by Certificate
Owners or Class A Certificateholders by a request in writing addressed to the
Trustee at its Corporate Trust Office.
SERVICING COMPENSATION
The Servicer will be entitled to compensation for the performance of its
servicing obligations under the Servicing Agreement. The Servicer will be
entitled to receive on each Monthly Allocation Date, the Servicing Fee in
respect of the related Collection Period equal to one-twelfth of the product
of 1.00% and the Aggregate Net Investment Value as of the first day of the
related Collection Period (or, in the case of the first Monthly Allocation
Date, as of the Cutoff Date). The Servicing Fee will be calculated and paid
based upon a 360-day year consisting of twelve 30-day months. So long as
TMCC is the Servicer, it may, by notice to the Trustee and the Titling
Trustee, on or before a Determination Date, elect to waive the Servicing Fee
with respect to the related Collection Period, so long as TMCC believes that
sufficient collections will be available from Interest Collections on one or
more future Monthly Allocation Dates to pay such waived Servicing Fee,
without interest. In such event, the Servicing Fee for such Collection
Period shall be deemed to equal zero for all purposes of the Agreement and
the Servicing Agreement.
The Servicer will also be entitled to additional servicing compensation
in the form of certain late payment fees, Deferral Fees and other
administrative fees or similar charges paid with respect to the Contracts,
and earnings from the investment of Security Deposits (to the extent lawful
and as provided in the Contracts). SEE "Additional Document Provisions--The
Servicing Agreement--Security Deposits". The Servicer will be entitled to
retain Deferral Fees paid in connection with deferred Contracts as additional
servicing compensation. The Servicer will pay all expenses incurred by it in
connection with its servicing activities under the Servicing Agreement,
including the payment of Uncapped Administrative Expenses allocable to the
SUBI Interest, and will not be entitled to reimbursement of such expenses
except to the extent any such expenses constitute Liquidation Expenses in
respect of a Contract or Leased Vehicle or reasonable issuance expenses under
an applicable insurance policy, or to the extent that Uncapped Administrative
Expenses are reimbursed out of Interest Collections.
The Servicing Fee will compensate the Servicer for performing the
functions of a third party servicer of the Contracts as an agent for the
Trustee under the Servicing Agreement, including collecting and posting
payments, responding to inquiries of lessees on the Contracts, investigating
delinquencies, policing the SUBI Assets, administering the Contracts, making
Advances, accounting for collections and furnishing monthly and annual
statements to the Trustee with respect to distributions and generating
federal income tax information.
SERVICER RESIGNATION AND TERMINATION
The Servicer may not resign from its obligations and duties under the
Servicing Agreement unless it determines that its duties thereunder are no
longer permissible by reason of a change in applicable law or regulations.
No such resignation will become effective until a successor servicer has
assumed the Servicer's obligations under the Servicing Agreement. The
Servicer may not assign the Servicing Agreement or any of its rights, powers,
duties or obligations thereunder except as otherwise provided therein or
except in connection with a consolidation, merger, conveyance, transfer or
lease made in compliance with the Servicing Agreement.
The rights and obligations of the Servicer under the Servicing Agreement
may be terminated following the occurrence and continuance of an Event of
Servicing Termination. SEE "Additional Document Provisions--The Servicing
Agreement--Rights Upon Event of Servicing Termination".
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INDEMNIFICATION BY THE SERVICER
The Servicer will indemnify the Trustee and its agents for any and all
liabilities, losses, damages and expenses that may be incurred by them as a
result of any act or omission by the Servicer in connection with the
performance of its duties under the Servicing Agreement.
EVENTS OF SERVICING TERMINATION
"Events of Servicing Termination" under the Servicing Agreement with
respect to the SUBI Assets will consist of, among other things: (i) any
failure by the Servicer to deliver to the Titling Trustee for distribution to
holders of interests in the SUBI or to the Trustee for distribution to the
Certificateholders any required payment on the related Certificate as to
allocations and distributions, which failure continues unremedied for three
Business Days after discovery of such failure by an officer of the Servicer
or receipt by the Servicer of notice thereof from the Trustee, the Titling
Trustee or holders of Certificates evidencing not less than 25% of the Voting
Interests of the Class A Certificates and the Class B Certificates, voting
together as a single class; (ii) any failure by the Servicer duly to observe
or perform in any material respect any other of its covenants or agreements
in the Servicing Agreement which failure materially and adversely affects the
rights of holders of interests in the SUBI or the Certificateholders and
which continues unremedied for 90 days after written notice of such failure
is given as described in clause (i) above; or (iii) the occurrence of certain
Insolvency Events relating to the Servicer. Notwithstanding the foregoing, a
delay in or failure of performance referred to under clause (i) above for a
period of ten Business Days shall not constitute an Event of Servicing
Termination if such failure or delay was caused by an event of force majeure.
Upon the occurrence of any such event, the Servicer shall not be relieved
from using all commercially reasonable efforts to perform its obligations in
a timely manner in accordance with the terms of the Servicing Agreement and
the Servicer shall provide to the Trustee, the Titling Trustee, the
Transferor and the Certificateholders prompt notice of such failure or delay
by it, together with a description of its efforts to so perform its
obligations.
RIGHTS UPON EVENT OF SERVICING TERMINATION
As long as an Event of Servicing Termination remains unremedied, the
Titling Trustee, upon the direction of the Trustee or holders of Certificates
evidencing not less than 51% of the Voting Interests of the Class A
Certificates and the Class B Certificates, voting together as a single class,
may terminate all of the rights and obligations of the Servicer under the
Servicing Agreement with respect to the SUBI Assets. In the event of such a
termination affecting the SUBI Assets, the Trust Agent generally will succeed
to the rights, powers, responsibilities, duties and liabilities of the
Servicer under the Servicing Agreement with respect to the SUBI Assets
(excluding certain specific obligations listed in the Servicing Agreement) or
provide for a new Servicer to be approved by each Rating Agency. The Trust
Agent or other new Servicer, will receive substantially the same servicing
compensation to which the Servicer otherwise would have been entitled. If,
however, a bankruptcy trustee or similar official has been appointed for the
Servicer, and no Event of Servicing Termination other than such appointment
has occurred, such trustee or official may have the power to prevent the
Titling Trustee, the Trustee or such Certificateholders from effecting a
transfer of servicing. Notwithstanding the termination of the Servicer's
rights and powers in such event, the Servicer will remain obligated to
perform certain specific obligations listed in the Servicing Agreement and to
reimburse the Trust Agent for any losses incurred in performing certain such
obligations, and will be entitled to payment of certain amounts payable to it
for services rendered prior to such termination.
The holders of Certificates evidencing not less than 51% of the Voting
Interests of the Class A Certificates and the Class B Certificates, voting
together as a single class, with the consent of the Titling Trustee and the
Trustee
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(which consents shall not be unreasonably withheld) may waive any default by
the Servicer in the performance of its obligations under the Servicing
Agreement and its consequences with respect to the SUBI Assets, other than a
default in making any required deposits to or payments from an Account in
accordance with the Servicing Agreement or in respect of a covenant or
provision of the Servicing Agreement that cannot be modified or amended
without the consent of each Certificateholder, in which event the related
waiver will require the approval of holders of all of the Certificates. No
such waiver will impair the rights of the Certificateholders with respect to
subsequent defaults.
NO PETITION
The Servicer will agree not to institute, or join in, any bankruptcy or
similar proceeding against the Transferor, the Titling Trustee or the Titling
Trust until one year and one day after final payment of all financings
involving interests in the Titling Trust.
AMENDMENT
The Servicing Agreement may be amended from time to time in a writing
signed by the Titling Trustee and the Servicer, with the approval of the
Trustee (which approval may be given in the circumstances described under
"Additional Document Provisions--Additional Agreement Provisions--
Amendment"). Any such amendment relating to the UTI or any Other SUBI may
require certain other approvals.
TERMINATION
The Servicing Agreement shall terminate upon the earlier to occur of (i)
the termination of the Titling Trust, (ii) the discharge of the Servicer in
accordance with its terms or (iii) the termination of the Agreement.
GOVERNING LAW
The Servicing Supplement will be governed by the laws of the State of
California.
CERTAIN LEGAL ASPECTS OF THE TITLING TRUST
THE TITLING TRUST
The Titling Trust was formed as a Delaware business trust. The Titling
Trust also has been qualified as a business trust authorized to transact
business in certain other states where it is required to be so qualified.
Because the Titling Trust has been registered as a business trust for
Delaware and other state law purposes, like a corporation, it may be eligible
to be a debtor in its own right under the United States Bankruptcy Code. SEE
"Risk Factors--Risks Associated with Possible Future Insolvency of TMCC;
Substantive Consolidation with TMCC".
STRUCTURAL CONSIDERATIONS
Unlike many structured financings in which the holders of the related
securities have a direct ownership interest or a perfected security interest
in the underlying assets being securitized, the Trust will not own directly
the SUBI Assets. Instead, the Titling Trust will own the Titling Trust
Assets, including the SUBI Assets, and the
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Titling Trustee will take action with respect thereto in the name of the
Titling Trust on behalf of and as directed by the beneficiaries of the
Titling Trust (i.e. the holders of the UTI Certificate and each SUBI
Certificate or Other SUBI Certificate). The Trust will own the assets of the
Trust, the primary asset of which will be the SUBI Certificate evidencing a
100% beneficial interest in the SUBI Assets, and the Trustee will take action
with respect thereto in the name of the Trust and on behalf of the
Certificateholders and the Transferor. Beneficial interests in the Contracts
and Leased Vehicles, rather than direct legal ownership thereof, are
transferred under this structure in order to avoid the administrative
difficulty and expense of retitling the Leased Vehicles in the name of the
transferee. The SUBI Assets will be segregated from the other Titling Trust
Assets on the books and records maintained with respect thereto by the
Servicer and/or the Titling Trustee. Except under the limited circumstances
described below, neither the Servicer nor any holders of other beneficial
interests in the Titling Trust will have rights in the SUBI Assets, and
payments made on or in respect of any Titling Trust Assets other than the
SUBI Assets will not be available to make payments on the Certificates or to
cover expenses of the Titling Trust allocable to the SUBI Assets.
ALLOCATION OF TITLING TRUST LIABILITIES
Pursuant to the Titling Trust Agreement, the various liabilities of the
Titling Trust will be allocated to and charged against (i) to the extent
incurred specifically with respect thereto, the SUBI Assets, the Titling
Trust Assets allocated to Other SUBIs ("Other SUBI Assets") or Titling Trust
Assets not allocated to the SUBI or any Other SUBI (the "UTI Assets"),
respectively, or (ii) pro rata among the Titling Trust Assets if incurred
with respect to the Titling Trust Assets generally. The Titling Trustee and
the beneficiaries of the Titling Trust and their assignees and pledgees will
be bound by the foregoing allocation. Thus, any liability to third parties
arising from or in respect of a Contract or Leased Vehicle will be borne by
the Trust as a holder of interests in the SUBI. If any such liability arises
from or in respect of a contract or leased vehicle that is an Other SUBI
Asset or a UTI Asset, the SUBI Assets will not be subject to such liability
unless such Other SUBI Assets or UTI Assets are insufficient to pay the
liability. However, to the extent that there are no other assets from which
to satisfy such liability, and such liability is owed to entities other than
the Titling Trustee or other beneficiaries of the Titling Trust, the SUBI
Assets may be used to satisfy such liabilities. Under such circumstances,
investors in the Class A Certificates could incur a loss on their investment.
THIRD-PARTY LIENS ON SUBI ASSETS
Because the Trustee will not own directly the SUBI Assets, and since
its interest therein generally will be an indirect beneficial ownership
interest, perfected liens of third-party creditors of the Titling Trust in
one or more SUBI Assets will take priority over the interest of the Trustee
therein. With respect to claims relating to the SUBI Assets, this result is
no different than would be the case if a claim were made against the Trust
and the Trust directly owned the SUBI Assets. However, because the Titling
Trust also will hold Other SUBI Assets and UTI Assets, and third-party
creditors of the Titling Trust may not be bound in all cases by the
allocation of liabilities described above, a general creditor of the Titling
Trust may obtain a lien on one or more SUBI Assets. Such liens could include
tax liens arising against the Transferor or the Trust, liens arising under
various federal and state criminal statutes, judgment liens arising from
successful claims under federal and state consumer protection laws and Lemon
Laws with respect to leases and leased vehicles that are Titling Trust Assets
and judgment liens arising from successful claims against the Titling Trust
arising from the operation of such leased vehicles. SEE "Risk Factors--Risks
Associated with Consumer Protection Laws", "--Risks Associated with ERISA
Liabilities" and "--Risks Associated with Vicarious Tort Liability with
Respect to Leased Vehicles".
The Titling Trust Agreement provides that, to the extent that such a
third-party claim is satisfied out of one or more SUBI Assets rather than
Other SUBI Assets or UTI Assets, as the case may be, the Titling Trustee will
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reallocate the remaining Titling Trust Assets (i.e., the Other SUBI Assets
and the UTI Assets) so that each portfolio will bear the expense of the claim
as nearly as possible as if the claim had been allocated as provided in the
Titling Trust Agreement. However, if a third party claim exceeds the value of
the portfolio or portfolios of Titling Trust Assets to which it should be
allocated, and as a result the damages and expenses with respect to such
claim are borne by the SUBI Assets, investors in the Class A Certificates
could incur a loss on their investment. SEE "Additional Document
Provisions--The Titling Trust Agreement--The SUBI, the Other SUBIs and the
UTI".
TMCC may pledge the UTI as security for obligations to third-party
lenders, and may create and sell or pledge Other SUBIs in connection with
other financings. Each holder or pledgee of the UTI or any Other SUBI will be
required expressly to disclaim any interest in the SUBI Assets, and to fully
subordinate any claims to the SUBI Assets in the event that this disclaimer
is not given effect. Although no assurance can be given, in the unlikely
event of a bankruptcy of TMCC, the Transferor believes that the SUBI Assets
would not be treated as part of TMCC's bankruptcy estate and that, even if
they were so treated, the subordination by holders and pledgees of the UTI
and Other SUBIs should be enforceable. In addition, a pledge of the UTI will
not impair the Titling Trustee's ability to reallocate leases and leased
vehicles out of the UTI Assets as Subsequent Contracts and Subsequent Leased
Vehicles during the Revolving Period.
BACK-UP SECURITY INTEREST IN CERTAIN SUBI ASSETS
The transfer of the SUBI Certificate by the Transferor to the Trust is
intended to constitute a sale of the SUBI Certificate and of the beneficial
interest in the SUBI Assets evidenced thereby, subject in each case to the
rights of the Transferor as the holder of the Transferor Interest. Although
unlikely, it is possible that a court could recharacterize (for accounting
and general state law purposes) the transactions contemplated by the Titling
Trust Agreement and SUBI Supplement as a financing secured by a pledge of
the SUBI Certificate or the SUBI Assets rather than as a sale. In such an
event, absent prior perfection of the Trustee's security interest in the SUBI
Assets, the holder of a perfected lien in one or more SUBI Assets would have
priority over the interest of the Trustee in such SUBI Assets.
Certain actions have been taken to ensure that, if the transfer of the
SUBI Interest were to be so recharacterized as a transfer to secure a loan,
the Trustee would be deemed to have a perfected security interest in the SUBI
Certificate (and the SUBI Interest evidenced thereby) and in the Contracts
and the Contract Rights susceptible of perfection under the Uniform
Commercial Code (the "UCC") as in effect in the Trust States. The "Contract
Rights" are all rights relating to the Contracts and the proceeds thereof,
including the documents evidencing such Contracts, Monthly Payments received
or due on or after the related Cutoff Date, Security Deposits (to the extent
applied to cover excess wear and tear charges or treated as Liquidation
Proceeds as described herein and as provided for in the Contracts),
Prepayments, Liquidation Proceeds and Net Insurance Proceeds (to the extent
constituting proceeds of the related Contract rather than proceeds of the
related Leased Vehicle) received on or after the related Cutoff Date. The
SUBI Certificate will constitute an "instrument" under the UCC and, by virtue
of its possession thereof, the Trustee will be deemed to have a perfected
security interest therein (and the SUBI Interest evidenced thereby). The
Contracts will not be stamped to reflect the Trustee's indirect interest
therein. On or prior to the Closing Date, however, "protective" UCC-1
financing statements will be filed in California, Illinois and Delaware with
respect to the Contracts and the Contract Rights to reflect the perfection of
any security interest that the Trustee would be deemed to have therein.
However, no action will be taken to perfect the lien that the Trustee would
be deemed to have in the Leased Vehicles in the event of such a
recharacterization. Therefore, to the extent that a valid lien is imposed by
a third party against a Leased Vehicle, the interest of the lienholder will
be superior to the unperfected beneficial interest of the Trustee in such
Leased Vehicle. The Servicing Agreement will require the Servicer to contest
all such liens and cause the removal of any liens that may be imposed, but
investors in the
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Class A Certificates could incur a loss on their investment if any such liens
are imposed against the Leased Vehicles. SEE "Additional Document
Provisions--The Servicing Agreement--Notification of Liens and Claims".
Additionally, any perfected security interest of the Trustee in all or
part of the property of the Trust could be subordinate to claims of any
trustee in bankruptcy or debtor-in-possession in the event of a bankruptcy of
the Transferor prior to any perfection of the transfer of the assets
transferred by the Transferor to the Trust pursuant to the Agreement. SEE
"Risk Factors--Risks Associated with Possible Future Insolvency of TMCC;
Substantive Consolidation with TMCC".
INSOLVENCY RELATED MATTERS
Although no assurance can be given, the Transferor believes that in the
unlikely event of a bankruptcy of TMCC the SUBI Assets would not be treated
as part of TMCC's bankruptcy estate and that, even if they were so treated,
the subordination by holders and pledgees of the UTI and Other SUBIs should
be enforceable. In addition, the Transferor has taken steps in structuring
the transactions contemplated hereby that are intended to make it unlikely
that the voluntary or involuntary application for relief by TMCC under any
Insolvency Laws will result in consolidation of the assets and liabilities of
the Transferor, the Titling Trust or the Trust with those of TMCC. If,
however, (i) a court concluded that the assets and liabilities of the
Transferor, the Titling Trust or the Trust should be consolidated with those
of TMCC in the event of the application of applicable Insolvency Laws to
TMCC, (ii) a filing were made under any Insolvency Law by or against the
Transferor, the Titling Trust or the Trust or (iii) an attempt were made to
litigate any of the foregoing issues, delays in payments on the Certificates
and possible reductions in the amount of such payments could occur.
CERTAIN LEGAL ASPECTS OF THE
CONTRACTS AND THE LEASED VEHICLES
Although all Contracts have been or will be originated in the Trust
States, in some instances the related lessees may live in other states at the
time of origination or may move to another state after the time of
origination. Consequently, the related Leased Vehicles may be operated and
registered in states other than Trust States and the related certificates of
title may be recorded in such other states. The following discussion of
certain legal aspects of the Contracts and Leased Vehicles does not purport
to address the laws of every state in which a Leased Vehicle may be operated
or registered or in which title may be recorded.
BACK-UP SECURITY INTERESTS
The Contracts are "chattel paper" as defined in the UCC. Pursuant to the
California UCC, a non-possessory security interest in or transfer of chattel
paper in favor of the Titling Trust and the Transferor may be perfected by
filing a UCC-1 financing statement with the California Secretary of State. On
or prior to the Closing Date, "protective" UCC-1 financing statements will be
filed in the Trust States to effect this perfection. If the Certificates were
to be recharacterized as loans secured by the SUBI Assets, the Trustee will
be deemed to have a perfected security interest in certain SUBI Assets,
including the Contracts. The Trustee's security interest in that circumstance
could be subordinate to the interest of certain other parties, if any, who
take possession of the Contracts before the filing described above has been
completed. Specifically, the Trustee's security interest in a Contract could
be subordinate to the rights of a purchaser of such Contract who takes
possession thereof without knowledge or actual notice of the Trustee's
security interest. The Contracts will not be stamped to reflect the foregoing
back-up security arrangements.
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Any perfected security interest of the Trustee in the Contracts will be
unaffected by any change of location of any lessee, since, under the UCC,
this back-up security interest will be perfected by the filing of a UCC-1
financing statement in the jurisdiction in which the chief executive office
of the "debtor" (in this case, the Titling Trust) is located, not the
location of any lessee.
VICARIOUS TORT LIABILITY
Although the Titling Trust will own the leased vehicles, they will be
operated by the lessees and their respective invitees. State laws differ as
to whether anyone suffering injury to person or property involving a leased
vehicle may bring an action against the owner of the vehicle merely by virtue
of that ownership. To the extent that applicable State law permits such an
action, the Titling Trust and the Titling Trust Assets may be subject to
liability to such an injured party.
For example, in California, under Section 17150 of the California Vehicle
Code, the owner of a motor vehicle subject to a lease is responsible for
injuries to persons or property resulting from the negligent or wrongful
operation of the vehicle by any person using the vehicle with the owner's
permission. The owner's liability for personal injuries is limited to $15,000
per person and $30,000 in total per accident and for property damage is
limited to $5,000 per accident. However, recourse for any judgment arising
out of the operation of the vehicle must first be had against the operator's
property if the operator is within the jurisdiction of the court. In
Pennsylvania, there is no cause of action against such an owner/lessor unless
the owner/lessor has negligently entrusted or continued to entrust the
vehicle to an inappropriate lessee.
The laws of most States, including the Trust States (other than
California), either do not permit such suits, or limit the lessor's liability
to the amount of any liability insurance that the lessee was required and
failed to maintain. Notwithstanding the foregoing, in the event that
vicarious liability is imposed on the Titling Trust as owner of a Leased
Vehicle in a state that does not so limit liability, and the coverage
provided by the Contingent and Excess Liability Insurance Policies is
insufficient to cover such loss, including in certain circumstances with
respect to a leased vehicle that is an Other SUBI Asset or a UTI Asset,
investors in the Class A Certificates could incur a loss on their investments.
The Titling Trust's insurance coverage is substantial. However, in the
event that all applicable insurance coverage were exhausted and damages were
assessed against the Titling Trust, claims could be imposed against the
Titling Trust Assets, including the Leased Vehicles. Such claims would not
take priority over any SUBI Assets to the extent that the Trustee has a prior
perfected security interest therein (such as would be the case, in certain
limited circumstances, with respect to the Contracts). If any such claims
were imposed against the Titling Trust Assets and the Trustee did not have a
prior perfected security interest, investors in the Class A Certificates
could incur a loss on their investment. SEE "Certain Legal Aspects of the
Titling Trust--Structural Considerations--Back-up Security Interest in
Certain SUBI Assets".
REPOSSESSION OF LEASED VEHICLES
In the event that a default by a lessee has not been cured within a
certain period of time after notice, the Servicer will ordinarily retake
possession of the related leased vehicle. Some jurisdictions require that the
lessee be notified of the default and be given a time period within which to
cure the default prior to repossession. Generally, this right to cure may be
exercised on a limited number of occasions in any one-year period. In these
jurisdictions, if the lessee objects or raises a defense to repossession, an
order must be obtained from the appropriate state court, and the vehicle must
then be repossessed in accordance with that order. Other jurisdictions
(including California and Pennsylvania) permit repossession without notice,
but only if the repossession can be
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accomplished peacefully. If a breach of the peace cannot be avoided, judicial
action is required. If a breach of the peace cannot be avoided, the lessor
typically must seek a writ of possession or replevin in a state court action
or pursue other judicial action to repossess such leased vehicle.
After the Servicer has repossessed a Leased Vehicle, it may provide the
lessee with a period of time within which to cure the default under the
related Contract. If by the end of such period the default has not been
cured, the Servicer will attempt to sell the Leased Vehicle. The Net
Repossessed Vehicle Proceeds therefrom may be less than the remaining amounts
due under the Contract at the time of default by the lessee.
DEFICIENCY JUDGMENTS
The proceeds of sale of a leased vehicle generally will be applied first
to the expenses of resale and repossession and then to the satisfaction of
the amounts due under the related lease contract. While some states impose
prohibitions or limitations on deficiency judgments if the net proceeds from
resale of a leased vehicle do not cover the full amounts due under the
related lease contract, a deficiency judgment can be sought in those states
(including each of the Trust States other than California and Pennsylvania)
that do not prohibit directly or limit such judgments. However, in some
states (including California and Pennsylvania), a lessee may be allowed an
offsetting recovery for any amount not recovered at resale because the terms
of the resale were not commercially reasonable. In any event, a deficiency
judgment would be a personal judgment against the lessee for the shortfall,
and a defaulting lessee might have little capital or sources of income
available following repossession. Therefore, in many cases, it may not be
useful to seek a deficiency judgment. Because it is a personal judgment
against an obligor who may have few if any assets remaining after the
repossession, even if a deficiency judgment is obtained, it may be settled at
a significant discount or it may prove impossible to collect all or any
portion thereof.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws impose requirements
upon lessors and servicers involved in consumer leasing. The federal Consumer
Leasing Act of 1976 and Regulation M, issued by the Board of Governors of the
Federal Reserve System, for example, require that a number of disclosures be
made at the time a vehicle is leased, including, among other things, all
amounts due at the time of origination of the lease, a description of the
lessee's liability at the end of the lease term, the amount of any periodic
payments, the circumstances under which the lessee may terminate the lease
prior to the end of the lease term and (beginning in October 1997) the
capitalized cost of the vehicle and a warning regarding possible charges for
early termination. The various consumer protection laws would apply to the
Titling Trust as a "co-lessor" of the Contracts and may also apply to the
Trust as holder of a beneficial interest in the Contracts. The failure to
comply with such consumer protection laws may give rise to liabilities on the
part of the Servicer, the Titling Trust and the Titling Trustee, including
liabilities for statutory damages and attorneys' fees. In addition, claims by
the Servicer, the Titling Trust and the Titling Trustee may be subject to
set-off as a result of such noncompliance.
Courts have applied general equitable principles in litigation relating
to repossession and deficiency balances. These equitable principles may have
the effect of relieving a lessee from some or all of the legal consequences
of a default.
In several cases, consumers have asserted that the self-help remedies of
lessors violate the due process protection provided under the Fourteenth
Amendment to the Constitution of the United States. Courts have generally
found that repossession and resale by a lessor do not involve sufficient
state action to afford constitutional protection to consumers.
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Many states, including each of the Trust States, have adopted laws (each,
a "Lemon Law") providing redress to consumers who purchase or lease a vehicle
that remains out of conformance with its manufacturer's warranty after a
specified number of attempts to correct a problem or after a specific time
period. Should any Leased Vehicle become subject to a Lemon Law, a lessee
could compel the Titling Trust to terminate the related Contract and refund
all or a portion of payments that previously have been paid. Although the
Titling Trust may be able to assert a claim against the manufacturer of any
such defective Leased Vehicle, there can be no assurance any such claim would
be successful. To the extent a lessee is able to compel the Titling Trust to
terminate the related Contract, such Contract will be deemed to be a
Liquidated Contract and amounts received thereafter on such Contract will be
deemed to be Liquidation Proceeds. As noted below, TMCC will represent and
warrant to the Trustee as of the Cutoff Date and as of each Transfer Date
that none of the Initial Leased Vehicles or the related Subsequent Leased
Vehicles, as the case may be, is out of compliance with any law, including
any Lemon Law. Nevertheless, there can be no assurance that one or more
Leased Vehicles will not become subject to return (and the related Contract
terminated) in the future under a Lemon Law.
Representations and warranties will be made in the Titling Trust
Agreement that each Contract complies with all requirements of law in all
material respects. If any such representation and warranty proves to be
incorrect with respect to any Contract, and is not timely cured, TMCC will be
required under the Servicing Agreement to deposit an amount equal to the
Reallocation Payment (together with, in certain circumstances during the
Amortization Period, an amount equal to the Reallocation Deposit Amount) in
respect of such Contract into the SUBI Collection Account unless the breach
is cured. SEE "Additional Document Provisions--The Titling Trust
Agreement--The SUBI, the Other SUBIs and the UTI" and "The
Contracts--Representations, Warranties and Covenants".
OTHER LIMITATIONS
In addition to laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including applicable Insolvency Laws,
may interfere with or affect the ability of a lessor to enforce its rights
under an automobile or light duty truck lease contract. For example, if a
lessee commences bankruptcy proceedings, the lessor's receipt of rental
payments due under the lease contract is likely to be delayed. In addition, a
lessee who commences bankruptcy proceedings might be able to assign the lease
contract to another party even though the lease prohibits assignment.
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
Set forth below is a discussion representing the opinion of Andrews &
Kurth L.L.P., special federal income tax counsel to the Transferor, as to
material federal income tax consequences to holders of the Class A
Certificates who are original owners and who hold the Class A Certificates as
capital assets under the Internal Revenue Code of 1986, as amended (the
"Code"). This discussion does not purport to be complete or to deal with all
aspects of federal income taxation or any aspects of state or local taxation
that may be relevant to Class A Certificateholders or Certificate Owners in
light of their particular circumstances, nor to certain types of Class A
Certificateholders or Certificate Owners subject to special treatment under
the federal income tax laws (for example, banks and life insurance
companies). This discussion is based upon present provisions of the Code, the
regulations promulgated thereunder and judicial and ruling authorities, all
of which are subject to change, which change may be retroactive. The parties
do not intend to seek a ruling from the Internal Revenue Service ("IRS") on
any of the issues discussed below. Moreover, there can be no assurance that
if such a ruling were sought, the IRS would rule favorably.
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Taxpayers and preparers of tax returns (including those filed by any
partnership or other issuer) should be aware that under applicable
Treasury Regulations a provider of advice on specific issues of law is
not considered an income tax return preparer unless the advice is (i)
given with respect to events that have occurred at the time the advice
is rendered and is not given with respect to the consequences of
contemplated actions and (ii) is directly relevant to the determination
of an entry on a tax return. Accordingly, taxpayers should consult
their respective tax advisors and tax return preparers regarding the
preparation of any item on a tax return, even where the anticipated tax
treatment has been discussed herein. Prospective investors should
consult their own tax advisors with regard to the federal income tax
consequences of the purchase, ownership or disposition of the Class A
Certificates, as well as the tax consequences arising under the laws of
any state, foreign country or other taxing jurisdiction.
CHARACTERIZATION OF THE CLASS A CERTIFICATES AS INDEBTEDNESS
The Transferor and the Trustee (by entering into the Agreement) and
each Certificateholder, and each Certificate Owner (by acquiring a
beneficial interest in a Class A Certificate) will express their intent
that and will agree to treat the Class A Certificates as indebtedness,
secured by the assets of the Trust, for all federal, state and local
income and franchise tax purposes. However, because different criteria
are used to determine the non-tax accounting characterization of the
transaction, the Transferor will treat the transfer of the SUBI to the
Trust, for financial accounting purposes, as a sale of an ownership
interest in the Titling Trust Assets and not as the issuance of a debt
obligation.
In general, the characterization of a transaction for federal income tax
purposes is based upon economic substance, and the substance of the
transaction in which the Class A Certificates are issued is consistent with
the treatment of the Class A Certificates as debt for federal income tax
purposes. Although there are certain judicial precedents holding that under
appropriate circumstances a taxpayer should be required to treat a
transaction in accordance with the form chosen by the taxpayer regardless of
the transaction's substance, the operative provisions of the transaction and
the Agreement will not be inconsistent with treating the Class A Certificates
as debt and, accordingly, these authorities should not be applied to require
sale characterization for federal income tax purposes. The determination of
whether the economic substance of a property transfer is a sale or a loan
secured by the transferred property depends upon numerous factors designed to
determine whether the Transferor has relinquished (and the transferee has
obtained) substantial incidents of ownership in the property. The primary
factors examined are whether the transferee has the opportunity to gain if
the property increases in value, and has the risk of loss if the property
decreases in value. Based upon its analysis of such factors, Andrews & Kurth
L.L.P. is of the opinion that, for federal income tax purposes, the
characterization of the Class A Certificates should be governed by the
substance of the transaction and accordingly, (i) the Trust will not be
treated as an association or a publicly traded partnership taxable as a
corporation and (ii) the Class A Certificates will properly be characterized
as indebtedness that is secured by the assets of the Trust.
TAXATION OF INTEREST AND DISCOUNT INCOME
Assuming that the Certificate Owners are owners of debt obligations
for federal income tax purposes, interest generally will be taxable as
ordinary income for federal income tax purposes when received by the
Certificate Owners utilizing the cash method of accounting and when
accrued by Certificate Owners utilizing the accrual method of
accounting. Interest received on the Class A Certificates may also
constitute "investment income" for purposes of certain limitations of
the Code concerning the deductibility of investment interest expense.
ORIGINAL ISSUE DISCOUNT. Under regulations issued with respect to the
original issue discount ("OID") provisions of the Code, the Class A
Certificates will be deemed to have been issued with OID in an amount equal
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to the excess of the "stated redemption price at maturity" of the Class A
Certificates (generally equal to their Initial Class Certificate Balances
plus all interest other than "qualified stated interest" payable prior to or
at maturity), over their original issue price (in this case, the initial
offering price at which a substantial amount of the related Class of Class A
Certificates is sold to the public). Qualified stated interest generally
means interest payable at a single fixed rate or qualified variable rate
provided that such interest payments are unconditionally payable at intervals
of one year or less during the entire term of the relevant Class A
Certificates. Under the OID provisions of the Code, interest will only be
treated as qualified stated interest if it is "unconditionally payable".
Interest will be treated as "unconditionally payable" only if
Certificateholders have reasonable remedies to compel payment of interest
deficiencies (e.g., default and acceleration rights). Because Class A
Certificateholders will not be entitled to penalty payments of interest on
interest deficiencies, and Class A Certificateholders will have no default
and acceleration rights in the event of interest shortfalls, interest paid on
the Class A Certificates may not be treated by the IRS as qualified stated
interest, and, in such event, would be treated as OID. A Class A
Certificateholder must include OID income over the term of the related Class
A Certificate under a constant yield method. In general, OID must be
included in income in advance of the receipt of cash representing that
income, regardless of the Certificateholder's method of accounting.
The issue price of a Class A Certificate is the first price at
which a substantial amount of Class A Certificates are sold to the
public (excluding brokers, underwriters or wholesalers). If less than a
substantial amount of a particular Class of Class A Certificates is sold
for cash on or prior to the Closing Date, the issue price of such Class
will be treated as the fair market value of such Class on the Closing
Date. The issue price of a Class A Certificate also includes the amount
paid by a Class A Certificateholder for accrued interest that relates to
a period prior to the issue date of the Class A Certificate. The stated
redemption price at maturity of a Class A Certificate includes the
initial Certificate Balance of the Class A Certificate, but generally
will not include distributions of interest if such distributions
constitute "qualified stated interest."
Under the de minimis rule, OID on a Class A Certificate will be
considered to be zero if such OID is less than 0.25% of the stated
redemption price at maturity of the Class A Certificate multiplied by
the weighted average maturity of the Class A Certificate.
Certificateholders generally must report de minimis OID pro rata as
principal payments are received, and such income will be capital gain if
the Class A Certificate is held as a capital asset. However, accrual
method holders may elect to accrue all de minimis OID as well as market
discount under a constant interest method.
The holder of a Class A Certificate issued with OID must include in
gross income, for all days during its taxable year on which it holds
such Class A Certificate, the sum of the "daily portions" of such
original issue discount. The amount of OID includible in income by a
Certificateholder will be computed by allocating to each day during a
taxable year a pro rata portion of the original issue discount that
accrued during the relevant accrual period. If a Certificateholder
purchases a Class A Certificate issued with OID at an "acquisition
premium" (i.e., at a price in excess of the adjusted issue price of the
Class A Certificate, but less than or equal to the "stated redemption
price at maturity"), the amount includible by such Certificateholder in
income in each taxable year as OID will be reduced by that portion of
the premium properly allocable to such year.
Although the matter is not entirely clear, the Transferor currently
intends to report all stated interest on the Class A Certificates as
qualified stated interest and not as OID.
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MARKET DISCOUNT.
Certificate Owners should be aware that the resale of a Class A
Certificate may be affected by the market discount rules of the Code.
These rules generally provide that, subject to a de minimis exception,
if a holder acquires a Class A Certificate at a market discount (i.e.,
at a price below its "adjusted issue price") and thereafter recognizes
gain upon a disposition of the Class A Certificate, the lesser of such
gain or the portion of the market discount that accrued while the Class
A Certificate was held by such holder will be treated as ordinary
interest income realized at the time of the disposition. A taxpayer may
elect to include market discount currently in gross income in taxable
years to which it is attributable, computed using either a ratable
accrual or a yield to maturity method.
PREMIUM.
A Certificate Owner who purchases a Class A Certificate for more
than its stated redemption price at maturity will be subject to the
premium amortization rules of the Code. Under those rules, the
Certificate Owner may elect to amortize such premium on a constant yield
method. Amortizable premium reduces interest income on the related
Class A Certificate. If the Certificate Owner does not make such an
election, the premium paid for the Class A Certificate generally will be
included in the tax basis of the Class A Certificate in determining the
gain or loss on its disposition.
Each Certificate Owner should consult his own tax advisor regarding
the impact of the original issue discount, market discount, and premium
amortization rules.
SALES OF CLASS A CERTIFICATES
In general, a Certificate Owner will recognize gain or loss upon
the sale, exchange, redemption or other taxable disposition of a Class A
Certificate measured by the difference between (i) the amount of cash
and the fair market value of any property received (other than amounts
attributable to, and taxable as, accrued stated interest) and (ii) the
Certificate Owner's tax basis in the Class A Certificate (as increased
by any OID or market discount previously included in income by the
holder and decreased by any deductions previously allowed for
amortizable bond premium and by any payments, other than qualified
stated interest payments, received with respect to such Class A
Certificate). Subject to the market discount rules discussed above and
to the more than one-year holding period requirement for long-term
capital gain treatment, any such gain or loss generally will be
long-term capital gain or loss, provided that the Class A Certificate
was held as a capital asset. The federal income tax rates applicable to
capital gains for taxpayers other than individuals, estates and trusts
are currently the same as those applicable to ordinary income; however,
the maximum ordinary income rate for individuals, estates and trusts is
generally 39.6%, whereas the maximum long-term capital gains rate for
such taxpayers is 28%. Moreover, capital losses generally may be used
only to offset capital gains.
FEDERAL INCOME TAX CONSEQUENCES TO FOREIGN INVESTORS
The following information describes the United States federal
income tax treatment of investors that are not United States persons
("Foreign Investors") if the Class A Certificates are treated as debt.
The term "Foreign Investor" means any person other than (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other
entity organized in or under the laws of the United States or any state
or political subdivision thereof, or (iii) an estate the income of which
is includible in gross income for United States federal income tax
purposes, regardless of its source or (iv) a trust whose administration
is subject to the primary supervision of a United States
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court and which has one or more United States fiduciaries who have authority
to control all substantial decisions of the trust.
The Code and Treasury regulations generally subject interest paid
to a Foreign Investor to a withholding tax at a rate of 30% (unless such
rate were changed by an applicable treaty). The withholding tax,
however, is eliminated with respect to certain "portfolio debt
investments" issued to Foreign Investors. Portfolio debt investments
include debt instruments issued in registered form for which the United
States payor receives a statement that the beneficial owner of the
instrument is a Foreign Investor. The Class A Certificates will be
issued in registered form; therefore, if the information required by the
Code is furnished (as described below) and no other exceptions to the
withholding tax exemption are applicable, no withholding tax will apply
to the Class A Certificates.
For the Class A Certificates to constitute portfolio debt
investments exempt from United States withholding tax, the withholding
agent must receive from the Certificate Owner an executed IRS Form W-8
signed under penalty of perjury by the Certificate Owner stating that
the Certificate Owner is a Foreign Investor and providing such
Certificate Owner's name and address. The statement must be received by
the withholding agent in the calendar year in which the interest payment
is made, or in either of the two preceding calendar years.
A Certificate Owner that is a nonresident alien or foreign
corporation will not be subject to United States federal income tax on
gain realized on the sale, exchange or redemption of such Class A
Certificate, provided that (i) such gain is not effectively connected
with a trade or business carried on by the Certificate Owner in the
United States, (ii) in the case of a Certificate Owner that is an
individual, such Certificate Owner is not present in the United States
for 183 days or more during the taxable year in which such sale,
exchange or redemption occurs and (iii) in the case of gain representing
accrued interest, the conditions described in the immediately preceding
paragraph are satisfied.
BACKUP WITHHOLDING
A Certificate Owner may be subject to a backup withholding at the
rate of 31% with respect to interest paid on the Class A Certificates if
the Certificate Owner, upon issuance, fails to supply the Trustee or his
broker with such Certificate Owner's taxpayer identification number,
fails to report interest, dividends or other "reportable payments" (as
defined in the Code) properly, or under certain circumstances, fails to
provide the Trustee or his broker with a certified statement, under
penalty of perjury, that such Certificate Owner is not subject to backup
withholding. Information returns will be sent annually to the IRS and
to each Certificate Owner setting forth the amount of interest paid on
the Class A Certificates and the amount of tax withheld thereon.
POSSIBLE ALTERNATIVE TREATMENT OF THE CLASS A CERTIFICATES
Although, as described above, it is the opinion of Andrews & Kurth
L.L.P. that the Class A Certificates will properly be characterized as
debt for federal income tax purposes, such opinion will not be binding
on the IRS and thus no assurance can be given that such a
characterization shall prevail. If the IRS were to contend successfully
that the Class A Certificates did not represent debt for federal income
tax purposes, certain adverse tax consequences to the Class A
Certificateholders could result. For example, the Trust generally
should be required to pay corporate income tax on its taxable income
(thus reducing the cash available to make payments on the Class A
Certificates). In addition, income to certain tax-exempt entities
(including pension funds) generally should be "unrelated business
taxable income", and income to foreign holders generally should be
subject to U.S. withholding tax and reporting requirements. Prospective
investors are advised to consult with their own tax
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advisors regarding the federal income tax consequences of the purchase,
ownership and disposition of the Class A Certificates.
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and Section 4975 of the Code prohibit pension,
profit sharing or other employee benefit plans ("Benefit Plans") from
engaging in certain transactions with persons that are "parties in
interest" under ERISA or "disqualified persons" under the Code with
respect to such Benefit Plans. ERISA also imposes certain duties on
persons who are fiduciaries of Benefit Plans subject to ERISA. Under
ERISA, any person who exercises any authority or control with respect to
the management or disposition of the assets of a Benefit Plan is
considered to be a fiduciary of such Benefit Plan (subject to certain
exceptions not here relevant). A violation of these "prohibited
transaction" rules may result in liability under ERISA and the Code for
such persons.
Neither ERISA nor the Code defines the terms "plan assets". Under
Section 2510.3-101 of the United States Department of Labor ("DOL")
regulations (the "Regulation"), a Plan's assets may include an interest
in the underlying assets of an entity (such as a trust) for certain
purposes, including the prohibited transaction provisions of ERISA and
the Code, if the Plan acquires an "equity interest" in such entity. The
Transferor believes that the Certificates will give Certificateholders
an equity interest in the Trust for purposes of the Regulation. Under
the Regulation, when a Plan acquires an equity interest that is neither
a "publicly offered security" nor a security issued by an investment
company registered under the Investment Company Act of 1940, the
underlying assets of the entity will be considered "plan assets" unless
the entity is an "operating company" or equity participation in the
entity by benefit plan investors is not "significant".
A "publicly-offered security" is a security that is (a) freely
transferable, (b) part of a class of securities that is owned,
immediately subsequent to the initial offering, by 100 or more investors
who were independent of the issuer and of one another ("Independent
Investors") and (c) either is (i) part of a class of securities
registered under section 12(b) or 12(g) of the Exchange Act, or (ii)
sold to the plan as part of an offering of securities to the public
pursuant to an effective registration statement under the Securities Act
and the class of securities of which such security is a part is
registered under the Exchange Act within 120 days (or such later time as
may be allowed by the Commission) after the end of the fiscal year of
the issuer during which the offering of such securities to the public
occurred. For purposes of the 100 Independent Investor criterion, each
Class of Certificates should be deemed to be a "class" of securities
that would be tested separately from any other securities that may be
issued by the Trust. Except to the extent otherwise disclosed herein,
it is anticipated that the Class A Certificates will meet the foregoing
criteria for treatment as "public-offered securities." No restrictions
will be imposed on the transfer of the Class A Certificates. Except to
the extent otherwise disclosed, the Transferor expects that each Class
of Class A Certificates will be held by at least 100 Independent
Investors at the conclusion of the initial public offering although no
assurance can be given, and no monitoring or other measures will be
taken to ensure, that such condition is met. The Class A Certificates
will be sold as part of an offering pursuant to an effective
registration statement under the Act and then will be timely registered
under the Exchange Act.
Equity participation in an entity by "benefit plan investors"
(i.e., Plans and other employee benefit plans not subject to ERISA, such
as governmental or foreign plans, as well as entities holding assets
deemed to be "plan assets") is not "significant" on any date on which
any series of certificates is issued and outstanding if, immediately
after the most recent acquisition of any equity interest therein, less
than 25% of the value of each class of equity interests therein
(excluding interests held by the related transferor, the trustee or
their affiliates in the case of a trust) is held by benefit plan
investors. No assurance can be given by the Transferor as to whether
the value
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of each Class of Certificates that might be deemed to be equity interests in
the Trust held by benefit plan investors will be "significant" upon
completion of the offering of any Certificates or thereafter, and no
monitoring or other measures will be taken with respect to the satisfaction
of the conditions to this exception.
TMCC, on behalf of itself and certain of its affiliates (including
the Transferor), has applied to the DOL for an administrative exemption
(the "Requested Exemption") from certain of the prohibited transaction
rules of ERISA with respect to the initial purchase, the holding and the
subsequent resale by Benefit Plans of certificates similar to the Class
A Certificates. There can be no assurance that the Requested Exemption
will be granted or that, if granted, it will be made retroactive through
the date of the issuance of the Class A Certificates. Should the
Requested Exemption be granted, it would apply to the acquisition,
holding and resale by Benefit Plans of the Class A Certificates provided
that specified conditions (including those described below) are met.
The Transferor believes that all conditions of the Requested Exemption
other than those within the control of the investors have or will be
met.
For the Requested Exemption to apply to the acquisition by a
Benefit Plan of Class A Certificates, the Class A Certificates would be
required to be offered and sold initially to the public (including
Benefit Plans) pursuant to an underwriting arrangement with one or more
underwriters which have received one of a group of administrative
exemptions from certain of the prohibited transaction rules of ERISA.
Such exemptions apply with respect to the initial purchase, the holding
and the subsequent resale by Benefit Plans of certificates representing
interests in asset backed pass-through trusts that consist of certain
receivables, loans and other obligations that meet the conditions and
requirements of such exemption. The DOL has granted such an
administrative exemption to one of the underwriters (Prohibited
Transaction Exemption 90-25; Exemption Application No. D-8102, 55 Fed.
Reg. 42597 (1990), as amended).
Among the other conditions that are required to be satisfied for
the Exemption to apply to the acquisition by a Benefit Plan of the Class
A Certificates are the following (each of which the Transferor believes
has been or will be met in connection with the Class A Certificates):
(i) The acquisition of the Class A Certificates by a Benefit Plan
is on terms (including the price for the Class A Certificates) that
are at least as favorable to the Benefit Plan as they would be in
an arm's length transaction with an unrelated party.
(ii) The rights and interests evidenced by the Class A Certificates
acquired by the Benefit Plan are not subordinated to the rights and
interests evidenced by any other Class of Certificates, and the
rights and interests evidenced by the SUBI Interest are not
subordinated to the rights and interests evidenced by Other SUBI
Certificates or UTI Certificates.
(iii) The Class A Certificates acquired by the Benefit Plan have
received a rating at the time of such acquisition that is in one of
the three highest generic rating categories from Standard & Poor's,
Moody's, Duff & Phelps Credit Rating Co. ("Duff & Phelps") or
Fitch Investors Service, Inc. ("Fitch").
(iv) The sum of all payments made to the Underwriters in connection
with the distribution of the Class A Certificates represents not
more than reasonable compensation for underwriting the Class A
Certificates. The sum of all payments made to and retained by the
Transferor pursuant to the sale of the SUBI Interest to the Trust
represents not more than the fair market value of the interest in
the Contracts and Leased Vehicles represented thereby. The sum of
all payments made to and retained by the Servicer with regard to
the SUBI Assets represents not more than reasonable compensation
for the Servicer's
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services under the Servicing Agreement and reimbursement of the
Servicer's reasonable expenses in connection therewith.
(v) The Revolving Period ends no more than 15 consecutive months
from the Closing Date and (A) all Subsequent Contracts meet the
terms and conditions for eligibility described in this Prospectus,
and (B) the addition of Subsequent Contracts does not result in the
reduction of the ratings on the Class A Certificates received from
any of Moody's, Standard & Poor's, Duff & Phelps or Fitch.
(vi) After the Revolving Period ends, the average Lease Rate for
the Contracts included in the SUBI Assets shall not be more than
200 basis points greater than the average Lease Rate for the
Initial Contracts.
(vii) Principal Collections that are reinvested in Subsequent
Contracts during the Revolving Period are first invested in an
eligible lease contract with the earliest origination date, then in
an eligible lease contract with the next earliest origination date
and so forth, beginning with the lease contracts that have been
reserved specifically for such purpose at the time of the initial
allocation of lease contracts to the SUBI, but excluding those
specific lease contracts reserved for allocation to or allocated to
Other SUBIs.
In addition, it is a condition that the Benefit Plan investing in
the Class A Certificates be an "accredited investor" as defined in Rule
501(a)(1) of Regulation D of the Commission under the Securities Act.
The Requested Exemption would not apply to Benefit Plans sponsored by the
Transferor, the Underwriters, the Trustee, the Servicer, any lessee with
respect to Contracts allocated to the SUBI Assets constituting more than 5%
of the aggregate unamortized principal balance of the SUBI Assets, or any
affiliate of such parties (the "Restricted Group"). As of the date hereof,
no lessee with respect to the Contracts allocated to the SUBI Assets
constitutes more than 5% of the aggregate unamortized principal balance of
the Trust (i.e., more than 5% of the Aggregate Net Investment Value as of the
Cutoff Date). Moreover, the Requested Exemption would provide relief for
sales, exchanges or transfers between a Benefit Plan and the underwriter or
sponsor with discretionary investment authority over such Benefit Plan's
assets, from certain self-dealing/conflict of interest prohibited
transactions, only if, among other requirements, (i) a Benefit Plan's
investment in the Class A Certificates does not exceed 25% of all of the
Class A Certificates outstanding at the time of the acquisition, and (ii)
immediately after the acquisition, no more than 25% of the assets of a
Benefit Plan with respect to which the person who has discretionary authority
or renders investment advice are invested in Class A Certificates
representing an interest in a trust containing assets sold or serviced by the
same entity.
Due to the complexities of these rules and the penalties imposed upon
persons involved in prohibited transactions, it is important that the
fiduciary of a Benefit Plan considering the purchase of Class A Certificates
consult with its counsel regarding the grant and applicability of the
Requested Exemption and the prohibited transaction provisions of ERISA and
the Code to such investment. Moreover, each Benefit Plan fiduciary should
determine whether, under the general fiduciary standards of investment
prudence and diversification, an investment in the Class A Certificates is
appropriate for the Benefit Plan, taking into account the overall investment
policy of the Benefit Plan and the composition of the Benefit Plan's
investment portfolio.
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UNDERWRITING
Under the terms and subject to the conditions contained in an
Underwriting Agreement dated -, 1997 (the "Underwriting Agreement"),
among the Transferor, TMCC, -, - and - (the "Underwriters"), the
Transferor has agreed to sell to the Underwriters, and the Underwriters
have agreed to purchase from the Transferor, severally but not jointly,
the following respective amounts of Class A Certificates:
<TABLE>
<CAPTION>
CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4
UNDERWRITER CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES
<S> <C> <C> <C> <C>
- - . . . . . . . . . . . $- $- $- $-
- - . . . . . . . . . . . $- $- $- $-
- - . . . . . . . . . . . $- $- $- $-
Total . . . . . . $- $- $- $-
</TABLE>
In the Underwriting Agreement the Underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase all the Class A
Certificates if any are purchased. The Underwriting Agreement provides that,
in the event of a default by an Underwriter, in certain circumstances the
purchase commitments of the non-defaulting Underwriter may be increased or
the Underwriting Agreement may be terminated.
The Transferor has been advised by the Underwriters that they
propose to offer the Class A Certificates to the public initially at the
public offering prices set forth on the cover page of this Prospectus
and to certain dealers at such prices less a concession of -%, -%, -%
and -% of the principal amount per Class A-1, Class A-2, Class A-3 and
Class A-4 Certificate, respectively, and that the Underwriters and such
dealers may allow a discount of -%, -%, -% and -% of such principal
amount per Class A-1, Class A-2, Class A-3 and Class A-4 Certificate,
respectively, on sales to certain other dealers. After the initial
public offering, the public offering price and concessions and discounts
to dealers may be changed by the Underwriters.
The Transferor and TMCC have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities
Act.
The Class A Certificates are a new issue of securities with no
established trading markets. The Transferor has been advised by the
Underwriters that the Underwriters intend to make a market in each Class
of Class A Certificates, as permitted by applicable laws and
regulations. The Underwriters are not obligated, however, to make a
market in any Class of Class A Certificates and any such market-making
may be discontinued at any time at the sole discretion of the
Underwriters without notice. Accordingly, no assurance can be given as
to the liquidity of or trading markets for any Class of Class A
Certificates.
The Underwriters have advised the Transferor that, pursuant to
Regulation M under the Securities Act, certain persons participating in
this offering may engage in transactions, including stabilizing bids and
syndicate covering transactions, which may have the effect of
stabilizing or maintaining the market price of any Class of Class A
Certificates at levels above those that might otherwise prevail in the
open market. A "stabilizing bid" is a bid for or the purchase of any
Class A Certificates on behalf of the Underwriters for the purpose of
fixing or maintaining the price of such Certificates. A "syndicate
covering transaction" is the bid for or the purchase of
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Class A Certificates on behalf of the Underwriters to reduce a short
position incurred by the Underwriters in connection with this offering.
Stabilizing bids and syndicate covering transactions may have the
effect of causing the price of the Class A Certificates of any Class to
be higher than it might be in the absence thereof. Neither the
Transferor nor the Underwriters makes any representation or prediction
as to the direction or magnitude of any such effect on the prices for
the Certificates. Neither the Transferor nor the Underwriters makes any
representation that the Underwriters will engage in any such
transactions or that, once commenced, any such transactions will not be
discontinued without notice.
The Trust may, from time to time, invest the funds in the Accounts
in Permitted Investments acquired from one or more of the Underwriters
or the Servicer.
It is expected that delivery of the Class A Certificates will be
made against payment therefor on or about the date specified in the last
paragraph of the cover page of this Prospectus, which is the - business
day following the date hereof. Under Rule 15c6-1 of the Commission
under the Exchange Act, trades in the secondary market generally are
required to settle in three business days, unless the parties to any
such trade expressly agree otherwise. Accordingly, purchasers who wish
to trade Class A Certificates on the date hereof will be required, by
virtue of the fact that the Class A Certificates initially will settle -
business days after the date hereof, to specify an alternate settlement
cycle at the time of any such trade to prevent a failed settlement.
Upon receipt of a request by an investor who has received an
electronic Prospectus from an Underwriter or a request by such
investor's representative within the period during which there is an
obligation to deliver a Prospectus, the Transferor or the Underwriters
will promptly deliver, or cause to be delivered, without charge, a paper
copy of the Prospectus.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Class A Certificates in Canada is being
made only on a private placement basis exempt from the requirement that
the Transferor prepare and file a prospectus with the securities
regulatory authorities in each province where trades of the Class A
Certificates are effected. Accordingly, any resale of the Class A
Certificates in Canada must be made in accordance with applicable
securities laws which will vary depending on the relevant jurisdiction,
and which may require resales to be made in accordance with available
statutory exemptions or pursuant to a discretionary exemption granted by
the applicable Canadian securities regulatory authority. Purchasers are
advised to seek legal advice prior to any resale of the Class A
Certificates.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Class A Certificates in Canada who receives a
purchase confirmation will be deemed to represent to the Transferor and
the dealer from whom such purchase confirmation is received that (i)
such purchaser is entitled under applicable provincial securities laws
to purchase such Class A Certificates without the benefit of a
prospectus qualified under such securities laws, (ii) where required by
law, that such purchaser is purchasing as principal and not as agent,
and (iii) such purchaser has reviewed the text above under "Resale
Restrictions".
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RIGHTS OF ACTION AND ENFORCEMENT
The securities being offered are those of foreign issuers and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a
result, Ontario purchasers must rely on other remedies that may be available,
including common law rights of action for damages or rescission or rights of
action under the civil liabilities provisions of the U.S. federal securities
laws.
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Ontario purchasers to effect service of process within Canada
upon the issuer or such persons. All or a substantial portion of the assets
of the issuer and such persons may be located outside of Canada and, as a
result, it may not be possible to satisfy a judgment against the issuer or
such persons in Canada or to enforce a judgment obtained in Canadian courts
against such issuer or persons outside of Canada. Following a recent
decision of the U.S. Supreme Court, it is possible that Ontario purchasers
will not be able to rely upon the remedies set out in Section 12(2) of the
Securities Act if the securities are being offered under a U.S. private
placement memorandum.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Class A Certificates to whom the Securities Act (British
Columbia) applies is advised that such purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the sale
of any Class A Certificates acquired by such purchaser pursuant to this
offering. Such report must be in the form attached to British Columbia
Securities Commission Blanket Order BOR #95/17, a copy of which may be
obtained from the Transferor. Only one such report must be filed in respect
of Class A Certificates acquired on the same date and under the same
prospectus exemption.
RATINGS OF THE CLASS A CERTIFICATES
It is a condition of issuance that each of Moody's and Standard & Poor's
rates each Class of Class A Certificates in its highest rating category. The
ratings of the Class A Certificates will be based primarily upon the value of
the Initial Contracts, the Reserve Fund and the terms of the Transferor
Interest and the Class B Certificates. There is no assurance that any such
rating will not be lowered or withdrawn by the assigning Rating Agency if, in
its judgment, circumstances so warrant. In the event that a rating with
respect to any Class of Class A Certificates is qualified, reduced or
withdrawn, no person or entity will be obligated to provide any additional
credit enhancement with respect to such Class of Class A Certificates.
The ratings of the Class A Certificates should be evaluated independently
from similar ratings on other types of securities. A rating is not a
recommendation to buy, sell or hold the related Class A Certificates,
inasmuch as such rating does not comment as to market price or suitability
for a particular investor. The ratings of each Class of Class A Certificates
addresses the likelihood of the payment of principal of and interest on such
Certificates pursuant to their terms.
There can be no assurance as to whether any rating agency other than
Moody's and Standard & Poor's will rate the Class A Certificates, or, if one
does, what rating will be assigned by such other rating agency. A rating on
any Class of Class A Certificates by another rating agency, if assigned at
all, may be lower than the ratings assigned to such Class A Certificates by
each of Moody's and Standard & Poor's.
101
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LEGAL MATTERS
Certain legal matters, including certain federal income tax
matters, with respect to the Class A Certificates have been passed upon
for TMCC and the Transferor by Andrews & Kurth L.L.P., Los Angeles,
California. Certain other legal matters will be passed upon for TMCC
and the Transferor with respect to California, Florida, Michigan, Ohio
and Pennsylvania law, by Hudson Cook LLP, Crofton, Maryland. Certain
other legal matters will be passed upon for TMCC and the Transferor with
respect to Delaware law, by -. Brown & Wood LLP, New York, New York will
act as counsel for the Underwriters and has performed certain legal
services for TMCC in connection with the Titling Trust.
REPORT OF EXPERTS
The consolidated balance sheets of TMCC and its subsidiaries as of
September 30, 1996 and 1995 and the related consolidated statements of
income, changes in shareholders' equity and cash flows for each of the
three years in the period ended September 30, 1996 incorporated by
reference in this Prospectus have been incorporated herein in reliance
on the report of Price Waterhouse LLP, independent accountants, given on
the authority of that firm as experts in accounting and auditing.
102
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103
<PAGE>
INDEX OF CAPITALIZED TERMS
Accelerated Principal Distribution Amount................. 12
Accounts.................................................. 66
Additional Loss Amounts................................... 73
Additional Loss Contract.................................. 68
Advance................................................... 18
Agency Agreement.......................................... 75
Aggregate Net Investment Value............................ 12
Aggregate Net Losses...................................... 68
Agreement............................................... i, 1
Amortization Period....................................... 11
Benefit Plans............................................. 93
Business Day............................................... 4
Capped Contingent and Excess Liability Premiums........... 54
Capped Origination Trust Administrative Expenses.......... 54
Capped Trust Administrative Expenses...................... 54
Cedel Bank................................................ 13
Cedel Participants........................................ 63
Certificate Balance........................................ 5
Certificate Distribution Amount........................... 59
Certificate Factor........................................ 47
Certificate Owners........................................ 13
Certificate Payment Date................................... 6
Certificate Principal Loss Amount......................... 55
Certificateholders' Account............................... 67
Certificateholders........................................ ii
Certificates............................................... i
Charge-off Rate........................................... 67
Charged-off Amount........................................ 49
Charged-off Contract...................................... 49
Class A Certificate Balance................................ 5
Class A Certificates...................................... ii
Class A Interest........................................... 4
Class A-1 Certificates.................................... ii
Class A-1 Interest......................................... 4
Class A-1 Rate............................................. 8
Class A-2 Certificates.................................... ii
Class A-2 Interest......................................... 4
Class A-2 Rate............................................. 8
Class A-3 Interest......................................... 4
Class A-3 Rate............................................. 8
Class A-4 Interest......................................... 4
Class A-4 Rate............................................. 8
Class B Certificates...................................... ii
104
<PAGE>
Class B Interest........................................... 4
Class Certificate Balance.................................. 5
Closing Date............................................... 5
Code...................................................... 89
Collection Period......................................... 10
Collections............................................... 10
Commission............................................... iii
Contingent and Excess Liability Insurance Policies........ 69
Contract Rights........................................... 85
Contracts.................................................. 2
Cooperative............................................... 64
Current Contract.......................................... 68
Cutoff Date................................................ 2
Dealers.................................................... 1
Deferral Fee.............................................. 34
Delinquency Percentage.................................... 68
Deposit Date.............................................. 15
Determination Date........................................ 50
Discounted Contract....................................... 10
Discounted Principal Balance.............................. 12
DOL....................................................... 94
DTC....................................................... 13
DTC Participants.......................................... 62
Early Amortization Event.................................. 57
ERISA..................................................... 93
Euroclear............................................. 13, 64
Euroclear Operator........................................ 64
Euroclear Participants.................................... 63
Events of Servicing Termination........................... 82
Excess Amounts............................................ 54
Exchange Act............................................. iii
First Bank................................................. 1
First Principal Monthly Allocation Date.................... 9
Five States................................................ 1
Indirect DTC Participants..................................62
Initial Certificate Balance................................ 5
Initial Class A Certificate Balance........................ 5
Initial Class A-1 Certificate Balance...................... 5
Initial Class A-2 Certificate Balance...................... 5
Initial Class A-3 Certificate Balance...................... 5
Initial Class A-4 Certificate Balance...................... 5
Initial Class B Certificate Balance........................ 5
Initial Contracts.......................................... 2
Initial Deposit........................................... 17
Initial Leased Vehicles.................................... 2
Insolvency Event.......................................... 28
Insolvency Laws........................................... 27
Interest Carryover Shortfall.............................. 54
105
<PAGE>
Interest Collections...................................... 11
Interest Period............................................ 8
Investor Interest.......................................... 4
Investor Percentage....................................... 11
Investors' Principal Allocation........................... 54
IRS....................................................... 89
Leased Vehicles............................................ 2
Lemon Law................................................. 88
Liquidated Contract....................................... 68
Liquidation Expenses...................................... 16
Liquidation Proceeds...................................... 15
Loss Amounts.......................................... 22, 49
Matured Contract.......................................... 12
Matured Leased Vehicle Expenses........................... 15
Matured Leased Vehicle Inventory.......................... 12
Matured Leased Vehicle Proceeds........................... 15
Maturity Advance.......................................... 18
Maturity Date............................................. 40
Monthly Amortization Event................................ 13
Monthly Payment........................................... 14
Moody's................................................... 20
Net Insurance Proceeds.................................... 66
Net Liquidation Proceeds.................................. 11
Net Matured Leased Vehicle Proceeds....................... 17
Net Repossessed Vehicle Proceeds.......................... 11
Nonrecoverable Advance.................................... 78
Origination Trust Agreement............................... 32
Other SUBI Assets......................................... 84
Other SUBI Certificates................................... 30
Other SUBIs................................................ 1
Outstanding Principal Balance............................. 14
Payment Ahead............................................. 15
Payoff Amount............................................. 40
Permitted Investments..................................... 69
Prepayment................................................ 66
Principal Allocation...................................... 11
Principal Carryover Shortfall............................. 54
Principal Collections..................................... 10
Rating Agencies........................................... 20
Realized Value............................................ 40
Reallocation Deposit Amount............................... 49
Reallocation Payment...................................... 45
Record Date................................................ 4
Registration Statement................................... iii
Repossessed Vehicle Expenses.............................. 15
Repossessed Vehicle Proceeds.............................. 15
Required Amount........................................... 17
Residual Value............................................ 14
106
<PAGE>
Residual Value Loss Amount................................ 22
Residual Value Surplus.................................... 17
Revolving Period........................................... 9
Schedule of Contracts and Leased Vehicles................. 44
Securities Act........................................... iii
Security Deposits......................................... 78
Servicer................................................... 3
Servicer's Certificate.................................... 80
Servicing Agreement........................................ 3
Servicing Fee............................................. 19
Servicing Supplement....................................... 3
Specified Reserve Fund Balance............................ 67
Standard & Poor's......................................... 20
SUBI.................................................... i, 1
SUBI..Supplement.......................................... 30
SUBI Assets................................................ i
SUBI Certificate.......................................... 14
SUBI Collection Account................................... 66
Subsequent Contracts....................................... 2
Subsequent Leased Vehicles................................. 2
Titling Trust.............................................. i
Titling Trust Agreement.................................... 2
Titling Trust Assets....................................... i
Titling Trustee............................................ 2
TMA........................................................ 3
TMC........................................................ 3
TMCC................................................... i, 33
TMS........................................................ 3
Transfer Date.............................................. 9
Transferor................................................. i
Transferor Amounts........................................ 50
Transferor Interest....................................... ii
Transferor Percentage..................................... 49
Trust...................................................... i
Trust Agent............................................... 75
Trustee.................................................... i
Unallocated Principal Collections......................... 50
UTI........................................................ 1
UTI Assets................................................ 84
UTI Certificates.......................................... 30
Voting Interests.......................................... 58
107
<PAGE>
ANNEX 1
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Class A-1
Certificates (the "Global Securities") will be available only in book-entry
form. Investors in the Global Securities may hold such Global Securities
through DTC, Cedel Bank or Euroclear. The Global Securities will be
tradeable as home market instruments in both the European and U.S. domestic
markets. Initial settlement and all secondary trades will settle in same-day
funds.
Secondary market trading between investors holding Global Securities
through Cedel Bank and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in accordance
with conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities through
DTC will be conducted according to the rules and procedure applicable to U.S.
corporate debt obligations and prior asset-backed securities issues.
Secondary cross-market trading between Cedel Bank or Euroclear and DTC
Participants holding securities will be effected on a
delivery-against-payment basis through the Relevant Depositaries of Cedel
Bank and Euroclear (in such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be
subject to U.S. withholding taxes unless such holders meet certain
requirements and deliver appropriate U.S. tax documents to the securities
clearing organizations or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name
of Cede & Co. as nominee of DTC. Investors' interests in the Global
Securities will be represented through financial institutions acting on their
behalf as direct and indirect Participants in DTC. As a result, Cedel Bank
and Euroclear will hold positions on behalf of their participants through
their Depositaries, which in turn will hold such positions in accounts as DTC
Participants.
Investors electing to hold their Global Securities through DTC will
follow DTC settlement practice. Investor securities custody accounts will be
credited with their holdings against payment in same-day funds on the
settlement date. Investors electing to hold their Global Securities through
Cedel Bank or Euroclear accounts will follow the settlement procedures
applicable to conventional eurobonds, except that there will be no temporary
global security and no "lock-up" or restricted period. Global Securities
will be credited to securities custody accounts on the settlement date
against payment in same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired
value date.
TRADING BETWEEN DTC PARTICIPANTS. Secondary market trading between DTC
Participants will be settled using the procedures applicable to prior
asset-backed securities issues in same-day funds.
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<PAGE>
TRADING BETWEEN CEDEL BANK AND/OR EUROCLEAR PARTICIPANTS. Secondary
market trading between Cedel Bank Participants or Euroclear Participants will
be settled using the Procedures applicable to conventional eurobonds in
same-day funds.
TRADING BETWEEN DTC SELLER AND CEDEL BANK OR EUROCLEAR PARTICIPANTS.
When Global Securities are to be transferred from the account of a DTC
Participant to the account of a Cedel Bank Participant or a Euroclear
Participant, the purchaser will send instructions to Cedel Bank or Euroclear
through a Cedel Bank Participant or Euroclear Participant at least one
business day prior to settlement. Cedel Bank or Euroclear will instruct the
respective Depositary, as the case may be, to receive the Global Securities
against payment. Payment will include interest accrued on the Global
Securities from and including the last coupon payment date to and excluding
the settlement date, on the basis of the actual number of days in such
accrual period and a year assumed to consist of 360 days. For transactions
settling on the 31st of the month, payment will include interest accrued to
and excluding the first day of the following month. Payment will then be made
by the respective Depositary to the DTC Participant's account against
delivery of the Global Securities. After settlement has been completed, the
Global Securities will be credited to the respective clearing system and by
the clearing system, in accordance with its usual procedures, to the Cedel
Bank Participant's or Euroclear Participant's account. The securities credit
will appear the next day (European time) and the cash debt will be
back-valued to, and the interest on the Global Securities will accrue from,
the value date (which would be the preceding day when settlement occurred in
New York). If settlement is not completed on the intended value date (i.e.,
the trade fails), the Cedel Bank or Euroclear cash debt will be valued
instead as of the actual settlement date.
Cedel Bank Participants and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to
preposition funds for settlement, either from cash on hand or existing lines
of credit, as they would for any settlement occurring within Cedel Bank or
Euroclear. Under this approach, they may take on credit exposure to Cedel
Bank or Euroclear until the Global Securities are credited to their accounts
one day later.
As an alternative, if Cedel Bank or Euroclear has extended a line of
credit to them, Cedel Bank Participants or Euroclear Participants can elect
not to preposition funds and allow that credit line to be drawn upon to
finance settlement. Under this procedure, Cedel Bank Participants or
Euroclear Participants purchasing Global Securities would incur overdraft
charges for one day, assuming they clear the overdraft when the Global
Securities are credited to their accounts. However, interest on the Global
Securities would accrue from the value date. Therefore, in many cases the
investment income on the Global Securities earned during that one-day period
may substantially reduce or offset the amount of such overdraft charges,
although this result will depend on each Cedel Bank Participants or Euroclear
Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities
to the respective European Depositary for the benefit of Cedel Bank
Participants or Euroclear Participants. The sale proceeds will be available
to the DTC seller on the settlement date. Thus, to the DTC Participants a
cross-market transaction will settle no differently than a trade between two
DTC Participants.
TRADING BETWEEN CEDEL BANK OR EUROCLEAR SELLER AND DTC PURCHASER. Due to
time zone differences in their favor, Cedel Bank Participants and Euroclear
Participants may employ their customary procedures for transactions in which
Global Securities are to be transferred by the respective clearing system,
through the respective Depositary, to a DTC Participant. The seller will send
instructions to Cedel Bank or Euroclear through a Cedel Bank Participant or
Euroclear Participant at least one business day prior to settlement. In these
cases, Cedel Bank or Euroclear will instruct the Relevant Depositary, as
appropriate, to deliver the Global Securities
A-2
<PAGE>
to the DTC Participant's account against payment. Payment will include
interest accrued on the Global Securities from and including the last coupon
payment to and excluding the settlement date on the basis of the actual
number of days in such accrual period and a year assumed to consist of 360
days. For transactions settling on the 31st of the month, payment will
include interest accrued to and excluding the first day of the following
month. The payment will then be reflected in the account of the Cedel Bank
Participant or Euroclear Participant the following day, and receipt of the
cash proceeds in the Cedel Bank Participant's or Euroclear Participant's
account would be back-valued to the value date (which would be the preceding
day, when settlement occurred in New York). Should the Cedel Bank
Participant or Euroclear Participant have a line of credit with its
respective clearing system and elect to be in debt in anticipation of receipt
of the sale proceeds in its account, the back valuation will extinguish any
overdraft incurred over that one-day period. If settlement is not completed
on the intended value date (i.e., the trade fails), receipt of the cash
proceeds in the Cedel Bank Participant's or Euroclear Participant's account
would instead be valued as of the actual settlement date.
Finally, day traders that use Cedel Bank or Euroclear and that purchase
Global Securities from DTC Participants for delivery to Cedel Bank Participants
or Euroclear Participants should note that these trades would automatically fail
on the sale side unless affirmative action were taken. At least three
techniques should be readily available to eliminate this potential problem:
(a) borrowing though Cedel Bank or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedel Bank or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant no
later than one day prior to settlement, which would give the Global Securities
sufficient time to be reflected in their Cedel Bank or Euroclear account in
order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase from the DTC Participant is at least one
day prior to the value date for the sale to the Cedel Bank Participant or
Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through Cedel
Bank or Euroclear (or through DTC if the holder has an address outside the U.S.)
will be subject to the 30% U.S. withholding tax that generally applies to
payments of interest (including original issue discount) on registered debt
issued by U.S. Persons, unless (i) each clearing system, bank or other
financial institution that holds customers' securities in the ordinary course of
its trade or business in the chain of intermediaries between such beneficial
owner and the U.S. entity required to withhold tax complies with applicable
certification requirements and (ii) such beneficial owner takes one of the
following steps to obtain an exemption or reduced tax rate:
EXEMPTION FOR NON-U.S. PERSONS (FORM W-8). Beneficial owners of Global
Securities that are Non-U.S. Persons can obtain a complete exemption from the
withholding tax by filing a signed Form W-8 (Certificate of Foreign Status). If
the information shown on Form W-8 changes, a new Form W-8 must be filed within
30 days of such change.
EXEMPTION FOR NON-U.S. PERSONS WITH EFFECTIVELY CONNECTED INCOME (FORM
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a
U.S. branch, for which the interest income is effectively connected with its
conduct of a trade or business in the United States, can obtain an exemption
from the
A-3
<PAGE>
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on
Income Effectively Connected with the Conduct of a Trade or Business in the
United States).
EXEMPTION OR REDUCED RATE FOR NON-U.S. PERSONS RESIDENT IN TREATY
COUNTRIES (FORM 1001). Non-U.S. Persons residing in a country that has a
tax treaty with the United States can obtain an exemption or reduced tax rate
depending on the treaty terms) by filing Form 1001 (Ownership, Exemption or
Reduced Rate Certificate). If the treaty provides only for a reduced rate,
withholding tax will be imposed at that rate unless the filer alternatively
files Form W-8. Form 1001 may be filed by the Certificate Owners or their
agents.
EXEMPTION FOR U.S. PERSONS (FORM W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form W-9 (Payer's
Request for Taxpayer Identification Number and Certification).
U.S. FEDERAL INCOME TAX REPORTING PROCEDURE. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his
agent, files by submitting the appropriate form to the person though whom it
holds (the clearing agency, in the case of persons holding directly on the
books of the clearing agency). Form W-8 and Form 1001 are effective for
three calendar years, and Form 4224 is effective for one calendar year.
As used in the foregoing discussion, the term "U.S. Person" means (i) a
citizen or resident of the United States, (ii) a corporation or partnership
organized in or under the laws of the United States or any political
subdivision thereof, (iii) an estate that is subject to United States federal
income tax, regardless of the source of its income or (iv) a trust if (a) a
court within the United States is able to exercise primary supervision over
the administration of the trust and (b) one or more United States fiduciaries
have the authority to control all substantial decisions of the Trust. The
term "Non-U.S. Person" means any person who is not a U.S. Person. This
summary does not deal with all aspects of U.S. federal income tax withholding
that may be relevant to foreign holders of Global Securities. Investors are
advised to consult their own tax advisors for specific tax advice concerning
their holding and disposing of Global Securities.
A-4
<PAGE>
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE SELLER OR ANY UNDERWRITER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE SELLER SINCE SUCH DATE.
TABLE OF CONTENTS
-----------------
Page
----
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . .iii
Documents Incorporated by Reference. . . . . . . . . . . . . . . . . . . .iii
Reports to Certificateholders. . . . . . . . . . . . . . . . . . . . . . . iv
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
The Trust and the SUBI . . . . . . . . . . . . . . . . . . . . . . . . . . 29
The Titling Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
The Transferor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
TMCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
The Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Maturity, Prepayment and Yield
Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Class A Certificate Factors and Trading Information;
Reports to Class A Certificateholders . . . . . . . . . . . . . . . . . 49
Description of the Certificates . . . . . . . . . . . . . . . . . . . . . 49
Assets of the Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Additional Document Provisions . . . . . . . . . . . . . . . . . . . . . . 73
Certain Legal Aspects of the Titling Trust . . . . . . . . . . . . . . . . 85
Certain Legal Aspects of the Contracts and the Leased Vehicles . . . . . . 88
Material Federal Income Tax Considerations . . . . . . . . . . . . . . . . 91
ERISA Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Notice to Canadian Residents . . . . . . . . . . . . . . . . . . . . . . .100
Ratings of the Class A Certificates . . . . . . . . . . . . . . . . . . .101
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
Report of Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
Index of Capitalized Terms . . . . . . . . . . . . . . . . . . . . . . . .104
Global Clearance, Settlement and Tax Documentation Procedures . . . . . .A-1
- --------------------------------------------------------------------------------
[LOGO]
TOYOTA AUTO LEASE TRUST 1997-A
$-
$- -% Auto Lease
Asset Backed Certificates, Class A-1
$- -% Auto Lease
Asset Backed Certificates, Class A-2
$- -% Auto Lease
Asset Backed Certificates, Class A-3
$- -% Auto Lease
Asset Backed Certificates, Class A-4
TOYOTA LEASING, INC.
Transferor
TOYOTA MOTOR CREDIT CORPORATION
Servicer
PROSPECTUS
JOINT BOOKRUNNERS
MERRILL LYNCH & CO.
(GLOBAL COORDINATOR)
LEHMAN BROTHERS
MORGAN STANLEY DEAN WITTER
-, 1997
<PAGE>
- ------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. Other Expenses of Issuance and Payment.
Expenses in connection with the offering of the Class A Certificates
being registered herein are estimated as follows:
SEC registration fee.............. $610.08
Legal fees and expenses........... -
Accounting fees and expenses...... -
Blue sky fees and expenses........ -
Rating agency fees................ -
Trustee fees and expenses......... -
Printing.......................... -
Miscellaneous..................... -
Total........................ $610.08
ITEM 14. Indemnification of Directors and Officers.
Toyota Motor Credit Corporation ("TMCC") and Toyota Leasing, Inc. ("TLI")
were incorporated as California corporations. Section 317 of the California
Corporations Code authorizes a corporation to indemnify any person who was or
is a party or is threatened to be made a party to any proceeding (other than
an action by or in the right of the corporation to procure a judgment in its
favor) by reason of the fact that such person is or was an officer or
director of the corporation, against expenses, judgments, fines, settlements
and other amounts actually and reasonably incurred in connection with such
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in the best interests of the corporation and, in
the case of a criminal proceeding, had no reasonable cause to believe the
conduct of such person was unlawful.
Each of TMCC's and TLI's Bylaws authorize TMCC and the Transferor to
indemnify their officers and directors to the maximum extent permitted by the
California Corporations Code. TMCC has entered into indemnification
agreements with its officers and directors to indemnify such officers and
directors to the maximum extent permitted by the California Corporations Code.
This item is not applicable to the other Registrants.
ITEM 15. Recent Sales of Unregistered Securities.
Not applicable.
II-1
<PAGE>
ITEM 16. Exhibits and Financial Statement Schedules.
a. Exhibits:
1.1 Form of Underwriting Agreement.*
3.1 Articles of Incorporation of Toyota Leasing, Inc.*
3.2 Bylaws of Toyota Leasing, Inc.*
4.1 Form of Securitization Trust Agreement between Toyota Leasing,
Inc. and First Bank National Association ("First Bank"), as Trustee
(including forms of Class A Certificates).
5.1 Opinion of Andrews & Kurth L.L.P. with respect to legality.*
8.1 Opinion of Andrews & Kurth L.L.P. with respect to federal
income tax matters.*
10.1 Amended and Restated Trust and Servicing Agreement among
Toyota Motor Credit Corporation ("TMCC"), TMTT, Inc., as
Trustee and First Bank, as Trust Agent, dated as of October 1, 1996
10.2 UTI Supplement to Amended and Restated Trust and Servicing
Agreement among TMCC, TMTT, Inc., as Trustee, and First Bank,
as Trust Agent, dated October 1, 1996 (including form of UTI Certificate).
10.3 Form of SUBI Supplement 1997-A to Amended and Restated Trust
Agreement among TMCC, TMTT, Inc., as Trustee and First Bank, as Trust
Agent (including form of SUBI Certificate).
10.4 Form of 1997-A SUBI Servicing Supplement to Amended and
Restated Trust and Servicing Agreement between TMTT, Inc., TMCC and
Toyota Leasing, Inc.
10.5 Administration Agreement among TMCC, TMTT, Inc., as Trustee,
and First Bank, as Trust Agent.*
10.6 Form of SUBI Certificate Purchase and Sale Agreement between
TMCC and Toyota Leasing, Inc.
10.7 Form of Indenture with respect to TMCC Demand Notes between
TMCC and -, as Trustee.*
23.1 Consent of Andrews & Kurth L.L.P. (included as part of
Exhibit 5.1).*
23.2 Consent of Andrews & Kurth L.L.P. (included as part of
Exhibit 8.1).*
23.3 Consent of Hudson Cook LLP.*
23.4 Consent of -.*
23.5 Consent of Price Waterhouse LLP.*
24.1 Powers of Attorney.**
25.1 Statement of Eligibility of -.*
- -----------
* To be filed by amendment.
** Included on pages II-5, II-6 and II-7.
b. Financial Statement Schedules:
Not applicable.
ITEM 17. Undertakings.
The undersigned Registrants hereby undertake as follows:
II-2
<PAGE>
(a) To provide to the Underwriters at the closing date specified in the
underwriting agreement certificates in such denominations and registered in
such names as required by the underwriters to provide prompt delivery to each
purchaser.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(c) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act will be deemed to be part of this
registration statement as of the time it was declared effective.
