UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended September 30, 1999
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-9961
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TOYOTA MOTOR CREDIT CORPORATION
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(Exact name of registrant as specified in its charter)
California 95-3775816
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19001 S. Western Avenue
Torrance, California 90509
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 787-1310
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Securities registered pursuant to section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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5.25% Fixed Rate Medium-Term
Notes due January 19, 2001 New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of November 30, 1999, the number of outstanding shares of capital
stock, par value $10,000 per share, of the registrant was 91,500, all of which
shares were held by Toyota Motor Sales, U.S.A., Inc.
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<PAGE>
PART I
ITEM 1. BUSINESS.
General
Toyota Motor Credit Corporation ("TMCC") is a wholly-owned subsidiary of Toyota
Motor Sales, USA, Inc. ("TMS") and was incorporated in California in 1982 and
commenced operations in 1983. TMCC provides retail leasing, retail and
wholesale financing and certain other financial services to authorized Toyota
and Lexus vehicle and Toyota industrial equipment dealers and their customers
in the United States (excluding Hawaii)and the Commonwealth of Puerto Rico.
TMCC has four wholly-owned subsidiaries, one of which is engaged in the
insurance business, one limited purpose subsidiary formed primarily to acquire
and securitize retail finance receivables, one limited purpose subsidiary
formed primarily to acquire and securitize lease finance receivables and one
subsidiary which provides retail and wholesale financing and certain other
financial services to authorized Toyota and Lexus vehicle dealers and their
customers in the Commonwealth of Puerto Rico. TMCC does business as Toyota
Motor Credit Corporation and Lexus Financial Services and markets products
under the service mark "Toyota Financial Services". TMCC and its wholly-owned
subsidiaries are collectively referred to as the "Company".
Toyota Credit Argentina S.A. ("TCA") provides retail and wholesale financing to
authorized Toyota vehicle dealers and their customers in Argentina. As of
December 13, 1999, TMCC owns a 33% interest in TCA. Banco Toyota do Brasil
("BTB") provides retail and lease financing to authorized Toyota vehicle
dealers and their customers in Brazil. BTB is owned 15% by TMCC. The
remaining interests in TCA and BTB are owned by Toyota Motor Corporation
("TMC"), the ultimate parent of TMCC and TMS.
The Company's earnings are primarily impacted by the level of average earning
assets, comprised primarily of investments in finance receivables and operating
leases, and asset yields as well as outstanding borrowings and the cost of
funds. The Company's business is substantially dependent upon the sale of
Toyota and Lexus vehicles in the United States. Changes in the volume of sales
of such vehicles resulting from governmental action, changes in consumer
demand, changes in pricing of imported units due to currency fluctuations, or
other events, could impact the level of finance and insurance operations of the
Company. To date, the level of the Company's operations has not been
restricted by the level of sales of Toyota and Lexus vehicles.
An operating agreement between TMCC, TMS and Toyota Motor Manufacturing North
America, Inc. ("TMMNA") (the "Operating Agreement"), provides that TMCC will
establish its own financing rates and is under no obligation to TMS to finance
wholesale obligations from any dealers or retail obligations of any customers.
In addition, pursuant to the Operating Agreement, TMS will arrange for the
repurchase of new Toyota and Lexus vehicles financed at wholesale by TMCC at
the aggregate cost financed in the event of dealer default. The Operating
Agreement also specifies that TMS will retain 100% ownership of TMCC as long as
TMCC has any funded debt outstanding and that TMS and TMMNA will make necessary
equity contributions or provide other financial assistance deemed appropriate
to ensure that TMCC maintains a minimum coverage on fixed charges of 1.10 times
such fixed charges in any fiscal quarter. Under the Operating Agreement, all
loans by TMS and TMMNA to TMCC must be subordinated to all other indebtedness
of TMCC. The Operating Agreement does not constitute a guarantee by TMS or
TMMNA of any obligations of TMCC. The fixed charge coverage provision of the
Operating Agreement is solely for the benefit of the holders of TMCC's
commercial paper and extendible commercial notes, and the Operating Agreement
may be amended or terminated at any time without notice to, or the consent of,
holders of other TMCC obligations.
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<PAGE>
Retail Leasing
TMCC purchases primarily new vehicle lease contracts originated by Toyota and
Lexus dealers. Lease contracts purchased must first meet TMCC's credit
standards after which TMCC assumes ownership of the leased vehicles and is
generally permitted to take possession of vehicles upon lessee default. TMCC
is responsible for contract collection and administration during the lease
period and for the value of the vehicle at lease maturity if the vehicle is not
purchased by the lessee or dealer. Off-lease vehicles returned to TMCC are
sold through a network of auction sites located throughout the United States as
well as through the internet. TMCC requires lessees to carry fire, theft,
collision and liability insurance on leased vehicles covering the interests of
both TMCC and the lessee. Leasing revenues contributed 76%, 80% and 83% to
total financing revenues for the fiscal years ended September 30, 1999, 1998
and 1997, respectively.
In October 1996, TMCC created Toyota Lease Trust, a Delaware business trust
(the "Titling Trust"), to act as lessor and to hold title to leased vehicles in
specified states in connection with a lease securitization program. TMCC acts
as the servicer for lease contracts purchased by the Titling Trust from Toyota
and Lexus dealers and services such lease contracts in the same manner as
contracts owned directly by TMCC. TMCC holds an undivided trust interest in
lease contracts owned by the Titling Trust, and such lease contracts are
included in TMCC's lease assets, until such time as the beneficial interests in
such contracts are transferred in connection with a securitization transaction.
Retail Financing
TMCC purchases primarily new and used vehicle installment contracts from Toyota
and Lexus dealers. Certain of the used vehicle contracts purchased by TMCC are
"Certified" Toyota and Lexus used vehicle contracts which relate to vehicles
purchased by dealers, reconditioned and certified to meet certain Toyota and
Lexus standards, and sold or leased with an extended warranty from the
manufacturer. Installment contracts purchased must first meet TMCC's credit
standards and thereafter TMCC retains responsibility for contract collection
and administration. TMCC acquires security interests in the vehicles financed
and generally can repossess vehicles if customers fail to meet contract
obligations. Substantially all of TMCC's retail financings are non-recourse
which relieves the dealers from financial responsibility in the event of
repossession. TMCC requires retail financing customers to carry fire, theft
and collision insurance on financed vehicles covering the interests of both
TMCC and the customer. Retail financing revenues contributed 21%, 17% and 14%
to total financing revenues for the fiscal years ended September 30, 1999, 1998
and 1997, respectively.
TMS has historically and continues to sponsor special lease and retail programs
by subsidizing below market lease and retail contract rates.
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<PAGE>
A summary of vehicle retail leasing and financing activity follows:
<TABLE>
<CAPTION>
Years Ended September 30,
------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Contract volume:
Lease................ 249,000 312,000 262,000 276,000 179,000
Retail............... 333,000 282,000 247,000 229,000 170,000
------- ------- ------- ------- -------
Total............. 582,000 594,000 509,000 505,000 349,000
======= ======= ======= ======= =======
Average amount financed:
Lease................ $24,700 $24,600 $24,200 $23,300 $24,800
Retail............... $17,600 $17,100 $16,500 $16,200 $15,100
Outstanding portfolio at
period end ($Millions):
Lease............. $11,605 $11,872 $11,622 $11,917 $9,305
Retail............ $8,916 $7,834 $5,866 $5,105 $4,489
Number of accounts 1,234,188 1,193,000 1,061,000 1,069,000 946,000
</TABLE>
Retail receivables and interests in lease finance receivables sold, totaling
$4.1 billion as of September 30, 1999 and $3.3 billion as of September 30,
1998, which TMCC continues to service, are excluded from the outstanding
portfolio amounts in the above table.
Wholesale Financing
TMCC provides wholesale financing primarily to qualified Toyota and Lexus
vehicle dealers to finance inventories of new Toyota and Lexus vehicles and
used Toyota, Lexus and other vehicles. TMCC acquires security interests in
vehicles financed at wholesale, and substantially all such financings are
backed by corporate or individual guarantees from or on behalf of participating
dealers. In the event of dealer default, TMCC has the right to liquidate any
assets acquired and seek legal remedies pursuant to the guarantees. Pursuant
to the Operating Agreement, TMS will arrange for the repurchase of new Toyota
and Lexus vehicles financed at wholesale by TMCC at the aggregate cost financed
in the event of dealer default.
A summary of vehicle wholesale financing activity follows:
<TABLE>
<CAPTION>
Years Ended September 30,
------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Dealer loans ($Millions)..... $11,093 $9,802 $8,573 $8,017 $7,626
Dealer repayments ($Millions) $10,983 $9,600 $8,684 $8,221 $7,444
Outstanding portfolio at
period end ($Millions).... $855 $746 $563 $668 $886
Average amount financed
per vehicle............... $22,120 $21,562 $20,695 $19,926 $18,999
</TABLE>
TMCC also makes term loans to dealers for business acquisitions, facilities
refurbishment, real estate purchases and working capital requirements. These
loans are typically secured with liens on real estate, other dealership assets
and/or personal guarantees of the dealers. Wholesale and other dealer
financing revenues contributed 3% to total financing revenues for each of the
fiscal years ended September 30, 1999, 1998 and 1997.
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<PAGE>
Insurance
The principal activities of TMCC's insurance subsidiary, Toyota Motor Insurance
Services, Inc. ("TMIS"), include marketing, underwriting, claims administration
and providing certain coverages related to vehicle service agreements and
contractual liability agreements sold by or through Toyota and Lexus vehicle
dealers and affiliates to customers. In addition, TMIS insures and reinsures
certain TMS and TMCC risks. Income before income taxes from insurance
operations contributed 13%, 16% and 12% to total income before income taxes for
the fiscal years ended September 30, 1999, 1998 and 1997, respectively.
Servicing
TMCC remains as servicer on accounts included in its asset-backed
securitization transactions and is paid a servicing fee.
Funding
Funding to support the Company's level of earning assets is provided by access
to the capital markets as well as earning asset liquidations and funds provided
by operating activities. Capital market funding has generally been in the form
of commercial paper, extendible commercial notes, domestic and euro medium-term
notes and bonds and transactions through the Company's asset-backed
securitization programs.
The Company uses a variety of derivative financial instruments to manage
interest rate and currency exchange exposures. The derivative instruments used
include cross currency and interest rate swap agreements, indexed note swap
agreements and option-based products. The Company does not use any of these
instruments for trading purposes.
Competition and Government Regulations
TMCC's primary competitors for retail leasing and financing are commercial
banks, savings and loan associations, credit unions, finance companies and
other captive automobile finance companies. Commercial banks and other captive
automobile finance companies also provide wholesale financing for Toyota and
Lexus dealers. Competition for the principal products and services provided
through the insurance operations is primarily from national and regional
independent service contract providers. TMCC's strategy is to supplement, with
competitive financing and insurance programs, the overall commitment of TMS to
offer a complete package of services to authorized Toyota and Lexus dealers and
their customers.
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<PAGE>
The finance and insurance operations of the Company are regulated under both
federal and state law. A majority of states have enacted legislation
establishing licensing requirements to conduct retail and other finance and
insurance activities. Most states also impose limits on the maximum rate of
finance charges. In certain states, the margin between the present statutory
maximum interest rates and borrowing costs is sufficiently narrow that, in
periods of rapidly increasing or high interest rates, there could be an adverse
effect on the Company's operations in these states if the Company were unable
to pass on increased interest costs to its customers. In addition, state laws
differ as to whether anyone suffering injury to person or property involving a
leased vehicle may bring an action against the owner of the vehicle merely by
virtue of that ownership. To the extent that applicable state law permits such
an action, TMCC may be subject to liability to such an injured party. However,
the laws of most states either do not permit such suits or limit the lessor's
liability to the amount of any liability insurance that the lessee was required
under applicable law to maintain (or, in some states, the lessor was permitted
to maintain), but failed to maintain. TMCC's lease contracts contain
provisions requiring the lessees to maintain levels of insurance satisfying
applicable state law and TMCC maintains certain levels of contingent liability
insurance for protection from catastrophic claims.
The Company's operations are also subject to regulation under federal and state
consumer protection statutes. The Company continually reviews its operations
for compliance with applicable laws. Future administrative rulings, judicial
decisions and legislation may require modification of the Company's business
practices and documentation.
Employee Relations
At November 30, 1999, the Company had approximately 2,873 full-time employees.
The Company considers its employee relations to be good.
Segment Information
Financial information regarding industry segments is set forth in Note 17 of
the Notes to Consolidated Financial Statements.
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<PAGE>
Toyota Motor Sales, U.S.A., Inc.
TMS is primarily engaged in the wholesale distribution of automobiles, light
trucks, industrial equipment and related replacement parts and accessories
throughout the United States (excluding Hawaii). Additionally, TMS exports
automobiles and related replacement parts and accessories to Europe, Asia and
United States territories.
TMS' corporate headquarters is located in Torrance, California. TMS has port
facilities, regional sales offices and parts distribution centers located
throughout the United States. Toyota vehicles are distributed in the United
States in twelve regional sales areas, ten of which are operated by or through
TMS and two which are serviced by private distributors who purchase vehicles
directly from TMS and distribute to Toyota dealers within their respective
regions. For the year ended September 30, 1999, these private distributors,
Gulf States Toyota, Inc. of Houston, Texas and Southeast Toyota Distributors,
Inc. of Deerfield Beach, Florida, accounted for approximately 30% of the
Toyota vehicles sold in the United States (excluding Hawaii). Lexus vehicles
are directly distributed by TMS to Lexus dealers throughout the United States
(excluding Hawaii).
For the year ended September 30, 1999, TMS sold approximately 1,465,000
automobiles and light trucks in the United States (excluding Hawaii), of which
approximately 980,500 were manufactured in the United States; TMS exported
approximately 34,800 automobiles. TMS' sales represented approximately 31% of
TMC's worldwide sales volume for the year ended March 31, 1999. For the years
ended September 30, 1999 and 1998, Toyota and Lexus vehicles accounted for
approximately 8.7% and 8.4%, respectively, of all retail automobile and light
truck unit sales volume in the United States.
Total revenues for TMS for the fiscal years ended September 30, 1999, 1998 and
1997, aggregated approximately $36.5 billion, $32.6 billion and $28.8 billion,
respectively, of which approximately $33.1 billion, $29.2 billion, and $25.3
billion, respectively, were attributable to revenues other than those
associated with financial services. At September 30, 1999, 1998 and 1997, TMS
had total assets of approximately $29 billion, $27.4 billion, and $23.6
billion, respectively. TMS had net worth in excess of $4.1 billion and net
income in excess of $225 million for each of the fiscal years ended September
30, 1999, 1998 and 1997.
TMS and TMMNA are wholly-owned subsidiaries of Toyota Motor North America,
Inc. ("TMA"), a holding company owned 100% by TMC. TMMNA is the holding
company for all manufacturing operations in the United States and coordinates
and supports numerous manufacturing related administrative functions. Total
revenues for TMMNA for the fiscal years ended September 30, 1999 and 1998,
aggregated approximately $13.7 billion and $11.9 billion, respectively, all of
which was attributable to revenues other than those associated with financial
services. At September 30, 1999 and 1998, TMMNA had total assets of
approximately $4.7 billion and $4.2 billion respectively. TMMNA had net worth
in excess of $2.4 billion and net income in excess of $100 million for the
fiscal years ended September 30, 1999 and 1998.
