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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-C
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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 registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective
pursuant to General Instruction A.(c), please check the following box
/ /
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective
pursuant to General Instruction A.(d), please check the following
box. /X/
Securities Act registration statement file
number to which this form relates: 333-65067
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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:
$189,000,000 Adjustable Rate Auto Lease Asset-Backed Certificates, Class A-1,
$424,500,000 Adjustable Rate Auto Lease Asset-Backed Certificates, Class A-2,
$72,800,000 Adjustable Rate 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 December 3, 1998, pursuant to a SUBI Certificate Purchase
and Sale Agreement (the "Certificate Transfer Agreement") dated as of December
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 December 3, 1998, pursuant to the Securitization Trust
Agreement (the "Securitization Trust Agreement") dated as of December 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-C (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 $189,000,000 Adjustable Rate
Auto Lease Asset-Backed Certificates, Class A-1, $424,500,000 Adjustable Rate
Auto Lease Asset-Backed Certificates, Class A-2, and $72,800,000 Adjustable Rate
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 November
19, 1998 comprising part of a Registration Statement on Form S-1 (Registration
No. 333-65067) (the "Registration Statement"). A complete description of the
Certificates is set forth in the Registration Statement, as amended by
amendments No. 1 and No. 2 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.
<TABLE>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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<S> <C>
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-C to Amended and Restated Trust Agreement
among TMCC, TMTT, Inc., as Trustee and First Bank National
Association, as Trust Agent, dated as of December 1, 1998.
4.4 1998-C SUBT Servicing Supplement to Amended and Restated Trust
and Servicing Agreement between TMTT, Inc. and TMCC, dated as
of December 1, 1998.
4.5 SUBI Certificate Purchase and Sale Agreement between TMCC and
Toyota Leasing, Inc., dated as of December 1, 1998.
4.6 TMCC Demand Note Indenture between TMCC and U.S. Bank National
Association, as trustee, dated December 1, 1998 (including form
of TMCC Demand Note).
4.7 ISDA Master Agreement and Schedule and Confirmations relating
thereto, each dated as of December 1, 1998 between TMCC and the
1998-C Securitization Trustee, on behalf of the 1998-C
Securitization Trust.
4.8 Securitization Trust Agreement between Toyota Leasing, Inc.
and U.S. Bank National Association (f/k/a First Bank National
Association, as Trustee.
</TABLE>
* Incorporated by reference to Registration Statement on Form S-1
(Registration No. 333-65067).
** 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, 1999 TOYOTA AUTO LEASE TRUST 1998-C
By: Toyota Motor Credit Corporation,
as Servicer
By: /s/ GEORGE E. BORST
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George E. Borst
Senior Vice President and General
Manager
S-1
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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-C Securitization Trustee
1998-C SUBI SUPPLEMENT
TO
AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
Dated as of December 1, 1998
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TABLE OF CONTENTS
ARTICLE XIV
RESERVED
ARTICLE XV
DEFINITIONS
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<S> <C> <C>
15.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE XVI
CREATION AND TERMINATION OF TRUST INTERESTS
16.01 Initial Creation of 1998-C SUBI Sub-Trust and 1998-C SUBI. . . . . . . . .3
16.02 Rights in Respect of 1998-C SUBI.. . . . . . . . . . . . . . . . . . . . .5
16.03 Issuance and Form of SUBI Certificates.. . . . . . . . . . . . . . . . . .5
16.04 Filings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
16.05 Termination of 1998-C 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-C SUBI Collection Account.. . . . . . . . . . . . . . . . . . . . . .7
17.02 1998-C 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-C 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
<TABLE>
<S> <C>
ANNEX OF SUPPLEMENTAL DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . .Annex I
EXHIBIT A Form of 1998-C SUBI Certificate. . . . . . . . . . . . . . . . . . . .A-1
EXHIBIT B Form of 1998-C SUBI Insurance Certificate. . . . . . . . . . . . . . .B-1
SCHEDULE I Schedule of 1998-C Contracts and 1998-C
Leased Vehicles as of the Cutoff Date. . . . . . . . . . . . . . . . .S-1
</TABLE>
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1998-C SUBI SUPPLEMENT TO
AMENDED AND RESTATED TRUST AND SERVICING AGREEMENT
1998-C SUBI SUPPLEMENT TO AMENDED AND RESTATED TRUST AND SERVICING
AGREEMENT, dated and effective as of December 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,
and 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-C 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-C SUBI Portfolio and allocate the related
Titling Trust Assets to the related 1998-C SUBI Sub-Trust, to create the
related 1998-C SUBI and to create and issue to or to the order of the UTI
Beneficiary (i) a 1998-C SUBI Certificate, evidencing beneficial interests in
the assets of the 1998-C SUBI other than the proceeds of the Residual Value
Insurance Policies and (ii) a 1998-C SUBI Insurance Certificate, evidencing
beneficial interests in the assets of the 1998-C SUBI that are proceeds of
the Residual Value Insurance Policies insofar as such policies relate to the
1998-C Leased Vehicles and the 1998-C Contracts, and to set forth the terms
and conditions thereof. It is the intention of the parties hereto that the
1998-C SUBI Certificate and the 1998-C SUBI Insurance Certificate
collectively represent 100% of the beneficial interests in the 1998-C SUBI.
D. The parties hereto desire to supplement the terms of the
Titling Trust Agreement relating to the establishment of the 1998-C 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 California (the
"California UCC")) (in such capacity, the "SUBI Securities Intermediary"),
establish a securities account (as defined in Section 8501 of the California
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 December 1, 1998, between TMCC and the SUBI Securities Intermediary,
("Account Control Agreement") into which the 1998-C SUBI Certificate and the
1998-C 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-C SUBI
Certificate and/or the 1998-C 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-C 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-C 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-C SUBI
Sub-Trust:
ARTICLE XIV
RESERVED
ARTICLE XV
DEFINITIONS
15.01 DEFINITIONS. For all purposes of this 1998-C 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-C 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-C 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-C
SUBI Supplement as a whole and not to any particular article or section
within this 1998-C 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
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to the "Titling Trustee, acting on behalf of the Titling Trust", or words of
similar import, shall be deemed to mean the Titling Trustee, acting on behalf
of Toyota Lease Trust and all beneficiaries thereof.
ARTICLE XVI
CREATION AND TERMINATION OF TRUST INTERESTS
16.01 INITIAL CREATION OF 1998-C SUBI SUB-TRUST AND 1998-C 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-C 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-C SUBI
Sub-Trust pursuant to Section 3.02(a) of the 1998-C Servicing Supplement.
The assets of the 1998-C 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 $749,988,732.51 and
those Contracts allocated to the 1998-C SUBI Sub-Trust pursuant to Section
3.02(a) of the 1998-C 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 related 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
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such proceeds pursuant to the terms of such Residual Value Insurance
Policies); (v) any portion of any Security Deposit actually and properly
applied by the Servicer against amounts due under the related Contract, to
the extent not applied to making repairs to the related Leased Vehicle or
paid to the Obligor, a third Person or Governmental Authority in accordance
with the Servicer's normal servicing practices; (vi) the 1998-C 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-C Servicing Supplement, the Titling Trustee hereby
identifies and allocates as 1998-C 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-C SUBI Asset to
be identified on the books and accounts of the Titling Trust as belonging to
the 1998-C SUBI Portfolio.
(b) Pursuant to Section 3.01(c) of the Titling Trust Agreement,
the Titling Trustee hereby creates the 1998-C SUBI Sub-Trust and the 1998-C
SUBI. The 1998-C SUBI shall represent a specific undivided beneficial
interest solely in the 1998-C SUBI Sub-Trust and the 1998-C 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-C SUBI Sub-Trust and of the terms and provisions of
this 1998-C 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-C
SUBI Sub-Trust pursuant to Section 16.01(b), the issuance of the 1998-C SUBI
Certificate and 1998-C SUBI Insurance Certificate pursuant to Section
16.03(a), the transfer to, or to the order of, the UTI Beneficiary of the
1998-C SUBI Certificate and the 1998-C 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-C SUBI, the 1998-C SUBI
Certificate and/or the 1998-C SUBI Insurance Certificate, there is and will
be no default by the UTI Beneficiary in its capacity as UTI Beneficiary 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-C SUBI Certificate and the 1998-C 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-C 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-C SUBI Certificate and the 1998-C 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-C 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-C SUBI Sub-Trust shall not elect to be treated as an
association under Section 301.7701-
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3(a) of the regulations of the United States Department of the Treasury for
federal income tax purposes.
(e) Each Beneficiary of the 1998-C SUBI Certificate and/or the
1998-C SUBI Insurance Certificate shall at all times maintain a minimum net
worth (excluding the value of the 1998-C SUBI Certificate and the 1998-C
Insurance Certificate held thereby and the value of any assets of the 1998-C
Securitization Trust established pursuant to the 1998-C Securitization Trust
Agreement) equal to at least $100,000; provided that such minimum net worth
requirement shall not apply to the 1998-C Securitization Trust or the 1998-C
Securitization Trustee.
16.02 RIGHTS IN RESPECT OF 1998-C SUBI.
Each holder of the 1998-C SUBI Certificate (including the 1998-C
Securitization Trustee, on behalf of the Holders of the securities issued by
the 1998-C Securitization Trust, after the transfer of the 1998-C SUBI
Certificate by the UTI Beneficiary to the Transferor and the subsequent
transfer of the 1998-C SUBI Certificate by the Transferor to the 1998-C
Securitization Trustee, on behalf of the 1998-C Securitization Trust) and the
1998-C SUBI Insurance Certificate is a third-party beneficiary of the Titling
Trust Agreement and this 1998-C SUBI Supplement, insofar as they apply to the
1998-C SUBI and the holder of the 1998-C SUBI Certificate or the 1998-C 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-C Securitization Trustee as holder of the
1998-C 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-C Securitization Trust Agreement and (ii) the Transferor as holder of
the 1998-C SUBI Insurance Certificate.
16.03 ISSUANCE AND FORM OF SUBI CERTIFICATES.
(a) The 1998-C SUBI shall be represented by two SUBI Certificates
to be issued hereunder: (i) the 1998-C SUBI Certificate, evidencing
beneficial interests in the assets of the 1998-C SUBI other than proceeds of
the Residual Value Insurance Policies; and (ii) the 1998-C SUBI Insurance
Certificate, evidencing beneficial interests in the assets of the 1998-C SUBI
that are proceeds of the Residual Value Insurance Policies insofar as such
Insurance Policies relate to the 1998-C Leased Vehicles and the 1998-C
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-C SUBI Certificate and 1998-C SUBI Insurance Certificate
collectively represent 100% of the beneficial interests in the 1998-C SUBI
and the assets of the 1998-C SUBI Sub-Trust. The Titling Trustee is hereby
instructed to issue the 1998-C SUBI Certificate and the 1998-C 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-C SUBI Certificate and the 1998-C SUBI Insurance
Certificate may be printed, lithographed, typewritten, mimeographed,
photocopied or otherwise produced in any other
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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-C SUBI Certificate and the 1998-C SUBI Insurance
Certificate in the name of the SUBI Securities 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-C SUBI Certificate and 1998-C 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-C SUBI Certificate and the 1998-C 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-C SUBI Certificate to the 1998-C SUBI Securities
Account. TLI shall not transfer the 1998-C SUBI Insurance Certificate in
connection with this transfer of the 1998-C SUBI Certificate.
(d) Pursuant to Section 3.01(g) of the Titling Trust Agreement,
the 1998-C SUBI Certificate may not be transferred or assigned except as
provided in connection with the termination of the 1998-C Securitization
Trust pursuant to Section 7.02 or 8.02 of the 1998-C 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-C SUBI Certificate
itself). Notwithstanding the foregoing, the 1998-C SUBI Certificate may, at
any time, be transferred or assigned to TLI, TMCC, or any of their respective
affiliates.
The 1998-C SUBI Insurance Certificate shall not be transferred or
assigned except to a transferee or assignee who is (i) the holder of the
1998-C 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-C SUBI Assets to the 1998-C
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
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the true and lawful attorney-in-fact of the Grantor (which appointment is
coupled with an interest and is irrevocable) with power to sign on behalf of
the Grantor any financing statements, continuation statements, security
agreements, mortgages, assignments, affidavits, letters of authority, notices
or similar documents necessary or appropriate to be executed or filed
pursuant to this Section 16.04.
16.05 TERMINATION OF 1998-C SUBI.
In connection with any purchase by the Transferor of the Investor
Certificateholders' interest in the corpus of the 1998-C Securitization Trust
pursuant to Section 7.02 of the 1998-C Securitization Trust Agreement or any
purchase by the Transferor of the assets of the 1998-C Securitization Trust
in connection with a Swap Termination pursuant to Section 8.02 of the 1998-C
Securitization Trust Agreement, and the succession thereof to all of the
interest in the 1998-C SUBI and 1998-C SUBI Certificate, should all of the
interest in the 1998-C SUBI thereafter be transferred to the UTI Beneficiary,
whether by sale or otherwise, then, upon the direction of the UTI
Beneficiary, the 1998-C SUBI shall be terminated, the 1998-C SUBI Certificate
and the 1998-C 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-C Contracts, 1998-C Leased Vehicles
and related 1998-C 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-C SUBI Supplement and on which each of their permitted assignees
and pledgees, and each pledgee or holder of the 1998-C SUBI Certificate and
the 1998-C SUBI Insurance Certificate (and each Beneficiary of the 1998-C
SUBI Certificate and the 1998-C 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-C Securitization Trust.
ARTICLE XVII
ACCOUNTS; CASH FLOWS; PERMITTED INVESTMENTS
17.01 1998-C SUBI COLLECTION ACCOUNT.
(a) The 1998-C Securitization Trustee shall establish in its name,
and maintain with respect to the 1998-C SUBI, the 1998-C SUBI Collection
Account for the benefit of (a) the Beneficiaries of the 1998-C SUBI
Certificate, (b) the Beneficiaries of the 1998-C SUBI Insurance Certificate
to the extent proceeds of the Residual Value Insurance Policies are
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deposited therein, and (c) to the extent provided below, the Titling Trustee,
which account shall constitute a SUBI Collection Account. The 1998-C SUBI
Collection Account initially shall be established with U.S. Bank National
Association, as 1998-C Securitization Trustee, and at all times shall be an
Eligible Account. In the event that the institution maintaining the 1998-C
SUBI Collection Account no longer meets the requirements stated in the
definition of Eligible Account, then the Servicer shall, with the 1998-C
Securitization Trustee's assistance as necessary, cause the 1998-C SUBI
Collection Account to be moved to a bank or trust company that satisfies
those requirements. In connection with the termination of the 1998-C
Securitization Trust pursuant to Article VII of the 1998-C Securitization
Trust Agreement, the 1998-C Securitization Trustee may transfer the 1998-C
SUBI Collection Account to the Trust Agent. The 1998-C SUBI Collection
Account shall relate solely to the 1998-C SUBI and the 1998-C 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-C SUBI Supplement or the 1998-C
Servicing Supplement. All amounts held in the 1998-C 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-C
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-C
Securitization Trust Agreement; any such amounts shall be withdrawn from the
1998-C SUBI Collection Account only for such purposes and only to the extent
set forth in Section 3.01 of the 1998-C Securitization Trust Agreement, or as
set forth in this Section 17.01(a) if the 1998-C SUBI Collection Account has
been transferred to the Trust Agent.
(b) The Servicer shall deposit into the 1998-C SUBI Collection
Account all amounts collected or received in respect of the 1998-C Contracts
and 1998-C 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-C Servicing Supplement
(in connection with any failure to satisfy the Monthly Remittance
Conditions). Amounts so deposited will be applied by the 1998-C
Securitization Trustee or by the Servicer as specified in the 1998-C
Securitization Trust Agreement and the 1998-C Servicing Supplement.
It is the intent of the parties hereto that the proceeds of the Residual
Value Insurance Policies applicable to the 1998-C Leased Vehicles and the
1998-C Contracts will be payable by the Servicer (or the insurer under the
Residual Value Insurance Policies) directly to the holder of the 1998-C SUBI
Insurance Certificate and will not under any circumstances be subject to the
lien of the 1998-C 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-C Securitization
Trustee, then such amounts will be distributed to the holder of the 1998-C
SUBI Insurance Certificate by the Titling Trustee or the 1998-C Securitization
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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-C SUBI Sub-Trust during the Revolving Period that are
not deposited into the 1998-C SUBI Collection 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-C 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-C SUBI
Collection Account as set forth in Section 4.02 of the 1998-C 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-C
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-C Securitization Trust Agreement, as
appropriate.
17.02 1998-C 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-C SUBI the 1998-C 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-C SUBI Certificate and 1998-C SUBI Insurance
Certificate (in the event that amounts relating to the Residual Value
Insurance Policies represented by the 1998-C SUBI Insurance Certificate are
in fact deposited in the 1998-C Lease Funding Account rather than paid
directly to the Holder of the 1998-C SUBI Insurance Certificate, as provided
in Section 17.01(b) hereof). Any such 1998-C 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-C SUBI Lease Funding Account to be
moved to a bank or trust company that satisfies those requirements. The
1998-C SUBI Lease Funding Account shall relate solely to the 1998-C SUBI and
the 1998-C 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-C SUBI Supplement or the 1998-C
Servicing Supplement. All amounts held in the 1998-C SUBI Lease Funding
Account shall be invested in Permitted Investments until distributed or
otherwise applied in accordance with the Titling Trust Agreement, this 1998-C
SUBI Supplement or the 1998-C Servicing Supplement. All transfers of funds
into and out of the 1998-C 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-C Servicing
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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 the UTI Beneficiary, as appropriate) without deposit into the
1998-C SUBI Collection Account or 1998-C 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-C SUBI Accounts and the Lease Funding Account shall
be separately invested by the Titling Trustee or the 1998-C 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-C 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-C Lease Funding Account, the Titling Trustee shall invest and reinvest
any monies in such account(s) in a mutual fund offered by the 1998-C
Securitization Trustee or an affiliate of the 1998-C 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-C 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-C Securitization Trustee on behalf of the 1998-C
Securitization Trust, its nominee or its Financial Intermediary. All income
gain or loss from investment of monies in the 1998-C 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-C Securitization Trustee on behalf of the 1998-C
Securitization Trust, its nominee or Financial Intermediary. If at any time
the Servicer shall not have given the 1998-C Securitization Trustee a timely
written investment directive with respect to the 1998-C SUBI
Certificateholders Account or the 1998-C SUBI Collection Account, the 1998-C
Securitization Trustee shall invest and reinvest any monies in such
account(s) in a mutual fund offered by the 1998-C Securitization Trustee or
an affiliate of the 1998-C Securitization Trustee, each of which meet the
requirements of clause (i) of the definition of Permitted Investments. The
1998-C 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-C Securitization Trustee shall have no liabilities in respect of
losses incurred as a result
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of the liquidation of any investment prior to its stated maturity or the
failure of the Servicer to provide timely written investment direction.
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-C
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-C 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-C 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-C SUBI Supplement and the
Titling Trust Agreement with respect to the 1998-C SUBI, the provisions of
this 1998-C SUBI Supplement shall prevail.
(b) For purposes of determining the parties' obligations under
this 1998-C SUBI Supplement with respect to the 1998-C SUBI, general
references in the Titling Trust Agreement to: (i) a SUBI Account shall be
deemed to refer more specifically to a 1998-C SUBI Account; (ii) a SUBI Asset
shall be deemed to refer more specifically to a 1998-C SUBI Asset; (ii) an
appropriate or applicable SUBI Collection Account shall be deemed to refer
more specifically to the 1998-C SUBI Collection Account; (iv) an appropriate
or applicable SUBI Lease Funding Account shall be deemed to refer more
specifically to a 1998-C SUBI Lease Funding Account; (v) a SUBI Sub-Trust or
SUBI Portfolio shall be deemed to refer more specifically to the 1998-C SUBI
Sub-Trust or 1998-C SUBI Portfolio, as the case may be; (vi) a SUBI
Supplement shall be deemed to refer more specifically to this 1998-C SUBI
Supplement; and (vii) a SUBI Servicing Supplement shall be deemed to refer
more specifically to the 1998-C Servicing Supplement.
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18.03 AMENDMENT.
(a) The 1998-C 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-C SUBI or the Beneficiaries of the 1998-C SUBI
Certificate and 1998-C SUBI Insurance Certificate, by a writing signed by the
Titling Trustee, the UTI Beneficiary, each 1998-C 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-C 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-C 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-C SUBI, the 1998-C
SUBI Portfolio or the Beneficiaries of the 1998-C SUBI Certificate and 1998-C
SUBI Insurance Certificate shall not require the consent of the Beneficiaries
of the 1998-C SUBI Certificate, the 1998-C SUBI Insurance Certificate or of
the 1998-C 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-C Securitization
Trust or the 1998-C 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-C
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-C 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-C
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-C Securitization Trustee insofar as it relates to the
1998-C Securitization Trust.
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18.05 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this 1998-C 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-C SUBI Supplement and shall in no way affect the validity or
enforceability of the other provisions of this 1998-C SUBI Supplement or of
the 1998-C SUBI Certificate or the 1998-C 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-C
SUBI Supplement invalid or unenforceable in any respect.
18.06 COUNTERPARTS.
This 1998-C SUBI Supplement may be executed in any number of
counterparts, each of which so executed and delivered shall be deemed to be
an original, but all of which counterparts shall together constitute but one
and the same instrument.
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IN WITNESS WHEREOF, TMCC, the Titling Trustee and, solely for the
limited purposes set forth herein, U.S. Bank National Association, as Trust
Agent, have caused this 1998-C 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-C Securitization Trustee and SUBI
Securities Intermediary
By: /s/ STEVEN E. CHARLES
------------------------------------------
Name:
Title:
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 1st day of December 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/ TRACEY B. KIRST
-------------------------------------
Notary Public
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 2nd day of December 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/ LISA JUKELEVICS
-------------------------------------
Notary Public
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 2nd day of December 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/ LISA JUKELEVICS
-------------------------------------
Notary Public
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 2nd day of December 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/ LISA JUKELEVICS
-------------------------------------
Notary Public
<PAGE>
SCHEDULE I
SCHEDULE OF 1998-C CONTRACTS AND
1998-C LEASED VEHICLES AS OF THE CUTOFF DATE
Omitted. On file with the Servicer, the Titling Trustee and the 1998-C
Securitization Trustee.
<PAGE>
TOYOTA LEASE TRUST
1998-C SUBI CERTIFICATE
Evidencing interests in specified 1998-C SUBI assets within the
1998-C 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, beneficial interest in specified assets of the 1998-C SUBI (the
"1998-C SUBI") which in turn is comprised of interests in the assets of the
1998-C SUBI Sub-Trust (the "1998-C 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-C SUBI Supplement.
This 1998-C SUBI Certificate and the 1998-C SUBI Insurance
Certificate are the only duly authorized SUBI Certificates issued under the
1998-C SUBI Supplement to the Titling Trust Agreement (the "1998-C SUBI
Supplement") dated as of December 1, 1998, among the UTI Beneficiary, the
Titling Trustee, and for certain limited purposes as set forth therein, the
Trust Agent and U.S. Bank National Association, as 1998-C Securitization
Trustee. This 1998-C SUBI Certificate is subject to the terms, provisions
and conditions of the Titling Trust Agreement and the 1998-C SUBI Supplement,
to which agreements any Beneficiary of this 1998-C 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. Prior to the date of initial issue of this
1998-C SUBI Certificate, the following certificates have been issued: (i) a
single UTI Certificate, representing 100% of the beneficial interests in the
UTI, (ii) the
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1997-A SUBI Certificate, representing 100% of the beneficial interests in the
1997-A SUBI and the 1997-A SUBI Sub-Trust, (iii) 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 and
(iv) the 1998-B SUBI Certificate and 1998-B SUBI Insurance Certificate,
collectively representing 100% of the beneficial interests in the 1998-B SUBI
and the 1998-B SUBI Sub-Trust. 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-C SUBI Sub-Trust is identified
in the 1998-C SUBI Supplement. Pursuant to the 1998-C SUBI Supplement, the
1998-C SUBI Assets were identified and allocated on the records of the
Titling Trust as a separate SUBI Sub-Trust (the "1998-C SUBI Sub-Trust"), and
the beneficial interest in the 1998-C SUBI Sub-Trust was designated as a
separate SUBI known as the "1998-C SUBI". The assets of the 1998-C SUBI
Sub-Trust are represented by two SUBI Certificates: (i) this 1998-C SUBI
Certificate evidencing beneficial interests in all the 1998-C SUBI Assets
other than the proceeds of the Residual Value Insurance Policies; and (ii)
the 1998-C SUBI Insurance Certificate evidencing beneficial interests in the
1998-C 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 this 1998-C SUBI Certificate or the 1998-C SUBI
Insurance Certificate shall be considered a 1998-C SUBI Beneficiary. The
rights of the Beneficiaries of this 1998-C SUBI Certificate and the 1998-C
SUBI Insurance Certificate to certain of the proceeds of the 1998-C SUBI
Assets are and will be further set forth in the Titling Trust Agreement and
the 1998-C SUBI Supplement.
This 1998-C SUBI Certificate is limited in right of payment to
certain collections and recoveries respecting the 1998-C Contracts (and the
related Obligors) and the 1998-C Leased Vehicles allocated to the 1998-C SUBI
Sub-Trust, all to the extent and as more specifically set forth in the
Titling Trust Agreement and the 1998-C SUBI Supplement. Copies of the
Titling Trust Agreement and the 1998-C 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-C
SUBI Beneficiary upon request.
By accepting this 1998-C 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-C SUBI Sub-Trust
(except for those evidenced by the 1998-C SUBI Insurance Certificate) and
those proceeds or assets derived from or earned by the 1998-C SUBI Assets
(except for those assets evidenced by the 1998-C SUBI Insurance Certificate
and the proceeds therefrom). In addition, by accepting this 1998-C 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-C 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
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SUBI Beneficiary with respect to Titling Trust Assets other than those
included within the 1998-C SUBI Sub-Trust.
The 1998-C 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-C SUBI and the 1998-C SUBI Portfolio, by a writing signed by
the Titling Trustee, the UTI Beneficiary, each 1998-C 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-C 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-C 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-C SUBI or the 1998-C SUBI
Portfolio and such amendments shall not require the consent of any 1998-C
SUBI Beneficiary or the 1998-C Securitization Trustee. If approval of any
1998-C 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-C SUBI Certificate.
As provided in the Titling Trust Agreement and the 1998-C SUBI
Supplement, this 1998-C 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-C 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-C 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-C SUBI Certificate shall have been executed by an
authorized officer of the Titling Trustee, by manual signature, this 1998-C
SUBI Certificate shall not entitle the holder hereof to any benefit under the
Titling Trust Agreement or the 1998-C 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-C SUBI
Certificate to be duly executed.
Dated: December __, 1998
TOYOTA LEASE TRUST
By: TMTT, INC., as Titling Trustee
By: ______________________________
Authorized Officer
4
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TOYOTA LEASE TRUST
1998-C SUBI INSURANCE CERTIFICATE
Evidencing interests in specified 1998-C SUBI assets within the 1998-C
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, beneficial interest in specified assets of the 1998-C SUBI (the
"1998-C SUBI") which in turn is comprised of interests in the assets of the
1998-C SUBI Sub-Trust (the "1998-C 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-C SUBI Supplement.
This SUBI Insurance Certificate and the 1998-C SUBI Certificate are the
only duly authorized SUBI Certificates issued under the 1998-C SUBI
Supplement to the Titling Trust Agreement (the "1998-C SUBI Supplement")
dated as of December 1, 1998, among the UTI Beneficiary, the Titling Trustee,
and for certain limited purposes as set forth therein, the Trust Agent and
U.S. Bank National Association, as 1998-C Securitization Trustee. This
1998-C SUBI Insurance Certificate is subject to the terms, provisions and
conditions of the Titling Trust Agreement and the 1998-C SUBI Supplement, to
which agreements any Beneficiary of this 1998-C 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. Prior to the date of initial issue of this
1998-C SUBI Insurance Certificate, the following certificates have been
issued: (i) a single UTI Certificate, representing 100% of the beneficial
interests in the UTI, (ii) the 1997-A SUBI Certificate, representing 100% of
the beneficial interests in the 1997-
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A SUBI and the 1997-A SUBI Sub-Trust, (iii) 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 and
(iv) the 1998-B SUBI Certificate and 1998-B SUBI Insurance Certificate,
collectively representing 100% of the beneficial interests in the 1998-B SUBI
and the 1998-B SUBI Sub-Trust. 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-C SUBI Sub-Trust is identified in the
1998-C SUBI Supplement. Pursuant to the 1998-C SUBI Supplement, the 1998-C
SUBI Assets were identified and allocated on the records of the Titling Trust
as a separate SUBI Sub-Trust (the "1998-C SUBI Sub-Trust"), and the
beneficial interest in the 1998-C SUBI Sub-Trust was designated as a separate
SUBI known as the "1998-C SUBI". The assets of the 1998-C SUBI Sub-Trust are
represented by two SUBI Certificates: (i) this SUBI Insurance Certificate
evidencing beneficial interests in the 1998-C 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-C SUBI
Certificate evidencing beneficial interests in all of the 1998-C SUBI Assets
other than the proceeds of the Residual Value Insurance Policies. Any holder
of the 1998-C SUBI Certificate or this 1998-C SUBI Insurance Certificate
shall be considered a 1998-C SUBI Beneficiary. The rights of the
Beneficiaries of this 1998-C SUBI Insurance Certificate and the 1998-C SUBI
Certificate to certain of the proceeds of the 1998-C SUBI Assets are and will
be further set forth in the Titling Trust Agreement and the 1998-C SUBI
Supplement.
This 1998-C SUBI Insurance Certificate is limited in right of payment to
certain collections and recoveries respecting the 1998-C Contracts (and the
related Obligors) and the 1998-C Leased Vehicles allocated to the 1998-C SUBI
Sub-Trust, all to the extent and as more specifically set forth in the
Titling Trust Agreement and the 1998-C SUBI Supplement. Copies of the
Titling Trust Agreement and the 1998-C 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-C
SUBI Beneficiary upon request.
By accepting this 1998-C 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-C SUBI
Sub-Trust (except for those evidenced by the 1998-C SUBI Certificate) and
those proceeds or assets derived from or earned by the 1998-C SUBI Assets
that are proceeds of Residual Value Insurance Policies. In addition, by
accepting this 1998-C 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-C 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-C SUBI Sub-Trust.
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The 1998-C 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-C SUBI and the 1998-C SUBI Portfolio, by a writing signed by
the Titling Trustee, the UTI Beneficiary, each 1998-C 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-C 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-C 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-C SUBI or the 1998-C SUBI
Portfolio and such amendments shall not require the consent of any 1998-C
SUBI Beneficiary or the 1998-C Securitization Trustee. If approval of any
1998-C 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-C SUBI Certificate.
As provided in the Titling Trust Agreement and the 1998-C SUBI
Supplement, this 1998-C 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-C 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-C 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-C SUBI Insurance Certificate shall have been executed
by an authorized officer of the Titling Trustee, by manual signature, this
1998-C SUBI Insurance Certificate shall not entitle the holder hereof to any
benefit under the Titling Trust Agreement or the 1998-C 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-C SUBI Insurance
Certificate to be duly executed.
Dated: December ___, 1998
TOYOTA LEASE TRUST
By: TMTT, INC., as Titling Trustee
By: _______________________________
Authorized Officer
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- --------------------------------------------------------------------------------
1998-C 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 December 1, 1998
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
ARTICLE I
DEFINITIONS
<S> <C>
1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SERVICER
2.01 Representations and Warranties of Servicer. . . . . . . . . . . . . . . . . . .3
ARTICLE III
CREATION OF 1998-C SUBI
3.01 Initial Creation of 1998-C SUBI Portfolio and 1998-C SUBI Sub-Trust . . . . . .4
3.02 Subsequent Additions to 1998-C SUBI Portfolio and 1998-C 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-C 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
<PAGE>
ARTICLE V
STATEMENTS AND REPORTS
5.01 Reporting by the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.02 Annual Accountants' Reports . . . . . . . . . . . . . . . . . . . . . . . . . 25
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-C 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
7.13 Effect of 1998-C SUBI Servicing Supplement on Titling Trust Agreement . . . . 32
</TABLE>
<PAGE>
EXHIBITS
<TABLE>
<S> <C>
EXHIBIT A Schedule of 1998-C Contracts and 1998-C 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>
<PAGE>
1998-C SUBI SERVICING SUPPLEMENT TO THE AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
1998-C SUBI SERVICING SUPPLEMENT TO THE AMENDED AND RESTATED TRUST
AND SERVICING AGREEMENT (the "1998-C SUBI Servicing Supplement"), dated as of
December 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-C SUBI Supplement to the Titling Trust Agreement,
dated as of December 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-C SUBI
Certificate evidencing beneficial interests in the assets of the 1998-C SUBI
other than the proceeds of the Residual Value Insurance Policies, and (ii) a
1998-C SUBI Insurance Certificate evidencing beneficial interests in the
assets of the 1998-C SUBI that are proceeds of the Residual Value Insurance
Policies insofar as such policies relate to the 1998-C Leased Vehicles and
the 1998-C Contracts. It is the intention of the parties hereto that the
1998-C SUBI Certificate and the 1998-C SUBI Insurance Certificate
collectively represent a 100% beneficial interest in the 1998-C SUBI, whose
beneficiaries generally will be entitled to the net cash flow arising from,
but only from, the related 1998-C SUBI Assets, all as set forth in the
Titling Trust Agreement and the 1998-C SUBI Supplement.
C. Also concurrently herewith, TMCC and the Transferor are entering
into that certain 1998-C SUBI Certificate Purchase and Sale Agreement, dated as
of December 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-C
SUBI, the 1998-C SUBI Certificate and the 1998-C 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-C
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-C
Securitization Trustee, are entering into that certain Securitization Trust
Agreement, dated as of December 1, 1998 (the "1998-C Securitization Trust
Agreement"), pursuant to which the 1998-C SUBI Certificate will be
transferred to the 1998-C Securitization Trustee, in that capacity on behalf
of the Securitization Trust, in connection with a Securitized Financing
thereof by the Transferor. The 1998-C SUBI Insurance Certificate will not be
transferred to the 1998-C Securitization Trustee and the Transferor will
retain the 1998-C SUBI Insurance Certificate.
