EXECUTION COPY
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1998-B SUBI SERVICING SUPPLEMENT
to
AMENDED AND RESTATED TRUST AND SERVICING AGREEMENT
Dated as of October 1, 1996
Among
TMTT, INC.,
as Titling Trustee,
TOYOTA MOTOR CREDIT CORPORATION,
as Servicer,
and
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
Dated as of September 1, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SERVICER
2.01 Representations and Warranties of Servicer . . . . . . . . . . . . . . 3
ARTICLE III
CREATION OF 1998-B SUBI
3.01 Initial Creation of 1998-B SUBI Portfolio and 1998-B SUBI Sub-
Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.02 Subsequent Additions to 1998-B SUBI Portfolio and 1998-B SUBI
Sub-Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.03 Servicer Payment in Respect of Certain Contracts and Leased
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.04 Filings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
SPECIFIC REQUIREMENTS FOR ADMINISTRATION AND SERVICING OF
CONTRACTS IN 1998-B SUBI PORTFOLIO
4.01 Servicer Bound by Titling Trust Agreement. . . . . . . . . . . . . . . . 7
4.02 Collection of Monthly Payments and Remittances; Application of
Proceeds; Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.03 Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.04 Collection and Application of Security Deposits. . . . . . . . . . . . . 14
4.05 Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.06 Payment of Certain Fees and Expenses; No Offset. . . . . . . . . . . . . 16
4.07 Servicing Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.08 Repossession and Sale of Leased Vehicles . . . . . . . . . . . . . . . . 17
4.09 Servicer to Act on Behalf of Titling Trust . . . . . . . . . . . . . . . 19
4.10 Indemnificationby Servicer . . . . . . . . . . . . . . . . . . . . . . . 20
4.11 Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.12 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.13 Servicer Not to Resign; Assignment . . . . . . . . . . . . . . . . . . . 22
4.14 Obligor Insurance Coverage in Respect of Leased Vehicles . . . . . . . . 23
4.15 Corporate Existence; Status; Merger. . . . . . . . . . . . . . . . . . . 23
ARTICLE V
STATEMENTS AND REPORTS
5.01 Reporting by the Servicer. . . . . . . . . . . . . . . . . . . . . . . . 24
5.02 Annual Accountants' Reports. . . . . . . . . . . . . . . . . . . . . . . 25
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Page
5.03 Other Certificates And Notices From Servicer . . . . . . . . . . . . . . 26
5.04 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VI
DEFAULT
6.01 Event of Servicing Termination; Termination of Servicer as to 1998-B
SUBI Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.02 No Effect on Other Parties . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VII
MISCELLANEOUS
7.01 Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 28
7.02 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.03 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.04 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.05 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.06 No Petition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.07 Inspection and Audit Rights. . . . . . . . . . . . . . . . . . . . . . . 30
7.08 Article and Section Headings . . . . . . . . . . . . . . . . . . . . . . 31
7.09 Execution in Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 31
7.10 Rights Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.11 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.12 Third-Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . 31
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EXHIBITS
Page
EXHIBIT A Schedule of 1998-B Contracts and 1998-B Leased Vehicles
as of the Initial Cutoff Date . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Servicer's Certificate. . . . . . . . . . . . . . . . . B-1
EXHIBIT C Form of Power of Attorney . . . . . . . . . . . . . . . . . . . C-1
SCHEDULE I Addresses of Branch Offices
iii
1998-B SUBI SERVICING SUPPLEMENT TO THE AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
SUBI SERVICING SUPPLEMENT TO THE AMENDED AND RESTATED TRUST AND
SERVICING AGREEMENT (the "1998-B SUBI Servicing Supplement"), dated as of
September 1, 1998, among TMTT, INC., a Delaware corporation, as Titling
Trustee of TOYOTA LEASE TRUST, a Delaware business trust (the "Titling
Trust") on behalf of the Titling Trust, TOYOTA MOTOR CREDIT CORPORATION, a
California corporation, as Servicer, and U.S. BANK NATIONAL ASSOCIATION
(formerly known as First Bank National Association), as Trust Agent.
RECITALS
A. Toyota Motor Credit Corporation ("TMCC"), the Titling Trustee and,
for certain limited purposes set forth therein, U.S. Bank National
Association (formerly known as First Bank National Association), as Trust
Agent, have entered into that certain Amended and Restated Trust and
Servicing Agreement, dated as of October 1, 1996, amending and restating
that certain Trust and Servicing Agreement, dated as of October 1, 1996,
among the same parties (as so amended and restated, and as it may be further
amended, supplemented or modified, the "Titling Trust Agreement"), pursuant
to which TMCC and the Titling Trustee formed the Titling Trust for the
purpose of taking assignments and conveyances of, holding in trust and
dealing in, various Titling Trust Assets in accordance with the Titling Trust
Agreement.
B. Concurrently herewith, and as contemplated by the Titling Trust
Agreement, TMCC, the Titling Trustee and the Trust Agent are entering into
that certain 1998-B SUBI Supplement to the Titling Trust Agreement, dated as
of September 1, 1998, pursuant to which the Titling Trustee, on behalf of the
Titling Trust and at the direction of TMCC, as UTI Beneficiary, will create
and issue to or to the order of TMCC (i) a 1998-B SUBI Certificate evidencing
beneficial interests in the assets of the 1998-B SUBI other than the proceeds
of the Residual Value Insurance Policies, and (ii) a 1998-B SUBI Insurance
Certificate evidencing beneficial interests in the assets of the 1998-B SUBI
that are proceeds of the Residual Value Insurance Policies insofar as such
policies relate to the 1998-B Leased Vehicles and the 1998-B Contracts. It
is the intention of the parties hereto that the 1998-B SUBI Certificate and
the 1998-B SUBI Insurance Certificate collectively represent a 100%
beneficial interest in the 1998-B SUBI, whose beneficiaries generally will be
entitled to the net cash flow arising from, but only from, the related 1998-B
SUBI Assets, all as set forth in the Titling Trust Agreement and the 1998-B
SUBI Supplement.
C. Also concurrently herewith, TMCC and the Transferor are entering
into that certain 1998-B SUBI Certificate Purchase and Sale Agreement, dated
as of September 1, 1998, pursuant to which TMCC is selling to the Transferor,
without recourse, all of TMCC's right, title and interest in and to the
1998-B SUBI, the 1998-B SUBI Certificate and the 1998-B SUBI Insurance
Certificate, all moneys due thereon and paid thereon or in respect thereof
and the
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right to realize on any property that may be deemed to secure the 1998-B
SUBI, and all proceeds thereof.
D. Also concurrently herewith, and as contemplated by the Titling
Trust Agreement, the Transferor and U.S. Bank National Association, as 1998-B
Securitization Trustee, are entering into that certain Securitization Trust
Agreement, dated as of September 1, 1998 (the "1998-B Securitization Trust
Agreement"), pursuant to which the 1998-B SUBI Certificate will be
transferred to the 1998-B Securitization Trustee, in that capacity on behalf
of the Securitization Trust, in connection with a Securitized Financing
thereof by the Transferor. The 1998-B SUBI Insurance Certificate will not be
transferred to the 1998-B Securitization Trustee and the Transferor will
retain the 1998-B SUBI Insurance Certificate.
E. The parties desire to supplement the servicing provisions of the
Titling Trust Agreement, insofar as they apply to the 1998-B SUBI, the 1998-B
SUBI Sub-Trust, the 1998-B SUBI Certificate and the 1998-B SUBI Insurance
Certificate, to provide for further specific servicing obligations that will
benefit the holders of the 1998-B SUBI Certificate and the 1998-B SUBI
Insurance Certificate and the parties to and other beneficiaries of the
Transaction Documents relating to the Securitized Financing contemplated by
the 1998-B Securitization Trust Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each party hereto, the
parties hereto agree to the following supplemental obligations with regard to
the 1998-B SUBI Sub-Trust:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS.
For all purposes of this 1998-B SUBI Servicing Supplement, except as
otherwise expressly provided or unless the context otherwise requires,
capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Annex of Definitions attached to the Titling
Trust Agreement or in the Annex of Supplemental Definitions attached to the
1998-B SUBI Supplement for all purposes of this 1998-B SUBI Servicing
Supplement. In the event of any conflict between a definition set forth in
the Annex of Definitions and the Annex of Supplemental Definitions, the
definition set forth in the Annex of Supplemental Definitions shall prevail.
In the event of any conflict between a definition set forth both herein and
in the Annex of Definitions or Annex of Supplemental Definitions, the
definition set forth herein shall prevail. All terms used in this 1998-B
SUBI Servicing Supplement include, as appropriate, all genders and the plural
as well as the singular. All references such as "herein", "hereof" and the
like shall refer to this 1998-B SUBI Servicing Supplement as a whole and not
to any particular article or section within this 1998-B SUBI Servicing
Supplement. All references such as "includes" and variations thereon shall
mean "includes without limitation" and references to "or"
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shall mean "and/or". Any reference herein to the "Titling Trustee, acting on
behalf of the Titling Trust", or words of similar import, shall be deemed to
mean the Titling Trustee, acting on behalf of Toyota Lease Trust and all
beneficiaries thereof. Any reference herein to the "1998-B Securitization
Trustee, acting on behalf of the 1998-B Securitization Trust", or words of
similar import, shall be deemed to mean the 1998-B Securitization Trustee,
acting on behalf of the Toyota Auto Lease Trust 1998-B and all beneficiaries
thereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SERVICER
2.01 REPRESENTATIONS AND WARRANTIES OF SERVICER.
The Servicer represents and warrants to the Titling Trustee, the 1998-B
Securitization Trustee and each SUBI Beneficiary as follows:
(a) ORGANIZATION AND GOOD STANDING. The Servicer has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of California, with corporate power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and now has, corporate power, authority and legal right to acquire,
own, sell and service the Contracts and related Leased Vehicles and to hold
the related Contract Documents and Certificates of Title as custodian on
behalf of the Titling Trust.
(b) DUE QUALIFICATION. The Servicer is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of property or the conduct of its business (including the servicing of the
Contracts and related Leased Vehicles as required by this Agreement) requires
such qualifications.
(c) POWER AND AUTHORITY. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
and the execution, delivery and performance of this Agreement has been duly
authorized by the Servicer by all necessary corporate action.
(d) BINDING OBLIGATIONS. This 1998-B SUBI Servicing Supplement
constitutes a legal, valid and binding obligation of the Servicer enforceable
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally or by general principles of equity.
(e) NO CONFLICT. The consummation of the transactions contemplated by
this 1998-B SUBI Servicing Supplement and the fulfillment of the terms of
this 1998-B SUBI Servicing Supplement does not conflict with, result in any
breach of any of the terms and provisions of, nor constitute (with or without
notice or lapse of time) a default under, the articles of incorporation or
bylaws of the Servicer, or conflict with or breach any of the material terms
or
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provisions of, or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement or other instrument to which the
Servicer is a party or by which it is bound; nor result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of
any such indenture, agreement or other instrument (other than this 1998-B
SUBI Servicing Supplement); nor violate any law or, to the best of the
Servicer's knowledge, any order, rule or regulation applicable to the
Servicer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties; which breach, default,
conflict, lien or violation would have a material adverse effect on the
earnings, business affairs or business prospects of the Servicer.
(f) NO PROCEEDINGS. To the Servicer's actual knowledge, there is no
action, suit or proceeding before or by any court or governmental agency or
body, domestic or foreign, now pending, or to the Servicer's knowledge,
threatened, against or affecting the Servicer (i) asserting the invalidity of
this 1998-B SUBI Servicing Supplement or (ii) seeking any determination or
ruling that might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability of, this
1998-B SUBI Servicing Supplement.
ARTICLE III
CREATION OF 1998-B SUBI
3.01 INITIAL CREATION OF 1998-B SUBI PORTFOLIO AND 1998-B SUBI SUB-TRUST.
(a) Pursuant to Section 3.01 of the Titling Trust Agreement and Section
16.01 of the 1998-B SUBI Supplement, the Titling Trustee has been directed to
cause to be identified and allocated on the books and records of the Titling
Trust the separate 1998-B SUBI Sub-Trust consisting of the 1998-B SUBI
Portfolio and certain other associated Titling Trust Assets specified
therein. The Titling Trustee, on behalf of the Titling Trust, hereby directs
that the Servicer so identify and allocate such a separate SUBI Portfolio of
Contracts and related Leased Vehicles from among all Titling Trust Assets
owned by the Titling Trustee on behalf of the Titling Trust and currently
accounted for as part of the UTI Sub-Trust.
(b) The Servicer hereby identifies and allocates such a portfolio of
Contracts and related Leased Vehicles more particularly described on Exhibit
A hereto which is in substantially the form of a Schedule of Contracts and
Leased Vehicles, in order to create the initial 1998-B SUBI Portfolio.
(c) The Servicer hereby represents and warrants to the Titling Trustee,
the 1998-B Securitization Trustee and each SUBI Beneficiary that each of the
Contracts described on Exhibit A hereto is an Eligible Contract.
(d) It is the intent of the parties hereto that the proceeds of the
Residual Value Insurance Policies applicable to the 1998-B Leased Vehicles
and the 1998-B Contracts will be payable by the Servicer (or the insurer
under the Residual Value Insurance Policies) directly to the holder of the
1998-B SUBI Insurance Certificate and will not, under any circumstances, be
4
subject to the lien of the 1998-B Securitization Trust Agreement or be
required to be deposited in any SUBI Account.
3.02 SUBSEQUENT ADDITIONS TO 1998-B SUBI PORTFOLIO AND 1998-B SUBI
SUB-TRUST.