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<PAGE>
ITEM 2. PROPERTIES.
The headquarters of the Company for both finance and insurance operations is
located in Torrance, California. In addition, as of November 30, 1999, the
finance operation has four regional offices and 33 branch offices in cities
throughout the United States and one branch office in the Commonwealth of
Puerto Rico. The insurance operation has six regional sales offices; five of
these premises are shared with the finance operation's branch offices. A
finance and insurance service center is located in Cedar Rapids, Iowa. All
premises are occupied under lease.
ITEM 3. LEGAL PROCEEDINGS.
Various legal actions, governmental proceedings and other claims are pending or
may be instituted or asserted in the future against TMCC and its subsidiaries
with respect to matters arising from the ordinary course of business. Certain
of these actions are or purport to be class action suits, seeking sizeable
damages. Certain of these actions are similar to suits which have been filed
against other financial institutions and captive finance companies. Management
and internal and external counsel perform periodic reviews of pending claims
and actions to determine the probability of adverse verdicts and resulting
amounts of liability. The amounts of liability on pending claims and actions
as of September 30, 1999 were not determinable; however, in the opinion of
management, the ultimate liability resulting therefrom should not have a
material adverse effect on TMCC's consolidated financial position or results of
operations. The foregoing is a forward looking statement within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Act of 1934, as amended, which represents the Company's expectations
and beliefs concerning future events. The Company cautions that its discussion
of Legal Proceedings is further qualified by important factors that could cause
actual results to differ materially from those in the forward looking
statement, including but not limited to the discovery of facts not presently
known to the Company or determinations by judges, juries or other finders of
fact which do not accord with the Company's evaluation of the possible
liability from existing litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
TMCC is a wholly-owned subsidiary of TMS and, accordingly, all shares of the
Company's stock are owned by TMS. There is no market for TMCC's stock.
No dividends have been declared or paid to date.
-8-
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>
Years Ended September 30,
-------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
(Dollars in Millions)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Financing Revenues:
Leasing.......................... $ 2,397 $ 2,595 $ 2,730 $ 2,448 $ 1,904
Retail financing................. 665 547 446 415 431
Wholesale and other
dealer financing.............. 103 98 89 109 121
------- ------- ------- ------- -------
Total financing revenues......... 3,165 3,240 3,265 2,972 2,456
Depreciation on leases........... 1,664 1,681 1,781 1,620 1,232
Interest expense................. 940 994 918 820 716
------- ------- ------- ------- -------
Net financing revenues........... 561 565 566 532 508
Insurance premiums earned and
contract revenues............. 122 112 97 86 76
Investment and other income...... 69 79 66 41 30
------- ------- ------- ------- -------
Net financing revenues
and other revenues............ 752 756 729 659 614
------- ------- ------- ------- -------
Expenses:
Operating and administrative..... 376 323 259 235 207
Provision for credit losses...... 83 127 136 115 66
Insurance losses and loss
adjustment expenses........... 63 55 51 49 41
------- ------- ------- ------- -------
Total expenses................... 522 505 446 399 314
------- ------- ------- ------- -------
Income before income taxes....... 230 251 283 260 300
Provision for income taxes....... 98 107 121 108 117
------- ------- ------- ------- -------
Net Income....................... $ 132 $ 144 $ 162 $ 152 $ 183
======= ======= ======= ======= =======
Ratio of earnings to
fixed charges................. 1.24 1.25 1.31 1.32 1.42
BALANCE SHEET DATA
Finance receivables, net......... $13,856 $11,521 $8,452 $7,474 $7,227
Investments in operating
leases, net.................... $ 8,605 $ 9,765 $10,257 $10,831 $8,148
Total assets..................... $24,578 $23,225 $19,830 $19,309 $16,225
Notes and loans payable.......... $18,565 $17,597 $14,745 $15,014 $12,696
Capital stock.................... $915 $915 $915 $915 $865
Retained earnings................ $1,435 $1,303 $1,159 $997 $844
</TABLE>
Certain prior period amounts have been reclassified to conform with the current
period presentation.
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<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net Income
- ----------
The following table summarizes TMCC's net income by business segment for the
fiscal years ended September 30, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
Years Ended September 30,
-------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
(Dollars in Millions)
Net income:
Financing operations................ $113 $119 $142
Insurance operations................ 19 25 20
---- ---- ----
Total net income................. $132 $144 $162
==== ==== ====
</TABLE>
Net income from financing operations decreased 5% in fiscal 1999, primarily due
to lower financing revenues and higher operating and administrative expenses,
substantially offset by lower interest expense, lower provision for credit
losses and lower depreciation on leases. The decrease in fiscal 1998 financing
operations net income from fiscal 1997 reflects increased provision for
residual value losses as well as higher operating and administrative expenses,
partially offset by increased investment and other income and lower provision
for credit losses.
Net income from insurance operations decreased 24% in fiscal 1999, primarily
due to higher operating and administrative expenses and lower investment
income. The increase in fiscal 1998 net income reflects increased underwriting
profit from providing coverage under various agreements as well as higher
investment income.
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<PAGE>
Earning Assets
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The composition of TMCC's net earning assets (which excludes retail receivables
and interests in lease finance receivables sold through securitization
transactions), as of the balance sheet dates reported herein and TMCC's vehicle
lease and retail contract volume and finance penetration for the years ended
September 30, 1999, 1998, and 1997 are summarized below:
<TABLE>
<CAPTION>
September 30,
---------------------------
1999 1998 1997
------- ------- -------
(Dollars in Millions)
<S> <C> <C> <C>
Vehicle lease
Investment in operating leases, net........ $ 8,290 $ 9,559 $10,124
Finance leases, net........................ 3,315 2,313 1,498
------- ------- -------
Total vehicle leases......................... 11,605 11,872 11,622
Vehicle retail finance receivables, net...... 8,916 7,834 5,866
Vehicle wholesale and other receivables...... 2,142 1,800 1,434
Allowance for credit losses.................. (202) (220) (213)
------- ------- -------
Total net earning assets..................... $22,461 $21,286 $18,709
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Years Ended September 30,
---------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Total contract volume:
Vehicle lease............................. 249,000 312,000 262,000
Vehicle retail............................ 333,000 282,000 247,000
------- ------- -------
Total........................................ 582,000 594,000 509,000
======= ======= =======
TMS sponsored contract volume:
Vehicle lease............................. 96,000 170,000 72,000
Vehicle retail............................ 46,000 80,000 17,000
------- ------- -------
Total........................................ 142,000 250,000 89,000
======= ======= =======
Used contract volume:
Vehicle lease............................. 6,000 7,000 6,000
Vehicle retail............................ 112,000 94,000 103,000
------- ------- -------
Total........................................ 118,000 101,000 109,000
======= ======= =======
Finance penetration (excluding fleet):
Vehicle lease............................. 17.7% 25.3% 23.2%
Vehicle retail............................ 16.0% 15.7% 13.0%
------- ------- -------
Total........................................ 33.7% 41.0% 36.2%
======= ======= =======
</TABLE>
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<PAGE>
TMCC's net earning assets as of September 30, 1999 increased from September 30,
1998 due to growth in retail and wholesale earning assets, partially offset by
a decline in lease earning assets. The increase in retail earning assets was
primarily due to higher retail contract volume, partially offset by the sale of
$989 million of retail finance receivables. Wholesale earning assets increased
from September 30, 1998 primarily due to higher dealer inventories. The
decrease in lease earning assets was primarily due to lower lease contract
volume and the sale of $780 million of interests in lease finance receivables.
The decrease in allowance for credit losses reflects improved loss experience
and is deemed adequate to cover expected losses based on current and historical
loss experience, portfolio composition and other factors.
TMCC's net earning assets as of September 30, 1998 increased from September 30,
1997 primarily due to growth in lease, retail and wholesale earning assets
attributable to higher volume, partially offset by the sale of $1.6 billion of
interests in lease finance receivables.
In October 1996, TMCC created Toyota Lease Trust, a Delaware business trust
(the "Titling Trust"), to act as a lessor and to hold title to leased vehicles
in specified states. The value of the lease contracts purchased by the Titling
Trust in fiscal 1999 and 1998 represented approximately 41% and 40%,
respectively, of all lease contracts purchased by both TMCC and the Titling
Trust. TMCC holds an undivided trust interest in lease contracts owned by the
Titling Trust, and such lease contracts are included in TMCC's lease assets,
until such time as the beneficial interests in such contracts are transferred
in connection with a securitization transaction. Substantially all leases
owned by the Titling Trust are classified as finance receivables due to
certain residual value insurance arrangements in place with respect to such
leases, while leases of similar nature originated outside of the Titling Trust
are classified as operating leases. The continued acquisition of leases by
the Titling Trust has changed the composition of earning assets resulting in
an increasing mix of finance receivables relative to operating lease assets
due to the classification differences described above.
TMS sponsors special lease and retail programs which subsidize reduced monthly
payments on certain Toyota and Lexus new vehicles and Toyota industrial
equipment to qualified lease and retail customers. Support amounts received
from TMS in connection with these programs approximate the balances required by
TMCC to maintain revenues at standard program levels and are earned over the
expected lease and retail installment contract terms. The level of sponsored
program activity varies based on TMS marketing strategies, and revenues earned
vary based on the mix of Toyota and Lexus vehicles, timing of programs and the
level of support provided. TMCC's revenues earned from TMS sponsored special
lease and retail contracts outstanding totaled $126 million, $142 million and
$174 million for fiscal years 1999, 1998 and 1997, respectively.
TMCC's lease contract volume for the year ended September 30, 1999 declined
from 1998 reflecting lower finance penetration due to changes in lease programs
and the residual value setting policy, as well as lower levels of programs
sponsored by TMS.
TMCC's retail contract volume for the year ended September 30, 1999 increased
from 1998 levels despite reduced TMS sponsored programs due to competitive
pricing and the strong sales of Toyota and Lexus vehicles.
Higher contract volume in 1998 compared to 1997 was primarily due to strong
sales of Toyota and Lexus vehicles as well as higher levels of programs
sponsored by TMS.
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<PAGE>
Net Financing Revenue and Other Revenues
- ----------------------------------------
TMCC's net financing revenues decreased slightly in fiscal 1999 primarily due
to lower leasing revenues, offset by lower interest expense and increased
retail and wholesale revenues. TMCC's continued use of the Titling Trust to
purchase leases has caused a shift in the composition of earning assets from
operating leases to finance receivables, as discussed earlier, and resulted in
increased revenues from finance leases (until such interests in leases were
sold in a securitization transaction) and reduced operating lease revenues and
depreciation on operating leases. The decrease in fiscal 1998 net financing
revenues reflects increased provision for residual value losses as well as
increased interest expense, partially offset by increased retail and wholesale
revenues.
Insurance premiums earned and contract revenues increased 9% and 15% in fiscal
1999 and 1998, respectively, due to higher underwriting revenues associated
with in-force agreements.
The following table summarizes TMCC's investment and other income for the
fiscal years ended September 30, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
Years Ended September 30,
--------------------------
1999 1998 1997
---- ---- ----
(Dollars in Millions)
<S> <C> <C> <C>
Investment income................................... $ 34 $ 32 $ 30
Servicing fee income................................ 39 26 13
Gains on assets sold................................ 15 21 23
Asset impairment.................................... (19) - -
---- ---- ----
Investment and other income...................... $ 69 $ 79 $ 66
==== ==== ====
</TABLE>
The decrease in investment and other income from fiscal 1998 to fiscal 1999 is
primarily due to the impairment of an asset retained in the fiscal 1997 sale
of interests in lease finance receivables, as well as lower gains on assets
sold, partially offset by higher servicing income. The increase in investment
and other income from fiscal 1997 to fiscal 1998 reflects primarily higher
levels of servicing fee income from accounts included in the Company's asset-
backed securitization programs. Servicing fee income increased 50% and 100%
in fiscal 1999 and 1998, respectively, due to growth in the combined balance
of sold interests in lease finance and sold retail receivables.
Gains recognized on asset-backed securitization transactions generally
accelerate the recognition of income on lease and retail contracts, net of
servicing fees and other related deferrals, into the period the assets are
sold. Numerous factors can affect the timing and amounts of these gains, such
as the type and amount of assets sold, the structure of the sale, key
assumptions used and current financial market conditions.
-13-
<PAGE>
Depreciation on Leases
- ----------------------
The following table sets forth the items included in TMCC's depreciation on
leases for the years ended September 30, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
September 30,
---------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
(Dollars in Millions)
Straight-line depreciation on operating leases.... $1,378 $1,501 $1,649
Provision for residual value losses............... 286 260 132
Parent support for certain vehicle disposition
losses........................................ - (80) -
------ ------ ------
Total depreciation on leases...................... $1,664 $1,681 $1,781
====== ====== ======
</TABLE>
Straight-line depreciation expense decreased 8% and 9% for fiscal 1999 and
1998, respectively, corresponding with a decline in average operating lease
assets. As discussed earlier, the acquisition of leases by the Titling Trust
has increased the ratio of lease finance receivables relative to operating
lease assets, which results in reduced operating lease revenues and
depreciation on operating leases.
TMCC is subject to residual value risk in connection with its lease portfolio.
TMCC's residual value exposure is a function of the number of off-lease
vehicles returned for disposition and any shortfall between the net
disposition proceeds and the estimated unguaranteed residual values on
returned vehicles. If the market value of a leased vehicle at contract
termination is less than its contract residual value, the vehicle is more
likely to be returned to TMCC. A higher rate of vehicle returns exposes TMCC
to a risk of higher aggregate losses.
Total unguaranteed residual values related to TMCC's vehicle lease portfolio
declined from approximately $7.6 billion at September 30, 1998 to $6.5 billion
at September 30, 1999 reflecting the acquisition of residual value insurance
on an increasing number of leases in connection with the lease securitization
program as well as sales of interests in lease finance receivables. TMCC
maintains an allowance for estimated losses on lease vehicles returned to the
Company for disposition at lease termination. The level of allowance required
to cover future vehicle disposition losses is based upon projected vehicle
return rates and projected residual value losses derived from market
information on used vehicle sales, historical factors, including lease return
trends, and general economic factors.
-14-
<PAGE>
The increase in the provision for residual value losses in fiscal 1999
reflects higher off-lease vehicle return rates and a larger supply of vehicles
coming off-lease resulting in higher total losses although the loss per
vehicle has declined during the same period. The number of returned leased
vehicles sold by TMCC during a specified period as a percentage of the number
of lease contracts that as of their origination dates were scheduled to
terminate ("full term return ratio") was 47% for fiscal 1999 as compared to
40% and 18% for fiscal 1998 and 1997, respectively. Losses at vehicle
disposition increased $42 million and $118 million during fiscal 1999 and
fiscal 1998, respectively, although per unit residual value loss rates have
improved for fiscal 1999 as compared with fiscal 1998. TMCC believes that
industry-wide record levels of incentives on new vehicles and a large supply
of late model off-lease vehicles have put downward pressure on used car
prices. In addition, TMCC's increased vehicle return rates and losses reflect
the impact of competitive new vehicle pricing for core Toyota and Lexus models.
Return rates and losses may also be affected by the amount and types
of accessories or installed optional equipment included in leased vehicles.