(d) For the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment that contains a form of
prospectus will be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
will be deemed to be the initial BONA FIDE offering thereof.
(e) TMCC, one of the undersigned registrants, hereby undertakes that,
for purposes of determining any liability under the Securities Act of 1933,
each filing of such registrant's annual report pursuant to Section 13(a) and
15(d) of the Securities Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof.
(f) The undersigned Registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high of the estimated
maximum offering range may be reflected in the form of prospectus
filed with the Commission
II-3
<PAGE>
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
PROVIDED, HOWEVER, that paragraphs (f)(1)(i) and (f)(1)(ii) do not apply if
the registration statement is on Form S-3 and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
(2) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Amendment No. 1 to Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Torrance and State of California, on the 30th day of
July, 1997.
TOYOTA AUTO LEASE TRUST 1997-A
By: TOYOTA LEASING, INC., solely as originator of
Toyota Auto Lease Trust 1997-A
By: /s/ Gregory Willis
----------------------------------------
Gregory Willis, Director and President
Know all men by these presents, that each person whose signature appears
below constitutes and appoints Gregory Willis, Jerome Lienhard and Dian
Ogilvie as his true and lawful attorney-in-fact and agent, with full powers
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign and to file any and all amendments, including
post-effective amendments to this Registration Statement, with the Securities
and Exchange Commission granting to said attorney in fact power and authority
to perform any other act on behalf of the undersigned required to be done in
connection therewith.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Gregory Willis Director and Principal Executive July 30, 1997
- ------------------------- Officer of Toyota Leasing, Inc.
Gregory Willis
/s/ Nobu Shigemi Director and Principal Financial July 30, 1997
- ------------------------- Officer and Principal Accounting
Nobu Shigemi Officer of Toyota Leasing, Inc.
/s/ William Latham, III Director of Toyota July 30, 1997
- ------------------------- Leasing, Inc.
William Latham, III
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Amendment No. 1 to Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Torrance and State of California, on the 30th day of
July, 1997.
TOYOTA LEASING, INC.
By: /s/ Gregory Willis
-----------------------------------------
Gregory Willis, Director and President
Know all men by these presents, that each person whose signature appears
below constitutes and appoints Gregory Willis, Jerome Lienhard and Dian
Ogilvie as his true and lawful attorney-in-fact and agent, with full powers
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign and to file any and all amendments, including
post-effective amendments to this Registration Statement, with the Securities
and Exchange Commission granting to said attorney in fact power and authority
to perform any other act on behalf of the undersigned required to be done in
connection therewith.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Gregory Willis Director and Principal Executive July 30, 1997
- -------------------------- Officer of Toyota Leasing, Inc.
Gregory Willis
/s/ Nobu Shigemi Director and Principal Financial July 30, 1997
- -------------------------- Officer and Principal Accounting
Nobu Shigemi Officer of Toyota Leasing, Inc.
/s/ William Latham, III Director of Toyota July 30, 1997
- -------------------------- Leasing, Inc.
William Latham, III
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Toyota
Motor Credit Corporation, as a registrant certifies that it has reasonable
grounds to believe that it meets all the requirements for filing on Form S-3
and the Registrants have duly caused this Registration Statement to be signed
on their behalf by the undersigned, thereunto duly authorized, in the City of
Torrance and State of California, on the 30th day of July, 1997.
TOYOTA MOTOR CREDIT CORPORATION, solely as
transferor of the SUBI to the Transferor and
issuer of the TMCC Demand Notes
By: /s/ George Borst
-------------------------------------------
George Borst
Senior Vice President and General Manager
TOYOTA LEASE TRUST
By: TOYOTA MOTOR CREDIT CORPORATION, solely
as originator of the Toyota Lease Trust
By: /s/ George Borst
-------------------------------------
George Borst, Director, Senior Vice
President and General Manager
Know all men by these presents, that each person whose signature appears
below constitutes and appoints Gregory Willis, Jerome Lienhard and Dian
Ogilvie as his true and lawful attorney-in-fact and agent, with full powers
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign and to file any and all amendments, including
post-effective amendments to this Registration Statement, with the Securities
and Exchange Commission granting to said attorney in fact power and authority
to perform any other act on behalf of the undersigned required to be done in
connection therewith.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ George Borst Director, Senior Vice President July 30, 1997
- ------------------------ and General Manager of TMCC
George Borst (principal executive officer)
/s/ Robert Pitts Director and Secretary of TMCC July 30, 1997
- ------------------------
Robert Pitts
II-7
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Nobu Shigemi Director, Senior Vice President July 30, 1997
- ------------------------ and Treasurer of TMCC (principal
Nobu Shigemi financial officer)
/s/ Douglas West Director of TMCC July 30, 1997
- ------------------------
Douglas West
/s/ Yale Gieszl Director of TMCC July 30, 1997
- ------------------------
Yale Gieszl
/s/ Gregory Willis Vice President of Finance July 30, 1997
- ------------------------ and Administration (principal
Gregory Willis accounting officer)
II-8
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Description Numbered Page
- ------- ----------- -------------
1.1 Form of Underwriting Agreement.*
3.1 Articles of Incorporation of Toyota Leasing, Inc.*
3.2 Bylaws of Toyota Leasing, Inc.*
4.1 Form of Securitization Trust Agreement between Toyota Leasing,
Inc. and First Bank National Association ("First Bank"), as
Trustee (including forms of Class A Certificates).
5.1 Opinion of Andrews & Kurth L.L.P. with respect to legality.*
8.1 Opinion of Andrews & Kurth L.L.P. with respect to federal
income tax matters.*
10.1 Amended and Restated Trust and Servicing Agreement among
Toyota Motor Credit Corporation ("TMCC"), TMTT, Inc., as
Trustee and First Bank, as Trust Agent, dated as of
October 1, 1996
10.2 UTI Supplement to Amended and Restated Trust and Servicing
Agreement among TMCC, TMTT, Inc., as Trustee, and First Bank,
as Trust Agent, dated October 1, 1996 (including form of UTI
Certificate).
10.3 Form of SUBI Supplement 1997-A to Amended and Restated Trust
Agreement among TMCC, TMTT, Inc., as Trustee and First Bank,
as Trust Agent (including form of SUBI Certificate).
10.4 Form of 1997-A SUBI Servicing Supplement to Amended and
Restated Trust and Servicing Agreement between TMTT, Inc.,
TMCC and Toyota Leasing, Inc.
10.5 Administration Agreement among TMCC, TMTT, Inc., as Trustee,
and First Bank, as Trust Agent.*
10.6 Form of SUBI Certificate Purchase and Sale Agreement between
TMCC and Toyota Leasing, Inc.
10.7 Form of Indenture with respect to TMCC Demand Notes between
TMCC and -, as Trustee.*
23.1 Consent of Andrews & Kurth L.L.P. (included as part of
Exhibit 5.1).*
23.2 Consent of Andrews & Kurth L.L.P. (included as part of
Exhibit 8.1).*
23.3 Consent of Hudson Cook LLP.*
23.4 Consent of -.*
23.5 Consent of Price Waterhouse LLP.*
24.1 Powers of Attorney.**
25.1 Statement of Eligibility of -.*
- ------------------
* To be filed by amendment.
** Included on pages II-5, II-6 and II-7.
II-9
<PAGE>
EXHIBIT 4.1
_________________________________________________________________
TOYOTA LEASING, INC.
AND
FIRST BANK NATIONAL ASSOCIATION, AS TRUSTEE
TOYOTA AUTO LEASE TRUST 1997-A
AUTOMOBILE LEASE ASSET-BACKED CERTIFICATES
SECURITIZATION TRUST AGREEMENT
DATED AS OF SEPTEMBER 1, 1997
_________________________________________________________________
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C> <C> <C>
RECITALS.................................................................... 1
ARTICLE ONE
DEFINITIONS................................ 2
Section 1.01. Definitions............................................. 2
Section 1.02. Article and Section References.......................... 2
ARTICLE TWO
CREATION OF TRUST.......................... 3
Section 2.01. Creation of Trust........................................ 3
Section 2.02. Conveyance of 1997-A SUBI Interest....................... 3
Section 2.03. Acceptance by Trustee.................................... 4
ARTICLE THREE
DISTRIBUTIONS; RESERVE FUND;
STATEMENTS TO CERTIFICATEHOLDERS................. 4
Section 3.01. Distributions............................................ 4
Section 3.02. Reserve Fund............................................. 10
Section 3.03. Statements to Certificateholders......................... 11
ARTICLE FOUR
THE CERTIFICATES........................... 14
Section 4.01. The Certificates......................................... 14
Section 4.02. Authentication and Delivery of
Certificates....................................................... 15
Section 4.03. Registration of Transfer and Exchange of
Certificates............................................. 16
Section 4.04. Mutilated, Destroyed, Lost or Stolen
Certificates............................................. 19
Section 4.05. Persons Deemed Owners.................................... 19
Section 4.06. Access to List of Certificateholders' Names and
Addresses................................................ 19
Section 4.07. Maintenance of Office or Agency.......................... 20
Section 4.08. Temporary Certificates................................... 20
Section 4.09. Book-Entry Certificates.................................. 21
Section 4.10. Notices to Clearing Agency............................... 22
Section 4.11. Definitive Certificates.................................. 23
</TABLE>
i
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C> <C> <C>
Section 4.12. Tax Treatment............................................ 24
ARTICLE FIVE
THE TRANSFEROR............................. 25
Section 5.01. Representations of Transferor............................ 25
Section 5.02. Liability of Transferor; Indemnities..................... 27
Section 5.03. Merger or Consolidation of, or
Assumption of the Obligations of,
Transferor; Certain Limitations.......................... 27
Section 5.04. Limitation on Liability of Transferor
and Others......................................................... 30
Section 5.05. Transferor May Own Investor
Certificates....................................................... 30
Section 5.06. No Transfer.............................................. 30
Section 5.07. Tax Matters Partner...................................... 31
ARTICLE SIX
THE SECURITIZATION TRUSTEE................. 31
Section 6.01. Duties of Trustee........................................ 31
Section 6.02. Certain Matters Affecting the
Securitization Trustee............................................. 33
Section 6.03. Trustee Not Liable for Certificates or
Contracts................................................ 34
Section 6.04. Trustee May Own Certificates............................. 36
Section 6.05. Trustee's Fees and Expenses.............................. 36
Section 6.06. Eligibility Requirements for Trustee..................... 36
Section 6.07. Resignation or Removal of Trustee........................ 37
Section 6.08. Successor Trustee........................................ 37
Section 6.09. Merger or Consolidation of Trustee....................... 38
Section 6.10. Appointment of Co-Trustee or Separate
Trustee.................................................. 39
Section 6.11. Representations and Warranties of
Trustee............................................................ 40
Section 6.12. Tax Returns.............................................. 41
Section 6.13. Trustee May Enforce Claims Without
Possession of Certificates............................... 41
Section 6.14. Suit for Enforcement..................................... 42
Section 6.15. Rights of Certificateholders to Direct
Trustee.................................................. 42
Section 6.16. No Petition.............................................. 43
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C> <C>
ARTICLE SEVEN
TERMINATION................................ 43
Section 7.01. Termination of the 1997-A Securitization
Trust................................................... 43
Section 7.02. Optional Purchase of 1997-A SUBI
Interest................................................ 45
ARTICLE EIGHT
EARLY AMORTIZATION EVENTS............................... 46
Section 8.01. Early Amortization Events................................ 46
Section 8.02. Additional Rights Upon the Occurrence of
Certain Events........................................... 48
ARTICLE NINE
MISCELLANEOUS PROVISIONS................................ 49
Section 9.01. Amendment............................................... 49
Section 9.02. Protection of Title to Trust............................ 51
Section 9.03. Limitation on Rights of
Certificateholders...................................... 52
Section 9.04. Governing Law........................................... 54
Section 9.05. Notices................................................. 54
Section 9.06. Severability of Provisions;
Counterparts............................................ 54
Section 9.07. Assignment.............................................. 55
Section 9.08. Certificates Nonassessable and Fully
Paid.................................................... 55
ARTICLE TEN
AGENT FOR SERVICE.......................... 55
Section 10.01. Agent for Service of Transferor......................... 55
Section 10.02. Agent of Trustee........................................ 55
</TABLE>
<TABLE>
<S> <C> <C> <C>
EXHIBITS:
Exhibit A-1 - Form of Class A-1 Certificate ..............................A-1
Exhibit A-2 - Form of Class A-2 Certificate ..............................A-2
Exhibit A-3 - Form of Class A-3 Certificate ..............................A-3
Exhibit A-4 - ...........................................................A-4
</TABLE>
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<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C> <C>
Exhibit B - Form of Class B Certificate ................................B-1
Exhibit C - Form of Transferor Certificate .............................C-1
Exhibit D-1 - Form of Non-Rule 144-A Representation
Letter....................................................D-1-1
Exhibit D-2 - Form of Rule 144-A Representation
Letter....................................................D-2-1
Exhibit E - Annex of Definitions........................................E-1
Exhibit F - Annex of Supplemental Definitions...........................F-1
</TABLE>
iv
<PAGE>
SECURITIZATION TRUST AGREEMENT
THIS SECURITIZATION TRUST AGREEMENT, dated as of September 1, 1997, is
made with respect to the formation of the TOYOTA AUTO LEASE TRUST 1997-A
(the "1997-A SECURITIZATION TRUST"), between TOYOTA LEASING, INC. a Delaware
corporation ("TLI" or, in its capacity as transferor hereunder, the
"Transferor"), and FIRST BANK NATIONAL ASSOCIATION, as trustee (the
"SECURITIZATION TRUSTEE").
RECITALS
A. The Toyota Lease Trust (the "Titling Trust") is governed by the
Amended and Restated Trust and Servicing Agreement dated as of October 1,
1996 (the "Titling Trust Agreement") among Toyota Motor Credit Corporation, a
California corporation, as grantor, initial beneficiary and servicer ("TMCC"
and in its capacity as servicer, the "Servicer"), TMTT, Inc. (the "TITLING
TRUSTEE"), a Delaware corporation, as trustee, and, for the limited purposes
stated therein, First Bank National Association ("FIRST BANK"), a national
banking association. The Titling Trust acquires and holds title to various
automobiles, light-duty trucks, related lease contracts and certain other
assets in accordance with the terms of the Titling Trust Agreement.
Capitalized terms used and not defined in these Recitals have the meanings
given in Article I below.
B. Concurrently herewith, TMCC, the Titling Trustee and First Bank have
entered into the 1997-A SUBI Supplement to the Titling Agreement dated as of
September 1, 1997 (the "1997-A SUBI Supplement") pursuant to which the
Titling Trust, at the direction of TMCC, will create and issue to TLI a
special unit of beneficial interest in the Titling Trust (the "1997-A SUBI"),
whose beneficiaries generally will be entitled to the net cash flow arising
from the related SUBI Portfolio (such SUBI Portfolio, the "1997-A SUBI
Portfolio"). The 1997-A SUBI will be evidenced by one SUBI Certificate
representing the entire beneficial interest in the 1997-A SUBI (the "1997-A
SUBI Certificate").
<PAGE>
C. Concurrently herewith, the Titling Trustee (on behalf of the Titling
Trust) and the Servicer also have entered into a Supplement 1997-A to
Servicing Agreement dated as of September 1, 1997 (the "1997-A SUBI Servicing
Supplement"), pursuant to which the terms of the Titling Trust Agreement will
be supplemented insofar as they apply to the 1997-A SUBI Portfolio, providing
for further servicing obligations that will benefit the holders of the 1997-A
SUBI Certificate.
D. Concurrently herewith, TMCC and the Transferor have entered into the
1997-A SUBI Certificate Purchase and Sale Agreement dated as of September 1,
1997 (the "SUBI Certificate Agreement"), pursuant to which TMCC sold to the
Transferor, without recourse, all of TMCC's right, title and interest in and
to the 1997-A SUBI and the 1997-A SUBI Certificate, all monies due thereon
and the right to realize on any property subject to the 1997-A SUBI, and all
proceeds thereof, all in consideration of the cash payment to TMCC of an
amount equal to the Aggregate Net Investment Value of the 1997-A SUBI
Portfolio as of the 1997-A Cutoff Date.
E. The parties desire to enter into this Securitization Trust Agreement
to create the 1997-A Securitization Trust, to provide for the issuance by the
1997-A Securitization Trust of certain Certificates and to provide for the
exchange of those Certificates for the 1997-A SUBI Certificate in connection
with a Securitized Financing by the Transferor.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS.
For all purposes of this Securitization Trust Agreement, except as
otherwise expressly provided or unless the context otherwise requires, (a)
unless otherwise defined herein, all capitalized terms used herein shall have
the meanings attributed
2
<PAGE>
to them in the Annex of Definitions or the Annex of Supplemental Definitions
attached hereto as Exhibit E and Exhibit F, respectively, (b) defined terms
include (i) all genders and (ii) the plural as well as the singular, (c) all
references to words such as "herein", "hereof" and the like shall refer to
this Securitization Trust Agreement as a whole and not to any particular
article or section within this Securitization Trust Agreement, (d) the term
"include" and all variations thereon shall mean "include without limitation",
and (e) the term "or" shall include "and/or".
SECTION 1.02. ARTICLE AND SECTION REFERENCES.
Except as otherwise specified herein, all article and section references
shall be to Articles and Sections in this Securitization Trust Agreement.
ARTICLE TWO
CREATION OF TRUST
SECTION 2.0
1. CREATION OF TRUST.
Upon the execution of this Securitization Trust Agreement by the parties
hereto, there is hereby created the Toyota Auto Lease Trust 1997-A.
SECTION 2.02. CONVEYANCE OF 1997-A SUBI INTEREST.
In consideration of the Securitization Trustee's delivery to, or upon the
order of, the Transferor of executed and authenticated Investor Certificates, in
authorized denominations, in an aggregate amount equal to the Initial
Certificate Balance, and of the executed and authenticated Transferor
Certificate, the Transferor does hereby transfer, assign and otherwise convey to
the Securitization Trustee, in trust for the benefit of the Certificateholders,
to the full extent of the Transferor's interest therein, without recourse
(subject to the Transferor's obligations herein):
3
<PAGE>
(i) all right, title and interest of the Transferor in and to the
1997-A SUBI and the 1997-A SUBI Certificate evidencing the 1997-A SUBI and
all monies due thereon and paid thereon or in respect thereof;
(ii) the right to realize upon any property that may be deemed to
secure the 1997-A SUBI Interest;
(iii) all rights accruing to the holder of the 1997-A SUBI Interest
under the Titling Trust Agreement, the 1997-A SUBI Supplement and the
1997-A SUBI Servicing Supplement; and
(iv) all proceeds of the foregoing;
PROVIDED that all monies and payments due or payable under any Residual Value
Insurance Policy applicable to the 1997-A Leased Vehicles and the right to
receive such payments and monies are retained by the Transferor and are not
hereby transferred, assigned or otherwise conveyed to the Securitization
Trustee.
The Transferor also does hereby grant to the Securitization Trustee a
security interest in all of the foregoing, and the Securitization Trustee
shall have all the rights, powers and privileges of a secured party under the
UCC.
SECTION 2.03. ACCEPTANCE BY TRUSTEE.
The Securitization Trustee does hereby accept all consideration conveyed
by the Transferor pursuant to Section 2.02 and declares that the
Securitization Trustee shall hold such consideration in trust as herein set
forth for the benefit of the Certificateholders, subject to the terms and
provisions of this Securitization Trust Agreement.
ARTICLE THREE
DISTRIBUTIONS; RESERVE FUND;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 3.01. DISTRIBUTIONS.
4
<PAGE>
(a) On each Determination Date, pursuant to Section 4.02(g) of the
1997-A SUBI Servicing Supplement, the Servicer shall calculate the amounts to
be distributed to the holder of the 1997-A SUBI Certificate, the Class A-1
Distributable Amount, the Class A-2 Distributable Amount, the Class A-3
Distributable Amount, the Class A-4 Distributable Amount, the Class B
Distributable Amount, the Transferor Distributable Amount, and all other
distributions to be made on the related Distribution Date.
(b) The rights of the Class B Certificateholders to receive
distributions of Interest Collections allocable to the 1997-A SUBI Interest
in respect of the Class B Certificates shall be and hereby are subordinated
to the rights of the Class A-1 Certificateholders, the Class A-2
Certificateholders, the Class A-3 Certificateholders and the Class A-4
Certificateholders to receive distributions of Interest Collections allocable
to the 1997-A SUBI Interest to the extent provided in this subsection.
On each Monthly Allocation Date, based on the monthly servicing report
prepared by the Servicer, the Securitization Trustee shall distribute from
the 1997-A SUBI Collection Account the product of (i) the Investor Percentage
with respect to Interest Collections, multiplied by (ii) the Interest
Collections in 1997-A SUBI Collection Account for the related Collection
Period, together with any Transferor Amounts and the Reserve Fund Withdrawal
Amount, if any, for such Monthly Allocation Date, and any amount of Principal
Collections allocable to the Class B Certificates but applied pursuant to
subsection (e)(iii) below, in the following amounts and in the following
order of priority to the following accounts and Persons:
(i) in the event of an Early Amortization Event involving an
Insolvency Event, as a result of which the Securitization Trustee has
elected or has been instructed to sell the property of the 1997-A
Securitization Trust pursuant to Section 8.02(a), to the Securitization
Trustee, the Investor Percentage of Capped Securitization Trust
Administrative Expenses;
(ii) to the Certificate Account until there has been deposited therein
pursuant to this clause (ii), the Class
5
<PAGE>
A-1 Interest Distributable Amount for the next Distribution Date
together with any unpaid Class A-1 Interest Carryover Shortfall, the
Class A-2 Interest Distributable Amount for such Distribution Date
together with any Class A-2 Interest Carryover Shortfall, the Class A-3
Interest Distributable Amount for such Distribution Date together with
any Class A-3 Interest Carryover Shortfall, and the Class A-4 Interest
Distributable Amount for such Distribution Date together with any Class
A-4 Interest Carryover Shortfall;
(iii) to the Certificate Account until there has been deposited
therein pursuant to this clause (iii), the Class B Interest Distributable
Amount for such Distribution Date, together with any unpaid Class B
Interest Carryover Shortfall;
(iv) to the Servicer, the Investor Percentage of the Capped
Contingent and Excess Liability Premium in respect of the related
Collection Period;
(v) to the Titling Trustee, the Investor Percentage of Capped
Titling Trust Administration Expenses;
(vi) in circumstances other than those set forth in clause (i), the
Investor Percentage of Capped Securitization Trust Administrative Expenses
for the preceding Collection Period, to the Securitization Trustee;
(vii) to the Servicer, the Investor Percentage of (a) the Servicing
Fee and (b) any unpaid Servicing Fee in respect of any prior Collection
Period;
(viii) to the Certificate Account until there has been deposited
therein pursuant to this clause (viii), the Class A-1 Loss Amount, the
Class A-2 Loss Amount, the Class A-3 Loss Amount and the Class A-4 Loss
Amount;
(ix) to the Certificate Account until there has been deposited therein
pursuant to this clause (ix), the aggregate amounts of the Class A-1
Certificate Principal Loss Amounts, Class A-2 Certificate Principal Loss
Amounts,
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Class A-3 Certificate Principal Loss Amounts and Class A-4 Certificate
Principal Loss Amounts, if any, for previous Distribution Dates that
have not been previously deposited in the Certificate Account;
(x) to the Certificate Account until there has been deposited therein
pursuant to this clause (x), the Class A-1 Certificate Principal Loss
Interest Amount, the Class A-2 Certificate Principal Loss Interest Amount,
the Class A-3 Certificate Principal Loss Interest Amount and the Class A-4
Certificate Principal Loss Interest Amount, if any, for such Distribution
Date;
(xi) to the Certificate Account until there has been deposited therein
pursuant to this clause (xi), the Class B Loss Amount;
(xii) to the Certificate Account until there has been deposited
therein pursuant to this clause (xii), the aggregate amount of the Class B
Certificate Principal Loss Amounts and Class B Certificate Principal
Carryover Shortfall, if any, for previous Distribution Dates that has not
been previously deposited in the Certificate Account pursuant to this
clause (xii);
(xiii) to the Certificate Account until there has been deposited
therein pursuant to this clause (xiii), the Class B Certificate Principal
Loss Interest Amount and the Class B Certificate Principal Carryover
Shortfall Interest Amount, if any, for such Distribution Date;
(xiv) the Investor Percentage of Uncapped Administrative Expenses, to
the Titling Trustee or the Securitization Trustee, as applicable; and
(xv) the balance, if any, shall constitute Excess Collections and
shall be applied as set forth in subsection (c) below.
Notwithstanding the foregoing, on any Distribution Date related to a Collection
Period in the Revolving Period, the amounts set
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forth in clauses (viii) through (xiii) above shall not be deposited in the
Certificate Account, but shall be treated as Principal Collections for
purposes of Section 3.02 of the 1997-A SUBI Servicing Supplement.
On each Semiannual Distribution Date, or if a Monthly Payment Event or an
Early Amortization Event has occurred, then on each Monthly Distribution
Date, the Securitization Trustee shall distribute to the holders of Investor
Certificates of each Class the amounts deposited in the Certificate Account
for such Class pursuant to the following clauses of this Section 3.01(b) and
in the following order of priority: (ii), (iii), (viii), (ix), (x), (xi),
(xii) and (xiii); provided that if the amount deposited pursuant to any such
clause in the Certificate Account is distributable to Class A
Certificateholders and the amount available pursuant to such clause is less
than the full amount due to be distributed pursuant to such clause, then such
available amount shall be distributed to the Class A-1 Certificateholders,
the Class A-2 Certificateholders, the Class A-3 Certificateholders and the
Class A-4 Certificateholders PRO RATA on the basis of the full amounts due
them pursuant to such clause.
(c) On each Monthly Allocation Date, based on the Servicer's
Certificate prepared by the Servicer, the Securitization Trustee shall
distribute any Excess Collections in the following amounts and in the following
order of priority:
(i) into the Reserve Fund until the amount on deposit therein equals
the Specified Reserve Fund Balance; and
(ii)(A) if the Monthly Allocation Date relates to a Collection Period
in the Revolving Period, any remainder to the Transferor, and (B) if the
Monthly Allocation Date relates to a Collection Period in the Amortization
Period, any remainder up to but not exceeding the product of one-twelfth of
[.25%] and the Aggregate Net Investment Value as of the last day of the
related Collection Period (the "Accelerated Principal Distribution Amount")
to the Certificate Account as additional principal. The balance of any
remainder will then be paid to the Transferor.
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(d)(i) On each Monthly Allocation Date beginning with the Monthly
Allocation Date related to the Collection Period in which the Amortization
Period commences and ending on the Monthly Allocation Date that is the
Distribution Date on which the Class B Certificates will be paid in full, based
on the Servicer's Certificate prepared by the Servicer, the Securitization
Trustee shall withdraw from the 1997-A SUBI Collection Account and deposit in
the Certificate Account an amount equal to the Investor Percentage of all
Principal Collections collected or received in respect of the related Collection
Period allocable to the 1997-A SUBI Interest.
(ii) If a Monthly Payment Event has not occurred, the Securitization
Trustee, based on the Servicer's Certificate prepared by the Servicer, shall
distribute to holders of the Certificates of each Class on the Targeted Maturity
Date for such Class the lesser of (x) the entire Certificate Principal Balance
of such Class of Investor Certificates and (y) the sum of the amount of
Principal Collections and the Accelerated Principal Distribution Amount on
deposit in the Certificate Account and the Maturity Advance actually made by the
Servicer in respect of such Class of Investor Certificates pursuant to Section
____ of the 1997-A SUBI Servicing Supplement.
(iii) If on any Targeted Maturity Date the entire Certificate Principal
Balance of the related Class of Investor Certificates is not distributed, then
the Securitization Trustee shall, based on the Servicer's Certificate,
distribute to the holders of such Class of Investor Certificates on each
following Monthly Distribution Date, until the Certificate Principal Balance of
such Class of Investor Certificates has been reduced to zero, the lesser of (x)
the outstanding Certificate Principal Balance of such Class of Investor
Certificates and (y) the amount of Principal Collections and the Accelerated
Principal Distribution Amount on deposit in the Certificate Account on such
Monthly Distribution Date.
(iv) If an Early Amortization Event or a Monthly Payment Event occurs in
any month, then on the Monthly Distribution Date in the next succeeding month
the Securitization Trustee shall, based on the Servicer's Certificate for such
Monthly Distribution
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Date, distribute the sum of the Principal Collections and the Accelerated
Principal Distribution Amount in the following order of priority:
(1) to the Class A-1 Certificateholders until the Class A-1
Certificate Principal Balance is reduced to zero;
(2) to the Class A-2 Certificateholders until the Class A-2
Certificate Principal Balance is reduced to zero;
(3) to the Class A-3 Certificateholders until the Class A-3
Certificate Principal Balance is reduced to zero;
(4) to the Class A-4 Certificateholders until the Class A-4
Certificate Principal Balance is reduced to zero; and
(5) to the Class B Certificateholders until the Class B Certificate
Principal Balance is reduced to zero.
(e) On each Monthly Allocation Date for which there is a Required
Amount, based on the Servicer's Certificate prepared by the Servicer, the
Securitization Trustee shall apply the following amounts in the following order
to the payment of the unpaid components of the Required Amount (in the order of
clauses (i) through (xiv) of Section 3.01(b)) to the extent necessary to pay
such components:
(i) the Reserve Fund Withdrawal Amount;
(ii) to the extent of any remaining Required Amount, first the
Transferor Interest Distributable Amount and then the Transferor Principal
Distributable Amount; and
(iii) to the extent of any remaining unpaid components of the Required
Amount in clauses (ii), (viii), (ix) and (x) of Section 3.01(b), the
amounts otherwise available for distribution on account of principal to the
Class B Certificateholders pursuant to Section 3.01(d).
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Amounts applied pursuant to the preceding sentence on a Distribution Date in
respect of the Revolving Period pursuant to clauses (viii) through (xiii) of
Section 3.01(b) shall be treated as Principal Collections and applied pursuant
to Section 3.02 of the 1997-A SUBI Servicing Supplement.
On such Distribution Date, after giving effect to all payments required to
be made and all required deposits to or withdrawals from the Reserve Fund,
amounts that otherwise would be payable to the Transferor in respect of the
Transferor Distributable Amount (other than Transferor Amounts) will be
deposited into the Reserve Fund until the amount on deposit therein equals the
Specified Reserve Fund Balance, and any remaining amounts so payable to the
Transferor will be distributed to the Transferor by the Securitization Trustee
as follows: (A) if such Distribution Date relates to a Collection Period during
the Revolving Period, the interest component of such remaining amounts will be
paid in respect of the Transferor Interest Distributable Amount and (B) if such
Distribution Date relates to a Collection Period during the Amortization Period,
(1) the interest component of such remaining amounts will be paid in respect of
the Transferor Interest Distributable Amount and (2) if and to the extent that
the Transferor Interest will be equal to or greater than zero, after all
required distributions have been made on such Distribution Date, the principal
component of such remaining amounts will be paid in respect of the Transferor
Principal Distributable Amount. Any amounts that would otherwise be payable to
the Transferor pursuant to the foregoing as the Transferor Principal
Distributable Amount, but may not be so paid because the Transferor Interest
would be less than or equal to zero, shall instead be distributed to the
Investor Certificateholders pursuant to Section 3.01(d).
(f) Subject to Section 7.01 respecting the final payment upon
retirement of each Certificate, the Securitization Trustee shall on each
Distribution Date distribute to each Certificateholder of any Class of record on
the related Record Date by check mailed to such Certificateholder at the address
of such Holder appearing in the Certificate Register (or, if DTC, its nominee or
a Clearing Agency is the relevant Certificateholder, by wire transfer of
immediately available
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funds or pursuant to other arrangements), the amount to be distributed to
such Certificateholder pursuant to such Holder's Certificates.
(g) Amounts properly received by the Transferor pursuant to this
Securitization Trust Agreement shall be free of any claim of the Securitization
Trust, the Securitization Trustee or the Investor Certificateholders and shall
not be available to the Securitization Trustee or the Securitization Trust for
the purpose of making deposits to the Reserve Fund or making payments to the
Investor Certificateholders, nor shall the Transferor be required to refund any
amount properly received by it.
SECTION 3.02. RESERVE FUND.
(a)(i) The Servicer shall establish and maintain with the
Securitization Trustee a separate trust account to be known as the "Reserve
Fund", which will include the money and other property deposited and held
therein pursuant to Section 3.01(c)(i) and this Section. Funds in the Reserve
Fund shall be property of the Transferor, and the Transferor hereby grants to
the Securitization Trustee for the benefit of the Investor Certificateholders a
security interest in all funds (including Permitted Investments) and the
proceeds thereof. The Reserve Fund shall be an Eligible Account and initially
shall be established with the Securitization Trustee. If for any reason the
Reserve Fund is no longer an Eligible Account, the Securitization Trustee shall
promptly cause the Reserve Fund to be moved to another institution or otherwise
changed so that the Reserve Fund becomes an Eligible Account.
(ii) All amounts held in the Reserve Fund shall, to the extent
permitted by applicable laws, rules and regulations, be invested, as directed by
the Servicer in Permitted Investments. Earnings on investment of funds in the
Reserve Fund shall be paid to the Transferor on each Distribution Date, and
losses and any investment expenses shall be charged against the funds on deposit
therein.
(b) On or prior to the Closing Date, the Transferor shall deposit an
amount equal to the Reserve Fund Initial Deposit
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into the Reserve Fund. The Transferor also does hereby grant to the
Securitization Trustee a security interest in such initial deposit, and the
Securitization Trustee shall have all the rights and powers of a secured
party under the UCC. Amounts on deposit in the Reserve Fund shall be
supplemented from time to time by the deposit therein of Excess Collections
otherwise distributable to the Transferor pursuant to Section 3.01(c), and
amounts that otherwise would be payable to the Transferor pursuant to Section
3.01(e) but for the fact that the amount on deposit in the Reserve Fund is
less than the Specified Reserve Fund Balance, to the extent described in this
subparagraph (b). On each Distribution Date the amounts on deposit in the
Reserve Fund shall be available for distribution as provided in Section 3.01
and, on each Distribution Date, if the amount on deposit in the Reserve Fund
(after giving effect to all deposits thereto or withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Fund Balance, the
Securitization Trustee will distribute any such excess amount to the
Transferor, whereupon such excess amount shall no longer be available to the
Securitization Trustee or the Investor Certificateholders.
(c) Upon termination of the Securitization Trust pursuant to Section
7.01, any amounts on deposit in the Reserve Fund shall be available for payment
of any remaining amounts due to the Investor Certificateholders, and for payment
of any remaining amounts due to the Securitization Trustee, and after payment of
such amounts due, shall be paid to the Transferor.
SECTION 3.03. STATEMENTS TO CERTIFICATEHOLDERS.
(a) On each Distribution Date, the Securitization Trustee shall
include with each distribution to each Certificateholder of record, a statement,
prepared by the Servicer, based on information in the Servicer's Certificate
furnished pursuant to Section 5.01(b) of the 1997-A SUBI Servicing Supplement,
setting forth for the related Collection Period and such Distribution Date the
following information as of the related Record Date or Deposit Date or such
Distribution Date, as the case may be:
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(i) the Investor Percentage for such Collection Period, stated
separately for Interest Collections and Loss Amounts, and for Principal
Collections;
(ii) the total amount being distributed to Investor Certificateholders
in such distribution;
(iii) the total amount being distributed to each Class of Investor
Certificateholders in such distribution;
(iv) the total amount of interest being distributed to each Class of
Investor Certificateholders in such distribution;
(v) the amount, if any, of Class A-1 Interest Carryover Shortfall,
Class A-2 Interest Carryover Shortfall, Class A-3 Interest Carryover
Shortfall, Class A-4 Interest Carryover Shortfall and Class B Interest
Carryover Shortfall included in such distribution;
(vi) the amount, if any, of the remaining unpaid Class A-1 Interest
Carryover Shortfall, Class A-2 Interest Carryover Shortfall, Class A-3
Interest Carryover Shortfall, Class A-4 Interest Carryover Shortfall and
Class B Interest Carryover Shortfall after giving effect to such
distribution;
(vii) the total amount of principal being distributed to each Class of
Investor Certificateholders in such distribution;
(viii) the Class A-1 Allocation Percentage, the Class A-2 Allocation
Percentage, the Class A-3 Allocation Percentage, the Class A-4 Allocation
Percentage, the Class B Allocation Percentage and the amount, if any, of
the reimbursement of Class A-1 Charged-off Amounts, Class A-1 Residual
Value Loss Amounts and Class A-1 Additional Loss Amounts, Class A-2
Charged-off Amounts, Class A-2 Residual Value Loss Amounts and Class A-2
Additional Loss Amounts, Class A-3 Charged-off Amounts, Class A-3 Residual
Value Loss Amounts and Class A-3 Additional Loss Amounts, Class A-4
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Charged-off Amounts, Class A-4 Residual Value Loss Amounts and Class A-4
Additional Loss Amounts and Class B Charged-off Amounts, Class B Residual
Value Loss Amounts and Class B Additional Loss Amounts being included in
such distribution;
(ix) the amount, if any, of the reimbursement of Class A-1 Certificate
Principal Loss Amounts, Class A-2 Certificate Principal Loss Amounts, Class
A-3 Certificate Principal Loss Amounts, Class A-4 Certificate Principal
Loss Amounts and Class B Certificate Principal Loss Amounts included in
such distribution;
(x) the amount, if any, of the aggregate of unreimbursed Class A-1
Certificate Principal Loss Amounts, Class A-2 Certificate Principal Loss
Amounts, Class A-3 Certificate Principal Loss Amounts, Class A-4
Certificate Principal Loss Amounts and Class B Certificate Principal Loss
Amounts after giving effect to such distribution;
(xi) the amount, if any, of accrued Class A-1 Certificate Principal
Loss Interest Amounts, Class A-2 Certificate Principal Loss Interest
Amounts, Class A-3 Certificate Principal Loss Interest Amounts, Class A-4
Certificate Principal Loss Interest Amounts and Class B Certificate
Principal Loss Interest Amounts included in such distribution;
(xii) the amount, if any, of accrued and unpaid Class A-1 Certificate
Principal Loss Interest Amounts, Class A-2 Certificate Principal Loss
Interest Amounts, Class A-3 Certificate Principal Loss Interest Amounts,
Class A-4 Certificate Principal Loss Interest Amounts and Class B
Certificate Principal Loss Interest Amounts after giving effect to such
distribution;
(xiii) the amount, if any, of accrued and unpaid Class B Certificate
Principal Carryover Shortfall after giving effect to such distribution;
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(xiv) the Investor Percentage of the Servicing Fee allocable to the
1997-A SUBI Interest for such Distribution Date and any unpaid previous
such amounts with respect to prior Distribution Dates;
(xv) the Certificate Balance, the Class A-1 Certificate Balance, the
Class A-2 Certificate Balance, the Class A-3 Certificate Balance, the Class
A-4 Certificate Balance, the Class B Certificate Balance, the Class A-1
Certificate Factor, the Class A-2 Certificate Factor, the Class A-3
Certificate Factor, the Class A-4 Certificate Factor and the Class B
Certificate Factor, each after giving effect to such distribution;
(xvi) the Transferor Amount, if any, included in such distribution and
the amount of the Transferor Interest, after giving effect to all payments
made on such Distribution Date;
(xvii) the Reserve Fund Withdrawal Amount, if any, included in such
distribution;
(xviii) the Aggregate Net Investment Value as of the end of such
Collection Period;
(xix) the portion of any Required Amount included in the distribution
to Investor Certificateholders, the amount on deposit in the Reserve Fund
on such Distribution Date, after giving effect to such distributions, the
change in such balance from the immediately preceding Distribution Date and
the Specified Reserve Fund Balance;
(xx) the amount of Payments Ahead on deposit in the 1997-A SUBI
Collection Account and representing Monthly Contract Payments due in one or
more immediately subsequent Collection Periods and the change in such
balance from the immediately preceding Distribution Date;
(xxi) the amount of Advances made in respect of such Distribution
Date, the amount of Outstanding Advances on
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such Distribution Date and the change in such amount from the immediately
preceding Distribution Date; and
(xxii) the weighted average Contract Rate of the Contracts in the
1997-A SUBI Portfolio for the immediately preceding Collection Period and
the Charge-off Rate and Delinquency Percentage for each of the three
immediately preceding Collection Periods.
[Each amount set forth pursuant to subclauses (ii) through (xiii) above shall be
expressed as a dollar amount per $1,000 of original principal balance of an
Investor Certificate.] Any Certificate Owner may obtain a copy of any such
statement, of any Servicer's Certificate required pursuant to Section 5.01(b) of
the 1997-A SUBI Servicing Supplement, any annual report of Independent
Accountants required pursuant to Section 5.02 of the 1997-A SUBI Servicing
Supplement, and of any annual Officer's Certificate required pursuant to Section
5.03 of the 1997-A SUBI Servicing Supplement, upon written request to the
Securitization Trustee at the Corporate Trust Office.
(b) Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law, the Securitization
Trustee shall mail to each Person who at any time during such calendar year
shall have been a Holder of an Investor Certificate, a statement or statements
which in the aggregate contain the sum of the amounts set forth in clauses
(a)(ii) through (xiii) in Section 3.03(a) for such calendar year or, in the
event such Person shall have been a Holder of an Investor Certificate during a
portion of such calendar year, for the applicable portion of such year, for the
purposes of such Certificateholder's preparation of federal income tax returns.
In addition, the Servicer shall furnish to the Securitization Trustee for
distribution to such Person at such time any other information reasonably
necessary under applicable law for the preparation of such income tax returns.
ARTICLE FOUR
THE CERTIFICATES
SECTION 4.0
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1. THE CERTIFICATES.
(a) The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class B Certificates
and the Transferor Certificate shall be substantially in the form of Exhibits
A-1, A-2, A-3, A-4, B and C, respectively, to this Securitization Trust
Agreement. The Class A-1 Certificates, the Class A-2 Certificates, the Class
A-3 Certificates and the Class A-4 Certificates shall be issuable in minimum
denominations of $1,000 and integral multiples in excess thereof and the
Class B Certificates shall be issuable in minimum denominations of $250,000
and integral multiples of $1,000 in excess thereof (provided that no Class B
Certificate may be issued or transferred in a denomination that would cause
there to be, immediately after such issuance or transfer, one hundred (100)
or more Class B Certificateholders); PROVIDED, HOWEVER, that one Class A-1
Certificate, one Class A-2 Certificate, one Class A-3 Certificate, one Class
A-4 Certificate and one Class B Certificate may be issued in a denomination
that includes any remaining portion of the Initial Class A-1 Certificate
Balance, the Initial Class A-2 Certificate Balance, the Initial Class A-3
Certificate Balance, the Initial Class A-4 Certificate Balance and the
Initial Class B Certificate Balance, respectively (each, a "Residual
Certificate"). A single Transferor Certificate shall be issued. The
Certificates shall be executed on behalf of the Transferor by manual or
facsimile signature of an officer of the Transferor. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Securitization
Trustee shall not be rendered invalid, notwithstanding that such individuals
or any of them have ceased to be so authorized prior to the authentication
and delivery of such Certificates or did not hold such offices at the date of
such Certificates. All Certificates shall be dated the date of their
authentication.
(b) The Investor Certificates shall represent fractional undivided
interests in the 1997-A Securitization Trust, including the right to receive
the Investor Percentage of Interest Collections and Principal Collections and
the other
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amounts at the times and in the amounts specified in this Securitization
Trust Agreement. The Transferor Certificate shall represent the interest in
the 1997-A Securitization Trust not represented by the Investor Certificates.
SECTION 4.02. AUTHENTICATION AND DELIVERY OF CERTIFICATES.
In exchange for, and simultaneously with the sale, assignment and
transfer to the Securitization Trustee of the 1997-A SUBI Interest, the
1997-A SUBI Certificate and the other assets of the 1997-A Securitization
Trust, the Securitization Trustee shall cause to be executed, authenticated
and delivered to or upon the order of the Transferor Investor Certificates in
authorized denominations equaling in the aggregate the sum of the Initial
Class A-1 Certificate Balance, the Initial Class A-2 Certificate Balance, the
Initial Class A-3 Certificate Balance, the Initial Class A-4 Certificate
Balance and the Initial Class B Certificate Balance, and the Transferor
Certificate, each duly authorized by the Securitization Trustee, and
evidencing the entire ownership of the Securitization Trust. No Certificate
shall be entitled to any benefit under this Securitization Trust Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit
A-1, A-2, A-3, A-4, B or C to this Securitization Trust Agreement, as the
case may be, executed by the Securitization Trustee by manual signature, and
such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and
delivered under this Securitization Trust Agreement.
SECTION 4.03. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Certificate Registrar shall maintain a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Certificate Register shall provide for the registration of Certificates and
transfers and exchanges of Certificates as provided in this Securitization
Trust Agreement. The Securitization Trustee is hereby initially appointed
Certificate Registrar for the purpose of registering
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Certificates and transfers and exchanges of Certificates as provided in this
Securitization Trust Agreement. In the event that, subsequent to the Closing
Date, the Securitization Trustee notifies the Servicer that it is unable to
act as Certificate Registrar, the Servicer shall appoint another bank or
trust company, having an office or agency located in the Borough of
Manhattan, The City of New York, agreeing to act in accordance with the
provisions of this Securitization Trust Agreement applicable to it, and
otherwise acceptable to the Securitization Trustee, to act as successor
Certificate Registrar under this Securitization Trust Agreement.
The Transferor Certificate shall be owned by the Transferor and may not
be transferred, as provided by Section 5.06.
No transfer of a Class B Certificate shall be made unless the
registration requirements of the Securities Act and any applicable state
securities laws are complied with, or such transfer is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an
exemption from the Securities Act and such state securities laws, the
Securitization Trustee shall require that the transferee execute a
representation letter acceptable to and in form and substance satisfactory to
the Securitization Trustee (PROVIDED that the forms attached as Exhibits D-1
and D-2 shall be deemed acceptable if they are completed in a manner
acceptable to the Securitization Trustee) certifying to the Securitization
Trustee the facts surrounding such transfer, which representation letter
shall not be an expense of the Securitization Trustee, the Transferor or the
Servicer. The Holder of a Class B Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Securitization
Trustee, the Transferor and the Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with the
Securities Act and such state laws. Neither the Transferor, the Servicer nor
the Securitization Trustee is under any obligation to register the Class B
Certificates under the Securities Act or any state securities laws.
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Notwithstanding anything to the contrary contained herein, no resale or
other transfer of a Class B Certificate or any interest therein shall be made
unless (i) immediately after giving effect to such resale or other transfer,
there would be less than 100 Class B Certificateholders and (ii) the
Securitization Trustee shall have received either a representation letter or
Opinion of Counsel from the prospective transferee of such Class B
Certificate, in form and substance satisfactory to the Transferor and the
Securitization Trustee (provided that the forms attached as Exhibits D-1 and
D-2 shall be deemed acceptable), to the effect that (A) such transferee will
not acquire such Class B Certificate with the assets of any "employee benefit
plan" as defined in Section 3(3) of ERISA, (B) no "prohibited transaction"
under ERISA or the Code will occur in connection with such prospective
transferee's acquisition of such Class B Certificate, (C) the acquisition of
such Class B Certificate is subject to a statutory or administrative
exemption, specified in such letter or opinion, from the "prohibited
transaction" provisions of ERISA and the Code, and (D) if the transferee is a
partnership, grantor trust or S corporation for federal income tax purposes
(a "Flow-Through Entity"), any Class B Certificates owned by such
Flow-Through Entity will represent less than 50% of the value of all the
assets owned by such Flow-Through Entity and no special allocation of income,
gain, loss, deduction or credit from such Class B Certificates will be made
among the beneficial owners of such Flow-Through Entity. Each prospective
transferee of any Class B Certificate will be required to represent to the
Securitization Trustee whether it will purchase such Class B Certificate with
the assets of an "employee benefit plan" as defined under ERISA or other
benefit plan investor.
The Class B Certificates, this Securitization Trust Agreement and related
documents may be amended or supplemented from time to time to modify
restrictions on and procedures for resale and other transfer of such Class B
Certificates to reflect any change in applicable law or regulation (or the
interpretation thereof) or practices relating to the resale or transfer of
restricted securities generally.
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(b) Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office of the Securitization Trustee in its capacity
as Certificate Registrar, or at the office of the agent of the Securitization
Trustee as Certificate Registrar, who shall initially be First Trust of New
York, National Association, 100 Wall Street, 20th Floor, New York, New York
10005, in the Borough of Manhattan, the City of New York, or the appropriate
office of any successor Certificate Registrar, the Securitization Trustee
shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class in
authorized denominations of a like aggregate principal amount.
(c) At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class of authorized
denominations of a like aggregate principal amount, upon surrender of the
Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange the Securitization Trustee on
behalf of the 1997-A Securitization Trust shall execute, authenticate and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Securitization Trustee and
the Certificate Registrar duly executed by the Holder thereof or his attorney
duly authorized in writing.
(d) No service charge shall be made to any Holder for any
registration of transfer or exchange of Certificates, but the Securitization
Trustee may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
(e) All Certificates surrendered for registration of transfer and
exchange shall be cancelled and subsequently destroyed by the Securitization
Trustee.
(f) No Class B Certificate shall be listed for trading on any
recognized securities exchange.
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SECTION 4.04. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction
of the destruction, loss or theft of any Certificate, and (ii) there is
delivered to the Certificate Registrar and the Securitization Trustee such
security or indemnity as may be required by them to save each of them and the
Securitization Trust harmless, then, in the absence of notice that such
Certificate has been acquired by a bona fide purchaser, the Securitization
Trustee on behalf of the 1997-A Securitization Trust shall execute and the
Securitization Trustee shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and fractional undivided interest. In connection
with the issuance of any new Certificate under this Section, the
Securitization Trustee may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto. Any duplicate Certificate issued pursuant to this
Section shall constitute complete and indefeasible evidence of ownership in
the 1997-A Securitization Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time, and any
such lost, stolen or destroyed Certificate shall, upon issuance of any such
duplicate Certificate, be null, void and of no effect.
SECTION 4.05. PERSONS DEEMED OWNERS.
Prior to due presentation of a Certificate for registration of transfer,
the Securitization Trustee, the Certificate Registrar and any of their
respective agents may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 3.01 and for all other purposes whatsoever,
and neither the Securitization Trustee, the Certificate Registrar nor any of
their respective agents shall be affected by any notice to the contrary.
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SECTION 4.06. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
The Certificate Registrar shall furnish or cause to be furnished to the
Servicer, within 15 days after receipt by the Certificate Registrar of a
written request therefor from the Servicer, a list, in such form as the
Servicer may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more
Certificateholders or holders of Investor Certificates evidencing not less
than 25% of the aggregate Percentage Interests of any Class (hereinafter
referred to as "Applicants") apply in writing to the Securitization Trustee,
and such application states that the Applicants desire to communicate with
other Investor Certificateholders with respect to their rights under this
Securitization Trust Agreement or under the Certificates and such application
is accompanied by a copy of the communication that such Applicants propose to
transmit, then the Securitization Trustee shall, within five Business Days
after the receipt of such application, afford such Applicants access, during
normal business hours, to the current list of Investor Certificateholders.
Every Certificateholder, by receiving and holding a Certificate, agrees with
the Servicer and the Securitization Trustee that neither the Servicer nor the
Securitization Trustee shall be held accountable by reason of the disclosure
of any such information as to the names and addresses of the
Certificateholders under the Agreement, regardless of the source from which
such information was derived.
SECTION 4.07. MAINTENANCE OF OFFICE OR AGENCY.
The Securitization Trustee shall maintain in the Borough of Manhattan,
The City of New York, an office or offices or agency or agencies where
Certificates may be surrendered for registration of transfer or exchange.
The initial such agency shall be c/o First Trust of New York, National
Association, 100 Wall Street, 20th Floor, New York, New York 10005; PROVIDED
that a copy of any such Certificate surrendered shall be sent to the
Securitization Trustee at the Corporate Trust Office. The Securitization
Trustee shall give prompt written notice to the Transferor, the Servicer and
the Certificateholders of any change
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in the location of any such office or agency. Notices and demands to or upon
the Securitization Trustee in respect of the Certificates and this
Securitization Trust Agreement shall not be sent to such office or agency,
but shall be sent as set forth in Section 10.02.
SECTION 4.08. TEMPORARY CERTIFICATES.
Pending the preparation of definitive Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates or Class A-4 Certificates, the
Securitization Trustee, on behalf of the 1997-A Securitization Trust, may
execute, authenticate and deliver, temporary Class A-1 Certificates, Class
A-2 Certificates, Class A-3 Certificates or Class A-4 Certificates that are
printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates or
Class A-4 Certificates in lieu of which they are issued. If temporary Class
A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates or Class A-4
Certificates are issued, the Transferor will cause definitive Class A-1
Certificates, Class A-2 Certificates, Class A-3 Certificates or Class A-4
Certificates to be prepared without unreasonable delay. After the
preparation of definitive Class A-1 Certificates, Class A-2 Certificates,
Class A-3 Certificates or Class A-4 Certificates, the temporary Class A-1
Certificates, Class A-2 Certificates, Class A-3 Certificates or Class A-4
Certificates shall be exchangeable for definitive Class A-1 Certificates,
Class A-2 Certificates, Class A-3 Certificates or Class A-4 Certificates upon
surrender of the temporary Class A-1 Certificates, Class A-2 Certificates,
Class A-3 Certificates or Class A-4 Certificates at the office or agency to
be maintained as provided in Section 4.07, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Class A
Certificates, the Securitization Trustee shall execute and authenticate and
deliver in exchange therefor a like principal amount of definitive Class A
Certificates in authorized denominations. Until so exchanged the temporary
Class A Certificates shall in all respects be entitled to the same benefits
under the Agreement as definitive Class A Certificates.
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SECTION 4.09. BOOK-ENTRY CERTIFICATES.
The Class A-1 Certificates, the Class A-2 Certificates, the Class A-3
Certificates and the Class A-4 Certificates, upon original issuance will be
issued in the form of one or more typewritten certificates representing the
Book-Entry Certificates, to be delivered to DTC, the initial Clearing Agency,
by, or on behalf of, the Transferor. The certificate or certificates
delivered to DTC evidencing such Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates and the Class A-4 Certificates shall
initially be registered on the Certificate Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Certificate Owner
will receive a definitive certificate representing such Certificate Owner's
interest in the Class A-1 Certificates, the Class A-2 Certificates, the Class
A-3 Certificates or the Class A-4 Certificates, except as provided in Section
4.11. Unless otherwise specified in this Securitization Trust Agreement,
unless and until definitive, fully registered Class A-1 Certificates, Class
A-2 Certificates, Class A-3 Certificates and the Class A-4 Certificates (the
"Definitive Certificates") have been issued to Certificate Owners pursuant to
Section 4.11:
(i) the provisions of this Section shall be in full force and effect;
(ii) the Transferor, the Servicer, the Certificate Registrar and the
Securitization Trustee may deal with the Clearing Agency for all purposes
(including the making of distributions on the Class A-1 Certificates, the
Class A-2 Certificates, the Class A-3 Certificates and the Class A-4
Certificates) as the authorized representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of the Agreement, the provisions of this Section shall
control;
(iv) the rights of Certificate Owners shall be exercised only through
(or through procedures established by) the Clearing Agency and shall be
limited to those
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established by law and agreements between such Certificate Owners and
the Clearing Agency and/or the Clearing Agency Participants. Unless and
until Definitive Certificates are issued pursuant to Section 4.11, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit distributions of principal
and interest on the Class A-1 Certificates, the Class A-2 Certificates,
the Class A-3 Certificates and the Class A-4 Certificates to such Clearing
Agency Participants; and
(v) whenever this Securitization Trust Agreement requires or permits
actions to be taken based upon instructions or directions of Holders of
Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates or
Class A-4 Certificates evidencing a specified aggregate Percentage Interest
thereof the Clearing Agency shall be deemed to represent such percentage
(if and to the extent that it will act on behalf of Certificate Owners
and/or Clearing Agency Participants) only to the extent that it has
received instructions to such effect from Certificate Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentages of the beneficial interest in Class A-1 Certificates,
Class A-2 Certificates, Class A-3 Certificates or Class A-4 Certificates
and has delivered such instructions to the Securitization Trustee.
SECTION 4.10. NOTICES TO CLEARING AGENCY.
Whenever notice or other communication to the Class A-1
Certificateholders, Class A-2 Certificateholders, the Class A-3
Certificateholders, or the Class A-4 Certificateholders is required under
this Securitization Trust Agreement, other than to the Holder of the Residual
Certificate with respect to the Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates or the Class A-4 Certificates,
respectively, unless and until Definitive Certificates shall have been issued
to Certificate Owners pursuant to Section 4.11, the Securitization Trustee
and the Servicer shall give all such notices and communications specified
herein to be given to Holders of the Class A-1 Certificates, the Class A-2
Certificates, the Class A-3
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Certificates, or the Class A-4 Certificates to the Clearing Agency.
SECTION 4.11. DEFINITIVE CERTIFICATES.
If (i)(A) the Transferor advises the Securitization Trustee in writing
that the Clearing Agency is no longer willing or able to properly discharge
its responsibilities as described in the letter of representations among the
Transferor, the Securitization Trustee and the Clearing Agency and (B) the
Securitization Trustee or the Transferor is unable to locate a qualified
successor, (ii) the Transferor at its option, advises the Securitization
Trustee in writing that it elects to terminate the book-entry system through
the Clearing Agency, or (iii) after the occurrence of an Early Amortization
Event, Certificate Owners representing beneficial interests in the Class A-1
Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the
Class A-4 Certificates (voting together as a single class) aggregating not
less than 51% of the Percentage Interests advise the Securitization Trustee
and the Clearing Agency through the Clearing Agency Participants in writing
that the continuation of a book-entry system through the Clearing Agency is
no longer in the best interests of the Certificate Owners, then the
Securitization Trustee shall notify all Certificate Owners, through the
Clearing Agency, of the occurrence of such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Securitization Trustee of the Class A-1 Certificates, the
Class A-2 Certificates, the Class A-3 Certificates or the Class A-4
Certificates by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, the Securitization Trustee shall
issue the Definitive Certificates and deliver such Definitive Certificates in
accordance with the instructions of the Clearing Agency. None of the
Transferor, the Certificate Registrar or the Securitization Trustee shall be
liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Certificates, the Securitization Trustee shall
recognize the Holders of the Definitive Certificates as Class A-1
Certificateholders, Class A-2 Certificateholders, Class A-3
Certificateholders or Class A-4
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Certificateholders hereunder, as applicable. The Securitization Trustee
shall not be liable if the Securitization Trustee or the Transferor is unable
to locate a qualified successor Clearing Agency.
SECTION 4.12. TAX TREATMENT.
(a) It is the intention of the Transferor and the Investor
Certificateholders that the Investor Certificates will be indebtedness of the
Transferor for federal, state and local income and franchise tax purposes and
for purposes of any other tax imposed on or measured by income. The
Transferor, the Securitization Trustee and each Holder of an Investor
Certificate (or Certificate Owner) by acceptance of its Investor Certificate
(or, in the case of a Certificate Owner, by virtue of such Certificate
Owner's acquisition of a beneficial interest therein) agree to treat the
Investor Certificates (or beneficial interest therein), for purposes of
federal, state and local income or franchise taxes and any other tax imposed
on or measured by income, as secured indebtedness of the Transferor and to
report the transactions contemplated by this Securitization Trust Agreement
on all applicable tax returns in a manner consistent with such treatment.
Each Holder of an Investor Certificate agrees that it will cause any
Certificate Owner acquiring an interest in a Certificate through it to comply
with this Securitization Trust Agreement as to treatment as secured
indebtedness for federal, state and local income and franchise tax purposes
and for purposes of any other tax imposed on or measured by income. Each
Holder of an Investor Certificate also agrees that it will not be entitled to
any of the tax benefits related to the Contracts and Leased Vehicles,
including any of the depreciation deductions resulting therefrom.
(b) In the event that, notwithstanding the statement of intentions and
undertakings set forth in Section 4.12(a), it is finally determined that the
Class A-1 Certificates, the Class A-2 Certificates, the Class A-3
Certificates, the Class A-4 Certificates and/or the Class B Certificates do
not evidence indebtedness of the Transferor for all income and franchise tax
purposes, but rather represent an equity interest in the assets of the 1997-A
Securitization Trust, then the Transferor, the
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Securitization Trustee, each Holder of such Investor Certificate and each
Certificate Owner thereof, by virtue of acquiring a beneficial interest
therein, all agree (i) to treat such Investor Certificates, together with the
Transferor Certificate, as representing an interest in a partnership for all
tax purposes, (ii) to treat all payments in respect of such Investor
Certificates (to the extent not a return of capital) as a "guaranteed
payment" thereon made pursuant to Section 707(c) of the Code, and (iii) to
allocate all other items of income, gain, deduction, loss or credit with
respect to the assets and operations of the 1997-A Securitization Trust to
the Transferor.
ARTICLE FIVE
THE TRANSFEROR
SECTION 5.01. REPRESENTATIONS OF TRANSFEROR.
The Transferor hereby makes the following representations on which the
Securitization Trustee relies in accepting the 1997-A SUBI Interest and
1997-A SUBI Certificate in trust and authenticating the Certificates. The
representations speak as of the execution and delivery of this Securitization
Trust Agreement, but shall survive the sale, transfer and assignment of the
1997-A SUBI Interest and 1997-A SUBI Certificate to the Securitization
Trustee.
(a) ORGANIZATION AND GOOD STANDING. The Transferor is a corporation
duly incorporated and validly existing and in good standing under the laws of
the State of California, with power and authority to own its properties and
to conduct its business as such properties shall be currently owned and such
business is presently conducted, and has power, authority and legal right to
acquire, own and sell the 1997-A SUBI Interest and 1997-A SUBI Certificate.
(b) DUE REGISTRATION. The Transferor is duly registered as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business requires such qualifications, except
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where the failure to so qualify or to have obtained such licenses and
approvals would not have a material adverse effect on the earnings, business
affairs or business prospects of the Transferor.
(c) POWER AND AUTHORITY. The Transferor has the power and authority
to execute and deliver this Securitization Trust Agreement and to carry out
its terms, the Transferor has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Securitization
Trustee as part of the 1997-A Securitization Trust and has duly authorized
such sale and assignment to the Securitization Trustee by all necessary
action; and the execution, delivery and performance of this Securitization
Trust Agreement have been duly authorized by the Transferor by all necessary
corporate action.
(d) VALID SALE; BINDING OBLIGATIONS. This Securitization Trust
Agreement evidences a valid sale, transfer and assignment of the 1997-A SUBI
Interest and 1997-A SUBI Certificate, enforceable against creditors of and
purchasers from the Transferor; and constitutes a legal, valid and binding
obligation of the Transferor enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights in general
and by general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law.
(e) NO VIOLATION. The consummation of the transactions contemplated
by this Securitization Trust Agreement and the fulfillment of the terms of
this Securitization Trust Agreement do not conflict with, result in any
breach of any of the terms and provisions of, nor constitute (with or without
notice or lapse of time) a default under, the certificate of incorporation of
the Transferor, or conflict with or violate any of the material terms or
provisions of, or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement or other instrument to which the
Transferor is a party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement or other instrument (other than
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this Securitization Trust Agreement); nor violate any law or, to the best of
the Transferor's knowledge, any order, rule or regulation applicable to the
Transferor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Transferor or its properties; which breach, default,
conflict, lien or violation would have a material adverse effect on the
earnings, business affairs or business prospects of the Transferor.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending, or to the Transferor's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Transferor or its properties: (i) asserting the
invalidity of this Securitization Trust Agreement or the Certificates, (ii)
seeking to prevent the issuance of the Certificates or the consummation of
any of the transactions contemplated by this Securitization Trust Agreement,
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by the Transferor of its obligations under, or the
validity or enforceability of, this Securitization Trust Agreement or the
Certificates or (iv) relating to the Transferor and which might adversely
affect the federal, Delaware or Illinois income tax attributes of the
Certificates.
(g) TITLE TO 1997-A SUBI CERTIFICATE. The Transferor has good title
to, and is the sole legal and beneficial owner of, the 1997-A SUBI
Certificate, free and clear of all Liens.
(h) CONSENTS AND APPROVALS. The Transferor has obtained or made all
necessary licenses, consents, approvals, waivers and notifications of
creditors, lessors and other nongovernmental Persons, in each case in
connection with the execution and delivery of this Securitization Trust
Agreement and the consummation of all the transactions herein contemplated,
and the Transferor is not required to obtain the consent of any other party
or the consent, license, approval, or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery,
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performance, validity or enforceability of this Securitization Trust
Agreement.
SECTION 5.02. LIABILITY OF TRANSFEROR; INDEMNITIES.
(a) The Transferor shall be liable in accordance with this
Securitization Trust Agreement only to the extent of the obligations in this
Securitization Trust Agreement specifically undertaken by the Transferor in such
capacity under this Securitization Trust Agreement and shall have no other
obligations or liabilities hereunder.
(b) The Transferor agrees to be, and shall be, liable (as if the
1997-A Securitization Trust were a limited partnership under the [California
Limited Partnership Act] in which the Transferor is the general partner) without
limitation for all liabilities (including taxes), contracts, expenses, indemnity
payments and other charges of the 1997-A Securitization Trust, other than
distributions to Certificateholders.
SECTION 5.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, TRANSFEROR; CERTAIN LIMITATIONS.
(a) Any Person (i) into which the Transferor may be merged or
consolidated, (ii) which may result from any merger, conversion or consolidation
to which the Transferor shall be a party or (ii) which may succeed to all or
substantially all of the business of the Transferor, shall be the successor to
the Transferor under this Securitization Trust Agreement without the execution
or filing of any document or any further act on the part of any of the parties
to this Securitization Trust Agreement, except that if the Transferor in any of
the foregoing cases is not the surviving entity, then the surviving entity shall
execute an agreement of assumption to perform every obligation of the Transferor
either generally or specifically as provided herein. The Transferor shall
provide notice of any merger, consolidation or succession pursuant to this
Section to each Rating Agency and shall receive from each Rating Agency a letter
to the effect that such merger, consolidation, or succession will not result in
a qualification, downgrading or
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withdrawal of the then-current rating assigned to any Rated Certificates.
(b)(i) Subject to subparagraph (ii) below, the purpose of the
Transferor shall be to engage in any lawful activity for which a corporation may
be organized under the laws of the State of California.
(ii) Notwithstanding subparagraph (b)(i) above, the purpose of the
Transferor shall be limited to the following purposes:
(A) to acquire from time to time from TMCC all right, title and
interest in and to the SUBI Certificates evidencing units of beneficial interest
in the SUBI Assets;
(B) to acquire, own, hold, service, sell, assign, pledge and
otherwise deal with the SUBI Certificates and SUBI Assets, related insurance
policies, related agreements with TMCC and any proceeds or further rights
associated with any of the foregoing;
(C) to sell, assign, transfer, convey and/or pledge all or any part
of each such SUBI Certificate to one or more trusts or other persons or legal
entities pursuant to one or more Securitization Trust Agreements, indentures or
similar agreements (the "Agreements") to be entered into by and among TMCC, as
servicer, the Transferor and each other pledgee or transferee named therein (the
"transferees");
(D) to sell any series or class of asset-backed certificates or other
securities issued by or evidencing interests in the transferees or obligations
of the transferees or the Transferor under the related Agreements, including the
Investor Certificates ("Securities");
(E) to hold and enjoy all of the rights and privileges of any
Securities so issued under the related Securitization Trust Agreements;
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(F) to perform its obligations under the Securitization Trust
Agreements, indentures or similar agreements; and
(G) to engage in any activity and to exercise any powers permitted to
corporations under the laws of the State of California that are related or
incidental to the foregoing and necessary, convenient and advisable to
accomplish the foregoing.
(c) Notwithstanding any other provision of this Section and any
provision of law, the Transferor shall not do any of the following:
(i) engage in any business or activity other than as set forth in
clause (b) above;
(ii) [without the affirmative vote of a majority of the members of the
Board of Directors of the Transferor (which must include the affirmative
vote of all Independent Directors of the Transferor, as required by
certificate of incorporation of the Transferor), (A) dissolve or liquidate,
in whole or in part, or institute proceedings to be adjudicated bankrupt or
insolvent, (B) consent to the institution of bankruptcy or insolvency
proceedings against it, (C) file a petition seeking or consent to
reorganization or relief under any applicable federal or state law relating
to bankruptcy, (D) consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Transferor or a substantial part of its property, (E) make a general
assignment for the benefit of creditors, (F) admit in writing its inability
to pay its debts generally as they become due, or (G) take any corporate
action in furtherance of the actions set forth in clauses (A) through (F)
above];
(iii) without the unanimous affirmative vote of the members of the
Board of Directors of the Transferor, merge or consolidate with any other
Person or sell all or substantially all of its assets or acquire all or
substantially all of the assets or capital stock or other ownership
interest of any other Person, (provided that such
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restrictions shall not limit the acquisition of SUBI Certificates or the
ability of the Transferor to sell, assign, transfer, convey and/or pledge
all or any part of any SUBI Certificate in accordance with Section
5.03(b)(ii) hereof, financing, and refinancing of, or otherwise dealing
with, beneficial interests in the Titling Trust in accordance with the
terms of subparagraph (b)(ii) above, which shall not be otherwise
restricted by this Section 5.03(c)); or
(iv) so long as any outstanding debt of the Transferor or Securities
are rated by any nationally recognized statistical rating agency issue,
unsecurited notes or otherwise borrow money unless
(A) the Transferor has made a written request to the related
nationally recognized rating agency to issue unsecured notes or incur borrowings
and such notes or borrowings are rated by the related nationally recognized
rating agency the same as or higher than the rating afforded any outstanding
rated debt or Securities, or
(B) such notes or borrowings (1) are fully subordinated (and which
shall provide for payment only after payment in respect of all outstanding rated
debt and/or Securities) or are nonrecourse against any assets of the Transferor
other than the assets pledged to secure such notes or borrowings, (2) do not
constitute a claim against the Transferor in the event that such assets are
insufficient to pay such notes or borrowings, and (3) where such notes or
borrowings are secured by the rated debt or Securities, are fully subordinated
(and which shall provide for payment only after payment in respect of all
outstanding rated debt and/or Securities) to such rated debt or Securities.
SECTION 5.04. LIMITATION ON LIABILITY OF TRANSFEROR AND OTHERS.
The Transferor and any director or officer or employee or agent of the
Transferor may rely in good faith on the advice of counsel or on any document of
any kind, prima facie properly
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executed and submitted by any Person respecting any matters arising under
this Securitization Trust Agreement.
SECTION 5.05. TRANSFEROR MAY OWN INVESTOR CERTIFICATES.
Each of the Transferor and any Person controlling, controlled by or under
common control with the Transferor may in its individual or any other capacity
become the owner or pledgee of Investor Certificates with the same rights as it
would have if it were not the Transferor or such an affiliate thereof except as
otherwise specifically provided in the definition of the term
"Certificateholder." Investor Certificates so owned by or pledged to the
Transferor or such controlling or commonly controlled Person shall have an equal
and proportionate benefit under the provisions of this Securitization Trust
Agreement, without preference, priority or distinction as among all of the
Investor Certificates. The Transferor will give notice to each Rating Agency if
any such controlling or commonly controlled Person shall at any time become the
owner or pledgee of Investor Certificates.
SECTION 5.06. NO TRANSFER.
The Transferor on behalf of itself and its successors and assigns hereby
covenants that it will not transfer, pledge or assign to any Person the
Transferor Certificate or any part of its right to receive any Excess
Collections pursuant to Section 3.01(c).
SECTION 5.07. TAX MATTERS PARTNER.
In the event that the 1997-A Securitization Trust is recharacterized as a
partnership for tax purposes, the Transferor shall act as "Tax Matters Partner"
(i) to represent the Transferor and the Class B Certificateholders, in their
capacities as partners in a partnership for tax purposes, before taxing
authorities or courts of competent jurisdiction in any tax matters affecting the
1997-A Securitization Trust as a tax partnership; and (ii) to execute any
agreements or other documents relating to or affecting such tax matters,
including agreements or other documents binding the Class B
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Certificateholders with respect to such tax matters or otherwise affecting
their rights, including, but not limited to, extending the statute of
limitations for assessment of tax deficiencies against the Class B
Certificateholders and adjusting the 1997-A Securitization Trust's federal,
state or local tax returns. The Transferor shall not be liable to the 1997-A
Securitization Trust or to any Certificateholder for any action taken or
omitted by the Transferor with regard to such tax matters or otherwise as a
result of its holding the position of Tax Matters Partner.
ARTICLE SIX
THE SECURITIZATION TRUSTEE
SECTION 6.0
1. DUTIES OF TRUSTEE.
(a) The Securitization Trustee, both prior to and after the occurrence of
an Event of Servicing Termination under the 1997-A SUBI Servicing Supplement,
undertakes to perform such duties and only such duties as are specifically set
forth in this Securitization Trust Agreement.
(b) The Securitization Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securitization Trustee that shall be specifically
required to be furnished pursuant to any provision of this Securitization Trust
Agreement, shall examine them to determine whether they conform on their face to
the requirements of this Securitization Trust Agreement.
(c) No provision of this Securitization Trust Agreement shall be construed
to relieve the Securitization Trustee from liability for its own negligent
action, its own negligent failure to act, its own bad faith or its own willful
misfeasance; PROVIDED, HOWEVER, that
(i) the duties and obligations of the Securitization Trustee shall be
determined solely by the express provisions of this Securitization Trust
Agreement, the Securitization Trustee shall not be liable except for the
performance of
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such duties and obligations as are specifically set forth in this
Securitization Trust Agreement, no implied covenants or obligations shall
be read into this Securitization Trust Agreement against the
Securitization Trustee, the permissive right of the Securitization
Trustee to do things enumerated in this Securitization Trust Agreement
shall not be construed as a duty and, in the absence of bad faith on the
part of the Securitization Trustee, the Securitization Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or opinions
furnished to the Securitization Trustee and conforming on their face to
the requirements of this Securitization Trust Agreement;
(ii) the Securitization Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Securitization Trustee was negligent in performing
its duties in accordance with the terms of this Securitization Trust
Agreement; and
(iii) the Securitization Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken in good faith
in accordance with the direction of the Holders of Investor Certificates
evidencing not less than 51% of the aggregate Percentage Interest relating
to the time, method and place of conducting any proceeding for any remedy
available to the Securitization Trustee, or exercising any trust or power
conferred upon the Securitization Trustee, under this Securitization Trust
Agreement or the Titling Trust Agreement (as supplemented by the 1997-A
SUBI Supplement).
(d) The Securitization Trustee shall not be required to expend or risk
its own funds or otherwise incur financial liability in the performance of any
of its duties under this Securitization Trust Agreement, or in the exercise of
any of its rights or powers, if there shall be reasonable grounds for believing
that the repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
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(e) All information obtained by the Securitization Trustee regarding
the Obligors and the Contracts contained in the 1997-A SUBI, whether upon the
exercise of its rights under this Securitization Trust Agreement or otherwise,
shall be maintained by the Securitization Trustee in confidence and shall not be
disclosed to any other Person, unless such disclosure is required by any
applicable law or regulation or pursuant to subpoena.
SECTION 6.02. CERTAIN MATTERS AFFECTING THE SECURITIZATION TRUSTEE.
(a) Except as otherwise provided in Section 6.01:
(i) the Securitization Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of an authorized signatory, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) the Securitization Trustee may consult with counsel and any
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken or suffered or omitted by it under this
Securitization Trust Agreement in good faith and in accordance with such
Opinion of Counsel;
(iii) the Securitization Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Securitization
Trust Agreement or the Titling Trust Agreement (as supplemented by the
1997-A SUBI Supplement), or to institute, conduct or defend any litigation
under this Securitization Trust Agreement or the Titling Trust Agreement
(as supplemented by the 1997-A SUBI Supplement), or in relation to this
Securitization Trust Agreement or the Titling Trust Agreement (as
supplemented by the 1997-A SUBI Supplement), at the request, order or
direction of any of the Certificateholders pursuant to the provisions of
this Securitization Trust Agreement or the
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Titling Trust Agreement (as supplemented by the 1997-A SUBI Supplement),
unless such Certificateholders shall have offered to the Securitization
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby;
(iv) the Securitization Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred upon
it by this Securitization Trust Agreement;
(v) the Securitization Trustee shall not be bound to recalculate,
reverify, or make any investigation into the facts of matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Investor Certificates
evidencing not less than 25% of the aggregate Percentage Interest of any
Class; PROVIDED, HOWEVER, that if the payment within a reasonable time to
the Securitization Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of
the Securitization Trustee, not reasonably assured to the Securitization
Trustee by the security afforded to it by the terms of this Securitization
Trust Agreement, the Securitization Trustee may require reasonable
indemnity against such cost, expense or liability as a condition to so
proceeding; the reasonable expense of every such examination shall be paid
by the Transferor or, if paid by the Securitization Trustee, shall be
reimbursed by the Transferor upon demand; and nothing in this clause shall
derogate from the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors; and
(vi) the Securitization Trustee may execute any of the trusts or
powers under this Securitization Trust Agreement or perform any duties
under this Securitization Trust Agreement either directly or by or through
agents or attorneys or a custodian.
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(b) No Certificateholder will have any right to institute any
proceeding with respect to this Securitization Trust Agreement except upon
satisfying the conditions set forth in Section 9.03(c).
SECTION 6.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR CONTRACTS.
The Securitization Trustee shall make no representations as to the validity
or sufficiency of this Securitization Trust Agreement or of the Certificates
(other than the execution by the Securitization Trustee on behalf of the 1997-A
Securitization Trust of, and the certificate of authentication on, the
Certificates), or of the 1997-A SUBI Interest or 1997-A SUBI Certificate. The
Securitization Trustee shall have no obligation to perform any of the duties of
the Transferor unless explicitly set forth in this Securitization Trust
Agreement. The Securitization Trustee shall at no time have any responsibility
or liability for or with respect to the legality, validity and enforceability of
the 1997-A SUBI Interest or 1997-A SUBI Certificate or any 1997-A Contract, any
ownership interest in any 1997-A Leased Vehicle, or the maintenance of any such
ownership interest, or for or with respect to the efficacy of the 1997-A
Securitization Trust or its ability to generate the payments to be distributed
to Certificateholders under this Securitization Trust Agreement, including
without limitation the validity of the assignment of the 1997-A SUBI Interest or
1997-A SUBI Certificate to the 1997-A Securitization Trust or of any intervening
assignment; the existence, condition, location and ownership of any 1997-A
Contract or 1997-A Leased Vehicle; the existence and enforceability of any
physical damage or credit life or credit disability insurance; the existence and
contents of any 1997-A Contract or any computer or other record thereof; the
completeness of any 1997-A Contract; the performance or enforcement of any
Contract; the compliance by the Transferor with any covenant or the breach by
the Transferor of any warranty or representation made under this Securitization
Trust Agreement or in any related document and the accuracy of any such warranty
or representation prior to the Securitization Trustee's receipt of notice or
other discovery of any noncompliance therewith or any breach thereof; the acts
or omissions of the Transferor or
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the Servicer; or any action by the Securitization Trustee taken at the
instruction of the Servicer PROVIDED, HOWEVER, that the foregoing shall
not relieve the Securitization Trustee of its obligation to perform its
duties under this Securitization Trust Agreement. Except with respect to
a claim based on the failure of the Securitization Trustee to perform its
duties under this Securitization Trust Agreement or based on the
Securitization Trustee's willful misconduct, bad faith or negligence, no
recourse shall be had for any claim based on any provision of this
Securitization Trust Agreement, the Certificates, the 1997-A SUBI
Interest or 1997-A SUBI Certificate or assignment thereof against the
institution serving as Trustee in its individual capacity. The
Securitization Trustee shall not have any personal obligation, liability
or duty whatsoever to any Certificateholder or any other Person with
respect to any such claim, and any such claim shall be asserted solely
against the 1997-A Securitization Trust or any indemnitor who shall
furnish indemnity as provided in this Securitization Trust Agreement. The
Securitization Trustee shall not be accountable for the use or
application by the Transferor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds
paid to the Servicer in respect of the 1997-A SUBI Interest or 1997-A
SUBI Certificate.
SECTION 6.04. TRUSTEE MAY OWN CERTIFICATES.
The Securitization Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates with the same rights as it would
have if it were not Trustee.
SECTION 6.05. TRUSTEE'S FEES AND EXPENSES.
The Securitization Trustee shall be entitled to reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts created by this Securitization Trust Agreement
and in the exercise and performance of any of the powers and duties of the
Securitization Trustee under this Securitization Trust Agreement, and payment or
reimbursement upon its request for all reasonable expenses, disbursements and
advances incurred or made by the
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Securitization Trustee in its capacity as Trustee in accordance with any
of the provisions of this Securitization Trust Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence, willful
misfeasance or bad faith or that is the responsibility of
Certificateholders under this Securitization Trust Agreement. Such
compensation and reimbursement shall be paid as set forth in Section
3.01(b) hereof.
SECTION 6.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Securitization Trustee under this Securitization Trust Agreement shall
at all times be a national banking association or state banking institution
[having its corporate trust office in the same State as the location of the
Corporate Trust Office as specified in this Securitization Trust Agreement]; and
organized and doing business under the laws of such State or the United States;
authorized under such laws to exercise corporate trust powers; having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authorities; and having a long-term deposit
rating no lower than Baa3 by Moody's, so long as Moody's is a Rating Agency, or
be otherwise acceptable to each Rating Agency, as evidenced by a letter to such
effect from each of them.
If the Securitization Trustee shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securitization Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Securitization Trustee shall
resign immediately in the manner and with the effect specified in Section 6.07.
SECTION 6.07. RESIGNATION OR REMOVAL OF TRUSTEE.
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(a) The Securitization Trustee may at any time resign and be
discharged from the trusts created by this Securitization Trust Agreement
by giving written notice thereof to the Transferor. Upon receiving such
notice of resignation, the Transferor shall promptly appoint a successor
Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
Trustee. If no successor Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(b) If at any time the Securitization Trustee shall cease to be
eligible in accordance with the provisions of Section 6.06 and shall fail to
resign after written request therefor by the Transferor, or if at any time the
Securitization Trustee shall be legally unable to act, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Securitization Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Securitization Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Transferor may remove the
Securitization Trustee. If it shall remove the Securitization Trustee under the
authority of the immediately preceding sentence, the Transferor shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Securitization Trustee so removed and
one copy to the successor Trustee, and payment of all fees owed to the outgoing
Trustee.