(a) The Titling Trustee is hereby directed to cause to be identified
and allocated on the books and records of the Titling Trust to the 1998-B
SUBI Sub-Trust on or before each Transfer Date certain additional Eligible
Contracts, related Leased Vehicles and other associated Titling Trust Assets
not then allocated, or reserved for allocation, to any other SUBI Portfolio
or Sub-Trust. Such Subsequent Contracts and Subsequent Leased Vehicles to be
allocated to the 1998-B SUBI Portfolio and 1998-B SUBI Sub-Trust shall have
an aggregate Discounted Principal Balance as of the related Transfer Date of
an amount not greater than all Principal Collections received after the
Cutoff Date (including the amounts treated as Principal Collections pursuant
to Section 3.01(c) and 3.01(k) of the 1998-B Securitization Trust Agreement)
that have not been so applied pursuant to this Section 3.02(a). The Titling
Trustee, on behalf of the Titling Trust, hereby directs the Servicer to
select at least one Transfer Date each month during the Revolving Period and
to identify such Subsequent Contracts, related Subsequent Leased Vehicles and
other associated Titling Trust Assets (as described in the 1998-B SUBI
Supplement and meeting the other requirements set forth therein) on or before
each Transfer Date, and cause such Subsequent Contracts and Subsequent Leased
Vehicles to be specifically identified on a supplemental Schedule of
Contracts and Leased Vehicles (which, when considered with all prior
Schedules of Contracts and Leased Vehicles, shall be considered to be the
definitive Schedule of Contracts and Leased Vehicles) to be delivered
pursuant to Section 5.01 hereof. On each such Transfer Date, such Subsequent
Contracts, Subsequent Leased Vehicles and other associated Titling Trust
Assets shall be added to the 1998-B SUBI Portfolio and 1998-B SUBI Sub-Trust,
as the case may be, as additional 1998-B SUBI Assets.
(b) The Servicer shall give one Business Day's prior notice to the
Titling Trustee and the 1998-B Securitization Trustee of each Transfer Date.
On each Transfer Date, the Servicer shall be deemed to have represented and
warranted to the 1998-B Securitization Trustee on behalf of the 1998-B
Securitization Trust that (i) all Subsequent Contracts added to the 1998-B
SUBI Portfolio on that date were Eligible Contracts as of the relevant
Transfer Date, (ii) no adverse selection procedures were employed in
selecting such Subsequent Contracts, (iii) it is not aware of any bias in the
selection of such Subsequent Contracts that would cause delinquencies or
losses with respect thereto to differ from those of the Initial Contracts,
other than the fact that such Subsequent Contracts were selected from all
Eligible Contracts not then allocated to any SUBI Portfolio or reserved for
allocation to another SUBI Portfolio on a "first-in, first-out" basis, based
on the date of origination and (iv) unless the 1998-B Securitization Trustee
receives a letter from each Rating Agency to the effect that the use of
different criteria would not result in the qualification, reduction or
withdrawal of its then current rating on any Investor Certificates rated by
either Rating Agency, after giving effect to such reallocation (A) each such
1998-B Contract will be allocated to the 1998-B SUBI Portfolio based upon its
Discounted Principal Balance as of the relevant Transfer Date, (B) the
weighted average remaining term of the 1998-B
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Contracts (including the Subsequent Contracts) will be not greater than 36
months, and (C) the weighted average Booked Residual Value of all 1998-B
Leased Vehicles relating to the 1998-B Contracts (including the Subsequent
Contracts), as a percentage of the aggregate of the Capitalized Costs of each
1998-B Contracts (including the Subsequent Contracts), will be not greater
than 70%, based on the characteristics of all 1998-B Contracts (including the
Subsequent Contracts).
(c) From and after the date on which the 1998-B SUBI Lease Funding
Account is required to be maintained as specified in Section 17.02 of the
1998-B SUBI Supplement, on each Transfer Date the Servicer shall withdraw
from the 1998-B SUBI Collection Account (but excluding any amounts in fact
deposited therein that the Servicer has notified the 1998-B Securitization
Trustee are proceeds of a Residual Value Insurance Policy) an amount equal to
the aggregate Discounted Principal Balance as of the relevant Transfer Date
of the Subsequent Contracts then being added to the 1998-B SUBI Portfolio and
1998-B SUBI Sub-Trust pursuant to Section 16.01 of the 1998-B SUBI Supplement
and the Servicer shall direct the Titling Trustee to deposit such amount into
the 1998-B Lease Funding Account or for payment to the UTI Beneficiary, as
appropriate, directly in connection with the purchase of Subsequent Contracts
and Subsequent Leased Vehicles.
3.03 SERVICER PAYMENT IN RESPECT OF CERTAIN CONTRACTS AND LEASED VEHICLES.
(a) The representations and warranties of the Servicer set forth in
Sections 3.01(c) and 3.02(b), with respect to each 1998-B Contract shall
survive delivery of the related Contract to the 1998-B SUBI Portfolio and the
1998-B SUBI Sub-Trust and shall continue (speaking as of the dates made) so
long as each such 1998-B Contract remains outstanding, or until the
termination of the 1998-B Securitization Trust Agreement pursuant to Section
7.01 thereof, whichever occurs earlier. Upon discovery by the Titling
Trustee, the 1998-B Securitization Trustee or the Servicer that any such
representation or warranty was incorrect as of the time specified with
respect to such representation and warranty and such incorrectness materially
and adversely affects the interests of the Transferor or Investor
Certificateholders in such 1998-B Contract, the party discovering such
incorrectness shall give prompt written notice to the others. Within 60 days
of its discovery of such incorrectness or notice to such effect to the
Servicer, the Servicer shall cure in all material respects the circumstances
or condition in respect of which such representation or warranty was
incorrect. If the Servicer is unable or unwilling to do so timely, it shall,
as the sole remedy for such breach, promptly (i) deposit the Reallocation
Payment in respect of such 1998-B Contract into the 1998-B SUBI Collection
Account, (ii) reallocate such 1998-B Contract and the related Leased Vehicle
and other related Titling Trust Assets from the 1998-B SUBI Portfolio to the
UTI Portfolio, and (iii) indemnify, defend and hold harmless the holders of
the 1998-B SUBI Certificate (including without limitation the 1998-B
Securitization Trustee on behalf of the 1998-B Securitization Trust and the
Certificateholders), the holder of the 1998-B SUBI Insurance Certificate and
any subsequent servicer (if other than the current Servicer) from and
against, any and all loss or liability with respect to or resulting from any
such 1998-B Contract or related Leased Vehicle. Notwithstanding the
foregoing, if any reallocation described in clause (ii) would cause the
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Transferor Interest to be equal to or less than zero, the Servicer also shall
deposit promptly into the 1998-B SUBI Collection Account a Reallocation
Deposit Amount in an amount such that the Transferor Interest will not be
reduced to less than zero, and the reallocation will not be made until such
deposit has been made.
(b) In the event that the Servicer receives funds from a Dealer that is
required, pursuant to a Dealer Agreement, to repurchase a Contract or Leased
Vehicle included in the 1998-B SUBI Portfolio, the Servicer shall, subject to
Section 17.01 of the 1998-B SUBI Supplement, within two Business Days of
receipt thereof, deposit such funds into the 1998-B SUBI Collection Account,
which deposit shall satisfy the UTI Beneficiary's obligations with respect to
enforcement of such Dealer repurchase obligation, and return to the
repurchasing Dealer the Certificate of Title and Contract with respect to
such Leased Vehicle.
(c) The obligations of the Servicer pursuant to this Section 3.03 shall
survive any termination of the Servicer with respect to the 1998-B SUBI
Portfolio and 1998-B SUBI Sub-Trust under this 1998-b SUBI Servicing
Supplement or the Titling Trust Agreement.
3.04 FILINGS.
The Servicer will undertake all other and future actions and activities
as may be reasonably necessary to perfect (or evidence) and confirm the
foregoing allocations of Trust Assets to the 1998-B SUBI Sub-Trust and the
1998-B SUBI Portfolio, as the case may be, including filing or causing to be
filed UCC financing statements and executing and delivering all related
filings, documents or writings as may be reasonably necessary hereunder or
under any other Securitization Trust Documents, whether on its own behalf or
pursuant to the power of attorney granted by the Grantor in the 1998-B SUBI
Supplement; provided, however, that in no event shall the Servicer be
required to take any action to perfect a security interest that may be held
by the 1998-B Securitization Trustee in any 1998-B Leased Vehicle.
ARTICLE IV
SPECIFIC REQUIREMENTS FOR
ADMINISTRATION AND SERVICING OF CONTRACTS
IN 1998-B SUBI PORTFOLIO
4.01 SERVICER BOUND BY TITLING TRUST AGREEMENT.
(a) Except as otherwise specifically provided herein: (i) the Servicer
shall continue to be bound by all provisions of the Titling Trust Agreement
with respect to the Contracts, Leased Vehicles and other associated Titling
Trust Assets in the 1998-B SUBI Sub-Trust, including without limitation the
provisions thereof relating to the administration and servicing of 1998-B
Contracts; and (ii) the provisions set forth herein shall operate either as
additions to or modifications of the extant obligations of the Servicer under
the Titling Trust Agreement, as the context may require. In the event the
provisions of this 1998-B SUBI Servicing Supplement are more exacting or
specific than those contained in the Titling Trust
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Agreement or in the event of any conflict between the provisions of this
1998-B SUBI Servicing Supplement with respect to the 1998-B SUBI, and those
of the Titling Trust Agreement, the provisions of this 1998-B SUBI Servicing
Supplement shall govern.
(b) For purposes of determining the Servicer's obligations with
respect to the servicing of the 1998-B SUBI Sub-Trust under this 1998-B SUBI
Servicing Supplement (including without limitation pursuant to Article Four
hereof), general references in the Titling Trust Agreement to: (i) a SUBI
Account shall be deemed to refer more specifically to the 1998-B SUBI
Account; (ii) a SUBI Asset shall be deemed to refer more specifically to a
1998-B SUBI Asset; (iii) an appropriate or applicable SUBI Collection Account
shall be deemed to refer more specifically to the 1998-B SUBI Collection
Account; (iv) an appropriate or applicable SUBI Lease Funding Account shall
be deemed to refer more specifically to the 1998-B SUBI Lease Funding
Account; (v) a SUBI Portfolio shall be deemed to refer more specifically to
the 1998-B SUBI Portfolio; (vi) a SUBI Sub-Trust shall be deemed to refer
more specifically to the 1998-B SUBI Sub-Trust; (vii) a SUBI Servicing
Supplement shall be deemed to refer more specifically to this 1998-B SUBI
Servicing Supplement; and (viii) a SUBI Supplement shall be deemed to refer
more specifically to the 1998-B SUBI Supplement.
(c) Coincident with the execution and delivery of this 1998-B SUBI
Servicing Supplement, the Servicer shall furnish the 1998-B Securitization
Trustee, on behalf of the 1998-B Securitization Trust, with an Officer's
Certificate listing the officers or other authorized signatories of the
Servicer currently involved in, or responsible for, the administration and
servicing of the Contracts in the 1998-B SUBI Portfolio, which list shall
from time to time be updated by the Servicer.
4.02 COLLECTION OF MONTHLY PAYMENTS AND REMITTANCES; APPLICATION
OF PROCEEDS; ACCOUNTS.
(a) The Servicer shall use commercially reasonable efforts,
consistent with its then current standards, policies and procedures or new
programs, whether or not implemented on a test basis, commenced in the
ordinary course of business, to (i) collect all payments required under the
terms and provisions of each 1998-B Contract included in the 1998-B SUBI
Portfolio; (ii) cause each Obligor to make all payments in respect of the
related 1998-B Contract included in the 1998-B SUBI Portfolio to which such
Obligor is a party or otherwise obligated; and (iii) to deposit all
Collections (excluding proceeds of the Residual Value Insurance Policies
which are to be transferred directly to the holder of the 1998-B SUBI
Insurance Certificate and which amounts shall not be deemed to be Collections
by the Servicer) and any Maturity Advance received from the Transferor into
the 1998-B SUBI Collection Account on or before the Deposit Date relating to
each Collection Period except as otherwise specified herein or in Section
17.01 or Section 17.02 of the 1998-B SUBI Supplement (in connection with any
failure to satisfy the Monthly Remittance Conditions).
Notwithstanding the foregoing and notwithstanding the
provisions of Section 3.01 of the 1998-B Securitization Trust Agreement, in
accordance with the provisions of
8
Section 7.01(c) of the Titling Trust Agreement, for so long as TMCC is the
Servicer and each Monthly Remittance Condition is satisfied, the Servicer
will be entitled to make deposits of Collections into the 1998-B SUBI
Collection Account net of amounts reimbursable or payable to the Servicer as
compensation, in respect of Advances or otherwise (including in respect of
amounts advanced by the Servicer in respect of amounts otherwise payable to
the 1998-B Securitization Trustee or to the Titling Trustee or Trust Agent),
and net of amounts payable or reimbursable (and actually so paid or
reimbursed directly by the Servicer) in respect of the Titling Trust. To the
extent the Servicer makes deposits net of any such amounts, the Servicer will
cause each relevant Servicer's Certificate to correctly and accurately
account for such amounts in providing all information with respect to
allocations, applications and payments to be made pursuant to Section 3.01 of
the 1998-B Securitization Trust Agreement on the same basis as though such
amounts were in fact deposited into the 1998-B SUBI Collection Account.
Moreover, as set forth in Section 3.01 of the 1998-B Securitization Trust
Agreement, the Servicer will, in each relevant Servicer's Certificate,
instruct the 1998-B Securitization Trustee not to make any distribution to
the Servicer, Transferor or Titling Trustee to the extent that the Servicer
has made any deposit net of a corresponding amount, and the 1998-B
Securitization Trustee will have no obligation with respect to or liability
for following any such instruction by the Servicer.
(b) Consistent with the foregoing, the Servicer may in its
discretion (i) waive any late payment charge or similar charge, in whole or
in part, in connection with delinquent payments on or deferrals or extensions
of a Contract included in the 1998-B SUBI Portfolio and (ii) defer one or
more payments under a Contract or extend the Maturity Date of any Contract.
