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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
TOYOTA AUTO LEASE TRUST 1998-B
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(Exact Name of Registrant as Specified in Its Charter)
California N/A
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(State of incorporation or organization) (IRS Employer Identification Number)
c/o Toyota Leasing, Inc.
19001 South Western Avenue, Torrance CA 90509
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(Address of principal executive offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of securities registration of a class of securities
pursuant to Section 12(b) of pursuant to Section 12(g) of the
the Exchange Act and is effective Exchange Act and is effective
pursuant to General Instruction pursuant to General Instruction
A.(c), please check the following A.(d), please check the following
box. / / box. /X/
Securities Act registration statement file number to which this form relates:
333-57109
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(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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None N/A
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Securities to be registered pursuant to Section 12(g) of the Act:
$335,000,000 5.35% Auto Lease Asset-Backed Certificates Class A-1
$575,000,000 5.45% Auto Lease Asset-Backed Certificates, Class A-2
$96,400,000 5.50% Auto Lease Asset-Backed Certificates, Class A-3
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(Title of Classes)
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Item 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On September 29, 1998 pursuant to a SUBI Certificate
Purchase and Sale Agreement (the "Certificate Transfer Agreement") dated as
of September 1, 1998, Toyota Motor Credit Corporation transferred to Toyota
Leasing, Inc. ("TLI") a certificate evidencing a special unit of beneficial
interest (the "SUBI Certificate") representing a beneficial interest in
certain specified assets of Toyota Lease Trust, a Delaware business trust.
Also on September 29, 1998, pursuant to the Securitization
Trust Agreement (the "Securitization Trust Agreement") dated as of September
1, 1998, between TLI and U.S. Bank National Association (formerly known as
First Bank National Association), as securitization trustee, TLI, as
originator of the Toyota Auto Lease Trust 1998-B (the "Securitization
Trust"), transferred to the Securitization Trust the SUBI Certificate
(excluding all rights to the proceeds of the Residual Value Insurance Policy)
in exchange for, among other things, the Auto Lease Asset Backed
Certificates, including the $335,000,000 5.35% Auto Lease Asset Backed
Certificates, Class A-1, $575,000,000 5.45% Auto Lease Asset Backed
Certificates, Class A-2, and $96,400,000 5.50% Auto Lease Asset Backed
Certificates, Class A-3 (the "Certificates") evidencing certain beneficial
interests in the assets of the Securitization Trust. These Certificates were
offered to the public pursuant to a Prospectus dated September 17, 1998
comprising part of a Registration Statement on Form S-1 (Registration No.
333-57109) (the "Registration Statement"). A complete description of the
Certificates is set forth in the Registration Statement, as amended by
amendment No. 1 thereto, and the Registration Statement and such amendments
are incorporated herein by reference.
This Registration Statement relates only to the
Certificates issued by the Securitization Trust (the "Registrant"), and not
to any other securities described in the Registration Statement.
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Item 2. EXHIBITS.
Exhibit No. Description of Exhibit
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3.1 Articles of Incorporation of Toyota Leasing, Inc.*
3.2 Bylaws of Toyota Leasing, Inc.*
4.1 Amended and Restated Trust and Servicing Agreement among
Toyota Motor Credit Corporation ("TMCC"), TMTT, Inc., as
Trustee and First Bank National Association, as Trust Agent,
dated as of October 1, 1996.**
4.2 UTI Supplement to Amended and Restated Trust and Servicing
Agreement among TMCC, TMTT, Inc., as Trustee, and First Bank
National Association, as Trust Agent, dated as of October 1,
1996.**
4.3 SUBI Supplement 1998-B to Amended and Restated Trust Agreement
among TMCC, TMTT, Inc., as Trustee and First Bank National
Association, as Trust Agent, dated as of September 1, 1998.
4.4 1998-B SUBI Servicing Supplement to Amended and Restated Trust
and Servicing Agreement between TMTT, Inc. and TMCC, dated as
of September 1, 1998.
4.5 SUBI Certificate Purchase and Sale Agreement between TMCC and
Toyota Leasing, Inc., dated as of September 1, 1998.
4.6 TMCC Demand Note Indenture between TMCC and U.S. Bank National
Association, as trustee, dated September 1, 1998 (including
form of TMCC Demand Note).
4.7 Securitization Trust Agreement between Toyota Leasing, Inc.
and U.S. Bank National Association (f/k/a First Bank National
Association, as Trustee.
* Incorporated by reference to Registration Statement on Form S-1
(Registration No. 333-57109).
** Incorporated by reference to Form 8-A relating to certain securities
offered by Registration Statement on Form S-1 (Registration No. 333-26717).
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SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the undersigned, thereto
duly authorized.
Date: December 16, 1998 TOYOTA AUTO LEASE TRUST 1998-B
By: Toyota Motor Credit Corporation,
as Servicer
By: /s/ GEORGE E. BORST
---------------------------------
George E. Borst
Senior Vice President and General Manager
S-1
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Execution Copy
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TOYOTA MOTOR CREDIT CORPORATION
TMTT, INC.,
as Titling Trustee of Toyota Lease Trust
and,
for Certain Limited Purposes only,
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
and,
U.S. Bank National Association ,
as 1998-B Securitization Trustee
1998-B SUBI SUPPLEMENT
TO
AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
Dated as of September 1, 1998
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TABLE OF CONTENTS
ARTICLE XIV
[RESERVED]
ARTICLE XV
DEFINITIONS
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<CAPTION>
<S> <C> <C>
15.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE XVI
CREATION AND TERMINATION OF TRUST INTERESTS
16.01 Initial Creation of 1998-B SUBI Sub-Trust and 1998-B SUBI. . . . . . . . .3
16.02 Rights in Respect of 1998-B SUBI.. . . . . . . . . . . . . . . . . . . . .5
16.03 Issuance and Form of SUBI Certificates.. . . . . . . . . . . . . . . . . .5
16.04 Filings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
16.05 Termination of 1998-B SUBI.. . . . . . . . . . . . . . . . . . . . . . . .7
16.06 Representations and Warranties of Titling Trustee. . . . . . . . . . . . .7
16.07 Resignation or Removal of Titling Trustee. . . . . . . . . . . . . . . . .7
ARTICLE XVII
ACCOUNTS; CASH FLOWS; PERMITTED INVESTMENTS
17.01 1998-B SUBI Collection Account.. . . . . . . . . . . . . . . . . . . . . .7
17.02 1998-B SUBI Lease Funding Account. . . . . . . . . . . . . . . . . . . . .9
17.03 Investment Gains and Losses. . . . . . . . . . . . . . . . . . . . . . . 10
17.04 Rebalancing After Third-Party Claim. . . . . . . . . . . . . . . . . . . 11
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
18.01 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
18.02 Effect of 1998-B SUBI Supplement on Titling Trust Agreement. . . . . . . 11
18.03 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
18.04 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
18.05 Severability of Provisions.. . . . . . . . . . . . . . . . . . . . . . . 13
18.06 Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
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EXHIBITS
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<S> <C> <C>
ANNEX OF SUPPLEMENTAL DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . .Annex I
EXHIBIT A Form of 1998-B SUBI Certificate. . . . . . . . . . . . . . . . . . .A-1
EXHIBIT B Form of 1998-B SUBI Insurance Certificate. . . . . . . . . . . . . .B-1
SCHEDULE I Schedule of 1998-B Contracts and 1998-B
Leased Vehicles as of the Cutoff Date. . . . . . . . . . . . . . . .S-1
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1998-B SUBI SUPPLEMENT TO
AMENDED AND RESTATED TRUST AND SERVICING AGREEMENT
1998-B SUBI SUPPLEMENT TO AMENDED AND RESTATED TRUST AND SERVICING
AGREEMENT, dated and effective as of September 1, 1998, among TOYOTA MOTOR
CREDIT CORPORATION, a California corporation (in its capacities as Grantor, UTI
Beneficiary and Servicer, respectively), TMTT, INC., as Titling Trustee, for the
limited purposes of acknowledging the provisions of Sections 17.01, 17.02 and
17.03 and having rights under Section 18.03, U.S. BANK NATIONAL ASSOCIATION
(formerly known as First Bank National Association), a national banking
association, as Trust Agent, and for the limited purposes of the provisions of
Sections 17.01, 17.02, 17.03, and the rights under 18.03, in its capacity as
1998-B Securitization Trustee.
RECITALS
A. The Grantor, 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 in connection
with any such allocation the Titling Trustee shall create a SUBI and issue
to, or to the order of, the UTI Beneficiary one or more SUBI Certificates
evidencing such 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 to
be designated the 1998-B SUBI Portfolio and allocate the related Titling
Trust Assets to the related 1998-B SUBI Sub-Trust, to create the related
1998-B SUBI and to create and issue to or to the order of the UTI Beneficiary
(i) a 1998-B SUBI Certificate, evidencing beneficial interests in the assets
of the 1998-B SUBI other than the proceeds of the Residual Value Insurance
Policies and (ii) a 1998-B SUBI Insurance Certificate, evidencing beneficial
interests in the assets of the 1998-B SUBI that are proceeds of the Residual
Value Insurance Policies insofar as such policies relate to the 1998-B Leased
Vehicles and the 1998-B Contracts, and to set forth the terms and conditions
thereof. It is the intention of the parties hereto that the 1998-B SUBI
Certificate and the 1998-B SUBI Insurance Certificate collectively represent
100% of the beneficial interests in the 1998-B SUBI.
D. The parties hereto desire to supplement the terms of the Titling
Trust Agreement relating to the establishment of the 1998-B SUBI Collection
Account.
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E. The parties hereto desire that, concurrently herewith, U.S. Bank
National Association, as securities intermediary (as defined in Section 8-102
of the UCC in effect on the date hereof in the State of New York (the "New
York UCC")) (in such capacity, the "SUBI Securities Intermediary"), establish
a securities account (as defined in Section 8-501 of the New York UCC) in the
name of and for the benefit of TMCC (the "TMCC SUBI Securities Account")
pursuant to that certain TMCC SUBI Account Control Agreement dated as of
September 1, 1998, between TMCC and the SUBI Securities Intermediary,
("Account Control Agreement") into which the 1998-B SUBI Certificate and the
1998-B SUBI Insurance Certificate will initially be transferred and held
until such time as TMCC directs the SUBI Securities Intermediary to debit the
TMCC SUBI Securities Account to reflect the transfer of the 1998-B SUBI
Certificate and/or the 1998-B SUBI Insurance Certificate, pursuant to a
financing transaction.
F. Concurrently herewith, the Titling Trustee, on behalf of the
Titling Trust, and the Servicer also will enter into the 1998-B 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 1998-B SUBI created hereby.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and in the Titling Trust Agreement, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each party hereto, the parties hereto agree to the following
supplemental obligations and provisions with regard to the 1998-B SUBI
Sub-Trust:
ARTICLE XIV
[RESERVED]
ARTICLE XV
DEFINITIONS
15.01 DEFINITIONS. For all purposes of this 1998-B 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 attached to the
Titling Trust Agreement or in the Annex of Supplemental Definitions attached
hereto for all purposes of this 1998-B SUBI Supplement. In the event of any
conflict between a definition set forth both in the Annex of Definitions and
in the Annex of Supplemental Definitions, the definition set forth in the
Annex of Supplemental Definitions shall prevail. In the event of any
conflict between a definition set forth both herein and in the Annex of
Definitions or Annex of Supplemental Definitions, the definitions set forth
herein shall prevail. All terms used in this 1998-B 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 1998-B
SUBI Supplement as a whole and not to any particular article or section
within this 1998-B 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
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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
16.01 INITIAL CREATION OF 1998-B SUBI SUB-TRUST AND 1998-B 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 "1998-B 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 Subsequent Contracts, Subsequent Leased
Vehicles and related Titling Trust Assets to be allocated to the 1998-B SUBI
Sub-Trust pursuant to Section 3.02(a) of the 1998-B Servicing Supplement.
The assets of the 1998-B 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 Cutoff Date, including the related
rights of the Titling Trust as lessor under such Contracts, having an
Aggregate Net Investment Value as of the Cutoff Date of $1,099,937,045.30 and
those Contracts allocated to the 1998-B SUBI Sub-Trust pursuant to Section
3.02(a) of the 1998-B Servicing Supplement; (ii) the related Leased Vehicles
and all proceeds thereof, including each Certificate of Title and the Booked
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) including as proceeds of any
related Insurance Policy (to the extent not applied to making repairs to the
related Leased Vehicle or otherwise paid to the Obligor, a third Person or
Governmental Authority by the Servicer as required by law or pursuant to its
normal servicing practices and, with respect to the Residual Value Insurance
Policies, net of any loss adjustment expenses that may be offset against such
proceeds pursuant to the terms of such Residual Value Insurance Policies
relating thereto); (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 other rights under or other proceeds of
any Insurance Policy relating to such Contracts, Leased Vehicles or payments
of the related Obligors with respect thereto (to the extent not applied to
making repairs to the related Leased Vehicle or otherwise paid to the
Obligor, a third Person or Governmental Authority by the Servicer as required
by law or pursuant to its normal servicing practices and, with respect to the
Residual Value Insurance Policies net of any loss adjustment expenses that
may be offset against such proceeds pursuant to the terms of such Residual
Value Insurance Policies); (v) any portion
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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 the Obligor, a third Person
or Governmental Authority in accordance with the Servicer's normal servicing
practices; (vi) the 1998-B 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 arising on or after
the Cutoff Date.
Based upon their identification and allocation by the Servicer pursuant
to the 1998-B Servicing Supplement, the Titling Trustee hereby identifies and
allocates as 1998-B 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 1998-B SUBI Asset to be
identified on the books and accounts of the Titling Trust as belonging to the
1998-B SUBI Portfolio.
(b) Pursuant to Section 3.01(c) of the Titling Trust Agreement,
the Titling Trustee hereby creates the 1998-B SUBI Sub-Trust and the 1998-B
SUBI. The 1998-B SUBI shall represent a specific undivided beneficial
interest solely in the 1998-B SUBI Sub-Trust and the 1998-B 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 1998-B SUBI Sub-Trust and of the terms and provisions of
this 1998-B SUBI Supplement and of the related Securitized Financing and (ii)
as of the date hereof, and after giving effect to the creation of the 1998-B
SUBI Sub-Trust pursuant to Section 16.01(b), the issuance of the 1998-B SUBI
Certificate and 1998-B SUBI Insurance Certificate pursuant to Section
16.03(a), the transfer to, or to the order of, the UTI Beneficiary of the
1998-B SUBI Certificate and the 1998-B SUBI Insurance Certificate pursuant to
Section 16.03(b) and the Account Control Agreement specified in recital E
herein, and the application by the UTI Beneficiary of any net proceeds from
any Securitized Financing involving the 1998-B SUBI, the 1998-B SUBI
Certificate and/or the 1998-B SUBI Insurance Certificate, there 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 the
1998-B SUBI Certificate and the 1998-B SUBI Insurance Certificate are held or
beneficially owned by a single Person, or by two or more Persons that are
treated as a single Person for federal income tax purposes, the 1998-B 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 1998-B SUBI Certificate and the 1998-B SUBI Insurance Certificate
are held or beneficially owned by two or more Persons that are not treated as
a single Person for federal income tax purposes, the parties hereto intend
that the 1998-B SUBI Sub-Trust be characterized as a separate entity for
federal and state income tax purposes that shall qualify as a partnership for
such purposes. The 1998-B SUBI Sub-Trust shall not elect to be treated as an
association under Section 301.7701-3(a) of the regulations of the United
States Department of the Treasury for federal income tax purposes.
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(e) Each Beneficiary of the 1998-B SUBI Certificate and/or the
1998-B SUBI Insurance Certificate shall at all times maintain a minimum net
worth (excluding the value of the 1998-B SUBI Certificate and the 1998-B
Insurance Certificate held thereby and the value of any assets of the 1998-B
Securitization Trust established pursuant to the 1998-B Securitization Trust
Agreement) equal to at least $100,000; provided that such minimum net worth
requirement shall not apply to the 1998-B Securitization Trust or the 1998-B
Securitization Trustee.
16.02 RIGHTS IN RESPECT OF 1998-B SUBI.
Each holder of the 1998-B SUBI Certificate (including the 1998-B
Securitization Trustee, on behalf of the Holders of the securities issued by
the 1998-B Securitization Trust, after the transfer of the 1998-B SUBI
Certificate by the UTI Beneficiary to the Transferor and the subsequent
transfer of the 1998-B SUBI Certificate by the Transferor to the 1998-B
Securitization Trustee, on behalf of the 1998-B Securitization Trust) and the
1998-B SUBI Insurance Certificate is a third-party beneficiary of the Titling
Trust Agreement and this 1998-B SUBI Supplement, insofar as they apply to the
1998-B SUBI and the holder of the 1998-B SUBI Certificate or the 1998-B SUBI
Insurance 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 (i) 1998-B Securitization Trustee as holder of the
1998-B SUBI Certificate acting at its own instigation or upon the instruction
of Investor Certificateholders pursuant to the terms of Section 6.15 of the
1998-B Securitization Trust Agreement and (ii) the Transferor as holder of
the 1998-B SUBI Insurance Certificate.
16.03 ISSUANCE AND FORM OF SUBI CERTIFICATES.
(a) The 1998-B SUBI shall be represented by two SUBI Certificates
to be issued hereunder: (i) the 1998-B SUBI Certificate, evidencing
beneficial interests in the assets of the 1998-B SUBI other than proceeds of
the Residual Value Insurance Policies; and (ii) the 1998-B SUBI Insurance
Certificate, evidencing beneficial interests in the assets of the 1998-B SUBI
that are proceeds of the Residual Value Insurance Policies insofar as such
Insurance Policies relate to the 1998-B Leased Vehicles and the 1998-B
Contracts and are net of loss adjustment expenses that may be offset against
such proceeds pursuant to the terms of such Residual Value Insurance
Policies. The 1998-B SUBI Certificate and 1998-B SUBI Insurance Certificate
collectively represent 100% of the beneficial interests in the 1998-B SUBI
and the assets of the 1998-B SUBI Sub-Trust. The Titling Trustee is hereby
instructed to issue the 1998-B SUBI Certificate and the 1998-B SUBI Insurance
Certificate substantially in the forms of Exhibits A and B attached hereto,
with 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.
The 1998-B SUBI Certificate and the 1998-B SUBI Insurance 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. The
Titling Trustee is hereby directed to issue and register the 1998-B SUBI
Certificate and the 1998-B SUBI Insurance Certificate in the name of the SUBI
Securities
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Intermediary in such capacity, on behalf of and for the benefit of TMCC, and
to deliver such SUBI Certificates on the Closing Date to the SUBI Securities
Intermediary upon the order of TMCC.
(b) The 1998-B SUBI Certificate and 1998-B SUBI Insurance
Certificate initially shall be held in the TMCC SUBI Securities Account.
(c) TMCC shall direct the SUBI Securities Intermediary in writing
to effect the transfer of the 1998-B SUBI Certificate and the 1998-B SUBI
Insurance Certificate to the TLI SUBI Securities Account. Thereafter, the
Transferor shall direct the SUBI Securities Intermediary in writing to effect
the transfer of the 1998-B SUBI Certificate to the 1998-B SUBI Securities
Account. TLI shall not transfer the 1998-B SUBI Insurance Certificate in
connection with this transfer of the 1998-B SUBI Certificate.
(d) Pursuant to Section 3.01(g) of the Titling Trust Agreement,
the 1998-B SUBI Certificate may not be transferred or assigned except as
provided in connection with the termination of the 1998-B Securitization
Trust pursuant to Section 7.02 or 8.02 of the 1998-B Securitization Trust
Agreement, in each case subject to the assignee or pledgee (x) giving a
non-petition covenant substantially similar to that set forth in Section 6.14
of the Titling Trust Agreement, and (y) executing 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 1998-B SUBI Certificate
itself). Notwithstanding the foregoing, the 1998-B SUBI Certificate may, at
any time, be transferred or assigned to TLI, TMCC, or any of their respective
affiliates.
The 1998-B SUBI Insurance Certificate shall not be transferred or
assigned except to a transferee or assignee who is (i) the holder of the
1998-B SUBI Certificate on the date of such transfer or (ii) TMCC, TLI or any
of their respective affiliates.
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 1998-B SUBI Assets to the 1998-B
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
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authority, notices or similar documents necessary or appropriate to be
executed or filed pursuant to this Section 16.04.
16.05 TERMINATION OF 1998-B SUBI.
In connection with any purchase by the Transferor of the Investor
Certificateholders' interest in the corpus of the 1998-B Securitization Trust
pursuant to Section 7.02 of the 1998-B Securitization Trust Agreement, and
the succession thereof to all of the interest in the 1998-B SUBI and 1998-B
SUBI Certificate, should all of the interest in the 1998-B SUBI thereafter be
transferred to the UTI Beneficiary, whether by sale or otherwise, then, upon
the direction of the UTI Beneficiary, the 1998-B SUBI shall be terminated,
the 1998-B SUBI Certificate and the 1998-B SUBI Insurance Certificate shall
be returned to the Titling Trustee and canceled thereby, and the Titling
Trustee, at the direction of the Servicer, shall reallocate all 1998-B
Contracts, 1998-B Leased Vehicles and related 1998-B SUBI Assets to the UTI
Sub-Trust.
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 1998-B SUBI Supplement and on which each of their permitted assignees
and pledgees, and each pledgee or holder of the 1998-B SUBI Certificate and
the 1998-B SUBI Insurance Certificate (and each Beneficiary of the 1998-B
SUBI Certificate and the 1998-B SUBI Insurance Certificate ) may rely.
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 1998-B Securitization Trust.
ARTICLE XVII
ACCOUNTS; CASH FLOWS; PERMITTED INVESTMENTS
17.01 1998-B SUBI COLLECTION ACCOUNT.
(a) The 1998-B Securitization Trustee shall establish in its name,
and maintain with respect to the 1998-B SUBI, the 1998-B SUBI Collection
Account for the benefit of (a) the Beneficiaries of the 1998-B SUBI
Certificate, (b) the Beneficiaries of the 1998-B SUBI Insurance Certificate
to the extent proceeds of the Residual Value Insurance Policies are deposited
therein, and (c) to the extent provided below, the Titling Trustee, which
account shall constitute a SUBI Collection Account. The 1998-B SUBI
Collection Account initially shall be established with U.S. Bank National
Association, as 1998-B Securitization Trustee, and at all times shall be an
Eligible Account. In the event that the institution maintaining the 1998-B
SUBI Collection Account no longer meets the requirements stated in the
definition of Eligible Account, then the Servicer shall, with the 1998-B
Securitization Trustee's assistance as
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necessary, cause the 1998-B SUBI Collection Account to be moved to a bank or
trust company that satisfies those requirements. In connection with the
termination of the 1998-B Securitization Trust pursuant to Article VII of the
1998-B Securitization Trust Agreement, the 1998-B Securitization Trustee may
transfer the 1998-B SUBI Collection Account to the Trust Agent. The 1998-B
SUBI Collection Account shall relate solely to the 1998-B SUBI and the 1998-B
SUBI Sub-Trust, and funds therein shall not be commingled with any other
monies, except as otherwise provided for or contemplated in Article VII of
the Titling Trust Agreement as supplemented by this 1998-B SUBI Supplement or
the 1998-B Servicing Supplement. All amounts held in the 1998-B SUBI
Collection Account shall be invested in Permitted Investments until
distributed or otherwise applied in accordance with Article V of the Titling
Trust Agreement or Sections 17.01(b), 17.01(c), 17.01(d), 17.02, 17.03 or
17.04 of this 1998-B SUBI Supplement. The Titling Trustee shall be a
beneficiary of the SUBI Collection Account only to the extent that amounts
described in Sections 7.01(c) and 7.03 of the Titling Trust Agreement are not
paid or reimbursed to the Titling Trustee, pursuant to such sections from a
Lease Funding Account, or paid directly by the Servicer pursuant to the terms
of the 1998-B Securitization Trust Agreement; any such amounts shall be
withdrawn from the 1998-B SUBI Collection Account only for such purposes and
only to the extent set forth in Section 3.01 of the 1998-B Securitization
Trust Agreement, or as set forth in this Section 17.01(a) if the 1998-B SUBI
Collection Account has been transferred to the Trust Agent.
(b) The Servicer shall deposit into the 1998-B SUBI Collection
Account all amounts collected or received in respect of the 1998-B Contracts
and 1998-B Leased Vehicles (in each case exclusive of the proceeds of any
Residual Value Insurance Policies and amounts reinvested or to be reinvested
in Subsequent Contracts) and any Maturity Advance received from the
Transferor on or before the Deposit Date relating to each Collection Period
except as otherwise specified herein or in the 1998-B Servicing Supplement
(in connection with any failure to satisfy the Monthly Remittance
Conditions). Amounts so deposited will be applied by the 1998-B
Securitization Trustee or by the Servicer as specified in the 1998-B
Securitization Trust Agreement and the 1998-B Servicing Supplement.
It is the intent of the parties hereto that the proceeds of the Residual
Value Insurance Policies applicable to the 1998-B Leased Vehicles and the
1998-B Contracts will be payable by the Servicer (or the insurer under the
Residual Value Insurance Policies) directly to the holder of the 1998-B SUBI
Insurance Certificate and will not under any circumstances be subject to the
lien of the 1998-B Securitization Trust Agreement. If, notwithstanding the
foregoing, any such amounts are in fact deposited in any SUBI Account or
other account established by the Titling Trustee or the 1998-B Securitization
Trustee, then such amounts will be distributed to the holder of the 1998-B
SUBI Insurance Certificate by the Titling Trustee or the 1998-B
Securitization Trustee, as the case may be, on the next succeeding Monthly
Allocation Date at the written direction of the Servicer.
(c) Principal Collections and Interest Collections (which amounts
are exclusive of proceeds of the Residual Value Insurance Policies) that are
to be reinvested in Subsequent Contracts and Subsequent Leased Vehicles to be
included in the 1998-B SUBI Sub-Trust during the Revolving Period that are
not deposited into the 1998-B SUBI Collection
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Account on a Monthly Allocation Date, will be so reinvested by the Servicer
on a Transfer Date during the calendar month in which such Monthly Allocation
Date occurs as specified in Section 3.02(a) of the 1998-B Servicing
Supplement.
(d) From and after the date, if any, on which the Monthly
Remittance Conditions cease to be satisfied, the Servicer will deposit all
Principal Collections and Interest Collections (which amounts are exclusive
of proceeds of the Residual Value Insurance Policies) into the 1998-B SUBI
Collection Account as set forth in Section 4.02 of the 1998-B Servicing
Supplement within two Business Days of its receipt thereof, and such amounts
will thereafter be applied as described in Section 3.02 of the 1998-B
Servicing Supplement and Section 17.02 hereof, insofar as they are to be
reinvested in Subsequent Contracts and Subsequent Leased Vehicles, or
pursuant to Section 3.01 of the 1998-B Securitization Trust Agreement, as
appropriate.
17.02 1998-B SUBI LEASE FUNDING ACCOUNT.
Notwithstanding the provisions of Section 7.03 of the Titling Trust
Agreement, the Titling Trustee shall be required to establish and maintain
with respect to the 1998-B SUBI the 1998-B SUBI Lease Funding Account in the
name of the Titling Trustee, which account shall constitute a SUBI Lease
Funding Account; only in the event that the Monthly Remittance Conditions are
no longer satisfied. Such account shall be for the benefit of the
Beneficiaries of the 1998-B SUBI Certificate and 1998-B SUBI Insurance
Certificate (in the event that amounts relating to the Residual Value
Insurance Policies represented by the 1998-B SUBI Insurance Certificate are
in fact deposited in the 1998-B Lease Funding Account rather than paid
directly to the Holder of the 1998-B SUBI Insurance Certificate, as provided
in Section 17.01(b) hereof). Any such 1998-B SUBI Lease Funding Account
initially shall be established with U.S. Bank National Association, 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 1998-B SUBI Lease Funding Account to be
moved to a bank or trust company that satisfies those requirements. The
1998-B SUBI Lease Funding Account shall relate solely to the 1998-B SUBI and
the 1998-B SUBI Portfolio, and funds 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 1998-B SUBI Supplement or the 1998-B
Servicing Supplement. All amounts held in the 1998-B SUBI Lease Funding
Account shall be invested in Permitted Investments until distributed or
otherwise applied in accordance with the Titling Trust Agreement, this 1998-B
SUBI Supplement or the 1998-B Servicing Supplement. All transfers of funds
into and out of the 1998-B SUBI Lease Funding Account shall be made in
accordance with Section 7.03 of the Titling Trust Agreement and Sections 3.02
and 4.02 of the 1998-B Servicing Supplement in connection with purchases of
Subsequent Contracts and Subsequent Leased Vehicles. Prior to the date, if
any, on which the Monthly Remittance Conditions cease to be satisfied, the
Servicer will instead be allowed to commingle the amounts to be reinvested in
additional Subsequent Contracts and Subsequent Leased Vehicles with its own
funds and to reinvest such amounts (by transfer of such amounts to the Lease
Funding Account or directly to
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the UTI Beneficiary, as appropriate) without deposit into the 1998-B SUBI
Collection Account or 1998-B SUBI Lease Funding Account.
17.03 INVESTMENT GAINS AND LOSSES.
Except as otherwise provided herein, all or a portion of the funds
deposited into the 1998-B SUBI Accounts and the Lease Funding Account shall
be separately invested by the Titling Trustee or the 1998-B Securitization
Trustee, as applicable, from time to time at the written direction of the
Servicer, in any Permitted Investments. All income, gain or loss from
investment of monies in the 1998-B SUBI Lease Funding Account shall be for
the account of the Servicer and credited or debited, as the case may be, from
such account; provided, that, each such investment shall be made in the name
of the Titling Trustee on behalf of the Titling Trust, its nominee or its
Financial Intermediary. All income, gain or loss from investment of monies
in the Lease Funding Account shall be for the account of the UTI Beneficiary
and credited or debited, as the case may be, from such account; provided,
that, each such investment shall be made in the name of the Titling Trustee
on behalf of the Titling Trust, its nominee or its Financial Intermediary. If
at any time the Servicer shall not have given the Titling Trustee a timely
written investment directive with respect to the Lease Funding Account or the
1998-B Lease Funding Account, the Titling Trustee shall invest and reinvest
any monies in such account(s) in a mutual fund offered by the 1998-B
Securitization Trustee or an affiliate of the 1998-B Securitization Trustee,
each of which meet the requirements of clause (i) of the definition of
Permitted Investments, or of the Trust Agent or another affiliate of the
Titling Trustee, each of which meet the requirements of clause (i) of the
definition of Permitted Investments. All income gain or loss from investment
of monies in the 1998-B SUBI Certificateholders' Account shall be for the
account of the Certificateholders and credited or debited, as the case may
be, from such account(s) provided that each such investment shall be made in
the name of the 1998-B Securitization Trustee on behalf of the 1998-B
Securitization Trust, its nominee or its Financial Intermediary. All income
gain or loss from investment of monies in the 1998-B SUBI Collection Account
shall be for the account of the Servicer and credited and debited, as the
case may be, from such account; provided, that, each such investment shall be
made in the name of the 1998-B Securitization Trustee on behalf of the 1998-B
Securitization Trust, its nominee or Financial Intermediary. If at any time
the Servicer shall not have given the 1998-B Securitization Trustee a timely
written investment directive with respect to the 1998-B SUBI
Certificateholders Account or the 1998-B SUBI Collection Account, the 1998-B
Securitization Trustee shall invest and reinvest any monies in such
account(s) in a mutual fund offered by the 1998-B Securitization Trustee or
an affiliate of the 1998-B Securitization Trustee, each of which meet the
requirements of clause (i) of the definition of Permitted Investments. The
1998-B Securitization Trustee shall not be liable for the selection of
investments or for investment losses incurred thereon in accordance with the
instructions of the Servicer or as otherwise specified in this Section 17.03.
The 1998-B Securitization Trustee shall have no liabilities in respect of
losses incurred as a result of the liquidation of any investment prior to its
stated maturity or the failure of the Servicer to provide timely written
investment direction.
10
<PAGE>
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-Trusts, including the 1998-B
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
18.01 GOVERNING LAW.
This 1998-B SUBI Supplement shall be created under and governed by and
construed under the internal laws of the State of Delaware, 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.
18.02 EFFECT OF 1998-B SUBI SUPPLEMENT ON TITLING 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 1998-B SUBI Supplement and the
Titling Trust Agreement with respect to the 1998-B SUBI, the provisions of
this 1998-B SUBI Supplement shall prevail.
(b) For purposes of determining the parties' obligations under
this 1998-B SUBI Supplement with respect to the 1998-B SUBI, general
references in the Titling Trust Agreement to: (i) a SUBI Account shall be
deemed to refer more specifically to a 1998-B SUBI Account; (ii) a SUBI Asset
shall be deemed to refer more specifically to a 1998-B SUBI Asset; (ii) an
appropriate or applicable SUBI Collection Account shall be deemed to refer
more specifically to the 1998-B SUBI Collection Account; (iv) an appropriate
or applicable SUBI Lease Funding Account shall be deemed to refer more
specifically to a 1998-B SUBI Lease Funding Account; (v) a SUBI Sub-Trust or
SUBI Portfolio shall be deemed to refer more specifically to the 1998-B SUBI
Sub-Trust or 1998-B SUBI Portfolio, as the case may be; (vi) a SUBI
Supplement shall be deemed to refer more specifically to this 1998-B SUBI
Supplement; and (vii) a SUBI Servicing Supplement shall be deemed to refer
more specifically to the 1998-B Servicing Supplement.
11
<PAGE>
18.03 AMENDMENT.
(a) The 1998-B SUBI Supplement and the Titling Trust Agreement may
be amended from time to time, to the extent such amendment applies to or
affects only the 1998-B SUBI or the Beneficiaries of the 1998-B SUBI
Certificate and 1998-B SUBI Insurance Certificate, by a writing signed by the
Titling Trustee, the UTI Beneficiary, each 1998-B 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 1998-B Securitization Trustee and upon prior written notice to
each Rating Agency that includes the substance of the proposed amendment.
Any amendment of the Titling Trust Agreement that applies to or affects the
UTI or any Other SUBI or any Beneficiary of the UTI or any Other SUBI in
addition to this 1998-B SUBI shall also be subject to the foregoing
provisions of this Section 18.03.
Notwithstanding the foregoing, this Section 18.03 does not modify or
supersede any provision in the Titling Trust Agreement. Without limiting the
foregoing, any amendment of the Titling Trust Agreement or any other SUBI
Supplement that neither applies to nor affects the 1998-B SUBI, the 1998-B
SUBI Portfolio or the Beneficiaries of the 1998-B SUBI Certificate and 1998-B
SUBI Insurance Certificate shall not require the consent of the Beneficiaries
of the 1998-B SUBI Certificate, the 1998-B SUBI Insurance Certificate or of
the 1998-B Securitization Trustee.
18.04 NOTICES.
The notice provisions of the Titling Trust Agreement shall apply equally
to this Supplement; provided, that, any notice to the 1998-B Securitization
Trust or the 1998-B Securitization Trustee shall be addressed as follows:
U.S. Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Toyota Auto Lease Trust 1998-B
A copy of each notice or other writing required to be delivered to the
Titling Trustee pursuant to the Titling Trust Agreement or this 1998-B SUBI
Supplement shall be addressed and delivered as follows:.
U.S. Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Toyota Auto Lease Trust 1998-B
A copy of each notice or other writing required to be delivered to the
Titling Trustee pursuant to the Titling Trust Agreement shall also be
delivered to the 1998-B Securitization Trustee insofar as it relates to the
1998-B Securitization Trust.
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<PAGE>
18.05 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this 1998-B 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 1998-B SUBI Supplement and shall in no way affect the validity or
enforceability of the other provisions of this 1998-B SUBI Supplement or of
the 1998-B SUBI Certificate or the 1998-B SUBI Insurance Certificate 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 1998-B
SUBI Supplement invalid or unenforceable in any respect.
18.06 COUNTERPARTS.
This 1998-B 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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<PAGE>
IN WITNESS WHEREOF, TMCC, the Titling Trustee and, solely for the
limited purposes set forth herein, U.S. Bank National Association, as Trust
Agent, have caused this 1998-B SUBI Supplement to be duly executed by their
respective officers as of the day and year first above written.
TOYOTA MOTOR CREDIT CORPORATION,
as Grantor, Servicer and UTI Beneficiary
By: /s/ GEORGE E. BORST
---------------------------------------
Name: George E. Borst
Title: Senior Vice President and
General Manager
TMTT, INC.,
as Titling Trustee
By: /s/ STEVEN E. CHARLES
---------------------------------------
Name: Steven E. Charles
Title: Vice President and Assistant
Secretary
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
By: /s/ STEVEN E. CHARLES
---------------------------------------
Name: Steven E. Charles
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
as 1998-B Securitization Trustee and SUBI
Securities Intermediary
By: /s/ STEVEN E. CHARLES
---------------------------------------
Name: Steven E. Charles
Title: Vice President
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 25th day of September 1998, before me, a notary public in and for
of the State of California, personally appeared George E. Borst, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in the capacity or capacities indicated in the
within instrument, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ANGELA WOERTLER
----------------------------------------
Notary Public
[Notary Seal]
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 28th day of September 1998, before me, a notary public in and for
of the State of Illinois, personally appeared Steven E. Charles, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in the capacity or capacities indicated in the
within instrument, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ REMONIA JAMISON
----------------------------------------
Notary Public
[Notary Seal]
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 28th day of September 1998, before me, a notary public in and for
of the State of Illinois, personally appeared Steven E. Charles, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in the capacity or capacities indicated in the
within instrument, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ REMONIA JAMISON
----------------------------------------
Notary Public
[Notary Seal]
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 28th day of September 1998, before me, a notary public in and for
of the State of California, personally appeared Steven E. Charles, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in the capacity or capacities indicated in the
within instrument, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ REMONIA JAMISON
----------------------------------------
Notary Public
[Notary Seal]
<PAGE>
SCHEDULE I
SCHEDULE OF 1998-B CONTRACTS AND
1998-B LEASED VEHICLES AS OF THE CUTOFF DATE
[Omitted. On file with the Servicer, the Titling Trustee and the 1998-B
Securitization Trustee.]
<PAGE>
TOYOTA LEASE TRUST
1998-B SUBI CERTIFICATE
Evidencing a fractional undivided interest in specified SUBI assets
within the 1998-B 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., Toyota Leasing, Inc. ("TLI") or any of their respective affiliates.
Number 1
THIS CERTIFIES THAT U.S. BANK NATIONAL ASSOCIATION, IN ITS CAPACITY AS
SECURITIES INTERMEDIARY, is the registered owner of a nonassessable,
fully-paid, fractional undivided interest in specified assets of the 1998-B
SUBI (the "1998-B SUBI") which in turn is comprised of interests in the
assets of the 1998-B SUBI Sub-Trust (the "1998-B 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, U.S. Bank National Association (formerly known as 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 1998-B SUBI Supplement.
This 1998-B SUBI Certificate and the 1998-B SUBI Insurance Certificate
are the only duly authorized SUBI Certificates issued under the 1998-B SUBI
Supplement to Amended and Restated Trust and Servicing Agreement (the "1998-B
SUBI Supplement") dated as of September 1, 1998, among the UTI Beneficiary,
the Titling Trustee, for certain limited purposes as set forth therein, the
Trust Agent and U.S. Bank National Association, as 1998-B Securitization
Trustee. This 1998-B SUBI Certificate is subject to the terms, provisions
and conditions of the Titling Trust Agreement and the 1998-B SUBI Supplement,
to which agreements any Beneficiary of this 1998-B SUBI Certificate or any
interest herein by virtue of the acceptance hereof or of any interest herein
hereby assents and by which such SUBI Beneficiary is bound.
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, representing 100%
of the beneficial interests in the UTI, the 1997-A SUBI Certificate,
representing 100% of the beneficial interests in the 1997-A SUBI and the
1997-A
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SUBI Sub-Trust, and the 1998-A SUBI Certificate and 1998-A SUBI Insurance
Certificate, collectively representing 100% of the beneficial interests in
the 1998-A SUBI and the 1998-A SUBI Sub-Trust have been issued to the UTI
Beneficiary prior to the date of the initial issue of this 1998-B SUBI
Certificate. SUBI Certificates representing 100% of the undivided interests
in each other SUBI to be formed will be issued in connection with the
formation of each related SUBI Sub-Trust.
The property of the Titling Trust is identified in the Titling Trust
Agreement and the property of the 1998-B SUBI Sub-Trust is identified in the
1998-B SUBI Supplement. Pursuant to the 1998-B SUBI Supplement, the 1998-B
SUBI Assets were identified and allocated on the records of the Titling Trust
as a separate SUBI Sub-Trust (the "1998-B SUBI Sub-Trust"), and the
beneficial interest in the 1998-B SUBI Sub-Trust was designated as a separate
SUBI known as the "1998-B SUBI". The assets of the 1998-B SUBI Sub-Trust are
represented by two SUBI Certificates: (i) this 1998-B SUBI Certificate
evidencing beneficial interests in all the 1998-B SUBI Assets other than the
proceeds of the Residual Value Insurance Policies; and (ii) the 1998-B SUBI
Insurance Certificate evidencing beneficial interests in the 1998-B SUBI
Assets that are proceeds of the Residual Value Insurance Policies, net of any
loss adjustment expenses that may be offset against such proceeds. Any
holder of the 1998-B SUBI Certificate or the 1998-B SUBI Insurance
Certificate shall be considered a 1998-B SUBI Beneficiary. The rights of the
Beneficiaries of this 1998-B SUBI Certificate and the 1998-B SUBI Insurance
Certificate to certain of the proceeds of the 1998-B SUBI Assets are and will
be further set forth in the Titling Trust Agreement and the 1998-B SUBI
Supplement.
This 1998-B SUBI 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 1998-B SUBI Sub-Trust, all
to the extent and as more specifically set forth in the Titling Trust
Agreement and the 1998-B SUBI Supplement. Copies of the Titling Trust
Agreement and the 1998-B 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 1998-B SUBI
Beneficiary upon request.
By accepting this 1998-B SUBI Certificate or any interest herein, the
related SUBI Beneficiary waives and releases 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 1998-B SUBI Sub-Trust
(except for those evidenced by the 1998-B SUBI Insurance Certificate) and
those proceeds or assets derived from or earned by the 1998-B SUBI Assets
(except for those assets evidenced by the 1998-B SUBI Insurance Certificate
and the proceeds therefrom). In addition, by accepting this 1998-B 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 1998-B 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 Titling Trust Assets other than those included within the
1998-B SUBI Sub-Trust.
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The 1998-B SUBI Supplement and the Titling Trust Agreement may be
amended from time to time, to the extent such amendment applies to or affects
only the 1998-B SUBI and the 1998-B SUBI Portfolio, by a writing signed by
the Titling Trustee, the UTI Beneficiary, each 1998-B 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 1998-B Securitization Trustee and upon prior written notice to
each Rating Agency that includes the substance of the proposed amendment.
Any amendment of the Titling Trust Agreement or of any other SUBI Supplement
that applies to or affects any UTI or Other SUBI and this 1998-B SUBI shall
also be subject to the foregoing provisions. The foregoing does not apply to
any amendment of the Titling Trust Agreement or any other SUBI Supplement
that neither applies to nor affects the 1998-B SUBI or the 1998-B SUBI
Portfolio and such amendments shall not require the consent of any 1998-B
SUBI Beneficiary or the 1998-B Securitization Trustee. If approval of any
1998-B 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 1998-B SUBI Certificate.
As provided in the Titling Trust Agreement and the 1998-B SUBI
Supplement, this 1998-B 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 1998-B 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 1998-B 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.
Unless this 1998-B SUBI Certificate shall have been executed by an
authorized officer of the Titling Trustee, by manual signature, this 1998-B
SUBI Certificate shall not entitle the holder hereof to any benefit under the
Titling Trust Agreement or the 1998-B 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 1998-B SUBI Certificate to
be duly executed.
Dated: September 29, 1998
TOYOTA LEASE TRUST
By: TMTT, INC., as Titling Trustee
By:
------------------------------------
Authorized Officer
ATTEST:
- ----------------------------
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TOYOTA LEASE TRUST
1998-B SUBI INSURANCE CERTIFICATE
Evidencing a fractional undivided interest in specified SUBI assets
within the 1998-B 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., Toyota Leasing, Inc. ("TLI") or any of their respective affiliates.
Number 1
THIS CERTIFIES THAT U.S. BANK NATIONAL ASSOCIATION, IN ITS CAPACITY AS
SECURITIES INTERMEDIARY, is the registered owner of a nonassessable,
fully-paid, fractional undivided interest in specified assets of the 1998-B
SUBI (the "1998-B SUBI") which in turn is comprised of interests in the
assets of the 1998-B SUBI Sub-Trust (the "1998-B 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, U.S. Bank National Association (formerly known as 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 1998-B SUBI Supplement.
This SUBI Insurance Certificate and the 1998-B SUBI Certificate are the
only duly authorized SUBI Certificates issued under the 1998-B SUBI
Supplement to Amended and Restated Trust and Servicing Agreement (the "1998-B
SUBI Supplement") dated as of September 1, 1998, among the UTI Beneficiary,
the Titling Trustee, for certain limited purposes as set forth therein, the
Trust Agent and U.S. Bank National Association, as 1998-B Securitization
Trustee. This 1998-B SUBI Insurance Certificate is subject to the terms,
provisions and conditions of the Titling Trust Agreement and the 1998-B SUBI
Supplement, to which agreements any Beneficiary of this 1998-B SUBI Insurance
Certificate or any interest herein by virtue of the acceptance hereof or of
any interest herein hereby assents and by which such SUBI Beneficiary is
bound.
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, representing 100%
of the beneficial interests in the UTI, 1997-A SUBI Certificate, representing
100% of the beneficial interests in the 1997-A SUBI and the 1997-A SUBI
Sub-Trust, and the 1998-A SUBI Certificate and 1998-A SUBI Insurance
Certificate, collectively
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representing 100% of the beneficial interests in the 1998-A SUBI and the
1998-A SUBI Sub-Trust have been issued to the UTI Beneficiary prior to the
date of initial issue of this 1998-B SUBI Certificate. SUBI Certificates
representing 100% of the undivided interests in each other SUBI to be formed
will be issued in connection with the formation of each related SUBI
Sub-Trust.
The property of the Titling Trust is identified in the Titling Trust
Agreement and the property of the 1998-B SUBI Sub-Trust is identified in the
1998-B SUBI Supplement. Pursuant to the 1998-B SUBI Supplement, the 1998-B
SUBI Assets were identified and allocated on the records of the Titling Trust
as a separate SUBI Sub-Trust (the "1998-B SUBI Sub-Trust"), and the
beneficial interest in the 1998-B SUBI Sub-Trust was designated as a separate
SUBI known as the "1998-B SUBI". The assets of the 1998-B SUBI Sub-Trust are
represented by two SUBI Certificates: (i) this SUBI Insurance Certificate
evidencing beneficial interests in the 1998-B SUBI Assets that are proceeds
of the Residual Value Insurance Policies net of any loss adjustment expenses
that may be offset against such proceeds; and (ii) the 1998-B SUBI
Certificate evidencing beneficial interests in all of the 1998-B SUBI Assets
other than the proceeds of the Residual Value Insurance Policies. Any holder
of the 1998-B SUBI Certificate or the 1998-B SUBI Insurance Certificate shall
be considered a 1998-B SUBI Beneficiary. The rights of the Beneficiaries of
this 1998-B SUBI Insurance Certificate and the 1998-B SUBI Certificate to
certain of the proceeds of the 1998-B SUBI Assets are and will be further set
forth in the Titling Trust Agreement and the 1998-B SUBI Supplement.
This 1998-B SUBI Insurance 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 1998-B SUBI Sub-Trust, all
to the extent and as more specifically set forth in the Titling Trust
Agreement and the 1998-B SUBI Supplement. Copies of the Titling Trust
Agreement and the 1998-B 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 1998-B SUBI
Beneficiary upon request.
By accepting this 1998-B SUBI Insurance Certificate or any interest
herein, the related SUBI Beneficiary waives and releases 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 1998-B SUBI
Sub-Trust (except for those evidenced by the 1998-B SUBI Certificate) and
those proceeds or assets derived from or earned by the 1998-B SUBI Assets
that are proceeds of Residual Value Insurance Policies (except for those
evidenced by the 1998-B SUBI Certificate and the proceeds thereof). In
addition, by accepting this 1998-B SUBI Insurance 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 1998-B 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 Titling Trust Assets
other than those included within the 1998-B SUBI Sub-Trust.
The 1998-B SUBI Supplement and the Titling Trust Agreement may be
amended from time to time, to the extent such amendment applies to or affects
only the 1998-B SUBI and the
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1998-B SUBI Portfolio, by a writing signed by the Titling Trustee, the UTI
Beneficiary, each 1998-B 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 1998-B
Securitization Trustee and upon prior written notice to each Rating Agency
that includes the substance of the proposed amendment. Any amendment of the
Titling Trust Agreement or of any other SUBI Supplement that applies to or
affects any UTI or Other SUBI and this 1998-B SUBI shall also be subject to
the foregoing provisions. The foregoing does not apply to any amendment of
the Titling Trust Agreement or any other SUBI Supplement that neither applies
to nor affects the 1998-B SUBI or the 1998-B SUBI Portfolio and such
amendments shall not require the consent of any 1998-B SUBI Beneficiary or
the 1998-B Securitization Trustee. If approval of any 1998-B 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 1998-B SUBI Certificate.
As provided in the Titling Trust Agreement and the 1998-B SUBI
Supplement, this 1998-B SUBI Insurance 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 1998-B SUBI Insurance 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 1998-B SUBI Insurance 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 1998-B SUBI Insurance Certificate shall have been executed
by an authorized officer of the Titling Trustee, by manual signature, this
1998-B SUBI Insurance Certificate shall not entitle the holder hereof to any
benefit under the Titling Trust Agreement or the 1998-B SUBI Supplement or be
valid for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Titling Trustee on behalf of the Titling Trust
and not in its individual capacity has caused this 1998-B SUBI Insurance
Certificate to be duly executed.