(c) Any resignation or removal of the Securitization Trustee and
appointment of a successor Trustee pursuant to any of the provisions of this
Section shall not become effective until acceptance of appointment by the
successor Trustee as provided in Section 6.08. The Servicer shall give each
Rating Agency notice of any such resignation or removal of the Securitization
Trustee and appointment and acceptance of a successor Trustee.
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SECTION 6.08. SUCCESSOR TRUSTEE.
Any successor Trustee appointed as provided in Section 6.07 shall execute,
acknowledge and deliver to the Transferor and to its predecessor Trustee an
instrument accepting such appointment under this Securitization Trust Agreement,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Securitization Trust Agreement, with
like effect as if originally named as Trustee. The predecessor Trustee shall
deliver to the successor Trustee all documents and statements held by it under
this Securitization Trust Agreement; and the Transferor and the predecessor
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Trustee all such rights, powers, duties and obligations. No successor
Trustee shall accept appointment as provided in this Section unless at the time
of such acceptance such successor Trustee shall be eligible under the provisions
of Section 6.06. Upon acceptance of appointment by a successor Trustee as
provided in this Section, the Transferor shall cause notice of the successor of
such Trustee under this Securitization Trust Agreement to be mailed to all
Certificateholders at their addresses as shown in the Certificate Register and
shall give notice by mail to each Rating Agency. If the Transferor fails to
mail or cause to be mailed such notice within ten days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Transferor.
SECTION 6.09. MERGER OR CONSOLIDATION OF TRUSTEE.
Any corporation (i) into which the Securitization Trustee may be merged or
consolidated, (ii) which may result from any merger, conversion or consolidation
to which the Securitization Trustee shall be a party, or (iii) which may succeed
to the corporate trust business of the Securitization Trustee, shall be the
successor of the Securitization Trustee hereunder, provided such corporation
shall be eligible pursuant to Section 6.06,
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without the execution or filing of any instrument or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding, except that if the Securitization Trustee in any of the
foregoing cases is not the surviving entity, then the surviving entity
shall execute an agreement of assumption to perform every obligation of
the Securitization Trustee, either generally or particularly as provided
herein. Notice of any such event shall be given by the Securitization
Trustee to each Rating Agency.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Securitization Trust
Agreement, at any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Securitization Trust may at the time be
located, the Transferor and the Securitization Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Securitization Trustee to act as co-trustee, jointly
with the Securitization Trustee, or separate trustee or separate trustees, of
all or any part of the 1997-A Securitization Trust, and to vest in such Person,
in such capacity and for the benefit of the Certificateholders, such title to
the 1997-A Securitization Trust, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Transferor and the Securitization Trustee may consider necessary or
desirable. If the Transferor shall not have joined in such appointment within
15 days after the receipt by it of a request so to do, the Securitization
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee under this Securitization Trust Agreement shall be required to
meet the terms of eligibility as a successor Trustee pursuant to Section 6.06
and no notice of a successor Trustee pursuant to Section 6.08 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required pursuant to Section 6.08.
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Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Securitization Trustee shall be conferred upon and exercised or
performed by the Securitization Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Securitization
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed,
the Securitization Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the 1997-A Securitization
Trust or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but solely at
the direction of the Securitization Trustee;
(ii) no trustee under this Securitization Trust Agreement shall be
personally liable by reason of any act or omission of any other trustee
under this Securitization Trust Agreement; and
(iii) the Transferor and the Securitization Trustee acting jointly
may at any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Securitization Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this
Securitization Trust Agreement and the conditions of this Section. Each
separate trustee and co-trustee, upon its acceptance of the trusts conferred,
shall be vested with the estates or property specified in its instrument of
appointment, either jointly with the Securitization Trustee or separately, as
may be provided therein, subject to all the provisions of this Securitization
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Trust Agreement, specifically including every provision of this
Securitization Trust Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Securitization Trustee. Each
such instrument shall be filed with the Securitization Trustee and a copy
thereof given to the Transferor and the Servicer.
Any separate trustee or co-trustee may at any time appoint the
Securitization Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Securitization Trust Agreement on its behalf and in its
name. If any separate trustee or co-trustee shall die, become incapable of
acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Securitization
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee. Notwithstanding anything to the contrary in this
Securitization Trust Agreement, the appointment of any separate trustee or
co-trustee shall not relieve the Securitization Trustee of its obligations
and duties under this Securitization Trust Agreement.
SECTION 6.11. REPRESENTATIONS AND WARRANTIES OF TRUSTEE.
The Securitization Trustee makes the following representations and
warranties on which the Transferor and Certificateholders may rely:
(i) ORGANIZATION AND GOOD STANDING. The Securitization Trustee is a
national banking association organized, existing and in good standing under
the laws of the United States of America.
(ii) POWER AND AUTHORITY. The Securitization Trustee has full power,
authority and right to execute, deliver and perform this Securitization
Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Securitization Trust
Agreement.
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(iii) DUE EXECUTION. This Securitization Trust Agreement has been
duly executed and delivered by the Securitization Trustee.
(iv) ENFORCEABILITY. This Securitization Trust Agreement constitutes
the legal, valid and binding obligation of the Securitization Trustee,
enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting enforcement of
creditors' rights generally and by general principles of equity.
SECTION 6.12. TAX RETURNS.
The Securitization Trustee shall, at the direction of the Servicer and on
behalf of the Transferor, prepare or shall cause to be prepared any required
federal tax information returns (in a manner consistent with the treatment of
the Investor Certificates as indebtedness) and shall file and distribute such
forms as required by law. The Servicer shall prepare or cause to be prepared
any federal and state tax returns that may be required with respect to the
1997-A Securitization Trust or the Securitization Trust assets and shall
deliver any such returns to the Securitization Trustee for signature at least
five days prior to the date such returns are required by law to be filed.
SECTION 6.13. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES.
All rights of action and claims under this Securitization Trust Agreement
or the Certificates may be prosecuted and enforced by the Securitization
Trustee without the possession of any of the Certificates or the production
thereof in any proceeding relating thereto, and any such proceeding
instituted by the Securitization Trustee shall be brought in its own name as
trustee. Any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances of the
Securitization Trustee, its agents and counsel, be for the ratable benefit of
the Certificateholders in respect of which such judgment has been obtained.
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SECTION 6.14. SUIT FOR ENFORCEMENT.
If an Event of Servicing Termination shall occur and be continuing under
the Titling Trust Agreement, as supplemented by the 1997-A SUBI Servicing
Supplement with respect to the 1997-A SUBI Portfolio, the Securitization
Trustee, in its discretion may, subject to the provisions of Sections 6.01
and 6.02 hereof and Section 6.01(b) of the 1997-A SUBI Servicing Supplement,
proceed to protect and enforce its rights and the rights of the
Certificateholders under this Securitization Trust Agreement, the Titling
Trust Agreement and the 1997-A SUBI Servicing Supplement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained herein or therein or in
aid of the execution of any power granted herein or therein or for the
enforcement of any other legal, equitable or other remedy as the
Securitization Trustee, being advised by counsel, shall deem most effectual
to protect and enforce any of the rights of the Securitization Trustee or the
Certificateholders.
SECTION 6.15. RIGHTS OF CERTIFICATEHOLDERS TO DIRECT TRUSTEE.
Holders of Investor Certificates evidencing not less than 25% of the
aggregate Percentage Interest shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Securitization Trustee under this Securitization Trust Agreement, or
exercising any trust or power conferred on the Securitization Trustee by this
Securitization Trust Agreement; PROVIDED, HOWEVER, that (a) if any greater
Percentage Interest is required to cause any action to be taken under the
Titling Trust Agreement or the 1997-A SUBI Supplement by the Securitization
Trustee in its capacity as a transferee of the 1997-A SUBI Certificate, the
greater Percentage Interest shall prevail; (b) subject to Sections 6.01 and
6.02, the Securitization Trustee shall have the right to decline to follow
any such direction if the Securitization Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
Securitization Trustee in good faith shall determine that the proceedings so
directed would be illegal or subject it to personal liability or be unduly
prejudicial to the
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rights of Certificateholders not parties to such direction; and (c) nothing
in this Securitization Trust Agreement shall impair the right of the
Securitization Trustee to take any action deemed proper by the Securitization
Trustee and which is not inconsistent with such direction by the
Certificateholders.
SECTION 6.16. NO PETITION.
The Securitization Trustee covenants and agrees that prior to the date
which is one year and one day after the last date upon which (a) each Class
of Investor Certificates has been paid in full, and (b) all obligations due
under any other Securitized Financing have been paid in full, the
Securitization Trustee will not institute against, or join any other Person
in instituting against the Transferor, TMCC, the Titling Trustee or the
Titling Trust any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or state
bankruptcy or similar law. The foregoing shall not limit the Securitization
Trustee's right to file any claim in or otherwise take actions with respect
to any such proceeding instituted by any Person not under such a constraint.
This Section shall survive the termination of this Securitization Trust
Agreement or the resignation or removal of the Securitization Trustee under
this Securitization Trust Agreement.
ARTICLE SEVEN
TERMINATION
SECTION 7.01. TERMINATION OF THE 1997-A SECURITIZATION TRUST.
(a) The 1997-A Securitization Trust and the respective obligations
and responsibilities of the Transferor and the Securitization Trustee shall
terminate upon the earliest of (i) the purchase as of any Distribution Date
by the Transferor of the corpus of the 1997-A Securitization Trust as
described in Section 7.02 (except that the Securitization Trust shall
continue solely for the limited purposes set forth in (b) and (c) below),
(ii) the day following the Distribution Date upon which all Investor
Certificates have been paid in full and after which there is no unreimbursed
Class A-1 Certificate Principal Loss Amount, Class
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A-2 Certificate Principal Loss Amount, Class A-3 Certificate Principal Loss
Amount, Class A-4 Certificate Principal Loss Amount, Class B Certificate
Principal Loss Amount, Class A-1 Certificate Principal Loss Interest Amount,
Class A-2 Certificate Principal Loss Interest Amount, Class A-4 Certificate
Principal Loss Interest Amount, Class A-3 Certificate Principal Loss Interest
Amount, Class B Certificate Principal Loss Interest Amount, Class B
Certificate Principal Carryover Shortfall or Class B Certificate Principal
Carryover Shortfall Interest Amount or (iii) the expiration, disposition or
termination of the 1997-A SUBI Interest; PROVIDED, HOWEVER, that in no event
shall the trust created by this Securitization Trust Agreement continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of William Jefferson Clinton of the State of Arkansas, living on
the date of the Agreement. The Transferor shall promptly notify the
Securitization Trustee and each Rating Agency of any prospective termination
of the 1997-A Securitization Trust.
(b) Notice of any termination, specifying the Distribution Date upon
which the Certificateholders may surrender their Certificates to the
Securitization Trustee for payment of the final distribution and retirement
of the Certificates, shall be given promptly by the Securitization Trustee by
letter to Certificateholders mailed not earlier than the 15th day and not
later than the 30th day prior to the date on which such final distribution is
expected to occur specifying (i) the Distribution Date upon which final
payment of the Certificates shall be made upon presentation and surrender of
Certificates at the Corporate Trust Office or such other office of the
Securitization Trustee therein specified, (ii) the amount of any such final
payment and (iii) if applicable, that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the Corporate Trust Office
or such other office of the Securitization Trustee therein specified. The
Securitization Trustee shall give such notice to the Certificate Registrar
(if other than the Securitization Trustee) at the time such notice is given
to Certificateholders. In the event such notice is given, in the case of an
optional purchase of the Securitization Trust corpus pursuant to Section
7.02, the Transferor shall deposit the amount
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specified in Section 7.02. Upon presentation and surrender of the
Certificates, the Securitization Trustee shall cause to be distributed to
Certificateholders so surrendering amounts distributable on such Distribution
Date pursuant to Section 3.01. No further interest will accrue with respect
to any Investor Certificate from and after the final Distribution Date with
respect thereto.
(c) In the event that all of the Certificateholders shall not have
surrendered their Certificates for retirement within six months after the
date specified in the above-mentioned written notice, the Securitization
Trustee shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for retirement and receive
the final distribution with respect thereto. If within one year after the
second notice all the Certificates shall not have been surrendered for
retirement, the Securitization Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain subject
to this Securitization Trust Agreement. Any funds remaining in the
Securitization Trust after exhaustion of such remedies shall be distributed
by the Securitization Trustee to the [United Way].
SECTION 7.02. OPTIONAL PURCHASE OF 1997-A SUBI INTEREST.
(a) On each Distribution Date following the last day of a Collection
Period as of which the Certificate Balance shall be less than or equal to ten
percent (10%) of the Initial Certificate Balance, the Transferor shall have
the option to purchase the Investor Certificateholders' interest in the
corpus of the 1997-A Securitization Trust. To exercise such option, the
Transferor shall notify the Securitization Trustee and the Servicer, in
writing, no later than the tenth day of the month preceding the month in
which the Distribution Date as of which such purchase is to be effected and
shall deposit in the 1997-A SUBI Collection Account an amount equal to the
greater of (i) the Aggregate Net Investment Value as of the last day of the
related Collection Period, and (ii) the sum of (A) the Certificate Balance
(B) the accrued and unpaid Class A-1 Interest
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Distributable Amount, Class A-2 Interest Distributable Amount, Class A-3
Interest Distributable Amount, Class A-4 Interest Distributable Amount and
Class B Interest Distributable Amount, (C) any accrued and unpaid Class A-1
Interest Carryover Shortfall, Class A-2 Interest Carryover Shortfall, Class
A-3 Interest Carryover Shortfall, Class A-4 Interest Carryover Shortfall and
Class B Interest Carryover Shortfall, (D) any unpaid Class A-1 Certificate
Principal Loss Amount, unpaid Class A-2 Certificate Principal Loss Amount,
unpaid Class A-3 Certificate Principal Loss Amount, unpaid Class A-4
Certificate Principal Loss Amount, unpaid Class B Certificate Principal Loss
Amount and unpaid Class B Certificate Principal Carryover Shortfall, and (E)
any accrued and unpaid Class A-1 Certificate Principal Loss Interest Amount,
unpaid Class A-2 Certificate Principal Loss Interest Amount, unpaid Class A-3
Certificate Principal Loss Interest Amount, unpaid Class A-4 Certificate
Principal Loss Interest Amount, unpaid Class B Certificate Principal Loss
Interest Amount and Class B Certificate Principal Carryover Shortfall
Interest Amount through the day preceding the final Distribution Date. The
Transferor also shall pay to the Servicer the aggregate amount of any
unreimbursed Advances. Thereupon the Transferor shall succeed to all of the
Investor Certificateholders' interests in and to the 1997-A Securitization
Trust corpus.
(b) The Investor Certificateholders' interest in the corpus of the
Securitization Trust may only be purchased pursuant to this Section 7.02 if
the Securitization Trustee and each Rating Agency receives an Opinion of
Counsel from the Transferor's counsel to the effect that such purchase would
not constitute a fraudulent conveyance, or each Rating Agency is otherwise
satisfied (as evidenced by written notice from each to the Securitization
Trustee).
ARTICLE EIGHT
EARLY AMORTIZATION EVENTS
SECTION 8.01. EARLY AMORTIZATION EVENTS.
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If any one of the following events shall occur during the Revolving
Period:
(a) failure on the part of the Servicer (i) to make any payment or
deposit required with respect to the 1997-A SUBI, the 1997-A SUBI Interest,
or the Investor Certificates under this Securitization Trust Agreement, the
Titling Trust Agreement or the 1997-A SUBI Supplement or the 1997-A SUBI
Servicing Supplement, on or before the date occurring five Business Days
after the payment or deposit is required to be made, or (ii) to deliver a
Servicer's Certificate within ten Business Days after any Determination Date,
which failure continues for three Business Days;
(b) failure on the part of the Transferor or the Servicer duly to
observe or perform in any material respect any other covenants or agreements
of the Transferor or the Servicer set forth in this Securitization Trust
Agreement, the Titling Trust Agreement, the 1997-A SUBI Supplement or the
1997-A SUBI Servicing Supplement, which failure materially and adversely
affects the rights of the holder of the 1997-A SUBI Interest or of the
Investor Certificateholders and which continues unremedied and continues to
affect materially and adversely the rights of the holder of the 1997-A SUBI
Interest or of the Investor Certificateholders for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, is given (i) to the Transferor or the Servicer, as the case may be,
by the Securitization Trustee or the Titling Trustee, or (ii) to the
Transferor or the Servicer, as the case may be, and to the Securitization
Trustee by the Holders of Investor Certificates evidencing not less than 25%
of the aggregate Percentage Interest;
(c) any representation or warranty made by TMCC in the SUBI
Certificate Agreement, by the Transferor in this Securitization Trust
Agreement, or the representation and warranty made by the Servicer in Section
3.02( ) of the 1997-A SUBI Servicing Supplement or any certificate given
pursuant to Section 3.02( ) of the 1997-A SUBI Servicing Supplement, shall
prove to have been incorrect in any material respect when made or given, as a
result of which the interests of the holder of the
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1997-A SUBI Interest or of the Investor Certificateholders are materially and
adversely affected and which continues to be incorrect in any material
respect and continues to affect materially and adversely affect the interests
of the holder of the 1997-A SUBI Interest or of the Certificateholders for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, is given (i) to TMCC, the Transferor or
the Servicer, as the case may be, by the Securitization Trustee or the
Titling Trustee, or (ii) to TMCC, the Transferor or the Servicer, as the case
may be, and to the Securitization Trustee by the Holders of Investor
Certificates evidencing not less than 25% of the aggregate Percentage
Interest; PROVIDED, HOWEVER, that an Early Amortization Event pursuant to
this subparagraph (c) shall not be deemed to have occurred hereunder if the
Servicer has made the deposit contemplated by Section of the 1997-A SUBI
Servicing Supplement and has reallocated the relevant 1997-A Contract and
1997-A Leased Vehicle to the UTI Portfolio within the time provided therefor;
(d) the Transferor shall file a petition commencing a voluntary case
under any chapter of the Federal bankruptcy laws; or the Transferor shall
file a petition or answer or consent seeking reorganization, arrangement,
adjustment, or composition under any other similar applicable Federal law, or
shall consent to the filing of any such petition, answer, or consent; or the
Transferor shall appoint, or consent to the appointment of a custodian,
receiver, liquidator, trustee, assignee, sequestrator or other similar
official in bankruptcy or insolvency of it or of any substantial part of its
property, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due;
(e) any order for relief against the Transferor shall have been
entered by a court having jurisdiction in the premises under any chapter of
the Federal bankruptcy laws; or a decree or order by a court having
jurisdiction in the premises shall have been entered approving as properly
filed a petition seeking reorganization, arrangement, adjustment, or
composition of the Transferor under any other similar applicable Federal law;
or a decree or order of a court having jurisdiction in the premises
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for the appointment of a custodian, receiver, liquidator, trustee, assignee,
sequestrator or other similar official in bankruptcy or insolvency of the
Transferor or of any substantial part of its property, or for the winding up
or liquidation of its affairs, shall have been entered;
(f) any Lien, other than Liens permitted under this Securitization
Trust Agreement, the Titling Trust Agreement or the 1997-A SUBI Supplement or
the 1997-A SUBI Servicing Supplement shall be created on or extend to or
otherwise arise upon or burden the 1997-A SUBI Interest, the 1997-A SUBI
Certificate, or the 1997-A Contracts or 1997-A Leased Vehicles, or any part
thereof or any interest therein or the proceeds thereof, and not be released
or bonded over within 60 days thereafter;
(g) the Transferor, the 1997-A Securitization Trust or the Titling
Trust shall become subject to registration as an "investment company" under
the Investment Company Act;
(h) on the last calendar day of any calendar month (commencing
September 1997) the aggregate amount of Principal Collections collected
through the last day of the related Collection Period that have not been
reinvested in new 1997-A Contracts and 1997-A Leased Vehicles, as
contemplated by Section 3.02 of the 1997-A SUBI Servicing Supplement, exceeds
[$1,000,000];
(i) an Event of Servicing Termination has occurred; or
(j) on any Distribution Date the aggregate amount withdrawn from the
Reserve Fund and deposited in the 1997-A SUBI Collection Account on or prior
to such Distribution Date (without reference to any subsequent deposits to
the Reserve Fund from any source) exceeds $_________;
then (but in the case of any event described in subparagraph (a), (b), (c) or
(f) after any applicable grace period) an early amortization event (an "Early
Amortization Event") shall have occurred.
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SECTION 8.02. ADDITIONAL RIGHTS UPON THE OCCURRENCE OF CERTAIN EVENTS
(a) Following the occurrence of an Early Amortization Event
described in Section 8.01(d) or (e) (such event, an "Insolvency Event"), the
Transferor shall promptly give notice to the Securitization Trustee of such
Insolvency Event. Within 15 days of the receipt by the Securitization Trustee
of the notice, the Securitization Trustee may and, upon receipt of a notice
from Investor Certificateholders evidencing more than 51% of the aggregate
Percentage Interest of the Class A Certificates or 51% of the aggregate
Percentage Interests of the Class A Certificates and the Class B Certificates
(voting together as a single class), shall publish a notice in Authorized
Newspapers that an Insolvency Event has occurred and that the Securitization
Trustee intends to sell, dispose of or otherwise liquidate the 1997-A SUBI
Interest, the 1997-A SUBI Certificate and the other property of the 1997-A
Securitization Trust in a commercially reasonable manner. Following such
publication, the Securitization Trustee shall, unless otherwise prohibited by
applicable law from any such action, sell, dispose of, or otherwise liquidate
the 1997-A SUBI Interest, the 1997-A SUBI Certificate and the other property
of the 1997-A Securitization Trust, in a commercially reasonable manner and
on commercially reasonable terms, which shall include the solicitation of
competitive bids, and shall proceed to consummate the sale, liquidation or
disposition thereof as provided above with the highest bidder; PROVIDED,
HOWEVER, that such sale, disposition or other liquidation shall not be made
without the consent of all Holders of Investor Certificates if a net loss
would be realized. The Transferor and the Servicer shall be permitted to bid
for the 1997-A Securitization Trust property. The Securitization Trustee may
obtain a prior determination from the conservator, receiver, or trustee in
bankruptcy of the Transferor that the terms and manner of any proposed sale,
disposition or liquidation are commercially reasonable. The provisions of
Sections 8.01 and 8.02 shall not be deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
1997-A SUBI Interest, the 1997-A SUBI
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Certificate and the other property of the 1997-A Securitization Trust
pursuant to Section 8.02 (A) above, net of expenses incurred in such sale,
disposition or liquidation, shall be treated as Principal Collections and
Interest Collections received during the Amortization Period; PROVIDED that
such Principal Collections, will be distributed, first, on a PRO RATA basis,
to the Class A-1 Certificateholders, the Class A-2 Certificateholders, Class
A-3 Certificateholders and the Class A-4 Certificateholders based on their
respective Certificate Balances, and second, to the Class B
Certificateholders; FURTHER PROVIDED that the Servicer on behalf of the
Securitization Trustee shall determine conclusively without liability for
such determination the amount of such proceeds which are allocable to
Interest Collections and the amount of such proceeds which are allocable to
Principal Collections. On the day following the Distribution Date on which
such proceeds are distributed to the Investor Certificateholders, the 1997-A
Securitization Trust shall terminate.
ARTICLE NINE
MISCELLANEOUS PROVISIONS
SECTION 9.01. AMENDMENT.
(a) This Securitization Trust Agreement and the other Transaction
Documents may be amended by the respective parties thereto, without the
consent of any of the Certificateholders, (i) to cure any ambiguity, mistake
or error, (ii) to correct or supplement any provisions herein or therein that
may be inconsistent with any provisions hereof or thereof or with the
prospectus pursuant to which the Class A Certificates were offered, (iii) to
add, change or eliminate any other provisions hereof or thereof with respect
to matters or questions arising hereunder or thereunder that shall not be
inconsistent with the provisions hereof or thereof, or (iv) to add or amend
any provision therein in connection with permitting transfers of the Class B
Certificates; PROVIDED, HOWEVER, that in the case of clause (iii), any such
action shall not, in the good faith judgment or the parties hereto or
thereto, adversely affect in any material respect the interests of the
Certificateholders and
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the Titling Trustee and the Securitization Trustee shall have received an
Opinion of Counsel to the effect that such action shall not affect the legal
interests or positions of the Certificateholders.
(b) This Securitization Trust Agreement and the other Transaction
Documents may also be amended from time to time by the respective parties
hereto or thereto including with respect to (i) changing the formula for
determining the Specified Reserve Fund Balance which change would result in a
decrease in the amount of the Specified Reserve Fund Balance, (ii) changing
the manner by which the Reserve Fund is funded, which changes could include
borrowings by the Transferor to fund all or a portion of the Reserve Fund
Initial Deposit (which borrowings would be payable from assets or cash flow
otherwise payable to the Transferor), (iii) changing the remittance schedule
for collection deposits in the 1997-A SUBI Collection Account, or (iv)
changing the definition of "Permitted Investments"), if either (A) the
Securitization Trustee has been furnished with a letter from each Rating
Agency to the effect that such amendment would not cause its then-current
rating of any Rated Certificate to be qualified, reduced or withdrawn, or (B)
the Securitization Trustee has received the consent of the Holders of
Investor Certificates representing not less than 51% of the aggregate
Percentage Interests (which consent of any Holder of an Investor Certificate
given pursuant to this Section or pursuant to any other provision of this
Securitization Trust Agreement shall be conclusive and binding on such Holder
and on all future Holders of such Investor Certificate and of any Investor
Certificate issued upon the transfer thereof or in exchange thereof or in
lieu thereof whether or not notation of such consent is made upon the
Investor Certificate); PROVIDED, HOWEVER, that no such amendment shall (x)
except as otherwise provided in Section 9.01(a), increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on the 1997-A SUBI or any 1997-A SUBI Certificate or distributions
that shall be required to be made on any Investor Certificate or the
applicable Certificate Rate or (y) reduce the aforesaid percentage of the
aggregate Percentage Interest of the Investor Certificates of each Class
required to consent to any such
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amendment, without the consent of the Holders of all Certificates of such
Class then outstanding.
(c) The Securitization Trustee shall provide each Rating Agency
prior notice of any proposed amendment hereto and copies of an Opinion of
Counsel, if required pursuant to Section 9.01(a), whether or not such
amendment requires its approval. Any notice of any such amendment or
modification as to which notice is required to be given to any Rating Agency
shall contain both the substance and substantial form of the proposed
amendment or modification.
(d) Promptly after the execution of any such amendment or consent,
the Securitization Trustee shall furnish written notification of the
substance of such amendment or consent to each Certificateholder. The failure
to send such notification shall not affect the validity of such amendment. It
shall not be necessary for the consent of Certificateholders pursuant to
Section 9.01(b) to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing
the authorization by Certificateholders of the execution thereof shall be
subject to such reasonable requirements as the Securitization Trustee may
prescribe.
(e) Prior to the execution of any amendment to this Securitization
Trust Agreement, the Securitization Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Securitization Trust Agreement. The
Securitization Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Securitization Trustee's own rights, duties
or immunities under this Securitization Trust Agreement or otherwise.
SECTION 9.02. PROTECTION OF TITLE TO TRUST.
(a) The Transferor shall execute and file, or cause to be executed
and filed, such financing statements and such continuation and other
statements, all in such manner and in such
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places as may be required by law fully to preserve, maintain and protect the
interest of the Certificateholders and the Securitization Trustee under this
Securitization Trust Agreement in the 1997-A SUBI Interest, the 1997-A SUBI
Certificate and in the proceeds thereof. The Transferor shall deliver (or
cause to be delivered) to the Securitization Trustee file-stamped copies of,
or filing receipts for, any document filed as provided above, as soon as
available following such filing.
(b) The Transferor shall not change its name, identity or corporate
structure in any manner that would, could or might make any financing
statement or continuation statement filed by the Transferor in accordance
with paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC, unless it shall have given the Securitization Trustee
written notice thereof and shall have promptly filed appropriate amendments
to all previously filed financing statements or continuation statements.
(c) The Transferor shall give the Securitization Trustee prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly make any such
filing.
(d) The Transferor shall deliver to the Securitization Trustee
promptly after the execution and delivery of each amendment to this
Securitization Trust Agreement, an Opinion of Counsel either (i) stating
that, in the opinion of such Counsel, all financing statements and
continuation statements have been executed and filed that are necessary fully
to preserve and protect the interest of the Securitization Trustee in the
1997-A SUBI Interest, and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are given, or (ii) stating
that, in the opinion of such Counsel, no such action is necessary to preserve
and protect such interest.
(e) The Transferor shall, to the extent required by applicable law,
cause the Class A-1 Certificates, the Class A-2
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Certificates, the Class A-3 Certificates and the Class A-4 Certificates to be
registered with the Commission pursuant to Section 12(b) or Section 12(g) of
the Exchange Act within the time periods specified in such Sections.
SECTION 9.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Securitization Trust Agreement or the 1997-A
Securitization Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
1997-A Securitization Trust, nor otherwise affect the rights, obligations and
liabilities of the parties to this Securitization Trust Agreement or any of
them.
(b) No Certificateholder shall have any right to vote (except as
provided in Section 9.01) or in any manner otherwise control the operation
and management of the 1997-A Securitization Trust, or the obligations of the
parties to this Securitization Trust Agreement, nor shall anything set forth
in this Securitization Trust Agreement, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action pursuant to any provision of this Securitization Trust Agreement.
(c) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Securitization Trust Agreement to
institute any suit, action, or proceeding in equity or at law upon or under
or with respect to this Securitization Trust Agreement or any other
Transaction Document, unless such Holder previously shall have given to the
Securitization Trustee a written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of Investor
Certificates evidencing not less than 25% of the aggregate Percentage
Interest, shall have made written request upon the Securitization Trustee to
institute such action, suit or proceeding in its own name as Trustee under
this
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Securitization Trust Agreement and shall have offered to the Securitization
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the
Securitization Trustee, for 30 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit, or proceeding and during such 30-day period, no request or
waiver inconsistent with such written request has been given to the
Securitization Trustee pursuant to this Section; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder and the Securitization Trustee, that no one or more
Holders of Certificates shall have any right in any manner whatever by virtue
or by availing itself or themselves of any provisions of this Securitization
Trust Agreement or any other Transaction Document to affect, disturb, or
prejudice the rights of the Holders of any other of the Certificates, or to
obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Securitization Trust Agreement or
any other Transaction Document, except in the manner provided in this
Securitization Trust Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the
Securitization Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 9.04. GOVERNING LAW.
THIS SECURITIZATION TRUST AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD
TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 9.05. NOTICES.
All demands, notices and communications under this Securitization Trust
Agreement shall be in writing, personally delivered or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon
receipt (i) in the case of the Transferor, to the agent for service as specified
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in this Securitization Trust Agreement, or at such other address as shall be
designated by the Transferor in a written notice to the Securitization
Trustee; (ii) in the case of the Securitization Trustee, at the Corporate
Trust Office; (iii) in the case of Standard & Poor's, at 25 Broadway, 20th
Floor, New York, New York 10004, Attention: Asset Backed Surveillance
Department; and (iv) in the case of Moody's, at 99 Church Street, New York,
New York 10007 Attention: ABS Monitoring Department. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in
this Securitization Trust Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder shall receive such
notice.
SECTION 9.06. SEVERABILITY OF PROVISIONS; COUNTERPARTS.
If any one or more of the covenants, agreements, provisions or terms of
this Securitization Trust Agreement shall be for any reason whatsoever held
invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Securitization Trust Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Securitization Trust Agreement or
of the Certificates or the rights of the Holders thereof.
This Securitization Trust Agreement may be executed simultaneously in any
number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same
instrument.
SECTION 9.07. ASSIGNMENT.
Notwithstanding anything to the contrary contained in this Securitization
Trust Agreement, except as provided in Section 5.03, this Securitization Trust
Agreement may not be assigned by the Transferor without the prior written
consent of Holders of Investor Certificates evidencing not less than 51% of the
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aggregate Percentage Interest. The Transferor shall provide a copy of any
such assignment to each Rating Agency.
SECTION 9.08. CERTIFICATES NONASSESSABLE AND FULLY PAID.
Except as provided in Section 5.02(b) with regard to the Transferor,
Certificateholders shall not be personally liable for obligations of the
1997-A Securitization Trust. The interests represented by the Certificates
shall be nonassessable for any losses or expenses of the 1997-A
Securitization Trust or for any reason whatsoever, and, upon the execution
and authentication thereof by the Securitization Trustee pursuant to Section
4.02, 4.03 or 4.04, the Certificates are and shall be deemed fully paid.
ARTICLE TEN
AGENT FOR SERVICE
SECTION 10.01. AGENT FOR SERVICE OF TRANSFEROR.
1. AGENT FOR SERVICE OF TRANSFEROR
The agent for service of process for the Transferor shall be its
Treasurer, at 19001 South Western Avenue, Torrance, California 90501, Attention:
Corporate Treasury Manager (fax: 310-787-6194).
SECTION 10.02. AGENT OF TRUSTEE.
The Securitization Trustee shall maintain an office or offices or agency or
agencies where notices and demands to or upon the Securitization Trustee in
respect of the Certificates and this Securitization Trust Agreement may be
served. The initial such office shall be the Corporate Trust Office. The
Securitization Trustee shall give prompt written notice to the Transferor, the
Servicer and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency. Certificates shall be
surrendered for transfer or exchange not at this office, but as set forth in
Section 4.07.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have caused this Securitization Trust
Agreement to be duly executed by their respective officers as of the day and
year first above written.
TOYOTA LEASING, INC.
as Transferor
By: ___________________________________
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION,
as Securitization Trustee
By: ___________________________________
Name:
Title:
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EXHIBIT A-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TOYOTA AUTO LEASE TRUST 1997-A
_____% AUTOMOBILE LEASE ASSET BACKED CERTIFICATE, CLASS A-1
evidencing a percentage interest in the distributions allocable to the Investor
Certificates, as defined below, evidencing an undivided interest in the
Securitization Trust, as defined below, the property of which includes, among
other things, a special unit of beneficial interest (the "1997-A SUBI Interest")
in Toyota Lease Trust, a Delaware business trust, which SUBI Interest represents
a beneficial interest in a pool of retail lease contracts for new and used
automobiles and light duty trucks (and the related automobiles and light-duty
trucks) entered into by various automobile and light duty truck dealers pursuant
to contractual arrangements with Toyota Motor Credit Corporation, and which
1997-A SUBI Interest was originally issued to Toyota Leasing, Inc. and then to
the Securitization Trust.
(This Certificate does not represent an obligation of, or an interest in, Toyota
Leasing, Inc., Toyota Motor Credit Corporation, the Titling Trustee, the
Securitization Trustee or any of their respective affiliates.)
Aggregate Denominations of
all Class A-1 Certificates: CUSIP #
$_______________
A-1-1
<PAGE>
Number A-1- Denomination: $____________
A-1-2
<PAGE>
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
_______________________________ ($____________) nonassessable, fully-paid,
fractional undivided interest in the Toyota Auto Lease Trust 1997-A (the
"Trust") formed by Toyota Leasing, Inc., a Delaware corporation, as
Transferor (the "Transferor"). The Securitization Trust was created pursuant
to a Securitization Trust Agreement dated as of 1, 1997 (the
"Agreement"), between the Transferor and First Bank National Association, a
national banking association, as trustee (the "Trustee"). A summary of
certain of the pertinent provisions of the Agreement is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Agreement.
This Certificate is one of the duly authorized Certificates issued under
the Agreement and designated as "Toyota Auto Lease Trust 1997-A _____%
Automobile Lease Asset Backed Certificates, Class 1997 A-1" (the "Class A-1
Certificates"). Also issued under the Agreement are Certificates designated as
"Toyota Auto Lease Trust 1997-A _____% Automobile Lease Asset Backed
Certificates, Class A-2" (the "Class A-2 Certificates"), Certificates designated
as "Toyota Auto Lease Trust 1997-A _____% Automobile Lease Asset Backed
Certificates, Class A-3" (the "Class A-3 Certificates", Certificates designated
as "Toyota Auto Lease Trust 1997-A __% Automobile Lease Asset Backed
Certificates, Class A-4" (the "Class A-4 Certificates") and, together with the
Class A-1 Certificates, the Class A-2 Certificates and Class A-3 Certificates,
the "Class A Certificates"), Certificates designated as "Toyota Auto Lease Trust
1997-A _____% Automobile Lease Asset Backed Certificates, Class B" (the "Class B
Certificates" and, together with the Class A Certificates, the "Investor
Certificates") and a Certificate designated as the "Toyota Auto Lease Trust
1997-A Asset Backed Transferor Certificate" (the "Transferor Certificate" and,
together with the Investor Certificates, the "Certificates"). The Class B
Certificates are subordinated to the Class A Certificates and the Transferor
Certificate is subordinated to the Investor Certificates to the extent described
in the Agreement. This Class A-1 Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Class A-1 Certificate by
A-1-3
<PAGE>
virtue of the acceptance hereof assents and by which such Holder is bound.
The property of the Securitization Trust includes, among other things, a
special unit of beneficial interest (the "1997-A SUBI Interest") in Toyota
Lease Trust, a Delaware business trust (the "Titling Trust"), which 1997-A
SUBI Interest represents a beneficial interest in a pool of retail automobile
and light duty truck lease contracts ("Contracts") and the new and used
automobiles and light duty trucks leased thereby ("Leased Vehicles") (such
pool of Contracts and Leased Vehicles, the "1997-A SUBI Portfolio") entered
into by various automobile and light duty truck dealers pursuant to
contractual arrangements with Toyota Motor Credit Corporation, which also
acts as servicer (in that capacity, the "Servicer") of the 1997-A SUBI
Portfolio.
Under the Agreement, there will be distributed on the 25th day of each
month or, if such 25th day is not a Business Day, the next succeeding
Business Day (each, a "Distribution Date"), commencing on __________ 25,
1997, to the Person in whose name this Class A-1 Certificate is registered at
the close of business on the last calendar day immediately preceding the
related Distribution Date or, if Definitive Certificates are issued, the last
day of the immediately preceding calendar month (each a "Record Date"), such
Class A-1 Certificateholder's percentage interest in (i) the Class A-1
Distributable Amount for such Distribution Date and (ii) the amount of any
repayment of any outstanding Class A-1 Interest Carryover Shortfall, Class
A-1 Loss Amounts, Class A-1 Certificate Principal Loss Amounts and Class A-1
Certificate Principal Loss Interest Amounts being made on such Distribution
Date, all to the extent and as more specifically set forth in the Agreement.
To the extent provided in the Agreement, no principal payments shall be made
in respect of the Class A-2 Certificates until the Class A-1 Certificates
have been paid in full, and no principal payments shall be made in respect of
the Class A-3 Certificates or the Class B Certificates until the Class A-2
Certificates have been paid in full.
Distributions on this Class A-1 Certificate will be made by the
Securitization Trustee by check mailed to the Class A-1
A-1-4
<PAGE>
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class A-1 Certificate or the making of any
notation hereon except that with respect to Class A-1 Certificates registered
in the name of Cede & Co., the nominee for The Depository Trust Company,
distributions will be made by wire transfer of immediately available funds.
Except as otherwise provided in the Agreement and notwithstanding the
foregoing, the final distribution on this Class A-1 Certificate will be made
after due notice by the Securitization Trustee of the pendency of such
distribution and only upon presentation and surrender of this Class A-1
Certificate at the Corporate Trust Office of the Securitization Trustee.
It is the intention of the Transferor and the Holders of Investor
Certificates that the Investor Certificates will be indebtedness for federal,
state and local income and franchise tax purposes and for purposes of any
other tax imposed on or measured by income. The Transferor, the
Securitization Trustee and the Holder of this Certificate (or Certificate
Owner) by acceptance of this Certificate (or, in the case of a Certificate
Owner, by virtue of such Certificate Owner's acquisition of a beneficial
interest herein) agree to treat the Investor Certificates (or beneficial
interests therein), for purposes of federal, state and local income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness and to report the transactions contemplated by the Agreement on
all applicable tax returns in a manner consistent with such treatment. Each
Holder of this Certificate agrees that it will cause any Certificate Owner
acquiring an interest in this Certificate through it to comply with the
Agreement as to treatment as indebtedness for federal, state and local income
and franchise tax purposes and for purposes of any other tax imposed on or
measured by income.
By accepting this Certificate, the Holder hereof (and each Certificate
Owner with respect hereto, by virtue of such Certificate Owner's acquisition
of a beneficial interest herein) waives any claim to any proceeds or assets
of the Titling Trustee and to all assets of the Titling Trust other than
those from time to time included in the 1997-A SUBI Assets and those proceeds
or assets derived from or earned by such 1997-A SUBI Assets.
A-1-5
<PAGE>
In the event that, notwithstanding the statement of intentions and
undertakings set forth in SECTION 4.12(a) of the Agreement and herein, it is
finally determined that the Class A-1 Certificates do not evidence
indebtedness of the Transferor for all income and franchise tax purposes, but
rather represent an equity interest in the assets of the Securitization
Trust, then the Holder (and each Certificate Owner hereof with respect hereto
by virtue of acquiring a beneficial interest herein), agrees (i) to treat
such Certificates, together with the Transferor Certificate, as representing
an interest in a partnership for all tax purposes, (ii) to treat all payments
in respect of such Certificates (to the extent not a return of capital) as a
"guaranteed payment" thereon made pursuant to Section 707(c) of the Code, and
(iii) to allocate all other items of income, gain, deduction, loss or credit
with respect to the assets and operations of the Securitization Trust to the
Transferor.
The Certificates do not represent an obligation of, or an interest in,
the Transferor, the Servicer, the Titling Trust, the Titling Trustee, the
Securitization Trustee or any of their respective affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1997-A SUBI Interest and 1997-A SUBI Certificate
and certain monies on deposit in the Reserve Fund and in certain other
accounts established for the benefit of the Certificateholders, in each case
to the extent and as more specifically set forth in the Agreement. A copy of
the Agreement may be examined during normal business hours at the Corporate
Trust Office of the Securitization Trustee, and at such other places, if any,
designated by the Securitization Trustee, by any Certificateholder upon
request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Agreement
at any time by the Transferor and the Securitization Trustee. In certain
limited circumstances, the Agreement may only be amended with the consent of
the Holders of Investor Certificates evidencing not less than 51% of the
aggregate Percentage Interest of all Investor Certificates, voting together
as a single class. Any such
A-1-6
<PAGE>
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and on all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the Corporate Trust Office of the Securitization Trustee in its capacity as
Certificate Registrar, or at the office of the agent of the Securitization
Trustee in its capacity as Certificate Registrar, who shall initially be
First Trust of New York, National Association, 100 Wall Street, 20th Floor,
New York, New York 10005, in the Borough of Manhattan, the City of New York,
or at the appropriate office of any successor Certificate Registrar,
accompanied by a written instrument of transfer in form satisfactory to the
Securitization Trustee and the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Class A-1 Certificates of authorized denominations
and of a like aggregate fractional undivided interest will be issued to the
designated transferee.
The Class A-1 Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof
(except for one Class A-1 Certificate in a smaller minimum denomination
representing any remaining portion of the Initial Class A-1 Certificate
Balance). As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class, of authorized denominations of a like aggregate principal amount,
as requested by the Holder surrendering the same. No service charge will be
made for any such registration of transfer or exchange, but the
Securitization Trustee may require payment of a sum sufficient to cover any
tax or governmental charges payable in connection therewith.
Prior to due presentation of this Certificate for registration of
transfer, the Securitization Trustee, the
A-1-7
<PAGE>
Certificate Registrar and any of their respective agents may treat the Person
in whose name this Class A-1 Certificate is registered as the owner hereof
for the purpose of receiving distributions and for all other purposes, and
neither the Securitization Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Securitization Trust created thereby shall terminate upon the payment to
Investor Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Securitization Trust. The Transferor may at its option purchase the
corpus of the Securitization Trust at a price specified in the Agreement, and
such purchase of the 1997-A SUBI Interest and 1997-A SUBI Certificate and
other property of the Securitization Trust will effect early retirement of
the Certificates; PROVIDED, HOWEVER, such right of purchase is exercisable
only on the Distribution Date following the last day of a Collection Period
as of which the Certificate Balance shall be less than or equal to ten
percent (10%) of the Initial Certificate Balance.
By accepting this Certificate, the Holder hereof (and each Certificate
Owner with respect hereto, by virtue of acquiring a beneficial interest
herein) covenants and agrees that prior to the date which is one year and one
day after the last date upon which (a) each Class of Investor Certificates
has been paid in full, and (b) all obligations due under any other
Securitized Financing have been paid in full, the Holder and/or Certificate
Owner will not institute against, or join any other Person in instituting
against the Transferor, Toyota Motor Credit Corporation, the Securitization
Trust, the Titling Trustee or the Titling Trust any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceedings under any federal or state bankruptcy or similar law. The
foregoing shall not limit the Holder's and/or Certificate Owner's right to
file any claim in or otherwise take actions with respect to any such
proceeding instituted by any Person not under such a constraint. This
non-petition covenant shall survive the termination of the Agreement.
A-1-8
<PAGE>
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Securitization Trustee, by manual signature,
this Class A-1 Certificate shall not entitle the Holder hereof to any benefit
under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class A-1 Certificate
to be duly executed.
Dated: __________ __, 199_
TOYOTA LEASING, INC.,
By:________________________________
Authorized Officer
A-1-9
<PAGE>
This is one of the Class A-1 Certificates referred
to in the within-mentioned Agreement.
FIRST BANK NATIONAL ASSOCIATION, as
Trustee
By:________________________________
A-1-10
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_________________________________________________________________
(Please print or typewrite name and address, including postal zip code, of
assignee)
_________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_________________________________________________________________
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
_____________________________*
Signature Guaranteed:
_____________________________*
* NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must
be guaranteed by an "eligible guarantor institution" meeting the requirements
of the Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
A-1-11
<PAGE>
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.
A-1-12
<PAGE>
EXHIBIT A-2
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TOYOTA AUTO LEASE TRUST 1997-A
_____% AUTOMOBILE LEASE ASSET BACKED CERTIFICATE, CLASS A-2
evidencing a percentage interest in the distributions allocable to the
Investor Certificates, as defined below, evidencing an undivided interest in
the Securitization Trust, as defined below, the property of which includes,
among other things, a special unit of beneficial interest (the "1997-A SUBI
Interest") in Toyota Lease Trust, a Delaware business trust, which SUBI
Interest represents a beneficial interest in a pool of retail lease contracts
for new and used automobiles and light duty trucks (and the related
automobiles and light-duty trucks) entered into by various automobile and
light duty truck dealers pursuant to contractual arrangements with Toyota
Motor Credit Corporation, and which 1997-A SUBI Interest was originally
issued to Toyota Leasing, Inc. and then to the Securitization Trust.
(This Certificate does not represent an obligation of, or an interest in,
Toyota Leasing, Inc., Toyota Motor Credit Corporation, the Titling Trustee,
the Securitization Trustee or any of their respective affiliates.)
Aggregate Denominations of
all Class A-2 Certificates: CUSIP #
$________________
A-2-1
<PAGE>
Number A-2-__ Denomination: $__________
A-2-2
<PAGE>
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
____________________________ ($__________) nonassessable, fully-paid,
fractional undivided interest in the Toyota Auto Lease Trust 1997-A (the
"Trust") formed by Toyota Leasing, Inc., a Delaware corporation, as
Transferor (the "Transferor"). The Securitization Trust was created pursuant
to a Securitization Trust Agreement dated as of 1, 1997 (the
"Agreement"), between the Transferor and First Bank National Association, a
national banking association, as trustee (the "Trustee"). A summary of
certain of the pertinent provisions of the Agreement is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Agreement.
This Certificate is one of the duly authorized Certificates issued under
the Agreement and designated as "Toyota Auto Lease Trust 1997-A _____%
Automobile Lease Asset Backed Certificates, Class A-2" (the "Class A-2
Certificates"). Also issued under the Agreement are Certificates designated
as "Toyota Auto Lease Trust 1997-A _____% Automobile Lease Asset Backed
Certificates, Class A-1" (the "Class A-1 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1997-A _____% Automobile Lease Asset
Backed Certificates, Class A-3" (the "Class A-3 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1997-A __% Automobile Lease Asset
Backed Certificates, Class A-4" (the "Class A-4 Certificates" and, together
with the Class A-2 Certificates, the Class A-3 Certificates and the Class A-1
Certificates, the "Class A Certificates"), Certificates designated as "Toyota
Auto Lease Trust 1997-A _____% Automobile Lease Asset Backed Certificates,
Class B" (the "Class B Certificates" and, together with the Class A
Certificates, the "Investor Certificates") and a Certificate designated as
the "Toyota Auto Lease Trust 1997-A Asset Backed Transferor Certificate" (the
"Transferor Certificate" and, together with the Investor Certificates, the
"Certificates"). The Class B Certificates are subordinated to the Class A
Certificates and the Transferor Certificate is subordinated to the Investor
Certificates to the extent described in the Agreement. This Class A-2
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which
A-2-3
<PAGE>
Agreement the Holder of this Class A-2 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
The property of the Securitization Trust includes, among other things, a
special unit of beneficial interest (the "1997-A SUBI Interest") in Toyota
Lease Trust, a Delaware business trust (the "Titling Trust"), which 1997-A
SUBI Interest represents a beneficial interest in a pool of retail automobile
and light duty truck lease contracts ("Contracts") and the new and used
automobiles and light duty trucks leased thereby ("Leased Vehicles") (such
pool of Contracts and Leased Vehicles; the "1997-A SUBI Portfolio") entered
into by various automobile and light duty truck dealers pursuant to
contractual arrangements with Toyota Motor Credit Corporation, which also
acts as servicer (in that capacity, the "Servicer") of the 1997-A SUBI
Portfolio.
Under the Agreement, there will be distributed on the 25th day of each
month or, if such 25th day is not a Business Day, the next succeeding
Business Day (each, a "Distribution Date"), commencing on __________ 25,
1997, to the Person in whose name this Class A-2 Certificate is registered at
the close of business on the last calendar day immediately preceding the
related Distribution Date or, if Definitive Certificates are issued, the last
day of the immediately preceding calendar month (each a "Record Date"), such
Class A-2 Certificateholder's percentage interest in (i) the Class A-2
Distributable Amount for such Distribution Date and (ii) the amount of any
repayment of any outstanding Class A-2 Interest Carryover Shortfall, Class
A-2 Loss Amounts, Class A-2 Certificate Principal Loss Amounts and Class A-2
Certificate Principal Loss Interest Amounts being made on such Distribution
Date, all to the extent and as more specifically set forth in the Agreement.
To the extent provided in the Agreement, no principal payments shall be made
in respect of the Class A-2 Certificates until the Class A-1 Certificates
have been paid in full, and no principal payments shall be made in respect of
the Class A-3 Certificates or the Class B Certificates until the Class A-2
Certificates have been paid in full.
Distributions on this Class A-2 Certificate will be made by the
Securitization Trustee by check mailed to the Class A-2
A-2-4
<PAGE>
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class A-2 Certificate or the making of any
notation hereon except that with respect to Class A-2 Certificates registered
in the name of Cede & Co., the nominee for The Depository Trust Company,
distributions will be made by wire transfer of immediately available funds.
Except as otherwise provided in the Agreement and notwithstanding the
foregoing, the final distribution on this Class A-2 Certificate will be made
after due notice by the Securitization Trustee of the pendency of such
distribution and only upon presentation and surrender of this Class A-2
Certificate at the Corporate Trust Office of the Securitization Trustee.
It is the intention of the Transferor and the Holders of Investor
Certificates that the Investor Certificates will be indebtedness for federal,
state and local income and franchise tax purposes and for purposes of any
other tax imposed on or measured by income. The Transferor, the
Securitization Trustee and the Holder of this Certificate (or Certificate
Owner) by acceptance of this Certificate (or, in the case of a Certificate
Owner, by virtue of such Certificate Owner's acquisition of a beneficial
interest herein) agree to treat the Investor Certificates (or beneficial
interest therein), for purposes of federal, state and local income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness and to report the transactions contemplated by the Agreement on
all applicable tax returns in a manner consistent with such treatment. Each
Holder of this Certificate agrees that it will cause any Certificate Owner
acquiring an interest in this Certificate through it to comply with the
Agreement as to treatment as indebtedness for federal, state and local income
and franchise tax purposes and for purposes of any other tax imposed on or
measured by income.
By accepting this Certificate, the Holder hereof (and each Certificate
Owner with respect hereto, by virtue of such Certificate Owner's acquisition
of a beneficial interest herein) waives any claim to any proceeds or assets
of the Titling Trustee and to all assets of the Titling Trust other than
those from time to time included in the 1997-A SUBI Assets and those proceeds
or assets derived from or earned by such 1997-A SUBI Assets.
A-2-5
<PAGE>
In the event that, notwithstanding the statement of intentions and
undertakings set forth in SECTION 4.12(a) of the Agreement and herein, it is
finally determined that the Class A-2 Certificates do not evidence
indebtedness of the Transferor for all income and franchise tax purposes, but
rather represent an equity interest in the assets of the Securitization
Trust, then the Holder (and each Certificate Owner hereof with respect hereto
by virtue of acquiring a beneficial interest herein), agrees (i) to treat
such Certificates, together with the Transferor Certificate, as representing
an interest in a partnership for all tax purposes, (ii) to treat all payments
in respect of such Certificates (to the extent not a return of capital) as a
"guaranteed payment" thereon made pursuant to Section 707(c) of the Code, and
(iii) to allocate all other items of income, gain, deduction, loss or credit
with respect to the assets and operations of the Securitization Trust to the
Transferor.
The Certificates do not represent an obligation of, or an interest in,
the Transferor, the Servicer, the Titling Trust, the Titling Trustee, the
Securitization Trustee or any of their respective affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1997-A SUBI Interest and 1997-A SUBI Certificate
and certain monies on deposit in the Reserve Fund and in certain other
accounts established for the benefit of the Certificateholders, in each case
to the extent and as more specifically set forth in the Agreement. A copy of
the Agreement may be examined during normal business hours at the Corporate
Trust Office of the Securitization Trustee, and at such other places, if any,
designated by the Securitization Trustee, by any Certificateholder upon
request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Agreement
at any time by the Transferor and the Securitization Trustee. In certain
limited circumstances, the Agreement may only be amended with the consent of
the Holders of Investor Certificates evidencing not less than 51% of the
aggregate Percentage Interest of all Investor Certificates, voting together
as a single class. Any such
A-2-6
<PAGE>
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and on all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the Corporate Trust Office of the Securitization Trustee in its capacity as
Certificate Registrar, or at the office of the agent of the Securitization
Trustee in its capacity as Certificate Registrar, who shall initially be
First Trust of New York, National Association, 100 Wall Street, 20th Floor,
New York, New York 10005, in the Borough of Manhattan, the City of New York,
or at the appropriate office of any successor Certificate Registrar,
accompanied by a written instrument of transfer in form satisfactory to the
Securitization Trustee and the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Class A-2 Certificates of authorized denominations
and of a like aggregate fractional undivided interest will be issued to the
designated transferee.
The Class A-2 Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof
(except for one Class A-2 Certificate in a smaller minimum denomination
representing any remaining portion of the Initial Class A-2 Certificate
Balance). As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class, of authorized denominations of a like aggregate principal amount,
as requested by the Holder surrendering the same. No service charge will be
made for any such registration of transfer or exchange, but the
Securitization Trustee may require payment of a sum sufficient to cover any
tax or governmental charges payable in connection therewith.
Prior to due presentation of this Certificate for registration of
transfer, the Securitization Trustee, the
A-2-7
<PAGE>
Certificate Registrar and any of their respective agents may treat the Person
in whose name this Class A-2 Certificate is registered as the owner hereof
for the purpose of receiving distributions and for all other purposes, and
neither the Securitization Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Securitization Trust created thereby shall terminate upon the payment to
Investor Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Securitization Trust. The Transferor may at its option purchase the
corpus of the Securitization Trust at a price specified in the Agreement, and
such purchase of the 1997-A SUBI Interest and 1997-A SUBI Certificate and
other property of the Securitization Trust will effect early retirement of
the Certificates; PROVIDED, HOWEVER, such right of purchase is exercisable
only on the Distribution Date following the last day of a Collection Period
as of which the Certificate Balance shall be less than or equal to ten
percent (10%) of the Initial Certificate Balance.
By accepting this Certificate, the Holder hereof (and each Certificate
Owner with respect hereto, by virtue of acquiring a beneficial interest
herein) covenants and agrees that prior to the date which is one year and one
day after the last date upon which (a) each Class of Investor Certificates
has been paid in full, and (b) all obligations due under any other
Securitized Financing have been paid in full, the Holder and/or Certificate
Owner will not institute against, or join any other Person in instituting
against the Transferor, Toyota Motor Credit Corporation, the Securitization
Trust, the Titling Trustee or the Titling Trust any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceedings under any federal or state bankruptcy or similar law. The
foregoing shall not limit the Holder's and/or Certificate Owner's right to
file any claim in or otherwise take actions with respect to any such
proceeding instituted by any Person not under such a constraint. This
non-petition covenant shall survive the termination of the Agreement.
A-2-8
<PAGE>
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Securitization Trustee, by manual signature, this
Class A-2 Certificate shall not entitle the Holder hereof to any benefit under
the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class A-2 Certificate to
be duly executed.
Dated: __________ __, 199_
TOYOTA LEASING INC.
By:____________________________________
Authorized Officer
A-2-9
<PAGE>
This is one of the Class A-2 Certificates referred
to in the within-mentioned Agreement.
FIRST BANK NATIONAL ASSOCIATION, as
Trustee
By:____________________________________
A-2-10
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or typewrite name and address, including postal zip code, of
assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
________________________________________________________________________________
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
________________________________________*
Signature Guaranteed:
________________________________________*
* NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must
be guaranteed by an "eligible guarantor institution" meeting the requirements
of the Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
A-2-11
<PAGE>
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
A-2-12
<PAGE>
EXHIBIT A-3
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TOYOTA AUTO LEASE TRUST 1997-A
_____% AUTOMOBILE LEASE ASSET BACKED CERTIFICATE, CLASS A-3
evidencing a percentage interest in the distributions allocable to the Investor
Certificates, as defined below, evidencing an undivided interest in the
Securitization Trust, as defined below, the property of which includes, among
other things, a special unit of beneficial interest (the "1997-A SUBI Interest")
in Toyota Lease Trust, a Delaware business trust, which SUBI Interest represents
a beneficial interest in a pool of retail lease contracts for new and used
automobiles and light duty trucks (and the related automobiles and light-duty
trucks) entered into by various automobile and light duty truck dealers pursuant
to contractual arrangements with Toyota Motor Credit Corporation, and which
1997-A SUBI Interest was originally issued to Toyota Leasing, Inc. and then to
the Securitization Trust.
(This Certificate does not represent an obligation of, or an interest in, Toyota
Leasing, Inc., Toyota Motor Credit Corporation, the Titling Trustee, the
Securitization Trustee or any of their respective affiliates.)
Aggregate Denominations of
all Class A-3 Certificates: CUSIP #
$______________
A-3-1
<PAGE>
Number A-3-__ Denomination: $____________
A-3-2
<PAGE>
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
_______________________________ ($____________) nonassessable, fully-paid,
fractional undivided interest in the Toyota Auto Lease Trust 1997-A (the
"Trust") formed by Toyota Leasing, Inc., a Delaware corporation, as Transferor
(the "Transferor"). The Securitization Trust was created pursuant to a
Securitization Trust Agreement dated as of __________ 1, 1997 (the "Agreement"),
between the Transferor and First Bank National Association, a national banking
association, as trustee (the "Trustee"). A summary of certain of the pertinent
provisions of the Agreement is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement.
This Certificate is one of the duly authorized Certificates issued under
the Agreement and designated as "Toyota Auto Lease Trust 1997-A _____%
Automobile Lease Asset Backed Certificates, Class A-3" (the "Class A-3
Certificates"). Also issued under the Agreement are Certificates designated as
"Toyota Auto Lease Trust 1997-A _____% Automobile Lease Asset Backed
Certificates, Class A-1" (the "Class A-1 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1997-A_____% Automobile Lease Asset
Backed Certificates, Class A-2" (the "Class A-2 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1997-A __% Automobile Lease Asset Backed
Certificates, Class A-4 (the "Class A-4 Certificates" and, together with the
Class A-3 Certificates, the Class A-2 Certificates and the Class A-1
Certificates, the "Class A Certificates"), Certificates designated as "Toyota
Auto Lease Trust 1997-A _____% Automobile Lease Asset Backed Certificates, Class
B" (the "Class B Certificates" and, together with the Class A Certificates, the
"Investor Certificates") and a Certificate designated as the "Toyota Auto Lease
Trust 1997-A Asset Backed Transferor Certificate" (the "Transferor Certificate"
and, together with the Investor Certificates, the "Certificates"). The Class B
Certificates are subordinated to the Class A Certificates and the Transferor
Certificate is subordinated to the Investor Certificates to the extent described
in the Agreement. This Class A-3 Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Class A-3
A-3-3
<PAGE>
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
The property of the Securitization Trust includes, among other things, a
special unit of beneficial interest (the "1997-A SUBI Interest") in Toyota Least
Trust, a Delaware business trust (the "Titling Trust"), which 1997-A SUBI
Interest represents a beneficial interest in a pool of retail automobile and
light duty truck lease contracts ("Contracts") and the new and used automobiles
and light duty trucks leased thereby ("Leased Vehicles") (such pool of Contracts
and Leased Vehicles; the "1997-A SUBI Portfolio") entered into by various
automobile and light duty truck dealers pursuant to contractual arrangements
with Toyota Motor Credit Corporation, which also acts as servicer (in that
capacity, the "Servicer") of the 1997-A SUBI Portfolio.
Under the Agreement, there will be distributed on the 25th day of each
month or, if such 25th day is not a Business Day, the next succeeding Business
Day (each, a "Distribution Date"), commencing on __________ 25, 1997, to the
Person in whose name this Class A-3 Certificate is registered at the close of
business on the last calendar day immediately preceding the related Distribution
Date or, if Definitive Certificates are issued, the last day of the immediately
preceding calendar month (each a "Record Date"), such Class A-3
Certificateholder's percentage interest in (i) the Class A-3 Distributable
Amount for such Distribution Date and (ii) the amount of any repayment of any
outstanding Class A-3 Interest Carryover Shortfall, Class A-3 Loss Amounts,
Class A-3 Certificate Principal Loss Amounts and Class A-3 Certificate Principal
Loss Interest Amounts being made on such Distribution Date, all to the extent
and as more specifically set forth in the Agreement. To the extent provided in
the Agreement, no principal payments shall be made in respect of the Class A-2
Certificates until the Class A-1 Certificates have been paid in full, and no
principal payments shall be made in respect of the Class A-3 Certificates or the
Class B Certificates until the Class A-2 Certificates have been paid in full.
Distributions on this Class A-3 Certificate will be made by the
Securitization Trustee by check mailed to the Class A-3
A-3-4
<PAGE>
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class A-3 Certificate or the making of any
notation hereon except that with respect to Class A-3 Certificates registered
in the name of Cede & Co., the nominee for The Depository Trust Company,
distributions will be made by wire transfer of immediately available funds.
Except as otherwise provided in the Agreement and notwithstanding the
foregoing, the final distribution on this Class A-3 Certificate will be made
after due notice by the Securitization Trustee of the pendency of such
distribution and only upon presentation and surrender of this Class A-3
Certificate at the Corporate Trust Office of the Securitization Trustee.
It is the intention of the Transferor and the Holders of Investor
Certificates that the Investor Certificates will be indebtedness for federal,
state and local income and franchise tax purposes and for purposes of any other
tax imposed on or measured by income. The Transferor, the Securitization
Trustee and the Holder of this Certificate (or Certificate Owner) by acceptance
of this Certificate (or, in the case of a Certificate Owner, by virtue of such
Certificate Owner's acquisition of a beneficial interest herein) agree to treat
the Investor Certificates (or beneficial interest therein), for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness and to report the transactions
contemplated by the Agreement on all applicable tax returns in a manner
consistent with such treatment. Each Holder of this Certificate agrees that it
will cause any Certificate Owner acquiring an interest in this Certificate
through it to comply with the Agreement as to treatment as indebtedness for
federal, state and local income and franchise tax purposes and for purposes of
any other tax imposed on or measured by income.
By accepting this Certificate, the Holder hereof (and each Certificate
Owner with respect hereto, by virtue of such Certificate Owner's acquisition of
a beneficial interest herein) waives any claim to any proceeds or assets of the
Titling Trustee and to all assets of the Titling Trust other than those from
time to time included in the 1997-A SUBI Assets and those proceeds or assets
derived from or earned by such 1997-A SUBI Assets.
A-3-5
<PAGE>
In the event that, notwithstanding the statement of intentions and
undertakings set forth in SECTION 4.12(a) of the Agreement and herein, it is
finally determined that the Class A-3 Certificates do not evidence indebtedness
of the Transferor for all income and franchise tax purposes, but rather
represent an equity interest in the assets of the Securitization Trust, then the
Holder (and each Certificate Owner hereof with respect hereto by virtue of
acquiring a beneficial interest herein), agrees (i) to treat such Certificates,
together with the Transferor Certificate, as representing an interest in a
partnership for all tax purposes, (ii) to treat all payments in respect of such
Certificates (to the extent not a return of capital) as a "guaranteed payment"
thereon made pursuant to Section 707(c) of the Code, and (iii) to allocate all
other items of income, gain, deduction, loss or credit with respect to the
assets and operations of the Securitization Trust to the Transferor.
The Certificates do not represent an obligation of, or an interest in, the
Transferor, the Servicer, the Titling Trust, the Titling Trustee, the
Securitization Trustee or any of their respective affiliates. The Certificates
are limited in right of payment to certain collections and recoveries respecting
the 1997-A SUBI Interest and 1997-A SUBI Certificate and certain monies on
deposit in the Reserve Fund and in certain other accounts established for the
benefit of the Certificateholders, in each case to the extent and as more
specifically set forth in the Agreement. A copy of the Agreement may be
examined during normal business hours at the Corporate Trust Office of the
Securitization Trustee and at such other places, if any, designated by the
Securitization Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Agreement at
any time by the Transferor and the Securitization Trustee. In certain limited
circumstances, the Agreement may only be amended with the consent of the Holders
of Investor Certificates evidencing not less than 51% of the aggregate
Percentage Interest of all Investor Certificates, voting together as a single
class. Any such
A-3-6
<PAGE>
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and on all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
Corporate Trust Office of the Securitization Trustee in its capacity as
Certificate Registrar, or at the office of the agent of the Securitization
Trustee in its capacity as Certificate Registrar, who shall initially be First
Trust of New York, National Association, 100 Wall Street, 20th Floor, New York,
New York 10005, in the Borough of Manhattan, the City of New York, or at the
appropriate office of any successor Certificate Registrar, accompanied by a
written instrument of transfer in form satisfactory to the Securitization
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Class A-3 Certificates of authorized denominations and of a like aggregate
fractional undivided interest will be issued to the designated transferee.
The Class A-3 Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof
(except for one Class A-3 Certificate in a smaller minimum denomination
representing any remaining portion of the Initial Class A-3 Certificate
Balance). As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class, of authorized denominations of a like aggregate principal amount, as
requested by the Holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Securitization
Trustee may require payment of a sum sufficient to cover any tax or governmental
charges payable in connection therewith.
Prior to due presentation of this Certificate for registration of transfer,
the Securitization Trustee, the
A-3-7
<PAGE>
Certificate Registrar and any of their respective agents may treat the Person
in whose name this Class A-3 Certificate is registered as the owner hereof
for the purpose of receiving distributions and for all other purposes, and
neither the Securitization Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Securitization Trust created thereby shall terminate upon the payment to
Investor Certificateholders of all amounts required to be paid to them pursuant
to the Agreement and the disposition of all property held as part of the
Securitization Trust. The Transferor may at its option purchase the corpus of
the Securitization Trust at a price specified in the Agreement, and such
purchase of the 1997-A SUBI Interest and 1997-A SUBI Certificate and other
property of the Securitization Trust will effect early retirement of the
Certificates; PROVIDED, HOWEVER, such right of purchase is exercisable only on
the Distribution Date following the last day of a Collection Period as of which
the Certificate Balance shall be less than or equal to ten percent (10%) of the
Initial Certificate Balance.
By accepting this Certificate, the Holder hereof (and each Certificate
Owner with respect hereto, by virtue of acquiring a beneficial interest herein)
covenants and agrees that prior to the date which is one year and one day after
the last date upon which (a) each Class of Investor Certificates has been paid
in full, and (b) all obligations due under any other Securitized Financing have
been paid in full, the Holder and/or Certificate Owner will not institute
against, or join any other Person in instituting against the Transferor, Toyota
Motor Credit Corporation, the Securitization Trust, the Titling Trustee or the
Titling Trust any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or state
bankruptcy or similar law. The foregoing shall not limit the Holder's and/or
Certificate Owner's right to file any claim in or otherwise take actions with
respect to any such proceeding instituted by any Person not under such a
constraint. This nonpetition covenant shall survive the termination of the
Agreement.
A-3-8
<PAGE>
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Securitization Trustee, by manual signature, this
Class A-3 Certificate shall not entitle the Holder hereof to any benefit under
the Agreement or be valid for any purpose.
A-3-9
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Class A-3 Certificate to
be duly executed.
Dated: __________ __, 199_
TOYOTA LEASING INC.
By:____________________________________
Authorized Officer
A-3-10
<PAGE>
This is one of the Class A-3 Certificates referred
to in the within-mentioned Agreement.
FIRST BANK NATIONAL ASSOCIATION, as
Trustee
By:____________________________________
A-3-11
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- -----------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
- -----------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- -----------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
-----------------------------*
Signature Guaranteed:
-----------------------------*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
A-3-12
<PAGE>
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
A-3-13
<PAGE>
EXHIBIT A-4
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TOYOTA AUTO LEASE TRUST 1997-A
_____% AUTOMOBILE LEASE ASSET BACKED CERTIFICATE, CLASS A-4
evidencing a percentage interest in the distributions allocable to the
Investor Certificates, as defined below, evidencing an undivided interest in
the Securitization Trust, as defined below, the property of which includes,
among other things, a special unit of beneficial interest (the "1997-A SUBI
Interest") in Toyota Lease Trust, a Delaware business trust, which SUBI
Interest represents a beneficial interest in a pool of retail lease contracts
for new and used automobiles and light duty trucks (and the related
automobiles and light-duty trucks) entered into by various automobile and
light duty truck dealers pursuant to contractual arrangements with Toyota
Motor Credit Corporation, and which 1997-A SUBI Interest was originally
issued to Toyota Leasing, Inc. and then to the Securitization Trust.
(This Certificate does not represent an obligation of, or an interest in,
Toyota Leasing, Inc., Toyota Motor Credit Corporation, the Titling Trustee,
the Securitization Trustee or any of their respective affiliates.)
Aggregate Denominations of
all Class A-4 Certificates: CUSIP #
$
--------------
A-4-1
<PAGE>
Number A-4- Denomination: $
-- ----------
A-4-2
<PAGE>
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
_______________________________ ($____________) nonassessable, fully-paid,
fractional undivided interest in the Toyota Auto Lease Trust 1997-A (the
"Trust") formed by Toyota Leasing, Inc., a Delaware corporation, as
Transferor (the "Transferor"). The Securitization Trust was created pursuant
to a Securitization Trust Agreement dated as of 1, 1997 (the
"Agreement"), between the Transferor and First Bank National Association, a
national banking association, as trustee (the "Trustee"). A summary of
certain of the pertinent provisions of the Agreement is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Agreement.
This Certificate is one of the duly authorized Certificates issued under
the Agreement and designated as "Toyota Auto Lease Trust 1997-A _____%
Automobile Lease Asset Backed Certificates, Class A-4" (the "Class A-4
Certificates"). Also issued under the Agreement are Certificates designated
as "Toyota Auto Lease Trust 1997-A _____% Automobile Lease Asset Backed
Certificates, Class A-1" (the "Class A-1 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1997-A_____% Automobile Lease Asset
Backed Certificates, Class A-2" (the "Class A-2 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1997-A __% Automobile Lease Asset
Backed Certificates, Class A-3 (the "Class A-3 Certificates" and, together
with the Class A-4 Certificates, the Class A-1 Certificates and the Class A-2
Certificates, the "Class A Certificates"), Certificates designated as "Toyota
Auto Lease Trust 1997-A _____% Automobile Lease Asset Backed Certificates,
Class B" (the "Class B Certificates" and, together with the Class A
Certificates, the "Investor Certificates") and a Certificate designated as
the "Toyota Auto Lease Trust 1997-A Asset Backed Transferor Certificate" (the
"Transferor Certificate" and, together with the Investor Certificates, the
"Certificates"). The Class B Certificates are subordinated to the Class A
Certificates and the Transferor Certificate is subordinated to the Investor
Certificates to the extent described in the Agreement. This Class A-4
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class A-4
A-4-3
<PAGE>
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
The property of the Securitization Trust includes, among other things, a
special unit of beneficial interest (the "1997-A SUBI Interest") in Toyota
Least Trust, a Delaware business trust (the "Titling Trust"), which 1997-A
SUBI Interest represents a beneficial interest in a pool of retail automobile
and light duty truck lease contracts ("Contracts") and the new and used
automobiles and light duty trucks leased thereby ("Leased Vehicles") (such
pool of Contracts and Leased Vehicles; the "1997-A SUBI Portfolio") entered
into by various automobile and light duty truck dealers pursuant to
contractual arrangements with Toyota Motor Credit Corporation, which also
acts as servicer (in that capacity, the "Servicer") of the 1997-A SUBI
Portfolio.
Under the Agreement, there will be distributed on the 25th day of each
month or, if such 25th day is not a Business Day, the next succeeding
Business Day (each, a "Distribution Date"), commencing on __________ 25,
1997, to the Person in whose name this Class A-3 Certificate is registered at
the close of business on the last calendar day immediately preceding the
related Distribution Date or, if Definitive Certificates are issued, the last
day of the immediately preceding calendar month (each a "Record Date"), such
Class A-4 Certificateholder's percentage interest in (i) the Class A-4
Distributable Amount for such Distribution Date and (ii) the amount of any
repayment of any outstanding Class A-4 Interest Carryover Shortfall, Class
A-4 Loss Amounts, Class A-4 Certificate Principal Loss Amounts and Class A-4
Certificate Principal Loss Interest Amounts being made on such Distribution
Date, all to the extent and as more specifically set forth in the Agreement.
To the extent provided in the Agreement, no principal payments shall be made
in respect of the Class A-2 Certificates until the Class A-1 Certificates
have been paid in full, no principal payments shall be made in respect of the
Class A-3 Certificates until the Class A-2 Certificates have been paid in
full and no principal payments shall be made in respect of the Class A-4
Certificates or the Class B Certificates until the Class A-3 Certificates
have been paid in full.
A-4-4
<PAGE>
Distributions on this Class A-4 Certificate will be made by the
Securitization Trustee by check mailed to the Class A-4 Certificateholder of
record in the Certificate Register without the presentation or surrender of
this Class A-3 Certificate or the making of any notation hereon except that
with respect to Class A-4 Certificates registered in the name of Cede & Co.,
the nominee for The Depository Trust Company, distributions will be made by
wire transfer of immediately available funds. Except as otherwise provided
in the Agreement and notwithstanding the foregoing, the final distribution on
this Class A-4 Certificate will be made after due notice by the
Securitization Trustee of the pendency of such distribution and only upon
presentation and surrender of this Class A-4 Certificate at the Corporate
Trust Office of the Securitization Trustee.
It is the intention of the Transferor and the Holders of Investor
Certificates that the Investor Certificates will be indebtedness for federal,
state and local income and franchise tax purposes and for purposes of any
other tax imposed on or measured by income. The Transferor, the
Securitization Trustee and the Holder of this Certificate (or Certificate
Owner) by acceptance of this Certificate (or, in the case of a Certificate
Owner, by virtue of such Certificate Owner's acquisition of a beneficial
interest herein) agree to treat the Investor Certificates (or beneficial
interest therein), for purposes of federal, state and local income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness and to report the transactions contemplated by the Agreement on
all applicable tax returns in a manner consistent with such treatment. Each
Holder of this Certificate agrees that it will cause any Certificate Owner
acquiring an interest in this Certificate through it to comply with the
Agreement as to treatment as indebtedness for federal, state and local income
and franchise tax purposes and for purposes of any other tax imposed on or
measured by income.
By accepting this Certificate, the Holder hereof (and each Certificate
Owner with respect hereto, by virtue of such Certificate Owner's acquisition
of a beneficial interest herein) waives any claim to any proceeds or assets
of the Titling Trustee and to all assets of the Titling Trust other than
those from time
A-4-5
<PAGE>
to time included in the 1997-A SUBI Assets and those proceeds or assets
derived from or earned by such 1997-A SUBI Assets.
In the event that, notwithstanding the statement of intentions and
undertakings set forth in SECTION 4.12(a) of the Agreement and herein, it is
finally determined that the Class A-4 Certificates do not evidence
indebtedness of the Transferor for all income and franchise tax purposes, but
rather represent an equity interest in the assets of the Securitization
Trust, then the Holder (and each Certificate Owner hereof with respect hereto
by virtue of acquiring a beneficial interest herein), agrees (i) to treat
such Certificates, together with the Transferor Certificate, as representing
an interest in a partnership for all tax purposes, (ii) to treat all payments
in respect of such Certificates (to the extent not a return of capital) as a
"guaranteed payment" thereon made pursuant to Section 707(c) of the Code, and
(iii) to allocate all other items of income, gain, deduction, loss or credit
with respect to the assets and operations of the Securitization Trust to the
Transferor.
The Certificates do not represent an obligation of, or an interest in,
the Transferor, the Servicer, the Titling Trust, the Titling Trustee, the
Securitization Trustee or any of their respective affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1997-A SUBI Interest and 1997-A SUBI Certificate
and certain monies on deposit in the Reserve Fund and in certain other
accounts established for the benefit of the Certificateholders, in each case
to the extent and as more specifically set forth in the Agreement. A copy of
the Agreement may be examined during normal business hours at the Corporate
Trust Office of the Securitization Trustee and at such other places, if any,
designated by the Securitization Trustee, by any Certificateholder upon
request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Agreement at
any time by the Transferor and the Securitization Trustee. In certain limited
circumstances, the Agreement may only be amended with the consent
A-4-6
<PAGE>
of the Holders of Investor Certificates evidencing not less than 51% of the
aggregate Percentage Interest of all Investor Certificates, voting together
as a single class. Any such consent by the Holder of this Certificate shall
be conclusive and binding on such Holder and on all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the Corporate Trust Office of the Securitization Trustee in its capacity as
Certificate Registrar, or at the office of the agent of the Securitization
Trustee in its capacity as Certificate Registrar, who shall initially be
First Trust of New York, National Association, 100 Wall Street, 20th Floor,
New York, New York 10005, in the Borough of Manhattan, the City of New York,
or at the appropriate office of any successor Certificate Registrar,
accompanied by a written instrument of transfer in form satisfactory to the
Securitization Trustee and the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Class A-4 Certificates of authorized denominations
and of a like aggregate fractional undivided interest will be issued to the
designated transferee.
The Class A-4 Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof
(except for one Class A-4 Certificate in a smaller minimum denomination
representing any remaining portion of the Initial Class A-4 Certificate
Balance). As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class, of authorized denominations of a like aggregate principal amount,
as requested by the Holder surrendering the same. No service charge will be
made for any such registration of transfer or exchange, but the
Securitization Trustee may require payment of a sum sufficient to cover any
tax or governmental charges payable in connection therewith.
A-4-7
<PAGE>
Prior to due presentation of this Certificate for registration of
transfer, the Securitization Trustee, the Certificate Registrar and any of
their respective agents may treat the Person in whose name this Class A-4
Certificate is registered as the owner hereof for the purpose of receiving
distributions and for all other purposes, and neither the Securitization
Trustee, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Securitization Trust created thereby shall terminate upon the payment to
Investor Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Securitization Trust. The Transferor may at its option purchase the
corpus of the Securitization Trust at a price specified in the Agreement, and
such purchase of the 1997-A SUBI Interest and 1997-A SUBI Certificate and
other property of the Securitization Trust will effect early retirement of
the Certificates; PROVIDED, HOWEVER, such right of purchase is exercisable
only on the Distribution Date following the last day of a Collection Period
as of which the Certificate Balance shall be less than or equal to ten
percent (10%) of the Initial Certificate Balance.
By accepting this Certificate, the Holder hereof (and each Certificate
Owner with respect hereto, by virtue of acquiring a beneficial interest
herein) covenants and agrees that prior to the date which is one year and one
day after the last date upon which (a) each Class of Investor Certificates
has been paid in full, and (b) all obligations due under any other
Securitized Financing have been paid in full, the Holder and/or Certificate
Owner will not institute against, or join any other Person in instituting
against the Transferor, Toyota Motor Credit Corporation, the Securitization
Trust, the Titling Trustee or the Titling Trust any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceedings under any federal or state bankruptcy or similar law. The
foregoing shall not limit the Holder's and/or Certificate Owner's right to
file any claim in or otherwise take actions with respect to any such
proceeding instituted by any Person not under such a
A-4-8
<PAGE>
constraint. This nonpetition covenant shall survive the termination of the
Agreement.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Securitization Trustee, by manual signature,
this Class A-4 Certificate shall not entitle the Holder hereof to any benefit
under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class A-4 Certificate
to be duly executed.
Dated: , 199
---------- --- --
TOYOTA LEASING INC.
By:
--------------------------------
Authorized Officer
A-4-9
<PAGE>
This is one of the Class A-4 Certificates referred
to in the within-mentioned Agreement.
FIRST BANK NATIONAL ASSOCIATION, as
Trustee
By:
--------------------------------
A-4-10
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- ----------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
- ----------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- ----------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated:
-----------------------------*
Signature Guaranteed:
-----------------------------*
* NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must
be guaranteed by an "eligible guarantor institution" meeting the requirements
of the Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
A-4-11
<PAGE>
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
A-4-12
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1
CERTIFICATES, THE CLASS A-2 CERTIFICATES AND THE CLASS A-3 CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS IN RELIANCE ON EXEMPTIONS PROVIDED BY THE
SECURITIES ACT AND SUCH STATE SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF
THIS CERTIFICATE MAY BE MADE UNLESS SUCH RESALE OR TRANSFER (A) IS MADE IN
ACCORDANCE WITH SECTION 4.03 OF THE AGREEMENT REFERRED TO HEREIN AND (B) IS MADE
(i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
(ii) IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, (iii) TO TOYOTA LEASING
INC. (THE "TRANSFEROR") OR (iv) TO A PERSON WHO THE TRANSFEROR REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT THAT IS AWARE THAT THE RESALE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A. NEITHER THE TRANSFEROR NOR FIRST BANK
NATIONAL ASSOCIATION, AS TRUSTEE (THE "SECURITIZATION TRUSTEE"), IS OBLIGATED TO
REGISTER THE CERTIFICATES UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE
SECURITIES LAWS. IN THE EVENT THAT THE TRANSFER OF A CLASS B CERTIFICATE IS TO
BE MADE, EITHER (A) AN OPINION OF COUNSEL OR (B) A REPRESENTATION LETTER FROM
THE PROSPECTIVE INVESTOR, IN EITHER CASE IN FORM AND SUBSTANCE SATISFACTORY TO
THE SECURITIZATION TRUSTEE AND THE TRANSFEROR, IS REQUIRED TO BE DELIVERED TO
THE SECURITIZATION TRUSTEE AND THE TRANSFEROR, TO THE EFFECT THAT SUCH TRANSFER
MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
STATE SECURITIES LAWS.
NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE UNLESS THE
SECURITIZATION TRUSTEE SHALL HAVE RECEIVED A REPRESENTATION LETTER OR OPINION OF
COUNSEL FROM THE TRANSFEREE OF THIS CERTIFICATE, ACCEPTABLE TO AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE TRANSFEROR AND THE SECURITIZATION TRUSTEE, TO
B-1
<PAGE>
THE EFFECT THAT (A) SUCH TRANSFEREE WILL NOT ACQUIRE THIS CERTIFICATE ON BEHALF
OR WITH THE ASSETS OF ANY "EMPLOYEE BENEFIT PLAN" AS DEFINED IN SECTION 3(3) OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), (B)
NO "PROHIBITED TRANSACTION" UNDER ERISA OR THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), WILL OCCUR IN CONNECTION WITH SUCH TRANSFEREE'S
ACQUISITION OF THIS CERTIFICATE OR (C) THE ACQUISITION OF THIS CERTIFICATE IS
SUBJECT TO A STATUTORY OR ADMINISTRATIVE EXEMPTION FROM THE "PROHIBITED
TRANSACTION" PROVISIONS OF ERISA AND THE CODE. IN ADDITION, NO TRANSFER OF THIS
CERTIFICATE WILL BE PERMITTED IF, AS A RESULT OF SUCH TRANSFER, 25% OR MORE OF
THE OUTSTANDING CERTIFICATE BALANCE OF ALL CLASS B CERTIFICATES WOULD BE HELD BY
EMPLOYEE BENEFIT PLANS" (AS DEFINED IN SECTION 3(3) OF ERISA) OR OTHER BENEFIT
PLAN INVESTORS.
THE RESTRICTIONS ON RESALE OR TRANSFER DESCRIBED ABOVE ARE SUBJECT TO ANY
REQUIREMENT OF LAW THAT THE DISPOSITION OF THE HOLDER'S PROPERTY SHALL AT ALL
TIMES BE AND REMAIN WITHIN ITS CONTROL.
TOYOTA AUTO LEASE TRUST 1997-A
_____% AUTOMOBILE LEASE ASSET BACKED CERTIFICATE, CLASS B
evidencing a percentage interest in the distributions allocable to the
Investor Certificates, as defined below, evidence an undivided
interest in the Securitization Trust, as defined below, the property
of which includes, among other things, a special unit of beneficial
interest (the "1997-A SUBI Interest") in Toyota Lease Trust, a
Delaware business trust, which 1997-A SUBI Interest represents a
beneficial interest in a pool of retail lease contracts for new and
used automobiles and light duty trucks (and the related automobiles
and light-duty trucks) entered into by various automobile and light
duty truck dealers pursuant to contractual arrangements with Toyota
Motor Credit Corporation, and which special unit of beneficial
interest was originally issued to Toyota Leasing Inc. and then to the
Securitization Trust.
B-2
<PAGE>
(This Certificate does not represent an obligation of, or an interest
in, Toyota Leasing, Inc., Toyota Motor Credit Corporation, the Titling
Trustee or the Securitization Trustee or any of their respective
affiliates.)
Aggregate Denominations
of all Class B Certificates: CUSIP #
$_____________
Number B-__ Denomination: $__________
THIS CERTIFIES THAT _______________ is the registered owner of a
________________________________________________ DOLLAR and ________________
CENTS ($__________ ) nonassessable, fully-paid, fractional undivided interest in
the Toyota Auto Lease Trust 1997-A (the "Trust") formed by Toyota Leasing, Inc.,
a Delaware corporation, as Transferor (the "Transferor"). The Securitization
Trust was created pursuant to a Securitization Trust Agreement dated as of
1, 1997 (the "Agreement"), between the Transferor and First Bank
National Association, a national banking association, as trustee (the
"Trustee"). A summary of certain of the pertinent provisions of the Agreement
is set forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Agreement.
This Certificate is one of the duly authorized Certificates issued under
the Agreement and designated as "Toyota Auto Lease Trust 1997-A_____% Automobile
Contract Asset Backed Certificates, Class B" (the "Class B Certificates"). Also
issued under the Agreement are Certificates designated as "Toyota Auto Lease
Trust 1997-A _____% Automobile Lease Asset Backed Certificates, Class A-1" (the
"Class A-1 Certificates"), Certificates designated as "Toyota Auto Lease Trust
1997-A_____% Automobile Lease Asset Backed Certificates, Class A-2" (the "Class
A-2 Certificates"), Certificates designated as "Toyota Auto Lease Trust 1997-A
_____% Automobile Lease Asset Backed Certificates, Class A-3" (the "Class A-3
Certificates" and, together with the Class A-1 Certificates and the Class A-2
Certificates, the "Class A Certificates" and, together with the Class B
Certificates, the
B-3
<PAGE>
"Investor Certificates") and a Certificate designated as the "Toyota Auto Lease
Trust 1997-A Automobile Asset Backed Transferor Certificate" (the "Transferor
Certificate" and, together with the Investor Certificates, the "Certificates").
The Class B Certificates are subordinated to the Class A Certificates, and the
Transferor Certificate is subordinated to the Investor Certificates, to the
extent described in the Agreement. This Class B Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class B Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
The property of the Securitization Trust includes, among other things, a
special unit of beneficial interest (the "1997-A SUBI Interest") in Toyota Lease
Trust, a Delaware business trust (the "Titling Trust"), which 1997-A SUBI
Interest represents a beneficial interest in a pool of retail automobile and
light duty truck lease contracts ("Contracts") and the new and used automobiles
and light duty trucks leased thereby ("Leased Vehicles") (such pool of Contracts
and Leased Vehicles, the "1997-A SUBI Portfolio") entered into by various
automobile and light duty truck dealers pursuant to contractual arrangements
with Toyota Motor Credit Corporation, which also acts as servicer (in that
capacity, the "Servicer") of the 1997-A SUBI Portfolio.
Under the Agreement, there will be distributed on the 25th day of each
month or, if such 25th day is not a Business Day, the next succeeding Business
Day (each, a "Distribution Date"), commencing on ___________ 25, 1997 to the
Person in whose name this Class B Certificate is registered at the close of
business on the last day of the immediately preceding calendar month (each a
"Record Date"), such Class B Certificateholder's percentage interest in (i) the
Class B Distributable Amount for such Distribution Date, and (ii) the amount of
any repayment of any outstanding Class B Interest Carryover Shortfall, Class B
Certificate Principal Carryover Shortfall, Class B Loss Amounts, Class B
Certificate Principal Loss Amounts, Class B Certificate Principal Loss Interest
Amounts and Class B Certificate Principal Carryover Shortfall Interest Amounts
being made on such Distribution Date, all to the extent and as more specifically
set
B-4
<PAGE>
forth in the Agreement. To the extent provided in the Agreement, no principal
payments shall be made in respect of the Class A-2 Certificates until the Class
A-1 Certificates have been paid in full, and no principal payments shall be made
in respect of the Class A-3 Certificates or the Class B Certificates until the
Class A-2 Certificates have been paid in full.
Distributions on this Class B Certificate will be made by the
Securitization Trustee by check mailed to the Class B Certificateholder of
record in the Certificate Register without the presentation or surrender of this
Class B Certificate or the making of any notation hereon or, at the option of a
Holder who owns Class B Certificates having an aggregate initial denomination of
$250,000 or more, upon written instructions received by the Securitization
Trustee not later than fifteen days prior to the related Record Date, by wire
transfer of immediately available funds to an account maintained by such Holder
at a depository institution in the United States having appropriate facilities
therefor. Except as otherwise provided in the Agreement and notwithstanding the
foregoing, the final distribution on this Class B Certificate will be made after
due notice by the Securitization Trustee of the pendency of such distribution
and only upon presentation and surrender of this Class B Certificate at the
Corporate Trust Office of the Securitization Trustee.
It is the intention of the Transferor and the Holders of Investor
Certificates that the Investor Certificates will be indebtedness for federal,
state and local income and franchise tax purposes and for purposes of any other
tax imposed on or measured by income. The Transferor, the Securitization
Trustee and the Holder of this Certificate by acceptance of this Certificate
agree to treat the Investor Certificates, for purposes of federal, state and
local income or franchise taxes and any other tax imposed on or measured by
income, as indebtedness and to report the transactions contemplated by the
Agreement on all applicable tax returns in a manner consistent with such
treatment.
By accepting this Certificate, the Holder hereof waives any claim to any
proceeds or assets of the Titling Trustee and to all
B-5
<PAGE>
assets of the Titling Trust other than those from time to time included in the
1997-A SUBI Assets and those proceeds or assets derived from or earned by such
1997-A SUBI Assets.
In the event that, notwithstanding the statement of intentions and
undertakings set forth in SECTION 4.12(a) of the Agreement and herein, it is
finally determined that the Class B Certificates do not evidence indebtedness of
the Transferor for all income and franchise tax purposes, but rather represent
an equity interest in the assets of the Securitization Trust, then Holder hereof
agrees (i) to treat such Certificates, together with the Transferor Certificate,
as representing an interest in a partnership for all tax purposes, (ii) to treat
all payments in respect of such Certificates (to the extent not a return of
capital) as a "guaranteed payment" thereon made pursuant to Section 707(c) of
the Code, and (iii) to allocate all other items of income, gain, deduction, loss
or credit with respect to the assets and operations of the Securitization Trust
to the Transferor.
The Certificates do not represent an obligation of, or an interest in, the
Transferor, the Servicer, the Titling Trust, the Titling Trustee, the
Securitization Trustee or any of their respective affiliates. The Certificates
are limited in right of payment to certain collections and recoveries respecting
the 1997-A SUBI Interest and 1997-A SUBI Certificate and certain monies on
deposit in the Reserve Fund and in certain other accounts established for the
benefit of the Certificateholders, in each case to the extent and as more
specifically set forth in the Agreement. A copy of the Agreement may be
examined during normal business hours at the Corporate Trust Office of the
Securitization Trustee, and at such other places, if any, designated by the
Securitization Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Agreement at
any time by the Transferor and the Securitization Trustee. In certain limited
circumstances, the Agreement may only be amended with the consent
B-6
<PAGE>
of the Holders of Investor Certificates evidencing not less than 51% of the
aggregate Percentage Interest of all Investor Certificates, voting together as a
single class. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and on all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
Corporate Trust Office of the Securitization Trustee in its capacity as
Certificate Registrar, or at the office of the agent of the Securitization
Trustee in its capacity as Certificate Registrar, who shall initially be First
Trust of New York, National Association, 100 Wall Street, 20th Floor, New York,
New York 10005, in the Borough of Manhattan, the City of New York, or at the
appropriate office of any successor Certificate Registrar, accompanied by a
written instrument of transfer in form satisfactory to the Securitization
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Class B Certificates of authorized denominations and of a like aggregate
fractional undivided interest will be issued to the designated transferee.
The Class B Certificates are issuable only as registered Certificates
without coupons in denominations of $250,000 and integral multiples of $1,000 in
excess thereof, (except for one Class B Certificate in a smaller minimum
denomination representing any remaining portion of the Initial Class B
Certificate Balance). As provided in the Agreement, and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class, of authorized denominations of a like aggregate
principal amount, as requested by the Holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Securitization Trustee may require payment of a sum
B-7
<PAGE>
sufficient to cover any tax or governmental charges payable in connection
therewith.
Prior to due presentation of this Certificate for registration of transfer,
the Securitization Trustee, the Certificate Registrar and any of their
respective agents may treat the Person in whose name this Class B Certificate is
registered as the owner hereof for the purpose of receiving distributions and
for all other purposes, and neither the Securitization Trustee, the Certificate
Registrar nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Securitization Trust created thereby shall terminate upon the payment to
Investor Certificateholders of all amounts required to be paid to them pursuant
to the Agreement and the disposition of all property held as part of the
Securitization Trust. The Transferor may at its option purchase the corpus of
the Securitization Trust at a price specified in the Agreement, and such
purchase of the 1997-A SUBI Interest and 1997-A SUBI Certificate and other
property of the Securitization Trust will effect early retirement of the
Certificates; PROVIDED, HOWEVER, such right of purchase is exercisable only on
the Distribution Date following the last day of a Collection Period as of which
the Certificate Balance shall be less than or equal to ten percent (10%) of the
Initial Certificate Balance.
By accepting this Certificate, the Holder hereof covenants and agrees that
prior to the date which is one year and one day after the last date upon which
(a) each Class of Investor Certificates has been paid in full, and (b) all
obligations due under any other Securitized Financing have been paid in full,
the Holder will not institute against, or join any other Person in instituting
against the Transferor, Toyota Motor Credit Corporation, the Securitization
Trust, the Titling Trustee or the Titling Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal or state bankruptcy or similar law. The foregoing shall not limit the
Holder's right to file any claim in or otherwise take actions with respect to
any such proceeding instituted by any Person not under such a constraint. This
B-8
<PAGE>
non-petition covenant shall survive the termination of the Agreement.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Securitization Trustee, by manual signature, this
Class B Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
B-9
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Class B Certificate to
be duly executed.
Dated: __________ __, 199_
TOYOTA LEASING INC.
By:________________________________
Authorized Officer
B-10
<PAGE>
This is one of the Class B Certificates referred
to in the within-mentioned Agreement.
FIRST BANK NATIONAL ASSOCIATION, as
Trustee
By:________________________________
B-11
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_________________________________________________________________
(Please print or typewrite name and address, including postal zip code, of
assignee)
_________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_________________________________________________________________
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
_____________________________*
Signature Guaranteed:
_____________________________*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
B-12
<PAGE>
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
B-13
<PAGE>
EXHIBIT C
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE APPLICABLE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED.
TOYOTA AUTO LEASE TRUST 1997-A
AUTOMOBILE LEASE ASSET BACKED TRANSFEROR CERTIFICATE
evidencing the entire interest in the distributions allocable to the
Transferor Certificate evidencing an undivided interest in the
Securitization Trust, as defined below, the property of which
includes, among other things, a special unit of beneficial interest
(the "1997-A SUBI Interest") in Toyota Lease Trust, a Delaware
business trust, which 1997-A SUBI Interest represents a beneficial
interest in a pool of retail lease contracts for new and used
automobiles and light duty trucks (and the related automobiles and
light-duty trucks) entered into by various automobile and light duty
truck dealers pursuant to contractual arrangements with Toyota Motor
Credit Corporation, and which 1997-A SUBI Interest was originally
issued to Toyota Leasing, Inc., and then to the Securitization Trust.
(This Certificate does not represent an obligation of, or an interest
in, Toyota Leasing, Inc., Toyota Motor Credit Corporation, or any of
their respective affiliates.)
THIS CERTIFIES THAT TOYOTA LEASING, INC. (the "Transferor") is the
registered owner of the entire interest not allocated to the Investor
Certificates in the Toyota Auto Lease Trust 1997-A (the "Trust") formed by
the Transferor. The Securitization Trust was created pursuant to a
Securitization Trust Agreement dated as of __________________1, 1997 (the
"Agreement"), between the Transferor and First Bank National Association, a
national banking association, as trustee (the "Trustee"). A summary of
certain of the
C-1
<PAGE>
pertinent provisions of the Agreement is set forth below. To the extent not
otherwise defined herein the capitalized terms used herein have the meanings
assigned to them in the Agreement.
This Certificate is the duly authorized Transferor Certificate issued
under the Agreement and designated as the "Toyota Auto Lease Trust 1997-A
Automobile Lease Asset Backed Transferor Certificate" (the "Transferor
Certificate"). Also issued under the Agreement are Certificates designated
as "Toyota Auto Lease Trust 1997-A ____% Automobile Lease Asset Backed
Certificates, Class A-1" (the "Class A-1 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1997-A ____% Automobile Contract Asset
Backed Certificates, Class A-2" (the "Class A-2 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1997-A ____% Automobile Lease Asset
Backed Certificates, Class A-3" (the "Class A-3 Certificates" and, together
with the Class A-1 Certificates and the Class A-2 Certificates, the "Class A
Certificates") and Certificates designated as "Toyota Auto Lease Trust 1997-A
___% Automobile Lease Asset Backed Certificates, Class B" (the "Class B
Certificates" and, together with the Class A Certificates, the "Investor
Certificates" and, together with the Transferor Certificate, the
"Certificates"). This Transferor Certificate is issued under and is subject
to the terms, provisions and conditions of the Agreement, to which Agreement
the Holder of this Transferor Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
The property of the Securitization Trust includes, among other things, a
special unit of beneficial interest (the "1997-A SUBI Interest") in Toyota
Lease Trust, a Delaware business trust (the "Titling Trust"), which 1997-A
SUBI Interest represents a beneficial interest in a pool of retail automobile
and light duty truck lease contracts ("Contracts") and the new and used
automobiles and light duty trucks leased thereby ("Leased Vehicles") (such
pool of Contracts and Leased Vehicles, the "1997-A SUBI Portfolio") entered
into by various automobile and light duty truck dealers pursuant to
contractual arrangements with Toyota Motor Credit Corporation, which also
acts as servicer (in that capacity, the "Servicer") of the 1997-A SUBI
Portfolio. During the Revolving Period, Principal Collections allocable to
C-2
<PAGE>
the 1997-A SUBI Interest generally will be applied towards the allocation to
the 1997-A SUBI Portfolio of additional qualifying Contracts and Leased
Vehicles from among all other unallocated Contracts and Leased Vehicles owned
by the Titling Trust.
Payments in respect of the 1997-A SUBI Interest will be allocated between
the Investor Certificates and this Transferor Certificate and paid to the
registered Holder of this Transferor Certificate as provided in the Agreement.
It is the intention of the Transferor, as the Holder of this Certificate,
and the Holders of Investor Certificates that the Investor Certificates will
be indebtedness for federal, state and local income and franchise tax
purposes and for purposes of any other tax imposed on or measured by income.
The Securitization Trustee and Transferor, as the Holder of this Certificate,
by acceptance of this Certificate, agree to treat the Investor Certificates,
for purposes of federal, state and local income or franchise taxes and any
other tax imposed on or measured by income, as indebtedness and to report the
transactions contemplated by the Agreement on all applicable tax returns in a
manner consistent with such treatment.
By accepting this Certificate, the Holder hereof waives any claim to any
proceeds or assets of the Titling Trustee and to all assets of the Titling
Trust other than those from time to time included in the 1997-A SUBI Assets
and those proceeds or assets derived from or earned by such 1997-A SUBI
Assets.
In the event that, notwithstanding the statement of intentions and
undertakings set forth in Section 4.12(a) of the Agreement and herein, it is
finally determined that the Investor Certificates do not evidence
indebtedness of the Transferor for all income and franchise tax purposes, but
rather represent an equity interest in the assets of the Securitization
Trust, then the Transferor, as Holder hereof, agrees (i) to treat the
Investor Certificates, together with this Certificate, as representing an
interest in a partnership for all tax purposes, (ii) to treat all payments in
respect of such Certificates (to the extent not a return of capital) as a
"guaranteed payment" thereon made pursuant to Section 707(c) of the Code, and
(iii) to
C-3
<PAGE>
allocate all other items of income, gain, deduction, loss or credit with
respect to the assets and operations of the Securitization Trust to the
Transferor.
The Certificates do not represent an obligation of, or an interest in,
the Transferor, the Servicer, the Titling Trust, the Titling Trustee, the
Securitization Trustee or any of their respective affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1997-A SUBI Interest and 1997-A SUBI Certificate
and certain monies on deposit in the Reserve Fund and in certain other
accounts established for the benefit of the Certificateholders, in each case
to the extent and as more specifically set forth in the Agreement. A copy of
the Agreement may be examined during normal business hours at the Corporate
Trust Office of the Securitization Trustee, and at such other places, if any,
designated by the Securitization Trustee, by any Certificateholder upon
request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Agreement
at any time by the Transferor and the Securitization Trustee. In certain
limited circumstances, the Agreement may only be amended with the consent of
the Holders of Certificates evidencing not less than 51% of the aggregate
Percentage Interest of all Investor Certificates, voting together as a single
class.
As provided in the Agreement, this Certificate shall be owned by the
Transferor and may not be transferred.
As provided in the Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of the same
Class, of authorized denominations of a like aggregate principal amount, as
requested by the Holder surrendering the same. No service charge will be
made for any such registration of transfer or exchange, but the
Securitization Trustee may require payment of a sum sufficient to cover any
tax or governmental charges payable in connection therewith.
C-4
<PAGE>
The obligations and responsibilities created by the Agreement and the
Securitization Trust created thereby shall terminate upon the payment to
Investor Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Securitization Trust. The Transferor may at its option purchase the
corpus of the Securitization Trust at a price specified in the Agreement, and
such purchase of the 1997-A SUBI Interest and 1997-A SUBI Certificate and
other property of the Securitization Trust will effect early retirement of
the Certificates; PROVIDED, HOWEVER, such right of purchase is exercisable
only on the Distribution Date following the last day of a Collection Period
as of which the Certificate Balance shall be less than or equal to ten
percent (10%) of the Initial Certificate Balance.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Securitization Trustee, by manual signature,
this Transferor Certificate shall not entitle the Holder hereof to any
benefit under the Agreement or be valid for any purpose.
C-5
<PAGE>
IN WITNESS WHEREOF, the Securitization Trustee on behalf of the
Securitization Trust and not in its individual capacity has caused this
Transferor Certificate to be duly executed.
Dated: , 1997 TOYOTA LEASING, INC.
-------------
(SEAL) By:
-------------------------
Authorized Officer
ATTEST
- ---------------------------
C-6
<PAGE>
This is the Transferor Certificate referred
to in the within-mentioned Agreement.
FIRST BANK NATIONAL ASSOCIATION, as
Trustee
By:
-------------------------------
C-7
<PAGE>
EXHIBIT D-1
NON-RULE 144A REPRESENTATION LETTER
Toyota Leasing, Inc.,
19001 S. Western Avenue
Torrance, California 90509
First Bank National Association
11 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Re: Toyota Auto Lease Trust 1997-A ____% Automobile
LEASE ASSET BACKED CERTIFICATES, CLASS B
Ladies and Gentlemen:
The undersigned purchaser (the "Purchaser") understands that the purchase
of the above-referenced certificates (the "Certificates") may be made only by
institutions which are "Accredited Investors" under Regulation D, as
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), which includes banks, savings and loan associations, registered
brokers and dealers, insurance companies, investment companies and
organizations described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended (the "Code"), corporations, business trusts and
partnerships, not formed for the specific purpose of acquiring the
Certificates offered, with total assets in excess of $5,000,000. The
undersigned represents on behalf of the Purchaser that the Purchaser is an
"Accredited Investor" within the meaning of such definition. The Purchaser is
urged to review carefully the responses, representations and warranties it is
making herein.
REPRESENTATIONS AND WARRANTIES
The Purchaser makes the following representations and warranties in order
to permit First Bank National Association, as trustee (the "Trustee") of the
Toyota Auto Lease Trust 1997-A (the "Securitization Trust"), and Toyota
Leasing, Inc. (the "Transferor") to determine its suitability as a purchaser
of
D-1-1
<PAGE>
Certificates and to determine that the exemption from registration relied
upon by the Transferor under Section 4(2) of the Securities Act is available
to it.
1. The Purchaser understands that the Certificates have not been, and
throughout their term will not be, registered or qualified under the
Securities Act or the securities law of any state and may be resold (which
resale is not currently contemplated) only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration under
the Securities Act and other applicable state securities laws are available,
that neither the Transferor nor the Securitization Trustee is required to
register the Certificates under the Securities Act or any applicable state
securities laws and that any transfer must comply with Section 4.03 of the
Securitization Trust Agreement, dated as of _______________1, 1997 (the
"Agreement"), among the Transferor, and the Securitization Trustee.
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Certificates.
3. The Purchaser is an institutional "accredited investor" within the
meaning of paragraphs 1, 2, 3 or 7 Rule 501(a) under the Securities Act and a
sophisticated institutional investor and has knowledge and experience in
financial and business matters (and, in particular, in such matters related
to securities similar to the Certificates) and is capable of evaluating the
merits and risks of its investment in the Certificates and is able to bear
the economic risk of such investment. The Purchaser has been given such
information concerning the Certificates and the Transferor as it has
requested.
4. The Purchaser is acquiring the Certificates as principal for its own
account (or for the account of one or more other sophisticated institutional
investors for which it is acting as duly authorized fiduciary or agent) for
the purpose of investment and not with a view to or for sale in connection
with any distribution thereof, subject nevertheless to any requirement of law
that the disposition of the Purchaser's property shall at all times be and
remain within its control.
D-1-2
<PAGE>
5. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Certificate, any
interest in any Certificate or any other similar security of the Transferor
to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of any Certificate, any interest in any Certificate or any other
similar security of the Transferor with, any person in any manner, or made
any general solicitation by means of general advertising or in any other
manner, or taken any other action, which would constitute a distribution of
the Certificates under the Securities Act or which would render the
disposition of any Certificate a violation of Section 5 of the Securities Act
or any state securities law, require registration or qualification pursuant
thereto, or require registration of the Securitization Trust or the
Transferor as an "investment company" under the Investment Company Act of
1940, as amended, nor will it act, nor has it authorized or will it authorize
any person to act in such manner with respect to the Certificates.
6. The Purchaser has reviewed the Private Placement Memorandum with
respect to the Certificates dated _______ __, 1997, including the Prospectus
attached thereto as Exhibit A (the "Private Placement Memorandum"), and the
agreements and other materials referred to therein, and has had the
opportunity to ask questions and receive answers concerning the terms and
conditions of the transaction contemplated by the Private Placement
Memorandum and to obtain additional information necessary to verify the
accuracy and completeness of any information furnished to the Purchaser or to
which the Purchaser had access.
7. [The Purchaser will not acquire the Certificates with the assets of
any "employee benefit plan" as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").] [No "prohibited
transaction" under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the Code will occur in connection with our acquisition
of the Certificates.] [The acquisition of the Certificates is subject to a
statutory or administrative exemption from the "prohibited transaction"
provisions of the Employee Retirement Income Security act of 1974, as amended
("ERISA"), and the Code [specifying exemption].l*
D-1-3
<PAGE>
8. [The Purchaser will not acquire the Certificates with the assets of
any "employee benefit plan" or any other benefit plan investor.] [The Purchaser
represents that it is an insurance company and is holding and will be holding
all funds used to purchase the Certificates in its general account, the
assets of which such Purchaser reasonably believes do not constitute "plan
assets" as defined in the plan asset regulations under ERISA.] [The Purchaser
will acquire the Certificates with the assets of an "employee benefit plan"
or other benefit plan investor]. *
9. The Purchaser understands that the Certificates will bear a legend
substantially as set forth in the form of Certificate included as Exhibit B
to the Agreement.
- ------------------
* Purchaser required to select applicable sentence.
D-1-4
<PAGE>
10. The Purchaser understands that there is no market, nor is there any
assurance that a market will develop, for the Certificates and that the
Transferor does not have any obligation to make or facilitate any such market
(or to otherwise repurchase the Certificates from the Purchaser) under any
circumstances.
11. The Purchaser has consulted with its own legal counsel, independent
accountants and financial advisors to the extent it deems necessary regarding
the tax consequences to it of ownership of the Certificates, is aware that
its taxable income with respect to the Certificates in any accounting period
may not correspond to the cash flow (if any) from the Certificates for such
period, and is not purchasing the Certificates in reliance on any
representations of the Transferor or its counsel with respect to tax matters.
12. The Purchaser represents, on behalf of itself (or, if it is
acquiring the Certificates on behalf of one or more other sophisticated
institutional investors, on behalf of each of such investors) that if the
Purchaser or any such other investor is a partnership, grantor trust or S
corporation for federal income tax purposes (a "Flow-Through Entity"), any
Certificates owned by such Flow-Through Entity will represent less than 50%
of the value of all the assets owned by such Flow-Through Entity and no
special allocation of income, gain, loss, deduction or credit from such
Certificates will be made among the beneficial owners of such Flow-Through
Entity.
13. The Purchaser agrees that it will obtain from any subsequent
purchaser of the Certificates substantially the same representations,
warranties and agreements contained in the foregoing paragraphs 1 through 12
and in this paragraph 13.
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Agreement or the Private Placement
Memorandum, as the case may be.
D-1-5
<PAGE>
The representations and warranties contained herein shall be binding
upon the successors of the undersigned.
Executed at , this day of 199
--------------- --- ------------ -
------------------------
Purchaser's Name (Print)
By
-------------------------------
Signature
Its
------------------------------
---------------------------------
Address of Purchaser
---------------------------------
Purchaser's Taxpayer
Identification Number
D-1-6
<PAGE>
EXHIBIT D-2
RULE 144A REPRESENTATION LETTER
Toyota Leasing, Inc.,
19001 S. Western Avenue
Torrance, California 90509
First Bank National Association
11 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Re: Toyota Auto Lease Trust ____% Automobile
Lease Asset Backed Certificates, Class B
----------------------------------------
Ladies and Gentlemen:
______________________ (the "Purchaser") is today purchasing in a private
resale from ________________________ (the "Transferor") $__________ aggregate
principal amount of the above-captioned certificates (the "Certificates"),
issued pursuant to the securitization trust agreement, dated as of________ 1,
1997 (the "Agreement"), among Toyota Leasing, Inc. ("the Transferor") and
First Bank National Association.
In connection with the purchase of the Certificates, the Purchaser hereby
represents and warrants to each of you as follows:
1. The Purchaser understands that the Certificates have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or the securities laws of any state.
2. The Purchaser is acquiring the Certificates for its own account only
for investment and not for any other person, and not with a view to, or for
resale in connection with, a distribution that would constitute a violation of
the Securities Act or any state securities laws (subject to the understanding
that disposition of the Purchaser's property will remain at all times within its
control). The Purchaser is not an affiliate of the Transferor, Toyota Motor
Credit Corporation, the Securitization
D-2-1
<PAGE>
Trustee, any custodian of the Certificates or any of their respective
affiliates.
3. The Purchaser agrees that the Certificates must be held indefinitely
by it unless (i) the Certificates are subsequently registered under the
Securities Act or (ii) an exemption from the registration requirements of the
Securities Act is available.
4. The Purchaser agrees that if at some time it wishes to dispose of or
exchange any of the Certificates, it will not transfer or exchange any of the
Certificates unless such transfer or exchange is in accordance with the
provisions of Section 4.03 of the Agreement.
5. The Purchaser is a qualified institutional buyer as defined in Rule
144A of the Securities Act and has completed and is delivering herewith either
of the forms of certification to that effect attached as Annexes hereto, it is
aware that the sale to it is being made in reliance on Rule 144A, it is
acquiring the Certificates for its own account or for the account of a qualified
institutional buyer and it understands that such Certificates may be resold,
pledged or transferred only (i) to a person who the Transferor reasonably
believes is a qualified institutional buyer that purchases for its own account
or for the account of a qualified institutional buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on Rule 144A or
(ii) pursuant to another exemption from registration under the Securities Act
and applicable state securities laws.
6. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Certificate, any
interest in any Certificate or any other similar security of the Transferor to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of any Certificate any interest in any Certificate or any other similar security
of the Transferor with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, which would constitute a distribution of the Certificates
under the Securities Act or which would render the disposition of any
D-2-2
<PAGE>
Certificate a violation of Section 5 of the Securities Act or any state
securities law, require registration or qualification pursuant thereto, or
require registration of the 1997-A Securitization Trust or the Transferor as
an "investment company" under the Investment Company Act of 1940, as amended,
nor will it act, nor has it authorized or will it authorize any person to act
in such manner with respect to the Certificates.
7. [The Purchaser will not acquire the Certificates with the assets of
any "employee benefit plan" as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").] [No "prohibited
transaction" under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the Internal Revenue Code of 1986, as amended (the
"Code"), will occur in connection with our acquisition of the Certificates.]
[The acquisition of the Certificates is subject to a statutory or administrative
exemption from the "prohibited transaction provisions of the Employee Retirement
Income Security act of 1974, as amended ("ERISA"), and the Internal Revenue Code
of 1986, as amended (the "Code"), [specifying exemption].](*)
8. [The Purchaser will not acquire the Certificates with the assets of
any "employee benefit plan" or any other benefit plan investor.] [The Purchaser
represents that it is an insurance company and is holding and will be holding
all funds used to purchase the Certificates in its general account, the assets
of which such Purchaser reasonably believes do not constitute "plan assets" as
defined in the plan asset regulations under ERISA.] [The Purchaser will acquire
the Certificates with the assets of an "employee benefit plan" or other benefit
plan investor.]
9. The Purchaser understands that there is no market, nor is there any
assurance that a market will develop, for the Certificates and that the
Transferor does not have any obligation to make or facilitate any such market
(or to otherwise repurchase the Certificates from the Purchaser) under any
circumstances.
____________________
* Purchaser required to select applicable sentence.
D-2-3
<PAGE>
10. The Purchaser has consulted with its own legal counsel, independent
accountants and financial advisors to the extent it deems necessary regarding
the tax consequences to it of ownership of the Certificates, is aware that
its taxable income with respect to the Certificates in any accounting period
may not correspond to the cash flow (if any) from the Certificates for such
period, and is not purchasing the Certificates in reliance on any
representations of the Transferor or its counsel with respect to tax matters.
11. The Purchaser has reviewed the Private Placement Memorandum with
respect to the Certificates dated ________ ___, 1997, including the
Prospectus attached as Exhibit A thereto (the "Private Placement
Memorandum"), and the agreements and other materials referred to therein, and
has had the opportunity to ask questions and receive answers concerning the
terms and conditions of the transaction contemplated by the Private Placement
Memorandum and to obtain additional information necessary to verify the
accuracy and completeness of any information furnished to the Purchaser or to
which the Purchaser had access.
12. The Purchaser understands that the Certificates will bear a legend
substantially as set forth in the form of Certificate included as Exhibit B
to the Agreement.
13. The Purchaser hereby further agrees to be bound by all the terms and
conditions of the Certificates as provided in the Agreement.
14. The Purchaser represents that if the Purchaser is a partnership,
grantor trust or S corporation for federal income tax purposes (a
"Flow-Through Entity"), any Certificates owned by such Flow-Through Entity
will represent less than 50% of the value of all the assets owned by such
Flow-Through Entity and no special allocation of income, gain, loss deduction
or credit from such Certificates will be made among the beneficial owners of
such Flow-Through Entity.
15. If the Purchaser sells any of the Certificates, the Purchaser will
obtain from any subsequent purchaser substantially the same representations
contained in this Representation Letter.
D-2-4
<PAGE>
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Agreement or the Private Placement
Memorandum, as the case may be.
The representations and warranties contained herein shall be binding upon
the successors of the undersigned.
Executed at ___________________, this ____ day of ___________ 199_
______________________________
Purchaser's Name (Print)
By____________________________
Signature
______________________________
Its
______________________________
Address of Purchaser
______________________________
Purchaser's Taxpayer
Identification Number
D-2-5
<PAGE>
ANNEX 1 TO EXHIBIT D-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Purchaser") hereby certifies as follows to the
addressees of the Rule 144A Representation Letter to which this certification
is attached with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Purchaser.
2. In connection with purchases by the Purchaser, the Purchaser is a
"qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("Rule 144A") because (i) the
Purchaser owned and/or invested on a discretionary basis $________(**) in
securities (except for the excluded securities referred to below) as of the
end of the Purchaser's most recent fiscal year (such amount being calculated
in accordance with Rule 144A) and (ii) the Purchaser satisfies the criteria
in the category marked below.
___ CORPORATION, ETC. The Purchaser is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ BANK. The Purchaser (a) is a national bank or banking
institution organized under the laws of any State, territory or
the District of Columbia, the business of which is substantially
confined to
________________________
** Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
D-2-6
<PAGE>
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements.
D-2-7
<PAGE>
___ SAVINGS AND LOAN. The Purchaser (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto
___ BROKER-DEALER. The Purchaser is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Purchaser is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia
___ STATE OR LOCAL PLAN. The Purchaser is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
___ ERISA PLAN. The Purchaser is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
____ INVESTMENT ADVISOR. The Purchaser is an investment advisor
registered under the Investment Advisors Act of 1940.
___ SMALL BUSINESS INVESTMENT COMPANY. The Purchaser is a small
business investment company licensed by the U.S. Small Business
Administration under
D-2-8
<PAGE>
Section 301(c) or (d) of the Small Business Investment Act of
1958.
___ BUSINESS DEVELOPMENT COMPANY. The Purchaser is a business
development company as defined in Section 202(a) (22) of the
Investment Advisors Act of 1940.
___ TRUST FUND. The Purchaser is a trust fund whose trustee is a
bank or trust company and whose participants are exclusively
State or Local Plans or ERISA Plans as defined above, and no
participant of the Purchaser is an individual retirement account
or an H.R. 10 (Keogh) plan.
3. The term "SECURITIES" as used herein does not include (i) securities
of issuers that are affiliated with the Purchaser, (ii) securities that are part
of an unsold allotment to or subscription by the Purchaser, if the Purchaser is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Purchaser, the Purchaser used
the cost of such securities to the Purchaser and did not include any of the
securities referred to in the preceding paragraph, except (i) where the
Purchaser reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Purchaser may have included securities
owned by subsidiaries of the Purchaser, but only if such subsidiaries are
consolidated with the Purchaser in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Purchaser's direction. However, such
securities were not included if the Purchaser is a majority owned, consolidated
subsidiary of another enterprise and the
D-2-9
<PAGE>
Purchaser is not itself a reporting company under the Securities Exchange Act
of 1934, as amended.
5. The Purchaser acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Purchaser may be in reliance on Rule 144A.
6. Until the date of purchase of the Certificates, the Purchaser will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the
Purchaser's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Purchaser is
a bank or savings and loan is provided above, the Purchaser agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
______________________________
Name of Purchaser or Adviser
By:___________________________
Name:
Title:
Date:_________________________
D-2-10
<PAGE>
ANNEX 2 TO EXHIBIT D-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Purchaser") hereby certifies as follows to the
addressees of the Rule 144A Representation Letter which this certification is
attached with respect to the Transferor Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Purchaser or, if the Purchaser is a
"qualified institutional buyer as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because the Purchaser is part
of a Family of Investment Companies (as defined below), is such an officer of
the Adviser.
2. In connection with purchases by the Purchaser, the Purchaser is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Purchaser is an investment company registered under the Investment Company
Act of 1940, as amended and (ii) as marked below, the Purchaser alone, or the
Purchaser's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the
end of the Purchaser's most recent fiscal year. For purposes of determining
the amount of securities owned by the Purchaser or the Purchaser's Family of
Investment Companies, the cost of such securities was used, except (i) where
the Purchaser or the Purchaser's Family of Investment Companies reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market.
___ The Purchaser owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the
Purchaser's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
D-2-11
<PAGE>
___ The Purchaser is part of a Family of Investment Companies which
owned in the aggregate $__________ in securities (other than the
excluded securities referred to below) as of the end of the
Purchaser's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i) securities
of issuers that are affiliated with the Purchaser or are part of the Purchaser's
Family of Investment Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities
owned but subject to a repurchase agreement and (vi) currency, interest rate and
commodity swaps.
5. The Purchaser is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Representation Letter to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Purchaser will be in reliance on
Rule 144A. In addition, the Purchaser will only purchase for the Purchaser's
own account.
6. Until the date of purchase of the Transferor Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Purchaser's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
______________________________
Name of Purchaser or Adviser
D-2-12
<PAGE>
By:___________________________
Name:
Title:
IF AN ADVISER:
______________________________
Name of Purchaser
Date:_________________________
D-2-13
<PAGE>
EXHIBIT 10.1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOYOTA LEASE TRUST
(a Delaware Business Trust)
---------------
AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
Among
TOYOTA MOTOR CREDIT CORPORATION,
TMTT, INC.
and
(For certain limited purposes only)
FIRST BANK NATIONAL ASSOCIATION
---------------
Dated as of October 1, 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
CREATION OF TITLING TRUST; GRANTOR'S INTEREST
SECTION 2.01 Creation of Titling Trust. . . . . . . . . . . . . . . . . 1
SECTION 2.02 Business Trust . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.03 Offices . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.04 Purposes. . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.05 Document Execution and Performance. . . . . . . . . . . . . 3
SECTION 2.06 Additional Beneficiaries. . . . . . . . . . . . . . . . . . 3
SECTION 2.07 Tax Reporting and Characterization. . . . . . . . . . . . . 4
ARTICLE III
BENEFICIAL INTERESTS IN THE TITLING TRUST
SECTION 3.01 Sub-Trusts: Creation of UTI and SUBIs . . . . . . . . . . . 4
SECTION 3.02 Beneficiary Liabilities . . . . . . . . . . . . . . . . . . 6
SECTION 3.03 Insurance Policies. . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.04 Allocation of Liabilities and Indemnification . . . . . . . 8
ARTICLE IV
THE SERVICER
SECTION 4.01 Duties of the Servicer. . . . . . . . . . . . . . . . . . . 8
SECTION 4.02 Liability of Servicer; Indemnities. . . . . . . . . . . . . 9
SECTION 4.03 Merger, Consolidation, or Assumption of the Obligations
of, the Servicer. . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.04 Limitation on Liability of Servicer and Others. . . . . . . 10
SECTION 4.05 Servicer Not to Resign; Delegation of Duties. . . . . . . . 11
SECTION 4.06 Servicing Compensation . . . . . . . . . . . . . . . . . . 12
SECTION 4.07 Powers of Attorney. . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.08 Protection of Title to Titling Trust . . . . . . . . . . . 13
ARTICLE V
PAYMENTS
SECTION 5.01 Payments from Titling Trust Assets Only . . . . . . . . . . 13
SECTION 5.02 Manner of Payment . . . . . . . . . . . . . . . . . . . . . 14
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ARTICLE VI
THE TITLING TRUSTEE
SECTION 6.01 Duties and Powers of Titling Trustee. . . . . . . . . . . . 14
SECTION 6.02 Duty of Care. . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.03 Certain Matters Affecting the Titling Trustee . . . . . . . 16
SECTION 6.04 Titling Trustee Not Liable for Certificates or Losses. . . 18
SECTION 6.05 Indemnity of Titling Trustee and Trust Agents . . . . . . . 19
SECTION 6.06 Titling Trustee's Right Not to Act. . . . . . . . . . . . . 19
SECTION 6.07 Qualification of Titling Trustee. . . . . . . . . . . . . . 20
SECTION 6.08 Resignation or Removal of Titling Trustee . . . . . . . . . 20
SECTION 6.09 Successor Titling Trustee . . . . . . . . . . . . . . . . . 20
SECTION 6.10 Merger or Consolidation of Titling Trustee. . . . . . . . . 21
SECTION 6.11 Appointment of Co-Titling Trustee, Separate Titling
Trustee, or Nominee . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.12 Representations, Warranties and Covenants of Titling
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.13 Titling Trustee's Fees and Expenses . . . . . . . . . . . . 24
SECTION 6.14 No Petition . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.15 Stock of TMTT, Inc. . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VII
ACCOUNTS; CASH FLOWS; PERMITTED INVESTMENTS
SECTION 7.01 Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.02 Relationship to Securitized Financings. . . . . . . . . . . 28
SECTION 7.03 SUBI Lease Funding Accounts . . . . . . . . . . . . . . . . 28
SECTION 7.04 Rebalancing After Third Party Claim . . . . . . . . . . . . 29
ARTICLE VIII
TERMINATION
SECTION 8.01 Termination of the Titling Trust. . . . . . . . . . . . . . 29
SECTION 8.02 Termination at the Option of Beneficiary. . . . . . . . . . 30
SECTION 8.03 Titling Trustee Actions Upon Termination. . . . . . . . . . 30
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ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9.02 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9.04 Severability of Provisions. . . . . . . . . . . . . . . . . 31
SECTION 9.05 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 9.06 Successors and Assigns. . . . . . . . . . . . . . . . . . . 31
SECTION 9.07 Table of Contents and Headings. . . . . . . . . . . . . . . 31
EXHIBITS
EXHIBIT A -- Form of Certificate of Trust . . . . . . . . . . . . . . . . A-1
EXHIBIT B -- Form of UTI Supplement, including
Form of UTI Certificate . . . . . . . . . . . . . . . . . B-1
EXHIBIT C -- Form of SUBI Supplement, including
Form of SUBI Certificate . . . . . . . . . . . . . . . . C-1
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AMENDED AND RESTATED TRUST AND SERVICING AGREEMENT, dated as of October
1, 1996 among TOYOTA MOTOR CREDIT CORPORATION, a California corporation (as
grantor, initial beneficiary and servicer) and TMTT, INC., a Delaware
corporation, as Titling Trustee, and, for the limited purposes set forth
herein, FIRST BANK NATIONAL ASSOCIATION, a national banking association, as
Trust Agent, amending and restating in its entirety the Trust and Servicing
Agreement dated as of October 1, 1996 among the same parties, and herein
referred to as the "Titling Trust Agreement" or this "Agreement".
IN CONSIDERATION of the mutual agreements herein contained, and of other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. For all purposes of this Titling Trust
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, capitalized terms used and not otherwise defined herein
shall have the meanings ascribed thereto in the Annex of Definitions attached
hereto for all purposes of this Titling Trust Agreement. In the event of any
conflict between a definition set forth herein and that set forth in the
Annex of Definitions, that set forth herein shall prevail. All terms used in
this Titling Trust Agreement include, as appropriate, all genders and the
plural as well as the singular. All references such as "herein", "hereof" and
the like shall refer to this Titling Trust Agreement as a whole and not to
any particular article or section within this Titling Trust Agreement. All
references such as "includes" and variations thereon shall mean "includes
without limitation" and references to "or" shall mean "and/or". Any reference
to the "Titling Trustee, acting on behalf of the Titling Trust", or words of
similar import, shall be deemed to mean the Titling Trustee, acting on behalf
of Toyota Lease Trust and all beneficiaries thereof.
ARTICLE II
CREATION OF TITLING TRUST; GRANTOR'S INTEREST
SECTION 2.01 CREATION OF TITLING TRUST.
There is hereby formed in accordance with the provisions of the Delaware
Act, a Delaware business trust to be known as the Toyota Lease Trust. The
Titling Trustee is hereby authorized and vested with the power and authority
to make and execute contracts, instruments, certificates, agreements and
other writings on behalf of the Titling Trust as set forth herein and to sue
and be sued on behalf of the Titling Trust.
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The Titling Trustee does hereby accept and agree to hold in trust, for
the benefit of the UTI Beneficiary and such other Persons as may become
Beneficiaries hereunder from time to time, all Titling Trust Assets conveyed
or to be conveyed pursuant to Section 3.01, and all monies and proceeds that
may be received thereunder, subject to the terms of this Agreement.
SECTION 2.02 BUSINESS TRUST.
It is the intention of the parties hereto that the Titling Trust be a
business trust under the Delaware Act and that this Agreement shall
constitute the governing instrument of the Titling Trust. Effective as of the
date hereof, the Titling Trustee shall have all rights, powers and duties set
forth herein and in the Delaware Act with respect to accomplishing the
purposes of the Titling Trust. The Titling Trustee shall file or cause to be
filed a certificate of trust for the Titling Trust pursuant to the Delaware
Act in substantially the form of Exhibit A attached hereto.
SECTION 2.03 OFFICES. The principal office of the Titling Trust, and
such additional offices as the Titling Trustee may establish, shall be
located at such place or places inside or outside of the State of Delaware as
the Titling Trustee may designate from time to time by written notice to each
Beneficiary and the Servicer. Initially, such principal office shall be in
the care of the Titling Trustee at the Corporate Trust Office.
SECTION 2.04 PURPOSES.
(a) The purposes of the Titling Trust are to: (i) take assignments and
conveyances of, hold in trust and release its ownership interest in the Titling
Trust Assets as nominee holder of legal title and for the benefit of, and at the
direction of, the Beneficiaries; (ii) engage in any of the other activities
described or authorized in this Agreement, any UTI Supplement or SUBI
Supplement, or in any amendment to this Agreement or any UTI Supplement or SUBI
Supplement; and (iii) engage in any and all activities that are necessary or
appropriate to accomplish the foregoing or that are incidental thereto or
connected therewith. The Titling Trust shall not engage in any activity other
than in connection with the foregoing or other than as required or authorized by
applicable law or (subject to the terms of this Agreement) the documents
relating to a Securitized Financing.
In consideration of the receipt of beneficial interests in the Titling
Trust described in Article III, the Grantor shall from time to time assign,
transfer, contribute or convey, or cause to be assigned, transferred,
contributed or conveyed, the Titling Trust Assets to the Titling Trust. The
Titling Trust, and the Titling Trustee on behalf of the Titling Trust, shall
hold in trust all legal rights and interests in the Titling Trust Assets for the
benefit of the Beneficiaries.
The UTI Beneficiary may from time to time designate the Titling Trust or
the Titling Trustee, on behalf of the Titling Trust, as the nominee holder of
legal title to Contracts that are Eligible Contracts, the related Leased
Vehicles and other Titling Trust Assets. In connection therewith, such Leased
Vehicles will be titled in the name of the Titling Trust or the Titling Trustee,
on behalf of the Titling Trust, and the Titling Trustee will accept such
designation and, subject to the other terms
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of this Agreement, will permit the related Certificates of Title to be titled
in the name of the Titling Trust or the Titling Trustee, on behalf of the
Titling Trust. Legal title to all Titling Trust Assets shall be vested in
the Titling Trust or the Titling Trustee, on behalf of the Titling Trust, as
a separate legal entity except to the extent otherwise specifically provided
herein or in any other document relating to a Securitized Financing or where
applicable state law requires any Titling Trust Asset to be vested otherwise,
in which case the Titling Trustee will, at the direction of the UTI
Beneficiary or the Servicer, cause legal title to be held as required thereby.
(b) The Titling Trustee hereby accepts and agrees to hold in trust all
Titling Trust Assets conveyed to it hereunder, for the use and benefit of, and
as nominee holder of legal title for, the Beneficiaries and any successors and
assigns as may be designated pursuant to the terms hereof or as may otherwise
succeed to the rights of a Beneficiary hereunder. The Servicer may appoint one
or more nominees to hold title to some or all of the Titling Trust Assets in the
name of such nominee title holder for the sole and exclusive benefit of the
Titling Trust and, upon the appointment of such nominee title holder(s), the
Titling Trustee will transfer title to all or such portion of the Titling Trust
Assets as directed by the Servicer.
SECTION 2.05 DOCUMENT EXECUTION AND PERFORMANCE. Each Beneficiary
hereby authorizes and directs the Titling Trustee, and the Titling Trustee
hereby agrees to: (i) at the request of a Beneficiary or the Servicer,
execute and deliver all agreements, instruments or documents necessary or
advisable to accept, or cause the Titling Trust to accept, the designation as
nominee holder of legal title to Contracts, Leased Vehicles and other Titling
Trust Assets as described herein and cause the related Certificates of Title
to be titled in the name of the Titling Trust or the Titling Trustee, on
behalf of the Titling Trust; (ii) take action that is required to be taken by
the Titling Trustee as specified in the documents relating to a Securitized
Financing or at the direction of the relevant Beneficiary in accordance with
applicable law; (iii) exercise its rights and perform its duties as Titling
Trustee as specified in the documents relating to a Securitized Financing;
(iv) at the direction of a Beneficiary (a) release, discharge, sell, assign,
transfer, pledge, convey or otherwise dispose of any right, title or interest
in and to any portion of the Titling Trust Assets comprising the related
Sub-Trust (or to cause the Titling Trust to take any such action), (b) amend
or revoke the terms hereof with respect to all or any portion of the related
Titling Trust Assets or affecting any other provision hereof; and (v) appoint
this as the attorney in fact for the Titling Trust as contemplated by the
Titling Trust Agreement and the related SUBI Servicing Supplement and direct
the Servicer to perform such administrative duties on behalf of the Titling
Trust as are set forth herein.
SECTION 2.06 ADDITIONAL BENEFICIARIES. Notwithstanding any other
provision of this Agreement, the UTI Beneficiary and the Servicer may in writing
designate additional Beneficiaries who shall have the right to designate the
Titling Trust or the Titling Trustee, on behalf of the Titling Trust, as nominee
holder of legal title to Contracts, Leased Vehicles and other Titling Trust
Assets and cause the related Certificates of Title to be titled in the name of
the Titling Trust or the Titling Trustee, on behalf of the Titling Trust. No
Person shall become a Beneficiary until it has delivered to the parties hereto
an agreement in form and substance satisfactory to the Titling Trustee and the
Servicer pursuant to which it agrees to become a party to this Agreement.
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SECTION 2.07 TAX REPORTING AND CHARACTERIZATION.
Consistent with the treatment of the Titling Trust for tax purposes as a
mere nominee holder of legal title of the Titling Trust Assets with respect
to each Sub-Trust, unless otherwise required by appropriate taxing
authorities, the Titling Trust will not file or cause to be filed any annual
or other tax returns with respect to the Titling Trust. Consistent with the
treatment of the UTI Sub-Trust as a mere agent of the UTI Beneficiary for tax
purposes, unless otherwise required by appropriate taxing authorities, the
UTI Beneficiary will not file or cause to be filed any annual or other tax
returns with respect to the UTI Sub-Trust. In the event that the Titling
Trust or the UTI Sub-Trust or the Titling Trustee on behalf of the Titling
Trust or the UTI Sub-Trust is required to file any tax returns, the Servicer
will prepare or cause to be prepared the returns for the Titling Trust, the
Titling Trustee or the UTI Sub-Trust and will deliver such returns to the
Titling Trustee for signature, unless applicable law requires one or more
Beneficiaries to sign such returns, in which case the Servicer will deliver
such returns to such Beneficiary or Beneficiaries.
ARTICLE III
BENEFICIAL INTERESTS IN THE TITLING TRUST
SECTION 3.01 SUB-TRUSTS: CREATION OF UTI AND SUBIS.
(a) Subject to the other provisions of this Section, to the extent
designated by the UTI Beneficiary from time to time, the Titling Trustee
shall establish one or more Sub-Trusts under this Agreement and allocate the
Titling Trust Assets identified by the UTI Beneficiary to each such
Sub-Trust, and the Titling Trustee shall hold such Titling Trust Assets as
Titling Trustee hereunder for the benefit, and subject to the direction, of
the Beneficiaries of such Sub-Trust. Each Sub-Trust shall have the name and
beneficiaries designated by the UTI Beneficiary and shall be a separate
series of the Titling Trust pursuant to Section 3806(b)(2) of the Delaware
Act. The Servicer shall maintain separate and distinct records for each
Sub-Trust, and the Titling Trust Assets allocated to such Sub-Trust shall be
held and accounted for separately from all other Titling Trust Assets.
Subject to the right of the Titling Trustee to allocate certain Liabilities,
charges and reserves as provided herein and in any UTI Supplement or SUBI
Supplement, and in accordance with Section 3804(a) of the Delaware Act or to
the extent otherwise permitted by applicable law, all debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a Sub-Trust shall be enforceable against the Titling Trust Assets
allocated to such Sub-Trust only, and not against the Titling Trust Assets
allocated to any other Sub-Trust. Every note, bond, contract or other
undertaking issued by or on behalf of a Sub-Trust (including any UTI
Certificate or SUBI Certificate) shall include a recitation limiting the
obligation represented thereby to the related Sub-Trust and the Titling Trust
Assets allocated thereto. The Certificate of Trust for the Titling Trust
shall include notice of the limitation of liabilities of each Sub-Trust of
the Titling Trust, in accordance with Section 3804(a) of the Delaware Act.
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(b) In accordance with Section 3806(b) of the Delaware Act, all Titling
Trust Assets that have not been allocated to a SUBI Sub-Trust shall
constitute, and be defined as, the "UTI Assets" and shall be, and be deemed
to be, identified to and assets of the UTI Sub-Trust separate from the assets
of any SUBI Sub-Trust within the Titling Trust. The UTI Sub-Trust shall be a
separate series of the Titling Trust pursuant to Section 3806(b)(2) of the
Delaware Act. In accordance with Section 3.01(a), the Servicer shall maintain
separate and distinct records for the UTI Sub-Trust and the UTI Assets shall
be held and accounted for separately from all other Titling Trust Assets. The
Titling Trustee shall distribute to or upon the order of the UTI Beneficiary,
a UTI representing an undivided interest in the UTI Sub-Trust and the UTI
Assets which may be subdivided and will be represented by one or more UTI
Certificates issued pursuant to one or more related UTI Supplements. Except
as otherwise provided for herein or in a UTI Supplement, all income and other
amounts with respect to the UTI shall be distributed or retained by the
Titling Trustee as directed from time to time by the UTI Beneficiary.
(c) The Titling Trustee shall from time to time, as directed in writing
by the UTI Beneficiary, and subject to Section 3.01(d), identify or cause to
be identified on the books and records of the Titling Trust one or more
separate SUBI Sub-Trusts to be accounted for separately from each other and
from the UTI Sub-Trust within the Titling Trust, and will identify and
allocate, or cause to be identified and allocated, to such SUBI Sub-Trust on
such books and records certain Titling Trust Assets that are not then
allocated to another SUBI Sub-Trust. Upon such allocation, such related SUBI
Assets shall no longer be assets of, or allocated to, the UTI (unless and
until specifically reallocated to the UTI from that SUBI in accordance with
the related SUBI Supplement). Each SUBI shall constitute a separate series of
the Titling Trust pursuant to Section 3806(b)(2) of the Delaware Act and
shall represent the beneficial interest in such SUBI and the SUBI Assets
allocated thereto from time to time. Each SUBI shall be represented by one or
more separate SUBI Certificates issued pursuant to the related SUBI
Supplement. The Titling Trustee shall issue each SUBI Certificate to or upon
the order of the UTI Beneficiary.
(d) Notwithstanding anything to the contrary contained in this Section,
the Titling Trustee shall create a new SUBI Sub-Trust and SUBI and issue to
or upon the order of the UTI Beneficiary one or more SUBI Certificates
evidencing such SUBI by executing and delivering a SUBI Supplement only (i)
upon receipt of a certification of the UTI Beneficiary, dated as of the date
of the issuance of the related SUBI Certificate, to the effect that, as of
the date of such certificate, and after giving effect to the creation of the
SUBI Sub-Trust, the transfer to the UTI Beneficiary of any SUBI Certificates
in connection therewith and the application by the UTI Beneficiary of any net
proceeds from any Securitized Financing involving such SUBI and such SUBI
Certificates, no Event of Servicing Termination or other Early Amortization
Event (or event that, with the passage of time or the giving of notice, or
both, could constitute an Event of Servicing Termination or other Early
Amortization Event), in each case as defined in the relevant Transaction
Documents, shall exist under any Securitized Financing or other agreement or
obligation secured by a UTI Pledge, and (ii) if, as of the date of the
issuance of the SUBI Certificates, the Titling Trustee shall not have
received from any pledgee of a UTI Pledge a notice asserting any such default
under any Securitized Financing or other agreement or obligation so secured.
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(e) The UTI Beneficiary shall not further transfer, assign, or pledge any
beneficial interest in the Titling Trust except as contemplated herein. The UTI
Beneficiary shall at all times maintain any minimum net worth specified in the
related UTI Supplement or any related SUBI Supplement.
(f) Each SUBI Beneficiary shall maintain with respect to the SUBI
relating thereto any minimum interest in that SUBI and the related SUBI
Sub-Trust as may be required by the applicable SUBI Supplement. Each SUBI
Beneficiary shall at all times maintain any minimum net worth specified in
the related SUBI Supplement.
(g) Except to the extent specified in this Agreement or in any
applicable SUBI Supplement, interests in a SUBI or SUBI Certificate shall be
nontransferable, provided that all or any part thereof may be (i) transferred
and assigned to a special purpose subsidiary of TMCC or another vehicle
created for the purpose of a Securitized Financing involving a SUBI, or (ii)
assigned, either absolutely or collaterally, or pledged by the UTI
Beneficiary or the related SUBI Beneficiary to or in favor of a trustee for
one or more securitization trusts solely for the purpose of securing or
otherwise facilitating one or more Securitized Financings, and provided
further that each such assignee or pledgee must (x) give a non-petition
covenant substantially similar to that set forth in Section 6.14, and (y)
execute an agreement between or among itself and each UTI Beneficiary and any
SUBI Beneficiary, to release all claims to the Titling Trust Assets allocated
to the UTI Sub-Trust or any other SUBI Sub-Trust and, in the event that such
release is not given effect, to fully subordinate all claims it may be deemed
to have against the Titling Trust Assets allocated thereto. In the event of a
sale or an absolute assignment, or upon foreclosure in the event of a
collateral assignment or pledge as contemplated in clause (ii), such
purchaser, assignee or pledgee shall be a SUBI Beneficiary in the manner and
to the extent set forth in the related SUBI Certificates so acquired and in
the applicable SUBI Supplement. If so specified in the related SUBI
Supplement, the foregoing provisions restricting the transfer of SUBI
Certificates may be waived upon delivery to the Titling Trustee and the UTI
Beneficiary of an Opinion of Counsel in form and scope reasonably
satisfactory thereto to the effect that a contemplated transfer of SUBI
Certificates will not have any material adverse effect upon the Titling
Trust, any Sub-Trust or the interests of any Beneficiary.
SECTION 3.02 BENEFICIARY LIABILITIES.
(a) The Beneficiary or Beneficiaries of each Sub-Trust shall, as to such
Sub-Trust but not as to any other Sub-Trust, each be jointly and severally
liable to third parties (including the Beneficiary or Beneficiaries of all other
Sub-Trusts) and indemnify, defend and hold harmless the Titling Trustee,
including its officers, directors, employees and agents, for all Liabilities
incurred in connection with the SUBI Assets of such Sub-Trust, including all
state and local taxes assessed on the Titling Trustee or the Titling Trust or
any such other Beneficiary resulting from the allocation of Titling Trust Assets
to such Sub-Trust.
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(b) The UTI Beneficiary shall (to the extent necessary after giving effect
to Section 3.02(a)) indemnify, defend and hold harmless the Titling Trustee,
including its officers, directors, employees and agents, for all Liabilities of
the Titling Trust or the UTI Sub-Trust to third parties to the same extent that
the UTI Beneficiary would be liable if the Titling Trust or the UTI Sub-Trust
were a partnership formed under either of the Delaware Partnership Acts and the
UTI Beneficiary were a general partner thereof.
(c) As set forth in this Section, the Titling Trustee and its
successors, assigns, agents, officers, directors and employees shall be
indemnified, defended and held harmless with respect to any Liabilities
arising out of or in connection with the Titling Trustee's acceptance or
performance of the trusts and duties contained in this Titling Trust
Agreement and in any SUBI Supplement or related SUBI Servicing Supplement.
Notwithstanding the foregoing, in no event shall the Titling Trustee or its
officers, directors or employees, be indemnified, defended or held harmless
for any Liabilities incurred solely (i) by reason of the Titling Trustee's
willful malfeasance, bad faith or negligence or (ii) by reason of the Titling
Trustee's breach of its representations set forth in Section 6.12. The
Titling Trustee shall promptly notify the Beneficiaries of any claim for
which it may seek indemnity. Failure by the Titling Trustee to so notify the
Beneficiaries of a claim for which it seeks indemnification shall not relieve
the Beneficiaries of their obligations under this Section except to the
extent of Liabilities that the Beneficiaries could have avoided if notice had
been so provided.
(d) All third party creditors of the Titling Trust shall be deemed to
be third party beneficiaries for purposes of this Section. The indemnities
contained in this Section shall survive the resignation or termination of the
Titling Trustee, or the termination of this Agreement. Any amounts that are
paid to the Titling Trustee pursuant to this Section shall no longer be
deemed to be Titling Trust Assets immediately after such amounts have been
paid to the Titling Trustee. To the extent provided in this Section, the
Beneficiaries hereby waive the limited liability protection otherwise
afforded under the Delaware Act (including Section 3803 thereof) or any other
law.
SECTION 3.03 INSURANCE POLICIES.
(a) The Grantor will cause to be maintained, and shall not, without the
prior written consent of the Servicer, which consent may not be unreasonably
withheld, or, in the case of a rated Securitized Financing, unless otherwise
specified in the related SUBI Supplement, the consent of each Rating Agency,
cause the termination without replacement of, one or more contingent liability,
excess liability, physical damage and/or umbrella Insurance Policies providing
coverage against third-party claims that may be raised against the Titling
Trust, any Sub-Trust or the Titling Trustee, on behalf of the Titling Trust or
any Sub-Trust, with respect to any Leased Vehicle in an amount at least equal to
$100 million per occurrence, not subject to any annual or aggregate cap on the
number of claims payable, which policy or policies may be a blanket insurance
policy or policies and which policy or policies may contemplate a per occurrence
deductible of up to $__ million.
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(b) The UTI Beneficiary shall cause each of the Contingent and Excess
Liability Insurance Policies referred to in Section 3.03(a) to name the Titling
Trustee or Titling Trust as additional insureds or loss payees.
SECTION 3.04 ALLOCATION OF LIABILITIES AND INDEMNIFICATION.
Notwithstanding any other provision of this Agreement, any Supplement or any
amendment hereto, (i) to the extent that a Liability, including any
indemnification obligation, shall be incurred or suffered with respect to, or
is attributable to, one or more Affected Trust Assets allocated to one or
more Sub-Trusts, the Beneficiaries of each such Sub-Trust shall bear in full
such Liability or indemnification obligation in proportion to the ratio of
the aggregate value of the Affected Trust Assets in the UTI Portfolio or the
related SUBI Portfolio, as the case may be, to the aggregate value of the
Affected Trust Assets, but (ii) to the extent that any such Liability or
indemnification obligation is suffered with respect to all Titling Trust
Assets generally, the Beneficiaries shall bear such Liability or
indemnification obligation in proportion to the ratio of the aggregate value
of the Contracts and Leased Vehicles in the UTI Portfolio or the related SUBI
Portfolio, as the case may be, to the aggregate value of all Contracts and
Leased Vehicles that are Titling Trust Assets.
ARTICLE IV
THE SERVICER
SECTION 4.01 DUTIES OF THE SERVICER. The Servicer is hereby appointed
and authorized to act as attorney-in-fact for the Titling Trust, and in such
capacity shall manage, service, administer and make collections on the
Titling Trust Assets with reasonable care, using that degree of skill and
attention that it exercises with respect to comparable assets that it
services for itself. The Titling Trustee shall, with the consent of the
Servicer, enter into any and all agreements specified by the Beneficiary of
the UTI or a SUBI in order to add, delete or amend any or all of the
obligations of the Servicer hereunder in respect of all or any portion of the
Titling Trust Assets in the UTI Sub-Trust or the related SUBI Sub-Trust. The
Servicer shall follow its customary standards, policies and procedures and,
unless otherwise indicated herein or in the related SUBI Servicing
Supplement, shall have full power and authority, acting alone, to do any and
all things in connection with such managing, servicing, administrating and
collecting that it may deem necessary or desirable in the interest of the
Titling Trust. The foregoing shall not be construed to prevent the Servicer
from implementing new programs, whether on an intermediate pilot or permanent
basis, or on a regional or nationwide basis, or from modifying its standards,
policies and procedures, as long as, in each case, the Servicer does or would
implement such programs, or modify its standards, policies and procedures, in
respect of comparable assets for itself in the ordinary course of business.
Without limiting the generality of the foregoing, the Servicer is hereby
authorized and empowered by the Beneficiaries and the Titling Trust to (x)
modify or extend the term of any Contract on the same terms and conditions it
applies or would apply to comparable assets owned by it, or (y) execute and
deliver, on behalf of the Titling Trust, any and all instruments, certificates
or other documents necessary or advisable to record and maintain title to the
Leased Vehicles in the
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name of the Titling Trust or the Titling Trustee, on behalf of the Titling
Trust, and to release interests of the Titling Trust, the Titling Trustee, on
behalf of the Titling Trust, and each Beneficiary in any Leased Vehicle in
connection with the sale or other disposition of a Leased Vehicle (whether
directly to the Obligor under the Contract relating to the Leased Vehicle or
to a third party) by the related Beneficiary as contemplated by this
Agreement and the other documents relating to a Securitized Financing. The
Servicer also shall be responsible for creating, maintaining and amending the
Schedule of Contracts and Leased Vehicles. The Servicer shall deliver to the
Titling Trustee, upon written request therefor by the Titling Trustee or any
Beneficiary, and upon any Trust Asset Transfer, a revised Schedule of
Contracts and Leased Vehicles current as of a date not more than ten days
prior to the date of such delivery.
The Servicer is hereby authorized to communicate with Obligors in the
course of its servicing of the Contracts and Leased Vehicles in its own name.
The Servicer is hereby authorized to commence, in its own name or in the name
of the Titling Trust, a legal proceeding or participate in a legal proceeding
(including a bankruptcy proceeding) relating to or involving the protection
or enforcement of the interest of the Titling Trust or the related
Beneficiary in any Contract, Leased Vehicle or other Trust Asset. If the
Servicer commences or participates in such legal proceeding in its own name,
the Titling Trust shall thereupon be deemed to have automatically assigned
legal title to each related Leased Vehicle and the Titling Trust's interest
in the related Contract to the Servicer for purposes of commencing or
participating in any such proceeding as a party or claimant, and the Servicer
is authorized and empowered by the Titling Trust to execute and deliver in
the Servicer's name any notices, demands, Claims, responses, affidavits or
other documents or instruments in connection with any such proceeding. The
Titling Trustee shall furnish the Servicer with any powers of attorney and
other documents and take any other steps which the Servicer may deem
necessary or appropriate to enable it to carry out its duties under this
Agreement and the other documents relating to a Securitized Financing.
SECTION 4.02 LIABILITY OF SERVICER; INDEMNITIES.
(a) The Servicer shall be liable in accordance with this Agreement and
the other documents relating to a Securitized Financing only to the extent of
the obligations specifically undertaken by the Servicer and shall have no
other obligations or liabilities hereunder or thereunder. The Servicer shall
indemnify, defend and hold harmless:
(i) (A) the Titling Trust, the Titling Trustee and the Trust
Agent from and against any and all Liabilities arising out of or
resulting from its use, ownership or operation of any Leased Vehicle; and
(B) the Titling Trust, the Titling Trustee and the Trust Agent from and
against any taxes that may at any time be asserted against any of them
with respect to the transactions contemplated by this Agreement (other
than taxes with respect to fees payable hereunder, such fees being
payable by the related Beneficiary, or as herein provided, by the
Servicer), including any state sales, gross receipts, general
corporation, tangible personal property, privilege or license, taxes and
costs and expenses in defending against the same,
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in each case to the extent not paid by the related Obligors and to the
extent related Titling Trust Assets are not available therefor hereunder
or are insufficient therefor;
(ii) the Titling Trust, the Titling Trustee, the Trust Agent
and the Beneficiaries from and against any and all Liabilities to the
extent that such Liabilities arose out of, or are imposed upon, any of
them through the Servicer by reason of its disregard of its obligations
and duties hereunder or thereunder; and
(iii) the Titling Trustee and the Trust Agent from and against all
Liabilities arising out of or incurred in connection with the acceptance or
performance of the trusts and duties contained in this Agreement, except to
the extent that such Liabilities: (A) are due to the willful misfeasance,
bad faith or negligence (except for errors in judgment) of the Titling
Trustee or Trust Agent, (B) arise from the material breach by the Titling
Trustee or the Trust Agent of any of its representations or warranties set
forth in this Agreement, or (C) shall arise out of or be incurred in
connection with the performance by the Titling Trustee of the duties of a
successor Servicer hereunder, or of any such duties on behalf of the
Titling Trustee by the Trust Agent.
(b) Indemnification under this Section shall include reasonable fees
and expenses of counsel and expenses of litigation. If the Servicer has made
any indemnity payments pursuant to this Section and the recipient thereafter
collects any such amounts from others, the recipient shall promptly repay
such amounts collected to the Servicer, without interest, to the extent of
such payments made by the Servicer. Indemnification under this Section shall
survive any transaction described in Section 4.03 with respect to any and all
Titling Trust Assets as of the date of such transaction and any acts,
occurrences or transactions related thereto whether arising before or after
the date of such transaction.
SECTION 4.03 MERGER, CONSOLIDATION, OR ASSUMPTION OF THE OBLIGATIONS
OF, THE SERVICER. Any corporation (i) into which the Servicer may be merged
or consolidated, (ii) resulting from any merger, conversion or consolidation
to which the Servicer shall be a party or (iii) succeeding to the business of
the Servicer and which is otherwise servicing leases or retail installment
sales contracts, which corporation executes an agreement of assumption to
perform every obligation of the Servicer hereunder, shall be the successor to
the Servicer without the execution or filing of any paper or any further act
on the part of any of the parties to this Agreement. The Servicer shall
provide notice of any merger, consolidation or succession pursuant to this
Section 4.03 to the Titling Trustee, the UTI Beneficiary and each Rating
Agency.
SECTION 4.04 LIMITATION ON LIABILITY OF SERVICER AND OTHERS.
(a) Neither the Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Titling Trust, the Titling Trustee,
the Trust Agent, or any Beneficiary, except as otherwise provided in this
Agreement and the other documents relating to a Securitized Financing, for any
action taken or for refraining from the taking of any action pursuant hereto or
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thereto, or for errors in judgment. Notwithstanding the foregoing, this
provision shall not protect the Servicer or any such Person against any
Liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence (except errors in judgment) in the performance of
duties or by reason of reckless disregard of obligations hereunder or
thereunder. The Servicer and its directors, officers, employees or agents may
rely in good faith on the advice of counsel or on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder or thereunder.
(b) Except as provided in this Agreement and the other documents
relating to a Securitized Financing, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties to service the Titling Trust Assets in accordance
herewith or therewith and that in its opinion may involve it in any expense
or Liability. Notwithstanding the foregoing, the Servicer may undertake any
reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other documents relating to a Securitized Financing and the
rights and duties of the parties hereto or thereto and the interests of any
Beneficiary hereunder or thereunder. In such event, the reasonable legal
expenses and costs for such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Titling Trust Assets relating
to the applicable Sub-Trust and the Servicer shall be entitled to be
reimbursed therefor solely from funds available therefor.
SECTION 4.05 SERVICER NOT TO RESIGN; DELEGATION OF DUTIES.
(a) Subject to Section 4.03, the Servicer shall not resign from the
obligations and duties imposed on it by this Agreement as Servicer except
upon a determination that the performance of its duties under this Agreement
is no longer permissible under applicable law. Any such determination
permitting the resignation of the Servicer shall be evidenced by an opinion
of counsel to such effect delivered to the Titling Trustee. No such
resignation shall become effective until a successor servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance
with Section 4.03. The Titling Trustee will, in no event, be obligated to
serve as successor servicer except upon its express prior written consent.
(b) The Servicer may not assign any of its rights, powers, duties or
obligations under this Agreement. Notwithstanding the foregoing, the Servicer
may make such an assignment in connection with a consolidation, merger,
conversion or succession effected in compliance with Section 4.03 or in
connection with the transfer to a successor servicer as contemplated by
clause (a) above.
(c) Except as provided in paragraphs (a) and (b) of this Section or in any
other document relating to a Securitized Financing, the duties and obligations
of the Servicer under this Agreement shall continue until this Agreement has
been terminated as provided in Section 8.01 and shall survive the exercise by
the Titling Trustee of any right or remedy under, or the enforcement by the
Titling Trustee of any provision contained in, this Agreement or any other
documents relating to a Securitized Financing.
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(d) Notwithstanding the foregoing, the Servicer may enter into
subservicing agreements with one or more subservicers (which may be Affiliates
of the Servicer) for the servicing and administration (in whole or in part) of
the Contracts and the Leased Vehicles, with the consent of the Beneficiaries
(which consent shall not be unreasonably withheld) if such subservicer is not an
Affiliate of the Servicer. References in this Agreement or any other document
relating to a Securitized Financing to actions taken or to be taken by the
Servicer in servicing the Contracts and Leased Vehicles include actions taken or
to be taken by any such subservicer on behalf of the Servicer. Each such
subservicing agreement will be upon terms and conditions not inconsistent with
this Agreement and the other documents relating to a Securitized Financing and
as the Servicer and any such subservicer may agree and shall contain a non-
petition covenant substantially identical to that set forth in Section 6.14. The
Servicer shall provide the Titling Trustee with a copy of each such subservicing
agreement.
(e) Notwithstanding any subservicing agreement, any of the provisions of
this Agreement or the other documents relating to a Securitized Financing that
relate to agreements or arrangements between the Servicer and any subservicer or
reference to actions that are taken through a subservicer or otherwise, the
Servicer shall remain obligated and liable to the Titling Trust and the Titling
Trustee pursuant to Section 4.02 without diminution of such obligation or
liability by virtue of such delegation or by virtue of indemnification from any
subservicer, to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Contracts and Leased
Vehicles.
SECTION 4.06 SERVICING COMPENSATION. The Servicer shall receive such
fees and reimbursement for expenses with respect to the Titling Trust Assets
relating to a Sub-Trust as may be agreed to from time to time between the
Servicer and the related Beneficiary.
SECTION 4.07 POWERS OF ATTORNEY. The Servicer is hereby designated by
each Beneficiary, the Titling Trust, and the Titling Trustee as its true and
lawful attorney-in-fact, with full power and authority to perform any and all
acts related to managing, servicing, administering, collecting or repossessing
any part of the Titling Trust Assets and any and all acts otherwise required or
permitted to be performed by the Servicer pursuant to Section 4.01 or otherwise
under this Agreement and the other documents relating to a Securitized Financing
whether acting in its own name or in the name of the Titling Trust, the Titling
Trustee or any Beneficiary. The Servicer is hereby authorized and empowered to
execute and deliver, on behalf and in the name of each Beneficiary, the Titling
Trust or the Titling Trustee, any and all instruments, certificates or other
documents relating thereto. The Servicer also has the right, power and
authority to designate in writing other persons and entities as true and lawful
attorneys-in-fact for and on its or their behalf to do anything that the
Servicer has the power to do under this Agreement and the other documents
relating to a Securitized Financing. Without limiting the generality of the
foregoing, the Servicer or any such person or entity designated by the Servicer
is hereby authorized and empowered by the Titling Trustee and the Titling Trust
to execute and deliver, on behalf of the Titling Trust and the Titling Trustee,
any and all applications for or duplicates of Certificates of Title in the name
of the Titling Trust or the Titling Trustee, on
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behalf of the Titling Trust, any and all applications for registrations of
vehicles and/or license plates, any and all applications for transfers of
Certificates of Title or registrations for vehicles and/or license plates,
and any and all other instruments, certificates or other documents which the
Servicer deems necessary or advisable to record, hold or release title to
and/or registration of motor vehicles in the name of the Titling Trust or the
Titling Trustee, as appropriate.
SECTION 4.08 PROTECTION OF TITLE TO TITLING TRUST.
(a) The Servicer shall maintain its computer systems so that its master
computer records (including any back-up archives) that refer to any Leased
Vehicles indicate clearly that legal title to such Leased Vehicle is held by the
Titling Trust or the Titling Trustee, on behalf of the Titling Trust, as
appropriate, as nominee holder of legal title for the related Beneficiary.
Indication of the legal title of the Titling Trust or the Titling Trustee, on
behalf of the Titling Trust, to a Leased Vehicle shall be deleted from or
modified on such computer systems when, and only when, legal title to such
Leased Vehicle is no longer owned by the Titling Trust or the Titling Trustee,
on behalf of the Titling Trust, for the benefit of the related Beneficiary.
(b) If at any time the Servicer or a Beneficiary proposes to sell, grant a
security interest in or otherwise transfer any interest in any Leased Vehicles
to any prospective purchaser, lender or other transferee, all computer tapes,
records or print-outs (including any restored from back-up archives) delivered
by the Titling Trustee to such prospective purchaser, lender or other transferee
that refers in any manner whatsoever to any Leased Vehicle shall indicate
clearly that legal title to such Leased Vehicle is held in the name of the
Titling Trust or the Titling Trustee, on behalf of the Titling Trust, for the
benefit of the related Beneficiary.
ARTICLE 5
PAYMENTS
SECTION 5.01 PAYMENTS FROM TITLING TRUST ASSETS ONLY. All payments, if
any, to be made by the Titling Trustee or the Servicer under this Agreement or
any other documents relating to a Securitized Financing, other than (i)
indemnities of the Servicer pursuant to Section 4.02, (ii) payment of the
Titling Trustee's fees and expenses by the Servicer pursuant to Section 6.13 or
(iii) amounts owing by the Titling Trustee arising from its willful misfeasance,
bad faith or negligence, shall be made only from any then available collections
and proceeds in respect of the Titling Trust Assets or the SUBI Assets of the
related Sub-Trust, as appropriate, and only to the extent that the Titling
Trustee or the Servicer shall have received such collections and proceeds in
respect thereof to make such payments in accordance with the terms hereof. This
Section is not intended to override the waivers of limited liability by the
Beneficiaries made in Section 3.02.
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SECTION 5.02 MANNER OF PAYMENT. All amounts payable to Beneficiaries
pursuant to this Agreement or any other document relating to a Securitized
Financing shall be paid or caused to be paid by the Titling Trustee or the
Servicer, as the case may be, to or for the account of the related Beneficiary
in immediately available funds by wire transfer or other method of same-day
transfer.
ARTICLE 6
THE TITLING TRUSTEE
SECTION 6.01 DUTIES AND POWERS OF TITLING TRUSTEE.
(a) The Titling Trustee and the Trust Agent undertake to perform such
duties and engage in such activities, and only such duties and activities, as
are specified in this Agreement, any SUBI Supplement or UTI Supplement, any
other amendment to this Agreement, SUBI Supplement or UTI Supplement, or as may
be directed by the Beneficiary in a manner not contrary to the terms hereof or
thereof from time to time, including in connection with (i) Securitized
Financings, (ii) sales of Contracts and other Titling Trust Assets to the extent
permitted by the terms of any existing Securitized Financings (so long as the
Certificate of Title of any Leased Vehicle so sold is amended to reflect the
transfer of ownership thereof from the Titling Trust or the Titling Trustee, on
behalf of the Titling Trust, as applicable, unless applicable law permits the
transfer of ownership of a motor vehicle without an amendment to the vehicle's
certificate of title) or (iii) activities ancillary thereto.