Notwithstanding the foregoing, the Servicer may not grant more than four
deferrals of any 1998-B Contract, and may not extend the Maturity Date of any
1998-B Contract by more than twelve months in the aggregate (or by sixteen
months with the inclusion of any deferrals) or such that its Maturity Date
will occur later than the last day of the Collection Period related to the
Class B Stated Maturity Date; provided, however, that if the Servicer defers
payments on any 1998-B Contract more than four times or extends the Maturity
Date thereof by more than twelve months in the aggregate (or by more than
sixteen months with the inclusion of any deferrals) or so that the extended
Maturity Date will occur later than the last day of the Collection Period
relating to the Class B Stated Maturity Date, then, as the sole remedy
therefor, the Servicer shall, on the Deposit Date related to the Collection
Period in which such extension was granted or on the Deposit Date relating to
the Collection Period in which the Servicer discovers or is notified that an
improper extension was granted, (y) deposit into the 1998-B SUBI Collection
Account an amount equal to the then Discounted Principal Balance of such
Contract plus an amount equal to the interest, or lease charge, portion of
any Monthly Payments with respect thereto at the related Lease Rate that were
accrued but unpaid as of the end of that Collection Period, and (z)
reallocate such 1998-B Contract and the related 1998-B Leased Vehicle from
the 1998-B SUBI Portfolio and 1998-B SUBI Sub-Trust to the UTI Portfolio and
UTI Sub-Trust. The obligations of the Servicer pursuant to this Section
4.02(b) shall survive any termination of the Servicer's obligations with
respect to the 1998-B SUBI Portfolio under this 1998-B SUBI Servicing
Supplement.
9
(c) As tonthly Payments, Liquidation Proceeds, Insurance Proceeds
(excluding proceeds of the Residual Value Insurance Policies which are to be
transferred directly to the holder of the 1998-B SUBI Insurance Certificate
by the Servicer), Prepayments, Payments Ahead or any other payments by or on
behalf of any Obligor or otherwise (excluding any late fees or deferral fees)
with respect to any 1998-B Contract or related 1998-B Leased Vehicle,
including (if applicable) any proceeds of recourse payments by the
originating Dealer, whether received by the Servicer through any lock box or
similar mechanism used for the collection of regular periodic payments on
receivables owned or serviced by it or received directly by the Servicer at
any of its servicing offices, but subject to Section 4.08 of this 1998-B SUBI
Servicing Supplement with regard to Liquidation Proceeds and Insurance
Proceeds:
(i) Upon receipt of any such funds (including funds
initially deposited in any Servicer lock-box account), the Servicer
shall deposit such funds into its operating account and shall
ascertain promptly the following information: (A) the amount of
each receipt, (B) the Contract Number to which such receipt
relates, (C) the nature of the payment (i.e., whether a Monthly
Payment, other Liquidation Proceeds, a Prepayment, payment of the
Residual Value of the related Leased Vehicle or any other payment
by or on behalf of any Obligor), (D) the date such payment is
credited; and (E) that such Contract has been allocated to the
1998-B SUBI Portfolio and 1998-B SUBI Sub-Trust (collectively, the
"Payment Information").
(ii) As to any such funds received by the Servicer
after the date, if any, on which it ceases to satisfy the Monthly
Remittance Conditions, the Servicer shall segregate all such funds
from other SUBI Sub-Trusts, and deposit all such funds (net of
reimbursement of any Liquidation Expenses incurred by the Servicer
with respect to any 1998-B Leased Vehicle whose Liquidation
Proceeds are included among such funds and excluding proceeds of
the Residual Value Insurance Policies which are to be transferred
directly to the holder of the 1998-B SUBI Insurance Certificate by
the Servicer) into the 1998-B SUBI Collection Account maintained by
the Titling Trustee. Such amounts will thereafter be applied as
set forth in Section 17.01(d) of the 1998-B SUBI Supplement.
(iii) In the event that any proceeds of the Residual
Value Insurance Policies applicable to the 1998-B Leased Vehicles
and the 1998-B Contracts are deposited in any SUBI Account or
another account maintained by the Titling Trustee or the 1998-B
Securitization Trustee, such amounts shall be distributed to the
holder of the 1998-B SUBI Insurance Certificate by the Titling
Trustee or the 1998-B Securitization Trustee, as applicable, on the
succeeding Monthly Allocation Date at the written direction of the
Servicer.
(iv) Upon the determination by the Servicer that any
proceeds received by it with respect to any 1998-B Contract
constitute one or more Payments Ahead, the Servicer shall, unless
otherwise instructed by the Titling Trustee, (A) maintain
appropriate records of such Payment Ahead so as to be able to
timely apply such Payment Ahead as a Monthly Payment with respect
to the applicable Contract and (B) deposit such
10
Payment Ahead into the 1998-B SUBI Collection Account on the
Deposit Date relating to the Collection Period during which such
Payment Ahead is to be applied, or, after the date, if any, on
which it ceases to satisfy the Monthly Remittance Conditions,
within two Business Days of such date.
(d) The Servicer shall treat all Charged-Off Vehicle Proceeds and
Matured Leased Vehicle Proceeds in the manner provided for other Liquidation
Proceeds in the Titling Trust Agreement and 1998-B SUBI Supplement; provided,
however, as set forth in Section 4.07 of this 1998-B SUBI Servicing
Supplement, that the Servicer may be reimbursed for related Charged-Off
Vehicle Expenses, Matured Leased Vehicle Expenses, other Liquidation Expenses
and Insurance Costs as provided in Section 4.02(h).
(e) The Servicer shall deposit into the 1998-B SUBI Collection
Account on or before each Deposit Date each Security Deposit that was applied
in respect of a Contract during the related Collection Period and not paid to
a third party or to the Servicer as Liquidation Expenses or Matured Leased
Vehicle Expenses, or reimbursements in respect thereof.
(f) The Servicer, on behalf of the Titling Trustee, shall
establish and maintain the 1998-B SUBI Collection Account as set forth in
Section 17.01(a) of the 1998-B SUBI Supplement.
(g) On each Determination Date the Servicer shall make the
calculations necessary to allow the 1998-B Securitization Trustee to make
allocations, applications and payments to holders of, or to the 1998-B SUBI
Accounts on behalf of the holders of, the 1998-B SUBI Certificates on the
related Monthly Allocation Date in accordance with Section 3.01 of the 1998-B
Securitization Trust Agreement. In connection therewith, the Servicer shall
determine the amount of Titling Trust Expenses incurred or suffered during
the preceding Collection Period and shall allocate such Titling Trust
Expenses among the various Sub-Trusts, including the 1998-B SUBI Sub-Trust,
in good faith and so as not to disproportionately affect any Sub-Trust,
generally as provided for in Section 3.04 or 7.04, as appropriate, of the
Titling Trust Agreement.
(h) The Servicer will be entitled to reimbursement of Matured
Leased Vehicle Expenses, Charged-Off Vehicle Expenses and other Liquidation
Expenses. The Servicer is hereby authorized to net such expenses from
proceeds or Collections in respect of the related 1998-B Contracts or 1998-B
Leased Vehicles (including other Liquidation Proceeds), or to withdraw such
amounts from amounts on deposit in the 1998-B SUBI Collection Account. The
Servicer also will be entitled to reimbursement of certain payments it makes
on behalf of Obligors (including payments it makes on behalf of the related
Obligors of taxes, vehicle registration charges, clearance of parking tickets
and similar items and expenses and charges incurred by it in the ordinary
course of servicing the 1998-B Contracts) from Collections with respect to
the 1998-B Contracts (whether or not as separate payments thereof by the
related Obligors) or from amounts realized upon the final disposition of
1998-B Leased Vehicles. To the extent such amounts are not reimbursed prior
to or at the final disposition of the related Leased Vehicle but remain
unpaid by the related Obligor, such unreimbursed amounts (together
11
with any unpaid Monthly Payments under the related Contract) will be treated
as Matured Leased Vehicle Expenses or Liquidation Expenses, as the case may
be, and the Servicer is hereby authorized to offset such reimbursable
payments, expenses and charges against Matured Leased Vehicle Proceeds or
Liquidation Proceeds, as the case may be.
To the extent that during any Collection Period (i) Collections,
Matured Leased Vehicle Proceeds, Liquidation Proceeds or separate payments
from the Obligors in respect of such payments, charges and expenses are
deposited into the 1998-B SUBI Collection Account rather than so offset by
the Servicer, (ii) any Monthly Payments arising from a Contract allocated to
the 1998-B SUBI Sub-Trust are received by the Titling Trustee or deposited in
the 1998-B SUBI Collection Account with respect to any prior Collection
Period as to which the Servicer has outstanding an unreimbursed Advance,
rather than being netted from Collections by the Servicer; or (iii) any
amount of unreimbursed Advances already deposited in the 1998-B SUBI
Collection Account on any Deposit Date are reasonably determined by the
Servicer to be Nonrecoverable Advances, then, on the related Deposit Date,
the Servicer shall (y) notify the Titling Trustee and the 1998-B
Securitization Trustee in writing as to any such amount and (z) instruct the
Titling Trustee to, and the Titling Trustee shall, promptly transfer an
amount equal to the aggregate of such amounts from the 1998-B SUBI Collection
Account, to the 1998-B SUBI Lease Funding Account. Thereafter, the Titling
Trustee shall remit to the Servicer from the 1998-B SUBI Lease Funding
Account the total of such amounts, without interest (the "Servicer
Reimbursement"). In lieu of causing the Titling Trustee to transfer such
amounts to the 1998-B SUBI Lease Funding Account (or in the event the 1998-B
SUBI Lease Funding Account has not been required to be established as set
forth in Section 17.02 of the 1998-B SUBI Supplement), the Servicer is hereby
authorized to deduct such amounts from amounts on deposit or otherwise to be
deposited into the 1998-B SUBI Collection Account.
(i) The Servicer shall account to the Titling Trustee and the
1998-B Securitization Trustee with respect to the 1998-B SUBI Sub-Trust
separately from any other Sub-Trust.
(j) The Servicer shall direct the Titling Trustee or the 1998-B
Securitization Trustee, as applicable, to invest amounts held in the 1998-B
SUBI Accounts and the Reserve Fund in Permitted Investments as provided in
the Titling Trust Agreement, 1998-B SUBI Supplement and the 1998-B
Securitization Trust Agreement. The maximum permissible maturities of any
such investments pursuant to this clause on any date shall be not later than
the Business Day immediately preceding the Monthly Allocation Date next
succeeding the date of such investment, except for (i) investments on which
the Trust Agent or 1998-B Securitization Trustee, respectively, is the
obligor (including repurchase agreements as to which it, in its commercial
capacity, is liable as principal), or that are TMCC Demand Notes, which may
mature on such next succeeding Monthly Allocation Date, (ii) investments
during the Revolving Period of Principal Collections (including amounts
treated as Principal Collections pursuant to Sections 3.01(c) and 3.01(k) of
the 1998-B Securitization Trust Agreement) on deposit in the 1998-B SUBI
Collection Account, which may mature on such dates as specified by the 1998-B
Securitization Trustee at the Servicer's direction so as to maintain the
availability of sufficient
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cash to make payments pursuant to Section 3.02(c) hereof, and (iii) amounts
on deposit in the 1998-B Certificateholders' Account, which may mature on the
Business Day preceding the next succeeding relevant Certificate Payment Date
(as described in Section 3.01 of the 1998-B Securitization Trust Agreement)
as specified in the related TMCC Demand Note in accordance with the terms of
the Indenture; provided, however, that any Permitted Investment consisting of
a TMCC Demand Note may mature on the relevant Certificate Payment Date rather
than on the prior Business Day to the extent specified in the Indenture.
(k) In the event the Servicer provides to the UTI Beneficiary, the
Titling Trustee and the 1998-B Securitization Trustee a letter from each
Rating Agency to the effect that the utilization by the Servicer of a
remittance schedule differing from those contemplated herein or in the 1998-B
SUBI Supplement with respect to Collections to be deposited in the 1998-B
SUBI Collection Account will not result in a qualification, downgrading or
withdrawal of the then-current rating assigned to the Rated Certificates by
such Rating Agency, (i) this 1998-B SUBI Servicing Supplement (and any
corresponding or related Sections in the 1998-B SUBI Supplement) may be so
modified without the consent of any Certificateholders and (ii) the Servicer
may remit such collections to the 1998-B SUBI Collection Account in
accordance with that alternative remittance schedule.
(l) The parties hereto acknowledge that the Titling Trustee, on
behalf of the Titling Trust, has made a complete transfer to the 1998-B
Securitization Trustee of the Collections in respect of the 1998-B SUBI
Assets contained in all accounts maintained by the Titling Trustee (excluding
proceeds of the Residual Value Insurance Policies, the rights to which are
evidenced by the 1998-B SUBI Insurance Certificate which is the sole property
of the Transferor) and, except as provided in this 1998-B SUBI Servicing
Supplement, the 1998-B SUBI Supplement and the 1998-B Securitization Trust
Agreement, neither the Titling Trustee nor the Servicer has any right to
direct such funds to a third party or to receive such funds (other than to
receive such funds pursuant to an investment thereof in Permitted Investments
on which such party is the obligor).
(m) In the event of a sale, disposition or other liquidation of
the 1998-B SUBI Certificate and the other property of the 1998-B
Securitization Trust pursuant to Section 7.02 or Section 8.02 of the 1998-B
Securitization Trust Agreement, the Servicer shall allocate the net proceeds
thereof as set forth in the 1998-B Securitization Trust Agreement.
4.03 RECORDS.
(a) As to any proceeds or other receipts with respect to any Trust
Asset, including without limitation Monthly Payments, Prepayments,
Liquidation Proceeds and any other payments by or on behalf of any Obligor or
otherwise with respect to any 1998-B Contract or 1998-B Leased Vehicle, the
Servicer shall maintain or cause to be maintained such computer and manual
records with respect to all such proceeds and other receipts in accordance
with the customary and usual procedures of institutions which service
closed-end automobile and light duty truck leases and, to the extent more
exacting, in conformity in all material respects with the
13
procedures used by the Servicer in respect of any such leases serviced by it
for its own account or the accounts of its Affiliates.
