EXHIBIT 10.4
1997-A SUBI SERVICING SUPPLEMENT
to
AMENDED AND RESTATED TRUST AND SERVICING AGREEMENT
Dated as of October 1, 1996
Among
TMTT, INC.,
as Titling Trustee,
TOYOTA MOTOR CREDIT CORPORATION,
as Servicer,
and
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
Dated as of September 1, 1997
TABLE OF CONTENTS
Page
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ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF SERVICER
SECTION 2.01. Representations and Warranties of Servicer . . . . . . . . . . . . 2
ARTICLE THREE
CREATION OF 1997-A SUBI
SECTION 3.01. Initial Creation of 1997-A SUBI Portfolio
and 1997-A SUBI Sub-Trust. . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.02. Subsequent Additions to 1997-A SUBI Portfolio
and 1997-A SUBI Sub-Trust. . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.03. Servicer Payment in Respect of Certain Contracts
And Leased Vehicles. . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.04. Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE FOUR
SPECIFIC REQUIREMENTS FOR
ADMINISTRATION AND SERVICING OF CONTRACTS
IN 1997-A SUBI PORTFOLIO
SECTION 4.01. Servicer Bound by Trust Agreement . . . . . . . . . . . . . . . . . 7
SECTION 4.02. Collection of Monthly Payments and Remittances;
Application of Proceeds; Accounts . . . . . . . . . . . . . . . . . 8
SECTION 4.03. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.04. Collection and Application of Security Deposits . . . . . . . . . . 13
SECTION 4.05. Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.06. Payment of Certain Fees And Expenses; No Offset . . . . . . . . . . 14
SECTION 4.07. Servicing Compensation. . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.08. Repossession And Sale of Leased Vehicles. . . . . . . . . . . . . . 15
SECTION 4.09. Servicer to Act on Behalf of Trustee. . . . . . . . . . . . . . . . 17
SECTION 4.10. Indemnification by Servicer . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.11. Third Party Claims. . . . . . . . . . . . . . . . . . . . . . . . . 19
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SECTION 4.12. Insurance Policies. . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.13. Servicer Not to Resign; Assignment. . . . . . . . . . . . . . . . . 19
SECTION 4.14. Obligor Insurance Coverage in Respect of Leased Vehicles. . . . . . 20
SECTION 4.15. Corporate Existence; Status; Merger . . . . . . . . . . . . . . . . 21
ARTICLE FIVE
STATEMENTS AND REPORTS
SECTION 5.01. Reporting by the Servicer . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.02. Annual Accountants' Reports . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.03. Other Certificates And Notices From Servicer. . . . . . . . . . . . 23
SECTION 5.04. Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE SIX
DEFAULT
SECTION 6.01. Events of Servicing Termination;
Termination of Servicer as to 1997-A SUBI Portfolio. . . . . . . . 24
SECTION 6.02. No Effect on Other Parties. . . . . . . . . . . . . . . . . . . . . 25
ARTICLE SEVEN
MISCELLANEOUS
SECTION 7.01. Termination of Agreement. . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.02. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.03. Governing Law.. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.05. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.06. Inspection and Audit Rights . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.07. Article And Section Headings. . . . . . . . . . . . . . . . . . . . 27
SECTION 7.08. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.09. Rights Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.10. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.11. Third-party Beneficiaries . . . . . . . . . . . . . . . . . . . . . 28
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EXHIBITS
EXHIBIT A - Schedule of 1997-A Contracts and 1997-A Leased Vehicles
as of the Initial Cutoff Date . . . . . . . . . . . . . . . . .A-1
EXHIBIT B - Form of Servicer's Certificate. . . . . . . . . . . . . . . . .B-1
EXHIBIT C - Form of Power of Attorney . . . . . . . . . . . . . . . . . . .C-1
SCHEDULE I Addresses of Branch Offices
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1997-A SUBI SERVICING SUPPLEMENT TO AMENDED AND RESTATED TRUST AND
SERVICING AGREEMENT (the "1997-A SUBI Servicing Supplement"), dated as of
September 1, 1997, among TMTT, INC., a Delaware corporation, as Titling
Trustee of TOYOTA LEASE TRUST, a Delaware business trust (the "Titling
Trust"), TOYOTA MOTOR CREDIT CORPORATION, a California corporation, as
Servicer, and U.S. BANK NATIONAL ASSOCIATION, as Trust Agent.
RECITALS
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 Titling Trustee and the Trust Agent are entering into
that certain 1997-A SUBI Supplement to the Titling Trust Agreement, dated as
of September 1, 1997, pursuant to which the Titling Trustee, on behalf of the
Titling Trust and at the direction of TMCC, as UTI Beneficiary, will create
and issue to TMCC a 1997-A SUBI Certificate representing a 100% beneficial
interest in the 1997-A SUBI, whose beneficiaries generally will be entitled
to the net cash flow arising from, but only from, the related 1997-A SUBI
Assets, all as set forth in the Titling Trust Agreement and the 1997-A SUBI
Supplement.
C. Also concurrently herewith, TMCC and the Transferor are entering
into that certain 1997-A SUBI Certificate Purchase and Sale Agreement,
pursuant to which TMCC is selling to the Transferor, without recourse, all of
TMCC's right, title and interest in and to the 1997-A SUBI and the 1997-A
SUBI Certificate, all moneys due thereon and paid thereon or in respect
thereof and the right to realize on any property that may be deemed to secure
the 1997-A SUBI, and all proceeds thereof.
D. Also concurrently herewith, and as contemplated by the Titling Trust
Agreement, the Transferor and U.S. Bank National Association, as 1997-A
Securitization Trustee, are entering into that certain Securitization Trust
Agreement, dated as of September 1, 1997 (the "1997-A Securitization Trust
Agreement"), pursuant to which the 1997-A SUBI Certificate will be
transferred to the 1997-A Securitization Trustee, in that capacity, in
connection with a Securitized Financing thereof by the Transferor.
E. The parties desire to supplement the terms of the Titling Trust
Agreement insofar as they apply to the 1997-A SUBI, the 1997-A SUBI
Sub-Trust, and the 1997-A SUBI Certificates to provide for further specific
servicing obligations that will benefit the holders of the 1997-A SUBI
Certificates and the parties to and the beneficiaries of the Transaction
Documents relating to the Securitized Financing contemplated by the 1997-A
Securitization Trust Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree to the following supplemental
obligations with regard to the 1997-A SUBI Sub-Trust:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS. For all purposes of this 1997-A SUBI
Servicing Supplement, except as otherwise expressly provided or unless the
context otherwise requires, capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Annex of Definitions
attached to the Titling Trust Agreement or the Annex of Supplemental
Definitions attached to the 1997-A SUBI Supplement for all purposes of this
1997-A SUBI Servicing Supplement. In the event of any conflict between a
definition set forth herein and that set forth in the Annex of Definitions or
Annex of Supplemental Definitions, that set forth herein shall prevail. All
terms used in this 1997-A SUBI Servicing Supplement include, as appropriate,
all genders and the plural as well as the singular. All references such as
"herein", "hereof" and the like shall refer to this 1997-A SUBI Servicing
Supplement as a whole and not to any particular article or section within
this 1997-A SUBI Servicing Supplement. All references such as "includes" and
variations thereon shall mean "includes without limitation" and references to
"or" shall mean "and/or". Any reference herein to the "Titling Trustee,
acting on behalf of the Titling Trust", or words of similar import, shall be
deemed to mean the Titling Trustee, acting on behalf of Toyota Lease Trust
and all beneficiaries thereof. Any reference herein to the "1997-A
Securitization Trustee, acting on behalf of the 1997-A Securitization Trust",
or words of similar import, shall be deemed to mean the 1997-A Securitization
Trustee, acting on behalf of the Toyota Auto Lease Trust 1997-A and all
beneficiaries thereof.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF SERVICER
SECTION 2.01. REPRESENTATIONS AND WARRANTIES OF SERVICER. The Servicer
represents and warrants to the Titling Trustee, the 1997-A Securitization
Trustee and each SUBI Beneficiary as follows:
(a) ORGANIZATION AND GOOD STANDING. The Servicer has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of California, with corporate power and authority to own
its properties and to conduct its business as such properties
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are currently owned and such business is presently conducted, and had at all
relevant times, and now has, corporate power, authority and legal right to
acquire, own, sell and service the Contracts and related Leased Vehicles and
to hold the related Contract Documents and Certificates of Title as custodian
on behalf of the Titling Trust.
(b) DUE QUALIFICATION. The Servicer is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of property or the conduct of its business (including the servicing of the
Contracts and related Leased Vehicles as required by this Agreement) requires
such qualifications.
(c) POWER AND AUTHORITY. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
and the execution, delivery and performance of this Agreement has been duly
authorized by the Servicer by all necessary corporate action.
(d) BINDING OBLIGATIONS. This 1997-A SUBI Servicing Supplement
constitutes a legal, valid and binding obligation of the Servicer enforceable
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally or by general principles of equity.
(e) NO CONFLICT. The consummation of the transactions contemplated by
this 1997-A SUBI Servicing Supplement and the fulfillment of the terms of
this 1997-A SUBI Servicing Supplement does not conflict with, result in any
breach of any of the terms and provisions of, nor constitute (with or without
notice or lapse of time) a default under, the articles of incorporation or
bylaws of the Servicer, or conflict with or breach any of the material terms
or provisions of, or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement or other instrument to which the
Servicer is a party or by which it is bound; nor result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of
any such indenture, agreement or other instrument (other than this 1997-A
SUBI Servicing Supplement); nor violate any law or, to the best of the
Servicer's knowledge, any order, rule or regulation applicable to the
Servicer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties; which breach, default,
conflict, lien or violation would have a material adverse effect on the
earnings, business affairs or business prospects of the Servicer.