Although vehicle loss rates are typically the result of a combination of
factors, to the extent certain types of optional equipment depreciate more
quickly than the value of the base vehicle, leased vehicles having a greater
portion of their manufacturer's suggested retail price attributable to such
optional equipment will experience relatively higher levels of loss. TMCC
expects the large supply of vehicles coming off-lease to continue through
fiscal 2000 and that the full term return ratio and losses will remain at or
near current levels.
The Company has taken action to reduce vehicle disposition losses by
developing strategies to increase dealer and lessee purchases of off-lease
vehicles, expanding marketing of off-lease vehicles through the internet and
maximizing proceeds on vehicles sold through auction. In addition, TMCC
implemented a new residual value setting policy for new model year 1999 Toyota
vehicles that separately calculates the residual value applicable to the base
vehicle and the residual value applicable to certain specified optional
accessories and optional equipment.
Under an arrangement with TMS, TMCC received Parent support for vehicle
disposition losses in the last three quarters of fiscal 1998. During fiscal
1999, the Company did not receive any Parent support for vehicle disposition
losses and there are currently no plans for such support in fiscal 2000.
TMCC's lease portfolio includes contracts with original terms ranging from 12
to 60 months; the average original contract term in TMCC's lease portfolio was
38 months and 40 months at September 30, 1999 and 1998, respectively.
-15-
<PAGE>
Interest Expense
- ----------------
Interest expense decreased 5% in fiscal 1999 compared with fiscal 1998
primarily due to lower average cost of borrowings, partially offset by an
increase in average debt outstanding. Interest expense increased 8% in fiscal
1998 reflecting higher average debt outstanding, slightly offset by a decline
in the average cost of borrowings. The weighted average cost of borrowings was
5.34%, 5.85% and 5.87% for the years ended September 30, 1999, 1998 and 1997,
respectively.
Operating and Administrative Expenses
- -------------------------------------
Operating and administrative expenses increased 16% and 25% in fiscal 1999 and
1998, respectively. The increases reflect primarily additional personnel and
operating costs required to support TMCC's growing customer base, growth in the
Company's insurance operations, as well as costs in connection with technology
upgrades and software modifications to address year 2000 issues. TMCC
anticipates continued growth in operating and administrative expenses
reflecting costs associated with portfolio growth and technology initiatives.
Provision for Credit Losses
- ---------------------------
TMCC's provision for credit losses decreased 35% and 7% during fiscal 1999 and
1998, respectively, reflecting management's estimate that current reserve
levels are adequate based on improved credit loss experience, portfolio
composition and other factors. Allowances for credit losses are evaluated
periodically, considering historical loss experience and other factors, and are
considered adequate to cover expected credit losses as of September 30, 1999.
In fiscal 1999, TMCC pilot tested an expanded tiered pricing program for retail
vehicle contracts. The objective of the expanded program is to better match
customer risk with contract rates charged to allow profitable purchases of a
wider range of risk levels. A national roll-out of the expanded tiered pricing
program for both retail and lease vehicle contracts is planned for fiscal 2000.
Implementation of this expanded program may result in both increased contract
yields and increased credit losses in connection with purchases of higher risk
contracts.
-16-
<PAGE>
An analysis of credit losses and the related allowance follows, excluding net
losses on receivables sold subject to limited recourse provisions:
<TABLE>
<CAPTION>
Years ended September 30,
------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
(Dollars in Millions)
<S> <C> <C> <C> <C> <C>
Allowance for credit losses
at beginning of period......... $220 $213 $203 $171 $164
Provision for credit losses....... 83 127 136 115 66
Charge-offs....................... (104) (120) (116) (81) (63)
Recoveries........................ 17 17 12 12 12
Other Adjustments................. (14) (17) (22) (14) (8)
---- ---- ---- ---- ----
Allowance for credit losses
at end of period............... $202 $220 $213 $203 $171
==== ==== ==== ==== ====
Allowance for credit losses
as a percent of gross
earning assets................. 0.89% 1.02% 1.13% 1.10% 1.10%
Net credit losses as a percent
of average earning assets...... .40% .51% .55% .41% .34%
Aggregate balances at end of
period for lease rentals
and installments 60
or more days past due.......... $35 $30 $30 $29 $20
Aggregate balances at end of
period for lease rentals
and installments 60 or more
days past due as a percent
of net investments in operating
leases and gross receivables
outstanding.................... .15% .14% .15% .15% .12%
</TABLE>
-17-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company requires, in the normal course of business, substantial funding to
support the level of its earning assets. Significant reliance is placed on the
Company's ability to obtain debt funding in the capital markets in addition to
funding provided by earning asset liquidations and cash provided by operating
activities as well as transactions through the Company's asset-backed
securitization programs. Debt issuances have generally been in the form of
commercial paper, and domestic and euro medium-term notes ("MTNs") and bonds.
On occasion, this funding has been supplemented by loans and equity
contributions from TMS. During FY 1999, TMCC began issuing extendible
commercial notes ("ECNs") which have an initial maturity period of up to ninety
days, subject to an extension for up to a maximum term of three hundred and
ninety days at the option of the Company.
Commercial paper and ECN issuances are used to meet short-term funding needs.
Commercial paper outstanding under TMCC's commercial paper program ranged from
approximately $1.1 billion to $2.9 billion during fiscal 1999, with an average
outstanding balance of $1.7 billion. The outstanding balance of ECNs at
September 30, 1999 totaled $146 million. For additional liquidity purposes,
TMCC maintains syndicated bank credit facilities with certain banks, which
aggregated $2.7 billion at September 30, 1999. No loans were outstanding under
any of these bank credit facilities during fiscal 1999. TMCC also maintains,
along with TMS, uncommitted, unsecured lines of credit with banks totaling
$175 million. At September 30, 1999, TMCC had issued approximately $13 million
in letters of credit.
Long-term funding requirements are met through the issuance of a variety of
debt securities underwritten in both the United States and international
capital markets. Domestic and euro MTNs and bonds have provided TMCC with
significant sources of funding. During fiscal 1999, TMCC issued approximately
$4.0 billion of domestic and euro MTNs and bonds all of which had original
maturities of one year or more.
The original maturities of all MTNs and bonds outstanding at September 30,
1999 ranged from one to eleven years. As of September 30, 1999, TMCC had
total MTNs and bonds outstanding of $16.9 billion, of which $7.6 billion was
denominated in foreign currencies.
TMCC anticipates continued use of MTNs and bonds in both the United States and
international capital markets. The Company maintains a shelf registration with
the SEC providing for the issuance of MTNs and other debt securities. At
November 30, 1999, approximately $0.6 billion was available for issuance under
this registration statement. The maximum aggregate principal amount authorized
to be outstanding at any time under TMCC's euro MTN program is $16.0 billion.
Approximately $6.0 billion was available for issuance under the euro MTN
program as of November 30, 1999. The United States and euro MTN programs may
be expanded from time to time to allow for the continued use of these sources
of funding. The Company has filed a new shelf registration statement with the
SEC covering debt securities in a principal amount equal to $1.0 billion to be
used for both MTN issuances and underwritten offerings. The Company expects to
increase the amount registered to $4.5 billion prior to effectiveness. In
addition, TMCC may issue bonds in the domestic and international capital
markets that are not issued under its MTN programs.
-18-
<PAGE>
Additionally, TMCC uses its asset-backed securitization programs to generate
funds for investment in earning assets as described in Note 7 to the
Consolidated Financial Statements. During the year ended September 30, 1999,
TMCC sold interests in lease finance receivables totaling $780 million. During
fiscal 1999, the number and principal amount of leases purchased by the Toyota
Lease Trust in connection with TMCC's lease securitization program comprised a
significant and increasing percentage of what otherwise would have been TMCC's
lease portfolio. However, until leases are included in a securitization
transaction, they continue to be classified as finance receivables on TMCC's
balance sheet. In addition, TMCC maintains a shelf registration statement with
the SEC relating to the issuance of asset-backed notes secured by, and
certificates representing interests, in retail receivables. During the year
ended September 30, 1999, TMCC sold retail receivables totaling $989 million in
connection with securities issued under the shelf registration statement. As
of November 30, 1999, $1.5 billion remained available for issuance under the
registration statement.
TMCC's ratio of earnings to fixed charges was 1.24, 1.25 and 1.31 in the years
ended September 30, 1999, 1998, and 1997, respectively. TMCC believes that the
decline in the ratio has not affected its ability to maintain liquidity or
access to outside funding sources.
Cash flows provided by operating, investing and financing activities have been
used primarily to support earning asset growth. Cash provided by the
liquidation and sale of earning assets, totaling $21.0 billion and $19.1
billion during fiscal 1999 and 1998, respectively, was used to purchase
additional investments in operating leases and finance receivables, totaling
$23.9 billion and $23.6 billion during fiscal 1999 and 1998, respectively.
Investing activities resulted in a net use of cash of $2.9 billion and
$4.5 billion in fiscal 1999 and 1998, respectively, as the purchase of
additional earning assets exceeded cash provided by the liquidation of earning
assets. Net cash provided by operating activities totaled $1.9 billion and
$2.0 billion in fiscal 1999 and 1998, and net cash provided by financing
activities totaled $1.1 billion and $2.5 billion, during fiscal 1999 and 1998,
respectively. The Company believes that cash provided by operating and
investing activities as well as access to domestic and international capital
markets, the issuance of commercial paper and ECNs, and asset-backed
securitization transactions will provide sufficient liquidity to meet its
future funding requirements.
-19-
<PAGE>
Year 2000 Date Conversion
- -------------------------
The year 2000 issue concerns the inability of computer systems and related
applications to function properly in the year 2000 and beyond. As a wholly-
owned subsidiary of TMS, TMCC is participating in TMS' comprehensive action
plan to identify and address year 2000 issues. As part of the year 2000
action plan, TMCC is identifying and evaluating potential year 2000 problems
and is implementing changes designed to yield year 2000 compliance in its
information technology systems, including mainframe, distributed and desktop
computer systems, networks and telecommunications (collectively, "IT systems")
and its non-information technology systems, including security and HVAC
systems, automated access readers and other machinery and equipment
(collectively, "embedded systems"). An additional component of the year 2000
action plan involves TMCC's communications with its external business partners
for the purpose of assessing and reducing the risk that TMCC's operations
could be adversely affected by such third parties' noncompliance with year
2000 issues.
Phases
The year 2000 action plan consists of four phases, some of which are being
conducted concurrently:
Inventory and Assessment: During this phase an inventory is taken of all
software and/or hardware components of significant applications or systems.
Software and hardware that is no longer in use or is planned to be replaced
before the year 2000, is identified and removed from the scope of the project.
Once the inventory is completed and verified, a preliminary determination of
whether the software or hardware is likely to have year 2000 date issues is
made either by manual review, vendor inquiry or by use of software tools
designed to search for date impacts. Once the assessment is completed, a
business critical prioritized plan is developed for remediation, testing, and
implementing the remediated hardware or software in the remaining phases.
Remediation: During this phase, software for which TMS or TMCC owns the
source code will be scanned and corrected. In most instances, TMCC will use
the "windowing" approach to fix source code which uses program logic to
correct year 2000 date issues. In some cases, it will be necessary to expand
the year field from two to four digits where the year 2000 date issue can not
be solved with the "windowing" method. Software for which TMS or TMCC does
not own the source code will be remediated by obtaining the year 2000 ready
version of the software from the vendor. For hardware and operating system
software, the year 2000 ready component will also be obtained from the vendor.
Testing: The testing phase focuses mainly on remediated hardware and software
that supports business critical functions. Test plans and test cases are
expected to be developed and performed for each application. For software
modified by TMCC, tests will be designed to demonstrate that application
functionality has not changed as a result of the remediation.
Implementation: During this phase, the remediated hardware and software
components will be implemented in the production environment. At this time,
policies and procedures will be implemented to ensure that additional
modifications to remediated and tested hardware and/or software are year 2000
compliant.
-20-
<PAGE>
State of Readiness
The Company has identified the following six areas for specific review and
remediation in connection with its year 2000 compliance efforts:
Critical Business Systems Applications: Includes distributed and mainframe
applications used in operations such as retail and lease financing, customer
account processing, collections, insurance operations and accounting systems.
TMCC has completed the inventory and remediation of these systems. All
business critical applications have been tested and implemented back into
production.
Desktop Systems: Includes commercial off-the-shelf software as well as custom
developed applications. TMCC has completed the inventory and assessment of
these systems and related software applications. Remediation and testing of
business critical custom developed systems is completed. Replacement of non-
compliant off-the-shelf software applications is expected by the end of fourth
quarter of calendar year 1999.
Technical Infrastructure: Includes mainframe, distributed and PC systems,
networks, and telecommunications. TMCC has completed the inventory and
assessment phases of its technical infrastructure. Testing and implementation
of business critical components has been completed.
Embedded Systems: Includes non-information technology systems described
above. TMCC has completed the inventory, assessment and implementation phases
for embedded systems at its owned facilities. With respect to embedded
systems located at facilities leased by TMCC, TMCC has completed the
assessment phase of contacting the property managers and/or owners regarding
the year 2000 status of the facilities. TMCC is establishing contingency
plans for coping with problems that may arise from embedded systems in leased
facilities that are not year 2000 compliant.
External Compliance: Includes financial institutions, dealers, suppliers,
trustees, underwriters and affiliates ("business partners"). Critical
business partners have been identified and prioritized. Letters and surveys
have been sent to business partners to assess the risk associated with those
business partners' failure to remediate their own year 2000 issues. TMCC has
completed the assessment phase of critical business partners. Testing of
business critical systems with external business partners will continue
through the end of calendar year 1999.
Non-Critical Systems: Includes systems and applications from the above-listed
areas which have been prioritized as non-critical. Such systems and
applications are being reviewed on an ongoing basis and will continue to be
assessed for year 2000 compliance through the end of calendar year 1999.
-21-
<PAGE>
TMS has contacted its affiliates and others involved in the manufacture of
Toyota and Lexus vehicles and equipment to determine the status of year 2000
product compliance, and based on information received to date, TMCC is not
aware of any year 2000 problems that would affect the operational safety of
these products.
Year 2000 Costs
Costs associated with the year 2000 systems and software modifications are
generally expensed as incurred. TMS is allocating a portion of its year 2000
costs to TMCC. TMCC's total costs incurred through fiscal year 1999 were $16.5
million. TMCC's total costs (including allocated costs from TMS) for the year
2000 issue are estimated not to exceed $20 million. The costs to be incurred
by TMCC in connection with its year 2000 compliance efforts are not expected
to have a material adverse effect on the Company's results of operations,
liquidity or capital resources. As a result of the application of resources
to year 2000 compliance efforts, certain information technology projects
previously scheduled to be initiated or implemented in fiscal 1999 were
deferred. Such deferral is not expected to have a material adverse effect on
the Company's results of operations, liquidity or capital resources.
Year 2000 Risks
The most reasonably likely worst case scenario with respect to the year 2000
issue is the failure of a business partner, particularly another financial
institution, to be year 2000 compliant. Although TMCC does not currently
anticipate that it will experience significant business disruptions as a
result of year 2000 problems, there remains uncertainty in this area. The
failure to achieve year 2000 compliance by energy and water utilities,
governmental agencies or other private or public suppliers of general
infrastructure could present substantial difficulties to TMCC's business
operations in the affected geographic areas. The inability of TMCC, its
external business partners or the public and private suppliers of general
infrastructure to identify and timely resolve year 2000 problems could result
in a significant adverse effect on the Company's operations and financial
results, including an inability to collect receivables, pay obligations,
process new business, raise capital and occupy facilities.