(b) The Servicer shall retain or cause to be retained all data
(including, without limitation, computerized records), together with all
operating software and appropriate documentation, relating directly to or
maintained in connection with the servicing of the 1998-B Contracts (the
"Contract Records") consistent with its then applicable retention policies or
applicable law. The Servicer shall provide or cause to be provided to the
Titling Trustee, on behalf of the Titling Trust, upon its request, copies of
all such data and appropriate documentation retained by the Servicer at all
reasonable times and upon reasonable notice. The Servicer shall promptly
report to the Titling Trustee, on behalf of the Titling Trust, any failure on
its part to maintain the Contract Records as herein provided and promptly
take appropriate action to remedy any such failure.
(c) Upon the occurrence and during the continuance of an Event of
Servicing Termination or if the rights of the Servicer with respect to the
1998-B SUBI Portfolio are terminated in accordance with Section 6.01(b) of
this 1998-B SUBI Servicing Supplement or, if this 1998-B SUBI Servicing
Supplement is terminated pursuant to Section 7.01, the Servicer shall, on
demand of the Titling Trustee, on behalf of the Titling Trust (either at the
request of the 1998-B Securitization Trustee or, as provided in Section
6.01(b) of this 1998-B SUBI Servicing Supplement, upon demand of Investor
Certificateholders representing not less than 51% of the aggregate Voting
Interest), deliver to the 1998-B Securitization Trustee all such data,
operating software and appropriate documentation necessary for the servicing
of the 1998-B Contracts, including but not limited to the related Contract
Documents and Title Documents, all moneys collected by it and required to be
deposited in any 1998-B SUBI Account on behalf of the Titling Trust, or in
the 1998-B SUBI Collection Account or the Reserve Fund on behalf of the
1998-B Securitization Trust, all Security Deposits with respect to 1998-B
Contracts, and any 1998-B Leased Vehicle in the possession of the Servicer
that has been repossessed or is part of Matured Leased Vehicle Inventory and
in either case has not yet been sold or otherwise disposed of. In addition
to delivering such data, operating software and appropriate documentation and
moneys, if a new servicer is appointed, the Servicer shall use its
commercially reasonable efforts to effect the orderly and efficient transfer
of the servicing of the 1998-B Contracts to the party that will be assuming
responsibility for such servicing, including, without limitation, directing
Obligors to remit payments in respect of such Contracts to an account or
address designated by the Titling Trustee or such new servicer.
4.04 COLLECTION AND APPLICATION OF SECURITY DEPOSITS.
Subject to Section 4.03(c) of this 1998-B SUBI Servicing
Supplement, the Servicer shall retain each Security Deposit remitted to it
(or deemed remitted to it) as agent and bailee for the Obligor until such
time as the Titling Trust, the Titling Trustee on behalf of the Titling
Trust, or the Servicer may lawfully and under the terms of the related
Contract apply such Security Deposit against unpaid amounts owed under the
Contract, damages to the related Leased Vehicle, excess wear and tear
charges, expenses in connection with the refurbishment and
14
disposal of the related Leased Vehicle or against fees, charges, payments or
expenses advanced or paid by the Servicer in accordance with applicable law,
its customary and usual servicing procedures and the related Contract, from
and after which time such amounts will be 1998-B SUBI Assets, subject to any
reimbursement due to the Servicer. To the extent any Security Deposit or
portion thereof is to be treated as proceeds of a Contract or Leased Vehicle
(because such Contract has become a Charged-Off Contract), the related
Security Deposit or such portion shall be deemed to be Liquidation Proceeds.
On each Deposit Date, but otherwise as provided in Section 4.02(c)(ii) of
this 1998-B SUBI Servicing Supplement, the Servicer shall deposit into the
1998-B SUBI Collection Account each Security Deposit that became Liquidation
Proceeds during the previous month; otherwise, each Security Deposit, after
deduction for amounts applied towards the payment or reimbursement of any
amount described above, shall be returned to the related Obligor by the
Servicer upon termination of such Contract.
4.05 ADVANCES.
(a) On or prior to each Deposit Date, the Servicer shall make an
Advance with respect to each outstanding delinquent 1998-B Contract and each
1998-B Contract as to which payments have been deferred resulting in the
diminution of the amount to be received on any Due Date relative to the
amount of each originally scheduled Monthly Payment if such 1998-B Contract
has not been reallocated to the UTI Portfolio with an accompanying
Reallocation Payment. Each such Advance will be made by deposit into the
1998-B SUBI Collection Account of an amount equal to the aggregate amount of
Monthly Payments due but not received during the related Collection Period.
(b) With respect to each Monthly Allocation Date, the Servicer
will have the option to make an Advance with respect to any 1998-B Leased
Vehicles in its possession and pending disposition during the related
Collection Period. Each such Advance shall be made by deposit into the 1998-B
SUBI Collection Account of an amount not to exceed the aggregate amount of
Liquidation Proceeds that the Servicer reasonably expects to realize (based
on criteria set forth in Section 9.09 of the 1998-B Securitization Trust
Agreement) upon disposition of all or any such Leased Vehicles.
(c) Notwithstanding any other provision of this 1998-B SUBI
Servicing Supplement, the Servicer shall not be obligated to make any Advance
in respect of any 1998-B Contract if the Servicer shall have reasonably
determined that any such Advance, if made, would constitute a Nonrecoverable
Advance. Any such determination relating to a claim by the Servicer for
reimbursement of Nonrecoverable Advances from monies on deposit on the 1998-B
SUBI Collection Account shall be evidenced by an Officer's Certificate (or
the statement to Certificateholders or the certification by any other
authorized signatory) of the Servicer furnished to each UTI Beneficiary, the
Titling Trustee and the 1998-B Securitization Trustee setting out the basis
for such determination, which determination shall be conclusive and binding
absent manifest error.
15
4.06 PAYMENT OF CERTAIN FEES AND EXPENSES; NO OFFSET.
(a) As part of its obligations hereunder, to the extent that cash
flows relating to the 1998-B SUBI Sub-Trust, as set forth in Section 3.01(c)
of the 1998-B Securitization Trust Agreement, are insufficient to provide for
the payment of all fees and expenses due to the Titling Trustee or the 1998-B
Securitization Trustee as Capped Titling Trust Administrative Expenses,
Capped Securitization Trust Administrative Expenses, Uncapped Titling Trust
Administrative Expenses or Uncapped Securitization Trust Administrative
Expenses, the Servicer shall advance an amount equal to such excess fees and
expenses as they become payable from time to time and agrees to indemnify the
Titling Trustee and the 1998-B Securitization Trustee and their respective
officers, directors, employees and agents for such amounts. The Servicer
shall be entitled to reimbursement of such advances as set forth the 1998-B
Securitization Trust Agreement. The obligations of the Servicer pursuant to
this Section shall survive any termination of the Servicer's rights and
obligations with respect to the 1998-B SUBI Portfolio under this 1998-B SUBI
Servicing Supplement.
(b) Prior to the termination of the Servicer's rights and
obligations with respect to the 1998-B SUBI Sub-Trust and thereafter if such
termination results from an Event of Servicing Termination, the obligations
of the Servicer with respect to the 1998-B SUBI Sub-Trust shall not be
subject to any defense, counterclaim or right of offset that the Servicer has
or may have against any UTI Beneficiary, the Titling Trustee on behalf of the
Titling Trust, or the 1998-B Securitization Trustee, whether in respect of
this 1998-B SUBI Servicing Supplement, the 1998-B SUBI Supplement, any
Securitization Trust Document, any 1998-B Contract, any related Contract
Document, any 1998-B Leased Vehicle or otherwise.
4.07 SERVICING COMPENSATION.
(a) As compensation for the performance of its obligations under
this 1998-B SUBI Servicing Supplement, the Servicer shall be entitled to
receive from the Titling Trustee, on behalf of the Titling Trust, on each
Monthly Allocation Date, the Servicing Fee equal to the sum of:
(i) An amount (the "Servicing Rate Portion") equal
to one-twelfth of 1.00% of the Aggregate Net Investment Value as of
the first day of the related Collection Period; and
(ii) Any late fees, deferral fees and other
administrative fees or similar charges paid by any Obligor pursuant to a
1998-B Contract during the related Collection Period;
PROVIDED, HOWEVER, the Servicing Fee shall be paid out of cash flows and in
accordance with the priorities of payments specified in Section 3.01(c) of
the 1998-B Securitization Trust Agreement and the Servicer may be reimbursed
for advancing certain Administrative Expenses as provided in this 1998-B SUBI
Servicing Supplement. Further, as additional servicing compensation with
16
regard to the 1998-B SUBI Sub-Trust, the Servicer also shall receive income
as and to the extent provided in the 1998-B Securitization Trust Agreement.
The Servicing Rate Portion will be calculated and paid based upon a
360-day year consisting of twelve 30-day months. The Servicer shall pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement of such expenses except to the
extent they constitute Charged-Off Vehicle Expenses, Matured Lease Vehicle
Expenses or other Liquidation Expenses or, as provided in Section 4.12 of
this 1998-B SUBI Servicing Supplement, expenses recoverable under an
applicable Insurance Policy or repayments from the related Obligor, as
provided in Section 4.08 of this 1998-B SUBI Servicing Supplement. For so
long as there shall be only one Servicer for the Titling Trust, the Servicing
Fee shall be deemed to be an expense incurred with respect to the Titling
Trust Assets generally; if at any time the Servicer shall only service some
(but not all) Sub-Trusts, the Servicing Fee shall be deemed to be an expense
incurred with respect to that discrete group of Titling Trust Assets
contained in the Sub-Trusts the Servicer then services.
(b) So long as TMCC is the Servicer, the Servicer may, by notice
to the Titling Trustee and the 1998-B Securitization Trustee on or prior to
any Determination Date, waive its Servicing Fee with respect to the related
Collection Period, if the Servicer believes that sufficient collections will
be available from Interest Collections on one or more future Monthly
Allocation Dates (other than from amounts on deposit in the Reserve Fund) to
pay such waived Servicing Fee, without interest. If the Servicer waives such
Servicing Fee, the Servicing Fee with respect to such Collection Period shall
be deemed to be zero for all purposes, provided, however, that for purposes
of Section 3.01(c)(iv) of the 1998-B Securitization Trust Agreement, any such
waived Servicing Fee thereafter shall be treated as an unpaid Servicing Fee
with respect to a prior Collection Period (unless the Servicer continues to
waive such Servicing).
4.08 REPOSSESSION AND SALE OF LEASED VEHICLES.
In accordance with the procedures used by the Servicer in respect
of any comparable leases and leased vehicles serviced by it for its own
account or the accounts of its Affiliates (including procedures used in
connection with new programs commenced in the ordinary course of business,
whether or not implemented on a test basis), the Servicer shall use its
commercially reasonable efforts to (i) repossess the 1998-B Leased Vehicle
related to any 1998-B Contract that the Servicer shall have determined to be
in default to the same extent the Servicer would repossess a vehicle pursuant
to a lease contract that is property of the Servicer or (ii) otherwise take
possession of any Leased Vehicle related to any 1998-B Contract to the same
extent the Servicer would take possession of a vehicle pursuant to a lease
contract that is property of the Servicer.
The Servicer shall, in accordance with the standards set forth in
the immediately preceding paragraph:
17
(a) follow such practices and procedures as it shall deem
necessary or advisable in its servicing of closed-end automobile and light
duty truck leases, which may include reasonable efforts to realize upon any
recourse to Dealers, consigning a Leased Vehicle to a motor vehicle dealer
for resale or selling a Leased Vehicle at public or private sale; and
(b) sell or otherwise dispose of each 1998-B Leased Vehicle that
is repossessed in accordance with the related 1998-B Contract or that becomes
part of Matured Leased Vehicle Inventory for the 1998-B SUBI Sub-Trust and,
if such related 1998-B Contract is in default, shall commence and prosecute
any proceedings in respect of such 1998-B Contract (and such 1998-B Leased
Vehicle) in its own name or, if the Servicer deems it necessary, in the name
of the Titling Trustee, on behalf of the Titling Trust.
The obligations of the Servicer under this Section are subject to
the provision that, in the event of damage to a 1998-B Leased Vehicle from a
cause for which the Obligor under the related 1998-B Contract was not
required to obtain casualty insurance or maintain such insurance in full
force and effect, the Servicer shall not be required to expend its own funds
in repairing such Leased Vehicle unless it shall reasonably determine that
such restoration will increase Liquidation Proceeds (net of Liquidation
Expenses) of the related 1998-B Contract by at least an equivalent amount.
The Servicer shall only expend funds in connection with the repossession
and/or sale of any 1998-B Leased Vehicle to the extent that it would do so in
connection with the sale or disposition of vehicles subject to lease
contracts that are its own property. The Servicer shall be responsible for
all other costs and expenses incurred by it in connection with any action
taken in respect of a 1998-B Contract or the related 1998-B Leased Vehicle;
provided, however, that it shall be entitled to reimbursement of such costs
and expenses to the extent they constitute Charged-Off Vehicle Expenses,
Matured Leased Vehicle Expenses or other Liquidation Expenses or expenses
recoverable under an applicable Insurance Policy. All Matured Leased Vehicle
Expenses or other Liquidation Proceeds and Insurance Proceeds (other than
proceeds of the Residual Value Insurance Policies, the rights to which are
evidenced by the 1998-B SUBI Insurance Certificate, which is the sole
property of the Transferor) shall be deposited and transferred as provided in
Section 4.02 of this 1998-B Servicing Supplement. Notwithstanding the
foregoing, in the event the Servicer determines that, in accordance with its
normal servicing procedures, it will apply the Insurance Proceeds with
respect to a damaged or destroyed Leased Vehicle to the substitution of
another vehicle (for which the Contract will remain in force, but will relate
to such substituted vehicle), the Servicer shall be permitted to so apply
such Insurance Proceeds and shall not report or treat such funds as Insurance
Proceeds hereunder. Any such substituted vehicle shall thereafter be the
relevant 1998-B Leased Vehicle and such vehicle shall be the "related Leased
Vehicle" or " related 1998-B Leased Vehicle" with respect to such 1998-B
Contract, for all purposes of the 1998-B SUBI Sub-Trust.