(f) NO PROCEEDINGS. To the Servicer's actual knowledge, there is no
action, suit or proceeding before or by any court or governmental agency or
body, domestic or foreign, now pending, or to the Servicer's knowledge,
threatened, against or affecting the Servicer (i) asserting the invalidity of
this 1997-A SUBI Servicing Supplement or (ii) seeking any determination or
ruling that might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability of, this
1997-A SUBI Servicing Supplement.
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ARTICLE THREE
CREATION OF 1997-A SUBI
SECTION 3.01. INITIAL CREATION OF 1997-A SUBI PORTFOLIO AND 1997-A SUBI
SUB-TRUST.
(a) Pursuant to Section 3.01 of the Titling Trust Agreement and Section
16.01 of the 1997-A SUBI Supplement, the Titling Trustee has been directed to
cause to be identified and allocated on the books and records of the Titling
Trust the separate 1997-A SUBI Portfolio consisting of the 1997-A SUBI Portfolio
and certain other associated Trust Assets meeting the criteria specified
therein. The Titling Trustee, on behalf of the Titling Trust, hereby directs
that the Servicer so identify and allocate such a separate SUBI Portfolio of
Contracts and related Leased Vehicles from among all 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 1997-A SUBI Portfolio.
(c) The Servicer hereby represents and warrants to the Titling Trustee,
the 1997-A Securitization Trustee and each SUBI Beneficiary that each of the
Contracts described on Exhibit A hereto is an Eligible Contract.
SECTION 3.02. SUBSEQUENT ADDITIONS TO 1997-A SUBI PORTFOLIO AND 1997-A
SUBI SUB-TRUST.
(a) The Titling Trustee is hereby directed to cause to be identified and
allocated on the books and records of the Titling Trust to the 1997-A SUBI
Sub-Trust on or before each Transfer Date certain additional Eligible
Contracts, related Leased Vehicles and other associated 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 1997-A SUBI Portfolio and 1997-A 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 of the 1997-A Securitization Trust Agreement) that have not
been so applied pursuant to this Section 3.02(a). The Titling Trustee, on
behalf of the Titling Trust, hereby directs the Servicer to identify such
Subsequent Contracts, related Subsequent Leased Vehicles and other associated
Titling Trust Assets (as described in the 1997-A SUBI Supplement and meeting
the other requirements set forth therein) on or before each Transfer Date,
and cause such Subsequent Contracts and Subsequent Leased Vehicles to be
specifically identified on the revised Schedule of Contracts and Leased
Vehicles to be delivered pursuant to Section 5.01 hereof. On each such
Transfer Date, such Subsequent Contracts, Subsequent Leased Vehicles and
other associated Titling Trust Assets shall be added to the 1997-A SUBI
Portfolio and 1997-A SUBI Sub-Trust, as the case may be, as additional 1997-A
SUBI Assets.
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(b) The Servicer shall give one Business Day's prior notice to the Titling
Trustee of each Transfer Date. On each Transfer Date, the Servicer shall be
deemed to have represented and warranted to the 1997-A Securitization Trustee on
behalf of the 1997-A Securitization Trust that (i) all Subsequent Contracts
added to the 1997-A SUBI Portfolio on that date were Eligible Contracts as of
the relevant Transfer Date, (ii) no adverse selection procedures were employed
in selecting such Subsequent Contracts, (iii) it is not aware of any bias in the
selection of such Subsequent Contracts that would cause the delinquencies or
losses therein to differ from those of Initial Contracts, other than the fact
that such Subsequent Contracts were selected from all Eligible Contracts not
then allocated to any SUBI Portfolio or reserved for allocation to another SUBI
Portfolio on a "first-in, first-out" basis, based on the date of origination,
and (iv) unless the 1997-A Securitization Trustee receives a letter from each
Rating Agency to the effect that the use of different criteria would not result
in the qualification, reduction or withdrawal of its then current rating on any
Rated Certificates in respect of the 1997-A Certificates, after giving effect to
such reallocation (A) each such 1997-A Contract will be allocated to the 1997-A
SUBI Portfolio based upon its Discounted Principal Balance as of the relevant
Transfer Date, (B) the weighted average remaining term of the 1997-A Contracts
(including the Subsequent Contracts) will be not greater than 39 months, and (C)
the weighted average Booked Residual Value of all 1997-A Contracts (including
the Subsequent Contracts), as a percentage of the aggregate Outstanding
Principal Balance of the 1997-A Contracts (including the Subsequent Contracts),
will be not greater than 68%, based on the characteristics of all 1997-A
Contracts (including the Subsequent Contracts) as of its date of origination.
(c) From and after the date on which the 1997-A SUBI Lease Funding Account
is required to be maintained as specified in Section 17.02 of the 1997-A SUBI
Supplement on each Transfer Date the Servicer shall transfer from the 1997-A
SUBI Collection Account to the 1997-A SUBI Lease Funding Account an amount equal
to the aggregate Discounted Principal Balance as of the relevant Transfer Date
of the Subsequent Contracts then being added to the 1997-A SUBI Portfolio and
1997-A SUBI Sub-Trust pursuant to Section 16.01 of the 1997-A SUBI Supplement
and the Services shall direct the Titling Trustee to withdraw such amounts
for deposit into the 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.
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SECTION 3.03. SERVICER PAYMENT IN RESPECT OF CERTAIN CONTRACTS AND LEASED
VEHICLES.
(a) The representations and warranties of the Servicer set forth in
Section 3.02(b), with respect to each 1997-A Contract shall survive delivery of
the related Contract to the 1997-A SUBI Portfolio and the 1997-A SUBI Sub-Trust
and shall continue so long as each such 1997-A Contract remains outstanding, or
until the termination of the 1997-A Securitization Trust Agreement pursuant to
Section 7.01 thereof, whichever occurs earlier. Upon discovery by the Titling
Trustee, the 1997-A Securitization Trustee or the Servicer that any such
representation or warranty was incorrect as of the time specified with respect
to such representation and warranty and materially and adversely affects such
1997-A Contract, the party discovering such incorrectness shall give prompt
written notice to the others. Within 60 days of its discovery of such
incorrectness or notice to such effect to the Servicer, the Servicer shall cure
in all material respects the circumstances or condition in respect of which 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 1997-A Contract
into the 1997-A SUBI Collection Account, (ii) reallocate such 1997-A Contract
and the related Leased Vehicle from the 1997-A SUBI Portfolio to the UTI
Portfolio, and (iii) indemnify, defend and hold harmless the holders of any
1997-A SUBI Certificate (including without limitation the 1997-A Securitization
Trustee on behalf of the 1997-A Securitization Trust and the Certificateholders)
and any subsequent servicer (if other than the current Servicer) from and
against, any and all loss or liability with respect to or resulting from any
such 1997-A Contract or related Leased Vehicle. Notwithstanding the foregoing,
if any reallocation described in clause (ii) would cause the Transferor Interest
to be equal to or less than zero, the Servicer also shall deposit promptly into
the 1997-A SUBI Collection Account an amount so that the Transferor Interest
will not be reduced to less than zero, and the reallocation will not be made
until such deposit has been made.
(b) In the event that the Servicer receives funds from a Dealer that is
required, pursuant to a Dealer Agreement, to repurchase a Contract or Leased
Vehicle included in the 1997-A SUBI Portfolio, the Servicer shall, subject to
Section 17.01 of the 1997-A SUBI Supplement, within two Business Days of receipt
thereof, deposit such funds into the 1997-A SUBI Collection Account, which
deposit shall satisfy the UTI Beneficiary's obligations with respect to
enforcement of such Dealer repurchase obligation, and return to the repurchasing
Dealer the Certificate of Title and Contract with respect to such Leased
Vehicle.
(c) The obligations of the Servicer pursuant to this Section 3.03 shall
survive any termination of the Servicer with respect to the 1997-A SUBI
Portfolio and 1997-A SUBI Sub-Trust under this 1997-A SUBI Servicing Supplement
or the Titling Trust Agreement.
SECTION 3.04. FILINGS.
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The Servicer will undertake all other and future actions and activities
as may be reasonably necessary to perfect (or evidence) and confirm the
foregoing allocations of Trust Assets to the 1997-A SUBI Portfolio and 1997-A
SUBI Sub-Trust, as the case may be, including filing or causing to be filed
UCC financing statements and executing and delivering all related filings,
documents or writings as may be reasonably necessary hereunder or under any
other Securitization Trust Documents, whether on its own behalf or pursuant
to the power of attorney granted by the Grantor in the 1997-A SUBI
Supplement; provided, however, that in no event shall the Servicer be
required to take any action to perfect a security interest that may be held
by the 1997-A Securitization Trustee in any 1997-A Leased Vehicle.
ARTICLE FOUR
SPECIFIC REQUIREMENTS FOR
ADMINISTRATION AND SERVICING OF CONTRACTS
IN 1997-A SUBI PORTFOLIO
SECTION 4.01. SERVICER BOUND BY TRUST AGREEMENT.