Dated: September 29, 1998
TOYOTA LEASE TRUST
By: TMTT, INC., as Titling Trustee
By:
------------------------------------
Authorized Officer
ATTEST:
4
<PAGE>
EXECUTION COPY
===============================================================================
1998-B 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
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
Dated as of September 1, 1998
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
DEFINITIONS
1.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SERVICER
2.01 Representations and Warranties of Servicer . . . . . . . . . . . . . . 3
ARTICLE III
CREATION OF 1998-B SUBI
3.01 Initial Creation of 1998-B SUBI Portfolio and 1998-B SUBI Sub-
Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.02 Subsequent Additions to 1998-B SUBI Portfolio and 1998-B SUBI
Sub-Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.03 Servicer Payment in Respect of Certain Contracts and Leased
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.04 Filings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
SPECIFIC REQUIREMENTS FOR ADMINISTRATION AND SERVICING OF
CONTRACTS IN 1998-B SUBI PORTFOLIO
4.01 Servicer Bound by Titling Trust Agreement. . . . . . . . . . . . . . . . 7
4.02 Collection of Monthly Payments and Remittances; Application of
Proceeds; Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.03 Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.04 Collection and Application of Security Deposits. . . . . . . . . . . . . 14
4.05 Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.06 Payment of Certain Fees and Expenses; No Offset. . . . . . . . . . . . . 16
4.07 Servicing Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.08 Repossession and Sale of Leased Vehicles . . . . . . . . . . . . . . . . 17
4.09 Servicer to Act on Behalf of Titling Trust . . . . . . . . . . . . . . . 19
4.10 Indemnificationby Servicer . . . . . . . . . . . . . . . . . . . . . . . 20
4.11 Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.12 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.13 Servicer Not to Resign; Assignment . . . . . . . . . . . . . . . . . . . 22
4.14 Obligor Insurance Coverage in Respect of Leased Vehicles . . . . . . . . 23
4.15 Corporate Existence; Status; Merger. . . . . . . . . . . . . . . . . . . 23
ARTICLE V
STATEMENTS AND REPORTS
5.01 Reporting by the Servicer. . . . . . . . . . . . . . . . . . . . . . . . 24
5.02 Annual Accountants' Reports. . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
5.03 Other Certificates And Notices From Servicer . . . . . . . . . . . . . . 26
5.04 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VI
DEFAULT
6.01 Event of Servicing Termination; Termination of Servicer as to 1998-B
SUBI Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.02 No Effect on Other Parties . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VII
MISCELLANEOUS
7.01 Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 28
7.02 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.03 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.04 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.05 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.06 No Petition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.07 Inspection and Audit Rights. . . . . . . . . . . . . . . . . . . . . . . 30
7.08 Article and Section Headings . . . . . . . . . . . . . . . . . . . . . . 31
7.09 Execution in Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 31
7.10 Rights Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.11 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.12 Third-Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
ii
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
EXHIBIT A Schedule of 1998-B Contracts and 1998-B 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
SCHEDULE I Addresses of Branch Offices
</TABLE>
iii
<PAGE>
1998-B SUBI SERVICING SUPPLEMENT TO THE AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
SUBI SERVICING SUPPLEMENT TO THE AMENDED AND RESTATED TRUST AND
SERVICING AGREEMENT (the "1998-B SUBI Servicing Supplement"), dated as of
September 1, 1998, among TMTT, INC., a Delaware corporation, as Titling
Trustee of TOYOTA LEASE TRUST, a Delaware business trust (the "Titling
Trust") on behalf of the Titling Trust, TOYOTA MOTOR CREDIT CORPORATION, a
California corporation, as Servicer, and U.S. BANK NATIONAL ASSOCIATION
(formerly known as First Bank National Association), as Trust Agent.
RECITALS
A. Toyota Motor Credit Corporation ("TMCC"), the Titling Trustee and,
for certain limited purposes set forth therein, U.S. Bank National
Association (formerly known as First Bank National Association), 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 1998-B SUBI Supplement to the Titling Trust Agreement, dated as
of September 1, 1998, 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 or to the order of TMCC (i) a 1998-B SUBI Certificate evidencing
beneficial interests in the assets of the 1998-B SUBI other than the proceeds
of the Residual Value Insurance Policies, and (ii) a 1998-B SUBI Insurance
Certificate evidencing beneficial interests in the assets of the 1998-B SUBI
that are proceeds of the Residual Value Insurance Policies insofar as such
policies relate to the 1998-B Leased Vehicles and the 1998-B Contracts. It
is the intention of the parties hereto that the 1998-B SUBI Certificate and
the 1998-B SUBI Insurance Certificate collectively represent a 100%
beneficial interest in the 1998-B SUBI, whose beneficiaries generally will be
entitled to the net cash flow arising from, but only from, the related 1998-B
SUBI Assets, all as set forth in the Titling Trust Agreement and the 1998-B
SUBI Supplement.
C. Also concurrently herewith, TMCC and the Transferor are entering
into that certain 1998-B SUBI Certificate Purchase and Sale Agreement, dated
as of September 1, 1998, pursuant to which TMCC is selling to the Transferor,
without recourse, all of TMCC's right, title and interest in and to the
1998-B SUBI, the 1998-B SUBI Certificate and the 1998-B SUBI Insurance
Certificate, all moneys due thereon and paid thereon or in respect thereof
and the
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<PAGE>
right to realize on any property that may be deemed to secure the 1998-B
SUBI, and all proceeds thereof.
D. Also concurrently herewith, and as contemplated by the Titling
Trust Agreement, the Transferor and U.S. Bank National Association, as 1998-B
Securitization Trustee, are entering into that certain Securitization Trust
Agreement, dated as of September 1, 1998 (the "1998-B Securitization Trust
Agreement"), pursuant to which the 1998-B SUBI Certificate will be
transferred to the 1998-B Securitization Trustee, in that capacity on behalf
of the Securitization Trust, in connection with a Securitized Financing
thereof by the Transferor. The 1998-B SUBI Insurance Certificate will not be
transferred to the 1998-B Securitization Trustee and the Transferor will
retain the 1998-B SUBI Insurance Certificate.
E. The parties desire to supplement the servicing provisions of the
Titling Trust Agreement, insofar as they apply to the 1998-B SUBI, the 1998-B
SUBI Sub-Trust, the 1998-B SUBI Certificate and the 1998-B SUBI Insurance
Certificate, to provide for further specific servicing obligations that will
benefit the holders of the 1998-B SUBI Certificate and the 1998-B SUBI
Insurance Certificate and the parties to and other beneficiaries of the
Transaction Documents relating to the Securitized Financing contemplated by
the 1998-B Securitization Trust Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each party hereto, the
parties hereto agree to the following supplemental obligations with regard to
the 1998-B SUBI Sub-Trust:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS.
For all purposes of this 1998-B 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 attached to the Titling
Trust Agreement or in the Annex of Supplemental Definitions attached to the
1998-B SUBI Supplement for all purposes of this 1998-B SUBI Servicing
Supplement. In the event of any conflict between a definition set forth in
the Annex of Definitions and the Annex of Supplemental Definitions, the
definition set forth in the Annex of Supplemental Definitions shall prevail.
In the event of any conflict between a definition set forth both herein and
in the Annex of Definitions or Annex of Supplemental Definitions, the
definition set forth herein shall prevail. All terms used in this 1998-B
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 1998-B SUBI Servicing Supplement as a whole and not
to any particular article or section within this 1998-B SUBI Servicing
Supplement. All references such as "includes" and variations thereon shall
mean "includes without limitation" and references to "or"
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<PAGE>
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 "1998-B Securitization
Trustee, acting on behalf of the 1998-B Securitization Trust", or words of
similar import, shall be deemed to mean the 1998-B Securitization Trustee,
acting on behalf of the Toyota Auto Lease Trust 1998-B and all beneficiaries
thereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SERVICER
2.01 REPRESENTATIONS AND WARRANTIES OF SERVICER.
The Servicer represents and warrants to the Titling Trustee, the 1998-B
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 has, corporate power, authority and legal right to acquire,
own, sell and service the 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
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 1998-B 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 1998-B SUBI Servicing Supplement and the fulfillment of the terms of
this 1998-B 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
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<PAGE>
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 1998-B
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 1998-B 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
1998-B SUBI Servicing Supplement.
ARTICLE III
CREATION OF 1998-B SUBI
3.01 INITIAL CREATION OF 1998-B SUBI PORTFOLIO AND 1998-B SUBI SUB-TRUST.
(a) Pursuant to Section 3.01 of the Titling Trust Agreement and Section
16.01 of the 1998-B 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 1998-B SUBI Sub-Trust consisting of the 1998-B SUBI
Portfolio and certain other associated Titling Trust Assets 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 Titling 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 1998-B SUBI Portfolio.
(c) The Servicer hereby represents and warrants to the Titling Trustee,
the 1998-B Securitization Trustee and each SUBI Beneficiary that each of the
Contracts described on Exhibit A hereto is an Eligible Contract.
(d) It is the intent of the parties hereto that the proceeds of the
Residual Value Insurance Policies applicable to the 1998-B Leased Vehicles
and the 1998-B Contracts will be payable by the Servicer (or the insurer
under the Residual Value Insurance Policies) directly to the holder of the
1998-B SUBI Insurance Certificate and will not, under any circumstances, be
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subject to the lien of the 1998-B Securitization Trust Agreement or be
required to be deposited in any SUBI Account.
3.02 SUBSEQUENT ADDITIONS TO 1998-B SUBI PORTFOLIO AND 1998-B 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 1998-B
SUBI Sub-Trust on or before each Transfer Date certain additional Eligible
Contracts, related Leased Vehicles and other associated Titling Trust Assets
not then allocated, or reserved for allocation, to any other SUBI Portfolio
or Sub-Trust. Such Subsequent Contracts and Subsequent Leased Vehicles to be
allocated to the 1998-B SUBI Portfolio and 1998-B SUBI Sub-Trust shall have
an aggregate Discounted Principal Balance as of the related Transfer Date of
an amount not greater than all Principal Collections received after the
Cutoff Date (including the amounts treated as Principal Collections pursuant
to Section 3.01(c) and 3.01(k) of the 1998-B 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
select at least one Transfer Date each month during the Revolving Period and
to identify such Subsequent Contracts, related Subsequent Leased Vehicles and
other associated Titling Trust Assets (as described in the 1998-B SUBI
Supplement and meeting the other requirements set forth therein) on or before
each Transfer Date, and cause such Subsequent Contracts and Subsequent Leased
Vehicles to be specifically identified on a supplemental Schedule of
Contracts and Leased Vehicles (which, when considered with all prior
Schedules of Contracts and Leased Vehicles, shall be considered to be the
definitive Schedule of Contracts and Leased Vehicles) to be delivered
pursuant to Section 5.01 hereof. On each such Transfer Date, such Subsequent
Contracts, Subsequent Leased Vehicles and other associated Titling Trust
Assets shall be added to the 1998-B SUBI Portfolio and 1998-B SUBI Sub-Trust,
as the case may be, as additional 1998-B SUBI Assets.
(b) The Servicer shall give one Business Day's prior notice to the
Titling Trustee and the 1998-B Securitization Trustee of each Transfer Date.
On each Transfer Date, the Servicer shall be deemed to have represented and
warranted to the 1998-B Securitization Trustee on behalf of the 1998-B
Securitization Trust that (i) all Subsequent Contracts added to the 1998-B
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 delinquencies or
losses with respect thereto to differ from those of the 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 1998-B 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 Investor Certificates rated by
either Rating Agency, after giving effect to such reallocation (A) each such
1998-B Contract will be allocated to the 1998-B SUBI Portfolio based upon its
Discounted Principal Balance as of the relevant Transfer Date, (B) the
weighted average remaining term of the 1998-B
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Contracts (including the Subsequent Contracts) will be not greater than 36
months, and (C) the weighted average Booked Residual Value of all 1998-B
Leased Vehicles relating to the 1998-B Contracts (including the Subsequent
Contracts), as a percentage of the aggregate of the Capitalized Costs of each
1998-B Contracts (including the Subsequent Contracts), will be not greater
than 70%, based on the characteristics of all 1998-B Contracts (including the
Subsequent Contracts).
(c) From and after the date on which the 1998-B SUBI Lease Funding
Account is required to be maintained as specified in Section 17.02 of the
1998-B SUBI Supplement, on each Transfer Date the Servicer shall withdraw
from the 1998-B SUBI Collection Account (but excluding any amounts in fact
deposited therein that the Servicer has notified the 1998-B Securitization
Trustee are proceeds of a Residual Value Insurance Policy) an amount equal to
the aggregate Discounted Principal Balance as of the relevant Transfer Date
of the Subsequent Contracts then being added to the 1998-B SUBI Portfolio and
1998-B SUBI Sub-Trust pursuant to Section 16.01 of the 1998-B SUBI Supplement
and the Servicer shall direct the Titling Trustee to deposit such amount into
the 1998-B Lease Funding Account or for payment to the UTI Beneficiary, as
appropriate, directly in connection with the purchase of Subsequent Contracts
and Subsequent Leased Vehicles.
3.03 SERVICER PAYMENT IN RESPECT OF CERTAIN CONTRACTS AND LEASED VEHICLES.
(a) The representations and warranties of the Servicer set forth in
Sections 3.01(c) and 3.02(b), with respect to each 1998-B Contract shall
survive delivery of the related Contract to the 1998-B SUBI Portfolio and the
1998-B SUBI Sub-Trust and shall continue (speaking as of the dates made) so
long as each such 1998-B Contract remains outstanding, or until the
termination of the 1998-B Securitization Trust Agreement pursuant to Section
7.01 thereof, whichever occurs earlier. Upon discovery by the Titling
Trustee, the 1998-B Securitization Trustee or the Servicer that any such
representation or warranty was incorrect as of the time specified with
respect to such representation and warranty and such incorrectness materially
and adversely affects the interests of the Transferor or Investor
Certificateholders in such 1998-B 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 such representation or warranty was
incorrect. 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 1998-B Contract into the 1998-B SUBI Collection
Account, (ii) reallocate such 1998-B Contract and the related Leased Vehicle
and other related Titling Trust Assets from the 1998-B SUBI Portfolio to the
UTI Portfolio, and (iii) indemnify, defend and hold harmless the holders of
the 1998-B SUBI Certificate (including without limitation the 1998-B
Securitization Trustee on behalf of the 1998-B Securitization Trust and the
Certificateholders), the holder of the 1998-B SUBI Insurance Certificate 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 1998-B Contract or related Leased Vehicle. Notwithstanding the
foregoing, if any reallocation described in clause (ii) would cause the
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Transferor Interest to be equal to or less than zero, the Servicer also shall
deposit promptly into the 1998-B SUBI Collection Account a Reallocation
Deposit Amount in an amount such 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 1998-B SUBI Portfolio, the Servicer shall, subject to
Section 17.01 of the 1998-B SUBI Supplement, within two Business Days of
receipt thereof, deposit such funds into the 1998-B 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 1998-B SUBI
Portfolio and 1998-B SUBI Sub-Trust under this 1998-b SUBI Servicing
Supplement or the Titling Trust Agreement.
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 1998-B SUBI Sub-Trust and the
1998-B SUBI Portfolio, as the case may be, including filing or causing to be
filed UCC financing statements and executing and delivering all related
filings, documents or 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 1998-B 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 1998-B Securitization Trustee in any 1998-B Leased Vehicle.
ARTICLE IV
SPECIFIC REQUIREMENTS FOR
ADMINISTRATION AND SERVICING OF CONTRACTS
IN 1998-B SUBI PORTFOLIO
4.01 SERVICER BOUND BY TITLING 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 Titling
Trust Assets in the 1998-B SUBI Sub-Trust, including without limitation the
provisions thereof relating to the administration and servicing of 1998-B
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 1998-B SUBI Servicing Supplement are more exacting or
specific than those contained in the Titling Trust
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Agreement or in the event of any conflict between the provisions of this
1998-B SUBI Servicing Supplement with respect to the 1998-B SUBI, and those
of the Titling Trust Agreement, the provisions of this 1998-B SUBI Servicing
Supplement shall govern.
(b) For purposes of determining the Servicer's obligations with
respect to the servicing of the 1998-B SUBI Sub-Trust under this 1998-B 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 1998-B SUBI
Account; (ii) a SUBI Asset shall be deemed to refer more specifically to a
1998-B SUBI Asset; (iii) an appropriate or applicable SUBI Collection Account
shall be deemed to refer more specifically to the 1998-B SUBI Collection
Account; (iv) an appropriate or applicable SUBI Lease Funding Account shall
be deemed to refer more specifically to the 1998-B SUBI Lease Funding
Account; (v) a SUBI Portfolio shall be deemed to refer more specifically to
the 1998-B SUBI Portfolio; (vi) a SUBI Sub-Trust shall be deemed to refer
more specifically to the 1998-B SUBI Sub-Trust; (vii) a SUBI Servicing
Supplement shall be deemed to refer more specifically to this 1998-B SUBI
Servicing Supplement; and (viii) a SUBI Supplement shall be deemed to refer
more specifically to the 1998-B SUBI Supplement.
(c) Coincident with the execution and delivery of this 1998-B SUBI
Servicing Supplement, the Servicer shall furnish the 1998-B Securitization
Trustee, on behalf of the 1998-B 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 1998-B SUBI Portfolio, which list shall
from time to time be updated by the Servicer.
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 1998-B Contract included in the 1998-B SUBI
Portfolio; (ii) cause each Obligor to make all payments in respect of the
related 1998-B Contract included in the 1998-B SUBI Portfolio to which such
Obligor is a party or otherwise obligated; and (iii) to deposit all
Collections (excluding proceeds of the Residual Value Insurance Policies
which are to be transferred directly to the holder of the 1998-B SUBI
Insurance Certificate and which amounts shall not be deemed to be Collections
by the Servicer) and any Maturity Advance received from the Transferor into
the 1998-B SUBI Collection Account on or before the Deposit Date relating to
each Collection Period except as otherwise specified herein or in Section
17.01 or Section 17.02 of the 1998-B SUBI Supplement (in connection with any
failure to satisfy the Monthly Remittance Conditions).
Notwithstanding the foregoing and notwithstanding the
provisions of Section 3.01 of the 1998-B Securitization Trust Agreement, in
accordance with the provisions of
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Section 7.01(c) of the Titling Trust Agreement, for so long as TMCC is the
Servicer and each Monthly Remittance Condition is satisfied, the Servicer
will be entitled to make deposits of Collections into the 1998-B SUBI
Collection Account net of amounts reimbursable or payable to the Servicer as
compensation, in respect of Advances or otherwise (including in respect of
amounts advanced by the Servicer in respect of amounts otherwise payable to
the 1998-B Securitization Trustee or to the Titling Trustee or Trust Agent),
and net of amounts payable or reimbursable (and actually so paid or
reimbursed directly by the Servicer) in respect of the Titling Trust. To the
extent the Servicer makes deposits net of any such amounts, the Servicer will
cause each relevant Servicer's Certificate to correctly and accurately
account for such amounts in providing all information with respect to
allocations, applications and payments to be made pursuant to Section 3.01 of
the 1998-B Securitization Trust Agreement on the same basis as though such
amounts were in fact deposited into the 1998-B SUBI Collection Account.
Moreover, as set forth in Section 3.01 of the 1998-B Securitization Trust
Agreement, the Servicer will, in each relevant Servicer's Certificate,
instruct the 1998-B Securitization Trustee not to make any distribution to
the Servicer, Transferor or Titling Trustee to the extent that the Servicer
has made any deposit net of a corresponding amount, and the 1998-B
Securitization Trustee will have no obligation with respect to or liability
for following any such instruction by the Servicer.
(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 1998-B 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 more than four
deferrals of any 1998-B Contract, and may not extend the Maturity Date of any
1998-B Contract by more than twelve months in the aggregate (or by sixteen
months with the inclusion of any deferrals) or such that its Maturity Date
will occur later than the last day of the Collection Period related to the
Class B Stated Maturity Date; provided, however, that if the Servicer defers
payments on any 1998-B Contract more than four times or extends the Maturity
Date thereof by more than twelve months in the aggregate (or by more than
sixteen months with the inclusion of any deferrals) or so that the extended
Maturity Date will occur later than the last day of the Collection Period
relating to the Class B Stated 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 1998-B 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 1998-B Contract and the related 1998-B Leased Vehicle from
the 1998-B SUBI Portfolio and 1998-B 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 1998-B SUBI Portfolio under this 1998-B SUBI Servicing
Supplement.
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(c) As tonthly Payments, Liquidation Proceeds, Insurance Proceeds
(excluding proceeds of the Residual Value Insurance Policies which are to be
transferred directly to the holder of the 1998-B SUBI Insurance Certificate
by the Servicer), Prepayments, Payments Ahead or any other payments by or on
behalf of any Obligor or otherwise (excluding any late fees or deferral fees)
with respect to any 1998-B Contract or related 1998-B 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 of this 1998-B SUBI
Servicing Supplement with regard to Liquidation Proceeds and Insurance
Proceeds:
(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 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, 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
1998-B SUBI Portfolio and 1998-B SUBI Sub-Trust (collectively, the
"Payment Information").
(ii) As to any such funds received by the Servicer
after the date, if any, on which it ceases to satisfy the Monthly
Remittance Conditions, the Servicer shall segregate all such funds
from other SUBI Sub-Trusts, and deposit all such funds (net of
reimbursement of any Liquidation Expenses incurred by the Servicer
with respect to any 1998-B Leased Vehicle whose Liquidation
Proceeds are included among such funds and excluding proceeds of
the Residual Value Insurance Policies which are to be transferred
directly to the holder of the 1998-B SUBI Insurance Certificate by
the Servicer) into the 1998-B SUBI Collection Account maintained by
the Titling Trustee. Such amounts will thereafter be applied as
set forth in Section 17.01(d) of the 1998-B SUBI Supplement.
(iii) In the event that any proceeds of the Residual
Value Insurance Policies applicable to the 1998-B Leased Vehicles
and the 1998-B Contracts are deposited in any SUBI Account or
another account maintained by the Titling Trustee or the 1998-B
Securitization Trustee, such amounts shall be distributed to the
holder of the 1998-B SUBI Insurance Certificate by the Titling
Trustee or the 1998-B Securitization Trustee, as applicable, on the
succeeding Monthly Allocation Date at the written direction of the
Servicer.
(iv) Upon the determination by the Servicer that any
proceeds received by it with respect to any 1998-B 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) deposit such
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Payment Ahead into the 1998-B SUBI Collection Account on the
Deposit Date relating to the Collection Period during which such
Payment Ahead is to be applied, or, after the date, if any, on
which it ceases to satisfy the Monthly Remittance Conditions,
within two Business Days of such date.
(d) The Servicer shall treat all Charged-Off Vehicle Proceeds and
Matured Leased Vehicle Proceeds in the manner provided for other Liquidation
Proceeds in the Titling Trust Agreement and 1998-B SUBI Supplement; provided,
however, as set forth in Section 4.07 of this 1998-B SUBI Servicing
Supplement, that the Servicer may be reimbursed for related Charged-Off
Vehicle Expenses, Matured Leased Vehicle Expenses, other Liquidation Expenses
and Insurance Costs as provided in Section 4.02(h).
(e) The Servicer shall deposit into the 1998-B SUBI Collection
Account on or before each Deposit Date each Security Deposit that was applied
in respect of 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 1998-B SUBI Collection Account as set forth in
Section 17.01(a) of the 1998-B SUBI Supplement.
(g) On each Determination Date the Servicer shall make the
calculations necessary to allow the 1998-B Securitization Trustee to make
allocations, applications and payments to holders of, or to the 1998-B SUBI
Accounts on behalf of the holders of, the 1998-B SUBI Certificates on the
related Monthly Allocation Date in accordance with Section 3.01 of the 1998-B
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 allocate such Titling Trust
Expenses among the various Sub-Trusts, including the 1998-B 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, Charged-Off Vehicle Expenses and other Liquidation
Expenses. The Servicer is hereby authorized to net such expenses from
proceeds or Collections in respect of the related 1998-B Contracts or 1998-B
Leased Vehicles (including other Liquidation Proceeds), or to withdraw such
amounts from amounts on deposit in the 1998-B SUBI Collection Account. The
Servicer also will be entitled to reimbursement of certain payments it makes
on behalf of Obligors (including payments it makes on behalf of the related
Obligors 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 1998-B Contracts) from Collections with respect to
the 1998-B Contracts (whether or not as separate payments thereof by the
related Obligors) or from amounts realized upon the final disposition of
1998-B Leased Vehicles. 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 Obligor, such unreimbursed amounts (together
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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 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 1998-B SUBI Collection Account rather than so offset by
the Servicer, (ii) any Monthly Payments arising from a Contract allocated to
the 1998-B SUBI Sub-Trust are received by the Titling Trustee or deposited in
the 1998-B SUBI Collection Account with respect to any prior Collection
Period as to which the Servicer has outstanding an unreimbursed Advance,
rather than being netted from Collections by the Servicer; or (iii) any
amount of unreimbursed Advances already deposited in the 1998-B SUBI
Collection Account on any Deposit Date are reasonably determined by the
Servicer to be Nonrecoverable Advances, then, on the related Deposit Date,
the Servicer shall (y) notify the Titling Trustee and the 1998-B
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 1998-B SUBI Collection
Account, to the 1998-B SUBI Lease Funding Account. Thereafter, the Titling
Trustee shall remit to the Servicer from the 1998-B 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 1998-B SUBI Lease Funding Account (or in the event the 1998-B
SUBI Lease Funding Account has not been required to be established as set
forth in Section 17.02 of the 1998-B SUBI Supplement), the Servicer is hereby
authorized to deduct such amounts from amounts on deposit or otherwise to be
deposited into the 1998-B SUBI Collection Account.
(i) The Servicer shall account to the Titling Trustee and the
1998-B Securitization Trustee with respect to the 1998-B SUBI Sub-Trust
separately from any other Sub-Trust.
(j) The Servicer shall direct the Titling Trustee or the 1998-B
Securitization Trustee, as applicable, to invest amounts held in the 1998-B
SUBI Accounts and the Reserve Fund in Permitted Investments as provided in
the Titling Trust Agreement, 1998-B SUBI Supplement and the 1998-B
Securitization Trust Agreement. 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 Trust Agent or 1998-B Securitization Trustee, respectively, is the
obligor (including repurchase agreements as to which it, in its commercial
capacity, is liable as principal), or that are TMCC Demand Notes, which may
mature on such next succeeding Monthly Allocation Date, (ii) investments
during the Revolving Period of Principal Collections (including amounts
treated as Principal Collections pursuant to Sections 3.01(c) and 3.01(k) of
the 1998-B Securitization Trust Agreement) on deposit in the 1998-B SUBI
Collection Account, which may mature on such dates as specified by the 1998-B
Securitization Trustee at the Servicer's direction so as to maintain the
availability of sufficient
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cash to make payments pursuant to Section 3.02(c) hereof, and (iii) amounts
on deposit in the 1998-B Certificateholders' Account, which may mature on the
Business Day preceding the next succeeding relevant Certificate Payment Date
(as described in Section 3.01 of the 1998-B Securitization Trust Agreement)
as specified in the related TMCC Demand Note in accordance with the terms of
the Indenture; provided, however, that any Permitted Investment consisting of
a TMCC Demand Note may mature on the relevant Certificate Payment Date rather
than on the prior Business Day to the extent specified in the Indenture.
(k) In the event the Servicer provides to the UTI Beneficiary, the
Titling Trustee and the 1998-B Securitization Trustee a letter from each
Rating Agency to the effect that the utilization by the Servicer of a
remittance schedule differing from those contemplated herein or in the 1998-B
SUBI Supplement with respect to Collections to be deposited in the 1998-B
SUBI Collection Account 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 1998-B SUBI Servicing Supplement (and any
corresponding or related Sections in the 1998-B SUBI Supplement) may be so
modified without the consent of any Certificateholders and (ii) the Servicer
may remit such collections to the 1998-B 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 1998-B
Securitization Trustee of the Collections in respect of the 1998-B SUBI
Assets contained in all accounts maintained by the Titling Trustee (excluding
proceeds of the Residual Value Insurance Policies, the rights to which are
evidenced by the 1998-B SUBI Insurance Certificate which is the sole property
of the Transferor) and, except as provided in this 1998-B SUBI Servicing
Supplement, the 1998-B SUBI Supplement and the 1998-B 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 (other than to
receive such funds pursuant to an investment thereof in Permitted Investments
on which such party is the obligor).
(m) In the event of a sale, disposition or other liquidation of
the 1998-B SUBI Certificate and the other property of the 1998-B
Securitization Trust pursuant to Section 7.02 or Section 8.02 of the 1998-B
Securitization Trust Agreement, the Servicer shall allocate the net proceeds
thereof as set forth in the 1998-B Securitization Trust Agreement.
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 1998-B Contract or 1998-B 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
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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 1998-B 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 retained by the Servicer 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
1998-B SUBI Portfolio are terminated in accordance with Section 6.01(b) of
this 1998-B SUBI Servicing Supplement or, if this 1998-B SUBI Servicing
Supplement is terminated pursuant to Section 7.01, the Servicer shall, on
demand of the Titling Trustee, on behalf of the Titling Trust (either at the
request of the 1998-B Securitization Trustee or, as provided in Section
6.01(b) of this 1998-B SUBI Servicing Supplement, upon demand of Investor
Certificateholders representing not less than 51% of the aggregate Voting
Interest), deliver to the 1998-B Securitization Trustee all such data,
operating software and appropriate documentation necessary for the servicing
of the 1998-B 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 1998-B SUBI Account on behalf of the Titling Trust, or in
the 1998-B SUBI Collection Account or the Reserve Fund on behalf of the
1998-B Securitization Trust, all Security Deposits with respect to 1998-B
Contracts, and any 1998-B 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 1998-B 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.
4.04 COLLECTION AND APPLICATION OF SECURITY DEPOSITS.
Subject to Section 4.03(c) of this 1998-B 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 and under the terms of the related
Contract apply such Security Deposit against unpaid amounts owed under the
Contract, damages to the related Leased Vehicle, excess wear and tear
charges, expenses in connection with the refurbishment and
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disposal of the 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 1998-B 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 Contract or Leased Vehicle
(because such Contract has become a Charged-Off Contract), the related
Security Deposit or such portion shall be deemed to be Liquidation Proceeds.
On each Deposit Date, but otherwise as provided in Section 4.02(c)(ii) of
this 1998-B SUBI Servicing Supplement, the Servicer shall deposit into the
1998-B 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.
4.05 ADVANCES.
(a) On or prior to each Deposit Date, the Servicer shall make an
Advance with respect to each outstanding delinquent 1998-B Contract and each
1998-B 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 1998-B Contract
has not been reallocated to the UTI Portfolio with an accompanying
Reallocation Payment. Each such Advance will be made by deposit into the
1998-B SUBI Collection Account of an amount equal to the aggregate amount of
Monthly Payments due but not received during the related Collection Period.
(b) With respect to each Monthly Allocation Date, the Servicer
will have the option to make an Advance with respect to any 1998-B Leased
Vehicles in its possession and pending disposition during the related
Collection Period. Each such Advance shall be made by deposit into the 1998-B
SUBI Collection Account of an amount not to exceed the aggregate amount of
Liquidation Proceeds that the Servicer reasonably expects to realize (based
on criteria set forth in Section 9.09 of the 1998-B Securitization Trust
Agreement) upon disposition of all or any such Leased Vehicles.
(c) Notwithstanding any other provision of this 1998-B SUBI
Servicing Supplement, the Servicer shall not be obligated to make any Advance
in respect of any 1998-B Contract if the Servicer shall have reasonably
determined that any such Advance, if made, would constitute a Nonrecoverable
Advance. Any such determination relating to a claim by the Servicer for
reimbursement of Nonrecoverable Advances from monies on deposit on the 1998-B
SUBI Collection Account shall be evidenced by an Officer's Certificate (or
the statement to Certificateholders or the certification by any other
authorized signatory) of the Servicer furnished to each UTI Beneficiary, the
Titling Trustee and the 1998-B Securitization Trustee setting out the basis
for such determination, which determination shall be conclusive and binding
absent manifest error.
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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 1998-B SUBI Sub-Trust, as set forth in Section 3.01(c)
of the 1998-B Securitization Trust Agreement, are insufficient to provide for
the payment of all fees and expenses due to the Titling Trustee or the 1998-B
Securitization Trustee as Capped Titling Trust Administrative Expenses,
Capped Securitization Trust Administrative Expenses, Uncapped Titling Trust
Administrative Expenses or Uncapped Securitization Trust 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 1998-B Securitization Trustee and their respective
officers, directors, employees and agents for such amounts. The Servicer
shall be entitled to reimbursement of such advances as set forth the 1998-B
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 1998-B SUBI Portfolio under this 1998-B SUBI
Servicing Supplement.
(b) Prior to the termination of the Servicer's rights and
obligations with respect to the 1998-B SUBI Sub-Trust and thereafter if such
termination results from an Event of Servicing Termination, the obligations
of the Servicer with respect to the 1998-B 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 1998-B Securitization Trustee, whether in respect of
this 1998-B SUBI Servicing Supplement, the 1998-B SUBI Supplement, any
Securitization Trust Document, any 1998-B Contract, any related Contract
Document, any 1998-B Leased Vehicle or otherwise.
4.07 SERVICING COMPENSATION.
(a) As compensation for the performance of its obligations under
this 1998-B 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:
(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
administrative fees or similar charges paid by any Obligor pursuant to a
1998-B 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(c) of
the 1998-B Securitization Trust Agreement and the Servicer may be reimbursed
for advancing certain Administrative Expenses as provided in this 1998-B SUBI
Servicing Supplement. Further, as additional servicing compensation with
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regard to the 1998-B SUBI Sub-Trust, the Servicer also shall receive income
as and to the extent provided in the 1998-B 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 Charged-Off Vehicle Expenses, Matured Lease Vehicle
Expenses or other Liquidation Expenses or, as provided in Section 4.12 of
this 1998-B SUBI Servicing Supplement, expenses recoverable under an
applicable Insurance Policy or repayments from the related Obligor, as
provided in Section 4.08 of this 1998-B 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 Titling 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 1998-B 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(c)(iv) of the 1998-B 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).
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 (including procedures used in
connection with new programs commenced in the ordinary course of business,
whether or not implemented on a test basis), the Servicer shall use its
commercially reasonable efforts to (i) repossess the 1998-B Leased Vehicle
related to any 1998-B Contract that the Servicer shall have determined to be
in default to the same extent the Servicer would repossess a vehicle pursuant
to a lease contract that is property of the Servicer or (ii) otherwise take
possession of any Leased Vehicle related to any 1998-B Contract to the same
extent the Servicer would take possession of a vehicle pursuant to a lease
contract that is property of the Servicer.
The Servicer shall, in accordance with the standards set forth in
the immediately preceding paragraph:
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(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 Leased Vehicle to a motor vehicle dealer
for resale or selling a Leased Vehicle at public or private sale; and
(b) sell or otherwise dispose of each 1998-B Leased Vehicle that
is repossessed in accordance with the related 1998-B Contract or that becomes
part of Matured Leased Vehicle Inventory for the 1998-B SUBI Sub-Trust and,
if such related 1998-B Contract is in default, shall commence and prosecute
any proceedings in respect of such 1998-B Contract (and such 1998-B 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 1998-B Leased Vehicle from a
cause for which the Obligor under the related 1998-B 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 1998-B Contract by at least an equivalent amount.
The Servicer shall only expend funds in connection with the repossession
and/or sale of any 1998-B Leased Vehicle to the extent that it would do so in
connection with the sale or disposition of vehicles subject to lease
contracts that are its own property. The Servicer shall be responsible for
all other costs and expenses incurred by it in connection with any action
taken in respect of a 1998-B Contract or the related 1998-B Leased Vehicle;
provided, however, that it shall be entitled to reimbursement of such costs
and expenses to the extent they constitute Charged-Off Vehicle Expenses,
Matured Leased Vehicle Expenses or other Liquidation Expenses or expenses
recoverable under an applicable Insurance Policy. All Matured Leased Vehicle
Expenses or other Liquidation Proceeds and Insurance Proceeds (other than
proceeds of the Residual Value Insurance Policies, the rights to which are
evidenced by the 1998-B SUBI Insurance Certificate, which is the sole
property of the Transferor) shall be deposited and transferred as provided in
Section 4.02 of this 1998-B Servicing Supplement. Notwithstanding the
foregoing, in the event the Servicer determines that, in accordance with its
normal servicing procedures, it will apply the Insurance Proceeds with
respect to a damaged or destroyed Leased Vehicle to the substitution of
another vehicle (for which the Contract will remain in force, but will relate
to such substituted vehicle), the Servicer shall be permitted to so apply
such Insurance Proceeds and shall not report or treat such funds as Insurance
Proceeds hereunder. Any such substituted vehicle shall thereafter be the
relevant 1998-B Leased Vehicle and such vehicle shall be the "related Leased
Vehicle" or " related 1998-B Leased Vehicle" with respect to such 1998-B
Contract, for all purposes of the 1998-B SUBI Sub-Trust.
Notwithstanding the foregoing, prior to transferring any such funds
out of its operating account, the Servicer shall first deduct therefrom any
unreimbursed Charged-Off Vehicle Expenses, Matured Leased Vehicle Expenses or
other 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
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the form attached as Exhibit C with regard to the 1998-B Leased Vehicles,
with full power of substitution. The Servicer shall not conduct such a
substitution other than in the ordinary course of its business and on
substantially the same terms as are consistent with its past practices.
The Servicer is not required hereby to deduct from Charged-Off
Vehicle Proceeds, Matured Leased Vehicle Proceeds or other Liquidation
Proceeds or Insurance Proceeds with respect to any particular 1998-B Leased
Vehicle all related unreimbursed Charged-Off 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 1998-B SUBI
Servicing Supplement.
4.09 SERVICER TO ACT ON BEHALF OF TITLING TRUST.
(a) In order to facilitate the servicing of the 1998-B SUBI
Sub-Trust by the Servicer, the Titling Trustee, on behalf of the Titling
Trust, hereby appoints the Servicer as its agent, bailee and custodian 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
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governmental filing, registration or approvals (collectively, "Filings")
arising with respect to or required of the Titling Trust or the Titling
Trustee, including (in the case of clauses (ii) and (iv)) such licenses,
permits, and other Filings as are required for the Titling Trust or the
Titling Trustee to accept assignments of 1998-B Contracts and to be
identified as the owner of 1998-B Leased Vehicles on their Certificates of
Title. The Servicer shall also identify any surety bonds 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 and the 1998-B
Securitization Trustee, promptly upon their execution and delivery by the
parties thereto, each amendment and supplement to the Titling Trust Agreement as
any such amendment and supplement relates to the 1998-B SUBI Sub-Trust. The
Servicer shall not act contrary to any provision of the Titling Trust Agreement
as it relates to the 1998-B SUBI Sub-Trust, as so amended or supplemented.
4.10 INDEMNIFICATION BY SERVICER.
The Servicer (for purposes of this Section, the "Indemnifying Party")
agrees to indemnify, defend and hold harmless the 1998-B Securitization Trustee,
the Titling Trustee and each of their respective officers, directors, employees
and agents (each an "Indemnified Party") for any and all liabilities, losses,
damages and expenses (including without limitation reasonable fees and expenses
of counsel) that may be incurred by any Indemnified Party 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
1998-B Contracts and 1998-B Leased Vehicles, the servicing of the 1998-B
Contracts, the Servicer's undertakings in clause (e) of Section 4.09 of this
1998-B SUBI Servicing Supplement or any other activity undertaken or omitted by
the Servicer with respect to any 1998-B SUBI Asset. Promptly after receipt by
an Indemnified Party under this Section of notice of the commencement of any
action, such Indemnified Party will, if a claim in respect thereof is to be made
against the Indemnifying Party under this Section, notify the Indemnifying Party
of the commencement thereof. In case any such action is brought against any
Indemnified Party and it notifies the Indemnifying Party of the commencement
thereof, the Indemnifying Party will assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Party (who may, unless there is, as
evidenced by an opinion of counsel to the Indemnified Party stating that there
is an unwaivable conflict of interest, be counsel to the Indemnifying Party),
and the Indemnifying Party will not be liable to such Indemnified Party under
this Section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation. The obligations set forth in this Section shall survive
the termination of this 1998-
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B SUBI Servicing Supplement or the resignation or removal of the Servicer
(generally or with respect to the 1998-B SUBI Sub-Trust) or the 1998-B
Securitization Trustee.
4.11 THIRD PARTY CLAIMS.
The Servicer shall immediately notify the Transferor (in the event
that TMCC is not acting as the Servicer hereunder), the Titling Trustee, on
behalf of the Titling Trust, the 1998-B Securitization Trustee, on behalf of the
1998-B Securitization Trust, and any other holder of the 1998-B SUBI Certificate
or 1998-B SUBI Insurance Certificate upon its learning that a claim of whatever
kind that would, if proven or converted to judgment, have a material adverse
impact on any UTI Beneficiary, the Transferor, the Titling Trustee, the Titling
Trust, the 1998-B Securitization Trust, the 1998-B Securitization Trustee, the
Investor Certificateholders, any 1998-B 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 1998-B SUBI Sub-Trust) or the servicing thereof or with respect
to any other Titling Trust Asset (whether or not constituting a 1998-B SUBI
Asset).
4.12 INSURANCE POLICIES.
So long as any 1998-B 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 shall constitute Administrative Expenses): (i) the Contingent
and Excess Liability Insurance Policies unless (A) one or more replacement
insurance policies or binder(s) 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 1998-B 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) each Rating Agency has delivered a letter to the 1998-B 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 Policies specified in clause (i) of the definition of
Residual Value Insurance Policies in the Annex of Supplemental Definitions,
unless the 1998-B 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 1998-B 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 Officer's Certificates (or
certification by a duly authorized signatory of the Servicer) certifying that
the policies it is required to maintain pursuant to this Section remain 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
1998-B SUBI Sub-Trust under this 1998-B SUBI Servicing Supplement.
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4.13 SERVICER NOT TO RESIGN; ASSIGNMENT.
(a) Except as provided in Section 6.01 of this 1998-B 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
(or the Executive Committee thereof) that by reason of a change in applicable
legal requirements the continued performance by the Servicer of its duties as
Servicer under this 1998-B 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 except as provided in Section
4.13(b). 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 1998-B
Securitization Trustee. The 1998-B 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 1998-B SUBI Servicing Supplement. No such resignation shall affect the
obligation of the Servicer to remit moneys to the 1998-B SUBI Collection Account
(in lieu of unrecoverable insurance proceeds pursuant to Section 4.14), or the
obligations of the Servicer pursuant to Sections 3.03(a), 4.04, 4.06(a), 4.10
or 4.12 of this 1998-B SUBI Servicing Supplement. No successor Servicer shall
be required to undertake any of the foregoing, other than (i) the obligations
set forth in Section 4.04, to the extent that such obligations are transferred
to a successor Servicer pursuant to Section 6.01 of this 1998-B SUBI Servicing
Supplement, (ii) the obligation set forth in Section 4.06(a) of this 1998-B SUBI
Servicing Supplement (which shall remain a joint and several obligation of the
initial Servicer and any successor Servicer) and (iii) the obligations set forth
in Section 4.10, which provision shall not require indemnification by any
successor Servicer for the actions of the Servicer under this 1998-B SUBI
Servicing Supplement. The Titling Trustee shall give prompt notice to each
Rating Agency of any such resignation of the Servicer, and the Titling Trustee
and 1998-B Securitization Trustee and of the proposed 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 1998-B SUBI Servicing Supplement.
(d) Except as provided above, the duties and obligations of the
Servicer under this 1998-B SUBI Servicing Supplement shall continue until this
1998-B SUBI Servicing
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Supplement shall have been terminated as provided in Section 7.01 of this
1998-B 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 1998-B SUBI Servicing Supplement or the enforcement by the Titling
Trustee, on behalf of the Titling Trust, of any provision of the Titling
Trust Documents.
4.14 OBLIGOR INSURANCE COVERAGE IN RESPECT OF LEASED VEHICLES.
The Servicer shall use its normal servicing procedures (including
procedures used in connection with new programs commenced in the ordinary course
of business, whether or not implemented on a test basis) to ensure that the
Obligor under each 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 Trust or the Titling Trustee on behalf of the Titling
Trust 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 Trust or the Titling Trustee on behalf
of the Titling Trust as an additional insured. Notwithstanding the foregoing,
if an insurance policy names the Servicer rather than the Titling Trust or the
Titling Trustee on behalf of the Titling Trust as loss payee or additional
insured, the Servicer shall not be required to correct such designation as long
as the Servicer is responsible for any increased deductibles under any
Contingent and Excess Liability Policy as provided in the following paragraph.
Except as otherwise set forth in this 1998-B SUBI Servicing Supplement or in any
other Transaction Document, the Servicer shall, on at least a monthly basis,
deposit into the 1998-B SUBI Collection Account any proceeds of such Insurance
Policy that the Servicer may receive with respect to any 1998-B Leased Vehicle.
In each case as to which a deductible is applicable under any
Contingent and Excess Liability Policy, the Servicer will pay the deductible on
behalf of the insured. The foregoing obligation of the Servicer shall survive
the resignation of the Servicer or any termination of it as Servicer under this
1998-B SUBI Servicing Supplement pursuant to Section 6.01 of this 1998-B SUBI
Servicing Supplement.
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 Transaction Documents.
23
<PAGE>
(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 1998-B SUBI Servicing Supplement and the
other Transaction Documents or is so bound by operation of law, or (ii) the
Servicer is the surviving corporation resulting from such consolidation or
merger.
ARTICLE V
STATEMENTS AND REPORTS
5.01 REPORTING BY THE SERVICER.
(a) On or prior to the 25th day of each calendar month, the Servicer
shall 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 1998-B
Contracts or the related 1998-B 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 (iii)
deliver such other reports, Officer's Certificates or certificates from other
authorized signatories as may be necessary pursuant to this 1998-B SUBI
Servicing Supplement to document to the 1998-B Securitization 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 deliver or cause to be delivered to the Titling Trustee and
the 1998-B Securitization Trustee a supplement to the Schedule of 1998-B
Contracts and 1998-B Leased Vehicles containing data reflecting the addition or
removal of 1998-B Contracts or 1998-B Leased Vehicles from the 1998-B SUBI
Portfolio as of the first day of the current 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
1998-B Contract added or removed. Such reports will be delivered by the
Servicer to the 1998-B Securitization Trustee and the Luxembourg Stock Exchange,
at such times as set forth in Section 3.03 of the 1998-B Securitization Trust
Agreement and will be made available at the offices of each Paying Agent. In
addition, the Servicer shall, on or prior to each Determination Date, cause to
be delivered to the Titling Trustee, the 1998-B Securitization Trustee, each
Rating Agency and the Luxembourg Stock Exchange a certificate in the name of the
Servicer, executed by an officer or authorized signatory therefor in respect of
such Collection
24
<PAGE>
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 and which information the
Servicer is able to reasonably provide), containing all information necessary to
make the allocations and applications or payments required by the 1998-B
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 1998-B Securitization Trust
Agreement. Any person may obtain a copy of a Servicer's Certificate at no
charge at the office of any Paying Agent or from the 1998-B Securitization
Trustee upon written request, and the 1998-B Securitization Trustee shall have
no obligation to determine whether such person is a Certificateholder.
(c) In addition, within a reasonable period of time after the end of
each calendar year during the term of the 1998-B Securitization Trust Agreement,
the Servicer will forward to the Titling Trustee, the 1998-B Securitization
Trustee, each Paying Agent and the Luxembourg Stock Exchange and the 1998-B
Securitization Trustee will make available to each Certificateholder, a
statement, setting forth the amounts described in clauses (ii) through (x) in
Section 3.03(a) of the 1998-B Securitization Trust Agreement on an aggregate or
annualized basis, as appropriate as well as the amount paid in respect of
interest on and principal of each Class of Class A Certificates.
(d) Upon the occurrence of a Liquidation Event of which the Servicer
has actual knowledge, the Servicer shall give prompt written notice thereof to
the 1998-B Securitization Trustee, specifying the cause or causes of such event.
5.02 ANNUAL ACCOUNTANTS' REPORTS.
Within 120 days after September 30 of each fiscal year for the
Servicer (commencing with the year ended September 30, 1999), the Servicer shall
deliver to the Titling Trustee, the 1998-B Securitization 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 concerning their
review of the activities of the Servicer during the preceding 12-month period
ended September 30 (or other applicable period in the case of the first such
report or letter) to the effect that such accountants have reviewed certain
records and documents relating to the servicing of the Contracts under this
Agreement (using procedures specified in such report or letter) and as a result
of such review, and in connection with such procedures, they are reporting such
exceptions, if any, as shall be set forth therein. Such report or letter shall
also indicate that the firm is independent with respect to the Transferor and
the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
In the event such Independent Accountants require the 1998-B
Securitization Trustee to agree to the procedures performed by such firm, the
Servicer shall direct the 1998-B Securitization Trustee in writing to so agree;
it being understood and agreed that the 1998-B Securitization Trustee will
deliver such letter of agreement in conclusive reliance upon the direction of
the Servicer, and the 1998-B Securitization Trustee makes no independent inquiry
or
25
<PAGE>
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
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 and the 1998-B Securitization
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 1998-B SUBI Servicing Supplement, and either (i) stating
that, to the best of his or her knowledge, no default by the Servicer under this
1998-B SUBI Servicing Supplement has occurred and is continuing, or (ii) if such
a default has occurred and is continuing, specifying such default and the nature
and status thereof.
(b) In the event the rating of the Servicer's long-term unsecured
debt obligations falls below Baa1 by Moody's or BBB+ for Standard & Poor's as
determined by a Rating Agency, then on a quarterly basis, the Servicer shall
cause to be delivered to the 1998-B 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 any 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.
5.04 TAX RETURNS.
As contemplated by Section 6.12 of the 1998-B Securitization Trust
Agreement, the Servicer shall direct the 1998-B 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 1998-B 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 1998-B Securitization Trust or the assets thereof
and shall timely deliver any such returns to the 1998-B Securitization Trustee
for signature.
ARTICLE VI
DEFAULT
26
<PAGE>
6.01 EVENT OF SERVICING TERMINATION; TERMINATION OF SERVICER AS TO
1998-B 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 1998-B 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 any Event of Servicing Termination shall have occurred and
be continuing, the Titling Trustee may or at the direction of the 1998-B
Securitization Trustee shall (which direction will only be given pursuant to
Section 6.01(c)(iii) of the 1998-B Securitization Trust Agreement), terminate
all or a portion of the rights and powers of the Servicer under this 1998-B
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 1998-B SUBI Servicing Supplement with respect to all periods
following such termination. Upon any such termination, and subject to the
limitations set forth in Section 4.13(b) of this 1998-B SUBI Servicing
Supplement, all rights, powers, duties and responsibilities of the Servicer
under this 1998-B 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 1998-B 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 1998-B Contracts
and the 1998-B 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 1998-B Contracts to the
new servicer (including transfer of the Security Deposits being held by the
Servicer pursuant to Section 4.04 of this 1998-B 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) 100% of the holders of each of the 1998-B
SUBI Certificate and 1998-B SUBI Insurance
27
<PAGE>
Certificate, waive any default by the Servicer in the performance of its
obligations hereunder and its consequences with regard to the Sub-Trust
containing those Titling 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.
6.02 NO EFFECT ON OTHER PARTIES.
Upon any termination of the rights and powers of the Servicer with
respect to the 1998-B 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 1998-B SUBI Sub-Trust, all the rights, powers, duties and obligations of the
Titling Trustee, the UTI Beneficiary and the Transferor under this 1998-B SUBI
Servicing Supplement, the 1998-B Securitization Trust Agreement, the 1998-B 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.