Notwithstanding the foregoing, prior to transferring any such funds
out of its operating account, the Servicer shall first deduct therefrom any
unreimbursed Charged-Off Vehicle Expenses, Matured Leased Vehicle Expenses or
other Liquidation Expenses and expenses recoverable under an applicable
Insurance Policy. In connection with this Section, the Titling Trustee, on
behalf of the Titling Trust, shall grant to the Servicer a power of attorney
in
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the form attached as Exhibit C with regard to the 1998-B Leased Vehicles,
with full power of substitution. The Servicer shall not conduct such a
substitution other than in the ordinary course of its business and on
substantially the same terms as are consistent with its past practices.
The Servicer is not required hereby to deduct from Charged-Off
Vehicle Proceeds, Matured Leased Vehicle Proceeds or other Liquidation
Proceeds or Insurance Proceeds with respect to any particular 1998-B Leased
Vehicle all related unreimbursed Charged-Off Vehicle Expenses, Matured Leased
Vehicle Expenses or other Liquidation Expenses or Insurance Expenses prior to
transferring such funds out of its operating account. Such expenses may
instead be reimbursed as provided in Section 4.02(h) of this 1998-B SUBI
Servicing Supplement.
4.09 SERVICER TO ACT ON BEHALF OF TITLING TRUST.
(a) In order to facilitate the servicing of the 1998-B SUBI
Sub-Trust by the Servicer, the Titling Trustee, on behalf of the Titling
Trust, hereby appoints the Servicer as its agent, bailee and custodian to
retain possession of the related Contract Documents, Title Documents and any
other related items that from time to time come into possession of the
Servicer, and the Servicer hereby accepts such appointment.
(b) The Servicer shall maintain each such Contract Document and
Title Document at its offices identified on the attached Schedule I, or at
such other office as shall be specified by the Servicer to the Titling
Trustee on 30 days' prior notice. The Servicer shall promptly report to the
Titling Trustee any failure on its part to retain possession of any such
Contract Documents or Title Documents and promptly take appropriate action to
remedy any such failure.
(c) Upon written instructions from the Titling Trustee, on behalf
of the Titling Trust, setting forth a reasonable basis therefor, or in the
exercise of its duties and powers hereunder, the Servicer shall release any
Contract Document, Title Document, or other related item to the Titling
Trustee or its agent or designee, as the case may be, at such place or places
as the Titling Trustee may designate, as soon as practicable. The Servicer
shall not be responsible for any loss occasioned by the failure of the
Titling Trustee to return any document or any delay in doing so.
(d) The Servicer shall be deemed to have received proper
instructions with respect to any such Contract Document, Title Document, any
other related item or any Contract Record, upon its receipt of written
instructions by a Responsible Officer of the Titling Trustee. A certified
copy of a bylaw or a resolution of the Board of Directors of the Titling
Trustee shall constitute conclusive evidence of the authority of any such
Responsible Officer to act and shall be considered in full force and effect
until receipt by the Servicer of written notice to the contrary given by the
Titling Trustee.
(e) The Servicer shall identify from time to time all (i) periodic
sales and use tax or property (real or personal) tax reports, (ii) periodic
renewals of licenses and permits, (iii) periodic renewals of qualification to
act as a trust and a business trust and (iv) other periodic
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governmental filing, registration or approvals (collectively, "Filings")
arising with respect to or required of the Titling Trust or the Titling
Trustee, including (in the case of clauses (ii) and (iv)) such licenses,
permits, and other Filings as are required for the Titling Trust or the
Titling Trustee to accept assignments of 1998-B Contracts and to be
identified as the owner of 1998-B Leased Vehicles on their Certificates of
Title. The Servicer shall also identify any surety bonds or other ancillary
undertakings required of the Titling Trust or the Titling Trustee in respect
of any Filing. The Servicer shall timely prepare and file, or cause to be
filed, with the cooperation of the Titling Trustee, on behalf of the Titling
Trustee, or the Titling Trust with the appropriate Person each Filing and
each such ancillary undertaking with a copy to the Titling Trustee. In
connection with this Section, the Titling Trustee, on behalf of the Titling
Trust, shall grant to the Servicer such authority, including without
limitation any necessary power of attorney in the form attached as Exhibit C,
as it may require in order to effect each such Filing and ancillary
undertaking. Should the Servicer at any time receive notice, or have actual
knowledge, of any non-compliance with any Filing requirement, it shall
promptly so notify the Titling Trustee.
(f) The Titling Trustee shall deliver to the Servicer and the 1998-B
Securitization Trustee, promptly upon their execution and delivery by the
parties thereto, each amendment and supplement to the Titling Trust Agreement as
any such amendment and supplement relates to the 1998-B SUBI Sub-Trust. The
Servicer shall not act contrary to any provision of the Titling Trust Agreement
as it relates to the 1998-B SUBI Sub-Trust, as so amended or supplemented.
4.10 INDEMNIFICATION BY SERVICER.
The Servicer (for purposes of this Section, the "Indemnifying Party")
agrees to indemnify, defend and hold harmless the 1998-B Securitization Trustee,
the Titling Trustee and each of their respective officers, directors, employees
and agents (each an "Indemnified Party") for any and all liabilities, losses,
damages and expenses (including without limitation reasonable fees and expenses
of counsel) that may be incurred by any Indemnified Party as a result of any act
or omission by the Servicer in connection with its maintenance and custody of
the Contract Documents, Title Documents, and Contract Records with respect to
1998-B Contracts and 1998-B Leased Vehicles, the servicing of the 1998-B
Contracts, the Servicer's undertakings in clause (e) of Section 4.09 of this
1998-B SUBI Servicing Supplement or any other activity undertaken or omitted by
the Servicer with respect to any 1998-B SUBI Asset. Promptly after receipt by
an Indemnified Party under this Section of notice of the commencement of any
action, such Indemnified Party will, if a claim in respect thereof is to be made
against the Indemnifying Party under this Section, notify the Indemnifying Party
of the commencement thereof. In case any such action is brought against any
Indemnified Party and it notifies the Indemnifying Party of the commencement
thereof, the Indemnifying Party will assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Party (who may, unless there is, as
evidenced by an opinion of counsel to the Indemnified Party stating that there
is an unwaivable conflict of interest, be counsel to the Indemnifying Party),
and the Indemnifying Party will not be liable to such Indemnified Party under
this Section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation. The obligations set forth in this Section shall survive
the termination of this 1998-
20
B SUBI Servicing Supplement or the resignation or removal of the Servicer
(generally or with respect to the 1998-B SUBI Sub-Trust) or the 1998-B
Securitization Trustee.
4.11 THIRD PARTY CLAIMS.
The Servicer shall immediately notify the Transferor (in the event
that TMCC is not acting as the Servicer hereunder), the Titling Trustee, on
behalf of the Titling Trust, the 1998-B Securitization Trustee, on behalf of the
1998-B Securitization Trust, and any other holder of the 1998-B SUBI Certificate
or 1998-B SUBI Insurance Certificate upon its learning that a claim of whatever
kind that would, if proven or converted to judgment, have a material adverse
impact on any UTI Beneficiary, the Transferor, the Titling Trustee, the Titling
Trust, the 1998-B Securitization Trust, the 1998-B Securitization Trustee, the
Investor Certificateholders, any 1998-B SUBI Asset or the Servicer is being made
by a third party with respect to any Contract or Leased Vehicle (whether or not
included in the 1998-B SUBI Sub-Trust) or the servicing thereof or with respect
to any other Titling Trust Asset (whether or not constituting a 1998-B SUBI
Asset).
4.12 INSURANCE POLICIES.
So long as any 1998-B SUBI Certificates are outstanding, the Servicer
will maintain and pay when due all premiums with respect to, and the Servicer
may not terminate or cause the termination of the following (all premiums with
respect to which shall constitute Administrative Expenses): (i) the Contingent
and Excess Liability Insurance Policies unless (A) one or more replacement
insurance policies or binder(s) is obtained providing coverage against third
party claims that may be raised against the Titling Trustee, on behalf of the
Titling Trust, with respect to any Leased Vehicle included in the 1998-B SUBI
Sub-Trust in an amount at least equal to $10 million per claim, not subject to
any annual or aggregate cap (which policy or policies may be a blanket insurance
policy or policies covering the Servicer and one or more of its Affiliates), or
(B) each Rating Agency has delivered a letter to the 1998-B Securitization
Trustee to the effect that the obtaining of any such replacement insurance
policy or policies, in and of itself, will not cause its then-current rating of
any of the Rated Certificates to be qualified, reduced or withdrawn; or (ii) the
Residual Value Insurance Policies specified in clause (i) of the definition of
Residual Value Insurance Policies in the Annex of Supplemental Definitions,
unless the 1998-B Contracts may properly be treated as finance leases for
purposes of generally accepted accounting principles, consistently applied, by
virtue of some reason other than maintenance of that policy, and the Servicer
has provided to the Titling Trustee and the 1998-B Securitization Trustee an
Officer's Certificate to that effect, describing such reasons which shall be in
accordance with GAAP. On or before December 31 of each year, the Servicer shall
provide to the Titling Trustee one or more Officer's Certificates (or
certification by a duly authorized signatory of the Servicer) certifying that
the policies it is required to maintain pursuant to this Section remain in full
force and effect. The obligations of the Servicer pursuant to this Section
shall survive any termination of the Servicer's obligations with respect to the
1998-B SUBI Sub-Trust under this 1998-B SUBI Servicing Supplement.
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4.13 SERVICER NOT TO RESIGN; ASSIGNMENT.
(a) Except as provided in Section 6.01 of this 1998-B SUBI Servicing
Supplement, the Servicer shall not resign from the duties and obligations hereby
imposed on it as Servicer except upon determination by its Board of Directors
(or the Executive Committee thereof) that by reason of a change in applicable
legal requirements the continued performance by the Servicer of its duties as
Servicer under this 1998-B Servicing Supplement would cause it to be in
violation of such legal requirements in a manner that would result in a material
adverse effect on the Servicer or its financial condition, said determination to
be evidenced by a board resolution to such effect accompanied by an Opinion of
Counsel reasonably satisfactory to the Titling Trustee of Independent counsel
reasonably satisfactory to the Titling Trustee, to such effect. No such
resignation shall become effective unless and until a new servicer is willing to
service the Contracts and enters into a servicing agreement with the Titling
Trustee, on behalf of the Titling Trust, such agreement to have substantially
the same provisions as this Servicing Agreement except as provided in Section
4.13(b). The Titling Trustee, on behalf of the Titling Trust, shall not
unreasonably fail to consent to such a servicing agreement.
(b) If the Servicer resigns in the circumstances contemplated by
clause (a) above, in addition to the requirements set forth therein, the Opinion
of Counsel required thereby also shall be reasonably satisfactory to the 1998-B
Securitization Trustee. The 1998-B Securitization Trustee shall not
unreasonably fail to consent to a servicing agreement with a new servicer that
proposes to enter into a servicing agreement that meets the standards required
by this 1998-B SUBI Servicing Supplement. No such resignation shall affect the
obligation of the Servicer to remit moneys to the 1998-B SUBI Collection Account
(in lieu of unrecoverable insurance proceeds pursuant to Section 4.14), or the
obligations of the Servicer pursuant to Sections 3.03(a), 4.04, 4.06(a), 4.10
or 4.12 of this 1998-B SUBI Servicing Supplement. No successor Servicer shall
be required to undertake any of the foregoing, other than (i) the obligations
set forth in Section 4.04, to the extent that such obligations are transferred
to a successor Servicer pursuant to Section 6.01 of this 1998-B SUBI Servicing
Supplement, (ii) the obligation set forth in Section 4.06(a) of this 1998-B SUBI
Servicing Supplement (which shall remain a joint and several obligation of the
initial Servicer and any successor Servicer) and (iii) the obligations set forth
in Section 4.10, which provision shall not require indemnification by any
successor Servicer for the actions of the Servicer under this 1998-B SUBI
Servicing Supplement. The Titling Trustee shall give prompt notice to each
Rating Agency of any such resignation of the Servicer, and the Titling Trustee
and 1998-B Securitization Trustee and of the proposed substitute servicer.
(c) The Servicer may not assign this Servicing Agreement or any of
its rights, powers, duties or obligations hereunder; provided, however, that the
Servicer may assign this Servicing Agreement in connection with a consolidation,
merger, conveyance, transfer or lease made in compliance with Section 4.15 of
this 1998-B SUBI Servicing Supplement.
(d) Except as provided above, the duties and obligations of the
Servicer under this 1998-B SUBI Servicing Supplement shall continue until this
1998-B SUBI Servicing
22
Supplement shall have been terminated as provided in Section 7.01 of this
1998-B SUBI Servicing Supplement and shall survive the exercise by the
Titling Trustee, on behalf of the Titling Trust, of any right or remedy under
this 1998-B SUBI Servicing Supplement or the enforcement by the Titling
Trustee, on behalf of the Titling Trust, of any provision of the Titling
Trust Documents.
4.14 OBLIGOR INSURANCE COVERAGE IN RESPECT OF LEASED VEHICLES.
The Servicer shall use its normal servicing procedures (including
procedures used in connection with new programs commenced in the ordinary course
of business, whether or not implemented on a test basis) to ensure that the
Obligor under each Contract shall have, and maintain in full force and effect
during the term of such Contract, a comprehensive, collision and property damage
insurance policy covering the actual cash value of the related Leased Vehicle
and naming the Titling Trust or the Titling Trustee on behalf of the Titling
Trust as a loss payee, as well as public liability, bodily injury and property
damage coverage in the amounts required by applicable state law or as set forth
in such Contract, and naming the Titling Trust or the Titling Trustee on behalf
of the Titling Trust as an additional insured. Notwithstanding the foregoing,
if an insurance policy names the Servicer rather than the Titling Trust or the
Titling Trustee on behalf of the Titling Trust as loss payee or additional
insured, the Servicer shall not be required to correct such designation as long
as the Servicer is responsible for any increased deductibles under any
Contingent and Excess Liability Policy as provided in the following paragraph.