(a) Except as otherwise specifically provided herein: (i) the Servicer
shall continue to be bound by all provisions of the Titling Trust Agreement with
respect to the Contracts, Leased Vehicles and other associated Trust Assets in
the 1997-A SUBI Sub-Trust, including without limitation the provisions thereof
relating to the administration and servicing of Contracts; and (ii) the
provisions set forth herein shall operate either as additions to or
modifications of the extant obligations of the Servicer under the Titling Trust
Agreement, as the context may require. In the event the provisions of this
1997-A SUBI Servicing Supplement are more exacting or specific than those
contained in the Titling Trust Agreement or in the event of any conflict between
the provisions of this 1997-A SUBI Servicing Supplement with respect to the
1997-A SUBI, the provisions of this 1997-A SUBI Servicing Supplement shall
govern.
(b) For purposes of determining the Servicer's obligations with respect to
the servicing of the 1997-A SUBI Sub-Trust under this 1997-A SUBI Servicing
Supplement (including without limitation pursuant to Article Four hereof),
general references in the Titling Trust Agreement to: (i) a SUBI Account shall
be deemed to refer more specifically to the 1997-A SUBI Account; (ii) a SUBI
Asset shall be deemed to refer more specifically to a 1997-A SUBI Asset; (iii)
an appropriate or applicable SUBI Collection Account shall be deemed to refer
more specifically to the 1997-A SUBI Collection Account; (iv) an appropriate or
applicable SUBI Lease Funding Account shall be deemed to refer more specifically
to the 1997-A SUBI Lease Funding Account; (v) a SUBI Portfolio shall be deemed
to refer more specifically to the 1997-A SUBI Portfolio; (vi) a SUBI Sub-Trust
shall be deemed to refer more specifically to the 1997-A SUBI Sub-Trust; (vii) a
SUBI Servicing Supplement shall be deemed to refer more specifically to this
1997-A SUBI Servicing Supplement; and (viii) a SUBI Supplement shall be deemed
to refer more specifically to the 1997-A SUBI Supplement.
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(c) Coincident with the execution and delivery of this 1997-A SUBI
Servicing Supplement, the Servicer shall furnish the 1997-A Securitization
Trustee, on behalf of the 1997-A Securitization Trust, with an Officer's
Certificate listing the officers or other authorized signatories of the Servicer
currently involved in, or responsible for, the administration and servicing of
the Contracts in the 1997-A SUBI Portfolio, which list shall from time to time
be updated by the Servicer.
SECTION 4.02. COLLECTION OF MONTHLY PAYMENTS AND REMITTANCES; APPLICATION
OF PROCEEDS; ACCOUNTS.
(a) The Servicer shall use commercially reasonable efforts, consistent
with its then current standards, policies and procedures or new programs,
whether or not implemented on a test basis, commenced in the ordinary course
of business, to (i) collect all payments required under the terms and
provisions of each Contract included in the 1997-A SUBI Portfolio; (ii) cause
each Obligor to make all payments in respect of the Contract included in the
1997-A SUBI Portfolio to which such Obligor is a party or otherwise
obligated; and (iii) to deposit all amounts collected or received in respect
of the 1997-A Contracts and 1997-A Leased Vehicles into the 1997-A 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 1997-A SUBI Supplement (in connection with any failure to
satisfy the Monthly Remittance Conditions).
(b) Consistent with the foregoing, the Servicer may in its discretion
(i) waive any late payment charge or similar charge, in whole or in part, in
connection with delinquent payments on or deferrals or extensions of a
Contract included in the 1997-A SUBI Portfolio and (ii) defer one or more
payments under a Contract or extend the Maturity Date of any Contract.
Notwithstanding the foregoing, the Servicer may not grant more than four
deferrals of any 1997-A Contract, and may not extend the Maturity Date of any
1997-A Contract by more than twelve months in the aggregate (or by sixteen
months with the inclusions of any deferrals) or such that its Maturity Date
will occur later than the last day of the Collection Period related to the
Stated Maturity Date; provided, however, that if the Servicer defers payments
on any 1997-A Contract more than four times or extends the Maturity Date
thereof by more than twelve months in the aggregate or so that the extended
Maturity Date will occur later than the last day of the Collection Period
relating to the 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 1997-A SUBI Collection Account an
amount equal to the then Discounted Principal Balance of such Contract plus
an amount equal to the interest, or lease charge, portion of any Monthly
Payments with respect thereto at the related Lease Rate that were accrued but
unpaid as of the end of that Collection Period, and (z) reallocate such
1997-A Contract and the related 1997-A Leased Vehicle from the 1997-A SUBI
Portfolio and SUBI Sub-Trust to the UTI Portfolio and UTI Sub-Trust. The
obligations of the Servicer pursuant to this Section 4.02(b) shall survive
any termination of the Servicer's obligations with respect to the 1997-A SUBI
Portfolio under this 1997-A SUBI Servicing Supplement.
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(c) As to any Monthly Payments, Liquidation Proceeds, Insurance Proceeds
(excluding proceeds of the Residual Value Insurance Policy which are to be
transferred directly to the Transferor), 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 1997-A Contract or related Leased
Vehicle, including (if applicable) any proceeds of recourse payments by the
originating Dealer, whether received by the Servicer through any lock box or
similar mechanism used for the collection of regular periodic payments on
receivables owned or serviced by it or received directly by the Servicer at any
of its servicing offices, but subject to Section 4.08 of this 1997-A 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 1997-A SUBI
Portfolio and 1997-A 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 1997-A
Leased Vehicle whose Liquidation Proceeds are included among such funds)
into the 1997-A SUBI Collection Account maintained by the Titling Trustee.
(iii) Upon the determination by the Servicer that any proceeds
received by it with respect to any 1997-A Contract constitute one or
more Payments Ahead, the Servicer shall, unless otherwise instructed by the
Titling Trustee, (A) maintain appropriate records of such Payment Ahead so
as to be able to timely apply such Payment Ahead as a Monthly Payment
9
with respect to the applicable Contract and (B) deposit such Payment
Ahead into the 1997-A 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, with two Business days of such date.
(d) The Servicer shall treat all Repossessed Vehicle Proceeds and Matured
Leased Vehicle Proceeds in the manner provided for other Liquidation Proceeds in
the Titling Trust Agreement and 1997-A SUBI Supplement; provided, however, as
set forth in Section 4.07 of this 1997-A SUBI Servicing Supplement, that the
Servicer may be reimbursed for related Repossessed Vehicle Expenses, Matured
Leased Vehicle Expenses, other Liquidation Expenses and Insurance Costs as
provided in Section 4.02(h).
(e) The Servicer shall deposit into the 1997-A SUBI Collection Account on
or before each Deposit Date each Security Deposit that was applied in respect of
a Contract during the related Collection Period and not paid to a third party or
to the Servicer as Liquidation Expenses or Matured Leased Vehicle Expenses, or
reimbursements in respect thereof.
(f) The Servicer, on behalf of the Titling Trustee, shall establish and
maintain the 1997-A SUBI Collection Account as set forth in Section 17.01(a) of
the 1997-A SUBI Supplement.
(g) On each Determination Date the Servicer shall make the calculations
necessary to allow the distribution by the 1997-A Securitization Trustee to
holders of, or to the accounts on behalf of the holders of, the 1997-A SUBI
Certificates on the related Monthly Allocation Date in accordance with Section
3.01 of the 1997-A Securitization Trust Agreement. In connection therewith, the
Servicer shall determine the amount of Titling Trust Expenses incurred or
suffered during the preceding Collection Period and shall calculate the
allocations of such Titling Trust Expenses among the various Sub-Trusts,
including the 1997-A SUBI Sub-Trust, in good faith and so as not to
disproportionately affect any Sub-Trust, generally as provided for in Section
3.04 or 7.04, as appropriate, of the Titling Trust Agreement.
(h) The Servicer will be entitled to reimbursement of Matured Leased
Vehicle Expenses, Repossessed Vehicle Expenses and other Liquidation Expenses.
The Servicer is hereby authorized to net such expenses from proceeds or
Collections in respect of the related 1997-A Contracts or 1997-A Leased Vehicles
(including other Liquidation Proceeds), or to withdraw such amounts from amounts
on deposit in the 1997-A SUBI Collection Account. The Servicer also will be
entitled to reimbursement of certain payments it makes on behalf of Obligors
(including payments of taxes, vehicle registration charges, clearance of parking
tickets and similar items and expenses and charges incurred by it in the
ordinary course of servicing the 1997-A Contracts) from Collections with respect
to the 1997-A Contracts (whether or not as separate payments thereof by the
related Obligors) or from amounts realized upon the final disposition of
10
1997-A Leased Vehicles. To the extent such amounts are not reimbursed prior to
or at the final disposition of the related leased vehicle but remain unpaid
by the related lessee, such unreimbursed amounts (together with any unpaid
Monthly Payments under the related Contract) will be treated as Matured
Leased Vehicle Expenses or Liquidation Expenses, as the case may be, and the
Servicer is hereby authorized to offset such reimbursable payments, expenses
and charges against Net Matured Leased Vehicle Proceeds or Liquidation
Proceeds, as the case may be.