E. The parties desire to supplement the servicing provisions of
the Titling Trust Agreement, insofar as they apply to the 1998-C SUBI, the
1998-C SUBI Sub-Trust, the 1998-C SUBI Certificate and the 1998-C SUBI
Insurance Certificate, to provide for further specific servicing obligations
that will benefit the holders of the 1998-C SUBI Certificate and the 1998-C
SUBI Insurance Certificate and the parties to and other beneficiaries of the
Transaction Documents relating to the Securitized Financing contemplated by
the 1998-C 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-C SUBI Sub-Trust:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS.
For all purposes of this 1998-C 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-C SUBI Supplement for all purposes of this 1998-C 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-C
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-C SUBI Servicing Supplement as a whole and not
to any particular article or section within this 1998-C 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-C Securitization
Trustee, acting on behalf of the 1998-C Securitization Trust", or words of
similar import, shall be deemed to mean the 1998-C Securitization Trustee,
acting on behalf of the Toyota Auto Lease Trust 1998-C 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-C 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 1998-C
Contracts and related 1998-C 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-C 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-C SUBI Servicing Supplement and the fulfillment of the terms of
this 1998-C 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-C
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-C 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-C SUBI Servicing Supplement.
ARTICLE III
CREATION OF 1998-C SUBI
3.01 INITIAL CREATION OF 1998-C SUBI PORTFOLIO AND 1998-C SUBI SUB-
TRUST.
(a) Pursuant to Section 3.01 of the Titling Trust Agreement and
Section 16.01 of the 1998-C 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-C SUBI Sub-Trust consisting of the 1998-C 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-C SUBI Portfolio.
(c) The Servicer hereby represents and warrants to the Titling
Trustee, the 1998-C 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-C Leased Vehicles and
the 1998-C Contracts will be payable by the Servicer (or the insurer under the
Residual Value Insurance Policies) directly to the holder of the 1998-C SUBI
Insurance Certificate and will not, under any circumstances, be
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subject to the lien of the 1998-C Securitization Trust Agreement or be
required to be deposited in any SUBI Account.
3.02 SUBSEQUENT ADDITIONS TO 1998-C SUBI PORTFOLIO AND 1998-C 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-C 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-C SUBI Portfolio and 1998-C 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-C
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-C 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-C SUBI
Portfolio and 1998-C SUBI Sub-Trust, as the case may be, as additional 1998-C
SUBI Assets.
(b) The Servicer shall give one Business Day's prior notice to the
Titling Trustee and the 1998-C Securitization Trustee of each Transfer Date.
On each Transfer Date, the Servicer shall be deemed to have represented and
warranted to the 1998-C Securitization Trustee on behalf of the 1998-C
Securitization Trust that (i) all Subsequent Contracts added to the 1998-C
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-C 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-C Contract will be allocated to the 1998-C SUBI Portfolio based upon its
Discounted Principal Balance as of the relevant Transfer Date, (B) the
weighted average remaining term of the 1998-C
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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-C
Leased Vehicles relating to the 1998-C Contracts (including the Subsequent
Contracts), as a percentage of the aggregate Capitalized Costs of the 1998-C
Contracts (including the Subsequent Contracts), as of the related date of
origination, will be not greater than 65%, based on the characteristics of
all 1998-C Contracts (including the Subsequent Contracts).
(c) From and after the date on which the 1998-C SUBI Lease Funding
Account is required to be maintained as specified in Section 17.02 of the
1998-C SUBI Supplement, on each Transfer Date the Servicer shall withdraw
from the 1998-C SUBI Collection Account (but excluding any amounts in fact
deposited therein that the Servicer has notified the 1998-C 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-C SUBI Portfolio and
1998-C SUBI Sub-Trust pursuant to Section 16.01 of the 1998-C SUBI Supplement
and the Servicer shall direct the Titling Trustee to deposit such amount into
the 1998-C 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-C Contract shall survive
delivery of the related 1998-C Contract to the 1998-C SUBI Portfolio and the
1998-C SUBI Sub-Trust and shall continue (speaking as of the dates made) so long
as each such 1998-C Contract remains outstanding, or until the termination of
the 1998-C Securitization Trust Agreement pursuant to Section 7.01 thereof,
whichever occurs earlier. Upon discovery by the Titling Trustee, the 1998-C
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-C 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-C Contract into the 1998-C SUBI Collection
Account, (ii) reallocate such 1998-C Contract and the related 1998-C Leased
Vehicle and other related Titling Trust Assets from the 1998-C SUBI Portfolio to
the UTI Portfolio, and (iii) indemnify, defend and hold harmless the holders of
the 1998-C SUBI Certificate (including without limitation the 1998-C
Securitization Trustee on behalf of the 1998-C Securitization Trust and the
Certificateholders), the holder of the 1998-C 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-C
Contract or related 1998-C 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-C 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-C SUBI Portfolio, the Servicer shall,
subject to Section 17.01 of the 1998-C SUBI Supplement, within two Business
Days of receipt thereof, deposit such funds into the 1998-C 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-C SUBI
Portfolio and 1998-C SUBI Sub-Trust under this 1998-C 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-C SUBI
Sub-Trust and the 1998-C 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-C 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-C Securitization Trustee in any 1998-C Leased Vehicle.
ARTICLE IV
SPECIFIC REQUIREMENTS FOR
ADMINISTRATION AND SERVICING OF CONTRACTS
IN 1998-C 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 1998-C Contracts, 1998-C Leased Vehicles and
other associated Titling Trust Assets in the 1998-C SUBI Sub-Trust, including
without limitation the provisions thereof relating to the administration and
servicing of 1998-C 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-C 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-C SUBI Servicing Supplement with respect to the 1998-C SUBI, and those
of the Titling Trust Agreement, the provisions of this 1998-C SUBI Servicing
Supplement shall govern.
(b) For purposes of determining the Servicer's obligations with
respect to the servicing of the 1998-C SUBI Sub-Trust under this 1998-C 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-C SUBI
Account; (ii) a SUBI Asset shall be deemed to refer more specifically to a
1998-C SUBI Asset; (iii) an appropriate or applicable SUBI Collection Account
shall be deemed to refer more specifically to the 1998-C SUBI Collection
Account; (iv) an appropriate or applicable SUBI Lease Funding Account shall
be deemed to refer more specifically to the 1998-C SUBI Lease Funding
Account; (v) a SUBI Portfolio shall be deemed to refer more specifically to
the 1998-C SUBI Portfolio; (vi) a SUBI Sub-Trust shall be deemed to refer
more specifically to the 1998-C SUBI Sub-Trust; (vii) a SUBI Servicing
Supplement shall be deemed to refer more specifically to this 1998-C SUBI
Servicing Supplement; and (viii) a SUBI Supplement shall be deemed to refer
more specifically to the 1998-C SUBI Supplement.
(c) Coincident with the execution and delivery of this 1998-C SUBI
Servicing Supplement, the Servicer shall furnish the 1998-C Securitization
Trustee, on behalf of the 1998-C 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-C 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
(including procedures used in connection with new programs commenced in the
ordinary course of business, whether or not implemented on a test basis), to
(i) collect all payments required under the terms and provisions of each
1998-C Contract included in the 1998-C SUBI Portfolio; (ii) cause each
Obligor to make all payments in respect of the related 1998-C Contract
included in the 1998-C 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-C 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-C 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-C
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-C 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-C SUBI
Collection Account net of amounts reimbursable or payable to the Servicer as
compensation (including in respect of amounts advanced by the Servicer in
respect of amounts otherwise payable to the 1998-C 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-C Securitization Trust Agreement on
the same basis as though such amounts were in fact deposited into the 1998-C
SUBI Collection Account. Moreover, as set forth in Section 3.01 of the
1998-C Securitization Trust Agreement, the Servicer will, in each relevant
Servicer's Certificate, instruct the 1998-C 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-C 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-C SUBI Portfolio and (ii) defer one or
more payments under a 1998-C Contract or extend the Maturity Date of any
1998-C Contract. Notwithstanding the foregoing, the Servicer may not grant
more than four deferrals of any 1998-C Contract, and may not extend the
Maturity Date of any 1998-C 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-C 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-C 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-C Contract and the
related 1998-C Leased Vehicle from the 1998-C SUBI Portfolio and 1998-C 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-C SUBI Portfolio under
this 1998-C SUBI Servicing Supplement.
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(c) As to any Monthly 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-C 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-C Contract or related 1998-C
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-C
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-C SUBI
Portfolio and 1998-C 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-C
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-C SUBI Insurance Certificate
by the Servicer) into the 1998-C SUBI Collection Account maintained by the
1998-C Securitization Trustee. Such amounts will thereafter be applied as
set forth in Section 17.01(d) of the 1998-C SUBI Supplement.
(iii) In the event that any proceeds of the Residual Value
Insurance Policies applicable to the 1998-C Leased Vehicles and the 1998-C
Contracts are deposited in any SUBI Account or another account maintained
by the Titling Trustee or the 1998-C Securitization Trustee, such amounts
shall be distributed to the holder of the 1998-C SUBI Insurance Certificate
by the Titling Trustee or the 1998-C 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-C 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
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Ahead as a Monthly Payment with respect to the applicable Contract and
(B) deposit such Payment Ahead into the 1998-C 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 this 1998-C SUBI
Supplement; provided, however, as set forth in Section 4.07 of this
1998-C 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-C 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-C SUBI Collection Account as set forth in
Section 17.01(a) of the 1998-C SUBI Supplement.
(g) On each Determination Date the Servicer shall make the
calculations necessary to allow the 1998-C Securitization Trustee to make
allocations, applications and payments to holders of, or to the 1998-C
SUBI Accounts on behalf of the holders of, the 1998-C SUBI Certificates
on the related Monthly Allocation Date in accordance with Section 3.01 of
the 1998-C 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-C
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-C
Contracts or 1998-C Leased Vehicles (including Liquidation Proceeds), or
to withdraw such amounts from amounts on deposit in the 1998-C 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-C
Contracts) from Collections with respect to the 1998-C Contracts (whether
or not as separate payments thereof by the related Obligors) or from
amounts realized upon the final disposition of 1998-C Leased Vehicles.
To the extent such amounts are not reimbursed prior to or at the final
disposition of the related 1998-C Leased
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Vehicle but remain unpaid by the related Obligor, such unreimbursed
amounts (together with any unpaid Monthly Payments under the related
1998-C Contract) will be treated as Matured Leased Vehicle Expenses,
Charged-off Vehicle Expenses or other 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,
Charged-off Vehicle Proceeds or other Liquidation Proceeds, as the case
may be.
To the extent that during any Collection Period (i)
Collections, Matured Leased Vehicle Proceeds, Charged-off Vehicle
Proceeds or other Liquidation Proceeds or separate payments from the
Obligors in respect of such payments, charges and expenses are deposited
into the 1998-C SUBI Collection Account rather than so offset by the
Servicer, (ii) any Monthly Payments arising from a Contract allocated to
the 1998-C SUBI Sub-Trust are received by the Titling Trustee or
deposited in the 1998-C 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-C 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-C 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-C SUBI Collection Account, to the 1998-C SUBI Lease Funding
Account. Thereafter, the Titling Trustee shall remit to the Servicer from
the 1998-C 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-C SUBI Lease Funding Account
(or in the event the 1998-C SUBI Lease Funding Account has not been
required to be established as set forth in Section 17.02 of the 1998-C
SUBI Supplement), the Servicer is hereby authorized to deduct such
amounts from amounts on deposit or otherwise to be deposited into the
1998-C SUBI Collection Account.
(i) The Servicer shall account to the Titling Trustee and the
1998-C Securitization Trustee with respect to the 1998-C SUBI Sub-Trust
separately from any other Sub-Trust.
(j) The Servicer shall direct the Titling Trustee or the
1998-C Securitization Trustee, as applicable, to invest amounts held in
the 1998-C SUBI Accounts and the Reserve Fund in Permitted Investments as
provided in the Titling Trust Agreement, 1998-C SUBI Supplement and the
1998-C 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-C 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 Certificate
Payment Date, (ii) investments during the Revolving Period of Principal
Collections (including amounts treated as Principal Collections pursuant
to Sections
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3.01(c) and 3.01(k) of the 1998-C Securitization Trust Agreement) on
deposit in the 1998-C SUBI Collection Account, which may mature on such
dates as specified by the 1998-C Securitization Trustee at the Servicer's
direction so as to maintain the availability of sufficient cash to make
payments pursuant to Section 3.02(c) hereof, and (iii) amounts on deposit
in the 1998-C 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-C Securitization Trust
Agreement); 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 as specified in the related TMCC Demand Note in accordance with
the terms of the Indenture.
(k) In the event the Servicer provides to the UTI Beneficiary,
the Titling Trustee and the 1998-C 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-C SUBI Supplement with respect to Collections to be deposited in the
1998-C 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-C SUBI Servicing
Supplement (and any corresponding or related Sections in the 1998-C SUBI
Supplement) may be so modified without the consent of any
Certificateholders and (ii) the Servicer may remit such collections to
the 1998-C 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-C Securitization Trustee of the Collections in respect of the 1998-C
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-C SUBI Insurance Certificate which is
the sole property of the Transferor) and, except as provided in this
1998-C SUBI Servicing Supplement, the 1998-C SUBI Supplement and the
1998-C 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-C SUBI Certificate and the other property of the 1998-C
Securitization Trust pursuant to Section 7.02 or Section 8.02 of the
1998-C Securitization Trust Agreement, the Servicer shall allocate the
net proceeds thereof as set forth in the 1998-C 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-C Contract or 1998-C Leased
Vehicle, the Servicer shall maintain or cause to be maintained such
computer and
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manual records with respect to all such proceeds and other receipts in
accordance with the customary and usual procedures of institutions which
service closed-end automobile and light duty truck leases and, to the
extent more exacting, in conformity in all material respects with the
procedures used by the Servicer in respect of any such leases serviced by
it for its own account or the accounts of its Affiliates.
(b) The Servicer shall retain or cause to be retained all data
(including, without limitation, computerized records), together with all
operating software and appropriate documentation, relating directly to or
maintained in connection with the servicing of the 1998-C 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-C SUBI Portfolio are terminated in accordance with Section
6.01(b) of this 1998-C SUBI Servicing Supplement or, if this 1998-C 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-C Securitization Trustee or, as
provided in Section 6.01(b) of this 1998-C SUBI Servicing Supplement,
upon demand of Investor Certificateholders representing not less than 51%
of the aggregate Voting Interest), deliver to the 1998-C Securitization
Trustee all such data, operating software and appropriate documentation
necessary for the servicing of the 1998-C 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-C SUBI Account
on behalf of the Titling Trust, or in the 1998-C SUBI Collection Account
or the Reserve Fund on behalf of the 1998-C Securitization Trust, all
Security Deposits with respect to 1998-C Contracts, and any 1998-C 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-C 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-C 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
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Titling Trust, or the Servicer may lawfully and under the terms of the
related 1998-C Contract apply such Security Deposit against unpaid
amounts owed under the 1998-C Contract, damages to the related 1998-C
Leased Vehicle, excess wear and tear charges, expenses in connection with
the refurbishment and disposal of the related 1998-C 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 1998-C Contract, from and after
which time such amounts will be 1998-C 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 1998-C Contract or
1998-C Leased Vehicle (because such 1998-C 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, or otherwise
as provided in Section 4.02(c)(ii) of this 1998-C SUBI Servicing
Supplement, the Servicer shall deposit into the 1998-C SUBI Collection
Account each Security Deposit that became Liquidation Proceeds during the
previous month; otherwise, each Security Deposit related to a 1998-C
Contract, 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 1998-C 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-C Contract
and each 1998-C 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-C 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-C 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-C Leased
Vehicles in its possession and pending disposition during the related
Collection Period. Each such Advance shall be made by deposit into the
1998-C 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-C
Securitization Trust Agreement) upon disposition of all or any such
1998-C Leased Vehicles.
(c) Notwithstanding any other provision of this 1998-C SUBI
Servicing Supplement, the Servicer shall not be obligated to make any
Advance in respect of any 1998-C 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-C 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-C
Securitization Trustee setting out the
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basis for such determination, which determination shall be conclusive and
binding absent manifest error.
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-C SUBI Sub-Trust, as set forth in Section
3.01(c) of the 1998-C Securitization Trust Agreement, are insufficient to
provide for the payment of all fees and expenses due to the Titling
Trustee or the 1998-C 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-C 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 in the 1998-C Securitization
Trust Agreement. The obligations of the Servicer pursuant to this
Section 4.06(a) shall survive any termination of the Servicer's rights
and obligations with respect to the 1998-C SUBI Portfolio under this
1998-C SUBI Servicing Supplement.
(b) Prior to the termination of the Servicer's rights and
obligations with respect to the 1998-C 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-C 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-C Securitization
Trustee, whether in respect of this 1998-C SUBI Servicing Supplement, the
1998-C SUBI Supplement, any Securitization Trust Document, any 1998-C
Contract, any related Contract Document, any 1998-C Leased Vehicle or
otherwise.
4.07 SERVICING COMPENSATION.
(a) As compensation for the performance of its obligations
under this 1998-C 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 (or, in the case of the first Monthly
Allocation Date, as of the Cutoff Date); and
(ii) Any late fees, deferral fees and other administrative fees
or similar charges paid by any Obligor pursuant to a 1998-C 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-C Securitization Trust Agreement
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and the Servicer may be reimbursed for advancing certain Administrative
Expenses as provided in this 1998-C SUBI Servicing Supplement. Further,
as additional servicing compensation with regard to the 1998-C SUBI
Sub-Trust, the Servicer also shall receive income as and to the extent
provided in the 1998-C 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 that such expenses (A) constitute
Charged-Off Vehicle Expenses, Matured Lease Vehicle Expenses or other
Liquidation Expenses, (B) as provided in Section 4.12 of this 1998-C SUBI
Servicing Supplement, are recoverable under an applicable Insurance
Policy, (C) constitute repayments from the related Obligor, as provided
in Section 4.08 of this 1998-C SUBI Servicing Supplement or (D) are
Uncapped Titling Trust Administrative Expenses or Uncapped Securitization
Trust Administrative Expenses reimbursed from Available Interest pursuant
to Section 3.01(c) of the 1998-C Securitization Trust Agreement. 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-C 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-C
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-C
Leased Vehicle related to any 1998-C 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 1998-C Leased Vehicle
related to any 1998-C Contract to the same extent the Servicer would take
possession of a vehicle pursuant to a lease contract that is property of
the Servicer.
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The Servicer shall, in accordance with the standards set forth
in the immediately preceding paragraph:
(a) follow such practices and procedures as it shall deem
necessary or advisable in its servicing of closed-end automobile and
light duty truck leases, which may include reasonable efforts to realize
upon any recourse to Dealers, consigning a 1998-C Leased Vehicle to a
motor vehicle dealer for resale or selling a 1998-C Leased Vehicle at
public or private sale; and
(b) sell or otherwise dispose of each 1998-C Leased Vehicle
that is repossessed in accordance with the related 1998-C Contract or
that becomes part of Matured Leased Vehicle Inventory for the 1998-C SUBI
Sub-Trust and, if such related 1998-C Contract is in default, shall
commence and prosecute any proceedings in respect of such 1998-C Contract
(and such 1998-C 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-C Leased Vehicle
from a cause for which the Obligor under the related 1998-C 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 1998-C Leased Vehicle unless it shall
reasonably determine that such restoration will increase Liquidation
Proceeds (net of Liquidation Expenses) of the related 1998-C Contract by
at least an equivalent amount. The Servicer shall only expend funds in
connection with the repossession and/or sale of any 1998-C 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-C Contract or the related 1998-C 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 Charged-off
Vehicle Proceeds, Matured Leased Vehicle Proceeds 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-C
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-C 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 1998-C 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-C Leased Vehicle and such vehicle shall
be the "related Leased Vehicle" or " related 1998-C Leased Vehicle" with
respect to such 1998-C Contract, for all purposes of the 1998-C SUBI
Sub-Trust.
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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 the form attached as Exhibit C with
regard to the 1998-C 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-C
Leased Vehicle all related unreimbursed Charged-Off Vehicle Expenses,
Matured Leased Vehicle Expenses or other Liquidation Expenses or expenses
recoverable under an applicable Insurance Policy 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-C SUBI Servicing
Supplement.
4.09 SERVICER TO ACT ON BEHALF OF TITLING TRUST.
(a) In order to facilitate the servicing of the 1998-C 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
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be considered in full force and effect until receipt by the Servicer of
written notice to the contrary given by the Titling Trustee.
(e) The Servicer shall identify from time to time all (i)
periodic sales and use tax or property (real or personal) tax reports,
(ii) periodic renewals of licenses and permits, (iii) periodic renewals
of qualification to act as a trust and a business trust and (iv) other
periodic governmental filing, registration or approvals (collectively,
"Filings") arising with respect to or required of the Titling Trust 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-C Contracts
and to be identified as the owner of 1998-C 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-C 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-C SUBI Sub-Trust. The Servicer shall not act contrary to any
provision of the Titling Trust Agreement as it relates to the 1998-C 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-C
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-C Contracts and 1998-C Leased Vehicles, the servicing of the 1998-C
Contracts, the Servicer's undertakings in clause (e) of Section 4.09 of
this 1998-C SUBI Servicing Supplement or any other activity undertaken or
omitted by the Servicer with respect to any 1998-C 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
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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-C SUBI Servicing Supplement or the resignation or removal of
the Servicer (generally or with respect to the 1998-C SUBI Sub-Trust) or
the 1998-C 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-C Securitization
Trustee, on behalf of the 1998-C Securitization Trust, and any other
holder of the 1998-C SUBI Certificate or 1998-C 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-C Securitization Trust, the 1998-C Securitization Trustee, the
Investor Certificateholders, any 1998-C SUBI Asset or the Servicer is
being made by a third party with respect to any 1998-C Contract or 1998-C
Leased Vehicle (whether or not included in the 1998-C SUBI Sub-Trust) or
the servicing thereof or with respect to any other Titling Trust Asset
(whether or not constituting a 1998-C SUBI Asset).
4.12 INSURANCE POLICIES.
So long as any 1998-C 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 1998-C Leased Vehicle included in the 1998-C 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-C 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-C 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-C
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
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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-C SUBI Sub-Trust under this 1998-C
SUBI Servicing Supplement.
4.13 SERVICER NOT TO RESIGN; ASSIGNMENT.
(a) Except as provided in Section 6.01 of this 1998-C 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-C
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 1998-C 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-C Securitization Trustee. The 1998-C
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-C SUBI
Servicing Supplement. No such resignation shall affect the obligation of
the Servicer to remit moneys to the 1998-C 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 (until
such obligations are transferred to a successor Servicer pursuant to the
terms of this Agreement), 4.06(a), 4.10 or 4.12 of this 1998-C 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-C SUBI Servicing
Supplement, (ii) the obligation set forth in Section 4.06(a) of this
1998-C 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-C 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-C
Securitization Trustee and of the proposed substitute servicer.
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(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-C SUBI Servicing
Supplement.
(d) Except as provided above, the duties and obligations of
the Servicer under this 1998-C SUBI Servicing Supplement shall continue
until this 1998-C SUBI Servicing Supplement shall have been terminated as
provided in Section 7.01 of this 1998-C 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-C 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-C SUBI Servicing Supplement or in any
other Transaction Document, the Servicer shall, on at least a monthly
basis, deposit into the 1998-C SUBI Collection Account any proceeds of
such Insurance Policy that the Servicer may receive with respect to any
1998-C 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-C SUBI Servicing Supplement pursuant to
Section 6.01 of this 1998-C 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
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<PAGE>
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.
(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-C 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-C Contracts or the related 1998-C 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-C SUBI Servicing Supplement to
document to the 1998-C 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-C Securitization Trustee a supplement to the
Schedule of 1998-C Contracts and 1998-C Leased Vehicles containing data
reflecting the addition or removal of 1998-C Contracts or 1998-C Leased
Vehicles from the 1998-C 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
24
<PAGE>
Principal Balance of each 1998-C Contract added or removed. Such reports
will be delivered by the Servicer to the 1998-C Securitization Trustee
and the Luxembourg Stock Exchange, at such times as set forth in Section
3.03 of the 1998-C 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-C Securitization Trustee, the Swap
Counterparty, 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 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 (other than
such information to be provided by the 1998-A Securitization Trustee
pursuant to Section 3.01(a) of the 1998-A Securitization Trust Agreement)
necessary to make the allocations and applications or payments required
by the 1998-C 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-C 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-C Securitization Trustee upon written request, and
the 1998-C 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-C Securitization
Trust Agreement, the Servicer will forward to the Titling Trustee, the
1998-C Securitization Trustee, the Swap Counterparty, each Paying Agent
and the Luxembourg Stock Exchange and the 1998-C Securitization Trustee
will make available to each Certificateholder, a statement, setting forth
the amounts described in clauses (ii) through (viii) in Section 3.03(a)
of the 1998-C 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 any Termination Event of which the
Servicer has actual knowledge, the Servicer shall give prompt written
notice thereof to the 1998-C 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-C 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 1998-C 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
25
<PAGE>
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-C
Securitization Trustee to agree to the procedures performed by such firm,
the Servicer shall direct the 1998-C Securitization Trustee in writing to
so agree; it being understood and agreed that the 1998-C Securitization
Trustee will deliver such letter of agreement in conclusive reliance upon
the direction of the Servicer, and the 1998-C Securitization Trustee
makes no independent inquiry or 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 fiscal year ended September 30, 1999), the Servicer
shall deliver an Officer's Certificate to the Titling Trustee and the
1998-C Securitization Trustee to the effect that a review of the
activities of the Servicer during the prior fiscal year (or since the
Closing Date 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-C SUBI Servicing Supplement, and either (i) stating that, to the
best of his or her knowledge, no default by the Servicer under this
1998-C 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-C
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-C Securitization
Trust Agreement, the Servicer shall direct the 1998-C 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-C Securitization Trust
Agreement, the Servicer shall timely prepare or cause to
26
<PAGE>
be prepared any federal and state tax returns that may be required with
respect to the 1998-C Securitization Trust or the assets thereof and
shall timely deliver any such returns to the 1998-C Securitization
Trustee for signature.
ARTICLE VI
DEFAULT
6.01 EVENT OF SERVICING TERMINATION; TERMINATION OF SERVICER AS
TO 1998-C 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-C 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-C Securitization Trustee shall (which direction will only be given
pursuant to Section 6.01(c)(iii) of the 1998-C Securitization Trust
Agreement), terminate all or a portion of the rights and powers of the
Servicer under this 1998-C 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-C 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-C SUBI Servicing Supplement, all rights, powers,
duties and responsibilities of the Servicer under this 1998-C 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-C 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-C Contracts and the 1998-C 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-C Contracts to the new
servicer (including transfer of the Security Deposits being held by the
Servicer pursuant to Section 4.04 of this 1998-C SUBI Servicing
Supplement), and as promptly as practicable, the Servicer shall provide
to the new
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<PAGE>
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-C SUBI Certificate and 1998-C SUBI Insurance
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-C 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-C SUBI Sub-Trust, all the rights,
powers, duties and obligations of the Titling Trustee, the UTI
Beneficiary and the Transferor under this 1998-C SUBI Servicing
Supplement, the 1998-C Securitization Trust Agreement, the 1998-C 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-C
Securitization Trust pursuant to Section 7.02 of the 1998-C
Securitization Trust Agreement, and the Transferor's then succeeding to
all of the interest in the 1998-C SUBI and if the UTI Beneficiary shall
thereafter succeed to such interest in the 1998-C SUBI, the Servicer,
upon the direction of the UTI Beneficiary as provided in Section 16.05 of
the 1998-C SUBI Supplement, shall reallocate all 1998-C Contracts, 1998-C
Leased Vehicles and related 1998-C 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-C SUBI shall terminate upon the termination of the 1998-C
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-C SUBI Sub-Trust pursuant to this 1998-C SUBI
Servicing Supplement.
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<PAGE>
7.02 AMENDMENT.
(a) To the extent that any amendment or supplement deals with the
1998-C SUBI Sub-Trust, this 1998-C 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-C Securitization Trustee, on behalf of the 1998-C Securitization
Trust, which shall be given only in the circumstances contemplated by Section
9.01 of the 1998-C 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-C SUBI Servicing Supplement, whether or not such amendment relates to
the 1998-C 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-C 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-C SUBI shall not require
the consent of the 1998-C Securitization Trustee or the Beneficiaries of the
1998-C SUBI Certificate or the 1998-C SUBI Insurance Certificate.
7.03 GOVERNING LAW.
This 1998-C 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
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-C 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-C 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
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<PAGE>
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 of the
beneficiaries of the Titling Trust and (z) if given by the 1998-C
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-C 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-C 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-C
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
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<PAGE>
purposes of this 1998-C 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.
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-C 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-C 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-C 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-C 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-C SUBI Servicing Supplement, insofar as it relates to the
1998-C SUBI Sub-Trust, will inure to the benefit of and be binding upon the
parties hereto, their respective successors and permitted assigns, the 1998-C
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-C SUBI
Certificate or the 1998-C SUBI Insurance Certificate (including without
limitation the 1998-C Securitization Trustee and the Certificateholders), who
shall be considered to be third-party beneficiaries hereof. Except as otherwise
provided in this 1998-C SUBI Servicing Supplement, no other Person will have any
right or obligation hereunder.
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7.13 EFFECT OF 1998-C SUBI SERVICING 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-C SUBI Servicing Supplement and the
Titling Trust Agreement with respect to the 1998-C SUBI, the provisions of this
1998-C SUBI Servicing Supplement shall prevail.
(b) For purposes of determining the parties' obligations under this
1998-C SUBI Servicing Supplement with respect to the 1998-C SUBI, general
references in the Titling Trust Agreement to: (i) a SUBI Account shall be
deemed to refer more specifically to a 1998-C SUBI Account; (ii) a SUBI Asset
shall be deemed to refer more specifically to a 1998-C SUBI Asset; (iii) an
appropriate or applicable SUBI Collection Account shall be deemed to refer more
specifically to the 1998-C SUBI Collection Account; (iv) an appropriate or
applicable SUBI Lease Funding Account shall be deemed to refer more specifically
to the 1998-C Lease Funding Account; (v) a SUBI Sub-Trust or SUBI Portfolio
shall be deemed to refer more specifically to the 1998-C SUBI Sub-Trust or
1998-C SUBI Portfolio, as the case may be; (vi) a SUBI Supplement shall be
deemed to refer more specifically to the 1998-C SUBI Supplement; and (vii) a
SUBI Servicing Supplement shall be deemed to refer more specifically to this
1998-C SUBI Servicing Supplement.
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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,
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-C
By: U.S. Bank National Association,
as 1998-C Securitization Trustee
By: /s/ STEVEN E. CHARLES
-------------------------------
Name: Steven E. Charles
Title: Vice President
<PAGE>
EXHIBIT A
SCHEDULE OF 1998-C CONTRACTS AND
1998-C LEASED VEHICLES AS OF THE INITIAL CUTOFF DATE
[Omitted. Copies on file with the Servicer, the Titling Trustee and the
1998-C Securitization Trustee.]
A-1
<PAGE>
EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-C
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
- -----------------------
Discounted Principal Balance
Aggregate Net Investment Value (ANIV)
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
Trigger Percentage
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)
<CAPTION>
Class A2 Class B Transferor Interest
-------- ------- -------------------
Percent Notional Balance Percent Balance Balance
------- ---------------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
ORIGINAL DEAL PARAMETER
- -----------------------
Discounted Principal Balance
Aggregate Net Investment Value (ANIV)
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
Trigger Percentage
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-C
Allocation Date of _____ for the Collection Period of _______ through _________
<TABLE>
<CAPTION>
CURRENT MONTH COLLECTION ACTIVITY
- ---------------------------------
<S> <C> <C> <C>
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
- ---------------------------------- -------- -------
<S> <C> <C>
INVENTORY ON HAND:
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
-------- ------- ---- -------
<S> <C> <C> <C> <C>
DELINQUENT CONTRACTS:
31-60 Days Delinquent
61-90 Days Delinquent
Over 90 Days Delinquent
----------------------------------------------------
Total Delinquencies
----------------------------------------------------
----------------------------------------------------
Amount
------
BEGINNING UNREINVESTED PRINCIPAL COLLECTIONS
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>
Average Average
Number Scheduled Sale Net Liqudation Residual
Sold Maturities Ratio Proceeds Value
---- ---------- ----- -------- -----
<S> <C> <C> <C> <C> <C>
MATURED VEHICLES SOLD FOR
EACH COLLECTION PERIOD:
Second Preceding Collecton Period
First Preceding Collection Period
Current Collection Period
Three Month Average
Ratio of 3 Month Average Net Liquidation Proceeds to Average Residual Value
for the Current Collection Period
<CAPTION>
Annualized Average
Charge-Off
Rate
------------------
<S> <C>
RATIO OF NET CREDIT LOSSES TO THE AVERAGE POOL BALANCE
FOR EACH COLLECTION PERIOD:
Second Preceding Collection Period
First Preceding Collection Period
Current Collection Period
Three Month Average
Trigger Indicator (1.25%)
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%)
<CAPTION>
Total
RESERVE FUND: Amount
------
<S> <C>
Beginning Balance
Withdrawal Amount / /
Transferor Excess
--------------
Ending Balance
Specified Reserve Fund Balance
--------------
Release to Transferor
Cumulative Withdrawal Amount
</TABLE>
B-2
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-C
Allocation Date of _____ for the Collection Period of _______ through _________
<TABLE>
<CAPTION>
Investor Interest Class A1
Percent Balance Percent Balance
------- ------- ------- -------
<S> <C> <C> <C> <C>
NOTIONAL/CERTIFICATE INTEREST ACCRUAL AMOUNT
- --------------------------------------------
INTEREST:
- ---------
Interest Collections
Net Investment Income
Non-recoverable Advances
-----------
Available Interest
Class A-1 and A-2 Notional Interest Accrual Amount
Unreimbursed Swap 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
-----------
<CAPTION>
Class A2 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 and A-2 Notional Interest Accrual Amount
Unreimbursed Swap 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>
B-3
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-C
Allocation Date of _____ for the Collection Period of _______ through _________
<TABLE>
<CAPTION>
Investor Interest Class A1 Class A2 Class B
Total Balance Balance Balance Balance
<S> <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:
-------- -------- -------- -------- -------
-------- -------- -------- -------- -------
* 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
--------
B-4
<PAGE>
INTEREST PAYMENTS:
Class Interest Rate for Current Interest Period
Interest Calculation for Current Interest Period
At Certificate Payment Date:
Paid to Swap Counterparty
Due to Swap Counterparty
Proration %
Interest Due to Investors
Interest Payment to Investors
SWAP SHORTFALL
Prior Swap Interest Shortfall Carryover
Swap Interest Shortfall Inc/(Dec) This Period
Swap Swap Interest Shortfall Carryover
INTEREST RESET:
Interest Rate
Number of Days
INTEREST FOR SUCCEEDING CERTIFICATE PAYMENT DATE
</TABLE>
I hereby certify to the best of my knowledge that the
servicing report provided is true and correct.