Except as otherwise set forth in this 1998-B SUBI Servicing Supplement or in any
other Transaction Document, the Servicer shall, on at least a monthly basis,
deposit into the 1998-B SUBI Collection Account any proceeds of such Insurance
Policy that the Servicer may receive with respect to any 1998-B Leased Vehicle.
In each case as to which a deductible is applicable under any
Contingent and Excess Liability Policy, the Servicer will pay the deductible on
behalf of the insured. The foregoing obligation of the Servicer shall survive
the resignation of the Servicer or any termination of it as Servicer under this
1998-B SUBI Servicing Supplement pursuant to Section 6.01 of this 1998-B SUBI
Servicing Supplement.
4.15 CORPORATE EXISTENCE; STATUS; MERGER.
(a) The Servicer shall keep in full effect its existence, rights and
franchises (except as set forth in (b) below) as a California corporation and
will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings of the
Servicer and its subsidiaries considered as a whole, and in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of, or to permit the Servicer to perform its obligations under,
the Transaction Documents.
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(b) The Servicer shall not consolidate with or merge into any other
corporation or convey, transfer or lease all or substantially all of its assets
as an entirety to any Person without the prior written consent of the Titling
Trustee, on behalf of the Titling Trust, unless (i) the corporation formed by
such consolidation or into which the Servicer has merged or the Person which
acquires by conveyance, transfer or lease all or substantially all the assets of
the Servicer as an entirety is (A) a citizen of or an entity organized and
existing under the laws of the United States or any State and (B) either
executes and delivers to the Titling Trustee, on behalf of the Titling Trust, an
agreement in form and substance reasonably satisfactory to the Titling Trustee,
that contains an assumption by such successor entity of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer under this 1998-B SUBI Servicing Supplement and the
other Transaction Documents or is so bound by operation of law, or (ii) the
Servicer is the surviving corporation resulting from such consolidation or
merger.
ARTICLE V
STATEMENTS AND REPORTS
5.01 REPORTING BY THE SERVICER.
(a) On or prior to the 25th day of each calendar month, the Servicer
shall cause to be delivered to the Titling Trustee a report in respect of the
prior calendar month, setting forth (i) any information relating to the 1998-B
Contracts or the related 1998-B Leased Vehicles that normally would be available
from a servicer of closed-end automobile and light-duty truck leases and is
reasonably requested by the Titling Trustee and (ii) if required, any additional
information required by the terms of any Securitized Financing, and (iii)
deliver such other reports, Officer's Certificates or certificates from other
authorized signatories as may be necessary pursuant to this 1998-B SUBI
Servicing Supplement to document to the 1998-B Securitization Trustee the
Servicer's right to any further reimbursement of unreimbursed Servicer Expenses.
(b) On or prior to each Determination Date and each Transfer Date,
the Servicer shall deliver or cause to be delivered to the Titling Trustee and
the 1998-B Securitization Trustee a supplement to the Schedule of 1998-B
Contracts and 1998-B Leased Vehicles containing data reflecting the addition or
removal of 1998-B Contracts or 1998-B Leased Vehicles from the 1998-B SUBI
Portfolio as of the first day of the current Collection Period (in the case of
each Determination Date) or as of the related Subsequent Cutoff Date (in the
case of each Transfer Date). Any such supplement shall contain, in addition to
the data required by the definition of the term "Schedule of Contracts and
Leased Vehicles", an identification of the Discounted Principal Balance of each
1998-B Contract added or removed. Such reports will be delivered by the
Servicer to the 1998-B Securitization Trustee and the Luxembourg Stock Exchange,
at such times as set forth in Section 3.03 of the 1998-B Securitization Trust
Agreement and will be made available at the offices of each Paying Agent. In
addition, the Servicer shall, on or prior to each Determination Date, cause to
be delivered to the Titling Trustee, the 1998-B Securitization Trustee, each
Rating Agency and the Luxembourg Stock Exchange a certificate in the name of the
Servicer, executed by an officer or authorized signatory therefor in respect of
such Collection
24
Period (the "Servicer's Certificate") substantially in the form
attached hereto as Exhibit B (and setting forth such additional information as
requested by each Rating Agency from time to time and which information the
Servicer is able to reasonably provide), containing all information necessary to
make the allocations and applications or payments required by the 1998-B
Securitization Trust Agreement in respect of the Collection Period immediately
preceding such Determination Date, including the information needed to prepare
the statement required by Section 3.03 of the 1998-B Securitization Trust
Agreement. Any person may obtain a copy of a Servicer's Certificate at no
charge at the office of any Paying Agent or from the 1998-B Securitization
Trustee upon written request, and the 1998-B Securitization Trustee shall have
no obligation to determine whether such person is a Certificateholder.
(c) In addition, within a reasonable period of time after the end of
each calendar year during the term of the 1998-B Securitization Trust Agreement,
the Servicer will forward to the Titling Trustee, the 1998-B Securitization
Trustee, each Paying Agent and the Luxembourg Stock Exchange and the 1998-B
Securitization Trustee will make available to each Certificateholder, a
statement, setting forth the amounts described in clauses (ii) through (x) in
Section 3.03(a) of the 1998-B Securitization Trust Agreement on an aggregate or
annualized basis, as appropriate as well as the amount paid in respect of
interest on and principal of each Class of Class A Certificates.
(d) Upon the occurrence of a Liquidation Event of which the Servicer
has actual knowledge, the Servicer shall give prompt written notice thereof to
the 1998-B Securitization Trustee, specifying the cause or causes of such event.
5.02 ANNUAL ACCOUNTANTS' REPORTS.
Within 120 days after September 30 of each fiscal year for the
Servicer (commencing with the year ended September 30, 1999), the Servicer shall
deliver to the Titling Trustee, the 1998-B Securitization Trustee and the UTI
Beneficiary (if TMCC is no longer both the Servicer and the UTI Beneficiary) a
report prepared by the Independent Accountants of the Servicer concerning their
review of the activities of the Servicer during the preceding 12-month period
ended September 30 (or other applicable period in the case of the first such
report or letter) to the effect that such accountants have reviewed certain
records and documents relating to the servicing of the Contracts under this
Agreement (using procedures specified in such report or letter) and as a result
of such review, and in connection with such procedures, they are reporting such
exceptions, if any, as shall be set forth therein. Such report or letter shall
also indicate that the firm is independent with respect to the Transferor and
the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
In the event such Independent Accountants require the 1998-B
Securitization Trustee to agree to the procedures performed by such firm, the
Servicer shall direct the 1998-B Securitization Trustee in writing to so agree;
it being understood and agreed that the 1998-B Securitization Trustee will
deliver such letter of agreement in conclusive reliance upon the direction of
the Servicer, and the 1998-B Securitization Trustee makes no independent inquiry
or
25
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
5.03 OTHER CERTIFICATES AND NOTICES FROM SERVICER.
(a) Within 120 days after September 30 of each calendar year
(commencing with the year ended September 30, 1998), the Servicer shall deliver
an Officer's Certificate to the Titling Trustee and the 1998-B Securitization
Trustee to the effect that a review of the activities of the Servicer during the
prior calendar year (or since the commencement of the Titling Trust in the case
of the first such Officer's Certificate) has been made under the supervision of
the officer executing such Officer's Certificate with a view to determining
whether during such period the Servicer has performed and observed all of its
obligations under this 1998-B SUBI Servicing Supplement, and either (i) stating
that, to the best of his or her knowledge, no default by the Servicer under this
1998-B SUBI Servicing Supplement has occurred and is continuing, or (ii) if such
a default has occurred and is continuing, specifying such default and the nature
and status thereof.
(b) In the event the rating of the Servicer's long-term unsecured
debt obligations falls below Baa1 by Moody's or BBB+ for Standard & Poor's as
determined by a Rating Agency, then on a quarterly basis, the Servicer shall
cause to be delivered to the 1998-B Securitization Trustee and each Rating
Agency an Officer's Certificate stating that neither the Titling Trust nor any
of its ERISA Affiliates: (i) maintains a Plan, which, as of its last valuation
date, has any unfunded current liability; (ii) anticipates that the value of the
assets of any Plan it maintains would not be sufficient to cover any Current
Liability; or (iii) is contemplating benefit improvements with respect to any
Plan then maintained by any such entity or the establishment of any new Plan,
either of which would cause any such entity to maintain a Plan with Unfunded
Current Liability.
5.04 TAX RETURNS.
As contemplated by Section 6.12 of the 1998-B Securitization Trust
Agreement, the Servicer shall direct the 1998-B Securitization Trustee to
prepare or cause to be prepared, on behalf of the Transferor, any required
federal tax information returns (in a manner consistent with the treatment of
the Investor Certificates as indebtedness). Also as contemplated by Section
6.12 of the 1998-B Securitization Trust Agreement, the Servicer shall timely
prepare or cause to be prepared any federal and state tax returns that may be
required with respect to the 1998-B Securitization Trust or the assets thereof
and shall timely deliver any such returns to the 1998-B Securitization Trustee
for signature.
ARTICLE VI
DEFAULT
26
6.01 EVENT OF SERVICING TERMINATION; TERMINATION OF SERVICER AS TO
1998-B SUBI PORTFOLIO.
(a) "Events of Servicing Termination" as used herein shall have the
meaning set forth in the attached Annex of Supplemental Definitions. Upon the
occurrence of an event or circumstance of force majeure, the Servicer shall not
be relieved from using all commercially reasonable efforts to perform its
obligations in a timely manner, and the Servicer shall provide to the Titling
Trustee, the 1998-B Securitization Trustee, the Transferor and the Investor
Certificateholders prompt notice of such failure or delay, together with a
description of its efforts to perform its obligations.
(b) If any Event of Servicing Termination shall have occurred and
be continuing, the Titling Trustee may or at the direction of the 1998-B
Securitization Trustee shall (which direction will only be given pursuant to
Section 6.01(c)(iii) of the 1998-B Securitization Trust Agreement), terminate
all or a portion of the rights and powers of the Servicer under this 1998-B
SUBI Servicing Supplement, including all or a portion of the rights of the
Servicer to receive the servicing compensation provided for in Section 4.07
of this 1998-B SUBI Servicing Supplement with respect to all periods
following such termination. Upon any such termination, and subject to the
limitations set forth in Section 4.13(b) of this 1998-B SUBI Servicing
Supplement, all rights, powers, duties and responsibilities of the Servicer
under this 1998-B SUBI Servicing Supplement, whether with respect to the
related Contract Documents, the related Title Documents or Contract Records,
the Servicing Fee or otherwise, so terminated shall vest in and be assumed by
any successor servicer appointed by the Titling Trustee pursuant to a
servicing agreement with the Titling Trustee, on behalf of the Titling Trust,
containing substantially the same provisions as this 1998-B SUBI Servicing
Supplement (including with respect to the compensation of such successor
servicer), and the Titling Trustee is hereby irrevocably authorized and
empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments (including
any notices to Obligors deemed necessary or advisable by the Titling
Trustee), and to do or accomplish all other acts or things necessary or
appropriate to effect such vesting and assumption, including, without
limitation, directing some or all of the Obligors to remit Monthly Payments,
Prepayments and all other payments on or in respect of the 1998-B Contracts
and the 1998-B Leased Vehicles to an account or address designated by the
Titling Trustee or such new servicer. Further, in such event, the Servicer
shall use its commercially reasonable efforts to effect the orderly and
efficient transfer of the servicing of the affected 1998-B Contracts to the
new servicer (including transfer of the Security Deposits being held by the
Servicer pursuant to Section 4.04 of this 1998-B SUBI Servicing Supplement),
and as promptly as practicable, the Servicer shall provide to the new
servicer a current computer tape containing all information from the Contract
Records required for the proper servicing of the affected Contracts, together
with documentation containing any and all information necessary for use of
the tape.
(c) The Titling Trustee, on behalf of the Titling Trust, shall upon
the written direction of (i) if there is a UTI Pledge, the pledgee thereof or,
if not, the UTI Beneficiary, or (ii) 100% of the holders of each of the 1998-B
SUBI Certificate and 1998-B SUBI Insurance
27
Certificate, waive any default by the Servicer in the performance of its
obligations hereunder and its consequences with regard to the Sub-Trust
containing those Titling Trust Assets, as the case may be. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Servicing TerminatION arising therefrom shall be deemed to have been remedied
for every purpose of this servicing agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.
6.02 NO EFFECT ON OTHER PARTIES.
Upon any termination of the rights and powers of the Servicer with
respect to the 1998-B SUBI Sub-Trust from time to time pursuant to Section 6.01
hereof, or upon any appointment of a successor to the Servicer with respect to
the 1998-B SUBI Sub-Trust, all the rights, powers, duties and obligations of the
Titling Trustee, the UTI Beneficiary and the Transferor under this 1998-B SUBI
Servicing Supplement, the 1998-B Securitization Trust Agreement, the 1998-B SUBI
Supplement, or any other Trust Document shall remain unaffected by such
termination or appointment and shall remain in full force and effect thereafter,
except as otherwise expressly provided herein or therein.
ARTICLE VII
MISCELLANEOUS
7.01 TERMINATION OF AGREEMENT.
(a) In connection with any purchase by the Transferor of the
Investor Certificateholders' interest in the corpus of the 1998-B
Securitization Trust pursuant to Section 7.02 of the 1998-B Securitization
Trust Agreement, and the Transferor's then succeeding to all of the interest
in the 1998-B SUBI and if the UTI Beneficiary shall thereafter succeed to
such interest in the 1998-B SUBI, the Servicer, upon the direction of the UTI
Beneficiary as provided in Section 16.05 of the 1998-B SUBI Supplement, shall
reallocate all 1998-B Contracts, 1998-B Leased Vehicles and related 1998-B
SUBI Assets to the UTI Sub-Trust.
(b) Except as provided in this Section, the respective duties and
obligations of the Servicer and the Titling Trustee with respect to the
1998-B SUBI shall terminate upon the termination of the 1998-B Securitization
Trust Agreement pursuant to Section 7.01 thereof. Upon such a termination,
the Servicer shall pay over to the Titling Trustee or any other Person
entitled thereto all monies held by the Servicer with respect to the 1998-B
SUBI Sub-Trust pursuant to this 1998-B SUBI Servicing Supplement.