To the extent that during any Collection Period (i) Collections, Matured
Leased Vehicle Proceeds, Liquidation Proceeds or separate payments from the
Obligors in respect of such payments, charges and expenses are deposited into
the 1997-A SUBI Collection Account rather than so offset by the Servicer,
(ii) any Monthly Payments arising from a Contract allocated to the 1997-A
SUBI Sub-Trust are received by the Titling Trustee or deposited in the 1997-A
SUBI Collection Account with respect to any prior Collection Period as to
which the Servicer has outstanding an unreimbursed Advance, rather than being
netted from Collections by the Servicer; or (iii) any amount of unreimbursed
Advances are reasonably determined by the Servicer to be Nonrecoverable
Advances, then, on the related Deposit Date, (y) the Servicer shall notify
the Titling Trustee and the 1997-A Securitization Trustee in writing as to
any such amount and (z) instruct the Titling Trustee to, and the Titling
Trustee shall, promptly transfer an amount equal to the aggregate of such
amounts from the 1997-A SUBI Collection Account, to the 1997-A SUBI Lease
Funding Account. Thereafter, the Titling Trustee shall remit to the Servicer
from the 1997-A SUBI Lease Funding Account the total of such amounts, without
interest (the "Servicer Reimbursement"). In lieu of causing the Titling
Trustee to transfer such amounts to the 1997-A SUBI Lease Funding Account (or
in the event the 1997-A Lease Funding Account has not been required to be
established as set forth in Section 17.02 of the 1997-A SUBI Supplement), the
Servicer is hereby authorized to deduct such amounts from amounts on deposit
or otherwise to be deposited into the 1997-A SUBI Collection Account, but in
each case will notify the Titling Trustee and 1997-A Securitization Trustee
in writing of such action and such amounts at the time of such reimbursement.
(i) The Servicer shall account to the Titling Trustee and the 1997-A
Securitization Trustee with respect to the 1997-A SUBI Sub-Trust separately from
any other Sub-Trust.
(j) The Servicer shall direct the Titling Trustee or the 1997-A
Securitization Trustee, as applicable, to invest amounts held in the 1997-A SUBI
Accounts and the Reserve Fund in Permitted Investments as provided in (and
subject to the limitations of) the Titling Trust Agreement and 1997-A SUBI
Supplement. The maximum permissible maturities of any such investments pursuant
to this clause on any date shall be not later than the Business Day immediately
preceding the Monthly Allocation Date next succeeding the date of such
investment, except for (i) investments on which the Trust Agent or 1997-A
Securitization Trustee, respectively, is the obligor (including repurchase
agreements as to which it, in its commercial capacity, is liable as principal),
which may mature on the Monthly Allocation Date, (ii) investments during the
Revolving Period of Principal Collections (including amounts treated as
Principal Collections pursuant to Section 3.01(b) of the 1997-A Securitization
Trust Agreement) on deposit in the 1997-A SUBI Collection Account, which may
mature on such dates as specified by the Titling Trustee at the Servicer's
direction so as to maintain the availability of sufficient cash to make payments
pursuant to Section
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3.02(c) hereof, and (iii) prior to the occurrence of a Monthly Payment Event,
if any, amounts on deposit in the 1997-A Certificateholders' Account invested
in TMCC Demand Notes, which may mature on the Business Day immediately
preceding, the next succeeding Certificate Payment Date or the next
succeeding Targeted Maturity Date, as applicable (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 1997-A 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 1997-A
SUBI Supplement with respect to Collections to be deposited in the 1997-A
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 1997-A SUBI Servicing Supplement (and any
corresponding or related Sections in the 1997-A SUBI Supplement) may be so
modified without the consent of any Certificateholders and (ii) the Servicer
may remit such collections to the 1997-A SUBI Collection Account in
accordance with that alternative remittance schedule.
(l) The parties hereto acknowledge that the Titling Trustee, on behalf of
the Titling Trust, has made a complete transfer to the 1997-A Securitization
Trustee of the Collections in respect of the 1997-A SUBI Assets contained in the
1997-A SUBI Collection Account (excluding proceeds of the Residual Value
Insurance Policy which are the sole property of the Transferor) and, except as
provided in this 1997-A SUBI Servicing Supplement, the 1997-A SUBI Supplement
and the 1997-A Securitization Trust Agreement, neither the Titling Trustee nor
the Servicer has any right to direct such funds to a third party or to receive
such funds.
(m) In the event of a sale, disposition or other liquidation of the 1997-A
SUBI Certificate and the other property of the 1997-A Securitization Trust
pursuant to Section 8.02 of the 1997-A Securitization Trust Agreement, the
Servicer shall allocate the net proceeds thereof between Principal Collections
and Interest Collections as set forth in the 1997-A Securitization Trust
Agreement.
SECTION 4.03. RECORDS.
(a) As to any proceeds or other receipts with respect to any Trust Asset,
including without limitation Monthly Payments, Prepayments, Liquidation Proceeds
and any other payments by or on behalf of any Obligor or otherwise with respect
to any 1997-A Contract or 1997-A Leased Vehicle, the Servicer shall maintain or
cause to be maintained such computer and manual records with respect to all such
proceeds and other receipts in accordance with the customary and usual
procedures of institutions which service closed-end automobile and light duty
truck leases and, to the extent more exacting, in conformity in all material
respects with the procedures used by the
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Servicer in respect of any such leases serviced by it for its own account or
the accounts of its Affiliates.
(b) The Servicer shall retain or cause to be retained all data (including,
without limitation, computerized records), together with all operating software
and appropriate documentation, relating directly to or maintained in connection
with the servicing of the 1997-A Contracts (the "Contract Records") consistent
with its then applicable retention policies or applicable law. The Servicer
shall provide or cause to be provided to the Titling Trustee, on behalf of the
Titling Trust, upon its request, copies of all such data and appropriate
documentation 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
1997-A SUBI Portfolio are terminated in accordance with Section 6.01(b) of
this 1997-A SUBI Servicing Supplement or, if this 1997-A SUBI Servicing
Supplement is terminated pursuant to Section 7.01, the Servicer shall, on
demand of the Titling Trustee, on behalf of the Titling Trust (either at the
request of the 1997-A Securitization Trustee or, as provided in Section
6.01(b) of this 1997-A SUBI Servicing Supplement, upon demand of Investor
Certificateholders representing not less than 51% of the aggregate Voting
Interest), deliver to the Titling Trustee all such data, operating software
and appropriate documentation necessary for the servicing of the 1997-A
Contracts, including but not limited to the related Contract Documents and
Title Documents, all moneys collected by it and required to be deposited in
any 1997-A SUBI Account on behalf of the Titling Trust, or in the 1997-A SUBI
Collection Account or the Reserve Fund on behalf of the 1997-A Securitization
Trust, all Security Deposits with respect to 1997-A Contracts, and any 1997-A
Leased Vehicle in the possession of the Servicer that has been repossessed or
is part of Matured Leased Vehicle Inventory and in either case has not yet
been sold or otherwise disposed of. In addition to delivering such data,
operating software and appropriate documentation and moneys, if a new
servicer is appointed, the Servicer shall use its commercially reasonable
efforts to effect the orderly and efficient transfer of the servicing of the
1997-A Contracts to the party that will be assuming responsibility for such
servicing, including, without limitation, directing Obligors to remit
payments in respect of such Contracts to an account or address designated by
the Titling Trustee or such new servicer.
SECTION 4.04. COLLECTION AND APPLICATION OF SECURITY DEPOSITS.
Subject to Section 4.03(c) of this 1997-A SUBI Servicing Supplement, the
Servicer shall retain each Security Deposit remitted to it (or deemed remitted
to it) as agent and bailee for the Obligor until such time as the Titling Trust,
the Titling Trustee on behalf of the Titling Trust, or the Servicer may lawfully
and under the terms of the related Contract apply such Security Deposit against
unpaid amounts owed under the Contract, damages to the related Leased Vehicle,
excess wear and tear charges, expenses in connection with the refurbishment and
disposal of the related
13
Leased Vehicle or against fees, charges, payments or expenses advanced or
paid by the Servicer in accordance with applicable law, its customary and
usual servicing procedures and the related Contract, from and after which
time such amounts will be 1997-A SUBI Assets, subject to any reimbursement
due to the Servicer. To the extent any Security Deposit or portion thereof
is to be treated as proceeds of a Contract or Leased Vehicle, the related
Security Deposit or such portion shall be deemed to be Liquidation Proceeds.
On each Deposit Date, but otherwise as provided in Section 4.02(c)(ii) of
this 1997-A SUBI Servicing Supplement, the Servicer shall deposit into the
1997-A SUBI Collection Account each Security Deposit that became Liquidation
Proceeds during the previous month; otherwise, each Security Deposit, after
deduction for amounts applied towards the payment or reimbursement of any
amount described above, shall be returned to the related Obligor by the
Servicer upon termination of such Contract.
SECTION 4.05. ADVANCES.
(a) On or prior to each Deposit Date, the Servicer shall make an Advance
with respect to each outstanding delinquent 1997-A Contract and each 1997-A
Contract as to which payments have been deferred resulting in the diminution
of the amount to be received on any Due Date relative to the amount of each
originally scheduled Monthly Payment if such 1997-A Contract has not been
reallocated to the UTI Portfolio with an accompanying Reallocation Payment.
Each such Advance will be made by deposit into the 1997-A SUBI Collection
Account of an amount equal to the aggregate amount of Monthly Payments due
but not received during the related Collection Period.
(b) Notwithstanding any other provision of this 1997-A SUBI Servicing
Supplement, the Servicer shall not be obligated to make any Advance in
respect of any 1997-A Contract if the Servicer shall have reasonably
determined that any such Advance, if made, would constitute a Nonrecoverable
Advance. Any such determination shall be evidenced by an Officer's
Certificate (or the certification by any other authorized signatory) of the
Servicer furnished to each UTI Beneficiary, the Titling Trustee and the
1997-A Securitization Trustee setting out the basis for such determination,
which determination shall be conclusive and binding absent manifest error.