ARTICLE VII
MISCELLANEOUS
7.01 TERMINATION OF AGREEMENT.
(a) In connection with any purchase by the Transferor of the
Investor Certificateholders' interest in the corpus of the 1998-B
Securitization Trust pursuant to Section 7.02 of the 1998-B Securitization
Trust Agreement, and the Transferor's then succeeding to all of the interest
in the 1998-B SUBI and if the UTI Beneficiary shall thereafter succeed to
such interest in the 1998-B SUBI, the Servicer, upon the direction of the UTI
Beneficiary as provided in Section 16.05 of the 1998-B SUBI Supplement, shall
reallocate all 1998-B Contracts, 1998-B Leased Vehicles and related 1998-B
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
1998-B SUBI shall terminate upon the termination of the 1998-B 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 monies held by the Servicer with respect to the 1998-B
SUBI Sub-Trust pursuant to this 1998-B SUBI Servicing Supplement.
7.02 AMENDMENT.
(a) To the extent that any amendment or supplement deals with the
1998-B SUBI Sub-Trust, this 1998-B 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 1998-B Securitization Trustee, on behalf of the
28
<PAGE>
1998-B Securitization Trust, which shall be given only in the circumstances
contemplated by Section 9.01 of the 1998-B Securitization Trust Agreement.
(b) The Servicer shall provide each Rating Agency that rated the
Investor Certificates prior notice of the content of any proposed amendment to
this 1998-B SUBI Servicing Supplement, whether or not such amendment relates to
the 1998-B SUBI or requires approval of any Rating Agency.
(c) Any amendment to the Titling Trust Agreement that applies to or
affects the UTI or any Other SUBI, in addition to the 1998-B SUBI Sub-Trust
shall also be subject to the foregoing provisions of this Section 7.02.
Notwithstanding the foregoing, this Section 7.02 does not modify or supersede
any provision in the Titling Trust Agreement. Without limiting the foregoing,
any amendment of the Titling Trust Agreement or any other SUBI Servicing
Agreement that neither applies to nor affects the 1998-B SUBI shall not require
the consent of the 1998-B Securitization Trustee or the Beneficiaries of the
1998-B SUBI Certificate or the 1998-B SUBI Insurance Certificate.
7.03 GOVERNING LAW.
This 1998-B SUBI Servicing Supplement shall in all respects be
governed by and construed in accordance with the internal laws of the State of
Delaware, 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 except for the rights, privileges, duties, liabilities
and immunities of the 1998-B Securitization Trustee which shall be governed by
and construed in accordance with the internal laws of the State of New York
without regard to any otherwise applicable principles of conflicts of laws.
7.04 NOTICES.
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--Corporate Treasury Manager (telecopier no.
(310) 787-6194); (b) if to the Titling 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 and (c)
if to the 1998-B Securitization Trustee, at 111 East Wacker Drive, Suite
3000, Chicago, Illinois 60601 (Telecopier No. (312) 228-9401. The Servicer,
the Titling Trustee or the 1998-B Securitization Trustee may change its
address for notices hereunder by giving notice of such change to the other
such Persons. All notices and demands (x) shall be deemed to have been given
upon delivery or tender of delivery thereof to any officer or other duly
authorized recipient of the Person entitled to receive such notices and
demands at the address of such Person for notices hereunder, (y) if given by
the Titling Trustee shall be deemed to have been given by all
29
<PAGE>
of the beneficiaries of the Titling Trust and (z) if given by the 1998-B
Securitization Trustee shall be deemed to be given by the Investor
Certificateholders.
7.05 SEVERABILITY.
If one or more of the provisions of this 1998-B 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 1998-B 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 1998-B SUBI Servicing Supplement
invalid or unenforceable in any respect.
7.06 NO PETITION.
The Servicer 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, the Transferor, 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. This Section shall survive the termination of
this Agreement or the resignation or removal of the Titling Trustee under this
Agreement.
7.07 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 1998-B 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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<PAGE>
7.08 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.
7.09 EXECUTION IN COUNTERPARTS.
This 1998-B 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.
7.10 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
1998-B 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
1998-B 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.
7.11 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 1998-B SUBI Servicing Supplement and to
better assure and confirm unto the requesting party its rights, powers and
remedies hereunder.
7.12 THIRD-PARTY BENEFICIARIES.
This 1998-B SUBI Servicing Supplement, insofar as it relates to the
1998-B SUBI Sub-Trust, will inure to the benefit of and be binding upon the
parties hereto, their respective successors and permitted assigns, the 1998-B
Securitization Trustee, the Titling Trustee (on behalf of the Titling Trust),
and each of the holders of any legal or beneficial interest in the 1998-B SUBI
Certificates (including without limitation the 1998-B Securitization Trustee and
the Certificateholders), who shall be considered to be third-party beneficiaries
hereof. Except as otherwise provided in this 1998-B SUBI Servicing Supplement,
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,
as Servicer
By: /s/ GEORGE E. BORST
-------------------------------------
Name: George E. Borst
Title: Senior Vice President and
General Manager
TOYOTA LEASE TRUST
By: TMTT, INC.,
as Titling Trustee
By: /s/ STEVEN E. CHARLES
-------------------------------------
Name: Steven E. Charles
Title: Vice President and Assistant
Secretary
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
By: /s/ STEVEN E. CHARLES
-------------------------------------
Name: Steven E. Charles
Title: Vice President
Acknowledged and Agreed:
TOYOTA AUTO LEASE TRUST 1998-B
By: U.S. Bank National Association,
as 1998-B Securitization Trustee
By: /s/ STEVEN E. CHARLES
------------------------------------
Name: Steven E. Charles
Title: Vice President
<PAGE>
SCHEDULE OF 1998-B CONTRACTS AND
1998-B LEASED VEHICLES AS OF THE INITIAL CUTOFF DATE
[Omitted. Copies on file with the Servicer, the Titling Trustee and the
1998-B Securitization Trustee.]
A-1
<PAGE>
FORM OF SERVICER'S CERTIFICATE
B-1
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-B
Allocation Date of ______ for the Collection Period of ________ through _______
<TABLE>
<CAPTION>
Investor Interest Class A1
----------------- --------
Total Percent Balance Percent Notional Balance
----- ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C>
ORIGINAL DEAL PARAMETER
Aggregate Net Investment Value (ANIV)
Discounted Principal Balance
Initial Notional/Certificate Balance
Percent of ANIV
Notional/Certificate Rate
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
Servicing Fee Percentage
Servicer Advance
Servicer Payahead
Reserve Fund:
Initial Deposit Amount
Specified Reserve Fund Percentage
Specified Reserve Fund Amount
Reserve Fund Trigger Percentage
Reserve Fund Trigger Amount
Number of Contracts
INPUT FROM PRIOR MONTHLY SERVICER'S CERTIFICATE
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
END OF PERIOD BALANCES:
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
</TABLE>
<TABLE>
<CAPTION>
Class A2 Class A3
-------- --------
Percent Notional Balance Percent Notional Balance
------- ---------------- ------- ----------------
<S> <C> <C> <C> <C>
ORIGINAL DEAL PARAMETER
Aggregate Net Investment Value (ANIV)
Discounted Principal Balance
Initial Notional/Certificate Balance
Percent of ANIV
Notional/Certificate Rate
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
Servicing Fee Percentage
Servicer Advance
Servicer Payahead
Reserve Fund:
Initial Deposit Amount
Specified Reserve Fund Percentage
Specified Reserve Fund Amount
Reserve Fund Trigger Percentage
Reserve Fund Trigger Amount
Number of Contracts
INPUT FROM PRIOR MONTHLY SERVICER'S CERTIFICATE
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
END OF PERIOD BALANCES:
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
</TABLE>
<TABLE>
<CAPTION>
Class B
------------------ Transferor Interest
Percent Balance Balance
------- ------- -------------------
<S> <C> <C> <C>
ORIGINAL DEAL PARAMETER
Aggregate Net Investment Value (ANIV)
Discounted Principal Balance
Initial Notional/Certificate Balance
Percent of ANIV
Notional/Certificate Rate
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
Servicing Fee Percentage
Servicer Advance
Servicer Payahead
Reserve Fund:
Initial Deposit Amount
Specified Reserve Fund Percentage
Specified Reserve Fund Amount
Reserve Fund Trigger Percentage
Reserve Fund Trigger Amount
Number of Contracts
INPUT FROM PRIOR MONTHLY SERVICER'S CERTIFICATE
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
END OF PERIOD BALANCES:
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
</TABLE>
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-B
Allocation Date of ______ for the Collection Period of ________ through _______
<TABLE>
<S> <C>
CURRENT MONTH COLLECTION ACTIVITY
Principal Collections
Prepayments in Full - Number
Prepayments in Full - Amount
Reallocation - Number of Leases
Reallocation Payment
Interest Collections
Net Liquidation Proceeds and Recoveries
Increase (Decrease) in Maturity Advances
Net Liquidation Proceeds - Vehicle Sales
Reimbursed Certificate Principal Losses
Net Investment Income
--------------
Total Available
Increase (Decrease) in Servicer Advances
(Increase) Decrease in PayAheads Held
<CAPTION>
ANIV
CURRENT MONTH OPERATIONAL ACTIVITY Vehicles Balance
INVENTORY ON HAND: -------- -------
<S> <C> <C>
Matured Lease Vehicle Inventory
Repossessed Vehicle Inventory
------------- --------------
Total Inventory on Hand
------------- --------------
------------- --------------
RESIDUAL VALUE (Gain) LOSS:
Matured Lease Vehicle Inventory Sold
Net Liquidation Proceeds
Net Residual Value (Gain) Loss
--------------
Cumulative Residual Value (Gain) Loss all periods
--------------
--------------
--------------
--------------
LIQUIDATION OF CHARGEOFFS AND REPOSSESSIONS:
Liquidated Contracts
Discounted Principal Balance
Net Liquidation Proceeds
Recoveries - Previously Liquidated Contracts
Aggregate Credit Losses for the Collection Period
--------------
Cumulative Credit Losses for all Periods
--------------
--------------
Repossessed in Current Period
--------------
--------------
<CAPTION>
Accounts Percent ANIV Percent
DELINQUENT CONTRACTS: -------- ------- ---- -------
<S> <C> <C> <C> <C>
31-60 Days Delinquent
61-90 Days Delinquent
Over 90 Days Delinquent
---------------------------------------------
Total Delinquencies
---------------------------------------------
---------------------------------------------
<CAPTION>
Amount
BEGINNING UNREINVESTED PRINCIPAL COLLECTIONS ------
<S> <C>
Current Month Principal Collections
Total Available
--------------
Allocation to Subsequent Contracts and Lease Vehicles
--------------
--------------
Ending Unreinvested Principal Collections
--------------
--------------
<CAPTION>
Annual
CAPPED AND UNCAPPED EXPENSES: Amount Amount
-------------------------
<S> <C> <C>
Capped Contingent and Excess Liability Premiums
Capped Titling Trust Administration Expenses
Capped Securitization Trust Administration Expenses
-------------------------
Total Capped Expenses
Uncapped Titling Trust Administration Expenses
Uncapped Securitization Trust Administration Expenses
-------------------------
Total Uncapped Expenses
Paid Expenses
Previous Unpaid Balance
Current Unpaid Balance
SERVICER'S FEE DUE:
Due from Previous Periods
Due for this Period
Paid this Period
Servicer's Fee Balance Due
SUPPLEMENTAL SERVICER'S FEES
<CAPTION>
Sold Net
Number Scheduled Sale Residual Mat Vehicle
MATURED VEHICLES SOLD FOR Sold Maturities Ratio Values Proceeds
EACH COLLECTION PERIOD: ---- ---------- ----- -------- --------
<S> <C> <C> <C> <C> <C>
Second Preceding Collecton Period
First Preceding Collection Period
Current Collection Period
Three Month Average
Residual Value Coverage %
<CAPTION>
Annualized Average
Charge-Off
Rate
RATIO OF NET CREDIT LOSSES TO THE AVERAGE POOL BALANCE ------------------
FOR EACH COLLECTION PERIOD:
<S> <C>
Second Preceding Collection Period
First Preceding Collection Period
Current Collection Period
Three Month Average
Trigger Indicator (1.25%) trigger was not hit
RATIO OF NUMBER OF CONTRACTS DELINQUENT 60 DAYS OR MORE TO THE Outstanding
NUMBER OF RECEIVABLES AS OF EACH COLLECTION PERIOD (INCLUDES Repossessions):
Second Preceding Collection Period
First Preceding Collection Period
Current Collection Period
Three Month Average
Trigger Indicator (1.25%) trigger was not hit
<CAPTION>
Class B Class A Total
RESERVE FUND: Amount Amount Amount
------- -------- ------
<S> <C> <C> <C>
Beginning Balance
Withdrawal Amount
Transferor Excess
------------ -------------- -------------
Ending Balance
Specified Reserve Fund Balance
Release to Transferor
Cumulative Withdrawal Amount
</TABLE>
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-B
Allocation Date of ______ for the Collection Period of ________ through _______
<TABLE>
<CAPTION>
Investor Interest Class A1 Class A2
----------------- -------- --------
Percent Balance Percent Balance Percent Balance
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NOTIONAL/CERTIFICATE INTEREST ACCRUAL AMOUNT
INTEREST:
Interest Collections
Net Investment Income
Non-recoverable Advances -------
Available Interest
Class A-1, A-2, A-3 Notional Interest Accrual Amount
Unreimbursed A-1, A-2, and A-3 Interest Shortfall
Interest Accrual for Adjusted Class B Certificat Bal.
Class B Interest Carryover Shortfall
Servicer's Fee
Capped Expenses
Interest Accrual on Class B Cert. Princ. Loss Amt.
Uncapped Expenses
------- ------- ------- ------- ------- -------
Total Unallocated Interest
Excess Interest to Transferor
------- ------- ------- ------- ------- -------
Net Interest Collections Available
Deposit to Reserve Fund
Withdrawal from Reserve Fund
-------
PRINCIPAL:
Certificate Principal Loss Amounts:
Current Loss Amount
Loss Reimbursement from Transferor
Loss Reimbursement from Reserve Fund
------- ------- ------- ------- ------- -------
Tranferor Ending Certificate Princ. Loss Amount
Principal Allocations:
Principal Collections
Liquidated Contracts
Accelerated Principal Distribution Amount
Maturity Advances
Carryover Shortfall
Prior Carryover Shortfall
Total Carryover Shortfall
Withdrawal from Reserve Fund
B Certificate Principal Subordinated Inc (Dec)
------- ------- ------- ------- ------- -------
Total Principal Reinvested
------- ------- ------- ------- ------- -------
Total Principal Allocated
------- ------- ------- ------- ------- -------
CLASS A CERTIFICATE PRINCIPAL LOSS AMOUNTS
Beginning Balance
Current increase (decrease)
-------
Ending Balance
-------
CLASS A INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
-------
Ending Balance
-------
CLASS B CERTIFICATE PRINCIPAL Loss Amounts
Beginning Balance
Current increase (decrease)
-------
Ending Balance
-------
CLASS B INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
-------
Ending Balance
-------
</TABLE>
<TABLE>
<CAPTION>
Class A3 Class B Transferor
-------- ------- Interest
Percent Balance Percent Balance Interest Principal
------- ------- ------- ------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
NOTIONAL/CERTIFICATE INTEREST ACCRUAL AMOUNT
INTEREST:
Interest Collections
Net Investment Income
Non-recoverable Advances
Available Interest
Class A-1, A-2, A-3 Notional Interest Accrual Amount
Unreimbursed A-1, A-2, and A-3 Interest Shortfall
Interest Accrual for Adjusted Class B Certificat Bal.
Class B Interest Carryover Shortfall
Servicer's Fee
Capped Expenses
Interest Accrual on Class B Cert. Princ. Loss Amt.
Uncapped Expenses
------- ------- ------- ------- ------- -------
Total Unallocated Interest
Excess Interest to Transferor
------- ------- ------- ------- ------- -------
Net Interest Collections Available
Deposit to Reserve Fund
Withdrawal from Reserve Fund
PRINCIPAL:
Certificate Principal Loss Amounts:
Current Loss Amount
Loss Reimbursement from Transferor
Loss Reimbursement from Reserve Fund
------- ------- ------- ------- ------- -------
Tranferor Ending Certificate Princ. Loss Amount
Principal Allocations:
Principal Collections
Liquidated Contracts
Accelerated Principal Distribution Amount
Maturity Advances
Carryover Shortfall
Prior Carryover Shortfall
Total Carryover Shortfall
Withdrawal from Reserve Fund
B Certificate Principal Subordinated Inc (Dec)
------- ------- ------- ------- ------- -------
Total Principal Reinvested
------- ------- ------- ------- ------- -------
Total Principal Allocated
------- ------- ------- ------- ------- -------
CLASS A CERTIFICATE PRINCIPAL LOSS AMOUNTS
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS A INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS B CERTIFICATE PRINCIPAL Loss Amounts
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS B INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS A CERTIFICATE PRINCIPAL LOSS AMOUNTS
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS A INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS B CERTIFICATE PRINCIPAL Loss Amounts
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS B INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
Ending Balance
</TABLE>
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-B
Allocation Date of ______ for the Collection Period of ________ through _______
<TABLE>
<CAPTION>
Investor Interest Class A1 Class A2 Class A3 Class B
Total Balance Balance Balance Balance Balance
----- ----------------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
PRINCIPAL DISTRIBUTIONS/ALLOCATIONS:
Distribution - Current Period
Allocations - Current Period
Allocations - Not Disbursed Beginning of Period
Allocations - Not Disbursed End of Period
INTEREST DISTRIBUTIONS/ ALLOCATIONS:
Allocations - Not Disbursed Beginning of Period
Allocations - Current Period
Distributions - Current Period
--------- ------------- -------- -------- -------- -------
Allocations - Not Disbursed End of Period
--------- ------------- -------- -------- -------- -------
--------- ------------- -------- -------- -------- -------
INTEREST DISTRIBUTIONS TO CERTIFICATEHOLDERS:
Interest on Permitted Investments**
Collections - Interest*
Transfer (to) from Reserve Account
---------
Interest Allocations - Current Month
Permitted Investment Maturities**
--------- ------------- -------- -------- -------- -------
Total Interest Distributed to Certificateholders
--------- ------------- -------- -------- -------- -------
PRINCIPAL DISTRIBUTIONS TO CERTIFICATEHOLDERS:
Collections - Principal
Transfer from Reserve Account
---------
Principal Allocations - Current Month
Permitted Investment Maturities
--------- ------------- -------- -------- -------- -------
Total Principal Distributed to Certificateholders
--------- ------------- -------- -------- -------- -------
--------- ------------- -------- -------- -------- -------
TOTAL PRINCIPAL AND INTEREST DISTRIBUTED:
--------- ------------- -------- -------- -------- -------
--------- ------------- -------- -------- -------- -------
</TABLE>
* Interest Collections wired from TMCC to the
Trust Collection Account.
** Total of these items represent principal
and interest on the TMCC demand notes and is
wired from TMCC to the Trust Certificateholder
Account.
Total Due Trustee ---------
I hereby certify to the best of my knowledge that the
servicing report provided is true and correct.
- -------------------------------
Holly Pearson, Treasury Manager
<PAGE>
EXHIBIT C
FORM OF POWER OF ATTORNEY
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the Toyota Lease Trust, a Delaware
business trust qualified to do business in the State of California does hereby
make, constitute, and appoint the persons listed on the attached Schedule A, as
Branch Managers for Toyota Motor Credit Corporation ("TMCC") for the branch
offices identified on the attached schedule (the "Branches"), its true and
lawful attorneys-in-fact for and in its name, stead and behalf, for the
following purpose only:
To execute or to designate, in writing, appropriate individuals to
execute Retail Motor Vehicle Lease Agreements (Non-Recourse) between
Toyota Lease Trust and various vehicle dealers in the territories
customarily managed by such Branch Manager's Branch
and for no other purpose whatsoever.
This Power of Attorney may be revoked by the Toyota Lease Trust by notice
in writing to the above-named attorneys-in-fact, in care of the Branch at the
Branch's place of business and this Power of Attorney shall immediately
terminate without notice if the above-named attorney-in-fact shall cease to be
an employee of TMCC at such Branch.
- -------------------------------------------------------------------------------
This Power of Attorney shall terminate three (3) years from the date hereof
without further action by the Toyota Lease Trust unless it shall have been
revoked or terminated in accordance with the terms hereof prior to that date.
This Power of Attorney 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.
Dated this _______ day of __________________, 1996.
TOYOTA LEASE TRUST
By TMTT, Inc., not in its individual
capacity, but solely as Trustee of
Toyota Lease Trust
By:
-------------------------------------
Countersigned
-------------------------
Branch Manager
Not valid unless countersigned by
Toyota Motor Credit Corporation Branch Manager
C-1
<PAGE>
SCHEDULE I
LIST OF BRANCH OFFICES
<TABLE>
- --------------------------------------------------------------------------------
BRANCHES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C>
Toyota Motor Credit Corporation
303 International Circle, Ste 300
BALTIMORE Hunt Valley, MD 21031
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
8550 United Plaza Blvd., Suite 903
BATON ROUGE Baton Rouge, LA 70809
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
Two Highwood Drive, Suite 204
BOSTON-NORTH Tewksbury, MA 01876
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
1500 West Park, Third Floor
BOSTON-WEST Westborough, MA 01581
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
1111 W. 22nd. Street, Suite 420
CHICAGO Oak Brook, IL 60521-1935
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
155 Pfingsten, Suite 225
CHICAGO-NORTH Deerfield, IL 60015
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
4501 Erskine Road, Suite 200
CINCINNATI Cincinnati, OH 45242
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
777 East Campbell Road, Suite 200
DALLAS Richardson, TX 75081
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
7670 S. Chester Street, #200
DENVER Englewood, CO 80112
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
19500 Victor Parkway, Suite 400
DETROIT Livonia, MI 48152
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
3975 Fair Ridge, Suite 300
FAIFAX Fairfax, VA 22033
- --------------------------------------------------------------------------------
</TABLE>
I-1
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------
BRANCHES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C>
Toyota Motor Credit Corporation
16945 Northchase Drive, Suite 1150
HOUSTON Houston, TX 77060
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
2600 Michelson Drive, Suite 500
IRVINE Irvine, CA 92712
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
7400 W 110th. Street, Suite 200
KANSAS CITY Overland Park, KS 66210
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
140 S. State College Blvd., Suite 300
LOS ANGELES Brea, CA 92621
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
440 E. Huntington Drive, Suite 200
LOS ANGELES-NORTH Arcadia, CA 91006
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
30501 Agoura Road, Suite 202
LOS ANGELES-WEST Agoura Hills, CA 91301
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
90 Crystal Run Road, Suite 310
MIDDLETOWN Middletown, NY 10940
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
750 Old Hickory Blvd., Suite 260
NASHVILLE Brentwood, TN 37027
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
1000 Bridgeport Avenue, Fourth Floor
NEW HAVEN Shelton, CT 06484
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
4 Gatehall Drive, Suite 350
PARSIPPANY Parsippany, NJ 07054
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
Two Walnut Grove Drive, Suite 310
PHILADELPHIA Horsham, PA 19044
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
10040 North 25th Ave., Suite 200
PHOENIX Phoenix, AZ 85021
- --------------------------------------------------------------------------------
</TABLE>
I-2
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------
BRANCHES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C>
Toyota Motor Credit Corporation
5000 Meadows Road, Suite 251
PORTLAND Lake Oswego, OR 97035
- --------------------------------------------------------------------------------
300 Las Cumbres Ave., Suite 24
PUERTO RICO Entsada Los Rio 00926
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
3951 Westerre Parkway, Suite 350
RICHMOND Richmond, VA 23233
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
8850 California Center Drive, Bldg. 1 #202
SACRAMENTO Sacramento, CA 95826
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
600 Emerson Road, Suite 310
ST. LOUIS Creve Coeur, MO 63141
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
14100 San Pedro, Suite 200
SAN ANTONIO San Antonio, TX 78232
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
7676 Hazard Center Drive, Suite 650
SAN DIEGO San Diego, CA 92108
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
4000 Executive Parkway, Suite 525
SAN FRANCISCO San Ramon, CA 94583
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
2300 Clayton Road, Suite 200
SAN FRANCISCO-NORTH Concord, CA 94520
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
3006 Northup Way, Suite 300
SEATTLE Bellevue, WA 98004
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
580 Howard Avenue, Suite 300
SOMERSET Somerset, NJ 08873
- --------------------------------------------------------------------------------
EQUIPMENT FINANCE & 19001 South Western Avenue
DIVERSIVIED PRODUCTS Torrance, CA 90509-2958
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
19300 Gramercy Place
CORPORATE Torrance, CA 90509
- --------------------------------------------------------------------------------
</TABLE>
I-3
<PAGE>
1998-B SUBI CERTIFICATE PURCHASE AND SALE AGREEMENT
THIS 1998-B SUBI CERTIFICATE PURCHASE AND SALE AGREEMENT (the "Agreement")
is dated as of September 1, 1998, by and between TOYOTA MOTOR CREDIT
CORPORATION, a California corporation ("TMCC"), and TOYOTA LEASING, INC., a
California corporation ("TLI").
A. TMCC, the Titling Trustee and, for certain limited purposes set forth
therein, U.S. Bank National Association (formerly known as First Bank National
Association), 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 1998-B Securitization Trustee, the Titling Trustee and the
Trust Agent are entering into that certain 1998-B SUBI Supplement to the Titling
Trust Agreement, dated as of September 1, 1998, 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 two SUBI Certificates collectively
representing a 100% beneficial interest in the 1998-B SUBI and the 1998-B SUBI
Assets (the 1998-B SUBI Certificate and the 1998-B SUBI Insurance Certificate,
as defined in the 1998-B SUBI Supplement), whose beneficiaries generally will be
entitled to the net cash flow arising from, but only from, the related 1998-B
SUBI Assets, all as set forth in the Titling Trust Agreement and the 1998-B 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 1998-B SUBI, the 1998-B SUBI Certificate and the 1998-B
SUBI Insurance Certificate.
D. The parties hereto desire that U.S. Bank National Association, as
securities intermediary (the "SUBI Securities Intermediary"), credit the
transfer of the 1998-B SUBI Certificate and the 1998-B SUBI Insurance
Certificate from the TMCC SUBI Account to the TLI SUBI Account.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
1
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the Annex
of Definitions attached to the Titling Trust Agreement or the Annex of
Supplemental Definitions attached to the 1998-B SUBI Supplement; provided,
however, that in the event of an inconsistency or conflict between a definition
in the Annex of Definitions or the Annex of Supplemental Definitions, the
definition in the Annex of Supplemental Definitions shall control. In the event
of any conflict between a definition set forth herein and that set forth in the
Annex of Definitions or the Annex of Supplemental Definitions, that set forth
herein shall prevail. All terms used in this agreement include, as appropriate,
all genders and the plural as well as the singular. 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. All references
such as "includes" and all variations thereon shall mean "includes without
limitation" and references to "or" shall mean "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 II
PURCHASE AND SALE OF 1998-B SUBI
SECTION 2.01. SALE OF 1998-B SUBI.
(a)(l) In consideration of TLI's delivery to, or upon the order of, TMCC
of (i) cash in the amount of $1,031,953,883.50 representing the cash proceeds
from the sale of the Investor Certificates net of certain expenses, and (ii)
$82,521,767.03 evidenced by a subordinated non-recourse promissory note, 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:
1. all right, title and interest in and to the 1998-B SUBI evidenced
by the 1998-B SUBI Certificate and all monies due thereon and paid thereon or in
respect thereof;
2. the right to realize upon any property that underlies or may be
deemed to secure the 1998-B SUBI to the extent of amounts payable under the
1998-B SUBI Certificate; and
3. all proceeds of the foregoing.
(a)(2) In consideration of TLI's delivery to, or upon the order of, TMCC of
a subordinated non-recourse promissory note, the payment terms of which limit
amounts payable to the amounts
2
<PAGE>
due as policy premiums for the Residual Value Insurance Policies and which is
payable only from certain amounts paid as claims or as premium refunds under
the Residual Value Insurance Policies, 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:
1. all right, title and interest in and to the 1998-B SUBI evidenced
by the 1998-B SUBI Insurance Certificate and all monies due thereon and paid
thereon or in respect thereof;
2. the right to realize upon any property that underlies or may be
deemed to secure the 1998-B SUBI to the extent of amounts, payable under the
1998-B SUBI Insurance Certificate; and
3. all proceeds of the foregoing.
The parties hereto agree that such note represents the value of the 1998-B SUBI
Certificates.
(b) It is the express and specific intent of the parties that the transfer
of the 1998-B SUBI, the 1998-B SUBI Certificate and the 1998-B SUBI Insurance
Certificate from TMCC to TLI, as provided for in this Agreement, is and shall be
construed for all purposes as a true, complete and absolute sale of the 1998-B
SUBI, the 1998-B SUBI Certificate and the 1998-B SUBI Insurance Certificate and
all of the related property and rights as described in subsection (a) above.
The parties hereto represent and agree that the 1998-B SUBI, the 1998-B SUBI
Certificate and the 1998-B SUBI Insurance Certificate are hereby transferred
from TMCC to TLI for fair consideration and without the intent to hinder, delay
or defraud creditors of TMCC or TLI.
(c) In connection with the foregoing conveyance, TMCC agrees to record and
file, at its own expense, a financing statement with respect to the 1998-B SUBI
and 1998-B SUBI Certificate and all of the related property and rights specified
in subsection (a) above necessary (i) to provide third parties with notice of
the conveyance hereunder and (ii) to perfect the sale of the 1998-B SUBI, the
1998-B SUBI Certificate, the 1998-B SUBI Insurance Certificate and the proceeds
thereof to TLI, (as well as to file any continuation statements required by
applicable state law to maintain the perfection afforded by the filing of such
financing statement), and to deliver a file-stamped copy of each such financing
statement (or continuation statement) or other evidence of such filings (which
may, for purposes of this Section, consist of telephone confirmation of such
filing with the file stamped copy of each such filing to be provided to TLI in
due course), as soon as is practicable after receipt by TMCC thereof.
The parties hereto intend that the conveyance hereunder be a sale. In the
event that the conveyance hereunder is not for any reason considered a sale, the
conveyance described above and all filings described in the foregoing paragraph
shall give TLI a first priority perfected security interest in, to and under the
property and rights conveyed hereunder and all proceeds of any of the foregoing
and this Agreement shall constitute a security agreement under applicable law.
3
<PAGE>
SECTION 2.02. ACCEPTANCE BY TLI.
TLI agrees to comply with all covenants and restrictions applicable to an
owner of the 1998-B SUBI, the 1998-B SUBI Certificate and the 1998-B SUBI
Insurance Certificate, whether set forth therein, in the Titling Trust
Agreement, the 1998-B SUBI Supplement or otherwise, and assumes all obligations
and liabilities, if any associated therewith.
SECTION 2.03. TRANSFER OF THE CERTIFICATES.
In connection with the transfer of the 1998-B SUBI Certificate and the
1998-B SUBI Insurance Certificate, TLI has established a "securities account" as
such term is defined in Section 8-501 (a) of the UCC with the SUBI Securities
Intermediary (the "TLI SUBI Securities Account"). TLI shall accept the transfer
of the 1998-B SUBI Securities Certificate and the 1998-B SUBI Insurance
Certificate to the TLI SUBI Securities Account. TMCC hereby agrees to instruct
the SUBI Securities Intermediary to credit the transfer of the SUBI Certificate
and the 1998-B SUBI Insurance Certificate from the TMCC SUBI Securities Account
to the TLI SUBI Securities Account.
ARTICLE III
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 1998-B Securitization
Trustee, which shall be given only in the circumstances contemplated by Section
9.01 of the 1998-B Securitization Trust Agreement.
SECTION 3.02. GOVERNING LAW.
This Agreement 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 conflict of laws and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
SECTION 3.03. SEVERABILITY.
If 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 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.
4
<PAGE>
SECTION 3.04. BINDING EFFECT.
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. 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 1998-B SUBI
Certificate and/or the 1998-B SUBI Insurance Certificate (including without
limitation the 1998-B Securitization Trust and the holders of any securities
issued thereby), 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.
SECTION 3.09. NO PETITION.
TLI, as transferee of the 1998-B SUBI Certificate and the 1998-B SUBI
Insurance Certificate 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.
[SIGNATURES ON NEXT PAGE]
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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: /s/ GEORGE E. BORST
-------------------------------------
Name: George E. Borst
Title: Senior Vice President and
General Manager
TOYOTA LEASING, INC.
By: /s/ GREGORY WILLIS
-------------------------------------
Name: Gregory Willis
Title: President
<PAGE>
EXECUTION COPY
TOYOTA MOTOR CREDIT CORPORATION
and
U.S. BANK NATIONAL ASSOCIATION
as Trustee
------------
Indenture
dated as of September 1, 1998
------------
$1,500,000,000
TMCC Demand Notes
<PAGE>
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . . . . . .1
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.02. Incorporation by Reference of TIA. . . . . . . . . . . . . . . .1
Section 1.03. Rules of Construction. . . . . . . . . . . . . . . . . . . . . .2
ARTICLE II. THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 2.01. Form; Title and Terms. . . . . . . . . . . . . . . . . . . . . .2
Section 2.02. Execution and Authentication . . . . . . . . . . . . . . . . . .3
Section 2.03. Securities Register. . . . . . . . . . . . . . . . . . . . . . .5
Section 2.04. Paying Agent to Hold Money in Trust. . . . . . . . . . . . . . .5
Section 2.05. Holder Lists . . . . . . . . . . . . . . . . . . . . . . . . . .5
Section 2.06. Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . .5
Section 2.07. Replacement Securities . . . . . . . . . . . . . . . . . . . . .6
Section 2.08. Outstanding Securities . . . . . . . . . . . . . . . . . . . . .7
Section 2.09. Securities Not Outstanding . . . . . . . . . . . . . . . . . . .7
Section 2.10. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Section 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . .7
Section 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . .8
Section 2.13. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . .9
Section 2.14. Computation of Interest. . . . . . . . . . . . . . . . . . . . .9
ARTICLE III. REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Section 3.01. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE IV. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Section 4.01. Payment of Securities. . . . . . . . . . . . . . . . . . . . . .9
Section 4.02. Maintenance of Office or Agency; Paying Agent and
Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.03. Company Statement as to Compliance; Notice of Certain
Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE V. CONSOLIDATIONS AND MERGERS, ETC . . . . . . . . . . . . . . . . . . 11
Section 5.01. Company May Consolidate, Etc., Only on Certain Terms . . . . . 11
Section 5.02. Successor Person Substituted for Company . . . . . . . . . . . 12
ARTICLE VI. DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.02. Acceleration of Maturity; Rescission and Annulment . . . . . . 12
Section 6.03. Collection of Indebtedness and Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6.04. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . 14
Section 6.05. Trustee May Enforce Claims without Possession of
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.06. Application of Money Collected . . . . . . . . . . . . . . . . 15
</TABLE>
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(CONTINUED)
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Section 6.07. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 15
Section 6.08. Unconditional Right of Holders to Receive Principal and
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.09. Restoration of Rights and Remedies . . . . . . . . . . . . . . 16
Section 6.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . 16
Section 6.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . 17
Section 6.12. Control by Holders of Securities . . . . . . . . . . . . . . . 17
Section 6.13. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 17
Section 6.14. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII. TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.02. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . 20
Section 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . 20
Section 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.06. Reports by Trustee to Holders. . . . . . . . . . . . . . . . . 20
Section 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . 21
Section 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . 21
Section 7.09. Successor Trustee by Merger, Etc . . . . . . . . . . . . . . . 22
Section 7.10. Eligibility; Disqualification. . . . . . . . . . . . . . . . . 23
Section 7.11. Preferential Collection of Claims Against Company. . . . . . . 23
ARTICLE VIII. DEFEASANCE; SATISFACTION AND DISCHARGE. . . . . . . . . . . . . . . 23
Section 8.01. Defeasance of the Indenture. . . . . . . . . . . . . . . . . . 23
Section 8.02. Satisfaction and Discharge of the Indenture. . . . . . . . . . 24
Section 8.03. Survival of Certain Obligations. . . . . . . . . . . . . . . . 25
Section 8.04. Acknowledgment of Discharge by Trustee . . . . . . . . . . . . 25
Section 8.05. Application of Trust Money . . . . . . . . . . . . . . . . . . 25
Section 8.06. Repayment to the Company . . . . . . . . . . . . . . . . . . . 26
Section 8.07. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . . . . . . . . . . . . . 26
Section 9.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . 26
Section 9.02. With Consent of Holders. . . . . . . . . . . . . . . . . . . . 27
Section 9.03. Compliance with TIA. . . . . . . . . . . . . . . . . . . . . . 28
Section 9.04. Revocation and Effect of Consents. . . . . . . . . . . . . . . 28
Section 9.05. Notation on or Exchange of Securities. . . . . . . . . . . . . 29
</TABLE>
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(CONTINUED)
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Section 9.06. Trustee to Sign Amendments, Etc. . . . . . . . . . . . . . . . 29
Section 9.07. Effect of Supplemental Indentures. . . . . . . . . . . . . . . 29
ARTICLE X. MEETINGS OF AND ACTIONS BY HOLDERS. . . . . . . . . . . . . . . . . 30
Section 10.01. Purposes for Which Meetings may be Called. . . . . . . . . . . 30
Section 10.02. Manner of Calling Meetings . . . . . . . . . . . . . . . . . . 30
Section 10.03. Call of Meetings by Company or Holders . . . . . . . . . . . . 30
Section 10.04. Who May Attend and Vote at Meetings. . . . . . . . . . . . . . 31
Section 10.05. Regulations may be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment . . . . . . . . . . . . . 31
Section 10.06. Voting at the Meeting and Record to be Kept. . . . . . . . . . 32
Section 10.07. Exercise of Rights of Trustee or Holders May Not be
Hindered or Delayed by Call of Meeting. . . . . . . . . . . . 32
Section 10.08. Evidence of Action Taken by Holders. . . . . . . . . . . . . . 32
Section 10.09. Proof of Execution of Instruments and of Holding of
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 10.10. Right of Revocation of Action Taken. . . . . . . . . . . . . . 33
ARTICLE XI. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 11.01. TIA Controls . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 11.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 11.03. Communications by Holders with Other Holders . . . . . . . . . 35
Section 11.04. Certificate and Opinion as to Conditions Precedent . . . . . . 35
Section 11.05. Statements Required in Certificate or Opinion. . . . . . . . . 35
Section 11.06. Rules by Trustee, Paying Agent, Registrar. . . . . . . . . . . 36
Section 11.07. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11.08. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11.09. No Adverse Interpretation of Other Agreements. . . . . . . . . 36
Section 11.10. No Recourse Against Others . . . . . . . . . . . . . . . . . . 36
Section 11.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11.12. Duplicate Originals. . . . . . . . . . . . . . . . . . . . . . 36
Section 11.13. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11.14. Headings and Table of Contents . . . . . . . . . . . . . . . . 37
</TABLE>
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EXHIBITS
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<CAPTION>
<S> <C>
Annex I - Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .I-1
Exhibit A - Form of Security . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
Exhibit B - Form of Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-1
</TABLE>
v
<PAGE>
INDENTURE dated as of September 1, 1998, between Toyota Motor Credit
Corporation, a California corporation (the "Company"), and U.S. Bank National
Association, a national banking association, as trustee (the "Trustee").
RECITALS
A. The Company is duly authorized to execute and deliver this Indenture
and to provide for the issuance by the Company of the Securities as provided
herein.
B. All things have been done that are necessary to make the Securities,
when executed by the Company and authenticated and delivered by the Trustee
hereunder, the valid and binding legal obligations of the Company in accordance
with the terms of this Indenture.
C. For and in consideration of the premises and the purchase of the
Securities by the Holders, each party hereto agrees as follows for the benefit
of each other party and for the equal and ratable benefit of the Holders.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE.
SECTION 1.01. DEFINITIONS.
All capitalized terms used in this Indenture and not defined elsewhere
herein shall have the meanings assigned to them in Annex I, which is hereby
incorporated by reference in and made a part of this Indenture.
SECTION 1.02. INCORPORATION BY REFERENCE OF TIA.
Wherever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
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<PAGE>
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) unless otherwise expressly provided in this Indenture, an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP and all financial computations required under this
Indenture shall be made in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(7) "including" shall be deemed to mean "including, without
limitation".
ARTICLE II.
THE SECURITIES.
SECTION 2.01. FORM; TITLE AND TERMS.
The Securities and the Trustee's certificate of authentication thereon
shall be substantially in the forms set forth in Exhibit A hereto. The
Securities may have notations, legends or endorsements required by law or stock
exchange rules. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the Securities shall constitute a
part of, and are hereby incorporated by reference in and made a part of, this
Indenture and to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to their incorporation
herein.
The Securities shall be known and designated as the "TMCC Demand Notes" of
the Company. The aggregate original principal amount of Securities that may be
authenticated and delivered under this Indenture is limited to $1,500,000,000,
except as otherwise provided in Sections 2.06, 2.07 and 9.05. References herein
and in the forms of Securities to "Security" or
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<PAGE>
"Securities" shall include references to the principal amounts issued
thereunder as evidenced by the appropriate notation on the Schedules.
The Securities shall be issuable only in registered form, without coupons.
The minimum denominations of the Securities will be $0.01.
Interest on the Securities which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date, shall, except as otherwise provided
in Section 2.12, be paid to the Persons in whose names the Securities (or one or
more Predecessor Securities) are registered at the close of business on the
Record Date next preceding such Interest Payment Date. At the option of the
Company, payment of interest on the Securities due on any Interest Payment Date,
falling after a Record Date for the payment of interest on the Securities and on
or before the related Interest Payment Date, shall be paid by wire transfer to
an account specified by the Person entitled thereto as proven by the names
appearing in the Securities register.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
The Securities shall be executed on behalf of the Company by an Officer of
the Company. Any such signature may be by facsimile.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
All of the Securities to be issued under this Indenture, and all of the
principal amounts to be evidenced by the Securities need not be issued at the
same time and may be issued from time to time at the order of the Company as
herein provided for. The Securities and the principal amount in respect of the
Securities to be issued hereunder shall all be of the same series known as the
"TMCC Demand Notes", but need not have the same issue date, Stated Maturity
Date, Required Rate, or Interest Payment Date. It is envisioned that five
certificates representing potential investments related to the Securities shall
be issued hereunder and carry principal balances which will correspond to
amounts actually on deposit in the 1998-B SUBI Certificateholders' Account in
respect of the following amounts: (1) one certificate representing amounts
allocated as Class A-1 Monthly Interest Accrual Amounts, any Class A-1 Interest
Carryover Shortfall, Class A-2 Monthly Interest Accrual Amounts, any Class A-2
Interest Carryover Shortfall, Class A-3 Monthly Interest Accrual Amounts, any
Class A-3 Interest Carryover Shortfall, Class B Monthly Interest Accrual Amounts
and any Class B Interest Carryover Shortfall (the "Interest Demand Note") in a
maximum aggregate principal amount equal to $422,062,000; (2) one certificate
representing amounts allocated to make applications in reduction of the Adjusted
Class A-1 Certificate Balance in a maximum aggregate principal amount equal to
$335,000,000; (6) one certificate representing amounts allocated to make
applications in reduction of the Adjusted Class A-2 Certificate Balance in a
maximum principal amount equal to $575,000,000; (7) one certificate representing
amounts allocated to make applications in reduction of the Adjusted Class A-3
Certificate Balance in a maximum principal amount equal to $96,400,000; and (8)
one certificate representing amounts allocated to make applications in reduction
of the Adjusted Class B Certificate Balance in a maximum principal amount equal
to $71,538,000; provided that nothing herein shall limit the number of
certificates representing the Securities that may be issued hereunder. Each
certificate representing a Security
3
<PAGE>
will have a Schedule attached thereto indicating: (i) the amount of the
increase in the principal amount outstanding under such Security and the date
on which each principal amount under such Security was first issued, (ii) the
Stated Maturity Date for such principal amount, (iii) the Required Rate
applicable to such principal amount, (iv) the amount of the decrease in the
principal amount outstanding under such Security and the date on which such
principal amount under such Security was paid, (v) the amount of the interest
paid on such Security and the date on which such interest was paid and (vi)
the aggregate principal amount outstanding with respect to such certificate
representing a Security.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. Entries on the Schedule to any
such Security shall not be valid until the Trustee manually signs the space
provided for such entry as authentication of such increase or decrease in
outstanding principal amount of such Security. Such signature shall be
conclusive evidence that the Security and such entry has been authenticated
under this Indenture.
The Trustee shall authenticate Securities for original issue in any amount
not to exceed the maximum aggregate principal amount as aforesaid, upon a
written order of the Company signed by an Officer of the Company. The Trustee
shall annotate and initial the Schedule attached to a Security to indicate the
issuance of an additional principal amount of the Securities, upon either (i) a
written order of the Company signed by an Officer of the Company, or (ii) if an
Officer's Certificate has previously been delivered to the Trustee by the
Company specifying the names and titles of officers, employees or agents of the
Company eligible to give such an order, the order of any such officer, employee
or agent of the Company, which order may be by facsimile (promptly confirmed in
writing). Any such order shall specify the principal amount in respect of the
Securities to be issued and to which certificate such amount shall be allocable,
the applicable Required Rate, the Stated Maturity Date and the date on which
such issue of principal in respect of the Securities is to be authenticated.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities and the Schedules attached thereto. Unless otherwise
provided in the appointment, an authenticating agent may authenticate Securities
and the Schedules attached thereto whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company. The Trustee is
initially appointed as the authentication agent by the Company.
Notwithstanding the foregoing, in lieu of annotating the related Schedule
and initializing such entries, the Trustee may instead provide a written
confirmation to the Company of its receipt of and compliance with any Company
Order and of its receipt of each payment made by the Company in respect of any
principal amount of any Security or interest on any principal amount of any
Securities, which alternative written confirmations shall be deemed to be
conclusive evidence that the Trustee has received any such Company Order or
payment from the Company, in each case with the same force and effect as if the
Schedule had in fact been annotated and initialed as described above; provided
that the Company shall not be obligated to make any payment at the Maturity of
any Security unless and until the Trustee delivers to the Company the related
Schedule annotated with entries corresponding to each such alternative
confirmation and having each such annotation authenticated as described above.
4
<PAGE>
SECTION 2.03. SECURITIES REGISTER.
The Company shall keep or cause to be kept at the Corporate Trust Office or
at any office or agency of the Company where Securities may be presented for
registration of transfer or for exchange as provided in Section 4.02 a register
in which, subject to such reasonable regulations as the Company may prescribe,
the Company shall provide for the registration of Securities and registration of
transfers and exchanges of Securities as in this Article provided. The
Registrar appointed pursuant to Section 4.02 shall keep the register of the
Securities and of their transfer and exchange.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
Each Paying Agent appointed pursuant to Section 4.02 shall hold in trust
for the benefit of the Persons entitled thereto, without interest, all money
held by such Paying Agent for the payment of principal and interest on the
Securities (whether such money has been paid to it by the Company or any other
obligor on the Securities), and shall notify the Trustee in writing of any
Default by the Company (or any other obligor on the Securities) in making any
such payment. If the Company or a Subsidiary of the Company acts as Paying
Agent, it shall segregate the money and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and account for any funds disbursed and the Trustee may at any time
during the continuance of any payment Default, upon written request to a Paying
Agent, require such Paying Agent to pay all money held by it to the Trustee and
to account for any funds disbursed. Upon payment of all funds held by it to the
Trustee, the Paying Agent shall have no further liability for such money. As
provided in Section 6.04 hereof, in any bankruptcy, insolvency, reorganization
or other similar proceeding relative to the Company or any other obligor on the
Securities, the Trustee shall serve as Paying Agent for the Securities; provided
that the foregoing shall not relieve the Company of its obligations under
Section 4.02.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list of the names and addresses of the Holders
furnished to it or maintained by it in its capacity as Registrar. If and so
long as the Trustee is not the Registrar, in accordance with Section 312(a) of
the TIA, the Company shall furnish or cause to be furnished to the Trustee
semiannually not less than 30 days nor more than 60 days before each Interest
Payment Date and at such times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Holders including an identification of the Securities and the
aggregate amount thereof.
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) The Trustee will not authenticate or deliver any Security in
connection with any registration of transfer to any person unless the Trustee
has received a certification from the transferring Holder to the effect that (i)
it is no longer the Securitization Trustee of the 1998-B Securitization Trust
and the proposed transferee is its successor in such capacity, or (ii) a
Liquidation Event has occurred and such proposed transfer is made in
contemplation of a
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<PAGE>
liquidation of the trust assets. Each certificate shall bear a legend
containing the foregoing transfer restrictions.
(b) When Securities are presented to the Registrar or a co-Registrar
with a written request satisfying the requirements of clause (a) to register
the transfer of such Securities or to exchange such Securities for an equal
principal amount of Securities in other authorized denominations, the
Registrar or co-Registrar shall register the transfer or make the exchange if
its reasonable requirements for such transactions (which may include a
requirement that any Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar and the Trustee
duly executed by the Holder thereof or his attorney duly authorized in
writing) are met. To permit registration of transfers and exchanges as
provided herein, the Company shall execute and the Trustee shall authenticate
and deliver Securities at the Registrar's or a co-Registrar's written
request. All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company evidencing the
same debt and entitling the Holders thereof to the same benefits under this
Indenture as the Securities surrendered upon such registration of transfer or
exchange. No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith, other than in the case of exchanges under Section
9.05 hereof not involving any transfer.
SECTION 2.07. REPLACEMENT SECURITIES.
If a defaced or mutilated Security is surrendered to the Trustee or if
the Holder of a Security presents evidence to the reasonable satisfaction of
the Trustee that the Security has been lost, destroyed or stolen the Company
shall execute and the Trustee shall authenticate a replacement Security if
the Company's and the Trustee's reasonable requirements are met. The Trustee
or the Company may require an indemnity bond or other security, sufficient in
the reasonable judgment of both the Company and the Trustee, to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer
if a Security is replaced. The Company and the Trustee may charge such
Holder for their reasonable expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company,
whether or not the apparently destroyed, lost or stolen Security shall be at
any time enforceable by anyone, and such replacement Security shall be
entitled to the benefits of and subject to the limitations of rights set
forth in this Indenture.
The provisions of this Section, as amended or supplemented pursuant to
this Indenture with respect to particular Securities or generally, shall be
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities.
SECTION 2.08. OUTSTANDING SECURITIES.
Securities outstanding at any time under this Indenture are all Securities
that have been theretofore authenticated and delivered under this Indenture,
except (a) those canceled by the
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Trustee, (b) those delivered to the Trustee for cancellation, (c) those in
exchange for or in lieu of which other Securities have been authenticated and
delivered under this Indenture and (d) those described in this Section as not
outstanding.
Except as provided in Section 2.09 hereof, a Security does not cease to
be outstanding because the Company or any other obligor upon the Securities
or any Affiliate of the Company or of such other obligor holds the Security.
If a Security is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If on the Stated Maturity Date of any Securities, the Paying Agent
(other than the Company or a Subsidiary) holds U.S. Legal Tender sufficient
to pay all of the principal and interest due on the Securities payable on
that date, then on and after that date such Securities shall cease to be
outstanding and interest on them shall cease to accrue.
SECTION 2.09. SECURITIES NOT OUTSTANDING.