Year 2000 Contingency Plan
The Company is currently developing a contingency plan to address problems
resulting from year 2000 noncompliance. TMCC's contingency planning focuses
on identifying systems of TMCC and its business partners that TMCC believes
will be the most likely to experience year 2000 problems. The contingency
plan includes arrangements with back-up vendors, suppliers and other resources
to permit operations to be conducted temporarily on a manual basis. TMCC's
contingency plan is substantially completed, although revisions will be made
on an ongoing basis through the end of the calendar year as circumstances
change and additional information becomes available.
-22-
<PAGE>
Euro Conversion
- ---------------
On January 1, 1999, eleven of the fifteen member countries of the European
Union (the "participating countries") established fixed conversion rates
between their existing sovereign currencies (the "legacy currencies") and the
euro. The participating countries agreed to adopt the euro as their common
legal currency on the date that the euro began trading on currency exchanges
and was available for non-cash transactions. The legacy currencies are
scheduled to remain legal tender in the participating countries as
denominations of the euro until January 1, 2002 (the "transition period").
During the transition period, public and private parties may pay for goods and
services using either the euro or the participating country's legacy currency.
Beginning January 1, 2002, the participating countries will issue new euro-
denominated bills and coins for use in cash transactions and legacy currencies
will be withdrawn from circulation, signifying the completion of the euro
conversion process.
As TMCC does not currently support Toyota finance operations in Europe, the
impact of the euro conversion is limited to issues in connection with raising
funds in the European capital markets. TMCC generally hedges all foreign
exchange exposure associated with its funding activities which limits its
exposure to movements in foreign exchange rates. In addition, payments in
foreign currencies owed by TMCC are made by its counterparties under
International Swaps and Derivatives Association, Inc. ("ISDA") master
agreements governing swap transactions. Accordingly, TMCC did not need to
make any material changes to its systems to accommodate these types of
payments. TMCC has provided changes to its standard settlement instructions
to the extent necessary to reflect changes in account information and payment
instructions occurring as a result of the introduction of the euro. TMCC does
not believe that it will experience significant issues relating to the
continuity of TMCC's contracts arising from the introduction of the euro. The
ISDA Master Agreements entered into by TMCC are generally governed by New York
law. New York has adopted legislation which prevents a party to a contract
from unilaterally breaking or changing its contractual obligations as a result
of the euro conversion. In addition, TMCC is a party to the EMU Protocol
published by ISDA designed to clarify the effects of certain issues
surrounding the introduction of the euro including continuity of contracts,
price source changes, payment netting and certain definitions.
The introduction of the euro has not had a material adverse effect on the
Company's operations or financial results. The Company plans to continue to
consider the euro in future funding strategies and will continue to fund in
all markets which are cost-effective.
-23-
<PAGE>
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 1995
The foregoing Business description and Management's Discussion and Analysis
contain various "forward looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which represent the Company's expectations or
beliefs concerning future events, including the following: that the Company
considers its employee relations to be good; that TMCC believes that industry-
wide record levels of incentives on new vehicles and large supply of late model
off-lease vehicles have put downward pressure on used car prices; that TMCC
anticipates continued growth in operating and administrative expenses
reflecting costs associated with portfolio growth and technology initiatives;
that the implementation of the expanded tiered pricing program may result in
increased contract yields and increased credit losses in connection with
purchases of higher risk contracts; that TMCC expects the large supply of
vehicles coming off-lease to continue through fiscal 2000 and that the full
term return ratio and losses will remain at or near current levels; that
allowances for credit losses are considered adequate to cover expected credit
losses; that TMCC anticipates continued use of MTNs and bonds in the United
States and the international capital markets; that the Company expects to
increase the amount registered with the SEC covering debt securities to $4.5
billion prior to effectiveness; that TMCC may issue bonds in the domestic and
international capital markets that are not issued under its MTN programs; that
the decline in the ratio of earnings to fixed charges has not affected its
ability to maintain liquidity or access to outside funding sources; that cash
provided by operating and investing activities as well as access to domestic
and international capital markets, the issuance of commercial paper and ECNs,
and asset-backed securitization transactions will provide sufficient liquidity
to meet the its future funding requirements; that the Company's action plan for
year 2000 compliance efforts will be carried out as described under Item 7 -
"Year 2000 Date Conversion - Phases and - State of Readiness"; that the
deferral of certain technology projects is not expected to have a material
adverse effect on the Company's results of operations, liquidity or
capital resources; that the total estimated cost in connection with the
year 2000 issue is not expected to have a material impact on the Company's
results of operations, liquidity or capital resources; that the risk to the
Company with respect to year 2000 issues is as described under Item 7 - "Year
2000 Date Conversion - Year 2000 Risks"; that the Company's contingency plan to
address year 2000 issues will be as described under Item 7 - "Year 2000 Date
Conversion - Year 2000 Contingency Plan"; that TMCC does not believe that it
will experience significant issues relating to the continuity of TMCC's
contracts arising from the introduction of the euro; that the Company does not
currently anticipate non-performance by any of its counterparties; that TMCC
believes that the new methodology will result in a more accurate measurement
of the interest rate risk in the portfolio.
-24-
<PAGE>
The Company cautions that these statements are further qualified by important
factors that could cause actual results to differ materially from those in the
forward looking statements, including, without limitation, the following:
decline in demand for Toyota and Lexus products; the effect of economic
conditions; a decline in the market acceptability of leasing; the effect of
competitive pricing on interest margins; increases in prevailing interest
rates; changes in pricing due to the appreciation of the Japanese yen against
the United States dollar; the effect of governmental actions; the effect of
competitive pressures on the used car market and residual values and the
continuation of the other factors causing an increase in vehicle returns and
disposition losses; the continuation of, and if continued, the level and type
of special programs offered by TMS; the ability of the Company to successfully
access the United States and international capital markets; the effects of any
rating agency actions; the monetary policies exercised by the European Central
Bank and other monetary authorities; unanticipated problems or delays in the
completion by the Company of its year 2000 action plan; failure of TMCC's
business partners to timely resolve their year 2000 issues ; the failure of the
Company to develop and implement an adequate contingency plan relating to year
2000 issues; increased costs associated with the Company's debt funding
efforts; with respect to the effects of litigation matters, the discovery of
facts not presently known to the Company or determination by judges, juries or
other finders of fact which do not accord with the Company's evaluation of the
possible liability from existing litigation; and the ability of the Company's
counterparties to perform under interest rate and cross currency swap
agreements. Results actually achieved thus may differ materially from expected
results included in these statements.
New Accounting Standards
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." This SOP provides guidance
on accounting for certain costs in connection with obtaining or developing
computer software for internal use and requires that entities capitalize such
costs once certain criteria are met. The Company adopted SOP 98-1 as of
October 1, 1998. The effect on the Company's financial statements was not
material.
In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities",
effective for fiscal years beginning after June 15, 1999. SFAS No. 133
requires companies to record derivatives on the balance sheet as assets and
liabilities, measured at fair value. Gains and losses resulting from changes
in the values of those derivatives would be accounted for as components of
comprehensive income depending on the use of the derivative and whether it
qualifies for hedge accounting. In June 1999, the FASB issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133", which defers the effective date of
SFAS No. 133 to fiscal years beginning after June 15, 2000. The Company has
not determined the impact that adoption of this standard will have on its
consolidated financial statements. The Company plans to adopt SFAS No. 133 by
October 1, 2000, as required.
-25-
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
TMCC uses a variety of interest rate and currency derivative financial
instruments to manage interest rate and currency exchange exposures. The
derivative instruments used include cross currency and interest rate swaps,
indexed note swaps and option-based products. TMCC does not use any of these
instruments for trading purposes. The total notional amounts of TMCC's
derivative financial instruments at September 30, 1999 and 1998 were
$26.0 billion and $23.4 billion, respectively. The notional amounts of
interest rate and indexed note swap agreements and option-based products do not
represent amounts exchanged by the parties and, thus, are not a measure of the
Company's exposure through its use of derivatives. The only market rate risk
related to TMCC's portfolio is interest rate risk as foreign currency risks are
entirely hedged through cross currency interest rate swap agreements.
TMCC uses interest rate swap agreements in managing its exposure to interest
rate fluctuations. Interest rate swap agreements are executed as an integral
part of specific debt transactions or on a portfolio basis. TMCC's interest
rate swap agreements involve agreements to pay fixed and receive a floating
rate, or receive fixed and pay a floating rate, at specified intervals,
calculated on an agreed-upon notional amount. Interest rate swap agreements
may also involve basis swap contracts which are agreements to exchange the
difference between certain floating interest amounts, such as the net payment
based on the commercial paper rate and the London Interbank Offered Rate
("LIBOR"), calculated on an agreed-upon notional amount.
TMCC also uses option-based products in managing its exposure to interest rate
fluctuations. Option-based products are executed on a portfolio basis and
consist primarily of purchased interest rate cap agreements and to a lesser
extent corridor agreements. Option-based products are agreements, which either
grant TMCC the right to receive or require TMCC to make payments at specified
interest rate levels.
TMCC uses indexed note swap agreements in managing its exposure in connection
with debt instruments whose interest rate and/or principal redemption amounts
are derived from other underlying instruments. Indexed note swap agreements
involve agreements to receive interest and/or principal amounts associated with
the indexed notes, denominated in either U.S. dollars or a foreign currency,
and to pay fixed or floating rates on fixed U.S. dollar liabilities.
TMCC uses cross currency interest rate swap agreements to entirely hedge
exposure to exchange rate fluctuations on principal and interest payments for
borrowings denominated in foreign currencies. Notes and loans payable issued
in foreign currencies are hedged by concurrently executed cross currency
interest rate swap agreements which involve the exchange of foreign currency
principal and interest obligations for U.S. dollar obligations at agreed-upon
currency exchange and interest rates.
Derivative financial instruments used by TMCC involve, to varying degrees,
elements of credit risk in the event a counterparty should default and market
risk as the instruments are subject to rate and price fluctuations. Credit
risk is managed through the use of credit standard guidelines, counterparty
diversification, monitoring of counterparty financial condition and master
netting agreements in place with all derivative counterparties. Credit exposure
of derivative financial instruments is represented by the fair value of
contracts with a positive fair value at September 30, 1999 reduced by the
effects of master netting agreements. The credit exposure of TMCC's derivative
financial instruments at September 30, 1999 was $88 million on an aggregate
notional amount of $26.0 billion. Additionally, at September 30, 1999,
approximately 89% of TMCC's derivative financial instruments, based on notional
amounts, were with commercial banks and investment banking firms assigned
investment grade ratings of "AA" or better by national rating agencies. TMCC
does not currently anticipate non-performance by any of its counterparties and
has no reserves related to non-performance as of September 30, 1999; TMCC has
not experienced any counterparty default during the three years ended
September 30, 1999.
-26-
<PAGE>
Changes in interest rates may impact TMCC's future weighted average interest
rate on outstanding debt as a result of floating rate liabilities. As of
September 30, 1999, an interest rate increase of 1% (100 basis points) would
raise TMCC's weighted average interest rate, including the effects of interest
rate swap agreements and option-based products, by .29%, from 5.44% to an
estimated 5.73%. Conversely, an interest rate decrease of 1% (100 basis
points) would lower TMCC's weighted average interest rate, including the
effects of interest rate swap agreements and option-based products, by .49%,
from 5.44% to an estimated 4.95% at September 30, 1999. TMCC's interest rate
exposure primarily results from changes in U.S. commercial paper rates and U.S.
LIBOR.
TMCC uses a value-at-risk methodology, in connection with other management
tools, to assess and manage the interest rate risk of aggregated loan and lease
assets and financial liabilities, including interest rate derivatives and
option-based products. Value-at-risk represents the potential losses in fair
value for a portfolio from adverse changes in market factors for a specified
period of time and likelihood of occurrence (i.e. level of confidence).
TMCC's value-at-risk methodology incorporates the impact from adverse changes
in market interest rates but does not incorporate any impact from other market
changes, such as foreign currency exchange rates or commodity prices, which do
not affect the value of TMCC's portfolio. The value-at-risk methodology
excludes changes in fair values related to investments in marketable securities
as these amounts are not significant.
During the quarter ended March 31, 1999, TMCC changed its value-at-risk
methodology. The new methodology makes no assumptions about the distribution
of interest rates; instead it relies on actual interest rate data. Four years
of historical interest rate data is used to build a database of prediction
errors in forward rates for a one month holding period. These prediction
errors are then applied randomly to current forward rates through a Monte
Carlo process to simulate 500 potential future yield curves. The portfolio is
then re-priced with these curves to develop a distribution of future portfolio
values. Options in the portfolio are priced with current market implied
volatilities and the simulated yield curves using the Black Scholes method.
The lowest portfolio value at the 95% confidence interval is compared with the
current portfolio value to derive the value-at-risk number. The previous
method used two years of historical interest rate volatilities, simulated only
100 potential future yield curves using a stratified random sampling
methodology and assumed that changes in interest rates are lognormally
distributed. Since the new model makes no assumptions about the distribution
of interest rates but instead uses the actual historical distribution of
interest rates along with an increased number of simulations, TMCC believes
that the new methodology will result in a more accurate measurement of the
interest rate risk in the portfolio.
-27-
<PAGE>
The value-at-risk and the average value-at-risk of TMCC's portfolio as of and
for the fiscal years ended September 30, 1999 and 1998, measured as the
potential 30 day loss in fair value from assumed adverse changes in interest
rates are as follows:
<TABLE>
<CAPTION>
Average for the
As of Fiscal Year Ending
New Method: September 30, 1999 September 30, 1999
------------------ -------------------
<S> <C> <C>
Mean portfolio value..................... $3,300.0 million $3,600.0 million
Value-at-risk............................ $86.3 million $71.6 million
Percentage of the mean portfolio value... 2.6% 2.0%
Confidence level......................... 95.0% 95.0%
Average for the
As of Fiscal Year Ending
Old Method: September 30, 1999 September 30, 1999
----------------- -------------------
<S> <C> <C>
Mean portfolio value..................... $3,300.0 million $3,600.0 million
Value-at-risk............................ $75.9 million $57.3 million
Percentage of the mean portfolio value... 2.3% 1.6%
Confidence level......................... 95.0% 95.0%
Average for the
As of Fiscal Year Ending
Old Method: September 30, 1998 September 30, 1998
----------------- -------------------
<S> <C> <C>
Mean portfolio value..................... $3,500.0 million $3,270.0 million
Value-at-risk............................ $32.5 million $29.8 million
Percentage of the mean portfolio value... 0.9% 0.9%
Confidence level......................... 95.0% 95.0%
</TABLE>
TMCC's calculated value-at-risk exposure represents an estimate of reasonably
possible net losses that would be recognized on its portfolio of financial
instruments assuming hypothetical movements in future market rates and is not
necessarily indicative of actual results which may occur. It does not
represent the maximum possible loss nor any expected loss that may occur, since
actual future gains and losses will differ from those estimated, based upon
actual fluctuations in market rates, operating exposures, and the timing
thereof, and changes in the composition of TMCC's portfolio of financial
instruments during the year. The increase in the value-at-risk levels from
fiscal 1998 was primarily due to the increase in interest rate volatility.