SECTION 4.06. PAYMENT OF CERTAIN FEES AND EXPENSES; NO OFFSET.
(a) As part of its obligations hereunder, to the extent that cash flows
relating to the 1997-A SUBI Sub-Trust, as set forth in Section 3.01(b) of the
1997-A Securitization Trust Agreement, are insufficient to provide for the
payment of all fees and expenses due to the Titling Trustee or the 1997-A
Securitization Trustee as Capped Titling Trust Administrative Expenses,
Capped Securitization Trust Administrative Expenses or Uncapped
Administrative Expenses, the Servicer shall advance an amount equal to such
excess fees and expenses as they become payable from time to time and agrees
to indemnify the Titling Trustee and the 1997-A Securitization Trustee and
their respective agents for such amounts. The Servicer shall be entitled to
reimbursement of such advances as set forth in Section 3.01(b) of the 1997-A
Securitization Trust Agreement. The
14
obligations of the Servicer pursuant to this Section shall survive any
termination of the Servicer's rights and obligations with respect to the
1997-A SUBI Portfolio under this 1997-A SUBI Servicing Supplement.
(b) Prior to the termination of the Servicer's rights and obligations
with respect to the 1997-A SUBI Sub-Trust and thereafter if such termination
results from an Event of Servicing Termination, the obligations of the
Servicer with respect to the 1997-A SUBI Sub-Trust shall not be subject to
any defense, counterclaim or right of offset that the Servicer has or may
have against any UTI Beneficiary, the Titling Trustee on behalf of the
Titling Trust, or the 1997-A Securitization Trustee, whether in respect of
this 1997-A SUBI Servicing Supplement, the 1997-A SUBI Supplement, any
Securitization Trust Document, any 1997-A Contract, any related Contract
Document, any 1997-A Leased Vehicle or otherwise.
SECTION 4.07. SERVICING COMPENSATION.
(a) As compensation for the performance of its obligations under this
1997-A SUBI Servicing Supplement, the Servicer shall be entitled to receive from
the Titling Trustee, on behalf of the Titling Trust, on each Monthly Allocation
Date, the Servicing Fee equal to the sum of:
(i) An amount (the "Servicing Rate Portion") equal to one-twelfth
of 1.00% of the Aggregate Net Investment Value as of the first day of
the related Collection Period; and
(ii) Any late fees, deferral fees and other administrative
fees or similar charges paid by any Obligor pursuant to a 1997-A
Contract during the related Collection Period;
provided, however, the Servicing Fee shall be paid out of cash flows and in
accordance with the priorities of payments specified in Section 3.01(b) of
the 1997-A Securitization Trust Agreement and the Servicer may be reimbursed
for advancing certain Administrative Expenses as provided in this 1997-A SUBI
Servicing Supplement. Further, as additional servicing compensation with
regard to the 1997-A SUBI Sub-Trust, the Servicer also shall receive income
as and to the extent provided in the 1997-A Securitization Trust Agreement.
The Servicing Rate Portion will be calculated and paid based upon a
360-day year consisting of twelve 30-day months. The Servicer shall pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement of such expenses except to the
extent they constitute Liquidation Expenses or expenses recoverable under an
applicable insurance policy, as provided in Section 4.12 of this 1997-A SUBI
Servicing Supplement. For so long as there shall be only one Servicer for
the Titling Trust, the Servicing Fee shall be deemed to be an expense
incurred with respect to the Titling Trust Assets generally; if at any time
the Servicer shall only service some (but not all) Sub-Trusts, the Servicing
Fee shall be deemed to be an expense incurred with respect to that discrete
group of Titling Trust Assets contained in the Sub-Trusts the Servicer then
services.
15
(b) So long as TMCC is the Servicer, the Servicer may, by notice to the
Titling Trustee and the 1997-A Securitization Trustee on or prior to any
Determination Date, waive its Servicing Fee with respect to the related
Collection Period, if the Servicer believes that sufficient collections will
be available from Interest Collections on one or more future Monthly
Allocation Dates (other than from amounts on deposit in the Reserve Fund) to
pay such waived Servicing Fee, without interest. If the Servicer waives such
Servicing Fee, the Servicing Fee with respect to such Collection Period shall
be deemed to be zero for all purposes, provided, however, that for purposes
of Section 3.01(b)(iv) of the 1997-A Securitization Trust Agreement, any such
waived Servicing Fee thereafter shall be treated as an unpaid Servicing Fee
with respect to a prior Collection Period (unless the Servicer continues to
waive such Servicing Fee for subsequent Monthly Allocation Dates or waives
such Servicing Fee permanently).
SECTION 4.08. REPOSSESSION AND SALE OF LEASED VEHICLES.
In accordance with the procedures used by the Servicer in respect of any
comparable leases and leased vehicles serviced by it for its own account or
the accounts of its Affiliates (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 repossess or otherwise take possession of the Leased
Vehicle related to any Contract included in the 1997-A SUBI Portfolio that
the Servicer shall have determined to be in default or a 1997-A Contract as
to which a Prepayment has been made but the related Leased Vehicle has not
been purchased by the Obligor.
The Servicer shall, in accordance with the standards set forth in the
immediately preceding paragraph:
(a) follow such practices and procedures as it shall deem necessary
or advisable in its servicing of closed-end automobile and light duty truck
leases, which may include reasonable efforts to realize upon any recourse
to Dealers, consigning a Leased Vehicle to a motor vehicle dealer for
resale or selling a Leased Vehicle at public or private sale; and
(b) sell or otherwise dispose of each 1997-A Leased Vehicle that is
repossessed in accordance with the related 1997-A Contract or that becomes
part of Matured Leased Vehicle Inventory for the 1997-A SUBI Sub-Trust and,
if such related Contract is in default, shall commence and prosecute any
proceedings in respect of such Contract (and such Leased Vehicle) in its
own name or, if the Servicer deems it necessary, in the name of the Titling
Trustee, on behalf of the Titling Trust.
The obligations of the Servicer under this Section are subject to the
provision that, in the event of damage to a 1997-A Leased Vehicle from a cause
for which the Obligor under the related 1997-A Contract was not required to
obtain casualty insurance or maintain such insurance in full force and effect,
the Servicer shall not be required to expend its own funds in repairing such
Leased
16
Vehicle unless it shall reasonably determine that such restoration will
increase Liquidation Proceeds (net of Liquidation Expenses) of the related
Contract by at least an equivalent amount. The Servicer shall only expend
funds in connection with the repossession and/or sale of any 1997-A Leased
Vehicle to the extent that it reasonably determines that Liquidation Expenses
will not exceed the anticipated Liquidation Proceeds. The Servicer shall be
responsible for all other costs and expenses incurred by it in connection
with any action taken in respect of a 1997-A Contract or the related Leased
Vehicle; provided, however, that it shall be entitled to reimbursement of
such costs and expenses to the extent they constitute Liquidation Expenses or
expenses recoverable under an applicable Insurance Policy. All Liquidation
Proceeds and Insurance Proceeds (other than proceeds of the Residual Value
Insurance Policy) shall be deposited and transferred as provided in Section
4.02 of this 1997-A Servicing Supplement. Notwithstanding the foregoing, in
the event the Servicer determines that, in accordance with its normal
servicing procedures, it will apply the Insurance Proceeds with respect to a
damaged or destroyed Leased Vehicle to the substitution of another vehicle
(for which the Contract will remain in force, but will relate to such
substituted vehicle), the Servicer shall be permitted to so apply such
Insurance Proceeds and shall not report or treat such funds as Insurance
Proceeds hereunder. Any such substituted vehicle shall thereafter be the
relevant 1997-A Leased Vehicle and such vehicle shall be the "related Leased
Vehicle" with respect to such 1997-A Contract, for all purposes of the 1997-A
SUBI Sub-Trust.
Notwithstanding the foregoing, prior to transferring any such funds out of
its operating account, the Servicer shall first deduct therefrom any
unreimbursed Liquidation Expenses and expenses recoverable under an applicable
Insurance Policy. In connection with this Section, the Titling Trustee, on
behalf of the Titling Trust, shall grant to the Servicer a power of attorney in
the form attached as Exhibit C with regard to the 1997-A Leased Vehicles, with
full power of substitution. If a Servicer conducts such a substitution it shall
give prompt written notice thereof to the Titling Trustee.
The Servicer is not required hereby to deduct from Repossessed Vehicle
Proceeds, Matured Leased Vehicle Proceeds or other Liquidation Proceeds or
Insurance Proceeds with respect to any particular 1997-A Leased Vehicle all
related unreimbursed Repossessed Vehicle Expenses, Matured Leased Vehicle
Expenses or other Liquidation Expenses or Insurance Expenses prior to
transferring such funds out of its operating account. Such expenses may instead
be reimbursed as provided in Section 4.02(h) of this 1997-A SUBI Servicing
Supplement.
SECTION 4.09. SERVICER TO ACT ON BEHALF OF TRUSTEE.
(a) In order to facilitate the servicing of the 1997-A SUBI Sub-Trust by
the Servicer, the Titling Trustee, on behalf of the Titling Trust, hereby
appoints the Servicer as its agent and bailee to retain possession of the
related Contract Documents, Title Documents and any other related items that
from time to time come into possession of the Servicer, and the Servicer hereby
accepts such appointment.