In determining whether the Holders of the required principal amount of
outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or whether a quorum is present
at a meeting of Holders of Securities, Securities owned by the Company or any
other obligor on the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver
or upon any such determination as to the presence of a quorum, only
Securities which a Trust Officer actually knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may
be regarded as outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the Securities
or an Affiliate of the Company or of such other obligor. The Trustee may
require an Officer's Certificate listing Securities owned by the Company or
any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor.
SECTION 2.10. [RESERVED].
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, each co-Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange or payment. The Trustee shall cancel all Securities surrendered for
registration of transfer, exchange, payment, replacement or cancellation.
Subject to Section 2.07 hereof, the Company may not execute new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation.
All canceled Securities held by the Trustee shall be destroyed and
certification of their destruction delivered to the Company, unless the
Company shall direct the Trustee, by a written order signed by an Officer of
the Company, to return the cancelled Securities to the Company.
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SECTION 2.12. DEFAULTED INTEREST.
If the Company fails to pay any principal of or interest on any Security
on the due date therefor (whether upon acceleration, at the related Stated
Maturity Date or otherwise), the Company shall pay, from and after the
expiration of any cure period, interest thereon, at the rate per annum borne
by the Securities, to the extent permitted by law. Any interest on any
Security which shall be payable, but shall not be punctually paid or duly
provided for, on any Interest Payment Date for such Security (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder
thereof on the relevant Record Date by virtue of having been such Holder; and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Person in whose name such Security (or a Predecessor Security
thereof) shall be registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which date shall be fixed in
the following manner:
(A) The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on such Security and
the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of U.S. Legal Tender equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit on or prior to the date of the proposed payment, such
U.S. Legal Tender when so deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided.
(B) Thereupon, the Trustee shall fix a "Special Record
Date" for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class, postage prepaid, to each
Holder of Securities at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Person in whose name such
Security (or a Predecessor Security thereof) shall be registered at
the close of business on such Special Record Date and shall no longer
be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after written notice given by
the Company to the Trustee of the proposed payment method pursuant to this
clause, such payment method shall be deemed practicable by the Trustee.
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Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer or in exchange
for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.13. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any Agent may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payments of principal of and, subject to Section 2.12, interest on
such Security and for all other purposes whatsoever (whether or not such
Security is overdue), and neither the Company nor the Trustee or any other
Agent shall be affected by notice to the contrary.
SECTION 2.14. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
ARTICLE III.
REDEMPTION
SECTION 3.01. REDEMPTION.
The Securities may not be redeemed at the option of the Company, in
whole or in part at any time prior to their respective Stated Maturities.
ARTICLE IV.
COVENANTS.
SECTION 4.01. PAYMENT OF SECURITIES.
The Company will punctually pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities and this
Indenture.
The Company will, on or prior to the day when any principal of or
interest on any of the Securities becomes payable, whether at the Stated
Maturity Date thereof, by demand for payment by any Holder of a Security (i)
if for any reason Standard & Poor's reduces the Company's short-term debt to
a rating less than A-1+ or the Company's long-term debt to a rating of less
than AA or Moody's reduces the Company's short-term debt to a rating less
than P-1 or the Company's long-term debt to a rating less than Aa3 and the
Trustee determines, based on advice of Morgan Stanley & Co. Incorporated, its
successor or its independent public accountants, that at such time one or
more Permitted Investments having substantially the same maturities, similar
demand features and bearing interest at the relevant Required Rates are
available and, based on oral or written advice to such effect from each
Rating Agency, that investment therein rather than in the Company's Demand
Notes will not, by itself, cause a Rating Agency to reduce or withdraw its
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rating of any Class of Certificates or (ii) in connection with any
Liquidation Event, in the form of Exhibit B hereto delivered to the Trustee,
surrender the Securities for repurchase, declaration of acceleration or
otherwise, and deposit with the Paying Agent (or, if the Company or a
Subsidiary of the Company is acting as Paying Agent, segregate and hold in
trust), in immediately available funds, no later than 12:00 noon (New York
City time), a sum in U.S. Legal Tender sufficient to pay the principal and
interest becoming due. Such sum shall be held in trust for the benefit of
the Holders entitled to such payment and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee in writing of its
action or failure so to act, and of the amount of each such payment made to
each Paying Agent.
On the second Business Day preceding each Monthly Allocation Date on
which Securities are to be issued or additional amounts are to be invested in
outstanding Securities, the Trustee will calculate the Commercial Paper Rate
for the relevant Interest Period for each Security in which an investment is
to be made, and shall inform the Company promptly in writing of each such
Commercial Paper Rate.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY; PAYING AGENT AND REGISTRAR.
The Company will maintain in Chicago, Illinois, an office or agency
where Securities may be presented or surrendered for payment ("Paying
Agent"), where Securities may be surrendered for registration of transfer or
exchange ("Registrar") and where notices and demands to or upon the Company
in respect of payments on the Securities or under this Indenture may be
served. Unless otherwise expressly provided herein, the Trustee, the Company
or a Subsidiary of the Company may act as Registrar, co-Registrar or Paying
Agent. The Company shall give prompt written notice to the Trustee and the
Holders of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company initially appoints the Trustee, as the initial Registrar and
Paying Agent in Chicago, Illinois, and designates, for the purposes of this
Section 4.02, such agent as an agency where notices and demands to or upon
the Company in respect of payments on the Securities or under this Indenture
may be served. The parties hereto agree such agency is not an agency for
service of process.
SECTION 4.03. COMPANY STATEMENT AS TO COMPLIANCE; NOTICE OF CERTAIN
DEFAULTS.
The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year, a written statement (which need not be contained in or
accompanied by an Officer's Certificate) signed by the principal executive
officer, the principal financial officer or the principal accounting officer
of the Company, stating that:
(a) a review of the activities of the Company during such year and of
its performance under this Indenture has been made under his or her
supervision, and
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(b) to the best of his or her knowledge, based on such review, (i) the
Company has complied with all the conditions and covenants imposed on it
under this Indenture throughout such year, or, if there has been a default in
the fulfillment of any such condition or covenant, specifying each such
default known to him or her and the nature and status thereof, and (ii) no
event has occurred and is continuing which is, or after notice or lapse of
time or both would become, an Event of Default, or, if such an event has
occurred and is continuing, specifying each such event known to him and the
nature and status thereof.
(c) The Company shall deliver to the Trustee, within five days after
the occurrence thereof, written notice of any event which after notice or
lapse of time or both would become an Event of Default pursuant to clause (c)
of Section 6.01.
ARTICLE V.
CONSOLIDATIONS AND MERGERS, ETC.
SECTION 5.01. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other
Person or Persons (whether or not affiliated with the Company), or successive
consolidations or mergers in which the Company or its successor or successors
shall be a party or parties, or shall prevent any conveyance, transfer or
lease of the property of the Company as an entirety or substantially as an
entirety, to any other Person (whether or not affiliated with the Company);
provided, however, that:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Company shall be the
surviving entity or the entity formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a Corporation organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia and
shall expressly assume, by an indenture (or indentures, if at such time there
is more than one Trustee) supplemental hereto, executed by the successor
Person and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of and interest on all the
Securities and the performance of every other covenant of this Indenture on
the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no
event which, after notice or lapse of time, would become an Event of Default,
shall have occurred and be continuing;
(3) either the Company or the successor Person shall have
delivered to the Trustee an Officer's Certificate and an Opinion of Counsel,
stating that such consolidation, merger, conveyance, transfer or lease and
such supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been complied
with.
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SECTION 5.02. SUCCESSOR PERSON SUBSTITUTED FOR COMPANY.
Upon any consolidation or merger or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 5.01, the successor Person formed by such
consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had been named as
the Company herein; and thereafter, except in the case of a lease to another
Person, the predecessor Person shall be released from all obligations and
covenants under this Indenture and the Securities.
ARTICLE VI.
DEFAULT AND REMEDIES.
SECTION 6.01. EVENTS OF DEFAULT.
The occurrence of any one of the following events for any reason
whatsoever, and whether voluntary, involuntary or by operation of law, shall
constitute an "Event of Default":
(a) default in the payment of any interest on any Security when such
interest becomes due and payable, and continuance of such default for a
period of 30 days; or
(b) default in the payment of the principal of any Security of such
series when it becomes due and payable at its Maturity, and continuance of
such default for a period of 10 days; or
(c) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture or the Securities, and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(d) any Insolvency Event of the Company.
SECTION 6.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Securities occurs and is
continuing, then the Trustee or the Holders of not less than 25% in principal
amount of the outstanding Securities may declare the principal of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal amount shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of not less than a majority in principal
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amount of the outstanding Securities, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
of money sufficient to pay:
(A) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel;
(B) all due and overdue installments of interest on all
Securities;
(C) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by or provided for in such Securities; and
(D) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate borne by or
provided for in such Securities; and
(2) all Events of Default with respect to Securities, other
than the non-payment of the principal of, and interest on Securities which
shall have become due solely by such declaration of acceleration, shall have
been cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 6.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if:
(1) default is made in the payment of any installment of
interest on any Security when such interest shall have become due and payable
and such default continues for a period of 30 days; or
(2) default is made in the payment of the principal of any
Security at its Maturity, and such default continues for a period of 10 days;
the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount of money then due
and payable with respect to such Securities with interest upon the overdue
principal and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installments of interest at the rate borne by
or provided for in such Securities, and, in addition thereto, such further
amount of money as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
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If the Company fails to pay the money it is required to pay the Trustee
pursuant to the preceding paragraph forthwith upon the demand of the Trustee,
the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the money so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and
may enforce the same against the Company or any other obligor upon such
Securities and collect the money adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other
obligor upon such Securities wherever situated.
If an Event of Default with respect to Securities occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant
or agreement in this Indenture or such Securities or in aid of the exercise
of any power granted herein or therein, or to enforce any other proper
remedy.
SECTION 6.04. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of any overdue principal
and/or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities, of the principal
and interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents or counsel) and of the Holders of Securities allowed in such
judicial proceeding; and
(ii) to collect and receive any money or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder of Securities to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly
to the Holders of Securities, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee
relating to this Indenture.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder
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thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security in any such proceeding.
SECTION 6.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or any of the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery or judgment, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, shall be for the ratable benefit of each and every Holder of a
Security in respect of which such judgment has been recovered.
SECTION 6.06. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee relating to this Indenture;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities for principal and interest in respect of which or for the benefit
of which such money has been collected, ratably, without preference or
priority of any kind, according to the aggregate amounts due and payable on
such Securities and Coupons for principal and interest, respectively;
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 6.07. LIMITATION ON SUITS.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities;
(2) the Holders of not less than 25% in principal amount of
the outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity satisfactory to it against the costs, expenses and liabilities
(including counsel's fees, expenses and disbursements) to be incurred in
compliance with such request;
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(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture or any Security to affect, disturb or prejudice
the rights of any other such Holders, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under
this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all such Holders.
SECTION 6.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Security, as the
case may be, on the respective Stated Maturity Date or other Maturity
therefor specified in such Security (subject in each case to the respective
cure periods set forth in Section 6.01) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
SECTION 6.09. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of a Security has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case the
Company, the Trustee and each such Holder shall, subject to any determination
in such proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee
and each such Holder shall continue as though no such proceeding had been
instituted.
SECTION 6.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 2.07, no right or remedy herein conferred upon or reserved to the
Trustee or to each and every Holder of a Security is intended to be exclusive
of any other right or remedy, and every right and remedy, to the extent
permitted by law, shall be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity
or otherwise. The assertion or employment of any right or remedy hereunder,
or otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
SECTION 6.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or
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constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
any Holder of a Security may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by such Holder, as the case may be.
SECTION 6.12. CONTROL BY HOLDERS OF SECURITIES.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct in writing the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series provided that:
(1) such direction shall not be in conflict with any law or
regulation, with this Indenture or with the Securities of such series;
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction;
(3) such direction is not unduly prejudicial to the rights of
the other Holders of Securities of such series not joining in such action;
and
(4) such direction shall not, in the good faith determination
of any Trust Officer of the Trustee, subject the Trustee to personal
liability unless such Holders have provided indemnity to the Trustee
satisfactory to it.
SECTION 6.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities on behalf of the Holders of all the Securities may
waive any past default hereunder with respect to such series and its
consequences, except a default:
(1) in the payment of the principal of or interest on any
Security which has not been cured as provided in Section 6.02; or
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
SECTION 6.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such
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suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by
the Company, the Trustee or by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the outstanding
Securities, or to any suit instituted by any Holder of any Security for the
enforcement of the payment of the principal of or interest on any Security on
or after the respective Maturities expressed in such Security or interest on
any overdue principal of any Security.
ARTICLE VII.
TRUSTEE.
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture
and use the same degree of care and skill in their exercise as a prudent
person would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or obligations
shall be implied in this Indenture which are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture, but need not
verify the accuracy of the contents thereof.
(c) Neither the Trustee nor any of its officers, directors or employees
shall be liable for its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
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(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.12 hereof.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties or obligations hereunder or in the exercise
of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Whether or not expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money
held in trust by the Trustee need not be segregated from other funds except
to the extent required by law.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders, unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it, against the costs,
expenses and liability (including counsel's fees, expenses and disbursements)
which might be incurred by the Trustee in compliance with such request or
direction.
SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to the provisions of Section 7.01 hereof:
(a) The Trustee may conclusively rely and be fully protected in acting
or refraining from acting on any document, resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order or
approval believed by it to be genuine and to have been signed or presented by
the proper Person. The Trustee need not investigate any fact or matter
stated in the document.
(b) Whenever in the administration of its duties and obligations
pursuant to this Indenture, before the Trustee acts or refrains from acting,
it may require an Officer's Certificate and an Opinion of Counsel, which
shall conform to Section 11.05. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate or opinion. The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys, agents, custodians and
nominees and shall not be responsible for the misconduct or negligence of any
attorney, agent, custodian or nominee appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
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(e) In the event that the Trustee is also acting as Paying Agent,
authenticating agent or Registrar hereunder, the rights and protections
afforded to the Trustee pursuant to this Article VII shall also be afforded
to such Paying Agent, authenticating agent or Registrar.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Company or its
Subsidiaries or Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee
must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities or any money paid to the Company or upon the
Company's written direction under any provision hereof, and the Trustee shall
not be accountable for the Company's use of the proceeds from the Securities,
and the Trustee shall not be responsible for any statement in the Securities
other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or an Event of Default occurs and is continuing and it is
actually known to a Trust Officer of the Trustee, the Trustee shall mail to
each Holder notice of the Default or Event of Default within 90 days after it
occurs; provided that, except in the case of a Default or an Event of Default
in payment of principal of or interest on any Security, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interest of the
Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to each Holder, and each other
Person so entitled under TIA Section 313(c), a brief report dated as of such
May 15 that shall comply with TIA Section 313(a). The Trustee need not send
such report if such report is not required by TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the Commission and each stock exchange,
if any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become listed on
any stock exchange prior to such listing.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust.
The Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such
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expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense incurred by it and its officers,
directors and employees including, without limitation, the cost and expense
of enforcement of this Indenture against the Company and of defending itself
against any claim (whether asserted by any Holder or the Company or
otherwise) unless the Trustee or its officers, directors and employees acted
with negligence, willful misconduct or bad faith on its part, arising out of
or in connection with the administration of this trust or any trust created
under Section 8.01 or 8.02 and its duties hereunder. The Trustee shall
notify the Company, as soon as is reasonably practicable, of any claim
asserted against the Trustee for which it may seek indemnity; PROVIDED,
HOWEVER that the Trustee's failure to provide such notice shall not
constitute a waiver of its rights under this Section 7.07. The Company need
not reimburse any expense or indemnify against any loss or liability incurred
by the Trustee through negligence, willful misconduct or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or Property
held or collected by the Trustee, in its capacity as Trustee, except money or
Property held in trust to pay principal of or interest on particular
Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(d) hereof, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any federal or state bankruptcy, insolvency,
reorganization or similar law.
The provisions of this Section 7.07 shall survive the termination of
this Indenture or the earlier resignation or termination of the Trustee.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company in writing and
mailing notice of such resignation to the Holders. The Holders of at least a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the Company and the Trustee in writing and may
appoint a successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged, by a court of competent
jurisdiction, a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its Property; or
(4) the Trustee becomes legally or otherwise incapable of
acting under and in accordance with the provisions of this Indenture.
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If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee, unless the Holders have appointed a successor Trustee in
accordance with the previous paragraph. Within one year after the successor
Trustee takes office, the Holders of a majority in principal amount of the
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance
of appointment as provided in this Section 7.08 and payment to the prior
Trustee of all sums due under Section 7.07 hereof.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all Property held by it as Trustee
to the successor Trustee, subject to the lien provided in Section 7.07
hereof, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder. The predecessor Trustee shall not
be liable for any acts or omissions of any successor Trustee and the
successor Trustee shall not be liable for any acts or omissions of any
predecessor Trustee.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the outstanding Securities
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 above shall continue for
the benefit of the retiring or removed Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall have a combined
capital and surplus of at least $25,000,000 as set forth in its most recent
published annual report of condition. Neither the Company nor any Person
directly or indirectly controlling, controlled by, or under common control
with the Company shall serve as Trustee. The Trustee shall comply with TIA
Section 310(b).
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SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII.
DEFEASANCE; SATISFACTION AND DISCHARGE.
SECTION 8.01. DEFEASANCE OF THE INDENTURE.
The Company shall be deemed to have satisfied and terminated all of its
obligations under this Indenture (subject to Section 8.03 hereof) if:
(1) the Company irrevocably shall have deposited in trust
with the Trustee, pursuant to an irrevocable trust agreement in form
reasonably satisfactory to the Trustee, as trust funds in trust solely for
the benefit of the Holders for that purpose, U.S. Legal Tender, in such
amounts as are sufficient, without consideration of the investment of any
such U.S. Legal Tender and after payment of all federal, state and local
taxes or other charges or assessments in respect thereof payable by the
Trustee, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to, and in
form reasonably satisfactory to, the Trustee, to pay the principal of and
interest on the outstanding Securities on the dates on which such payments
are due and payable in accordance with the terms of this Indenture and of the
Securities, provided that the Trustee shall have been irrevocably instructed
in writing to apply such U.S. Legal Tender to the payment of said principal
and interest on the Securities;
(2) no Default or Event of Default shall have occurred or be
continuing on the date of such deposit or shall occur on or before the 366th
day after the date of such deposit;
(3) such deposit shall not result in a breach or violation
of, or constitute a default under, this Indenture or any other instrument or
agreement to which the Company is a party or by which it or its Property is
bound;
(4) the Company shall have delivered to the Trustee an
Opinion of Counsel in form satisfactory to the Trustee to the effect that
Holders of the Securities will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and the defeasance
contemplated hereby and will be subject to Federal income tax in the same
amounts and in the same manner and at the same time as would have been the
case if such deposit and defeasance had not occurred and that the deposit is
not subject to the control of any bankruptcy court;
(5) such defeasance shall not cause the Securities, if then
listed on any national securities exchange registered under the Exchange Act,
to be delisted;
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(6) such deposit shall not result in the Company, the Trustee
or the irrevocable trust becoming or being deemed an "investment company"
under the Investment Company Act of 1940, as amended; and
(7) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent specified herein relating to the defeasance contemplated
by this Section 8.01 have been complied with.
In the event all or any portion of the Securities are to be redeemed
through such irrevocable trust, the Company shall make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of
notice of such redemption or redemptions by the Trustee in the name and at
the expense of the Company.
SECTION 8.02. SATISFACTION AND DISCHARGE OF THE INDENTURE.
In addition to its rights under Section 8.01 above, the Company may
terminate all of its obligations under this Indenture (subject to Section
8.03 hereof) if:
(1) either
(A) all Securities theretofore authenticated and delivered
(other than Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.07 hereof)
have been delivered to the Trustee for cancellation; or
(B) all Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year;
and the Company, in the case of (i) or (ii) above, has
irrevocably deposited in trust with the Trustee, pursuant to an
irrevocable trust agreement in form reasonably satisfactory to the
Trustee, as trust funds in trust solely for the benefit of the Holders
for that purpose, an amount of U.S. Legal Tender sufficient, without
consideration of the investment thereof and after payment of all
federal, state and local taxes or other charges or assessments in
respect thereof payable by the Trustee, to pay the principal of and
interest on the outstanding Securities on the dates on which such
payments are due and payable in accordance with the terms of this
Indenture and of the Securities, provided that the Trustee shall have
been irrevocably instructed in writing to apply such U.S. Legal Tender
to the payment of said principal and interest on the Securities;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
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(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent specified herein relating to the satisfaction and discharge of this
Indenture pursuant to this Section 8.02 have been complied with.
SECTION 8.03. SURVIVAL OF CERTAIN OBLIGATIONS.
Notwithstanding the defeasance of this Indenture or the satisfaction and
discharge of this Indenture referred to in Section 8.01 and Section 8.02
above, respectively, the respective obligations of the Company and the
Trustee under Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.11,
2.13, 2.14, Sections 4.01, 4.02, 4.03, 6.08, 7.07, 7.08, 7.09, 7.10, 7.11,
8.03, 8.04, 8.05, 8.06 and 8.07, Article IX, and Sections 11.01, 11.02,
11.06, 11.07, 11.08, 11.10, 11.11 and 11.13 hereof shall survive until the
Securities are no longer outstanding. Thereafter the obligations of the
Company and the Trustee under Sections 7.07, 8.05, 8.06, 8.07 and 11.10
hereof shall survive.
SECTION 8.04. ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE.
Subject to Section 8.07 below and after the Company has delivered to the
Trustee an Officer's Certificate and an Opinion of Counsel, each stating that
all conditions precedent referred to in Section 8.01 or Section 8.02, as the
case may be, relating to the defeasance or satisfaction and discharge of this
Indenture have been complied with, the Trustee upon written request of the
Company shall acknowledge in writing the defeasance or the satisfaction and
discharge, as the case may be, of this Indenture and the discharge of the
Company's obligations under this Indenture except for those surviving
obligations specified in Section 8.03 above. The Company shall reimburse the
Trustee for reasonable costs and expenses incurred by it in the performance
of its duties and obligations under this Section 8.04.
SECTION 8.05. APPLICATION OF TRUST MONEY.
The Trustee shall hold any U.S. Legal Tender deposited with it in the
irrevocable trust established pursuant to Section 8.01 or 8.02, as the case
may be. The Trustee shall apply the deposited U.S. Legal Tender through the
Paying Agent (other than the Company or a Subsidiary or Affiliate of the
Company), in accordance with this Indenture and the terms of the irrevocable
trust agreement, to the payment of principal of and interest on the
Securities as and when the same become due and payable. The U.S. Legal
Tender so held in trust shall not be part of the trust estate under this
Indenture, but shall constitute a separate trust fund for the benefit of all
Holders entitled thereto.
SECTION 8.06. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall pay to the Company upon written
request, and, if applicable, in accordance with the irrevocable trust
established pursuant to Section 8.01 or 8.02 above, any U.S. Legal Tender
held by them for the payment of principal of or interest on the Securities
that remains unclaimed for two years after the date on which such payment
shall have become due (whether on or before the related Stated Maturity
Date); provided, however, that, before being required to make any such
payment to the Company, the Trustee may, at the
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expense of the Company, cause to be mailed to the Holders of such Securities,
at their last addresses as they appear on the Securities register, notice
that such moneys remain unclaimed and that, after a date specified in said
notice, the balance of such moneys then unclaimed will be returned to the
Company. After payment to the Company as aforesaid, Holders entitled to such
moneys must look to the Company for such payment unless an applicable
abandoned property law designates another Person.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender in
accordance with Section 8.01 or 8.02 hereof by reason of any legal proceeding or
by reason of any order or judgment of any court or Governmental Authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01 or 8.02, as the case may be until
such time as the Trustee or Paying Agent is permitted to apply all such funds in
accordance with Section 8.01 or 8.02, as the case may be, and 8.05; provided,
however, that if the Company has made any payment of principal of or interest on
any Securities because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the U.S. Legal Tender held by the Trustee.
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS.
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee, together, may amend or supplement this
Indenture or the Securities without notice to or consent of any Holder (i) to
cure any ambiguity, defect or inconsistency, or to make any other provisions
with respect to matters or questions arising under this Indenture, provided that
any such action does not, in the good faith judgment of the Company, materially
and adversely affect the rights or interests of any Holder of Securities, (ii)
to add to the covenants and agreements of the Company such further covenants and
agreements as the Board of Directors of the Company shall consider to be for the
protection or benefit of the Holders (including to add any Events of Default),
(iii) to add to or change or eliminate any provision of this Indenture as shall
be necessary or desirable in accordance with any amendments to the Trust
Indenture Act, provided such action does not adversely affect the rights or
interests of any Holder of Securities and (iv) to secure all of the Securities.
In addition to the requirements set forth in Section 9.06 herein, the Trustee
may require delivery of an Opinion of Counsel to the effect that such amendment
will not materially and adversely affect the interest of any Certificateholder
in connection with any such amendment or supplement, and the Trustee shall be
fully protected in relying upon such Opinion of Counsel.
In addition, this Indenture may be amended or supplemented by the Trustee
and the Company without the consent of any Holder or of any Certificate Owner
with respect to the Investor Certificates issued pursuant to the 1998-B
Securitization Trust Agreement or of the Trustee of the 1998-B Securitization
Trust to (i) reflect changes necessary or appropriate in
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connection with any event described under Section 5.01, Section 7.08 or
Section 7.09 or (ii) to surrender any right or power reserved to or conferred
upon the Company.
SECTION 9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.08 and the next succeeding paragraph, the Company,
when authorized by a resolution of its Board of Directors, and the Trustee with
the written consent of the Holders of at least a majority in aggregate principal
amount of the outstanding Securities (which consent will not be given except at
the written direction of Investor Certificateholders of at least 25% in
aggregate principal amount of the Class A Certificates) may amend or supplement
this Indenture or the Securities for the purpose of adding any provisions to or
changing in any manner, or eliminating any other provisions of this Indenture or
modifying in any manner the rights with respect to the Securities. Subject to
Section 6.08 and the next succeeding paragraph, the Holders of at least a
majority in aggregate principal amount of the outstanding Securities may waive
compliance by the Company with any provision of or obligation under this
Indenture or the Securities without notice to any other Holders.
Notwithstanding anything to the contrary in the foregoing provisions of
this Section 9.02, without the consent of each Holder and Investor
Certificateholder affected, no amendment, supplement or waiver, including a
waiver pursuant to Section 6.02, may:
(1) reduce the percentage in principal amount of the outstanding
Securities the consent of whose Holders is required for any amendment or
supplement to this Indenture, for any waiver (of compliance with any obligation
or provision of this Indenture or of certain Defaults or Events of Default
hereunder or their consequences) provided for in this Indenture, or for a
rescission of acceleration of the Securities pursuant to Section 6.02, or reduce
the requirements pursuant to Section 10.05 for a quorum or voting;
(2) reduce the rate or change the time for payment of interest
on any Security;
(3) reduce the principal amount of any Security;
(4) alter the repurchase provisions of any Security in a manner
adverse to any Holder thereof, or change the Stated Maturity of any Security;
(5) waive any default in the payment of the principal of or
interest on any Security which has not been cured as provided in Section 6.02;
(6) impair the right of Holders to institute suit for the
enforcement of any payment of the principal of or interest on the Securities on
or after the respective due dates therefor (after the expiration of any
applicable cure period);
(7) make any changes in Section 6.02, 6.08 or this second
paragraph of Section 9.02;
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(8) change any obligation of the Company to maintain an office
or agency in the place and for the purpose specified in Section 4.02 or make the
Securities payable in any coin or currency other than U.S. Legal Tender;
(9) make any change to or modify the priority between the
Holders of the Securities and any other creditors of the Company; or
(10) provide for uncertificated Securities in addition to
certificated Securities.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
SECTION 9.03. COMPLIANCE WITH TIA.
Every amendment to or waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
such Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives
written notice of revocation before the date on which the Trustee receives an
Officer's Certificate certifying that the Holders of the requisite principal
amount of Securities have consented to the amendment, supplement or waiver.
Such amendment, waiver or supplement, as the case may be, shall be effective
upon receipt by the Trustee of such Officer's Certificate.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
two sentences of the immediately preceding paragraph, those Persons who were
Holders at the close of business on such record date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
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All Holders that consent to such modification, waiver or action in the
manner and within the time period requested shall be entitled to receive the
consideration, if any, offered for such consent.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
has so determined, the Company in exchange for the Security may execute and the
Trustee shall authenticate a new Security of like kind that reflects the changed
terms.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall be entitled to receive, and shall be fully protected in
relying upon, an Officer's Certificate and an Opinion of Counsel stating that
the execution of any amendment, supplement or waiver authorized pursuant to this
Article IX is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise. In signing or refusing to sign such amendment or
supplement, the Trustee shall be entitled to receive and, subject to Section
7.01 hereof, shall be fully protected in relying upon, an Officer's Certificate
and an Opinion of Counsel as conclusive evidence that such amendment or
supplement is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms. The Company shall not sign an amendment or
supplement until its Board of Directors approves thereof.
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplement or amendment to this Indenture in
accordance with this Article, this Indenture shall be modified in accordance
therewith and such supplement or amendment shall form a part of the Indenture
for all purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered shall be bound thereby. Any Holder and every
subsequent Holder of a Security (or portion thereof) shall be bound by any
waivers authorized or obtained by this Article.
ARTICLE X.
MEETINGS OF AND ACTIONS BY HOLDERS.
SECTION 10.01. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article X for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to waive or to consent to the waiving of any
Default or Event of Default
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hereunder and its consequences, or to take any other action authorized to be
taken by Holders pursuant to any of the provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant to the
provisions of Article VII;
(c) to consent to an amendment, supplement or waiver pursuant to the
provisions of Section 9.02; or
(d) to take any other action (i) authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount of the Securities under
any other provision of this Indenture, or authorized or permitted by law or (ii)
which the Trustee deems necessary or appropriate in connection with the
administration of this Indenture.
SECTION 10.02. MANNER OF CALLING MEETINGS.
The Trustee may at any time call a meeting of Holders to take any action
specified in Section 10.01 hereof, to be held at such time and at such place in
New York, New York or elsewhere as the Trustee shall determine. Notice of every
meeting of Holders, setting forth the time and place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be mailed
by the Trustee, first-class postage prepaid, to the Company, and to the Holders
of the Securities at their last addresses as they shall appear on the
registration books of the Registrar, not less than 10 nor more than 60 days
prior to the date fixed for a meeting.
Any meeting of Holders shall be valid without notice if the Holders of all
Securities then outstanding are present in Person or by proxy, or if notice is
waived before or after the meeting by the Holders of all Securities outstanding,
and if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
SECTION 10.03. CALL OF MEETINGS BY COMPANY OR HOLDERS.
In case at any time the Company, pursuant to a Certified Resolution of its
Board of Directors delivered to the Trustee, or the Holders of not less than 10%
in aggregate principal amount of the Securities then outstanding, shall have
requested the Trustee to call a meeting of Holders to take any action specified
in Section 10.01 hereof, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or the Holders of Securities in the amount above specified may
determine the time and place in New York City or elsewhere for such meeting and
may call such meeting for the purpose of taking such action, by notice given as
provided in Section 10.02.
SECTION 10.04. WHO MAY ATTEND AND VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders, a Person shall (a) be a
registered Holder of one or more Securities, or (b) be a Person appointed by an
instrument in writing as proxy for the registered Holder or Holders of
Securities. The only Persons who shall be entitled to be present or to speak at
any meeting of Holders shall be the Persons entitled to vote at such
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meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 10.05. REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF THE MEETING;
VOTING RIGHTS; ADJOURNMENT.
Notwithstanding any other provision of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of Holders,
in regard to proof of the holding of Securities and of the appointment of
proxies, and in regard to the appointment and duties of inspectors of votes, and
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall think appropriate. Such regulations may fix a record date and time for
determining the Holders of record of Securities entitled to vote at such
meeting, in which case those and only those Persons who are Holders of
Securities at the record date and time so fixed, or their proxies, shall be
entitled to vote at such meeting whether or not they shall be such Holders at
the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders as provided in Section 10.03, in which case the Company or
the Holders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the Holders of a majority in principal
amount of the Securities represented at the meeting and entitled to vote.
At any meeting each Holder or proxy shall be entitled to vote with respect
to the outstanding Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any
Securities challenged as not outstanding and ruled by the chairman of the
meeting to be not outstanding. The chairman of the meeting shall not have the
right to vote other than by virtue of Securities held by him or instruments in
writing as aforesaid duly designating him as the proxy to vote on behalf of
other Holders. At any meeting of Holders, the presence of Persons holding or
representing a majority of the principal amount of the outstanding Securities
shall be sufficient for a quorum. Any meeting of Holders duly called pursuant
to the provisions of Sections 10.02 or 10.03 may be adjourned from time to time
by vote of the Holders of a majority in aggregate principal amount of the
Securities represented at the meeting and entitled to vote, and the meeting may
be held as so adjourned without further notice.
Except as limited by Sections 6.02 and 6.08 and the second paragraph of
Section 9.02, any resolution presented to a meeting at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the Holders of a majority
in principal amount of the outstanding Securities.
SECTION 10.06. VOTING AT THE MEETING AND RECORD TO BE KEPT.
The vote upon any resolution submitted to any meeting of Holders shall be
by written ballots on which shall be subscribed the signatures of the Holders of
Securities or of their representatives by proxy and the principal amount of the
Securities voted by the ballot. The
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permanent chairman of the meeting shall appoint two inspectors of votes, who
shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified
written reports in duplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Holders shall be prepared by
the secretary of the meeting and there shall be attached to such record the
original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more Persons having knowledge of the facts,
setting forth a copy of the notice of the meeting and showing that such
notice was mailed as provided in Section 10.02 or Section 10.03. The record
shall be signed and verified by the affidavits of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.07. EXERCISE OF RIGHTS OF TRUSTEE OR HOLDERS MAY NOT BE HINDERED
OR DELAYED BY CALL OF MEETING.
Nothing contained in this Article X shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Holders under any of the provisions of this Indenture or of
the Securities.
SECTION 10.08. EVIDENCE OF ACTION TAKEN BY HOLDERS.
(a) In addition to the foregoing provisions of this Article X, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing, or
by combination of such instrument or instruments and the record of a meeting of
Holders duly called and held in accordance with this Article X. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee. Proof of execution
of any such instrument or of a writing appointing any such agent, or of the
holding by any Person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Article.
(b) Any request, demand, authorization, direction, notice, consent, waiver
or other action of the Holder of any Security in accordance with this Section
10.08 shall bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(c) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other action in accordance
with this Section 10.08, the
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Company may, at its option, by or pursuant to an Officer's Certificate
delivered to the Trustee, fix in advance a record date for the determination
of Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or such other act, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other act may be given
before or after such record date, but only those Persons who were Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
percentage of outstanding Securities have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other act, and for that purpose the outstanding Securities shall be computed
as of such record date; provided, that no such authorization, agreement or
consent by the Holders on the record date shall be deemed effective unless
such request, demand, authorization, direction, notice, consent, waiver or
other act shall become effective pursuant to the provisions of paragraph (a)
of this Section 10.08 not later than 90 days after the record date.
SECTION 10.09. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES.
The execution of any instrument by a Holder or his agent or proxy may be
proved in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee, and the holding of Securities shall be proved by the Security register
or by a certificate of the Registrar.
SECTION 10.10. RIGHT OF REVOCATION OF ACTION TAKEN.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 10.08, of the taking of any action by the Holders of the
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any Holder of a Security the serial
number of which is shown by the evidence to be included among the serial numbers
of the Securities the Holders of which have consented to such action may, by
filing written notice at the Corporate Trust Office and upon proof of holding as
provided in this Article, revoke such action so far as concerns such Security.
After such time, such action shall be conclusive and binding upon such Holder
and the Securities issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
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ARTICLE XI.
MISCELLANEOUS.
SECTION 11.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
SECTION 11.02. NOTICES.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company:
Toyota Motor Credit Corporation
19001 South Western Avenue
Torrance, California 90501
Telecopier: (310) 787-6194
Attention: Treasury Department
if to the Trustee:
U. S. Bank National Association
111 E. Wacker Drive, Suite 3000
Chicago, Illinois 60601
Telecopier: (312) 228-9401
Attention: TMCC Demand Notes
The Company or the Trustee by written notice to the other may designate
additional or different addresses as shall be furnished in writing by either
party. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when receipt is acknowledged, if telecopied; and five days after
mailing if sent by registered or certified mail (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Holder shall be mailed to him by
first class mail, postage prepaid, at his address as it appears on the register
of the Registrar and shall be sufficiently given to such Holder if so mailed
within the time prescribed. If the Company mails a notice or communication to
Holders, it shall simultaneously mail a copy to the Trustee.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
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<PAGE>
SECTION 11.03. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officer's Certificate (which shall include the statements
set forth in Section 11.05 hereof) stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with (and, if applicable, setting forth in
reasonable detail any financial calculations providing the basis of such
opinion);
(2) an Opinion of Counsel (which shall include the statements
set forth in Section 11.05 hereof) stating that, in the opinion of such counsel,
all such conditions precedent have been complied with; and
(3) in the case of conditions precedent compliance with which is
subject to verification by accountants, the Company shall comply with Section
314(c)(3) of the Trust Indenture Act of 1939 ("TIA").
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each Officer's Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may rely on
an Officer's Certificate or certificates of public officials.
At the request of the Trustee, any Officer's Certificate or Opinion of
Counsel shall address any particular condition precedent to such action.
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<PAGE>
SECTION 11.06. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 11.07. LEGAL HOLIDAYS.
If a payment date is not a Business Day at a particular place where the
principal of or interest on the Securities is payable, payment may be made on
the next succeeding day that is a Business Day at such place of payment, and no
interest shall accrue for the intervening period.
SECTION 11.08. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD (TO THE EXTENT
PERMITTED BY LAW) TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder, Affiliate or incorporator, as
such, of the Company shall not have any liability for any obligations of the
Company under the Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such Persons from such liability.
Such waivers and releases are part of the consideration for the issuance of the
Securities.
SECTION 11.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities shall
bind their successors. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 11.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13. SEVERABILITY.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or enforceable, the validity, legality and enforceability of
the remaining provisions shall not in any
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way be affected or impaired thereby, and a Holder shall have no claim
thereunder for or against any party hereto.
SECTION 11.14. HEADINGS AND TABLE OF CONTENTS.
The headings and Table of Contents in this Indenture are for convenience of
reference only and shall not be deemed a part of this Indenture or limit or
otherwise affect the meaning hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
TOYOTA MOTOR CREDIT CORPORATION
By: /s/ GEORGE E. BORST
-------------------------------------------
Name: George E. Borst
Title: Senior Vice President and General
Manager
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ STEVEN E. CHARLES
-------------------------------------------
Name: Steven E. Charles
Title: Vice President
<PAGE>
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On September 25, 1998, before me, Angela Woertler, Notary Public,
personally appeared George E. Borst, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
/s/ ANGELA WOERTLER
-------------------------------------------
Notary Public
<PAGE>
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On September 28, 1998, before me, Remonia Jamison, Notary Public,
personally appeared Steven E. Charles, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
/s/ REMONIA JAMISON
-------------------------------------------
Notary Public
<PAGE>
ANNEX I
TO
INDENTURE
DATED AS OF SEPTEMBER 1, 1998
BETWEEN
TOYOTA MOTOR CREDIT CORPORATION
AND
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
Definitions
The following terms have the respective meanings set forth below for all
purposes of the Indenture, and Section and Article references are to Sections
and Articles in the Indenture. Capitalized terms used in the Indenture and
the Securities not otherwise defined shall have the respective meanings
assigned thereto in the Annex of Definitions attached to the Amended and
Restated Trust and Servicing Agreement dated as of October 1, 1996 among
Toyota Motor Credit Corporation, TMTT, Inc. and (for certain limited purposes
only) First Bank National Association or in the Supplemental Annex of
Definitions attached to the 1998-B SUBI Supplement to the Amended and
Restated Trust and Servicing Agreement dated as of September 1, 1998, among
TMTT, Inc.(for certain limited purposes only), U.S. National Bank
Association, as Trust Agent, and U.S. Bank National Association, as 1998-B
Securitization Trustee. In the event of any conflict between a definition
set forth both herein and in the Annex of Definitions or Annex of
Supplemental Definitions, the definition set forth herein shall prevail.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls or is controlled by, or is under direct or indirect
common control with, such Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have the meanings correlative to
the foregoing. For purposes of this Indenture, the 1998-B Securitization
Trust (and the 1998-B Securitization Trustee on behalf of the 1998-B
Securitization Trust) shall not be considered to be "Affiliates" of the
Company.
"Agent" means any Registrar, Paying Agent or co-Registrar or other agent of
the Company acting under the Indenture.
"Board of Directors" means the board of directors of the Company or any
committee thereof authorized generally or in any particular respect to exercise
the power of the board of directors of the Company.
"Certified Resolution" means a copy of a resolution of the Board of
Directors of the Company, certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted and to be in full force and effect on
the date of such certification.
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"Commercial Paper Rate" means the Money Market Yield on the Calculation
Date for commercial paper maturing in one month as such rate appears at 11:00
a.m. New York City time on the Calculation Date on page 133 of the Dow Jones
Telerate Service (or such other page as may replace such page on that service
or such other service or services as may succeed such service) which shows
information for such rate as of the prior business day under the caption
"Daily Commercial Paper Rates (Non financial) from the Federal Reserve"(or
similar heading of like import). If by 3:00 p.m., New York City time, on the
related Calculation Date such rate is not yet available, then the Commercial
Paper Rate will be the Money Market Yield of the arithmetic mean of the
offered rates at approximately 11:00 a.m., New York City time, on such date
of three leading dealers of commercial paper in The City of New York for
commercial paper having a maturity date of one month placed for an industrial
issuer whose bond rating is "AA", or the equivalent, from a nationally
recognized securities rating agency; PROVIDED, HOWEVER, that if such dealers
are not quoting as mentioned in this sentence, the Commercial Paper Rate for
such date shall be the Commercial Paper Rate as in effect as of the
immediately preceding Calculation Date. For purposes of these definitions,
"Calculation Date" shall mean the Business Day preceding each of the
original dates of investment in the Security (each of which is a Monthly
Allocation Date), and each Monthly Allocation Date thereafter, and "Money
Market Yield" shall mean a yield (expressed as a percentage rounded upwards
to the nearest one hundred-thousandth of a percentage point) calculated in
accordance with the following formula:
Money Market Yield = ([D x 360]/[360-{D x M}]) x 100
where "D" refers to the applicable per annum rate for commercial paper rate
quoted on a bank discount basis and expressed as a decimal, and "M" refers to
the actual number of days in the interest period for which interest is being
calculated. Such Commercial Paper Rate shall be calculated on each
Calculation Date by the Trustee.
"Company" means Toyota Motor Credit Corporation, a California
corporation, the issuer of the Securities under the Indenture, until a
successor replaces it pursuant to the Indenture and thereafter means such
successor.
"Corporate Trust Office" means an office of the Trustee at which at any
particular time its corporate trust business shall be administered, which at
the date of execution of the Indenture is located at 111 East Wacker Drive,
Suite 3000, Chicago, Illinois 60601, or at any other such address as the
Trustee may designate from time to time by notice to the Holders.
"Date of Investment" means each Monthly Allocation Date on which an
amount is invested in the TMCC Demand Notes.
"Default" means any event that is or with the passing of time or giving
of notice or both would be an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.12.
"Event of Default" has the meaning specified in Section 6.01.
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<PAGE>
"GAAP" means generally accepted accounting principles in the United
States which are applied by the Company as of the date of the Indenture.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Holder" with respect to the TMCC Demand Notes, means a Person in
possession of a TMCC Demand Note, or a Person deemed an owner thereof
pursuant to Section 2.13 of the Indenture.
"Indenture" means the Indenture dated as of September 1, 1998 between
the Company and U.S. Bank National Association, as trustee, relating to
$1,500,000,000 aggregate principal amount of the Company's TMCC Demand Notes,
including Exhibit A and this Annex I thereto, as the same may be amended or
supplemented from time to time in accordance with its terms.
"Interest Payment Date" is any date on which interest is payable as set
forth in the Security.
"Maturity", with respect to any Security, means the date on which the
principal (and the accrued interest thereon to but excluding the date on
which such principal is paid) of such Security or an installment of principal
(and the accrued interest thereon to the date on which such principal is
paid) becomes due and payable as provided in or pursuant to the Indenture,
whether (i) at the Stated Maturity Date thereof, (ii) on the date specified
in a demand (as evidenced by the delivery to the Trustee of a demand in the
form of Exhibit B to the Indenture) for the payment of 100% of the
outstanding principal amount of the TMCC Demand Notes by any Holder following
(x) the occurrence of a Liquidation Event or (y) in connection with a
reduction of the rating of the Company's short-term debt to a rating less
than "A-1+" by Standard & Poor's or "P-1" by Moody's or a downgrade of the
Company's long-term debt to a rating less than "AA" by Standard & Poor's or
"Aa3" by Moody's in the circumstances provided for in Section 4.01 of the
Indenture or (iii) upon declaration of acceleration upon the occurrence of an
Event of Default hereunder. A demand duly delivered to the Trustee in
accordance with clause (ii) above will cause the entire principal amount (and
the accrued interest thereon to but excluding the date on which such
principal is paid) of the outstanding Securities to become due and payable on
the date specified in such demand. A Maturity pursuant to clause (i) or (ii)
of this definition, in and of itself, shall not be an Event of Default or
Default hereunder.
"Officer" means the President or Vice President, the Chief Financial
Officer, the Chief Accounting Officer, the Treasurer, the Controller,
Secretary or Assistant Secretary of the Company.
"Officer's Certificate" means a certificate signed by any Officer of the
Company, and otherwise complying with the applicable requirements of Sections
11.04 and 11.05 of the Indenture.
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"Opinion of Counsel" means a written opinion from legal counsel who, in
the case of an Opinion of Counsel addressed to the Trustee, is reasonably
acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company. Each opinion shall comply with the applicable requirements of
Sections 11.04 and 11.05 of the Indenture.
"Paying Agent" has the meaning specified in Section 4.02.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture or
governmental authority.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security. For purposes of this definition, any Security
authenticated and delivered under Section 2.07 in exchange for or in lieu of
a defaced, mutilated, lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the defaced, mutilated, lost, destroyed or stolen
Security.
"Record Date" means the day immediately preceding the related
Certificate Payment Date (whether or not a Business Day).
"Registrar" has the meaning specified in Section 4.02.
"Required Rate" with respect to any Monthly Allocation Date and the
principal amount outstanding as set forth on any of the Schedules attached to
a Security, means a per annum rate of interest which shall be calculated as
follows: first, calculate the amount of interest that would have accrued on
(i) the Interest Demand Note at the Commercial Paper Rate, as such rate shall
be adjusted monthly on the second Business Day preceding each Monthly
Allocation Date; (ii) on any Security representing the investment of any
amount allocated in reduction of the Adjusted Class A-1 Certificate Balance,
at 5.35% per annum; (iii) on any Security representing the investment of any
amount allocated in reduction of the Adjusted Class A-2 Certificate Balance,
at 5.45% per annum; (iv) on any Security representing the investment of any
amount allocated in reduction of the Adjusted Class A-3 Certificate Balance,
at 5.50% per annum; or (v) on any Security representing the investment of any
amount allocated in reduction of the Adjusted Class B Certificate Balance, at
6.55% per annum, in each case for the number of days in each Interest Period
(as defined in the 1998-B Securitization Trust Agreement) for such investment
for such Class on the basis of months assumed to consist of 30 days and years
assumed to consist of 360 days, and, second, express the amount of interest
so accrued as a per annum rate on the amount invested in such Security for
the period from the date of investment in such Security to but excluding the
Maturity of such Security, on the basis of months assumed to consist of 30
days and years assumed to consist of 360 days.
"Securities" means the Company's TMCC Demand Notes.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor thereto, and the regulations promulgated thereunder.
"Special Record Date" has the meaning specified in Section 2.12.
I-4
<PAGE>
"Stated Maturity Date" when used with respect to the principal on the
Securities means the date specified on the Schedule attached to the
certificate representing such Security as the fixed date on which the
principal thereof is due and payable, which date shall be (i) with respect to
the Interest Demand Note, the Business Day preceding the Certificate Payment
Date that immediately follows the related Date of Investment; and (ii) with
respect to any Security representing the investment of any amount allocated
in reduction of the Adjusted Class A-1 Certificate Balance, the Adjusted
Class A-2 Certificate Balance, Adjusted Class A-3 Certificate Balance or the
Adjusted Class B Certificate Balance, the Business Day preceding the Class
A-1 Targeted Maturity Date, the Class A-2 Targeted Maturity Date, the Class
A-3 Targeted Maturity Date or the Class B Targeted Maturity Date, as
applicable.
"Subsidiary" means any Corporation of which at the time of determination
the Company or one or more Subsidiaries owns or controls directly or
indirectly more than 50% of the shares of Voting Stock.
"TIA" and "Trust Indenture Act" mean the Trust Indenture Act of 1939, as
amended, and any reference herein to the Trust Indenture Act or a particular
provision thereof shall mean such Act or provision, as the case may be, as
amended or replaced from time to time or as supplemented from time to time by
rules or regulations adopted by the Commission under or in furtherance of the
purposes of such Act or provision, as the case may be.
"Trustee" means U.S. Bank National Association, as trustee under the
Indenture until a successor replaces it in accordance with the provisions of
the Indenture, and thereafter means such successor.
"Trust Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee, or any other
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers or to whom
any corporate trust matter is referred because of such officer's knowledge
and familiarity with the particular subject.
"United States" and "U.S." each mean the United States of America.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
I-5
<PAGE>
EXHIBIT A
THE TRUSTEE WILL NOT AUTHENTICATE OR DELIVER THIS SECURITY IN CONNECTION WITH
ANY REGISTRATION OF TRANSFER TO ANY PERSON UNLESS THE TRUSTEE HAS RECEIVED A
CERTIFICATION FROM THE TRANSFERRING HOLDER TO THE EFFECT THAT (i) IT IS NO
LONGER THE SECURITIZATION TRUSTEE OF THE 1998-B SECURITIZATION TRUST AND THE
PROPOSED TRANSFEREE IS ITS SUCCESSOR IN SUCH CAPACITY, OR (ii) A LIQUIDATION
EVENT HAS OCCURRED AND SUCH PROPOSED TRANSFER IS MADE IN CONTEMPLATION OF A
LIQUIDATION OF THE TRUST ASSETS.