7.02 AMENDMENT.
(a) To the extent that any amendment or supplement deals with the
1998-B SUBI Sub-Trust, this 1998-B SUBI Servicing Supplement may be amended from
time to time in a writing signed by the Titling Trustee, on behalf of the
Titling Trust, the Trust Agent and the Servicer, with the prior written consent
of the 1998-B Securitization Trustee, on behalf of the
28
1998-B Securitization Trust, which shall be given only in the circumstances
contemplated by Section 9.01 of the 1998-B Securitization Trust Agreement.
(b) The Servicer shall provide each Rating Agency that rated the
Investor Certificates prior notice of the content of any proposed amendment to
this 1998-B SUBI Servicing Supplement, whether or not such amendment relates to
the 1998-B SUBI or requires approval of any Rating Agency.
(c) Any amendment to the Titling Trust Agreement that applies to or
affects the UTI or any Other SUBI, in addition to the 1998-B SUBI Sub-Trust
shall also be subject to the foregoing provisions of this Section 7.02.
Notwithstanding the foregoing, this Section 7.02 does not modify or supersede
any provision in the Titling Trust Agreement. Without limiting the foregoing,
any amendment of the Titling Trust Agreement or any other SUBI Servicing
Agreement that neither applies to nor affects the 1998-B SUBI shall not require
the consent of the 1998-B Securitization Trustee or the Beneficiaries of the
1998-B SUBI Certificate or the 1998-B SUBI Insurance Certificate.
7.03 GOVERNING LAW.
This 1998-B SUBI Servicing Supplement shall in all respects be
governed by and construed in accordance with the internal laws of the State of
Delaware, without reference to its conflicts of laws provisions, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws except for the rights, privileges, duties, liabilities
and immunities of the 1998-B Securitization Trustee which shall be governed by
and construed in accordance with the internal laws of the State of New York
without regard to any otherwise applicable principles of conflicts of laws.
7.04 NOTICES.
All demands, notices and communications hereunder shall be in
writing and shall be delivered or mailed by registered or certified
first-class United States mail, postage prepaid, hand delivery, any prepaid
courier service, or by telecopier, and addressed in each case as follows: (a)
if to TMCC or the Servicer (if the same as TMCC), at Toyota Motor Credit
Corporation, βββββ βββββ βββββββ ββββββ, ββββββββ, ββββββββββ βββββ,
Attention: Treasury Department--Corporate Treasury Manager (telecopier no.
(βββ) βββ-ββββ); (b) if to the Titling Trustee, at βββ ββββ ββββββ βββββ,
βββββ ββββ, βββββββ, ββββββββ βββββ (Telecopier No. (βββ) βββ-ββββ), with a
copy to the principal Trust Agent designated by the Titling Trustee and (c)
if to the 1998-B Securitization Trustee, at βββ ββββ ββββββ βββββ, βββββ
ββββ, βββββββ, ββββββββ βββββ (Telecopier No. (βββ) βββ-ββββ. The Servicer,
the Titling Trustee or the 1998-B Securitization Trustee may change its
address for notices hereunder by giving notice of such change to the other
such Persons. All notices and demands (x) shall be deemed to have been given
upon delivery or tender of delivery thereof to any officer or other duly
authorized recipient of the Person entitled to receive such notices and
demands at the address of such Person for notices hereunder, (y) if given by
the Titling Trustee shall be deemed to have been given by all
29
of the beneficiaries of the Titling Trust and (z) if given by the 1998-B
Securitization Trustee shall be deemed to be given by the Investor
Certificateholders.
7.05 SEVERABILITY.
If one or more of the provisions of this 1998-B SUBI Servicing
Supplement shall be for any reason whatever held invalid or unenforceable, such
provisions shall be deemed severable from the remaining covenants, agreements
and provisions of this 1998-B SUBI Servicing Supplement, and such invalidity or
unenforceability shall in no way affect the validity or enforceability of such
remaining covenants, agreements and provisions, or the rights of any parties
hereto. To the extent permitted by law, the parties hereto waive any provision
of law that renders any provision of this 1998-B SUBI Servicing Supplement
invalid or unenforceable in any respect.
7.06 NO PETITION.
The Servicer covenants and agrees that prior to the date which is one
year and one day after the date upon which all obligations under each
Securitized Financing has been paid in full, it will not institute against, or
join any other Person in instituting against, the Transferor, the Titling
Trustee or the Titling Trust any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceedings under any federal or
state bankruptcy or similar law. This Section shall survive the termination of
this Agreement or the resignation or removal of the Titling Trustee under this
Agreement.
7.07 INSPECTION AND AUDIT RIGHTS.
The Servicer agrees that, on reasonable prior notice, it will permit
any representative or designee of the Titling Trustee, on behalf of the Titling
Trust, during the normal business hours of the Servicer, to examine all books of
account, records, reports and other papers of the Servicer relating to the
Titling Trust Assets, to make copies and extracts therefrom, to cause such books
to be audited by Independent Accountants selected by the Titling Trustee, and to
discuss the affairs, finances and accounts relating to the Titling Trust Assets
with its officers, employees and Independent Accountants (and by this provision
the Servicer hereby authorizes such Independent Accountants to discuss with such
representatives such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Such rights shall include,
but shall not be limited to, any off-site storage facilities at which any data
(including, without limitation, computerized records), together with all
operating software and appropriate documentation, may be held. The Titling
Trustee agrees to keep confidential all the confidential information of the
Servicer acquired during any such examination as if such information were its
own confidential information, except to the extent necessary for the purposes of
this 1998-B SUBI Servicing Supplement. The expenses incident to the exercise by
the Titling Trustee of any right under this Section shall be reimbursable by the
Servicer.
30
7.08 ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
7.09 EXECUTION IN COUNTERPARTS.
This 1998-B SUBI Servicing Supplement may be executed in any number of
counterparts, each of which so executed and delivered shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
7.10 RIGHTS CUMULATIVE.
All rights and remedies from time to time conferred upon or reserved
to the Titling Trustee, on behalf of the Titling Trust, the Servicer or the
1998-B Securitization Trustee or to any or all of the foregoing are cumulative,
and none is intended to be exclusive of another. No delay or omission in
insisting upon the strict observance or performance of any provision of this
1998-B SUBI Servicing Supplement, or in exercising any right or remedy, shall be
construed as a waiver or relinquishment of such provision, nor shall it impair
such right or remedy. Every right and remedy may be exercised from time to time
and as often as deemed expedient.
7.11 FURTHER ASSURANCES.
Each party will do such acts, and execute and deliver to any other
party such additional documents or instruments, as may be reasonably requested
in order to effect the purposes of this 1998-B SUBI Servicing Supplement and to
better assure and confirm unto the requesting party its rights, powers and
remedies hereunder.
7.12 THIRD-PARTY BENEFICIARIES.
This 1998-B SUBI Servicing Supplement, insofar as it relates to the
1998-B SUBI Sub-Trust, will inure to the benefit of and be binding upon the
parties hereto, their respective successors and permitted assigns, the 1998-B
Securitization Trustee, the Titling Trustee (on behalf of the Titling Trust),
and each of the holders of any legal or beneficial interest in the 1998-B SUBI
Certificates (including without limitation the 1998-B Securitization Trustee and
the Certificateholders), who shall be considered to be third-party beneficiaries
hereof. Except as otherwise provided in this 1998-B SUBI Servicing Supplement,
no other Person will have any right or obligation hereunder.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers duly authorized as of the day and
year first above written.
TOYOTA MOTOR CREDIT CORPORATION,
as Servicer
By: /s/ ββββββ β. βββββ
-------------------------------------
Name: ββββββ β. βββββ
Title: Senior Vice President and
General Manager
TOYOTA LEASE TRUST
By: TMTT, INC.,
as Titling Trustee
By: /s/ ββββββ β. βββββββ
-------------------------------------
Name: ββββββ β. βββββββ
Title: Vice President and Assistant
Secretary
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
By: /s/ ββββββ β. βββββββ
-------------------------------------
Name: ββββββ β. βββββββ
Title: Vice President
Acknowledged and Agreed:
TOYOTA AUTO LEASE TRUST 1998-B
By: U.S. Bank National Association,
as 1998-B Securitization Trustee
By: /s/ ββββββ β. βββββββ
------------------------------------
Name: ββββββ β. βββββββ
Title: Vice President
SCHEDULE OF 1998-B CONTRACTS AND
1998-B LEASED VEHICLES AS OF THE INITIAL CUTOFF DATE
[Omitted. Copies on file with the Servicer, the Titling Trustee and the
1998-B Securitization Trustee.]
A-1
FORM OF SERVICER'S CERTIFICATE
B-1
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-B
Allocation Date of ______ for the Collection Period of ________ through _______
Investor Interest Class A1
----------------- --------
Total Percent Balance Percent Notional Balance
----- ------- ------- ------- ----------------
ORIGINAL DEAL PARAMETER
Aggregate Net Investment Value (ANIV)
Discounted Principal Balance
Initial Notional/Certificate Balance
Percent of ANIV
Notional/Certificate Rate
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
Servicing Fee Percentage
Servicer Advance
Servicer Payahead
Reserve Fund:
Initial Deposit Amount
Specified Reserve Fund Percentage
Specified Reserve Fund Amount
Reserve Fund Trigger Percentage
Reserve Fund Trigger Amount
Number of Contracts
INPUT FROM PRIOR MONTHLY SERVICER'S CERTIFICATE
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
END OF PERIOD BALANCES:
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
Class A2 Class A3
-------- --------
Percent Notional Balance Percent Notional Balance
------- ---------------- ------- ----------------
ORIGINAL DEAL PARAMETER
Aggregate Net Investment Value (ANIV)
Discounted Principal Balance
Initial Notional/Certificate Balance
Percent of ANIV
Notional/Certificate Rate
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
Servicing Fee Percentage
Servicer Advance
Servicer Payahead
Reserve Fund:
Initial Deposit Amount
Specified Reserve Fund Percentage
Specified Reserve Fund Amount
Reserve Fund Trigger Percentage
Reserve Fund Trigger Amount
Number of Contracts
INPUT FROM PRIOR MONTHLY SERVICER'S CERTIFICATE
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
END OF PERIOD BALANCES:
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
Class B
------------------ Transferor Interest
Percent Balance Balance
------- ------- -------------------
ORIGINAL DEAL PARAMETER
Aggregate Net Investment Value (ANIV)
Discounted Principal Balance
Initial Notional/Certificate Balance
Percent of ANIV
Notional/Certificate Rate
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
Servicing Fee Percentage
Servicer Advance
Servicer Payahead
Reserve Fund:
Initial Deposit Amount
Specified Reserve Fund Percentage
Specified Reserve Fund Amount
Reserve Fund Trigger Percentage
Reserve Fund Trigger Amount
Number of Contracts
INPUT FROM PRIOR MONTHLY SERVICER'S CERTIFICATE
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
END OF PERIOD BALANCES:
Aggregate Net Investment Value
Discounted Principal Balance
Notional Certificate Balance
Adjusted Notional/Certificate Balance
Percent of ANIV
Servicer Advances
Servicer Pay Ahead Balance
Maturity Advances Outstanding
Cumulative Credit Losses to Date
Cumulative Reimbursed Credit Loss
Cumulative Residual Value (Gain) Loss
Cumulative Reimbursed Residual Value Losses
Certificate Principal Loss Amount
Number of Current Contracts
Weighted Average Coupon (WAC)
Weighted Average Remaining Term (WAM)
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-B
Allocation Date of ______ for the Collection Period of ________ through _______
CURRENT MONTH COLLECTION ACTIVITY
Principal Collections
Prepayments in Full - Number
Prepayments in Full - Amount
Reallocation - Number of Leases
Reallocation Payment
Interest Collections
Net Liquidation Proceeds and Recoveries
Increase (Decrease) in Maturity Advances
Net Liquidation Proceeds - Vehicle Sales
Reimbursed Certificate Principal Losses
Net Investment Income
--------------
Total Available
Increase (Decrease) in Servicer Advances
(Increase) Decrease in PayAheads Held
ANIV
CURRENT MONTH OPERATIONAL ACTIVITY Vehicles Balance
INVENTORY ON HAND: -------- -------
Matured Lease Vehicle Inventory
Repossessed Vehicle Inventory
------------- --------------
Total Inventory on Hand
------------- --------------
------------- --------------
RESIDUAL VALUE (Gain) LOSS:
Matured Lease Vehicle Inventory Sold
Net Liquidation Proceeds
Net Residual Value (Gain) Loss
--------------
Cumulative Residual Value (Gain) Loss all periods
--------------
--------------
--------------
--------------
LIQUIDATION OF CHARGEOFFS AND REPOSSESSIONS:
Liquidated Contracts
Discounted Principal Balance
Net Liquidation Proceeds
Recoveries - Previously Liquidated Contracts
Aggregate Credit Losses for the Collection Period
--------------
Cumulative Credit Losses for all Periods
--------------
--------------
Repossessed in Current Period
--------------
--------------
Accounts Percent ANIV Percent
DELINQUENT CONTRACTS: -------- ------- ---- -------
31-60 Days Delinquent
61-90 Days Delinquent
Over 90 Days Delinquent
---------------------------------------------
Total Delinquencies
---------------------------------------------
---------------------------------------------
Amount
BEGINNING UNREINVESTED PRINCIPAL COLLECTIONS ------
Current Month Principal Collections
Total Available
--------------
Allocation to Subsequent Contracts and Lease Vehicles
--------------
--------------
Ending Unreinvested Principal Collections
--------------
--------------
Annual
CAPPED AND UNCAPPED EXPENSES: Amount Amount
-------------------------
Capped Contingent and Excess Liability Premiums
Capped Titling Trust Administration Expenses
Capped Securitization Trust Administration Expenses
-------------------------
Total Capped Expenses
Uncapped Titling Trust Administration Expenses
Uncapped Securitization Trust Administration Expenses
-------------------------
Total Uncapped Expenses
Paid Expenses
Previous Unpaid Balance
Current Unpaid Balance
SERVICER'S FEE DUE:
Due from Previous Periods
Due for this Period
Paid this Period
Servicer's Fee Balance Due
SUPPLEMENTAL SERVICER'S FEES
Sold Net
Number Scheduled Sale Residual Mat Vehicle
MATURED VEHICLES SOLD FOR Sold Maturities Ratio Values Proceeds
EACH COLLECTION PERIOD: ---- ---------- ----- -------- --------
Second Preceding Collecton Period
First Preceding Collection Period
Current Collection Period
Three Month Average
Residual Value Coverage %
Annualized Average
Charge-Off
Rate
RATIO OF NET CREDIT LOSSES TO THE AVERAGE POOL BALANCE ------------------
FOR EACH COLLECTION PERIOD:
Second Preceding Collection Period
First Preceding Collection Period
Current Collection Period
Three Month Average
Trigger Indicator (1.25%) trigger was not hit
RATIO OF NUMBER OF CONTRACTS DELINQUENT 60 DAYS OR MORE TO THE Outstanding
NUMBER OF RECEIVABLES AS OF EACH COLLECTION PERIOD (INCLUDES Repossessions):
Second Preceding Collection Period
First Preceding Collection Period
Current Collection Period
Three Month Average
Trigger Indicator (1.25%) trigger was not hit
Class B Class A Total
RESERVE FUND: Amount Amount Amount
------- -------- ------
Beginning Balance
Withdrawal Amount
Transferor Excess
------------ -------------- -------------
Ending Balance
Specified Reserve Fund Balance
Release to Transferor
Cumulative Withdrawal Amount
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-B
Allocation Date of ______ for the Collection Period of ________ through _______
Investor Interest Class A1 Class A2
----------------- -------- --------
Percent Balance Percent Balance Percent Balance
------- ------- ------- ------- ------- -------
NOTIONAL/CERTIFICATE INTEREST ACCRUAL AMOUNT
INTEREST:
Interest Collections
Net Investment Income
Non-recoverable Advances -------
Available Interest
Class β-β, β-β, β-β Notional Interest Accrual ββββββ
ββββββββββββ β-β, β-β, and A-3 Interest Shortfall
Interest Accrual for Adjusted Class B Certificat Bal.