- ------------------------------------------------
Holly Pearson, Treasury Manager
B-5
<PAGE>
EXHIBIT C
FORM OF 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
I-1
<PAGE>
- --------------------------------------------------------------------------------
BRANCHES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
BRANCHES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
BRANCHES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
5000 Meadows Road, Suite 251
PORTLAND Lake Oswego, OR 97035
- --------------------------------------------------------------------------------
300 Las Cumbre Avenue, Ste. 24
PUERTO RICO Entrada Los Rio, 00926
- --------------------------------------------------------------------------------
Toyota Motor Credit Corporation
3957 Westerre Parkway, Suite 200
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
- --------------------------------------------------------------------------------
3
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-C
Allocation Date of Month 2x, 19xx for the Collection Period of
Month 1x
<PAGE>
EXECUTION COPY
1998-C SUBI CERTIFICATE PURCHASE AND SALE AGREEMENT
THIS 1998-C SUBI CERTIFICATE PURCHASE AND SALE AGREEMENT (the
"Agreement") is dated as of December 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-C Securitization Trustee, the Titling Trustee and the
Trust Agent are entering into that certain 1998-C SUBI Supplement to the Titling
Trust Agreement, dated as of December 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-C SUBI and the 1998-C SUBI
Assets (the 1998-C SUBI Certificate and the 1998-C SUBI Insurance Certificate,
as defined in the 1998-C SUBI Supplement), whose beneficiaries generally will be
entitled to the net cash flow arising from, but only from, the related 1998-C
SUBI Assets, all as set forth in the Titling Trust Agreement and the 1998-C 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-C SUBI, the 1998-C SUBI Certificate and the 1998-C
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-C SUBI Certificate and the 1998-C 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-C 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-C SUBI
SECTION 2.01. SALE OF 1998-C SUBI.
(a)(l) In consideration of TLI's delivery to, or upon the order of, TMCC
of (i) cash in the amount of $703,577,282.53 representing the cash proceeds from
the sale of the Investor Certificates net of certain expenses, and (ii)
$47,399,673.95 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:
(A) all right, title and interest in and to the 1998-C SUBI evidenced
by the 1998-C SUBI Certificate and all monies due thereon and paid thereon or in
respect thereof;
(B) the right to realize upon any property that underlies or may be
deemed to secure the 1998-C SUBI to the extent of amounts payable under the
1998-C SUBI Certificate; and
(C) all proceeds of the foregoing.
(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
2
<PAGE>
to the amounts 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:
(A) all right, title and interest in and to the 1998-C SUBI
evidenced by the 1998-C SUBI Insurance Certificate and all monies due thereon
and paid thereon or in respect thereof;
(B) the right to realize upon any property that underlies or may be
deemed to secure the 1998-C SUBI to the extent of amounts, payable under the
1998-C SUBI Insurance Certificate; and
(C) all proceeds of the foregoing.
The parties hereto agree that such note represents the value of the 1998-C SUBI
Certificates.
(b) It is the express and specific intent of the parties that the transfer
of the 1998-C SUBI, the 1998-C SUBI Certificate and the 1998-C 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-C
SUBI, the 1998-C SUBI Certificate and the 1998-C 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-C SUBI, the 1998-C SUBI
Certificate and the 1998-C 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-C SUBI
and 1998-C 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-C SUBI, the
1998-C SUBI Certificate, the 1998-C 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-C SUBI, the 1998-C SUBI Certificate and the 1998-C SUBI
Insurance Certificate, whether set forth therein, in the Titling Trust
Agreement, the 1998-C 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-C SUBI Certificate and the
1998-C 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-C SUBI Securities Certificate and the 1998-C 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-C 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-C Securitization
Trustee, which shall be given only in the circumstances contemplated by Section
9.01 of the 1998-C 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-C SUBI
Certificate and/or the 1998-C SUBI Insurance Certificate (including without
limitation the 1998-C 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-C SUBI Certificate and the 1998-C 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]
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers duly authorized as of the day and
year first above written.
TOYOTA MOTOR CREDIT CORPORATION
By: /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>
EXHIBIT 4.6
TOYOTA MOTOR CREDIT CORPORATION
and
U.S. BANK NATIONAL ASSOCIATION
as Trustee
________________
Indenture
dated as of December 1, 1998
________________
$1,200,000,000
TMCC Demand Notes
<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
- ------- ---------
(Section)316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.04
<PAGE>
(Section)317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
(Section)318(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
- ---------
N.A. means not applicable
<PAGE>
</TABLE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
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
-i-
<PAGE>
TABLE OF CONTENTS
(Continued)
Section 6.06. Application of Money Collected . . . . . . . . . . . 15
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
-ii-
<PAGE>
TABLE OF CONTENTS
(Continued)
Section 9.05. Notation on or Exchange of Securities. . . . . . . . 29
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>
-iii-
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS
<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 December 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.
"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.
1
<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
$1,200,000,000, except as otherwise provided in Sections 2.06, 2.07 and 9.05.
References herein and in the forms of Securities to "Security" or
2
<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-C SUBI
Certificateholders' Account in respect of the following amounts: (1) one
certificate representing amounts allocated as Class A-1 Notional Interest
Accrual Amounts, any Class A-1 Interest Carryover Shortfall Amount, Class A-2
Notional Interest Accrual Amounts, any Class A-2 Interest Carryover Shortfall
Amount, Class A-3 Notional Interest Accrual Amounts, any Class A-3 Interest
Carryover Shortfall Amount, Class B Notional Interest Accrual Amounts, any
Adjustable Rate Class B Interest Carryover Shortfall Amount, Class B Fixed
Rate Interest Accrual Amounts and any Fixed Rate Class B Interest Carryover
Shortfall Amount (the "Interest Demand Note") in a maximum aggregate
principal amount equal to $513,700,000; (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
$189,000,000; (3) 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 $424,500,000; (4) 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
$72,800,000; and (5) one certificate representing amounts allocated to make
applications in reduction of the Adjusted Class B Certificate Balance in a
maximum principal amount equal to $48,700,000;
3
<PAGE>
provided that nothing herein shall limit the number of certificates
representing the Securities that may be issued hereunder. Each certificate
representing a Security 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
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Company the related Schedule annotated with entries corresponding to each
such alternative confirmation and having each such annotation authenticated
as described above.
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-
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C Securitization Trust and the proposed transferee is its successor in such
capacity, or (ii) a Swap Termination has occurred and such proposed transfer
is made in contemplation of a 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.
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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 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
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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.
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).
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(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.
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
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long-term debt to a rating less than Aa3 and the Trustee determines, based on
advice of Merrill Lynch, Pierce, Fenner & Smith and/or Credit Suisse First
Boston Corporation, 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 rating of any Class of Certificates or (ii) in connection
with any Swap Termination, 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
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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
(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;
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(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.
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
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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 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
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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.
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
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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 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;
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(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;
(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.
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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 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.
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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 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:
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(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.
(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
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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.
(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.
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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 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;
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(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.
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.
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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).
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
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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;
(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
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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
(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.
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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 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
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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-C Securitization Trust Agreement or of the Trustee of the 1998-C
Securitization Trust to (i) reflect changes necessary or appropriate in
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;
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(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;
(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
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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.
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.
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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 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
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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
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.
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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 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.
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(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 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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<PAGE>
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 -
Corporate Treasury Manager
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.
34
<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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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 CALIFORNIA, 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 December 1, 1998, before me, Tracey B. Kirst, 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/ Tracey B. Kirst
------------------------------------
Notary Public
<PAGE>
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On December 2, 1998, before me, Lisa Jukelevics, 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/ Lisa Jukelevics
------------------------------------
Notary Public
<PAGE>
ANNEX I
TO
INDENTURE
DATED AS OF DECEMBER 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-C SUBI Supplement to the Amended and
Restated Trust and Servicing Agreement dated as of December 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-C
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-C Securitization
Trust (and the 1998-C Securitization Trustee on behalf of the 1998-C
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.
I-1
<PAGE>
"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.
I-2
<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 December 1, 1998 between the
Company and U.S. Bank National Association, as trustee, relating to
$1,200,000,000 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 Swap Termination 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.
I-3
<PAGE>
"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 by
(a) calculating 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
5.265% per annum; (iii) on any Security representing the investment of any
amount allocated in reduction of the Adjusted Class A-2 Certificate Balance,
at 5.413% per annum; (iv) on any Security representing the investment of any
amount allocated in reduction of the Adjusted Class A-3 Certificate Balance,
at 5.463% per annum; or (v) on any Security representing the investment of
any amount allocated in reduction of the Adjusted Class B Certificate Balance
at 6.959% per annum, in each case from the date of investment to but
excluding the succeeding relevant Certificate Payment Date 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, (b) expressing 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, the 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-C SECURITIZATION TRUST AND THE
PROPOSED TRANSFEREE IS ITS SUCCESSOR IN SUCH CAPACITY, OR (ii) A SWAP
TERMINATION 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 Notional Interest Accrual Amounts, Class
A-1 Interest Carryover Shortfall Amounts, Class A-2 Notional Interest Accrual
Amounts, Class A-2 Interest Carryover Shortfall Amounts, Class A-3 Notional
Interest Accrual Amounts, Class A-3 Interest Carryover Shortfall Amounts,
Class B Notional Interest Accrual Amounts, Adjustable Rate Class B Interest
Carryover Shortfall Amounts, Class B Fixed Rate Interest Accrual Amounts
and/or Fixed Rate Class B Interest Carryover Shortfall Amounts)
(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-C
Securitization Trustee under the 1998-C Securitization Trust Agreement dated
as of December 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
A-1
<PAGE>
amount of principal, as set forth on the Schedule from time to time, from the
date such principal 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)(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 the Adjusted Class B
Certificate Balance., (each an "Interest Payment Date"), at the then
applicable Required Rate as such rate shall be adjusted on each Calculation
Date (2). Insert for TMCC Demand Notes issued in connection with the
investment of any Class A-1 Notional Interest Accrual Amount, Class A-1
Interest Carryover Shortfall Amount, Class A-2 Notional Interest Accrual
Amount, Class A-2 Interest Carryover Shortfall Amount, Class A-3 Notional
Interest Accrual Amount, Class A-3 Interest Carryover Shortfall Amount, Class
B Notional Interest Accrual Amount, Adjustable Rate Class B Interest
Carryover Shortfall Amount. , until 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 amount (and the
accrued interest thereon to, but excluding, the date on which such principal
is paid) evidenced by this Security shall be, the Business Day preceding the
earlier of (x) the Targeted Maturity Date for the Class A-1/A-2/B
Certificates3)(the Certificate Payment Date immediately following the related
- -------------------------
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 the Adjusted Class B Certificate Balance.
2 Insert for TMCC Demand Notes issued in connection with the
investment of any Class A-1 Notional Interest Accrual Amount, Class A-1
Interest Carryover Shortfall Amount, Class A-2 Notional Interest Accrual
Amount, Class A-2 Interest Carryover Shortfall Amount, Class A-3 Notional
Interest Accrual Amount, Class A-3 Interest Carryover Shortfall Amount, Class
A-4 Notional Interest Accrual Amount, Class A-4 Interest Carryover Shortfall
Amount,
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.
A-2
<PAGE>
Date of Investment4), (y) 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 the occurrence of a Swap Terminator
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.
- -------------------------
4 Insert for TMCC Demand Notes issued in connection with the investment
of any Class A-1 Notional Interest Accrual Amount, Class A-1 Interest
Carryover Shortfall Amount, Class A-2 Notional Interest Accrual Amount, Class
A-2 Interest Carryover Shortfall Amount, Class A-3 Notional Interest Accrual
Amount, Class A-3 Interest Carryover Shortfall Amount, Class B Notional
Interest Accrual Amount, Adjustable Rate Class B Interest Carryover Shortfall
Amount, Class B Fixed Rate Interest Accrual Amount and/or Fixed Rate Class B
Interest Carryover Shortfall Amount.
A-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: December __, 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>
<CAPTION>
- ------------------------------------------------------------------------------
U.S. Bank National Association, U.S. Bank National Association,
- ------------------------------------------------------------------------------
as Trustee as Trustee
- ------------------------------------------------------------------------------
OR
- ------------------------------------------------------------------------------
<S> <C>
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 December 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 $1,200,000,000, 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 CALIFORNIA 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
December 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 Swap Termination (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 Ratings Services, a division of The
McGraw-Hill Companies, Inc. ("Standard & Poor's") or "P-1" by Moody's
Investors Service, Inc. ("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.
The date on which such principal and accrued interest is to be paid is:
__________________.
Dated:
By: ________________________________
B-1
<PAGE>
B-2
<PAGE>
(MULTICURRENCY--CROSS BORDER)
ISDA-Registered Trademark-
INTERNATIONAL SWAP DEALERS ASSOCIATION, INC.
MASTER AGREEMENT
dated as of December 1, 1998
TOYOTA MOTOR CREDIT CORPORATION and TOYOTA AUTO LEASE TRUST 1998-C have entered
and/or anticipate entering into one or more transactions (each a "Transaction")
that are or will be governed by this Master Agreement, which includes the
schedule (the "Schedule"), and the documents and other confirming evidence (each
a "Confirmation") exchanged between the parties confirming those Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) DEFINITIONS. The term defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required
currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3)
each other applicable condition precedent specified in this Agreement.
<PAGE>
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to
make payment of any such amount will be automatically satisfied and
discharged and, if the aggregate amount that would otherwise have been
payable by one party exceeds the aggregate amount that would otherwise have
been payable by the other party, replaced by an obligation upon the party by
whom the larger aggregate amount would have been payable to pay to the other
party the excess of the larger aggregate amount over the smaller aggregate
amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii) above
will not, or will cease to, apply to such Transactions from such date). This
election may be made separately for different groups of Transactions and will
apply separately to each pairing of Offices through which the parties make and
receive payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to
be deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y
under this Section 2(d)) promptly upon the earlier of determining
that such deduction or withholding is required or receiving
notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure that
the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will equal
the full amount Y would have received had no such deduction or
withholding been required. However, X will not be required to
pay any additional amount to Y to the extent that it would not be
required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure
would not have occurred but for (I) any action taken by a
taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is
entered into (regardless of whether such action is taken or
brought with respect to a party to this Agreement) or (II) a
Change in Tax Law.
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(ii) LIABILITY. If:--
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under the laws
of the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which is it a party, to deliver
this Agreement and any other documentation relating to this Agreement that
it is required by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any Credit Support
Document to which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable to it, any
provision of its constitutional documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets
or any contractual restriction binding on or affecting it or any of its
assets;
(iv) CONSENTS. All governmental and other consents that are required
to have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been complied
with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and
any Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
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(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this
Agreement or any Credit Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may
have any obligation under this Agreement or under any Credit Support Document
to which it is a party:--
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the
legal or commercial position of the party in receipt of such demand), with
any such form or document to be accurate and completed in a manner
reasonably satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated.
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organised, managed and controlled, or considered to have its seat, or in
which a branch or office through which it is acting for the purpose of this
Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other
party against any Stamp Tax levied or imposed upon the other party or in
respect of the other party's execution or performance of this Agreement by
any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction
with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of this
Agreement (in either case other than in accordance with its
terms) prior to the satisfaction of all obligations of such party
under each Transaction to which such Credit Support Document
relates without the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party (1)
defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however
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described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at
such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on the
due date thereof in an aggregate amount of not less than the applicable
Threshold Amount under such agreements or instruments (after giving effect
to any applicable notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement, or composition with or for the benefit of its
creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding
or petition instituted or presented against it, such proceeding or
petition (A) results in a judgment of insolvency or bankruptcy or
the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged,
stayed or restrained in each case within 30 days of the institution
or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all the assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:--
(1) the resulting, serving or transferee entity fails to assume all
the obligations of such party or such Credit Support Provider under
this Agreement or any Credit Support Document to which it or its
predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such Party of any event specified below constitutes an illegality
if the event is specified in (i) below, a Tax Event if the event specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii)
below, and, if specified to be applicable, a Credit Event
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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into, or
due to the promulgation of, or any change in, the interpretation by any
court, tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a result
of a breach by the party of Section 4(b)) for such party (which will be the
Affected Party):--
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other material
provision of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party
to perform, any contingent or other obligation which the party
(or such Credit Support Provider) has under any Credit Support
Document relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on which
a Transaction is entered into (regardless of whether such action is taken
or brought with respect to a party to this Agreement) or (y) a Change in
Tax Law, the party (which will be the Affected Party) will, or there is a
substantial likelihood that it will, on the next succeeding Scheduled
Payment Date (1) be required to pay to the other party an additional amount
in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount is required to be deducted or withheld for or
on account of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be paid in
respect of such Tax under Section 2(d)(i)(4) (other than by reason of
Section 2(d)(i)(4)(A) or (B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to pay
an additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which the
other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"), any
Credit Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers all
or substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate, will
be the Affected Party;) or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination
Event" is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
illegality, it will be treated as an Illegality and will not constitute an
Event of Default.
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6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality
under Section 5(b)(i)(1) or a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party
is the Affected Party, the Affected Party will, as a condition to its right
to designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after
it gives notice under Section 6(b)(i) all its rights and obligations under
this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject to
and conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party's policies in effect at
such time would permit it to enter into transactions with the transferee on
the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1)
or a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) RIGHT TO TERMINATE. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected with
respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a Credit
Event Upon Merger or an Additional Termination Event if there is only one
Affected Party may, by not more than 20 days notice to the other party and
provided that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount, if
any, payable in respect of an Early Termination Date shall be determined
pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in determining
a Market Quotation, the records of the party obtaining such quotation will
be conclusive evidence of the existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event.)
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from an
Event of Default:--
(1) FIRST METHOD AND MARKET QUOTATION. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting
Party the excess, if a positive number, of (A) the sum of the
Settlement Amount (determined by the Non-defaulting Party) in respect
of the Terminated Transactions and the Termination Currency Equivalent
of the Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) FIRST METHOD AND LOSS. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this Agreement.
(3) SECOND METHOD AND MARKET QUOTATION. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the sum
of the Settlement Amount (determined by the
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Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting
Party.
(4) SECOND METHOD AND LOSS. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute value
of that amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from a
Termination Event:--
(1) ONE AFFECTED PARTY. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4),
if Loss applies, except that, in either case, references to the
Defaulting Party and to the Non-defaulting Party will be deemed
to be references to the Affected Party and the party which is not
the Affected Party, respectively, and, if Loss applies and fewer
than all the Transactions are being terminated, Loss shall be
calculated in respect of all Terminated Transactions.
(2) TWO AFFECTED PARTIES. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will determine
a Settlement Amount in respect of the Terminated
Transactions, and an amount will be payable equal to (I) the
sum of (a) one-half of the difference between the Settlement
Amount of the party with the higher Settlement Amount ("X")
and the Settlement Amount of the party with the lower
Settlement Amount ("Y") and (b) the Termination Currency
Equivalent of the Unpaid Amounts owing to X less (II) the
Termination Currency Equivalent of the Unpaid Amounts owing
to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with
the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X;
if it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies
an amount recoverable under this Section 6(e) is a reasonable pre-estimate
of loss and not a penalty. Such amount is payable for the loss of bargain
and the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
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7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency other
than the Contractual Currency, except to the extent such tender results in the
actual receipt by the party to which payment is owed, acting in a reasonable
manner and in good faith in converting the currency so tendered into the
Contractual Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect of this Agreement, the party required to
make the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason the amount in the Contractual
Currency so received exceeds the amount in the Contractual Currency payable in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
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9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts
(including by facsimile transmission), each of which will be deemed an
original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
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to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date
it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form,
it being agreed that the burden of proving receipt will be on the sender
and will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that
electronic message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan
in New York City, if this Agreement is expressed to be governed by the
laws of the State of New York; and
(ii) waives any objection which it may have at any time to the laying
of venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be
governed by English law, the Contracting States, as defined in Section 1(3)
of the Civil Jurisdiction and Judgments Act 1982 or any modification,
extension or re-enactment thereof for the time being in force) nor will the
bringing of Proceedings in any one or more jurisdictions preclude the
bringing of Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
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reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues
and assets (irrespective of their use or intended use), all immunity on the
grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be
entitled in any Proceedings in the courts of any jurisdiction and irrevocably
agrees, to the extent permitted by applicable law, that it will not claim any
such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after
the date on which the relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified
as such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
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"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with
Section 6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed
in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to
such recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of
such jurisdiction, or being or having been organised, present or engaged in a
trade or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding
a connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under,
or enforced, this Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case
of tax matters, by the practice of any relevant governmental revenue
authority) and "LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which
commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) (a) in relation to any obligation
under Section 2(a)(i), in the place(s) specified in the relevant Confirmation
or, if not so specified, as otherwise agreed by the parties in writing or
determined pursuant to provisions contained, or incorporated by reference, in
this Agreement, (b) in relation to any other payment, in the place where the
relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment, (c) in relation to any
notice or other communication, including notice contemplated under Section
5(a)(i), in the city specified in the address for notice provided by the
recipient and, in the case of a notice contemplated by Section 2(b), in the
place where the relevant new account is to be located and (d) in relation to
Section 5(a)(v)(2), in the relevant locations for performance with respect to
such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading
position (or any gain resulting from any of them). Loss includes losses and
costs (or gains) in respect of any payment or delivery required to have been
made (assuming satisfaction of each applicable condition precedent) on or
before the relevant Early Termination Date and not made, except, so as to
avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies.
Loss does not include a party's legal fees and out-of-pocket expenses
referred to under Section 11. A party will determine its Loss as of the
relevant Early Termination Date, or, if that is not reasonably practicable,
as of the earliest date thereafter as is reasonably practicable. A party may
(but need not) determine its Loss by reference to quotations of relevant
rates or prices from one or more leading dealers in the relevant markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an
amount, if any, that would be paid to such party (expressed as a negative
number) or by such party (expressed as a positive number) in consideration of
an agreement between such party (taking into account any existing Credit
Support Document with respect to the obligations of such party) and the
quoting Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions
that would, but for the occurrence of the relevant Early Termination Date, have
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been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation
will be the quotation remaining after disregarding the highest and lowest
quotations. For this purpose, if more than one quotation has the same highest
value or lowest value, then one of such quotations shall be disregarded. If
fewer than three quotations are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or group of Terminated
Transactions cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
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"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
17
<PAGE>
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b)
above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be
the average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
TOYOTA MOTOR CREDIT CORPORATION TOYOTA AUTO LEASE TRUST 1998-C*
................................... ......................................
(Name of Party) (Name of Party)
By: /s/ George E. Borst By: /s/ Steven E. Charles
................................ ...................................
Name: George E. Borst Name: STEVEN E. CHARLES
Title: Senior Vice President and Title: Vice President
General Manager
Date: Date:
* U.S. Bank National Association
as 1998-C Securitization
Trustee
18
<PAGE>
EXECUTION COPY
SCHEDULE
TO THE
MASTER AGREEMENT
DATED AS OF DECEMBER 1, 1998
BETWEEN
TOYOTA MOTOR CREDIT CORPORATION.
("PARTY A")
AND
TOYOTA AUTO LEASE TRUST 1998-C
("PARTY B")
Part 1. Termination Provisions.
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:
Section 5(a)(v), None
Section 5(a)(vi), None
Section 5(a)(vii), None
Section 5(b)(iv), None
and in relation to Party B for the purpose of:
Section 5(a)(v), None
Section 5(a)(vi), None
Section 5(a)(vii), None
Section 5(b)(iv), None
(b) "SPECIFIED TRANSACTION" has the meaning specified in Section 14.
(c) The "BREACH OF AGREEMENT" provisions of Section 5(a)(ii) will not
apply to Party B.
The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will not
apply to Party A or Party B.
The "MISREPRESENTATION" provisions of Section 5(a)(iv) will not apply
to Party B.
The "DEFAULT UNDER THE SPECIFIED TRANSACTION" provisions of Section
5(a)(v) will not apply to Party A and will not apply to Party B.
The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply to
Party A and will not apply to Party B.
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will not
apply to Party A and will not apply to Party B.
(e) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will not
apply to Party A and will not apply to Party B; PROVIDED, HOWEVER,
where an Event of Default specified
<PAGE>
in Sections 5(a)(vii) (1), (3), (4), (5), (6) or, to the extent
analogous thereto, (8), is governed by a system of law which does not
permit termination to take place upon or after the occurrence of the
relevant Event of Default in accordance with the terms of this
Agreement, then the Automatic Early Termination provision of Section
6(a) will apply to Party A and Party B.
If an Early Termination Date occurs under Section 6(a) as a result of
Automatic Early Termination, the Defaulting Party shall fully
indemnify the Non-defaulting Party on demand against all expense,
loss, damage or liability that the Non-defaulting Party may incur in
respect of this Agreement and each Transaction as a consequence of
movements in interest, currency, exchange or other relevant rates or
prices or Market Quotations between the Early Termination Date and the
Local Business Day on which the Non-defaulting Party first becomes
aware that the Early Termination Date has occurred under Section 6(a).
The Non-defaulting Party may for this purpose convert any expense,
loss, damage or liability to the Termination Currency.
(f) PAYMENTS ON EARLY TERMINATION. "Market Quotation" and "Second Method"
will apply for the purpose of Section 6(e) of this Agreement;
PROVIDED, HOWEVER, that in the case of an Event of Default as
described under Section 5(a)(i) or 5(a)(vii) with respect to Party A
as the Defaulting Party, the related Settlement Amount, if negative,
will be deemed to be zero.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) The "TAX EVENT" provisions of Section 5(b)(ii) are hereby amended by
(i) inserting "(I)" after the caption "Tax Event." at the beginning
thereof and (ii) inserting "and (II) at least 51% by Voting Interests
of the Class A Certificateholders (as defined in the Trust Agreement)
and any Adjustable Rate Class B Certificateholders (as defined in the
Trust Agreement) directs the Trustee to terminate this Agreement and
to liquidate the assets of Party B" at the end thereof before the
semicolon.
(i) The "TAX EVENT UPON MERGER" provisions of Section 5(b)(iii) are hereby
amended by (i) inserting "(I)" after the caption "Tax Event Upon
Merger." at the beginning thereof and (ii) inserting "and (II) at
least 51% by Voting Interests of the Class A Certificateholders and
any Adjustable Rate Class B Certificateholders directs the Trustee to
terminate this Agreement and to liquidate the assets of Party B" at
the end thereof before the semicolon.
(j) ADDITIONAL TERMINATION EVENT will apply. Any of the following shall
constitute an Additional Termination Event:
(i) INSOLVENCY OF TRANSFEROR. The Transferor shall file a
petition commencing a voluntary case under any chapter of the
Federal bankruptcy laws; or the Transferor shall file a petition
or answer or consent seeking reorganization, arrangement,
adjustment, or composition under any other similar applicable
Federal law, or shall consent to the filing of any such petition,
answer, or consent; or the Transferor shall appoint, or consent
to the appointment of a custodian,
2
<PAGE>
receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or insolvency of it or of any
substantial part of its property, or shall make any assignment
for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due; or any
order for relief against the Transferor shall have been entered
by a court having jurisdiction in the premises under any chapter
of the Federal bankruptcy laws; or a decree or order by a court
having jurisdiction in the premises shall have been entered
approving as properly filed a petition seeking reorganization,
arrangement, adjustment, or composition of the Transferor under
any other similar applicable Federal Law; or a decree or order of
a court having jurisdiction in the premises for the appointment
of a custodian, receiver, liquidator, trustee, assignee,
sequestrator or other similar official in bankruptcy or
insolvency of the Transferor or of any substantial part of its
property, or for the winding up or liquidation of its affairs,
shall have been entered (in which event Party B shall be the
Affected Party).
(ii) INVESTMENT COMPANY. Party B or the Transferor becomes
subject to registration as an "investment company" for purposes
of the Investment Company Act of 1940, as amended (in which event
Party B shall be the Affected Party).
Part 2. Tax Representations
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this
Agreement, each of Party A and Party B makes the following
representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other
party under this Agreement. In making this representation, it may
rely on (i) the accuracy of any representations made by the other
party pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement of the other party contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the
satisfaction of the agreement of the other party contained in Section
4(d) of this Agreement, PROVIDED that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.
(b) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the representations specified
below:
(A) Party A makes the following representation: It is a
corporation duly organized and incorporated under the laws of the
State of California.
(B) Party B makes the following representation: It is a trust
organized or formed under the laws of the State of California.
Part 3. Agreement to Deliver Documents
3
<PAGE>
For the purpose of Section 4(a) of this Agreement, each party agrees to
deliver the following documents as applicable:
(a) Tax forms, documents or certificates to be delivered are:
<TABLE>
<CAPTION>
PARTY REQUIRED TO DATE BY WHICH TO BE
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DELIVERED
------------------ -------------------------- --------------------
<S> <C> <C>
Party A and Party B Any document required or reasonably Promptly upon the earlier of
requested to allow the other party to (i) reasonable demand by the
make payments under this Agreement other party and (ii) learning
without any deduction or withholding that the form or document is
for or on account of any Tax or with required
such deduction or withholding tax at
a reduced rate
</TABLE>
(b) Other documents to be delivered are:
<TABLE>
<CAPTION>
PARTY REQUIRED TO COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE DELIVERED 3(d) REPRESENTATION
- ------------------ -------------------------- ----------------------------- -------------------
<S> <C> <C> <C>
Party A and Party B Certificate or other documents At or promptly following the Yes
evidencing the authority of the execution of this Agreement,
party entering into this and, if a Confirmation so
Agreement and the persons acting requires it on or before the
on behalf of such party date set forth therein
Party A and Party B Legal Opinions in the form At or promptly following the No
reasonably acceptable to the execution of this Agreement
other party
</TABLE>
Part 4. Miscellaneous
(a) ADDRESSES FOR NOTICES: For the purpose of Section 12(a) of this Agreement:
Address for notices or communications to Party A:
Address: 19001 South Western Avenue
Torrance, California 90509
Attention: Corporate Treasury Manager
Telex No.: 3719707
Facsimile No.: 310-787-6194
Answerback: TMSUSA Z
(For all purposes)
4
<PAGE>
Address for notices or communications to Party B:
Address: Toyota Auto Lease Trust 1998-C
c/o U.S. Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Corporate Trust/Steve Charles
Fax: (312) 228-9401
(For all purposes)
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not Applicable
Party B appoints as its Process Agent: Not Applicable
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. Party A will be the Calculation Agent. All
calculations by the Calculation Agent (the "CA") shall be made in good
faith and through the exercise of the CA's commercially reasonable
judgment.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:
Party A: Not Applicable
Party B: Not Applicable
(g) CREDIT SUPPORT PROVIDER.
Party A: Not Applicable
Party B: Not Applicable
(h) GOVERNING LAW. This Agreement and each Confirmation will be governed
by and construed in accordance with the laws of the State of New York,
without reference to its choice of law doctrine.
(i) WAIVER OF JURY TRIAL. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury
in respect of any proceedings relating to this Agreement.
5
<PAGE>
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
Part 5. Other Provisions
(a) GROSS-UP, LIABILITY. Neither Party A nor Party B will in any
circumstance be required to pay additional amounts in respect of any
Indemnifiable Tax or be under any obligation to pay to the other any
amount in respect of any liability of such other for or on account of
any Tax and, accordingly, Section 2(d)(i)(4) and Section 2(d)(ii) of
this Agreement shall not apply.
(b) EARLY TERMINATION.
(i) Section 6(b)(ii) is hereby amended to read in its entirety as
follows:
TRANSFER TO AVOID TERMINATION EVENT.
(1) If an Illegality under Section 5(b)(i)(1) or a Tax Event or a Tax
Event Upon Merger occurs, if Party A is the Affected Party it will,
and, if Party B is the Affected Party it may request Party A to, as a
condition to its right, if any, to designate an Early Termination Date
under Section 6(b)(iv), use all reasonable efforts (which will not
require Party A to incur a loss, excluding immaterial, incidental
expenses) to transfer within 20 days after it gives notice under
Section 6(b)(i) all its rights and obligations under this Agreement in
respect of the Affected Transactions to another of its Offices so
that such Termination Event ceases to exist.
If Party A is not able to make such a transfer it will give notice to
the other party to that effect within such 20 day period.
Any such transfer under this Section 6(b)(ii)(1) will be subject to
and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with
the transferee on the terms proposed.
(2) No transfer or substitution pursuant to this Section 6(b)(ii)
shall occur unless and until the Trustee has received the written
affirmation of each of Standard & Poor's and Moody's that such
transfer or substitution shall not adversely affect the then-current
ratings of the Certificates (as defined in the Trust Agreement).
(c) Section 6(b)(iii) shall not apply.