-28-
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEX TO FINANCIAL STATEMENTS
Page
-------
Report of Independent Accountants................................ 30
Consolidated Balance Sheet at September 30, 1999 and 1998........ 31
Consolidated Statement of Income for the
years ended September 30, 1999, 1998 and 1997................. 32
Consolidated Statement of Shareholder's Equity for
the years ended September 30, 1999, 1998 and 1997............. 33
Consolidated Statement of Cash Flows for the
years ended September 30, 1999, 1998 and 1997................. 34
Notes to Consolidated Financial Statements....................... 35-62
All schedules have been omitted because they are not required, not applicable,
or the information has been included elsewhere.
-29-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors and Shareholder of
Toyota Motor Credit Corporation
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of shareholder's equity and of cash flows
present fairly, in all material respects, the financial position of Toyota
Motor Credit Corporation (a wholly-owned subsidiary of Toyota Motor Sales,
U.S.A., Inc.) and its subsidiaries at September 30, 1999 and 1998, and the
results of their operations and their cash flows for each of the three years in
the period ended September 30, 1999, in conformity with generally accepted
accounting principles in the United States. These financial statements are the
responsibility of Toyota Motor Credit Corporation's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards in the United States which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
/S/ PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
October 29, 1999
-30-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
CONSOLIDATED BALANCE SHEET
(Dollars in Millions)
<TABLE>
<CAPTION>
September 30,
-----------------------
1999 1998
-------- --------
<S> <C> <C>
ASSETS
------
Cash and cash equivalents.................. $ 180 $ 156
Investments in marketable securities....... 450 435
Finance receivables, net................... 13,856 11,521
Investments in operating leases, net....... 8,605 9,765
Receivable from Parent and Affiliate....... 717 512
Other receivables.......................... 366 304
Deferred charges........................... 131 167
Other assets............................... 242 266
Income taxes receivable.................... 31 99
------- -------
Total Assets...................... $24,578 $23,225
======= =======
LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------
Notes and loans payable.................... $18,565 $17,597
Accrued interest........................... 161 176
Accounts payable and accrued expenses...... 1,096 995
Deposits................................... 201 240
Deferred income............................ 636 607
Deferred income taxes...................... 1,554 1,379
------- -------
Total Liabilities.................... 22,213 20,994
------- -------
Commitments and Contingencies
Shareholder's Equity:
Capital stock, $l0,000 par value
(100,000 shares authorized; issued
and outstanding 91,500 in 1999 and
1998)................................ 915 915
Retained earnings....................... 1,435 1,303
Accumulated other comprehensive income.. 15 13
------- -------
Total Shareholder's Equity........... 2,365 2,231
------- -------
Total Liabilities and
Shareholder's Equity.............. $24,578 $23,225
======= =======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-31-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Dollars in Millions)
<TABLE>
<CAPTION>
Years ended September 30,
----------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Financing Revenues:
Leasing................................. $2,397 $2,595 2,730
Retail financing........................ 665 547 446
Wholesale and other dealer financing.... 103 98 89
------ ------ ------
Total financing revenues................... 3,165 3,240 3,265
Depreciation on leases.................. 1,664 1,681 1,781
Interest expense........................ 940 994 918
------ ------ ------
Net financing revenues..................... 561 565 566
Insurance premiums earned and contract
revenues................................ 122 112 97
Investment and other income................ 69 79 66
------ ------ ------
Net financing revenues and other revenues.. 752 756 729
------ ------ ------
Expenses:
Operating and administrative............ 376 323 259
Provision for credit losses............. 83 127 136
Insurance losses and loss adjustment
expenses............................. 63 55 51
------ ------ ------
Total expenses............................. 522 505 446
------ ------ ------
Income before income taxes................. 230 251 283
Provision for income taxes................. 98 107 121
------ ------ ------
Net Income................................. $ 132 $ 144 $ 162
====== ====== ======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-32-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
(Dollars in Millions)
<TABLE>
<CAPTION>
Accumulated
Other
Capital Retained Comprehensive
Stock Earnings Income Total
------- -------- ------------- -------
<S> <C> <C> <C> <C>
Balance at September 30, l996.... $ 915 $ 997 $ 2 $ 1,914
------ ------- ---------- ------
Net income in 1997............... - 162 - 162
Change in net unrealized gains
on available-for-sale
marketable securities......... - - 5 5
------ -------- ---------- ------
Total Comprehensive Income - 162 5 167
------ -------- ---------- ------
Balance at September 30, 1997.... 915 1,159 7 2,081
------ -------- ---------- ------
Net income in 1998............... - 144 - 144
Change in net unrealized gains
on available-for-sale
marketable securities......... - - 6 6
------ ------- ---------- ------
Total Comprehensive Income - 144 6 150
------ -------- ---------- ------
Balance at September 30, 1998.... 915 1,303 13 2,231
------ -------- ---------- ------
Net income in 1999............... - 132 - 132
Change in net unrealized gains
on available-for-sale
marketable securities......... - - 2 2
------ ------- ---------- ------
Total Comprehensive Income - 132 2 134
------ -------- ---------- ------
Balance at September 30, 1999.... $ 915 $ 1,435 $ 15 $2,365
====== ======= ========== ======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-33-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Millions)
<TABLE>
<CAPTION>
Years ended September 30,
------------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................................. $ 132 $ 144 $ 162
------ ------ ------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization..................... 1,711 1,826 1,822
Provision for credit losses....................... 83 127 136
Gain from sale of finance receivables, net........ (15) (21) (23)
Realized loss on asset impairment................. 19 - -
Decrease in accrued interest...................... (15) (37) (13)
Increase in deferred income taxes................. 173 420 149
Increase in other assets.......................... (271) (614) (198)
Increase (decrease) in other liabilities.......... 42 139 (74)
------ ------ ------
Total adjustments...................................... 1,727 1,840 1,799
------ ------ ------
Net cash provided by operating activities................. 1,859 1,984 1,961
------ ------ ------
Cash flows from investing activities:
Addition to investments in marketable
securities.......................................... (705) (996) (581)
Disposition of investments in marketable
securities.......................................... 693 901 638
Purchase of finance receivables........................ (20,309) (19,034) (15,595)
Liquidation of finance receivables..................... 15,802 14,003 12,553
Proceeds from sale of finance receivables.............. 2,042 1,830 1,956
Addition to investments in operating leases............ (3,577) (4,552) (4,269)
Disposition of investments in operating leases......... 3,137 3,303 3,057
------ ------ ------
Net cash used in investing activities..................... (2,917) (4,545) (2,241)
------ ------ ------
Cash flows from financing activities:
Proceeds from issuance of notes and loans payable...... 6,634 6,039 5,482
Payments on notes and loans payable.................... (4,985) (4,250) (4,510)
Net (decrease) increase in commercial paper,
with original maturities less than 90 days.......... (567) 751 (685)
------ ------ ------
Net cash provided by financing activities................. 1,082 2,540 287
------ ------ ------
Net increase (decrease) in cash and cash equivalents...... 24 (21) 7
Cash and cash equivalents at the beginning
of the period.......................................... 156 177 170
------ ------ ------
Cash and cash equivalents at the end of the
period................................................. $ 180 $ 156 $ 177
====== ====== ======
Supplemental disclosures:
Interest paid.......................................... $979 $995 $906
Income taxes paid...................................... $17 $6 $5
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-34-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Nature of Operations
- -----------------------------
Toyota Motor Credit Corporation ("TMCC") provides retail and wholesale
financing, retail leasing and certain other financial services to authorized
Toyota and Lexus vehicle and Toyota industrial equipment dealers and their
customers in the United States (excluding Hawaii) and Puerto Rico. TMCC is a
wholly-owned subsidiary of Toyota Motor Sales, U.S.A., Inc. ("TMS" or the
"Parent"). TMS is primarily engaged in the wholesale distribution of
automobiles, trucks, industrial equipment and related replacement parts and
accessories throughout the United States (excluding Hawaii). Substantially all
of TMS's products are purchased from Toyota Motor Corporation ("TMC") or its
affiliates.
TMCC has four wholly-owned subsidiaries, Toyota Motor Insurance Services, Inc.
("TMIS"), Toyota Motor Credit Receivables Corporation ("TMCRC"), Toyota
Leasing, Inc. ("TLI") and Toyota Credit de Puerto Rico Corporation ("TCPR").
TMCC and its wholly-owned subsidiaries are collectively referred to as the
"Company". Effective July 1, 1998, Toyota Motor Insurance Company, Toyota
Motor Insurance Corporation of Vermont and Toyota Motor Life Insurance Company
which had been wholly-owned subsidiaries of TMCC became wholly-owned
subsidiaries of TMIS. The insurance subsidiaries provide certain insurance
services along with certain insurance and contractual coverages in connection
with the sale and lease of vehicles. In addition, the insurance subsidiaries
insure and reinsure certain TMS and TMCC risks. TMCRC, a limited purpose
subsidiary, operates primarily to acquire retail finance receivables from TMCC
for the purpose of securitizing such receivables. TLI, a limited purpose
subsidiary, operates primarily to acquire lease finance receivables from TMCC
for the purpose of securitizing such leases. TCPR provides retail and
wholesale financing and certain other financial services to authorized Toyota
and Lexus vehicle dealers and their customers in Puerto Rico.
Toyota Credit Argentina S.A. ("TCA") was incorporated in September 1998 and
commenced business operations in December 1998. TCA provides retail and
wholesale financing to authorized Toyota vehicle dealers and their customers
in Argentina. TCA is owned 85% by TMC and 15% by TMCC. As of September 30,
1999 TMCC's investment in TCA totaled $2 million and is accounted for using
the cost method.
Banco Toyota do Brasil ("BTB") was incorporated in January 1999 and commenced
business operations in June 1999. BTB provides retail and lease financing to
authorized Toyota vehicle dealers and their customers in Brazil. BTB is owned
85% by TMC and 15% by TMCC. As of September 30, 1999 TMCC's investment in BTB
totaled $4 million and is accounted for using the cost method.
The Company's business is substantially dependent upon the sale of Toyota and
Lexus vehicles in the United States. Changes in the volume of sales of such
vehicles resulting from governmental action, changes in consumer demand,
changes in pricing of imported units due to currency fluctuations, or other
events could impact the level of finance and insurance operations of the
Company.
-35-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies
- ---------------------------------------------------
Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of TMCC and its
wholly-owned subsidiaries. All significant intercompany transactions and
balances have been eliminated.
Cash and Cash Equivalents
-------------------------
Cash equivalents, consisting primarily of money market instruments and debt
securities, represent highly liquid investments with original maturities of
three months or less.
Investments in Marketable Securities
------------------------------------
Investments in marketable securities consist of debt and equity securities.
Debt securities designated as held-to-maturity are carried at amortized cost
and are reduced to net realizable value for other than temporary declines in
market value. Debt and equity securities designated as available-for-sale are
carried at fair value with unrealized gains or losses included in accumulated
other comprehensive income, net of applicable taxes. Realized investment gains
and losses, which are determined on the specific identification method, are
reflected in income.
Investments in Operating Leases
-------------------------------
Investments in operating leases are recorded at cost and depreciated on a
straight-line basis, over the lease terms to the estimated residual value.
Revenue from operating leases is recognized on a straight-line basis over the
lease terms.
Finance Receivables
-------------------
Finance receivables are recorded at the present value of the related future
cash flows. Revenue associated with finance receivables is recognized on a
level-yield basis over the contract terms.
-36-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies (Continued)
- ---------------------------------------------------
Allowance for Credit Losses
---------------------------
Allowances for credit losses are evaluated periodically, considering historical
loss experience and other factors, and are maintained in amounts considered by
management to be appropriate in relation to receivables outstanding and
expected future loss experience. Losses are charged to the allowance for
credit losses when it has been determined that collateral cannot be recovered
and any shortfall between proceeds received and the carrying cost of
repossessed collateral is charged to the allowance. Recoveries are credited to
the allowance for credit losses.
Allowance for Residual Value Losses
-----------------------------------
Allowances for estimated losses on lease vehicles returned to TMCC for
disposition at lease termination are established based upon projected vehicle
return rates and projected residual value losses derived from historical and
market information as well as general economic factors. The provision for
residual value losses is included in lease depreciation expense.
Deferred Charges
----------------
Deferred charges consist primarily of premiums paid for option-based products,
underwriters' commissions and other debt issuance costs which are amortized to
interest expense over the life of the related instruments on a straight-line
basis, which is not materially different from the effective interest method.
Derivative Financial Instruments
--------------------------------
TMCC uses a variety of derivative financial instruments to manage funding costs
and risks associated with changes in interest and foreign currency exchange
rates. The derivative instruments used include interest rate, cross currency
interest rate and indexed note swap agreements and option-based products. TMCC
does not use any of these instruments for trading purposes. The derivative
financial instruments are specifically designated to the underlying debt
obligations or to portfolio level risks. Cash flows related to these
instruments are classified in the same categories as cash flows from related
borrowing activities.
Interest Rate Swap Agreements
-----------------------------
Interest rate swap agreements are executed as an integral part of specific debt
transactions or on a portfolio basis. The differential paid or received on
interest rate swap agreements is recorded on an accrual basis as an adjustment
to interest expense over the term of the agreements.
Cross Currency Interest Rate Swap Agreements
--------------------------------------------
Cross currency interest rate swap agreements are executed as an integral part
of foreign currency debt transactions. The differential between the contract
rates and the foreign currency spot exchange rates as of the reporting dates is
classified in other receivables or accounts payable and accrued expenses; the
differential paid or received on the interest rate swap portion of the
agreements is recorded on an accrual basis as an adjustment to interest expense
over the term of the agreements.
-37-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies (Continued)
- ---------------------------------------------------
Indexed Note Swap Agreements
----------------------------
Indexed note swap agreements are executed as an integral part of indexed note
transactions. Any differential between contract rates and foreign currency
spot exchange rates as of the reporting dates is classified in other
receivables or accounts payable and accrued expenses; the interest differential
paid or received on indexed note swap agreements is recorded on an accrual
basis as an adjustment to interest expense over the term of the agreements.
Option-Based Products
---------------------
Option-based products are executed on a portfolio basis. Premiums paid for
option-based products are included in deferred charges and are amortized to
interest expense over the life of the instruments on a straight-line basis.
Amounts receivable under option-based products are recorded on an accrual basis
as a reduction to interest expense.
Insurance Operations
--------------------
Revenues from insurance premiums and from providing coverage under various
contractual agreements are earned over the terms of the respective policies and
agreements in proportion to estimated claims activity. Certain costs of
acquiring new business, consisting primarily of commissions and premium taxes,
are deferred and amortized over the terms of the related policies on the same
basis as revenues are earned. The liability for reported losses and the
estimate of unreported losses are recorded in accounts payable and accrued
expenses. Commission and fee income are recognized in relation to the level of
services performed.
Income Taxes
------------
TMCC uses the liability method of accounting for income taxes under which
deferred tax assets and liabilities are adjusted to reflect changes in tax
rates and laws in the period such changes are enacted resulting in adjustments
to the current period's provision for income taxes.
The Company joins with TMS in filing consolidated federal income tax returns
and combined or consolidated income tax returns in certain states. Federal and
state income tax expense is generally recognized as if the Company filed its
tax returns on a stand alone basis. In those states where TMCC joins in the
filing of consolidated or combined income tax returns, TMCC is allocated its
share of the total income tax expense based on the Company's income or loss
which would be allocable to such states if the Company filed separate returns.