[FORM OF FACE OF SECURITY]
TOYOTA MOTOR CREDIT CORPORATION
TMCC Demand Notes
[For amounts allocated as Class A-1 Monthly Interest Accrual Amounts, Class A-1
Interest Carryover Shortfalls, Class A-2 Monthly Interest Accrual Amounts, Class
A-2 Interest Carryover Shortfalls, Class A-3 Monthly Interest Accrual Amounts,
Class A-3 Interest Carryover Shortfalls, Class B Monthly Interest Accrual
Amounts and/or Class B Interest Carryover Shortfalls]
[For amounts allocated to make applications in reduction of the Adjusted Class
A-1 Certificate Balance]
[For amounts allocated to make applications in reduction of the Adjusted Class
A-2 Certificate Balance]
[For amounts allocated to make applications in reduction of the Adjusted Class
A-3 Certificate Balance]
[For amounts allocated to make applications in reduction of the Adjusted Class B
Certificate Balance]
No.______
Toyota Motor Credit Corporation, a California corporation (the "Company,"
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received, hereby promises to pay to U.S. Bank
National Association, in its capacity as 1998-B Securitization Trustee under the
1998-B Securitization Trust Agreement dated as of September 1, 1998, or
registered assigns, the principal sum of U.S. Dollars as shall be set forth on
the Schedule attached hereto as of the date of Maturity, and to pay interest on
the outstanding amount of principal, as set forth on the Schedule from time to
time, from the date such principal
A-1
<PAGE>
amount is originally issued and outstanding to the Business Day next
preceding the relevant Certificate Payment Date immediately following the
related Date of Investment [(or from the most recent Interest Payment Date
to which interest has been paid or duly provided for to the Business Day
next preceding the relevant Certificate Payment Date immediately following
such Interest Payment Date)](1), (each an "Interest Payment Date"), at
the then applicable Required Rate [as such rate shall be adjusted on each
Calculation Date](2), to but excluding the date on which the principal
hereof is paid or duly provided for. Interest on this Security will be
computed on the basis of a 360 day year of twelve 30 day months. The
interest so payable and punctually paid or duly provided for on any
Interest Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the date that is
one day (whether or not a Business Day), next preceding such Interest
Payment Date (each, a "Record Date"). Any such interest which is payable,
but is not punctually paid or duly provided for, on any Interest Payment
Date, shall forthwith cease to be payable to the Holder on such Record Date
by virtue of having been such Holder, and, at the election of the Company,
(i) may be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of this Security not
less than 10 days prior to such Special Record Date or (ii) may be paid in
any other lawful manner, all as more fully provided in the Indenture.
Payment of the principal and interest on this Security will be made at the
office or agency of the Company maintained for that purpose in Chicago,
Illinois in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that, except as otherwise provided in the Indenture,
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the register of Securities
maintained by the Registrar.
The date of Maturity with respect to the principal (and the accrued
interest thereon to, but excluding, the date on which such principal is paid)
amount evidenced by this Security shall be, the earlier of (x) [the Targeted
Maturity Date for the Class A-1/A-2/A-3/B Certificates](3) [the Certificate
Payment Date immediately following the related Date of Investment](4), (y) the
date
- -----------------------
(1) Insert for TMCC Demand Notes issued in connection with the investment
of amounts allocated in reduction of the Adjusted Class A-1 Certificate Balance,
Adjusted Class A-2 Certificate Balance, Adjusted Class A-3 Certificate Balance
or Adjusted Class B Certificate Balance.
(2) Insert for TMCC Demand Notes issued in connection with the investment
of any Class A-1 Monthly Interest Accrual Amount, Class A-1 Interest Carryover
Shortfall, Class A-2 Monthly Interest Accrual Amount, Class A-2 Interest
Carryover Shortfall, Class A-3 Monthly Interest Accrual Amount, Class A-3
Interest Carryover Shortfall, Class B Monthly Interest Accrual Amount or Class B
Interest Carryover Shortfall.
(3) Insert for TMCC Demand Notes issued in connection with the investment
of amounts allocated in reduction of the Adjusted Class A-1 Certificate Balance,
Adjusted Class A-2 Certificate Balance, Adjusted Class A-3 Certificate Balance
or Adjusted Class B Certificate Balance.
(4) Insert for TMCC Demand Notes issued in connection with the investment
of any Class A-1 Monthly Interest Accrual Amount, Class A-1 Interest Carryover
Shortfall, Class A-2
A-2
<PAGE>
specified in a demand (as evidenced by the delivery to the Trustee of a demand
in the form of Exhibit B to the Indenture) for the payment of 100% of the
outstanding principal amount of the TMCC Demand Notes by any Holder following
the occurrence of a Liquidation Event or (z) the date upon which the outstanding
Securities become due and payable due to the declaration of acceleration upon
the occurrence of an Event of Default under the terms of the Indenture.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
- ------------------------------------------------------------------------------
Monthly Interest Accrual Amount, Class A-2 Interest Carryover Shortfall,
Class A-3 Monthly Interest Accrual Amount, Class A-3 Interest Carryover
Shortfall, Class B Monthly Interest Accrual Amount or Class B Interest
Carryover Shortfall.
A-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: [_____], 1998 TOYOTA MOTOR CREDIT CORPORATION
By:
-------------------------------
Name: George. E. Borst
Title: Senior Vice President
and General Manager
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned Indenture.
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------
U.S. Bank National Association, U.S. Bank National Association,
- -------------------------------------------------------------------------------
as Trustee as Trustee
- -------------------------------------------------------------------------------
OR
- -------------------------------------------------------------------------------
By: __________________________ By:_________________________
Authorized Signatory as Authenticating Agent
- -------------------------------------------------------------------------------
By:_________________________
Authorized Signatory
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
[FORM OF REVERSE OF SECURITY]
TOYOTA MOTOR CREDIT CORPORATION
TMCC DEMAND NOTES
1. INDENTURE.
This Security is one of the duly authorized issue of the Company's TMCC
Demand Notes (the "Securities"), issued by the Company under an Indenture dated
as of [September 1], 1998 (as the same may be amended or supplemented from time
to time, the "Indenture") between the Company and U.S. Bank National
Association, as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture).
The Securities are unsecured general obligations of the Company, limited to
an aggregate principal amount of $1,500,000,000, except as otherwise provided in
the Indenture.
No reference herein to the Indenture and no provision of this Security or
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, places and rate and in the coin and currency herein and
in the Indenture prescribed.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to: Toyota Motor Credit
Corporation, Attention: Treasury Department.
2. CAPITALIZED TERMS.
Capitalized terms used in this Security have the meanings assigned to them
in the Indenture unless otherwise defined in this Security.
3. PAYING AGENT AND REGISTRAR.
The Trustee has been appointed to act as initial Paying Agent and Registrar
for the Securities in Chicago, Illinois. The Company may appoint additional
Paying Agents and co-Registrars, and may change any Paying Agent, Registrar or
co-Registrar, all as provided in the Indenture. Except as otherwise provided in
the Indenture, the Trustee, the Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-Registrar.
4. REDEMPTION.
The Securities are not redeemable prior to their respective Maturities at
the option of the Company, in whole or from time to time in part.
A-5
<PAGE>
5. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are issuable only in registered form, without coupons, in
denominations of at least U.S. $0.01 and integral multiples of $0.01 in excess
thereof. The Securities may be transferred only in accordance with the
provisions of Section 2.06(a) of the Indenture. A Holder may register the
exchange of any Security only in accordance with the provisions of Section 2.06
of the Indenture. The Registrar or a co-Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents in form
satisfactory to the Registrar and the Trustee. No service charge shall be made
to a Holder for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith, except as otherwise
provided in the Indenture. The Company will maintain in Chicago, Illinois, an
office or agency where Securities may be surrendered for registration of
transfer or exchange.
6. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any Agent may treat the Person in whose name such
Security is registered as the owner of such Security for all purposes.
7. UNCLAIMED MONEY.
The Trustee and the Paying Agent shall pay to the Company upon written
request any U.S. Legal Tender held by them for the payment of the principal of
or interest on the Securities which remains unclaimed for two years after the
date on which such payment shall have become due. After payment to the Company
as aforesaid, Holders entitled to such moneys must look to the Company for such
payment unless an applicable abandoned property law designates another Person.
8. DISCHARGE PRIOR TO MATURITY.
If the Company irrevocably deposits with the Trustee U.S. Legal Tender
sufficient to pay the principal of and interest on the Securities to maturity,
or if all the outstanding Securities have been delivered to the Trustee for
cancellation, and in either case if the Company complies with the other
provisions of the Indenture relating thereto, the Company will be discharged
from certain provisions of the Indenture and the Securities, excluding its
obligation to pay the principal of and interest on the Securities.
9. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions and limitations set forth in the Indenture,
the Indenture or the Securities may be amended or supplemented with the consent
of the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and compliance with any provision or obligation
under the Indenture or the Securities may be waived with the consent of the
Holders of a majority in aggregate principal amount of the Securities then
outstanding. The Indenture also permits the Company and the Trustee, without
notice to or consent of any Holder, to enter into certain amendments or
supplements to the Indenture or the Securities.
A-6
<PAGE>
10. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee, or the
Holders of at least 25% in principal amount of the outstanding Securities, may
declare all unpaid principal of and accrued interest on the Securities to be due
and payable immediately in the manner and with the effect provided in the
Indenture. The Indenture provides that the Holders of a majority in principal
amount of the Securities outstanding may rescind an acceleration of the
Securities and its consequences on the terms and subject to the conditions set
forth in the Indenture. The Indenture also provides that the Holders of a
majority in principal amount of the outstanding Securities may waive an existing
Default or Event of Default and its consequences except, among other things, a
default in the payment of the principal of or interest on any of the Securities
which has not been cured as provided in Section 6.02.
11. [RESERVED.]
12. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or incorporator, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by accepting a
Security waives and releases all such Persons from such liability. Such waiver
and release are part of the consideration for the issuance of the Securities.
13. AUTHENTICATION.
This Security and the entries on the Schedule shall not be valid unless the
Trustee or an authenticating agent has signed the certificate of authentication
on this Security and such Schedule by manual signature or has satisfied the
provisions set forth in the last paragraph of Section 2.02 of the Indenture.
14. GOVERNING LAW; HEADINGS.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD (TO THE EXTENT PERMITTED BY LAW) TO
PRINCIPLES OF CONFLICTS OF LAW.
The headings in this Security are for convenience of reference only and
shall not be deemed a part of this Security or limit or otherwise affect the
meaning hereof.
A-7
<PAGE>
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto
(Insert Taxpayer Identification No.)
-------------------
- ------------------
- ------------------
(Please print or typewrite name and address including postal zip code of
assignee)
- ------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ___________________ attorney to transfer said Security on the
books of the Company with full power of substitution in the premises.
A-8
<PAGE>
SCHEDULE TO
TMCC DEMAND NOTE
NUMBER _________
MAXIMUM AMOUNT $_________________
<TABLE>
<CAPTION>
AMOUNTS INVESTED AMOUNTS PAID
-------------------------------- ----------------------------------
Date of
Investment Aggregate Current Stated Principal
or Amount of Amount Required Maturity Principal Interest Balance Initial of
Payment Investment Invested Rate Date Amount Amount Outstanding Trustee
- ------------ ---------- --------- -------- -------- ---------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
A-9
<PAGE>
EXHIBIT B
FORM OF DEMAND
The undersigned hereby certifies to U.S. Bank National Association, in its
capacity as trustee (the "Trustee") under the Indenture dated as of September 1,
1998 (the "Indenture") between the Trustee and Toyota Motor Credit Corporation,
that it is the holder of all or a portion of the Securities issued and
outstanding under the Indenture, and that pursuant to the terms of the
Indenture, it is demanding the payment in full of the principal (plus accrued
interest thereon to the date specified below) of the outstanding Securities in
connection with:
/ / the occurrence of a Liquidation Event (which I hereby certify is effective
as of _____________________)
/ / the downgrade of the Company's short-term debt to a rating less than "A-1+"
by Standard & Poor's or "P-1" by Moody's or a downgrade of the Company's
long-term debt to a rating less than "AA" by Standard & Poor's or "Aa3" by
Moody's (and I hereby certify that I have obtained the advice of
________________ pursuant to Section 4.01 of the Indenture and have
received the advice required by such Section concerning ratings downgrades
from _____________________ of Standard & Poor's and from _________________
of Moody's Investor's Service
The date on which such principal and accrued interest is to be paid is:
____________________.
Dated:
By:
----------------------------------
<PAGE>
CROSS-REFERENCE TABLE
(not a part of this Indenture)
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- ---------
<S> <C>
Section 310(a) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a) (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a) (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a) (4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a) (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08
7.10
11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b) (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09
4.10
11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
11.02
(c) (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c) (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c) (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09(c)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
<CAPTION>
TIA Indenture
Section Section
- ------- ---------
<S> <C>
Section 316(a) (last sentence) . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a) (1) (A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a) (1) (B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a) (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
<PAGE>
<S> <C>
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.04
(Section)317(a) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
(Section)318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
</TABLE>
- ---------
N.A. means not applicable
<PAGE>
EXECUTION COPY
- --------------------------------------------------------------------------------
TOYOTA LEASING, INC.
AND
U.S. BANK NATIONAL ASSOCIATION, AS 1998-B SECURITIZATION TRUSTEE
TOYOTA AUTO LEASE TRUST 1998-B
AUTO LEASE ASSET-BACKED CERTIFICATES
1998-B SECURITIZATION TRUST AGREEMENT
Dated as of September 1, 1998
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I DEFINITIONS 2
1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.02 Article and Section References. . . . . . . . . . . . . . . . . . . . .2
ARTICLE II CREATION OF TRUST; ESTABLISHMENT OF SUBI SECURITIES ACCOUNT . . . . . .3
2.01 Creation of Trust; Establishment of SUBI Securities Account . . . . . .3
2.02 Conveyance of 1998-B SUBI . . . . . . . . . . . . . . . . . . . . . . .3
2.03 Acceptance by 1998-B Securitization Trustee . . . . . . . . . . . . . .4
2.04 Transfer of Collections . . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE III ALLOCATIONS, APPLICATIONS AND PAYMENTS; THE RESERVE FUND;
STATEMENTS TO CERTIFICATEHOLDERS . . . . . . . . . . . . . . . . . . . . . . .5
3.01 Allocations, Applications and Payments. . . . . . . . . . . . . . . . .5
3.02 1998-B SUBI Certificateholders' Account; The Reserve Fund . . . . . . 16
3.03 Statements to Certificateholders. . . . . . . . . . . . . . . . . . . 22
ARTICLE IV THE CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.01 The Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.02 Authentication and Delivery of Certificates . . . . . . . . . . . . . 26
4.03 Registration of Transfer and Exchange of Certificates . . . . . . . . 26
4.04 Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . 29
4.05 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . 29
4.06 Access to List of Certificateholders' Names and Addresses . . . . . . 29
4.07 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . 30
4.08 Temporary Certificates. . . . . . . . . . . . . . . . . . . . . . . . 30
4.09 Book-Entry Certificates . . . . . . . . . . . . . . . . . . . . . . . 31
4.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.11 Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . . 32
4.12 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.13 ERISA Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE V THE TRANSFEROR . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.01 Representations of Transferor . . . . . . . . . . . . . . . . . . . . 34
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5.02 Liability of Transferor: Indemnities. . . . . . . . . . . . . . . . . 36
5.03 Merger or Consolidation of, or Assumption of the Obligations
of, Transferor; Certain Limitations . . . . . . . . . . . . . . . . . 36
5.04 Limitation on Liability of Transferor and Others. . . . . . . . . . . 38
5.05 Transferor May Own Investor Certificates. . . . . . . . . . . . . . . 38
5.06 No Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.07 Tax Matters Partner . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.08 Maturity Advances . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VI THE 1998-B SECURITIZATION TRUSTEE . . . . . . . . . . . . . . . . . . 39
6.01 Duties of the 1998-B Securitization Trustee . . . . . . . . . . . . . 39
6.02 Certain Matters Affecting the 1998-B Securitization Trustee . . . . . 41
6.03 1998-B Securitization Trustee Not Liable for Certificates or
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.04 1998-B Securitization Trustee May Own Certificates. . . . . . . . . . 43
6.05 1998-B Securitization Trustee's Fees and Expenses . . . . . . . . . . 43
6.06 Eligibility Requirements for 1998-B Securitization Trustee. . . . . . 43
6.07 Resignation or Removal of 1998-B Securitization Trustee . . . . . . . 44
6.08 Successor 1998-B Securitization Trustee . . . . . . . . . . . . . . . 44
6.09 Merger or Consolidation of 1998-B Securitization Trustee. . . . . . . 45
6.10 Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . . 45
6.11 Representations and Warranties of Trustee . . . . . . . . . . . . . . 46
6.12 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.13 Trustee May Enforce Claims Without Possession of Certificates . . . . 47
6.14 Suit for Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . 47
6.15 Rights of Certificateholders to Direct Trustee. . . . . . . . . . . . 48
6.16 No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.17 Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.01 Termination of the 1998-B Securitization Trust. . . . . . . . . . . . 49
7.02 Optional Purchase of 1998-B SUBI. . . . . . . . . . . . . . . . . . . 50
ARTICLE VIII ACCUMULATION EVENTS AND LIQUIDATION EVENTS. . . . . . . . . . . . . . 51
8.01 Accumulation Events . . . . . . . . . . . . . . . . . . . . . . . . . 51
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8.02 Liquidation Events. . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE IX MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 52
9.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.02 Protection of Title to Trust. . . . . . . . . . . . . . . . . . . . . 54
9.03 Limitation on Rights of Certificateholders. . . . . . . . . . . . . . 54
9.04 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.06 Severability of Provisions: Counterparts. . . . . . . . . . . . . . . 56
9.07 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.08 Certificates Nonassessable and Fully Paid . . . . . . . . . . . . . . 56
ARTICLE X AGENT FOR SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.01 Agent for Service of Transferor . . . . . . . . . . . . . . . . . . . 57
10.02 Agent of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 57
</TABLE>
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<PAGE>
EXHIBITS:
<TABLE>
<S> <C> <C>
Exhibit A-1 Form of Class A-1 Certificate . . . . . . . . . . . . . . . . . . . .A-1
Exhibit A-2 Form of Class A-2 Certificate . . . . . . . . . . . . . . . . . . .A-2-1
Exhibit A-3 Form of Class A-3 Certificate . . . . . . . . . . . . . . . . . . .A-3-1
Exhibit B Form of Class B Certificate . . . . . . . . . . . . . . . . . . . . .B-1
Exhibit C Form of Transferor Certificate. . . . . . . . . . . . . . . . . . . .C-1
Exhibit D Form of Rule 144A Transferee Certificate. . . . . . . . . . . . . . .D-1
Exhibit E Form of Non-Rule 144A Transferee Certificate. . . . . . . . . . . . .E-1
</TABLE>
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<PAGE>
1998-B SECURITIZATION TRUST AGREEMENT
THIS 1998-B SECURITIZATION TRUST AGREEMENT, dated as of September 1,
1998, is made with respect to the formation of the TOYOTA AUTO LEASE TRUST
1998-B (the "1998-B Securitization Trust"), between TOYOTA LEASING, INC. a
California corporation ("Transferor" or, in its capacity as transferor
hereunder, the "Transferor"), and U.S. Bank National Association, a national
banking association, as trustee (the "1998-B Securitization Trustee").
RECITALS
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., a Delaware
corporation, as trustee (the "Titling Trustee") and, for the limited purposes
stated therein, First Bank National Association (now known as U.S. Bank
National Association), a national banking association, as trust agent.
Pursuant to the Co-Trustee Agreement, Delaware Trust Capital Management, Inc.
will act as co-trustee of the Titling Trust. 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.
Concurrently herewith, TMCC, the Titling Trustee and U.S. Bank
National Association (formerly known as First Bank National Association)
("U.S. Bank") have entered into the 1998-B SUBI Supplement to the Titling
Trust Agreement dated as of September 1, 1998 (the "1998-B SUBI Supplement")
pursuant to which the Titling Trust, at the direction of TMCC, will create
and issue a special unit of beneficial interest in the Titling Trust (the
"1998-B SUBI"), whose beneficiaries generally will be entitled to the net
cash flow arising from the related SUBI Portfolio (such SUBI Portfolio, the
"1998-B SUBI Portfolio"). The 1998-B SUBI will be evidenced by (i) one
certificate (the "1998-B SUBI Certificate") evidencing beneficial interests
in the assets of the 1998-B SUBI other than proceeds of the Residual Value
Insurance Policies, (whether or not such proceeds are attributable to the
1998-B Leased Vehicles and the 1998-B Contracts) and (ii) one certificate
(the "1998-B SUBI Insurance Certificate") evidencing beneficial interests in
the assets of the 1998-B SUBI that are proceeds of the Residual Value
Insurance Policies attributable to the 1998-B Leased Vehicles and the 1998-B
Contracts (which assets are net of claims adjustment expenses). The 1998-B
SUBI Certificate and the 1998-B SUBI Insurance Certificate collectively
represent a 100% beneficial interest in the 1998-B SUBI.
Concurrently herewith, the Titling Trustee (on behalf of the
Titling Trust), and the Servicer and U.S. Bank also have entered into a
1998-B SUBI Servicing Supplement to the Titling Trust Agreement dated as of
September 1, 1998 (the "1998-B SUBI Servicing Supplement"), pursuant to which
the terms of the Titling Trust Agreement will be supplemented insofar as they
apply to the 1998-B SUBI Portfolio, providing for further servicing
obligations that will benefit the holders of the 1998-B SUBI Certificate.
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Concurrently herewith, TMCC and the Transferor have entered into
the 1998-B SUBI Certificate Purchase and Sale Agreement dated as of September
1, 1998 (the "SUBI Certificate Purchase and Sale Agreement"), pursuant to
which TMCC sold to the Transferor, without recourse, all of TMCC's right,
title and interest in and to the 1998-B SUBI, the 1998-B SUBI Certificate and
the 1998-B SUBI Insurance Certificate, all monies due thereon and the right
to realize on any property subject to the 1998-B SUBI, and all proceeds
thereof, for the consideration stated therein. The parties hereto
acknowledge that the Transferor is not transferring or conveying to the
1998-B Securitization Trust or the 1998-B Securitization Trustee any right to
or interest in the 1998-B SUBI Insurance Certificate.
The parties hereto desire that U.S. Bank National Association,
as securities intermediary (the "SUBI Securities Intermediary"), establish a
securities account (as defined in Section 8-102 of the UCC) in the name of
U.S. Bank National Association, as 1998-B Securitization Trustee (the "1998-B
SUBI Securities Account") to which the 1998-B SUBI Certificate will be
transferred pursuant to this 1998-B Securitization Trust Agreement.
The parties desire to enter into this 1998-B Securitization
Trust Agreement to create the 1998-B Securitization Trust, to provide for the
issuance by the 1998-B Securitization Trust of certain Certificates and to
provide for the exchange of those Certificates for the 1998-B 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 I
DEFINITIONS
1.01 DEFINITIONS.
For all purposes of this 1998-B 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 to them in the Annex of Definitions attached to the
Titling Trust Agreement or the Annex of Supplemental Definitions attached to
the 1998-B SUBI Supplement; PROVIDED, HOWEVER, that in the event a term is
defined both in the Annex of Definitions and in the Annex of Supplemental
Definitions, the definition in the Annex of Supplemental Definitions shall
prevail, (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 1998-B Securitization Trust Agreement as a
whole and not to any particular article or section within this 1998-B
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".
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1.02 ARTICLE AND SECTION REFERENCES.
Except as otherwise specified herein, all article and section references
shall be to Articles and Sections in this 1998-B Securitization Trust Agreement.
ARTICLE II
CREATION OF TRUST; ESTABLISHMENT OF SUBI SECURITIES ACCOUNT
2.01 CREATION OF TRUST; ESTABLISHMENT OF SUBI SECURITIES ACCOUNT.
(a) CREATION OF TRUST. Upon the execution of this 1998-B
Securitization Trust Agreement by the parties hereto, there is hereby created
the Toyota Auto Lease Trust 1998-B.
(b) ESTABLISHMENT OF 1998-B SUBI SECURITIES ACCOUNT.
(i) Pursuant to a separate agreement dated September 1, 1998,
between the 1998-B Securitization Trust and U.S. Bank National
Association, a securities account (as such term is defined in
Section 8-501(a) of the UCC) (the "1998-B SUBI Securities Account") will
be established and maintained with U.S. Bank National Association, in its
capacity as SUBI Securities Intermediary, for the benefit of the Toyota
Auto Lease Trust 1998-B.
(ii) The Transferor shall direct the SUBI Securities Intermediary
to credit to the 1998-B SUBI Securities Account the interests in the
1998-B SUBI Certificate transferred, assigned, or otherwise conveyed by
the Transferor as described in Section 2.02 of this 1998-B Securitization
Trust Agreement.
2.02 CONVEYANCE OF 1998-B SUBI CERTIFICATE.
(a) CONVEYANCE TO 1998-B SECURITIZATION TRUSTEE. In consideration
of the 1998-B Securitization Trustee's delivery to the Transferor of executed
and authenticated Investor Certificates, in authorized denominations in the
aggregate equal to the Initial Class A-1 Certificate Balance, Initial Class
A-2 Certificate Balance, Initial Class A-3 Certificate Balance and Initial
Class B Certificate Balance, and of the executed and authenticated Transferor
Certificate, the Transferor does hereby transfer, assign and otherwise convey
to the 1998-B 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):
(i) all of the right, title and interest of the Transferor in
and to the 1998-B SUBI Certificate, the rights in and benefits of the
1998-B SUBI evidenced by the 1998-B SUBI Certificate 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 foregoing;
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(iii) all rights accruing to the holder of the 1998-B SUBI
Certificate under the Titling Trust Agreement, the 1998-B SUBI Supplement
and the 1998-B SUBI Servicing Supplement; and
(iv) all proceeds of the foregoing; provided that all monies and
payments due or payable under any Residual Value Insurance Policies
applicable to the 1998-B Leased Vehicles and the 1998-B Contracts and the
right to receive such payments and monies, as evidenced by the 1998-B
SUBI Insurance Certificate, are retained by the Transferor and are not
hereby transferred, assigned or otherwise conveyed to the 1998-B
Securitization Trustee nor will they, under any circumstances, be subject
to the lien of the 1998-B Securitization Trust or any claim by 1998-B
Securitization Trustee.
(b) GRANT OF SECURITY INTEREST. The Transferor also does hereby
grant to the 1998-B Securitization Trustee a security interest in all of the
foregoing (exclusive of the monies and payments referred to in the proviso in
Section 2.02(a)(iv)), and the 1998-B Securitization Trustee shall have all
the rights, powers and privileges thereto and therein of a secured party
under the New York UCC.
(c) TERMINATION. The rights and powers granted herein to the 1998-B
Securitization Trustee have been granted in order to perfect its security
interests in the assets referred to in Section 2.02(a), are powers coupled
with an interest and will neither be affected by the bankruptcy of any other
person or entity nor by the lapse of time. The obligations of the SUBI
Securities Intermediary hereunder shall continue in effect until the security
interests of the 1998-B Securitization Trustee in the 1998-B SUBI Securities
Account have been terminated pursuant to the terms of this Securitization
Trust Agreement and the 1998-B Securitization Trustee has notified the SUBI
Securities Intermediary of such termination in writing. In the event of a
termination of this 1998-B Securitization Trust Agreement pursuant to Section
7.01(a)(i) or (iii), or upon repurchase of the 1998-B SUBI pursuant to
Section 7.02, the 1998-B Securitization Trustee is hereby authorized to
convey all interests in the 1998-B SUBI Certificate and in the 1998-B SUBI
evidenced thereby to the Transferor. In the event of a termination of this
1998-B Securitization Trust Agreement pursuant to Section 7.01(a)(iv) or (v),
the 1998-B Securitization Trustee is hereby authorized to convey all
interests in the 1998-B SUBI Certificate and in the 1998-B SUBI evidenced
thereby to the purchaser thereof. The 1998-B Securitization Trustee is
hereby authorized and directed to seek a buyer for the 1998-B SUBI
Certificate on the occurrence of a Liquidation Event in connection with the
related liquidation of the 1998-B Securitization Trust, in each case pursuant
to Section 8.02. The 1998-B Securitization Trustee shall not be responsible
for or have any liability with respect to any losses incurred in connection
with any such liquidation, other than as a result of its own negligence or
willful misfeasance.
2.03 ACCEPTANCE BY 1998-B SECURITIZATION TRUSTEE.
The 1998-B Securitization Trustee does hereby accept all consideration
conveyed by the Transferor pursuant to Section 2.02 and declares that the
1998-B 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 1998-B Securitization Trust Agreement.
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<PAGE>
In accepting the 1998-B SUBI Certificate, the 1998-B Securitization
Trustee does hereby release all claims to the Titling Trust Assets allocated
to the UTI Sub-Trust or to 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.
2.04 TRANSFER OF COLLECTIONS.
The parties hereto acknowledge that the Titling Trustee, on behalf of
the Titling Trust, has made a complete transfer to the 1998-B Securitization
Trustee of the Collections in respect of the 1998-B SUBI Assets contained in
all accounts maintained by the Titling Trustee (excluding proceeds of the
Residual Value Insurance Policies, as evidenced by the 1998-B SUBI Insurance
Certificate, which are the sole property of the Transferor) and, except as
provided in this 1998-B SUBI Securitization Trust Agreement, the 1998-B SUBI
Supplement and the 1998-B SUBI Servicing Supplement, neither the Titling
Trustee nor the Servicer has any right to direct such funds to a third party
or to receive such funds (other than to receive such funds pursuant to an
investment thereof in Permitted Investments on which such party is the
obligor).
ARTICLE III
ALLOCATIONS, APPLICATIONS AND PAYMENTS; THE RESERVE FUND;
STATEMENTS TO CERTIFICATEHOLDERS
3.01 ALLOCATIONS, APPLICATIONS AND PAYMENTS.
(a) SERVICER'S CERTIFICATES. On each Determination Date, the
Servicer shall deliver to the 1998-B Securitization Trustee a Servicer's
Certificate which sets forth, among other things, the amount of Interest
Collections and Principal Collections allocable to the 1998-B SUBI, the
Investor Percentage, the Transferor Percentage, the Certificate Factor for
each Class, the amount of Advances (which includes Inventory Advances) and
Maturity Advances, if any, to be made by or reimbursed to the Servicer, the
aggregate 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 preceding Collection Period and related Monthly Allocation
Date. On or prior to each Determination Date, the Servicer shall also
determine the Specified Reserve Fund Balance and the amounts to be allocated
and applied or paid in respect of the Investor Interest and Transferor
Interest and in respect of other amounts to be released from the Trust.
(b) SOURCE OF DEPOSITS.
(i) If, based on the Servicer's Certificate prepared by the
Servicer, funds are to be deposited into the 1998-B SUBI Certificateholders'
Account, the 1998-B Securitization Trustee shall make such deposit from the
following sources, in the following order of priorities:
(A) from net investment earnings on Permitted Investments made
on prior Monthly Allocation Dates of funds in the 1998-B SUBI
Certificateholders' Account in respect of the Class A-1 Monthly Interest
Accrual Amount, the Class A-2 Monthly Interest Accrual Amount, the Class
A-3 Monthly Interest Accrual Amount and interest accrued on
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<PAGE>
the Adjusted Class B Certificate Balance and Certificate Principal Loss
Amounts allocated thereto and not reimbursed; and
(B) applicable amounts in the 1998-B SUBI Collection Account or
the Reserve Fund, as applicable.
(ii) Provided that (A) the Transferor has not exercised its option to
repurchase the 1998-B SUBI and (B) a Liquidation Event has not occurred, on each
relevant Monthly Allocation Date that is a Certificate Payment Date, all amounts
to be paid to Certificateholders, the Transferor or other Persons, shall be made
from the 1998-B SUBI Collection Account. On each Monthly Allocation Date, the
1998-B Securitization Trustee will withdraw, to the extent necessary, the
amounts specified herein from the 1998-B SUBI Certificateholders' Account and/or
the Reserve Fund and deposit such amounts into the 1998-B SUBI Collection
Account in order to make the applications and payments indicated herein.
(c) ALLOCATIONS AND APPLICATIONS IN RESPECT OF INTEREST. The
Certificates of each Class will bear interest at the rate specified therein, and
such interest will accrue for each related Interest Period on the basis of
twelve months, each assumed to consist of thirty days, and a year assumed to
consist of 360 days. Provided that the Transferor has not exercised its option
to repurchase the 1998-B SUBI pursuant to Section 7.02 herein, and provided that
the Trust has not been liquidated, pursuant to Section 7.01 herein, on each
Monthly Allocation Date, based solely upon the information set forth in the
Servicer's Certificate, the 1998-B Securitization Trustee shall make the
following allocations of Available Interest in the following amounts (to the
extent sufficient therefor) and in the following order of priority:
(i) an amount equal to the amount of the Class A-1 Monthly
Interest Accrual Amount, the Class A-2 Monthly Interest Accrual Amount
and the Class A-3 Monthly Interest Accrual Amount for the related Monthly
Interest Period, on a pro rata basis;
(ii) an amount equal to the amount of any unreimbursed Class A-1
Interest Carryover Shortfall, Class A-2 Interest Carryover Shortfall and
Class A-3 Interest Carryover Shortfall, on a pro rata basis.
(iii) an amount equal to the amount of interest accrued on the
Adjusted Class B Certificate Balance during the related Monthly Interest
Period, plus any Class B Interest Carryover Shortfall;
(iv) to the Servicer, an amount equal to the Investor Percentage
of (a) the Servicing Fee for the related Collection Period and (b) the
aggregate of the Investor Percentage of the accrued but unpaid Servicing
Fees in respect of any prior Collection Periods;
(v) to the Servicer, an amount equal to the Investor Percentage
of the Capped Contingent and Excess Liability Premiums that have not yet
been reimbursed to the Servicer;
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(vi) to the Titling Trustee(or the Servicer, if such amounts were
previously advanced by the Servicer), an amount equal to the Investor
Percentage of Capped Titling Trust Administrative Expenses;
(vii) to the 1998-B Securitization Trustee(or the Servicer, if
such amounts were previously advanced by the Servicer), an amount equal
to the Investor Percentage of Capped Securitization Trust Administrative
Expenses;
(viii) an amount equal to the sum of (a) the aggregate Loss Amounts
allocable to the Adjusted Class A-1 Certificate Balance, the Adjusted
Class A-2 Certificate Balance and the Adjusted Class A-3 Certificate
Balance on such Monthly Allocation Date plus (b) the aggregate
Certificate Principal Loss Amounts allocated to the Adjusted Class A-1
Certificate Balance, the Adjusted Class A-2 Certificate Balance and the
Adjusted Class A-3 Certificate Balance on any prior Monthly Allocation
Date (on a pro rata basis based on the aggregate amounts of such Loss
Amounts and Certificate Principal Loss Amounts previously allocated to
each such Class), in each case to the extent not reimbursed on such date
through the application of amounts withdrawn from the Reserve Fund or
Transferor Amounts and not reimbursed pursuant to this clause (viii) on
any prior date;
(ix) an amount equal to the amount, if any, of interest accrued
during the related Monthly Interest Period at the Class B Rate on any
Certificate Principal Loss Amounts previously allocated to the Adjusted
Class B Certificate Balance and not yet reimbursed prior to such date;
(x) an amount equal to the aggregate amount of Loss Amounts
allocable to the Adjusted Class B Certificate Balance on such Monthly
Allocation Date and not reimbursed pursuant to this clause or through the
application of amounts withdrawn from the Reserve Fund and Transferor
Amounts, plus the aggregate amount of Certificate Principal Loss Amounts
allocated to the Adjusted Class B Certificate Balance on any prior
Monthly Allocation Date and not previously reimbursed pursuant to this
clause (x);
(xi) an amount equal to the excess of the Specified Reserve Fund
Balance over the amount then on deposit in the Reserve Fund;
(xii) to the Titling Trustee (or the Servicer, if such amounts
were previously advanced by the Servicer), an amount equal to the
Investor Percentage of Uncapped Titling Trust Administrative Expenses;
(xiii) to the 1998-B Securitization Trustee (or the Servicer, if
such amounts were previously advanced by the Servicer), an amount equal
to the Investor Percentage of Uncapped Securitization Trust
Administrative Expenses; and
(xiv) the balance, if any, shall constitute Excess Amounts.
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(d) SOURCES OF APPLICATIONS AND PAYMENTS. Applications and/or
payments of amounts allocated pursuant to the priorities set forth in Section
3.01(c) above will be made from the following sources in the following order of
priority:
(i) Available Interest, to the extent thereof;
(ii) in the case of Section 3.01(c) clauses (i), (ii), (iii),
(viii), (ix) or (x), amounts withdrawn from the Reserve Fund to the
extent of the lesser of (A) the amount on deposit in the Reserve Fund on
the related Deposit Date and available therefor and (B) the amount, if
any, by which the aggregate of amounts allocable and applicable or
payable pursuant to such clauses (i), (ii), (iii), (viii), (ix) or (x)
exceeds the amount of Available Interest available to make such
allocation and application or payment based on the foregoing priorities;
PROVIDED, HOWEVER, that amounts allocated to the Class B Reserve Amount
shall be utilized only if there are no other amounts then on deposit in
the Reserve Fund and shall be available exclusively for payment of
accrued and unpaid interest with respect to the Class B Certificates, and
on the Class B Targeted Maturity Date, for reduction of the Adjusted
Class B Certificate Balance until the Adjusted Class B Certificate
Balance has been reduced to zero; and PROVIDED, FURTHER, that if such
Monthly Allocation Date is a relevant Certificate Payment Date that is on
or after the Class B Targeted Maturity Date, and if amounts then on
deposit in the Reserve Fund are sufficient to both repay any unreimbursed
Maturity Advances and to reduce the Adjusted Certificate Balance of each
Class of Investor Certificates then outstanding to zero, such amounts
will be so applied to the extent available therefor; and
(iii) in the case of Section 3.01(c) clauses (i) through (x) and,
to the extent set forth in Sections 3.01(i)(ii) and 3.01(i)(iii),
Transferor Amounts.
(e) PAYMENTS TO CLASS A CERTIFICATEHOLDERS.
(i) Subject to Sections 3.01(i), (k) and (l), payments of interest
will be made to the Class A-1 Certificateholders, Class A-2 Certificateholders
and Class A-3 Certificateholders, respectively, of (A) amounts allocated
pursuant to clauses (i) and (ii) of Section 3.01(c) above (whether from amounts
held in the 1998-B SUBI Collection Account or 1998-B SUBI Certificateholders'
Account) and (B) the net investment income earned on Permitted Investments with
respect to funds deposited into the 1998-B Certificateholders' Account on prior
Monthly Allocation Dates in respect of the Adjusted Class A-1 Certificate
Balance, Adjusted Class A-2 Certificate Balance or Adjusted Class A-3
Certificate Balance, as the case may be, (1) on each Monthly Allocation Date in
March and September, commencing in March 1999, until the related Targeted
Maturity Date, as well as (2) on the related Targeted Maturity Date and (3) if
the Adjusted Class Certificate Balance of such Class has not been reduced to
zero on its Targeted Maturity Date, on each Monthly Allocation Date following
such Targeted Maturity Date until such Adjusted Class Certificate Balance is
reduced to zero, in each case to the extent of amounts available therefor. In
addition, also subject to Sections 3.01(i), (k) and (l), in connection with a
Liquidation Event or any exercise by the Transferor of its option to repurchase
the 1998-B SUBI Certificate pursuant to Section 7.02, on the Monthly Allocation
Date following the receipt by the
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1998-B Securitization Trustee of the proceeds of such liquidation or option
exercise, payments of interest will be made to the Class A-1
Certificateholders, Class A-2 Certificateholders and Class A-3
Certificateholders, respectively, from such proceeds, to the extent available
therefor pursuant to Section 3.01(o).
(ii) Payments in reduction of the Adjusted Class A-1 Certificate
Balance, the Adjusted Class A-2 Certificate Balance and the Adjusted Class
A-3 Certificate Balance will be made from the amounts allocated therefore in
Sections 3.01(c) and 3.01(l) on (A) the related Targeted Maturity Date and
(B) if the Adjusted Class A-1 Certificate Balance, Adjusted Class A-2
Certificate Balance or Adjusted Class A-3 Certificate Balance is not reduced
to zero on the related Targeted Maturity Date, then, for each such Class, on
each subsequent Monthly Allocation Date until the date on which the Adjusted
Class A-1 Certificate Balance, Adjusted Class A-2 Certificate Balance or
Adjusted Class A-3 Certificate Balance, as the case may be, is reduced to
zero, in each case to the extent of amounts available therefor. In addition,
in connection with a Liquidation Event or any exercise by the Transferor of
its option to repurchase the 1998-B SUBI Certificate pursuant to Section
7.02, on the Monthly Allocation Date following the receipt by the 1998-B
Securitization Trustee of the proceeds of such liquidation or option
exercise, payments in reduction of the Adjusted Class A-1 Certificate
Balance, the Adjusted Class A-2 Certificate Balance and the Adjusted Class
A-3 Certificate Balance will be made from such proceeds, to the extent
available therefor pursuant to Section 3.01(o), all as more fully described
in Sections 3.01(l)(iii) and (iv).
(f) PAYMENTS TO CLASS B CERTIFICATEHOLDERS.
(i) Subject to Sections 3.01(i), (k) and (l), payments of interest
will be made to the Class B Certificateholders of (A) the amounts allocated
pursuant to clauses (iii) and (ix) of Section 3.01(c) above (whether from
amounts held in the 1998-B SUBI Collection Account or 1998-B SUBI
Certificateholders' Account) and (B) the net investment income earned on
Permitted Investments with respect to funds deposited into the 1998-B
Certificateholders' Account on prior Monthly Allocation Dates in respect of the
Adjusted Class B Certificate Balance, (1) on each Monthly Allocation Date in
March and September, commencing in March 1999, until the related Targeted
Maturity Date, as well as (2) on the related Targeted Maturity Date and (3) if
the Adjusted Class B Certificate Balance has not been reduced to zero on its
Targeted Maturity Date, on each Monthly Allocation Date following such Targeted
Maturity Date until the Adjusted Class B Certificate Balance is reduced to zero,
in each case to the extent of amounts available therefor. In addition, also
subject to Sections 3.01(i), (k) and (l), in connection with a Liquidation Event
or any exercise by the Transferor of its option to repurchase the 1998-B SUBI
Certificate pursuant to Section 7.02, on the Monthly Allocation Date following
the receipt by the Trust of the proceeds of such liquidation or option exercise,
payments of interest will be made to the Class B Certificateholders from such
proceeds, to the extent available therefor pursuant to Section 3.01(o).
(ii) Payments in reduction of the Adjusted Class B Certificate
Balance will be made from the amounts allocated therefore in Sections 3.01(c)
and 3.01(l) on (A) the Class B Targeted Maturity Date and (B) if the Adjusted
Class B Certificate Balance is not reduced to zero on the
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Class B Targeted Maturity Date, then on each subsequent Monthly Allocation
Date until the date on which the Adjusted Class B Certificate Balance is
reduced to zero, in each case to the extent of amounts available therefor. In
addition, in connection with a Liquidation Event or any exercise by the
Transferor of its option to repurchase the SUBI Certificate pursuant to
Section 7.02, on the Monthly Allocation Date following the receipt by the
1998-B Securitization Trustee of the proceeds of such liquidation or option
exercise, payments in reduction of the Adjusted Class B Certificate Balance
will be made from such proceeds, to the extent available therefor pursuant to
Section 3.01(o), all as more fully described in Sections 3.01(l)(iii) and
(iv).
(g) PAYMENTS TO SERVICER, SECURITIZATION TRUSTEE AND TITLING TRUSTEE.
On each Monthly Allocation Date, the 1998-B Securitization Trustee shall pay to
the Servicer the amounts allocated pursuant to clauses (iv) and (v) of Section
3.01(c) above. On each Monthly Allocation Date, the 1998-B Securitization
Trustee shall pay to the Titling Trustee the amounts allocated pursuant to
clauses (vi) and (xii) of Section 3.01(c) above, except that if the Servicer
previously has made Advances in respect of such amounts, such payment will
instead be made to the Servicer up to the amount of such Advances not previously
reimbursed. On each Monthly Allocation Date, the 1998-B Securitization Trustee
will be entitled to withdraw from the 1998-B SUBI Collection Account for its own
benefit and use, the amounts allocated pursuant to clauses (vii) and (xiii) of
Section 3.01(c) above, except that if the Servicer previously has made Advances
in respect of such amounts, the 1998-B Securitization Trustee shall instead pay
such amounts to the Servicer up to the amount of such Advances not previously
reimbursed.
Notwithstanding the foregoing, in accordance with the provisions of
Section 7.01(c) of the Titling Trust Agreement and Section 4.02(a) of the 1998-B
SUBI Servicing Supplement, for so long as TMCC is the Servicer and each Monthly
Remittance Condition is satisfied, the Servicer will be entitled to make
deposits of Collections into the 1998-B SUBI Collection Account net of amounts
payable or reimbursable to the Servicer as compensation amounts, in respect of
Advances or otherwise (including in respect of amounts advanced by the Servicer
in respect of amounts otherwise payable to the 1998-B Securitization Trustee or
to the Titling Trustee or Trust Agent), and net of amounts payable or
reimbursable (and actually so paid or reimbursed directly by the Servicer) in
respect of Titling Trust. To the extent the Servicer makes deposits net of any
such amounts, the Servicer will cause each relevant Servicer's Certificate to
correctly and accurately account for such amounts in providing all information
with respect to allocations, applications and payments to be made pursuant to
Section 3.01 of the 1998-B Securitization Trust Agreement on the same basis as
though such amounts were in fact deposited into the 1998-B SUBI Collection
Account. Moreover, the Servicer will, in each relevant Servicer's Certificate,
instruct the 1998-B Securitization Trustee not to make any distribution to the
Servicer, Transferor or Titling Trustee to the extent that the Servicer has made
any deposit net of a corresponding amount, and the 1998-B Securitization Trustee
will have no obligation with respect to or liability for following any such
instruction by the Servicer.
(h) DEPOSITS INTO AND RELEASES FROM THE RESERVE FUND.
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(i) On each Monthly Allocation Date, the 1998-B Securitization
Trustee shall withdraw from the 1998-B SUBI Collection Account and
deposit into the Reserve Fund the amount allocated pursuant to clause
(xi) of Section 3.01(c) above.
(ii) On each Monthly Allocation Date, the 1998-B Securitization
Trustee shall distribute to the Transferor, to the extent thereof, (A)
any net investment income from investment of funds in the Reserve Fund
and (B) any amounts in excess of the Specified Reserve Fund Balance on
such date; provided that no such release will be made if Transferor
Amounts are being held in the Reserve Fund because the Servicer is
required to deliver certifications concerning ERISA matters as set forth
in Section 3.01(i) below.
(i) PAYMENTS TO TRANSFEROR; TRANSFEROR AMOUNTS. On each Monthly
Allocation Date, the 1998-B Securitization Trustee shall make the following
payments in respect of the Transferor Interest in the following order of
priority:
(i) to the Transferor, from and in reduction of the amounts of
Principal Collections otherwise to be deposited into the 1998-B SUBI
Collection Account or 1998-B SUBI Certificateholders' Account, an amount
equal to the aggregate amount of any unreimbursed Maturity Advances, as
specified in the related Servicer's Certificate (notwithstanding anything
herein to the contrary, such payment is to be made prior to any other
application or payment of amounts described in Section 3.01(e), Section
3.01(f) or Section 3.01(l));
(ii) to the Transferor, an amount as Transferor Amounts equal to
the Transferor Percentage of Collections, to the extent any portion of
such amount is not required to be applied to cover certain shortfalls as
described in this Section, or in Sections 3.01(d), 3.01(l) or 3.01(n)
below;
(iii) to the Transferor, Excess Amounts, payable as follows:
(A) if such Monthly Allocation Date relates to a Collection
Period the last day of which is during the Revolving Period, the
amount allocated as Excess Amounts pursuant to clause (xiv) of
Section 3.01(c) (subject to the proviso in subsection (C) below);
and
(B) if such Monthly Allocation Date relates to a Collection
Period the last day of which is after the Revolving Period, the
balance of any such Excess Amounts (subject to the proviso in
subsection (C) below) after the 1998-B Securitization Trustee has
first deposited such amounts, up to but not exceeding the
Accelerated Principal Distribution Amount, into the 1998-B SUBI
Certificateholders' Account or SUBI Collection Account (if such
Monthly Allocation Date is a relevant Certificate Payment Date);
(C) provided, however, that in the event TMCC is and
continues to be required to deliver the certifications concerning
ERISA matters specified in Section 5.03(b) of the 1998-B SUBI
Servicing Supplement, any such Excess Amounts that
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would be released to the Transferor as described above shall
instead be deposited into the Reserve Fund, whether or not the
then applicable Specified Reserve Fund Balance has been met.
Notwithstanding the foregoing, on each Monthly Allocation Date for which
there is a Required Amount, after giving effect to all allocations, applications
and payments required to be made and all required deposits to or withdrawals
from the Reserve Fund on such Monthly Allocation Date, amounts that otherwise
would be payable to the Transferor in respect of Transferor Amounts will be
deposited in the Reserve Fund until the amount on deposit therein equals the
Specified Reserve Fund Balance with the remainder to be paid to the Transferor
by the 1998-B Securitization Trustee as follows:
(1) if such Monthly Allocation Date relates to a Collection
Period the last day of which is during the Revolving Period, Transferor
Amounts relating to the Transferor Percentage of Interest Collections;
and
(2) if such Monthly Allocation Date relates to a Collection
Period the last day of which is after the Revolving Period, (A) the
Transferor Amounts relating to the Transferor Percentage of Interest
Collections and (B) if and to the extent that the Transferor Interest
will be equal to or greater than zero, after all required allocations,
applications and payments have been made on such Monthly Allocation Date,
the remaining Transferor Amounts relating to the Transferor Percentage of
Principal Collections.
Any amounts that would otherwise be payable to the Transferor pursuant
to the preceding paragraph, but not paid to the Transferor because the
Transferor Interest would be less than or equal to zero, shall instead be
held in the 1998-B SUBI Collection Account until:
(1) applied to cover the Class A-1 Monthly Interest Accrual
Amount, the Class A-2 Monthly Interest Accrual Amount, the Class A-3
Monthly Interest Accrual Amount, any Class A-1 Interest Carryover
Shortfall, Class A-2 Interest Carryover Shortfall, Class A-3 Interest
Carryover Shortfall, interest accrued on the Adjusted Class B Certificate
Balance, any Class B Interest Carryover Shortfall or any interest accrued
on unreimbursed Certificate Principal Loss Amounts previously allocated
to the Adjusted Class B Certificate Balance;
(2) applied in reduction of the Adjusted Class A-1 Certificate
Balance, Adjusted Class A-2 Certificate Balance, Adjusted Class A-3
Certificate Balance and the Adjusted Class B Certificate Balance until
each such Certificate Balance has been reduced to zero;
(3) the Transferor Interest again exceeds zero.
Amounts properly received by the Transferor pursuant to this Section 3.01
shall be free of any claim of the 1998-B Securitization Trust, the 1998-B
Securitization Trustee or the Investor
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Certificateholders and shall not be available to the 1998-B Securitization
Trustee or the 1998-B 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.