(d) Section 6(b)(iv) is hereby amended by (i) deleting (A) the words "a
Credit Event Upon Merger" and (B) the words "or a Tax Event Upon
Merger occurs and the Burdened Party is not the Affected Party," from
clause (2) of said Section 6(b)(iv) and (ii) deleting the words from
and including "either party in the case of" to the end of Section
6(b)(iv) and adding the words "either party in the case of an
Illegality or an Additional Termination Event, or Party B in the case
of a Tax Event or a Tax Event upon Merger may, by not more than 20
days notice to the other party and provided that the relevant
Termination Event is then continuing, designate a day not earlier
than the day such notice is effective
6
<PAGE>
as an Early Termination Date in respect of all Affected
Transactions." at the end of said Section 6(b)(iv).
(e) Any termination payment payable pursuant to Section 6(e) shall be
computed separately for each Transaction hereunder and any amount
owed by either Party A or Party B with respect to the termination of
any such Transaction shall not be netted against any other amounts
due under this Agreement.
(f) Section 7 is hereby amended to read in its entirety as follows:
Except as stated under Section 6(b)(ii) and as provided in this
Section 7, and except for the assignment by way of security in favor
of the Trustee under the Trust Agreement, neither Party A nor Party
B is permitted to assign, novate or transfer as a whole or in part
any of its rights, obligations or interests under this Agreement.
Party A may transfer this Agreement to another party (the
"Transferee"), on ten Business Days' prior written notice, PROVIDED
that (i) such notice shall be accompanied by a guarantee of Party A
of such Transferee's obligations in form and substance reasonably
satisfactory to the Trustee; (ii) Party A delivers an opinion of
independent counsel of recognized standing in form and substance
reasonably satisfactory to the Trustee confirming that as of the
date of such transfer the Transferee will not, as a result of such
transfer, be required to withhold or deduct on account of tax under
this Agreement; (iii) a Termination Event or Event of Default does
not occur under this Agreement as a result of such transfer and (iv)
the Trustee has received written affirmation of Standard & Poor's
and Moody's (or their successors) that such transfer shall not
adversely affect the then-current ratings of the Certificates. In
addition, in the event the long-term debt rating of Party A is
reduced to a level below "Aa3" by Moody's (or its successor) or "AA"
by Standard & Poor's (or its successor) or the short-term debt
rating of Party A is reduced to a level below P-1 by Moody's or A-1+
by Standard Poor's, Party A may assign this Agreement to another
party (or otherwise obtain a replacement swap agreement on
substantially the same terms as this Agreement) and thereby be
released from its obligations under this Agreement, PROVIDED that
(i) such Transferee, by a written instrument, accepts all of the
obligations of Party A under this Agreement to the reasonable
satisfaction of the Trustee, (ii) Party A delivers an opinion of
independent counsel of recognized standing in form and substance
reasonably satisfactory to the Trustee confirming that as of the
date of such transfer the Transferee will not, as a result of such
transfer, be required to withhold or deduct on account of tax under
this Agreement, (iii) a Termination Event or Event of Default does
not occur under this Agreement as a result of such transfer and (iv)
the ratings assigned to the Certificates after such assignment and
release will be at least equal to the ratings assigned by Moody's
and Standard & Poor's (or their successors) to the Certificates at
the time of such reduction of the rating of Party A's long-term
debt. Any cost of such transfer will be borne by Party A or such
Transferee and not by Party B. In addition, in the event that Party
A does not elect to assign this Agreement or obtain a replacement
swap agreement after such a reduction in rating, Party A may (but
shall not be obligated to) establish any other arrangement
satisfactory to Moody's and Standard & Poor's such that the ratings
of the Certificates by the applicable rating agency will not be
withdrawn or reduced.
7
<PAGE>
(g) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding at
the end thereof the following Subparagraphs:
(g) It is entering into this Agreement and any other documentation
relating to this Agreement as principal (and not as agent or in any
other capacity, fiduciary or otherwise).
(h) It is an "eligible swap participant" as defined in 17 C.F.R.
Section 35.1(b)(2) and has entered into this Agreement and each
Transaction in connection with its line of business including
financial intermediation services or the financing of its business.
(i) It hereby acknowledges and agrees that this Agreement and each
Transaction hereunder or thereunder is intended to be a "swap
agreement" as that term is defined in the U.S. Bankruptcy Code (as
amended from time to time) and that the rights granted to each party
under Section 6 include a contractual right to terminate a "swap
agreement" and to offset and net out termination values and payment
amounts in connection therewith.
(h) AMENDMENTS. Section 9(b) of this Agreement is hereby amended to read:
AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing and executed by each
of the parties; PROVIDED, HOWEVER, that all such amendments,
modifications or waivers shall require the written affirmation of
each of Standard & Poor's and Moody's that such amendments,
modifications or waivers shall not adversely affect the then-current
ratings of the Certificates.
(i) CONFIRMATIONS. Each Confirmation supplements, forms part of, and
will be read and construed as one with this Agreement.
(j) ADDITIONAL DEFINITIONS. Terms defined or referred to in the Trust
Agreement shall bear the same respective meanings herein. "Trust
Agreement" shall mean the 1998-C Securitization Trust Agreement,
dated as of December 1, 1998, between Toyota Leasing, Inc. and U.S.
Bank National Association, as trustee.
(k) INTEREST RATE AND CURRENCY EXCHANGES DEFINITIONS. Reference is
hereby made to the 1991 ISDA Definitions (the "Definitions"),
published by the International Swaps and Derivatives Association,
Inc., which are hereby incorporated by reference herein without
regard to any revision or subsequent edition thereof.
(l) PAYMENTS FROM PARTY B. Notwithstanding anything contained in this
Agreement to the contrary, any amount required to be paid by Party B
pursuant to this Agreement will be payable only to the extent and in
accordance with the priority provided in the Trust Agreement.
(m) NO SET-OFF. Without affecting the provisions of this Agreement
requiring the calculation of certain net payment amounts, all
payments under this Agreement will be made without set-off or
counterclaims.
8
<PAGE>
(n) INCONSISTENCY. In the event of an inconsistency among or between
any of the following documents, the relevant document first listed
below shall govern.
(i) Part 5(l) of the Schedule;
(ii) Confirmation;
(iii) Schedule;
(iv) Definitions;
(v) Sections 1 through 14 of this Agreement.
(o) DEFAULT INTEREST; OTHER AMOUNTS. Section 2(e) of this Agreement is
hereby amended by adding the following at the end of the first
sentence thereof:
; PROVIDED, HOWEVER, that this Section 2(e) shall not apply to
either Party A or Party B if its failure to pay is caused solely by
such party becoming required to deduct or withhold on account of any
Tax as set out in Section 2(d)(i).
9
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Schedule by their
duly authorized officers as of December 1, 1998.
TOYOTA MOTOR CREDIT CORPORATION
By: /s/ George E. Borst
-----------------------------------
George E. Borst
Senior Vice President and General
Manager
Date:
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION,
as 1998-C Securitization Trustee
By: /s/ Steven E. Charles
------------------------------------
Name: Steven E. Charles
Title: Vice President
Date:
10
<PAGE>
EXECUTION COPY
Class A-1 Confirmation to the
ISDA Master Agreement
dated as of December 1, 1998
Toyota Auto Lease Trust 1998-C
c/o U.S. Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Re: Transaction Ref. No. 1 between Toyota Motor Credit Corporation
("Party A") and Toyota Auto Lease Trust 1998-C ("Party B")
Dear Sirs:
The purpose of this letter agreement is to confirm the terms and
conditions of the Swap Transaction entered into between you and us on the
Trade Date specified below (the "Transaction"). This letter agreement
constitutes a "Confirmation" as referred to in the ISDA Master Agreement
specified below.
The definitions and provisions contained in the 1991 ISDA Definitions
(as published by the International Swaps and Derivatives Association,
Inc.)(the "Definitions") are incorporated in this Confirmation. In the event of
any inconsistency between those Definitions and this Confirmation, this
Confirmation will govern.
1. This Confirmation supplements, forms part of, and is subject to, the ISDA
Master Agreement, dated as of December 1, 1998, as amended and supplemented
from time to time (the "Agreement"), between you and us. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified below. Expressions used herein and not defined herein or in the
Definitions shall bear the meaning ascribed thereto in the Agreement.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Party A: Toyota Motor Credit Corporation
Party B: Toyota Auto Lease Trust 1998-C
Trade Date: November 19, 1998
Effective Date: December 3, 1998
Termination Date: Class A-1 Targeted Maturity Date (as
defined in the Trust Agreement), subject
to adjustment in accordance with the
Following Business Day Convention;
provided, however, that if the
Termination Date is extended in
accordance with the provisions of
paragraph 4 hereof,
<PAGE>
"Termination Date" shall have the
meaning given to such term in
paragraph 4.
Party A Floating Amounts:
Party A Floating Rate
Payer: Party A
Party A Floating Rate
Payer Notional Amount: The Class A-1 Certificate Balance (as
defined in the Trust Agreement) on the
last day of the applicable Calculation
Period.
Party A Floating Rate Payer
Period End Dates: Each March 25, June 25, September 25
and December 25, commencing on March 25,
1999, up to and including the Termination
Date, subject to adjustment in accordance
with the Following Business Day
Convention.
Party A Floating Rate Payer
Payment Dates: Each March 25, June 25, September 25
and December 25, commencing on March 25,
1999, up to and including the Termination
Date, subject to adjustment in
accordance with the Following Business
Day Convention.
Party A Floating Rate Option: USD-LIBOR-BBA.
Designated Maturity: 3 months, with the exception of the
initial Calculation Period, in which case
the Designated Maturity shall be the
linear interpolation of four and three
months.
Spread: Plus .23%
Party A Floating Rate
for the initial
Calculation Period: 5.243258% (excluding the Spread)
Party A Floating Rate
Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation
Period.
Compounding: Inapplicable.
2
<PAGE>
Party B Fixed Amounts:
Party B Fixed Rate Payer: Party B
Party B Fixed Rate Payer
Notional Amount: The Class A-1 Certificate Balance on
the last day of the applicable
Calculation Period.
Party B Fixed Rate Payer
Period End Dates: Each March 25, June 25, September 25
and December 25, commencing on March 25,
1999, up to and including the
Termination Date, with no adjustment,
with the exception of the Termination
Date, which shall be subject to
adjustment in accordance with the
Following Business Day Convention.
Party B Fixed Rate Payer
Payment Dates: Each March 25, June 25, September 25
and December 25, commencing on March
25, 1999, up to and including the
Termination Date, subject to adjustment
in accordance with the Following
Business Day Convention.
Party B Fixed Rate: 5.265%
Party B Fixed Rate
Day Count Fraction: 30/360
Business Days: "Business Day" as defined in the Trust
Agreement
Calculation Agent: Party A
3. Details of Variation to Agreement:
Taxation: If, as a result of the occurrence of any of the events described in
Section 5(b)(ii) or 5(b)(iii) of the Agreement, on any Party B Fixed Rate
Payer Payment Date Party A receives a payment from Party B from which an
amount has been deducted or withheld for or on account of a Tax, the payment
obligations of Party B hereunder with respect to such Payment Date shall be
reduced by the amount of any taxes so deducted or withheld and Party A's
payment obligations with respect to such Payment Date shall be reduced in
proportion to the amount by which Party B's payment obligations are so
reduced. If, as a result of the occurrence of any of the events described in
Section 5(b)(ii) or 5(b)(iii) of the Agreement, on any Party A Floating Rate
Payer Payment Date Party B receives a payment from Party A from which an
amount has been deducted or withheld for or on account of a Tax, the payment
obligations of Party A hereunder
3
<PAGE>
with respect to such Payment Date shall be reduced by the amount of any taxes
so deducted or withheld and the payment obligations of Party B with respect
to such Payment Date shall remain the same.
Interest Deferral: If on any Party B Fixed Rate Payer Payment Date, the
amount allocated under the Trust Agreement and paid by Party B to Party A is
less than the Party B Fixed Amount due on such date (the amount of any such
insufficiency, the "Swap Interest Shortfall Amount"), the obligation of
Party A to pay Party A Floating Amounts on the corresponding Party A Floating
Rate Payer Payment Date will be reduced in the same proportion as the
proportion that such Swap Interest Shortfall Amount represents of the Party B
Fixed Amount otherwise due on such date. If on a subsequent Party B Fixed
Rate Payer Payment Date, amounts are available and are paid by Party B to
Party A pursuant to the Trust Agreement to reimburse all or any part of such
Swap Interest Shortfall Amount, then the obligation of Party A to pay Party A
Floating Amounts on the corresponding Party A Floating Rate Payer Payment
Date will be increased in the same proportion as the proportion that the
amount of such reimbursement represents of the Party B Fixed Amount otherwise
due on such date. If a Swap Interest Shortfall Amount shall exist on any
Early Termination Date, for purposes or computing the Market Quotation, the
aggregate amount of all outstanding Swap Interest Shortfall Amounts shall be
due on the first Party B Fixed Rate Payer Payment Date following the Early
Termination Date and the amount due from Party A on the first Party A
Floating Rate Payer Payment Date following the Early Termination Date will be
increased in the same proportion as the proportion that the amount of such
outstanding Swap Interest Shortfall Amounts represents of the Party B Fixed
Amount that would otherwise be due on such date.
Extension: If on the Termination Date, the Class A-1 Certificate Balance has
not been reduced to zero, the Termination Date shall be extended to the
Extension Period End Date, being the earlier of (i) the Party A Floating Rate
Payer Payment Date (as defined in Section 4 below) on which the Class A-1
Certificate Balance is reduced to zero and (ii) the Stated Maturity Date (as
defined in the Trust Agreement) for the Class A-1 Certificates, subject to
adjustment in accordance with the Following Business Day Convention. The
period from the Class A-1 Targeted Maturity Date to the Extension Period End
Date is referred to herein as the "Extension Period".
4. During the Extension Period, instead of the Party B Fixed Amounts and
the Party A Floating Amounts described above in Section 2, the following
provisions will be applicable:
Party A Floating Amount
Floating Rate Payer: Party A
Party A Floating Rate
Payer Notional Amount: The Class A-1 Certificate
Balance on the last day of the
applicable Calculation Period.
Initial Extension Period
Calculation Period: Commencing on the Class A-1
Targeted Maturity Date.
4
<PAGE>
Party A Floating Rate Payer
Period End Dates: The 25th day of each month
commencing January 25, 2001,
subject to adjustment in
accordance with the Following
Business Day Convention.
Party A Floating Rate Payer
Payment Dates: The 25th day of each month
commencing January 25, 2001,
subject to adjustment in
accordance with the Following
Business Day Convention.
Party A Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Spread: Plus 0.26%
Floating Rate
Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation
Period.
Compounding: Inapplicable.
Party B Fixed Amount
Fixed Rate Payer: Payer B
Party B Fixed Rate
Payer Notional Amount: The Class A-1 Certificate
Balance on the last day of the
Calculation Period.
Initial Extension Period
Calculation Period: Commencing on the Class A-1
Targeted Maturity Date.
Party B Fixed Rate
Payer Period End Dates: (i) the 25th day of each month,
with no adjustment and (ii) the
Extension Period End Date, which
shall be subject to adjustment
in accordance with the Following
Business Day Convention.
Party B Fixed Rate
5
<PAGE>
Payer Payment Dates: The 25th day of each month,
subject to adjustment in
accordance with the Following
Business Day Convention, and the
Extension Period End Date,
subject to adjustment in
accordance with the Following
Business Day Convention.
Party B Fixed Rate: 5.265%
Fixed Rate
Day Count Fraction: 30/360
Reset Dates: First day of each Calculation
Period.
5. Account Details
Payments to Party A:
Account for Payments in USD: Bank of America, Concord,
California
ABA No. 121-000-358
A/C No. 12351-07564
A/C Toyota Motor Credit
Corporation
Payments to Party B:
Account for Payments in USD: U.S. Bank National Association
ABA # 091000022
180121167365
47300121
Acct# 77085461
6. Party A Documentation and Operations Officers
Documentation: Delores Doll
Phone: 310-787-6191
Fax: 310-787-5715
Operations: Delores Doll
Phone: 310-787-6191
Fax: 310-787-5715
7. Relationship between Parties:
Each party will be deemed to represent to the other party on the date
on which it enters into the Agreement that (absent a written agreement
between the parties that expressly imposes affirmative obligations to the
contrary):
6
<PAGE>
NON-RELIANCE. It is acting for its own account, and it has made its
own independent decisions to enter into the Agreement and as to
whether the Agreement is appropriate or proper for it based upon its
own judgment and upon advice from such advisers as it has deemed
necessary. It is not relying on any communication (written or oral)
of the other party as investment advice or as a recommendation to
enter into the Agreement; it being understood that information and
explanations related to the terms and conditions of the Agreement
shall not be considered investment advice or a recommendation to
enter into the Agreement. No communication (written or oral)
received from the other party shall be deemed to be an assurance or
guarantee as to the expected results of the Agreement.
ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits
of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of the Agreement. It is also capable of
assuming, and assumes, the risks of the Agreement.
STATUS OF PARTIES. The other party is not acting as a fiduciary for
or as adviser to it in respect of the Agreement.
8. Governing Law: New York
7
<PAGE>
Please confirm that the foregoing correctly sets forth the terms of
our agreement by executing the copy of this Class A-1 Confirmation enclosed
for that purpose and returning it to us.
TOYOTA MOTOR CREDIT CORPORATION
By: /s/ George E. Borst
------------------------------------
George E. Borst
Senior Vice President
and General Manager
Confirmed as of the date first written:
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION,
as 1998-C Securitization Trustee
By: /s/ Steven E. Charles
------------------------------------
Name: Steven E. Charles
Title: Vice President
<PAGE>
EXECUTION COPY
Class A-2 Confirmation to the
ISDA Master Agreement
dated as of December 1, 1998
Toyota Auto Lease Trust 1998-C
c/o U.S. Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Re: Transaction Ref. No. 2 between Toyota Motor Credit Corporation ("Party
A") and Toyota Auto Lease Trust 1998-C ("Party B")
Dear Sirs:
The purpose of this letter agreement is to confirm the terms and
conditions of the Swap Transaction entered into between you and us on the Trade
Date specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA Definitions
(as published by the International Swaps and Derivations Association, Inc.)(the
"Definitions") are incorporated in this Confirmation. In the event of any
inconsistency between those Definitions and this Confirmation, this Confirmation
will govern.
1. This Confirmation supplements, forms part of, and is subject to, the ISDA
Master Agreement, dated as of December 1, 1998, as amended and supplemented
from time to time (the "Agreement"), between you and us. All provisions
contained in the Agreement govern this Confirmation except as expressly modified
below. Expressions used herein and not defined herein or in the Definitions
shall bear the meaning ascribed thereto in the Agreement.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Party A: Toyota Motor Credit Corporation
Party B: Toyota Auto Lease Trust 1998-C
Trade Date: November 19, 1998
Effective Date: December 3, 1998
Termination Date: Class A-2 Targeted Maturity Date (as
defined in the Trust Agreement), subject
to adjustment in accordance with the
Following Business Day Convention;
provided, however, that if the
Termination Date is extended in
accordance with the provisions of
paragraph 4 hereof,
<PAGE>
"Termination Date" shall have the
meaning given to such term in paragraph
4.
Party A Floating Amounts:
Party A Floating Rate
Payer: Party A
Party A Floating Rate
Payer Notional Amount: The Class A-2 Certificate Balance (as
defined in the Trust Agreement) on the
last day of the applicable Calculation
Period.
Party A Floating Rate Payer
Period End Dates: Each March 25, June 25, September 25 and
December 25, commencing on March 25,
1999, up to and including the
Termination Date, subject to adjustment
in accordance with the Following
Business Day Convention.
Party A Floating Rate Payer
Payment Dates: Each March 25, June 25, September 25 and
December 25, commencing on March 25,
1999, up to and including the
Termination Date, subject to adjustment
in accordance with the Following
Business Day Convention.
Party A Floating Rate Option: USD-LIBOR-BBA.
Designated Maturity: 3 months, with the exception of the
initial Calculation Period, in which
case the Designated Maturity shall be
the linear interpolation of four and
three months.
Spread: Plus 0.27%
Party A Floating Rate
for the initial
Calculation Period: 5.243258% (excluding the Spread)
Party A Floating Rate
Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation
Period.
Compounding: Inapplicable.
2
<PAGE>
Party B Fixed Amounts:
Party B Fixed Rate Payer: Party B
Party B Fixed Rate Payer
Notional Amount: The Class A-2 Certificate Balance on the
last day of the applicable Calculation
Period.
Party B Fixed Rate Payer
Period End Dates: Each March 25, June 25, September 25 and
December 25, commencing on March 25,
1999, up to and including the
Termination Date, with no adjustment,
with the Exception of the Termination
Date, which shall be subject to
adjustment in accordance with the
Following Business Day Convention.
Party B Fixed Rate Payer
Payment Dates: Each March 25, June 25, September 25 and
December 25, commencing on March 25,
1999, up to and including the
Termination Date, subject to adjustment
in accordance with the Following
Business Day Convention.
Party B Fixed Rate: 5.413%
Party B Fixed Rate
Day Count Fraction: 30/360
Business Days: "Business Day" as defined in the Trust
Agreement
Calculation Agent: Party A
3. Details of Variation to Agreement:
Taxation: If, as a result of the occurrence of any of the events described in
Section 5(b)(ii) or 5(b)(iii) of the Agreement, on any Party B Fixed Rate Payer
Payment Date Party A receives a payment from Party B from which an amount has
been deducted or withheld for or on account of a Tax, the payment obligations of
Party B hereunder with respect to such Payment Date shall be reduced by the
amount of any taxes so deducted or withheld and Party A's payment obligations
with respect to such Payment Date shall be reduced in proportion to the amount
by which Party B's payment obligations are so reduced. If, as a result of the
occurrence of any of the events described in Section 5(b)(ii) or 5(b)(iii) of
the Agreement, on any Party A Floating Rate Payer Payment Date Party B receives
a payment from Party A from which an amount has been deducted or withheld for or
on account of a Tax, the payment obligations of Party A hereunder
3
<PAGE>
with respect to such Payment Date shall be reduced by the amount of any taxes
so deducted or withheld and the payment obligations of Party B with respect
to such Payment Date shall remain the same.
Interest Deferral: If on any Party B Fixed Rate Payer Payment Date, the
amount allocated under the Trust Agreement and paid by Party B to Party A is
less than the Party B Fixed Amount due on such date (the amount of any such
insufficiency, the "Swap Interest Shortfall Amount"), the obligation of
Party A to pay Party A Floating Amounts on the corresponding Party A Floating
Rate Payer Payment Date will be reduced in the same proportion as the
proportion that such Swap Interest Shortfall Amount represents of the Party B
Fixed Amount otherwise due on such date. If on a subsequent Party B Fixed
Rate Payer Payment Date, amounts are available and are paid by Party B to
Party A pursuant to the Trust Agreement to reimburse all or any part of such
Swap Interest Shortfall Amount, then the obligation of Party A to pay Party A
Floating Amounts on the corresponding Party A Floating Rate Payer Payment
Date will be increased in the same proportion as the proportion that the
amount of such reimbursement represents of the Party B Fixed Amount otherwise
due on such date. If a Swap Interest Shortfall Amount shall exist on any
Early Termination Date, for purposes of computing the Market Quotation, the
aggregate amount of all outstanding Swap Interest Shortfall Amounts shall be
due on the first Party B Fixed Rate Payer Payment Date following the Early
Termination Date and the amount due from Party A on the first Party A
Floating Rate Payer Payment Date following the Early Termination Date will be
increased in the same proportion as the proportion that the amount of such
outstanding Swap Interest Shortfall Amounts represents of the Party B Fixed
Amount that would otherwise be due on such date.
Extension: If on the Termination Date, the Class A-2 Certificate Balance has
not been reduced to zero, the Termination Date shall be extended to the
Extension Period End Date, being the earlier of (i) the Party A Floating Rate
Payer Payment Date (as defined in Section 4 below) on which the Class A-2
Certificate Balance is reduced to zero and (ii) the Stated Maturity Date (as
defined in the Trust Agreement) for the Class A-2 Certificates, subject to
adjustment in accordance with the Following Business Day Convention. The
period from the Class A-2 Targeted Maturity Date to the Extension Period End
Date is referred to herein as the "Extension Period".
4. During the Extension Period, instead of the Party B Fixed Amounts and
the Party A Floating Amounts described above in Section 2, the following
provisions will be applicable:
Party A Floating Amount
Floating Rate Payer: Party A
Party A Floating Rate
Payer Notional Amount: The Class A-2 Certificate
Balance on the last day of the
applicable Calculation Period.
Initial Extension Period
Calculation Period: Commencing on the Class A-2
Targeted Maturity Date.
4
<PAGE>
Party A Floating Rate Payer
Period End Dates: The 25th day of each month
commencing January 25, 2002,
subject to adjustment in
accordance with the Following
Business Day Convention.
Party A Floating Rate Payer
Payment Dates: The 25th day of each month
commencing January 25, 2002,
subject to adjustment in
accordance with the Following
Business Day Convention.
Party A Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Spread: Plus 0.30%
Floating Rate
Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation
Period.
Compounding: Inapplicable.
Party B Fixed Amount
Fixed Rate Payer: Party B
Party B Fixed Rate
Payer Notional Amount: The Class A-2 Certificate
Balance on the last day of the
Calculation Period.
Initial Extension Period
Calculation Period: Commencing on the Class A-2
Targeted Maturity Date.
Party B Fixed Rate
Payer Period End Dates: (i) The 25th day of each month,
with no adjustment and (ii) the
Extension Period End Date, which
shall be subject to adjustment
in accordance with the Following
Business Day Convention.
Party B Fixed Rate
5
<PAGE>
Payer Payment Dates: The 25th day of each month,
subject to adjustment in
accordance with the Following
Business Day Convention, and the
Extension Period End Date,
subject to adjustment in
accordance with the Following
Business Day Convention.
Party B Fixed Rate: 5.413%
Fixed Rate
Day Count Fraction: 30/360
Reset Dates: First day of each Calculation
Period.
5. Account Details
Payments to Party A:
Account for Payments in USD: Bank of America, Concord,
California
ABA No. 121-000-358
A/C No. 12351-07564
A/C Toyota Motor Credit
Corporation
Payments to Party B:
Account for Payments in USD: U.S. Bank National Association
ABA # 091000022
180121167365
47300121
Acct# 77085461
6. Party A Documentation and Operations Officers
Documentation: Delores Doll
Phone: 310-787-6191
Fax: 310-787-5715
Operations: Delores Doll
Phone: 310-787-6191
Fax: 310-787-5715
7. Relationship between Parties:
Each party will be deemed to represent to the other party on the date
on which it enters into the Agreement that (absent a written agreement
between the parties that expressly imposes affirmative obligations to the
contrary):
6
<PAGE>
NON-RELIANCE. It is acting for its own account, and it has made its own
independent decisions to enter into the Agreement and as to whether the
Agreement is appropriate or proper for it based upon its own judgement and
upon advice from such advisers as it has deemed necessary. It is not
relying on any communication (written or oral) of the other party as
investment advice or as a recommendation to enter into the Agreement; it
being understood that information and explanations related to the terms and
conditions of the Agreement shall not be considered investment advice or a
recommendation to enter into the Agreement. No communication (written or
oral) received from the other party shall be deemed to be an assurance or
guarantee as to the expected results of the Agreement.
ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks of
the Agreement. It is also capable of assuming, and assumes, the risks of
the Agreement.
STATUS OF PARTIES. The other party is not acting as a fiduciary for or as
adviser to it in respect of the Agreement.
8. Governing Law: New York
7
<PAGE>
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Class A-2 Confirmation enclosed for that
purpose and returning it to us.
TOYOTA MOTOR CREDIT CORPORATION
By: /s/ George E. Borst
-----------------------------
George E. Borst
Senior Vice President
and General Manager
Confirmed as of the date first written:
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION,
as 1998-C Securitization Trustee
By: /s/ Steven E. Charles
-----------------------------
Name: Steven E. Charles
Title: Vice President
<PAGE>
EXECUTION COPY
Class A-3 Confirmation to the
ISDA Master Agreement
dated as of December 1, 1998
Toyota Auto Lease Trust 1998-C
c/o U.S. Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Re: Transaction Ref. No. 3 between Toyota Motor Credit Corporation ("Party A")
and Toyota Auto Lease Trust 1998-C ("Party B")
Dear Sirs:
The purpose of this letter agreement is to confirm the terms and conditions
of the Swap Transaction entered into between you and us on the Trade Date
specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.) (the
"Definitions") are incorporated in this Confirmation. In the event of any
inconsistency between those Definitions and this Confirmation, this Confirmation
will govern.
1. This Confirmation supplements, forms part of, and is subject to , the ISDA
Master Agreement, dated as of December 1, 1998, as amended and supplemented from
time to time (the "Agreement"), between you and us. All provisions contained in
the Agreement govern this Confirmation except as expressly modified below.
Expressions used herein and not defined herein or in the Definitions shall bear
the meaning ascribed thereto in the Agreement.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Party A: Toyota Motor Credit Corporation
Party B: Toyota Auto Lease Trust 1998-C
Trade Date: November 19, 1998
Effective Date: December 3, 1998
Termination Date: Class A-3 Targeted Maturity Date
(as defined in the Trust
Agreement), subject to adjustment
in accordance with the Following
Business Day Convention; provided,
however, that if the Termination
Date is extended in accordance with
the provisions of paragraph 4
hereof,
<PAGE>
"Termination Date" shall have the
meaning given to such term in
paragraph 4.
Party A Floating Amounts:
Party A Floating Rate
Payer: Party A
Party A Floating Rate
Payer Notional Amount: The Class A-3 Certificate Balance
(as defined in the Trust Agreement)
on the last day of the applicable
Calculation Period.
Party A Floating Rate Payer
Period End Dates: Each March 25, June 25, September
25 and December 25, commencing on
March 25, 1999, up to and including
the Termination Date, subject to
adjustment in accordance with the
Following Business Day Convention.
Party A Floating Rate Payer
Payment Dates: Each March 25, June 25, September
25 and December 25, commencing on
March 25, 1999, up to and including
the Termination Date, subject to
adjustment in accordance with the
Following Business Day Convention.
Party A Floating Rate Option: USD-LIBOR-BBA.
Designated Maturity: 3 months, with the exception of the
initial Calculation Period, in
which case the Designated Maturity
shall be the linear interpolation
of four and three months.
Spread: Plus 0.32%
Party A Floating Rate
for the initial
Calculation Period: 5.243258% (excluding the Spread)
Party A Floating Rate
Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation
Period.
Compounding: Inapplicable.
2
<PAGE>
Party B Fixed Amounts:
Party B Fixed Rate Payer: Party B
Party B Fixed Rate Payer
Notional Amount: The Class A-3 Certificate Balance
on the last day of the applicable
Calculation Period.
Party B Fixed Rate Payer
Period End Dates: Each March 25, June 25, September
25 and December 25, commencing on
March 25, 1999, up to and including
the Termination Date, with no
adjustment, with the exception of
the Termination Date, which shall
be subject to adjustment in
accordance with the Following
Business Day Convention.
Party B Fixed Rate Payer
Payment Dates: Each March 25, June 25, September 25 and
December 25, commencing on March 25,
1999, up to and including the
Termination Date, subject to adjustment
in accordance with the Following
Business Day Convention.
Party B Fixed Rate: 5.463%
Party B Fixed Rate
Day Count Fraction: 30/360
Business Days: "Business Day" as defined in the
Trust Agreement
Calculation Agent: Party A
3. Details of Variation to Agreement:
Taxation: If, as a result of the occurrence of any of the events described in
Section 5(b)(ii)or 5(b)(iii) of the Agreement, on any Party B Fixed Rate Payer
Payment Date Party A receives a payment from Party B from which an amount had
been deducted or withheld for or on account of a Tax, the payment obligations of
Party B hereunder with respect to such Payment Date shall be reduced by the
amount of any taxes so deducted or withheld and Party A's payment obligations
with respect to such Payment Date shall be reduced in proportion to the amount
by which Party B's payment obligations are so reduced. If, as a result of the
occurrence of any of the events described in Section 5(b)(ii) or 5(b)(iii) of
the Agreement, on any Party A Floating Rate Payer Payment Date Party B receives
a payment from Party A from which an amount has been deducted or withheld for or
on account of a Tax, the payment obligations of Party A hereunder
3
<PAGE>
with respect to such Payment Date shall be reduced by the amount of any taxes so
deducted or withheld and the payment obligations of Party B with respect to such
Payment Date shall remain the same.
Interest Deferral: If on any Party B Fixed Rate Payer Payment Date, the amount
allocated under the Trust Agreement and paid by Party B to Party A is less than
the Party B Fixed Amount due on such date (the amount of any such insufficiency,
the "Swap Interest Shortfall Amount"), the obligation of Party A to pay Party A
Floating Amounts on the corresponding Party A Floating Rate Payer Payment Date
will be reduced in the same proportion as the proportion that such Swap Interest
Shortfall Amount represents of the Party B Fixed Amount otherwise due on such
date. If on a subsequent Party B Fixed Rate Payer Payment Date, amounts are
available and are paid by Party B to Party A pursuant to the Trust Agreement to
reimburse all or any part of such Swap Interest Shortfall Amount then the
obligation of Party A to pay Party A Floating Amounts on the corresponding Party
A Floating Rate Payer Payment Date will be increased in the same proportion as
the proportion that the amount of such reimbursement represents of the Party B
Fixed Amount otherwise due on such date. If a Swap Interest Shortfall Amount
shall exist on any Early Termination Date, for purposes of computing the Market
Quotation, the aggregate amount of all outstanding Swap Interest Shortfall
Amounts shall be due on the first Party B Fixed Rate Payer Payment Date
following the Early Termination Date and the amount due from Party A on the
first Party A Floating Rate Payer Payment Date following the Early Termination
Date will be increased in the same proportion as the proportion that the amount
of such outstanding Swap Interest Shortfall Amounts represents of the Party B
Fixed Amount that would otherwise be due on such date.
Extension: If on the Termination Date, the Class A-3 Certificate Balance has
not been reduced to zero, the Termination Date shall be extended to the
Extension Period End Date, being the earlier of (i) the Party A Floating Rate
Payer Payment Date (as defined in Section 4 below) on which the Class A-3
Certificate Balance is reduced to zero and (ii) the Stated Maturity Date (as
defined in the Trust Agreement) for the Class A-3 Certificates, subject to
adjustment in accordance with the Following Business Day Convention. The period
from the Class A-3 Targeted Maturity Date to the Extension Period End Date is
referred to herein as the "Extension Period".