Based on an informal tax sharing agreement with TMS and other members of the
TMS group, the Company pays TMS for its share of the consolidated federal and
consolidated or combined state income tax expense and is reimbursed for the
benefit of any of its tax basis losses utilized in the consolidated federal and
consolidated or combined state income tax returns.
-38-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies (Continued)
- ---------------------------------------------------
Asset-Backed Securitization Transactions
----------------------------------------
TMCC periodically sells retail receivables and interests in lease finance
receivables through limited purpose subsidiaries TMCRC and TLI, respectively.
TMCC retains servicing rights for sold assets and receives a servicing fee
which is recognized over the remaining term of the related sold retail
receivables or interests in lease finance receivables. TMCRC and TLI retain
subordinated interests in the excess cash flows of these transactions, certain
cash deposits and other related amounts which are held as restricted assets
subject to limited recourse provisions. The Company's retained interests in
such receivables are included in investments in marketable securities and are
classified as available for sale.
Pre-tax gains on sold retail receivables and interests in lease finance
receivables are recognized in the period in which the sale occurs and are
included in other income. In determining such gains, the investment in the
sold retail receivable and interests in lease finance receivable pool is
allocated between the portion sold and the portion retained based on their
relative fair values on the date sold.
New Accounting Standards
------------------------
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." This SOP provides guidance
on accounting for certain costs in connection with obtaining or developing
computer software for internal use and requires that entities capitalize such
costs once certain criteria are met. The Company adopted SOP 98-1 as of
October 1, 1998. The effect on the Company's financial statements was not
material.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", effective for fiscal years beginning after
June 15, 1999. SFAS No. 133 requires companies to record derivatives on the
balance sheet as assets and liabilities, measured at fair value. Gains and
losses resulting from changes in the values of those derivatives would be
accounted for as components of comprehensive income depending on the use of the
derivative and whether it qualifies for hedge accounting. In June 1999, the
FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133", which
defers the effective date of SFAS No. 133 to fiscal years beginning after June
15, 2000. The Company has not determined the impact that adoption of this
standard will have on its consolidated financial statements. The Company plans
to adopt SFAS No. 133 by October 1, 2000, as required.
Reclassifications
-----------------
Certain 1998 and 1997 amounts have been reclassified to conform with the 1999
presentation.
-39-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Investments in Marketable Securities
- ---------------------------------------------
TMCC records its investments in marketable securities which are designated as
available-for-sale at fair value estimated using quoted market prices or
discounted cash flow analysis. Unrealized gains, net of income taxes, related
to available-for-sale securities are included in comprehensive income.
Securities designated as held-to-maturity are recorded at amortized cost.
The estimated fair value and amortized cost of investments in marketable
securities are as follows:
<TABLE>
<CAPTION>
September 30, 1999
----------------------------------------
Gross Gross
Fair Unrealized Unrealized
Cost Value Gains Losses
---- ----- ---------- ----------
(Dollars in Millions)
<S> <C> <C> <C> <C>
Available-for-sale securities:
Asset-backed securities............. $220 $229 $ 17 $ (8)
Corporate debt securities........... 90 87 - (3)
Equity securities................... 68 87 20 (1)
U.S. debt securities................ 33 33 - -
---- ---- ---- ----
Total available-for-sale securities.... $411 $436 $ 37 $(12)
==== ====
Held-to-maturity securities:
U.S. debt securities................ 14 14
---- ----
Total marketable securities............ $425 $450
==== ====
</TABLE>
<TABLE>
<CAPTION>
September 30, 1998
----------------------------------------
Gross Gross
Fair Unrealized Unrealized
Cost Value Gains Losses
---- ----- ---------- ----------
(Dollars in Millions)
<S> <C> <C> <C> <C>
Available-for-sale securities:
Asset-backed securities............. $201 $211 $ 10 $ -
Corporate debt securities........... 77 76 1 (2)
Equity securities................... 62 73 11 -
U.S. debt securities................ 61 63 2 -
---- ---- ---- ----
Total available-for-sale securities.... $401 $423 $ 24 $ (2)
==== ====
Held-to-maturity securities:
U.S. debt securities................ 12 12
---- ----
Total marketable securities............ $413 $435
==== ====
</TABLE>
-40-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Investments in Marketable Securities (Continued)
- ---------------------------------------------
The contractual maturities of investments in marketable securities at
September 30, 1999 are as follows:
<TABLE>
<CAPTION>
Available-for-Sale Held-to-Maturity
Securities Securities
------------------ ----------------
Fair Fair
Cost Value Cost Value
---- ----- ---- -----
(Dollars in Millions)
<S> <C> <C> <C> <C>
Within one year...................... $ 7 $ 7 $ 11 $ 11
After one year through five years.... 59 58 3 3
After five years through ten years... 22 22 - -
After ten years...................... 35 33 - -
Equity securities.................... 68 87 - -
Asset-backed securities.............. 220 229 - -
---- ---- ---- ----
Total............................. $411 $436 $ 14 $ 14
==== ==== ==== ====
</TABLE>
The proceeds from sales of available-for-sale securities were $562 million and
$659 million for the years ended September 30, 1999 and 1998, respectively.
Realized gains on sales of available-for-sale securities were $ 6 million,
$6 million and $5 million for the year ended September 30, 1999, 1998 and 1997,
respectively. Realized losses on sales of available-for-sale securities were
$5 million, $1 million and $2 million for the years ended September 30, 1999,
1998 and 1997, respectively.
-41-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Finance Receivables
- ----------------------------
Finance receivables, net consisted of the following:
<TABLE>
<CAPTION>
September 30,
----------------------
1999 1998
------- -------
(Dollars in Millions)
<S> <C> <C>
Retail............................... $ 9,524 $ 8,395
Finance leases....................... 4,065 2,856
Wholesale and other dealer loans..... 1,292 1,099
------- -------
14,881 12,350
Unearned income...................... (888) (709)
Allowance for credit losses.......... (137) (120)
------- -------
Finance receivables, net.......... $13,856 $11,521
======= =======
</TABLE>
Contractual maturities are as follows:
<TABLE>
<CAPTION>
Due in the Wholesale
Years Ending and Other
September 30, Retail Dealer Loans
------------- ------ ------------
(Dollars in Millions)
<S> <C> <C>
2000.................. $3,018 $ 988
2001.................. 2,528 68
2002.................. 1,981 58
2003.................. 1,335 56
2004.................. 596 64
Thereafter............ 66 58
------ ------
Total.............. $9,524 $1,292
====== ======
</TABLE>
Finance leases, net consisted of the following:
<TABLE>
<CAPTION>
September 30,
---------------------
1999 1998
------ ------
(Dollars in Millions)
<S> <C> <C>
Minimum lease payments.................. $3,242 $2,339
Estimated unguaranteed residual values.. 823 517
------ ------
Finance leases....................... 4,065 2,856
Unearned income......................... (627) (434)
Allowance for credit losses............. (46) (20)
------ ------
Finance leases, net.................. $3,392 $2,402
====== ======
</TABLE>
-42-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Finance Receivables (Continued)
- ----------------------------
The aggregate balances related to finance receivables 60 or more days past due
totaled $17 million and $16 million at September 30, 1999 and 1998,
respectively. Future minimum finance lease payments for each of the five
succeeding years ending September 30, are: 2000 - $789 million; 2001 - $842
million; 2002 - $959 million; 2003 - $447 million and 2004 - $205 million. A
substantial portion of TMCC's finance receivables have historically been repaid
prior to contractual maturity dates; contractual maturities and future minimum
lease payments as shown above should not be considered as necessarily
indicative of future cash collections. The majority of retail and finance
lease receivables do not involve recourse to the dealer in the event of
customer default.
Note 5 - Investments in Operating Leases
- ----------------------------------------
Investments in operating leases, net consisted of the following:
<TABLE>
<CAPTION>
September 30,
----------------------
1999 1998
------- -------
(Dollars in Millions)
<S> <C> <C>
Vehicles................................. $10,246 $11,809
Equipment and other...................... 548 442
------- -------
10,794 12,251
Accumulated depreciation................. (2,124) (2,386)
Allowance for credit losses.............. (65) (100)
------- -------
Investments in operating leases, net.. $ 8,605 $ 9,765
======= =======
</TABLE>
Rental income from operating leases was $2,185 million, $2,372 million and
$2,568 million for the years ended September 30, 1999, 1998 and 1997,
respectively. Future minimum rentals on operating leases for each of the five
succeeding years ending September 30, are: 2000 - $1,646 million; 2001 -
$1,024 million; 2002 - $402 million; 2003 - $88 million; 2004 - $6 million and
thereafter - $2 million. A substantial portion of TMCC's operating lease
contracts have historically been terminated prior to maturity; future minimum
rentals as shown above should not be considered as necessarily indicative of
future cash collections.
-43-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 6 - Allowance for Credit Losses
- ------------------------------------
An analysis of the allowance for credit losses follows:
<TABLE>
<CAPTION>
Years ended September 30,
--------------------------
1999 1998 1997
---- ---- ----
(Dollars in Millions)
<S> <C> <C> <C>
Allowance for credit losses
at beginning of period........... $220 $213 $203
Provision for credit losses......... 83 127 136
Charge-offs......................... (104) (120) (116)
Recoveries.......................... 17 17 12
Other adjustments................... (14) (17) (22)
---- ---- ----
Allowance for credit losses
at end of period................. $202 $220 $213
==== ==== ====
</TABLE>
Note 7 - Sale of Retail Receivables and Interests in Lease Finance Receivables
- ------------------------------------------------------------------------------
TMCC maintains programs to sell retail receivables and interests in lease
finance receivables through limited purpose subsidiaries TMCRC and TLI,
respectively. During fiscal year 1999, TMCC sold interests in lease finance
receivables totaling $780 million and retail finance receivables totaling $989
million, as described below.
TMCC holds an Undivided Trust Interest ("UTI") in leases held in a titling
trust established by TMCC. In December 1998, TMCC identified certain leases
included in the UTI to be allocated to a separate portfolio represented by a
Special Unit of Beneficial Interest ("SUBI") totaling $780 million. TMCC then
sold the SUBI to TLI which in turn contributed substantially all of the SUBI
to a trust; TMCC continues to act as servicer for all assets represented by
the UTI and the SUBI and is paid a servicing fee. TLI retains subordinated
interests in the excess cash flows of these transactions, certain cash
deposits and other related amounts which are held as restricted assets subject
to limited recourse provisions. None of the lease assets represented by the
SUBI or the restricted assets are available to satisfy any obligations of
TMCC.
-44-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - Sale of Retail Receivables and Interests in Lease Finance Receivables
- ------------------------------------------------------------------------------
(Continued)
Following is a summary of amounts included in investment in marketable
securities and other receivables:
<TABLE>
<CAPTION>
September 30,
---------------------
1999 1998
---- ----
(Dollars in Millions)
<S>
Investment in marketable securities <C> <C>
Interest only strips................ $130 $114
Allowance for estimated credit and
residual value losses on sold
receivables....................... (76) (62)
Undivided interest in trust......... 54 53
---- ----
Total........................... $108 $105
==== ====
Other Receivables................... $108 $ 78
==== ====
</TABLE>
The pretax gain resulting from the sale of interests in lease finance
receivables and retail receivables totaled approximately $8 million, $15
million and $23 million in fiscal 1999, 1998 and 1997, respectively, after
providing an allowance for estimated credit and residual value losses.
Principal collections related to the lease receivables sold in December 1998
were used to purchase additional vehicle lease contracts resulting in gains of
approximately $7 million for fiscal 1999.
During fiscal 1999, TMCC recorded an adjustment to other receivables totaling
$19 million to recognize the impairment of an asset retained in the fiscal
1997 sale of interests in lease finance receivables. The impairment was
recognized when the future undiscounted cash flows of the asset was estimated
to be insufficient to recover its related carrying value. The impairment
adjustment is included in investment and other income.
The outstanding balance of the lease finance receivables represented by the
sold SUBI which TMCC continues to service totaled $3.1 billion and $2.8
billion at September 30, 1999 and 1998, respectively. The outstanding balance
of sold retail finance receivables which TMCC continues to service totaled
$1.0 billion and $493 million at September 30, 1999 and 1998, respectively.
-45-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8 - Notes and Loans Payable
- --------------------------------
Notes and loans payable at September 30, 1999 and 1998, which consisted of
senior debt, included the following:
<TABLE>
<CAPTION>
September 30,
----------------------
1999 1998
------- -------
(Dollars in Millions)
<S> <C> <C>
Commercial paper, net................... $ 1,427 $ 2,546
Extendible commercial notes, net.......... 146 -
------- -------
Other senior debt, due in the years
ending September 30,:
1999.............................. - 1,943
2000.............................. 4,077 2,521
2001.............................. 3,213 2,678
2002.............................. 2,718 2,689
2003.............................. 2,095 1,884
2004.............................. 2,466 899
Thereafter........................ 2,336 2,324
------- -------
16,905 14,938
Unamortized premium..................... 87 113
------- -------
Total other senior debt........... 16,992 15,051
------- -------
Notes and loans payable........ $18,565 $17,597
======= =======
</TABLE>
Short-term borrowings include commercial paper, extendible commercial notes and
certain medium-term notes ("MTNs"). The weighted average remaining term of
commercial paper was 21 days and 15 days at September 30, 1999 and 1998,
respectively. The weighted average interest rate on commercial paper was 5.33%
and 5.57% at September 30, 1999 and 1998, respectively. The weighted average
remaining term and weighted average interest rate on extendible commercial
notes at September 30, 1999 was 18 days and 5.39%, respectively. Short-term
MTNs with original terms of one year or less, included in other senior debt,
were $1,358 million and $488 million at September 30, 1999 and 1998,
respectively. The weighted average interest rate on these short-term MTNs was
5.57% and 5.52% at September 30, 1999 and 1998, respectively, including the
effect of interest rate swap agreements.
The weighted average interest rate on other senior debt was 5.45% and 5.65% at
September 30, 1999 and 1998, respectively, including the effect of interest
rate swap agreements and option-based products. The rates have been calculated
using rates in effect at September 30, 1999 and 1998, some of which are
floating rates that reset daily. Less than one percent of other senior debt at
September 30, 1999 had interest rates, including the effect of interest rate
swap agreements, that were fixed for a period of more than one year. The
weighted average of these fixed interest rates was 5.28% at September 30, 1999.
Approximately 41% of other senior debt at September 30, 1999 had floating
interest rates that were covered by option-based products. The weighted
average strike rate on these option-based products was 5.83% at September 30,
1999. TMCC manages interest rate risk through continuous adjustment of the mix
of fixed and floating rate debt using interest rate swap agreements and option-
based products.
-46-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8 - Notes and Loans Payable (Continued)
- --------------------------------
Included in notes and loans payable at September 30, 1999 and 1998 were
unsecured notes denominated in various foreign currencies as follows:
<TABLE>
<CAPTION>
September 30,
------------------------------
1999 1998
----------- -----------
(Amounts in Millions)
<S> <C> <C>
British pound sterling.............. 675 564
Danish kroner....................... 400 400
Dutch guilder....................... 250 250
French franc........................ 1,545 1,545
German deutsche mark................ 3,342 3,442
Greek drachma....................... 5,000 5,000
Hong Kong dollar.................... 618 -
Italian lire........................ 477,300 927,300
Japanese yen........................ 140,268 134,240
Luxembourg franc.................... 2,000 2,000
New Zealand dollar.................. 200 200
Singapore dollar.................... 200 -
South African rand.................. 250 250
Swedish kronor...................... 1,060 1,060
Swiss franc......................... 3,110 3,385
</TABLE>
Concurrent with the issuance of these unsecured notes, TMCC entered into cross
currency interest rate swap agreements to convert these obligations at maturity
into U.S. dollar obligations which in aggregate total a principal amount of
$8.2 billion at September 30, 1999. TMCC's foreign currency debt was
translated into U.S. dollars in the financial statements at the various foreign
currency spot exchange rates in effect at September 30, 1999. The receivables
or payables arising as a result of the differences between the September 30,
1999 foreign currency spot exchange rates and the contract rates applicable to
the cross currency interest rate swap agreements are classified in other
receivables or accounts payable and accrued expenses, respectively, and would
in aggregate total a net payable position of $621 million at September 30,
1999.