17
(b) The Servicer shall maintain each such Contract Document and Title
Document at its offices identified on the attached Schedule I, or at such
other office as shall be specified by the Servicer to the Titling Trustee on
30 days' prior notice. The Servicer shall promptly report to the Titling
Trustee any failure on its part to retain possession of any such Contract
Documents or Title Documents and promptly take appropriate action to remedy
any such failure.
(c) Upon written instructions from the Titling Trustee, on behalf of the
Titling Trust, setting forth a reasonable basis therefor, or in the exercise
of its duties and powers hereunder, the Servicer shall release any Contract
Document, Title Document, or other related item to the Titling Trustee or its
agent or designee, as the case may be, at such place or places as the Titling
Trustee may designate, as soon as practicable. The Servicer shall not be
responsible for any loss occasioned by the failure of the Titling Trustee to
return any document or any delay in doing so.
(d) The Servicer shall be deemed to have received proper instructions
with respect to any such Contract Document, Title Document, any other related
item or any Contract Record, upon its receipt of written instructions by a
Responsible Officer of the Titling Trustee. A certified copy of a bylaw or a
resolution of the Board of Directors of the Titling Trustee shall constitute
conclusive evidence of the authority of any such Responsible Officer to act
and shall be considered in full force and effect until receipt by the
Servicer of written notice to the contrary given by the Titling Trustee.
(e) The Servicer shall identify from time to time all (i) periodic sales
and use tax or property (real or personal) tax reports, (ii) periodic
renewals of licenses and permits, (iii) periodic renewals of qualification to
act as a trust and a business trust and (iv) other periodic governmental
filing, registration or approvals (collectively, "Filings") arising with
respect to or required of the Titling Trust, including (in the case of
clauses (ii) and (iv)) such licenses, permits, and other Filings as are
required for the Titling Trust or the Titling Trustee on behalf of the
Titling Trust to accept assignments of 1997-A Contracts and to be identified
as the owner of 1997-A Leased Vehicles on their Certificates of Title, as
contemplated by Section 4.01 of this 1997-A SUBI Servicing Supplement. The
Servicer shall also identify any surety bonds or other ancillary undertakings
required of the Titling Trust or the Titling Trustee in respect of any
Filing. The Servicer shall timely prepare and file, or cause to be filed,
with the cooperation of the Titling Trustee, on behalf of the Titling
Trustee, or the Titling Trust with the appropriate Person each Filing and
each such ancillary undertaking with a copy to the Titling Trustee. In
connection with this Section, the Titling Trustee, on behalf of the Titling
Trust, shall grant to the Servicer such authority, including without
limitation any necessary power of attorney in the form attached as Exhibit C,
as it may require in order to effect each such Filing and ancillary
undertaking. Should the Servicer at any time receive notice, or have actual
knowledge, of any non-compliance with any Filing requirement, it shall
promptly so notify the Titling Trustee.
(f) The Titling Trustee shall deliver to the Servicer, promptly upon
their execution and delivery by the parties thereto, the Titling Trust
Agreement and each amendment and supplement thereto as any such amendment and
supplement relates to the 1997-A SUBI Sub-Trust. The Servicer
18
shall not act contrary to any provision of the Titling Trust Agreement as it
relates to the 1997-A SUBI Sub-Trust, as so amended or supplemented.
SECTION 4.10. INDEMNIFICATION BY SERVICER.
The Servicer agrees to indemnify, defend and hold harmless the 1997-A
Securitization Trustee and its agents for any and all liabilities, losses,
damages and expenses (including without limitation reasonable fees and
expenses of counsel) that may be incurred by the 1997-A Securitization
Trustee or its agents as a result of any act or omission by the Servicer in
connection with its maintenance and custody of the Contract Documents, Title
Documents, and Contract Records with respect to 1997-A Contracts and 1997-A
Leased Vehicles, the servicing of the 1997-A Contracts, the Servicer's
undertakings in clause (e) of Section 4.09 of this 1997-A SUBI Servicing
Supplement or any other activity undertaken or omitted by the Servicer with
respect to any 1997-A SUBI Asset. The obligations set forth in this Section
shall survive the termination of this 1997-A SUBI Servicing Supplement or the
resignation or removal of the Servicer (generally or with respect to the
1997-A SUBI Sub-Trust) or the 1997-A Securitization Trustee.
SECTION 4.11. THIRD PARTY CLAIMS.
The Servicer shall immediately notify TMCC (in the event that TMCC is not
acting as the Servicer hereunder) and the Titling Trustee, on behalf of the
Titling Trust, the 1997-A Securitization Trustee and any other holder of any
1997-A SUBI Certificate upon its learning that a claim of whatever kind that
would have a material adverse impact on any UTI Beneficiary, the Transferor, the
Titling Trustee, the Titling Trust, the 1997-A Securitization Trust, the 1997-A
Securitization Trustee, any 1997-A SUBI Asset or the Servicer is being made by a
third party with respect to any Contract or Leased Vehicle (whether or not
included in the 1997-A SUBI Sub-Trust) or the servicing thereof or with respect
to any other Trust Asset (whether or not constituting a 1997-A SUBI Asset).
SECTION 4.12. INSURANCE POLICIES.
So long as any 1997-A SUBI Certificates are outstanding, the Servicer
will maintain and pay when due all premiums with respect to, and the Servicer
may not terminate or cause the termination of the following (all premiums
with respect to which shall constitute Administrative Expenses): (i) the
Contingent and Excess Liability Insurance Policies unless (A) one or more
replacement insurance policies or binder(s) is obtained providing coverage
against third party claims that may be raised against the Titling Trustee, on
behalf of the Titling Trust, with respect to any Leased Vehicle included in
the 1997-A SUBI Sub-Trust in an amount at least equal to $10 million per
claim, not subject to any annual or aggregate cap (which policy or policies
may be a blanket insurance policy or policies covering the Servicer and one
or more of its Affiliates), or (B) either each Rating Agency has delivered a
letter to the 1997-A Securitization Trustee to the effect that the obtaining
of any such replacement insurance policy or policies, in and of itself, will
not cause its then-current rating of any of the Rated Certificates to be
qualified, reduced or withdrawn; or (ii) the Residual Value Insurance Policy,
unless the 1997-A Contracts may properly
19
be treated as finance leases for purposes of generally accepted accounting
principles, consistently applied, by virtue of some reason other than
maintenance of that policy, and the Servicer has provided to the Titling
Trustee and the 1997-A Securitization Trustee an Officer's Certificate to
that effect, describing such reasons which shall be in accordance with GAAP.
On or before December 31 of each year, the Servicer shall provide to the
Titling Trustee one or more 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
1997-A SUBI Sub-Trust under this 1997-A SUBI Servicing Supplement.
SECTION 4.13. SERVICER NOT TO RESIGN; ASSIGNMENT.
(a) Except as provided in Section 6.01 of this 1997-A SUBI Servicing
Supplement, the Servicer shall not resign from the duties and obligations hereby
imposed on it as Servicer except upon determination by its Board of Directors
(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 1997-A Servicing Supplement would cause it to be in
violation of such legal requirements in a manner that would result in a material
adverse effect on the Servicer or its financial condition, said determination to
be evidenced by a Board Resolution to such effect accompanied by an Opinion of
Counsel reasonably satisfactory to the Titling Trustee of Independent counsel
reasonably satisfactory to the Titling Trustee, to such effect. No such
resignation shall become effective unless and until a new servicer is willing to
service the Contracts and enters into a servicing agreement with the Titling
Trustee, on behalf of the Titling Trust, such agreement to have substantially
the same provisions as this Servicing Agreement. The Titling Trustee, on behalf
of the Titling Trust, shall not unreasonably fail to consent to such a servicing
agreement.
(b) If the Servicer resigns in the circumstances contemplated by clause
(a) above, in addition to the requirements set forth therein, the Opinion of
Counsel required thereby also shall be reasonably satisfactory to the 1997-A
Securitization Trustee. The 1997-A Securitization Trustee shall not
unreasonably fail to consent to a servicing agreement with a new servicer
that proposes to enter into a servicing agreement that meets the standards
required by this 1997-A SUBI Servicing Supplement. No such resignation shall
affect the obligation of the Servicer to remit moneys to the 1997-A SUBI
Collection Account (in lieu of unrecoverable insurance proceeds pursuant to
Section 4.14), or the obligations of the Servicer pursuant to Sections
3.03(a), 4.04, 4.06(a), 4.10 or 4.12 of this 1997-A SUBI Servicing
Supplement; no successor Servicer shall be required to undertake any of the
foregoing, other than the obligation set forth in Section 4.06(a) of this
1997-A SUBI Servicing Supplement (which shall remain a joint and several
obligation of the initial Servicer and any successor Servicer). The Titling
Trustee shall give prompt notice to each Rating Agency of any such
resignation of the Servicer, and the Titling Trustee and 1997-A
Securitization Trustee must obtain from each Rating Agency a letter approving
each substitute servicer.
20
(c) The Servicer may not assign this Servicing Agreement or any of its
rights, powers, duties or obligations hereunder; provided, however, that the
Servicer may assign this Servicing Agreement in connection with a
consolidation, merger, conveyance, transfer or lease made in compliance with
Section 4.15 of this 1997-A SUBI Servicing Supplement.