4. During the Extension Period, instead of the Party B Fixed Amounts and the
Party A Floating Amounts described above in Section 2, the following provisions
will be applicable:
Party A Floating Amount
Floating Rate Payer: Party A
Party A Floating Rate
Payer Notional Amount: The Class A-3 Certificate
Balance on the last day of the
applicable Calculation Period.
Initial Extension Period
Calculation Period: Commencing on the Class A-3
Targeted Maturity Date.
4
<PAGE>
Party A Floating Rate Payer
Period End Dates: The 25th day of each month
commencing April 25, 2002,
subject to adjustment in
accordance with the Following
Business Day Convention.
Party A Floating Rate Payer
Payment Dates: The 25th day of each month
commencing April 25, 2002,
subject to adjustment in
accordance with the Following
Business Day Convention.
Party A Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Spread: Plus 0.35%
Floating Rate
Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation
Period.
Compounding: Inapplicable.
Party B Fixed Amount
Fixed Rate Payer: Party B
Party B Fixed Rate
Payer Notional Amount: The Class A-3 Certificate
Balance on the last day of the
Calculation Period.
Initial Extension Period
Calculation Period: Commencing on the Class A-3
Targeted Maturity Date.
Party B Fixed Rate
Payer Period End Dates: (i) The 25th day of each month, with
no adjustment and (ii) the Extension
Period End Date, which shall be subject
to adjustment in accordance with the
Following Business Day Convention.
Party B Fixed Rate
5
<PAGE>
Payer Payment Dates: The 25th day of each month,
subject to adjustment in
accordance with the Following
Business Day Convention, and
the Extension Period End Date,
subject to adjustment in
accordance with the Following
Business Day Convention.
Party B Fixed Rate: 5.463%
Fixed Rate
Day Count Fraction: 30/360
Reset Dates: First day of each Calculation
Period.
5. Account Details
Payments to Party A:
Account for Payments in USD: Bank of America, Concord,
California
ABA No. 121-000-358
A/C No. 12351-07564
A/C Toyota Motor Credit
Corporation
Payments to Party B:
Accounts for Payments in USD: U.S. Bank National Association
ABA #091000022
180121167365
47300121
Acct# 77085461
6. Party A Documentation and Operations Officers
Documentation: Delores Doll
Phone: 310-787-6191
Fax: 310-787-5715
Operations: Delores Doll
Phone: 310-787-6191
Fax: 310-787-5715
7. Relationship between Parties:
Each party will be deemed to represent to the other party on the date on
which it enters into the Agreement that (absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary):
6
<PAGE>
NON-RELIANCE. It is acting for its own account, and it has made its
own independent decisions to enter into the Agreement and as to
whether the Agreement is appropriate or proper for it based upon its
own judgment and upon advice from such advisers as it has deemed
necessary. It is not relying on any communication (written or oral)
of the other party as investment advice or as a recommendation to
enter into the Agreement; it being understood that information and
explanations related to the terms and conditions of the Agreement
shall not be considered investment advice or a recommendation to enter
into the Agreement. No communication (written or oral) received from
the other party shall be deemed to be an assurance or guarantee as to
the expected results of the Agreement.
ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits of
and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of the Agreement. It is also capable of assuming,
and assumes, the risks of the Agreement.
STATUS OF PARTIES. The other party is not acting as a fiduciary for or
as adviser to it in respect of the Agreement.
8. Governing Law: New York
7
<PAGE>
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Class A-3 Confirmation enclosed for
that purpose and returning it to us.
TOYOTA MOTOR CREDIT CORPORATION
By: /s/ George E. Borst
------------------------------------
George E. Borst
Senior Vice President
and General Manager
Confirmed as of the date first written:
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION,
as 1998-C Securitization Trustee
By: /s/ Steven E. Charles
------------------------------------
Name: Steven E. Charles
Title: Vice President
<PAGE>
EXECUTION COPY
Class B Confirmation to the
ISDA Master Agreement
dated as of December 1, 1998
Toyota Auto Lease Trust 1998-C
c/o U.S. Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Re: Transaction Ref. No. 4 between Toyota Motor Credit Corporation
("Party A") and Toyota Auto Lease Trust 1998-C ("Party B")
Dear Sirs:
The purpose of this letter agreement is to confirm the terms and
conditions of the Swap Transaction entered into between you and us on the
Trade Date specified below (the "Transaction"). This letter agreement
constitutes a "Confirmation" as referred to in the ISDA Master Agreement
specified below.
The definitions and provisions contained in the 1991 ISDA
Definitions (as published by the International Swaps and Derivatives
Association, Inc.)(the "Definitions") are incorporated in this Confirmation.
In the event of any inconsistency between those Definitions and this
Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms part of, and is subject to, the ISDA
Master Agreement, dated as of December 1, 1998, as amended and supplemented
from time to time (the "Agreement"), between you and us. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified below. Expressions used herein and not defined herein or in the
Definitions shall bear the meaning ascribed thereto in the Agreement.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Party A: Toyota Motor Credit Corporation
Party B: Toyota Auto Lease Trust 1998-C
Trade Date: November 19, 1998
Effective Date: December 3, 1998
Termination Date: Class B Targeted Maturity Date (as
defined in the Trust Agreement), subject
to adjustment in accordance with the
Following Business Day Convention;
provided, however, that if the
Termination Date is extended in
accordance with the provisions of
paragraph 4 hereof,
<PAGE>
"Termination Date" shall have the
meaning given to such term in
paragraph 4.
Party A Floating Amounts:
Party A Floating Rate
Payer: Party A
Party A Floating Rate
Payer Notional Amount: The Class B Certificate Balance (as
defined in the Trust Agreement) on the
last day of the applicable Calculation
Period.
Party A Floating Rate Payer
Period End Dates: Each March 25, June 25, September 25
and December 25, commencing on March 25,
1999, up to and including the Termination
Date, subject to adjustment in accordance
with the Following Business Day
Convention.
Party A Floating Rate Payer
Payment Dates: Each March 25, June 25, September 25
and December 25, commencing on March 25,
1999, up to and including the Termination
Date, subject to adjustment in accordance
with the Following Business Day
Convention.
Party A Floating Rate
Option: USD-LIBOR-BBA.
Designated Maturity: 3 months, with the exception of the
initial Calculation Period, in which case
the Designated Maturity shall be the
linear interpolation of four and three
months.
Spread: Plus 2.00%
Party A Floating Rate
for the initial
Calculation Period: 5.243258% (excluding the Spread)
Party A Floating Rate
Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation
Period.
Compounding: Inapplicable.
2
<PAGE>
Party B Fixed Amounts:
Party B Fixed Rate Payer: Party B
Party B Fixed Rate Payer
Notional Amount: The Class B Certificate Balance on the
last day of the applicable Calculation
Period.
Party B Fixed Rate Payer
Period End Dates: Each March 25, June 25, September 25
and December 25, commencing on March 25,
1999, up to and including the Termination
Date, with no adjustment, with the
exception of the Termination Date, which
shall be subject to adjustment in
accordance with the Following Business
Day Convention.
Party B Fixed Rate Payer
Payment Dates: Each March 25, June 25, September 25
and December 25, commencing on March 25,
1999, up to and including the Termination
Date, subject to adjustment in
accordance with the Following Business
Day Convention.
Party B Fixed Rate: 6.959%
Party B Fixed Rate
Day Count Fraction: 30/360
Business Days: "Business Day" as defined in the Trust
Agreement
Calculation Agent: Party A
3. Details of Variation to Agreement:
Taxation: If, as a result of the occurrence of any of the events described in
Section 5(b)(ii) or 5(b)(iii) of the Agreement, on any Party B Fixed Rate
Payer Payment Date Party A receives a payment from Party B from which an
amount has been deducted or withheld for or on account of a Tax, the payment
obligations of Party B hereunder with respect to such Payment Date shall be
reduced by the amount of any taxes so deducted or withheld and Party A's
payment obligations with respect to such Payment Date shall be reduced in
proportion to the amount by which Party B's payment obligations are so reduced.
If, as a result of the occurrence of any of the events described in Section
5(b)(ii) or 5(b)(iii) of the Agreement, on any Party A Floating Rate Payer
Payment Date Party B receives a payment from Party A from which an amount has
been deducted or withheld for or on account of a Tax, the payment obligations
of Party A hereunder
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<PAGE>
with respect to such Payment Date shall be reduced by the amount of any taxes
so deducted or withheld and the payment obligations of Party B with respect to
such Payment Date shall remain the same.
Interest Deferral: If on any Party B Fixed Rate Payer Payment Date, the
amount allocated under the Trust Agreement and paid by Party B to Party A is
less than the Party B Fixed Amount due on such date (the amount of any such
insufficiency, the "Swap Interest Shortfall Amount"), the obligation of Party
A to pay Party A Floating Amounts on the corresponding Party A Floating Rate
Payer Payment Date will be reduced in the same proportion as the proportion
that such Swap Interest Shortfall Amount represents of the Party B Fixed
Amount otherwise due on such date. If on a subsequent Party B Fixed Rate
Payer Payment Date, amounts are available and are paid by Party B to Party A
pursuant to the Trust Agreement to reimburse all or any part of such Swap
Interest Shortfall Amount, then the obligation of Party A to pay Party A
Floating Amounts on the corresponding Party A Floating Rate Payer Payment
Date will be increased in the same proportion as the proportion that the
amount of such reimbursement represents of the Party B Fixed Amount otherwise
due on such date. If a Swap Interest Shortfall Amount shall exist on any
Early Termination Date, for purposes of computing the Market Quotation, the
aggregate amount of all outstanding Swap Interest Shortfall Amounts shall be
due on the first Party B Fixed Rate Payer Payment Date following the Early
Termination Date and the amount due from Party A on the first Party A
Floating Rate Payer Payment Date following the Early Termination Date will be
increased in the same proportion as the proportion that the amount of such
outstanding Swap Interest Shortfall Amounts represents of the Party B Fixed
Amount that would otherwise be due on such date.
Extension: If on the Termination Date, the Class B Certificate Balance has
not been reduced to zero, the Termination Date shall be extended to the
Extension Period End Date, being the earlier of (i) the Party A Floating Rate
Payer Payment Date (as defined in Section 4 below) on which the Class B
Certificate Balance is reduced to zero and (ii) the Stated Maturity Date (as
defined in the Trust Agreement) for the Class B Certificates, subject to
adjustment in accordance with the Following Business Day Convention. The
period from the Class B Targeted Maturity Date to the Extension Period End
Date is referred to herein as the "Extension Period".
4. During the Extension Period, instead of the Party B Fixed Amounts and the
Party A Floating Amounts described above in Section 2, the following
provisions will be applicable:
Party A Floating Amount
Floating Rate Payer: Party A
Party A Floating Rate
Payer Notional Amount: The Class B Certificate Balance on the
last day of the applicable Calculation
Period.
Initial Extension Period
Calculation Period: Commencing on the Class B Targeted
Maturity Date.
4
<PAGE>
Party A Floating Rate Payer
Period End Dates: The 25th day of each month commencing
January 25, 2004, subject to adjustment
in accordance with the Following Business
Day Convention.
Party A Floating Rate Payer
Payment Dates: The 25th day of each month commencing
January 25, 2004, subject to adjustment
in accordance with the Following Business
Day Convention.
Party A Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Spread: Plus 2.03%
Floating Rate
Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period.
Compounding: Inapplicable.
Party B Fixed Amount
Fixed Rate Payer: Party B
Party B Fixed Rate
Payer Notional Amount: The Class B Certificate Balance on the
last day of the Calculation Period.
Initial Extension Period
Calculation Period: Commencing on the Class B Targeted
Maturity Date
Party B Fixed Rate
Payer Period End Dates: (i) The 25th day of each month, with
no adjustment and (ii) the Extension
Period End Date, which shall be subject
to adjustment in accordance with the
Following Business Day Convention.
Party B Fixed Rate
Payer Payment Dates: The 25th day of each month, subject to
adjustment in accordance with the
Following Business Day Convention, and
5
<PAGE>
the Extension Period End Date, subject
to adjustment in accordance with the
Following Business Day Convention.
Party B Fixed Rate: 6.959%
Fixed Rate
Day Count Fraction: 30/360
Reset Dates: First day of each Calculation Period.
5. Account Details
Payments to Party A:
Account for Payments in USD: Bank of America, Concord, California
ABA No. 121-000-358
A/C No. 12351-07564
A/C Toyota Motor Credit Corporation
Payments to Party B:
Account for Payments in USD: U.S. Bank National Association
ABA # 091000022
180121167365
47300121
Acct# 77085461
6. Party A Documentation and Operations Officers
Documentation: Delores Doll
Phone: 310-787-6191
Fax: 310-787-5715
Operations: Delores Doll
Phone: 310-787-6191
Fax: 310-787-5715
7. Relationship between Parties:
Each party will be deemed to represent to the other party on the date on
which it enters into the Agreement that (absent a written agreement between
the parties that expressly imposes affirmative obligations to the contrary):
NON-RELIANCE. It is acting for its own account, and it has made its own
independent decisions to enter into the Agreement and as to whether the
Agreement is appropriate or proper for it based upon its own judgment and
upon advice from such advisers as it has deemed necessary. It is not relying
on any communication (written or oral) of the other
6
<PAGE>
party as investment advice or as a recommendation to enter into the
Agreement; it being understood that information and explanations
related to the terms and conditions of the Agreement shall not be
considered investment advice or a recommendation to enter into the
Agreement. No communication (written or oral) received from the other
party shall be deemed to be an assurance or guarantee as to the
expected results of the Agreement.
ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits
of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of the Agreement. It is also capable of assuming,
and assumes, the risks of the Agreement.
STATUS OF PARTIES. The other party is not acting as a fiduciary
for or as adviser to it in respect of the Agreement.
8. Governing Law: New York
7
<PAGE>
Please confirm that the foregoing correctly sets forth the terms
of our agreement by executing the copy of this Adjustable Rate Class B
Confirmation enclosed for that purpose and returning it to us.
TOYOTA MOTOR CREDIT CORPORATION
By: /s/ George E. Borst
-----------------------------------
George E. Borst
Senior Vice President
and General Manager
Confirmed as of the date first written:
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION,
as 1998-C Securitization Trustee
By: /s/ Steven E. Charles
-----------------------------------
Name: Steven E. Charles
Title: Vice President
<PAGE>
- --------------------------------------------------------------------------------
TOYOTA LEASING, INC.
AND
U.S. BANK NATIONAL ASSOCIATION,
AS 1998-C SECURITIZATION TRUSTEE
TOYOTA AUTO LEASE TRUST 1998-C
AUTO LEASE ASSET-BACKED CERTIFICATES
1998-C SECURITIZATION TRUST AGREEMENT
Dated as of December 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-C SUBI Certificate....................................3
2.03 Acceptance by 1998-C 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-C SUBI Certificateholders' Account; The Reserve Fund...............21
3.03 Statements to Certificateholders........................................27
ARTICLE IV THE CERTIFICATES........................................................29
4.01 The Certificates........................................................29
4.02 Authentication and Delivery of Certificates.............................30
4.03 Registration of Transfer and Exchange of Certificates...................30
4.04 Mutilated, Destroyed, Lost or Stolen Certificates.......................35
4.05 Persons Deemed Owners...................................................35
4.06 Access to List of Certificateholders' Names and Addresses...............35
4.07 Maintenance of Office or Agency.........................................36
4.08 Temporary Certificates..................................................36
4.09 Book-Entry Certificates.................................................36
4.10 Notices.................................................................37
4.11 Definitive Certificates.................................................38
4.12 Tax Treatment...........................................................39
4.13 ERISA Matters...........................................................39
ARTICLE V THE TRANSFEROR..........................................................40
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PAGE
5.01 Representations of Transferor...........................................40
5.02 Liability of Transferor: Indemnities....................................41
5.03 Merger or Consolidation of, or Assumption of the Obligations of,
Transferor; Certain Limitations.........................................42
5.04 Limitation on Liability of Transferor and Others........................44
5.05 Transferor May Own Investor Certificates................................44
5.06 No Transfer.............................................................44
5.07 Tax Matters Partner.....................................................44
5.08 Maturity Advances.......................................................45
ARTICLE VI THE 1998-C SECURITIZATION TRUSTEE.......................................45
6.01 Duties of the 1998-C Securitization Trustee.............................45
6.02 Certain Matters Affecting the 1998-C Securitization Trustee.............46
6.03 1998-C Securitization Trustee Not Liable for Certificates or Contracts..48
6.04 1998-C Securitization Trustee May Own Certificates......................48
6.05 1998-C Securitization Trustee's Fees and Expenses.......................49
6.06 Eligibility Requirements for 1998-C Securitization Trustee..............49
6.07 Resignation or Removal of 1998-C Securitization Trustee.................49
6.08 Successor 1998-C Securitization Trustee.................................50
6.09 Merger or Consolidation of 1998-C Securitization Trustee................50
6.10 Appointment of Co-Trustee or Separate Trustee...........................51
6.11 Representations and Warranties of 1998-C Securitization Trustee.........52
6.12 Tax Returns.............................................................53
6.13 1998-C Securitization Trustee May Enforce Claims Without Possession of
Certificates............................................................53
6.14 Suit for Enforcement....................................................53
6.15 Rights of Certificateholders to Direct 1998-C Securitization Trustee....53
6.16 No Petition.............................................................54
6.17 Negative Pledge.........................................................54
ARTICLE VII TERMINATION.............................................................54
7.01 Termination of the 1998-C Securitization Trust..........................54
7.02 Optional Purchase of 1998-C SUBI........................................56
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<PAGE>
PAGE
ARTICLE VIII ACCUMULATION EVENTS AND SWAP TERMINATION...............................56
8.01 Accumulation Events....................................................56
8.02 Swap Termination, Events of Default and Termination Events.............57
ARTICLE IX MISCELLANEOUS PROVISIONS...............................................58
9.01 Amendment..............................................................58
9.02 Protection of Title to Trust...........................................60
9.03 Limitation on Rights of Certificateholders.............................61
9.04 Governing Law..........................................................61
9.05 Notices to Parties.....................................................62
9.06 Severability of Provisions: Counterparts...............................62
9.07 Assignment.............................................................62
9.08 Certificates Nonassessable and Fully Paid..............................62
9.09 Inventory Advances.....................................................63
ARTICLE X AGENT FOR SERVICE......................................................63
10.01 Agent for Service of Transferor........................................63
10.02 Agent of Trustee.......................................................63
iii
<PAGE>
PAGE
EXHIBITS:
Exhibit A-1 Form of Class A-1 Certificate..................................A-1-1
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-1 Form of Adjustable Rate Class B Certificate....................B-1-1
Exhibit B-2 Form of Fixed Rate Class B Certificate.........................B-2-1
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-C SECURITIZATION TRUST AGREEMENT
This 1998-C SECURITIZATION TRUST AGREEMENT, dated as of December 1,
1998, is made with respect to the formation of the TOYOTA AUTO LEASE TRUST
1998-C (the "1998-C Securitization Trust"), between TOYOTA LEASING, INC. a
California corporation ("TLI" or, in its capacity as transferor hereunder,
the "Transferor"), U.S. Bank National Association, a national banking
association, as trustee (the "1998-C Securitization Trustee").
RECITALS
A. The Toyota Lease Trust (the "Titling Trust") is governed by the
Amended and Restated Trust and Servicing Agreement dated as of October 1,
1996 (the "Titling Trust Agreement") among Toyota Motor Credit Corporation, a
California corporation, as grantor, initial beneficiary and servicer ("TMCC"
and in its capacity as servicer, the "Servicer"), TMTT, Inc., 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 and 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 the Annex of Definitions and the Annex of
Supplemental Definitions described in Article I.
B. 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-C SUBI Supplement to the Titling
Trust Agreement dated as of December 1, 1998 (the "1998-C 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-C SUBI"), whose beneficiaries generally will be entitled to the net
cash flow arising from the related SUBI Portfolio (such SUBI Portfolio, the
"1998-C SUBI Portfolio"). The 1998-C SUBI will be evidenced by (i) one
certificate (the "1998-C SUBI Certificate") evidencing beneficial interests
in the assets of the 1998-C SUBI other than proceeds of the Residual Value
Insurance Policies, (whether or not such proceeds are attributable to the
1998-C Leased Vehicles and the 1998-C Contracts) and (ii) one certificate
(the "1998-C SUBI Insurance Certificate") evidencing beneficial interests in
the assets of the 1998-C SUBI that are proceeds of the Residual Value
Insurance Policies attributable to the 1998-C Leased Vehicles and the 1998-C
Contracts (which assets are net of claims adjustment expenses). The 1998-C
SUBI Certificate and the 1998-C SUBI Insurance Certificate collectively
represent a 100% beneficial interest in the 1998-C SUBI.
C. Concurrently herewith, the Titling Trustee (on behalf of the Titling
Trust), and the Servicer and U.S. Bank also have entered into a 1998-C SUBI
Servicing Supplement to the
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<PAGE>
Titling Trust Agreement dated as of December 1, 1998 (the "1998-C SUBI
Servicing Supplement"), pursuant to which the terms of the Titling Trust
Agreement will be supplemented insofar as they apply to the 1998-C SUBI
Portfolio, providing for further servicing obligations that will benefit the
holders of the 1998-C SUBI Certificate.
D. Concurrently herewith, TMCC and the Transferor have entered into the
1998-C SUBI Certificate Purchase and Sale Agreement dated as of December 1,
1998 (the "SUBI Certificate Purchase and Sale Agreement"), pursuant to which
TMCC is selling to the Transferor, without recourse, all of TMCC's right,
title and interest in and to the 1998-C SUBI, the 1998-C SUBI Certificate and
the 1998-C SUBI Insurance Certificate, all monies due thereon and the right
to realize on any property subject to the 1998-C 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-C Securitization Trust or the 1998-C Securitization Trustee any right to
or interest in the 1998-C SUBI Insurance Certificate.
E. The parties hereto desire that U.S. Bank, 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, as 1998-C
Securitization Trustee (the "1998-C SUBI Securities Account") to which the
1998-C SUBI Certificate will be transferred pursuant to this 1998-C
Securitization Trust Agreement.
F. The parties desire to enter into this 1998-C Securitization Trust
Agreement to create the 1998-C Securitization Trust and to provide for the
issuance by the 1998-C Securitization Trust of the Certificates in exchange
for the 1998-C 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-C Securitization Trust Agreement, except
as otherwise expressly provided or unless the context otherwise requires,
(a) capitalized terms used herein and not otherwise defined 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-C 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-C Securitization Trust Agreement as a
whole and not to any particular article or section within this 1998-C
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".
2
<PAGE>
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-C 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-C Securitization
Trust Agreement by the parties hereto, there is hereby created the Toyota Auto
Lease Trust 1998-C.
(b) ESTABLISHMENT OF 1998-C SUBI SECURITIES ACCOUNT.
(i) Pursuant to a separate agreement dated December 1, 1998,
between the 1998-C Securitization Trust and the SUBI Securities
Intermediary, a securities account (as such term is defined in
Section 8-501(a) of the UCC) (the "1998-C SUBI Securities Account")
will be established and maintained with U.S. Bank, in its capacity as
SUBI Securities Intermediary, for the benefit of the Toyota Auto Lease
Trust 1998-C.
(ii) The Transferor shall direct the SUBI Securities Intermediary
to credit to the 1998-C SUBI Securities Account the interests in the
1998-C SUBI Certificate transferred, assigned, or otherwise conveyed by
the Transferor as described in Section 2.02.
2.02 CONVEYANCE OF 1998-C SUBI CERTIFICATE.
(a) CONVEYANCE TO 1998-C SECURITIZATION TRUSTEE. In consideration of
the 1998-C 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 separately,
the portions of the Initial Class B Certificate Balance represented by the
Adjustable Rate Class B Certificates and the Fixed Rate Class B Certificates,
and of the executed and authenticated Transferor Certificate, the Transferor
does hereby transfer, assign and otherwise convey to the 1998-C 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-C SUBI Certificate, the rights in and benefits of the
1998-C SUBI evidenced by the 1998-C 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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<PAGE>
(iii) all rights accruing to the holder of the 1998-C SUBI
Certificate under the Titling Trust Agreement, the 1998-C SUBI Supplement
and the 1998-C 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-C Leased Vehicles and the 1998-C Contracts and the
right to receive such payments and monies, as evidenced by the 1998-C
SUBI Insurance Certificate, are retained by the Transferor and are not
hereby transferred, assigned or otherwise conveyed to the 1998-C
Securitization Trustee nor will they, under any circumstances, be subject
to the lien of the 1998-C Securitization Trust or any claim by the 1998-C
Securitization Trustee.
(b) GRANT OF SECURITY INTEREST. The Transferor also does hereby grant
to the 1998-C 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-C Securitization Trustee shall have all
the rights, powers and privileges thereto and therein of a secured party
under the California UCC.
(c) TERMINATION. The rights and powers granted herein to the 1998-C
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-C Securitization Trustee in the 1998-C SUBI Securities
Account have been terminated pursuant to the terms of this Securitization
Trust Agreement and the 1998-C Securitization Trustee has notified the SUBI
Securities Intermediary of such termination in writing. In the event of a
termination of this 1998-C Securitization Trust Agreement pursuant to
Section 7.01(a)(i), (ii) or (iii), or upon repurchase of the 1998-C SUBI
Certificate pursuant to Section 7.02, the 1998-C Securitization Trustee is
hereby authorized to convey all interests in the 1998-C SUBI Certificate and
in the 1998-C SUBI evidenced thereby to the Transferor. In the event of a
termination of this 1998-C Securitization Trust Agreement pursuant to
Section 7.01(a)(iv), the 1998-C Securitization Trustee is hereby authorized
to convey all interests in the 1998-C SUBI Certificate and in the 1998-C SUBI
evidenced thereby to the purchaser thereof. The 1998-C Securitization
Trustee is hereby authorized and directed to seek a buyer for the 1998-C SUBI
Certificate on the occurrence of a Swap Termination in connection with the
related liquidation of the 1998-C Securitization Trust pursuant to
Section 8.02. The 1998-C 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-C SECURITIZATION TRUSTEE.
The 1998-C Securitization Trustee does hereby accept all consideration
conveyed by the Transferor pursuant to Section 2.02 and declares that the
1998-C 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-C Securitization Trust Agreement.
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<PAGE>
In accepting the 1998-C SUBI Certificate, the 1998-C Securitization
Trustee does hereby release all claims to the Titling Trust Assets allocated to
the SUBI Insurance Certificate, 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-C Securitization Trustee
of the Collections in respect of the 1998-C SUBI Assets contained in all
accounts maintained by the Titling Trustee (excluding proceeds of the Residual
Value Insurance Policies, as evidenced by the 1998-C SUBI Insurance Certificate,
which are the sole property of the Transferor) and, except as provided in this
1998-C SUBI Securitization Trust Agreement, the 1998-C SUBI Supplement and the
1998-C 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) DETERMINATION OF INTEREST RATES; DETERMINATION OF INTEREST PAYMENT
AMOUNTS; SERVICER'S CERTIFICATES.
(i) For the initial Interest Payment Period, the Class A-1
Rate, Class A-2 Rate, Class A-3 Rate and Class B Adjustable Rate shall be
determined by straight line interpolation (based on the actual number of
days in the initial Interest Payment Period) between three-month LIBOR
and LIBOR for U.S. Dollar deposits having maturities of four months, such
rate to be calculated by the 1998-C Securitization Trustee two Business
Days prior to the Closing Date. For each subsequent Interest Payment
Period the 1998-C Securitization Trustee will make the following
determinations:
(A) On the Interest Determination Date for each
Class of Class A Certificates and the Adjustable Rate Class B
Certificates, the 1998-C Securitization Trustee will determine
three-month LIBOR or, if such Interest Payment Period commences on
or after the related Targeted Maturity Date, one-month LIBOR, in
each case as at 11:00 a.m. (London time) on the Interest
Determination Date in question. Such offered rate will be that
which appears on the display designated as Telerate Page 3750 on
the Dow Jones Telerate Service (or such other page or service as
may replace it for the purpose of displaying London interbank
offered rates of major banks for U.S. Dollar deposits).
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(B) If for any reason the relevant page is
unavailable or such offered rate does not appear, the 1998-C
Securitization Trustee shall determine the rates at which
three-month deposits (or one-month deposits, if applicable) in
U.S. Dollars are offered by the Reference Banks at approximately
11:00 a.m. (London time) on the Interest Determination Date to
prime banks in the London interbank market commencing on the first
day of the relevant Interest Payment Period. The 1998-C
Securitization Trustee shall request the principal London office
of each of the Reference Banks to provide a quotation of its rate.
If at least two quotations are provided as requested, the 1998-C
Securitization Trustee shall determine the arithmetic mean of the
quotations. If fewer than two quotations are provided as
requested, the 1998-C Securitization Trustee shall determine the
arithmetic mean of the rates quoted by major banks in New York
City, at approximately 11:00 a.m. (New York City time) on the
first day of the relevant Interest Payment Period for three-month
loans (or one-month loans, if applicable) in U.S. Dollars to
leading European banks commencing on that date. The rate so
determined by the 1998-C Securitization Trustee will be
"three-month LIBOR" (or "one-month LIBOR" as applicable) for such
Interest Payment Period.
(ii) The 1998-C Securitization Trustee shall as soon as
practicable after 11:00 a.m. (London time) on each Interest Determination
Date determine the Class A-1 Rate, Class A-2 Rate, Class A-3 Rate and
Class B Adjustable Rate, the actual number of days in the related
Interest Payment Period and the amount of interest that will accrue on
each Class of Certificates during the related Interest Payment Period
(ignoring for these purposes any possibility of shortfalls or the need to
make the calculations described in (iii) and (iv) below).
(iii) On each relevant Determination Date, the Servicer will
determine whether on the related Certificate Payment Date for the Class
A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates
or the Adjustable Rate Class B Certificates, the aggregate of amounts
payable to the Swap Counterparty as described below in Section 3.01(e)
will be less than the relevant Class A-1 Swap Interest Amount, Class A-2
Swap Interest Amount, Class A-3 Swap Interest Amount or Class B Swap
Interest Amount, as the case may be, and whether any amounts will be
available to reimburse any outstanding Class A-1 Swap Interest Shortfall
Amount, Class A-2 Swap Interest Shortfall Amount, Class A-3 Swap Interest
Shortfall Amount or Class B Swap Interest Shortfall Amount, and shall
calculate the Class A-1 Interest Payment Amount, Class A-2 Interest
Payment Amount, Class A-3 Interest Payment Amount and the Adjustable Rate
Class B Interest Payment Amount for such Certificate Payment Date. The
Servicer shall include the Class A-1 Interest Payment Amount, Class A-2
Interest Payment Amount, Class A-3 Interest Payment Amount and Class B
Interest Payment Amount in the Servicer's Certificate for each relevant
Certificate Payment Date as provided in Section 3.01(a)(iv) below.
(iv) On each Determination Date, the Servicer shall deliver to
the 1998-C Securitization Trustee a Servicer's Certificate which sets
forth, among other things, the
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amount of Interest Collections and Principal Collections allocable to
the 1998-C SUBI, the Investor Percentage, the Transferor Percentage,
the Certificate Factor for each Class, the amount of Advances
(including, separately, any Inventory Advances and Nonrecoverable
Advances ), if any, to be made by or reimbursed to the Servicer, any
Maturity Advances to be made by or reimbursed to the Transferor, 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-C SUBI Certificateholders'
Account, the 1998-C 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-C SUBI Certificateholders' Account in respect of the Class A-1
Notional Interest Accrual Amount, the Class A-2 Notional Interest
Accrual Amount, the Class A-3 Notional Interest Accrual Amount, the
Class B Notional Interest Accrual Amount, the Class B Fixed Rate
Interest Accrual Amount, any Class A-1 Interest Carryover Shortfall
Amount, Class A-2 Interest Carryover Shortfall Amount, Class A-3
Interest Carryover Shortfall Amount, Adjustable Rate Class B Interest
Carryover Shortfall Amount or Fixed Rate Class B Interest Carryover
Shortfall Amount; and
(B) applicable amounts in the 1998-C SUBI Collection
Account or the Reserve Fund, as applicable.
(ii) Provided that (A) the Transferor has not exercised its option to
repurchase the 1998-C SUBI and (B) a Swap Termination 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-C SUBI Collection Account. On each Monthly Allocation Date, the
1998-C Securitization Trustee will withdraw, to the extent necessary, the
amounts specified herein from the 1998-C SUBI Certificateholders' Account and/or
the Reserve Fund and deposit such amounts into the 1998-C 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.
Interest will be calculated on the basis of: (i) in the case of the Class A-1
Notional Interest Accrual Amount, the Class A-2 Notional Interest Accrual
Amount, the Class A-3 Notional Interest Accrual Amount, the Class B Notional
Interest Accrual Amount and the Class B Fixed Rate Interest Accrual Amount, a
360-day year consisting of twelve 30-day months, and (ii) in the case of the
amount of interest accrued on the Certificates at the Class A-1 Rate, the Class
A-2 Rate, the Class A-3 Rate and the Class B Adjustable Rate, as applicable,
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and amounts due from the Swap Counterparty under the Swap Agreement, the
actual number of days in the related Interest Payment Period and a 360-day
year. Provided that the Transferor has not exercised its option to repurchase
the 1998-C 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-C 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 Notional
Interest Accrual Amount, the Class A-2 Notional Interest Accrual Amount
and the Class A-3 Notional 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 Amount, Class A-2 Interest Carryover
Shortfall Amount and Class A-3 Interest Carryover Shortfall Amount, on a
pro rata basis.
(iii) an amount equal to the Class B Notional Interest Accrual
Amount and the Class B Fixed Rate Interest Accrual Amount for the related
Monthly Interest Period, plus any Adjustable Rate Class B Interest
Carryover Shortfall Amount and any Fixed Rate Class B Interest Carryover
Shortfall Amount;
(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;
(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-C 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
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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 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 (ix) (allocable between the Adjustable Rate Class B Certificates
and Fixed Rate Class B Certificates on a pro rata basis based on the
portions of the Adjusted Class B Certificate Balance allocated thereto);
(x) for deposit into the Reserve Fund, until the amount on
deposit therein equals the Specified Reserve Fund Balance;
(xi) 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;
(xii) to the 1998-C 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
(xiii) the balance, if any, shall constitute Excess Amounts.