-47-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 9 - Fair Value of Financial Instruments
- --------------------------------------------
The fair value of financial instruments at September 30, 1999 and 1998, was
estimated using the valuation methodologies described below. Considerable
judgement was employed in interpreting market data to develop estimates of fair
value; accordingly, the estimates presented herein are not necessarily
indicative of the amounts that the Company could realize in a current market
exchange. The use of different market assumptions or valuation methodologies
could have a material effect on the estimated fair value amounts.
The carrying amounts and estimated fair values of the Company's financial
instruments at September 30, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
September 30,
---------------------------------------------------
1999 1998
------------------------ ------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
----------- ---------- ----------- ----------
(Dollars in Millions)
<S> <C> <C> <C> <C>
Balance sheet financial
instruments:
Assets:
Cash and cash equivalents........... $180 $180 $156 $156
Investments in marketable
securities....................... $450 $450 $435 $435
Retail finance receivables, net..... $10,464 $10,279 $9,120 $9,164
Other receivables................... $271 $271 $157 $157
Receivables from cross currency
interest rate swap agreements.... $95 $117 $147 $292
Liabilities:
Notes and loans payable............. $18,565 $19,401 $17,597 $18,376
Payables from cross currency
interest rate swap agreements.... $716 $466 $667 $401
Other payables...................... $380 $380 $328 $328
</TABLE>
-48-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 9 - Fair Value of Financial Instruments (Continued)
- --------------------------------------------
<TABLE>
<CAPTION>
September 30,
-------------------------------------------------
1999 1998
----------------------- ------------------------
Contract or Unrealized Contract or Unrealized
Notional Gains/ Notional Gains/
Amount (Losses) Amount (Losses)
----------- ---------- ----------- ----------
(Dollars in Millions)
<S> <C> <C> <C> <C>
Off-balance sheet
financial instruments:
Cross currency interest
rate swap agreements.... $8,764 $(453) $8,969 $(92)
Interest rate swap
agreements.............. $8,980 $24 $7,284 $346
Option-based products...... $6,850 $41 $6,300 $5
Indexed note swap
agreements.............. $1,318 $2 $755 $(30)
</TABLE>
The fair value estimates presented herein are based on information available to
management as of September 30, 1999 and 1998.
The methods and assumptions used to estimate the fair value of financial
instruments are summarized as follows:
Cash and Cash Equivalents
-------------------------
The carrying amount of cash and cash equivalents approximates market value due
to the short maturity of these investments.
Investments in Marketable Securities
------------------------------------
The fair value of marketable securities was estimated using quoted market
prices or discounted cash flow analysis.
Retail Finance Receivables
--------------------------
The carrying amounts of $1.1 billion and 1.0 billion of variable rate finance
receivables at September 30, 1999 and 1998,respectably, were assumed to
approximate fair value as these receivables reprice at prevailing market rates.
The fair value of fixed rate finance receivables was estimated by discounting
expected cash flows using the rates at which loans of similar credit quality
and maturity would be originated as of September 30, 1999 and 1998.
-49-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 9 - Fair Value of Financial Instruments (Continued)
- --------------------------------------------
Other Receivables and Other Payables
------------------------------------
The carrying amount and fair value of other receivables and other payables are
presented separately from the receivables and payables arising from cross
currency interest rate swap agreements. The carrying amount of the remaining
other receivables and payables approximate market value due to the short
maturity of these instruments.
Notes and Loans Payable
-----------------------
The fair value of notes and loans payable was estimated by discounting expected
cash flows using the interest rates at which debt of similar credit quality and
maturity would be issued as of September 30, 1999 and 1998. The carrying
amount of commercial paper and extendible commercial notes were assumed to
approximate fair value due to the short maturity of these instruments.
Cross Currency Interest Rate Swap Agreements
--------------------------------------------
The estimated fair value of TMCC's outstanding cross currency interest rate
swap agreements was derived by discounting expected cash flows using quoted
market exchange rates and quoted market interest rates as of September 30, 1999
and 1998.
Interest Rate Swap Agreements
-----------------------------
The estimated fair value of TMCC's outstanding interest rate swap agreements
was derived by discounting expected cash flows using quoted market interest
rates as of September 30, 1999 and 1998.
Option-based Products
---------------------
The estimated fair value of TMCC's outstanding option-based products was
derived by discounting expected cash flows using market exchange rates and
market interest rates as of September 30, 1999 and 1998.
Indexed Note Swap Agreements
----------------------------
The estimated fair value of TMCC's outstanding indexed note swap agreements was
derived using quoted market prices as of September 30, 1999 and 1998.
-50-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10 - Financial Instruments with Off-Balance Sheet Risk
- -----------------------------------------------------------
Inventory Lines of Credit
- -------------------------
TMCC has extended inventory floorplan lines of credit to dealers, the unused
portion of which amounted to $1.5 billion and $1.0 billion at September 30,
1999 and 1998, respectively. Security interests are acquired in vehicles and
equipment financed and substantially all such financings are backed by
corporate or individual guarantees from or on behalf of the participating
dealers.
Derivative Financial Instruments
- --------------------------------
TMCC utilizes a variety of derivative financial instruments to manage its
currency exchange rate risk arising as a result of borrowings denominated in
foreign currencies and its interest rate risk as explained in this note. TMCC
does not enter into these arrangements for trading purposes.
A reconciliation of the activity of TMCC's derivative financial instruments for
the years ended September 30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
September 30,
----------------------------------------------------------------
Cross
Currency
Interest Interest Indexed
Rate Swap Rate Swap Option-based Note Swap
Agreements Agreements Products Agreements
------------ ------------ ------------- ------------
1999 1998 1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ---- ---- ----
(Dollars in Billions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning Notional Amount... $9.0 $6.5 $7.3 $6.3 $6.3 $5.6 $0.8 $2.4
Add:
New agreements........... 0.5 3.6 4.7 3.1 2.7 2.6 0.8 0.3
Less:
Expired agreements....... 0.7 1.1 3.0 2.1 2.1 1.9 0.3 1.9
---- ---- ---- ---- ---- ---- ---- ----
Ending Notional Amount...... $8.8 $9.0 $9.0 $7.3 $6.9 $6.3 $1.3 $0.8
==== ==== ==== ==== ==== ==== ==== ====
</TABLE>
-51-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10 - Financial Instruments with Off-Balance Sheet Risk (Continued)
- -----------------------------------------------------------
Interest Rate Risk Management
- -----------------------------
TMCC utilizes interest rate swap agreements in managing its exposure to
interest rate fluctuations. Interest rate swap agreements are executed as an
integral part of specific debt transactions or on a portfolio basis. TMCC's
interest rate swap agreements involve agreements to pay fixed and receive a
floating rate, or receive fixed and pay a floating rate, at specified
intervals, calculated on an agreed-upon notional amount. Interest rate swap
agreements may also involve basis swap contracts which are agreements to
exchange the difference between certain floating interest amounts, such as the
net payment based on the commercial paper rate and the London Interbank Offered
Rate ("LIBOR"), calculated on an agreed-upon notional amount. The original
maturities of interest rate swap agreements ranged from one to five years at
September 30, 1999.
TMCC also utilizes option-based products in managing its exposure to interest
rate fluctuations. Option-based products are executed on a portfolio basis and
consist primarily of purchased interest rate cap agreements and to a lesser
extent corridor agreements. Option-based products are agreements which either
grant TMCC the right to receive or require TMCC to make payments at specified
interest rate levels. Approximately 41% of TMCC's other senior debt at
September 30, 1999 had floating interest rates that were covered by option-
based products which had an average strike rate of 5.83%. The premiums paid
for option-based products are included in deferred charges and are amortized to
interest expense over the life of the instruments on a straight-line basis.
Amounts receivable under option-based products are recorded as a reduction to
interest expense. The original maturities of option-based products ranged from
one to four years at September 30, 1999.
The aggregate notional amounts of interest rate swap agreements and option-
based products outstanding at September 30, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
September 30,
---------------------
1999 1998
---- ----
(Dollars in Billions)
<S> <C> <C>
Floating rate swaps............................ $8.3 $5.2
Basis swaps.................................... 0.6 1.0
Fixed rate swaps............................... 0.1 1.1
---- ----
Total interest rate swap agreements........ $9.0 $7.3
==== ====
Option-based products.......................... $6.9 $6.3
==== ====
</TABLE>
-52-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10 - Financial Instruments with Off-Balance Sheet Risk (Continued)
- -----------------------------------------------------------
Interest Rate Risk Management (Continued)
- -----------------------------
TMCC utilizes indexed note swap agreements in managing its exposure in
connection with debt instruments whose interest rate and/or principal
redemption amounts are derived from other underlying instruments. Indexed note
swap agreements involve agreements to receive interest and/or principal amounts
associated with the indexed notes, denominated in either U.S. dollars or a
foreign currency, and to pay fixed or floating rates on fixed U.S. dollar
liabilities. At September 30, 1999, TMCC was the counterparty to $1.3 billion
of indexed note swap agreements, of which $0.4 billion was denominated in
foreign currencies and $0.9 billion was denominated in U.S. dollars. At
September 30, 1998, TMCC was the counterparty to $0.8 billion of indexed note
swap agreements, of which $0.3 billion was denominated in foreign currencies
and $0.5 billion was denominated in U.S. dollars. The original maturities of
indexed note swap agreements ranged from one to ten years at September 30,
1999.
The notional amounts of interest rate and indexed note swap agreements and
option-based products do not represent amounts exchanged by the parties and,
thus, are not a measure of the Company's exposure through its use of
derivatives. The amounts exchanged are calculated based on the notional
amounts and other terms of the derivatives which relate to interest rates or
financial or other indexes.
Foreign Exchange Risk Management
- --------------------------------
TMCC utilizes cross currency interest rate swap agreements to manage exposure
to exchange rate fluctuations on principal and interest payments for borrowings
denominated in foreign currencies. Notes and loans payable issued in foreign
currencies are hedged by concurrently executed cross currency interest rate
swap agreements which involve the exchange of foreign currency principal and
interest obligations for U.S. dollar obligations at agreed-upon currency
exchange and interest rates. The aggregate notional amounts of cross currency
interest rate swap agreements at September 30, 1999 and 1998 were $8.8 billion
and $9.0 billion, respectively. The original maturities of cross currency
interest rate swap agreements ranged from one to ten years at September 30,
1999.
-53-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10 - Financial Instruments with Off-Balance Sheet Risk (Continued)
- -----------------------------------------------------------
Credit Risk Management
- ----------------------
TMCC manages the risk of counterparty default through the use of credit
standard guidelines, counterparty diversification and monitoring of
counterparty financial condition. At September 30, 1999, approximately 89% of
TMCC's derivative financial instruments, based on notional amounts, were with
commercial banks and investment banking firms assigned investment grade ratings
of "AA" or better by national rating agencies. TMCC does not anticipate non-
performance by any of its counterparties and has no reserves related to non-
performance as of September 30, 1999; TMCC has not experienced any counterparty
default during the three years ended September 30, 1999. Additionally, TMCC's
loss in the event of counterparty default is partially mitigated as a result of
master netting agreements in place with all derivative counterparties which
allow the net difference between TMCC and each counterparty to be exchanged in
the event of default.
Credit exposure of derivative financial instruments is represented by the fair
value of contracts with a positive fair value at September 30, 1999 reduced by
the effects of master netting agreements. The credit exposure of TMCC's
derivative financial instruments at September 30, 1999 was $88 million on an
aggregate notional amount of $26 billion.
Note 11 - Pension and Other Benefit Plans
- -----------------------------------------
All full-time employees of the Company are eligible to participate in the TMS
pension plan commencing on the first day of the month following hire. Benefits
payable under this non-contributory defined benefit pension plan are based upon
the employees' years of credited service and the highest sixty consecutive
months' compensation, reduced by a percentage of social security benefits. The
Company's pension expense was $6 million for the year ended September 30, 1999,
and $4 million for each of the years ended September 30, 1998 and 1997. At
September 30, 1999, 1998 and 1997, the accumulated benefit obligation and plan
net assets for employees of the Company were not determined separately from
TMS; however, the plan's net assets available for benefits exceeded the
accumulated benefit obligation. TMS funding policy is to contribute annually
the maximum amount deductible for federal income tax purposes.
-54-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 12 - Provision for Income Taxes
- ------------------------------------
The provision for income taxes consisted of the following:
<TABLE>
<CAPTION>
Years ended September 30,
--------------------------
1999 1998 1997
---- ---- ----
(Dollars in Millions)
<S> <C> <C> <C>
Current
Federal........................... $(130) $(317) $(14)
State............................. 17 (16) (14)
---- ---- ----
Total current ................. (113) (333) (28)
---- ---- ----
Deferred
Federal........................... 202 399 109
State............................. 9 41 40
---- ---- ----
Total deferred................. 211 440 149
---- ---- ----
Provision for income taxes.. $ 98 $107 $121
==== ==== ====
</TABLE>
A reconciliation between the provision for income taxes computed by applying
the federal statutory tax rate to income before income taxes and actual income
taxes provided is as follows:
<TABLE>
<CAPTION>
Years ended September 30,
-------------------------
1999 1998 1997
---- ---- ----
(Dollars in Millions)
<S> <C> <C> <C>
Provision for income taxes at
federal statutory tax rate......... $ 81 $ 88 $ 99
State and local taxes (net of
federal tax benefit)............... 17 17 17
Other, including changes in
applicable state tax rates......... - 2 5
---- ---- ----
Provision for income taxes......... $ 98 $107 $121
==== ==== ====
Effective tax rate.................... 42.53% 42.81% 42.69%
</TABLE>
-55-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 12 - Provision for Income Taxes (Continued)
- ------------------------------------
The deferred federal and state income tax liabilities are as follows:
<TABLE>
<CAPTION>
September 30,
---------------------
1999 1998
---- ----
(Dollars in Millions)
<S> <C> <C>
Federal........................................ $1,403 $1,235
State.......................................... 151 144
------ ------
Net deferred income tax liability........... $1,554 $1,379
====== ======
</TABLE>
The Company's deferred tax assets and liabilities consisted of the following:
<TABLE>
<CAPTION>
September 30,
---------------------
1999 1998
---- ----
(Dollars in Millions)
<S> <C> <C>
Assets:
Alternative minimum tax..................... $ 137 $ 304
Provision for losses........................ 59 65
Deferred administrative fees................ 82 71
NOL carryforwards........................... 34 42
Deferred acquisition costs.................. 21 8
Unearned insurance premiums................. 4 4
Revenue recognition......................... 1 1
Other....................................... 2 2
------ ------
Deferred tax assets...................... 340 497
------ ------
Liabilities:
Lease transactions.......................... 1,696 1,679
State taxes................................. 188 189
Other....................................... 10 8
------ ------
Deferred tax liabilities................. 1,894 1,876
------ ------
Valuation allowance...................... - -
------ ------
Net deferred income tax liability..... $1,554 $1,379
====== ======
</TABLE>
TMCC has state tax net operating loss carryforwards of $496 million which
expire beginning in fiscal 2000 through 2015.