(b) Neither the Titling Trustee nor the Trust Agent shall engage in any
activities other than activities required or permitted by the provisions of this
Agreement. Except as provided in or permitted by this Titling Trust Agreement,
any UTI Supplement, any SUBI Supplement or any related SUBI Servicing
Supplement, neither the Titling Trustee nor the Trust Agent shall (i) issue
beneficial interests in the Titling Trust Assets or securities of the Titling
Trust other than the UTI and UTI Certificates and one or more SUBIs and SUBI
Certificates; (ii) borrow money on behalf of the Titling Trust; (iii) make loans
on behalf of the Titling Trust; (iv) invest in or underwrite securities; (v)
offer securities in exchange for Titling Trust Assets (other than UTI
Certificates and SUBI Certificates); (vi) repurchase or otherwise reacquire any
UTI Certificate or SUBI Certificate except as permitted by or in connection with
any Securitized Financing; or (vii) grant any security interest in or lien upon
any Titling Trust Assets.
(c) At the direction of the UTI Beneficiary or the Servicer and at the
expense of the [Servicer], the Titling Trustee shall: (i) apply for and maintain
(or cause to be applied for and maintained) all licenses, permits and
authorizations necessary and appropriate for the Titling Trust or the Titling
Trustee in carrying out the terms of this Agreement (including receiving
assignments of Contracts and causing Certificates of Title to reflect the
Titling Trust, the Titling Trustee on behalf of the Titling Trust, as the owner
of the Leased Vehicles) in each jurisdiction that the UTI Beneficiary or the
Servicer reasonably deems appropriate; (ii) file (or cause to be filed) all
notices, reports and other required filings in each jurisdiction that the UTI
Beneficiary or the Servicer reasonably deems appropriate; (iii) file (or cause
to be filed) in each jurisdiction that the UTI
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Beneficiary or the Servicer reasonably deems appropriate applications for
Certificates of Title as are necessary and appropriate so as to cause the
Titling Trust or the Titling Trustee , on behalf of the Titling Trust, to be
recorded as the holder of legal title of record of the Leased Vehicles and to
execute and deliver to each Dealer a power of attorney in order to allow such
Dealers to so record the Titling Trust or the Titling Trustee, on behalf of
the Titling Trust, as the holder of legal title to such Leased Vehicles; (iv)
to the extent that the UTI Beneficiary or the Servicer deems it necessary or
useful to have a lien recorded on Certificates of Title, file (or cause to be
filed) in each jurisdiction that the UTI Beneficiary or the Servicer
reasonably deems appropriate, such applications as are necessary to record
upon each of the Certificates of Title an Administrative Lien in favor of an
Administrative Lienholder; (v) be, or cause the Titling Trust to be, the
assignee of the original Dealer/Obligee with respect to the Contracts; and
(vi) pay or cause to be paid all applicable taxes and fees properly due and
owing in connection with its activities.
(d) The Titling Trustee, or the Trust Agent on its behalf, shall establish
accounts and receive, maintain, invest and disburse funds in accordance with
Articles V and VII hereof and the SUBI Supplements.
(e) Neither any Beneficiary nor the Servicer shall direct the Titling
Trustee or the Trust Agent to take any action that (i) is inconsistent with the
purposes of the Titling Trust as set forth in Section 2.04 or (ii) would result
in the treatment of the Titling Trust or any SUBI Sub-Trust as an entity that is
taxable as an "association" for federal income tax purposes.
SECTION 6.02 DUTY OF CARE.
(a) In carrying out their duties hereunder, the Titling Trustee and the
Trust Agent each shall exercise the rights and powers vested in it only as set
forth in this agreement. No provision of this Agreement shall be construed to
relieve the Titling Trustee or the Trust Agent from liability for their own
negligent actions, negligent failure to act, bad faith or willful misfeasance or
similar act or omission; provided, however, that:
(i) neither the Titling Trustee nor the Trust Agent shall be
personally liable for any action taken, suffered or omitted by it or any
error of judgment, in each case made in good faith by any officer of, or
any other employee of the Corporate Trust Office of, the Titling Trustee or
any Trust Agent, including any the president, vice-president, assistant
vice-president, trust officer, corporate secretary or assistant corporate
secretary or any other officer of the Titling Trustee or such Trust Agent
customarily performing functions similar to those performed by such
officers or to whom any corporate trust matter is referred because of such
Person's knowledge of or familiarity with the particular subject, unless it
shall be proved that the Titling Trustee or Trust Agent was negligent or
acted with willful misfeasance in performing its duties in accordance with
the terms of this Agreement; and
(ii) neither the Titling Trustee nor the Trust Agent shall be
personally liable with respect to any action taken, suffered or omitted to
be taken in good faith in accordance with
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the express direction of the UTI Beneficiary (to the extent relating to the
Undivided Trust Interest) or the holder or pledgee of a SUBI Certificate
that is not the Titling Trustee or a trust agent of the Titling Trustee in
connection with a Securitized Financing (to the extent relating to the SUBI
evidenced thereby) relating to the exercise of any trust, power or
authority conferred upon the Titling Trustee under this Agreement.
(b) Notwithstanding subsection (a) above, the Titling Trustee shall not be
required to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties under this Agreement, or in the exercise
of any of its rights or powers, if there shall be reasonable grounds for
believing that the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it, and none of the provisions
contained in this Agreement shall in any event require the Titling Trustee to
perform, or be responsible for the manner of performance of, any of the
obligations of a Servicer hereunder or under any related SUBI Servicing
Supplement except during such time, if any, as the Titling Trustee shall be
successor to, and be vested with the rights, duties, powers and privileges of,
any Servicer in accordance with the terms of this Agreement or any related SUBI
Servicing Supplement.
(c) Except for actions expressly authorized by this Agreement, a SUBI
Supplement, a UTI Supplement, or an amendment thereto, the Titling Trustee shall
take no action as to which the Titling Trustee has been notified by a
Beneficiary, or has actual knowledge, that such action would impair the
beneficial interests in the Titling Trust, would impair the value of any Titling
Trust Asset or would adversely affect the then outstanding credit rating issued
by a Rating Agency with respect to any class of securities issued in a
Securitized Financing.
(d) All information obtained by the Titling Trustee regarding the
administration of the Titling Trust, whether upon the exercise of its rights
under this Agreement or otherwise, shall be maintained by the Titling Trustee in
confidence and shall not be disclosed to any other Person other than to the
Trust Agent or an appropriate Beneficiary unless such disclosure is required by
any applicable law or regulation or pursuant to subpoena, or such information is
already otherwise publicly available.
SECTION 6.03 CERTAIN MATTERS AFFECTING THE TITLING TRUSTEE.
Except as otherwise provided in this Agreement:
(a) The Titling Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, officer's certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been signed or presented by
an authorized signatory of the relevant party. In particular, but without
limitation, whenever in this Agreement it is provided that the Titling Trustee
shall receive or may rely on the instructions or directions of a Beneficiary in
connection with a Securitized Financing, any written instruction or direction
purporting to bear the signature of any officer or authorized signatory of the
Beneficiary,
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or the holder or pledgee of a UTI Certificate or a SUBI Certificate in
connection with a Securitized Financing reasonably believed by it to be
genuine may be deemed by the Titling Trustee to have been signed or presented
by the proper party.
(b) The Titling Trustee may consult with counsel, and any written opinion
of counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it under this Agreement in good faith
and in accordance with such opinion of counsel.
(c) The Titling Trustee shall be under no obligation to exercise any of
the discretionary rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or in relation
to this Agreement, at the request, order or direction of a Beneficiary in
connection with a Securitized Financing or any Beneficiary of the Titling Trust
pursuant to the provisions of this Agreement, unless such requesting Person(s)
shall have offered to the Titling Trustee reasonable security or indemnity
against the Liabilities that may be incurred therein or thereby.
(d) The Titling Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by a Beneficiary;
provided, however, that if the payment within a reasonable time to the Titling
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Titling Trustee, not
reasonably assured to the Titling Trustee by the security afforded to it by the
terms of this Agreement or any SUBI Supplement, the Titling Trustee may require
reasonable indemnity against such costs, expenses or liabilities as a condition
to so proceeding; the reasonable expense of every such examination shall be paid
by the Person(s) requesting such examination or, if paid by the Titling Trustee,
shall be reimbursed as a Titling Trust expense upon demand.
(e) The Titling Trustee may execute any of the trusts or powers under this
Agreement or perform any duties under this Agreement either directly or by or
through agents or attorneys or one or more custodians and shall not be liable
for the negligence or willful misconduct of such agents or attorneys appointed
with due care. By way of illustration and not in limitation of the foregoing,
the Titling Trustee may from time to time enter into one or more Trust Agency
Agreements with such Trust Agents, including any Affiliate of the Titling
Trustee, as are by experience and expertise qualified to act in a trustee
capacity and otherwise acceptable to the UTI Beneficiary. Notwithstanding the
foregoing, the Titling Trustee shall replace any Trust Agent if (i) in the good
faith judgment of the UTI Beneficiary, the compensation or level of service of
such Trust Agent shall no longer be reasonably competitive with those of any
alternative agent reasonably proposed by the UTI Beneficiary, or (ii) if the
Trust Agent has materially breached its obligations under the Trust Agency
Agreement, the UTI Beneficiary or a Beneficiary in connection with a Securitized
Financing has given written notice to the Titling Trustee and the Trust Agent of
such breach, and the Trust Agent has not cured such breach in all material
respects within 30 Business Days thereafter. Such Trust Agency Agreement shall
specify the duties, powers, liabilities,
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obligations and compensation of such Trust Agent(s) to carry out on behalf of
the Titling Trustee any or all of its obligations as Titling Trustee of the
Titling Trust arising under this Agreement or otherwise and shall contain a
non-petition covenant substantially identical to that set forth in Section
6.14, provided, however, that nothing contained in any Trust Agency Agreement
shall excuse, limit or otherwise affect any power, duty, obligation,
liability or compensation otherwise applicable to the Titling Trustee
hereunder. The Titling Trustee hereby engages First Bank National
Association as its initial Trust Agent, and First Bank National Association
by its signature hereto accepts such engagement, with all provisions of this
Section 6.03(e) relating to Trust Agents constituting a Trust Agency
Agreement between First Bank National Association and the Titling Trustee,
subject to any amendment or supplement thereto between such parties not
inconsistent herewith. First Bank National Association shall carry out as
Trust Agent each and every obligation of the Titling Trustee hereunder and
under any SUBI Supplement and is hereby delegated by the Titling Trustee all
power and authority delegable by the Titling Trustee hereunder in order
better to be able to carry out its duties as Trust Agent.
SECTION 6.04 TITLING TRUSTEE NOT LIABLE FOR CERTIFICATES OR LOSSES.
The Titling Trustee shall have no obligation to perform any of the duties
of the Grantor or the Servicer unless explicitly set forth herein or in any SUBI
Supplement or related SUBI Servicing Supplement. The Titling Trustee shall at
no time have any responsibility or liability for or with respect to the (a)
legality, validity and enforceability of any security interest in any Trust
Asset; (b) the perfection or priority of such a security interest or the
maintenance of any such perfection and priority; (c) the efficacy of the Titling
Trust or its ability to generate the payments to be distributed to any
Beneficiary or its permitted assignee(s) under this Agreement, including the
existence, condition, location and ownership of any Trust Asset; (d) the
existence and enforceability of any Insurance Policy; (e) the existence and
contents of any Contract or any computer or other record thereof; (f) the
validity of the assignment of any Trust Asset to the Titling Trustee or of any
intervening assignment; (g) the completeness of any Contract; (h) the
performance or enforcement of any Contract; (i) the compliance by the Grantor or
any Servicer with any covenant or the breach by the Grantor or any Servicer of
any warranty or representation in any document and the accuracy of any such
warranty or representation prior to the Titling Trustee's receipt of notice or
other discovery of any noncompliance therewith or any breach thereof; (j) any
investment of monies by any Servicer or any loss resulting therefrom (it being
understood that the Titling Trustee shall remain responsible for any Titling
Trust Assets that it may hold); (k) the acts or omissions of any Dealer or any
other Person, the Grantor, any Servicer or any obligor under, or in connection
with the origination of, any Contract; (1) any action of any Servicer taken in
the name of the Titling Trustee; or (m) any action by the Titling Trustee taken
at the instruction of any Servicer; provided, however, that the foregoing shall
not relieve the Titling Trustee of its obligation to perform its duties under
this Agreement. Except with respect to a claim based on the Titling Trustee's
or any Trust Agent's willful misconduct, bad faith or negligence, (i) no
recourse shall be had against the institution serving as Titling Trustee in its
individual capacity for any claim based on any provision of this Agreement, a
SUBI Supplement or UTI Supplement or any amendment thereof, a SUBI Certificate
or any Trust Asset or assignment thereof and (ii) the Titling Trustee shall not
have any personal
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obligation, liability or duty whatsoever to the UTI Beneficiary or any other
Person with respect to any such claim, and any such claim shall be asserted
solely against the Titling Trust Assets (subject to Section 3.04) or any
indemnitor who shall furnish indemnity as provided in this Agreement. The
Titling Trustee shall not be accountable for the use or application by a
Beneficiary of any SUBI Certificate or of the proceeds of such SUBI
Certificate, or for the use or application of any funds properly paid to any
Servicer hereunder or pursuant to any SUBI Servicing Supplement.
SECTION 6.05 INDEMNITY OF TITLING TRUSTEE AND TRUST AGENTS.
The Titling Trustee and any Trust Agent shall be indemnified and held
harmless out of and to the extent of the Titling Trust Assets with respect to
any Claim arising out of or incurred in connection with (a) any of the Titling
Trust Assets (including any Claim relating to any Contract, Leased Vehicle,
consumer fraud, consumer leasing act violation, misrepresentation, deceptive and
unfair trade practice, and any other claim arising in connection with any
Contract, personal injury or property damage claim arising with respect to any
Leased Vehicle or any claim with respect to any tax arising with respect to any
Titling Trust Asset) or (b) the Titling Trustee's or Trust Agent's acceptance or
performance of the trusts and duties contained in this Agreement or any Trust
Agency Agreement, with any allocation of such indemnification among the Titling
Trust Assets to be made as provided for in Section 3.04; provided, however, that
neither the Titling Trustee nor any Trust Agent shall be indemnified or held
harmless out of the Titling Trust Assets as to any Claim for which the Servicer
shall be expressly and solely liable hereunder or pursuant to any SUBI Servicing
Supplement (unless the Servicer shall not have paid such claim upon the final
determination of its liability therefor), (ii) incurred by reason of the Titling
Trustee's or such Trust Agent's willful misconduct, bad faith or negligence or
(iii) incurred by reason of the Titling Trustee's breach of its representations,
warranties or covenants herein or in any Transaction Document. The
Beneficiaries will indemnify, defend and hold harmless the Titling Trustee and
any Trust Agent for any such Claims that the Titling Trust Assets are
insufficient to satisfy, with any allocation of such indemnification among the
Beneficiaries to be made as provided for in Section 3.04. Such indemnification
shall be irrespective of any other indemnification provided to the Beneficiaries
under any other documents relating to a Securitized Financing.
SECTION 6.06 TITLING TRUSTEE'S RIGHT NOT TO ACT.
Notwithstanding anything to the contrary contained herein, the Titling
Trustee shall have the right to decline to act in any particular manner
otherwise provided for herein if the Titling Trustee, being advised in writing
by counsel, determines that such action may not lawfully be taken, or if the
Titling Trustee in good faith shall determine that such action would be illegal
or subject it to personal liability or, in the case of a direction from one or
more Beneficiaries, be prejudicial to the rights of other Beneficiaries; and
provided further, that nothing in this Agreement shall impair the right of the
Titling Trustee to take any action deemed proper by the Titling Trustee that is
not inconsistent with such otherwise required acts.
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SECTION 6.07 QUALIFICATION OF TITLING TRUSTEE.
Except as otherwise provided in this Agreement, the Titling Trustee under
this Agreement shall at all times be (a) a corporation organized under the laws
of one of the fifty states of the United States, the District of Columbia or the
Commonwealth of Puerto Rico (which corporation shall not be the Grantor or any
Affiliate thereof), (b) qualified to do business as a trustee in each of the
Trust States and (c) otherwise acceptable to each Rating Agency rating any class
of securities at the request of the Grantor issued in connection with any
Securitized Financing and to any pledgee of a UTI Pledge (such acceptance by any
such pledgee not to be unreasonably withheld, delayed or conditioned).
SECTION 6.08 RESIGNATION OR REMOVAL OF TITLING TRUSTEE.
(a) The Titling Trustee may not at any time resign without the express
written consent of the Beneficiaries.
(b) If at any time the Titling Trustee shall cease to be qualified in
accordance with Section 6.07, or if any representation or warranty made by the
Titling Trustee pursuant to Section 6.12 or the Trust Agent pursuant to Section
6.15 shall prove to have been untrue in any material respect when made and shall
not have been cured within 45 days after any Beneficiary gives the Titling
Trustee written notice of such inaccuracy, but the Titling Trustee shall fail to
resign after written request therefor by any Beneficiary or pledgee of any UTI
Certificate or SUBI Certificate in connection with a Securitized Financing, or
if at any time the Titling Trustee shall be legally unable to act, or shall be
adjudged bankrupt or insolvent, or a receiver of the Titling Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Titling Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the UTI Beneficiary shall
remove the Titling Trustee. If the Titling Trustee is removed under the
authority of the immediately preceding sentence, the UTI Beneficiary shall
promptly appoint a successor Titling Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Titling
Trustee so removed and one copy to the successor Titling Trustee, together with
payment of all fees owed to the outgoing Titling Trustee.
(c) Any resignation or removal of the Titling Trustee and appointment of a
successor Titling Trustee pursuant to any of the provisions of this section
shall not become effective until acceptance of appointment by the successor
Titling Trustee.
SECTION 6.09 SUCCESSOR TITLING TRUSTEE.
Any successor Titling Trustee appointed as provided in Section 6.08 shall
execute, acknowledge and deliver to the UTI Beneficiary, the Servicer and to its
predecessor Titling Trustee an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Titling
Trustee shall become effective and such successor Titling Trustee, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers,
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duties and obligations of the Titling Trustee under this Agreement, with like
effect as if originally named as Titling Trustee. The predecessor Titling
Trustee shall deliver to the successor Titling Trustee all documents and
statements held by it under this Agreement, and the UTI Beneficiary and the
predecessor Titling Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor Titling Trustee all such rights,
powers, duties and obligations. No successor Titling Trustee shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor Titling Trustee shall be eligible under the provisions of
Section 6.07. Upon acceptance of appointment by a successor Titling Trustee
as provided in this Section, the UTI Beneficiary shall mail notice of the
successor of such Titling Trustee under this Agreement to each pledgee or
other Beneficiary of a UTI Certificate or a SUBI Certificate. If the UTI
Beneficiary fails to mail such notice within ten days after acceptance of
appointment by the successor Titling Trustee, the successor Titling Trustee
shall cause such notice to be mailed at the expense of the UTI Beneficiary.
SECTION 6.10 MERGER OR CONSOLIDATION OF TITLING TRUSTEE.
The Titling Trustee shall not merge or consolidate with, or sell all or any
substantial part of its assets to any other Person, without the express written
consent of the UTI Beneficiary. Any such corporation (i) into which the Titling
Trustee may be merged or consolidated, (ii) which may result from any merger,
conversion, or consolidation to which the Titling Trustee shall be a party, or
(iii) which may succeed to the corporate business of the Titling Trustee, which
corporation executes an agreement of assumption to perform every obligation of
the Titling Trustee under this Agreement, shall be the successor of the Titling
Trustee hereunder, provided such corporation shall be eligible pursuant to
Section 6.07, without the execution or filing of any other instrument or any
further act on the part of any of the parties hereto other than the written
consent of the UTI Beneficiary. The Titling Trustee shall give reasonable
written notice to each SUBI Beneficiary and each Rating Agency of any such
merger or consolidation.
SECTION 6.11 APPOINTMENT OF CO-TITLING TRUSTEE, SEPARATE TITLING TRUSTEE,
OR NOMINEE.
(a) Notwithstanding any other provisions of this Agreement, if at any time
the Titling Trustee determines that it is in the best interests of the Titling
Trust to take any action for the purpose of meeting any legal requirements of
any jurisdiction in which any Titling Trust Asset may at the time be located or
within which such Titling Trust Asset is to be acquired or for any other purpose
as so determined by the Titling Trustee, the Beneficiary of the Sub-Trust to
which such Trust Asset is allocated and the Titling Trustee, acting jointly,
shall have the power to execute and deliver all instruments to appoint one or
more Persons approved by the Titling Trustee and such Beneficiary to act as co-
trustee, jointly with the Titling Trustee, or as a separate trustee or nominee
holder of legal title, of all or any part of such Titling Trust Assets, and to
vest in such Person, in such capacity and for the benefit of such Beneficiary
and its permitted assignee(s), such title to such Titling Trust Assets, or any
part thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as such Beneficiary and the Titling
Trustee may consider necessary or desirable. No co-trustee, separate trustee,
or nominee holder of legal title
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under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to Section 6.07, except that no co-trustee,
separate trustee or nominee holder of legal title under this Agreement may be
the UTI Beneficiary or any Affiliate thereof.
(b) Each separate trustee, co-trustee and nominee holder of legal title
shall, to the extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Titling Trustee shall be conferred upon and exercised or performed
by the Titling Trustee and such separate trustee, co-trustee or nominee
holder of legal title jointly (it being understood that such separate
trustee, co-trustee or nominee holder of legal title is not authorized to
act separately without the Titling Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed (whether as Titling Trustee under this
Agreement or as successor to any Servicer under this Agreement or any SUBI
Servicing Supplement), the Titling Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Titling Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee, co-trustee or
nominee holder of legal title, but solely at the direction of the Titling
Trustee;
(ii) no trustee or nominee holder of legal title under this
Agreement shall be personally liable by reason of any act or omission of
any other trustee or nominee holder of legal title under this Agreement;
and
(iii) the Beneficiaries and the Titling Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee,
co-trustee or nominee holder of legal title.
(c) Any notice, request or other writing given to the Titling Trustee
shall be deemed to have been given to each of the then separate trustees, co-
trustees and nominee holders of legal title, as effectively as if given to each
of them. Every instrument appointing any separate trustee, co-trustee or other
nominee holder of legal title shall refer to this Agreement and the conditions
of this Section. Each separate trustee, co-trustee and nominee holder of legal
title, upon its acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment, either jointly
with the Titling Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Titling Trustee. Each such instrument shall be
filed with the Titling Trustee and a copy thereof given to the Servicer and each
Beneficiary.
Any separate trustee, co-trustee or nominee holder of legal title may at
any time appoint the Titling Trustee its agent or attorney-in-fact with full
power and authority, to the extent not prohibited by law, to do any lawful act
under or in respect of this Agreement on its behalf and in its name. If
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any separate trustee, co-trustee or nominee holder of legal title shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts relating to this Agreement and the
Titling Trust Assets shall vest in and be exercised by the Titling Trustee,
to the extent permitted by law, without the appointment of a new or successor
trustee. Notwithstanding anything to the contrary in this Agreement, the
appointment of any separate trustee, co-trustee or nominee holder of legal
title shall not relieve the Titling Trustee of its obligations and duties
under this Agreement.
SECTION 6.12 REPRESENTATIONS, WARRANTIES AND COVENANTS OF TITLING
TRUSTEE.
The Titling Trustee hereby represents, warrants and covenants for the
benefit of the Grantor, each Beneficiary and each pledgee of a UTI Certificate
or SUBI Certificate:
(a) ORGANIZATION AND GOOD STANDING. The Titling Trustee is a corporation,
duly organized, validly existing and in good standing under the law of the State
of Delaware and is, or promptly will be, qualified to do business as a foreign
corporation and is, or promptly will be, in good standing in each state that is
a Trust State as of the date of this Agreement. The Titling Trustee shall
promptly take or cause to be taken all such actions and execute and file or
cause to be executed and filed all such instruments and documents, the cost of
which shall be a Titling Trust Expense, as may reasonably be required in order
for the Titling Trustee to qualify to do business and be in good standing in
each other State identified in writing from time to time by the Grantor or the
UTI Beneficiary.
(b) POWER AND AUTHORITY. The Titling Trustee has full power, authority
and right to execute and deliver this Agreement, and has, or promptly will have,
full power and authority to perform its obligations hereunder in each state that
is a Trust State as of the date of this Agreement, and has taken all necessary
action to authorize the execution and delivery of this Agreement, and has taken,
or promptly will take, all necessary action to authorize performance by it of
this Agreement in each state that is a Trust State as of the date of this
Agreement.
(c) DUE EXECUTION. This Agreement has been duly executed and delivered by
the Titling Trustee, and is a legal, valid and binding instrument enforceable
against the Titling Trustee in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(d) NO CONFLICT. To the Titling Trustee's actual knowledge, neither the
execution and delivery of this Agreement nor the consummation of the
transactions herein contemplated, nor compliance with the provisions hereof,
will conflict with or result in a breach of, or constitute a default (with
notice or passage of time or both) under any provision of any law, governmental
rule, regulation, judgment, decree or order binding on the Titling Trustee or
the articles of incorporation
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or bylaws of the Titling Trustee or any provision of any mortgage, indenture,
contract agreement or other instrument to which the Titling Trustee is a
party or by which it is bound.
(e) SINGLE PURPOSE. The Titling Trustee has not engaged, is not currently
engaged, and will not engage during the term of this Agreement in any other
activity other than serving as Titling Trustee and in such ancillary activities
as are necessary and proper in order to act as Titling Trustee in accordance
with this Agreement, any SUBI Supplement or UTI Supplement, and any amendment
thereto or any of the other documents relating to a Securitized Financing.
SECTION 6.13 TITLING TRUSTEE'S FEES AND EXPENSES.
The Titling Trustee shall be paid out of Titling Trust Assets in the UTI
Portfolio reasonable compensation (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust) and
reimbursement for all services rendered by it in the execution of the Titling
Trust and in the exercise and performance of any of the powers and duties under
this Agreement and the other documents relating to a Securitized Financing to
which it is a party, and as an expense of the Titling Trust, reimbursement of
all reasonable costs and expenses (including reasonable attorneys' fees and
expenses) of incorporation, qualification, periodic maintenance of its corporate
franchises and qualification, annual board of directors' meetings and all
necessary corporate filings, franchise taxes and fees.
SECTION 6.14 NO PETITION.
Each of the Titling Trustee and First Bank National Association, as Trust
Agent, covenants and agrees that prior to the date which is one year and one day
after the date upon which all obligations under each Securitized Financing has
been paid in full, it will not institute against, or join any other Person in
instituting against, TMCC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceedings under any federal or
state bankruptcy or similar law. This Section shall survive the termination of
this Agreement or the resignation or removal of the Titling Trustee under this
Agreement.
SECTION 6.15 STOCK OF TMTT, INC.
First Bank National Association hereby represents, warrants and covenants,
for the benefit of the Grantor, each Beneficiary and each pledgee of a UTI
Certificate or SUBI Certificate, as follows:
(a) OWNERSHIP OF STOCK. All of the issued and outstanding Titling Trustee
Stock is owned by First Bank National Association, free and clear of any lien,
encumbrance or any other restriction, agreement or commitment of any kind (other
than as provided for in this Agreement) that would in any way restrict First
Bank National Association's ability freely to transfer, convey and assign the
Titling Trustee Stock. All such Titling Trustee Stock currently outstanding is
(and any Titling Trustee Stock that may be issued in the future will be) validly
issued, fully paid and nonassessable
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and has not been (and will not be) issued in violation of any preemptive,
first refusal or other subscription rights of any Person. There are no
outstanding options, warrants, conversion' rights, subscription rights,
preemptive rights, exchange rights or other rights, agreements or commitments
of any kind obligating First Bank National Association to sell any Titling
Trustee Stock or to issue any additional capital stock in the Titling Trustee
to any Person. First Bank National Association will not issue any additional
Titling Trustee Stock without the express written consent of the UTI
Beneficiary.
(b) TRANSFER OF TITLING TRUSTEE STOCK. For so long as First Bank National
Association is acting as a Trust Agent pursuant to this Agreement or any Trust
Agency Agreement, but subject to any applicable legal or regulatory
requirements, it will retain ownership of all of the Titling Trustee Stock. If
at any time (and for any reason, including First Bank National Association's
resignation or termination as Trust Agent or the termination of the Titling
Trust) First Bank National Association either is no longer acting as a Trust
Agent, is no longer able, because of legal or regulatory changes, to own the
Titling Trustee Stock, or the Titling Trustee would have to be removed pursuant
to Section 6.08 because of its being owned by First Bank National Association,
First Bank National Association will (i) notify the UTI Beneficiary of such
event and (ii) sell to the UTI Beneficiary's designee (who shall not be the UTI
Beneficiary or any Affiliate thereof), at the UTI Beneficiary's option, without
recourse except with respect to the representations, warranties and covenants of
the Titling Trustee and the Trust Agent contained herein, all of the Titling
Trustee Stock for the sum of Ten Dollars ($10). The UTI Beneficiary's designee
shall have sixty (60) days from the date of receipt of such notice in which to
exercise such option and to consummate such acquisition, during which time First
Bank National Association shall refrain from offering for sale or selling any
Titling Trustee Stock to any Person other than the UTI Beneficiary's designee.
If the UTI Beneficiary's designee shall not consummate such acquisition within
such period, First Bank National Association shall be free to offer for sale or
sell to any Person any or all of the Titling Trustee Stock or to dissolve the
Titling Trustee; provided, however, that a successor Titling Trustee shall have
been appointed in accordance herewith. If the UTI Beneficiary's designee shall
timely exercise its option to acquire the Titling Trustee Stock, First Bank
National Association shall promptly tender all such Titling Trustee Stock to
such buyer at a time and place determined by the buyer, duly endorsed in blank
or with duly endorsed stock powers attached, against payment of the purchase
price. The UTI Beneficiary shall pay any transfer or similar taxes arising from
a transfer of the Titling Trustee Stock as contemplated herein. If no designee
of the UTI Beneficiary shall be willing to purchase the Titling Trustee Stock as
described above, then the Titling Trustee and each Beneficiary shall have the
right to petition a court of competent jurisdiction to appoint a successor
trustee meeting the requirements for a successor trustee set forth herein.
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ARTICLE VII
ACCOUNTS; CASH FLOWS; PERMITTED INVESTMENTS
SECTION 7.01 ACCOUNTS.
(a) Unless otherwise specified in the UTI Supplement, the Titling
Trustee will establish and maintain with respect to the Undivided Trust
Interest a Lease Funding Account satisfying the definition of an Eligible
Account. The Lease Funding Account shall be established and maintained in
the name of the Titling Trustee on behalf of the UTI Sub-Trust. None of the
Grantor, any Beneficiary or, subject to Section 7.02(c), the holder or
pledgee of any UTI Certificate or SUBI Certificate shall have any right to
draw on the Lease Funding Account without the express written consent of the
Titling Trustee; provided, however, that the Titling Trustee, with the
express written consent of the related UTI Beneficiary, shall so consent to
the extent provided for in the documentation relating to any Securitized
Financing of such UTI Certificate or SUBI Certificate. The Lease Funding
Account shall only contain funds relating to UTI Assets.
(b) For so long as the Monthly Remittance Conditions are satisfied, the
Servicer shall not be required to remit to the Lease Funding Account
collections in respect of any Titling Trust Assets allocable to the Lease
Funding Account on a daily basis but shall be entitled to retain such
collections, without segregation from its other funds, until the Business Day
preceding the date identified as a "Distribution Date" in the related UTI
Supplement, at which time the Servicer shall so remit all such collections in
immediately available funds; provided that (i) investments on which the Trust
Agent is the obligor (including repurchase agreements as to which it, in its
commercial capacity, is liable as principal), may mature on the Distribution
Date, and (ii) investments made of Principal Collections or Interest
Collections on deposit in a SUBI Collection Account may mature on such dates
as specified by the Titling Trustee at the Servicer's direction so as to
maintain the availability of sufficient cash to make the payments described
in any SUBI Supplement or related SUBI Servicing Supplement.
Notwithstanding the foregoing, commencing with the first day of the
first period identified as a "Collection Period" in the related UTI
Supplement or SUBI Supplement, as the case may be, that begins at least two
Business Days after the day on which any Monthly Remittance Conditions cease
to be satisfied and for so long as the Monthly Remittance Conditions are not
satisfied, all collections in respect of the UTI Assets or the related SUBI
Assets, as applicable, then held by the Servicer shall be immediately so
deposited and all such future collections shall be so remitted by the
Servicer to the appropriate account in accordance with this Agreement or the
related SUBI Servicing Supplement, as applicable, on a daily basis within two
Business Days after receipt thereof. Each SUBI Servicing Supplement shall
also provide (i) the terms on which any other funds received by any Servicer,
including funds transferred from any of the SUBI Collection Accounts to the
extent of (1) the net investment value (as recorded on the books of the
Titling Trust) of any Contracts and Leased Vehicles allocated to a SUBI in a
Trust Asset Transfer, (2) reimbursement of any Servicer Advances provided for
in any Securitized Financing with respect to such SUBI or (3) funding for
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such SUBI's share of any allocable Titling Trust Expenses will be deposited
by the Servicer into the Lease Funding Account (or transferred directly to
the Servicer, Grantor or UTI Beneficiary directly, as appropriate) and (ii)
whether and under what circumstances any other funds received by the Servicer
with respect to a SUBI Asset, including income with respect to any investment
made in any SUBI Account, shall be deposited by the Servicer into an
appropriate SUBI Account.
(c) Except as otherwise provided in Section 7.03, a UTI Supplement or a
SUBI Supplement, all Titling Trust Expenses shall be paid out of the Lease
Funding Account or from monies held by the Servicer and allocable thereto or
distributable in respect thereof, including: (i) any reimbursement due to the
Servicer for payments from its own operating accounts in order to fund (A)
amounts due to Dealers in payment for the assignment to the Titling Trustee
of Contracts and Leased Vehicles occurring prior to the Titling Trustee's
notice to the Servicer to cease acquiring Contracts and Leased Vehicles on
behalf of the Titling Trustee given pursuant to Section 7.02(c)(ii) and (B)
any other Advances made by the Servicer with the consent of the Titling
Trustee (to be given at the direction of the UTI Beneficiary or in accordance
with the terms of any Securitized Financing), with respect to any Contract or
Leased Vehicle, (ii) Servicer fees (and expenses, if any, not covered by the
Servicer fee under any SUBI Servicing Supplement), (iii) Titling Trustee fees
and expenses and (iv) other Titling Trust Expenses, if any; provided,
however, that, to the extent that any Liability of the Titling Trustee or any
Beneficiary is incurred in respect of Affected Trust Assets allocated to one
or more Sub-Trusts, then such Liability shall be borne in accordance with
Section 3.04, and the Titling Trustee, at the direction of the Servicer,
shall transfer periodically from the related SUBI Collection Accounts to the
Lease Funding Account each Sub-Trust's appropriate share of such aggregate
Liabilities of the Titling Trust.
Prior to the funding of the Lease Funding Account from collections on
outstanding Contracts or otherwise, the UTI Beneficiary will advance monies
to fund the origination of Contracts as described in the UTI Supplement. The
UTI Supplement or any SUBI Supplement may provide that all or any portion of
the collections on the related UTI Assets or SUBI Assets will be deposited in
the Lease Funding Account or the related SUBI Lease Funding Account for a
period of time specified therein. Prior to the creation of a SUBI, the
expenses of the Titling Trust will be advanced by the UTI Beneficiary or
funded from collections on the Contracts in the UTI Portfolio, as more fully
described in the UTI Supplement. Thereafter, during any period during which
there are no monies on deposit in the Lease Funding Account, expenses of the
Titling Trust will be advanced by the UTI Beneficiary as and to the extent
provided in the UTI Supplement and each SUBI Supplement.
(d) All or a portion of the funds deposited into the Lease Funding
Account shall be separately invested by the Titling Trustee from time to time
at the direction of the UTI Beneficiary or its designee in any of the
Permitted Investments; provided, however, that should the terms of any
Securitized Financing impose any more stringent limits on the types or tenors
of permitted investments in the Lease Funding Account than are provided for
in the definition of Permitted Investments, such limits shall apply thereto
for the period specified in the related Transaction Documents. The Servicer
is hereby made the designee of the UTI Beneficiary for such purpose. All
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income, gain or loss from investment of monies in the Lease Funding Account
shall, unless otherwise specified in the Transaction Documents with respect
to any Securitized Financing, be for the account of the UTI Beneficiary;
provided that each such investment shall be made in the name of the Titling
Trustee, its nominee or its Financial Intermediary. If at any time the
relevant Beneficiary or its designee shall not have given the Titling Trustee
a timely investment directive with respect to any account, the Titling
Trustee shall invest and reinvest any monies in such account(s) in a mutual
fund offered by the Trust Agent meeting the requirements of clause (i) of the
definition of Permitted Investments.
SECTION 7.02 RELATIONSHIP TO SECURITIZED FINANCINGS.
(a) All funds in each SUBI Collection Account (other than any DE
MINIMIS amount necessary to maintain the account), however derived, to the
extent not required to fund that SUBI's share of Trust Liabilities or to fund
any Trust Asset Transfer into that SUBI Sub-Trust as provided for in the
related SUBI Supplement, shall be reinvested or paid out in accordance with
the terms and provisions hereof or of such SUBI Supplement.
(b) A UTI Pledge shall be recognized by the Titling Trustee for
purposes of this Agreement only if the UTI Beneficiary shall have given the
Titling Trustee written notice of such UTI Pledge and the name and address of
the related pledgee. During any period in which the Titling Trustee has
neither received notice from any pledgee of a UTI Pledge nor otherwise
obtained actual knowledge to the effect that (i) there is any sum due with
respect to any Securitized Financing secured by a UTI Pledge not otherwise
timely paid by a UTI Beneficiary (after any applicable grace period), or (ii)
there is any outstanding and uncured other default by a UTI Beneficiary with
respect to any such Securitized Financing (after any applicable grace
period), the Titling Trustee, promptly upon receipt of a written demand
therefor accompanied by a determination by such UTI Beneficiary (or any
Servicer on its behalf) as to the amount of Excess Funds, shall pay out to
such UTI Beneficiary upon its request the Excess Funds so requested.
(c) During any period as to which the Titling Trustee either has
received notice from any pledgee of a UTI Pledge or otherwise has obtained
actual knowledge that either of the defaults described in Sections 7.02(b)(i)
and (ii) has occurred and is continuing, the Titling Trustee shall (i) not
create any new SUBI, (ii) direct each Servicer not to accept any further
assignments on behalf of the Titling Trustee of Contracts or Leased Vehicles
(other than as provided for in Sections 7.03 and 7.04), and (iii) distribute
to such pledgee of a UTI Pledge, on demand, all Excess Funds that would
otherwise be distributable to the UTI Beneficiary.
SECTION 7.03 SUBI LEASE FUNDING ACCOUNTS.
In the event that for any reason (a) (i) a different Servicer shall be
engaged by the Titling Trustee to manage one or more SUBI Portfolios, on the
one hand, and the UTI Portfolio, on the other hand, or (ii) circumstances
with respect to any Securitized Financing secured by a UTI Pledge are such
that (A) the Titling Trustee has given to any Servicer the notice provided
for in Section
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7.02(c)(ii) or (B) if there is any outstanding UTI Pledge, the Titling
Trustee is notified that a Trust Asset Transfer into one or more SUBI
Sub-Trusts would cause a borrowing base deficiency (as defined in the
documents related to such Securitized Financing) to occur in any Securitized
Financing secured by a UTI Pledge, and (b) at such time the Titling Trustee,
acting pursuant to any SUBI Supplement or SUBI Servicing Supplement, would
otherwise be causing its Servicer to effect Trust Asset Transfers from the
UTI Sub-Trust into one or more SUBI Sub-Trusts: (1) the Titling Trustee shall
establish and maintain in its name for each SUBI a separate SUBI Lease
Funding Account, (2) to the extent that the Titling Trustee would, but for
the conditions set forth in the foregoing clauses (a) and (b), cause the
transfer from any SUBI Collection Account to the Lease Funding Account in
connection with any Trust Asset Transfer, the Titling Trustee shall instead
cause the transfer of such funds from that SUBI Collection Account to the
SUBI Lease Funding Account established with respect to that SUBI, (3) the
Titling Trustee shall direct the Servicer then servicing the respective SUBI
Portfolio to acquire on behalf of the Titling Trust, for the account of that
SUBI Sub-Trust rather than for the UTI Sub-Trust, Contracts and Leased
Vehicles from Dealers, and (4) the Titling Trustee shall apply any such funds
in any such SUBI Lease Funding Account directly to reimburse the Servicer
then servicing that SUBI Portfolio for any payments made by it to Dealers in
respect of such Contracts and Leased Vehicles. In the event that Contracts
and Leased Vehicles are being acquired by any Servicer(s) on behalf of the
Titling Trustee (on behalf of the Titling Trust) both with respect to the UTI
Sub-Trust and any SUBI Sub-Trust simultaneously, the Titling Trustee shall
first allocate all such Contracts and Leased Vehicles to the SUBI Sub-Trusts
until funds available for such purpose in any SUBI Lease Funding Account
shall be exhausted and then shall allocate all remaining Contracts and Leased
Vehicles to the UTI Sub-Trust.
SECTION 7.04 REBALANCING AFTER THIRD PARTY CLAIM.
To the extent that a third party claim against Titling Trust Assets is
satisfied out of Titling Trust Assets in proportions other than as provided
in Section 3.04, then, notwithstanding anything to the contrary contained
herein, the Titling Trustee shall promptly identify and reallocate (or cause
the Servicer to identify and reallocate) the remaining Titling Trust Assets
among the UTI Sub-Trust and each of the SUBI Sub-Trusts so that each shall
bear the expense of the third party claim as nearly as possible as if the
burden of such claim had been allocated as provided in Section 3.04.
ARTICLE VIII
TERMINATION
SECTION 8.01 TERMINATION OF THE TITLING TRUST.
(a) This Agreement and the Titling Trust shall terminate upon the last
to occur of (i) the payment to the Beneficiaries and each permitted
purchaser, assignee and pledgee thereof of interests in the Titling Trust of
all amounts and obligations required to be paid to them, and the expiration
or termination of all Securitized Financings by their respective terms, and
(ii) the maturity or liquidation and the disposition of all Titling Trust
Assets and the disposition to the Beneficiaries or
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<PAGE>
their permitted purchasers, assignees or pledgees of all net proceeds
thereof. Notwithstanding the foregoing, in no event shall the trust created
by this Agreement continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
ambassador of the United States to the Court of St. James, living on the date
of this Agreement.
(b) Upon the termination of the Titling Trust, (i) after satisfaction
of all creditors, if any, of the Titling Trust, the Titling Trustee shall
distribute the Titling Trust Assets to the Beneficiaries in accordance with
this Agreement and the outstanding UTI Supplements and SUBI Supplements; (ii)
the Beneficiaries to whom such Titling Trust Assets are distributed shall
retitle or cause to be retitled any Leased Vehicles so distributed to those
Beneficiaries and shall pay or cause to be paid all applicable titling and
registration fees and taxes; and (iii) the Titling Trustee shall file or
cause to be filed a certificate of cancellation with the Delaware Secretary
of State pursuant to Section 3810(c) of the Delaware Act.
SECTION 8.02 TERMINATION AT THE OPTION OF BENEFICIARY.
Notwithstanding the provisions of Section 8.01, the Titling Trust shall be
deemed terminated, solely with respect to the Titling Trust Assets allocated
to the related Sub-Trust, and not as to any of the Titling Trust Assets
allocated to any other Sub-Trust, upon the written direction to the Titling
Trustee by any Beneficiary with respect to such Sub-Trust to revoke and
terminate such portion of the Titling Trust. Upon such termination of the
Titling Trust with respect to such a Sub-Trust, the Titling Trustee shall
distribute to the Beneficiary for such Sub-Trust all Titling Trust Assets
allocated to such Sub-Trust and shall cause the Certificates of Title to the
Leased Vehicles allocated to such Sub-Trust to be issued in the name of, or
at the direction of, such Beneficiaries. The Beneficiary to whom such
Titling Trust Assets are distributed shall then pay or cause to be paid all
applicable titling and registration fees and taxes.
SECTION 8.03 TITLING TRUSTEE ACTIONS UPON TERMINATION. Upon
termination of this Agreement, the Titling Trust and/or one or more
Sub-Trusts pursuant to Section 8.01 or 8.02, the Titling Trustee shall take
such action as may be requested by any Beneficiary to transfer the related
Titling Trust Assets to such Beneficiary or such other Person as such
Beneficiary may designate, including the execution of the assignment forms on
the Certificates of Title and any other instruments of transfer and
assignment with respect to the Leased Vehicles.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.01 AMENDMENT. Prior to the first Securitized Financing,
this Agreement may be amended by written agreement between the UTI
Beneficiary and the Titling Trustee to correct or supplement any provision in
this Agreement, to cure any ambiguity, and to add, change or eliminate any
other provision of this Agreement with respect to matters or questions
arising under this Agreement. After the first Securitized Financing, any such
amendment shall also require such additional approvals, if any, as are
required under documents relating to each Securitized Financing.
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<PAGE>
SECTION 9.02 GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the internal laws of the State
of California, without reference to its conflicts of laws provisions, and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
SECTION 9.03 NOTICES. All demands, notices and communications under
this Agreement shall be in writing and shall be delivered or mailed by
registered or certified first class United States mail, postage prepaid,
return receipt requested; hand delivery; prepaid courier service; or
telecopier, and addressed in each case as follows: (a) if to the Grantor or
UTI Beneficiary, at Toyota Motor Credit Corporation, 19001 S. Western Avenue,
Torrance, California 90509, Attention: Corporate Treasury Manager (Telecopier
No. (310) 787-6194), (b) if to the Titling Trustee, at TMTT, Inc., care of
First Bank National Association, 111 East Wacker Drive, Suite 3000, Chicago,
Illinois 60601, Attention: Corporate Trust Office (at Telecopier No. (312)
228-9401), and (c) if to the Trust Agent, First Bank National Association,
111 East Wacker Drive, Suite 3000, Chicago, Illinois 60601, Attention:
Corporate Trust Office (at Telecopier No. (312) 228-9401) or at such other
address as shall be designated by the Grantor or Beneficiary, the Titling
Trustee or the Trust Agent in written notice to the other parties hereto.
Delivery shall occur only upon actual receipt or rejected tender of such
communication by an officer of the recipient entitled to received such
notices located at the address of such recipient for notices hereunder. A
copy of all notices to the Titling Trustee shall be delivered to First Bank
National Association for so long as it is a Trust Agent.
SECTION 9.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of any
Certificates or the rights of the holders thereof.
SECTION 9.05 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which so executed and delivered shall be
deemed to be an original, but all of which counterparts shall together
constitute but one and the same instrument.
SECTION 9.06 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained in this Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their permitted successors and assigns and the
Beneficiaries and their respective permitted successors and assigns. Any
request, notice, direction, consent, waiver or other instrument or action by
a Beneficiary shall bind the successors and assigns of such Beneficiary.
SECTION 9.07 TABLE OF CONTENTS AND HEADINGS. The Table of Contents and
Article and Section headings are for convenience of reference only and shall
not define or limit any of the terms or provisions hereof.
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<PAGE>
IN WITNESS WHEREOF, TMCC, the Titling Trustee and, solely for the
limited purposes set forth herein, First Bank National Association, as Trust
Agent, have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
TOYOTA MOTOR CREDIT CORPORATION, as Grantor,
Initial Beneficiary and Servicer
By:
-----------------------------------------
Name:
Title:
TMTT, Inc., as Titling Trustee
By:
-----------------------------------------
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION,
as Trust Agent
By:
-----------------------------------------
Name:
Title:
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<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST OF
TOYOTA LEASE TRUST
THIS Certificate of Trust of Toyota Lease Trust (the "Titling Trust"),
dated as of September 24, 1996, is being duly executed and filed by First
Bank National Association, a national banking association, as Trust Agent,
and TMTT, Inc., a Delaware corporation, as trustee, to form a business trust
under the Delaware Business Trust Act (12 Del. Code Sections 3801 et seq.).
1. NAME. The name of the business trust formed hereby is Toyota
Lease Trust.
2. DELAWARE TRUSTEE. The name and business address of the
trustee of the Titling Trust in the State of Delaware is TMTT, Inc., 1209
Orange Street, Wilmington, New Castle County, Delaware.
3. SERIES TRUST. The Titling Trust shall be a series trust and the
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular series shall be enforceable
against the assets of such series only, and not against the assets of the
Titling Trust generally.
4. EFFECTIVE DATE. This Certificate of Trust shall be effective
upon filing.
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<PAGE>
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Titling Trust, have executed this Certificate of Trust as of the date
first-above written.
FIRST BANK NATIONAL ASSOCIATION,
As Trust Agent
By:
-----------------------------------------
Name:
Title:
TMTT, INC., as Titling Trustee
By:
-----------------------------------------
Name:
Title:
A-2
<PAGE>
EXHIBIT B
FORM OF UTI SUPPLEMENT
B-1
<PAGE>
EXHIBIT C
FORM OF SUBI SUPPLEMENT
C-1
<PAGE>
ANNEX OF DEFINITIONS
Unless otherwise specified in the agreement to which this Annex of
Definitions is attached, the following terms have the indicated meanings.
Terms defined herein but not directly or indirectly used or referenced in the
agreement to which this Annex of Definitions is attached shall not be deemed
to have any meaning or significance with respect to such agreement.
"ADDITIONAL LOSS CONTRACT" means, with respect to any SUBI Portfolio, a
Contract included in such SUBI Portfolio that has been sold or otherwise
disposed of to pay an Additional Loss Amount with respect to the related SUBI.
"ADMINISTRATIVE EXPENSE" means any reasonable administrative cost or
expense associated with any relevant Securitization Trust and the Titling
Trust, as the context indicates, including reasonable fees and expenses of
attorneys and accountants.
"ADMINISTRATIVE LIEN" means any first lien specified upon any Certificate
of Title as deemed necessary and useful by the Servicer or the UTI
Beneficiary to provide for delivery of title documentation to the Titling
Trustee or its designee.
"ADMINISTRATIVE LIENHOLDER" means the Person or Persons identified as
such from time to time to the Titling Trustee by the Servicer and in whose
name one or more Administrative Liens are specified on Certificates of Title.
"ADVANCE" if a Transaction Document specifies that Advances are to be
made, unless otherwise provided in such Transaction Document, means an
advance to be made by the Servicer on the date specified in such Transaction
Document in respect of the related SUBI Collection Period and with respect to
each outstanding Contract that is included in the related SUBI Portfolio as
to which the scheduled Monthly Payment is delinquent or as to which payments
have been deferred by the Servicer which deferrals have resulted in any
diminution of the amount of Collections received in connection therewith
relative to the originally scheduled Monthly Payments, each such advance to
be in an amount equal to the aggregate amount of the Monthly Payments due
thereon during such SUBI Collection Period but not received during such SUBI
Collection Period.
"AFFECTED TRUST ASSETS" means a discrete Titling Trust Asset or group of
Titling Trust Assets impacted by any Liability (including contract, tort or
tax claims relating to one or more specific Contracts or Leased Vehicles) as
described in Section 3.04 of the Titling Trust Agreement.
"AFFILIATE" means, as to any Person, any other Person that (i) directly
or indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any employee benefit plan) or (ii) is an officer or director
of such Person. A Person shall be deemed to be "controlled by" any other
Person if such
<PAGE>
other Person possesses, directly or indirectly, power (x) to vote 5% or more
of the securities (on a fully diluted basis) having ordinary voting power for
the election of directors or managing partners; or (y) to direct or cause the
direction of the management and policies of such Person whether by contract
or otherwise.
"AUTHORIZED NEWSPAPER" means a newspaper of general circulation in the
Borough of Manhattan, The City of New York, printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"BENEFICIARY" means the UTI Beneficiary or any holder of a UTI
Certificate or SUBI Certificate, including any trust formed with respect to a
Securitized Financing but excluding the Titling Trustee, any Trust Agent, or
any trustee or trust agent with respect to a Securitized Financing or UTI
Pledge.
"BOOKED RESIDUAL VALUE" means the stipulated fair market value of a
Leased Vehicle as of the Maturity Date of the related Contract, each as set
forth on the face of such Contract at the time of origination or, with
respect to a Contract for which the Maturity Date of such Contract has been
extended by the Servicer, the stipulated fair market value of the related
Leased Vehicle as of such extended Maturity Date.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other day
on which banking institutions in New York, New York, Chicago, Illinois or Los
Angeles, California are authorized or obligated by law, executive order or
governmental decree to be closed.
"CERTIFICATE OF TITLE" means a certificate of title or other evidence of
ownership of a Leased Vehicle issued by the Registrar of Titles in the
respective jurisdiction in which such Leased Vehicle is registered, which
Certificate of Title shall reflect as the owner of such Leased Vehicle
"Toyota Lease Trust", "TMTT, Inc., as Trustee of Toyota Lease Trust" or such
other similar designation as may be acceptable to any relevant Registrar of
Titles.
"CERTIFICATE OF TRUST" means the Certificate of Trust for the Titling
Trust required to be filed with the office of the Secretary of State of the
State of Delaware pursuant to Section 3810 of the Delaware Act, substantially
in the form set forth in the Titling Trust Agreement.
"CHARGED-OFF CONTRACT" means a Contract with respect to which (a) the
related Leased Vehicle has been repossessed and sold or otherwise disposed
of, or (b) the Contract has been written off by the Servicer in accordance
with the Credit and Collection Policy's provisions for writing off lease
contracts other than with respect to repossessions.
"CLAIMS" means any losses, liabilities and expenses (including reasonable
attorney's and other professional fees and expenses) incurred in connection
with reasonable collection efforts or the defense of any suit or action.
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<PAGE>
"CLASS" means all Certificates whose form is identical except for
variation in denomination, principal amount or owner.
"CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"CLOSING DATE" means, with respect to any Securitized Financing, the date
specified as such in the related Transaction Documents.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLECTION PERIOD" means, with respect to any Distribution Date, the
calendar month preceding such Distribution Date.
"COLLECTIONS" means with respect to any Collection Period, all net
collections received in respect of the Contracts and Leased Vehicles during
such Collection Period, including Monthly Payments (including Payments Ahead
that represent Monthly Payments due during such Collection Period),
Prepayments, Advances, Net Matured Leased Vehicle Proceeds, Net Repossessed
Vehicle Proceeds and other Net Liquidation Proceeds, less (i) amounts
representing Payments Ahead with respect to future Collection Periods, (ii)
amounts retained by or paid to the Servicer in respect of outstanding
Advances and (iii) Additional Loss Amounts in respect of such Collection
Period.
"COMMISSION" means the Securities and Exchange Commission, and any
successor thereto.
"CONTINGENT AND EXCESS LIABILITY INSURANCE POLICIES" means, collectively,
the contingent liability insurance policies maintained or to be maintained by
TMCC with third party insurers providing coverage for bodily injury and
property damage suffered by third persons caused by the operation of any
vehicle that is a Leased Vehicle, and each of the excess liability insurance
policies maintained or to be maintained by TMCC with third party insurers
providing excess insurance coverage as to such liabilities.
"CONTRACT" means any of the fixed rate retail closed-end lease contracts
(and all proceeds thereof) originated in connection with the lease of the
Leased Vehicles that are or were originated by Dealers pursuant to and in
conformity with Dealer Agreements between such Dealers and TMCC, the rights
to which have been assigned to the Titling Trust, or the Titling Trustee on
behalf of the Titling Trust, in accordance with such Dealer Agreements.
"CONTRACT DOCUMENTS" means, with respect to each Contract, (i) the fully
executed Contract, (ii) the related Certificate of Title (or the application
therefor if the Certificate of Title has not been
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<PAGE>
received), (iii) any written agreements modifying such Contract (including
any written extension thereof), (iv) all related credit applications, factory
invoices, Dealer worksheets, written records of certification of information
provided in the credit application and odometer statements required by
applicable law, (v) documents related to the provision of insurance and (vi)
all other documents relating to such Contract and retained by the Servicer.
"CONTRACT RECORD" means all data maintained by the Servicer (including,
without limitation, computerized records), together with all operating
software and appropriate documentation, relating directly to or maintained in
connection with the servicing of the Contracts.
"CORPORATE TRUST OFFICE" means, as of the date hereof, the office of the
Titling Trustee or of the Securitization Trustee, as indicated by the
context. Initially, the Corporate Trust Office of each of the Titling Trustee
and the Securitization Trustee is located at 111 East Wacker Drive, Suite
3000, Chicago, Illinois 60601, Attention: Corporate Trust Office. After the
date of the attached agreement, Corporate Trust Office will mean the
corporate trust office designated in writing to the Servicer and to the
Beneficiaries by the Titling Trustee, Securitization Trustee or any successor
thereto, as the case may be.
"CREDIT AND COLLECTION POLICY" means those credit and collection policies
and practices of the Servicer, as applied by the Servicer, with respect to
the origination and servicing of Contracts and related Leased Vehicles as
they may be amended, supplemented, or modified by the Servicer from time to
time with the consent of the UTI Beneficiary.
"CURRENT CONTRACT" means a Contract that is not a Charged-off Contract,
a Matured Contract, a Liquidated Contract or an Additional Loss Contract.
"DEALER" means a motor vehicle dealer, located in a State permitted by
the Origination Criteria, that has entered into a Dealer Agreement.
"DEALER AGREEMENT" means that certain Retail Motor Vehicle Lease
Agreement substantially in the form to be attached as an exhibit to the UTI
Supplement or in such other form as may be approved from time to time entered
into between the Titling Trust and a Dealer setting forth the respective
rights and obligations of the Titling Trust and the Dealer, acting as an
independent contractor, with respect to the Dealer's entering into Contracts.
"DELAWARE ACT" means the Delaware Business Trust Act 12 Del. Code,
Sections 3801 ET SEQ.
"DELAWARE PARTNERSHIP ACTS" means the Delaware Revised Uniform Limited
Partnership Act and the Delaware Uniform Partnership Act, in each case as
amended.
"DETERMINATION DATE" means, with respect to any Distribution Date, the
second Business Day prior to such Distribution Date.
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<PAGE>
"DISCOUNTED CONTRACT" means a Contract with Lease Rate lower than the
rate specified in the related SUBI Supplement.
"DISCOUNTED PRINCIPAL BALANCE" means (i) with respect to any Discounted
Contract, an amount equal to the present value of the sum of all remaining
Monthly Lease Payments on such Contract paid on a timely basis, plus the
Booked Residual Value of the related Leased Vehicle, calculated by
discounting such Monthly Lease Payments by the Discount Rate, and (ii) with
respect to any other Contract, its Outstanding Principal Balance at such time.
"DISCOUNT RATE" means the per annum rate specified in the applicable
SUBI Supplement.
"DISTRIBUTION DATE" means, with respect to the UTI and a Collection
Period, the twenty-fifth day of the following month, or if that day is not a
Business Day, the next Business Day, beginning with October 25, 1997.
"DTC" means The Depository Trust Company and its successors.
"ELIGIBLE ACCOUNT" means (i) an account maintained with a federal or
state chartered depository or trust institution, the short-term unsecured
debt obligations of which have the Required Rating, (ii) a segregated trust
account maintained with a depository or trust institution in its corporate
trust department or (iii) an account otherwise acceptable to each Rating
Agency without reduction or withdrawal of its rating of any related Rated
Certificates, as evidenced by a letter from each Rating Agency.
"ELIGIBLE CONTRACT" means a Contract as to which the following criteria
Contract is originated and assigned by the relevant Dealer to the Titling
Trust and, with respect to any Contract included or to be included in a
specific SUBI Portfolio, any additional criteria specified in the related
SUBI Supplement, are satisfied as of the date such Contract becomes an asset
of such SUBI Portfolio:
(a) that was originated (i) by a Dealer, (ii) in the ordinary course
of its retail business, (iii) pursuant to a Dealer Agreement (if
originated by a Dealer), and (iv) in compliance with the customary
underwriting standards employed by the Grantor in originating leases for
its own account;
(b) which Contract and the related Leased Vehicle are free of all
liens and other interests (including tax liens, mechanics liens and liens
that arise by operation of law, but excluding any Administrative Lien);
(c) that was originated in compliance with, and complies with, all
material applicable legal requirements, including, to the extent
applicable, the Federal Consumer Credit Protection Act (including the
Consumer Leasing Act), as amended, Regulation M of the Board of Governors
of the Federal Reserve System, as amended, all State leasing and
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consumer protection laws and all State and federal usury, fair credit
billing, fair credit reporting, equal credit opportunity, and fair debt
collection practices laws;
(d) as to which 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
originator of such Contract in connection with (i) the origination of
such Contract, (ii) the execution, delivery and performance by such
originator of such Contract and (iii) the acquisition by the Titling
Trust of such Contract and the related Leased Vehicle have been duly
obtained, effected or given and were in full force and effect as of such
date of creation or acquisition;
(e) that is the legal, valid and binding full-recourse payment
obligation of the Obligor thereunder, enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity);
(f) that, according to the records of the Grantor, is not subject to
any right of rescission, setoff, counterclaim or any other defense
(including defenses arising out of violations of usury laws) of the
Obligor thereunder to payment of the amounts due thereunder, and no such
right of rescission, setoff, counterclaim or other defense has been
asserted or threatened;
(g) as to which each of the originating Dealer, the Servicer and the
Titling Trust has satisfied all obligations required to be fulfilled on
its part;
(h) that is payable solely in United States dollars in the United
States;
(i) the Obligor of which is a Person located in one or more of the
States and is not the Grantor, the Transferor or any of their respective
Affiliates;
(j) that requires the Obligor thereunder to maintain in full force
and effect during the term of such Contract a public liability and a
comprehensive and collision physical damage Insurance Policy, with
coverage in amounts not less than that required by applicable State law,
and that, as a term of such Contract, requires such Insurance Policy to
name the Titling Trust, the Titling Trustee or an agent of the Titling
Trust on behalf of the Titling Trust as a "loss payee" and an "additional
insured";
(k) the related Leased Vehicle of which is titled in the name of the
Titling Trust or the Titling Trustee on behalf of the Titling Trust (or
properly completed applications for such title have been submitted to the
appropriate titling authority) in a Trust State and all transfer and
similar taxes imposed in connection therewith have been paid;
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(l) that is a closed-end lease contract having an original scheduled
maturity of 60 months, will have been written for a "capitalized cost"
(which may exceed the manufacturer's suggested retail price), plus a
lease charge which is based on the imputed Lease Rate and will provide
for equal monthly payments required to be made by the Obligor thereunder
within 30 days after the billing date for such payment that, when
allocated between principal and the lease charge at the Lease Rate on a
constant yield basis, will be sufficient to amortize the capitalized cost
over the term of the lease to an amount equal to the Booked Residual
Value; provided that such Contract will allow the related lessee
voluntarily to terminate such Contract by paying certain miscellaneous
charges and a "payoff amount" equal to the sum of (i) unpaid Monthly
Payments and any incidental charges owing under the Contract, less
unearned lease charges and (ii) the Booked Residual Value, less (iii) the
actual wholesale price or the wholesale price otherwise determined by
TMCC in a commercially reasonable manner or by third party appraisal (if
elected by the Obligor) realized upon the sale or other disposition of
the related Leased Vehicle (including the amount of related Security
Deposit, if any, actually applied to reduce any deficiency);
(m) that is fully assignable and that does not require the consent
of the Obligor thereunder as a condition to any transfer, sale or
assignment of the rights of the originator under such Contracts;
(n) that is a "true lease", as opposed to a lease intended as
security, under the laws of the State in which it was originated as such
laws relate to the perfection of security interests therein;
(o) that meets the Origination Criteria and, in the case of any
Contract included in a SUBI Portfolio, meets any Additional Origination
Criteria specified in the related SUBI Supplement;
(p) that was fully and properly executed by the parties thereto and,
upon conveyance to the Titling Trust pursuant to the Titling Trust
Agreement, shall have been validly assigned by the originating Dealer to
the Titling Trust in accordance with the terms of the Dealer Agreement
under which it was originated and immediately thereafter shall be owned
by the Titling Trust;
(q) that is substantially identical to one of the forms of Contract
attached to the UTI Supplement (or such other form as may be approved
from time to time by TMCC in the ordinary course of business);
(r) as to which the information set forth in the Schedule of
Contracts and Leased Vehicles with respect to such Contract and related
Leased Vehicle as of such Cutoff Date is true and correct in all material
respects;
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(s) the Obligor under which Contract, according to the records of
the Servicer, has not filed or had filed against it any petition for
relief, rearrangement of its debts or other protection from its creditors
under any State or federal bankruptcy or insolvency laws, except as
otherwise permitted by the Origination Criteria;
(t) in respect of which the Grantor has taken no action such that
such Contract has been satisfied, subordinated, amended, waived,
restricted, rescinded, held to be invalid or unenforceable, altered or
modified in any respect, except (i) to the extent that such action (A)
does not render such Contract not in conformity with any other criteria
for an Eligible Contract, and (B) was made in accordance with the
Grantor's obligations under the Agreement, and (ii) if such action was
made pursuant to a document, instrument or writing, such document,
instrument or writing is included in the related Contract Documents;
(u) as to which the Grantor, in accordance with its standard
underwriting procedures, has independently reviewed and verified the
accuracy of the material information contained in each of the related
Contract application;
(v) as to which, according to the records of the Grantor, no
default, breach, violation or event permitting acceleration under the
terms of the Contract exists, and no continuing condition that, with
notice or lapse of time, or both, would constitute a default, breach,
violation or event permitting acceleration under the terms of the
Contract has arisen, the Grantor has not waived any of the foregoing, and
the related Leased Vehicle has not been repossessed without
reinstatement;
(w) that has not been originated in, and is not subject to the laws
of, any jurisdiction under which the sale, transfer, and assignment of
such Contract under its terms or pursuant to which transfers of the
Contracts or of the related Certificates of Title are unlawful, void or
voidable;
(x) as to which there is only one executed original, which will be
conveyed by the Dealer to the Titling Trustee or to the Grantor or
Servicer as the agent of the Titling Trustee, in each case on behalf of
the Titling Trust;
(y) that constitutes "chattel paper" as defined in the UCC;
(z) that was originated without any fraud or misrepresentation on
the part of the Grantor;
(aa) as to which all taxes of any nature or description whatsoever
relating thereto that are due and owing as of the date of origination
have been paid or provided for in full except for (i) any state transfer
taxes payable in connection with the transfer of any Contracts to the
Titling Trustee and (ii) similar transfer taxes to which the Titling
Trustee has consented to in writing; and
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(bb) as to which the related Leased Vehicle was a new vehicle (which
may be a dealer demonstrator vehicle driven fewer than 20,000 miles) or
used vehicle (four model years old or less at the time of origination of
the related Contract, and which may be a certified used vehicle or
manufacturers' program vehicle), whether an automobile, light duty truck,
minivan or sports utility vehicle. As used in this clause (bb),
certified used vehicle means a vehicle purchased by a dealer,
reconditioned and certified to meet certain Toyota or Lexus required
standards and sold or leased with an extended warranty, and
manufacturers' program vehicle means a vehicle that has been sold to a
rental car company, repurchased by the manufacturer and subsequently
purchased by a dealer to sell or lease as a current model year or one
year old used vehicles with 20,000 miles or less.
"ELIGIBLE SERVICER" means TMCC or an entity that is servicing a portfolio
of automobile and/or light truck retail installment lease contracts, that is
legally qualified and has the capacity to service the Contracts and that has
demonstrated the ability to service a portfolio of similar lease contracts
professionally and competently in accordance with high standards of skill and
care.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect from time
to time. References to sections of ERISA shall be construed to refer also to
any successor sections.
"ERISA AFFILIATE" means each person (as defined in Section 3(9) of ERISA)
which, together with the identified person, would be deemed to be a member of
the same "controlled group" within the meaning of Section 414(b), (c), (m)
and (o) of the Code or Section 4001 of ERISA.
"EXCESS FUNDS" means, as of any date, the amount of funds in the Lease
Funding Account or otherwise held by the Servicer or the Titling Trustee in
respect of the UTI in excess of those (i) required to maintain the account to
meet all existing Liabilities of the Titling Trust to be paid out of such
account (after accounting for all transfers to be made from any SUBI Account
on or before such date) and (ii) required to be retained in such account as
reserves for reasonably anticipated Liabilities of the Titling Trust (after
taking into account all transfers to be made to such Lease Funding Account
out of any SUBI Account in respect of that SUBI's proportionate share of such
anticipated Liabilities).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXTENSION FEE" means, with respect to any Contract that has had its
Maturity Date extended as contemplated in the Titling Trust Agreement or any
SUBI Servicing Supplement, any payment required to be made by the Obligor in
connection with such extension.
"FDIC" means the Federal Deposit Insurance Corporation and its successors.
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"FINANCIAL INTERMEDIARY" means a financial intermediary, as such term is
defined in Section 8-313(4) of the UCC.
"FIRST BANK" means First Bank National Association, a national banking
association.
"FNMA" means the Federal National Mortgage Association and its successors.
"FUNDING ADVANCE" means the amount of each advance of the face amount or
any portion of a Contract (including with respect to any taxes, fees or
charges payable to the related Dealer or any third party at the time of the
funding thereof) made by the UTI Beneficiary or any agent thereof in
connection with the funding of such Contract that has not previously been
reimbursed thereto.
"FUNDING ADVANCE REIMBURSEMENT AMOUNT" means, with respect to any
Distribution Date, the aggregate amount of Funding Advances made during the
related Collection period and not previously reimbursed to the UTI
Beneficiary from Collections on the related Contracts or otherwise.
"FUNDING ADVANCE REIMBURSEMENT DATE" means a Distribution Date on which a
Funding Advance Reimbursement Amount is to be made.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government.
"GRANTOR" means TMCC in its capacity as Grantor.
"INDEPENDENT" with respect to any specified Person means another Person
who (a) is in fact independent of TMCC and any of its Affiliates; (b) does
not have any direct financial interest or any material indirect financial
interest in TMCC or any of its Affiliates; and (c) is not connected with TMCC
or any of its Affiliates as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions. Whenever
it is provided in the attached agreement that any Independent Person's
opinion or certificate shall be furnished, such Independent Person shall be
deemed to be Independent to the satisfaction of the recipient thereof if
such opinion or certificate shall state that the signer has read this
definition and that the signer is in fact Independent within the meaning
hereof.
"INDEPENDENT ACCOUNTANT" means an Accountant, who may also be the
Accountant who audits the books of TMCC or any of its Affiliates, who is
Independent with respect to TMCC and its Affiliates as contemplated by Rule
101 of the Code of Professional Conduct of the American Institute of
Certified Public Accountants.
"INDEPENDENT DIRECTOR" means a director of the Transferor who shall at no
time be (i) a director, officer, employee or former employee of the Transferor
or any Affiliate thereof, (ii) a natural person related to any director,
officer, employee or former employee of any the Transferor
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or any Affiliate thereof, (iii) a holder (directly or indirectly) of any
voting securities of the Transferor or any Affiliate thereof, or (iv) a
natural person related to a holder (directly or indirectly) of any voting
securities of the Transferor or any Affiliate thereof.
"INSOLVENCY EVENT" means, with respect to any Person:
(i) Such Person shall file a petition commencing a voluntary case
under any chapter of the Federal bankruptcy laws; or such Person shall
file a petition or answer or consent seeking reorganization, arrangement,
adjustment, or composition under any other similar applicable Federal
law, or shall consent to the filing of any such petition, answer, or
consent; or such Person shall appoint, or consent to the appointment of a
custodian, receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or insolvency of it or of any substantial
part of its property, or shall make any assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts
generally as they become due; or
(ii) any order for relief against such Person shall have been entered
by a court having jurisdiction in the premises under any chapter of the
Federal bankruptcy laws; or a decree or order by a court having
jurisdiction in the premises shall have been entered approving as
properly filed a petition seeking reorganization, arrangement,
adjustment, or composition of such Person under any other similar
applicable Federal Law; or a decree or order of a court having
jurisdiction in the premises for the appointment of a custodian,
receiver, liquidator, trustee, assignee, sequestrator or other similar
official in bankruptcy or insolvency of such Person or of any substantial
part of its property, or for the winding up or liquidation of its
affairs, shall have been entered.
"INSURANCE COSTS" means, with respect to any Insurance Policy, the
premiums therefor, any deductibles and any coinsurance payments.
"INSURANCE POLICIES" means any residual value insurance policy and any
policy of comprehensive, collision, public liability, physical damage,
personal liability, credit accident or health, credit life or unemployment
insurance maintained by the Grantor, any Obligor under any Contract or any
Affiliate of any such Person to the extent that any such policy covers or
applies to any Contract, Leased Vehicle or the ability of any lessee under
any Contract to make required payments with respect to a Contract or the
related Leased Vehicle; provided that, with respect to any SUBI, "Insurance
Policies" means only such of the foregoing policies as relate to the related
SUBI Portfolio and, in the case of such insurance policies that relate to
Contracts or related assets in more than one SUBI Portfolio, such policies
only insofar as they, or the proceeds thereof, relate to Contracts or related
assets included in the related SUBI Portfolio.
"INTEREST COLLECTIONS" means with respect to any Collection Period, an
amount equal to the amount by which Collections exceed Principal Collections
with respect to such Collection Period.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended.
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"LEASE FUNDING ACCOUNT" means the Lease Funding Account established and
maintained in accordance with Section 7.01(a) of the Titling Trust Agreement.
"LEASED VEHICLE" means the new or used (including any dealer demonstrator
vehicle or manufacturers' program vehicle) automobile, minivan, sports
utility vehicle or light duty truck, together with all accessories, additions
and parts constituting a part thereof and all accessions thereto, which is
the subject of a Contract.
"LIABILITIES" means all losses, liabilities, claims, damages, expenses
(including related reasonable legal and other professional fees and
expenses), taxes, actions and suits of any kind.
"LIEN" means any security interest, lien, charge, pledge, equity or
encumbrance of any kind other than tax liens, mechanics' liens and any liens
that attach to property, as the context may require, by operation of law.
"LIQUIDATED CONTRACT" means a Contract that has been the subject of a
Prepayment in full or otherwise has been paid in full or, in the case of a
Charged-off Contract, a Contract as to which the Servicer has determined that
the final amounts in respect thereof have been paid.
"LIQUIDATION EXPENSES" means reasonable out-of-pocket expenses (including
related attorneys' fees and expenses) incurred by the Servicer in connection
with the attempted realization of the full amounts due or to become due under
any Contract, including expenses incurred in connection with the repossession
of the related Leased Vehicle, the sale of such Leased Vehicle, whether upon
its repossession or return (if such Contract is a Matured Contract), any
collection effort (whether or not resulting in a lawsuit against the Obligor
under such Contract) or any claim under an Insurance Policy.
"LIQUIDATION PROCEEDS" means gross amounts received by the Servicer or
the Titling Trustee, on behalf of the Titling Trust (before reimbursement for
Liquidation Expenses), in connection with the realization of the full amounts
due or to become due under any Contract, whether from the sale or other
disposition of the related Leased Vehicle (without regard to whether such
proceeds exceed the Booked Residual Value), the proceeds of any collection
effort (whether or not resulting in a lawsuit against the Obligor under such
Contract), the proceeds of recourse payments by Dealers, receipt of Insurance
Proceeds, or collection of amounts due hereunder in respect of such Contract
(including the application of Security Deposits) or otherwise.
"MATURED CONTRACT" means any Contract that has reached its Maturity Date.
"MATURED VEHICLE", as of any date, means any Leased Vehicle, the related
Contract of which has reached its Maturity Date, and which Leased Vehicle has
been returned to the Servicer on behalf of the Titling Trust (or the Titling
Trustee on behalf of the Titling Trust), regardless of the status of the sale
or disposition of such Leased Vehicle as of the date of such return.
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"MATURITY DATE" means, with respect to any Contract, the date on which
the last scheduled Monthly Payment shall be due and payable, as such date may
be extended in accordance with the provisions of the UTI Supplement and any
applicable SUBI Servicing Supplement.
"MONTHLY PAYMENT" means, with respect to any Contract, the amount of each
fixed monthly payment payable to the Obligee of such Contract in accordance
with the terms thereof, net of any portion of such monthly payment that
represents collections allocable to payments to be made by the Obligor for
sales taxes or similar items, and excluding any portion thereof relating to
the payment of insurance premiums, late payment charges, extension fees or
other similar items.
"MONTHLY REMITTANCE CONDITIONS" means that (i) TMCC is the Servicer, (ii)
either (a) TMCC's short-term unsecured debt is rated at least P-1 by Moody's
and A-1 by Standard & Poor's (so long as Moody's and Standard & Poor's are
Rating Agencies), or (b) certain arrangements are made that have been
approved in writing by each Rating Agency that has rated any class of
securities issued in connection with a Securitized Financing and (iii) no
Early Amortization Event or Event of Servicing Termination as defined in any
SUBI Supplement shall have occurred and be continuing.
"MOODY'S" means Moody's Investors Service, Inc., and its successors.
"OBLIGEE" means each Person who is the lessor under a Contract or the
assignee thereof, including the Titling Trust or the Titling Trustee on behalf
of the Titling Trust.
"OBLIGOR" means the Person who is the lessee under a Contract.
"OFFICER'S CERTIFICATE" means, with respect to any Person, a certificate
signed by the President, any Vice President, the Treasurer or any Assistant
Treasurer, the Secretary or any Assistant Secretary thereof.
"OPINION OF COUNSEL" means, with respect to any Person, a written opinion
of counsel which counsel shall be reasonably acceptable to the indicated
recipient; provided that, in the case of opinions to be delivered by TMCC or
TLI, such counsel may be an employee of or outside counsel to the Transferor
or the Servicer.
"ORIGINATION CRITERIA" means, with respect to any Contract, the TMCC's
written underwriting criteria in effect as of the date of origination of any
specific Contract, and as the same may be amended, supplemented or modified
from time to time by TMCC in the ordinary course of business.
"OTHER PROCEEDS" means monies arising from the sale, exchange, lease,
collection or other disposition of lease contracts and related leased
vehicles or other receivables (other than the Contracts and Leased Vehicles)
as to which the Servicer is acting as servicer.
"OUTSTANDING PRINCIPAL BALANCE" means, with respect to any Contract as of
any date, the amount to which the capitalized cost of a Contract has been
amortized at any point in time, which will be
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an amount equal to (i) the sum of all Monthly Payments remaining to be made,
including overdue Monthly Payments (provided, however, that Payments Ahead
received but not yet applied are deemed to be Monthly Payments remaining to
be made), less any unearned finance or other similar unearned lease charges
relating to the period beginning after the next succeeding Payment Date on
such Contract (determined on a constant yield basis) in accordance with the
Servicer's usual practices, plus (ii) the Booked Residual Value of the
related Leased Vehicle. The term "principal amount" and "principal balance"
as used herein in relation to any Contract or Contracts shall refer, as of
such date of determination, to the Outstanding Principal Balance of such
Contract or Contracts computed as of such time.
"PAYMENT AHEAD" means any payment of one or more Monthly Payments (not
constituting a Prepayment) remitted by an Obligor with respect to a Contract
in excess of the Monthly Payment due with respect to such Contract, which
sums the Obligor has instructed the Servicer to hold and apply to Monthly
Payments due in one or more immediately subsequent calendar months.
"PAYMENT DATE" means, as to each Contract, the date each month therein
set forth as the date Monthly Payments are due.
"PERMITTED INVESTMENTS" means any one or more of the following
instruments, obligations or securities, in each case subject to any further
criteria specified in the related SUBI Supplement:
(a) obligations of, and obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any agency
thereof, provided such obligations are backed by the full faith and credit of
the United States;
(b) general obligations of or obligations guaranteed by FNMA or any
state of the United States, the District of Columbia or the Commonwealth of
Puerto Rico then rated the highest available credit rating of each Rating
Agency for such obligations;
(c) certificates of deposit issued by any depository institution or
trust company (including any Securitization Trustee) incorporated under the
laws of the United States or of any state thereof, the District of Columbia
or the Commonwealth of Puerto Rico and subject to supervision and examination
by banking authorities of one or more of such jurisdictions, provided that
the short-term unsecured debt obligations of such depository institution or
trust company are then rated the highest available rating of each Rating
Agency for such obligations;
(d) certificates of deposit, demand or time deposits of, bankers
acceptances issued by, or federal funds sold by any depository institution or
trust company (including any Securitization Trustee) incorporated under the
laws of the United States or any State and subject to supervision and
examination by federal and/or State banking authorities and the deposits of
which are fully insured by the Federal Deposit Insurance Corporation, so long
as at the time of such investment or contractual commitment providing for
such investment either such depository institution or trust company has the
Required Rating or such Securitization Trustee shall have received a letter
from
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each Rating Agency to the effect that such investment would not result in the
qualification, downgrading or withdrawal of the ratings then assigned to any
Rated Certificates;
(e) certificates of deposit issued by any bank, trust company, savings
bank or other savings institution and fully insured by the FDIC;
(f) repurchase obligations held by any Securitization Trustee that are
acceptable to the Securitization Trustee with respect to any security
described in clauses (a), (b) or (g) hereof or any other security issued or
guaranteed by any other agency or instrumentality of the United States, in
either case entered into with a federal agency or a depository institution or
trust company (acting as principal) described in clause (d) above; PROVIDED,
HOWEVER, that repurchase obligations entered into with any particular
depository institution or trust company (including such Securitization
Trustee) will not be Permitted Investments to the extent that the aggregate
principal amount of such repurchase obligations with such depository
institution or trust company held by such Securitization Trustee on behalf of
the related Securitization Trust or of all of the Titling Trust Assets shall
exceed 10% of either the Aggregate Net Investment Value or the aggregate
unpaid principal balance or face amount, as the case may be, of all Permitted
Investments so held thereby;
(g) interests in any open-end or closed-end management type investment
company or investment trust (i) registered under the Investment Company Act,
the portfolio of which is limited to the obligations of, or guaranteed by,
the United States and to agreements to repurchase such obligations, which
agreements, with respect to principal and interest, are at least 100%
collateralized by such obligations marked to market on a daily basis and the
investment company or investment trust shall take delivery of such
obligations either directly or through an independent custodian designated in
accordance with the Investment Company Act and (ii) acceptable to each Rating
Agency (as approved in writing by each Rating Agency) as collateral for
securities having ratings equivalent to the ratings of the Rated Certificates
on the Closing Date;
(h) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any State so
long as at the time of such investment or contractual commitment providing
for such investment (i) the long-term, unsecured debt of such corporation has
the highest available rating from each Rating Agency, (ii) such corporation
is TMCC and TMCC's long term debt obligations shall at such time have rating
of at least - from Standard & Poor's and at least - from Moody's, and TMCC's
short term debt obligations shall at such time have rating of at least - from
Standard & Poor's and at least - from Moody's or (iii) a Securitization
Trustee shall have received a letter from each Rating Agency to the effect
that such investment would not result in the qualification, downgrading or
withdrawal of the ratings then assigned to any Rated Certificates or
commercial paper or other short-term debt having the Required Rating;
(i) money market funds so long as such funds are rated Aaa by Moody's
(so long as Moody's is a Rating Agency) and AAAm by Standard & Poor's (so
long as Standard & Poor's is a Rating Agency), and any other fund for which a
Securitization Trustee or an Affiliate of such Securitization Trustee serves
as an investment advisor, administrator, shareholder servicing agent
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and/or custodian or subcustodian, provided that any shares of such funds have
a credit rating of at least Aaa by Moody's (so long as Moody's is a Rating
Agency) and AAAm by Standard & Poor's (so long as Standard & Poor's is a
Rating Agency) and notwithstanding that (i) such Trustee or Affiliate charges
and collects fees and expenses from such funds for services rendered, (ii)
such Trustee charges and collects fees and expenses for services rendered
pursuant to the related Securitization Trust Agreement or under the Trust
Agency Agreement and (iii) services performed for such funds and pursuant to
either such Agreement may converge at any time. Each of the Transferor and
the Servicer hereby specifically authorizes each such Trustee or Affiliate
thereof to charge and collect all fees and expenses from such funds for
services rendered to such funds, in addition to any fees and expenses such
Trustee may charge and collect for services rendered pursuant to either such
Agreement; and
(j) such other investments acceptable to each Rating Agency (as approved
in writing by each Rating Agency) as will not result in the qualification,
downgrading or withdrawal of the ratings then assigned to any Rated
Certificates by such Rating Agency;
provided that each of the foregoing investments shall mature no later than
the day specified in the related SUBI Supplement, and shall be required to be
held to such maturity.