(j) INVESTMENT OF AVAILABLE AMOUNTS. Amounts allocated and to be
applied or paid to the Class A Certificates and the Class B Certificates
pursuant to Sections 3.01(c), (d) and (l) and not paid on any Monthly Allocation
Date will be deposited into the 1998-B Certificateholders' Account on such date
and invested in Permitted Investments as follows:
(i) during the Revolving Period, amounts allocated and applied
pursuant to clauses (i), (ii), (iii), (viii), (ix) and (x) of Section
3.01(c) above will be invested in Permitted Investments maturing on or
prior to the succeeding relevant Certificate Payment Date and bearing
interest at the related Required Rates;
(ii) following the termination of the Revolving Period on any
Monthly Allocation Date that is not a Certificate Payment Date, both
Available Interest allocated and applied pursuant to subsection (i) above
and all amounts allocable and applicable in respect of the Adjusted Class
A-1 Certificate Balance, the Adjusted Class A-2 Certificate Balance,
Adjusted Class A-3 Certificate Balance and the Adjusted Class B
Certificate Balance (including reimbursements of Loss Amounts or
Certificate Principal Loss Amounts) will be invested in Permitted
Investments maturing on or prior to the succeeding relevant Certificate
Payment Date, and bearing interest at the related Required Rates.
(k) INVESTMENT IN SUBSEQUENT CONTRACTS AND SUBSEQUENT LEASED VEHICLES.
Notwithstanding anything in this Agreement to the contrary, on any Monthly
Allocation Date related to a Collection Period the last day of which is during
the Revolving Period:
(i) The amounts to be applied or paid pursuant to the priorities
set forth in clauses (viii) and (x) of Section 3.01(c) above that are
allocated to reimburse Loss Amounts or Certificate Principal Loss Amounts
(whether from Available Interest, amounts withdrawn from the Reserve Fund
or Transferor Amounts) and amounts allocated for deposit into the 1998-B
Certificateholders' Account from Principal Collections pursuant to
Section 3.01(l)(ii) below shall not be deposited in the 1998-B SUBI
Certificateholders' Account, but shall be treated as and be deemed to be
Principal Collections that are part of the Investor Percentage of
Principal Collections for purposes of Section 3.02 of the 1998-B SUBI
Servicing Supplement and this Section 3.01 and available for reinvestment
in Subsequent Contracts and Subsequent Leased Vehicles; and
(ii) Transferor Amounts relating to the Transferor Percentage of
Principal Collections (other than such amounts allocated to cover
shortfalls as described above under Sections 3.01(d) and 3.01(i) above)
shall be available for reinvestment in Subsequent Contracts and
Subsequent Leased Vehicles; provided, however, that on any Monthly
Allocation Date related to a Collection Period the last day of which is
after the
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Revolving Period, such amounts will constitute Transferor Amounts and
shall be applied and paid as described in Section 3.01(i) above.
(l) ALLOCATIONS IN RESPECT OF ADVANCES; APPLICATIONS AND PAYMENTS OF
PRINCIPAL COLLECTIONS.
(i) Provided that a Liquidation Event has not occurred, on each
Monthly Allocation Date, based on the related Servicer's Certificate, the 1998-B
Securitization Trustee shall allocate an amount equal to the amount of any
unreimbursed Advances (which includes Inventory Advances) and Nonrecoverable
Advances and shall pay to the Servicer the amount of any unreimbursed Advances
and Nonrecoverable Advances so allocated (unless the Servicer has deposited
Collections net of such amounts pursuant to Section 3.01(g) above) from (i)
Principal Collections, to the extent available therefor and (ii) Interest
Collections, to the extent of any insufficiency.
(ii) Thereafter, on any relevant Monthly Allocation Date, the 1998-B
Securitization Trustee shall apply the Investor Percentage of remaining
Principal Collections plus any Accelerated Principal Distribution Amount (A) in
reimbursement to the Transferor for unreimbursed Maturity Advances and (B) for
deposit into the 1998-B SUBI Certificateholders' Account in respect of the
Adjusted Class A-1 Certificate Balance (until the Adjusted Class A-1 Certificate
Balance is reduced to zero), the Adjusted Class A-2 Certificate Balance (until
the Adjusted Class A-2 Certificate Balance is reduced to zero), the Adjusted
Class A-3 Certificate Balance (until the Adjusted Class A-3 Certificate Balance
is reduced to zero) or the Adjusted Class B Certificate Balance (until the
Adjusted Class B Certificate Balance is reduced to zero), in that order.
(iii) On each Certificate Payment Date that coincides with or follows
the related Targeted Maturity Date for any Class of Certificates, payments in
reduction of the Adjusted Class A-1 Certificate Balance, Adjusted Class A-2
Certificate Balance, Adjusted Class A-3 Certificate Balance or Adjusted Class B
Certificate Balance shall be made as follows and in the following order of
priority:
(A) with respect to the Class A-1 Certificates, all amounts on
deposit in the 1998-B SUBI Collection Account and the 1998-B SUBI
Certificateholders' Account in respect of the Adjusted Class A-1
Certificate Balance (after giving effect to any application of amounts
withdrawn from the Reserve Fund or Transferor Amounts available for such
application pursuant to Section 3.01(d)) will be paid to the Class A-1
Certificateholders until the Adjusted Class A-1 Certificate Balance is
reduced to zero;
(B) with respect to the Class A-2 Certificates, all amounts on
deposit in the 1998-B SUBI Collection Account and the 1998-B SUBI
Certificateholders' Account in respect of the Adjusted Class A-2
Certificate Balance (after giving effect to any application of amounts
withdrawn from the Reserve Fund and Transferor Amounts available for such
application pursuant to Section 3.01(d)) will be paid to Class A-2
Certificateholders until the class A-2 Certificate Balance is reduced to
zero;
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(C) with respect to the Class A-3 Certificates, all amounts on
deposit in the 1998-B SUBI Collection Account and the 1998-B SUBI
Certificateholders' Account in respect of the Adjusted Class A-3
Certificate Balance (after giving effect to any application of amounts
withdrawn from the Reserve Fund and Transferor Amounts available for such
application pursuant to Section 3.01(d)) will be paid to Class A-3
Certificateholders until the Adjusted Class A-3 Certificate Balance is
reduced to zero; and
(D) with respect to the Class B Certificates, all amounts on
deposit in the 1998-B SUBI Collection Account and the 1998-B SUBI
Certificateholders' Account in respect of the Adjusted Class B
Certificate Balance (after giving effect to any application of amounts
withdrawn from the Reserve Fund and Transferor Amounts available for such
application pursuant to Section 3.01(d)) will be paid to the Class B
Certificateholders.
(iv) Notwithstanding the foregoing, (a) payments in reduction of the
Adjusted Class A-1 Certificate Balance, the Adjusted Class A-2 Certificate
Balance, the Adjusted Class A-3 Certificate Balance or the Adjusted Class B
Certificate Balance may be made prior to the related Targeted Maturity Date if
the assets of the Trust are liquidated following a Liquidation Event pursuant to
Section 7.01, and (b) payments in reduction of the Adjusted Class B Certificate
Balance may be made prior to the related Targeted Maturity Date in connection
with the exercise of the Transferor of its option to repurchase the 1998-B SUBI
Certificate pursuant to Section 7.02.
(m) MATURITY ADVANCES. To the extent that the Adjusted Class A-1
Certificate Balance is not reduced to zero on the Class A-1 Targeted Maturity
Date, the Adjusted Class A-2 Certificate Balance is not reduced to zero on the
Class A-2 Targeted Maturity Date, the Adjusted Class A-3 Certificate Balance is
not reduced to zero on the Class A-3 Targeted Maturity Date or the Adjusted
Class B Certificate Balance is not reduced to zero on the Class B Targeted
Maturity Date, the Transferor will have the option to make a Maturity Advance in
any amount up to the amount of such deficiency; provided that the Transferor
must give the Servicer and the 1998-B Securitization Trustee no fewer than two
Business Days' written notice of its intention to do so. Amounts received by
the Servicer or 1998-B Securitization Trustee in respect of any Maturity Advance
shall be deposited promptly by such recipient into the 1998-B SUBI Collection
Account for application on the relevant Certificate Payment Date that follows
the date such Maturity Advance is made and such notice is given.
(n) ALLOCATIONS OF LOSS AMOUNTS. The Investor Percentage of Loss
Amounts allocated to the Certificates shall be allocable to the Investor
Certificates. Loss Amounts allocated to the Investor Certificates on any
Monthly Allocation Date will be allocated in the following order of priority:
(i) in reduction of the Adjusted Class B Certificate Balance,
until the Adjusted Class B Certificate Balance is reduced to zero; and
(ii) in reduction of the Adjusted Class A-1 Certificate Balance,
the Adjusted Class A-2 Certificate Balance and the Adjusted Class A-3
Certificate Balance pro rata (based on such Adjusted Class A-1
Certificate Balance, Adjusted Class A-2 Certificate Balance and Adjusted
Class A-3 Certificate Balance as of the last day of the related
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Collection Period) until the Adjusted Certificate Balance of each such
Class is reduced to zero.
Loss Amounts will be reimbursable on the Monthly Allocation Date on which
they are allocated, and Certificate Principal Loss Amounts will be reimbursable
on future Monthly Allocation Dates, in each case from Available Interest,
amounts withdrawn from the Reserve Fund and Transferor Amounts pursuant to
Sections 3.01(c), (d) and (i); PROVIDED, HOWEVER, that no such reimbursements
will be made for any Class of Certificates after the first relevant Certificate
Payment Date on which the Adjusted Class B Certificate Balance, the Adjusted
Class A-1 Certificate Balance, the Adjusted Class A-2 Certificate Balance, the
Adjusted Class A-3 Certificate Balance or the Adjusted Class B Certificate
Balance, as the case may be, is reduced to zero.
Certificate Principal Loss Amounts which are not reimbursed as provided
herein will bear interest at the Class A-1 Rate, Class A-2 Rate, Class A-3 Rate
or Class B Rate, as the case may be, until reimbursed or until the Adjusted
Class B Certificate Balance, the Adjusted Class A-1 Certificate Balance, the
Adjusted Class A-2 Certificate Balance or the Adjusted Class A-3 Certificate
Balance, as the case may be, is reduced to zero, and allocations and payments in
respect thereof will be made pursuant to Section 3.01(c).
(o) PAYMENTS FOLLOWING LIQUIDATION EVENT. Notwithstanding the
priorities set forth in Section 3.01 above, following any Liquidation Event and
liquidation of the assets of the 1998-B Securitization Trust pursuant to Section
8.02, the net proceeds of the liquidation of the assets of the 1998-B Trust will
be paid pursuant to the following payment priorities on the Monthly Allocation
Date following the receipt of such proceeds:
(i) to pay to the Transferor, an amount equal to the amount of
any unreimbursed Maturity Advances;
(ii) to pay to the 1998-B Securitization Trustee and Titling
Trustee, an amount equal to the amount of any Capped or Uncapped
Administrative Expense not yet reimbursed;
(iii) to pay to the Servicer, an amount equal to the amount of any
unreimbursed Advances made by it;
(iv) to pay to the Class A Certificateholders, as applicable, on
a pro rata basis, based on the respective amounts of interest so accrued
on each such Class, an amount equal to the sum of the accrued and unpaid
Class A-1 Monthly Interest Accrual Amounts, the Class A-2 Monthly
Interest Accrual Amounts and the Class A-3 Monthly Interest Accrual
Amounts through the date of such payment and an amount equal to the sum
of the unreimbursed Class A-1 Interest Carryover Shortfall, Class A-2
Interest Carryover Shortfall and Class A-3 Interest Carryover Shortfall
through the date of such payment;
(v) to pay to the Class B Certificateholders, an amount equal to
the amount of any accrued and unpaid interest on the Adjusted Class B
Certificate Balance and any
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Certificate Principal Loss Amounts allocated thereto through the
date of such payment and not previously reimbursed;
(vi) to pay to the Class A Certificateholders, an amount equal to
the sum of (i) the Adjusted Class A-1 Certificate Balance plus any
unreimbursed Certificate Principal Loss Amounts allocated thereto, (ii)
the Adjusted Class A-2 Certificate Balance plus any unreimbursed
Certificate Principal Loss Amounts allocated thereto and (iii) the
Adjusted Class A-3 Certificate Balance plus any unreimbursed Certificate
Principal Loss Amounts allocated thereto to be paid to the Class A-1
Certificateholders, Class A-2 Certificateholders and Class A-3
Certificateholders on a pro rata basis, based on the amounts described in
clauses (i), (ii) and (iii) above;
(vii) to pay to the Class B Certificateholders, an amount equal to
the Adjusted Class B Certificate Balance plus any unreimbursed
Certificate Principal Loss Amounts allocated thereto; and
(viii) to pay to the Transferor any remaining proceeds.
(p) SUBORDINATION. The rights of the Class B Certificateholders to
receive allocations, applications and payments in respect of certain amounts of
Available Interest, amounts withdrawn from the Reserve Fund and Transferor
Amounts shall be and hereby are subordinated to the rights of the Class A-1
Certificateholders, the Class A-2 Certificateholders and the Class A-3
Certificateholders to receive the allocations, applications and payments in
respect thereof to the extent dictated by the payment priorities set forth in
this Section 3.01.
(q) PROCEEDS OF RESIDUAL VALUE INSURANCE POLICIES. In the event that
any proceeds of the Residual Value Insurance Policies are transferred to an
account maintained by the Titling Trustee or the 1998-B Securitization Trustee,
such amounts shall be distributed to the holder of the 1998-B SUBI Insurance
Certificate by the Titling Trustee, or the 1998-B Securitization Trustee, as
applicable, on the succeeding Monthly Allocation Date as directed in writing by
the Servicer.
3.02 1998-B SUBI CERTIFICATEHOLDERS' ACCOUNT; THE RESERVE FUND.
(a) ESTABLISHMENT OF 1998-B SUBI CERTIFICATEHOLDERS' ACCOUNT. A
separate trust account to be known as the "1998-B SUBI Certificateholders'
Account" will be established and shall be maintained with the 1998-B
Securitization Trustee which will include the money and other property deposited
and held therein pursuant to Section 3.01 and this Section. The 1998-B SUBI
Certificateholders' Account shall be an Eligible Account. If for any reason the
1998-B SUBI Certificateholders' Account is no longer an Eligible Account, the
1998-B Securitization Trustee shall promptly cause the 1998-B SUBI
Certificateholders' Account to be moved to another institution or otherwise
changed so that the 1998-B SUBI Certificateholders' Account becomes an Eligible
Account.
Pursuant to Section 4.02(j) of the 1998-B SUBI Servicing Supplement, on
each Monthly Allocation Date the Servicer shall direct the 1998-B Securitization
Trustee in writing to cause the funds in the 1998-B SUBI Certificateholders'
Account to be invested in Permitted Investments
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bearing interest at the applicable Required Rates, which are expected to be
TMCC Demand Notes so long as the TMCC Demand Notes are Permitted Investments.
Such Permitted Investments shall mature in such a manner that the amount
required to be distributed on the next succeeding Certificate Payment Date
will be available on such next succeeding Certificate Payment Date. If such
investments mature prior to the succeeding relevant Monthly Allocation Date,
the Servicer will direct the 1998-A Securitization Trustee to invest such
amounts in Permitted Investments that are not TMCC Demand Notes and that will
mature on the succeeding relevant Monthly Allocation Date, and the net
investment income with respect to such investments, but only such
investments, will be distributable to the Transferor on such succeeding
relevant Monthly Allocation Date. All amounts held in the 1998-B SUBI
Certificateholders' Account shall be invested by the 1998-B Securitization
Trustee in Permitted Investments at the written direction of the Servicer
until distributed or otherwise applied in accordance with the 1998-B
Securitization Trust Agreement.
Except as provided in the preceding paragraph, earnings (net of
investment losses) on the investment of funds deposited into the 1998-B SUBI
Certificateholders' Account in respect of the Class A-1 Monthly Interest Accrual
Amount, any Class A-1 Interest Carryover Shortfalls, the Class A-2 Monthly
Interest Accrual Amount, any Class A-2 Interest Carryover Shortfalls, the Class
A-3 Monthly Interest Accrual Amount, any Class A-3 Interest Carryover
Shortfalls, interest accrued on the Adjusted Class B Certificate Balance and on
Certificate Principal Loss Amounts allocated thereto and not reimbursed and any
Class B Interest Carryover Shortfalls, shall be part of Available Interest.
Such net investment earnings need not be withdrawn from the 1998-B SUBI
Certificateholders' Account and redeposited as Available Interest, but may be
retained in the 1998-B SUBI Certificateholders' Account and applied as provided
in this 1998-B Securitization Trust Agreement. The 1998-B Securitization
Trustee shall incur no liability relating to any investments made pursuant to
this Section 3.02(a) absent its own negligence or willful misfeasance.
In the event that a Trust Officer of the 1998-B Securitization Trustee
has actual knowledge that Standard & Poor's has downgraded TMCC's short-term
debt to a rating less than A-1+ or Standard & Poor's has downgraded TMCC's
long-term debt to a rating of less than AA, Moody's has downgraded TMCC's
short-term debt to a rating less than P-1 or Moody's downgrades TMCC's
long-term debt to a rating less than Aa3, the 1998-B Securitization Trustee
shall determine whether (i) at such time one or more Permitted Investments
other than TMCC Demand Notes having substantially the same maturities and
similar demand features as the TMCC Demand Notes and bearing interest at the
relevant Required Rates are available and (ii) investment in such other
Permitted Investments rather than in TMCC Demand Notes will not cause a
Rating Agency to reduce or withdraw its rating of any Class of Investor
Certificates. In making such determinations, the 1998-B Securitization
Trustee shall be entitled to rely (as to clause (i)) on the advice of Morgan
Stanley & Co. Incorporated, or a nationally recognized firm of independent
accountants, and (as to clause (ii)) shall inquire directly of the Rating
Agencies based on the specific securities, if any, identified pursuant to the
foregoing. If the 1998-B Securitization Trustee concludes that both
conditions are satisfied, or a Trust Officer of the 1998-B Securitization
Trustee has actual knowledge that a Liquidation Event has occurred, the
1998-B Securitization Trustee will exercise its right under the Indenture to
demand payment in full of all outstanding TMCC Demand Notes.
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(b) ESTABLISHMENT OF THE RESERVE FUND. The Transferor shall establish
and maintain with the 1998-B 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) and this Section. Funds
in the Reserve Fund shall be the property of the Transferor and not the property
of the 1998-B Securitization Trust. The Transferor hereby grants to the 1998-B
Securitization Trustee for the benefit of the Investor Certificateholders a
security interest in all funds (including Permitted Investments) in the Reserve
Fund (including the Reserve Fund Initial Deposit) and the proceeds thereof, and
the 1998-B Securitization Trustee shall have all of the rights of a secured
party under the UCC with respect thereto; provided that all income from the
investment of funds in the Reserve Fund and the right to receive such income are
retained by the Transferor and are not transferred, assigned or otherwise
conveyed to the 1998-B Securitization Trustee hereunder. The Reserve Fund shall
be an Eligible Account and initially shall be established with the 1998-B
Securitization Trustee. If for any reason the Reserve Fund is no longer an
Eligible Account, the 1998-B 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.
All amounts held in the Reserve Fund shall be invested by the 1998-B
Securitization Trustee, as directed in writing by the Servicer pursuant to
Section 4.02(j) of the 1998-B SUBI Servicing Supplement, in Permitted
Investments. Earnings on investment of funds in the Reserve Fund shall be paid
to the Transferor on each Monthly Allocation Date, subject to Section
3.01(h)(ii), and losses and any investment expenses shall be charged against the
funds on deposit therein. The 1998-B Securitization Trustee shall incur no
liability for the selection of investments or for losses thereon absent its own
negligence or willful misfeasance. The 1998-B Securitization Trustee shall have
no liability in respect of losses incurred as a result of the liquidation of any
investment prior to its stated maturity date or the failure of the Servicer to
provide timely written investment directions.
(c) DESIGNATION OF THE RESERVE FUND. The 1998-B Securitization
Trustee hereby confirms that (i) the 1998-B Securitization Trustee is acting,
with respect to its duties under this Section 3.02, as a "securities
intermediary" as defined in Section 8-102 of the UCC (in such capacity, the
"Reserve Fund Securities Intermediary"), (ii) has established the Reserve Fund
as a "securities account" as such term is defined in Section 8-501(a) of the
UCC, (iii) the Reserve Fund Securities Intermediary shall, subject to the terms
of this Agreement, treat the 1998-B Securitization Trustee as entitled to
exercise the rights that comprise any financial asset credited to the Reserve
Fund, and (iv) all securities or other property underlying any financial assets
credited to the Reserve Fund shall be registered in the name of the Securities
Intermediary, endorsed to the Securities Intermediary or in blank or credited to
another securities account maintained in the name of the Securities Intermediary
for the benefit of 1998-B Securitization Trustee and in no case will any
financial asset credited to the Reserve Fund be registered in the name of any
other person, payable to the order of any other person, or specially endorsed to
any other person, except to the extent the foregoing have been specially
endorsed by the Transferor to the 1998-B Securitization Trustee. The 1998-B
Securitization Trustee shall incur no liability relating to any investments made
pursuant to this Section 3.02(c) absent its own negligence or willful
misfeasance.
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(d) FINANCIAL ASSETS ELECTION. The 1998-B Securitization Trustee
hereby agrees that the Reserve Fund and each item of property (whether
investment property, financial asset, security or instrument), other than cash,
credited to the Reserve Fund shall be treated as a "financial asset" within the
meaning of Section 8-102(A)(9) of the UCC.
(e) ENTITLEMENT ORDERS. If at any time the Reserve Fund Securities
Intermediary shall receive an "entitlement order" (within the meaning of Section
8-102(A)(8) of the UCC) issued by the 1998-B Securitization Trustee and relating
to the Reserve Fund, the Reserve Fund Securities Intermediary shall comply with
such entitlement order without further consent by any other person. The 1998-B
Securitization Trustee hereby agrees only to issue entitlement orders at the
written direction of the Servicer. The Reserve Fund Securities Intermediary
shall have no obligation to act, and shall be fully protected in refraining from
acting, in respect of the financial assets credited to the Reserve Fund in the
absence of such an entitlement order.
(f) SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event that the
1998-B Securitization Trustee has or subsequently obtains a security interest in
the Reserve Fund or any security entitlement credited thereto by agreement,
operation of law or otherwise, the 1998-B Securitization Trustee hereby agrees
that such security interest shall be subordinate to the security interest of the
Transferor. The financial assets and other items deposited to the Reserve Fund
will not be subject to deduction, set-off, banker's lien, or any other right in
favor of any person other than the Transferor provided, however, that
notwithstanding anything herein to the contrary, the 1998-B Securitization
Trustee shall have a lien senior to that of the Transferor for any and all
amounts required for the payment of the purchase price of a financial asset,
which purchase has been placed but not yet cleared or settled. Any such
deductions shall not be deemed to refer to deductions for payment of the
purchase price in securities transactions not yet settled or cleared.
(g) CONFLICTING ORDERS. The 1998-B Securitization Trustee, in such
capacity, has not entered into and, until termination of this 1998-B
Securitization Trust Agreement, will not enter into, any agreement with any
other person relating to the Reserve Fund or any financial assets credited
thereto pursuant to which it has agreed to comply with entitlement orders (as
defined in Section 8-102(a)(8) of the UCC) of such person. No financial asset
will be registered in the name of the 1998-B Securitization Trustee, in such
capacity, payable to its order, or specially endorsed to it, except to the
extent such financial asset has been endorsed to the Reserve Fund Securities
Intermediary or in blank.
(h) DEPOSITS INTO THE RESERVE FUND. On or prior to the Closing Date,
the Transferor shall deposit an amount equal to the Reserve Fund Initial Deposit
into the Reserve Fund, of which amount $780,957 shall be allocated as the Class
B Reserve Amount. Amounts on deposit in the Reserve Fund shall be supplemented
from time to time by the deposit therein of amounts described in Section
3.01(c)(xi), and under section 3.01(i); PROVIDED, HOWEVER, that no such
subsequent amounts shall be allocated to the Class B Reserve Amount. On each
Monthly Allocation Date the amounts on deposit in the Reserve Fund shall be
available for allocation and application or payment as provided in Section 3.01;
provided that, Subject to the provisions of Section 3.01, on each Certificate
Payment Date, if the amount on deposit in the Reserve Fund
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(after giving effect to all deposits thereto or withdrawals therefrom on such
Monthly Allocation Date) is greater than the Specified Reserve Fund Balance,
the 1998-B Securitization Trustee will pay any such excess amount to the
Transferor as and to the extent described in Section 3.01, whereupon such
excess amount shall no longer be available to the 1998-B Securitization
Trustee or the Investor Certificateholders.
(i) PAYMENTS FOLLOWING TERMINATION OF TRUST. On each related Stated
Maturity Date and upon termination of the 1998-B 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 on such date to reimburse Maturity
Advances or other unreimbursed Advances or pay accrued and unpaid compensation
payable to the Servicer through such date, for payment to the Investor
Certificateholders, and for payment of any remaining amounts due to the 1998-B
Securitization Trustee or the Titling Trustee. Upon termination of the 1998-B
Securitization Trust pursuant to Section 7.01, after payment of such amounts
due, any amounts remaining on deposit in the Reserve Fund shall be paid to the
Transferor. Upon termination of the 1998-B Securitization Trust, the 1998-B
Securitization Trustee shall release from the lien of this 1998-B Securitization
Trust Agreement the Reserve Fund and any financial assets held therein, and
shall execute any requisite filing under the UCC as provided by the Transferor
to evidence such release and the release of any security interest of the 1998-B
Securitization Trust or the 1998-B Securitization Trustee therein.
(j) The Securities Intermediary undertakes to perform such duties and
only such duties as are specifically set forth in this Section 3.02. The
Reserve Fund Securities Intermediary, in such capacity, shall not have any
duties or responsibilities except those expressly set forth in this Section 3.02
or be a trustee for or have any fiduciary obligation to any party hereto.
(k) The duties and obligations of the Reserve Fund Securities
Intermediary, in such capacity, shall be determined solely by the express
provisions of this Section 3.02, and the Reserve Fund Securities Intermediary
shall take such action with respect to this Section 3.02 as it shall be directed
hereunder, and the Reserve Fund Securities Intermediary, in such capacity, shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Section 3.02 and as specifically directed by the
1998-B Securitization Trustee, and no implied covenants or obligations shall be
read into this Section 3.02 against the Reserve Fund Securities Intermediary;
and in the absence of bad faith on the part of the Reserve Fund Securities
Intermediary, the Reserve Fund Securities Intermediary 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 Reserve Fund
Securities Intermediary which conform to the requirements of this Section 3.02.
(l) The Reserve Fund Securities Intermediary, in such capacity, shall
not be liable for any error of judgment made in good faith by an officer or
officers of the Reserve Fund Securities Intermediary, acting as such, unless it
shall be determined that the Reserve Fund Securities Intermediary, or any such
officer or officers, was negligent in ascertaining the pertinent facts, or
otherwise acted with negligence or willful misfeasance, and the Reserve Fund
Securities Intermediary shall not be liable with respect to any action taken or
omitted to be taken by it in
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good faith in accordance with any direction of the 1998-B Securitization
Trustee given under this 1998-B Securitization Trust Agreement.
(m) None of these provisions of this 1998-B Securitization Trust
Agreement shall require the Reserve Fund Securities Intermediary to expend or
risk its own funds or otherwise to incur any liability, financial or otherwise,
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it.
(n) The Reserve Fund Securities Intermediary may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval or other paper or document actually believed
by it to be genuine and to have been signed or presented by the proper party or
parties.
(o) Whenever in the administration of the provisions of this Section
3.02, the Reserve Fund Securities Intermediary shall deem it necessary or
desirable that a matter be proved or established prior to taking or suffering
any action to be taken hereunder, the Reserve Fund Securities Intermediary shall
be entitled to receive from the Transferor a certificate of an officer thereof
stating that the matter is established as fact and such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Reserve Fund Securities
Intermediary, be deemed to be conclusively proved and established by a
certificate signed by one of the Trust Officers of the 1998-B Securitization
Trustee and delivered to the Reserve Fund Securities Intermediary, and such
certificate, in the absence of negligence or willful misfeasance on the part of
the Reserve Fund Securities Intermediary, shall be full warrant to the Reserve
Fund Securities Intermediary for any action taken, suffered or omitted by it
under the provisions of this Section 3.02 on the basis thereof.
(p) The Reserve Fund Securities Intermediary may consult with counsel
and the advice or any opinion of counsel shall be full and complete
authorization and protection in respect of any action taken or omitted by it
hereunder in good faith and in accordance with such advice or opinion of
counsel.
(q) The Reserve Fund Securities Intermediary shall not be bound to
make any investigation into the facts or matters stated in any resolution,
order, certificate, statement, instrument, opinion, report, notice, request,
consent, entitlement order, approval or other paper or document.
(r) The Reserve Fund Securities Intermediary shall have no obligation
to invest or reinvest any cash held in the Reserve Fund in the absence of timely
and specific written investment direction from the 1998-B Securitization
Trustee. In no event shall the Reserve Fund Securities Intermediary be liable
for the selection of investments or for investment losses incurred as a result
of the liquidation of any investment prior to its stated maturity or the failure
of the 1998-B Securitization Trustee to provide timely written investment
direction.
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(s) The Reserve Fund Securities Intermediary may at any time resign by
giving 30 days written notice of resignation to the 1998-B Securitization
Trustee and the Transferor. Upon receiving such notice of resignation, the
1998-B Securitization Trustee shall promptly appoint a successor and, upon the
acceptance by the successor of such appointment, release the resigning Reserve
Fund Securities Intermediary from its obligations hereunder by written
instrument, a copy of which instrument shall be delivered to each of the 1998-B
Securitization Trustee, the resigning Reserve Fund Securities Intermediary and
the successor. If no successor shall have been so appointed and have accepted
appointment within 45 days after the giving of such notice of resignation, the
resigning Reserve Fund Securities Intermediary may petition any court of
competent jurisdiction for the appointment of a successor.
(t) The parties each (for itself and any person or entity claiming
through it) hereby release, waive, discharge, exculpate and covenant not to sue
the Reserve Fund Securities Intermediary for any action taken or omitted under
this Section 3.02 except to the extent caused by the Reserve Fund Securities
Intermediary's negligence or willful misfeasance. Anything in this 1998-B
Securitization Trust Agreement to the contrary notwithstanding, in no event
shall the Reserve Fund Securities Intermediary be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Reserve Fund Securities Intermediary has
been advised of the likelihood of such loss or damage (unless so advised prior
to taking any such action) and regardless of the form of action.
(u) The Servicer, in its capacity as such, shall indemnify, defend and
hold harmless the Reserve Fund Securities Intermediary and its officers,
directors, employees, representatives and agents, from and against and reimburse
the Reserve Fund Securities Intermediary for any and all claims, expenses,
obligations, liabilities, losses, damages, injuries (to person, property, or
natural resources), penalties, stamp or other similar taxes, actions, suits,
judgments, reasonable costs and expenses (including reasonable attorney's and
agent's fees and expenses) directly or indirectly relating to, or arising from,
claims against the Reserve Fund Securities Intermediary by reason of its
participation in the transactions contemplated by this Section 3.02, including
without limitation all reasonable costs required to be associated with claims
for damages to persons or property, and reasonable attorneys' and consultants'
fees and expenses and court costs except to the extent caused by the Reserve
Fund Securities Intermediary's negligence or willful misfeasance. The
provisions of this Section 3.02(u) shall survive the termination of this 1998-B
Securitization Trust Agreement or the earlier resignation or removal of the
Reserve Fund Securities Intermediary.
3.03 STATEMENTS TO CERTIFICATEHOLDERS.
(a) On each Determination Date, commencing in October, 1998, the
Servicer will prepare and forward to the Titling Trustee, the 1998-B
Securitization Trustee and the Luxembourg Stock Exchange, and the 1998-B
Securitization Trustee will make available to each Certificateholder on each
Monthly Allocation Date, a statement setting forth with respect to the related
Monthly Allocation Date or the related Collection Period, among other things,
the following:
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(i) the Investor Percentage and Transferor Percentage in effect
with respect to the related Collection Period;
(ii) the aggregate amount being allocated and applied or paid to
the Certificateholders of each Class (the "Certificate Distribution
Amount");
(iii) the amount of the Certificate Distribution Amount allocable
to (A) the Class A-1 Monthly Interest Accrual Amount, the Class A-2
Monthly Interest Accrual Amount, the Class A-3 Monthly Interest Accrual
Amount and the Class B Monthly Interest Accrual Amount; (B) any
unreimbursed Class A-1 Interest Carryover Shortfall, Class A-2 Interest
Carryover Shortfall, Class A-3 Interest Carryover Shortfall and any Class
B Interest Carryover Shortfall; and (C) the reduction of the Adjusted
Class A-1 Certificate Balance, the Adjusted Class A-2 Certificate
Balance, the Adjusted Class A-3 Certificate Balance and the Adjusted
Class B Certificate Balance, separately identifying any Maturity
Advances;
(iv) the Adjusted Class A-1 Certificate Balance, the Adjusted
Class A-2 Certificate Balance, the Adjusted Class A-3 Certificate Balance
and Adjusted Class B Certificate Balance, in each case as of such Monthly
Allocation Date and after giving effect to the allocation and application
or payment of the Certificate Distribution Amount;
(v) the aggregate amount, if any, of the reimbursement of Loss
Amounts included in the Certificate Distribution Amount and the amount
thereof allocated to the Adjusted Class A-1 Certificate Balance, the
Adjusted Class A-2 Certificate Balance, the Adjusted Class A-3
Certificate Balance and the Adjusted Class B Certificate Balance;
(vi) the amount of the Certificate Distribution Amount allocable
to reimbursement of Certificate Principal Loss Amounts and the amount
thereof allocated to the Adjusted Class A-1 Certificate Balance, the
Adjusted Class A-2 Certificate Balance, the Adjusted Class A-3
Certificate Balance and the Adjusted Class B Certificate Balance;
(vii) the amount, if any, of the remaining unreimbursed
Certificate Principal Loss Amounts, after giving effect to the allocation
and application or payment of the Certificate Distribution Amount;
(viii) the Investor Percentage of the Servicing Fee and any amounts
remaining unpaid in respect thereof from any prior Monthly Allocation
Date;
(ix) the amount of any Required Amount included in the
Certificate Distribution Amount and the balance on deposit in the Reserve
Fund on such Monthly Allocation Date, after giving effect to 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 as of the date of such
report;
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(x) the amount of Transferor Amounts, if any, included in the
Certificate Distribution Amount;
(xi) the Aggregate Net Investment Value as of the end of such
Collection Period;
(xii) 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;
(xiii) the amount of Advances and Maturity Advances made, and the
amount of unreimbursed Advances and Maturity Advances outstanding after
giving effect to the allocation or distribution of the Certificate
Distribution Amount; and
(xiv) Whether the "Residual Value Test" is satisfied, separately
stating (A) whether with respect to the related Collection Period the
number of Leased Vehicles returned to the Servicer relating to Contracts
that became Matured Contracts and that were sold during such period is
greater than 25% of all Contracts that, as of their respective
origination dates, had been scheduled to become Matured Contracts during
such period (provided that at least 500 such Contracts had been scheduled
to become Matured Contracts during such Collection Period), and (B)
whether the average Net Matured Leased Vehicle Proceeds during the three
immediately preceding calendar months is less than 75% of the average
Residual Values of Leased Vehicles disposed of or liquidated during such
period.
(b) The Servicer shall prepare certain reports during the Revolving
Period that reflect or include certain statistical information with respect to
Subsequent Lease Contracts and Subsequent Leased Vehicles allocated as SUBI
Assets during the Revolving Period. Such reports will be delivered by the
Servicer to the 1998-B Securitization Trustee and the Luxembourg Stock Exchange
within 20 days of the last day of the Collection Period during which Subsequent
Contracts and Subsequent Leased Vehicles are added to the 1998-B SUBI Sub-Trust
such that the aggregate Discounted Principal Balance and Subsequent Contracts
and Subsequent Leased Vehicles added since the Closing Date exceeds 10% of the
Aggregate Net Investment Value as of the Cut-Off Date or, for each subsequent
such report, exceeds 10% of the Aggregate Net Investment Value as of the date of
the prior report. Each such report will be delivered by the Servicer to the
1998-B Securitization Trustee and each Paying Agent and made available to each
person who makes a written request therefor.
(c) With respect to the Monthly Allocation Date in October 1998,
amounts collected by the Servicer during July, August and September 1998 will be
allocated and used to make applications and payments on such Monthly Allocation
Date pursuant to the priorities set forth in Section 3.01 as though all such
amounts had been collected during the September 1998 Collection Period. For
such Monthly Allocation Date, the Servicer will prepare reports concerning such
collections as though each of July, August and September 1998 had each been a
separate Collection Period corresponding to separate Monthly Allocation Dates.
Any person
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may obtain a copy of any such statement, of any Servicer's
Certificate required pursuant to Section 5.01(b) of the 1998-B SUBI Servicing
Supplement, any annual report of Independent Accountants required pursuant to
Section 5.02 of the 1998-B SUBI Servicing Supplement, and of any annual
Officer's Certificate required pursuant to Section 5.03 of the 1998-B SUBI
Servicing Supplement, upon written request to the 1998-B Securitization Trustee
at the Corporate Trust Office.
(d) Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law, the 1998-B
Securitization Trustee shall mail to each Person who at any time during such
calendar year shall have been a Holder of a Class B Certificate, a statement or
statements, based on the Servicer's Certificate prepared by the Servicer, which
in the aggregate contain the sum of the amounts set forth in clauses (iii),
(vii) and (viii) in Section 3.03(a) for such calendar year or, in the event such
Person shall have been a Holder of a Class B Certificate during a portion of
such calendar year, for the applicable portion of such year, for the purposes of
such Certificateholder's preparation of income tax returns. In addition, the
Servicer shall furnish to the 1998-B 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 IV
THE CERTIFICATES
4.01 THE CERTIFICATES.
(a) The Class A-1 Certificates, the Class A-2 Certificates, the Class
A-3 Certificates, the Class B Certificates and the Transferor Certificate shall
be substantially in the form of Exhibits A-1, A-2, A-3, B and C, respectively,
to this 1998-B Securitization Trust Agreement. The Class A-1 Certificates, the
Class A-2 Certificates and the Class A-3 Certificates shall be issuable in
minimum denominations of $1,000 and integral multiples of $1 in excess thereof
and the Class B Certificates shall be issuable in minimum denominations of
$500,000 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 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 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 1998-B Securitization Trust by manual or facsimile
signature of an officer or other authorized signatory of the 1998-B
Securitization Trustee. 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 1998-B Securitization Trustee shall not be
rendered invalid, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the
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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 1998-B Securitization Trust, including the right to receive the
Investor Percentage of Interest Collections and Principal Collections and the
other amounts at the times and in the amounts specified in this 1998-B
Securitization Trust Agreement. The Transferor Certificate shall represent the
interest in the 1998-B Securitization Trust not represented by the Investor
Certificates.
(c) No Certificate shall be entitled to any benefit under this 1998-B
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, B or C to this 1998-B Securitization
Trust Agreement, as the case may be, executed by the 1998-B Securitization
Trustee or an authentication agent appointed for such purpose by the 1998-B
Securitization Trustee, by manual or facsimile signature. Such certificate of
authentication upon any Certificate shall be the sole conclusive evidence that
such Certificate has been duly authenticated and delivered under this 1998-B
Securitization Trust Agreement. The 1998-B Securitization Trustee is hereby
authorized to appoint an authentication agent to execute any or all such
certificates of authentication on behalf of the 1998-B Securitization Trustee.
4.02 AUTHENTICATION AND DELIVERY OF CERTIFICATES.
(a) In exchange for, and simultaneously with the sale, assignment and
transfer to the 1998-B Securitization Trustee of the 1998-B SUBI (exclusive of
all monies and payments due or payable under any Residual Value Insurance
Policies and the right to receive such amounts), the 1998-B SUBI Certificate and
the other assets of the 1998-B Securitization Trust, the 1998-B 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 and the Initial Class B Certificate Balance, and the Transferor
Certificate, each duly authenticated by the 1998-B Securitization Trustee or any
authentication agent appointed thereby, and evidencing the entire ownership of
the 1998-B Securitization Trust.
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 Registrar shall provide for the registration of Certificates and
transfers and exchanges of Certificates as provided in this 1998-B
Securitization Trust Agreement; provided, however, that Bankers Trust Luxembourg
S.A. shall provide for transfers and exchanges of the Definitive Certificates,
if any. The 1998-B Securitization Trustee is hereby initially appointed
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as provided in this 1998-B Securitization Trust
Agreement. In the event that, subsequent to the Closing Date, the 1998-B
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
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Borough of Manhattan, The City of New York, agreeing to act in accordance
with the provisions of this 1998-B Securitization Trust Agreement applicable
to it, and otherwise acceptable to the 1998-B Securitization Trustee, to act
as successor Certificate Registrar under this 1998-B Securitization Trust
Agreement.
The Transferor Certificate shall be owned by the Transferor and may not
be transferred, as provided by Section 5.06.
(b) No transfer of the Class B Certificates shall be made unless such
resale or transfer is made (i) pursuant to an effective Registration Statement
under the Securities Act, (ii) in a transaction (other than a transaction in
clause (iv) below) exempt from the registration requirements of the Securities
Act and applicable state and foreign securities laws, (iii) to the Transferor or
(iv) to a Person who the transferor of such Class B Certificate reasonably
believes is a qualified institutional buyer within the meaning of Rule 144A
under the Securities Act and that is aware that the resale or other transfer is
being made in reliance on Rule 144A or to an institutional "accredited investor"
as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act (an
"Institutional Accredited Investor"). In the event that a transfer is to be
made as described in clause (ii) of the preceding sentence, the prospective
transferee shall deliver or cause to be delivered an Opinion of Counsel in form
and substance satisfactory to the 1998-B Securitization Trustee and the
Transferor to the effect that such transfer may be made without registration
under the Securities Act or any applicable state or foreign securities laws. In
the event that a transfer is to be made to an institutional accredited investor
as described in clause (iv), the 1998-B Securitization Trustee shall require
that the transferee execute a representation letter acceptable to and in form
and substance satisfactory to the 1998-B Securitization Trustee (provided that
the form attached as Exhibit E shall be deemed acceptable if it is completed in
a manner acceptable to the 1998-B Securitization Trustee) certifying to the
1998-B Securitization Trustee the facts surrounding such transfer, which
representation letter shall not be an expense of the 1998-B Securitization
Trustee, the Transferor or the Servicer. In the case of a transfer under either
clause (ii) or clause (iv), the Holder of a Class B Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the 1998-B
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 and foreign securities laws. Neither the
Transferor, the Servicer nor the 1998-B Securitization Trustee is under any
obligation to register the Class B Certificates under the Securities Act or any
applicable state or foreign securities laws. Prospective purchasers of the Class
B Certificates are hereby notified that the seller of any Class B Certificates
may be relying on the exemption from the registration requirements of Section 5
of the Act provided by Rule 144A under the Act.
The Class B Certificates or a beneficial interest therein may not be
transferred unless the 1998-B Securitization Trustee has received a certificate
to the effect that 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
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income, gain, loss, deduction or credit from such Class B Certificates will
be made among the beneficial owners of such Flow-Through Entity.
Subject to the last sentence of this paragraph, no Class B Certificate
or beneficial interest therein may be transferred to a transferee who is an
employee benefit plan, trust or account, subject to ERISA, or subject to Section
4975 of the Code, or a governmental plan defined in Section 3(32) of ERISA
subject to any federal, state or local law which is, to a material extent,
similar to the foregoing provisions of ERISA or the Code and is not an entity,
including an insurance company separate account or an insurance company general
account if the assets in any such accounts constitute "Plan Assets" for the
purposes of regulation Section 2510.3101 of ERISA, whose underlying assets
include Benefit Plan assets by reason of a Benefit Plan's investment in the
entity. If any Paying Agent or a Trust Officer of the 1998-B Securitization
Trustee has actual knowledge of any such transfer, such transfer shall be deemed
null and void. Unless the 1998-B Securitization Trustee shall have received
either (a) a certificate from the transferee making the representations with
respect to such ERISA matters set forth in Exhibit D hereto or (b) an opinion of
counsel concerning such ERISA matters as set forth in Exhibit D hereto, the
1998-B Securitization Trustee shall not permit a transfer of Class B
Certificates to such transferee unless, in the sole determination of the 1998-B
Securitization Trustee, after giving effect to the proposed transfer to such
transferee, 25% or more of the Class B Certificates (taken as a percentage of
the Adjusted Class B Certificate Balance) will not thereupon be registered in
the names of persons who have failed to provide such a certification or opinion.
The Transferor shall, whenever the 1998-B Securitization Trust is not
subject to Section 13 or 15(d) of the Exchange Act, make available, upon
request, to any holder of such Class B Certificates in connection with any sale
thereof and any prospective purchaser of Class B Certificates from such holder
the information specified in Rule 144A(d)(4) under the Securities Act.
In addition, no resale or other transfer of the Class B Certificates or
any interest therein shall be permitted unless immediately after giving effect
to such resale or other transfer, there would be fewer than 100 Class B
Certificateholders.
The Class B Certificates, this 1998-B 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.
(c) Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office of the 1998-B Securitization Trustee in its capacity
as Certificate Registrar, or at the office of the agent of the 1998-B
Securitization Trustee as Certificate Registrar, who shall initially be U.S.
Bank National Association, 100 Wall Street, 20th Floor, New York, New York
10005, in the Borough of Manhattan, the City of New York and, with respect to
the Definitive Certificates, Bankers Trust Luxembourg S.A. for so long as any
Class A Certificates are listed on the Luxembourg and Stock Exchange, or the
appropriate office of any successor Certificate Registrar,
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the 1998-B Securitization Trust shall execute, and the 1998-B Securitization
Trustee shall 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.
(d) At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class of authorized denominations
of a like aggregate Percentage Interest, upon surrender of the Certificates to
be exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the 1998-B Securitization Trust shall execute, and the
1998-B Securitization Trustee shall 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 1998-B Securitization Trustee and the Certificate Registrar duly executed by
the Holder thereof or his attorney duly authorized in writing.
No service charge shall be imposed on any Holder for any registration of
transfer or exchange of Certificates, but the 1998-B 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.
All Certificates surrendered for registration of transfer and exchange
shall be cancelled and subsequently destroyed by the 1998-B Securitization
Trustee.
No Class B Certificate shall be listed for trading on any recognized
securities exchange.
(e) Each purchaser of a Class B Certificate that does not deliver a
transfer certificate in the form of Exhibit E hereto will be deemed to have
represented to and agreed with the parties hereto (or, in the case of purchases
by agents or fiduciaries acting for beneficial owners of an account for which
such agents or fiduciaries exercise complete investment discretion, such agents
or fiduciaries will be deemed to have confirmed to the parties hereto on behalf
of such beneficial owners) as follows (terms used below that are defined in Rule
144A under the Securities Act are used as defined therein):
(i) The purchaser understands that the Class B Certificate has
not been registered under the Securities Act, or the securities laws of
any state or foreign jurisdiction.
(ii) The purchaser is acquiring the Class B Certificate for its
own account (or for the account of a "qualified institutional buyer")
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 or foreign 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, the 1998-B Securitization Trustee or
any of their respective affiliates.
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(iii) The purchaser agrees that the Class B Certificate must be
held indefinitely by it unless (i) subsequently registered under the
Securities Act or (ii) an exemption from the registration requirements of
the Securities Act is available.
(iv) The purchaser agrees that it will not transfer or exchange
any Class B Certificate unless such transfer or exchange is made in
accordance with the provisions of this Section 4.03.
(v) The purchaser is a qualified institutional buyer as defined
in Rule 144A of the Securities Act and is aware that the sale to it is
being made in reliance on Rule 144A, it is acquiring the Class B
Certificate for its own account or for the account of a qualified
institutional buyer and it understands that such Class B Certificate may
be resold, pledged or transferred only (i) to a person who the purchaser
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 and foreign
securities laws.
(vi) Neither the purchaser nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of any Class B
Certificate, any interest in any Class B Certificate or any other similar
security of the Transferor or the 1998-B Securitization Trust to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Class B Certificate, any interest in any Class B
Certificate or any other similar security of the Transferor or the 1998-B
Securitization Trust 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
Class B Certificates under the Securities Act or which would render the
disposition of any Class B Certificate a violation of Section 5 of the
Securities Act or any state or foreign securities law, require
registration or qualification pursuant thereto, or require registration
of the 1998-B 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 Class B Certificates.
(vii) The purchaser understands that there is no market, nor is
there any assurance that a market will develop, for the Class B
Certificates and that the Transferor and the 1998-B Securitization Trust
have no obligation to make or facilitate any such market (or to otherwise
repurchase the Class B Certificate from the purchaser) under any
circumstances.
(viii) 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 Class
B Certificate, is aware that its taxable income with respect to the Class
B Certificate in any accounting period may not correspond to the cash
flow (if any) from the Class B Certificate for such period, and is
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not purchasing the Class B Certificate in reliance on any
representations of the Transferor or its counsel with respect to tax
matters.
(ix) The purchaser has reviewed the Private Placement Memorandum
dated September 24, 1998 (the "Private Placement Memorandum"), including
the prospectus attached thereto, 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.
(x) The purchaser understands that the Class B Certificates will
bear legends substantially as set forth herein.
(xi) The purchaser agrees to be bound by all the terms and
conditions of the Class B Certificates provided in this 1998-B
Securitization Trust Agreement.
4.04 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar (or Bankers Trust Luxembourg S.A. with respect to the Definitive
Certificates), or the Certificate Registrar (or Bankers Trust Luxembourg S.A.)
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Certificate Registrar (or
Bankers Trust Luxembourg S.A. with respect to the Definitive Certificates) and
the 1998-B Securitization Trustee such security or indemnity as may be required
by them to save each of them and the 1998-B Securitization Trust harmless, then,
in the absence of notice that such Certificate has been acquired by a bona fide
purchaser, the 1998-B Securitization Trustee on behalf of the 1998-B
Securitization Trust shall execute and the 1998-B 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
Percentage Interest. In connection with the issuance of any new Certificate
under this Section, the 1998-B 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 1998-B 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.
4.05 PERSONS DEEMED OWNERS.
Prior to due presentation of a Certificate for registration of transfer,
the 1998-B 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
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neither the 1998-B Securitization Trustee, the Certificate Registrar nor any
of their respective agents shall be affected by any notice to the contrary.
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 1998-B Securitization Trustee, and such application states that
the Applicants desire to communicate with other Investor Certificateholders with
respect to their rights under this 1998-B 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 1998-B
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 1998-B
Securitization Trustee that neither the Servicer nor the 1998-B 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.
4.07 MAINTENANCE OF OFFICE OR AGENCY.
The 1998-B 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 U.S. Bank Trust National Association, 100
Wall Street, 20th Floor, New York, New York 10005 and, with respect to the
Definitive Certificates shall be Bankers Trust Luxembourg S.A., 14 Boulevard
F.D. Roosevelt, L-2450, Luxembourg, for so long as any Class A Certificates are
listed on the Luxembourg Stock Exchange; provided that a copy of any such
Certificate surrendered shall be sent to the 1998-B Securitization Trustee at
the Corporate Trust Office. The 1998-B Securitization Trustee shall give prompt
written notice to the Transferor, the Servicer and the Certificateholders of any
change in the location of any such office or agency. Notices and demands to or
upon the 1998-B Securitization Trustee in respect of the Certificates and this
1998-B Securitization Trust Agreement shall not be sent to such office or
agency, but shall be sent as set forth in Section 10.02.