(d) Except as provided above, the duties and obligations of the Servicer
under this 1997-A SUBI Servicing Supplement shall continue until this 1997-A
SUBI Servicing Supplement shall have been terminated as provided in Section
7.01 of this 1997-A SUBI Servicing Supplement and shall survive the exercise
by the Titling Trustee, on behalf of the Titling Trust, of any right or
remedy under this 1997-A SUBI Servicing Supplement or the enforcement by the
Titling Trustee, on behalf of the Titling Trust, of any provision of the
Titling Trust Documents.
SECTION 4.14. OBLIGOR INSURANCE COVERAGE IN RESPECT OF LEASED VEHICLES.
The Servicer shall use its 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 1997-A SUBI Servicing Supplement or in any other
Securitization Trust Document, the Servicer shall, on at least a monthly
basis, deposit into the 1997-A SUBI Account any proceeds of such Insurance
Policy that the Servicer may receive with respect to any 1997-A Leased
Vehicle.
In each case as to which a deductible is applicable under any Contingent
and Excess Liability Policy, the Servicer will pay on behalf of the insured all
amounts that would have been payable under such policy if there were no
deductible (not to exceed the amount of such deductible) less amounts that are
payable under any outstanding policy of primary insurance maintained (or that
would be payable under any such policy maintained) as required under the related
Contract. The foregoing obligation of the Servicer shall survive the resignation
of the Servicer or any termination of it as Servicer under this 1997-A SUBI
Servicing Supplement pursuant to Section 6.01 of this 1997-A SUBI Servicing
Supplement.
SECTION 4.15. CORPORATE EXISTENCE; STATUS; MERGER.
(a) The Servicer shall keep in full effect its existence, rights and
franchises (except as set forth in (b) below) as a California corporation and
will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure
21
to so qualify would not have a material adverse effect on the condition,
financial or otherwise, or the earnings of the Servicer and its subsidiaries
considered as a whole, and in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of, or to
permit the Servicer to perform its obligations under, the Titling Trust
Documents.
(b) The Servicer shall not consolidate with or merge into any other
corporation or convey, transfer or lease all or substantially all of its
assets as an entirety to any Person without the prior written consent of the
Titling Trustee, on behalf of the Titling Trust, unless (i) the corporation
formed by such consolidation or into which the Servicer has merged or the
Person which acquires by conveyance, transfer or lease all or substantially
all the assets of the Servicer as an entirety is (A) a citizen of or an
entity organized and existing under the laws of the United States or any
State and (B) either executes and delivers to the Titling Trustee, on behalf
of the Titling Trust, an agreement in form and substance reasonably
satisfactory to the Titling Trustee, that contains an assumption by such
successor entity of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the Servicer under this
1997-A SUBI Servicing Supplement and the other Trust Documents or is so bound
by operation of law, or (ii) the Servicer is the surviving corporation
resulting from such consolidation or merger.
ARTICLE FIVE
STATEMENTS AND REPORTS
SECTION 5.01. REPORTING BY THE SERVICER.
(a) On or prior to the 25th day of each calendar month, the Servicer
shall cause to be delivered to the Titling Trustee a report in respect of the
prior calendar month, setting forth (i) any information relating to the
1997-A Contracts or the related Leased Vehicles that normally would be
available from a servicer of closed-end automobile and light-duty truck
leases and is reasonably requested by the Titling Trustee and (ii) if
required, any additional information required by the terms of any Securitized
Financing, and (c) deliver such other reports, Officer's Certificates or
certificates from other authorized signatories as may be necessary pursuant
to this 1997-A SUBI Servicing Supplement to document to the Titling Trustee
the Servicer's right to any further reimbursement of unreimbursed Servicer
Expenses.
(b) On or prior to each Determination Date and each Transfer Date, the
Servicer shall cause to be delivered to the Titling Trustee and the 1997-A
Securitization Trustee a supplement to the Schedule of 1997-A Contracts and
1997-A Leased Vehicles containing data reflecting the addition or removal of
Contracts or Leased Vehicles from the 1997-A SUBI Portfolio as of the first
day of the related 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
22
Leased Vehicles", an identification of the Discounted Principal Balance of
each 1997-A Contract added or removed. In addition, the Servicer shall, on
or prior to each Determination Date, cause to be delivered to the Titling
Trustee, the 1997-A Securitization Trustee and each Rating Agency a
certificate in the name of the Servicer, executed by an officer or authorized
signatory therefor in respect of such Collection Period (the "Servicer's
Certificate") substantially in the form attached hereto as Exhibit B (and
setting forth such additional information as requested by each Rating Agency
from time to time and which information the Servicer is able to reasonably
provide), containing all information necessary to make the allocations and
distributions required by the 1997-A Securitization Trust Agreement in
respect of the Collection Period immediately preceding such Determination
Date, including the information needed to prepare the statement required by
Section 3.03 of the 1997-A Securitization Trust Agreement. Any Certificate
Owner may obtain a copy of a Servicer's Certificate upon written request.
SECTION 5.02. ANNUAL ACCOUNTANTS' REPORTS.
Within 120 days after September 30 of each year (commencing with the year
ended September 30, 1998), the Servicer shall deliver to the Titling Trustee
and the UTI Beneficiary (if TMCC is no longer both the Servicer and the UTI
Beneficiary) a report concerning their review of the activities of the
Servicer during the preceding 12-month period ended September 30 (or other
applicable period in the case of the first such report or letter) to the
effect that such accountants have reviewed certain records and documents
relating to the servicing of the Contracts under this Agreement (using
procedures specified in such report or letter) and as a result of such
review, and in connection with such procedures, they are reporting such
exceptions, if any, as shall be set forth therein. Such report or letter
shall also indicate that the firm is independent with respect to the
Transferor and the Servicer within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants.
SECTION 5.03. OTHER CERTIFICATES AND NOTICES FROM SERVICER.
(a) Within 120 days after September 30 of each calendar year (commencing
with the year ended September 30, 1998), the Servicer shall deliver an
Officer's Certificate to the Titling Trustee to the effect that a review of
the activities of the Servicer during the prior calendar year (or since the
commencement of the Titling Trust in the case of the first such Officer's
Certificate) has been made under the supervision of the officer executing
such Officer's Certificate with a view to determining whether during such
period the Servicer has performed and observed all of its obligations under
this
23
1997-A SUBI Servicing Supplement, and either (i) stating that, to the best of
his or her knowledge, no default by the Servicer under this 1997-A SUBI
Servicing Supplement has occurred and is 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 fall below investment grade as determined by a Rating Agency,
then on a quarterly basis, the Servicer shall cause to be delivered to the
1997-A Securitization Trustee and each Rating Agency an Officer's Certificate
stating that neither the Titling Trust nor any of its ERISA Affiliates: (i)
maintains a Plan, which, as of its last valuation date, has Unfunded Current
Liability; (ii) anticipates that the value of the assets of any Plan it
maintains would not be sufficient to cover any Current Liability; or (iii) is
contemplating benefit improvements with respect to any Plan then maintained
by any such entity or the establishment of any new Plan, either of which
would cause any such entity to maintain a Plan with Unfunded Current
Liability.
SECTION 5.04. TAX RETURNS.
As contemplated by Section 6.12 of the 1997-A Securitization Trust
Agreement, the Servicer shall direct the 1997-A Securitization Trustee to
prepare or cause to be prepared, on behalf of the Transferor, any required
federal tax information returns (in a manner consistent with the treatment of
the Investor Certificates as indebtedness). Also as contemplated by Section
6.12 of the 1997-A Securitization Trust Agreement, the Servicer shall timely
prepare or cause to be prepared any federal and state tax returns that may be
required with respect to the 1997-A Securitization Trust or the assets
thereof and shall timely deliver any such returns to the 1997-A
Securitization Trustee for signature.
ARTICLE SIX
DEFAULT
SECTION 6.01. EVENTS OF SERVICING TERMINATION; TERMINATION OF SERVICER
AS TO 1997-A SUBI PORTFOLIO.
(a) "Events of Servicing Termination" as used herein shall have the
meaning set forth in the attached Annex of Supplemental Definitions. Upon
the occurrence of an event or circumstance of force majeure, the Servicer
shall not be relieved from using all commercially reasonable efforts to
perform its obligations in a timely manner, and the Servicer shall provide to
the Titling Trustee, the 1997-A Securitization Trustee, the Transferor and
the Investor Certificateholders prompt notice of such failure or delay,
together with a description of its efforts to perform its obligations.
(b) If an Event of Servicing Termination shall have occurred and be
continuing, the Titling Trustee, on behalf of the Titling Trust, may remedy
such Event of Servicing Termination, or the Titling Trustee may, and at the
direction of any pledgee of a UTI Pledge shall, by notice given
24
to the Servicer, terminate all or a portion of the rights and powers of the
Servicer under this 1997-A SUBI Servicing Supplement, including all or a
portion of the rights of the Servicer to receive the servicing compensation
provided for in Section 4.07 of this 1997-A SUBI Servicing Supplement with
respect to all periods following such termination. Upon any such
termination, all rights, powers, duties and responsibilities of the Servicer
under this 1997-A SUBI Servicing Supplement, whether with respect to the
related Contract Documents, the related Title Documents or Contract Records,
the Servicing Fee or otherwise, so terminated shall vest in and be assumed by
any successor servicer appointed by the Titling Trustee pursuant to a
servicing agreement with the Titling Trustee, on behalf of the Titling Trust,
containing substantially the same provisions as this 1997-A SUBI Servicing
Supplement (including with respect to the compensation of such successor
servicer), and the Titling Trustee is hereby irrevocably authorized and
empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments (including
any notices to Obligors deemed necessary or advisable by the Titling
Trustee), and to do or accomplish all other acts or things necessary or
appropriate to effect such vesting and assumption, including, without
limitation, directing some or all of the Obligors to remit Monthly Payments,
Prepayments and all other payments on or in respect of the 1997-A Contracts
and the 1997-A Leased Vehicles to an account or address designated by the
Titling Trustee or such new servicer. Further, in such event, the Servicer
shall use its commercially reasonable efforts to effect the orderly and
efficient transfer of the servicing of the affected 1997-A Contracts to the
new servicer (including transfer of the Security Deposits being held by the
Servicer pursuant to Section 4.04 of this 1997-A SUBI Servicing Supplement),
and as promptly as practicable, the Servicer shall provide to the new
servicer a current computer tape containing all information from the Contract
Records required for the proper servicing of the affected Contracts, together
with documentation containing any and all information necessary for use of
the tape.