In the event that on any Monthly Allocation Date the amount available
pursuant to clause (iii) above allocable in respect of the Class B Notional
Interest Accrual Amount, the Fixed Rate Class B Interest Accrual Amount and any
outstanding Adjustable Rate Class B Interest Carryover Shortfall Amount and
Fixed Rate Class B Interest Carryover Shortfall Amount are insufficient
therefor, the amounts so available will be allocated as between the Adjustable
Rate Class B Certificates and the Fixed Rate Class B Certificates on a pro rata
basis, based on such Class B Notional Interest Accrual Amount and Fixed Rate
Class B Interest Accrual Amount. Similarly, if on any Monthly Allocation Date
amounts are available pursuant to clause (iii) above allocable in reimbursement
of some but not all outstanding Adjustable Rate Class B Interest Carryover
Shortfall Amounts and Fixed Rate Class B Interest Carryover Shortfall Amounts,
such amounts will be allocated (and so applied or paid) on a pro rata basis
based on the amounts of such outstanding Interest Carryover Shortfall Amounts.
(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;
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(ii) in the case of Section 3.01(c) clauses (i), (ii), (iii),
(viii) or (ix), 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) or (ix) 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 remaining
on deposit in the Reserve Fund (including the Class B Reserve Amount) are
sufficient to (i) fund any amounts payable to the 1998-C Securitization
Trustee, the Titling Trustee and the Servicer; (ii) pay accrued and
unpaid interest on each Class of Investor Certificates; and (iii) reduce
the Adjusted Certificate Balance of each Class of Investor Certificates
then outstanding to zero, such amounts will be so applied; and
(iii) in the case of Section 3.01(c) clauses (i) through (ix)
and, to the extent set forth in Sections 3.01(i)(i)(B) and 3.01(i)(i)(C),
Transferor Amounts.
(e) INTEREST PAYMENTS TO CLASS A CERTIFICATEHOLDERS.
(i) Subject to Sections 3.01(i), (k) and (l), on each relevant
Certificate Payment Date the 1998-C Securitization Trustee shall make
payments to the Swap Counterparty of (A) amounts allocated pursuant to
clauses (i) and (ii) of Section 3.01(c) above (whether from amounts held
in the 1998-C SUBI Collection Account or 1998-C SUBI Certificateholders'
Account) for the Monthly Interest Periods relating to such Certificate
Payment Date, and (B) the net investment income earned on Permitted
Investments with respect to funds deposited into the 1998-C
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, in each case to the extent of amounts available therefor.
(ii) In exchange for amounts so paid to the Swap Counterparty
pursuant to the Swap Agreement, the Swap Counterparty shall pay to the
1998-C Securitization Trustee for deposit into the 1998-C SUBI Collection
Account the amount owed by the Swap Counterparty to the 1998-C
Securitization Trust under the Swap Agreement for the benefit of the
Class A-1 Certificateholders, the Class A-2 Certificateholders and/or the
Class A-3 Certificateholders, as the case may be. Upon receipt of such
payments from the Swap Counterparty, the 1998-C Securitization Trustee
shall pay the Class A-1 Interest Payment Amount, Class A-2 Interest
Payment Amount and Class A-3 Interest Payment Amount, to the Class A-1
Certificateholders, Class A-2 Certificateholders and Class A-3
Certificateholders, respectively. Subject to Sections 3.01(i), (k) and
(l), in connection with
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a Swap Termination or any exercise by the Transferor of its option to
repurchase the 1998-C SUBI Certificate pursuant to Section 7.02, on
the Monthly Allocation Date following the receipt by the 1998-C
Securitization Trustee of the proceeds of such liquidation or sale to
the Transferor, 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). If the aggregate of
the amount paid by the 1998-C Securitization Trust to the Swap
Counterparty on any Certificate Payment Date pursuant to Section
3.01(e)(1) is less than the Class A-1 Swap Interest Amount, the Class
A-2 Swap Interest Amount or the Class A-3 Swap Interest Amount then
under the Swap Agreement, the corresponding payment due from the Swap
Counterparty in exchange therefor shall be reduced in the same
proportion as the proportion that any such Swap Interest Shortfall
Amount represents of such Class A-1 Swap Interest Amount, Class A-2
Swap Interest Amount or Class A-3 Swap Interest Amount, as applicable.
If, on a subsequent Certificate Payment Date the aggregate of the
amount paid by the 1998-C Securitization Trust to the Swap
Counterparty pursuant to Section 3.01(e) is sufficient to reimburse
all or any part of any unreimbursed Class A-1 Swap Interest Shortfall
Amount, Class A-2 Swap Interest Shortfall Amount or Class A-3 Swap
Interest Shortfall Amount, then under the Swap Agreement, the
corresponding payment due from the Swap Counterparty in exchange
therefor shall be increased proportionately in the same proportion as
such reimbursement represents of the current Class A-1 Swap Interest
Amount, Class A-2 Swap Interest Amount or Class A-3 Swap Interest
Amount, as applicable. The amount paid by the Swap Counterparty,
adjusted as permitted above, shall be equal to the Class A-1 Interest
Payment Amount, the Class A-2 Interest Payment Amount and the Class
A-3 Interest Payment Amount.
(f) INTEREST PAYMENTS TO CLASS B CERTIFICATEHOLDERS.
(i) Subject to Sections 3.01(i), (k) and (l), on each relevant
Certificate Payment Date, the 1998-C Securitization Trustee shall make
payments to (A) the Holders of the Fixed Rate Class B Certificates of (1)
amounts allocated to the Fixed Rate Class B Certificates pursuant to
clause (iii) of Section 3.01(c) above (whether from amounts held in the
1998-C SUBI Collection Account or 1998-C SUBI Certificateholders'
Account) for the Monthly Interest Periods relating to such Certificate
Payment Date, and (2) the net investment income earned on Permitted
Investments with respect to funds deposited into the 1998-C
Certificateholders' Account on prior Monthly Allocation Dates in respect
of the portion of the Adjusted Class B Certificate Balance represented by
the Fixed Rate Class B Certificates, and (B) to the Swap Counterparty of
(1) amounts allocated to the Adjustable Rate Class B Certificates
pursuant to clause (iii) of Section 3.01(c) above (whether from amounts
held in the 1998-C SUBI Collection Account or 1998-C SUBI
Certificateholders' Account) for the Monthly Interest Periods relating to
such Certificate Payment Date and (2) the net investment income earned on
Permitted Investments with respect to funds deposited into the 1998-C
Certificateholders' Account on prior Monthly Allocation Dates in respect
of the portion of the Adjusted Class B Certificate Balance represented by
the Adjustable Rate Class B Certificates in each case to the extent of
amounts available therefor.
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(ii) In exchange for amounts so paid to the Swap Counterparty
pursuant to the Swap Agreement, the Swap Counterparty shall pay to the
1998-C Securitization Trustee for deposit into the 1998-C SUBI Collection
Account the amount owed by the Swap Counterparty under the Swap Agreement
for the benefit of the Adjustable Rate Class B Certificateholders. Upon
receipt of such payments from the Swap Counterparty, the 1998-C
Securitization Trustee shall pay the Class B Interest Payment Amount to
the Adjustable Rate Class B Certificateholders. Subject to
Sections 3.01(i), (k) and (l), in connection with a Swap Termination or
any exercise by the Transferor of its option to repurchase the 1998-C
SUBI Certificate pursuant to Section 7.02, on the Monthly Allocation Date
following the receipt by the 1998-C Securitization Trustee of the
proceeds of such liquidation or sale to the Transferor, 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).
If the aggregate of the amount paid by the 1998-C Securitization Trust to
the Swap Counterparty on any Certificate Payment Date pursuant to Section
3.01(f)(i)(B) is less than the Class B Swap Interest Amount, then under
the Swap Agreement, the corresponding payment due from the Swap
Counterparty in exchange therefor shall be reduced in the same proportion
as the proportion that any such Class B Swap Interest Shortfall Amount
represents of such Class B Swap Interest Amount. If, on a subsequent
Certificate Payment Date the aggregate of the amount paid by the 1998-C
Securitization Trust to the Swap Counterparty pursuant to Section
3.01(f)(i)(B) is sufficient to reimburse all or any part of any
unreimbursed Class B Swap Interest Shortfall Amount, then under the Swap
Agreement, the corresponding payment due from the Swap Counterparty in
exchange therefor shall be increased proportionately in the same
proportion as such reimbursement represents of the current Class B Swap
Interest Amount. The amount paid by the Swap Counterparty as provided
above shall be equal to the Class B Interest Payment Amount.
(g) PAYMENTS TO SERVICER, SECURITIZATION TRUSTEE AND TITLING TRUSTEE.
On each Monthly Allocation Date, the 1998-C 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-C Securitization
Trustee shall pay to the Titling Trustee the amounts allocated pursuant to
clauses (vi) and (xi) 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-C Securitization Trustee
will be entitled to withdraw from the 1998-C SUBI Collection Account for its own
benefit and use, the amounts allocated pursuant to clauses (vii) and (xii) of
Section 3.01(c) above, except that if the Servicer previously has made Advances
in respect of such amounts, the 1998-C 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-C
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-C 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
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respect of amounts otherwise payable to the 1998-C 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-C Securitization Trust Agreement on the
same basis as though such amounts were in fact deposited into the 1998-C SUBI
Collection Account. Moreover, the Servicer will, in each relevant Servicer's
Certificate, instruct the 1998-C Securitization Trustee not to make any
distribution to the Servicer, 1998-C Securitization Trustee or Titling Trustee
to the extent that the Servicer has made any deposit net of a corresponding
amount. The 1998-C 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.
(i) On each Monthly Allocation Date, the 1998-C Securitization
Trustee shall withdraw from the 1998-C SUBI Collection Account and
deposit into the Reserve Fund the amount allocated pursuant to clause (x)
of Section 3.01(c) above.
(ii) On each Monthly Allocation Date, the 1998-C 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. (i) On each Monthly
Allocation Date, the 1998-C Securitization Trustee shall make the following
payments in respect of the Transferor Interest in the following order of
priority:
(A) to the Transferor, from and in reduction of the amounts of
Principal Collections otherwise to be deposited into the 1998-C SUBI
Collection Account or 1998-C 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));
(B) 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;
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(C) to the Transferor, Excess Amounts, payable as follows:
(1) 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 (xiii) of Section 3.01(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-C SUBI Servicing Supplement, any such
Excess Amounts that 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; and
(2) 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 after the 1998-C
Securitization Trustee has first deposited such amounts, up to but
not exceeding the Accelerated Principal Distribution Amount, into
the 1998-C SUBI Certificateholders' Account or SUBI Collection
Account (if such Monthly Allocation Date is a relevant Certificate
Payment Date); 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-C SUBI
Servicing Supplement, any such Excess Amounts that 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.
(ii) 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 following amounts to be paid to the
Transferor by the 1998-C Securitization Trustee from the remainder of
such amounts as follows:
(A) 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
(B) if such Monthly Allocation Date relates to a Collection
Period the last day of which is after the Revolving Period, (I) the
Transferor Amounts relating to the Transferor Percentage of Interest
Collections and (II) 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.
(C) Any amounts that would otherwise be payable to the
Transferor pursuant to the preceding paragraph, but not paid to the
Transferor because the Transferor
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Interest would be less than or equal to zero, shall instead be held in
the 1998-C SUBI Collection Account until:
(1) applied to cover the Class A-1 Notional Interest
Accrual Amount, the Class A-2 Notional Interest Accrual Amount, the
Class A-3 Notional Interest Accrual Amount, any Class A-1 Interest
Carryover Shortfall Amount, Class A-2 Interest Carryover Shortfall
Amount, Class A-3 Interest Carryover Shortfall Amount, the Class B
Notional Interest Accrual Amount, any Adjustable Rate Class B Interest
Carryover Shortfall Amount, the Class B Fixed Rate Interest Accrual
Amount, any Fixed Rate Class B Interest Carryover Shortfall Amount or
any Loss Amounts or Certificate Principal Loss Amounts allocable to
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;
(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.
(iii) Amounts properly received by the Transferor pursuant to
this Section 3.01 shall be free of any claim of the 1998-C Securitization
Trust, the 1998-C Securitization Trustee or the Investor
Certificateholders and shall not be available to the 1998-C
Securitization Trustee or the 1998-C 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 pursuant to
Section 3.01(c) to be applied or paid to the Class A Certificates and the Class
B Certificates pursuant to Sections 3.01(e), (f) and (l) and not paid on any
Monthly Allocation Date will be deposited into the 1998-C 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) and (iii) 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 (and
prior to the occurrence of any Swap Termination) on any Monthly
Allocation Date that is not a Certificate Payment Date, both Available
Interest allocated and applied pursuant to clauses (i), (ii), (iii),
(viii) and (ix) of Section 3.01(c) above and all other 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 reimbursement of Loss Amounts or Certificate Principal Loss
Amounts) will be invested in Permitted Investments maturing
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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 (ix) 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-C Certificateholders' Account from Principal Collections
pursuant to Section 3.01(l)(ii) below shall not be deposited in the
1998-C 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-C 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 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.
(i) On each Monthly Allocation Date, based on the related Servicer's
Certificate, the 1998-C Securitization Trustee shall apply the Investor
Percentage of 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-C 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.
(ii) 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:
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(A) with respect to the Class A-1 Certificates, all amounts on
deposit in the 1998-C SUBI Collection Account and the 1998-C SUBI
Certificateholders' Account representing amounts allocated for reduction
of the Adjusted Class A-1 Certificate Balance in accordance with Section
3.01(c) (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-C SUBI Collection Account and the 1998-C SUBI
Certificateholders' Account representing amounts allocated for reduction
of the Adjusted Class A-2 Certificate Balance in accordance with Section
3.01(c) (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;
(C) with respect to the Class A-3 Certificates, all amounts on
deposit in the 1998-C SUBI Collection Account and the 1998-C SUBI
Certificateholders' Account representing amounts allocated for reduction
of the Adjusted Class A-3 Certificate Balance in accordance with Section
3.01(c) (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-C SUBI Collection Account and the 1998-C SUBI
Certificateholders' Account representing amounts allocated for reduction
of the Adjusted Class B Certificate Balance in accordance with Section
3.01(c) (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 Adjustable Rate Class B
Certificateholders and the Fixed Rate Class B Certificateholders on a pro
rata basis based on the portions of the Adjusted Class B Certificate
Balance allocated thereto.
(iii) Notwithstanding the foregoing, (A) if the assets of the 1998-C
Securitization Trust are liquidated following a Swap Termination pursuant to
Sections 7.01 and 8.02, 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
shall be made from the proceeds of such liquidation based upon the priorities
set forth in Section 3.01(o) on the Monthly Allocation Date following the
receipt by the 1998-C Securitization Trustee of the proceeds of such
liquidation (which date may be prior to the related Targeted Maturity Date),
and (B) in connection with the exercise by the Transferor of its option to
repurchase the 1998-C SUBI Certificate pursuant to Section 7.02, payments in
reduction of the Adjusted Class B Certificate Balance (and, to the extent
that such amounts have not yet been reduced to zero, any Adjusted Class A-1
Certificate Balance, Adjusted Class A-2 Certificate Balance and Adjusted
Class A-3 Certificate Balance) shall be made from the proceeds of such sale
to the Transferor on the
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Monthly Allocation Date following the receipt by the 1998-C Securitization
Trustee of the proceeds of such sale (which date may be prior to the related
Targeted Maturity Date).
(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 on such Targeted Maturity Date or any subsequent Certificate
Payment Date in any amount up to the amount of such deficiency; PROVIDED,
HOWEVER, that (i) the Transferor must give the Servicer and the 1998-C
Securitization Trustee no fewer than two Business Days' written notice of its
intention to make such a Maturity Advance and (ii) any such Maturity Advance
must be made pursuant to the payment priorities set forth in Section
3.01(l)(ii). Amounts received by the Servicer or 1998-C Securitization
Trustee in respect of any Maturity Advance shall be deposited promptly by
such recipient into the 1998-C 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) LOSS AMOUNTS AND CERTIFICATE PRINCIPAL LOSS AMOUNTS. (i) The
Investor Percentage of Loss Amounts allocated to the Investor Certificates on
any Monthly Allocation Date will be allocated in the following order of
priority:
(A) in reduction of the Adjusted Class B Certificate
Balance, until the Adjusted Class B Certificate Balance is reduced
to zero (with the amount of any such reduction being allocated
between the Adjustable Rate Class B Certificates and the Fixed
Rate Class B Certificates on a pro rata basis based on the portion
of the Adjusted Class B Certificate Balance allocated thereto on
the last day of the related Collection Period); and
(B) 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 Collection Period) until the
Adjusted Certificate Balance of each such Class is reduced to
zero.
(ii) 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 related 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.
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(iii) Interest will be deemed to accrue on Certificate Principal
Loss Amounts which are not reimbursed as provided herein at the Class A-1
Notional Rate, the Class A-2 Notional Rate, the Class A-3 Notional Rate
or, if allocated to the Adjusted Class B Certificate Balance, such
portion represented by the Adjustable Rate Class B Certificates will be
allocated interest at the Class B Notional Rate and such portion
represented by the Fixed Rate Class B Certificates will be allocated
interest at the Class B Fixed Rate, in each case until reimbursed or
until the related 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. Such allocations and payments in respect of such
interest amounts and reimbursements will be made pursuant to Section
3.01(c).
(o) PAYMENTS FOLLOWING SWAP TERMINATION. (i) Notwithstanding the
priorities set forth in Section 3.01 above, following any Swap Termination
and liquidation of the assets of the 1998-C Securitization Trust pursuant to
Section 8.02, the net proceeds of the liquidation of the assets of the 1998-C
Trust will be allocated and applied or paid pursuant to the following payment
priorities on the Monthly Allocation Date following the receipt of such
proceeds:
(1) to pay to the Transferor, an amount equal to the
amount of any unreimbursed Maturity Advances;
(2) to pay to the 1998-C Securitization Trustee and
Titling Trustee, an amount equal to the amount of any Capped or
Uncapped Administrative Expense not yet reimbursed;
(3) to pay to the Servicer, an amount equal to the
amount of any unreimbursed Advances made by it or any Capped or
Uncapped Administrative Expenses advanced by it and not yet
reimbursed, and any other servicing compensation due to it;
(4) to pay to the Class A Certificateholders, as
applicable, an amount equal to the sum of the Class A-1 Swap
Interest Amount, any Class A-1 Swap Interest Shortfall Amount, the
Class A-2 Swap Interest Amount, any Class A-2 Swap Interest
Shortfall Amount, the Class A-3 Swap Interest Amount and any
Class A-3 Swap Interest Shortfall Amount through the date of such
payment (with a single corresponding Interest Payment Period from
the most recent relevant Certificate Payment Date for each Class
of Class A Certificates through such date) to be paid to Class A
Certificateholders in respect of interest on a pro rata basis
based on the respective amounts of interest so accrued on each
such Class at the applicable Class A-1 Rate, Class A-2 Rate and
Class A-3 Rate, respectively;
(5) to pay to the Adjustable Rate Class B Certificate-
holders an amount equal to the sum of the Class B Swap Interest
Amount and any Class B Swap Interest Shortfall Amount through the
date of such payment (with a single corresponding Interest Payment
Period from the most recent relevant Certificate Payment Date
through such date), and to pay to the Fixed Rate Class B
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Certificateholders, an amount equal to the sum of the Class B
Fixed Rate Interest Accrual Amount and any Fixed Rate Class B
Interest Carryover Shortfall Amount through the date of such
payment (with a single corresponding Interest Payment Period from
the most recent relevant Certificate Payment Date through such
date), to be allocated as between the Adjustable Rate Class B
Certificates and the Fixed Rate Class B Certificates on a pro rata
basis, based on the portion of the Adjusted Class B Certificate
Balance represented by the Adjustable Rate Class B Certificates
and the Fixed Rate Class B Certificates, plus an amount equal to
interest accrued at the related Required Rate during such period
on amounts deposited in the 1998-C SUBI Certificateholders'
Account in respect of the Adjusted Class B Certificate Balance on
prior Monthly Allocation Dates;
(6) 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) of Section 3.01(c);
(7) 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
to be allocated as between the Adjustable Rate Class B
Certificates and the Fixed Rate Class B Certificates on a pro rata
basis, based on the portion of the Adjusted Class B Certificate
Balance represented by the Adjustable Rate Class B Certificates
and the Fixed Rate Class B Certificates; and
(8) to pay to the Transferor any remaining proceeds.
(ii) Any swap termination payment payable by the Swap Counterparty to
the Trust pursuant to the Swap Agreement in respect of the Class A
Certificates will be applied, first, to cover any shortfall in the
amounts allocable and payable pursuant to the foregoing clauses (1), (2),
(3) and (4). Next, any remaining portion of such swap termination
payment will be applied to cover the amount, if any, by which the amount
of interest that would have accrued on the Class A-1 Certificates at the
Class A-1 Rate, the Class A-2 Certificates at the Class A-2 Rate and the
Class A-3 Certificates at the Class A-3 Rate during the period specified
in clause (4) above exceeds the amount payable to each such Class as set
forth in clause (4) above, on a pro rata basis based on each such excess
amount. Thereafter, any remaining portion of such swap termination
payment will be applied to cover any shortfall in the amounts allocable
and payable pursuant to clauses (6), (5) and (7), in that order, with any
remainder to be paid pursuant to clause (8) above. Notwithstanding the
foregoing priorities, to the extent that the 1998-C Securitization Trust
is required to make any swap termination payment to the
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Swap Counterparty in respect of the Class A Certificates, the amount
thereof shall be made available from (and therefore shall reduce)
amounts otherwise allocable and payable pursuant to the foregoing
clauses (6), (4), (8), (7), (5), (3), (2) and (1) in that order.
(iii) Any swap termination payment payable by the Swap Counterparty to
the 1998-C Securitization Trust pursuant to the Swap Agreement in respect
of the Adjustable Rate Class B Certificates will be applied, first, to
cover any shortfall in the amounts allocable and payable pursuant to the
foregoing clauses (1), (2), (3) and (5) (to the extent allocable and
payable to the Adjustable Rate Class B Certificates). Next, any
remaining portion of such swap termination payment will be applied to
cover the amount, if any, by which the amount of interest that would have
accrued on the Adjustable Rate Class B Certificates at the Class B
Adjustable Rate during the period specified in clause (5) above exceeds
the amount payable to such Class as set forth in clause (5) above.
Thereafter, any remaining portion of such swap termination payment will
be applied to cover any shortfall in the amounts allocable and payable
pursuant to clauses (7) (to the extent allocable and payable to the
Adjustable Rate Class B Certificates), (4), (5) (to the extent allocable
and payable to the Fixed Rate Class B Certificates), (6) and (7) (to the
extent allocable and payable to the Fixed Rate Class B Certificates), in
that order, with any remainder to be paid pursuant to clause (8) above.
Notwithstanding the foregoing priorities, to the extent that the Trust is
required to make any swap termination payment to the Swap Counterparty in
respect of the Adjustable Rate Class B Certificates, the amount thereof
shall be made available from (and therefore shall reduce) amounts
otherwise allocable and payable pursuant to the foregoing clauses (7) (to
the extent allocable and payable to the Adjustable Rate Class B
Certificates), (5) (to the extent allocable and payable to the Adjustable
Rate Class B Certificates), (8), (7) (to the extent allocable and payable
to the Fixed Rate Class B Certificates), (6), (5) (to the extent
allocable and payable to the Fixed Rate Class B Certificates), (4) (3),
(2) and (1) in that order.
(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-C Securitization
Trustee, such amounts shall be distributed to the holder of the 1998-C SUBI
Insurance Certificate by the Titling Trustee, or the 1998-C Securitization
Trustee, as applicable, on the succeeding Monthly Allocation Date as directed
in writing by the Servicer.
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3.02 1998-C SUBI CERTIFICATEHOLDERS' ACCOUNT; THE RESERVE FUND.
(a) ESTABLISHMENT OF 1998-C SUBI CERTIFICATEHOLDERS' ACCOUNT. A
separate trust account to be known as the "1998-C SUBI Certificateholders'
Account" will be established and shall be maintained with the 1998-C
Securitization Trustee which will include the money and other property
deposited and held therein pursuant to Section 3.01 and this Section. The
1998-C SUBI Certificateholders' Account shall be an Eligible Account. If for
any reason the 1998-C SUBI Certificateholders' Account is no longer an
Eligible Account, the 1998-C Securitization Trustee shall promptly cause the
1998-C SUBI Certificateholders' Account to be moved to another institution or
otherwise changed so that the 1998-C SUBI Certificateholders' Account becomes
an Eligible Account.
Pursuant to Section 4.02(j) of the 1998-C SUBI Servicing Supplement,
on each Monthly Allocation Date the Servicer shall direct the 1998-C
Securitization Trustee in writing to cause the funds in the 1998-C SUBI
Certificateholders' Account to be invested in Permitted Investments 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-C 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-C SUBI
Certificateholders' Account shall be invested by the 1998-C Securitization
Trustee in Permitted Investments at the written direction of the Servicer
until distributed or otherwise applied in accordance with the 1998-C
Securitization Trust Agreement.
Except as provided in the preceding paragraph, earnings (net of
investment losses) on the investment of funds deposited into the 1998-C SUBI
Certificateholders' Account in respect of the Class A-1 Notional Interest
Accrual Amount, any Class A-1 Interest Carryover Shortfall Amounts, the Class
A-2 Notional Interest Accrual Amount, any Class A-2 Interest Carryover
Shortfall Amounts, the Class A-3 Notional Interest Accrual Amount, any Class
A-3 Interest Carryover Shortfall Amounts, the Class B Notional Interest
Accrual Amount, any Adjustable Rate Class B Interest Carryover Shortfall
Amount, the Class B Fixed Rate Interest Accrual Amount or any Fixed Rate
Class B Interest Carryover Shortfall Amount shall be part of Available
Interest. Such net investment earnings need not be withdrawn from the 1998-C
SUBI Certificateholders' Account and redeposited as Available Interest, but
may be retained in the 1998-C SUBI Certificateholders' Account and applied as
provided in this 1998-C Securitization Trust Agreement. The 1998-C
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-C 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
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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-C
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, by itself, cause a Rating Agency to reduce or withdraw its
rating of any Class of Investor Certificates. In making such determinations,
the 1998-C Securitization Trustee shall be entitled to rely (as to clause
(i)) on the advice of Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Credit Suisse First Boston Corporation 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-C Securitization Trustee concludes
that both conditions are satisfied, or a Trust Officer of the 1998-C
Securitization Trustee has actual knowledge that a Swap Termination has
occurred, the 1998-C Securitization Trustee will exercise its right under the
Indenture to demand payment in full of all outstanding TMCC Demand Notes.
(b) ESTABLISHMENT OF THE RESERVE FUND. The Transferor shall
establish and maintain with the 1998-C 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 Sections 3.01(c)
and (h) and this Section. Funds in the Reserve Fund shall be the property of
the Transferor and not the property of the 1998-C Securitization Trust. The
Transferor hereby grants to the 1998-C 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-C 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-C Securitization Trustee hereunder. The Reserve Fund shall be an
Eligible Account and initially shall be established with the 1998-C
Securitization Trustee. If for any reason the Reserve Fund is no longer an
Eligible Account, the 1998-C 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-C
Securitization Trustee, as directed in writing by the Servicer pursuant to
Section 4.02(j) of the 1998-C 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-C Securitization Trustee shall incur
no liability for the selection of investments or for losses thereon absent
its own negligence or willful misfeasance. The 1998-C 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) RESERVE FUND SECURITIES INTERMEDIARY. The 1998-C Securitization
Trustee hereby confirms that (i) the 1998-C Securitization Trustee is acting,
with respect to its duties under this
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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-C
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 Reserve Fund Securities Intermediary,
endorsed to the Reserve Fund Securities Intermediary or in blank or credited
to another securities account maintained in the name of the Reserve Fund
Securities Intermediary for the benefit of 1998-C 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-C
Securitization Trustee. The 1998-C 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.
(d) FINANCIAL ASSETS ELECTION. The 1998-C 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-C 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-C 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-C 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-C 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-C 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-C Securitization Trustee, in such
capacity, has not entered into and, until termination of this 1998-C
Securitization Trust Agreement, will not enter into, any agreement with any
other person relating to the Reserve Fund or any financial assets
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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-C 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 $881,866.66 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)(x), 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 (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-C 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-C
Securitization Trustee or the Investor Certificateholders.
(i) PAYMENTS FOLLOWING TERMINATION OF TRUST. On each related
Stated Maturity Date and upon termination of the 1998-C 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
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-C Securitization
Trustee or the Titling Trustee. Upon termination of the 1998-C
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-C Securitization Trust, the
1998-C Securitization Trustee shall release from the lien of this 1998-C
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-C Securitization Trust or the 1998-C 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
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Section 3.02 and as specifically directed by the 1998-C 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 good faith
in accordance with any direction of the 1998-C Securitization Trustee given
under this 1998-C Securitization Trust Agreement.
(m) None of the provisions of this 1998-C 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-C 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.
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(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-C
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-C Securitization Trustee to
provide timely written investment direction.
(s) The Reserve Fund Securities Intermediary may at any time resign
by giving 30 days written notice of resignation to the 1998-C Securitization
Trustee and the Transferor. Upon receiving such notice of resignation, the
1998-C 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-C 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-C 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
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of this Section 3.02(u) shall survive the termination of this 1998-C
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 December, 1998, the
Servicer will prepare and forward to the Titling Trustee, the 1998-C
Securitization Trustee and the Luxembourg Stock Exchange, and the 1998-C
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:
(i) the Investor Percentage and Transferor Percentage in effect
with respect to the related Collection Period;
(ii) the Certificate Distribution Amount;
(iii) the amount of the Certificate Distribution Amount allocable
to (A) the Class A-1 Notional Interest Accrual Amount, the Class A-2
Notional Interest Accrual Amount, the Class A-3 Notional Interest Accrual
Amount, the Class B Notional Interest Accrual Amount, and the Class B
Fixed Rate Interest Accrual Amount; (B) any unreimbursed Class A-1
Interest Carryover Shortfall Amount, Class A-1 Swap Interest Carryover
Shortfall Amount, Class A-2 Interest Carryover Shortfall Amount, Class
A-2 Swap Interest Carryover Shortfall Amount, Class A-3 Interest
Carryover Shortfall Amount, Class A-3 Swap Interest Carryover Shortfall
Amount, Adjustable Rate Class B Interest Carryover Shortfall Amount,
Class B Swap Interest Carryover Shortfall Amount and Fixed Rate Class B
Interest Carryover Shortfall Amount; (C) the Class A-1 Swap Interest
Amount, the Class A-2 Swap Interest Amount, the Class A-3 Swap Interest
Amount and the Class B Swap Interest Amount; (D) the Class A-1 Interest
Payment Amount, Class A-2 Interest Payment Amount, Class A-3 Interest
Payment Amount, Adjustable Rate Class B Interest Payment Amount and Fixed
Rate Class B Interest Payment Amount; and (E) 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 (and the portions thereof
allocable to the Adjustable Rate Class B Certificates and the Fixed Rate
Class B Certificates), 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 (and
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the portions thereof allocable to the Adjustable Rate Class B
Certificates and the Fixed Rate Class B Certificates);
(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 (and the
portions thereof allocable to the Adjustable Rate Class B Certificates
and the Fixed Rate Class B Certificates);
(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;
(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 (separately identifying Inventory
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
(separately identifying Nonrecoverable Advances); 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
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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-C 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-C
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-C Securitization Trustee and each
Paying Agent and made available to each person who makes a written request
therefor.
(c) Any person may obtain a copy of any statement required by this
Section or required pursuant to Section 5.01(b) of the 1998-C SUBI Servicing
Supplement, any annual report of Independent Accountants required pursuant to
Section 5.02 of the 1998-C SUBI Servicing Supplement, and of any annual
Officer's Certificate required pursuant to Section 5.03 of the 1998-C SUBI
Servicing Supplement, upon written request to the 1998-C 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-C Securitization Trustee shall mail to each Person who at any time
during such calendar year shall have been a Holder, 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 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-C 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-1, B-2 and C, respectively, to this 1998-C 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
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$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 or more Class B
Certificateholders); provided, however, that one Class A-1 Certificate, one
Class A-2 Certificate, one Class A-3 Certificate, one Adjustable Rate Class B
Certificate and one Fixed Rate 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 or the portion of the Initial Class B
Certificate Balance allocable thereto, respectively (each, a "Residual
Certificate"). A single Transferor Certificate shall be issued. The
Certificates shall be executed on behalf of the 1998-C Securitization Trust
by manual or facsimile signature of an officer or other authorized signatory
of the 1998-C 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-C
Securitization Trustee shall not be rendered invalid, notwithstanding that
such individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices
at the date of such Certificates. All Certificates shall be dated the date of
their authentication.
(b) The Investor Certificates shall represent fractional undivided
beneficial interests in the 1998-C 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-C Securitization Trust Agreement. The Transferor Certificate
shall represent the interest in the 1998-C Securitization Trust not
represented by the Investor Certificates.
(c) No Certificate shall be entitled to any benefit under this
1998-C 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-1, B-2 or C
to this 1998-C Securitization Trust Agreement, as the case may be, executed
by the 1998-C Securitization Trustee or an authentication agent appointed
for such purpose by the 1998-C 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-C Securitization Trust Agreement.
The 1998-C Securitization Trustee is hereby authorized to appoint an
authentication agent to execute any or all such certificates of
authentication on behalf of the 1998-C Securitization Trustee.