4.08 TEMPORARY CERTIFICATES.
Pending the preparation of definitive Class A-1 Certificates, Class A-2
Certificates or Class A-3 Certificates, the 1998-B Securitization Trust may
execute, and the 1998-B Securitization Trustee may authenticate and deliver,
temporary Class A-1 Certificates, Class A-2 Certificates or Class A-3
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 or Class A-3
Certificates in lieu of which they are issued. If
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temporary Class A-1 Certificates, Class A-2 Certificates or Class A-3
Certificates are issued, the Transferor will cause definitive Class A-1
Certificates, Class A-2 Certificates or Class A-3 Certificates to be prepared
without unreasonable delay. After the preparation of definitive Class A-1
Certificates, Class A-2 Certificates or Class A-3 Certificates, the temporary
Class A-1 Certificates, Class A-2 Certificates or Class A-3 Certificates
shall be exchangeable for definitive Class A-1 Certificates, Class A-2
Certificates or Class A-3 Certificates upon surrender of the temporary Class
A-1 Certificates, Class A-2 Certificates, or Class A-3 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 1998-B Securitization Trust shall execute and the
1998-B Securitization Trustee shall 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.
4.09 BOOK-ENTRY CERTIFICATES.
The Class A-1 Certificates, the Class A-2 Certificates and the Class A-3
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 and Class A-3 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 or the Class A-3
Certificates, except as provided in Section 4.11. Unless otherwise specified in
this 1998-B Securitization Trust Agreement, unless and until definitive, fully
registered Class A-1 Certificates, Class A-2 Certificates, and Class A-3
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 1998-B 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 and the Class A-3 Certificates)
as the authorized representative of the Certificate Owners; to the extent
that the provisions of this Section conflict with any other provisions of
the Agreement, the provisions of this Section shall control;
(iii) the rights of Certificate Owners shall be exercised only
through (or through procedures established by) the Clearing Agency and
shall be limited to those 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
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of principal and interest on the Class A-1 Certificates, the Class A-2
Certificates and the Class A-3 Certificates to such Clearing Agency
Participants; and
(iv) whenever this 1998-B 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 or Class A-3
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 or Class A-3 Certificates and has delivered such
instructions to the 1998-B Securitization Trustee.
4.10 NOTICES.
Whenever notice or other communication to the Class A-1
Certificateholders, Class A-2 Certificateholders or the Class A-3
Certificateholders is required under this 1998-B 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 or the Class A-3 Certificates,
respectively, unless and until Definitive Certificates shall have been issued to
Certificate Owners pursuant to Section 4.11, the 1998-B 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
or the Class A-3 Certificates to the Clearing Agency. Whenever notice or other
communication to the holders of Definitive Certificates is required under this
1998-B Securitization Trust Agreement, the 1998-B Securitization Trustee and the
Servicer shall give all such notices and communications specified herein to the
Holders of such Definitive Certificates, for so long as any Definitive
Certificates are listed on the Luxembourg Stock Exchange, by publication in a
leading daily newspaper of general circulation in Luxembourg or, if publication
in Luxembourg is not practical, in Europe. Such publication is expected to be
made in the LUXEMBOURGER WORT. If Definitive Certificates are issued with
respect to any Class of Certificates, such notices will also be mailed to the
addresses of holders thereof at the addresses therefor as they appear in the
Certificate Register maintained by the 1998-B Securitization Trustee prior to
such mailing. Such notices will be deemed to have been given on the date of
such publication or mailing.
4.11 DEFINITIVE CERTIFICATES.
The Class B Certificates shall be issued in definitive form on the
Closing Date. The Class A Certificates shall be issued in book-entry form on
the Closing Date pursuant to Section 4.09 hereof. Definitive Certificates may
be issued representing the Class A Certificates thereafter if: (i)(A) the
Transferor advises the 1998-B 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 1998-B Securitization Trustee and the Clearing Agency and (B)
the 1998-B Securitization Trustee or the Transferor is unable to locate a
qualified successor, (ii) the Transferor at its option, advises the 1998-B
Securitization Trustee in writing that
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it elects to terminate the book-entry system through the Clearing Agency, or
(iii) after the occurrence of a Liquidation Event, Certificate Owners
representing beneficial interests in the Class A-1 Certificates, the Class
A-2 Certificates and the Class A-3 Certificates (voting together as a single
class) aggregating not less than 51% of the Percentage Interests advise the
1998-B 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. Following the occurrence of any such event, the 1998-B
Securitization Trustee shall notify all Certificate Owners of the occurrence
thereof and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the 1998-B Securitization
Trustee of the Class A-1 Certificates, the Class A-2 Certificates and the
Class A-3 Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the 1998-B
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
1998-B 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 1998-B Securitization Trustee shall recognize the Holders of the
Definitive Certificates as Class A-1 Certificateholders, Class A-2
Certificateholders, Class A-3 Certificateholders and Class B
Certificateholders, as applicable. The 1998-B Securitization Trustee shall
not be liable if the 1998-B Securitization Trustee or the Transferor is
unable to locate a qualified successor Clearing Agency.
Holders of Definitive Certificates in Luxembourg may contact Bankers
Trust Luxembourg S.A. to arrange for receipt of their Definitive Certificates.
Holders of Definitive Certificates in Luxembourg will be able to effect
transfers by delivery of the Definitive Certificates to Bankers Trust Luxembourg
S.A. with instructions for the transfer of all or part thereof to the proposed
transferee thereof. The 1998-B Securitization Trustee is hereby instructed to
maintain a paying agent and transfer agent in Luxembourg for so long as any
Class A Certificates are listed on the Luxembourg Stock Exchange and the rules
of such exchange so require.
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 1998-B 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 1998-B 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 1998-B Securitization Trust Agreement
as to treatment as secured indebtedness for federal, state and local income and
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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 1998-B
Contracts and 1998-B 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
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 1998-B Securitization Trust, then the Transferor,
the 1998-B 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 1998-B Securitization Trust to the Transferor.
4.13 ERISA MATTERS.
The Transferor shall cause the Class A-1 Certificates, the Class A-2
Certificates and the Class A-3 Certificates to be registered under Section 12(g)
of the Exchange Act within 120 days after December 31, 1998, and, with respect
to each such Class of Class A Certificates, maintain such registration until the
Class Certificate Balance of such Class of Class A Certificates (after giving
effect to any reimbursements of Certificate Principal Loss Amounts allocated
thereto) is reduced to zero. The Transferor has applied to the Department of
Labor for an administrative exemption (the "Requested Exemption") from certain
of the prohibited transaction rules of ERISA in respect of the Class A
Certificates. Notwithstanding the foregoing, if the Requested Exemption is
granted by the Department of Labor substantially in the form for which the
application for the Requested Exemption was made, the Transferor, at its option,
may deregister the Class A Certificates under the Exchange Act or, if such
registration has not been effected, not register the Class A Certificates under
the Exchange Act.
ARTICLE V
THE TRANSFEROR
5.01 REPRESENTATIONS OF TRANSFEROR.
The Transferor hereby makes the following representations on which the
1998-B Securitization Trustee relies in accepting the 1998-B SUBI and 1998-B
SUBI Certificate in trust and authenticating the Certificates. The
representations speak as of the execution and delivery of this 1998-B
Securitization Trust Agreement, but shall survive the sale, transfer and
assignment of the 1998-B SUBI and 1998-B SUBI Certificate to the 1998-B
Securitization Trustee.
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(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 1998-B SUBI and 1998-B 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 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 1998-B 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 1998-B
Securitization Trustee as part of the 1998-B Securitization Trust and has duly
authorized such sale and assignment to the 1998-B Securitization Trustee by all
necessary action; and the execution, delivery and performance of this 1998-B
Securitization Trust Agreement have been duly authorized by the Transferor by
all necessary corporate action.
(d) VALID SALE: BINDING OBLIGATIONS. This 1998-B Securitization Trust
Agreement evidences a valid sale, transfer and assignment of the 1998-B SUBI
Certificate and the assets of the 1998-B SUBI evidenced thereby (which do not
include any proceeds of the Residual Value Insurance Policies), and constitutes
a legal, valid and binding obligation of the Transferor enforceable in
accordance with its terms, in each case 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 1998-B Securitization Trust Agreement and the fulfillment of the terms
of this 1998-B 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 Articles of Incorporation
or Bylaws 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 those contemplated by
this 1998-B Securitization Trust Agreement and any documents related hereto);
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.
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(f) NO PROCEEDINGS. There are no proceedings or investigations
pending, or to the Transferor's 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 1998-B 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 1998-B 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 1998-B Securitization Trust Agreement or
the Certificates or (iv) relating to the Transferor and which might adversely
affect the federal or Delaware income tax attributes of the Certificates.
(g) TITLE TO 1998-B SUBI CERTIFICATE. Prior to the transfer pursuant
to this 1998-B Securitization Trust Agreement, the Transferor has good title to,
and is the sole legal and beneficial owner of, the 1998-B SUBI Certificate, free
and clear of all Liens, except as provided for in the Back-Up Security
Agreement.
(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 1998-B 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, performance, validity or enforceability of this 1998-B Securitization
Trust Agreement.
5.02 LIABILITY OF TRANSFEROR: INDEMNITIES.
The Transferor shall be liable in accordance with this 1998-B
Securitization Trust Agreement only to the extent of the obligations in this
1998-B Securitization Trust Agreement specifically undertaken by the Transferor
in such capacity under this 1998-B Securitization Trust Agreement and shall have
no other obligations or liabilities hereunder.
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 (iii) which may succeed to all or
substantially all of the business of the Transferor, shall be the successor to
the Transferor under this 1998-B 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 1998-B 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 prior notice of any merger, consolidation
or succession pursuant to this Section to each Rating Agency.
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(b) (i) Subject to subparagraph (c) 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 other than the banking
business, the trust company business or the practice of a profession that is
permitted to be incorporated under the California Corporations Code.
(ii) Notwithstanding subparagraph (b) above, the purpose of the
Transferor shall be limited to the following purposes and activities incidental
to and necessary or convenient to accomplish 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 Agreements;
(F) to perform its obligations under the 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 or
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;
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(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 the 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 consenting 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 affirmative vote of the members of the Board of
Directors of the Transferor (including each Independent Director), merge
or consolidate with any other corporation, company or entity 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
corporation, company or entity; PROVIDED that such restrictions shall not
(a) limit the acquisition of the 1998-B SUBI Certificate or the 1998-B
SUBI Insurance Certificate from TMCC, the 1998-B Securitization Trustee
or any other Person, or the acquisition of any other SUBI Certificate
from TMCC or any other Person, or (b) limit 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)(2) hereof, on which
there shall be no such restriction; or
(iv) so long as any outstanding debt of the Transferor or
Securities are rated by any nationally recognized statistical rating
agency, issue unsecuritized 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.
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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 executed and submitted by any Person respecting
any matters arising under this 1998-B Securitization Trust Agreement.
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 1998-B 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.
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 (a) the
Transferor Certificate or any part of its right to receive any Excess Amounts
pursuant to Section 3.01(i) or (b) the 1998-B SUBI Insurance Certificate, except
as expressly set forth in the 1998-B SUBI Supplement.
5.07 TAX MATTERS PARTNER.
In the event that the 1998-B 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
1998-B 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 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 1998-B
Securitization Trust's federal, state or local tax returns. In the event of such
recharacterization, the Transferor shall provide written notice of such
recharacterization to the 1998-B Securitization Trustee. The Transferor shall
not be liable to the 1998-B 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.
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5.08 MATURITY ADVANCES.
If, with respect to any Class of Certificates, on the related Targeted
Maturity Date or any subsequent relevant Certificate Payment Date the aggregate
of amounts available in the 1998-B SUBI Certificateholders' Account, the 1998-B
SUBI Collection Account or from other sources to be paid in respect of the
Adjusted Class A-1 Certificate Balance, the Adjusted Class A-2 Certificate
Balance, the Adjusted Class A-3 Certificate Balance or the Adjusted Class B
Certificate Balance pursuant to Section 3.01 of this 1998-B Securitization Trust
Agreement are insufficient to reduce such Adjusted Class A-1 Certificate
Balance, Adjusted Class A-2 Certificate Balance, Adjusted Class A-3 Certificate
Balance or Adjusted Class B Certificate Balance to zero, as applicable, and to
reimburse all unreimbursed Certificate Principal Loss Amounts previously
allocated thereto, the Transferor may, at its sole option, make a Maturity
Advance with respect to such shortfall to the Servicer or the 1998-B
Securitization Trustee for deposit into the 1998-B SUBI Collection Account.
ARTICLE VI
THE 1998-B SECURITIZATION TRUSTEE
6.01 DUTIES OF THE 1998-B SECURITIZATION TRUSTEE.
(a) The 1998-B Securitization Trustee, both prior to and after the
occurrence of an Event of Servicing Termination under the 1998-B SUBI Servicing
Supplement, undertakes to perform such duties and only such duties as are
specifically set forth in this 1998-B Securitization Trust Agreement.
(b) The 1998-B Securitization Trustee, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the 1998-B Securitization Trustee that shall be
specifically required to be furnished pursuant to any provision of this 1998-B
Securitization Trust Agreement, shall examine them to determine whether they
conform on their face to the requirements of this 1998-B Securitization Trust
Agreement.
(c) No provision of this 1998-B Securitization Trust Agreement shall
be construed to relieve the 1998-B 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 1998-B Securitization
Trustee shall be determined solely by the express provisions of this
1998-B Securitization Trust Agreement, the 1998-B Securitization Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this 1998-B Securitization
Trust Agreement, no implied covenants or obligations shall be read into
this 1998-B Securitization Trust Agreement against the 1998-B
Securitization Trustee, the permissive right of the 1998-B Securitization
Trustee to do things enumerated in this 1998-B Securitization Trust
Agreement shall not be construed as a duty and, in the absence of bad
faith on the part of the 1998-B Securitization Trustee, the 1998-B
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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 1998-B Securitization
Trustee and conforming on their face to the requirements of this 1998-B
Securitization Trust Agreement;
(ii) the 1998-B 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 1998-B Securitization Trustee
was negligent in performing its duties in accordance with the terms of
this 1998-B Securitization Trust Agreement; and
(iii) the 1998-B 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 1998-B Securitization Trustee,
or exercising any trust or power conferred upon the 1998-B Securitization
Trustee, under this 1998-B Securitization Trust Agreement or the Titling
Trust Agreement (as supplemented by the 1998-B SUBI Supplement).
(d) The 1998-B 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 1998-B 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.
(e) All information obtained by the 1998-B Securitization Trustee
regarding the Obligors and the Contracts contained in the 1998-B SUBI, whether
upon the exercise of its rights under this 1998-B Securitization Trust Agreement
or otherwise, shall be maintained by the 1998-B 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.
(f) Pursuant to Section 3.03(a) of the 1998-B SUBI Servicing
Supplement, in the event that the 1998-B Securitization Trustee discovers that a
representation or warranty with respect to a 1998-B Contract was incorrect as of
the time specified with respect to such representation and warranty and such
incorrectness materially and adversely affects such 1998-B Contract, the 1998-B
Securitization Trustee shall give prompt written notice to the Servicer and the
Titling Trustee of such incorrectness.
6.02 CERTAIN MATTERS AFFECTING THE 1998-B SECURITIZATION TRUSTEE.
(a) Except as otherwise provided in Section 6.01:
(i) the 1998-B 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
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document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) the 1998-B 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 1998-B Securitization Trust Agreement in good faith and in
accordance with such Opinion of Counsel;
(iii) the 1998-B Securitization Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
1998-B Securitization Trust Agreement or the Titling Trust Agreement (as
supplemented by the 1998-B SUBI Supplement), or to institute, conduct or
defend any litigation under this 1998-B Securitization Trust Agreement or
the Titling Trust Agreement (as supplemented by the 1998-B SUBI
Supplement), or in relation to this 1998-B Securitization Trust Agreement
or the Titling Trust Agreement (as supplemented by the 1998-B SUBI
Supplement), at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this 1998-B
Securitization Trust Agreement or the Titling Trust Agreement (as
supplemented by the 1998-B SUBI Supplement), unless such
Certificateholders shall have offered to the 1998-B Securitization
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby;
(iv) the 1998-B Securitization Trustee shall not be personally
liable for any action taken, suffered or omitted by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this 1998-B Securitization Trust
Agreement;
(v) the 1998-B 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 1998-B 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 1998-B Securitization
Trustee, not reasonably assured to the 1998-B Securitization Trustee by
the security afforded to it by the terms of this 1998-B Securitization
Trust Agreement, the 1998-B 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 1998-B 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 1998-B Securitization Trustee may execute any of the
trusts or powers under this 1998-B Securitization Trust Agreement or
perform any duties under this 1998-
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B Securitization Trust Agreement either directly or by or through agents
or attorneys or a custodian.
(b) No Certificateholder will have any right to institute any
proceeding with respect to this 1998-B Securitization Trust Agreement except
upon satisfying the conditions set forth in Section 9.03(c).
6.03 1998-B SECURITIZATION TRUSTEE NOT LIABLE FOR CERTIFICATES OR CONTRACTS.
The 1998-B Securitization Trustee makes no representations as to the
validity or sufficiency of this 1998-B Securitization Trust Agreement or of
the Certificates (other than the execution by the 1998-B Securitization
Trustee on behalf of the 1998-B Securitization Trust of, and the certificate
of authentication on, the Certificates), or of the 1998-B SUBI or 1998-B SUBI
Certificate. The 1998-B Securitization Trustee shall have no obligation to
perform any of the duties of the Transferor unless explicitly set forth in
this 1998-B Securitization Trust Agreement. The 1998-B Securitization Trustee
shall at no time have any responsibility or liability for or with respect to
the legality, validity and enforceability of the 1998-B SUBI or 1998-B SUBI
Certificate or any 1998-B Contract, any ownership interest in any 1998-B
Leased Vehicle, or the maintenance of any such ownership interest, or for or
with respect to the efficacy of the 1998-B Securitization Trust or its
ability to generate the payments to be distributed to Certificateholders
under this 1998-B Securitization Trust Agreement, including without
limitation the validity of the assignment of the 1998-B SUBI or 1998-B SUBI
Certificate to the 1998-B Securitization Trust or of any intervening
assignment; the existence, condition, location and ownership of any 1998-B
Contract or 1998-B Leased Vehicle; the existence and enforceability of any
physical damage or credit life or credit disability insurance; the existence
and contents of any 1998-B Contract or any computer or other record thereof;
the completeness of any 1998-B Contract; the performance or enforcement of
any 1998-B Contract; the compliance by the Transferor with any covenant or
the breach by the Transferor of any warranty or representation made under
this 1998-B Securitization Trust Agreement or in any related document and the
accuracy of any such warranty or representation prior to the 1998-B
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 the Servicer; or any action by the 1998-B Securitization
Trustee taken at the instruction of the Servicer PROVIDED, HOWEVER, that the
foregoing shall not relieve the 1998-B Securitization Trustee of its
obligation to perform its duties under this 1998-B Securitization Trust
Agreement. Except with respect to a claim based on the failure of the 1998-B
Securitization Trustee to perform its duties under this 1998-B Securitization
Trust Agreement or based on the 1998-B Securitization Trustee's willful
misconduct, bad faith or negligence, no recourse shall be had for any claim
based on any provision of this 1998-B Securitization Trust Agreement, the
Certificates, the 1998-B SUBI or 1998-B SUBI Certificate or assignment
thereof against the institution serving as the 1998-B Securitization Trustee
in its individual capacity. The 1998-B 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 1998-B Securitization Trust
or any indemnitor who shall furnish indemnity as provided in this 1998-B
Securitization Trust Agreement. The 1998-B 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
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Certificates, or for the use or application of any funds paid to the Servicer
in respect of the 1998-B SUBI or 1998-B SUBI Certificate.
6.04 1998-B SECURITIZATION TRUSTEE MAY OWN CERTIFICATES.
The 1998-B 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 the 1998-B Securitization Trustee.
6.05 1998-B SECURITIZATION TRUSTEE'S FEES AND EXPENSES.
The 1998-B 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 1998-B Securitization
Trust Agreement and in the exercise and performance of any of the powers and
duties of the 1998-B Securitization Trustee under this 1998-B Securitization
Trust Agreement, and payment or reimbursement upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
1998-B Securitization Trustee in its capacity as 1998-B Securitization
Trustee in accordance with any of the provisions of this 1998-B
Securitization Trust Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ in each case to the extent their services are provided in
connection with the 1998-B Securitization Trustee's administration of this
1998-B Securitization Trust Agreement) 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 1998-B
Securitization Trust Agreement. Such compensation and reimbursement shall be
paid as set forth in Sections 3.01(c) and (g) hereof.
6.06 ELIGIBILITY REQUIREMENTS FOR 1998-B SECURITIZATION TRUSTEE.
The 1998-B Securitization Trustee under this 1998-B Securitization
Trust Agreement shall at all times be a national banking association or State
banking institution; and organized and doing business under the laws of any
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 1998-B 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 1998-B Securitization Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the 1998-B Securitization Trustee shall resign immediately in the manner and
with the effect specified in Section 6.07.
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6.07 RESIGNATION OR REMOVAL OF 1998-B SECURITIZATION TRUSTEE.
(a) RESIGNATION. The 1998-B Securitization Trustee may at any time
resign and be discharged from the trusts created by this 1998-B
Securitization Trust Agreement by giving written notice thereof to the
Transferor. Upon receiving such notice of resignation, the Transferor shall
promptly appoint a successor 1998-B Securitization Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the resigning 1998-B Securitization 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) REMOVAL. If at any time the 1998-B 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 1998-B Securitization Trustee shall be legally unable to act,
or shall be adjudged a bankrupt or insolvent, or a receiver of the 1998-B
Securitization Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the 1998-B Securitization Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Transferor may remove the 1998-B Securitization
Trustee. If it shall remove the 1998-B Securitization Trustee under the
authority of the immediately preceding sentence, the Transferor shall
promptly appoint a successor 1998-B Securitization Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the 1998-B Securitization Trustee so removed and one copy to the successor
1998-B Securitization Trustee, and arrange for the payment of all fees owed
to the outgoing 1998-B Securitization Trustee.
(c) EFFECTIVE DATE OF RESIGNATION OR REMOVAL. Any resignation or
removal of the 1998-B Securitization Trustee and appointment of a successor
1998-B Securitization Trustee pursuant to any of the provisions of this
Section shall not become effective until acceptance of appointment by the
successor 1998-B Securitization Trustee as provided in Section 6.08. The
Servicer shall give each Rating Agency notice of any such resignation or
removal of the 1998-B Securitization Trustee and appointment and acceptance
of a successor Trustee.
6.08 SUCCESSOR 1998-B SECURITIZATION TRUSTEE.
Any successor 1998-B Securitization Trustee appointed as provided in
Section 6.07 shall execute, acknowledge and deliver to the Transferor and to
its predecessor 1998-B Securitization Trustee an instrument accepting such
appointment under this 1998-B 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 1998-B 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 1998-B 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
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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 1998-B 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.
6.09 MERGER OR CONSOLIDATION OF 1998-B SECURITIZATION TRUSTEE.
Any corporation (i) into which the 1998-B Securitization Trustee may be
merged or consolidated, (ii) which may result from any merger, conversion or
consolidation to which the 1998-B Securitization Trustee shall be a party, or
(iii) which may succeed to the corporate trust business of the 1998-B
Securitization Trustee, shall be the successor of the 1998-B Securitization
Trustee hereunder, provided such corporation shall be eligible pursuant to
Section 6.06, 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 1998-B Securitization Trustee in
any of the foregoing cases is not the surviving entity, then the surviving
entity shall assume and agree to perform every obligation of the 1998-B
Securitization Trustee, either generally or particularly as provided herein.
Notice of any such event shall be given by the 1998-B Securitization Trustee
to each Rating Agency.
6.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of this 1998-B Securitization
Trust Agreement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the 1998-B
Securitization Trust may at the time be located, the Transferor and the
1998-B Securitization Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons to act
jointly with the 1998-B Securitization Trustee, or separate trustee or
separate trustees, of all or any part of the 1998-B Securitization Trust, and
to vest in such Person, in such capacity and for the benefit of the
Certificateholders, such title to the 1998-B 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
1998-B 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 1998-B Securitization Trustee alone
shall have the power to make such appointment. No co-trustee or separate
trustee under this 1998-B 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 shall be required 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.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
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(i) all rights, powers, duties and obligations conferred or
imposed upon the 1998-B Securitization Trustee shall be conferred upon
and exercised or performed by the 1998-B 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 1998-B 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 1998-B 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 1998-B 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 1998-B
Securitization Trustee;
(ii) no trustee under this 1998-B Securitization Trust Agreement
shall be personally liable by reason of any act or omission of any other
trustee under this 1998-B Securitization Trust Agreement; and
(iii) the Transferor and the 1998-B Securitization Trustee acting
jointly may at any time accept the resignation of or remove any separate
trustee or co-trustee.
(c) Any notice, request or other writing given to the 1998-B
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 1998-B 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 1998-B
Securitization Trustee or separately, as may be provided therein, subject to
all the provisions of this 1998-B Securitization Trust Agreement,
specifically including every provision of this 1998-B Securitization Trust
Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the 1998-B Securitization Trustee. Each such
instrument shall be filed with the 1998-B Securitization Trustee and a copy
thereof given to the Transferor and the Servicer.
(d) Any separate trustee or co-trustee may at any time appoint the
1998-B 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 1998-B 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
1998-B Securitization Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee. Notwithstanding anything to the
contrary in this 1998-B Securitization Trust Agreement, the appointment of
any separate trustee or co-trustee shall not relieve the 1998-B
Securitization Trustee of its obligations and duties under this 1998-B
Securitization Trust Agreement.
6.11 REPRESENTATIONS AND WARRANTIES OF TRUSTEE.
The 1998-B Securitization Trustee makes the following representations
and warranties on which the Transferor and Certificateholders may rely:
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ORGANIZATION AND GOOD STANDING. The 1998-B Securitization Trustee is a
national banking association organized, existing and in good standing under
the laws of the United States.
POWER AND AUTHORITY. The 1998-B Securitization Trustee has full power,
authority and right to execute, deliver and perform this 1998-B
Securitization Trust Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this 1998-B
Securitization Trust Agreement.
DUE EXECUTION. This 1998-B Securitization Trust Agreement has been
duly executed and delivered by the 1998-B Securitization Trustee.
ENFORCEABILITY. This 1998-B Securitization Trust Agreement constitutes
the legal, valid and binding obligation of the 1998-B 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.
6.12 TAX RETURNS.
The 1998-B Securitization Trustee shall, at the written 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 1998-B Securitization Trust or the assets of the
1998-B Securitization Trust and shall deliver any such returns to the 1998-B
Securitization Trustee for signature at least five days prior to the date
such returns are required by law to be filed. The 1998-B Securitization Trust
shall not elect to be treated as an association under Treasury Regulations
Section 301.7701-3(a) for federal income tax purposes.
6.13 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CERTIFICATES.
All rights of action and claims under this 1998-B Securitization Trust
Agreement or the Certificates may be prosecuted and enforced by the 1998-B
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 1998-B 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 1998-B Securitization Trustee, its agents and counsel, be for
the ratable benefit of the Certificateholders in respect of which such
judgment has been obtained.
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 1998-B SUBI
Servicing Supplement with respect to the 1998-B SUBI Portfolio, the 1998-B
Securitization Trustee, in its discretion may, subject to the provisions of
Sections 6.01 and 6.02 hereof and Sections 6.01(b) and 6.01(c) of the 1998-B
SUBI Servicing
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Supplement, proceed to protect and enforce its rights and the rights of the
Certificateholders under this 1998-B Securitization Trust Agreement, the
Titling Trust Agreement and the 1998-B 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 1998-B
Securitization Trustee, being advised by counsel, shall deem most effectual
to protect and enforce any of the rights of the 1998-B Securitization Trustee
or the Certificateholders.
6.15 RIGHTS OF CERTIFICATEHOLDERS TO DIRECT TRUSTEE.
Holders of Investor Certificates evidencing not less than 25% of the
Voting Interests of the Certificates, voting together as a single class,
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the 1998-B Securitization Trustee
under this 1998-B Securitization Trust Agreement (including to direct the
1998-B Securitization Trustee to take or withhold any action with respect to
the TMCC Demand Notes), or exercising any trust or power conferred on the
1998-B Securitization Trustee by this 1998-B 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 1998-B
SUBI Supplement by the 1998-B Securitization Trustee in its capacity as a
transferee of the 1998-B SUBI Certificate, the greater Percentage Interest
shall prevail; (b) subject to Sections 6.01 and 6.02, the 1998-B
Securitization Trustee shall have the right to decline to follow any such
direction if the 1998-B Securitization Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
1998-B 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 rights of Certificateholders not parties to
such direction; and (c) nothing in this 1998-B Securitization Trust Agreement
shall impair the right of the 1998-B Securitization Trustee to take any
action deemed proper by the 1998-B Securitization Trustee and which is not
inconsistent with such direction by the Certificateholders.
6.16 NO PETITION.
The 1998-B 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 1998-B 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 1998-B
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 1998-B
Securitization Trust Agreement or the resignation or removal of the 1998-B
Securitization Trustee under this 1998-B Securitization Trust Agreement.
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6.17 NEGATIVE PLEDGE.
Except as expressly set forth herein with respect to the disposition of
the assets of the 1998-B Securitization Trust in connection with the
termination of the 1998-B Securitization Trust pursuant to Section 7.01, the
1998-B Securitization Trustee shall not sell, assign, pledge, convey or
otherwise transfer to any person the 1998-B SUBI Certificate or any interest
therein.
ARTICLE VII
TERMINATION
7.01 TERMINATION OF THE 1998-B SECURITIZATION TRUST.
(a) The 1998-B Securitization Trust and the respective obligations and
responsibilities of the Transferor and the 1998-B Securitization Trustee
shall terminate upon the earliest of (i) the maturity, sale or other
liquidation, as the case may be, of the last outstanding 1998-B Contract and
1998-B Leased Vehicle evidenced by the 1998-B SUBI and the distribution of
all proceeds thereof (other than proceeds of Residual Value Insurance
Policies), together with all amounts on deposit in all 1998-B SUBI Accounts
and the Reserve Fund in the manner provided in Section 3.01, (ii) the
purchase by the Transferor of the corpus of the 1998-B Securitization Trust
as described in Section 7.02 (except that the 1998-B Securitization Trust
shall continue solely for the limited purposes set forth in (b) and (c)
below), (iii) the day following the Monthly Allocation Date on which the
Class A-1 Certificate Balance, the Class A-2 Certificate Balance, the Class
A-3 Certificate Balance and the Class B Certificate Balance have been reduced
to zero and all Loss Amounts and Certificate Principal Loss Amounts have been
reimbursed, (iv) on the occurrence of a Liquidation Event and the subsequent
liquidation of the assets of the 1998-B Securitization Trust and the
distribution of the net proceeds thereof to Certificateholders, the 1998-B
Securitization Trustee, the Titling Trustee and the Transferor pursuant to
Section 3.01(o) of this 1998-B Securitization Trust Agreement, or (v) the
expiration, disposition or termination of the 1998-B SUBI; PROVIDED, HOWEVER,
that in no event shall the trust created by this 1998-B Securitization Trust
Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, late ambassador of the
United States of America to the Court of St. James', living on the date of
the Agreement. The Transferor shall promptly notify the 1998-B
Securitization Trustee and each Rating Agency of any prospective termination
of the 1998-B Securitization Trust.
(b) Notice of any termination, specifying the Monthly Allocation Date
upon which the Certificateholders may surrender their Certificates to the
1998-B Securitization Trustee or, in the case of any Definitive Class A
Certificates, to the 1998-B Securitization Trustee or the Paying Agent in
Luxembourg, for payment of the final distribution and retirement of the
Certificates, shall be given promptly by the 1998-B Securitization Trustee
(i) for so long as any Class A Certificates are listed on the Luxembourg
Stock Exchange, by publication in a leading daily newspaper of general
circulation in Luxembourg, or, if publication in Luxembourg is not practical,
in Europe (such publication is expected to be made in the LUXEMBOURGER WORT)
and (ii) if Definitive Certificates are issued by letter to
Certificateholders mailed not later than the 15th day and not earlier than
the 30th day prior to the date on which such final distribution is expected
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to occur specifying (A) the Certificate Payment 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 1998-B
Securitization Trustee therein specified, or, in the case of any Definitive
Class A Certificates, to the 1998-B Securitization Trustee or the Paying
Agent in Luxembourg, (B) the amount of any such final payment and (C) if
applicable, that the related Record Date for such Certificate Payment Date is
not applicable, payments being made only upon presentation and surrender of
the Certificates at the locations therein specified. Such notices will be
mailed to the addresses of the holders thereof as they appear in the
Certificate Register maintained by the Trustee on the Record Date preceding
such mailing. Such notices will be deemed to have been given on the date of
such publication or mailing. The 1998-B Securitization Trustee shall give
such notice to the Certificate Registrar (if other than the 1998-B
Securitization Trustee) at the time such notice is given to
Certificateholders.
(c) In the event such notice is given, in the case of an optional
purchase of the 1998-B Securitization Trust corpus pursuant to Section 7.02,
the Transferor shall deposit into the 1998-B SUBI Collection Account, the
amount specified in Section 7.02. Upon presentation and surrender of the
Certificates, the 1998-B Securitization Trustee shall cause to be paid to
Certificateholders so surrendering amounts payable on such Certificate
Payment Date pursuant to Section 3.01. No further interest will accrue with
respect to any Investor Certificate from and after the final Certificate
Payment Date with respect thereto.
(d) 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 1998-B
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 any Certificates shall not have been surrendered for
retirement, the 1998-B 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 1998-B Securitization Trust Agreement. Any funds remaining in the
1998-B Securitization Trust after exhaustion of such remedies shall be
distributed by the 1998-B Securitization Trustee at the request of the
Transferor to the Transferor, and such remaining Certificateholders shall
look solely to the Transferor for such funds.
7.02 OPTIONAL PURCHASE OF 1998-B SUBI.
On each Monthly Allocation Date on or after the Class A-3 Targeted
Maturity Date, if either before or after giving effect to any allocations,
applications or payments in respect of principal required to be made on such
Monthly Allocation Date, the Investor Balance shall be less than or equal to
$109,993,704.53 (10% of the Aggregate Net Investment Value as of the Cutoff
Date) or amounts sufficient to effectively reduce the Investor Balance to
such amount have been deposited in the 1998-B SUBI Collection Account on such
date, the Transferor shall have the option to purchase the Investor
Certificateholders' interest in the corpus of the 1998-B Securitization
Trust. To exercise such option, the Transferor shall notify the 1998-B
Securitization
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Trustee and the Servicer, in writing, no later than the fifteenth day of the
month preceding the month in which such purchase is to be effected, and shall
deposit in the 1998-B SUBI Certificateholders' Account an amount equal to the
greater of (i) the Aggregate Net Investment Value as of the last day of the
preceding Collection Period, and (ii) the sum of (A) the Adjusted Class A-1
Certificate Balance, the Adjusted Class A-2 Certificate Balance, the Adjusted
Class A-3 Certificate Balance and the Adjusted Class B Certificate Balance
(B) any accrued and unpaid interest with respect to the Class A-1
Certificates, Class A-2 Certificates, Class A-3 Certificates and Class B
Certificates, including any accrued and unpaid Class A-1 Interest Carryover
Shortfall, Class A-2 Interest Carryover Shortfall, Class A-3 Interest
Carryover Shortfall and Class B Interest Carryover Shortfall, (C) 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 B Certificate Principal Loss Amount (and interest accrued
thereon), (D) any unreimbursed Maturity Advances, other Advances or
compensation payable to the Servicer through such date and (E) any
compensation or reimbursements due to the Titling Trustee and the 1998-B
Securitization Trustee hereunder. On such Monthly Allocation Date, upon
receipt of such amount, the 1998-B Securitization Trustee shall distribute
such amounts pursuant to the priorities set forth in Section 3.01, and any
balance shall be distributed to the Transferor. Thereupon the Transferor
shall succeed to all of the Investor Certificateholders' interests in and to
the 1998-B Securitization Trust corpus.
ARTICLE VIII
ACCUMULATION EVENTS AND LIQUIDATION EVENTS
8.01 ACCUMULATION EVENTS.
If an Accumulation Event or Liquidation Event shall occur during the
Revolving Period, then (but in the case of any event described in
subparagraph (i), (ii), (iii) or (iv) of the definition of "Accumulation
Event" after any applicable grace period set forth in such clause), the
Revolving Period shall terminate and Principal Collections and reimbursed
Loss Amounts and Certificate Principal Loss Amounts will no longer be
reinvested in Subsequent Contracts and Subsequent Leased Vehicles.
8.02 LIQUIDATION EVENTS.
(a) Following the occurrence of a Liquidation Event, the Transferor
shall promptly give notice to the 1998-B Securitization Trustee of such
Liquidation Event. Within 15 days of the receipt by the 1998-B
Securitization Trustee of the notice, the 1998-B Securitization Trustee shall
publish a notice in the Authorized Newspapers that a Liquidation Event has
occurred and that the 1998-B Securitization Trustee intends to sell, dispose
of or otherwise liquidate the 1998-B SUBI, the 1998-B SUBI Certificate and
the other property of the 1998-B Securitization Trust in a commercially
reasonable manner. Following such publication, the 1998-B Securitization
Trustee shall, unless otherwise prohibited by applicable law from any such
action, sell, dispose of, or otherwise liquidate the 1998-B SUBI, the 1998-B
SUBI Certificate and the other property of the 1998-B Securitization Trust,
in a commercially reasonable manner and on commercially reasonable terms,
which may, but are not required to, include the solicitation of competitive
bids, and shall proceed to consummate the sale, liquidation or disposition
thereof as provided above with the
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highest bidder. The Transferor and the Servicer shall be permitted to bid
for the 1998-B Securitization Trust property. The 1998-B 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
1998-B SUBI Certificate and the 1998-B SUBI Assets evidenced thereby pursuant
to Section 8.02(a) above, shall be payable pursuant to the priorities set
forth in Section 3.01(o) above; PROVIDED, that the Servicer on behalf of the
1998-B 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 Certificate Payment Date on
which such proceeds are distributed to the Investor Certificateholders, the
1998-B Securitization Trust shall terminate.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.01 AMENDMENT.
(a) This 1998-B 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, (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, and
(iv) to add or amend any provision therein in connection with permitting
transfers of the Class B Certificates; PROVIDED, HOWEVER, that any such
action shall not, in the good faith judgment of the parties hereto or
thereto, adversely affect in any material respect the interests of the
Certificateholders and the Titling Trustee and the 1998-B Securitization
Trustee shall have received an Opinion of Counsel to the effect that such
action shall not materially and adversely affect the interests of the
Certificateholders PROVIDED, HOWEVER, further, that any amendment eliminating
the Reserve Fund or reducing the Specified Reserve Fund Balance shall also
require the Transferor to deliver to the 1998-B Securitization Trustee an
Opinion of Counsel to the effect that after such amendment, for federal
income tax purposes, the 1998-B Securitization 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 1998-B Securitization
Trust.
(b) This 1998-B Securitization Trust Agreement and the other
Transaction Documents may also be amended from time to time by the respective
parties hereto or thereto for the purpose of adding any provisions to or
changing in any manner, or eliminating any of the provisions of this
Agreement or the other Transaction Documents or of modifying in any manner
the right of each Class of Certificateholders, including with respect to (i)
changing the formula for determining the Specified Reserve Fund Balance which
change would result in a decrease in the
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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 1998-B SUBI Collection Account, (iv) changing the definition
of "Permitted Investments") or (v) to obtain or comply with the Requested
Exemption, if either (A) the 1998-B 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 1998-B Securitization Trustee has received
the consent of the Holders of Investor Certificates representing not less
than 51% of the Voting Interests of the Certificates, voting together as a
single class (which consent of any Holder of an Investor Certificate given
pursuant to this Section or pursuant to any other provision of this 1998-B
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 1998-B SUBI or any 1998-B 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 amendment, without the consent of the Holders
of all Certificates of such Class then outstanding. It shall not be
necessary for the consent of Certificate Owners pursuant to this 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.
(c) The 1998-B 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
1998-B 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 1998-B Securitization
Trustee may prescribe.
(e) Prior to the execution of any amendment to this 1998-B
Securitization Trust Agreement, the 1998-B 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
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this 1998-B Securitization Trust Agreement. The 1998-B Securitization
Trustee may, but shall not be obligated to, enter into any such amendment
which affects the 1998-B Securitization Trustee's own rights, duties or
immunities under this 1998-B Securitization Trust Agreement or otherwise.
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 places as may be required by law fully to
preserve, maintain and protect the interest of the Certificateholders and the
1998-B Securitization Trustee under this 1998-B Securitization Trust
Agreement in the 1998-B SUBI, the 1998-B SUBI Certificate and in the proceeds
thereof. The Transferor shall deliver (or cause to be delivered) to the
1998-B Securitization Trustee file-stamped copies of, or filing receipts for,
any document filed as provided above, as soon as available following such
filing.
(b) If the Transferor shall 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 it shall give the 1998-B
Securitization Trustee written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements as contemplated by Sections 9-402(7) and 9-406 of the
UCC as in effect in California on the date hereof or any successor provision
thereof.
(c) The Transferor shall give the 1998-B 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 1998-B Securitization Trustee
promptly after the execution and delivery of each amendment to this 1998-B
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 1998-B Securitization Trustee in
the 1998-B SUBI, 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.
9.03 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
(a) The death or incapacity of any Certificateholder shall not operate
to terminate this 1998-B Securitization Trust Agreement or the 1998-B
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
1998-B Securitization
58
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Trust, nor otherwise affect the rights, obligations and liabilities of the
parties to this 1998-B 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 1998-B Securitization Trust, or the obligations of the
parties to this 1998-B Securitization Trust Agreement, nor shall anything set
forth in this 1998-B 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 1998-B
Securitization Trust Agreement.
(c) No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this 1998-B Securitization Trust Agreement to
institute any suit, action, or proceeding in equity or at law upon or under
or with respect to this 1998-B Securitization Trust Agreement or any other
Transaction Document, unless such Holder previously shall have given to the
1998-B 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 Voting
Interests of the Certificates, considered as a single Class, shall have made
written request upon the 1998-B Securitization Trustee to institute such
action, suit or proceeding in its own name as Trustee under this 1998-B
Securitization Trust Agreement and shall have offered to the 1998-B
Securitization Trustee such reasonable indemnity as it may require against
the costs, expenses, and liabilities to be incurred therein or thereby, and
the 1998-B 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;
it being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the 1998-B
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 1998-B 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 1998-B Securitization Trust Agreement or any other Transaction
Document, except in the manner provided in this 1998-B 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 1998-B Securitization
Trustee shall be entitled to such relief as can be given either at law or in
equity.
9.04 GOVERNING LAW.
THIS 1998-B 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.
59
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9.05 NOTICES.
With respect to the Class A Certificates, all demands, notices and
communications under this 1998-B Securitization Trust Agreement shall, for so
long as any Class A Certificates are listed on the Luxembourg Stock Exchange,
be given by publication in a leading daily newspaper of general circulation
in Luxembourg, or, if publication in Luxembourg is not practical, in Europe.
Such publication is expected to be made in the LUXEMBOURGER WORT. In
addition, with respect to the Class B Certificates and, if Class A Definitive
Certificates are issued, the Class A Certificates, such notices will be
mailed to the addresses of holders thereof at the addresses therefor as they
appear in the Corporate Register maintained by the 1998-B Securitization
Trustee prior to such mailing. Such notices will be deemed to have been given
on the date of such publication or the date of mailing or (prior to the
issuance of Definitive Certificates) on the date delivered to the Clearing
Agency pursuant to Section 4.10 above.
All demands, notices and communications under this 1998-B
Securitization Trust Agreement to the parties hereto 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 in this 1998-B
Securitization Trust Agreement, or at such other address as shall be
designated by the Transferor in a written notice to the 1998-B Securitization
Trustee; (ii) in the case of the 1998-B 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 1998-B Securitization Trust Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder shall receive such notice.
9.06 SEVERABILITY OF PROVISIONS: COUNTERPARTS.
If any one or more of the covenants, agreements, provisions or terms of
this 1998-B 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 1998-B Securitization Trust Agreement and shall in no way affect the
validity or enforceability of the other provisions of this 1998-B Securitization
Trust Agreement or of the Certificates or the rights of the Holders thereof.
This 1998-B 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.
60
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9.07 ASSIGNMENT.
Notwithstanding anything to the contrary contained in this 1998-B
Securitization Trust Agreement, except as provided in Sections 5.03 and 5.06,
this 1998-B 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 aggregate Voting Interests
of all Classes of Certificates. The Transferor shall provide a copy of any
such assignment to each Rating Agency.
9.08 CERTIFICATES NONASSESSABLE AND FULLY PAID.
Except as provided in Section 5.02 with regard to the Transferor,
Certificateholders shall not be personally liable for obligations of the
1998-B Securitization Trust. The interests represented by the Certificates
shall be nonassessable for any losses or expenses of the 1998-B
Securitization Trust or for any reason whatsoever, and, upon the execution
and authentication thereof by the 1998-B Securitization Trustee pursuant to
Sections 4.02, 4.03 or 4.04, the Certificates are and shall be deemed fully
paid.
9.09 INVENTORY ADVANCES.
As set forth more fully in the 1998-B SUBI Servicing Supplement, the
Servicer is authorized to make an Inventory Advance if it expects to recover
the full amount thereof in connection with the liquidation of the related
1998-B Leased Vehicles. The 1998-A Securitization Trustee shall not accept
monies from the Servicer that the Servicer has identified or designated as
Inventory Advances in the related Statement to Certificateholders unless it
shall also have received the written representation of the Servicer that the
Servicer expects to recover the full amount thereof in connection with the
liquidation of the related 1998-B Leased Vehicles based on its estimation of
expected Liquidation Proceeds. In estimating the expected Liquidation
Proceeds, the Servicer shall take into account (a) the specific 1998-B Leased
Vehicles that are to be the subject of such Inventory Advance and (b) its own
recent actual experience with the liquidation of vehicles of comparable makes
and models, in each case on a basis consistent with the review and estimates
the Servicer prepares in establishing and revising its own servicing
guidelines.
ARTICLE X
AGENT FOR SERVICE
10.01 AGENT FOR SERVICE OF TRANSFEROR.
The agent for service of process for the Transferor shall be its
Corporate Treasury Manager, at 19001 South Western Avenue, Torrance,
California 90501, Attention: Corporate Treasury Manager (fax: 310-787-6194).
10.02 AGENT OF TRUSTEE.
The 1998-B Securitization Trustee shall maintain an office or offices
or agency or agencies where notices and demands to or upon the 1998-B
Securitization Trustee in respect of the
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Certificates and this 1998-B Securitization Trust Agreement may be served.
The initial such office shall be the Corporate Trust Office. The 1998-B
Securitization Trustee shall give prompt written notice to the Transferor,
the Servicer and 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]
62
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IN WITNESS WHEREOF, the parties have caused this 1998-B Securitization
Trust Agreement to be duly executed by their respective officers as of the
1st day of September, 1998.
TOYOTA LEASING, INC.
as Transferor
By: /s/ GREGORY WILLIS
-----------------------------------
Name: Gregory Willis
Title: President
U.S. BANK NATIONAL ASSOCIATION,
as 1998-B Securitization Trustee and as
Securities Intermediary
By: /s/ STEVEN E. CHARLES
-----------------------------------
Name: Steven E. Charles
Title: Vice President
<PAGE>
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 1998-B
5.35% AUTO LEASE ASSET BACKED CERTIFICATE, CLASS A-1
Evidencing a percentage interest in the distributions allocable to the
Class A-1 Certificates, as defined below.
This Certificate does not represent an obligation of, or an interest
in, Toyota Leasing, Inc., Toyota Motor Credit Corporation, the Titling
Trustee, the 1998-B Securitization Trustee or any of their respective
affiliates.
Initial Class A-1 Certificate Balance: CUSIP #892317 AF5
$335,000,000
Number A-1-1 Denomination: $[ ]
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a ______________
_________________________ DOLLARS ($____________) nonassessable, fully-paid,
fractional undivided interest in the Toyota Auto Lease Trust 1998-B (the "1998-B
Securitization Trust") formed by Toyota Leasing, Inc., a California corporation,
as Transferor (the "Transferor"). The 1998-B Securitization Trust was created
pursuant to a 1998-B Securitization Trust Agreement dated as of September 1,
1998 (the "Agreement"), between the Transferor and U.S. Bank National
Association, a national banking association, as trustee (the "1998-B
Securitization 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 1998-B 5.35% Auto Lease
Asset Backed Certificates, Class A-1" (the "Class A-1 Certificates"). Also
issued under the Agreement are Certificates
A-1-1
<PAGE>
designated as "Toyota Auto Lease Trust 1998-B 5.45% Auto Lease Asset Backed
Certificates, Class A-2" (the "Class A-2 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1998-B 5.50% Auto 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"), Certificates designated as "Toyota Auto Lease Trust 1998-B
6.55 % Auto Lease Asset Backed Certificates, Class B" (the "Class B
Certificates" and, together with the Class A Certificates, the "Investor
Certificates") and a Certificate evidencing the Transferor Interest (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 virtue of the acceptance hereof assents and by which such
Holder is bound.
The property of the 1998-B Securitization Trust includes, among other
things, the 1998-B SUBI Certificate evidencing beneficial interests in the
assets of the 1998-B SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-B SUBI 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 "1998-B
SUBI Portfolio") entered into by various automobile and light duty truck
dealers pursuant to contractual arrangements with the Titling Trust. Toyota
Motor Credit Corporation acts as servicer (in that capacity, the "Servicer")
of the 1998-B SUBI Portfolio. During the Revolving Period, Principal
Collections and amounts applied to reimburse Loss Amounts and Certificate
Principal Loss Amounts allocable to the assets of the 1998-B SUBI represented
by the 1998-B SUBI Certificate generally will be reinvested in Subsequent
Contracts and Subsequent Leased Vehicles from among other unallocated
Contracts and Leased Vehicles owned by the Titling Trust. At the time of
reinvestment, such Subsequent Contracts and Subsequent Leased Vehicles will
be allocated to the 1998-B SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-B SUBI will be deposited in
the Certificateholders' Account and invested in Permitted Investments (which
are expected to be TMCC Demand Notes) maturing prior to the relevant Targeted
Maturity Date.
Payments in respect of the 1998-B SUBI Certificate will be allocated
between the Investor Certificates and the Transferor Certificate and paid to
the registered Holder of this Certificate as provided in the Agreement.