None of the foregoing will be considered a Permitted Investment if:
(i) it constitutes a certificated security, bankers' acceptance,
commercial paper, negotiable certificate of deposit or other
obligation that constitutes an "instrument" within the meaning
of Section 9-105(1)(i) of the UCC and is susceptible of physical
delivery unless it is transferred to the Titling Trustee, a
Securitization Trustee or its Financial Intermediary in
accordance with Sections 8-313(1)(a), 8-313(1)(d)(i) or
8-313(1)(g) of the UCC, and such Trustee obtains evidence that
any such property that is in registrable form has been
registered in its name or the name of its Financial
Intermediary, its custodian or its nominee;
(ii) it constitutes a book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations,
unless, in accordance with applicable law, (A) a book-entry
registration thereof is made to an appropriate book-entry
account maintained with a Federal Reserve Bank by the Titling
Trustee, a Securitization Trustee or by a custodian therefor,
(B) a deposit advice or other written confirmation of such
book-entry registration is issued to such Trustee or custodian,
(C) any such custodian makes entries in its books and records
identifying such book-entry security is held through the Federal
Reserve System pursuant to federal book-entry regulations and
belongs to such Trustee and indicating that such custodian holds
such Permitted Investment solely as agent for such Trustee, (D)
such Trustee makes entries in its books and records establishing
that it holds such security solely as Titling Trustee or
Securitization Trustee for the Titling Trust or the related
Securitization Trust, as the case may be, and (E) any additional
or alternative
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procedures as may hereafter become necessary to effect complete
transfer of ownership thereof to such Trustee are satisfied,
consistent with changes in applicable law or regulations or the
interpretation thereof; or
(iii) it constitutes an uncertificated security under Article 8 of the
UCC that is not governed by clause (ii) above, unless the
transfer to, and ownership thereof by, the Titling Trustee or
Securitization Trustee, its Financial Intermediary, its
custodian or its nominee by the issuer of such security is
registered by the issuer thereof.
Notwithstanding anything to the contrary contained in this definition, no
Permitted Investment may be purchased at a premium and no Permitted
Investment shall be an interest only instrument. Any of the foregoing which
constitutes an uncertificated security shall not be considered a Permitted
Investment if: (i) a notation of the right of the issuer thereof to a lien
thereon is contained in the initial transaction statement therefor sent to
the Titling Trustee; (ii) the Titling Trustee has notice or actual knowledge
of (A) any restriction on the transfer thereof imposed by the issuer thereof,
or (B) any adverse claim, or a notation of any such restriction or of any
specific adverse claim as to which the issuer has a duty under the law of the
state in which the Corporate Trust Office is located at the time of
registration is contained in the initial transaction statement therefor sent
to the Titling Trustee; or (iii) to the Titling Trustee's actual knowledge, a
creditor has served legal process upon the issuer thereof at its chief
executive office in the United States which legal process attempts to place a
Lien thereon prior to the registration thereof in the name of the Titling
Trustee.
For purposes of this definition, any reference to the highest available
credit rating of an obligation shall mean the highest available credit rating
for such obligation (excluding any "+" signs associated with such rating), or
such lower credit rating (as approved in writing by each Rating Agency) as
will not result in the qualification, downgrading or withdrawal of the rating
then assigned to any Rated Certificates by such Rating Agency.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated association, Governmental Authority or any other entity.
"PLAN" means an "employee benefit plan," as such term is defined in
Section 3(3) of ERISA.
"PREPAYMENT" means, with respect to any Contract other than a Charged-off
Contract, payment to the Servicer of 100% of the Outstanding Principal
Balance of such Contract together with all accrued and unpaid lease charge or
interest thereon.
"PRINCIPAL COLLECTIONS" means with respect to any Collection Period, all
Collections allocable to the principal component of any Contract (including
any payment in respect of the related Leased Vehicle, other than any payment
as to which a Loss Amount has been realized and allocated during any prior
Collection Period), discounted to the extent such Contract is a Discounted
Contract, and shall include for each Collection Period during the Revolving
Period, amounts otherwise allocable
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or distributable to Certificateholders on the related Monthly Allocation Date
as reimbursement of Loss Amounts allocable to the Investor Interest.
"RATED CERTIFICATES" means each Class of Certificates that has been rated
by a Rating Agency at the request of the Transferor.
"RATING AGENCY" means each nationally recognized statistical rating
organization that rates a security in a Securitized Financing at the request
of the Grantor as of the related Closing Date at the request of the
Transferor and continues to do so.
"RECORD DATE" means, with respect to each Distribution Date, (i) in the
case of the Class A Certificates, the calendar day immediately preceding
such Distribution Date (or, if Definitive Certificates have been issued, the
last day of the immediately preceding calendar month) and (ii) in the case of
the Class B Certificates, the last day of the calendar month immediately
preceding the month in which such Distribution Date occurs.
"REGISTRAR OF TITLES" means any applicable department, agency or official
in a State responsible for accepting applications for, and maintaining
records regarding, Certificates of Title and liens thereon.
"REQUIRED AMOUNT" means, with respect to any Distribution Date, the
amount by which Interest Collections allocable to the Investor Interest for
the related Collection Period are insufficient to pay the amounts set forth
in Section 3.02 (b) of the Securitization Trust Agreement including, among
other things, (i) accrued and unpaid interest on the Certificates, (ii)
overdue interest (with interest accrued thereon during such Collection period
at the applicable Certificate Rate, to the extent lawful) and (iii) any Loss
Amount for such Collection Period allocable to the Investor Interest,
together with interest accrued thereon through the related Collection Period
at the applicable Certificate Rate.
"REQUIRED RATING" means a rating on commercial paper or other short term
unsecured debt obligations of Prime-1 by Moody's so long as Moody's is a
Rating Agency and A-1+ by Standard & Poor's so long as Standard & Poor's is a
Rating Agency; and any requirement that deposits or debt obligations have the
"Required Rating" shall mean that such deposits or debt obligations have the
foregoing required ratings from Moody's and Standard & Poor's.
"RESIDUAL UTI CERTIFICATE" has the meaning set forth in Section 11.02 of
the UTI Supplement.
"RESIDUAL UTI UNIT" has the meaing set forth in Section 11.01 of the UTI
Supplement.
"RESIDUAL VALUE" means the actual Liquidation Proceeds, net of
Liquidation Expenses, received with respect to the disposition of any Leased
Vehicle, whether at maturity of the related Contract or otherwise, and
whether or not such Residual Value exceeds the Booked Residual Value.
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"RESIDUAL VALUE INSURANCE POLICY" means Residual Value Insurance Policy
number _______________ issued on _______________ by ________________, in
favor of TMCC and naming the Titling Trust as additional insured.
"RESPONSIBLE OFFICER" means an officer of the Titling Trustee or
Securitization Trustee assigned to the relevant Corporate Trust Office,
including the President, any Vice President, any trust officer, the corporate
Secretary and any assistant corporate Secretary or any other officer
performing functions similar to those performed by the persons who at the
time shall be such officers, and any other officer thereof to whom a matter
is referred because of his or her knowledge of and familiarity with the
particular subject.
"SCHEDULE OF CONTRACTS AND LEASED VEHICLES" means the list of Contracts
and related Leased Vehicles, on microfiche, microfilm or hard paper copy,
that are included as Titling Trust Assets in the Titling Trust, as such list
may be revised and supplemented from time to time (which Schedules may be
prepared on either a cumulative or additive basis) pursuant to Section 5.01
of the 1997-A Servicing Supplement, and which shall set forth the following
information with respect to each such Contract in separate columns:
Contract Number
Date of Origination
Maturity Date
Monthly Payment
Original Principal Balance
Outstanding Principal Balance as of the last day of the
immediately preceding calendar month
Booked Residual Value
Security Deposit
Sub-Trust to which Contract is assigned
Vehicle Identification Number
Model Year
Make
Model
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIZED FINANCING" means (i) any financing transaction of any sort
undertaken by the related Beneficiary based on or secured by, directly or
indirectly, Titling Trust Assets, the UTI or any UTI Unit, any SUBI or any
interest in any of the foregoing, (ii) any sale by a Beneficiary of any
interest in one or more SUBIs or (iii) any other asset securitization,
secured loan or similar transaction involving Titling Trust Assets or any
beneficial interest therein or in the Titling Trust.
"SECURITY DEPOSIT" means the security deposit, reconditioning reserve or
similar deposit paid by an Obligor at the time of origination of the related
Contract; provided that the Titling Trust Assets
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shall includeSecurity Deposits such deposits only to the extent actually
applied to cover excess wear and tear charges or may otherwise lawfully be
retained by the Titling Trust as lessor or its agents in respect of fees,
charges or reimbursable advances, payments or expenses thereby under the
related Contract.
"SERVICER" means TMCC, in its capacity as servicer under the Titling
Trust Agreement and any relevant Servicing Supplement, or any successor to
TMCC in such capacities.
"SERVICER EXPENSES" means all reasonable amounts expended by the Servicer
in connection with its performance of its duties under the Titling Trust
Agreement, including those incurred in connection with the preparation,
execution and delivery of all legal documentation relating to the formation
of the Titling Trust and the servicing of the UTI Assets prior to the
creation of the first SUBI, the making of any requisite license or other
applications, filings and related filing fees in connection with the
commencement of origination of leases and the recordation of related
certificates of title in the name of the Titling Trust and the perfection of
security interests therein or the registration of any offering of securities
in any Securitized Financing, the costs and expenses of preparing and
delivering servicing, tax and other reports as set forth in the Titling Trust
Agreement and the costs and expenses of providing any monitoring, billing and
collection services with respect thereto, in each case including any
reasonable attorneys' fees and expenses, and in each case excluding any costs
and expenses to be paid out of the Servicing Fee specified in any supplement
to the Titling Trust Agreement.
"SERVICER REIMBURSEMENT" means the amount of any required reimbursement
to the Servicer of Servicer Expenses on a Closing Date or Distribution Date
as set forth in the related SUBI Servicing Supplement.
"SERVICER'S CERTIFICATE" means an certificate of an officer or other
authorized signatory of the Servicer completed and executed pursuant to
Section 5.01(b) of the related SUBI Servicing Supplement.
"SERVICING FEE" means (a) prior to the creation of the first SUBI, zero
and (b) after the creation of the first SUBI, the sum of each SUBI Servicing
Fee specified in a SUBI Supplement plus (i) during any UTI Collection Period
for which TMCC is the Servicer, 1.00% of the outstanding balances of the
Contracts in the UTI Portfolio and (ii) during any UTI Collection Period for
which TMCC is not the Servicer, -% the outstanding balances of the Contracts
in the UTI Portfolio during any UTI Collection Period for which TMCC is no
longer the Servicer.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a division
of The McGraw Hill Companies, Incorporated, and its successors.
"STATE" means any state of the United States, the District of Columbia
and the Commonwealth of Puerto Rico in which, pursuant to the Origination
Criteria, an Eligible Contract may be originated.
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"SUBI" means any "special unit of beneficial interest" in the Titling
Trust comprised of a beneficial interest in a SUBI Sub-Trust.
"SUBI ACCOUNT" means, with respect to a SUBI, the SUBI Collection Account
or the SUBI Lease Funding Account that is established and maintained in
connection therewith in accordance with Section 7.01(a) of the Titling Trust
Agreement.
"SUBI ASSETS" means, with respect to any SUBI, those Titling Trust Assets
that are identified as relating to and allocated to such SUBI by the Titling
Trustee upon the written direction of the UTI Beneficiary pursuant to the
Titling Trust Agreement and related SUBI Supplement.
"SUBI BENEFICIARY" means any Beneficiary that is a Beneficiary because it
is the holder or pledgee of a SUBI Certificate.
"SUBI CERTIFICATE" means, with respect to a SUBI, each of the
certificates evidencing such SUBI, substantially in the form included as an
exhibit to each SUBI Supplement, executed and delivered pursuant to the
related SUBI Supplement.
"SUBI COLLECTION ACCOUNT" means, with respect to a SUBI, any account
denominated as such that is established and maintained in accordance with
the related SUBI Supplement and SUBI Servicing Supplement.
"SUBI LEASE FUNDING ACCOUNT" means, with respect to a SUBI, any account
denominated as such that is established and maintained in accordance with
related SUBI Supplement and SUBI Servicing Supplement.
"SUBI PORTFOLIO" means, with respect to any SUBI, the related Contracts
and Leased Vehicles comprising the related SUBI Assets.
"SUBI SERVICING SUPPLEMENT" means any agreement supplementing the
servicing provisions of the Titling Trust Agreement that is executed by
TMCC, the Titling Trustee and one or more other parties in connection with a
Securitized Financing.
"SUBI SUB-TRUST" means a separate Sub-Trust of the Titling Trust that is
established at the direction of the UTI Beneficiary on the books and records
of the Titling Trust by the Titling Trustee and that is accounted for
separately within the Titling Trust. The Titling Trustee shall from time to
time, as directed in writing by the UTI Beneficiary, and subject to Section
3.01(d) of the Titling Trust Agreement, identify or cause to be identified on
the books and records of the Titling Trust one or more separate Sub-Trusts to
be accounted for separately within the Titling Trust (each, a "SUBI
Sub-Trust") and identify and allocate, or cause to be identified and
allocated, to such SUBI Sub-Trust on such books and records certain Titling
Trust Assets that are not then allocated to another SUBI Sub-Trust. Upon
such allocation, such related SUBI Assets shall no longer be assets of, or
allocated to, the UTI (unless and until specifically reallocated to the UTI
from that SUBI in
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accordance with the related SUBI Supplement). Each SUBI shall constitute a
separate series of the Titling Trust pursuant to Section 3806(b)(2) of the
Delaware Act and shall represent the beneficial interest in such SUBI and the
SUBI Assets allocated thereto from time to time. Each SUBI shall be
represented by one or more separate SUBI Certificates issued pursuant to the
related SUBI Supplement. The Titling Trustee shall issue each SUBI
Certificate to or upon the order of the UTI Beneficiary.
"SUBI SUPPLEMENT" means any of the one or more supplements to the Titling
Trust Agreement, substantially in the form attached thereto as an exhibit,
the execution and delivery of which by the UTI Beneficiary and the Titling
Trustee in accordance with Section 3.01(c) of the Titling Trust Agreement
will effect the creation of a SUBI.
"SUB-TRUST" means any of the sub-trusts of the Titling Trust established
by the Titling Trustee as directed by the UTI Beneficiary from time to time,
and to which the Titling Trustee will allocate Titling Trust Assets
identified by the UTI Beneficiary, having the name and beneficiaries
designated by the UTI Beneficiary and being a separate series of the Titling
Trust pursuant to Section 3806(b)(2) of the Delaware Act.
"TITLING TRUST" means Toyota Lease Trust, a Delaware business trust,
formed pursuant to the Titling Trust Agreement.
"TITLING TRUST AGREEMENT" means the Trust and Servicing Agreement dated
as of October 1, 1996, among TMCC, TMTT, Inc., as Titling Trustee, and, for
certain limited purposes, the Trust Agent, as amended and restated by the
Amended and Restated Trust and Servicing Agreement also dated as of October
1, 1996 among TMCC, TMTT, Inc., as Titling Trustee, and, for certain limited
purposes, First Bank.
"TITLING TRUST ASSETS" means: (i) any capital contributed by the Grantor;
(ii) the Contracts and all proceeds thereof; (iii) the Leased Vehicles and
all proceeds thereof, including each Certificate of Title and the Residual
Value of each Leased Vehicle, whether realized through the exercise by
Obligors of purchase options under the Contracts, the proceeds of sale of the
Leased Vehicles to Dealers or third parties or through payments received from
any other Person (directly or indirectly) under any related Insurance Policy
(to the extent not applied to repair or otherwise paid to a third Person or
Governmental Authority by the Servicer as required by law or pursuant to its
normal servicing practices) or as a subsidy or other funding of any
modification of the related Booked Residual Value; (iv) all of the Titling
Trust's rights (but not its obligations) with respect to any Contract or
Leased Vehicle, including the right to enforce and to proceeds arising from
all Dealer repurchase obligations arising under Dealer Agreements; (v) all of
TMCC's rights (but not its obligations) with respect to any Contract or
Leased Vehicle, including the right to enforce and to proceeds arising from
all Dealer repurchase obligations arising under Dealer Agreements; (vi) any
Insurance Policy and rights thereunder or proceeds therefrom relating to any
of the Contracts, Leased Vehicles or payments of the related Obligors with
respect thereto; (vii) any portion of any Security Deposit actually and
properly applied by the Servicer against amounts due under the related
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Contract, to the extent not applied to making repairs to the related Leased
Vehicle or paid to a third party or Governmental Authority in accordance with
the Services normal servicing practices; and (viii) all proceeds of any of
the foregoing.
"TITLING TRUSTEE" means TMTT, Inc., in its capacity as such under the
Titling Trust Agreement, and any successor thereto in such capacity appointed
pursuant to the Titling Trust Agreement.
"TITLING TRUSTEE ACCOUNTS" means any of the separate UTI Collection
Account, Lease Funding Account, SUBI Collection Account and/or SUBI Lease
Funding Account established by the Titling Trustee with respect to the UTI or
the related SUBI as described in the Titling Trust Agreement and the related
SUBI Supplement and SUBI Servicing Supplement. Each such account maintained
with respect to Rated Certificates shall be an Eligible Account.
"TITLING TRUSTEE STOCK" means the issued and outstanding capital stock of
the Titling Trustee, together with any additional capital stock of the
Titling Trustee that may be issued from time to time.
"TLI" means Toyota Leasing, Inc. and its successors.
"TMCC" means Toyota Motor Credit Corporation, a California corporation,
its successors and assigns.
"TMS" means Toyota Motor Sales U.S.A., Inc., a California corporation,
its successors and assigns.
"TRANSACTION DOCUMENTS" means and includes the Titling Trust Agreement,
the UTI Supplement and, with respect to any Securitized Financing involving
the creation of a SUBI, the related SUBI Supplement, SUBI Certificate
Agreement, SUBI Servicing Supplement, SUBI Certificate(s), Securitization
Trust Agreement or indenture, trust agreement or similar instrument governing
the securitization of such SUBI and any securities offered or sold that are
secured by interests in the related SUBI, in each case as the same may be
amended, supplemented or modified from time to time but only to the extent
that any such amendment, supplement or modification relates to such SUBI.
"TRANSFEROR" means TLI in its capacity as transferor under any
Securitization Trust Agreement and each other related Transaction Document.
"TRUST AGENCY AGREEMENT" means any of the one or more agency agreements
entered into by the Titling Trustee in furtherance of its execution of any
of the trusts or powers under the Titling Trust Agreement or performance of
any duties under the Titling Trust Agreement either directly or by or through
agents or attorneys or one or more custodians as set forth in the Titling
Trust Agreement. In addition, with respect to any Securitization Trustee,
Trust Agency Agreement means any of the one or more agency agreements entered
into by such Securitization Trustee in furtherance
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of its execution of any of the trusts or powers under the related
Securitization Trust Agreement or performance of any duties under such
Securitization Trust Agreement either directly or by or through agents or
attorneys or one or more custodians as set forth in such Securitization Trust
Agreement.
"TRUST AGENT" means any of the one or more Persons, including any
Affiliate of the Titling Trustee or any Securitization Trustee, engaged by
the Titling Trustee or such Securitization Trustee pursuant to a Trust Agency
Agreement.
"TRUST ASSET TRANSFER" means the allocation to a SUBI Sub-Trust of Trust
Assets not then allocated to any other SUBI Sub-Trust pursuant to Section
3.01(c) of the Titling Trust Agreement.
"TRUST STATES" initially means California, Florida, Michigan, Ohio and
Pennsylvania and after the date of this Agreement, means those States and
such other States as designated in writing from time to time to the Titling
Trustee in which Dealers are regularly originating Contracts and assigning
them to the Titling Trust as contemplated by the Titling Trust Agreement.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.
"UNITED STATES" means the United States of America, its territories and
possessions and areas subject to its jurisdiction.
"UNDIVIDED TRUST INTEREST" or "UTI" means the exclusive, undivided
beneficial interest in all Trust Assets (including Contracts and Leased
Vehicles), other than SUBI Assets, held by the UTI Beneficiary.
"UNDIVIDED TRUST INTEREST CERTIFICATE" or "UTI CERTIFICATE" means the one
or more trust certificates (together with any replacements thereof) issued by
the Titling Trust at the direction of the UTI Beneficiary substantially in
the form attached as an exhibit to the form of UTI Supplement.
"UTI ACCOUNT" means any of the separate UTI Collection Accounts and/or
Lease Funding Account established by the Titling Trustee with respect to the
UTI pursuant to Section 12.01 of the UTI Supplement.
"UTI ASSETS" means all Titling Trust Assets that have not been allocated
to a SUBI Sub-Trust.
"UTI BENEFICIARY" means TMCC, in its capacity as the initial beneficiary
of the Titling Trust on the date of the UTI Supplement, and its successors
and assigns (exclusive of any pledgee of a UTI Pledge).
"UTI COLLECTION ACCOUNT" means the separate account established by the
Titling Trustee with respect to the UTI pursuant to Section 12.01 of the UTI
Supplement.
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"UTI PLEDGE" means a pledge of and grant of a security interest in the
UTI and UTI Certificate, or any interest therein, in connection with any
Securitized Financing, and the terms and conditions thereof set forth in the
related documentation.
"UTI PORTFOLIO" means the Contracts and Leased Vehicles comprising the
Undivided Trust Interest.
"UTI SUB-TRUST" means the separate Sub-Trust of the Titling Trust
containing all Trust Assets that have not been allocated to any SUBI
Sub-Trust.
"UTI SUPPLEMENT" means any of the one or more supplements or amendments
to the Titling Trust Agreement, substantially in the form attached thereto as
an exhibit, the execution and delivery of which by the UTI Beneficiary and
the Titling Trustee in accordance with Section 3.01(b) of the Titling Trust
Agreement will effect the creation of a UTI.
"UTI CERTIFICATE" has the meaning described in Section 11.02 of the UTI
Supplement.
"UTI UNIT CERTIFICATE" has the meaning described in Section 11.02 of the
UTI Supplement.
"UTI UNIT" has the meaning described in Section 11.01 of the UTI
Supplement.
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EXHIBIT 10.2
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TOYOTA MOTOR CREDIT CORPORATION
TMTT, INC.,
as Trustee of Toyota Lease Trust
and,
for Certain Limited Purposes only,
FIRST BANK NATIONAL ASSOCIATION,
as Trust Agent
UTI SUPPLEMENT
TO
AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
Dated as of October 1, 1996
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<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE X
DEFINITIONS
SECTION 10.01 Definitions............................................. 2
ARTICLE XI
CREATION AND TERMINATION OF TRUST INTERESTS
SECTION 11.01 Initial Creation of UTI, Subdivision Thereof............ 2
SECTION 11.02 Issuance and Form of UTI Certificates................... 3
SECTION 11.03 Filings................................................. 4
SECTION 11.04 Termination of UTI...................................... 5
ARTICLE XII
ACCOUNTS AND CASH FLOWS
SECTION 12.01 Accounts................................................ 5
SECTION 12.02 Cash Flows.............................................. 6
SECTION 12.03 Distribution of Funds, Default in UTI Pledge............ 7
SECTION 12.04 Lease Funding Accounts.................................. 7
SECTION 12.05 Rebalancing After Third-Party Claim..................... 8
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 Governing Law........................................... 8
SECTION 13.02 Effect of UTI Supplement on Trust Agreement............. 8
SECTION 13.03 Counterparts............................................ 9
EXHIBITS
EXHIBIT A Form of Direction to Create UTI Unit..................... A-1
EXHIBIT B Form of Direction to Reallocate UTI Unit Assets.......... B-1
EXHIBIT C Form of [Residual] UTI [Unit] Certificate................ C-1
EXHIBIT D Forms of Contract........................................ D-1
EXHIBIT E Form of Dealer Agreement................................. E-1
<PAGE>
UTI SUPPLEMENT TO AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
UTI SUPPLEMENT TO AMENDED AND RESTATED TRUST AND SERVICING AGREEMENT,
dated and effective as of October 1, 1996, among TOYOTA MOTOR CREDIT
CORPORATION, a California corporation (in its capacities as grantor, initial
beneficiary and servicer), TMTT, INC., a Delaware corporation, as Titling
Trustee, and for certain limited purposes only, FIRST BANK NATIONAL
ASSOCIATION, a national banking association, as Trust Agent.
RECITALS
A. TMCC, the Titling Trustee and the Trust Agent have entered into that
certain Trust and Servicing Agreement, as the same was amended and restated
pursuant to that certain Amended and Restated Trust and Servicing Agreement,
each dated as of October 1, 1996 (collectively, the "Titling Trust Agreement"),
pursuant to which the Grantor and the Titling Trustee formed Toyota Lease Trust,
a Delaware business trust for the purpose of taking assignments and conveyances
of, holding in trust and dealing in, various Titling Trust Assets in accordance
with the Titling Trust Agreement.
B. The Titling Trust Agreement contemplates that all Titling Trust
Assets, other than those from time to time identified on the Titling Trust's
books and records by the Titling Trustee on behalf of the Titling Trust and at
the direction of the UTI Beneficiary, as SUBI Assets allocated to separate SUBI
Sub-Trusts, shall constitute UTI Assets, and that the Titling Trustee shall
create an undivided trust interest therein and issue to the UTI Beneficiary a
UTI Certificate evidencing such UTI, and the UTI Beneficiary and its permitted
assignees generally will be entitled to the proceeds of, including the net cash
flow arising from, but only from, the UTI Assets.
C. The parties hereto desire to supplement the terms of the Titling Trust
Agreement to cause the Titling Trustee, at the direction of the UTI Beneficiary,
to identify the UTI Portfolio and to allocate the related Titling Trust Assets
to the UTI Sub-Trust and to create and issue to the UTI Beneficiary one or more
UTI Certificates that collectively evidence the entire beneficial interest in
the UTI, and to set forth the terms and conditions thereof.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and in the Titling Trust Agreement, the parties hereto agree to
the following supplemental obligations and provisions with regard to the UTI
Portfolio:
<PAGE>
ARTICLE X
DEFINITIONS
SECTION 10.01 DEFINITIONS.
For all purposes of this UTI Supplement, except as otherwise expressly
provided or unless the context otherwise requires, capitalized terms used and
not otherwise defined herein shall have the meanings ascribed thereto in the
Annex of Definitions attached hereto for all purposes of this UTI Supplement.
In the event of any conflict between a definition set forth herein and that
set forth in the Annex of Definitions, that set forth herein shall prevail.
All terms used in this UTI Supplement include, as appropriate, all genders
and the plural as well as the singular. All references such as "herein",
"hereof" and the like shall refer to this UTI Supplement as a whole and not
to any particular article or section within this UTI Supplement. All
references such as "includes" and variations thereon shall mean "includes
without limitation" and references to "or" shall mean "and/or". Any
reference herein to the "Titling Trustee, acting on behalf of the Titling
Trust", or words of similar import, shall be deemed to mean the Titling
Trustee, acting on behalf of Toyota Lease Trust and all beneficiaries thereof.
ARTICLE XI
CREATION AND TERMINATION OF TRUST INTERESTS
SECTION 11.01 INITIAL CREATION OF UTI, SUBDIVISION THEREOF.
(a) Pursuant to Section 3.01(b) of the Titling Trust Agreement, all
Titling Trust Assets (including without limitation Contracts and Leased
Vehicles), other than any Titling Trust Assets denominated as SUBI Assets
from time to time in accordance with Section 3.01(c) of the Titling Trust
Agreement, shall constitute UTI Assets. All Contracts and Leased Vehicles
that are included as UTI Assets shall be, for so long as they remain UTI
Assets, "UTI Contracts" and "UTI Leased Vehicles", respectively, and
collectively shall comprise the "UTI Portfolio". The UTI Assets also shall
include: the Lease Funding Account, including all cash and Permitted
Investments therein and all income from the investment of funds therein; all
Insurance Policies and rights thereunder to the extent applicable to the UTI
Portfolio, including the right to proceeds therefrom with respect to the UTI
Portfolio or obligors with respect thereto, as the case may be; the right to
receive the proceeds of all Dealer or other repurchase obligations, if any,
relating to the UTI Portfolio; and all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing into cash or other property.
(b) Also pursuant to Section 3.01(b) of the Titling Trust Agreement,
the beneficial interest in the UTI Assets shall constitute the UTI. The UTI
shall represent an undivided beneficial interest solely in the UTI Assets.
(c) Upon the written direction of the UTI Beneficiary to the Titling
Trustee (in substantially the form attached as Exhibit A) in connection with a
UTI Pledge or otherwise, the
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Titling Trustee shall from time to time identify and allocate or cause to be
identified and allocated on the books and records of the Titling Trust one or
more separate sub-portfolios of UTI Assets, to be so identified and allocated
by date of origination, lease number and original principal balance, but
otherwise not accounted for independently within the UTI Portfolio, which
shall be represented by one or more UTI Unit Certificates (as defined in
Section 11.02(a)), with the residual UTI Assets and the residual UTI
Portfolio being represented by the Residual UTI Certificate.
All UTI Assets not allocated or identified as UTI Unit Assets shall remain
as Residual UTI Assets until allocated as UTI Unit Assets or SUBI Assets. Upon
such allocation as UTI Unit Assets or SUBI Assets, such Residual UTI Assets
shall no longer be assets of, or allocated to, the Residual UTI Portfolio,
unless and until specifically reallocated to the Residual UTI Portfolio from
that UTI Unit Portfolio or SUBI Portfolio pursuant to a written direction from
the holder of the related UTI Unit Certificate or SUBI Certificate, as
applicable, to the Titling Trustee. Each such direction to reallocate UTI Unit
Assets or SUBI Assets to the Residual UTI Portfolio, and each similar direction
to allocate UTI Unit Assets or UTI Residual Assets to a SUBI Portfolio, shall be
in substantially the form attached as Exhibit B. The undivided beneficial
interest in each such UTI Unit Portfolio shall constitute a separate subdivision
of the Undivided Trust Interest (each, a "UTI Unit"); the undivided interest in
the Residual UTI Portfolio shall constitute a separate subdivision of the UTI
(the "Residual UTI Unit"); and the Residual UTI Unit and any UTI Units
outstanding from time to time collectively shall comprise the UTI.
The Titling Trustee shall distribute to or upon the order of the UTI
Beneficiary one or more UTI Units, each UTI Unit representing a specific
undivided interest in (but only in) such identified UTI Unit Portfolio and the
UTI Unit Assets allocated thereto from time to time.
(d) The UTI Beneficiary shall at all times maintain a minimum net worth of
at least $5,000,000 (excluding the value of any UTI Certificate(s) or SUBI
Certificates held thereby).
SECTION 11.02 ISSUANCE AND FORM OF UTI CERTIFICATES.
(a) The UTI initially shall be represented by a single trust certificate
(together with any replacements thereof, the "Residual UTI Certificate"). Upon
the written direction described above in Section 11.01(c), the UTI thereafter
shall be represented by the Residual UTI Certificate and any additional trust
certificate representing each UTI Unit to be formed (together with any
replacements thereof, a "UTI Unit Certificate") and such previous UTI Unit
Certificates as may have been issued and not retired. All such trust
certificates shall constitute "UTI Certificates" within the meaning of Section
3.01(b) of the Titling Trust Agreement. The Residual UTI Certificate, and each
other UTI Certificate shall be in substantially the form of Exhibit C attached
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required by this UTI Supplement, and may have such letters,
numbers or other marks of identification and such legends and endorsements
placed thereon as may, consistently herewith and with the Titling Trust
Agreement, be directed by the UTI Beneficiary. Each UTI Certificate shall be
printed, lithographed, typewritten,
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mimeographed, photocopied or otherwise produced or may be produced in any
other manner as may, consistently herewith and with the Titling Trust
Agreement, be determined by the UTI Beneficiary.
(b) Each UTI Certificate shall contain (i) an express written waiver
of any claim by any holder thereof to any assets of the Titling Trustee and to
all of the Titling Trust Assets or proceeds thereof other than the UTI Unit
Assets or Residual UTI Assets, as the case may be, represented by such UTI
Certificate, and those proceeds or assets derived from or earned by such UTI
Assets, and (ii) an express subordination in favor of the holder of each SUBI
Certificate (or pledgee thereof) by any holder or pledgee of a UTI Certificate
to any claim to any SUBI Asset that, notwithstanding such holder's or pledgee's
disclaimer, may be determined to exist.
(c) Neither any interest in the UTI nor any UTI Certificate may be
transferred or assigned by the UTI Beneficiary other than as contemplated
herein, and any such purported transfer or assignment shall be deemed null,
void and of no effect. However, any UTI Certificates and the Residual UTI
Certificate may be pledged, and a security interest therein granted, and may
be transferred or assigned absolutely to or by the pledgee thereof, solely in
connection with exercise of remedies with respect to a default under or with
respect to any Securitized Financing secured thereby or any UTI Pledge
secured thereby; provided that each pledgee or transferee must (i) give a
non-petition covenant substantially similar to that set forth in Section 6.14
of the Titling Trust Agreement, and (ii) execute an agreement between or
among itself, each other assignee or pledgee from time to time of the UTI or
any UTI Certificate, and each assignee or pledgee from time to time of any
SUBI or SUBI Certificate, to release all claims to the SUBI Assets and, in
the event that such release is not given effect, to fully subordinate all
claims it may be deemed to have against the SUBI Assets.
SECTION 11.03 FILINGS.
The Grantor, the UTI Beneficiary (if different from the Grantor) and the
Titling Trustee, as directed by and at the expense the Grantor or the UTI
Beneficiary, will undertake all other and future actions and activities as may
be deemed reasonably necessary by the Grantor or the UTI Beneficiary to perfect
(or evidence) and confirm the foregoing allocations of Titling Trust Assets to
the UTI Portfolio, including without limitation filing or causing to be filed
UCC financing statements and executing and delivering all related filings,
documents or writings as may be deemed reasonably necessary by the Grantor or
the UTI Beneficiary hereunder or for such purposes under any other documents
relating to any Securitized Financing involving the UTI or a UTI Pledge;
provided, however, that in no event will the Grantor, the UTI Beneficiary or the
Titling Trustee be required to take any action to perfect (i) any allocation of
UTI Assets to a UTI Unit Portfolio or (ii) any security interest that may be
deemed to be held by any party in any UTI Leased Vehicle. The Grantor and the
UTI Beneficiary each hereby revocably makes and appoints each of the Titling
Trustee and the Servicer from time to time of the UTI Portfolio, and any of the
respective officers, employees or agents, as the true and lawful
attorney-in-fact of the Grantor and the UTI Beneficiary, which appointment is
coupled with an interest and is revocable (but, in the case of the Servicer, is
made only for so long as such Servicer is acting in such capacity) with power to
sign on behalf of
4
<PAGE>
the Grantor or the UTI Beneficiary any financing statements, continuation
statements, security agreements, assignments, affidavits, letters of
authority, notices or similar documents necessary or appropriate
SECTION 11.04 TERMINATION OF UTI.
In connection with the termination of the Titling Trust Agreement and the
Titling Trust, upon the direction of the UTI Beneficiary and the consent of any
pledgee of a UTI Pledge, the UTI shall be terminated and the UTI Certificates
shall be returned to the Titling Trustee and canceled thereby.
ARTICLE XII
ACCOUNTS AND CASH FLOWS
SECTION 12.01 ACCOUNTS.
(a) On the date of the creation of the first SUBI, the Titling Trustee
will establish, and for so long as may be required by the provisions of any SUBI
Supplement, the Titling Trustee will maintain with respect to the UTI the UTI
Collection Account and Lease Funding Account (collectively, the "UTI Accounts")
described in Section 7.01(a) of the Titling Trust Agreement. All amounts that
are held in the UTI Collection Account shall be invested in Permitted
Investments in accordance with Section 12.02 of this UTI Supplement until
distributed or otherwise applied in accordance with the Titling Trust Agreement
or this UTI Supplement.
(b) The UTI Accounts shall relate solely to the UTI and the UTI
Portfolio and any funds held therein shall not be commingled with any other
monies, except as otherwise provided for or contemplated in the Titling Trust
Agreement as supplemented by this UTI Supplement. SUBI Accounts established
pursuant to any SUBI Supplement shall relate solely to the respective SUBI's
and SUBI Portfolios. The Titling Trustee, as directed by the Servicer, will
account for and record separately all proceeds that are received by the
Titling Trustee relating to each of the Titling Trustee Accounts from the
Titling Trust Assets.
(c) For so long as TMCC shall be the Servicer, the Servicer and the
Titling Trustee may make any remittances pursuant to this Article net of
amounts to be distributed to such remitting party from the Lease Funding
Account or the UTI Collection Account. In particular, unless otherwise
specified in any SUBI Supplement, advances by the UTI Beneficiary or the
Servicer with respect to the funding of Contracts or the payment of Titling
Trust Expenses, and the reimbursement of such advances from collections on
the Contracts, the proceeds of any Securitized Financing or otherwise, will
not require deposit of funds into the Lease Funding Account or UTI Collection
Account, and may in each case be made by using funds that have been
commingled with other funds. Nonetheless, each such party shall account for
all of the above described remittances and distributions as if the amounts
were deposited and/or transferred separately rather than on a net basis.
5
<PAGE>
SECTION 12.02 CASH FLOWS.
(a) Subject to Section 7.01(b) of the Titling Trust Agreement and
Sections 12.04 and 12.05 hereof, and except as otherwise provided herein, in
any SUBI Supplement or in any related SUBI Servicing Supplement, the Servicer
or Titling Trustee shall deposit as described in Section 7.01(b) of the
Titling Trust Agreement all collections and proceeds received by the Servicer
with respect to any Contract or Leased Vehicle, whether from regular periodic
payments by obligors under a Contract sent to a Servicer lock box or from any
other payments from such obligors or any other Persons received in any other
way by the Servicer. All such collections and proceeds shall be identified
by the Servicer as related either to (i) Contracts and Leased Vehicles in a
particular SUBI Portfolio or (ii) Contracts and Leased Vehicles remaining as
part of the UTI Portfolio and shall be deposited by the Servicer into the
appropriate SUBI Collection Account to the extent they relate to any SUBI
Portfolio and into the UTI Collection Account (or simply paid to the UTI
Beneficiary by the Servicer if the UTI Beneficiary and the Servicer are not
the same person) to the extent they relate to the UTI Portfolio.
(b) Except as provided in Sections 12.01, 12.04 and 12.05 of this
UTI Supplement, or as provided in any SUBI Supplement or related SUBI
Servicing Supplement, the Titling Trustee shall, at the direction of the
Servicer, make, or cause to be made, the following payments and transfers on
each Distribution Date in the following order and priority: (i) to or on
behalf of the Servicer, all Servicer Expenses incurred during the related
Collection Period, together with any unreimbursed Servicer Expenses incurred
in one or more prior Collection Periods; (ii) to or on behalf of the
Servicer, all Servicing Fees incurred during the related Collection Period,
together with any unpaid Servicing Fees incurred in one or more prior
Collection Periods; (iii) to or on behalf of the Person to whom due, all
Titling Trust Expenses incurred during the related Collection Period,
together with any unpaid Titling Trust Expenses incurred in one or more prior
Collection Periods; and (iv) to or upon the direction of the UTI Beneficiary,
any remaining funds therein.
(c) Except as provided in Sections 12.04 and 12.05 of this UTI
Supplement, or as provided in any SUBI Supplement or related SUBI Servicing
Supplement, the Titling Trustee shall, at the direction of the Servicer,
make, or cause to be made (or permit the allocation by the Servicer with
respect to monies held by the Servicer), on each Funding Advance
Reimbursement Date, payment from the Lease Funding Account (or from monies
held by the Servicer and allocable or distributable therefor) to or on behalf
of the Servicer, the related Funding Advance Reimbursement Amount, together
with any unreimbursed Funding Advance Reimbursement Amounts incurred in one
or more prior Collection Periods.
(d) Unless this UTI Supplement is amended to reflect a different
arrangement specified in any one or more SUBI Supplements, the allocation of
Liabilities of the Titling Trust, including with respect to any Affected
Trust Assets, shall be as specified in Section 3.04 of the Titling Trust
Agreement.
6
<PAGE>
SECTION 12.03 DISTRIBUTION OF FUNDS, DEFAULT IN UTI PLEDGE.
(a) On any date during any period in which the Titling Trustee has
neither received notice from the Servicer or any pledgee of a UTI Pledge nor
otherwise obtained actual knowledge to the effect that (i) there is any sum
due with respect to the related Securitized Financing or other UTI Pledge not
otherwise timely paid by the UTI Beneficiary (after any applicable grace
period), (ii) there is any other outstanding and uncured default by the UTI
Beneficiary with respect thereto (after any applicable grace period), or
(iii) any reimbursements of Funding Advances due to the Servicer have not
been made, the Titling Trustee, promptly upon receipt of a written demand
therefor from the related UTI Beneficiary accompanied by a written
determination by the Servicer as to the extent of Excess Funds in the Lease
Funding Account, shall pay out to such UTI Beneficiary upon its request any
or all Excess Funds so requested.
(b) Notwithstanding subsection (a) above, or any direction of the
Grantor, the UTI Beneficiary or the Servicer to the contrary, during any
period as to which the Titling Trustee either has received notice from the
Servicer or any pledgee of a UTI Pledge or otherwise has obtained actual
knowledge that a default in connection therewith has occurred and is
continuing, and the Titling Trustee has not received notice of correction or
cure thereof and other assurances and indemnifications reasonably
satisfactory to it with respect to such correction or cure, the Titling
Trustee shall (i) not create any new SUBI, (ii) direct each Servicer not to
accept any further assignments on behalf of the Titling Trustee of Contracts
or Leased Vehicles except as provided for in Sections 3.04, 7.02, 7.03 and
7.04 of the Titling Trust Agreement and Section 12.04 of this UTI Supplement,
and (iii) distribute to the relevant pledgee of the UTI Pledge to which such
default relates, on demand, all Excess Funds that would otherwise be
distributable to the UTI Beneficiary up to the amount necessary to cure any
such default. The Grantor, UTI Beneficiary and Servicer each hereby agrees
to and ratifies each such action on the part of the Titling Trustee, and
covenants not to give the Titling Trustee contrary instructions or directions.
(c) If for any reason circumstances with respect to any Securitized
Financing or other UTI Pledge are such that the Titling Trustee has given to any
Servicer the notice provided for in subsection (b)(ii) above, the Titling
Trustee shall take the actions set forth in Section 12.04 of this UTI
Supplement.
SECTION 12.04 LEASE FUNDING ACCOUNTS.
In the event that for any reason (a) (i) a different Servicer shall be
engaged by the Titling Trustee to manage one or more SUBI Portfolios, on the one
hand, and the UTI Portfolio, on the other hand, or (ii) the Titling Trustee has
actual knowledge that circumstances with respect to any Securitized Financing
secured by a UTI Pledge are such that a Trust Asset Transfer into one or more
SUBI Portfolios would cause a borrowing base deficiency (as defined in the
documents related to such Securitized Financing or UTI Pledge) or similar
default to occur with respect to such Securitized Financing or UTI Pledge, and
(b) at such time the Titling Trustee, acting pursuant to any SUBI Supplement,
would otherwise be causing the related Servicer to effect Trust Asset Transfers
7
<PAGE>
from the UTI Portfolio into one or more SUBI Portfolios upon the written
direction of the UTI Beneficiary, the Titling Trustee shall (1) establish (to
the extent such account has not already been established with respect to such
SUBI Portfolio) and maintain in its name for each SUBI a separate SUBI Lease
Funding Account, each of which shall be a Titling Trustee Account and a SUBI
Account; (2) to the extent that the Titling Trustee would, but for the
conditions set forth in clauses (a)(i) and (a)(ii) of this Section 12.04,
cause the transfer of funds from any SUBI Collection Account to the Lease
Funding Account (or directly to the Servicer) in connection with any Trust
Asset Transfer, instead cause the transfer of such funds from that SUBI
Collection Account to the related SUBI Lease Funding Account; (3) direct the
Servicer then servicing the respective SUBI Portfolio to acquire on behalf of
the Titling Trust, for the account of that SUBI Portfolio rather than for the
UTI Portfolio, Contracts and Leased Vehicles from Dealers, and (4) apply any
such funds in any such SUBI Lease Funding Account directly to reimburse the
Servicer then servicing that SUBI Portfolio for any payments made by it to
Dealers in respect of such Contracts and Leased Vehicles. In the event that
Contracts and Leased Vehicles are being acquired by any Servicer(s) at such
direction of the Titling Trustee on behalf of the Titling Trust with respect
to both the UTI Portfolio and any SUBI Portfolio simultaneously, the Titling
Trustee and the Servicer shall first allocate all such Contracts and Leased
Vehicles to the relevant SUBI Portfolios until funds available for such
purpose in any SUBI Lease Account shall be exhausted and then shall allocate
all remaining Contracts and Leased Vehicles to the UTI Portfolio.
SECTION 12.05 REBALANCING AFTER THIRD-PARTY CLAIM.
To the extent that a third-party Claim against Titling Trust Assets is
satisfied out of Titling Trust Assets in proportions other than as provided in
Section 3.04 of the Titling Trust Agreement, then, notwithstanding anything to
the contrary contained herein, the Titling Trustee shall promptly identify and
reallocate (or cause the Servicer to identify and reallocate) the remaining
Titling Trust Assets among the UTI Sub-Trust and each of the SUBI Sub-Trusts
such that each shall bear the expense of such Claim as nearly as possible as if
the burden thereof had been allocated as provided in Section 3.04 of the Titling
Trust Agreement.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 GOVERNING LAW.
This UTI Supplement shall be created under and governed by and construed
under the internal laws of the State of California, without regard to any
otherwise applicable principles of conflicts of laws, and the obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws.
8
<PAGE>
SECTION 13.02 EFFECT OF UTI SUPPLEMENT ON TRUST AGREEMENT.
(a) Except as otherwise specifically provided herein: (i) the parties
shall continue to be bound by all provisions of the Titling Trust Agreement;
and (ii) the provisions set forth herein shall operate either as additions to
or modifications of the extant obligations of the parties under the Titling
Trust Agreement, as the context may require. In the event of any conflict
between the provisions of this UTI Supplement and the Titling Trust Agreement
with respect to the UTI and any UTI Assets, the provisions of this UTI
Supplement shall prevail.
(b) For purposes of determining the parties' obligations under this
UTI Supplement with respect to the UTI, general references in the Titling Trust
Agreement to a UTI Supplement shall be deemed to refer more specifically to this
UTI Supplement.
SECTION 13.03 COUNTERPARTS.
This UTI Supplement may be executed in any number of counterparts, each of
which so executed and delivered shall be deemed to be an original, but all of
which counterparts shall together constitute but one and the same instrument.
9
<PAGE>
IN WITNESS WHEREOF, the Grantor, the Titling Trustee and (solely for the
limited purposes set forth in Sections 6.03(e), 6.11(d), 6.14, 6.15, 9.01 and
9.03 of the Titling Trust Agreement), the Trust Agent, have caused this UTI
Supplement to be duly executed by the respective officers as of the day and year
first above written.
TOYOTA MOTOR CREDIT CORPORATION,
as Grantor, UTI Beneficiary and Servicer
By: ______________________________________
Name:
Title:
TMTT, Inc.,
as Titling Trustee
By: ______________________________________
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION,
as Trust Agent
By: ______________________________________
Name:
Title:
10
<PAGE>
EXHIBIT A
FORM OF DIRECTION TO CREATE UTI UNIT
TMTT, INC., Titling Trustee
c/o First Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Corporate Trust Office
Re: Toyota Least Trust
Creation of UTI Unit No. ____
Dear sirs:
Pursuant to Section 11.01(c) of the UTI Supplement (the "UTI Supplement")
dated as of October 1, 1996, to the Trust and Servicing Agreement, as the same
was amended and restated pursuant to the Amended and Restated Trust and
Servicing Agreement (the "Titling Trust Agreement"), dated as of October 1,
1996, each among Toyota Motor Credit Corporation ("TMCC") as grantor, initial
beneficiary and servicer, TMTT, INC., as trustee (the "Titling Trustee"), and
for certain limited purposes only, First Bank National Association, a national
banking association as trust agent, you are hereby directed to create a UTI Unit
No. ___ (the "UTI Unit") comprised of the assets identified in the attached
schedule.
You are hereby directed to register the UTI Unit Certificate in the name of
[Pledgee/Transferee] as of [date], and to deliver the same on [date] to
[Pledgee/Transferee or Agent] at [Address], against confirmation of receipt of
[amount of proceeds of Pledge or Securitized Financing] received in the account
described in the attached account details.
The [name, date and parties to controlling document] setting forth the
terms and conditions of the [Pledge/Securitized Financing] is attached hereto.
Your attention is directed to Sections ___, ___ and ___, which specify events of
default the occurrence of which may require the Titling Trustee to make future
distributions of amounts payable to the UTI Beneficiary to the persons or on the
basis specified in Section 12.03 of the UTI Supplement.
A-1
<PAGE>
TMCC, as UTI Beneficiary, hereby represents and warrants to the Titling
Trustee that all of the conditions precedent to the creation of a UTI Unit are
satisfied as of the date of this instruction, including, but not limited to,
those contained in Sections 3.01 and 7.02 of the Titling Trust Agreement and
Section 11.02 of the UTI Supplement.
Dated: TOYOTA MOTOR CREDIT CORPORATION,
----------------------- as UTI Beneficiary
By:
------------------------------------
Name:
Title:
A-2
<PAGE>
EXHIBIT B
FORM OF DIRECTION TO REALLOCATE UTI UNIT ASSETS
TMTT, INC., Titling Trustee
c/o First Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Corporate Trust Office
Re: Toyota Least Trust
Reallocation with respect to UTI Unit No. ____
Dear sirs:
Pursuant to Section 11.01(c) of the UTI Supplement (the "UTI Supplement")
dated as of October 1, 1996, to the Trust and Servicing Agreement, as the same
was amended and restated pursuant to the Amended and Restated Trust and
Servicing Agreement (collectively, the "Titling Trust Agreement"), dated as of
October 1, 1996, each among Toyota Motor Credit Corporation ("TMCC") as grantor,
initial beneficiary and servicer, TMTT, INC., as trustee (the "Trustee"), and
for certain limited purposes only, First Bank National Association, a national
banking association as trust agent, you are hereby directed to allocate to a UTI
Unit Portfolio relating to UTI Unit No. ___ the Contracts and Leased Vehicles
specified on the attached schedule, and additionally, for the term of the
[Secured Financing UTI Pledge] documented in the attached [name, date and
parties to controlling document], to regard and treat the related proceeds and
other rights associated with such leases and leased vehicles in relation to such
UTI Unit No. ___ as specified in the UTI Supplement.
TMCC, as UTI Beneficiary, hereby represents and warrants to the Titling
Trustee that all of the conditions precedent to the allocation of UTI Assets to
a UTI Unit are satisfied as of the date of this direction, including, but not
limited to, those contained in Sections 3.01 and 7.02 of the Titling Trust
Agreement and Section 11.02 of the UTI Supplement.
Dated: TOYOTA MOTOR CREDIT CORPORATION
------------------------
By:
---------------------------------
Name:
Title:
B-1
<PAGE>
EXHIBIT C
FORM OF [RESIDUAL] UTI [UNIT] CERTIFICATE
TOYOTA LEASE TRUST
UNDIVIDED TRUST INTEREST CERTIFICATE
evidencing a fractional undivided interest in the UTI Sub-Trust (as defined
below).
(This Certificate does not represent any obligation of, or an interest in,
Toyota Motor Credit Corporation, Toyota Motor Sales, U.S.A., Inc., TMTT, Inc.,
TLI, Inc. or any of their respective affiliates.)
Number ___
THIS CERTIFIES THAT_____________________________________is the registered
owner of a nonassessable, fully-paid, fractional undivided interest in the UTI
[UTI Unit] (the ["UTI"]["UTI Unit"]) comprised of interests in those Titling
Trust Assets not allocated to any other Sub-Trust of the Titling Trust [or the
Residual UTI Sub-Trust], such assets comprising the UTI Sub-Trust (the "UTI
Sub-Trust") of the Toyota Lease Trust, a Delaware business trust (the "Trust")
formed by Toyota Motor Credit Corporation, as Grantor and UTI Beneficiary (in
such capacities, the "Grantor" and the "UTI Beneficiary" respectively), and
TMTT, Inc., a Delaware corporation, as trustee (the "Trustee") pursuant to a
Trust and Servicing Agreement, as the same was amended and restated pursuant to
the Amended and Restated Trust and Servicing Agreement (as amended and restated,
the "Titling Trust Agreement"), each dated and effective as of October 1, 1996,
among the Grantor, the Titling Trustee, and, for certain limited purposes set
forth therein, First Bank National Association, a national banking association,
as Trust Agent (the "Trust Agent"). A summary of certain of the provisions of
the Titling Trust Agreement is set forth below. Capitalized terms used and not
otherwise defined herein have the meanings ascribed thereto in the Titling Trust
Agreement and UTI Supplement (defined below).
This Certificate is one of the duly authorized UTI Certificates issued
under the Titling Trust Agreement, as supplemented by the UTI Supplement (the
"UTI Supplement") dated and effective as of October 1, 1996, among the UTI
Beneficiary, the Titling Trustee and, for certain limited purposes only set
forth therein, the Trust Agent (the "UTI Certificates"). This UTI Certificate
is subject to the terms, provisions and conditions of the Titling Trust
Agreement and the UTI Supplement, to which agreements each UTI Beneficiary by
virtue of the acceptance hereof or of any interest herein hereby assents and by
which such UTI Beneficiary is bound.
C-1
<PAGE>
Also issued or to be issued under the Titling Trust Agreement are various
other series of certificates evidencing undivided interests in other Sub-Trusts
of the Titling Trust. [To date, no other UTI Certificate has been issued, but]
SUBI Certificates representing 100% of the undivided interests in each SUBI
Sub-Trust formed or to be formed have or will be issued at the time each related
SUBI Sub-Trust is formed.
The property of the Titling Trust includes, or will include, among other
things: (i) any capital contributed by the Grantor; (ii) the Contracts and all
proceeds thereof; (iii) the Leased Vehicles and all proceeds thereof, including
each Certificate of Title and the Residual Value of each Leased Vehicle, whether
realized through the exercise by Obligors of purchase options under the
Contracts, the proceeds of sale of the Leased Vehicles to Dealers or third
parties or through payments received from any other Person (directly or
indirectly) under any related Insurance Policy (to the extent not applied to
repair or otherwise paid to a third Person or Governmental Authority by the
Servicer as required by law or pursuant to its normal servicing practices) or
as a subsidy or other funding of any modification of the related Booked Residual
Value; (iv) all of the Titling Trust's rights (but not its obligations) with
respect to any Contract or Leased Vehicle, including the right to enforce and to
proceeds arising from all Dealer repurchase obligations arising under Dealer
Agreements; (v) all of TMCC's rights (but not its obligations) with respect to
any Contract or Leased Vehicle, including the right to enforce and to proceeds
arising from all Dealer repurchase obligations arising under Dealer Agreements;
(vi) any Insurance Policy and rights thereunder or proceeds therefrom relating
to any of the Contracts, Leased Vehicles or payments of the related Obligors
with respect thereto; (vii) any portion of any security deposit actually and
properly applied by the Servicer against amounts due under the related Contract,
to the extent not applied to making repairs to the related Leased Vehicle or
paid to a third party or Governmental Authority in accordance with the
Servicer's normal servicing practices; and (viii) all proceeds of any of the
foregoing (such assets, together with any other assets of the Titling Trust, the
"Titling Trust Assets"). The Titling Trust Agreement provides that, from time
to time, certain of the Titling Trust Assets will be identified and allocated on
the records of the Titling Trust into one or more separate Sub-Trusts comprised
of identified Titling Trust Assets (such Sub-Trusts the "UTI Sub-Trust" or a
"SUBI Sub-Trust", as the case may be, and the related assets, "UTI Assets" or
"SUBI Assets", as the case may be).
Pursuant to the UTI Supplement, the UTI Assets were identified and
allocated on the records of the Titling Trust as the UTI Sub-Trust, and the
beneficial interest in the UTI Sub-Trust was designated as the UTI. The rights
of the UTI Beneficiary to certain of the proceeds of the UTI Assets are further
set forth in the Titling Trust Agreement and the UTI Supplement.
This UTI Certificate is limited in right of payment to certain collections
and recoveries respecting the Contracts (and the related Obligors) and the
Leased Vehicles allocated to the UTI [Unit] Sub-Trust, all to the extent and as
more specifically set in the Titling Trust Agreement and the UTI Supplement.
Copies of the Titling Trust Agreement and the UTI Supplement may be examined
during normal business hours at the principal office of the Titling Trustee, and
at such other places, if any, designated by the Titling Trustee, or by the UTI
Beneficiary upon request.
C-2
<PAGE>
By accepting this UTI Certificate or any interest herein, the UTI
Beneficiary waives any claim to any proceeds or assets of the Titling Trustee
and to all of the Titling Trust Assets other than those from time to time
included within the UTI [Unit] Sub-Trust and those proceeds or assets derived
from or earned by the UTI Assets. In addition, by accepting this UTI
Certificate or any interest herein, the UTI Beneficiary hereby expressly
subordinates any claim or interest in or to any Titling Trust Assets not
included in the UTI [Unit] Sub-Trust that may be determined to exist in favor of
such UTI Beneficiary notwithstanding the foregoing disclaimer to the rights and
interests of each SUBI Beneficiary.
The Titling Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the parties thereto by written agreement between the UTI
Beneficiary and the Titling Trustee to correct or supplement any provision in
the Titling Trust Agreement, to cure any ambiguity, and to add, change or
eliminate any other provision of the Titling Trust Agreement with respect to
matters or questions arising under the Titling Trust Agreement. After the first
Securitized Financing, any such amendment shall also require such additional
approvals, if any, as are required under documents relating to each Securitized
Financing.
As provided in the Titling Trust Agreement and the UTI Supplement, this UTI
Certificate and the underlying interests represented hereby may not be
transferred or assigned, and any purported transfer or assignment shall be null,
void, and of no effect, except in accordance with the provisions of the Titling
Trust Agreement and the UTI Supplement.
Prior to due presentation of this UTI Certificate for registration of a
permitted transfer, the Titling Trustee, the certificate registrar and any of
their respective agents may treat the person or entity in whose name this UTI
Certificate is registered as the owner hereof for the purpose of receiving
distributions and for all other purposes, and, except as provided for in the
Titling Trust Agreement, neither the Titling Trustee, the certificate registrar
nor any such agent shall be affected by any notice to the contrary.
Unless this UTI Certificate shall have been executed by an authorized
officer of the Titling Trustee, by manual signature, this UTI Certificate shall
not entitle the holder hereof to any benefit under the Titling Trust Agreement
or the UTI Supplement or be valid for any purpose.
C-3
<PAGE>
IN WITNESS WHEREOF, the Titling Trustee on behalf of the Titling Trust and
not in its individual capacity has caused this UTI Certificate to be duly
executed.
Dated: TOYOTA LEASE TRUST
By: TMTT, INC., as Titling Trustee
By:
---------------------------------
Authorized Officer
ATTEST:
- ------------------------------
C-4
<PAGE>
EXHIBIT D
FORMS OF CONTRACT
[Omitted - On file with the Servicer]
D-1
<PAGE>
EXHIBIT E
FORM OF DEALER AGREEMENT
E-1
<PAGE>
EXHIBIT 10.3
- -------------------------------------------------------------------------------
TOYOTA MOTOR CREDIT CORPORATION
TMTT, INC.,
as Titling Trustee of Toyota Lease Trust
and,
for Certain Limited Purposes only,
FIRST BANK NATIONAL ASSOCIATION,
as Trust Agent
1997-A SUBI SUPPLEMENT
TO
AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
Dated as of _______________, 1997
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE XV
DEFINITIONS
SECTION 15.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE XVI
CREATION AND TERMINATION OF TRUST INTERESTS
SECTION 16.01 Initial Creation of 1997-A SUBI Sub-Trust and 1997-A SUBI . 4
SECTION 16.02 Rights in Respect of 1997-A SUBI. . . . . . . . . . . . . . 6
SECTION 16.03 Issuance and Form of 1997-A SUBI Certificates . . . . . . . 6
SECTION 16.04 Filings . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 16.05 Termination of 1997-A SUBI. . . . . . . . . . . . . . . . . 7
SECTION 16.06 Representations and Warranties of Titling Trustee . . . . . 7
SECTION 16.07 Resignation or Removal of Titling Trustee . . . . . . . . . 7
ARTICLE XVII
ACCOUNTS; CASH FLOWS; PERMITTED INVESTMENTS
SECTION 17.01 1997-A SUBI Collection Account. . . . . . . . . . . . . . . 8
SECTION 17.02 1997-A SUBI Lease Account . . . . . . . . . . . . . . . . . 8
SECTION 17.03 Investment Gains and Losses . . . . . . . . . . . . . . . . 9
SECTION 17.04 Rebalancing After Third-Party Claim . . . . . . . . . . . . 9
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
SECTION 18.01 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 18.02 Effect of 1997-A SUBI Supplement on Trust Agreement . . . . 10
SECTION 18.03 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 18.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 18.05 Severability of Provisions. . . . . . . . . . . . . . . . . 11
SECTION 18.06 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 11
EXHIBITS
EXHIBIT A Form of Series 1997-A SUBI Certificate . . . . . . . . . . . A-1
SCHEDULE I Schedule of Series 1997-A Contracts and Series 1997-A
Leased Vehicles as of the 1997-A Cut-off Date. . . . . . . . S-1
<PAGE>
1997-A SUBI SUPPLEMENT TO
AMENDED AND RESTATED TRUST AND SERVICING AGREEMENT
1997-A SUBI SUPPLEMENT TO AMENDED AND RESTATED TRUST AND SERVICING
AGREEMENT, dated and effective as of _____________, 1997, among TOYOTA MOTOR
CREDIT CORPORATION, a California corporation (in its capacities as Grantor,
UTI Beneficiary and Servicer, respectively), TMTT, INC., as Titling Trustee,
and for certain limited purposes only, FIRST BANK NATIONAL ASSOCIATION, a
national banking association, as Trust Agent.
RECITALS
A. TMCC, the Titling Trustee and the Trust Agent have entered into the
Titling Trust Agreement, pursuant to which the Grantor and the Titling
Trustee formed the Titling Trust, for the purpose of taking assignments and
conveyances of, holding in trust and dealing in, various Titling Trust Assets
in accordance with the Titling Trust Agreement.
B. The Titling Trust Agreement contemplates that certain of the Titling
Trust Assets, other than those previously identified on the Titling Trust's
books and records as Other SUBI Assets and allocated to a separate SUBI
Sub-Trust, may be allocated to a SUBI Sub-Trust and thenceforth constitute
SUBI Assets within such SUBI Sub-Trust, and that the Titling Trustee shall
create a SUBI and issue to, or to the order of, the UTI Beneficiary one or
more SUBI Certificates evidencing the related SUBI, and the related SUBI
Beneficiaries and their permitted assignees generally will be entitled to the
net cash flow arising from, but only from, such SUBI Assets.
C. The parties hereto desire to supplement the terms of the Titling
Trust Agreement to cause the Titling Trustee to identify a SUBI Portfolio and
allocate the related Titling Trust Assets to the 1997-A SUBI Sub-Trust, to
create the 1997-A SUBI and to create and issue to the UTI Beneficiary a SUBI
Certificate evidencing the entire beneficial interest in the 1997-A SUBI, and
to set forth the terms and conditions thereof.
D. The Titling Trustee, on behalf of the Titling Trust, and the
Servicer also will enter into the 1997-A SUBI Servicing Supplement pursuant
to which, among other things, the terms of the Titling Trust Agreement will
be supplemented insofar as they apply solely to the servicing of the SUBI
Sub-Trust created hereby to provide for further specific servicing
obligations that will benefit solely the SUBI Beneficiaries with respect to
the 1997-A SUBI created hereby.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and in the Titling Trust Agreement, the parties hereto agree
to the following supplemental obligations and provisions with regard to the
1997-A SUBI Sub-Trust:
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ARTICLE XIV
[RESERVED]
ARTICLE XV
DEFINITIONS
SECTION 15.01 DEFINITIONS. For all purposes of this 1997-A SUBI
Supplement, except as otherwise expressly provided or unless the context
otherwise requires, capitalized terms used and not otherwise defined herein
shall have the meanings ascribed thereto in the Annex of Definitions or the
Annex of Supplemental Definitions attached hereto for all purposes of this
1997-A SUBI Supplement. In the event of any conflict between a definition set
forth herein and that set forth in the Annex of Definitions or Annex of
Supplemental Definitions, that set forth herein shall prevail. All terms used
in this 1997-A SUBI Supplement include, as appropriate, all genders and the
plural as well as the singular. All references such as "herein", "hereof" and
the like shall refer to this 1997-A SUBI Supplement as a whole and not to any
particular article or section within this 1997-A SUBI Supplement. All
references such as "includes" and variations thereon shall mean "includes
without limitation" and references to "or" shall mean "and/or". Any reference
herein to the "Titling Trustee, acting on behalf of the Titling Trust", or
words of similar import, shall be deemed to mean the Titling Trustee, acting
on behalf of Toyota Lease Trust and all beneficiaries thereof.
ARTICLE XVI
CREATION AND TERMINATION OF TRUST INTERESTS
SECTION 16.01 INITIAL CREATION OF 1997-A SUBI SUB-TRUST AND 1997-A
SUBI.
(a) Pursuant to Section 3.01(c) of the Titling Trust Agreement, Titling
Trust Assets not already denominated as SUBI Assets with respect to a different
SUBI Sub-Trust may be identified and allocated as SUBI Assets of a separate SUBI
Sub-Trust at the direction of the UTI Beneficiary. The UTI Beneficiary hereby
directs the Titling Trustee to identify and allocate or cause to be identified
and allocated on the books and records of the Titling Trust a separate portfolio
of SUBI Assets (the "1997-A SUBI Assets") consisting of (i) the Contracts and
related Leased Vehicles listed on Schedule I hereto and other related Titling
Trust Assets to be accounted for and held in trust independently from all other
Titling Trust Assets within the Titling Trust, including all Titling Trust
Assets already identified and allocated to any other SUBI Sub-Trust and from
those remaining as assets of the UTI Sub-Trust and (ii) the Contracts, Leased
Vehicles and related Titling Trust Assets to be allocated to the 1997-A
Sub-Trust pursuant to Section 3.02(a) of the 1997-A Servicing Supplement.
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The assets of the 1997-A SUBI Sub-Trust established hereby shall consist
of: (i) those Contracts identified by contract number on Schedule I hereto
that are Eligible Contracts as of the 1997-A Cut-off Date, including the
related rights of the Titling Trust as Lessor under such Contracts, having an
Aggregate Net Investment Value of $____ as of the 1997-A Cut-off Date and those
Contracts allocated to the 1997-A Sub-Trust pursuant to Section 3.02(a) of
the 1997-A Servicing Supplement; (ii) the related Leased Vehicles and all
proceeds thereof, including each Certificate of Title and the Residual Value
of each Leased Vehicle, whether realized through the exercise by Obligors of
purchase options under the Contracts, the proceeds of sale of the Leased
Vehicles to Dealers or third parties or through payments received from any
other Person (directly or indirectly) under any related Insurance Policy (to
the extent not applied to repair or otherwise paid to a third Person or
Governmental Authority by the Servicer as required by law or pursuant to its
normal servicing practices) or as a subsidy or other funding of any
modification of the related Booked Residual Value; (iii) all of the Titling
Trust's right, title, interest and obligations (except such obligations that
are specifically retained by the Titling Trust pursuant to the terms of the
Titling Trust Agreement) with respect to such Contracts or Leased Vehicles,
including the right to enforce all Dealer repurchase obligations arising
under Dealer Agreements and to proceeds arising therefrom; (iv) any Insurance
Policy and rights thereunder or proceeds therefrom relating to such
Contracts, Leased Vehicles or payments of the related Obligors with respect
thereto; (v) any portion of any Security Deposit actually and properly
applied by the Servicer against amounts due under the related Contract, to
the extent not applied to making repairs to the related Leased Vehicle or
paid to a third party or Governmental Authority in accordance with the
Servicer's normal servicing practices; (vi) the 1997-A SUBI Collection
Account, including all cash and Permitted Investments therein and all income
from the investment of funds therein and (vii) all proceeds of any of the
foregoing.
Based upon their identification and allocation by the Servicer pursuant
to the 1997-A SUBI Servicing Supplement, the Titling Trustee hereby
identifies and allocates as 1997-A SUBI Assets the portfolio of Contracts and
Leased Vehicles more particularly described on Schedule I hereto, and the
related Titling Trust Assets described above, each such 1997-A SUBI Asset to
be identified on the books and accounts of the Trust as belonging to the
1997-A SUBI Portfolio.
(b) Pursuant to Section 3.01(c) of the Titling Trust Agreement, the
Titling Trustee hereby creates the 1997-A SUBI Sub-Trust and the 1997-A SUBI.
The 1997-A SUBI shall represent a specific undivided beneficial interest
solely in the 1997-A SUBI Sub-Trust and the 1997-A SUBI Assets.
(c) As required by Section 3.01(d) of the Titling Trust Agreement, the UTI
Beneficiary hereby certifies to the Titling Trustee that as of the date of
execution and delivery hereof: that (i) either there is no pledgee of the UTI or
each such pledgee of a UTI Pledge has received prior notice of the creation of
the 1997-A SUBI Sub-Trust and of the terms and provisions of this 1997-A SUBI
Supplement and of the related Securitized Financing and (ii) as of the date
hereof, and after giving effect to the creation of the 1997-A SUBI Sub-Trust,
the transfer to the UTI Beneficiary of the 1997-A SUBI Certificate in
connection therewith and the application by the UTI Beneficiary of any net
proceeds from any Securitized Financing involving such SUBI and such SUBI
Certificate, there
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is and will be no default with respect to any Securitized Financing or other
agreement or obligation secured by a UTI Pledge.
(d) The parties hereto intend that, at any time during which all 1997-A
SUBI Certificates are held or beneficially owned by a single Person, the
1997-A SUBI Sub-Trust shall not constitute a separate entity for federal
income tax purposes or for state income or franchise tax purposes. However,
at any time that the 1997-A SUBI Certificates are held or beneficially owned
by two or more Persons, the parties hereto intend that the 1997-A Sub-Trust
be characterized as a separate entity for federal and state income tax
purposes that shall qualify as a partnership for such purposes.
(e) The Beneficiary of the 1997-A SUBI Certificate shall at all times
maintain a minimum net worth (excluding the value of the 1997-A SUBI Certificate
held thereby and the value of any assets of the 1997-A Securitization Trust
established pursuant to the 1997-A Trust Agreement) equal to at least $100,000.
SECTION 16.02 RIGHTS IN RESPECT OF 1997-A SUBI.
Each holder of a 1997-A SUBI Certificate (including the 1997-A
Securitization Trustee, on behalf of the Holders of the securities issued by
the 1997-A Securitization Trust) is a third-party beneficiary of the Titling
Trust Agreement and this 1997-A SUBI Supplement, insofar as they apply to the
1997-A SUBI and the holder of the 1997-A SUBI Certificate. Therefore, to that
extent, references in the Titling Trust Agreement to the ability of any
"holder of a SUBI Certificate", "assignee of a SUBI Certificate" or the like
to take any action shall also be deemed to refer to the 1997-A Securitization
Trustee acting at its own instigation or upon the instruction of Investor
Certificateholders pursuant to the terms of Section 6.15 of the 1997-A
Securitization Trust Agreement.
SECTION 16.03 ISSUANCE AND FORM OF 1997-A SUBI CERTIFICATE.
(a) The 1997-A SUBI shall be represented by a single 1997-A SUBI
Certificate, which shall represent 100% of the beneficial interests in the
1997-A SUBI and the 1997-A SUBI Sub-Trust, as further set forth herein. The
1997-A SUBI Certificate shall be substantially in the form of Exhibit A
attached hereto, but may have such letters, numbers or other marks of
identification and such legends and endorsements placed thereon as may,
consistently herewith and with the Titling Trust Agreement, be directed by
the Beneficiary.
The 1997-A SUBI Certificate may be printed, lithographed, typewritten,
mimeographed, photocopied or otherwise produced in any other manner as may,
consistently herewith and with the Titling Trust Agreement, be determined by
the UTI Beneficiary.
(b) As required by Section 3.01(g) of the Titling Trust Agreement, the
1997-A SUBI Certificate may not be transferred or assigned unless the
assignee or pledgee (x) gives a non-petition covenant substantially similar
to that set forth in Section 6.14 of the Titling Trust Agreement, and
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(y) executes an agreement between or among itself and each UTI Beneficiary
and each SUBI Beneficiary of each SUBI relating to another Sub-Trust, to
release all claims to the Titling Trust Assets allocated to the UTI Sub-Trust
or to such other SUBI Sub-Trust and, in the event that such release is not
given effect, to fully subordinate all claims it may be deemed to have
against the Titling Trust Assets allocated thereto (which agreement may be
included in the 1997-A SUBI Certificate itself). In addition, the 1997-A SUBI
Certificate or any beneficial interest therein may not be transferred by any
Beneficiary thereof without the prior written consent of each registered
holder of a 1997-A SUBI Certificate.
SECTION 16.04 FILINGS.
The Grantor, the UTI Beneficiary (if different from the Grantor) and the
Titling Trustee, as directed by the Grantor or the UTI Beneficiary, will
undertake all other and future actions and activities as may be deemed
reasonably necessary by the Grantor or the UTI Beneficiary to perfect (or
evidence) and confirm the allocation of the 1997-A SUBI Assets to the 1997-A
SUBI Portfolio as provided herein, including filing or causing to be filed UCC
financing statements and executing and delivering all related filings, documents
or writings as may be deemed reasonably necessary by the Servicer hereunder or
under any other agreements or instruments relating to such Securitized
Financing. The Grantor hereby irrevocably makes and appoints each of the
Titling Trustee and the Servicer (in the case of the Servicer, only for so long
as such Servicer is acting in such capacity), and any of their respective
officers, employees or agents, as the true and lawful attorney-in-fact of the
Grantor (which appointment is coupled with an interest and is irrevocable) with
power to sign on behalf of the Grantor any financing statements, continuation
statements, security agreements, mortgages, assignments, affidavits, letters of
authority, notices or similar documents necessary or appropriate to be executed
or filed pursuant to this Section 16.04.
SECTION 16.05 TERMINATION OF 1997-A SUBI.
In connection with any purchase by the Grantor or the Servicer of the
1997-A Certificateholders' interest in the corpus of the 1997-A
Securitization Trust pursuant to Section 7.02 of the 1997-A Securitization
Trust Agreement, and the succession thereof to all of the interest in the
1997-A SUBI, should all of the interest in the 1997-A SUBI thereafter be
transferred to the UTI Beneficiary, whether by sale or otherwise, then, upon
the direction of the UTI Beneficiary, the 1997-A SUBI shall be terminated,
the 1997-A SUBI Certificates shall be returned to the Titling Trustee and
canceled thereby, and the Titling Trustee, at the direction of the Servicer,
shall reallocate all 1997-A Contracts, 1997-A Leased Vehicles and related
1997-A SUBI Assets to the UTI Sub-Trust.
SECTION 16.06 REPRESENTATIONS AND WARRANTIES OF TITLING TRUSTEE.
The Titling Trustee hereby makes the same representations and warranties
set forth in Section 6.12 of the Titling Trust Agreement as of the date hereof,
on which the Grantor and UTI Beneficiary have relied in executing this 1997-A
SUBI Supplement and on which each of their permitted
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assignees and pledgees, and each pledgee or holder of a 1997-A SUBI
Certificate (and each 1997-A SUBI Beneficiary) may rely.
SECTION 16.07 RESIGNATION OR REMOVAL OF TITLING TRUSTEE. No
resignation or removal of the Titling Trustee pursuant to any provision of
the Titling Trust Agreement shall be effective unless and until each Rating
Agency has confirmed, in writing, that such resignation or removal would not
cause it to reduce, modify or withdraw its then current rating of any class
of securities issued by the 1997-A Securitization Trust.
ARTICLE XVII
ACCOUNTS; CASH FLOWS; PERMITTED INVESTMENTS
SECTION 17.01 1997-A SUBI COLLECTION ACCOUNT.
(a) The Titling Trustee shall establish and maintain with respect to the
1997-A SUBI the 1997-A SUBI Collection Account in the name of the 1997-A
Securitization Trustee, for the benefit of the 1997-A SUBI Beneficiaries,
which account shall constitute a SUBI Collection Account. The 1997-A SUBI
Collection Account initially shall be established with First Bank, as Trust
Agent, and at all times shall be an Eligible Account. In the event that the
Trust Agent no longer meets the requirements stated in the definition of
Eligible Account, then the Servicer shall, with the Titling Trustee's
assistance as necessary, cause the 1997-A SUBI Collection Account to be moved
to a bank or trust company that satisfies those requirements. The 1997-A SUBI
Collection Account shall relate solely to the 1997-A SUBI and the 1997-A SUBI
Sub-Trust, and funds therein shall not be commingled with any other moneys,
except as otherwise provided for or contemplated in the Titling Trust
Agreement as supplemented by this 1997-A SUBI Supplement or in the 1997-A
SUBI Servicing Supplement. All amounts held in the 1997-A SUBI Collection
Account shall be invested in Permitted Investments until distributed or
otherwise applied in accordance with the Titling Trust Agreement or this
1997-A SUBI Supplement.
(b) On each Deposit Date, as directed by the Servicer, the Titling
Trustee shall release proceeds of the Residual Value Insurance Policy payable
with respect to 1997-A Leased Vehicles and, subject to the provisions of and
as set forth in the 1997-A Securitization Trust Agreement, amounts
distributable therefrom, to TLI as the transferee from TMCC of the SUBI
Certificate, and therefore SUBI Beneficiary, or the designee thereof, the
parties hereto acknowledging and agreeing that TLI has, concurrently with the
execution and delivery hereof, executed and delivered an instrument
transferring the 1997-A SUBI Certificate and to the 1997-A Securitization
Trust exclusive of the proceeds of such Residual Value Insurance Policy.
(c) On each Monthly Allocation Date, as directed by the Servicer, the
Titling Trustee shall transfer or cause the transfer of all Principal
Collections (exclusive of amounts applied to Subsequent Contracts) and Interest
Collections in respect of the 1997-A SUBI Sub Trust (other than
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proceeds under the Residual Value Insurance Policy) with respect to the
related Collection Period, to the 1997-A SUBI Collection Account.
SECTION 17.02 1997-A SUBI LEASE ACCOUNT.
At such time as shall be required by Section 7.03 of the 1997-A
Securitization Trust Agreement, the Titling Trustee shall establish and
maintain with respect to the 1997-A SUBI the 1997-A SUBI Lease Account in the
name of the Titling Trustee, for the benefit of the 1997-A SUBI
Beneficiaries, which account shall constitute a SUBI Lease Account. Any such
1997-A SUBI Lease Account initially shall be established with First Bank, as
Trust Agent, and at all times shall be an Eligible Account. In the event that
the Trust Agent no longer meets the requirements stated in the definition of
Eligible Account, then the Servicer shall, with the Titling Trustee's
assistance as necessary, cause the 1997-A SUBI Lease Account to be moved to a
bank or trust company that satisfies those requirements. The 1997-A SUBI
Lease Account shall relate solely to the 1997-A SUBI and the 1997-A SUBI
Portfolio, and funds therein shall not be commingled with any other moneys,
except as otherwise provided for or contemplated in the Titling Trust
Agreement as supplemented by this 1997-A SUBI Supplement or in the 1997-A
SUBI Servicing Supplement. All amounts held in the 1997-A SUBI Lease Account
shall be invested in Permitted Investments until distributed or otherwise
applied in accordance with the Titling Trust Agreement, this 1997-A SUBI
Supplement or the 1997-a Servicing Supplement. All transfers of funds into
and out of the 1997-A SUBI Lease Account shall be made in accordance with
Section 7.03 of the Titling Trust Agreement.
SECTION 17.03 INVESTMENT GAINS AND LOSSES.
All or a portion of the funds deposited into the 1997-A SUBI Accounts
shall be separately invested by the Titling Trustee or the 1997-A
Securitization Trustee, as applicable, from time to time at the direction of
the Servicer, in any Permitted Investments. All income, gain or loss from
investment of monies in the Lease Funding Account shall, unless otherwise
specified in the Transaction Documents with respect to any Securitized
Financing, be for the account of the UTI Beneficiary; provided, that, each
such investment shall be made in the name of the Titling Trustee, its nominee
or its Financial Intermediary. If at any time the Servicer shall not have
given the Titling Trustee a timely investment directive with respect to any
1997-A SUBI Account, the Titling Trustee shall invest and reinvest any monies
in such account(s) in a mutual fund offered by the Trust Agent or another
affiliate of the Titling Trustee meeting the requirements of clause (i) of
the definition of Permitted Investments.
SECTION 17.04 REBALANCING AFTER THIRD-PARTY CLAIM.