4.02 AUTHENTICATION AND DELIVERY OF CERTIFICATES.
(a) In exchange for, and simultaneously with the sale, assignment
and transfer to the 1998-C Securitization Trustee of the 1998-C 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-C SUBI
Certificate and the other assets of the 1998-C Securitization Trust, the
1998-C Securitization Trustee shall cause to be executed, authenticated and
delivered to or upon the order of the Transferor Investor Certificates in
authorized denominations equaling in the aggregate the sum of the Initial
Class A-1 Certificate Balance, the Initial Class A-2 Certificate Balance, the
Initial Class A-3 Certificate Balance, the portions of the Initial Class B
Certificate Balance allocable to the Adjustable Rate Class B Certificates and
Fixed Rate Class B Certificates, respectively, and the
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Transferor Certificate, each duly authenticated by the 1998-C Securitization
Trustee or any authentication agent appointed thereby, and evidencing the
entire ownership of the 1998-C 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-C
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-C 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-C
Securitization Trust Agreement. In the event that, subsequent to the Closing
Date, the 1998-C Securitization Trustee notifies the Servicer that it is
unable to act as Certificate Registrar, the Servicer shall appoint another
bank or trust company, having an office or agency located in the Borough of
Manhattan, The City of New York, agreeing to act in accordance with the
provisions of this 1998-C Securitization Trust Agreement applicable to it,
and otherwise acceptable to the 1998-C Securitization Trustee, to act as
successor Certificate Registrar under this 1998-C 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 any 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-C 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-C Securitization Trustee shall require that the transferee
execute a representation letter acceptable to and in form and substance
satisfactory to the 1998-C 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-C Securitization Trustee) certifying to the
1998-C Securitization Trustee the facts surrounding such transfer, which
representation letter shall not be an expense of the 1998-C 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-C
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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-C Securitization Trustee is under
any obligation to register any Class B Certificates under the Securities Act
or any applicable state or foreign securities laws. Prospective purchasers
of Class B Certificates are hereby notified that the seller of any Class B
Certificate may be relying on the exemption from the registration
requirements of Section 5 of the Act provided by Rule 144A under the Act.
Class B Certificates or beneficial interests therein may not be
transferred unless the 1998-C 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 income, gain, loss,
deduction or credit from such Class B Certificates will be made among the
beneficial owners of such Flow-Through Entity.
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-C Securitization Trustee
has actual knowledge of any such transfer, such transfer shall be deemed null
and void. Unless the 1998-C Securitization Trustee shall have received a
certificate from the transferee making the representations with respect to
such ERISA matters set forth in Exhibit D hereto, the 1998-C Securitization
Trustee shall not permit a transfer of Class B Certificates to such
transferee.
The Transferor shall, whenever the 1998-C 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.
Either Class of Class B Certificates, this 1998-C Securitization Trust
Agreement and related documents may be amended or supplemented from time to
time to modify restrictions on and procedures for resale and other transfer
of such Class B Certificates to reflect any change in applicable law or
regulation (or the interpretation thereof) or practices relating to the
resale or transfer of restricted securities generally.
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(c) Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office of the 1998-C Securitization Trustee in its
capacity as Certificate Registrar, or at the office of the agent of the
1998-C Securitization Trustee as Certificate Registrar, who shall initially
be U.S. Bank National Association located at One Illinois Center, 111 E.
Wacker Drive, Suite 3000, Chicago, Illinois 60601 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, the 1998-C
Securitization Trust shall execute, and the 1998-C 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-C Securitization Trust
shall execute, and the 1998-C 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-C 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-C 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-C 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 such 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 such 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
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(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-C Securitization Trustee or
any of their respective affiliates.
(iii) The purchaser agrees that such 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 such 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-C 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-C
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 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-C 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 any Class B Certificates.
(vii) The purchaser understands that there is no market, nor is
there any assurance that a market will develop, for any Class B
Certificates and that the Transferor and the 1998-C Securitization Trust
have no obligation to make or facilitate any such market (or to otherwise
repurchase such 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 such Class
B Certificate, is aware that its taxable income with respect to such
Class B Certificate in any accounting period may not correspond to the
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cash flow (if any) from such Class B Certificate for such period, and is
not purchasing such 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 December 2, 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 related Class of Class B Certificates provided in this
1998-C 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-C Securitization Trustee such security or
indemnity as may be required by them to save each of them and the 1998-C
Securitization Trust harmless, then, in the absence of notice that such
Certificate has been acquired by a bona fide purchaser, the 1998-C
Securitization Trustee on behalf of the 1998-C Securitization Trust shall
execute and the 1998-C 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-C 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-C 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-C 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
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of receiving distributions pursuant to Section 3.01 and for all other
purposes whatsoever, and neither the 1998-C 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-C Securitization
Trustee, and such application states that the Applicants desire to
communicate with other Investor Certificateholders with respect to their
rights under this 1998-C 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-C
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-C Securitization Trustee that neither the Servicer nor
the 1998-C 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-C 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-C
Securitization Trustee at the Corporate Trust Office. The 1998-C
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-C
Securitization Trustee in respect of the Certificates and this 1998-C
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-C Securitization Trust
may execute, and the 1998-C 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
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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 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-C Securitization Trust shall execute and the 1998-C 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-C 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-C 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
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Clearing Agency Participants and receive and transmit distributions 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-C 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-C Securitization Trustee.
4.10 NOTICES.
Whenever notice or other communication to the Class A-1 Certificate-
holders, Class A-2 Certificateholders or the Class A-3 Certificateholders is
required under this 1998-C 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-C 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.
In addition, the 1998-C Securitization Trustee and the Servicer shall give
all such notices and communications to the Class A Certificateholders, 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. Whenever notice
or other communication to the holders of definitive Class A Certificates is
required under this 1998-C Securitization Trust Agreement, the 1998-C
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 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. Notices with respect to any Class of Definitive
Certificates (whether Class B Certificates or Class A Certificates), 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-C
Securitization Trustee prior to such mailing. All such notices will be
deemed to have been given on the date of such publication or mailing or
(prior to the issuance of definitive Class A Certificates) on the date
delivered to the Clearing Agency. 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-C Securitization
Trust Agreement shall be conclusively presumed to have been duly given,
whether or not the Certificateholder shall receive such notice.
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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-C 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-C Securitization Trustee and the Clearing Agency and (B)
the 1998-C Securitization Trustee or the Transferor is unable to locate a
qualified successor or (ii) the Transferor at its option, advises the 1998-C
Securitization Trustee in writing that it elects to terminate the book-entry
system through the Clearing Agency. Following the occurrence of any such
event, the 1998-C 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-C
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-C 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-C 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-C 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-C Securitization Trustee shall
not be liable if the 1998-C 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-C 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-C 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-C Securitization Trust
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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-C Securitization Trust Agreement as to treatment as
secured indebtedness for federal, state and local income and franchise tax
purposes and for purposes of any other tax imposed on or measured by income.
Each Holder of an Investor Certificate also agrees that it will not be
entitled to any of the tax benefits related to the 1998-C Contracts and
1998-C 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-C Securitization
Trust, then the Transferor, the 1998-C 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-C
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.
ARTICLE V
THE TRANSFEROR
5.01 REPRESENTATIONS OF TRANSFEROR.
The Transferor hereby makes the following representations on which the
1998-C Securitization Trustee relies in accepting the 1998-C SUBI and 1998-C
SUBI Certificate in trust and authenticating the Certificates. The
representations speak as of the execution and delivery of this 1998-C
Securitization Trust Agreement, but shall survive the sale, transfer and
assignment of the 1998-C SUBI and 1998-C SUBI Certificate to the 1998-C
Securitization Trustee.
(a) ORGANIZATION AND GOOD STANDING. The Transferor is a
corporation duly incorporated and validly existing and in good standing under
the laws of the State of California, with power and
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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-C
SUBI and 1998-C 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-C 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-C Securitization Trustee as part of the 1998-C Securitization Trust
and has duly authorized such sale and assignment to the 1998-C Securitization
Trustee by all necessary action; and the execution, delivery and performance
of this 1998-C Securitization Trust Agreement have been duly authorized by
the Transferor by all necessary corporate action.
(d) VALID SALE: BINDING OBLIGATIONS. This 1998-C Securitization
Trust Agreement evidences a valid sale, transfer and assignment of the 1998-C
SUBI Certificate and the assets of the 1998-C 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-C Securitization Trust Agreement and the
fulfillment of the terms of this 1998-C 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-C 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.
(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
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other governmental instrumentality having jurisdiction over the Transferor or
its properties: (i) asserting the invalidity of this 1998-C 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-C 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-C 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-C SUBI CERTIFICATE. Prior to the transfer
pursuant to this 1998-C Securitization Trust Agreement, the Transferor has
good title to, and is the sole legal and beneficial owner of, the 1998-C 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-C 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-C Securitization Trust Agreement.
5.02 LIABILITY OF TRANSFEROR: INDEMNITIES.
The Transferor shall be liable in accordance with this 1998-C
Securitization Trust Agreement only to the extent of the obligations in this
1998-C Securitization Trust Agreement specifically undertaken by the
Transferor in such capacity under this 1998-C 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-C 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-C 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.
(b) Subject to subparagraphs (c) and (d) 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
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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.
(c) 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:
(i) 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;
(ii) 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;
(iii) 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");
(iv) 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");
(v) to hold and enjoy all of the rights and privileges of any
Securities so issued under the related Agreements;
(vi) to perform its obligations under the Agreements; and
(vii) 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.
(d) 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
clauses (b) and (c) above;
(ii) without the affirmative vote of a majority of the members of the
Board of Directors of the Transferor (which must include the affirmative
vote of all Independent Directors of the Transferor, as required by 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
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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-C SUBI Certificate or the 1998-C SUBI
Insurance Certificate from TMCC, the 1998-C 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(c)(ii) and (iii) 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.
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-C Securitization Trust
Agreement.
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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-C
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-C SUBI Insurance Certificate,
except as expressly set forth in the 1998-C SUBI Supplement.
5.07 TAX MATTERS PARTNER.
In the event that the 1998-C 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-C 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-C 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-C Securitization Trustee. The Transferor shall not be liable to the
1998-C 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.
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-C SUBI Certificateholders'
Account, the 1998-C 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-C
Securitization Trust Agreement are insufficient to reduce such Adjusted Class
A-1 Certificate Balance, Adjusted Class A-2 Certificate Balance, Adjusted
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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-C Securitization Trustee for deposit into the 1998-C
SUBI Collection Account; PROVIDED, HOWEVER, that any such Maturity Advance
must be made pursuant to the payment priorities set forth in Section
3.01(l)(ii).
ARTICLE VI
THE 1998-C SECURITIZATION TRUSTEE
6.01 DUTIES OF THE 1998-C SECURITIZATION TRUSTEE.
(a) The 1998-C Securitization Trustee, both prior to and after the
occurrence of an Event of Servicing Termination under the 1998-C SUBI
Servicing Supplement, undertakes to perform such duties and only such duties
as are specifically set forth in this 1998-C Securitization Trust Agreement.
(b) The 1998-C Securitization Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the 1998-C Securitization Trustee that shall be
specifically required to be furnished pursuant to any provision of this
1998-C Securitization Trust Agreement, shall examine them to determine
whether they conform on their face to the requirements of this 1998-C
Securitization Trust Agreement.
(c) No provision of this 1998-C Securitization Trust Agreement shall be
construed to relieve the 1998-C 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-C Securitization Trustee
shall be determined solely by the express provisions of this 1998-C
Securitization Trust Agreement, the 1998-C Securitization Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this 1998-C Securitization Trust Agreement, no
implied covenants or obligations shall be read into this 1998-C
Securitization Trust Agreement against the 1998-C Securitization Trustee,
the permissive right of the 1998-C Securitization Trustee to do things
enumerated in this 1998-C Securitization Trust Agreement shall not be
construed as a duty and, in the absence of bad faith on the part of the
1998-C Securitization Trustee, the 1998-C 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-C Securitization Trustee and conforming on their face to the
requirements of this 1998-C Securitization Trust Agreement;
(ii) the 1998-C 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-C Securitization Trustee was
negligent in performing its duties in accordance with the terms of this
1998-C Securitization Trust Agreement; and
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(iii) the 1998-C 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-C Securitization Trustee,
or exercising any trust or power conferred upon the 1998-C Securitization
Trustee, under this 1998-C Securitization Trust Agreement or the Titling
Trust Agreement (as supplemented by the 1998-C SUBI Supplement).
(d) The 1998-C 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-C 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-C Securitization Trustee
regarding the Obligors and the Contracts contained in the 1998-C SUBI,
whether upon the exercise of its rights under this 1998-C Securitization
Trust Agreement or otherwise, shall be maintained by the 1998-C
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-C SUBI Servicing
Supplement, in the event that the 1998-C Securitization Trustee discovers
that a representation or warranty with respect to a 1998-C Contract was
incorrect as of the time specified with respect to such representation and
warranty and such incorrectness materially and adversely affects such 1998-C
Contract, the 1998-C Securitization Trustee shall give prompt written notice
to the Servicer and the Titling Trustee of such incorrectness.
6.02 CERTAIN MATTERS AFFECTING THE 1998-C SECURITIZATION TRUSTEE.
(a) Except as otherwise provided in Section 6.01:
(i) the 1998-C Securitization Trustee may rely and shall be protected
in acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of an authorized signatory, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) the 1998-C 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-C Securitization Trust Agreement in good faith and in
accordance with such Opinion of Counsel;
(iii) the 1998-C Securitization Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
1998-C Securitization Trust Agreement or
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the Titling Trust Agreement (as supplemented by the 1998-C SUBI
Supplement), or to institute, conduct or defend any litigation under this
1998-C Securitization Trust Agreement or the Titling Trust Agreement (as
supplemented by the 1998-C SUBI Supplement), or in relation to this 1998-C
Securitization Trust Agreement or the Titling Trust Agreement (as
supplemented by the 1998-C SUBI Supplement), at the request, order or
direction of any of the Certificateholders pursuant to the provisions of
this 1998-C Securitization Trust Agreement or the Titling Trust Agreement
(as supplemented by the 1998-C SUBI Supplement), unless such Certificate-
holders shall have offered to the 1998-C Securitization Trustee reasonable
security or indemnity against the costs, expenses and liabilities that may
be incurred therein or thereby;
(iv) the 1998-C 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-C Securitization Trust
Agreement;
(v) the 1998-C 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-C 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-C Securitization Trustee, not
reasonably assured to the 1998-C Securitization Trustee by the security
afforded to it by the terms of this 1998-C Securitization Trust Agreement,
the 1998-C 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-C 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-C Securitization Trustee may execute any of the trusts
or powers under this 1998-C Securitization Trust Agreement or perform any
duties under this 1998-C 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-C Securitization Trust Agreement except
upon satisfying the conditions set forth in Section 9.03(c).
6.03 1998-C SECURITIZATION TRUSTEE NOT LIABLE FOR CERTIFICATES OR CONTRACTS.
The 1998-C Securitization Trustee makes no representations as to the
validity or sufficiency of this 1998-C Securitization Trust Agreement or of the
Certificates (other than the execution by
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the 1998-C Securitization Trustee on behalf of the 1998-C Securitization
Trust of, and the certificate of authentication on, the Certificates), or of
the 1998-C SUBI or 1998-C SUBI Certificate. The 1998-C Securitization
Trustee shall have no obligation to perform any of the duties of the
Transferor unless explicitly set forth in this 1998-C Securitization Trust
Agreement. The 1998-C Securitization Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of the 1998-C SUBI or 1998-C SUBI Certificate or any 1998-C
Contract, any ownership interest in any 1998-C Leased Vehicle, or the
maintenance of any such ownership interest, or for or with respect to the
efficacy of the 1998-C Securitization Trust or its ability to generate the
payments to be distributed to Certificateholders under this 1998-C
Securitization Trust Agreement, including without limitation the validity of
the assignment of the 1998-C SUBI or 1998-C SUBI Certificate to the 1998-C
Securitization Trust or of any intervening assignment; the existence,
condition, location and ownership of any 1998-C Contract or 1998-C Leased
Vehicle; the existence and enforceability of any physical damage or credit
life or credit disability insurance; the existence and contents of any 1998-C
Contract or any computer or other record thereof; the completeness of any
1998-C Contract; the performance or enforcement of any 1998-C Contract; the
compliance by the Transferor with any covenant or the breach by the
Transferor of any warranty or representation made under this 1998-C
Securitization Trust Agreement or in any related document and the accuracy of
any such warranty or representation prior to the 1998-C 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-C Securitization Trustee taken at the
instruction of the Servicer PROVIDED, HOWEVER, that the foregoing shall not
relieve the 1998-C Securitization Trustee of its obligation to perform its
duties under this 1998-C Securitization Trust Agreement.
Except with respect to a claim based on the failure of the 1998-C
Securitization Trustee to perform its duties under this 1998-C Securitization
Trust Agreement or based on the 1998-C Securitization Trustee's willful
misconduct, bad faith or negligence, no recourse shall be had for any claim
based on any provision of this 1998-C Securitization Trust Agreement, the
Certificates, the 1998-C SUBI or 1998-C SUBI Certificate or assignment
thereof against the institution serving as the 1998-C Securitization Trustee
in its individual capacity. The 1998-C 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-C Securitization Trust
or any indemnitor who shall furnish indemnity as provided in this 1998-C
Securitization Trust Agreement. The 1998-C Securitization Trustee shall not
be accountable for the use or application by the Transferor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Servicer in respect of the 1998-C SUBI
or 1998-C SUBI Certificate.
6.04 1998-C SECURITIZATION TRUSTEE MAY OWN CERTIFICATES.
The 1998-C 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-C Securitization Trustee.
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6.05 1998-C SECURITIZATION TRUSTEE'S FEES AND EXPENSES.
The 1998-C 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-C Securitization
Trust Agreement and in the exercise and performance of any of the powers and
duties of the 1998-C Securitization Trustee under this 1998-C Securitization
Trust Agreement, and payment or reimbursement upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
1998-C Securitization Trustee in its capacity as 1998-C Securitization
Trustee in accordance with any of the provisions of this 1998-C
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-C Securitization Trustee's administration of this
1998-C 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-C
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-C SECURITIZATION TRUSTEE.
The 1998-C Securitization Trustee under this 1998-C 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-C 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-C Securitization
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the 1998-C Securitization Trustee shall resign immediately in the
manner and with the effect specified in Section 6.07.
6.07 RESIGNATION OR REMOVAL OF 1998-C SECURITIZATION TRUSTEE.
(a) RESIGNATION. The 1998-C Securitization Trustee may at any time
resign and be discharged from the trusts created by this 1998-C
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-C Securitization Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the resigning 1998-C 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
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Trustee may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
(b) REMOVAL. If at any time the 1998-C 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-C Securitization Trustee shall be legally unable to act,
or shall be adjudged a bankrupt or insolvent, or a receiver of the 1998-C
Securitization Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the 1998-C Securitization Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Transferor may remove the 1998-C Securitization
Trustee. If it shall remove the 1998-C Securitization Trustee under the
authority of the immediately preceding sentence, the Transferor shall
promptly appoint a successor 1998-C Securitization Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the 1998-C Securitization Trustee so removed and one copy to the successor
1998-C Securitization Trustee, and arrange for the payment of all fees owed
to the outgoing 1998-C Securitization Trustee.
(c) EFFECTIVE DATE OF RESIGNATION OR REMOVAL. Any resignation or
removal of the 1998-C Securitization Trustee and appointment of a successor
1998-C Securitization Trustee pursuant to any of the provisions of this
Section shall not become effective until acceptance of appointment by the
successor 1998-C 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-C Securitization Trustee and appointment and acceptance
of a successor Trustee.
6.08 SUCCESSOR 1998-C SECURITIZATION TRUSTEE.
Any successor 1998-C Securitization Trustee appointed as provided in
Section 6.07 shall execute, acknowledge and deliver to the Transferor and to
its predecessor 1998-C Securitization Trustee an instrument accepting such
appointment under this 1998-C 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-C 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-C Securitization Trust Agreement; and the Transferor and the
predecessor Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting
and confirming in the successor Trustee all such rights, powers, duties and
obligations. No successor Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 6.06. Upon acceptance of
appointment by a successor Trustee as provided in this Section, the
Transferor shall cause notice of the successor of such Trustee under this
1998-C 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.
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6.09 MERGER OR CONSOLIDATION OF 1998-C SECURITIZATION TRUSTEE.
Any corporation (i) into which the 1998-C Securitization Trustee may be
merged or consolidated, (ii) which may result from any merger, conversion or
consolidation to which the 1998-C Securitization Trustee shall be a party, or
(iii) which may succeed to the corporate trust business of the 1998-C
Securitization Trustee, shall be the successor of the 1998-C 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-C 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-C
Securitization Trustee, either generally or particularly as provided herein.
Notice of any such event shall be given by the 1998-C Securitization Trustee
to each Rating Agency.
6.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of this 1998-C Securitization
Trust Agreement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the 1998-C
Securitization Trust may at the time be located, the Transferor and the
1998-C 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-C Securitization Trustee, or separate trustee or
separate trustees, of all or any part of the 1998-C Securitization Trust, and
to vest in such Person, in such capacity and for the benefit of the
Certificateholders, such title to the 1998-C 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-C 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-C Securitization Trustee alone
shall have the power to make such appointment. No co-trustee or separate
trustee under this 1998-C 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:
(i) all rights, powers, duties and obligations conferred or imposed
upon the 1998-C Securitization Trustee shall be conferred upon and
exercised or performed by the 1998-C 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-C 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-C 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-C Securitization Trust or any portion thereof in any such
jurisdiction) shall be
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exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the 1998-C Securitization Trustee;
(ii) no trustee under this 1998-C Securitization Trust Agreement shall
be personally liable by reason of any act or omission of any other trustee
under this 1998-C Securitization Trust Agreement; and
(iii) the Transferor and the 1998-C 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-C
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-C 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-C
Securitization Trustee or separately, as may be provided therein, subject to
all the provisions of this 1998-C Securitization Trust Agreement,
specifically including every provision of this 1998-C Securitization Trust
Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the 1998-C Securitization Trustee. Each such
instrument shall be filed with the 1998-C 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-C 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-C 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-C 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-C Securitization Trust Agreement, the appointment of
any separate trustee or co-trustee shall not relieve the 1998-C
Securitization Trustee of its obligations and duties under this 1998-C
Securitization Trust Agreement.
6.11 REPRESENTATIONS AND WARRANTIES OF 1998-C SECURITIZATION TRUSTEE.
The 1998-C Securitization Trustee makes the following representations
and warranties on which the Transferor and Certificateholders may rely:
ORGANIZATION AND GOOD STANDING. The 1998-C 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-C Securitization Trustee has full power,
authority and right to execute, deliver and perform this 1998-C
Securitization Trust Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this 1998-C
Securitization Trust Agreement.
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DUE EXECUTION. This 1998-C Securitization Trust Agreement has been duly
executed and delivered by the 1998-C Securitization Trustee.
ENFORCEABILITY. This 1998-C Securitization Trust Agreement constitutes
the legal, valid and binding obligation of the 1998-C 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-C 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-C Securitization Trust or the assets of the
1998-C Securitization Trust and shall deliver any such returns to the 1998-C
Securitization Trustee for signature at least five days prior to the date
such returns are required by law to be filed. The 1998-C 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 1998-C SECURITIZATION TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES.
All rights of action and claims under this 1998-C Securitization Trust
Agreement or the Certificates may be prosecuted and enforced by the 1998-C
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-C 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-C 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-C SUBI Servicing
Supplement with respect to the 1998-C SUBI Portfolio, the 1998-C
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-C
SUBI Servicing Supplement, proceed to protect and enforce its rights and the
rights of the Certificateholders under this 1998-C Securitization Trust
Agreement, the Titling Trust Agreement and the 1998-C 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-C Securitization Trustee, being advised by counsel, shall
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deem most effectual to protect and enforce any of the rights of the 1998-C
Securitization Trustee or the Certificateholders.
6.15 RIGHTS OF CERTIFICATEHOLDERS TO DIRECT 1998-C SECURITIZATION 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-C Securitization Trustee
under this 1998-C Securitization Trust Agreement (including to direct the
1998-C 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-C Securitization Trustee by this 1998-C 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-C
SUBI Supplement by the 1998-C Securitization Trustee in its capacity as a
transferee of the 1998-C SUBI Certificate, the greater Percentage Interest
shall prevail; (b) subject to Sections 6.01 and 6.02, the 1998-C
Securitization Trustee shall have the right to decline to follow any such
direction if the 1998-C Securitization Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
1998-C 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-C Securitization Trust Agreement
shall impair the right of the 1998-C Securitization Trustee to take any
action deemed proper by the 1998-C Securitization Trustee and which is not
inconsistent with such direction by the Certificateholders.
6.16 NO PETITION.
The 1998-C 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-C
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-C
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-C
Securitization Trust Agreement or the resignation or removal of the 1998-C
Securitization Trustee under this 1998-C Securitization Trust Agreement.
6.17 NEGATIVE PLEDGE.
Except as expressly set forth herein with respect to the disposition of
the assets of the 1998-C Securitization Trust in connection with the
termination of the 1998-C Securitization Trust pursuant to Section 7.01, the
1998-C Securitization Trustee shall not sell, assign, pledge, convey or
otherwise transfer to any person the 1998-C SUBI Certificate or any interest
therein.
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ARTICLE VII
TERMINATION
7.01 TERMINATION OF THE 1998-C SECURITIZATION TRUST.
(a) The 1998-C Securitization Trust and the respective obligations and
responsibilities of the Transferor and the 1998-C 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-C Contract and
1998-C Leased Vehicle evidenced by the 1998-C 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-C 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-C Securitization Trust
as described in Section 7.02 (except that the 1998-C 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 Swap Termination and the subsequent
liquidation of the assets of the 1998-C Securitization Trust and the
distribution of the net proceeds thereof to Certificateholders, the 1998-C
Securitization Trustee, the Titling Trustee and the Transferor pursuant to
Section 3.01(o) of this 1998-C Securitization Trust Agreement, or (v) the
expiration, disposition or termination of the 1998-C SUBI; PROVIDED, HOWEVER,
that in no event shall the trust created by this 1998-C 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-C
Securitization Trustee and each Rating Agency of any prospective termination
of the 1998-C Securitization Trust.
(b) Notice of any termination, specifying the Monthly Allocation Date
upon which the final distribution on, and retirement of, the Certificates
shall occur, shall be given promptly by the 1998-C Securitization Trustee.
For so long as any Class A Certificates are listed on the Luxembourg Stock
Exchange, such notice shall 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). With respect to any Class A or Class B
Definitive Certificates that are issued such notice shall also be given 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 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-C Securitization Trustee therein specified, or, in the case of
any Definitive Class A Certificates, to the 1998-C 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
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such mailing. Such notices will be deemed to have been given on the date of
such publication or mailing. The 1998-C Securitization Trustee shall give
such notice to the Certificate Registrar (if other than the 1998-C
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-C Securitization Trust corpus pursuant to Section 7.02,
the Transferor shall deposit into the 1998-C SUBI Collection Account, the
amount specified in Section 7.02. Upon presentation and surrender of the
Certificates, the 1998-C 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-C
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-C 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-C Securitization Trust Agreement. Any funds remaining in the
1998-C Securitization Trust after exhaustion of such remedies shall be
distributed by the 1998-C 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-C 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
$74,998,873.25 (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-C SUBI Collection Account on such
date, the Transferor shall have the option to purchase the Investor
Certificateholders' interest in the corpus of the 1998-C Securitization Trust
and to effect a termination of the Trust. To exercise such option, the
Transferor shall notify the 1998-C Securitization 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-C
SUBI Collection 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, (C) any
unreimbursed Certificate Principal Loss Amounts, allocated to any Class of
Investor Certificates (and interest accrued thereon), (D) any unreimbursed
Advances or compensation payable to the Servicer through such date and (E)
any compensation or
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reimbursements due to the Servicer, the Titling Trustee and the 1998-C
Securitization Trustee hereunder. On such Monthly Allocation Date, upon
receipt of such amount, the 1998-C 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-C Securitization Trust corpus.
ARTICLE VIII
ACCUMULATION EVENTS AND SWAP TERMINATION
8.01 ACCUMULATION EVENTS.
If an Accumulation Event or Swap Termination 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 SWAP TERMINATION, EVENTS OF DEFAULT AND TERMINATION EVENTS.
(a) If a Trust Officer of the 1998-C Securitization Trust obtains
actual knowledge of an Event of Default or Termination Event (as such terms
are defined in the Swap Agreement), the 1998-C Securitization Trustee shall
promptly publish and deliver notice to the Certificateholders as provided in
Section 4.10 of this 1998-C Securitization Trust Agreement. In the case of
any Tax Event or Tax Event Upon Merger (as defined in the Swap Agreement),
such notice shall specify that unless the 1998-C Securitization Trustee
receives within 30 days of the date of publication of such notice the
direction of Holders of at least 51% of the Voting Interests of the Class A
Certificateholders and Adjustable Rate Class B Certificateholders (acting as
a single Class) to elect to terminate the Swap Agreement and liquidate the
assets of the 1998-C Securitization Trust, the 1998-C Securitization Trustee
shall not designate an Early Termination Date (as defined in the Swap
Agreement) and, accordingly, such event will not constitute a Termination
Event. Upon the occurrence of (i) any Event of Default under the Swap
Agreement arising from any action taken, or failure to act, by the Swap
Counterparty, or (ii) a Termination Event under the Swap Agreement (except as
described in the following sentence) with respect to which the Swap
Counterparty is an Affected Party (as defined in the Swap Agreement), the
1998-C Securitization Trustee may and will, at the direction of 51% of the
Voting Interest of the Certificateholders, by notice to the Swap
Counterparty, designate an Early Termination Date with respect to the Swap
Agreement. If a Termination Event under the Swap Agreement occurs (i) as a
result of the insolvency or bankruptcy of the Transferor or (ii) because the
1998-C Securitization Trust or the Transferor becomes subject to registration
as an "Investment Company" under the Investment Company Act of 1940, the
1998-C Securitization Trustee shall terminate the Swap Agreement.
If the 1998-C Securitization Trustee or the Swap Counterparty elects to
designate an Early Termination Date and thereafter to terminate the Swap
Agreement and liquidate the assets
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of the 1998-C Securitization Trust, the 1998-C Securitization Trustee will
specify in a further notice to the Class A Certificateholders the date
elected, and shall also deliver such notice to the Luxembourg Stock Exchange.
As soon as the 1998-C Securitization Trustee is reasonably able to do so, it
will so publish and deliver a further notice to each such party specifying
the date on which the net proceeds of such liquidation are to be allocated
and applied or paid pursuant to Section 3.01(o). In the event that a Swap
Termination occurs, whether because the 1998-C Securitization Trust elects to
designate or receives appropriate direction from the relevant Certificateholders
to designate an Early Termination Date, or because the Swap Counterparty
elects to designate an Early Termination Date, the 1998-C Securitization
Trustee shall, unless otherwise prohibited by applicable law from any such
action, sell, dispose of or otherwise liquidate the 1998-C SUBI, the 1998-C
SUBI Certificate and such other property of the 1998-C Securitization Trust
in accordance with Section 8.02(c).
(b) Following publication of the notice provided for in Section
8.02(a), the 1998-C Securitization Trustee shall, unless otherwise prohibited
by applicable law from any such action, sell, dispose of, or otherwise
liquidate the 1998-C SUBI, the 1998-C SUBI Certificate and the other property
of the 1998-C 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 highest
bidder. The Transferor and the Servicer shall be permitted to bid for the
1998-C Securitization Trust property. The 1998-C Securitization Trustee may
obtain a prior determination from the conservator, receiver, or trustee in
bankruptcy of the Transferor, if appropriate, or from any other third party
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. The proceeds from the sale,
disposition or liquidation of the 1998-C SUBI Certificate and the 1998-C SUBI
Assets evidenced thereby pursuant to this Section 8.02(b), shall be payable
pursuant to the priorities set forth in Section 3.01(o) above. On the day
following the Certificate Payment Date on which such proceeds are distributed
to the Investor Certificateholders, the 1998-C Securitization Trust shall
terminate.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.01 AMENDMENT.
(a) This 1998-C 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
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Certificateholders and the Titling Trustee and the 1998-C 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-C Securitization Trustee an
Opinion of Counsel to the effect that after such amendment, for federal
income tax purposes, the 1998-C 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-C Securitization
Trust.
(b) This 1998-C 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 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-C SUBI Collection
Account or (iv) changing the definition of "Permitted Investments" if either
(A) the 1998-C 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-C 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-C 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-C SUBI or any 1998-C SUBI Certificate or payments that shall be
required to be made on any Investor Certificate or the applicable Class A-1
Rate, Class A-2 Rate, Class A-3 Rate, Class B Adjustable Rate or Class B
Fixed 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-C 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
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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-C 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-C Securitization
Trustee may prescribe.
(e) The 1998-C Securitization Trustee may enter into an amendment to
the Swap Agreement without the consent of any Certificateholder for the
purpose of (i) curing any ambiguity or mistake, (ii) correcting any defective
provisions or to correct or supplement any provision therein which may be
inconsistent with any other provision therein or with any provision of this
1998-C Securitization Trust Agreement, or (iii) adding any other provisions
with respect to matters or questions arising under the Swap Agreement;
provided, in the case of any amendment pursuant to clause (iii) above, that
such amendment will not adversely affect in any material respect the
interests of any Certificateholder; and provided, further, that any such
amendment will be deemed not to adversely affect in any material respect the
interests of any Certificateholder if the 1998-C Securitization Trustee
receives written confirmation from each Rating Agency that its then
outstanding ratings of the Investor Certificates will not be reduced or
withdrawn as a result of such amendment.
(f) Prior to the execution of any amendment to this 1998-C Securitization
Trust Agreement or the Swap Agreement, the 1998-C Securitization Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this 1998-C
Securitization Trust Agreement. The 1998-C Securitization Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
1998-C Securitization Trustee's own rights, duties or immunities under this
1998-C Securitization Trust Agreement or the Swap 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-C Securitization Trustee under this 1998-C Securitization Trust
Agreement in the 1998-C SUBI, the 1998-C SUBI Certificate and in the proceeds
thereof. The Transferor shall deliver (or cause to be delivered) to the
1998-C 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
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the Transferor in accordance with paragraph (a) above seriously misleading it
shall give the 1998-C 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-C 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-C Securitization Trustee
promptly after the execution and delivery of each amendment to this 1998-C
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-C Securitization Trustee in
the 1998-C 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-C Securitization Trust Agreement or the 1998-C
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-C Securitization Trust, nor otherwise affect the rights, obligations and
liabilities of the parties to this 1998-C 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-C Securitization Trust, or the obligations of the
parties to this 1998-C Securitization Trust Agreement, nor shall anything set
forth in this 1998-C 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-C
Securitization Trust Agreement.