Except as otherwise provided in the Agreement, interest payments in
respect of this Certificate shall be made semi-annually on the 25th day of
March and September (or if such day is not a Business Day, the next
succeeding Business Day, each such day a "Certificate Payment Date"),
commencing on March 25, 1999, and through the Class A-1 Targeted Maturity
Date and thereafter, if applicable, monthly on each succeeding Certificate
Payment Date until the Adjusted Class A-1 Certificate Balance has been
reduced to zero. Except to the extent provided otherwise 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
A-1-2
<PAGE>
payments will be made in respect of the Class B Certificates until the Class
A-3 Certificates have been paid in full. Except as otherwise provided in the
Agreement, the principal of the Class A-1 Certificates shall be distributable
on the A-1 Targeted Maturity Date which shall be October 25, 2000 (or if such
day is not a Business Day, on the next succeeding Business Day) and
thereafter, if applicable, monthly on each succeeding Certificate Payment
Date until the Adjusted Class A-1 Certificate Balance has been reduced to
zero. In any event, any remaining unpaid principal of any Class A-1
Certificate shall be due and payable on July 25, 2002 (or if such day is not
a Business Day, on the next succeeding Business Day).
On each Certificate Payment Date, the 1998-B Securitization Trustee
shall pay or cause to be paid to the Person in whose name this Class A-1
Certificate is registered at the close of business on the calendar day
immediately preceding such Certificate Payment Date or, if Definitive
Certificates have been issued, the last Business Day of the immediately
preceding calendar month (the "Record Date"), amounts distributable as
interest on the Class A-1 Certificates pursuant to the terms of the
Agreement, all to the extent and as more specifically set forth in the
Agreement. Payments of principal may be made earlier under certain
circumstances (in connection with the exercise of the Transferor of its right
to purchase the SUBI, described below, or the liquidation of the 1998-B SUBI
following a Liquidation Event) or later (depending on payment, delinquency
and loss experience). Distributions on this Class A-1 Certificate will be
made by the 1998-B Securitization Trustee by check mailed to the Class A-1
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 1998-B 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 1998-B Securitization
Trustee or at the offices of Bankers Trust Luxembourg S.A. (initially at 14
Boulevard F.D. Roosevelt, L-450 Luxembourg).
It is the intention of the Transferor and the Investor
Certificateholders 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 1998-B
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 an Investor Certificate also agrees that it will not be entitled to
any of the tax benefits related to the 1998-B Contracts and 1998-B Leased
Vehicles, including any of the depreciation deductions resulting therefrom.
A-1-3
<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 1998-B
Securitization Trust, then the Holder is deemed to agree (and each
Certificate Owner hereof with respect hereto by virtue of acquiring a
beneficial interest herein is deemed to agree): (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 1998-B 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
1998-B Securitization Trustee or any of their respective Affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1998-B SUBI Assets evidenced by the 1998-B 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. 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 of the Titling Trust Assets other than those from
time to time included in the 1998-B SUBI Sub-Trust (except for those
evidenced by the 1998-B SUBI Insurance Certificate) and those proceeds or
assets derived from or earned by such 1998-B SUBI Assets (except for those
evidenced by the 1998-B SUBI Insurance Certificate and the proceeds
therefrom). A copy of the Agreement may be examined during normal business
hours at the Corporate Trust Office of the 1998-B Securitization Trustee, at
the offices of Bankers Trust Luxembourg S.A. (initially at 14 Boulevard F.D.
Roosevelt, L-450 Luxembourg) and at such other places, if any, designated by
the 1998-B 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 1998-B Securitization Trustee without
the consent of any Certificateholders. 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 Voting Interest of
all Investor Certificates, voting together as a single class. To be entitled
to vote in respect of an interest in the Class A-1 Certificates, a person
shall be a holder of record of such Class A-1 Certificates as shown on the
books of the Certificate Registrar on the last day of the preceding month, or
a person appointed by such holder by an instrument in writing. 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.
A-1-4
<PAGE>
As provided in the Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of the same
Class, in authorized denominations of a like aggregate principal amount, as
requested by the Holder surrendering the same or for register of transfer at
the Corporate Trust Office of the 1998-B Securitization Trustee in its
capacity as Certificate Registrar, or at the office of the agent of the
1998-B Securitization Trustee in its capacity as Certificate Registrar, who
shall initially be U.S. Bank National Association, 100 Wall Street, 20th
Floor, New York, New York 10005, in the Borough of Manhattan, the City of New
York, and, with respect to the Definitive Certificates only, a transfer agent
appointed in Luxembourg, or at the appropriate office of any successor
Certificate Registrar, accompanied by a written instrument of transfer in
form satisfactory to the 1998-B 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. No service charge will
be made for any such registration of transfer or exchange, but the 1998-B
Securitization Trustee may require payment of a sum sufficient to cover any
tax or governmental charges payable in connection therewith.
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).
Prior to due presentation of this Certificate for registration of
transfer, the 1998-B Securitization Trustee, the 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 1998-B
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
1998-B 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 1998-B Securitization Trust. The Transferor may at its option purchase
the corpus of the 1998-B Securitization Trust at a price specified in the
Agreement, and such purchase of the 1998-B SUBI and 1998-B SUBI Certificate
and other property of the 1998-B Securitization Trust will effect early
retirement of the Certificates; PROVIDED, HOWEVER, such right of purchase is
exercisable only on the Monthly Allocation Date on or after the Class A-3
Targeted Maturity Date, if either before or after giving effect to any
payments of principal required to be made on such Monthly Allocation Date,
the Investor Balance shall be less than or equal to $109,993,704.53 (ten
percent of the Aggregate Net Investment Value as of the Cutoff Date).
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 (and each Certificate Owner is deemed to agree)
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
A-1-5
<PAGE>
obligations due under any other Securitized Financing have been paid in full,
the Holder (or Certificate Owner) will not institute against, or join any
other Person in instituting against the Transferor, Toyota Motor Credit
Corporation, the 1998-B Securitization Trustee, the 1998-B 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 (or any 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
noncompetition covenant shall survive the termination of the Agreement.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the 1998-B 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.
A-1-6
<PAGE>
IN WITNESS WHEREOF, the 1998-B Securitization Trustee on behalf of the
1998-B Securitization Trust and not in its individual capacity has caused this
Class A-1 Certificate to be duly executed.
Dated: September 29, 1998
TOYOTA AUTO LEASE TRUST 1998-B
By: U.S. BANK NATIONAL ASSOCIATION,
as 1998-B Securitization Trustee
By:
-------------------------------------------------
Authorized Officer
Certificate of Authentication
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION, as
1998-B Securitization Trustee
By:
-------------------------------------------------
Authorized Officer
A-1-7
<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 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-1-8
<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 1998-B
5.45% AUTO LEASE ASSET BACKED CERTIFICATE, CLASS A-2
Evidencing a percentage interest in the distributions allocable to the
Class A-2 Certificates, as defined below.
This Certificate does not represent an obligation of, or an interest
in, Toyota Leasing, Inc., Toyota Motor Credit Corporation, the Titling
Trustee, the 1998-B Securitization Trustee or any of their respective
affiliates.
Initial Class A-2 Certificate Balance:
$575,000,000 CUSIP #892317 AG3
Number A-2-1 Denomination: $[ ]
THIS CERTIFIES THAT CEDE & CO. IS the registered owner of a ______________
______________________________ DOLLARS ($_________) nonassessable, fully-paid,
fractional undivided interest in the Toyota Auto Lease Trust 1998-B (the "1998-B
Securitization Trust") formed by Toyota Leasing, Inc., a California corporation,
as Transferor (the "Transferor"). The 1998-B Securitization Trust was created
pursuant to a 1998-B Securitization Trust Agreement dated as of September 1,
1998 (the "Agreement"), between the Transferor and U.S. Bank National
Association, a national banking association, as trustee (the "1998-B
Securitization 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 1998-B 5.45% Auto Lease
Asset Backed Certificates, Class A-2" (the "Class A-2 Certificates"). Also
issued under the Agreement are Certificates
A-2-1
<PAGE>
designated as "Toyota Auto Lease Trust 1998-B 5.35% Auto Lease Asset Backed
Certificates, Class A-1" (the "Class A-1 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1998-B 5.50% Auto 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"), Certificates designated as "Toyota Auto Lease Trust 1998-B
6.55% Auto Lease Asset Backed Certificates, Class B" (the "Class B
Certificates" and, together with the Class A Certificates, the "Investor
Certificates") and a Certificate evidencing the Transferor Interest (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 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 1998-B Securitization Trust includes, among other
things, the 1998-B SUBI Certificate evidencing beneficial interests in the
assets of the 1998-B SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-B SUBI 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 "1998-B
SUBI Portfolio") entered into by various automobile and light duty truck
dealers pursuant to contractual arrangements with the Titling Trust. Toyota
Motor Credit Corporation acts as servicer (in that capacity, the "Servicer")
of the 1998-B SUBI Portfolio. During the Revolving Period, Principal
Collections and amounts applied to reimburse Loss Amounts and Certificate
Principal Loss Amounts allocable to the assets of the 1998-B SUBI represented
by the 1998-B SUBI Certificate generally will be reinvested in Subsequent
Contracts and Subsequent Leased Vehicles from among other unallocated
Contracts and Leased Vehicles owned by the Titling Trust. At the time of
reinvestment, such Subsequent Contracts and Subsequent Leased Vehicles will
be allocated to the 1998-B SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-B SUBI will be deposited in
the Certificateholders' Account and invested in Permitted Investments (which
are expected to be TMCC Demand Notes) maturing prior to the relevant Targeted
Maturity Date.
Payments in respect of the 1998-B SUBI Certificate will be allocated
between the Investor Certificates and the Transferor Certificate and paid to
the registered Holder of this Certificate as provided in the Agreement.
Except as otherwise provided in the Agreement, interest payments in
respect of this Certificate shall be made semi-annually on the 25th day of
March and September (or if such day is not a Business Day, the next
succeeding Business Day, each such day a "Certificate Payment Date"),
commencing on March 25, 1999, and through the Class A-2 Targeted Maturity
Date and thereafter, if applicable, monthly on each succeeding Certificate
Payment Date until the Adjusted Class A-2 Certificate Balance has been
reduced to zero. Except to the extent provided otherwise 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
A-2-2
<PAGE>
payments shall be made in respect of the Class B Certificates until
the Class A-3 Certificates have been paid in full. Except as otherwise
provided in the Agreement, the principal of the Class A-2 Certificates shall
be distributable on the Class A-2 Targeted Maturity Date which shall be
September 25, 2001 (or if such day is not a Business Day, on the next
succeeding Business Day) and thereafter, if applicable, monthly on each
succeeding Certificate Payment Date until the Adjusted Class A-2 Certificate
Balance has been reduced to zero. In any event, any remaining unpaid
principal of any Class A-2 Certificate shall be due and payable on March 25,
2003 (or if such day is not a Business Day, on the next succeeding Business
Day).
On each Certificate Payment Date, the 1998-B Securitization Trustee
shall pay or cause to be paid to the Person in whose name this Class A-2
Certificate is registered at the close of business on the calendar day
immediately preceding such Certificate Payment Date or, if Definitive
Certificates have been issued, the last Business Day of the immediately
preceding calendar month (the "Record Date"), amounts distributable as
interest on the Class A-2 Certificates pursuant to the terms of the
Agreement, all to the extent and as more specifically set forth in the
Agreement. Payments of principal may be made earlier under certain
circumstances (in connection with the exercise of the Transferor of its right
to purchase the 1998-B SUBI, described below, or the liquidation of the SUBI
following a Liquidation Event) or later (depending on payment, delinquency
and loss experience). Distributions on this Class A-2 Certificate will be
made by the 1998-B Securitization Trustee by check mailed to the Class A-2
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 1998-B 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 1998-B Securitization
Trustee or at the offices of Bankers Trust Luxembourg S.A. (initially at 14
Boulevard F.D. Roosevelt, L-450 Luxembourg).
It is the intention of the Transferor and the Investor
Certificateholders 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 1998-B
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 of the Transferor and to report the transactions contemplated by
the Agreement on all applicable tax returns in a manner consistent with such
treatment. Each Holder of an Investor Certificate also agrees that it will
not be entitled to any of the tax benefits related to the 1998-B Contracts
and 1998-B Leased Vehicles, including any of the depreciation deductions
resulting therefrom.
A-2-3
<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 1998-B
Securitization Trust, then the Holder is deemed to agree (and each
Certificate Owner hereof with respect hereto by virtue of acquiring a
beneficial interest herein is deemed to agree): (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 1998-B 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
1998-B Securitization Trustee or any of their respective Affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1998-B SUBI Assets evidenced by the 1998-B 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. 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 of the Titling Trust Assets other than those from
time to time included in the 1998-B SUBI Sub-Trust (except for those
evidenced by the 1998-B SUBI Insurance Certificate) and those proceeds or
assets derived from or earned by such 1998-B SUBI Assets (except for those
evidenced by the 1998-B SUBI Insurance Certificate and the proceeds
therefrom). A copy of the Agreement may be examined during normal business
hours at the Corporate Trust Office of the 1998-B Securitization Trustee, at
the offices of Bankers Trust Luxembourg S.A. (initially at 14 Boulevard F.D.
Roosevelt, L-450 Luxembourg) and at such other places, if any, designated by
the 1998-B 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 1998-B Securitization Trustee without
the consent of any Certificateholders. 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 Voting Interest of
all Investor Certificates, voting together as a single class. To be entitled
to vote in respect of an interest in the Class A-2 Certificates, a person
shall be a holder of record of such Class A-2 Certificates as shown on the
books of the Certificate Registrar on the last day of the preceding month, or
a person appointed by such holder by an instrument in writing. 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.
A-2-4
<PAGE>
As provided in the Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of the same
Class, in authorized denominations of a like aggregate principal amount, as
requested by the Holder surrendering the same or for register of transfer at
the Corporate Trust Office of the 1998-B Securitization Trustee in its
capacity as Certificate Registrar, or at the office of the agent of the
1998-B Securitization Trustee in its capacity as Certificate Registrar, U.S.
Bank National Association, 100 Wall Street, 20th Floor, New York, New York
10005, in the Borough of Manhattan, the City of New York, and, with respect
to the Definitive Certificates only, a transfer agent appointed in
Luxembourg, or at the appropriate office of any successor Certificate
Registrar, accompanied by a written instrument of transfer in form
satisfactory to the 1998-B 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. No service charge will
be made for any such registration of transfer or exchange, but the 1998-B
Securitization Trustee may require payment of a sum sufficient to cover any
tax or governmental charges payable in connection therewith.
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).
Prior to due presentation of this Certificate for registration of
transfer, the 1998-B Securitization Trustee, the 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 1998-B
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
1998-B 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 1998-B Securitization Trust. The Transferor may at its option purchase
the corpus of the 1998-B Securitization Trust at a price specified in the
Agreement, and such purchase of the 1998-B SUBI and 1998-B SUBI Certificate
and other property of the 1998-B Securitization Trust will effect early
retirement of the Certificates; PROVIDED, HOWEVER, such right of purchase is
exercisable only on the Monthly Allocation Date on or after the Class A-3
Targeted Maturity Date, if either before or after giving effect to any
payments of principal required to be made on such Monthly Allocation Date,
the Investor Balance shall be less than or equal to $109,993,104.53 (ten
percent of the Aggregate Net Investment Value as of the Cutoff Date).
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 (and each Certificate Owner is deemed to agree) 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
A-2-5
<PAGE>
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 1998-B Securitization Trustee, the 1988-B 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.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the 1998-B 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.
A-2-6
<PAGE>
IN WITNESS WHEREOF, the 1998-B Securitization Trustee on behalf of the
1998-B Securitization Trust and not in its individual capacity has caused this
Class A-2 Certificate to be duly executed.
Dated: September 29, 1998
TOYOTA AUTO LEASE TRUST 1998-B
By: U.S. BANK NATIONAL ASSOCIATION, as 1998-B
Securitization Trustee
By:
--------------------------------------------------
Authorized Officer
Certificate of Authentication
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION, as
1998-B Securitization Trustee
By:
--------------------------------------------------
Authorized Officer
A-2-7
<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 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-2-8
<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 1998-B
5.50% AUTO LEASE ASSET BACKED CERTIFICATE, CLASS A-3
Evidencing a percentage interest in the distributions allocable to the
Class A-3 Certificates, as defined below.
This Certificate does not represent an obligation of, or an interest
in, Toyota Leasing, Inc., Toyota Motor Credit Corporation, the Titling
Trustee, the 1998-B Securitization Trustee or any of their respective
affiliates.
Initial Class A-3 Certificate Balance: CUSIP #892317 AH1
$96,400,000
Number A-3-1 Denomination: $[ ]
THIS CERTIFIES THAT CEDE & CO. IS the registered owner of a _______________
_________________________________ DOLLARS ($_____________) nonassessable,
fully-paid, fractional undivided interest in the Toyota Auto Lease Trust 1998-B
(the "1998-B Securitization Trust") formed by Toyota Leasing, Inc., a California
corporation, as Transferor (the "Transferor"). The 1998-B Securitization Trust
was created pursuant to a 1998-B Securitization Trust Agreement dated as of
September 1, 1998 (the "Agreement"), between the Transferor and U.S. Bank
National Association, a national banking association, as trustee (the "1998-B
Securitization 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 1998-B 5.50% Auto Lease
Asset Backed Certificates, Class A-3" (the "Class A-3 Certificates"). Also
issued under the Agreement are Certificates
A-3-1
<PAGE>
designated as "Toyota Auto Lease Trust 1998-B 5.35% Auto Lease Asset Backed
Certificates, Class A-1" (the "Class A-1 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1998-B 5.45% Auto Lease Asset Backed
Certificates, Class A-2" (the "Class A-2 Certificates" and, together with the
Class A-1 Certificates and the Class A-3 Certificates, the "Class A
Certificates"), Certificates designated as "Toyota Auto Lease Trust 1998-B
6.55% Auto Lease Asset Backed Certificates, Class B" (the "Class B
Certificates" and, together with the Class A Certificates, the "Investor
Certificates") and a Certificate evidencing the Transferor Interest (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
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
The property of the 1998-B Securitization Trust includes, among other
things, the 1998-B SUBI Certificate evidencing beneficial interests in the
assets of the 1998-B SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-B SUBI 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 "1998-B
SUBI Portfolio") entered into by various automobile and light duty truck
dealers pursuant to contractual arrangements with the Titling Trust. Toyota
Motor Credit Corporation acts as servicer (in that capacity, the "Servicer")
of the 1998-B SUBI Portfolio. During the Revolving Period, Principal
Collections and amounts applied to reimburse Loss Amounts and Certificate
Principal Loss Amounts allocable to the assets of the 1998-B SUBI represented
by the 1998-B SUBI Certificate generally will be reinvested in Subsequent
Contracts and Subsequent Leased Vehicles from among other unallocated
Contracts and Leased Vehicles owned by the Titling Trust. At the time of
reinvestment, such Subsequent Contracts and Subsequent Leased Vehicles will
be allocated to the 1998-B SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-B SUBI will be deposited in
the Certificateholders' Account and invested in Permitted Investments (which
are expected to be TMCC Demand Notes) maturing prior to the relevant Targeted
Maturity Date.
Payments in respect of the 1998-B SUBI Certificate will be allocated
between the Investor Certificates and the Transferor Certificate and paid to
the registered Holder of this Certificate as provided in the Agreement.
Except as otherwise provided in the Agreement, interest payments in
respect of this Certificate shall be made semi-annually on the 25th day of
March and September (or if such day is not a Business Day, the next
succeeding Business Day, each such day a "Certificate Payment Date"),
commencing on March 25, 1999, and through the Class A-3 Targeted Maturity
Date and thereafter, if applicable, monthly on each succeeding Certificate
Payment Date until the Adjusted Class A-3 Certificate Balance has been
reduced to zero. Except to the extent provided otherwise 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 until the
Class A-2 Certificates have been paid in full and no
A-3-2
<PAGE>
principal payments shall be made in respect of the Class B Certificates until
the Class A-3 Certificates have been paid in full. Except as otherwise
provided in the Agreement, the principal of the Class A-3 Certificates shall
be distributable on the Class A-3 Targeted Maturity Date which shall be
February 25, 2002 (or if such day is not a Business Day, on the next
succeeding Business Day) and thereafter, if applicable, monthly on each
succeeding Certificate Payment Date until the Adjusted Class A-3 Certificate
Balance has been reduced to zero. In any event, any remaining unpaid
principal of any Class A-3 Certificate shall be due and payable on December
25, 2003 (or if such day is not a Business Day, on the next succeeding
Business Day).
On each Certificate Payment Date, the 1998-B Securitization Trustee
shall pay or cause to be paid to the Person in whose name this Class A-3
Certificate is registered at the close of business on the calendar day
immediately preceding such Certificate Payment Date or, if Definitive
Certificates have been issued, the last Business Day of the immediately
preceding calendar month (the "Record Date"), amounts distributable as
interest on the Class A-3 Certificates pursuant to the terms of the
Agreement, all to the extent and as more specifically set forth in the
Agreement. Payments of principal hereof may be made earlier under certain
circumstances (in connection with the exercise of the Transferor of its right
to purchase the 1998-B SUBI, described below, or the liquidation of the SUBI
following a Liquidation Event) or later (depending on payment, delinquency
and loss experience). Distributions on this Class A-3 Certificate will be
made by the 1998-B Securitization Trustee by check mailed to the Class A-3
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 1998-B 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 1998-B Securitization
Trustee or at the offices of Bankers Trust Luxembourg S.A. (initially at 14
Boulevard F.D. Roosevelt, L-450 Luxembourg).
It is the intention of the Transferor and the Investor
Certificateholders 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 1998-B
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 of the Transferor and to report the transactions contemplated by
the Agreement on all applicable tax returns in a manner consistent with such
treatment. Each Holder of an Investor Certificate also agrees that it will
not be entitled to any of the tax benefits related to the 1998-B Contracts
and 1998-B Leased Vehicles, including any of the depreciation deductions
resulting therefrom.
A-3-3
<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 1998-B
Securitization Trust, then the Holder is deemed to agree (and each
Certificate Owner hereof with respect hereto by virtue of acquiring a
beneficial interest herein is deemed to agree): (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 1998-B 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
1998-B Securitization Trustee or any of their respective Affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1998-B SUBI Assets evidenced by the 1998-B 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. 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 of the Titling Trust Assets other than those from
time to time included in the 1998-B SUBI Sub-Trust (except for those
evidenced by the 1998-B SUBI Insurance Certificate) and those proceeds or
assets derived from or earned by such 1998-B SUBI Assets (except for those
evidenced by the 1998-B SUBI Insurance Certificate and the proceeds
therefrom). A copy of the Agreement may be examined during normal business
hours at the Corporate Trust Office of the 1998-B Securitization Trustee, at
the offices of Bankers Trust Luxembourg S.A. (initially at 14 Boulevard F.D.
Roosevelt, L-450 Luxembourg) and at such other places, if any, designated by
the 1998-B 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 1998-B Securitization Trustee without
the consent of any Certificateholders. 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 Voting Interest of
all Investor Certificates, voting together as a single class. To be entitled
to vote in respect of an interest in the Class A-3 Certificates, a person
shall be a holder of record of such Class A-3 Certificates as shown on the
books of the Certificate Registrar on the last day of the preceding month, or
a person appointed by such holder by an instrument in writing. 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.
A-3-4
<PAGE>
As provided in the Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of the same
Class, in authorized denominations of a like aggregate principal amount, as
requested by the Holder surrendering the same or for register of transfer in
the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the 1998-B Securitization
Trustee in its capacity as Certificate Registrar, or at the office of the
agent of the 1998-B Securitization Trustee in its capacity as Certificate
Registrar, who shall initially be U.S. Bank National Association, 100 Wall
Street, 20th Floor, New York, New York 10005, in the Borough of Manhattan,
the City of New York, and with respect to the Definitive Certificates only, a
transfer agent appointed in Luxembourg, or at the appropriate office of any
successor Certificate Registrar, accompanied by a written instrument of
transfer in form satisfactory to the 1998-B 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. No service
charge will be made for any such registration of transfer or exchange, but
the 1998-B Securitization Trustee may require payment of a sum sufficient to
cover any tax or governmental charges payable in connection therewith.
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).
Prior to due presentation of this Certificate for registration of
transfer, the 1998-B Securitization Trustee, the 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 1998-B
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
1998-B 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 1998-B Securitization Trust. The Transferor may at its option purchase
the corpus of the 1998-B Securitization Trust at a price specified in the
Agreement, and such purchase of the 1998-B SUBI and 1998-B SUBI Certificate
and other property of the 1998-B Securitization Trust will effect early
retirement of the Certificates; PROVIDED, HOWEVER, such right of purchase is
exercisable only on the Monthly Allocation Date on or after the Class A-3
Targeted Maturity Date, if either before or after giving effect to any
payments of principal required to be made on such Monthly Allocation Date,
the Investor Balance shall be less than or equal to $109,993,704.53 (ten
percent of the Aggregate Net Investment Value as of the Cutoff Date).
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 (and each Certificate Owner is deemed to agree) that prior
to the date which is one year and one day after the
A-3-5
<PAGE>
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 1998-B Securitization Trustee, the
1998-B 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 any 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
noncompetition covenant shall survive the termination of the Agreement.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the 1998-B 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-3-6
<PAGE>
IN WITNESS WHEREOF, the 1998-B Securitization Trustee on behalf of the
1998-B Securitization Trust and not in its individual capacity has caused this
Class A-3 Certificate to be duly executed.
Dated: September 29, 1998
TOYOTA AUTO LEASE TRUST 1998-B
By: U.S. BANK NATIONAL ASSOCIATION, as
1998-B Securitization Trustee
By:
---------------------------------------------------
Authorized Officer
Certificate of Authentication
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION, as
1998-B Securitization Trustee
By:
---------------------------------------------------
Authorized Officer
A-3-7
<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 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-3-8
<PAGE>
EXHIBIT B
THIS CLASS B CERTIFICATE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION
IN RELIANCE ON EXEMPTIONS PROVIDED BY THE SECURITIES ACT AND SUCH STATE OR
FOREIGN SECURITIES LAWS. THE CLASS B CERTIFICATES ARE ELIGIBLE FOR PURCHASE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT. NO RESALE OR OTHER TRANSFER
OF THIS CERTIFICATE SHALL 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 (OTHER THAN A TRANSACTION IN CLAUSE
(iv) BELOW) EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS, (iii) TO TOYOTA LEASING
INC. (THE "TRANSFEROR") OR (iv) TO A PERSON WHO THE TRANSFEROR OF THIS CLASS
B CERTIFICATE 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 OR TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" UNDER RULE 501(a)(1),(2),(3) OR (7) UNDER
THE SECURITIES ACT. IN THE EVENT THAT THE TRANSFER OF A CLASS B CERTIFICATE
IS TO BE MADE AS DESCRIBED IN CLAUSE (ii) OF THE PRECEDING SENTENCE, THE
PROSPECTIVE INVESTOR IS REQUIRED TO DELIVER AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE 1998-B SECURITIZATION TRUSTEE AND THE
TRANSFEROR TO THE EFFECT THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE OR FOREIGN SECURITIES LAWS.
THE PROSPECTIVE TRANSFEREE IN A TRANSFER OF A CLASS B CERTIFICATE TO BE MADE
AS DESCRIBED IN CLAUSE (iv) ABOVE MUST DELIVER TO THE 1998-B SECURITIZATION
TRUSTEE A REPRESENTATION LETTER REQUIRED BY SECTION 4.03 OF THE AGREEMENT
REFERRED TO HEREIN. PROSPECTIVE PURCHASERS OF THE CLASS B CERTIFICATES ARE
HEREBY NOTIFIED THAT THE SELLER OF ANY CLASS B CERTIFICATES MAY BE RELYING ON
THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SECTION 5 OF THE ACT
PROVIDED BY RULE 144A UNDER THE ACT.
THIS CLASS B CERTIFICATE OR A BENEFICIAL INTEREST HEREIN MAY NOT BE
TRANSFERRED UNLESS THE 1998-B SECURITIZATION TRUSTEE HAS RECEIVED (I) EITHER (A)
A CERTIFICATE FROM THE TRANSFEREE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN DEFINED IN SECTION 3(32) OF ERISA SUBJECT TO ANY FEDERAL STATE
OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS
OF
B-1
<PAGE>
ERISA OR THE CODE ("SIMILAR LAW") (EACH, A "BENEFIT PLAN") AND IS NOT AN
ENTITY INCLUDING AN INSURANCE COMPANY SEPARATE ACCOUNT OR AN INSURANCE
COMPANY GENERAL ACCOUNT IF THE ASSETS IN ANY SUCH ACCOUNTS CONSTITUTE "PLAN
ASSETS" FOR PURPOSES OF REGULATION SECTION 2510.3-101 OF ERISA, WHOSE
UNDERLYING ASSETS INCLUDE BENEFIT PLAN ASSETS BY REASON OF A BENEFIT PLAN'S
INVESTMENT IN THE ENTITY (SUCH BENEFIT PLAN OR ENTITY, A "BENEFIT PLAN
INVESTOR") OR (B) AN OPINION OF COUNSEL SATISFACTORY TO THE 1998-B
SECURITIZATION TRUSTEE, THE TRANSFEROR AND THE SERVICER TO THE EFFECT THAT
THE PURCHASE OR HOLDING OF SUCH CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN
THE ASSETS OF THE 1998-B SECURITIZATION TRUST BEING DEEMED TO BE "PLAN
ASSETS" SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR
PROHIBITED TRANSACTIONS PROVISIONS OF SECTION 4975 OF THE CODE OR SIMILAR
LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975 OF THE CODE OR
SIMILAR LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE TRANSFEROR OR THE SERVICER
TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER
ERISA, SECTION 4975 OF THE CODE OF SIMILAR LAW) IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT AND (II) A CERTIFICATE TO THE EFFECT THAT 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.
NOTWITHSTANDING THE FOREGOING RESTRICTIONS, THE 1998-B SECURITIZATION TRUSTEE
SHALL PERMIT A TRANSFER OF CLASS B CERTIFICATES WITHOUT RECEIVING THE
CERTIFICATE OR OPINION REGARDING ERISA MATTERS REFERENCED IN (I) ABOVE IF, IN
THE SOLE DETERMINATION OF THE 1998-B SECURITIZATION TRUSTEE, AFTER GIVING
EFFECT TO THE PROPOSED TRANSFER, BENEFIT PLANS WILL NOT OWN 25% OR MORE OF
THE CLASS B CERTIFICATES (BY CLASS CERTIFICATE BALANCE).
IN ADDITION, NO RESALE OR OTHER TRANSFER OF THIS CLASS B CERTIFICATE OR
ANY INTEREST THEREIN SHALL BE PERMITTED UNLESS IMMEDIATELY AFTER GIVING
EFFECT TO SUCH RESALE OR OTHER TRANSFER, THERE WOULD BE FEWER THAN 100 CLASS
B CERTIFICATEHOLDERS.
THIS CLASS B CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
CLASS A CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO
BELOW.
B-2
<PAGE>
TOYOTA AUTO LEASE TRUST 1998-B
6.55% AUTO LEASE ASSET BACKED CERTIFICATE, CLASS B
Evidencing a percentage interest in the distributions allocable to the
Investor Certificates, as defined below.
This Certificate does not represent an obligation of, or an interest in,
Toyota Leasing, Inc., Toyota Motor Credit Corporation, the Titling Trustee
or the 1998-B Securitization Trustee or any of their respective affiliates.
Initial Class B Certificate Balance: CUSIP #_______________
$71,538,000
Number B-1 Denomination: $12,500,000
THIS CERTIFIES THAT SIGLER & CO. is the registered owner of TWELVE MILLION
DOLLARS ($12,500,000) nonassessable, fully-paid, fractional undivided interest
in the Toyota Auto Lease Trust 1998-B (the "1998-B Securitization Trust") formed
by Toyota Leasing, Inc., a California corporation, as Transferor (the
"Transferor"). The 1998-B Securitization Trust was created pursuant to a 1998-B
Securitization Trust Agreement dated as of September 1, 1998 (the "Agreement"),
between the Transferor and U.S. Bank National Association, a national banking
association, as trustee (the "1998-B Securitization 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 1998-B 6.55% Auto
Lease Asset Backed Certificates, Class B" (the "Class B Certificates"). Also
issued under the Agreement are Certificates designated as "Toyota Auto Lease
Trust 1998-B 5.35% Auto Lease Asset Backed Certificates, Class A-1" (the
"Class A-1 Certificates"), Certificates designated as "Toyota Auto Lease
Trust 1998-B 5.45% Auto Lease Asset Backed Certificates, Class A-2" (the
"Class A-2 Certificates"), Certificates designated as "Toyota Auto Lease
Trust 1998-B 5.50% Auto 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 "Investor Certificates") and a Certificate
evidencing the Transferor Interest (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.
B-1
<PAGE>
The property of the 1998-B Securitization Trust includes, among other
things, the 1998-B SUBI Certificate evidencing beneficial interests in the
assets of the 1998-B SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-B SUBI 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 "1998-B
SUBI Portfolio") entered into by various automobile and light duty truck
dealers pursuant to contractual arrangements with the Titling Trust. Toyota
Motor Credit Corporation acts as servicer (in that capacity, the "Servicer")
of the 1998-B SUBI Portfolio. During the Revolving Period, Principal
Collections and amounts applied to reimburse Loss Amounts and Certificate
Principal Loss Amounts allocable to the assets of the 1998-B SUBI represented
by the 1998-B SUBI Certificate generally will be reinvested in Subsequent
Contracts and Subsequent Leased Vehicles from among other unallocated
Contracts and Leased Vehicles owned by the Titling Trust. At the time of
reinvestment, such Subsequent Contracts and Subsequent Leased Vehicles will
be allocated to the 1998-B SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-B SUBI will be deposited in
the Certificateholders' Account and invested in Permitted Investments (which
are expected to be TMCC Demand Notes) maturing prior to the relevant Targeted
Maturity Date.
Payments in respect of the 1998-B SUBI Certificate will be allocated
between the Investor Certificates and the Transferor Certificate and paid to the
registered Holder of this Certificate as provided in the Agreement.
Except as otherwise provided in the Agreement, interest payments in
respect of this Certificate shall be made semi-annually on the 25th day of
March and September (or if such day is not a Business Day, the next
succeeding Business Day, each such day a "Certificate Payment Date"),
commencing on March 25, 1999, and through the Class B Targeted Maturity Date
and thereafter, if applicable, monthly on each succeeding Certificate Payment
Date until the Adjusted Class B Certificate Balance has been reduced to zero.
Except to the extent provided otherwise 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 until the Class A-2
Certificates have been paid in full and no principal payments shall be made
in respect of the Class B Certificates until the Class A-3 Certificates have
been paid in full. Except as otherwise provided in the Agreement, the
principal of the Class B Certificates shall be distributable on the Class B
Targeted Maturity Date which shall be September 25, 2003 (or if such day is
not a Business Day, on the next succeeding Business Day) and thereafter, if
applicable, monthly on each succeeding Certificate Payment Date until the
Adjusted Class B Certificate Balance has been reduced to zero. In any event,
any remaining unpaid principal of any Class B Certificate shall be due and
payable on March 25, 2005 (or if such day is not a Business Day, on the next
succeeding Business Day).
Distributions on this Class B Certificate will be made by the 1998-B
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
1998-B Securitization Trustee not later
B-2
<PAGE>
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 1998-B 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 1998-B Securitization
Trustee.
It is the intention of the Transferor and the Investor
Certificateholders 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 1998-B
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 of the Transferor and to report the transactions contemplated by
the Agreement on all applicable tax returns in a manner consistent with such
treatment. Each Holder of an Investor Certificate also agrees that it will
not be entitled to any of the tax benefits related to the 1998-B Contracts
and 1998-B Leased Vehicles, including any of the depreciation deductions
resulting therefrom.
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 1998-B Securitization
Trust, then the Holder is deemed to agree (and each Certificate Owner by
virtue of acquiring a beneficial interest herein is deemed to agree) (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 1998-B
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
1998-B Securitization Trustee or any of their respective Affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1998-B SUBI Assets evidenced by the 1998-B 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. 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 of the Titling Trust Assets other than those from
time to time included in the 1998-B SUBI Sub-Trust (except for those
evidenced by the 1998-B SUBI Insurance Certificate) and those proceeds or
assets derived from or earned by such 1998-B SUBI Assets (except for those
evidenced by the 1998-B SUBI Insurance
B-3
<PAGE>
Certificate and the proceeds therefrom). A copy of the Agreement may be
examined during normal business hours at the Corporate Trust Office of the
1998-B Securitization Trustee at the offices of Bankers Trust Company
Luxembourg S.A. in Luxembourg (initially at 14 Boulevard F.D. Roosevelt,
L-450 Luxembourg) and at such other places, if any, designated by the 1998-B
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 1998-B Securitization Trustee without
the consent of any Certificateholders. 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 Voting Interest of
all Investor Certificates, voting together as a single class. To be entitled
to vote in respect of an interest in the Class B Certificates, a person shall
be a holder of record of such Class B Certificates as shown on the books of
the Certificate Registrar on the last day of the preceding month, or a person
appointed by an instrument in writing. 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 therein set
forth, Certificates are exchangeable for new Certificates of the same Class,
in authorized denominations of a like aggregate principal amount, as
requested by the Holder surrendering the same or for register of transfer at
the Corporate Trust Office of the 1998-B Securitization Trustee in its
capacity as Certificate Registrar, or at the office of the agent of the
1998-B Securitization Trustee in its capacity as Certificate Registrar, who
shall initially be U.S. Bank National Association, 100 Wall Street, 20th
Floor, New York, New York 10005, or at the appropriate office of any
successor Certificate Registrar, accompanied by a written instrument of
transfer in form satisfactory to the 1998-B 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 $500,000 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 1998-B 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 1998-B Securitization Trustee, the Certificate Registrar and any of their
respective agents may treat the
B-4
<PAGE>
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 1998-B 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
1998-B 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 1998-B Securitization Trust. The Transferor may at its option purchase
the corpus of the 1998-B Securitization Trust at a price specified in the
Agreement, and such purchase of the 1998-B SUBI and 1998-B SUBI Certificate
and other property of the 1998-B Securitization Trust will effect early
retirement of the Certificates; PROVIDED, HOWEVER, such right of purchase is
exercisable only on the Monthly Allocation Date on or after the Class A-3
Targeted Maturity Date, if either before or after giving effect to any
payments of principal required to be made on such Monthly Allocation Date,
the Investor Balance shall be less than or equal to $109,993,704.53 (ten
percent of the Aggregate Net Investment Value as of the Cutoff Date).
By accepting this Certificate, the Holder hereof covenants and agrees
(and each Certificate Owner is deemed to agree) 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 (or
Certificate Owner) will not institute against, or join any other Person in
instituting against the Transferor, Toyota Motor Credit Corporation, the
1998-B Securitization Trustee, the 1998-B 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 (or any 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.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the 1998-B 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-5
<PAGE>
IN WITNESS WHEREOF, the 1998-B Securitization Trustee on behalf of the
1998-B Securitization Trust and not in its individual capacity has caused
this Class B Certificate to be duly executed.
Dated: September ____, 1998
TOYOTA AUTO LEASE TRUST 1998-B
By: U.S. BANK NATIONAL ASSOCIATION, AS 1998-B
SECURITIZATION TRUSTEE
By:
------------------------------------------------
Authorized Officer
B-6
<PAGE>
Certificate of Authentication
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION, as
1998-B Securitization Trustee
By:
------------------------------------------------
B-7
<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 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-8
<PAGE>
EXHIBIT C
TRANSFEROR CERTIFICATE
THIS CERTIFICATE IS NOT TRANSFERABLE.
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 1998-B
AUTO LEASE ASSET BACKED TRANSFEROR CERTIFICATE
Evidencing the entire interest in the distributions allocable to
the Transferor Certificate, as defined below.
This Certificate does not represent an obligation of, or an
interest in, Toyota Leasing, Inc., Toyota Motor Credit Corporation, the
Titling Trustee, the 1998-B Securitization Trustee, 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 1998-B (the "1998-B
Securitization Trust") formed by the Transferor. The 1998-B Securitization
Trust was created pursuant to a 1998-B Securitization Trust Agreement dated
as of September 1, 1998 (the "Agreement"), between the Transferor and U.S.
Bank National Association, a national banking corporation, as trustee (the
"1998-B Securitization 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 the duly authorized Transferor Certificate issued
under the Agreement and designated as the "Toyota Auto Lease Trust 1998-B
Auto Lease Asset Backed Transferor Certificate" (the "Transferor
Certificate"). Also issued under the Agreement are Certificates designated as
"Toyota Auto Lease Trust 1998-B 5.35% Auto Lease Asset Backed Certificates,
Class A-1" (the "Class A-1 Certificates"), Certificates designated as "Toyota
Auto Lease Trust 1998-B 5.45% Auto Lease Asset Backed Certificates, Class
A-2" (the "Class A-2 Certificates"), Certificates designated as "Toyota Auto
Lease Trust 1998-B 5.50% Auto 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 1998-B 6.55% Auto 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.
C-1
<PAGE>
The property of the 1998-B Securitization Trust includes, among other
things, the 1998-B SUBI Certificate evidencing beneficial interests in the
assets of the 1998-B SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-B SUBI 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 "1998-B
SUBI Portfolio") entered into by various automobile and light duty truck
dealers pursuant to contractual arrangements with the Titling Trust. Toyota
Motor Credit Corporation acts as servicer (in that capacity, the "Servicer")
of the 1998-B SUBI Portfolio. During the Revolving Period, Principal
Collections and amounts applied to reimburse Loss Amounts and Certificate
Principal Loss Amounts allocable to the assets of the 1998-B SUBI represented
by the 1998-B SUBI Certificate generally will be reinvested in Subsequent
Contracts and Subsequent Leased Vehicles from among other unallocated
Contracts and Leased Vehicles owned by the Titling Trust. At the time of
reinvestment, such Subsequent Contracts and Subsequent Leased Vehicles will
be allocated to the 1998-B SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-B SUBI will be deposited in
the Certificateholders' Account and invested in Permitted Investments (which
are expected to be TMCC Demand Notes) maturing prior to the Targeted Maturity
Date.
Payments in respect of the 1998-B SUBI Certificate 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 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 1998-B
Securitization Trustee and the Holder of this Certificate by acceptance of
this Certificate 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
secured indebtedness of the Transferor and to report the transactions
contemplated by the Agreement on all applicable tax returns in a manner
consistent with such treatment.
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 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 1998-B Securitization Trust, then the
Holder hereof, agrees (i) to treat such Certificate, together with the
Investor Certificates, 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 1998-B 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
1998-B Securitization Trustee or any of their respective affiliates. The
Certificates are limited in right of payment to certain collections and
C-2
<PAGE>
recoveries respecting the 1998-B SUBI and 1998-B 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. 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 of the Titling Trust Assets other than those from time to
time included in the 1998-B SUBI Sub-Trust (except for those evidenced by the
1998-B SUBI Insurance Certificate) and those proceeds or assets derived from
or earned by such 1998-B SUBI Assets (except for those evidenced by the
1998-B SUBI Insurance Certificate and the proceeds therefrom). A copy of the
Agreement may be examined during normal business hours at the Corporate
Trust Office of the 1998-B Securitization Trustee, and at such other places,
if any, designated by the 1998-B 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 1998-B Securitization Trustee without
the consent of any Certificateholders. In certain limited circumstances, the
Agreement may only be amended with the consent of the Investor
Certificateholders evidencing not less than 51% of the aggregate Voting
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.
The obligations and responsibilities created by the Agreement and the
1998-B 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 1998-B Securitization Trust. The Transferor may at its option purchase
the corpus of the 1998-B Securitization Trust at a price specified in the
Agreement, and such purchase of the 1998-B SUBI and the 1998-B SUBI
Certificate and other property of the 1998-B Securitization Trust will effect
early retirement of the Certificates; provided, however, such right of
purchase is exercisable only on the Monthly Allocation Date on or after the
Class A-3 Targeted Maturity Date, if either before or after giving effect to
any payment required to be made on such Monthly Allocation Date, the
Certificate Balance shall be less than or equal to $109,993,704.53 (ten
percent of the Aggregate Net Investment Value of the Cutoff Date).
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the 1998-B 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-3
<PAGE>
IN WITNESS WHEREOF, the 1998-B Securitization Trustee on behalf of the
1998-B Securitization Trust and not in its individual capacity has caused
this Transferor Certificate to be duly executed.
Dated: September 29, 1998
TOYOTA AUTO LEASE TRUST 1998-B
By: U.S. BANK NATIONAL ASSOCIATION,
as 1998-B Securitization Trustee
------------------------------------
Authorized Officer
Certificate of Authentication
This is the Transferor Certificate referred to in the within-mentioned
Agreement.
By: U.S. BANK NATIONAL ASSOCIATION,
as 1998-B Securitization Trustee
------------------------------------
Authorized Officer
C-4
<PAGE>
EXHIBIT D
FORM OF RULE 144A TRANSFEREE CERTIFICATE
Toyota Motor Credit Corporation U.S. Bank National Association
Toyota Leasing, Inc. c/o One Illinois Center
Toyota Motor Credit Corporation 111 E. Wacker Drive, Suite 3000
19001 South Western Avenue Chicago, Illinois 60601
Torrance, California 90509
Re: Toyota Auto Lease Trust 1998-B;
6.55% Auto Lease Asset Backed Certificates, Class B
Ladies and Gentlemen:
(the "Purchaser") is today purchasing in a private
resale from (the "Seller") $ aggregate principal amount
of Auto Lease Asset Backed Certificates, Class B (the "Certificates"), issued
pursuant to the securitization trust agreement, dated as of September 1, 1998
(the "Agreement"), between Toyota Leasing, Inc. ("TLI") and U.S. Bank
National Association ("U.S. Bank"), as trustee (the "Trustee"). The
Certificates are securities issued by and evidencing interests in Toyota Auto
Lease Trust 1998-B (the "Trust").
In connection with the purchase of the Certificates, the Purchaser
hereby represents and warrants to each of you as follows:
1. Either (a) the Purchaser is not an employee benefit plan, trust
or account subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or subject to Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or a governmental
plan defined in section 3(32) of ERISA subject to any federal, state or
local law which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code ("Similar Law") (each, a "Benefit Plan")
and is not an entity, including an insurance company separate account or
an insurance company general account if the assets in any such account
constitute "plan assets" for purposes of regulation section 2510.3-101 of
ERISA, whose underlying assets include Benefit Plan assets by reason of a
Benefit Plan's investment in the entity; or (b) the Transferee is
delivering herewith an opinion of counsel addressed to the Trustee, the
Transferor and the Servicer to the effect that the purchase or holding
of such Certificate will not constitute or result in the assets of the
trust being deemed to be "plan assets" subject to the fiduciary
responsibility provisions of ERISA or prohibited transactions provisions
of Section 4975 of the Code or Similar Law, will not constitute or
result in a prohibited transaction within the meaning of Section 406 or
Section 407 of ERISA or Section 4975 of the Code or Similar Law, and
will not subject the Trustee, the Transferor or the Servicer to any
obligation or liability (including obligations or liabilities under
ERISA, Section 4975 of the Code or Similar Law) in addition to those
undertaken in the Agreement. The foregoing representation and opinion
need not be given if the Trustee determines in its sole discretion that,
after giving effect to the proposed transfer, Benefit Plans will not own
25% or more of the Class B Certificates (taken as a percentage of the
Adjusted Class B Certificate Balance).
2. If the Purchaser (and if the Purchaser is acquiring the
Certificates for an account, such account) 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.
D-1
<PAGE>
EXHIBIT E
FORM OF NON-RULE 144A REPRESENTATION LETTER
Toyota Motor Credit Corporation
Toyota Leasing, Inc.
c/o Toyota Motor Credit Corporation
19001 South Western Avenue
Torrance, California 90509
U.S. Bank National Association
One Illinois Center
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
or
Lehman Brothers Inc.
Three World Financial Center
200 Vesey Street
New York, New York 10285
Re: Toyota Auto Lease Trust 1998-B
6.55% Auto 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 by institutions which are "Accredited Investors" under Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities
Act"). 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 U.S. Bank National Association, as trustee (the "Trustee") of
the Toyota Auto Lease Trust 1998-B (the "Trust"), Toyota Leasing, Inc. (the
"Transferor") and Lehman Brothers Inc. or Morgan Stanley & Co. Incorporated
determine its suitability as a purchaser of Certificates and to determine
that the private transfer exemption from registration relied upon by the
Transferor under 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 laws 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 is available, that neither the Transferor nor the 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 September
1, 1998 (the "Agreement"), between the Transferor and the Trustee.
E-1
<PAGE>
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 "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) 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 risk of its investment in the Certificates
and is able to bear the economic risks of such investment. The Purchaser
has been given such information concerning the Certificates, Toyota Motor
Credit Corporation and the Transferor as it has requested.
4. The Purchaser is acquiring the Certificates as principal for its
own account 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.
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 Trust
under the Investment Company Act of 1940, as amended, nor will it
set, 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 September 24, 1998, including
the Prospectus attached thereto as Exhibit A (the "Private Placement
Memorandum") 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. Either (a) Purchaser is not an employee benefit plan, trust or
account subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or subject to Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or a governmental
plan defined in section 3(32) of ERISA subject to any federal, state or
local law which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code ("Similar Law") (each, a "Benefit Plan")
and is not an entity, including an insurance company separate account or
an insurance company general account if the assets in any such accounts
constitute "plan assets" for purposes of regulation section 2510.3-101
of ERISA, whose underlying assets include Benefit Plan assets by reason
of a Benefit Plan's investment in the entity; or (b) Transferee is
delivering herewith an opinion of counsel addressed to the Trustee, the
Transferor and the Servicer to the effect that the purchase or holding of
such Certificate will not constitute or result in the assets of the trust
being deemed to be "plan assets" subject to the fiduciary responsibility
provisions of ERISA or prohibited transactions provisions of Section 4975
of the Code or Similar Law, will not constitute or result in a prohibited
transaction within the meaning of Section 406 or Section 407 of ERISA or
Section 4975 of the Code or Similar Law, and will not subject the
Trustee, the Transferor or the Servicer to any obligation or liability
(including obligations or liabilities under ERISA, Section 4975 of the
Code or Similar Law) in addition to those undertaken in the Agreement.
The foregoing representation and opinion need not be given if the
Trustee determines in its sole discretion that, after giving effect to
the proposed
E-2
<PAGE>
transfer, Benefit Plans will not own 25% or more of the Class B
Certificates (taken as a percentage of the Adjusted Class B Certificate
Balance).
8. The Purchaser understands that the Certificates will bear a
legend substantially as set forth in the form of Certificate included
as an Exhibit to the Agreement.
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.
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 represents, on behalf of itself that if the
Purchaser is a partnership, grantor trust or S corporation for federal
income tax purposes (a "Flow-Through Entity"), any Class B Certificates
owned by or on behalf of 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.
12. 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
11 and in this paragraph 12.
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 continued herein shall be binding
upon the successors of the undersigned.
Executed at , this day of , 199 .
----------------------------------------
Purchaser's Name (Print)
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
----------------------------------------
Address of Purchaser
----------------------------------------
Purchaser's Taxpayer
Identification Number
E-3