To the extent that a third-party Claim against Titling Trust Assets is
satisfied out of Titling Trust Assets in proportions other than as provided
in Section 3.04 of the Titling Trust Agreement, then, notwithstanding
anything to the contrary contained herein, the Titling Trustee, at the
direction of the Servicer, shall promptly identify and reallocate (or cause
the Servicer to identify and reallocate) the remaining Titling Trust Assets
among the UTI Sub-Trust and each of the SUBI Sub-
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Trusts, including the 1997-A SUBI Sub-Trust, such that each shall bear the
expense of such Claim as nearly as possible as if the burden thereof had been
allocated as provided in Section 3.04 of the Titling Trust Agreement.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
SECTION 18.01 GOVERNING LAW.
This 1997-A SUBI Supplement shall be created under and governed by and
construed under the internal laws of the State of California, without regard
to any otherwise applicable principles of conflicts of laws, and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
SECTION 18.02 EFFECT OF 1997-A SUBI SUPPLEMENT ON TRUST AGREEMENT.
(a) Except as otherwise specifically provided herein: (i) the parties
shall continue to be bound by all provisions of the Titling Trust Agreement;
and (ii) the provisions set forth herein shall operate either as additions to
or modifications of the extant obligations of the parties under the Titling
Trust Agreement, as the context may require. In the event of any conflict
between the provisions of this 1997-A SUBI Supplement and the Titling Trust
Agreement with respect to the 1997-A SUBI, the provisions of this 1997-A SUBI
Supplement shall prevail.
(b) For purposes of determining the parties' obligations under this
1997-A SUBI Supplement with respect to the 1997-A SUBI, general references in
the Titling Trust Agreement to: (i) a SUBI Account shall be deemed to refer
more specifically to the 1997-A SUBI Account; (ii) a SUBI Asset shall be
deemed to refer more specifically to a 1997-A SUBI Asset; (ii) an appropriate
or applicable SUBI Collection Account shall be deemed to refer more
specifically to the 1997-A SUBI Collection Account; (iv) an appropriate or
applicable SUBI Lease Account shall be deemed to refer more specifically to a
1997-A SUBI Lease Account; (v) a SUBI Sub-Trust or SUBI Portfolio shall be
deemed to refer more specifically to the 1997-A SUBI Sub-Trust or 1997-A SUBI
Portfolio, as the case may be; (vi) a SUBI Supplement shall be deemed to
refer more specifically to this 1997-A SUBI Supplement; and (vii) a SUBI
Servicing Supplement shall be deemed to refer more specifically to the 1997-A
SUBI Servicing Supplement.
SECTION 18.03 AMENDMENT.
(a) Notwithstanding Section 9.01 of the Titling Trust Agreement, the
Titling Trust Agreement, as supplemented by this Supplement, to the extent that
it applies solely to the 1997-A SUBI and the 1997-A SUBI Portfolio, may be
amended from time to time by a writing signed by the Titling Trustee, the UTI
Beneficiary, each 1997-A SUBI Beneficiary and, to the extent that any such
amendment affects any obligation or interest of the Trust Agent, the Trust
Agent, in each case
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only with the prior written consent of the 1997-A Securitization Trustee and
upon receipt of written notice from each Rating Agency that the proposed
amendment will not cause such Rating Agency to reduce or withdraw any then
current rating on any class of securities issued by the 1997-A Securitization
Trust.
SECTION 18.04 NOTICES.
The notice provisions of the Titling Trust Agreement shall apply equally to
this Supplement; provided, that, any notice to the 1997-A Securitization Trustee
shall be addressed as follows:
First Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Corporate Trust Office
A copy of each notice or other writing required to be delivered to the
Titling Trustee pursuant to the Titling Trust Agreement or this 1997-A SUBI
Supplement also shall be delivered to the 1997-A Securitization Trustee with
respect to the 1997-A Securitization Trust.
SECTION 18.05 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this 1997-A SUBI Supplement shall be for any reason whatsoever held invalid,
then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of
this 1997-A SUBI Supplement and shall in no way affect the validity or
enforceability of the other provisions of this 1997-A SUBI Supplement or of
any 1997-A SUBI Certificates or the rights of the holders thereof. To the
extent permitted by law, the parties hereto waive any provision of law that
renders any provision of this 1997-A SUBI Supplement invalid or unenforceable
in any respect.
SECTION 18.06 COUNTERPARTS.
This 1997-A SUBI Supplement may be executed in any number of
counterparts, each of which so executed and delivered shall be deemed to be
an original, but all of which counterparts shall together constitute but one
and the same instrument.
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IN WITNESS WHEREOF, TMCC, the Titling Trustee and, solely for the
limited purposes set forth herein, First Bank National Association, as Trust
Agent, have caused this 1997-A SUBI Supplement to be duly executed by their
respective officers as of the day and year first above written.
TOYOTA MOTOR CREDIT CORPORATION,
Grantor, Servicer and UTI Beneficiary
By:
----------------------------------
Name:
Title:
TMTT, INC., as Titling Trustee
By:
----------------------------------
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION,
as Trust Agent
By:
----------------------------------
Name:
Title:
TLI, INC.,
assignee of UTI Beneficiary (solely to
acknowledge the provisions hereof)
By:
----------------------------------
Name:
Title:
[Appropriate Notary Blocks to be inserted for each Signatory]
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SCHEDULE I
SCHEDULE OF SERIES 1997-A CONTRACTS AND
SERIES 1997-A LEASED VEHICLES AS OF THE 1997-A CUT-OFF DATE
[Omitted. On file with the Servicer, the Titling Trustee and the 1997-A
Securitization Trustee.]
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EXHIBIT A
FORM OF SERIES 1997-A SUBI CERTIFICATE
TOYOTA LEASE TRUST
SERIES 1997-A SPECIAL UNIT OF BENEFICIAL INTEREST CERTIFICATE
evidencing a fractional undivided interest in the 1997-A SUBI
Sub-Trust (as defined below).
(This Certificate does not represent any obligation of, or an
interest in, Toyota Motor Credit Corporation, Toyota Motor Sales,
U.S.A., Inc., TMTT, Inc., TLI, Inc. or any of their respective
affiliates.)
Number
----
THIS CERTIFIES THAT
-------------------------------------------------------
is the registered owner of a nonassessable, fully-paid, fractional undivided
interest in the 1997-A SUBI (the "1997-A SUBI") comprised of interests in the
assets of the 1997-A SUBI Sub-Trust (the "1997-A Sub-Trust") of the Toyota
Lease Trust, a Delaware business trust (the "Titling Trust") formed by Toyota
Motor Credit Corporation, as Grantor and UTI Beneficiary (in such capacities,
the "Grantor" and the "UTI Beneficiary" respectively), and TMTT, Inc., a
Delaware corporation, as trustee (the "Titling Trustee") pursuant to a Trust
and Servicing Agreement, as the same was amended and restated pursuant to an
Amended and Restated Trust and Servicing Agreement (the "Titling Trust
Agreement"), each dated and effective as of October 1, 1996, among the
Grantor, the Titling Trustee, and, for certain limited purposes set forth
therein, First Bank National Association, a national banking association, as
trust agent (the "Trust Agent"). A summary of certain of the provisions of
the Titling Trust Agreement is set forth below. Capitalized terms used and
not otherwise defined herein have the meanings ascribed thereto in the
Titling Trust Agreement and 1997-A SUBI Supplement.
This Certificate is the only duly authorized 1997-A SUBI Certificate
issued under the Titling Trust Agreement, as supplemented by the 1997-A SUBI
Supplement (the "1997-A SUBI Supplement") dated and effective as of ________,
1997, among the UTI Beneficiary, the Titling Trustee and, for certain limited
purposes only set forth therein, the Trust Agent (the "1997-A SUBI
Certificate"). This 1997-A SUBI Certificate is subject to the terms,
provisions and conditions of the Titling Trust Agreement and the 1997-A SUBI
Supplement, to which agreements each 1997-A SUBI Beneficiary by virtue of the
acceptance hereof or of any interest herein hereby assents and by which such
SUBI Beneficiary is bound.
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Also issued or to be issued under the Titling Trust Agreement are various
other series of certificates evidencing undivided interests in other
Sub-Trusts of the Titling Trust. A single UTI Certificate has been issued to
the UTI Beneficiary, no other 1997-A SUBI Certificate had been issued on the
date this 1997-A SUBI Certificate was issued and SUBI Certificates
representing 100% of the undivided interests in each other SUBI to be formed
will be issued at the time each related SUBI Sub-Trust is formed.
The property of the Titling Trust includes, or will include, among other
things: (i) any capital contributed by the Grantor; (ii) the Contracts and
all proceeds thereof; (iii) the Leased Vehicles and all proceeds thereof,
including each Certificate of Title and the Residual Value of each Leased
Vehicle, whether realized through the exercise by Obligors of purchase
options under the Contracts, the proceeds of sale of the Leased Vehicles to
Dealers or third parties or through payments received from any other Person
(directly or indirectly) under any related Insurance Policy (to the extent
not applied to repair or otherwise paid to a third Person or Governmental
Authority by the Servicer as required by law or pursuant to its normal
servicing practices) or as a subsidy or other funding of any modification of
the related Booked Residual Value; (iv) all of the Titling Trust's rights
(but not its obligations) with respect to any Contract or Leased Vehicle,
including the right to enforce and to proceeds arising from all Dealer
repurchase obligations arising under Dealer Agreements; (v) all of TMCC's
rights (but not its obligations) with respect to any Contract or Leased
Vehicle, including the right to enforce and to proceeds arising from all
Dealer repurchase obligations arising under Dealer Agreements; (vi) any
Insurance Policy and rights thereunder or proceeds therefrom relating to any
of the Contracts, Leased Vehicles or payments of the related Obligors with
respect thereto; (vii) any portion of any Security Deposit actually and
properly applied by the Servicer against amounts due under the related
Contract, to the extent not applied to making repairs to the related Leased
Vehicle or paid to a third party or Governmental Authority in accordance with
the Servicer's normal servicing practices; and (viii) all proceeds of any of
the foregoing (such assets, the "Titling Trust Assets"). The Titling Trust
Agreement provides that, from time to time, certain of the Titling Trust
Assets will be identified and allocated on the records of the Titling Trust
into one or more separate Sub-Trusts comprised of identified Titling Trust
Assets (such Sub-Trusts the "UTI Sub-Trust" or a "SUBI Sub-Trust", as the
case may be, and the related assets, "UTI Assets" or "SUBI Assets", as the
case may be).
Pursuant to the 1997-A SUBI Supplement, the 1997-A SUBI Assets were
identified and allocated on the records of the Titling Trust as a separate
SUBI Sub-Trust (the "1997-A SUBI Sub-Trust"), and the beneficial interest in
the 1997-A SUBI Sub-Trust was designated as a separate SUBI known as the
"1997-A SUBI". The rights of the 1997-A SUBI Beneficiaries to certain of the
proceeds of the 1997-A SUBI Assets are and will be further set forth in the
Titling Trust Agreement and the 1997-A SUBI Supplement.
The 1997-A SUBI Certificates are limited in right of payment to certain
collections and recoveries respecting the Contracts (and the related Obligors)
and the Leased Vehicles allocated to the 1997-A SUBI Sub-Trust, all to the
extent and as more specifically set forth in the Titling Trust Agreement and the
1997-A SUBI Supplement. Copies of the Titling Trust Agreement and the
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1997-A SUBI Supplement may be examined during normal business hours at the
principal office of the Titling Trustee, and at such other places, if any,
designated by the Titling Trustee, by each 1997-A SUBI Beneficiary upon
request.
By accepting this 1997-A SUBI Certificate or any interest herein, the
related SUBI Beneficiary waives any claim to any proceeds or assets of the
Titling Trustee and to all of the Titling Trust Assets other than those from
time to time included within the 1997-A SUBI Sub-Trust and those proceeds or
assets derived from or earned by the 1997-A SUBI Assets. In addition, by
accepting this 1997-A SUBI Certificate or any interest herein, the related
SUBI Beneficiary hereby expressly subordinates any claim or interest in or to
any proceeds or assets of the Titling Trustee and to all of the Titling Trust
Assets other than those from time to time included within the 1997-A SUBI
Sub-Trust that may be determined to exist in favor of such SUBI Beneficiary
notwithstanding the foregoing disclaimer to the rights and interests of each
SUBI Beneficiary with respect to another SUBI.
The Titling Trust Agreement and 1997-A SUBI Supplement permits, with
certain exceptions therein provided, the amendment thereof and the
modification of the rights and obligations of the parties thereto with
respect to the 1997-A SUBI Assets, the 1997-A SUBI Sub-Trust and the 1997-A
SUBI and the rights of 1997-A SUBI Beneficiaries at any time by a writing
signed by the Titling Trustee, the UTI Beneficiary, each 1997-A SUBI
Beneficiary and, to the extent that any such amendment affects any obligation
or interest of the Trust Agent, the Trust Agent, in each case only with the
prior written consent of the 1997-A Securitization Trustee and upon receipt
of written notice from each Rating Agency that the proposed amendment will
not cause such Rating Agency to reduce or withdraw any then current rating on
any class of securities issued by the 1997-A Securitization Trust that was
initially issued at the request of the UTI Beneficiary. If approval of any
1997-A SUBI Beneficiary is required, any such consent shall be conclusive and
binding on such Beneficiary and on all future Beneficiaries hereof whether or
not notation of such consent is made upon this 1997-A SUBI Certificate.
As provided in the Titling Trust Agreement and the 1997-A SUBI
Supplement, this 1997-A SUBI Certificate and the underlying interests
represented hereby may not be transferred or assigned, except in accordance
with the provisions thereof.
Prior to due presentation of this 1997-A SUBI Certificate for
registration of a permitted transfer, the Titling Trustee, the certificate
registrar and any of their respective agents may treat the person or entity
in whose name this 1997-A SUBI Certificate is registered as the owner hereof
for the purpose of receiving distributions and for all other purposes, and,
except as provided for in the Titling Trust Agreement, neither the Titling
Trustee, the certificate registrar nor any such agent shall be affected by
any notice to the contrary.
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Unless this 1997-A SUBI Certificate shall have been executed by an
authorized officer of the Titling Trustee, by manual signature, this 1997-A SUBI
Certificate shall not entitle the holder hereof to any benefit under the Titling
Trust Agreement or the 1997-A SUBI Supplement or be valid for any purpose.
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IN WITNESS WHEREOF, the Titling Trustee on behalf of the Titling Trust
and not in its individual capacity has caused this 1997-A SUBI Certificate to
be duly executed.
Dated: TOYOTA LEASE TRUST
By: TMTT, INC., as Titling Trustee
By:
------------------------------------
Authorized Officer
ATTEST:
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ANNEX OF SUPPLEMENTAL DEFINITIONS
Unless otherwise specified in the agreement to which this Annex of
Supplemental Definitions is attached, the following terms have the indicated
meanings. Terms defined herein but not directly or indirectly used or
referenced in the agreement to which this Annex of Supplemental Definitions is
attached shall not be deemed to have any meaning or significance with respect to
such agreement.
"1997-A CERTIFICATE ACCOUNT" means the SUBI Account established pursuant to
the 1997-A Securitization Trust Agreement and designated as the "Series 1997-A
SUBI Certificate Account".
"1997-A COLLECTION ACCOUNT" means the SUBI Account established pursuant to
the Series 1997-A SUBI Supplement and designated as the "Series 1997-A SUBI
Collection Account".
"1997-A CONTRACTS" means the Contracts allocated to the 1997-A SUBI and
1997-A SUBI Sub-Trust pursuant to the 1997-A SUBI Supplement, including those
allocated during the Revolving Period..
"1997-A LEASED VEHICLES" means the Leased Vehicles and related Titling
Trust Assets allocated to the 1997-A SUBI and 1997-A SUBI Sub-Trust pursuant to
the 1997-A SUBI Supplement, including those allocated during the Revolving
Period.
"1997-A PROSPECTUS" means that Prospectus dated __________, 1997,
prepared by the Transferor in connection with the Securitized Financing of
the 1997-A SUBI by the Transferor.
"1997-A SECURITIZATION TRUST" means the trust created by the 1997-A
Securitization Trust Agreement, the estate of which consists or will consist of
(i) the 1997-A SUBI, the 1997-A SUBI Certificate, and all monies due and to
become due thereunder on and after the Cutoff Date, excluding any proceeds of
the Residual Value Insurance Policy, whether or not relating to any assets of
the 1997-A SUBI Portfolio; (ii) such monies as are from time to time deposited
in the 1997-A Collection Account; (iii) all rights accruing to the holder of the
1997-A SUBI Interest as a third-party beneficiary of the Titling Trust
Agreement, the 1997-A SUBI Supplement, the 1997-A Servicing Supplement and the
Reserve Fund; and (iv) all proceeds of the foregoing.
"1997-A SECURITIZATION TRUST AGREEMENT" means that certain Securitization
Trust Agreement, dated as of _________, 1997, between the Transferor and
Securitization Trustee, pursuant to which the 1997-A SUBI Certificate will be
transferred to the Securitization Trustee, in that capacity, in connection
with the Securitized Financing of the 1997-A SUBI by the Transferor.
"1997-A SECURITIZATION TRUSTEE" means First Bank National Association in
its capacity, as trustee in connection with the Securitized Financing of the
1997-A SUBI by the Transferor.
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"1997-A SERVICING SUPPLEMENT" means the SUBI Servicing Supplement to the
Titling Trust Agreement dated as of ________, 1997 and relating to the
servicing of the 1997-A SUBI.
"1997-A SUBI" means the SUBI created pursuant to the 1997-A SUBI
Supplement.
"1997-A SUBI ACCOUNT" means any SUBI Account related to the 1997-A SUBI.
"1997-A SUBI ASSETS" means the 1997-A Contracts, 1997-A Leased Vehicles and
related Titling Trust Assets allocated to the 1997-A SUBI and 1997-A SUBI
Sub-Trust pursuant to the 1997-A SUBI Supplement, including those allocated
during the Revolving Period.
"1997-A SUBI CERTIFICATE" means the SUBI Certificate issued by the Titling
Trust pursuant to the 1997-A SUBI Supplement evidencing the 1997-A SUBI
Interest.
"1997-A SUBI CERTIFICATE PURCHASE AND SALE AGREEMENT" means the 1997-A
SUBI Certificate Purchase and Sale Agreement, dated as of _________, 1997,
pursuant to which TMCC will sell to the Transferor, without recourse, all of
its right, title and interest in and to the 1997-A SUBI and the 1997-A SUBI
Certificate and the proceeds thereof.
"1997-A SUBI INTEREST" has the meaning set forth in Section 2.02 of the
Securitization Trust Agreement.
"1997-A SUBI PORTFOLIO" means the SUBI Portfolio that includes the 1997-A
Contracts and 1997-A Leased Vehicles allocated to the 1997-A SUBI and 1997-A
SUBI Sub-Trust pursuant to the 1997-A SUBI Supplement.
"1997-A SUBI SUB-TRUST" means the SUBI Sub-Trust created pursuant to the
1997-A SUBI Supplement including as its assets the 1997-A SUBI Portfolio and the
related Titling Trust Assets.
"1997-A SUBI SUPPLEMENT" means the SUBI Supplement to the Titling Trust
Agreement dated as of _________, 1997 pursuant to which the Titling Trustee,
at the direction of the UTI Beneficiary, creates the 1997-A Sub-Trust and the
1997-A SUBI and issues the 1997-A SUBI Certificate.
"ACCELERATED PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to any
Monthly Allocation Date during the Amortization Period, the lesser of (x) the
product of (i) one-twelfth of [__]% and (ii) the Aggregate Net Investment Value
as of the last day of the related Collection Period and (y) any portion of the
Investor Percentage of Interest Collections in respect of the related Collection
Period remaining after all required distributions and/or allocations to
Certificateholders have been made and after all required deposits into the
Reserve Fund have been made.
"ADDITIONAL LOSS AMOUNT" means, with respect to any Collection Period, an
amount equal to the sum of (a) all amounts of losses incurred in respect of any
uninsured liability to third parties (i.e., litigation risk) on the part of the
Titling Trust that is ultimately borne by the SUBI Assets
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during such Collection Period, whether such liability is incurred (i) with
respect to the 1997-A SUBI Assets and is therefore allocated to the 1997-A
SUBI Assets pursuant to the 1997-A SUBI Supplement, (ii) with respect to the
Titling Trust Assets generally and a pro rata portion of such liability is
allocated to the 1997-A SUBI Assets pursuant to the Titling Trust Agreement
or (iii) with respect to UTI Assets or Other SUBI Assets if such UTI Assets
or Other SUBI Assets are insufficient to pay such liability and a portion
thereof is therefore allocated to the 1997-A SUBI Assets pursuant to the
Titling Trust Agreement and (ii) all monies reserved within the 1997-A SUBI
Collection Account against future losses in respect of such liabilities by
the Servicer on behalf of the Securitization Trustee as of the last day of
such Collection Period.
"AGGREGATE NET INVESTMENT VALUE" means, as of any day, the sum of (i) the
aggregate of the Discounted Principal Balances of all 1997-A Contracts at such
date, each such Discounted Principal Balance being derived from the Schedule of
Contracts and Leased Vehicles as in effect on such date; PROVIDED that as of the
last day of any Collection Period, there shall be eliminated from the Schedule
of Contracts and Leased Vehicles for the purpose of this definition (including
the determination at any subsequent time of the Aggregate Net Investment Value
as of the last day of any Collection Period) each 1997-A Contract that became a
Charged-off, Liquidated, Matured or Additional Loss Contract before the end of
such Collection Period, (ii) the aggregate of the Booked Residual Values of
those Leased Vehicles that have been added to Matured Leased Vehicle Inventory
within the three immediately preceding Collection Periods but have not been sold
or otherwise disposed of as of the last day of the most recent Collection Period
for no more than three full Collection Periods, each such Booked Residual Value
being derived from the Schedule of Contracts and Leased Vehicles as in effect on
such date, and (iii) prior to the last Transfer Date, the aggregate amount of
Principal Collections that have not been reinvested in additional 1997-A
Contracts and 1997-A Leased Vehicles pursuant to Section 3.02 of the 1997-A
Servicing Supplement.
"AGGREGATE NET LOSSES" means, with respect to a Collection Period, an
amount equal to the aggregate Discounted Principal Balances of all 1997-A
Contracts that became Charged-off Contracts during such Collection Period minus
the sum of (x) all Net Repossessed Vehicle Proceeds and other Net Liquidation
Proceeds collected during such Collection Period with respect to Charged-off
Contracts and (y) the portion of amounts subsequently received in respect of
Contracts liquidated in prior Collection Periods.
"AMORTIZATION DATE" means ____________ 1, 1998.
"AMORTIZATION PERIOD" means the period beginning with the day immediately
succeeding the last day of the Revolving Period and ending on the day the
Certificates have been paid in full and all unpaid Class A-1 Certificate
Principal Loss Amounts, Class A-2 Certificate Principal Loss Amounts, the Class
A-3 Certificate Principal Loss Amounts, the Class A-4 Certificate Principal Loss
Amounts, Class B Certificate Principal Loss Amounts and unpaid Class B
Certificate Principal Carryover Shortfalls have been paid in full, in each case
with accrued interest thereon, or the Securitization Trust otherwise terminates.
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"APPLICANTS" shall have the meaning specified in Section 4.06 of the
Securitization Trust Agreement.
"BOOK-ENTRY CERTIFICATES" means a beneficial interest in the Class A
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency.
"Capped Contingent and Excess Liability Premiums CAPPED CONTINGENT AND
EXCESS LIABILITY PREMIUMS" means, with respect to any Monthly Allocation
Date, an amount sufficient to pay or reserve for payment of one-twelfth of
the portion of the annual premium payable on the Contingent and Excess
Liability Insurance Policies allocable to the 1997-A SUBI Interest, up to but
not exceeding $_____ in any calendar year.
"CAPPED SECURITIZATION TRUST ADMINISTRATIVE EXPENSES" means, with respect
to any Monthly Allocation Date, the Securitization Trustee's compensation and
other Administrative Expenses with respect to the Securitization Trust payable
or reimbursable thereto on such Monthly Allocation Date under the Securitization
Trust Agreement, including those due under Section 6.05 of the Securitization
Trust Agreement; provided that the amount so payable and/or reimbursable on such
Monthly Allocation Date, taken together with all such compensation and
Administrative Expenses paid or reimbursed since the beginning of the calendar
year in which such Monthly Allocation Date occurs, will not exceed [$50,000.00]
(or [$100,000.00] in any year in which an Early Amortization Event of the type
set forth in clause (iv) of the definition of Early Amortization Event occurs
and the Securitization Trustee sells the property of the Securitization Trust
pursuant to Section 8.02 of the Securitization Trust Agreement).
"CAPPED TITLING TRUST ADMINISTRATIVE EXPENSES" means, with respect to any
Monthly Allocation Date, the Titling Trustee's compensation and other
Administrative Expenses with respect to the Titling Trust allocable to the
1997-A SUBI Interest and payable or reimbursable thereto on such Monthly
Allocation Date under the Securitization Trust Agreement, including those due
under Section 6.13 of the Titling Trust Agreement; provided that the amount so
payable and/or reimbursable on such Monthly Allocation Date, taken together with
all such compensation and Administrative Expenses paid or reimbursed since the
beginning of the calendar year in which such Monthly Allocation Date occurs,
will not exceed [$50,000.00] (or [$100,000.00] in any year in which an Early
Amortization Event of the type set forth in clause (iv) of the definition of
Early Amortization Event occurs and the Securitization Trustee sells the
property of the Securitization Trust pursuant to Section 8.02 of the
Securitization Trust Agreement).
"CERTIFICATE BALANCE" initially means the Initial Certificate Balance and,
as of any date, means the sum of the Class A Certificate Balance and the Class B
Certificate Balance as of the close of business on such date, after giving
effect to any changes therein on such date.
"CERTIFICATE FACTOR" means, with respect to any Monthly Allocation Date, a
seven-digit decimal figure equal to the Certificate Balance as of the last day
of the related Collection Period divided by the Initial Certificate Balance.
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"CERTIFICATE OWNER" means, with respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant in
accordance with the rules of such Clearing Agency) and shall mean, with
respect to a Definitive Certificate, the related Certificateholder.
"Certificate Principal Loss Amount CERTIFICATE PRINCIPAL LOSS AMOUNT"
means, with respect to any Monthly Allocation Date, an amount equal the sum
of any Class A-1, Class A-2, Class A-3, Class A-4 and Class B Certificate
Principal Loss Amount.
"CERTIFICATE RATE" means the Class A-1 Rate, the Class A-2 Rate, the
Class A-3 Rate, the Class A-4 Rate or the Class B Rate, as indicated by the
context.
"CERTIFICATE REGISTER" means the register of Certificateholders
maintained by the Securitization Trustee pursuant to Section 4.03 of the
Securitization Trust Agreement.
"CERTIFICATE REGISTRAR" means the Securitization Trustee unless a
successor thereto is appointed pursuant to Section 4.03 of the Securitization
Trust Agreement.
"CERTIFICATEHOLDER" or "HOLDER" means the Person in whose name a
Certificate is registered in the Certificate Register, except that, solely
for the purposes of giving any consent, waiver, request or demand pursuant to
the Securitization Trust Agreement, the interest evidenced by any Certificate
registered in the name of the Transferor, TMCC, or any Person controlling,
controlled by or under common control with the Transferor or TMCC, shall not
be taken into account in determining whether the requisite percentage
necessary to effect any such consent, waiver, request or demand shall have
been obtained.
"CERTIFICATES" means, collectively, the Class A-1 Certificates, the Class
A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the
Class B Certificates and the Transferor Certificate.
"CERTIFICATE PAYMENT DATE" means
"CHARGE-OFF RATE" means, with respect to any Collection Period, the
Aggregate Net Losses with respect to 1997-A Contracts that became Charged-off
Contracts during such Collection Period expressed, on an annualized basis, as
a percentage of the average of (i) the Aggregate Net Investment Value on the
last day of the immediately preceding Collection Period and (ii) the
Aggregate Net Investment Value on the last day of such Collection Period.
"CHARGE-OFF RATE TEST" means that determination, made on each
Determination Date by the Servicer, of the average of the Charge-off Rates
for each of the three immediately preceding Collection Periods (or the months
of _____ and ______ in the case of the first Determination Date, the months of
_______ and _____ and the _____ Collection Period in the case of the second
Determination Date, and the month
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of ___ and the ____ and ____ Collection Periods in the case of the third
Determination Date). The Charge-off Rate Test will be satisfied if such
average is ___% or less.
"CHARGED-OFF AMOUNT" means, with respect to any Collection Period, the
Aggregate Net Losses with respect to 1997-A Contracts that became Charged-off
Contracts during such Collection Period.
"CLASS A CERTIFICATES" means the Class A-1 Certificates and the Class A-2
Certificates.
"CLASS A CERTIFICATE BALANCE" means the sum of the Class A-1 Certificate
Balance, the Class A-2 Certificate Balance, the Class A-3 Certificate Balance
and the Class A-4 Certificate Balance.
"CLASS A CERTIFICATEHOLDER" means any Holder of a Class A-1 Certificate,
Class A-2 Certificate, Class A-3 Certificate or Class A-4 Certificate.
"CLASS A PERCENTAGE" means the Class A-4 Certificate Balance immediately
after the Class A-1, the Class A-2 and the Class A-3 Certificates have been paid
in full as a percentage of the Certificate Balance at such time.
"CLASS A-1 ADDITIONAL LOSS AMOUNT" means, as of any Monthly Allocation
Date, an amount equal to the product of (i) the Class A-1 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the portion of the Additional Loss Amount incurred
in respect of such Collection Period that is allocable to the 1997-A SUBI
Interest.
"CLASS A-1 ALLOCATION PERCENTAGE" means, as of any Monthly Allocation Date,
the Class A-1 Certificate Balance as of the last day of the related Collection
Period as a percentage of the Certificate Balance as of such date.
"CLASS A-1 CERTIFICATE" means one of the Certificates executed and
authenticated by the Securitization Trustee in substantially the form set forth
in the Securitization Trust Agreement.
"CLASS A-1 CERTIFICATE BALANCE" means, initially, the Initial Class A-1
Certificate Balance and, on any date, shall equal the Initial Class A-1
Certificate Balance, reduced by the sum of (i) all amounts distributed to Class
A-1 Certificateholders and allocable to principal on or prior to such date and
(ii) the amount, if any, by which (a) the aggregate of all Class A-1 Certificate
Principal Loss Amounts on or prior to such date exceeds (b) the aggregate of all
Class A-1 Certificate Principal Loss Amounts reimbursed or deemed reimbursed on
or prior to such date.
"CLASS A-1 CERTIFICATE FACTOR" means, with respect to any Monthly
Allocation Date, a seven-digit decimal figure equal to the Class A-1 Certificate
Balance as of the close of business on such Monthly Allocation Date (after
giving effect to all changes in the Class A-1 Certificate Balance made on that
date) divided by the Initial Class A-1 Certificate Balance.
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"CLASS A-1 CERTIFICATEHOLDER" means any Holder of a Class A-1 Certificate.
"CLASS A-1 CERTIFICATE PRINCIPAL LOSS AMOUNT" means, with respect to any
Monthly Allocation Date, the amount, if any, by which (i) the sum of the Class
A-1 Loss Amount for the related Collection Period and any previously
unreimbursed Class A-1 Certificate Principal Loss Amount exceeds (ii) the amount
available to be distributed in respect of the Class A-1 Certificates pursuant to
Section 3.03(b)(viii) or (b)(ix) of the Securitization Trust Agreement on such
Monthly Allocation Date.
"CLASS A-1 CERTIFICATE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect
to any Monthly Allocation Date, the aggregate amount of accrued and unpaid
interest at the Class A-1 Rate on the aggregate amount of unreimbursed Class A-1
Certificate Principal Loss Amounts through such Monthly Allocation Date.
"CLASS A-1 CHARGED-OFF AMOUNT" means, as of any Monthly Allocation Date, an
amount equal to the product of (i) the Class A-1 Allocation Percentage, (ii) the
Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the Charged-off Amount incurred in respect of such Collection
Period.
"CLASS A-1 DISTRIBUTABLE AMOUNT" means, with respect to any Monthly
Allocation Date, the sum of the Class A-1 Principal Distributable Amount and the
Class A-1 Interest Distributable Amount.
"CLASS A-1 INTEREST CARRYOVER SHORTFALL" means, with respect to any Monthly
Allocation Date, the excess, if any, of (i) the Class A-1 Interest Distributable
Amount for such Monthly Allocation Date plus any outstanding Class A-1 Interest
Carryover Shortfall from the immediately preceding Monthly Allocation Date plus
interest on such outstanding Class A-1 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-1 Certificate Rate from such immediately
preceding Monthly Allocation Date to but not including the current Monthly
Allocation Date, over (ii) the amount of interest distributed to Class A-1
Certificateholders on such current Monthly Allocation Date.
"CLASS A-1 INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Monthly Allocation Date, the product of (i) one-twelfth of the Class A-1
Certificate Rate (or in case of first Monthly Allocation Date, of the Class A-1
Rate) and (ii) the Class A-1 Certificate Balance as of the immediately preceding
Monthly Allocation Date (after giving effect to changes in the Class A-1
Certificate Balance made on such immediately preceding Monthly Allocation Date)
or, in the case of the first Monthly Allocation Date, the Initial Class A-1
Certificate Balance.
"CLASS A-1 LOSS AMOUNT" means, with respect to any Monthly Allocation Date,
the product of (a) the Class A-1 Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period, and
(c) the Loss Amount for the related Collection Period.
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"CLASS A-1 PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Monthly Allocation Date related to a Collection Period commencing during the
Amortization Period, the amount (if any) that is distributable in respect of
principal of the Class A-1 Certificates to the Class A-1 Certificateholders
pursuant to Section 3.01 (d) of the Securitization Trust Agreement.
"CLASS A-1 RATE" means ____% per annum.
"CLASS A-1 RESIDUAL VALUE LOSS AMOUNT" means, as of any Monthly Allocation
Date, an amount equal to the product of (i) the Class A-1 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the Residual Value Loss Amount incurred in respect
of such Collection Period.
"CLASS A-1 TARGETED MATURITY DATE" means _______.
"CLASS A-2 ADDITIONAL LOSS AMOUNT" means, as of any Monthly Allocation
Date, an amount equal to the product of (i) the Class A-2 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the portion of the Additional Loss Amount incurred
in respect of such Collection Period that is allocable to the 1997-A SUBI
Interest.
"CLASS A-2 ALLOCATION PERCENTAGE" means, as of any Monthly Allocation Date,
the Class A-2 Certificate Balance as of the last day of the related Collection
Period as a percentage of the Certificate Balance as of such date.
"CLASS A-2 CERTIFICATE" means one of the Certificates executed and
authenticated by the Securitization Trustee in substantially the form set forth
in the Securitization Trust Agreement.
"CLASS A-2 CERTIFICATE BALANCE" means, initially, the Initial Class A-2
Certificate Balance and, on any date, shall equal the Initial Class A-2
Certificate Balance, reduced by the sum cf (i) all amounts distributed to Class
A-2 Certificateholders in respect of principal of the Class A-2 Certificates on
or prior to such date and (ii) the amount, if any, by which (a) the aggregate of
all Class A-2 Certificate Principal Loss Amounts on or prior to such date
exceeds (b) the aggregate of all Class A-2 Certificate Principal Loss Amounts
reimbursed or deemed reimbursed on or prior to such date.
"CLASS A-2 CERTIFICATE FACTOR" means, with respect to any Monthly
Allocation Date, a seven-digit decimal figure equal to the Class A-2 Certificate
Balance as of the close of business on such Monthly Allocation Date (after
giving effect to all changes in the Class A-2 Certificate Balance made on that
date) divided by the Initial Class A-2 Certificate Balance.
"CLASS A-2 CERTIFICATEHOLDER" means any Holder of a Class A-2 Certificate.
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"CLASS A-2 CERTIFICATE PRINCIPAL LOSS AMOUNT" means, with respect to any
Monthly Allocation Date, the amount, if any, by which (i) the sum of the Class
A-2 Loss Amount for the related Collection Period and any previously
unreimbursed Class A-2 Certificate Principal Loss Amount exceeds (ii) the amount
available to be distributed in respect of the Class A-2 Certificates pursuant to
Section 3.03(b)(viii) or (b)(ix) of the Securitization Trust Agreement on such
Monthly Allocation Date.
"CLASS A-2 CERTIFICATE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect
to any Monthly Allocation Date, the aggregate amount of accrued and unpaid
interest (at the Class A-2 Rate) on the aggregate amount of unreimbursed Class
A-2 Certificate Principal Loss Amounts through such Monthly Allocation Date.
"CLASS A-2 CHARGED-OFF AMOUNT" means, as of any Monthly Allocation Date, an
amount equal to the product of (i) the Class A-2 Allocation Percentage, (ii) the
Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the Charged-off Amount incurred in respect of such Collection
Period.
"CLASS A-2 DISTRIBUTABLE AMOUNT" means, with respect to any Monthly
Allocation Date, the sum of the Class A-2 Principal Distributable Amount and the
Class A-2 Interest Distributable Amount.
"CLASS A-2 INTEREST CARRYOVER SHORTFALL" means, with respect to any Monthly
Allocation Date, the excess, if any, of (i) the Class A-2 Interest Distributable
Amount for such Monthly Allocation Date plus any outstanding Class A-2 Interest
Carryover Shortfall from the immediately preceding Monthly Allocation Date plus
interest on such outstanding Class A-2 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-2 Rate from such immediately preceding
Monthly Allocation Date to but not including the current Monthly Allocation
Date, over (ii) the amount of interest distributed to Class A-2
Certificateholders on such current Monthly Allocation Date.
"CLASS A-2 INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Monthly Allocation Date, the product of (i) one-twelfth of the Class A-2 Rate
(or in the case of the first Monthly Allocation Date, of the Class A-2 Rate) and
(ii) the Certificate Balance as of the immediately preceding Monthly Allocation
Date (after giving effect to changes in the Class A-2 Certificate Balance made
on such immediately preceding Monthly Allocation Date) or, in the case of the
first Monthly Allocation Date, the Initial Class A-2 Certificate Balance.
"CLASS A-2 LOSS AMOUNT" means, with respect to any Monthly Allocation Date,
the product of (a) the Class A-2 Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period, and
(c) the Loss Amount for the related Collection Period.
"CLASS A-2 PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Monthly Allocation Date related to a Collection Period commencing during the
Amortization Period, the amount (if any)
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<PAGE>
that is distributable to the Class A-2 Certificateholders pursuant to Section
3.01(d) of the Securitization Trust Agreement.
"CLASS A-2 RATE" means ___% per annum.
"CLASS A-2 RESIDUAL VALUE LOSS AMOUNT" means, as of any Monthly Allocation
Date, an amount equal to the product of (i) the Class A-2 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the Residual Value Loss Amount incurred in respect
of such Collection Period.
"CLASS A-2 TARGETED MATURITY DATE" means _________.
"CLASS A-3 ADDITIONAL LOSS AMOUNT" means, as of any Monthly Allocation
Date, an amount equal to the product of (i) the Class A-3 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the portion of the Additional Loss Amount incurred
in respect of such Collection Period that is allocable to the 1997-A SUBI
Interest.
"CLASS A-3 ALLOCATION PERCENTAGE" means, as of any Monthly Allocation Date,
the Class A-3 Certificate Balance as of the last day of the related Collection
Period as a percentage of the Certificate Balance as of such date.
"CLASS A-3 CERTIFICATE" means one of the Certificates executed and
authenticated by the Securitization Trustee in substantially the form set forth
in the Securitization Trust Agreement.
"CLASS A-3 CERTIFICATE BALANCE" means, initially, the Initial Class A-3
Certificate Balance and, on any date, shall equal the Initial Class A-3
Certificate Balance, reduced by the sum cf (i) all amounts distributed to Class
A-3 Certificateholders in respect of principal of the Class A-3 Certificates on
or prior to such date and (ii) the amount, if any, by which (a) the aggregate of
all Class A-3 Certificate Principal Loss Amounts on or prior to such date
exceeds (b) the aggregate of all Class A-3 Certificate Principal Loss Amounts
reimbursed or deemed reimbursed on or prior to such date.
"CLASS A-3 CERTIFICATE FACTOR" means, with respect to any Monthly
Allocation Date, a seven-digit decimal figure equal to the Class A-3 Certificate
Balance as of the close of business on such Monthly Allocation Date (after
giving effect to all changes in the Class A-3 Certificate Balance made on that
date) divided by the Initial Class A-3 Certificate Balance.
"CLASS A-3 CERTIFICATEHOLDER" means any Holder of a Class A-3 Certificate.
"CLASS A-3 CERTIFICATE PRINCIPAL LOSS AMOUNT" means, with respect to any
Monthly Allocation Date, the amount, if any, by which (i) the sum of the Class
A-3 Loss Amount for the related Collection Period and any previously
unreimbursed Class A-3 Certificate Principal Loss
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<PAGE>
Amount exceeds (ii) the amount available to be distributed in respect of the
Class A-3 Certificates pursuant to Section 3.03(b)(viii) or (b)(ix) of the
Securitization Trust Agreement on such Monthly Allocation Date.
"CLASS A-3 CERTIFICATE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect
to any Monthly Allocation Date, the aggregate amount of accrued and unpaid
interest (at the Class A-3 Rate) on the aggregate amount of unreimbursed Class
A-3 Certificate Principal Loss Amounts through such Monthly Allocation Date.
"CLASS A-3 CHARGED-OFF AMOUNT" means, as of any Monthly Allocation Date, an
amount equal to the product of (i) the Class A-3 Allocation Percentage, (ii) the
Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the Charged-off Amount incurred in respect of such Collection
Period.
"CLASS A-3 DISTRIBUTABLE AMOUNT" means, with respect to any Monthly
Allocation Date, the sum of the Class A-3 Principal Distributable Amount and the
Class A-3 Interest Distributable Amount.
"CLASS A-3 INTEREST CARRYOVER SHORTFALL" means, with respect to any Monthly
Allocation Date, the excess, if any, of (i) the Class A-3 Interest Distributable
Amount for such Monthly Allocation Date plus any outstanding Class A-3 Interest
Carryover Shortfall from the immediately preceding Monthly Allocation Date plus
interest on such outstanding Class A-3 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-3 Rate from such immediately preceding
Monthly Allocation Date to but not including the current Monthly Allocation
Date, over (ii) the amount of interest distributed to Class A-3
Certificateholders on such current Monthly Allocation Date.
"CLASS A-3 INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Monthly Allocation Date, the product of (i) one-twelfth of the Class A-3 Rate
(or in the case of the first Monthly Allocation Date, of the Class A-3 Rate) and
(ii) the Certificate Balance as of the immediately preceding Monthly Allocation
Date (after giving effect to changes in the Class A-3 Certificate Balance made
on such immediately preceding Monthly Allocation Date) or, in the case of the
first Monthly Allocation Date, the Initial Class A-3 Certificate Balance.
"CLASS A-3 LOSS AMOUNT" means, with respect to any Monthly Allocation Date,
the product of (a) the Class A-3 Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period, and
(c) the Loss Amount for the related Collection Period.
"CLASS A-3 PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Monthly Allocation Date related to a Collection Period commencing during the
Amortization Period, the amount (if any) that is distributable to the Class A-3
Certificateholders pursuant to Section 3.01(d) of the Securitization Trust
Agreement.
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<PAGE>
"CLASS A-3 RATE" means ______% per annum.
"CLASS A-3 RESIDUAL VALUE LOSS AMOUNT" means, as of any Monthly Allocation
Date, an amount equal to the product of (i) the Class A-3 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the Residual Value Loss Amount incurred in respect
of such Collection Period.
"CLASS A-3 TARGETED MATURITY DATE" means _________.
"CLASS A-4 ADDITIONAL LOSS AMOUNT" means, as of any Monthly Allocation
Date, an amount equal to the product of (i) the class A-4 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the portion of the Additional Loss Amount incurred
in respect of such Collection Period that is allocable to the 1997-A SUBI
Interest.
"CLASS A-4 ALLOCATION PERCENTAGE" means, as of any Monthly Allocation Date,
the Class A-4 Certificate Balance as of the last day of the related Collection
Period as a percentage of the Certificate Balance as of such date.
"CLASS A-4 CERTIFICATE" means one of the Certificates executed and
authenticated by the Securitization Trustee in substantially the form set forth
in the Securitization Trust Agreement.
"CLASS A-4 CERTIFICATE BALANCE" means, initially, the Initial Class A-4
Certificate Balance and, on any date, shall equal the Initial Class A-4
Certificate Balance, reduced by the sum cf (i) all amounts distributed to Class
A-4 Certificateholders in respect of principal of the Class A-4 Certificates on
or prior to such date and (ii) the amount, if any, by which (a) the aggregate of
all Class A-4 Certificate Principal Loss Amounts on or prior to such date
exceeds (b) the aggregate of all Class A-4 Certificate Principal Loss Amounts
reimbursed or deemed reimbursed on or prior to such date.
"CLASS A-4 CERTIFICATE FACTOR" means, with respect to any Monthly
Allocation Date, a seven-digit decimal figure equal to the Class A-4 Certificate
Balance as of the close of business on such Monthly Allocation Date (after
giving effect to all changes in the Class A-4 Certificate Balance made on that
date) divided by the Initial Class A-4 Certificate Balance.
"CLASS A-4 CERTIFICATEHOLDER" means any Holder of a Class A-4 Certificate.
"CLASS A-4 CERTIFICATE PRINCIPAL LOSS AMOUNT" means, with respect to any
Monthly Allocation Date, the amount, if any, by which (i) the sum of the Class
A-4 Loss Amount for the related Collection Period and any previously
unreimbursed Class A-4 Certificate Principal Loss Amount exceeds (ii) the amount
available to be distributed in respect of the Class A-4 Certificates pursuant to
Section 3.03(b)(viii) or (b)(ix) of the Securitization Trust Agreement on such
Monthly Allocation Date.
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<PAGE>
"CLASS A-4 CERTIFICATE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect
to any Monthly Allocation Date, the aggregate amount of accrued and unpaid
interest (at the Class A-4 Rate) on the aggregate amount of unreimbursed Class
A-4 Certificate Principal Loss Amounts through such Monthly Allocation Date.
"CLASS A-4 CHARGED-OFF AMOUNT" means, as of any Monthly Allocation Date, an
amount equal to the product of (i) the Class A-4 Allocation Percentage, (ii) the
Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the Charged-off Amount incurred in respect of such Collection
Period.
"CLASS A-4 DISTRIBUTABLE AMOUNT" means, with respect to any Monthly
Allocation Date, the sum of the Class A-4 Principal Distributable Amount and the
Class A-4 Interest Distributable Amount.
"CLASS A-4 INTEREST CARRYOVER SHORTFALL" means, with respect to any Monthly
Allocation Date, the excess, if any, of (i) the Class A-4 Interest Distributable
Amount for such Monthly Allocation Date plus any outstanding Class A-4 Interest
Carryover Shortfall from the immediately preceding Monthly Allocation Date plus
interest on such outstanding Class A-4 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-4 Rate from such immediately preceding
Monthly Allocation Date to but not including the current Monthly Allocation
Date, over (ii) the amount of interest distributed to Class A-4
Certificateholders on such current Monthly Allocation Date.
"CLASS A-4 INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Monthly Allocation Date, the product of (i) one-twelfth of the Class A-4 Rate
(or in the case of the first Monthly Allocation Date, of the Class A-4 Rate) and
(ii) the Certificate Balance as of the immediately preceding Monthly Allocation
Date (after giving effect to changes in the Class A-4 Certificate Balance made
on such immediately preceding Monthly Allocation Date) or, in the case of the
first Monthly Allocation Date, the Initial Class A-4 Certificate Balance.
"CLASS A-4 LOSS AMOUNT" means, with respect to any Monthly Allocation Date,
the product of (a) the Class A-4 Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period, and
(c) the Loss Amount for the related Collection Period.
"CLASS A-4 PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Monthly Allocation Date related to a Collection Period commencing during the
Amortization Period, the amount (if any) that is distributable to the Class A-4
Certificateholders pursuant to Section 3.01(d) of the Securitization Trust
Agreement.
"CLASS A-4 RATE" means _____% per annum.
"CLASS A-4 RESIDUAL VALUE LOSS AMOUNT" means, as of any Monthly Allocation
Date, an amount equal to the product of (i) the Class A-4 Allocation Percentage,
(ii) the Investor Percentage
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<PAGE>
with respect to Loss Amounts for the related Collection Period and (iii) the
Residual Value Loss Amount incurred in respect of such Collection Period.
"CLASS A-4 TARGETED MATURITY DATE" means ______.
"CLASS B ADDITIONAL LOSS AMOUNT" means, as of any Monthly Allocation Date,
an amount equal to the product of (i) the Class B Allocation Percentage, (ii)
the Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Additional Loss Amount incurred in respect
of such Collection Period that is allocable to the 1997-A SUBI Interest.
"CLASS B ALLOCATION PERCENTAGE" means, as of any Monthly Allocation Date,
the Class B Certificate Balance as of the last day of the related Collection
Period as a percentage of the Certificate Balance as of such date.
"CLASS B CERTIFICATE" means any one of the Certificates executed and
authenticated by the Securitization Trustee in substantially the form set forth
in the Securitization Trust Agreement.
"CLASS B CERTIFICATE BALANCE" means, initially, the Initial Class B
Certificate Balance and, on any date, shall equal the Initial Class B
Certificate Balance, reduced by the sum of (i) all amounts distributed to Class
B Certificateholders in respect of principal of the Class B Certificates on or
prior to such date, (ii) the amount, if any, by which (a) the aggregate of all
Class B Certificate Principal Loss Amounts on or prior to such date exceeds (b)
the aggregate of all Class B Certificate Principal Loss Amounts reimbursed on or
prior to such date, and (iii) the amount, if any, by which (a) the aggregate of
all Class B Certificate Principal Carryover Shortfalls on or prior to such
Monthly Allocation Date exceeds (b) the aggregate of all Class B Certificate
Principal Carryover Shortfall reimbursed on or prior to such date.
"CLASS B CERTIFICATE FACTOR" means, with respect to any Monthly Allocation
Date, a seven-digit decimal figure equal to the Class B Certificate Balance as
of the close of business on such Monthly Allocation Date (after giving effect to
all changes in the Class B Certificate Balance made on that date) divided by the
Initial Class B Certificate Balance.
"CLASS B CERTIFICATE PRINCIPAL CARRYOVER SHORTFALL" means, with respect to
any Monthly Allocation Date (a) with respect to a Collection Period commencing
during the Revolving Period, the amount of principal allocable to the Class B
Certificates that otherwise would have been made available for reinvestment in
additional 1997-A SUBI Assets pursuant to Section 3.02 of the 1997-A Servicing
Supplement and (b) with respect to a Collection Period commencing during the
Amortization Period, the amount of principal allocable or distributable to the
Class B Certificateholders, but which is instead applied as set forth in Section
3.01(b)(viii), (ix) and (x) pursuant to Section 3.01(e)(iii) of the
Securitization Trust Agreement.
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<PAGE>
"CLASS B CERTIFICATE PRINCIPAL CARRYOVER SHORTFALL INTEREST AMOUNT" means,
with respect to any Monthly Allocation Date, the aggregate amount of interest
accrued at the Class B Certificate Rate on the unreimbursed Class B Certificate
Principal Carryover Shortfall as of the immediately preceding Monthly Allocation
Date from such preceding Monthly Allocation Date to the current Monthly
Allocation Date (to the extent lawful).
"CLASS B CERTIFICATE PRINCIPAL LOSS AMOUNT" means, with respect to any
Monthly Allocation Date, the amount, if any, by which (i) the sum of the Class B
Loss Amount for the related Collection Period and any previously unreimbursed
Class B Certificate Principal Loss Amount exceeds (ii) the amount available to
be distributed to the Class B Certificateholders in respect of principal on such
Monthly Allocation Date pursuant to Section 3.01(b)(xi) or (xii) of the
Securitization Trust Agreement.
"CLASS B CERTIFICATE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect to
any Monthly Allocation Date, the aggregate amount of accrued and unpaid interest
(at the Class B Certificate Rate) on the aggregate amount of unreimbursed Class
B Certificate Principal Loss Amounts (to the extent lawful).
"CLASS B CERTIFICATEHOLDER" means any Holder of a Class B Certificate.
"CLASS B CHARGED-OFF AMOUNT" means, as of any Monthly Allocation Date, an
amount equal to the product of (i) the Class B Allocation Percentage, (ii) the
Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the Charged-off Amount incurred in respect of such Collection
Period.
"CLASS B DISTRIBUTABLE AMOUNT" means, with respect to any Monthly
Allocation Date, the sum of the Class B Principal Distributable Amount and the
Class B Interest Distributable Amount.
"CLASS B INTEREST CARRYOVER SHORTFALL" means, with respect to any Monthly
Allocation Date, the excess, if any, of (i) the Class B Interest Distributable
Amount for such Monthly Allocation Date plus any outstanding Class B Interest
Carryover Shortfall from the immediately preceding Monthly Allocation Date plus
interest on such outstanding Class B Interest Carryover Shortfall, to the extent
permitted by law, at the Class B Certificate Rate from such immediately
preceding Monthly Allocation Date to but not including the current Monthly
Allocation Date over (ii) the amount of interest distributed to Class B
Certificateholders on such current Monthly Allocation Date.
"CLASS B INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any Monthly
Allocation Date, the product of (i) one-twelfth of the Class B Certificate Rate
(or in the case of the first Monthly Allocation Date, of the Class B Certificate
Rate) and (ii) the Class B Certificate Balance as of the immediately preceding
Monthly Allocation Date (after giving effect to changes in the Class B
Certificate Balance made on such immediately preceding Monthly Allocation Date)
or, in the case of the first Monthly Allocation Date, the Initial Class B
Certificate Balance.
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<PAGE>
"CLASS B LOSS AMOUNT" means, with respect to any Monthly Allocation Date,
the product of (a) the Class B Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period, and
(c) the Loss Amount with respect to the related Collection Period.
"CLASS B PERCENTAGE" means the Class B Certificate Balance immediately
after the Class A-1 Certificates have been paid in full as a percentage of the
Certificate Balance at such time.
"CLASS B PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any Monthly
Allocation Date related to a Collection Period in the Amortization Period, the
amount (if any) that is distributable to the Class B Certificateholders pursuant
to Section 3.01(d) of the Securitization Trust Agreement.
"CLASS B RATE" means ____% per annum.
"CLASS B RESIDUAL VALUE LOSS AMOUNT" means, as of any Monthly Allocation
Date, an amount equal to the product of (i) the Class B Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the Residual Value Loss Amount with respect to such
Collection Period.
"CLOSING DATE" means _______, 1997.
"CURRENT LIABILITY" means, with respect to any Plan, the present value of
the accrued benefits under the Plan, as set forth in the most recent audited
consolidated financial statements of TMS and its subsidiaries.
"CUTOFF DATE" means August 1, 1997.
"DEFINITIVE CERTIFICATES" means, as of any date of determination, any
Certificates not then outstanding in book-entry form.
"DELINQUENCY PERCENTAGE" means, with respect to any Collection Period,
the percentage equivalent to a fraction, the numerator of which is the number
of Current Contracts as to which, as of the last day of such Collection
Period more than 10% of the Monthly Payment remaining unpaid (including
amounts due on one or more prior Due Dates and including without limitation
because of a check being returned for insufficient funds) 61 days or more
after its Due Date (other than a 1997-A contract as to which an extension has
been granted with respect to such Due Date by the Servicer pursuant to
Section 4.01 of the Titling Trust Agreement), whether or not (a) the related
1997-A Leased Vehicle has been repossessed (or the process of repossession
has been commenced) but has not yet sold or otherwise disposed of during such
Collection Period, or (b) the related Obligor is the subject of bankruptcy or
similar proceedings, and the denominator of which is the aggregate number of
Current Contracts on the last day of such Collection Period.
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<PAGE>
"DELINQUENCY RATE TEST" means that determination, made on each
Determination Date by the Servicer, of the average of the Delinquency
Percentages for each of the three immediately preceding Collection Periods
(or the months of _____ and _____ in the case of the first Determination
Date, the months of _____ and ______ and the ______ Collection Period in
the case of the second Determination Date, and the month of _____ and the
_____ and _____ Collection Periods in the case of the third Determination
Date). The Delinquency Rate Test will be satisfied if such average is ___%
or less.
"DEPOSIT DATE" means the Business Day immediately preceding each Monthly
Allocation Date.
"DISCOUNT RATE" means __% per annum.
"DISCOUNTED CONTRACT" means a 1997-A Contract with an imputed Lease Rate of
less than __%.
"EARLY AMORTIZATION EVENT" means any of the following events:
(i) failure on the part of the Servicer (i) to make any payment or
deposit required with respect to the 1997-A SUBI, the 1997-A SUBI Interest,
or the Investor Certificates under the Securitization Trust Agreement, the
Titling Trust Agreement or the 1997-A SUBI Supplement or the 1997-A Servicing
Supplement, on or before the date occurring five Business Days after the
payment or deposit is required to be made, or (ii) to deliver a Servicer's
Certificate within ten Business Days after any Determination Date;
(ii) failure on the part of the Transferor or the Servicer duly to
observe or perform in any material respect any other covenants or agreements
of the Transferor or the Servicer set forth in the Securitization Trust
Agreement, the Tiling Trust Agreement, the 1997-A SUBI Supplement or the
1997-A Servicing Supplement, which failure materially and adversely affects
the rights of the holder of the 1997-A SUBI Interest or of the Investor
Certificateholders and which continues unremedied and continues to affect
materially and aversely the rights of the holder of the 1997-A SUBI Interest
or of the Investor Certificateholders for a period of 60 days after the date
on which written notice of such failure, requiring the same to be remedied,
if given (i) to the Transferor or the Servicer, as the case may be, by the
Securitization Trustee or the Titling Trustee, or (ii) to the Transferor or
the Servicer, as the case may be, and to the Securitization Trustee by the
Holders of Investor Certificates evidencing not less than 25% of the
aggregate Percentage Interest;
(iii) any representation or warranty made by TMCC in the SUBI
Certificate Agreement or by the Transferor in the Securitization Trust
Agreement, or the representation and warranty made by the Servicer in Section
2.01 of the 1997-A Servicing Supplement or any certificate given pursuant to
Section 5.01 of the 1997-A Servicing Supplement, shall prove to have been
incorrect in any material respect when made or given, as a result of which
the interests of the holder of the 1997-A SUBI Interest or of the Investor
Certificateholders are materially and adversely affected and which continues
to be incorrect in any material respect and continues to materially and
adversely affect the
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<PAGE>
interests of the holder of the 1997-A SUBI Interest or of the
Certificateholders for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, is given (i) to
TMCC, the Transferor or the Servicer, as the case may be, by the Trustee or
the Titling Trustee, or (ii) to TMCC, the Transferor or the Servicer, as the
case may be, and to the Trustee by the Holders of Investor Certificates
evidencing not less than 25% of the aggregate Percentage Interest; PROVIDED,
HOWEVER, that an Early Amortization Event pursuant to this subparagraph (iii)
shall not be deemed to have occurred hereunder if the Servicer has made the
deposit contemplated by Section 3.03 of the 1997-A Servicing Supplement and
has reallocated the relevant 1997-A Contract and 1997-A Leased Vehicle to the
UTI Portfolio within the time provided therefor;
(iv) any Insolvency Event relating to the Transferor;
(v) any Lien, other than Liens permitted under the Securitization
Trust Agreement, the Titling Trust Agreement or the 1997-A SUBI Supplement or
the 1997-A Servicing Supplement shall be created on or extend to or otherwise
arise upon or burden the 1997-A SUBI Interest, the 1997-A SUBI Certificate,
or the 1997-A Contracts or the 1997-A Leased Vehicles, or any part thereof
or any interest therein or the proceeds thereof, and not be released or
bonded over within 60 days thereafter;
(vi) the Transferor, the Securitization Trust or the Titling Trust
becomes subject to registration as an "investment company" for purposes of
the Investment Company Act of 1940, as amended;
(vii) the Servicer determines on the last day of any calendar month
(commencing on _________) that the amount of Principal Collections and
reimbursed Loss Amounts that have not been reinvested in Subsequent Contracts
and Subsequent Leased Vehicles as of the last day of the preceding Collection
Period exceeds $1,000,000;
(viii) an Event of Servicing Termination occurs; or
(ix) if on any Distribution Date the aggregate amount withdrawn from
the Reserve Fund and deposited into the SUBI Collection Account on or prior
to such Distribution Date (without giving effect to any deposits into the
Reserve Fund) exceeds $______ (i.e., __% of the Aggregate Net Investment
Value as of the Cutoff Date).
"ELIGIBLE CONTRACT" means a Contract as to which the criteria specified in
the definition of "Eligible Contract" set forth in the Appendix of Definitions
as of the date of the 1997-A SUBI Supplement, and also satisfies the following
criteria as of such date:
(a) such Contract was originated in the United States, after ______,
1996 in the case of the Initial Contracts, and on or before ________, 1997
in the case of the Subsequent Contracts and has a Maturity Date on or after
______ and no later than ______ in the case of the Initial Contracts, and
on or after _______ and ______ no later than ____ in the case of the
Subsequent Contracts;
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(b) such Contract was not more than 60 days past due as of the
Cutoff Date or the related Transfer Date, as the case may be, and has not
been deferred more than 4 times or extended by more than 12 months in the
aggregate or otherwise modified except in accordance with the Servicer's
normal credit and collection policies and practices;
(c) such Contract is not an asset of any SUBI other than the 1997-A
SUBI; and
(d) such Contract is a finance lease for accounting purposes.
"EVENT OF SERVICING TERMINATION" means any of the following events:
(i) failure by the Servicer to deliver to the Titling Trustee for
distribution to holders of interests in the SUBI or to the Securitization
Trustee for distribution to the Holders of any required payment on the
Certificates as to allocations and distributions, which failure continues
unremedied for three Business Days after discovery of such failure by an officer
of the Servicer or receipt by the Servicer of notice thereof from the
Securitization Trustee, the Titling Trustee or holders of Certificates
evidencing not less than 25% of the Voting Interests of the Class A Certificates
and the Class B Certificates, voting together as a single class;
(ii) failure by the Servicer to deliver to the Titling Trustee or the
Securitization Trustee any report relating to the 1997-A SUBI Sub-Trust and
required to be delivered to it pursuant to the 1997-A SUBI Servicing Supplement
within ten Business Days after discovery or written notice thereof as described
in clause (i) above;
(iii) failure by the Servicer duly to observe or perform in any
material respect any other of its covenants or agreements in the Titling Trust
Agreement or SUBI Servicing Supplement which failure materially and adversely
affects the rights of holders of interests in the SUBI or the Certificateholders
and which continues unremedied for 90 days after discovery or written notice
thereof as described in clause (i) above;
(iv) the occurrence of an Insolvency Event with respect to the Servicer;
(v) any representation, warranty or statement of the Servicer made in
the 1997-A SUBI Servicing Supplement or any certificate, report or other
writing delivered pursuant thereto or to any related Transaction Document
shall prove to be incorrect in any material respect as of the time when the
same shall have been made and such circumstance or condition in respect of
which such representation, warranty or statement was incorrect shall not have
been eliminated or otherwise cured within 30 days after discovery or written
notice thereof as described in clause (i) above;
(vi) the Servicer shall have failed to make an Advance (other than any
Nonrecoverable Advance) at the time and in the amount required by Section 4.05
of the 1997-A SUBI Servicing Supplement, which failure continues for five
Business Days after discovery of such failure by an
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<PAGE>
officer of the Servicer or within three Business Days after discovery or
written notice thereof as described in clause (i) above; or
(vii) the Servicer shall have failed to perform its obligations under
the 1997-A SUBI Servicing Supplement with respect to maintenance of the
Contingent and Excess Liability Insurance Policies or the Residual Value
Insurance Policy.
Notwithstanding the foregoing, a delay or failure in the performance
referred to under clause (i) or (vi) above for a period of ten Business Days,
or referred to in clause (ii) above for a period of 20 Business Days, or
referred to in clause (v) for a period of 90 days, or referred to in clause
(vii) for a period of 60 days, shall NOT constitute an Event of Servicing
Termination if such delay or failure in performance arises from an event or
circumstance of force majeure.
"EXCESS COLLECTIONS" means, with respect to any Distribution Date, the
amount specified in Section 3.01(b)(xv) of the Securitization Trust Agreement.
"FIRST PRINCIPAL DISTRIBUTION DATE" means the Distribution Date in the
month commencing after the earlier to occur of Amortization Date or an Early
Amortization Event.
"INITIAL CERTIFICATE BALANCE" means the sum of the Initial Class A
Certificate Balance and the Initial Class B Certificate Balance.
"INITIAL CLASS A CERTIFICATE BALANCE" means the sum of the Initial Class
A-1 Certificate Balance, the Initial Class A-2 Certificate Balance, the Initial
Class A-3 Certificate Balance and the Initial Class A-4 Certificate Balance.
"INITIAL CLASS A-1 CERTIFICATE BALANCE" means $ ____.
"INITIAL CLASS A-2 CERTIFICATE BALANCE" means $ _____.
"INITIAL CLASS A-3 CERTIFICATE BALANCE" means $ _____.
"INITIAL CLASS A-4 CERTIFICATE BALANCE" means $ _____.
"INITIAL CLASS B CERTIFICATE BALANCE" means $ ______.
"INITIAL DEPOSIT" means the amount to be deposited in the Reserve Fund by
the Transferor on the Closing Date equal to $________ (___% of the Aggregate
Net Investment Value as of the Cutoff Date).
"INVESTOR CERTIFICATEHOLDER" means any Class A or Class B
Certificateholder.
"INVESTOR CERTIFICATES" means the Class A Certificates and the Class B
Certificates.
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"INVESTOR PERCENTAGE" means, with respect to any Collection Period,
(a) as used with respect to Interest Collections and Loss Amounts
allocable to the 1997-A SUBI Interest, the percentage equivalent of a fraction
(not to exceed 100%), the numerator of which is the Certificate Balance as of
the last day of the immediately preceding Collection Period (or, in the case of
the first Collection Period, the Initial Certificate Balance), and the
denominator of which is the Aggregate Net Investment Value as of the last day of
the immediately preceding Collection Period (or, in the case of the first
Collection Period, the Cutoff Date); and
(b) as used with respect to Principal Collections allocable to the 1997-A
SUBI Interest, the percentage equivalent of a fraction (not to exceed 100%), the
numerator of which is the Certificate Balance and the denominator of which is
the Aggregate Net Investment Value, calculated as of the last day of the
Collection Period (i) preceding the Amortization Date (if no Early Amortization
Event occurs prior to such date) or (ii) preceding the month, if any, during
which an Early Amortization Event occurs.
"LIQUIDATED CONTRACT" means a 1997-A Contract that (a) has been the subject
of a Prepayment in full, or otherwise has been paid in full, regardless of
whether all or any part of such payment has been made by the Obligor under the
related 1997-A Lease, the Servicer pursuant to the Servicing Agreement or 1997-A
Servicing Supplement, an insurer pursuant to an Insurance Policy or, in the case
of a 1997-A Contract that is a Charged-off Contract, as to which the Servicer
has determined that the final amounts in respect thereof have been realized.
"LIQUIDATION EXPENSES" means reasonable out-of-pocket expenses incurred by
the Servicer in connection with the realization of the full amounts due or to
become due under any 1997-A Lease, including expenses incurred in connection
with the repossession of any 1997-A Leased Vehicle, the sale or other
disposition of a 1997-A Leased Vehicle, whether upon repossession or upon return
of a 1997-A Leased Vehicle related to a Matured Lease, any collection effort
(whether or not resulting in a lawsuit against the Obligor under such 1997-A
Lease) or any application for Insurance Proceeds.
"LOSS AMOUNT" means, with respect to any Distribution Date, an amount equal
to the sum of the Charged-off Amount, the Residual Value Loss Amount and the
Additional Loss Amount, in each case for the related Collection Period.
"MATURITY ADVANCE" means any advance made by TMCC on any Targeted Maturity
Date with respect to principal distributable on the related Class of Class A
Certificates if on such date the aggregate of amounts available in the
Certificate Account or from Transferor Amounts or Interest Collections to be
paid as principal thereof pursuant to Section 3.01 of the 1997-A Securitization
Trust Agreement are insufficient to pay in full the related Certificate
Principal Balance, in an amount equal to the lesser of (x) such shortfall and
(y) the aggregate of Excess Amounts released to the Transferor during the period
from and including the preceding Targeted Maturity Date (or from the Cutoff Date
in the case of the first Targeted Maturity Date) to such Targeted Maturity Date,
together with the aggregate amount of Available Interest applied to cover such
shortfall on such date.
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"MONTHLY ALLOCATION DATE" means the day on which Collections in respect of
the Contracts and Leased Vehicles represented by the SUBI are allocated, and
shall occur on the twenty-fifth day of each month (or, if such day is not a
Business Day, on the next succeeding Business Day) commencing on October 25,
1997.
"MONTHLY PAYMENT EVENT" means (i) the downgrade by Standard & Poor's of
TMCC's short-term debt to a rating less than A-1+, or (ii) the downgrade by
Moody's of TMCC's short term debt to a rating less than P-1 or TMCC's long term
debt to a rating less than Aa3, unless within ten days of such event alternative
arrangements are made with respect to the investment of Collections to be
invested, and such alternative arrangements are will not result in a downgrade,
modification or qualification of the then current rating of the Rated
Certificates as evidenced by a letter from each of the Rating Agencies.
"NONRECOVERABLE ADVANCE" means any Advance that, in the Servicer's
reasonable judgment, may not be ultimately recoverable by the Servicer from
Matured Leased Vehicle Proceeds, Repossessed Vehicle Proceeds or other
Liquidation Proceeds or Insurance Proceeds (excluding proceeds of any Residual
Value Insurance Policy) or otherwise.
"OUTSTANDING ADVANCES" means, with respect to a 1997-A Contract and the
last day of a Collection Period, the sum of all Advances made on or prior to
such date minus all payments or collections on or prior to such date that are
specified in Section 4.05 of the 1997-A Servicing Supplement as applied to
reimburse unreimbursed or nonrecoverable Advances with respect to such 1997-A
Contract.
"PERCENTAGE INTEREST" means, as to any Investor Certificate, the percentage
obtained by dividing the outstanding principal balance of such Investor
Certificate by the Certificate Balance by the Class A Certificate Balance, the
Class A-1 Certificate Balance, the Class A-2 Certificate Balance, the Class A-3
Certificate Balance, the Class A-4 Certificate Balance or the Class B
Certificate Balance, as the context may require; PROVIDED, HOWEVER, that where
the Percentage Interest is relevant in determining whether the vote of the
requisite percentage of Investor Certificateholders necessary to requisite
percentage of Investor Certificateholders necessary to effect any consent,
waiver, request or demand shall have been obtained, the aggregate Percentage
Interest shall be deemed to be reduced by the amount equal to the Percentage
Interest (without giving effect to this provision) represented by the interests
evidenced by any such Investor Certificate that is registered in the name of the
Transferor, TMCC or any Person controlling, controlled by or under common
control with the Transferor or TMCC.
"PROSPECTUS" means that certain prospectus dated _________, 1997 relating
to the public offering of the Certificates issued by the 1997-A Securitization
Trust.
"REALLOCATION PAYMENT" means the amount required to be deposited by the
Servicer into the 1997-A SUBI Collection Account in connection with any 1997-A
Contract as to which a breach of a representation, warranty or covenant that
materially and adversely affects the owners of interests
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in the 1997-A SUBI or the Certificateholders is not cured in all material
respects within 60 days after TMCC discovers such breach or is given notice
thereof, which amount will equal the Discounted Principal Balance of such
Contract as of the last day of the Collection Period during which the related
cure period ended plus an amount equal to any imputed lease charge on such
Contract at the related Lease Rate that was delinquent as of the end of such
Collection Period.
"REQUIRED AMOUNT" means, as of any Deposit Date, the excess of (i) the sum
of any anticipated amounts to be payable as set forth in Section 3.01(b) clauses
(i) through (xiv) of the Securitization Trust Agreement with respect to the
related Distribution Date, over (ii) the product of (A) the Investor Percentage
with respect to Interest Collections and (B) the Interest Collections collected
during or received with respect to the related Collection Period and allocable
to the 1997-A SUBI Interest.
"RESERVE FUND" means the account designated as such and established and
maintained pursuant to Section 3.02 of the Securitization Trust Agreement.
"RESERVE FUND INITIAL DEPOSIT" means $________.
"RESERVE FUND WITHDRAWAL AMOUNT" means, with respect to a Distribution
Date, the lesser of (a) the Required Amount for such Distribution Date and (b)
the amount on deposit in the Reserve Fund.
"RESIDUAL CERTIFICATE" means any Book-Entry Certificate issued on the
Closing Date pursuant to Section 4.01 of the Securitization Trust Agreement to
represent a Certificate having a principal amount less than $1,000.
"RESIDUAL VALUE LOSS AMOUNT" means, as of any Distribution Date, the sum of
(a) the aggregate of the Booked Residual Values of all 1997-A Leased Vehicles
that were included in Matured Leased Vehicle Inventory but that had remained
unsold and not otherwise disposed of by the Servicer for at least three full
Collection Periods as of the last day of such Collection Period and (b) the
excess, if any, of (i) the aggregate of the Booked Residual Values of all 1997-A
Leased Vehicles previously included in Matured Leased Vehicle Inventory that
were sold or otherwise disposed of during such Collection Period over (ii) Net
Matured Vehicle Proceeds for such Collection Period.
"REVOLVING PERIOD" means the period from the Closing Date through the
Business Day preceding the earlier of _________ 1, 1998 or the date of an Early
Amortization Event.
"SECURITIZATION TRUST AGREEMENT" means the Securitization Trust Agreement
dated as of _______ between TLI and First Bank, pursuant to which the
Securitization Trust was formed.
"SECURITIZATION TRUST" means the Toyota Auto Lease Trust 1997-A formed
pursuant to the Securitization Trust Agreement.
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"SPECIFIED RESERVE FUND BALANCE" means, with respect to any Distribution
Date, $________, except that, if on any Distribution Date the Charge-off Rate
Test or Delinquency Rate Test is not satisfied, then the Specified Reserve
Fund Balance will be an amount equal to the greater of (a) $_______ and (b)
__% of the Certificate Principal Balance as of such Distribution Date (after
giving effect to distributions in respect of principal to be made on such
Distribution Date); provided, however, that the Specified Reserve Fund
Balance shall in no event be more than the sum of the outstanding principal
amounts of each Class of Certificates.
"SUBSEQUENT CONTRACTS" means those additional retail closed-end lease
contracts in which, during the Revolving Period, payments made on or in respect
of the 1997-A SUBI Assets allocable to principal and certain reimbursed Loss
Amounts will be reinvested.
"SUBSEQUENT LEASED VEHICLES" means the automobiles and light duty trucks
relating to the Subsequent Contracts.
"TMCC DEMAND NOTES" means the unsecured debt obligations of TMCC issued
from time to time as a Permitted Investment pursuant to the terms of the
Indenture dated as of ________, 1997 between TMCC as issuer and ______ as
Indenture Trustee thereunder.
"TMCC INTEREST DEMAND NOTES" means the TMCC Demand Notes in which amounts
in the 1997-A SUBI Certificate Account in respect of interest on the 1997-A SUBI
Assets is invested; each TMCC Interest Demand Note shall mature on the
Certificate Payment Date next succeeding the date of issuance of such TMCC
Interest Demand Note.
"TMCC PRINCIPAL DEMAND NOTES" means the TMCC Demand Notes in which amounts
in the 1997-A SUBI Certificate Account in respect of principal on the 1997-A
SUBI Assets is invested; each TMCC Principal Demand Note shall mature on the
Targeted Maturity Date next succeeding the date of issuance of such TMCC
Principal Demand Note.
"TRANSFER DATE" means any of the one or more Business Days during the
Revolving Period selected by the Servicer on which the Servicer will direct the
Titling Trustee to reinvest Principal Collections and certain reimbursed Loss
Amounts in Subsequent Contracts and Subsequent Leased Vehicles.
"TRANSFEROR" means TLI, in its capacity as transferor under the
Securitization Trust Agreement, and each successor thereto in the same capacity
pursuant to the Securitization Trust Agreement.
"TRANSFEROR AMOUNTS" means, with respect to any Monthly Allocation Date,
amounts available for distribution to the Transferor in respect of the
Transferor Distributable Amount for such Monthly Allocation Date that are
instead distributed pursuant to Section 3.01(e) because of an insufficiency in
the amount of Interest Collections and the Reserve Fund Withdrawal Amount
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available to make such distributions on such Distribution Date (as determined
pursuant to Section 3.01(e)).
"TRANSFEROR CERTIFICATE" means the Certificate executed and authenticated
by the Securitization Trustee in substantially the form set forth in the
Securitization Trust Agreement.
"TRANSFEROR DISTRIBUTABLE AMOUNT" means, with respect to any Distribution
Date, the sum of the Transferor Principal Distributable Amount and the
Transferor Interest Distributable Amount.
"TRANSFEROR INTEREST" means, as of any date, an amount equal to (i) the
Aggregate Net Investment Value less (ii) the Certificate Balance.
"TRANSFEROR INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the amount equal to the Transferor Percentage (with respect
to Interest Collections) of all Interest Collections collected during or
received in respect of the related Collection Period allocable to the 1997-A
SUBI Interest, less the Transferor Percentage of Capped Securitization Trust
Administrative Expenses and Uncapped Administrative Expenses.
"TRANSFEROR PERCENTAGE" means, with respect to Interest Collections and
Principal Collections allocable to the 1997-A SUBI Interest, respectively,
received in or with respect to any Collection Period, 100% minus the Investor
Percentage as applied for such Collection Period with respect to such items,
respectively.
"TRANSFEROR PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date related to a Collection Period in the Amortization Period, the
amount equal to the Transferor Percentage (with respect to Principal
Collections) of all Principal Collections collected during or received in
respect of the related Collection Period allocable to the 1997-A SUBI Interest.
"UNALLOCATED PRINCIPAL COLLECTIONS" means, with respect to any
Distribution Date, the amount of any Principal Collections that normally
would be , but are not, included in Transferor Amounts for such Distribution
Date pursuant to Section 3.01(e) of the Securitization Trust Agreement
because the Transferor Interest is less than or equal to zero. Such amounts
instead will be retained in the SUBI Collection Account for allocation or
distribution to Certificateholders on such Distribution Date.
"UNCAPPED ADMINISTRATIVE EXPENSES" means Administrative Expenses that would
be Capped Contingent and Excess Liability Premiums, Capped Titling Trust
Administrative Expenses or Capped Securitization Trust Administrative Expenses,
respectively, except and to the extent that they exceed $____, $____ or $____,
respectively, in any calendar year.
"UNINVESTED PRINCIPAL COLLECTIONS" means, as of the end of the Revolving
Period, any Principal Collections with respect to the Revolving Period (or
amounts treated as Principal Collections pursuant to Section 3.01(b) of the
Securitization Trust Agreement) then on deposit in
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the 1997-A SUBI Collection Account that have not been reinvested in
additional 1997-A Contracts and 1997-A Leased Vehicles as contemplated by
Section 3.02 of the 1997-A Servicing Supplement.
"VOTING INTEREST" means, as to any Investor Certificate, the percentage
obtained by dividing the outstanding principal balance of such Investor
Certificate by the Certificate Balance (or by the Class A Certificate Balance,
the Class A-1 Certificate Balance, the Class A-2 Certificate Balance, the Class
A-3 Certificate Balance, the Class A-4 Certificate Balance or the Class B
Certificate Balance, as the context may require); provided, however, that where
the Voting Interest is relevant in determining whether the vote of the requisite
percentage of Investor Certificateholders necessary to effect any consent,
waiver, request or demand shall have been obtained, the aggregate Voting
Interest shall be deemed to be reduced by the amount equal to the Voting
Interest (without giving effect to this provision) represented by the interests
evidenced by any such Investor Certificate that is registered in the name of
TLI, TMCC or any Person controlling, controlled by or under common control with
TLI or TMCC.
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EXHIBIT 10.4
- --------------------------------------------------------------------
1997-A SUBI SERVICING SUPPLEMENT
to
AMENDED AND RESTATED TRUST AND SERVICING AGREEMENT
Dated as of October 1, 1996
Among
TMTT, INC.,
as Titling Trustee,
TOYOTA MOTOR CREDIT CORPORATION,
as Servicer,
and
FIRST BANK NATIONAL ASSOCIATION,
as Trust Agent
Dated as of _______________, 1997
- --------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions............................................. 2
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF SERVICER
SECTION 2.01 Representations and Warranties of Servicer............. 2
ARTICLE THREE
CREATION OF 1997-A SUBI
SECTION 3.01. Initial Creation of 1997-A SUBI Portfolio and
1997-A SUBI Sub-Trust................................. 4
SECTION 3.02. Subsequent Additions to 1997-A SUBI Portfolio
and 1997-A SUBI Sub-Trust............................. 4
SECTION 3.03. Servicer Payment in Respect of
Certain Contracts And Leased Vehicles................. 5
SECTION 3.04. Filings................................................. 5
ARTICLE FOUR
SPECIFIC REQUIREMENTS FOR
ADMINISTRATION AND SERVICING OF CONTRACTS
IN 1997-A SUBI PORTFOLIO
SECTION 4.01. Servicer Bound by Trust Agreement...................... 5
SECTION 4.02. Collection of Monthly Payments and Remittances;
Application of Proceeds; Accounts..................... 6
SECTION 4.03. Records................................................ 11
SECTION 4.04. Collection and Application of Security Deposits........ 12
SECTION 4.05. Advances............................................... 12
SECTION 4.06. Payment of Certain Fees And Expenses; No Offset........ 13
SECTION 4.07. Servicing Compensation................................. 13
SECTION 4.08. Repossession And Sale of Leased Vehicles............... 14
SECTION 4.09. Servicer to Act on Behalf of Trustee................... 15
SECTION 4.10. Indemnification by Servicer............................ 17
SECTION 4.11. Third Party Claims..................................... 17
SECTION 4.12. Insurance Policies..................................... 17
SECTION 4.13. Servicer Not to Resign; Assignment..................... 18
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SECTION 4.14. Obligor Insurance Coverage in Respect of Leased
Vehicles.............................................. 19
SECTION 4.15. Corporate Existence; Status; Merger.................... 19
ARTICLE FIVE
STATEMENTS AND REPORTS
SECTION 5.01. Reporting by the Servicer.............................. 20
SECTION 5.02. Annual Accountants' Reports............................ 21
SECTION 5.03. Other Certificates And Notices From Servicer........... 21
SECTION 5.04. Tax Returns............................................ 21
ARTICLE SIX
DEFAULT
SECTION 6.01. Events of Servicing Termination; Termination
of Servicer as to 1997-A SUBI Portfolio............... 22
SECTION 6.02. No Effect on Other Parties............................. 23
ARTICLE SEVEN
MISCELLANEOUS
SECTION 7.01. Termination of Agreement............................... 23
SECTION 7.02. Amendment.............................................. 23
SECTION 7.03. Governing Law.......................................... 24
SECTION 7.04. Notices................................................ 24
SECTION 7.05. Severability........................................... 24
SECTION 7.06. Inspection and Audit Rights............................ 25
SECTION 7.07. Article And Section Headings........................... 25
SECTION 7.08. Execution in Counterparts.............................. 25
SECTION 7.09. Rights Cumulative...................................... 25
SECTION 7.10. Further Assurances..................................... 26
SECTION 7.11. Third-party Beneficiaries.............................. 26
EXHIBITS
EXHIBIT A - Schedule of 1997-A Contracts and 1997-A Leased
Vehicles as of the Initial Cutoff Date................ A-1
EXHIBIT B - Form of Servicer's Certificate........................ B-1
EXHIBIT C - Form of Power of Attorney............................. C-1
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1997-A SUBI SERVICING SUPPLEMENT TO AMENDED AND RESTATED TRUST AND
SERVICING AGREEMENT (the "1997-A SUBI Servicing Supplement"), dated as of
___________, 1997, among TMTT, INC., a Delaware corporation, as Titling
Trustee of TOYOTA LEASE TRUST, a Delaware business trust (the "Titling
Trust"), TOYOTA MOTOR CREDIT CORPORATION, a California corporation, as
Servicer, and FIRST BANK NATIONAL ASSOCIATION, as Trust Agent.