Class B Interest Carryover Shortfall
Servicer's Fee
Capped Expenses
Interest Accrual on Class B Cert. Princ. Loss Amt.
Uncapped Expenses
------- ------- ------- ------- ------- -------
Total Unallocated Interest
Excess Interest to Transferor
------- ------- ------- ------- ------- -------
Net Interest Collections Available
Deposit to Reserve Fund
Withdrawal from Reserve Fund
-------
PRINCIPAL:
Certificate Principal Loss Amounts:
Current Loss Amount
Loss Reimbursement from Transferor
Loss Reimbursement from Reserve Fund
------- ------- ------- ------- ------- -------
Tranferor Ending Certificate Princ. Loss Amount
Principal Allocations:
Principal Collections
Liquidated Contracts
Accelerated Principal Distribution Amount
Maturity Advances
Carryover Shortfall
Prior Carryover Shortfall
Total Carryover Shortfall
Withdrawal from Reserve Fund
B Certificate Principal Subordinated Inc (Dec)
------- ------- ------- ------- ------- -------
Total Principal Reinvested
------- ------- ------- ------- ------- -------
Total Principal Allocated
------- ------- ------- ------- ------- -------
CLASS A CERTIFICATE PRINCIPAL LOSS AMOUNTS
Beginning Balance
Current increase (decrease)
-------
Ending Balance
-------
CLASS A INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
-------
Ending Balance
-------
CLASS B CERTIFICATE PRINCIPAL Loss Amounts
Beginning Balance
Current increase (decrease)
-------
Ending Balance
-------
CLASS B INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
-------
Ending Balance
-------
Class A3 Class B Transferor
-------- ------- Interest
Percent Balance Percent Balance Interest Principal
------- ------- ------- ------- ---------- ---------
NOTIONAL/CERTIFICATE INTEREST ACCRUAL AMOUNT
INTEREST:
Interest Collections
Net Investment Income
Non-recoverable Advances
Available Interest
Class β-β, β-β, β-β Notional Interest Accrual ββββββ
ββββββββββββ β-β, β-β, and A-3 Interest Shortfall
Interest Accrual for Adjusted Class B Certificat Bal.
Class B Interest Carryover Shortfall
Servicer's Fee
Capped Expenses
Interest Accrual on Class B Cert. Princ. Loss Amt.
Uncapped Expenses
------- ------- ------- ------- ------- -------
Total Unallocated Interest
Excess Interest to Transferor
------- ------- ------- ------- ------- -------
Net Interest Collections Available
Deposit to Reserve Fund
Withdrawal from Reserve Fund
PRINCIPAL:
Certificate Principal Loss Amounts:
Current Loss Amount
Loss Reimbursement from Transferor
Loss Reimbursement from Reserve Fund
------- ------- ------- ------- ------- -------
Tranferor Ending Certificate Princ. Loss Amount
Principal Allocations:
Principal Collections
Liquidated Contracts
Accelerated Principal Distribution Amount
Maturity Advances
Carryover Shortfall
Prior Carryover Shortfall
Total Carryover Shortfall
Withdrawal from Reserve Fund
B Certificate Principal Subordinated Inc (Dec)
------- ------- ------- ------- ------- -------
Total Principal Reinvested
------- ------- ------- ------- ------- -------
Total Principal Allocated
------- ------- ------- ------- ------- -------
CLASS A CERTIFICATE PRINCIPAL LOSS AMOUNTS
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS A INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS B CERTIFICATE PRINCIPAL Loss Amounts
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS B INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS A CERTIFICATE PRINCIPAL LOSS AMOUNTS
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS A INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS B CERTIFICATE PRINCIPAL Loss Amounts
Beginning Balance
Current increase (decrease)
Ending Balance
CLASS B INTEREST SUBORDINATED:
Beginning Balance
Current increase (decrease)
Ending Balance
TOYOTA MOTOR CREDIT CORPORATION
Servicer's Certificate - Toyota Auto Lease Trust 1998-B
Allocation Date of ______ for the Collection Period of ________ through _______
Investor Interest Class A1 Class A2 Class A3 Class B
Total Balance Balance Balance Balance Balance
----- ----------------- -------- -------- -------- -------
PRINCIPAL DISTRIBUTIONS/ALLOCATIONS:
Distribution - Current Period
Allocations - Current Period
Allocations - Not Disbursed Beginning of Period
Allocations - Not Disbursed End of Period
INTEREST DISTRIBUTIONS/ ALLOCATIONS:
Allocations - Not Disbursed Beginning of Period
Allocations - Current Period
Distributions - Current Period
--------- ------------- -------- -------- -------- -------
Allocations - Not Disbursed End of Period
--------- ------------- -------- -------- -------- -------
--------- ------------- -------- -------- -------- -------
INTEREST DISTRIBUTIONS TO CERTIFICATEHOLDERS:
Interest on Permitted Investments**
Collections - Interest*
Transfer (to) from Reserve Account
---------
Interest Allocations - Current Month
Permitted Investment Maturities**
--------- ------------- -------- -------- -------- -------
Total Interest Distributed to Certificateholders
--------- ------------- -------- -------- -------- -------
PRINCIPAL DISTRIBUTIONS TO CERTIFICATEHOLDERS:
Collections - Principal
Transfer from Reserve Account
---------
Principal Allocations - Current Month
Permitted Investment Maturities
--------- ------------- -------- -------- -------- -------
Total Principal Distributed to Certificateholders
--------- ------------- -------- -------- -------- -------
--------- ------------- -------- -------- -------- -------
TOTAL PRINCIPAL AND INTEREST DISTRIBUTED:
--------- ------------- -------- -------- -------- -------
--------- ------------- -------- -------- -------- -------
* Interest Collections wired from TMCC to the
Trust Collection Account.
** Total of these items represent principal
and interest on the TMCC demand notes and is
wired from TMCC to the Trust Certificateholder
Account.
Total Due Trustee ---------
I hereby certify to the best of my knowledge that the
servicing report provided is true and correct.
-------------------------------
βββββ βββββββ, Treasury Manager
EXHIBIT C
FORM OF POWER OF ATTORNEY
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the Toyota Lease Trust, a Delaware
business trust qualified to do business in the State of California does hereby
make, constitute, and appoint the persons listed on the attached Schedule A, as
Branch Managers for Toyota Motor Credit Corporation ("TMCC") for the branch
offices identified on the attached schedule (the "Branches"), its true and
lawful attorneys-in-fact for and in its name, stead and behalf, for the
following purpose only:
To execute or to designate, in writing, appropriate individuals to
execute Retail Motor Vehicle Lease Agreements (Non-Recourse) between
Toyota Lease Trust and various vehicle dealers in the territories
customarily managed by such Branch Manager's Branch
and for no other purpose whatsoever.
This Power of Attorney may be revoked by the Toyota Lease Trust by notice
in writing to the above-named attorneys-in-fact, in care of the Branch at the
Branch's place of business and this Power of Attorney shall immediately
terminate without notice if the above-named attorney-in-fact shall cease to be
an employee of TMCC at such Branch.
-------------------------------------------------------------------------------
This Power of Attorney shall terminate three (3) years from the date hereof
without further action by the Toyota Lease Trust unless it shall have been
revoked or terminated in accordance with the terms hereof prior to that date.
This Power of Attorney may be executed in any number of counterparts, each
of which so executed and delivered shall be deemed to be an original, but all of
which counterparts shall together constitute but one and the same instrument.
Dated this _______ day of __________________, 1996.
TOYOTA LEASE TRUST
By TMTT, Inc., not in its individual
capacity, but solely as Trustee of
Toyota Lease Trust
By:
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Countersigned
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Branch Manager
Not valid unless countersigned by
Toyota Motor Credit Corporation Branch Manager
C-1
SCHEDULE I
LIST OF BRANCH OFFICES
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BRANCHES
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Toyota Motor Credit Corporation
βββ βββββββββββββ ββββββ, βββ βββ
βββββββββ ββββ ββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ ββββββ βββββ ββββ., βββββ βββ
BATON ROUGE βββββ βββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββ ββββββββ βββββ, βββββ βββ
ββββββ-βββββ βββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ ββββ ββββ, βββββ βββββ
ββββββ-ββββ βββββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ β. ββββ. ββββββ, βββββ βββ
βββββββ βββ βββββ, ββ βββββ-ββββ
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Toyota Motor Credit Corporation
βββ βββββββββ, βββββ βββ
βββββββ-βββββ βββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ βββββββ ββββ, βββββ βββ
ββββββββββ ββββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββ ββββ ββββββββ ββββ, βββββ βββ
ββββββ ββββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ β. βββββββ ββββββ, #βββ
ββββββ βββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββββ ββββββ βββββββ, βββββ βββ
βββββββ βββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ ββββ βββββ, βββββ βββ
ββββββ βββββββ, ββ βββββ
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I-1
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BRANCHES
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Toyota Motor Credit Corporation
βββββ ββββββββββ βββββ, βββββ ββββ
βββββββ βββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ βββββββββ βββββ, βββββ βββ
ββββββ ββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ β βββββ. Street, Suite 200
KANSAS CITY ββββββββ ββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββ β. βββββ βββββββ ββββ., βββββ βββ
βββ βββββββ ββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββ β. ββββββββββ βββββ, βββββ βββ
βββ βββββββ-βββββ βββββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββββ ββββββ ββββ, βββββ βββ
βββ βββββββ-ββββ ββββββ βββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββ βββββββ βββ ββββ, βββββ βββ
ββββββββββ ββββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββ βββ βββββββ ββββ., βββββ βββ
βββββββββ βββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ ββββββββββ ββββββ, ββββββ βββββ
βββ βββββ βββββββ, ββ βββββ
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Toyota Motor Credit Corporation
β ββββββββ βββββ, βββββ βββ
ββββββββββ ββββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββ ββββββ βββββ βββββ, βββββ βββ
ββββββββββββ βββββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββββ βββββ ββββ βββ., βββββ βββ
βββββββ βββββββ, ββ βββββ
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I-2
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BRANCHES
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Toyota Motor Credit Corporation
ββββ βββββββ ββββ, βββββ βββ
ββββββββ ββββ ββββββ, ββ βββββ
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βββ βββ βββββββ βββ., βββββ ββ
ββββββ ββββ Entsada Los Rio 00926
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Toyota Motor Credit Corporation
ββββ ββββββββ βββββββ, βββββ βββ
ββββββββ ββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ ββββββββββ ββββββ βββββ, ββββ. 1 #202
SACRAMENTO ββββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββ βββββββ ββββ, βββββ βββ
ββ. βββββ βββββ βββββ, ββ βββββ
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Toyota Motor Credit Corporation
14100 San βββββ, Suite βββ
βββ βββββββ βββ βββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ ββββββ ββββββ βββββ, βββββ βββ
βββ βββββ βββ βββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ βββββββββ βββββββ, βββββ βββ
βββ βββββββββ βββ βββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ βββββββ ββββ, βββββ βββ
βββ βββββββββ-βββββ βββββββ, ββ βββββ
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Toyota Motor Credit Corporation
ββββ βββββββ βββ, βββββ βββ
βββββββ ββββββββ, ββ βββββ
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Toyota Motor Credit Corporation
βββ ββββββ ββββββ, βββββ βββ
ββββββββ ββββββββ, ββ βββββ
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EQUIPMENT FINANCE & βββββ βββββ βββββββ ββββββ
DIVERSIVIED PRODUCTS ββββββββ, ββ βββββ-ββββ
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Toyota Motor Credit Corporation
βββββ ββββββββ βββββ
βββββββββ ββββββββ, ββ βββββ
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I-3