(c) No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this 1998-C Securitization Trust Agreement to
institute any suit, action, or proceeding in equity or at law upon or under
or with respect to this 1998-C Securitization Trust Agreement or any other
Transaction Document, unless such Holder previously shall have given to the
1998-C 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
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request upon the 1998-C Securitization Trustee to institute such action, suit
or proceeding in its own name as Trustee under this 1998-C Securitization
Trust Agreement and shall have offered to the 1998-C Securitization Trustee
such reasonable indemnity as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and the 1998-C 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-C 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-C
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-C
Securitization Trust Agreement or any other Transaction Document, except in
the manner provided in this 1998-C 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-C Securitization Trustee shall be entitled to
such relief as can be given either at law or in equity.
9.04 GOVERNING LAW.
THIS 1998-C 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.
9.05 NOTICES TO PARTIES.
All demands, notices and communications under this 1998-C 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, by the agent for service as specified in this 1998-C
Securitization Trust Agreement, or at such other address as shall be
designated by the Transferor in a written notice to the 1998-C Securitization
Trustee; and (ii) in the case of the 1998-C Securitization Trustee, at the
Corporate Trust Office. Such notices as shall be required to be sent to the
Rating Agencies shall be deemed to have been duly given upon receipt (i) in
the case of Standard & Poor's, at 25 Broadway, 20th Floor, New York, New York
10004, Attention: Asset Backed Surveillance Department; and (ii) in the case
of Moody's, at 99 Church Street, New York, New York 10007 Attention: ABS
Monitoring Department.
9.06 SEVERABILITY OF PROVISIONS: COUNTERPARTS.
If any one or more of the covenants, agreements, provisions or terms of
this 1998-C 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-C Securitization Trust Agreement and shall
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in no way affect the validity or enforceability of the other provisions of
this 1998-C Securitization Trust Agreement or of the Certificates or the
rights of the Holders thereof.
This 1998-C 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.
9.07 ASSIGNMENT.
Notwithstanding anything to the contrary contained in this 1998-C
Securitization Trust Agreement, except as provided in Sections 5.03 and 5.06,
this 1998-C 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-C Securitization Trust. The interests represented by the Certificates
shall be nonassessable for any losses or expenses of the 1998-C Securitization
Trust or for any reason whatsoever, and, upon the execution and authentication
thereof by the 1998-C 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-C 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-C Leased Vehicles. The 1998-C 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-C 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-C 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.
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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-C Securitization Trustee shall maintain an office or offices or
agency or agencies where notices and demands to or upon the 1998-C
Securitization Trustee in respect of the Certificates and this 1998-C
Securitization Trust Agreement may be served. The initial such office shall
be the Corporate Trust Office. The 1998-C 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]
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IN WITNESS WHEREOF, the parties have caused this 1998-C
Securitization Trust Agreement to be duly executed by their respective
officers as of December 1, 1998.
TOYOTA LEASING, INC.
as Transferor
By: /S/ GREGORY WILLIS
-------------------------------------
Name: Gregory Willis
Title: President
U.S. BANK NATIONAL ASSOCIATION,
as 1998-C Securitization Trustee and as
Securities Intermediary
By: /S/ STEVEN E. CHARLES
-------------------------------------
Name: Steven E. Charles
Title: Vice President
67
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EXHIBIT A-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TOYOTA AUTO LEASE TRUST 1998-C
ADJUSTABLE RATE 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-C Securitization Trustee or any of their respective
affiliates.
Initial Class A-1 Certificate Balance: CUSIP #
-------------
$
--------------
Number A-1-1 Denomination: $
--------------
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a ______________
($______________) nonassessable, fully-paid, fractional undivided interest in
the Toyota Auto Lease Trust 1998-C (the "1998-C Securitization Trust") formed by
Toyota Leasing, Inc., a California corporation, as Transferor (the
"Transferor"). The 1998-C Securitization Trust was created pursuant to a 1998-C
Securitization Trust Agreement dated as of December 1, 1998 (the "Agreement"),
between the Transferor and U.S. Bank National Association, a national banking
association, as trustee (the "1998-C 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-C Adjustable Rate
Auto Lease Asset Backed Certificates, Class A-1" (the "Class A-1 Certificates").
Also issued under the Agreement are Certificates designated as "Toyota Auto
Lease Trust 1998-C Adjustable Rate Auto Lease Asset Backed Certificates, Class
A-2" (the "Class A-2 Certificates"), Certificates designated as "Toyota Auto
Lease Trust 1998-C Adjustable Rate 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
A-1
<PAGE>
Certificates, the "Class A Certificates"), Certificates designated as "Toyota
Auto Lease Trust 1998-C Adjustable Rate 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-C Securitization Trust includes, among other
things, the 1998-C SUBI Certificate evidencing beneficial interests in the
assets of the 1998-C SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-C 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-C
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-C 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-C SUBI represented
by the 1998-C 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-C SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-C 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-C 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 quarterly on the 25th day of March, June,
September and December (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 the 25th day of the month (or if such day
is not a Business Day, the next succeeding Business Day, each such day a
"Certificate Payment Date") until the Adjusted Class A-1 Certificate Balance has
been reduced to zero.
Except as otherwise provided in the Agreement, for Interest Payment Periods
commencing prior to the related Targeted Maturity Date, interest will accrue on
the Class A-1 Certificates at three-month LIBOR plus 0.23% per annum, on the
Class A-2 Certificates at three-month LIBOR
A-2
<PAGE>
plus 0.27% per annum and on the Class A-3 Certificates at three-month LIBOR
plus 0.32% per annum. Except as otherwise provided in the Agreement, for
Interest Payment Periods commencing on or after the related Targeted Maturity
Date, interest will accrue on the Class A-1 Certificates at one-month LIBOR
plus 0.26% per annum, on the Class A-2 Certificates at one-month LIBOR plus
0.30% per annum and on the Class A-3 Certificates at one-month LIBOR plus
0.35% per annum. Amounts available to make interest payments to the Class A
Certificateholders will be limited to amounts payable by the Swap
Counterparty in accordance with the Swap Agreement. If such amount payable
by the Swap Counterparty is less than the amount of interest accrued on the
Class A Certificates, there will be a proportional reduction in the amount of
interest payable on the Class A-1 Certificates, the Class A-2 Certificates
and the Class A-3 Certificates, as applicable. The Interest Payment Amount
for each Class A Certificate shall be calculated by applying any proportional
reduction (calculated as described in the Agreement) to the amount of
interest determined to have accrued on each Class of Class A Certificates.
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 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, to the extent of amounts allocated and available therefor, shall
be distributable on the A-1 Targeted Maturity Date which shall be December 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 December 25, 2002 (or if such day is not a Business Day,
on the next succeeding Business Day).
On each Certificate Payment Date, the 1998-C 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 than the
Class A-1 Targeted Maturity Date under certain circumstances (in connection with
the liquidation of the assets of the 1998-C Securitization Trust following a
Swap Termination) or later than the Class A-1 Targeted Maturity Date (depending
on payment, delinquency and loss experience). Distributions on this Class A-1
Certificate will be made by the 1998-C 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-C Securitization Trustee of the pendency of such distribution
and only upon presentation and
A-3
<PAGE>
surrender of this Class A-1 Certificate at the Corporate Trust Office of the
1998-C 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-C 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-C Contracts and 1998-C 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 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-C
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-C 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-C Securitization Trustee or any of their respective Affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1998-C SUBI Assets evidenced by the 1998-C 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-C SUBI Sub-Trust (except for those
evidenced by the 1998-C SUBI Insurance Certificate) and those proceeds or
assets derived from or earned by such 1998-C SUBI Assets (except for those
evidenced by the 1998-C 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-C Securitization Trustee, at
the offices of Bankers Trust Luxembourg S.A. (initially at 14
A-4
<PAGE>
Boulevard F.D. Roosevelt, L-450 Luxembourg) and at such other places, if any,
designated by the 1998-C 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-C 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.
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-C Securitization Trustee in its capacity as Certificate
Registrar, or at the office of the agent of the 1998-C 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-C 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-C 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-C 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-C Securitization Trustee, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
A-5
<PAGE>
The obligations and responsibilities created by the Agreement and the
1998-C 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-C Securitization Trust. The Transferor may at its option purchase
the corpus of the 1998-C Securitization Trust at a price specified in the
Agreement, and such purchase of the 1998-C SUBI and 1998-C SUBI Certificate
and other property of the 1998-C 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 $74,998,873.25 (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
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-C Securitization Trustee, the 1998-C 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-C 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-6
<PAGE>
IN WITNESS WHEREOF, the 1998-C Securitization Trustee on behalf of the
1998-C Securitization Trust and not in its individual capacity has caused this
Class A-1 Certificate to be duly executed.
Dated: December 3, 1998
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION,
as 1998-C 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-C Securitization Trustee
By:
-------------------------------------
Authorized Officer
A-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-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-C
ADJUSTABLE RATE 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-C Securitization Trustee or any of their respective
affiliates.
Initial Class A-2 Certificate Balance:
$ CUSIP #
------------- ------------
Number A-2-1 Denomination: $
------------
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a ______________
($____________) nonassessable, fully-paid, fractional undivided interest
in the Toyota Auto Lease Trust 1998-C (the "1998-C Securitization Trust") formed
by Toyota Leasing, Inc., a California corporation, as Transferor (the
"Transferor"). The 1998-C Securitization Trust was created pursuant to a 1998-C
Securitization Trust Agreement dated as of December 1, 1998 (the "Agreement"),
between the Transferor and U.S. Bank National Association, a national banking
association, as trustee (the "1998-C 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-C Adjustable Rate
Auto Lease Asset Backed Certificates, Class A-2" (the "Class A-2 Certificates").
Also issued under the Agreement are Certificates designated as "Toyota Auto
Lease Trust 1998-C Adjustable Rate Auto Lease Asset Backed Certificates, Class
A-1" (the "Class A-1 Certificates"), Certificates designated as "Toyota Auto
Lease Trust 1998-C Adjustable Rate Auto Lease Asset Backed Certificates, Class
A-3" (the
A-2-1
<PAGE>
"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-C Adjustable Rate 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-C Securitization Trust includes, among other
things, the 1998-C SUBI Certificate evidencing beneficial interests in the
assets of the 1998-C SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-C 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-C
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-C 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-C SUBI represented
by the 1998-C 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-C SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-C 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-C 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 quarterly on the 25th day of March, June,
September and December (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 the 25th day of the month (or if such day
is not a Business Day, the next succeeding Business Day, each such day a
"Certificate Payment Date") until the Adjusted Class A-2 Certificate Balance has
been reduced to zero.
Except as otherwise provided in the Agreement, for Interest Payment Periods
commencing prior to the related Targeted Maturity Date, interest will accrue on
the Class A-1 Certificates at three-month LIBOR plus 0.23% per annum, on the
Class A-2 Certificates at three-month LIBOR
A-2-2
<PAGE>
plus 0.27% per annum and on the Class A-3 Certificates at three-month LIBOR
plus 0.32% per annum. Except as otherwise provided in the Agreement, for
Interest Payment Periods commencing on or after the related Targeted Maturity
Date, interest will accrue on the Class A-1 Certificates at one-month LIBOR
plus 0.26% per annum, on the Class A-2 Certificates at one-month LIBOR plus
0.30% per annum and on the Class A-3 Certificates at one-month LIBOR plus
0.35% per annum. Amounts available to make interest payments to the Class A
Certificateholders will be limited to amounts payable by the Swap
Counterparty in accordance with the Swap Agreement. If such amount payable
by the Swap Counterparty is less than the amount of interest accrued on the
Class A Certificates, there will be a proportional reduction in the amount of
interest payable on the Class A-1 Certificates, the Class A-2 Certificates
and the Class A-3 Certificates, as applicable. The Interest Payment Amount
for each Class A Certificate shall be calculated by applying any proportional
reduction (calculated as described in the Agreement) to the amount of
interest determined to have accrued on each Class of Class A Certificates.
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 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, to the extent of amounts allocated and available therefor, shall
be distributable on the Class A-2 Targeted Maturity Date which shall be December
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 February 25, 2003 (or if such day is not
a Business Day, on the next succeeding Business Day).
On each Certificate Payment Date, the 1998-C 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 than the
Class A-2 Targeted Maturity Date under certain circumstances (in connection with
the liquidation of the assets of the 1998-C Securitization Trust following a
Swap Termination) or later than the Class A-2 Targeted Maturity Date (depending
on payment, delinquency and loss experience). Distributions on this Class A-2
Certificate will be made by the 1998-C 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-C 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-C Securitization
A-2-3
<PAGE>
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-C 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-C Contracts and 1998-C 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 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-C
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-C 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-C Securitization Trustee or any of their respective Affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1998-C SUBI Assets evidenced by the 1998-C 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-C SUBI Sub-Trust (except for those
evidenced by the 1998-C SUBI Insurance Certificate) and those proceeds or
assets derived from or earned by such 1998-C SUBI Assets (except for those
evidenced by the 1998-C 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-C 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-C Securitization Trustee, by any Certificateholder upon request.
A-2-4
<PAGE>
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-C 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.
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-C Securitization Trustee in its capacity as Certificate
Registrar, or at the office of the agent of the 1998-C 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-C 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-C 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-C 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-C 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-C 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
A-2-5
<PAGE>
disposition of all property held as part of the 1998-C Securitization Trust.
The Transferor may at its option purchase the corpus of the 1998-C
Securitization Trust at a price specified in the Agreement, and such purchase
of the 1998-C SUBI and 1998-C SUBI Certificate and other property of the
1998-C 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 $74,998,873.25 (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
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-C 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-C 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-C Securitization Trustee on behalf of the
1998-C Securitization Trust and not in its individual capacity has caused this
Class A-2 Certificate to be duly executed.
Dated: December 3, 1998
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION, as
1998-C 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-C 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-C
ADJUSTABLE RATE 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-C Securitization Trustee or any of their respective
affiliates.
Initial Class A-3 Certificate Balance: CUSIP #
$ ------------
-----------------
Number A-3-1 Denomination: $
------------
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a ______________
($___________) nonassessable, fully-paid, fractional undivided interest
in the Toyota Auto Lease Trust 1998-C (the "1998-C Securitization Trust") formed
by Toyota Leasing, Inc., a California corporation, as Transferor (the
"Transferor"). The 1998-C Securitization Trust was created pursuant to a 1998-C
Securitization Trust Agreement dated as of December 1, 1998 (the "Agreement"),
between the Transferor and U.S. Bank National Association, a national banking
association, as trustee (the "1998-C 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-C Adjustable Rate
Auto Lease Asset Backed Certificates, Class A-3" (the "Class A-3 Certificates").
Also issued under the Agreement are Certificates designated as "Toyota Auto
Lease Trust 1998-C Adjustable Rate Auto Lease Asset
A-3-1
<PAGE>
Backed Certificates, Class A-1" (the "Class A-1 Certificates"), Certificates
designated as "Toyota Auto Lease Trust 1998-C Adjustable Rate 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-C Adjustable Rate 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-C Securitization Trust includes, among other
things, the 1998-C SUBI Certificate evidencing beneficial interests in the
assets of the 1998-C SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-C 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-C
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-C 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-C SUBI represented
by the 1998-C 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-C SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-C 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-C 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 quarterly on the 25th day of March, June,
September and December (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 the 25th day of the month (or if such day
is not a Business Day, the next succeeding Business Day, each such day a
"Certificate Payment Date") until the Adjusted Class A-3 Certificate Balance has
been reduced to zero.
A-3-2
<PAGE>
Except as otherwise provided in the Agreement, for Interest Payment Periods
commencing prior to the related Targeted Maturity Date, interest will accrue on
the Class A-1 Certificates at three-month LIBOR plus 0.23% per annum, on the
Class A-2 Certificates at three-month LIBOR plus 0.27% per annum and on the
Class A-3 Certificates at three-month LIBOR plus 0.32% per annum. Except as
otherwise provided in the Agreement, for Interest Payment Periods commencing on
or after the related Targeted Maturity Date, interest will accrue on the Class
A-1 Certificates at one-month LIBOR plus 0.26% per annum, on the Class A-2
Certificates at one-month LIBOR plus 0.30% per annum and on the Class A-3
Certificates at one-month LIBOR plus 0.35% per annum. Amounts available to make
interest payments to the Class A Certificateholders will be limited to amounts
payable by the Swap Counterparty in accordance with the Swap Agreement. If such
amount payable by the Swap Counterparty is less than the amount of interest
accrued on the Class A Certificates, there will be a proportional reduction in
the amount of interest payable on the Class A-1 Certificates, the Class A-2
Certificates and the Class A-3 Certificates, as applicable. The Interest
Payment Amount for each Class A Certificate shall be calculated by applying any
proportional reduction (calculated as described in the Agreement) to the amount
of interest determined to have accrued on each Class of Class A Certificates.
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 A-3
Certificates, to the extent of amounts allocated and available therefor, shall
be distributable on the Class A-3 Targeted Maturity Date which shall be March
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 February 25, 2004 (or if such day is not
a Business Day, on the next succeeding Business Day).
On each relevant Certificate Payment Date, the 1998-C 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
and principal 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 than the Class A-3
Targeted Maturity Date under certain circumstances (in connection with the
liquidation of the assets of the 1998-C Securitization Trust following a Swap
Termination) or later than the Class A-3 Targeted Maturity Date (depending on
payment, delinquency and loss experience). Distributions on this Class A-3
Certificate will be made by the 1998-C 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
A-3-3
<PAGE>
notwithstanding the foregoing, the final distribution on this Class A-3
Certificate will be made after due notice by the 1998-C 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-C 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-C 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-C Contracts and 1998-C 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 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-C
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-C 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-C Securitization Trustee or any of their respective Affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1998-C SUBI Assets evidenced by the 1998-C 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-C SUBI Sub-Trust (except for those
evidenced by the 1998-C SUBI Insurance Certificate) and those proceeds or
assets derived from or earned by such 1998-C SUBI Assets (except for those
evidenced by the 1998-C 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-C Securitization Trustee, at
the offices of Bankers Trust Luxembourg S.A. (initially at 14
A-3-4
<PAGE>
Boulevard F.D. Roosevelt, L-450 Luxembourg) and at such other places, if any,
designated by the 1998-C 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-C 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.
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-C Securitization Trustee in its capacity as
Certificate Registrar, or at the office of the agent of the 1998-C
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-C 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-C 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-C 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-C Securitization Trustee, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
A-3-5
<PAGE>
The obligations and responsibilities created by the Agreement and the
1998-C 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-C Securitization Trust. The Transferor may at its option purchase
the corpus of the 1998-C Securitization Trust at a price specified in the
Agreement, and such purchase of the 1998-C SUBI and 1998-C SUBI Certificate
and other property of the 1998-C 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 $74,998,873.25 (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
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-C Securitization Trustee, the 1998-C 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-C 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-C Securitization Trustee on behalf of the
1998-C Securitization Trust and not in its individual capacity has caused this
Class A-3 Certificate to be duly executed.
Dated: December 3, 1998
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION, as
1998-C 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-C 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-1
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-C 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-C 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-C SECURITIZATION TRUSTEE HAS RECEIVED (I) 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-1-1
<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") 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.
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-1-2
<PAGE>
TOYOTA AUTO LEASE TRUST 1998-C
ADJUSTABLE RATE 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-C Securitization Trustee or any of their respective affiliates.
Initial Class B Certificate Balance:
$
--------------
Number B-1 Denomination: $
--------------
THIS CERTIFIES THAT _______________________ is the registered owner of a
______________ ($______________) nonassessable, fully-paid, fractional undivided
interest in the Toyota Auto Lease Trust 1998-C (the "1998-C Securitization
Trust") formed by Toyota Leasing, Inc., a California corporation, as Transferor
(the "Transferor"). The 1998-C Securitization Trust was created pursuant to a
1998-C Securitization Trust Agreement dated as of December 1, 1998 (the
"Agreement"), between the Transferor and U.S. Bank National Association, a
national banking association, as trustee (the "1998-C 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-C Adjustable Rate
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-C Adjustable Rate Auto Lease Asset Backed Certificates, Class
A-1" (the "Class A-1 Certificates"), Certificates designated as "Toyota Auto
Lease Trust 1998-C Adjustable Rate Auto Lease Asset Backed Certificates, Class
A-2" (the "Class A-2 Certificates"), Certificates designated as "Toyota Auto
Lease Trust 1998-C Adjustable Rate 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-1-3
<PAGE>
The property of the 1998-C Securitization Trust includes, among other
things, the 1998-C SUBI Certificate evidencing beneficial interests in the
assets of the 1998-C SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-C 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-C
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-C 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-C SUBI represented
by the 1998-C 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-C SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-C 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-C 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 quarterly on the 25th day of
March, June, September and December (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 the 25th day of the
month (or if such day is not a Business Day, the next succeeding Business
Day, each such day a "Certificate Payment Date") until the Adjusted Class B
Certificate Balance has been reduced to zero. Except as otherwise provided
in the Agreement, for Interest Payment Periods commencing prior to the Class
B Targeted Maturity Date, interest will accrue on the Class B Certificates at
three-month LIBOR plus 2.00% per annum. For Interest Payment Periods
commencing on or after the related Targeted Maturity Date, interest will
accrue on the Class B Certificates at one-month LIBOR plus 2.03% per annum.
Amounts available to make interest payments to the Class B Certificateholders
will be limited to amounts payable by the Swap Counterparty in accordance
with the Swap Agreement. If such amount payable by the Swap Counterparty is
less than the amount of interest accrued on the Class B Certificates, there
will be a proportional reduction in the amount of interest payable on the
Class B Certificates. The Class B Interest Payment Amount shall be
calculated by applying any proportional reduction (calculated as described in
the Agreement) to the amount of interest determined to have accrued on the
Class B Certificates. Any such shortfall may be made up for on subsequent
Certificate Payment Dates, as more fully described in the Agreement.
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
B-1-4
<PAGE>
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, to the extent of amounts allocable and
available therefor, shall be distributable on the Class B Targeted Maturity
Date which shall be December 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 May
25, 2006 (or if such day is not a Business Day, on the next succeeding
Business Day).
On each relevant Certificate Payment Date, the 1998-C Securitization
Trustee shall pay or cause to be paid to the Person in whose name this Class B
Certificate is registered at the close of business on the last Business Day of
the immediately preceding calendar month (the "Record Date") amounts
distributable as interest and principal on the Class B 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 than the Class B
Targeted Maturity Date under certain circumstances (in connection with the
exercise of the Transferor of its right to purchase the 1998-C SUBI Certificate,
described below, or the liquidation of the assets of the 1998-C Securitization
Trust following a Swap Termination) or later than the Class B Targeted Maturity
Date (depending on payment, delinquency and loss experience).
Distributions on this Class B Certificate will be made by the 1998-C
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-C
Securitization Trustee not later than fifteen days prior to the related Record
Date, by wire transfer of immediately available funds to an account maintained
by such Holder at a depository institution in the United States having
appropriate facilities therefor. Except as otherwise provided in the Agreement
and notwithstanding the foregoing, the final distribution on this Class B
Certificate will be made after due notice by the 1998-C 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-C
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-C 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
B-1-5
<PAGE>
related to the 1998-C Contracts and 1998-C 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-C 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-C 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-C Securitization Trustee or any of their respective Affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1998-C SUBI Assets evidenced by the 1998-C 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-C SUBI Sub-Trust (except for those
evidenced by the 1998-C SUBI Insurance Certificate) and those proceeds or
assets derived from or earned by such 1998-C SUBI Assets (except for those
evidenced by the 1998-C 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-C 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-C 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-C 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
B-1-6
<PAGE>
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-C Securitization Trustee in its capacity as Certificate
Registrar, or at the office of the agent of the 1998-C 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-C 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-C 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-C Securitization Trustee, the Certificate Registrar and any of their
respective agents may treat the Person in whose name this Class B Certificate is
registered as the owner hereof for the purpose of receiving distributions and
for all other purposes, and neither the 1998-C 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-C 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-C Securitization Trust. The Transferor may at its option purchase
the corpus of the 1998-C Securitization Trust at a price specified in the
Agreement, and such purchase of the 1998-C SUBI and 1998-C SUBI Certificate
and other property of the 1998-C 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 $74,998,873.25 (ten
percent of the Aggregate Net Investment Value as of the Cutoff Date).
B-1-7
<PAGE>
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-C Securitization Trustee,
the 1998-C 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-C 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-1-8
<PAGE>
IN WITNESS WHEREOF, the 1998-C Securitization Trustee on behalf of the
1998-C Securitization Trust and not in its individual capacity has caused this
Class B Certificate to be duly executed.
Dated: December 3, 1998
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION, as
1998-C Securitization Trustee
By:
-------------------------------------
Authorized Officer
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-C Securitization Trustee
By:
-------------------------------------
B-1-9
<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-1-10
<PAGE>
EXHIBIT B-2
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-C 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-C 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-C SECURITIZATION TRUSTEE HAS RECEIVED (I) 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-2-1
<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") 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.
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-2-2
<PAGE>
TOYOTA AUTO LEASE TRUST 1998-C
____% 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-C Securitization Trustee or any of their respective affiliates.
Initial Class B Certificate Balance:
$
--------------
Number B-2 Denomination: $
--------------
THIS CERTIFIES THAT _____________________ is the registered owner of a
______________ ($______________) nonassessable, fully-paid, fractional undivided
interest in the Toyota Auto Lease Trust 1998-C (the "1998-C Securitization
Trust") formed by Toyota Leasing, Inc., a California corporation, as Transferor
(the "Transferor"). The 1998-C Securitization Trust was created pursuant to a
1998-C Securitization Trust Agreement dated as of December 1, 1998 (the
"Agreement"), between the Transferor and U.S. Bank National Association, a
national banking association, as trustee (the "1998-C 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-C ____% 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-C Adjustable Rate Auto Lease Asset Backed Certificates, Class A-1" (the
"Class A-1 Certificates"), Certificates designated as "Toyota Auto Lease Trust
1998-C Adjustable Rate Auto Lease Asset Backed Certificates, Class A-2" (the
"Class A-2 Certificates"), Certificates designated as "Toyota Auto Lease Trust
1998-C Adjustable Rate 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-2-3
<PAGE>
The property of the 1998-C Securitization Trust includes, among other
things, the 1998-C SUBI Certificate evidencing beneficial interests in the
assets of the 1998-C SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-C 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-C
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-C 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-C SUBI represented
by the 1998-C 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-C SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-C 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-C 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 quarterly on the 25th day of March, June,
September and December (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 the 25th day of the month (or if such day
is not a Business Day, the next succeeding Business Day, each such day a
"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, to the extent of amount allocable and available therefor, shall be
distributable on the Class B Targeted Maturity Date which shall be December 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 May 25, 2006 (or if such day is not a Business Day, on the
next succeeding Business Day).
On each relevant Certificate Payment Date, the 1998-C Securitization
Trustee shall pay or cause to be paid to the Person in whose name this Class B
Certificate is registered at the close
B-2-4
<PAGE>
of business on the last Business Day of the immediately preceding calendar
month (the "Record Date") amounts distributable as interest and principal on
the Class B 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 than the Class B Targeted Maturity Date under
certain circumstances (in connection with the exercise of the Transferor of
its right to purchase the 1998-C SUBI Certificate, described below, or the
liquidation of the assets of the 1998-C Securitization Trust following a Swap
Termination) or later than the Class B Targeted Maturity Date (depending on
payment, delinquency and loss experience).
Distributions on this Class B Certificate will be made by the 1998-C
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-C Securitization Trustee not later than fifteen days prior to the
related Record Date, by wire transfer of immediately available funds to an
account maintained by such Holder at a depository institution in the United
States having appropriate facilities therefor. Except as otherwise provided
in the Agreement and notwithstanding the foregoing, the final distribution on
this Class B Certificate will be made after due notice by the 1998-C
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-C 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-C 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-C Contracts and 1998-C 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-C 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,
B-2-5
<PAGE>
deduction, loss or credit with respect to the assets and operations of the
1998-C 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-C Securitization Trustee or any of their respective Affiliates. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the 1998-C SUBI Assets evidenced by the 1998-C 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-C SUBI Sub-Trust (except for those
evidenced by the 1998-C SUBI Insurance Certificate) and those proceeds or
assets derived from or earned by such 1998-C SUBI Assets (except for those
evidenced by the 1998-C 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-C 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-C 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-C 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-C Securitization Trustee in its capacity as Certificate
Registrar, or at the office of the agent of the 1998-C 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-C Securitization
Trustee and the Certificate Registrar duly executed by the Holder hereof or
B-2-6
<PAGE>
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-C 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-C Securitization Trustee, the Certificate Registrar and any of their
respective agents may treat the Person in whose name this Class B Certificate is
registered as the owner hereof for the purpose of receiving distributions and
for all other purposes, and neither the 1998-C 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-C 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-C Securitization Trust. The Transferor may at its option purchase
the corpus of the 1998-C Securitization Trust at a price specified in the
Agreement, and such purchase of the 1998-C SUBI and 1998-C SUBI Certificate
and other property of the 1998-C 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 $74,998,873.25 (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-C Securitization Trustee,
the 1998-C 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.
B-2-7
<PAGE>
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the 1998-C 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-2-8
<PAGE>
IN WITNESS WHEREOF, the 1998-C Securitization Trustee on behalf of the
1998-C Securitization Trust and not in its individual capacity has caused this
Class B Certificate to be duly executed.
Dated: December 3, 1998
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION, as
1998-C Securitization Trustee
By:
-------------------------------------
Authorized Officer
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-C Securitization Trustee
By:
-------------------------------------
B-2-9
<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-2-10
<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-C
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-C 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-C (the "1998-C Securitization
Trust") formed by the Transferor. The 1998-C Securitization Trust was created
pursuant to a 1998-C Securitization Trust Agreement dated as of December 1, 1998
(the "Agreement"), between the Transferor and U.S. Bank National Association, a
national banking corporation, as trustee (the "1998-C 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-C Auto Lease
Asset Backed Transferor Certificate" (the "Transferor Certificate"). Also
issued under the Agreement are Certificates designated as "Toyota Auto Lease
Trust 1998-C Adjustable Rate Auto Lease Asset Backed Certificates, Class A-1"
(the "Class A-1 Certificates"), Certificates designated as "Toyota Auto Lease
Trust 1998-C Adjustable Rate Auto Lease Asset Backed Certificates, Class A-2"
(the "Class A-2 Certificates"), Certificates designated as "Toyota Auto Lease
Trust 1998-C Adjustable Rate 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-C Adjustable Rate 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-C Securitization Trust includes, among other
things, the 1998-C SUBI Certificate evidencing beneficial interests in the
assets of the 1998-C SUBI other than the proceeds of the Residual Value
Insurance Policies. The 1998-C 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-C
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-C 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-C SUBI represented
by the 1998-C 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-C SUBI. Following the Revolving Period, Principal
Collections allocable to the assets of the 1998-C 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-C 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-C
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-C 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-C 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-C
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-C SUBI and 1998-C 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-C SUBI Sub-Trust (except for those evidenced by the
1998-C SUBI Insurance Certificate) and those proceeds or assets derived from
or earned by such 1998-C SUBI Assets (except for those evidenced by the
1998-C 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-C Securitization Trustee, and at such other places, if
any, designated by the 1998-C 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-C 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-C 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-C Securitization Trust. The Transferor may at its option purchase
the corpus of the 1998-C Securitization Trust at a price specified in the
Agreement, and such purchase of the 1998-C SUBI and 1998-C SUBI Certificate
and other property of the 1998-C 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 $74,998,873.25 (ten percent of the
Aggregate Net Investment Value as of the Cutoff Date).
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the 1998-C 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-C Securitization Trustee on behalf of the
1998-C Securitization Trust and not in its individual capacity has caused this
Transferor Certificate to be duly executed.
Dated: December 3, 1998
TOYOTA AUTO LEASE TRUST 1998-C
By: U.S. BANK NATIONAL ASSOCIATION,
as 1998-C 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-C 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-C;
Adjustable Rate 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 Adjustable Rate Auto Lease
Asset Backed Certificates, Class B (the "Certificates"), issued pursuant to
the securitization trust agreement, dated as of December 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-C (the "Trust").
In connection with the purchase of the Certificates, the Purchaser
hereby represents and warrants to each of you as follows:
1. 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.
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.
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Annex of Definitions and Annex of
Supplemental Definitions incorporated in the Agreement.
D-1
<PAGE>
The representations and warranties contained herein shall be binding
upon the heirs, executors, administrators and other successors of the
undersigned. If there is more than one signatory hereto, the obligations,
representations, warranties and agreements of the undersigned are made
jointly and severally.
Executed at , this day of , 199 .
---------------------------------------
Purchaser's Name (Print)
By:
-----------------------------------
Signature
Its
-----------------------------------
-----------------------------------
Address of Purchaser
-----------------------------------
Purchaser's Taxpayer
Identification Number
D-2
<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
Merrill Lynch, Pierce, Fenner & Smith Incorporated
250 Vesey Street
World Financial Center
North Tower--10th Floor
New York, NY 10281-1310
or
Credit Suisse First Boston Corporation
Eleven Madison Avenue, 5th Floor
New York, NY 10010-3629
Re: Toyota Auto Lease Trust 1998-C
Adjustable Rate 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-C (the "Trust"), Toyota Leasing, Inc. (the
"Transferor") and Credit Suisse First Boston Corporation or Merrill Lynch,
Pierce, Fenner & Smith Incorporated to 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
E-1
<PAGE>
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 December 1, 1998 (the "Agreement"), between the Transferor and the Trustee.
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Certificates.
3. The Purchaser is an "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 act, nor has it authorized or will it
authorize any person to act in such manner with respect to the Certificates.
6. The Purchaser has reviewed the Private Placement Memorandum with
respect to the Certificates dated December 2, 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. 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 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.
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
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<PAGE>
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