RECITALS
A. TMCC, the Titling Trustee and, for certain limited purposes set forth
therein, First Bank, as Trust Agent, have entered into that certain Amended and
Restated Trust and Servicing Agreement, dated as of October 1, 1996, amending
and restating that certain Trust and Servicing Agreement, dated as of October 1,
1996, among the same parties (as so amended and restated, and as it may be
further amended, supplemented or modified, the "Titling Trust Agreement"),
pursuant to which TMCC and the Titling Trustee formed the Titling Trust for the
purpose of taking assignments and conveyances of, holding in trust and dealing
in, various Titling Trust Assets in accordance with the Titling Trust Agreement.
B. Concurrently herewith, and as contemplated by the Titling Trust
Agreement, TMCC, the Titling Trustee and the Trust Agent are entering into
that certain 1997-A SUBI Supplement to the Titling Trust Agreement, dated as
of ________, 1997, pursuant to which the Titling Trustee, on behalf of the
Titling Trust and at the direction of TMCC, as UTI Beneficiary, will create
and issue to TMCC a 1997-A SUBI Certificate representing a 100% beneficial
interest in the 1997-A SUBI, whose beneficiaries generally will be entitled
to the net cash flow arising from, but only from, the related 1997-A SUBI
Assets, all as set forth in the Titling Trust Agreement and the 1997-A SUBI
Supplement.
C. Also concurrently herewith, TMCC and the Transferor are entering into
that certain SUBI Certificate Purchase and Sale Agreement, pursuant to which
TMCC is selling to the Transferor, without recourse, all of TMCC's right, title
and interest in and to the 1997-A SUBI and the 1997-A SUBI Certificate, all
moneys due thereon and paid thereon or in respect thereof and the right to
realize on any property that may be deemed to secure the 1997-A SUBI, and all
proceeds thereof.
D. Also concurrently herewith, and as contemplated by the Titling Trust
Agreement, the Transferor and First Bank National Association, as 1997-A
Securitization Trustee, are entering into that certain Securitization Trust
Agreement, dated as of _________, 1997 (the "1997-A Securitization Trust
Agreement"), pursuant to which the 1997-A SUBI Certificate will be
transferred to the 1997-A Securitization Trustee, in that capacity, in
connection with a Securitized Financing thereof by the Transferor.
<PAGE>
E. The parties desire to supplement the terms of the Titling Trust
Agreement insofar as they apply to the 1997-A SUBI, the 1997-A SUBI Sub-Trust,
and the 1997-A SUBI Certificates to provide for further specific servicing
obligations that will benefit the holders of the 1997-A SUBI Certificates and
the parties to and the beneficiaries of the Transaction Documents relating to
the Securitized Financing contemplated by the 1997-A Securitization Trust
Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree to the following supplemental
obligations with regard to the 1997-A SUBI Sub-Trust:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS. For all purposes of this 1997-A SUBI
Servicing Supplement, except as otherwise expressly provided or unless the
context otherwise requires, capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Annex of Definitions or
the Annex of Supplemental Definitions attached hereto for all purposes of this
1997-A SUBI Servicing Supplement. In the event of any conflict between a
definition set forth herein and that set forth in the Annex of Definitions or
Annex of Supplemental Definitions, that set forth herein shall prevail. All
terms used in this 1997-A SUBI Servicing Supplement include, as appropriate, all
genders and the plural as well as the singular. All references such as
"herein", "hereof" and the like shall refer to this 1997-A SUBI Servicing
Supplement as a whole and not to any particular article or section within this
1997-A SUBI Servicing Supplement. All references such as "includes" and
variations thereon shall mean "includes without limitation" and references to
"or" shall mean "and/or". Any reference herein to the "Titling Trustee, acting
on behalf of the Titling Trust", or words of similar import, shall be deemed to
mean the Titling Trustee, acting on behalf of Toyota Lease Trust and all
beneficiaries thereof. Any reference herein to the "1997-A Securitization
Trustee, acting on behalf of the 1997-A Securitization Trust", or words of
similar import, shall be deemed to mean the 1997-A Securitization Trustee,
acting on behalf of the Toyota Auto Lease Trust 1997-A and all beneficiaries
thereof.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF SERVICER
SECTION 2.01. REPRESENTATIONS AND WARRANTIES OF SERVICER. The Servicer
represents and warrants to the Titling Trustee, the 1997-A Securitization
Trustee and each SUBI Beneficiary as follows:
(a) ORGANIZATION AND GOOD STANDING. The Servicer has been duly organized
and is validly existing as a corporation in good standing under the laws of the
State of California, with corporate power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and now
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has, corporate power, authority and legal right to acquire, own, sell and
service the 1997-A Contracts and related Leased Vehicles and to hold the
related Contract Documents and Certificates of Title as custodian on behalf
of the Titling Trust.
(b) DUE QUALIFICATION. The Servicer is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business (including the servicing of the 1997-A Contracts
and related Leased Vehicles as required by this Agreement) requires such
qualifications.
(c) POWER AND AUTHORITY. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery and performance of this Agreement has been duly
authorized by the Servicer by all necessary corporate action.
(d) BINDING OBLIGATIONS. This 1997-A SUBI Servicing Supplement
constitutes a legal, valid and binding obligation of the Servicer enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally or by general principles of equity.
(e) NO CONFLICT. The consummation of the transactions contemplated by
this 1997-A SUBI Servicing Supplement and the fulfillment of the terms of this
1997-A SUBI Servicing Supplement does not conflict with, result in any breach of
any of the terms and provisions of, nor constitute (with or without notice or
lapse of time) a default under, the articles of incorporation or bylaws of the
Servicer, or conflict with or breach any of the material terms or provisions of,
or constitute (with or without notice or lapse of time) a default under, any
indenture, agreement or other instrument to which the Servicer is a party or by
which it is bound; nor result in the creation or imposition of any lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than this 1997-A SUBI Servicing Supplement); nor violate
any law or, to the best of the Servicer's knowledge, any order, rule or
regulation applicable to the Servicer of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or its properties; which breach, default,
conflict, lien or violation would have a material adverse effect on the
earnings, business affairs or business prospects of the Servicer.
(f) NO PROCEEDINGS. To the Servicer's actual knowledge, there is no
action, suit or proceeding before or by any court or governmental agency or
body, domestic or foreign, now pending, or to the Servicer's knowledge,
threatened, against or affecting the Servicer (i) asserting the invalidity of
this 1997-A SUBI Servicing Supplement or (ii) seeking any determination or
ruling that might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability of, this
1997-A SUBI Servicing Supplement.
3
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ARTICLE THREE
CREATION OF 1997-A SUBI
SECTION 3.01. INITIAL CREATION OF 1997-A SUBI PORTFOLIO AND 1997-A SUBI
SUB-TRUST.
(a) Pursuant to Section 3.01 of the Titling Trust Agreement and Section
16.01 of the 1997-A SUBI Supplement, the Titling Trustee has been directed to
cause to be identified and allocated on the books and records of the Titling
Trust the separate 1997-A SUBI Portfolio consisting of the 1997-A SUBI Portfolio
and certain other associated Trust Assets meeting the criteria specified
therein. The Titling Trustee, on behalf of the Titling Trust, hereby directs
that the Servicer so identify and allocate such a separate SUBI Portfolio of
Contracts and related Leased Vehicles from among all Trust Assets owned by the
Titling Trustee on behalf of the Titling Trust and currently accounted for as
part of the UTI Sub-Trust.
(b) The Servicer hereby identifies and allocates such a portfolio of
Contracts and related Leased Vehicles more particularly described on Exhibit A
hereto which is in substantially the form of a Schedule of Contracts and Leased
Vehicles, in order to create the initial 1997-A SUBI Portfolio.
(c) The Servicer hereby represents and warrants to the Titling Trustee,
the 1997-A Securitization Trustee and each SUBI Beneficiary that each of the
Contracts described on Exhibit A hereto is an Eligible Contract.
SECTION 3.02. SUBSEQUENT ADDITIONS TO 1997-A SUBI PORTFOLIO AND 1997-A
SUBI SUB-TRUST.
(a) The Titling Trustee is hereby directed to cause to be identified and
allocated on the books and records of the Titling Trust to the 1997-A SUBI
Sub-Trust on or before each Transfer Date certain additional Eligible Contracts,
related Leased Vehicles and other associated Trust Assets not then allocated, or
reserved for allocation to, any other SUBI Portfolio or Sub-Trust. Such
Subsequent Contracts and Leased Vehicles to be allocated to the 1997-A SUBI
Portfolio and 1997-A SUBI Sub-Trust shall have an aggregate Discounted Principal
Balance as of the related Subsequent Cutoff Date approximately equal to, but not
greater than, all Principal Collections received after the Cutoff Date
(including the amounts treated as Principal Collections pursuant to Section 3.01
of the 1997-A Securitization Trust Agreement) that have not been so applied
pursuant to this Section 3.02(a). The Titling Trustee, on behalf of the Titling
Trust, hereby directs the Servicer to identify such Subsequent Contracts,
related Leased Vehicles and other associated Trust Assets (as described in the
1997-A SUBI Supplement and meeting the other requirements set forth therein) on
or before each Transfer Date, and cause such Contracts and Leased Vehicles to be
specifically identified on the revised Schedule of Contracts and Leased Vehicles
to be delivered pursuant to Section 5.01 hereof. On each such Transfer Date,
such Subsequent Contracts, Leased Vehicles and other associated Trust Assets
shall be added to the 1997-A SUBI Portfolio and 1997-A SUBI Sub-Trust, as the
case may be, as additional 1997-A SUBI Assets.
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(b) The Servicer shall give one Business Day's prior notice to the Titling
Trustee of each Transfer Date. On each Transfer Date, the Servicer shall be
deemed to have represented and warranted to the 1997-A Securitization Trustee on
behalf of the 1997-A Securitization Trust that (i) all Subsequent Contracts
added to the 1997-A SUBI Portfolio on that date were Eligible Contracts as of
the relevant Transfer Date, (ii) no adverse selection procedures were employed
in selecting such Subsequent Contracts, (iii) it is not aware of any bias in the
selection of such Subsequent Contracts that would cause the delinquencies or
losses therein to differ from those of Initial Contracts, other than the fact
that such Subsequent Contracts were selected from all Eligible Contracts not
then allocated to any SUBI Portfolio or reserved for allocation to another SUBI
Portfolio on a "first-in, first-out" basis, based on the date of origination,
and (iv) unless the 1997-A Securitization Trustee receives a letter from each
Rating Agency to the effect that the use of different criteria would not result
in the qualification, reduction or withdrawal of its then current rating on any
Rated Certificates in respect of the 1997-A Certificates, after giving effect to
such reallocation (A) each such 1997-A Contract will be allocated to the 1997-A
SUBI Portfolio based upon its Discounted Principal Balance as of the relevant
Transfer Date, (B) the weighted average remaining term of the 1997-A Contracts
(including the Subsequent Contracts) will be not greater than ____ months, and
(C) the weighted average Booked Residual Value of all 1997-A Contracts
(including the Subsequent Contracts), as a percentage of the aggregate
Outstanding Principal Balance of the 1997-A Contracts (including the Subsequent
Contracts), will be not greater than __%, based on the characteristics of each
1997-A Contract as of its date of origination.
(c) On each Transfer Date, the Servicer shall transfer from the 1997-A
SUBI Collection Account to the Lease Funding Account an amount equal to the
aggregate Discounted Principal Balance as of the relevant Transfer Date of the
Subsequent Contracts then being added to the 1997-A SUBI Portfolio and 1997-A
SUBI Sub-Trust pursuant to Section 16.01 of the 1997-A SUBI Supplement.
(d) In the circumstances set forth in Section 17.02 of the 1997-A SUBI
Supplement, the Servicer shall transfer from the 1997-A SUBI Collection Account
to the 1997-A SUBI Lease Account the amounts specified therein of the 1997-A
SUBI Supplement.
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SECTION 3.03. SERVICER PAYMENT IN RESPECT OF CERTAIN CONTRACTS AND LEASED
VEHICLES.
(a) The representations and warranties of the Servicer set forth in
Section 3.02(b), with respect to each 1997-A Contract shall survive delivery of
the related Contract to the 1997-A SUBI Portfolio and the 1997-A SUBI Sub-Trust
and shall continue so long as each such 1997-A Contract remains outstanding, or
until the termination of the 1997-A Securitization Trust Agreement pursuant to
Section 7.01 thereof, whichever occurs earlier. Upon discovery by the Titling
Trustee, the 1997-A Securitization Trustee or the Servicer that any such
representation or warranty was incorrect as of the time effective and materially
and adversely affects such 1997-A Contract, the party discovering such
incorrectness shall give prompt written notice to the others. Within 60 days of
its discovery of such incorrectness or notice to such effect to the Servicer,
the Servicer shall cure in all material respects the circumstances or condition
in respect of which the representation or warranty was incorrect as of the time
effective. If the Servicer is unable or unwilling to do so timely, it shall, as
the sole remedy for such breach, promptly (i) deposit the Reallocation Payment
in respect of such 1997-A Contract into the 1997-A SUBI Collection Account ,
(ii) reallocate such 1997-A Contract and the related Leased Vehicle from the
1997-A SUBI Portfolio to the UTI Portfolio, and (iii) indemnify, defend and hold
harmless the holders of any 1997-A SUBI Certificate (including without
limitation the 1997-A Securitization Trustee on behalf of the 1997-A
Securitization Trust and the Certificateholders) and any subsequent servicer (if
other than the current Servicer) from and against, any and all loss or liability
with respect to or resulting from any such 1997-A Contract or related Leased
Vehicle. Notwithstanding the foregoing, if any reallocation described in clause
(ii) would cause the Transferor Interest to be equal to or less than zero, the
Servicer also shall deposit promptly into the 1997-A SUBI Collection Account an
amount so that the Transferor Interest will not be reduced to less than zero,
and the reallocation will not be made until such deposit has been made.
(b) In the event that the Servicer receives funds from a Dealer that is
required, pursuant to a Dealer Agreement, to repurchase a Contract or Leased
Vehicle included in the 1997-A SUBI Portfolio, the Servicer shall, subject to
Section 7.01(b) of the Titling Trust Agreement, within two Business Days of
receipt thereof, deposit such funds into the 1997-A SUBI Collection Account,
which deposit shall satisfy the UTI Beneficiary's obligations with respect to
enforcement of such Dealer repurchase obligation, and return to the repurchasing
Dealer the Certificate of Title and Contract with respect to such Leased
Vehicle.
(c) The obligations of the Servicer pursuant to this Section 3.03 shall
survive any termination of the Servicer with respect to the 1997-A SUBI
Portfolio and 1997-A SUBI Sub-Trust under this 1997-A SUBI Servicing Supplement
or the Titling Trust Agreement.
SECTION 3.04. FILINGS.
The Servicer will undertake all other and future actions and activities as
may be reasonably necessary to perfect (or evidence) and confirm the foregoing
allocations of Trust Assets to the 1997-A SUBI Portfolio and 1997-A SUBI
Sub-Trust, as the case may be, including filing or causing to be filed UCC
financing statements and executing and delivering all related filings, documents
or
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writings as may be reasonably necessary hereunder or under any other
Securitization Trust Documents, whether on its own behalf or pursuant to the
power of attorney granted by the Grantor in the 1997-A SUBI Supplement;
provided, however, that in no event shall the Servicer be required to take any
action to perfect a security interest that may be held by the 1997-A
Securitization Trustee in any 1997-A Leased Vehicle.
ARTICLE FOUR
SPECIFIC REQUIREMENTS FOR
ADMINISTRATION AND SERVICING OF CONTRACTS
IN 1997-A SUBI PORTFOLIO
SECTION 4.01. SERVICER BOUND BY TRUST AGREEMENT.
(a) Except as otherwise specifically provided herein: (i) the Servicer
shall continue to be bound by all provisions of the Titling Trust Agreement with
respect to the Contracts, Leased Vehicles and other associated Trust Assets in
the 1997-A SUBI Sub-Trust, including without limitation the provisions thereof
relating to the administration and servicing of Contracts; and (ii) the
provisions set forth herein shall operate either as additions to or
modifications of the extant obligations of the Servicer under the Titling Trust
Agreement, as the context may require. In the event the provisions of this
1997-A SUBI Servicing Supplement are more exacting or specific than those
contained in the Titling Trust Agreement or in the event of any conflict between
the provisions of this 1997-A SUBI Servicing Supplement with respect to the
1997-A SUBI, the provisions of this 1997-A SUBI Servicing Supplement shall
govern.
(b) For purposes of determining the Servicer's obligations with respect to
the servicing of the 1997-A SUBI Sub-Trust under this 1997-A SUBI Servicing
Supplement (including without limitation pursuant to Article Four hereof),
general references in the Titling Trust Agreement to: (i) a SUBI Account shall
be deemed to refer more specifically to the 1997-A SUBI Account; (ii) a SUBI
Asset shall be deemed to refer more specifically to the 1997-A SUBI Asset; (iii)
an appropriate or applicable SUBI Collection Account shall be deemed to refer
more specifically to the 1997-A SUBI Collection Account; (iv) an appropriate or
applicable SUBI Lease Account shall be deemed to refer more specifically to a
1997-A SUBI Lease Account; (v) a SUBI Portfolio shall be deemed to refer more
specifically to the 1997-A SUBI Portfolio; (vi) a SUBI Sub-Trust shall be deemed
to refer more specifically to the 1997-A SUBI Sub-Trust; (vii) a SUBI Servicing
Supplement shall be deemed to refer more specifically to this 1997-A SUBI
Servicing Supplement; and (viii) a SUBI Supplement shall be deemed to refer more
specifically to the 1997-A SUBI Supplement.
(c) Coincident with the execution and delivery of this 1997-A SUBI
Servicing Supplement, the Servicer shall furnish the 1997-A Securitization
Trustee, on behalf of the 1997-A Securitization Trust, with an Officer's
Certificate listing the officers or other authorized signatories of the Servicer
currently involved in, or responsible for, the administration and servicing of
the Contracts in the 1997-A SUBI Portfolio, which list shall from time to time
be updated by the Servicer.
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SECTION 4.02. COLLECTION OF MONTHLY PAYMENTS AND REMITTANCES;
APPLICATION OF PROCEEDS; ACCOUNTS
(a) The Servicer shall use commercially reasonable efforts, consistent
with its then current standards, policies and procedures or new programs,
whether or not implemented on a test basis, commenced in the ordinary course of
business, to (i) collect all payments required under the terms and provisions of
each 1997-A Contract; and (ii) cause each Obligor to make all payments in
respect of the 1997-A Contract to which such Obligor is a party or otherwise
obligated.
(b) Consistent with the foregoing, the Servicer may in its discretion
(i) waive any late payment charge or similar charge, in whole or in part, in
connection with delinquent payments on or deferrals or extensions of a
Contract included in the 1997-A SUBI Portfolio and (ii) defer one or more
payments under a Contract or extend the Maturity Date of any Contract.
Notwithstanding the foregoing, the Servicer may not grant deferrals or
otherwise extend the Maturity Date of a Contract more than a total of ___
times or by more than __ months in the aggregate over the life of such
Contract, and may not extend the Maturity Date of any 1997-A Contract to
occur later than the last day of the Collection Period related to the Final
Scheduled Distribution Date; provided, however, that if the Servicer extends
the Maturity Date of a 1997-A Contract by more than a total of __ times or by
more than __ months in the aggregate as described above, or extends the
Maturity Date so that the extended Maturity Date will occur later than the
last day of the Collection Period relating to the Final Scheduled Maturity
Date, then, as the sole remedy therefor, the Servicer shall, on the Deposit
Date related to the Collection Period in which such extension was granted or
on the Deposit Date relating to the Collection Period in which the Servicer
discovers or is notified that an improper extension was granted, (y) deposit
into the 1997-A SUBI Collection Account an amount equal to the then
Discounted Principal Balance of such Contract plus an amount equal to the
interest, or lease charge, portion of any Monthly Payments with respect
thereto at the related Lease Rate that were accrued but unpaid as of the end
of that Collection Period, and (z) reallocate such 1997-A Contract and the
related 1997-A Leased Vehicle from the 1997-A SUBI Portfolio and SUBI
Sub-Trust to the UTI Portfolio and UTI Sub-Trust. The obligations of the
Servicer pursuant to this Section 4.02(b) shall survive any termination of
the Servicer's obligations with respect to the 1997-A SUBI Portfolio under
this 1997-A SUBI Servicing Supplement.
(c) As to any Monthly Payments, Liquidation Proceeds, Insurance Proceeds
(excluding proceeds of the Residual Value Insurance Policy which are to be
transferred directly to TLI), Prepayments, Payments Ahead or any other payments
by or on behalf of any Obligor or otherwise with respect to any 1997-A Contract
or related Leased Vehicle, including (if applicable) any proceeds of recourse
payments by the originating Dealer, whether received by the Servicer through any
lock box or similar mechanism used for the collection of regular periodic
payments on receivables owned or serviced by it or received directly by the
Servicer at any of its servicing offices, but subject to Section 4.08(b) of this
1997-A SUBI Servicing Supplement with regard to Liquidation Proceeds and
Insurance Proceeds:
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(i) Upon receipt of any such funds (including funds initially deposited in
any Servicer lock-box account) the Servicer shall deposit such funds into its
operating account and shall ascertain promptly (but in any event within two
Business Days) the following information: (A) the amount of each receipt, (B)
the Contract Number to which such receipt relates, (C) the nature of the payment
(i.e., whether a Monthly Payment, Insurance Proceeds, other Liquidation
Proceeds, a Prepayment, payment of the Residual Value of the related Leased
Vehicle or any other payment by or on behalf of any Obligor), (D) the date such
payment is credited; and (E) that such Contract has been allocated to the 1997-A
SUBI Portfolio and 1997-A SUBI Sub-Trust (collectively, the "Payment
Information").
(ii) As to any such funds received by the Servicer accompanied by all
necessary Payment Information, the Servicer shall, within two Business Days
after such receipt, (A) enter the Payment Information in its computer system,
(B) subject to Section 7.01 of the Titling Trust Agreement, segregate all such
funds from other SUBI Sub-Trusts, and (C) subject to Section 7.01 of the Titling
Trust Agreement, and except as set forth in this 1997-A SUBI Servicing
Supplement, deposit all such funds (net of reimbursement of any Liquidation
Expenses incurred by the Servicer with respect to any 1997-A Leased Vehicle
whose Liquidation Proceeds are included among such funds) into the 1997-A SUBI
Collection Account maintained by the Titling Trustee.
(iii) As to such funds received by the Servicer that are not
accompanied by all Payment Information, the Servicer shall enter into its
computer system such Payment Information as is available from time to time.
Upon receipt of the remaining Payment Information, the Servicer shall, within
two Business Days after such receipt, (A) enter the Payment Information in its
computer system and (B) segregate all such funds as set forth in clause (ii)
above. The Servicer shall use its reasonable commercial efforts to obtain any
missing Payment Information as soon as practicable after receipt of any such
funds.
(iv) Upon the determination by the Servicer that any proceeds received by
it with respect to any 1997-A Contract constitute one or more Payments Ahead,
the Servicer shall, unless otherwise instructed by the Titling Trustee, (A)
maintain appropriate records of such Payment Ahead so as to be able to timely
apply such Payment Ahead as a Monthly Payment with respect to the applicable
Contract and (B) subject to Section 7.01 of the Titling Trust Agreement, deposit
such Payment Ahead into the 1997-A SUBI Collection Account.
(d) The Servicer shall treat all Repossessed Vehicle Proceeds and Matured
Leased Vehicle Proceeds in the manner provided for other Liquidation Proceeds in
the Titling Trust Agreement and 1997-A SUBI Supplement; provided, however, as
set forth in Section 4.07 of this 1997-A SUBI Servicing Supplement, that the
Servicer may be reimbursed for related Repossessed Vehicle Expenses, Matured
Leased Vehicle Expenses, other Liquidation Expenses and Insurance Expenses as
provided in Section 4.02(i).
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(e) The Servicer shall deposit into the 1997-A SUBI Collection Account on
or before each Deposit Date each Security Deposit that was applied in respect of
a 1997-A Contract during the related Collection Period and not paid to a third
party or to the Servicer as Liquidation Expenses or Matured Leased Vehicle
Expenses, or reimbursements in respect thereof.
(f) The Servicer, on behalf of the Titling Trustee, shall establish and
maintain the 1997-A SUBI Collection Account as set forth in Section 17.01(a) of
the 1997-A SUBI Supplement. The Servicer, on behalf of the 1997-A
Securitization Trustee, shall establish and maintain (i) the Reserve Fund as set
forth in Section 3.02 of the 1997-A Securitization Trust Agreement, and (ii)
the 1997-A Certificate Account as set forth in Section 3.03 of the 1997-A
Securitization Trust Agreement.
(g) On each Determination Date the Servicer shall make the calculations
necessary to allow the distribution by the 1997-A Securitization Trustee to
holders of, or to the accounts on behalf of the holders of, the 1997-A SUBI
Certificates on the related Monthly Allocation Date in accordance with Section
3.01 of the 1997-A Securitization Trust Agreement. In connection therewith, the
Servicer shall determine the amount of Titling Trust Expenses incurred or
suffered during the preceding Collection Period and shall calculate the
allocations of such Titling Trust Expenses among the various Sub-Trusts,
including the 1997-A SUBI Sub-Trust, in good faith and so as not to
disproportionately affect any Sub-Trust, generally as provided for in Section
3.04 or 7.04, as appropriate, of the Titling Trust Agreement.
(h) The Servicer will be entitled to reimbursement of Matured Leased
Vehicle Expenses Matured Leased Vehicle Expenses, Repossessed Vehicle
Expenses and other Liquidation Expenses. The Servicer is hereby authorized to
net such expenses from proceeds or Collections in respect of the related
Contacts or Leased Vehicles (including other Liquidation Proceeds), or to
withdraw such amounts from amounts on deposit in the 1997-A SUBI Collection
Account. The Servicer also will be entitled to reimbursement of certain
payments it makes on behalf of Obligors (including payments of taxes, vehicle
registration charges, clearance of parking tickets and similar items and
expenses and charges incurred by it in the ordinary course of servicing the
Contracts) from Collections with respect to the related Contracts (whether or
not as separate payments thereof by the related Obligors) or from amounts
realized upon the final disposition of the related Leased Vehicle. To the
extent such amounts are not reimbursed prior to or at the final disposition
of the related leased vehicle but remain unpaid by the related lessee, such
unreimbursed amounts (together with any unpaid Monthly Payments under the
related Contract) will be treated as Matured Leased Vehicle Expenses or
Liquidation Expenses, as the case may be, and the Servicer is hereby
authorized to offset such reimbursable payments, expenses and charges against
Net Matured Leased Vehicle Proceeds or Liquidation Proceeds, as the case may
be.
To the extent that during any Collection Period (i) Collections, Matured
Leased Vehicle Proceeds, Liquidation Proceeds or separate payments from the
Obligors in respect of such payments, charges and expenses are deposited into
the 1997-A SUBI Collection Account rather than so offset by the Servicer, (ii)
any Monthly Payments arising from a Contract allocated to the 1997-A SUBI
Sub-Trust are received by the Titling Trustee or deposited in the 1997-A SUBI
Collection Account with respect to any prior Collection Period as to which the
Servicer has outstanding an unreimbursed
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Advance, rather than being netted from Collections by the Servicer; or (iii)
any amount of unreimbursed Advances are reasonably determined by the Servicer
to be Nonrecoverable Advances, then, on the related Deposit Date, (y) the
Servicer shall notify the Titling Trustee and the 1997-A Securitization
Trustee in writing as to any such amount and (z) instruct the Titling Trustee
to, and the Titling Trustee shall, promptly transfer an amount equal to the
aggregate of such amounts from the 1997-A SUBI Collection Account, to the
1997-A SUBI Lease Funding Account. Thereafter, the Titling Trustee shall
remit to the Servicer from the 1997-A SUBI Lease Funding Account the total of
such amounts, without interest (the "Servicer Reimbursement"). In lieu of
causing the Titling Trustee to transfer such amounts to the 1997-A SUBI Lease
Funding Account, the Servicer is hereby authorized to deduct such amounts
from amounts on deposit or otherwise to be deposited into the 1997-A SUBI
Collection Account, but in each case will notify the Titling Trustee and
1997-A Securitization Trustee in writing of such action and such amounts at
the time of such reimbursement.
(i) The Servicer shall account to the Titling Trustee and the 1997-A
Securitization Trustee with respect to the 1997-A SUBI Sub-Trust separately from
any other Sub-Trust.
(j) The Servicer shall direct the Titling Trustee or the 1997-A
Securitization Trustee, as applicable, to invest amounts held in the 1997-A SUBI
Accounts and the Reserve Fund in Permitted Investments as provided in (and
subject to the limitations of) the Titling Trust Agreement and 1997-A SUBI
Supplement. The maximum permissible maturities of any such investments pursuant
to this clause on any date shall be not later than the Business Day immediately
preceding the Monthly Allocation Date next succeeding the date of such
investment, except for (i) investments on which the Titling Trustee or 1997-A
Securitization Trustee, respectively, is the obligor (including repurchase
agreements as to which it, in its commercial capacity, is liable as principal),
which may mature on the Monthly Allocation Date, (ii) investments during the
Revolving Period of Principal Collections (including amounts treated as
Principal Collections pursuant to Section 3.01 of the 1997-A Securitization
Trust Agreement) on deposit in the 1997-A SUBI Collection Account, which may
mature on such dates as specified by the Titling Trustee at the Servicer's
direction so as to maintain the availability of sufficient cash to make payments
pursuant to Section 3.02(c) hereof, and (iii) investments in TMCC Demand Notes
which may mature on the Business Day immediately preceding (x) in the case of
TMCC Interest Demand Notes, the next succeeding Certificate Payment Date and (y)
in the case of TMCC Principal Demand Notes, the next succeeding Targeted
Maturity Date.
(k) In the event the Servicer provides to the UTI Beneficiary, the Titling
Trustee and the 1997-A Securitization Trustee a letter from each Rating Agency
to the effect that the utilization by the Servicer of an alternative remittance
schedule with respect to Collections to be deposited in the 1997-A SUBI
Collection Account (including but not limited to the use of an alternative
remittance schedule pursuant to which the obligations of the Servicer to make
such remittances are secured by a Servicer Letter of Credit satisfactory to each
such Rating Agency) will not result in a qualification, downgrading or
withdrawal of the then-current rating assigned to the Rated Certificates by such
Rating Agency, (i) this 1997-A SUBI Servicing Supplement may be so modified
without the consent
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of any Certificateholders and (ii) the Servicer may remit such collections to
the 1997-A SUBI Collection Account in accordance with that alternative
remittance schedule.
(l) The parties hereto acknowledge that the Titling Trustee, on behalf of
the Titling Trust, has made a complete transfer to the 1997-A Securitization
Trustee of the Collections in respect of the 1997-A SUBI Assets contained in the
1997-A SUBI Collection Account (excluding proceeds of the Residual Value
Insurance Policy) and, except as provided in this 1997-A SUBI Servicing
Supplement, the 1997-A SUBI Supplement and the 1997-A Securitization Trust
Agreement, neither the Titling Trustee nor the Servicer has any right to direct
such funds to a third party or to receive such funds.
(m) In the event of a sale, disposition or other liquidation of the 1997-A
SUBI Certificate and the other property of the 1997-A Securitization Trust
pursuant to Section 8.02 of the 1997-A Securitization Trust Agreement, the
Servicer shall allocate the net proceeds thereof between Principal Collections
and Interest Collections as set forth in the 1997-A Securitization Trust
Agreement.
SECTION 4.03. RECORDS.
(a) As to any proceeds or other receipts with respect to any Trust Asset,
including without limitation Monthly Payments, Prepayments, Liquidation Proceeds
and any other payments by or on behalf of any Obligor or otherwise with respect
to any 1997-A Contract or 1997-A Leased Vehicle, the Servicer shall maintain or
cause to be maintained such computer and manual records with respect to all such
proceeds and other receipts in accordance with the customary and usual
procedures of institutions which service closed-end automobile and light duty
truck leases and, to the extent more exacting, in conformity in all material
respects with the procedures used by the Servicer in respect of any such leases
serviced by it for its own account or the accounts of its Affiliates.
(b) The Servicer shall retain or cause to be retained all data (including,
without limitation, computerized records), together with all operating software
and appropriate documentation, relating directly to or maintained in connection
with the servicing of the 1997-A Contracts (the "Contract Records") consistent
with its then applicable retention policies or applicable law. The Servicer
shall provide or cause to be provided to the Titling Trustee, on behalf of the
Titling Trust, upon its request, copies of all such data and appropriate
documentation at all reasonable times and upon reasonable notice. The Servicer
shall promptly report to the Titling Trustee, on behalf of the Titling Trust,
any failure on its part to maintain the Contract Records as herein provided and
promptly take appropriate action to remedy any such failure.
(c) Upon the occurrence and during the continuance of an Event of
Servicing Termination or if the rights of the Servicer with respect to the
1997-A SUBI Portfolio are terminated in accordance with Section 6.01(b) of this
1997-A SUBI Servicing Supplement or, if this 1997-A SUBI Servicing Supplement is
terminated pursuant to Section 7.01, the Servicer shall, on demand
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of the Titling Trustee, on behalf of the Titling Trust (either at the request
of the 1997-A Securitization Trustee or, as provided in Section 6.01(b) of
this 1997-A SUBI Servicing Supplement, upon demand of Investor
Certificateholders representing not less than 51% of the aggregate Voting
Interest), deliver to the Titling Trustee all such data, operating software
and appropriate documentation necessary for the servicing of the 1997-A
Contracts, including but not limited to the related Contract Documents and
Title Documents, all moneys collected by it and required to be deposited in
any 1997-A SUBI Account on behalf of the Titling Trust, or in the 1997-A SUBI
Collection Account or the Reserve Fund on behalf of the 1997-A Securitization
Trust, all Security Deposits with respect to 1997-A Contracts, and any 1997-A
Leased Vehicle in the possession of the Servicer that has been repossessed or
is part of Matured Leased Vehicle Inventory and in either case has not yet
been sold or otherwise disposed of. In addition to delivering such data,
operating software and appropriate documentation and moneys, if a new
servicer is appointed, the Servicer shall use its commercially reasonable
efforts to effect the orderly and efficient transfer of the servicing of the
1997-A Contracts to the party that will be assuming responsibility for such
servicing, including, without limitation, directing Obligors to remit
payments in respect of such Contracts to an account or address designated by
the Titling Trustee or such new servicer.
SECTION 4.04. COLLECTION AND APPLICATION OF SECURITY DEPOSITS.
Subject to Section 4.03(c) of this 1997-A SUBI Servicing Supplement, the
Servicer shall retain each Security Deposit remitted to it (or deemed remitted
to it) as agent and bailee for the Obligor until such time as the Titling Trust,
the Titling Trustee on behalf of the Titling Trust, or the Servicer may lawfully
an under the terms of the related Contract apply such Security Deposit against
unpaid amounts owed under the Contract, damages to the vehicle, excess wear and
tear charges, expenses in connection with the refurbishment and disposal of
related Leased Vehicle or against fees, charges, payments or expenses advanced
or paid by the Servicer in accordance with applicable law, its customary and
usual servicing procedures and the related Contract, from and after which time
such amounts will be 1997-A SUBI Assets, subject to any reimbursement due to the
Servicer. To the extent any Security Deposit or portion thereof is to be
treated as proceeds of a 1997-A Contract or 1997-A Leased Vehicle, the related
Security Deposit or such portion shall be deemed to be Liquidation Proceeds. On
at least a monthly basis, but otherwise as provided in Section 4.02(c)(ii) of
this 1997-A SUBI Servicing Supplement, the Servicer shall deposit into the
1997-A SUBI Collection Account each Security Deposit that became Liquidation
Proceeds during the previous month; otherwise, each Security Deposit, after
deduction for amounts applied towards the payment or reimbursement of any amount
described above, shall be returned to the related Obligor by the Servicer upon
termination of such Contract.
SECTION 4.05. ADVANCES.
(a) On or prior to each Deposit Date, the Servicer shall make an Advance
with respect to each outstanding delinquent 1997-A Contract and each 1997-A
Contract as to which payments have been deferred resulting in the diminution of
the amount to be received on any Due Date relative to the amount of each
originally scheduled Monthly Payment if such Contract has not been
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reallocated to the UTI Portfolio with an accompanying Reallocation Payment.
Each such advance will be made by deposit into the 1997-A SUBI Collection
Account of an amount equal to the aggregate amount of Monthly Payments due
but not received during the related Collection Period.
(b) Notwithstanding any other provision of this 1997-A SUBI Servicing
Supplement, the Servicer shall not be obligated to make any Advance in respect
of any 1997-A Contract if the Servicer shall have reasonably determined that any
such Advance, if made, would constitute a Nonrecoverable Advance. Any such
determination shall be evidenced by an Officer's Certificate of the Servicer
furnished to each UTI Beneficiary, the Titling Trustee and the 1997-A
Securitization Trustee setting out the basis for such determination, which
determination shall be conclusive and binding absent manifest error.
SECTION 4.06. PAYMENT OF CERTAIN FEES AND EXPENSES; NO OFFSET.
(a) As part of its obligations hereunder, to the extent that cash flows
relating to the 1997-A SUBI Sub-Trust, as set forth in Section 3.01(b) of the
1997-A Securitization Trust Agreement, are insufficient to provide for the
payment of all fees and expenses due to the Titling Trustee or the 1997-A
Securitization Trustee as Capped Trust Administrative Expenses, Capped
Securitization Trust Administrative Expenses or Uncapped Administrative
Expenses, the Servicer shall advance an amount equal to such excess fees and
expenses as they become payable from time to time and agrees to indemnify the
Titling Trustee and the 1997-A Securitization Trustee and their respective
agents for such amounts. The Servicer shall be entitled to reimbursement of
such advances as set forth in Section 3.01(b) of the 1997-A Securitization Trust
Agreement. The obligations of the Servicer pursuant to this Section shall
survive any termination of the Servicer's rights and obligations with respect to
the 1997-A SUBI Portfolio under this 1997-A SUBI Servicing Supplement.
(b) Prior to the termination of the Servicer's rights and obligations with
respect to the 1997-A SUBI Sub-Trust and thereafter if such termination results
from an Event of Servicing Termination, the obligations of the Servicer with
respect to the 1997-A SUBI Sub-Trust shall not be subject to any defense,
counterclaim or right of offset that the Servicer has or may have against any
UTI Beneficiary, the Titling Trustee on behalf of the Titling Trust, or the
1997-A Securitization Trustee, whether in respect of this 1997-A SUBI Servicing
Supplement, the 1997-A SUBI Supplement, any Securitization Trust Document, any
1997-A Contract, any related Contract Document, any 1997-A Leased Vehicle or
otherwise.
SECTION 4.07. SERVICING COMPENSATION.
(a) As compensation for the performance of its obligations under this
1997-A SUBI Servicing Supplement, the Servicer shall be entitled to receive from
the Titling Trustee, on behalf of the Titling Trust, on each Monthly Allocation
Date, the Servicing Fee equal to the sum of:
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(i) An amount (the "Servicing Rate Portion") equal to one-twelfth of
1.00% of the Aggregate Net Investment Value as of the first day of the
related Collection Period; and
(ii) Any late fees, deferral fees and other administration fees or
similar charges paid by any Obligor pursuant to a 1997-A Contract during
the related Collection Period;
provided, however, the Servicing Fee shall be paid out of cash flows and in
accordance with the priorities of payments specified in Section 3.01(b) of the
1997-A Securitization Trust Agreement and the Servicer may be reimbursed for
advancing certain Administrative Expenses as provided in this 1997-A SUBI
Servicing Supplement. Further, as additional servicing compensation with regard
to the 1997-A SUBI Sub-Trust, the Servicer also shall receive income as and to
the extent provided in the 1997-A Securitization Trust Agreement.
The Servicing Rate Portion will be calculated and paid based upon a 360-day
year consisting of twelve 30-day months. The Servicer shall pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement of such expenses except to the extent they
constitute Liquidation Expenses or expenses recoverable under an applicable
insurance policy, as provided in Section 4.12 of this 1997-A SUBI Servicing
Supplement. For so long as there shall be only one Servicer for the Titling
Trust, the Servicing Fee shall be deemed to be an expense incurred with respect
to the Titling Trust Assets generally; if at any time the Servicer shall only
service some (but not all) Sub-Trusts, the Servicing Fee shall be deemed to be
an expense incurred with respect to that discrete group of Trust Assets
contained in the Sub-Trusts the Servicer then services.
(b) So long as TMCC is the Servicer, the Servicer may, by notice to the
Titling Trustee and the 1997-A Securitization Trustee on or prior to any
Determination Date, waive its Servicing Fee with respect to the related
Collection Period, if the Servicer believes that sufficient collections will be
available from Interest Collections on one or more future Monthly Allocation
Dates (other than from amounts on deposit in the Reserve Fund) to pay such
waived Servicing Fee, without interest. If the Servicer waives such Servicing
Fee, the Servicing Fee with respect to such Collection Period shall be deemed to
be zero for all purposes, provided, however, that for purposes of Section
3.01(b)(vii) of the 1997-A Securitization Trust Agreement, any such waived
Servicing Fee thereafter shall be treated as an unpaid Servicing Fee with
respect to a prior Collection Period (unless the Servicer continues to waive
such Servicing Fee for subsequent Monthly Allocation Dates or waives such
Servicing Fee permanently).
SECTION 4.08. REPOSSESSION AND SALE OF LEASED VEHICLES.
In accordance with the procedures used by the Servicer in respect of any
comparable leases and leased vehicles serviced by it for its own account or the
accounts of its Affiliates, the Servicer shall use its commercially reasonable
efforts to repossess or otherwise take possession of the Leased Vehicle related
to any 1997-A Contract that the Servicer shall have determined to be in default
or
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a 1997-A Contract as to which a Prepayment has been made but the related
Leased Vehicle has not been purchased by the Obligor.
The Servicer shall, in accordance with the standards set forth in the
immediately preceding paragraph:
(a) follow such practices and procedures as it shall deem necessary or
advisable in its servicing of closed-end automobile and light duty truck
leases, which may include reasonable efforts to realize upon any recourse to
Dealers, consigning a 1997-A Leased Vehicle to a motor vehicle dealer for
resale or selling a 1997-A Leased Vehicle at public or private sale; and
(b) sell or otherwise dispose of each 1997-A Leased Vehicle that is
repossessed in accordance with the related 1997-A Contract or that becomes
part of Matured Leased Vehicle Inventory for the 1997-A SUBI Sub-Trust and,
if such related Contract is in default, shall commence and prosecute any
Proceedings in respect of such Contract (and such Leased Vehicle) in its own
name or, if the Servicer deems it necessary, in the name of the Titling
Trustee, on behalf of the Titling Trust.
The obligations of the Servicer under this Section are subject to the
provision that, in the event of damage to a 1997-A Leased Vehicle from a cause
for which the Obligor under the related 1997-A Contract was not required to
obtain casualty insurance or maintain such insurance in full force and effect,
the Servicer shall not be required to expend its own funds in repairing such
Leased Vehicle unless it shall reasonably determine that such restoration will
increase Liquidation Proceeds (net of Liquidation Expenses) of the related
Contract by at least an equivalent amount. The Servicer shall only expend funds
in connection with the repossession and/or sale of any 1997-A Leased Vehicle to
the extent that it reasonably determines that Liquidation Expenses will not
exceed the anticipated Liquidation Proceeds. The Servicer shall be responsible
for all other costs and expenses incurred by it in connection with any action
taken in respect of a 1997-A Contract or the related Leased Vehicle; provided,
however, that it shall be entitled to reimbursement of such costs and expenses
to the extent they constitute Liquidation Expenses or expenses recoverable under
an applicable Insurance Policy. All Liquidation Proceeds and Insurance Proceeds
(other than proceeds of the Residual Value Insurance Policy) shall be deposited
and transferred as provided in Section 4.02 of this 1997-A Servicing Supplement.
The foregoing notwithstanding, prior to transferring any such funds out of
its operating account, the Servicer shall first deduct therefrom any
unreimbursed Liquidation Expenses and expenses recoverable under an applicable
Insurance Policy. In connection with this Section, the Titling Trustee, on
behalf of the Titling Trust, shall grant to the Servicer a power of attorney in
the form attached as Exhibit C with regard to the 1997-A Leased Vehicles, and
the Servicer, as "Grantee" thereunder, with full power of substitution, if a
Servicer conducts such a substitution it shall give prompt written notice
thereof to the Titling Trustee.
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The Servicer is not required hereby to deduct from Repossessed Vehicle
Proceeds, Matured Leased Vehicle Proceeds or other Liquidation Proceeds or
Insurance Proceeds with respect to any particular 1997-A Leased Vehicle all
related unreimbursed Repossessed Vehicle Expenses, Matured Leased Vehicle
Expenses or other Liquidation Expenses or Insurance Expenses prior to
transferring such funds out of its operating account. Such expenses may instead
be reimbursed as provided in Section 4.02(h) of this 1997-A SUBI Servicing
Supplement.
SECTION 4.09. SERVICER TO ACT ON BEHALF OF TRUSTEE.
(a) In order to facilitate the servicing of the 1997-A SUBI Sub-Trust by
the Servicer, the Titling Trustee, on behalf of the Titling Trust, hereby
appoints the Servicer as its agent and bailee to retain possession of the
related Contract Documents, Title Documents and any other related items that
from time to time come into possession of the Servicer, and the Servicer hereby
accepts such appointment.
(b) The Servicer shall maintain each such Contract Document and Title
Document at its offices identified on the attached Schedule I, or at such other
office as shall be specified by the Servicer to the Titling Trustee on 30 days'
prior notice. The Servicer shall promptly report to the Titling Trustee any
failure on its part to retain possession of any such Contract Documents or Title
Documents and promptly take appropriate action to remedy any such failure.
(c) Upon written instructions from the Titling Trustee, on behalf of the
Titling Trust, setting forth a reasonable basis therefor, or in the exercise of
its duties and powers hereunder, the Servicer shall release any Contract
Document, Title Document, or other related item to the Titling Trustee or its
agent or designee, as the case may be, at such place or places as the Titling
Trustee may designate, as soon as practicable. The Servicer shall not be
responsible for any loss occasioned by the failure of the Titling Trustee to
return any document or any delay in doing so.
(d) The Servicer shall be deemed to have received proper instructions with
respect to any such Contract Document, Title Document, any other related item or
any Contract Record, upon its receipt of written instructions by a Responsible
Officer of the Titling Trustee. A certified copy of a bylaw or a resolution of
the Board of Directors of the Titling Trustee shall constitute conclusive
evidence of the authority of any such Responsible Officer to act and shall be
considered in full force and effect until receipt by the Servicer of written
notice to the contrary given by the Titling Trustee.
(e) The Servicer shall identify from time to time all (i) periodic sales
and use tax or property (real or personal) tax reports, (ii) periodic renewals
of licenses and permits, (iii) periodic renewals of qualification to act as a
trust and a business trust and (iv) other periodic governmental filing,
registration or approvals (collectively, "Filings") arising with respect to or
required of the Titling Trust, including (in the case of clauses (ii) and (iv))
such licenses, permits, and other Filings as are required for the Titling
Trustee to accept assignments of 1997-A Contracts and to be identified as the
owner of 1997-A Leased Vehicles on their Certificates of Title, as contemplated
by Section 4.01 of this 1997-A SUBI Servicing Supplement. The Servicer shall
also identify any surety bonds
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or other ancillary undertakings required of the Titling Trust or the Titling
Trustee in respect of any Filing. The Servicer shall timely prepare and
file, or cause to be filed, with the cooperation of the Titling Trustee, on
behalf of the Titling Trustee, or the Titling Trust with the appropriate
Person each Filing and each such ancillary undertaking with a copy to the
Titling Trustee. In connection with this Section, the Titling Trustee, on
behalf of the Titling Trust, shall grant to the Servicer such authority,
including without limitation any necessary power of attorney in the form
attached as Exhibit C, as it may require in order to effect each such Filing
and ancillary undertaking. Should the Servicer at any time receive notice,
or have actual knowledge, of any non-compliance with any Filing requirement,
it shall promptly so notify the Titling Trustee.
(f) The Titling Trustee shall deliver to the Servicer, promptly upon their
execution and delivery by the parties thereto, the Titling Trust Agreement and
each amendment and supplement thereto as any such amendment and supplement
relates to the 1997-A SUBI Sub-Trust. The Servicer shall not act contrary to
any provision of the Titling Trust Agreement as it relates to the 1997-A SUBI
Sub-Trust, as so amended or supplemented.
SECTION 4.10. INDEMNIFICATION BY SERVICER.
The Servicer agrees to indemnify, defend and hold harmless the 1997-A
Securitization Trustee and its agents for any and all liabilities, losses,
damages and expenses (including without limitation reasonable fees and expenses
of counsel) that may be incurred by the 1997-A Securitization Trustee or its
agents as a result of any act or omission by the Servicer in connection with its
maintenance and custody of the Contract Documents, Title Documents, and Contract
Records with respect to 1997-A Contracts and 1997-A Leased Vehicles, the
servicing of the 1997-A Contracts, the Servicer's undertakings in clause (e) of
Section 4.09 of this 1997-A SUBI Servicing Supplement or any other activity
undertaken or omitted by the Servicer with respect to any 1997-A SUBI Asset. The
obligations set forth in this Section shall survive the termination of this
1997-A SUBI Servicing Supplement or the resignation or removal of the Servicer
(generally or with respect to the 1997-A SUBI Sub-Trust) or the 1997-A
Securitization Trustee.
SECTION 4.11. THIRD PARTY CLAIMS.
The Servicer shall immediately notify TMCC (in the event that TMCC is not
acting as the Servicer hereunder) and the Titling Trustee, on behalf of the
Titling Trust, 1997-A Securitization Trustee and any other holder of any 1997-A
SUBI Certificate upon its learning that a claim of whatever kind that would have
a material adverse impact on any UTI Beneficiary, the Transferor, the Titling
Trustee, the Titling Trust, the 1997-A Securitization Trust, the 1997-A
Securitization Trustee, any 1997-A SUBI Asset or the Servicer is being made by a
third party with respect to any Contract or Leased Vehicle (whether or not
included in the 1997-A SUBI Sub-Trust) or the servicing thereof or with respect
to any other Trust Asset (whether or not constituting a 1997-A SUBI Asset).
SECTION 4.12. INSURANCE POLICIES.
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So long as any 1997-A SUBI Certificates are outstanding, the Servicer will
maintain and pay when due all premiums with respect to, and the Servicer may not
terminate or cause the termination of the following, all premiums with respect
to (which premiums shall constitute Administrative Expenses): (i) each
Contingent and Excess Liability Insurance Policy unless (A) a replacement
insurance policy or policies is obtained providing coverage against third party
claims that may be raised against the Titling Trustee, on behalf of the Titling
Trust, with respect to any Leased Vehicle included in the 1997-A SUBI Sub-Trust
in an amount at least equal to $10 million per claim, not subject to any annual
or aggregate cap (which policy or policies may be a blanket insurance policy or
policies covering the Servicer and one or more of its Affiliates), or (B) either
each Rating Agency has delivered a letter to the 1997-A Securitization Trustee
to the effect that the obtaining of any such replacement insurance policy or
policies, in and of itself, will not cause its then-current rating of any of the
Rated Certificates to be qualified, reduced or withdrawn; or (ii) the Residual
Value Insurance Policy, unless the 1997-A Contracts may properly be treated as
finance leases for purposes of generally accepted accounting principles,
consistently applied, by virtue of some reason other than maintenance of that
policy, and the Servicer has provided to the Titling Trustee and the 1997-A
Securitization Trustee an Officer's Certificate to that effect, describing such
reasons which shall be in accordance with GAAP. On or before December 31 of
each year, the Servicer shall provide to the Titling Trustee one or more
insurance certificates certifying that each of the particular policies it is
required to maintain pursuant to this Section remains in full force and effect.
The obligations of the Servicer pursuant to this Section shall survive any
termination of the Servicer's obligations with respect to the 1997-A SUBI
Sub-Trust under this 1997-A SUBI Servicing Supplement.
SECTION 4.13. SERVICER NOT TO RESIGN; ASSIGNMENT.
(a) Except as provided in Section 6.01 of this 1997-A SUBI Servicing
Supplement, the Servicer shall not resign from the duties and obligations hereby
imposed on it as Servicer except upon determination by its Board of Directors
that by reason of a change in applicable legal requirements the continued
performance by the Servicer of its duties as Servicer under this 1997-A
Servicing Supplement would cause it to be in violation of such legal
requirements in a manner that would result in a material adverse effect on the
Servicer or its financial condition, said determination to be evidenced by a
Board Resolution to such effect accompanied by an Opinion of Counsel reasonably
satisfactory to the Titling Trustee of Independent counsel reasonably
satisfactory to the Titling Trustee, to such effect. No such resignation shall
become effective unless and until a new servicer is willing to service the
Contracts and enters into a servicing agreement with the Titling Trustee, on
behalf of the Titling Trust, such agreement to have substantially the same
provisions as this Servicing Agreement. The Titling Trustee, on behalf of the
Titling Trust, shall not unreasonably fail to consent to such a servicing
agreement.
(b) If the Servicer resigns in the circumstances contemplated by clause
(a) above, in addition to the requirements set forth therein, the Opinion of
Counsel required thereby also shall be reasonably satisfactory to the 1997-A
Securitization Trustee. The 1997-A Securitization Trustee shall not
unreasonably fail to consent to a servicing agreement with a new servicer that
proposes to enter into a servicing agreement that meets the standards required
by this 1997-A SUBI Servicing
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Supplement. No such resignation shall affect the obligation of the Servicer
to remit moneys to the 1997-A SUBI Collection Account (in lieu of
unrecoverable insurance proceeds), or the obligations of the Servicer
pursuant to Sections 3.03(a), 4.04, 4.06(a), 4.08 or 4.10 of this 1997-A
SUBI Servicing Supplement; no successor Servicer shall be required to
undertake any of the foregoing, other than the obligation set forth in
Section 4.06(a) of this 1997-A SUBI Servicing Supplement (which shall remain
a joint and several obligation of the initial Servicer and any successor
Servicer). The Titling Trustee shall give prompt notice to each Rating
Agency of any such resignation of the Servicer, and the Titling Trustee and
1997-A Securitization Trustee must obtain from each Rating Agency a letter
approving each substitute servicer.
(c) The Servicer may not assign this Servicing Agreement or any of its
rights, powers, duties or obligations hereunder; provided, however, that the
Servicer may assign this Servicing Agreement in connection with a consolidation,
merger, conveyance, transfer or lease made in compliance with Section 4.15 of
this 1997-A SUBI Servicing Supplement.
(d) Except as provided above, the duties and obligations of the Servicer
under this 1997-A SUBI Servicing Supplement shall continue until this 1997-A
SUBI Servicing Supplement shall have been terminated as provided in Section 6.01
of this 1997-A SUBI Servicing Supplement and shall survive the exercise by the
Titling Trustee, on behalf of the Titling Trust, of any right or remedy under
this 1997-A SUBI Servicing Supplement or the enforcement by the Titling Trustee,
on behalf of the Titling Trust, of any provision of the Titling Trust Documents.
SECTION 4.14. OBLIGOR INSURANCE COVERAGE IN RESPECT OF LEASED VEHICLES.
The Servicer shall use its best efforts to ensure that the Obligor under
each 1997-A Contract shall have, and maintain in full force and effect during
the term of such Contract, a comprehensive, collision and property damage
insurance policy covering the actual cash value of the related Leased Vehicle
and naming the Titling Trustee as a loss payee, as well as public liability,
bodily injury and property damage coverage in the amounts required by applicable
state law or as set forth in such Contract, and naming the Titling Trustee as an
additional insured. Except as otherwise set forth in this 1997-A SUBI Servicing
Supplement or in any other Securitization Trust Document, the Servicer shall, on
at least a monthly basis, deposit into the 1997-A SUBI Account any proceeds of
such Insurance Policy that the Servicer may receive with respect to any 1997-A
Leased Vehicle.
In each case as to which a deductible is applicable under any Contingent
and Excess Liability Policy, the Servicer will promptly deposit into the 1997-A
SUBI Collection Account all amounts that would have been payable under such
policy if there were no deductible (not to exceed the amount of such deductible)
less amounts that are payable under any outstanding policy of primary insurance
maintained (or that would be payable under any such policy maintained) as
required under the related Contract. The foregoing obligation of the Servicer
shall survive the resignation of the Servicer or any termination of it as
Servicer under this 1997-A SUBI Servicing Supplement pursuant to Section 6.01 of
this 1997-A SUBI Servicing Supplement.
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SECTION 4.15. CORPORATE EXISTENCE; STATUS; MERGER.
(a) The Servicer shall keep in full effect its existence, rights and
franchises (except as set forth in (b) below) as a California corporation and
will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings of the
Servicer and its subsidiaries considered as a whole, and in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of, or to permit the Servicer to perform its obligations under,
the Titling Trust Documents.
(b) The Servicer shall not consolidate with or merge into any other
corporation or convey, transfer or lease all or substantially all of its assets
as an entirety to any Person without the prior written consent of the Titling
Trustee, on behalf of the Titling Trust, unless (i) the corporation formed by
such consolidation or into which the Servicer has merged or the Person which
acquires by conveyance, transfer or lease all or substantially all the assets of
the Servicer as an entirety is (A) a citizen of or an entity organized and
existing under the laws of the United States or any State and (B) either
executes and delivers to the Titling Trustee, on behalf of the Titling Trust, an
agreement in form and substance reasonably satisfactory to the Titling Trustee,
that contains an assumption by such successor entity of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer under this 1997-A SUBI Servicing Supplement and the
other Trust Documents or is so bound by operation of law, or (ii) the Servicer
is the surviving corporation resulting from such consolidation or merger.
ARTICLE FIVE
STATEMENTS AND REPORTS
SECTION 5.01. REPORTING BY THE SERVICER.
(a) On or prior to the 25th day of each calendar month, the Servicer shall
(a) cause to be delivered to the Titling Trustee a supplement to the Schedule of
1997-A Contracts and 1997-A Leased Vehicles containing data reflecting the
addition or removal of Contracts or Leased Vehicles from the 1997-A SUBI
Portfolio as of the last day of the prior calendar month, (b) cause to be
delivered to the Titling Trustee a report in respect of the prior calendar
month, setting forth (i) any information relating to the 1997-A Contracts or the
related Leased Vehicles that normally would be available from a servicer of
closed-end automobile and light-duty truck leases and is reasonably requested by
the Titling Trustee and (ii) if required, any additional information required by
the terms of any Securitized Financing, and (c) deliver such other reports or
Officer's Certificates as may be necessary pursuant to this 1997-A SUBI
Servicing Supplement to document to the Titling Trustee the Servicer's right to
any further reimbursement of unreimbursed Servicer Expenses.
(b) On or prior to each Determination Date and each Transfer Date, the
Servicer shall cause to be delivered to the Titling Trustee and the 1997-A
Securitization Trustee a supplement to
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the Schedule of 1997-A Contracts and 1997-A Leased Vehicles containing data
reflecting the addition or removal of Contracts or Leased Vehicles from the
1997-A SUBI Portfolio as of the last day of the prior Collection Period (in
the case of each Determination Date) or as of the related Subsequent Cutoff
Date (in the case of each Transfer Date). Any such supplement shall contain,
in addition to the data required by the definition of the term "Schedule of
Contracts and Leased Vehicles", an identification of the Discounted Principal
Balance of each 1997-A Contract added or removed. In addition, the Servicer
shall, on or prior to each Determination Date, cause to be delivered to the
Titling Trustee, the 1997-A Securitization Trustee and each Rating Agency a
certificate in the name of the Servicer, executed by an officer or authorized
signatory therefor in respect of such Collection Period (the "Servicer's
Certificate") substantially in the form attached hereto as Exhibit B (and
setting forth such additional information as requested by each Rating Agency
from time to time, which information the Servicer is able to reasonably
provide), containing all information necessary to make the allocations and
distributions required by the 1997-A Securitization Trust Agreement in
respect of the Collection Period immediately preceding such Determination
Date, including the information needed to prepare the statement required by
Section 3.03 of the 1997-A Securitization Trust Agreement. Any Certificate
Owner may obtain a copy of a Servicer's Certificate upon written request.
SECTION 5.02. ANNUAL ACCOUNTANTS' REPORTS.
Within 120 days after September 30 of each year (commencing with the year
ended September 30, 1998), the Servicer shall deliver to the Titling Trustee and
the UTI Beneficiary (if TMCC is no longer both the Servicer and the UTI
Beneficiary) a report, prepared by the Independent Accountants of the Servicer,
stating that such Independent Accountants have examined the annual financial
statements of the Servicer in accordance with generally accepted auditing
standards, which examination included such tests of the accounting records and
such other auditing procedures as they considered necessary in the
circumstances, and that as a part of that examination, certain documents and
records of the Servicer relating to the servicing of the 1997-A Contracts were
reviewed and tested and nothing came to the attention of such Independent
Accountants that caused them to believe that the provisions of this 1997-A SUBI
Servicing Supplement were not being complied with, except for (a) such
exceptions as such firm shall believe to be immaterial, and (b) such other
exceptions as shall be set forth in such statement.
SECTION 5.03. OTHER CERTIFICATES AND NOTICES FROM SERVICER.
(a) Within 120 days after September 30 of each calendar year (commencing
with the year ended September 30, 1998), the Servicer shall deliver an Officer's
Certificate to the Titling Trustee to the effect that a review of the activities
of the Servicer during the prior calendar year (or since the commencement of the
Titling Trust in the case of the first such Officer's Certificate) has been made
under the supervision of the officer executing such Officer's Certificate with a
view to determining whether during such period the Servicer has performed and
observed all of its obligations under this 1997-A SUBI Servicing Supplement, and
either (i) stating that, to the best of his or her knowledge, no default by the
Servicer under this 1997-A SUBI Servicing Supplement has occurred and is
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continuing, or (ii) if such a default has occurred and is continuing, specifying
such default and the nature and status thereof.
(b) On or prior to each Determination Date, the Servicer shall cause to be
delivered to the 1997-A Securitization Trustee and each Rating Agency an
Officer's Certificate stating that neither the Titling Trust nor any of its
ERISA Affiliates: (i) maintains a Plan, which, as of its last valuation date,
has Unfunded Current Liability; (ii) anticipates that the value of the assets of
any Plan it maintains would not be sufficient to cover any Current Liability; or
(iii) is contemplating benefit improvements with respect to any Plan then
maintained by any such entity or the establishment of any new Plan, either of
which would cause any such entity to maintain a Plan with Unfunded Current
Liability.
SECTION 5.04. TAX RETURNS.
As contemplated by Section 6.12 of the 1997-A Securitization Trust
Agreement, the Servicer shall direct the 1997-A Securitization Trustee to
prepare or cause to be prepared, on behalf of the Transferor, any required
federal tax information returns (in a manner consistent with the treatment of
the Investor Certificates as indebtedness). Also as contemplated by Section
6.12 of the 1997-A Securitization Trust Agreement, the Servicer shall timely
prepare or cause to be prepared any federal and state tax returns that may be
required with respect to the 1997-A Securitization Trust or the assets thereof
and shall timely deliver any such returns to the 1997-A Securitization Trustee
for signature.
ARTICLE SIX
DEFAULT
SECTION 6.01. EVENTS OF SERVICING TERMINATION; TERMINATION OF SERVICER AS
TO 1997-A SUBI PORTFOLIO.
(a) "Events of Servicing Termination" as used herein shall have the
meaning set forth in the attached Annex of Supplemental Definitions. Upon the
occurrence of an event or circumstance of force majeure, the Servicer shall not
be relieved from using all commercially reasonable efforts to perform its
obligations in a timely manner, and the Servicer shall provide to the Titling
Trustee, the 1997-A Securitization Trustee, the Transferor and the Investor
Certificateholders prompt notice of such failure or delay, together with a
description of its efforts to perform its obligations.
(b) If an Event of Servicing Termination shall have occurred and be
continuing, the Titling Trustee, on behalf of the Titling Trust, may remedy such
Event of Servicing Termination, or the Titling Trustee may, and at the direction
of any pledgee of a UTI Pledge shall, by notice given to the Servicer, terminate
all or a portion of the rights and powers of the Servicer under this 1997-A SUBI
Servicing Supplement, including all or a portion of the rights of the Servicer
to receive the servicing compensation provided for in Section 4.07 of this
1997-A SUBI Servicing Supplement
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with respect to all periods following such termination. Upon any such
termination, all rights, powers, duties and responsibilities of the Servicer
under this 1997-A SUBI Servicing Supplement, whether with respect to the
related Contract Documents, the related Title Documents or Contract Records,
the Servicing Fee or otherwise, so terminated shall vest in and be assumed by
any successor servicer appointed by the Titling Trustee pursuant to a
servicing agreement with the Titling Trustee, on behalf of the Titling Trust,
containing substantially the same provisions as this 1997-A SUBI Servicing
Supplement (including with respect to the compensation of such successor
servicer), and the Titling Trustee is hereby irrevocably authorized and
empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments (including
any notices to Obligors deemed necessary or advisable by the Titling
Trustee), and to do or accomplish all other acts or things necessary or
appropriate to effect such vesting and assumption, including, without
limitation, directing some or all of the Obligors to remit Monthly Payments,
Prepayments and all other payments on or in respect of the 1997-A Contracts
and the 1997-A Leased Vehicles to an account or address designated by the
Titling Trustee or such new servicer. Further, in such event, the Servicer
shall use its commercially reasonable efforts to effect the orderly and
efficient transfer of the servicing of the affected 1997-A Contracts to the
new servicer (including transfer of the Security Deposits being held by the
Servicer pursuant to Section 4.04 of this 1997-A SUBI Servicing Supplement),
and as promptly as practicable, the Servicer shall provide to the new
servicer a current computer tape containing all information from the Contract
Records required for the proper servicing of the affected Contracts, together
with documentation containing any and all information necessary for use of
the tape.
(c) The Titling Trustee, on behalf of the Titling Trust, shall upon the
written direction of (i) if there is a UTI Pledge, the pledgee thereof or, if
not, the UTI Beneficiary, or (ii) the holder of the requisite percentage of any
SUBI (as set forth in the applicable SUBI Supplement), waive any default by the
Servicer in the performance of its obligations hereunder and its consequences
with regard to the Sub-Trust containing those Trust Assets, as the case may be.
Upon any such waiver of a past default, such default shall cease to exist, and
any Event of Servicing Termination arising therefrom shall be deemed to have
been remedied for every purpose of this Servicing Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 6.02. NO EFFECT ON OTHER PARTIES.
Upon any termination of the rights and powers of the Servicer with respect
to the 1997-A SUBI Sub-Trust from time to time pursuant to Section 6.01 hereof,
or upon any appointment of a successor to the Servicer with respect to the
1997-A SUBI Sub-Trust, all the rights, powers, duties and obligations of the
Titling Trustee, the UTI Beneficiary and TLI, Inc. under this 1997-A SUBI
Servicing Supplement, the 1997-A Securitization Trust Agreement, the 1997-A SUBI
Supplement, or any other Trust Document shall remain unaffected by such
termination or appointment and shall remain in full force and effect thereafter,
except as otherwise expressly provided herein or therein.
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ARTICLE SEVEN
MISCELLANEOUS
SECTION 7.01. TERMINATION OF AGREEMENT.
(a) In connection with any purchase by TLI, Inc. of the Investor
Certificateholders' interest in the corpus of the 1997-A Securitization Trust
pursuant to Section 7.02 of the 1997-A Securitization Trust Agreement, and TLI,
Inc.'s then succeeding to all of the interest in the 1997-A SUBI represented,
and if the UTI Beneficiary shall thereafter succeed to such interest in the
1997-A SUBI, the Servicer, upon the direction of the UTI Beneficiary as provided
in Section 15.05 of the 1997-A SUBI Supplement, shall reallocate all 1997-A
Contracts, 1997-A Leased Vehicles and related 1997-A SUBI Assets to the UTI
Sub-Trust.
(b) Except as provided in this Section, the respective duties and
obligations of the Servicer and the Titling Trustee with respect to the 1997-A
SUBI shall terminate upon the termination of the 1997-A Securitization Trust
Agreement pursuant to Section 7.01 thereof. Upon such a termination, the
Servicer shall pay over to the Titling Trustee or any other Person entitled
thereto all moneys held by the Servicer with respect to the 1997-A SUBI
Sub-Trust pursuant to this 1997-A SUBI Servicing Supplement.
SECTION 7.02. AMENDMENT.
(a) To the extent that any amendment or supplement deals with the 1997-A
SUBI Sub-Trust, this 1997-A SUBI Servicing Supplement may be amended from time
to time in a writing signed by the Titling Trustee, on behalf of the Titling
Trust, the Trust Agent and the Servicer, with the prior written consent of the
1997-A Securitization Trustee, which shall be given only in the circumstances
contemplated by Section 9.01 of the 1997-A Securitization Trust Agreement.
(b) The Servicer shall provide each Rating Agency (as defined in the
1997-A Securitization Trust Agreement) prior notice of the content of any
proposed amendment to this 1997-A SUBI Servicing Supplement, whether or not such
amendment relates to the 1997-A SUBI or requires approval of any Rating Agency.
SECTION 7.03. GOVERNING LAW.
This 1997-A SUBI Servicing Supplement shall in all respects be governed by
and construed in accordance with the internal laws of the State of California,
without reference to its conflicts of laws provisions, and the obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws.
SECTION 7.04. NOTICES.
25
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All demands, notices and communications hereunder shall be in writing and
shall be delivered or mailed by registered or certified first-class United
States mail, postage prepaid, hand delivery, any prepaid courier service, or by
telecopier, and addressed in each case as follows: (a) if to TMCC or the
Servicer (if the same as TMCC), at Toyota Motor Credit Corporation, 19001 South
Western Avenue, Torrance, California 90501, Attention: Treasury Department
(telecopier no. (310) 787-6194); and (b) if to the Trustee, at 111 East Wacker
Drive, Suite 3000, Chicago, Illinois 60601 (Telecopier No. (312) 228-9401), with
a copy to the principal Trust Agent designated by the Titling Trustee. The
Servicer or the Titling Trustee may change its address for notices hereunder by
giving notice of such change to the other such Persons. All notices and demands
(y) shall be deemed to have been given upon delivery or tender of delivery
thereof to any officer of the Person entitled to receive such notices and
demands at the address of such Person for notices hereunder, and (z) if given by
the Titling Trustee shall be deemed to have been given by all of the
beneficiaries of the Titling Trust.
SECTION 7.05. SEVERABILITY.
If one or more of the provisions of this 1997-A SUBI Servicing Supplement
shall be for any reason whatever held invalid or unenforceable, such provisions
shall be deemed severable from the remaining covenants, agreements and
provisions of this 1997-A SUBI Servicing Supplement, and such invalidity or
unenforceability shall in no way affect the validity or enforceability of such
remaining covenants, agreements and provisions, or the rights of any parties
hereto. To the extent permitted by law, the parties hereto waive any provision
of law that renders any provision of this 1997-A SUBI Servicing Supplement
invalid or unenforceable in any respect.
SECTION 7.06. INSPECTION AND AUDIT RIGHTS.
The Servicer agrees that, on reasonable prior notice, it will permit any
representative or designee of the Titling Trustee, on behalf of the Titling
Trust, during the normal business hours of the Servicer, to examine all books of
account, records, reports and other papers of the Servicer relating to the
Titling Trust Assets, to make copies and extracts therefrom, to cause such books
to be audited by Independent Accountants selected by the Titling Trustee, and to
discuss the affairs, finances and accounts relating to the Titling Trust Assets
with its officers, employees and Independent Accountants (and by this provision
the Servicer hereby authorizes such Independent Accountants to discuss with such
representatives such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Such rights shall include,
but shall not be limited to, any off-site storage facilities at which any data
(including, without limitation, computerized records), together with all
operating software and appropriate documentation, may be held. The Titling
Trustee agrees to keep confidential all the confidential information of the
Servicer acquired during any such examination as if such information were its
own confidential information, except to the extent necessary for the purposes of
this 1997-A SUBI Servicing Supplement. The expenses incident to the exercise by
the Titling Trustee of any right under this Section shall be reimbursable by the
Servicer.
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SECTION 7.07. ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
SECTION 7.08. EXECUTION IN COUNTERPARTS.
This 1997-A SUBI Servicing Supplement may be executed in any number of
counterparts, each of which so executed and delivered shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
SECTION 7.09. RIGHTS CUMULATIVE.
All rights and remedies from time to time conferred upon or reserved to the
Titling Trustee, on behalf of the Titling Trust, the Servicer or the 1997-A
Securitization Trustee or to any or all of the foregoing are cumulative, and
none is intended to be exclusive of another. No delay or omission in insisting
upon the strict observance or performance of any provision of this 1997-A SUBI
Servicing Supplement, or in exercising any right or remedy, shall be construed
as a waiver or relinquishment of such provision, nor shall it impair such right
or remedy. Every right and remedy may be exercised from time to time and as
often as deemed expedient.
SECTION 7.10. FURTHER ASSURANCES.
Each party will do such acts, and execute and deliver to any other party
such additional documents or instruments, as may be reasonably requested in
order to effect the purposes of this 1997-A SUBI Servicing Supplement and to
better assure and confirm unto the requesting party its rights, powers and
remedies hereunder.
SECTION 7.11. THIRD-PARTY BENEFICIARIES.
This 1997-A SUBI Servicing Supplement, insofar as it relates to the 1997-A
SUBI Sub-Trust, will inure to the benefit of and be binding upon the parties
hereto, their respective successors and permitted assigns, the 1997-A
Securitization Trustee, the Titling Trustee (on behalf of the Titling Trust),
and each of the holders of any legal or beneficial interest in the 1997-A SUBI
Certificates (including without limitation the 1997-A Securitization Trustee and
the Certificateholders), who shall be considered to be third-party beneficiaries
hereof. Except as otherwise provided in this 1997-A SUBI Servicing Supplement,
no other Person will have any right or obligation hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers duly authorized as of the day and
year first above written.
TOYOTA MOTOR CREDIT CORPORATION
By:
--------------------------------
Name:
Title:
TMTT, INC.,
as trustee of TOYOTA LEASE TRUST
By:
--------------------------------
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION,
as Trust Agent
By:
--------------------------------
Name:
Title:
Acknowledged and Agreed:
FIRST BANK NATIONAL ASSOCIATION,
as 1997-A Securitization Trustee
By:
-------------------------------
Name:
Title:
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<PAGE>
EXHIBIT A
SCHEDULE OF 1997-A CONTRACTS AND
1997-A LEASED VEHICLES AS OF THE INITIAL CUTOFF DATE
[Omitted. Copies on file with the Servicer, the Titling Trustee and the
1997-A Securitization Trustee.]
A-1
<PAGE>
EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
B-1
<PAGE>
EXHIBIT C
FORM OF POWER OF ATTORNEY
C-1
<PAGE>
EXHIBIT 10.6
1997-A SUBI CERTIFICATE PURCHASE AND SALE AGREEMENT
THIS 1997-A SUBI CERTIFICATE PURCHASE AND SALE AGREEMENT (the "Agreement")
is dated as of ___________, 1997, by and between TOYOTA MOTOR CREDIT
CORPORATION, a California corporation ("TMCC"), and TOYOTA LEASING, INC., a
Delaware corporation ("TLI").
A. TMCC, TMTT Inc., a Delaware corporation (the "Titling Trustee"),
and, for certain limited purposes set forth therein, First Bank National
Association, a national banking association) ("First Bank"), have entered into
an Amended and Restated Trust and Servicing Agreement dated as of October 1,
1996 (the "Titling Trust Agreement") pursuant to which Toyota Lease Trust, a
Delaware business trust (the "Titling Trust"), was formed for the purpose of
taking assignments and conveyances of, holding in trust and dealing in various
Titling Trust Assets (as defined in the Titling Trust Agreement) in accordance
with the Titling Trust Agreement.
B. Concurrently herewith, and as contemplated by the terms of the
Titling Trust Agreement, TMCC, the Titling Trustee and First Bank have entered
into a 1997-A SUBI Supplement to Amended and Restated Trust and Servicing
Agreement dated as of _________, 1997 (the 1997-A SUBI Supplement") pursuant to
which the Titling Trust at the direction of TMCC, will create and issue to TLI a
special unit of beneficial interest in the Titling Trust, or "SUBI" (as defined
in the Titling Trust Agreement) (such SUBI, the "1997-A SUBI"). The
beneficiaries of the 1997-A SUBI generally will be entitled to the net cash flow
arising from, but only from, the related SUBI Portfolio (as defined in the
Titling Trust Agreement) (the "1997-A SUBI Portfolio"). The 1997-A SUBI will be
evidenced by one 1997-A SUBI Certificate (as defined in the Titling Trust
Agreement) representing 100% of the beneficial interest in the 1997-A SUBI (the
"1997-A SUBI Certificate"), all as set forth in the Titling Trust Agreement and
the 1997-A SUBI Supplement.
C. TMCC and TLI desire to enter into this Agreement to provide for
the sale by TMCC to TLI, without recourse, of all of TMCC's right, title and
interest in and to the 1997-A SUBI and the 1997-A SUBI Certificate.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
<PAGE>
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, (a) unless otherwise defined herein,
all capitalized terms used herein shall have the meanings attributed to them in
the Annex of Definitions or the Annex of Supplemental Definitions, as
applicable, attached to the 1997-A SUBI Supplement (b) the capitalized terms
expressly defined in this Agreement have the meanings assigned to them in this
Agreement and include (i) all genders and (ii) the plural as well as the
singular, (c) all references to words such as "herein", "hereof" and the like
shall refer to this Agreement as a whole and not to any particular article or
section within this Agreement, (d) the term "include" and all variations thereon
shall mean "include without limitation", and (e) the term "or" shall include
"and/or".
SECTION 1.02. ARTICLE AND SECTION REFERENCES.
Except as otherwise specified herein, all article and section references
shall be to Articles and Sections in this Agreement.
ARTICLE TWO
PURCHASE AND SALE OF 1997-A SUBI
SECTION 2.01. SALE OF 1997-A SUBI.
In consideration of TLI's payment to, or upon the order of, TMCC of cash in
an amount equal to the Aggregate Net Investment Value of the 1997-A SUBI
Portfolio as of the Initial Cut-off Date, TMCC does hereby absolutely sell,
assign and otherwise convey to TLI, without recourse, and TLI does hereby
purchase and acquire, as of the date set forth above:
(i) all right, title and interest in and to the 1997-A SUBI and the
1997-A SUBI Certificate and all monies due thereon and paid thereon or in
respect thereof;
(ii) the right to realize upon any property that underlies or may be
deemed to secure the 1997-A SUBI; and
2
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(iii) all proceeds of the foregoing.
SECTION 2.02. ACCEPTANCE BY TLI.
TLI agrees to comply with all covenants and restrictions applicable to an
owner of the 1997-A SUBI and 1997-A SUBI Certificate, whether set forth therein,
in the Titling Trust Agreement, the 1997-A SUBI Supplement or otherwise, and
assumes all obligations and liabilities, if any associated therewith.
ARTICLE THREE
MISCELLANEOUS
SECTION 3.01. AMENDMENT.
This Agreement may be amended from time to time in a writing signed by the
parties hereto, with the prior written consent of the 1997-A Securitization
Trustee, which shall be given only in the circumstances contemplated by Section
9.01 of the 1997-A Securitization Trust Agreement.
SECTION 3.02. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE
PRINCIPLES OF CONFLICT OF LAWS.
SECTION 3.03. SEVERABILITY.
If one or more of the provisions of this Agreement shall be for any reason
whatever held invalid or unenforceable, such provisions shall be deemed
severable from the remaining covenants, agreements and provisions of this
Agreement, and such invalidity or unenforceability shall in no way affect the
validity or enforceability of such remaining covenants, agreements and
provisions, or the rights of any parties hereto. To the extent permitted by
law, the parties hereto waive any provision of law that renders any provision of
this Agreement invalid or unenforceable in any respect.
SECTION 3.04. BINDING EFFECT.
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The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and permitted assigns of the parties
hereto.
SECTION 3.05. ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
SECTION 3.06. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
so executed and delivered shall be deemed to be an original, but all of which
counterparts shall together constitute but one and the same instrument.
SECTION 3.07. FURTHER ASSURANCES.
Each party will do such acts, and execute and deliver to any other party
such additional documents or instruments as may be reasonably requested in order
to effect the purposes of this Agreement and to better assure and confirm unto
the requesting party its rights, powers and remedies hereunder.
SECTION 3.08. THIRD-PARTY BENEFICIARIES.
This Agreement will inure to the benefit of and be binding upon each
subsequent holder of any legal or beneficial interest in the 1997-A SUBI
Certificate (including without limitation the 1997-A Securitization Trust and
the 1997-A Certificateholders), who shall be considered to be third-party
beneficiaries hereof. Except as otherwise provided in this Agreement, no other
Person will have any right or obligation hereunder.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers duly authorized as of the day and
year first above written.
TOYOTA MOTOR CREDIT CORPORATION
By:
-----------------------------
Name:
Title:
TOYOTA LEASING, INC.
By:
-----------------------------
Name:
Title:
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