(c) The Titling Trustee, on behalf of the Titling Trust, shall upon the
written direction of (i) if there is a UTI Pledge, the pledgee thereof or, if
not, the UTI Beneficiary, or (ii) the holder of the requisite percentage of
any SUBI (as set forth in the applicable SUBI Supplement), waive any default
by the Servicer in the performance of its obligations hereunder and its
consequences with regard to the Sub-Trust containing those 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.
SECTION 6.02. NO EFFECT ON OTHER PARTIES.
Upon any termination of the rights and powers of the Servicer with
respect to the 1997-A SUBI Sub-Trust from time to time pursuant to Section
6.01 hereof, or upon any appointment of a successor to the Servicer with
respect to the 1997-A SUBI Sub-Trust, all the rights, powers, duties and
obligations of the Titling Trustee, the UTI Beneficiary and the Transferor
under this 1997-A SUBI Servicing Supplement, the 1997-A Securitization Trust
Agreement, the 1997-A SUBI Supplement, or any other Trust Document shall
remain unaffected by such termination or
25
appointment and shall remain in full force and effect thereafter, except as
otherwise expressly provided herein or therein.
ARTICLE SEVEN
MISCELLANEOUS
SECTION 7.01. TERMINATION OF AGREEMENT.
(a) In connection with any purchase by the Transferor of the Investor
Certificateholders' interest in the corpus of the 1997-A Securitization Trust
pursuant to Section 7.02 of the 1997-A Securitization Trust Agreement, and
TLI, Inc.'s then succeeding to all of the interest in the 1997-A SUBI
represented, and if the UTI Beneficiary shall thereafter succeed to such
interest in the 1997-A SUBI, the Servicer, upon the direction of the UTI
Beneficiary as provided in Section 16.05 of the 1997-A SUBI Supplement, shall
reallocate all 1997-A Contracts, 1997-A Leased Vehicles and related 1997-A
SUBI Assets to the UTI Sub-Trust.
(b) Except as provided in this Section, the respective duties and
obligations of the Servicer and the Titling Trustee with respect to the
1997-A SUBI shall terminate upon the termination of the 1997-A Securitization
Trust Agreement pursuant to Section 7.01 thereof. Upon such a termination,
the Servicer shall pay over to the Titling Trustee or any other Person
entitled thereto all moneys held by the Servicer with respect to the 1997-A
SUBI Sub-Trust pursuant to this 1997-A SUBI Servicing Supplement.
SECTION 7.02. AMENDMENT.
(a) To the extent that any amendment or supplement deals with the
1997-A SUBI Sub-Trust, this 1997-A SUBI Servicing Supplement may be amended
from time to time in a writing signed by the Titling Trustee, on behalf of
the Titling Trust, the Trust Agent and the Servicer, with the prior written
consent of the 1997-A Securitization Trustee, which shall be given only in
the circumstances contemplated by Section 9.01 of the 1997-A Securitization
Trust Agreement.
(b) The Servicer shall provide each Rating Agency that rated the
Certificates prior notice of the content of any proposed amendment to this
1997-A SUBI Servicing Supplement, whether or not such amendment relates to
the 1997-A SUBI or requires approval of any Rating Agency.
SECTION 7.03. GOVERNING LAW.
This 1997-A SUBI Servicing Supplement shall in all respects be governed
by and construed in accordance with the internal laws of the State of
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.
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SECTION 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, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Treasury Department--Corporate Treasury Manager (telecopier no.
(▇▇▇) ▇▇▇-▇▇▇▇); and (b) if to the Trustee, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to
the principal Trust Agent designated by the Titling Trustee. The Servicer or
the Titling Trustee may change its address for notices hereunder by giving
notice of such change to the other such Persons. All notices and demands (y)
shall be deemed to have been given upon delivery or tender of delivery
thereof to any officer or other duly authorized recipient of the Person
entitled to receive such notices and demands at the address of such Person
for notices hereunder, and (z) if given by the Titling Trustee shall be
deemed to have been given by all of the beneficiaries of the Titling Trust.
SECTION 7.05. SEVERABILITY.
If one or more of the provisions of this 1997-A SUBI Servicing
Supplement shall be for any reason whatever held invalid or unenforceable,
such provisions shall be deemed severable from the remaining covenants,
agreements and provisions of this 1997-A SUBI Servicing Supplement, and such
invalidity or unenforceability shall in no way affect the validity or
enforceability of such remaining covenants, agreements and provisions, or the
rights of any parties hereto. To the extent permitted by law, the parties
hereto waive any provision of law that renders any provision of this 1997-A
SUBI Servicing Supplement invalid or unenforceable in any respect.
SECTION 7.06. INSPECTION AND AUDIT RIGHTS.
The Servicer agrees that, on reasonable prior notice, it will permit any
representative or designee of the Titling Trustee, on behalf of the Titling
Trust, during the normal business hours of the Servicer, to examine all books
of account, records, reports and other papers of the Servicer relating to the
Titling Trust Assets, to make copies and extracts therefrom, to cause such
books to be audited by Independent Accountants selected by the Titling
Trustee, and to discuss the affairs, finances and accounts relating to the
Titling Trust Assets with its officers, employees and Independent Accountants
(and by this provision the Servicer hereby authorizes such Independent
Accountants to discuss with such representatives such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Such rights shall include, but shall not be limited to, any
off-site storage facilities at which any data (including, without limitation,
computerized records), together with all operating software and appropriate
documentation, may be held. The Titling Trustee agrees to keep confidential
all the confidential information of the Servicer acquired during any such
examination as if such information were its own confidential information,
except to the extent necessary for the purposes of this 1997-A SUBI Servicing
Supplement. The
27
expenses incident to the exercise by the Titling Trustee of any right under
this Section shall be reimbursable by the Servicer.
SECTION 7.07. ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
SECTION 7.08. EXECUTION IN COUNTERPARTS.
This 1997-A SUBI Servicing Supplement may be executed in any number of
counterparts, each of which so executed and delivered shall be deemed to be
an original, but all of which counterparts shall together constitute but one
and the same instrument.
SECTION 7.09. RIGHTS CUMULATIVE.
All rights and remedies from time to time conferred upon or reserved to
the Titling Trustee, on behalf of the Titling Trust, the Servicer or the
1997-A Securitization Trustee or to any or all of the foregoing are
cumulative, and none is intended to be exclusive of another. No delay or
omission in insisting upon the strict observance or performance of any
provision of this 1997-A SUBI Servicing Supplement, or in exercising any
right or remedy, shall be construed as a waiver or relinquishment of such
provision, nor shall it impair such right or remedy. Every right and remedy
may be exercised from time to time and as often as deemed expedient.
SECTION 7.10. FURTHER ASSURANCES.
Each party will do such acts, and execute and deliver to any other party
such additional documents or instruments, as may be reasonably requested in
order to effect the purposes of this 1997-A SUBI Servicing Supplement and to
better assure and confirm unto the requesting party its rights, powers and
remedies hereunder.
SECTION 7.11. THIRD-PARTY BENEFICIARIES.
This 1997-A SUBI Servicing Supplement, insofar as it relates to the
1997-A SUBI Sub-Trust, will inure to the benefit of and be binding upon the
parties hereto, their respective successors and permitted assigns, the 1997-A
Securitization Trustee, the Titling Trustee (on behalf of the Titling Trust),
and each of the holders of any legal or beneficial interest in the 1997-A
SUBI Certificates (including without limitation the 1997-A Securitization
Trustee and the Certificateholders), who shall be considered to be
third-party beneficiaries hereof. Except as otherwise provided in this
1997-A SUBI Servicing Supplement, no other Person will have any right or
obligation hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers duly authorized as of the day and
year first above written.
TOYOTA MOTOR CREDIT CORPORATION
By:
---------------------------
Name:
Title:
TMTT, INC.,
as trustee of TOYOTA LEASE TRUST
By:
----------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
By:
----------------------------
Name:
Title:
Acknowledged and Agreed:
U.S. BANK NATIONAL ASSOCIATION,
as 1997-A Securitization Trustee
By:
---------------------------
Name:
Title:
30
EXHIBIT A
SCHEDULE OF 1997-A CONTRACTS AND
1997-A LEASED VEHICLES AS OF THE INITIAL CUTOFF DATE
[Omitted. Copies on file with the Servicer, the Titling Trustee and the 1997-A
Securitization Trustee.]
A-1
EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
B-1
EXHIBIT C
FORM OF POWER OF ATTORNEY
C-1
SCHEDULE I
LIST OF BRANCH OFFICES
C-2