-56-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13 - Comprehensive Income
- ------------------------------
The Company's total comprehensive earnings were as follows:
<TABLE>
<CAPTION>
Years Ended September 30,
-------------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
(Dollars in Millions)
Net income.................................... $ 132 $ 144 $ 162
Other comprehensive income:
Net unrealized gains arising during
period (net of tax of $2, $4 and $3
in 1999, 1998 and 1997).............. 4 9 7
Less: reclassification adjustment for
gains included in net income
(net of tax of $1, $2 and $1
in 1999, 1998 and 1997)........... (2) (3) (2)
------ ------ ------
Net unrealized gain on available-for-sale
marketable securities................... 2 6 5
------ ------ ------
Total Comprehensive Income................. $ 134 $ 150 $ 167
====== ====== ======
</TABLE>
-57-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 14 - Related Party Transactions
- ------------------------------------
An operating agreement with TMS and Toyota Motor Manufacturing North America
Inc. ("TMMNA") (the "Operating Agreement") provides that 100% ownership of TMCC
will be retained by TMS as long as TMCC has any funded debt outstanding and
that TMS and TMMNA will provide necessary equity contributions or other
financial assistance it deems appropriate to ensure that TMCC maintains a
minimum coverage on fixed charges of 1.10 times such charges in any fiscal
quarter. The coverage provision of the Operating Agreement is solely for the
benefit of the holders of TMCC's commercial paper and extendible commercial
notes. The Operating Agreement may be amended or terminated at any time
without notice to, or the consent of, holders of other TMCC obligations. The
Operating Agreement does not constitute a guarantee by TMS of any obligations
of TMCC.
TMCC has an arrangement to borrow and invest funds with TMS at short term
market rates. For the years ended September 30, 1999, 1998 and 1997, TMCC had
no borrowings from TMS. The Operating Agreement provides that borrowings from
TMS are subordinated to all other indebtedness of TMCC. For the years ended
September 30, 1999, 1998 and 1997, the highest amounts of funds invested with
TMS were $2 billion, $567 million and $817 million, respectively; interest
earned on these investments totaled $41 million, $3 million and $5 million for
the years ended September 30, 1999, 1998 and 1997, respectively.
Under an arrangement with the Parent, TMS provided support to TMCC for certain
vehicle disposition losses incurred during fiscal 1998. TMS support amounts
included in the Consolidated Statement of Income related to this arrangement
totaled $80 million for the year ended September 30, 1998. TMCC did not
receive any Parent support for vehicle disposition losses during fiscal 1999.
TMS provides certain technical and administrative services and incurs certain
expenses on the Company's behalf and, accordingly, allocates these charges to
the Company. The charges, reimbursed by TMCC to TMS, totaled $25 million,
$13 million and $12 million for the years ended September 30, 1999, 1998 and
1997, respectively. In addition, TMS sponsors special retail and lease
programs offered by TMCC; for the years ended September 30, 1999, 1998 and
1997, TMCC recognized revenue of $126 million, $142 million and $174 million,
respectively, related to TMS sponsored programs.
The Company leases its headquarters facility and Iowa Service Center from TMS;
rent expense paid to TMS for these facilities totaled $4 million, $3 million
and $3 million for the years ended September 30, 1999, 1998 and 1997,
respectively. TMCC leases a corporate aircraft to TMS and provides wholesale
financing for TMS affiliates; TMCC recognized revenue related to these
arrangements of $6 million, $7 million and $5 million for the years ended
September 30, 1999, 1998 and 1997, respectively.
TMIS provides certain insurance services, and insurance and reinsurance
coverages, respectively, to TMS. Premiums, commissions and fees earned on
these services for the years ended September 30, 1999, 1998 and 1997 totaled
$24 million, $18 million and $12 million, respectively.
In April 1999, Toyota Credit Canada Inc., an affiliate of the Company, paid off
$201 million in intercompany loans. Interest charged on these loans reflected
market rates and totaled $8 million for the year ended September 30, 1999.
-58-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 15 - Lines of Credit/Standby Letters of Credit
- ---------------------------------------------------
To support its commercial paper program, TMCC maintains syndicated bank credit
facilities with certain banks which aggregated $2.7 billion and $3.0 billion at
September 30, 1999 and 1998, respectively. No loans were outstanding under any
of these bank credit facilities as of September 30, 1999 or 1998.
To facilitate and maintain letters of credit, TMCC maintains, along with TMS,
uncommitted, unsecured lines of credit with banks totaling $175 million as of
September 30, 1999 and 1998. Approximately $13 million and $12 million in
letters of credit had been issued as of September 30, 1999, and 1998,
respectively.
Note 16 - Commitments and Contingent Liabilities
- ------------------------------------------------
At September 30, 1999, the Company was a lessee under lease agreements for
facilities with minimum future commitments as follows: years ending
September 30, 2000 - $14 million; 2001 - $12 million; 2002 - $10 million;
2003 - $7 million; 2004 - $4 million and thereafter - $4 million.
TMCC has guaranteed payments of principal and interest on $58 million principal
amount of flexible rate demand pollution control revenue bonds maturing in
2006, issued in connection with the Kentucky manufacturing facility of an
affiliate.
Effective August 1999, TMCC has guaranteed payments of principal, interest and
premiums, if any, on $67.5 million principal amount of flexible rate demand
solid waste disposal revenue bonds issued by Putnam County, West Virginia, of
which $40 million matures in June 2028, and $27.5 million matures in August
2029. The bonds were issued in connection with the West Virginia manufacturing
facility of an affiliate.
Effective February 1999, TMCC has guaranteed payments of principal, interest
and premiums, if any, on $30 million principal amount of flexible rate demand
pollution control revenue bonds issued by Gibson County, Indiana, of which $10
million matures in October 2027, January 2028 and January 2029. The bonds were
issued in connection with the Indiana manufacturing facility of an affiliate.
Effective July 1999, TMCC has authorized a guarantee of up to $50 million of
the debt of TCA, of which $40 million has been guaranteed as of September 30,
1999.
TMCC has guaranteed the obligations of TMIS relating to vehicle service
insurance agreements issued in several states. These guarantees have been
given without regard to any security and without any limitation as to duration
or amount.
An operating agreement between TMCC and TCPR (the "Agreement"), provides that
TMCC will make necessary equity contributions or provide other financial
assistance TMCC deems appropriate to ensure that TCPR maintains a minimum
coverage on fixed charges of 1.10 times such fixed charges in any fiscal
quarter. The Agreement does not constitute a guarantee by TMCC of any
obligations of TCPR. The fixed charge coverage provision of the Agreement is
solely for the benefit of the holders of TCPR's commercial paper, and the
Agreement may be amended or terminated at any time without notice to, or the
consent of, holders of other TCPR obligations.
-59-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 16 - Commitments and Contingent Liabilities (Continued)
- ------------------------------------------------
Various legal actions, governmental proceedings and other claims are pending or
may be instituted or asserted in the future against TMCC and its subsidiaries
with respect to matters arising from the ordinary course of business. Certain
of these actions are or purport to be class action suits, seeking sizeable
damages. Certain of these actions are similar to suits which have been filed
against other financial institutions and captive finance companies. Management
and internal and external counsel perform periodic reviews of pending claims
and actions to determine the probability of adverse verdicts and resulting
amounts of liability. The amounts of liability on pending claims and actions
as of September 30, 1999 were not determinable; however, in the opinion of
management, the ultimate liability resulting therefrom should not have a
material adverse effect on TMCC's consolidated financial position or results of
operations.
Note 17 - Segment Information
- -----------------------------
The Company's operating segments include finance and insurance operations.
Finance operations include retail leasing, retail and wholesale financing and
certain other financial services to authorized Toyota and Lexus vehicle and
Toyota industrial equipment dealers and their customers in the United States
(excluding Hawaii) and Puerto Rico. Insurance operations are performed by TMIS
and subsidiaries. The principal activities of TMIS include marketing,
underwriting, claims administration and providing certain coverages related to
vehicle service agreements and contractual liability agreements sold by or
through Toyota and Lexus vehicle dealers and affiliates to customers in the
United States (excluding Hawaii). In addition, the insurance subsidiaries
insure and reinsure certain TMS and TMCC risks.
The accounting policies of the operating segments are the same as those
described in Note 2 of the Notes to Consolidated Financial Statements. The
Company reports consolidated financial information for both external and
internal purposes. Currently, TMCC's finance and insurance segments operate
only in the United States and Puerto Rico.
-60-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 17 - Segment Information (Continued)
- -----------------------------
Financial results for the Company's operating segments are summarized below:
<TABLE>
<CAPTION>
September 30,
---------------------------------------
1999 1998 1997
--------- --------- ---------
(Dollars in Millions)
<S> <C> <C> <C>
Assets:
Financing operations.................... $ 24,156 $ 22,858 $ 19,519
Insurance operations.................... 732 630 447
Eliminations/reclassifications.......... (310) (263) (136)
--------- --------- ---------
Total assets.......................... $ 24,578 $ 23,225 $ 19,830
========= ========= =========
Gross revenues:
Financing operations.................... $ 3,215 $ 3,295 $ 3,311
Insurance operations.................... 141 136 125
Eliminations............................ - - (8)
--------- --------- ---------
Total gross revenues.................. $ 3,356 $ 3,431 $ 3,428
========= ========= =========
Depreciation and amortization:
Financing operations.................... $ 1,710 $ 1,825 $ 1,821
Insurance operations.................... 1 1 1
--------- --------- ---------
Total depreciation and amortization... $ 1,711 $ 1,826 $ 1,822
========= ========= =========
Interest Expense:
Financing operations.................... $ 940 $ 994 $ 918
Insurance operations.................... - - -
--------- --------- ---------
Total interest expense $ 940 $ 994 $ 918
========= ========= =========
Interest Income:
Financing operations.................... $ 9 $ 1 $ -
Insurance operations.................... 20 19 15
--------- --------- ---------
Total interest income $ 29 $ 20 $ 15
========= ========= =========
Income tax expense:
Financing operations.................... $ 87 $ 92 $ 108
Insurance operations.................... 11 15 13
--------- --------- ---------
Total income tax expense.............. $ 98 $ 107 $ 121
========= ========= =========
Net Income:
Financing operations.................... $ 113 $ 119 $ 142
Insurance operations.................... 19 25 20
--------- --------- ---------
Net Income............................ $ 132 $ 144 $ 162
========= ========= =========
Capital expenditures:
Financing operations.................... $ 33 $ 32 $ 14
Insurance operations.................... 4 1 1
--------- --------- ---------
Total capital expenditures............ $ 37 $ 33 $ 15
========= ========= =========
</TABLE>
-61-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 18 - Selected Quarterly Financial Data (Unaudited)
- -------------------------------------------------------
<TABLE>
<CAPTION>
Total
Financing Interest Depreciation Net
Revenues Expense on Leases Income
---------- -------- ------------ --------
(Dollars in Millions)
<S> <C> <C> <C> <C>
Year Ended September 30, 1999:
First quarter.............. $ 805 $243 $ 431 $ 35
Second quarter............. 786 220 427 28
Third quarter.............. 788 230 410 39
Fourth quarter............. 786 247 396 30
------ ---- ------ ----
Total................... $3,165 $940 $1,664 $132
====== ==== ====== ====
Year Ended September 30, 1998:
First quarter.............. $ 796 $234 $ 422 $ 37
Second quarter............. 800 239 414 30
Third quarter.............. 812 249 423 32
Fourth quarter............. 832 272 422 45
------ ---- ------ ----
Total................... $3,240 $994 $1,681 $144
====== ==== ====== ====
Year Ended September 30, 1997:
First quarter.............. $ 830 $227 $ 471 $ 38
Second quarter............. 829 225 446 47
Third quarter.............. 812 228 438 44
Fourth quarter............. 794 238 426 33
------ ---- ------ ----
Total................... $3,265 $918 $1,781 $162
====== ==== ====== ====
</TABLE>
Note 19 - Subsequent Events
- ---------------------------
In December 1999, TMCC increased its investment in TCA from 15% to 33%.
Accordingly, the Company will change its method of carrying the investment
from cost to equity method in fiscal 2000 as required by generally accepted
accounting principles.
-62-
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There is nothing to report with regard to this item.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth certain information regarding the directors and
executive officers of TMCC as of November 30, 1999.
Name Age Position
---- --- --------
Yoshimi Inaba............. 53 Director and President, TMCC;
Director and President, TMS;
Director, TMC
George Borst ............. 51 Director, Senior Vice President
and General Manager, TMCC;
Senior Vice President, TMS
Nobukazu Tsurumi.......... 51 Director, Group Vice President
and Treasurer, TMCC
Robert Pitts.............. 51 Director and Secretary, TMCC;
Group Vice President, TMS
James Press............... 53 Director, TMCC; Director and
Executive Vice President, TMS
Chiaki Yamaguchi.......... 49 Director, TMCC; Senior Vice
President and Treasurer, TMS
Douglas West.............. 54 Director, TMCC; Senior Vice
President and Secretary, TMS
Ryuji Araki............... 59 Director, TMCC; Senior Managing
Director, TMC
Michael Deaderick......... 53 Group Vice President - Operations
and Assistant Secretary, TMCC; Group
Vice President, TMS
All directors of TMCC are elected annually and hold office until their
successors are elected and qualified. Officers are elected annually and serve
at the pleasure of the Board of Directors.
Mr. Inaba was named Director and President of TMCC and TMS in June 1999. From
June 1997 to June 1999, Mr. Inaba was the General Manager of the Europe,
Africa and United Kingdom Division of TMC. In addition, Mr. Inaba became a
member of TMC's Board of Directors in 1997. From June 1996 to May 1997, Mr.
Inaba was Senior Vice President of TMS. From August 1995 to May 1996, Mr.
Inaba was Group Vice President of TMS. Mr. Inaba has been employed with TMC,
in various positions worldwide, since 1968.
Mr. Borst was named Director and Senior Vice President and General Manager of
TMCC in April 1997 and Senior Vice President of TMS in June 1997. From January
1993 to May 1997, Mr. Borst was Group Vice President of TMS. From April 1989
to December 1992, Mr. Borst was a Vice President of TMS. Mr. Borst has been
employed with TMS, in various positions, since 1985.
-63-
<PAGE>
Mr. Tsurumi was named Director, Group Vice President and Treasurer of TMCC and
Vice President of TMS in January 1999. From January 1996 to December 1998, Mr.
Tsurumi was Managing Director for Toyota Finance Australia. From January 1994
to December 1995, Mr. Tsurumi was Deputy General Manager of the Accounting
Division of TMC. Mr. Tsurumi has been employed with TMC, in various positions
worldwide, since 1971.
Mr. Pitts was named Director of TMCC and Group Vice President of TMS in April
1993 and Secretary of TMCC in April 1997. From January 1984 to March 1993, he
was an executive with TMCC having been named General Manager in January 1984
and Vice President in April 1989. Mr. Pitts has been employed with TMS and
TMCC, in various positions, since 1971.
Mr. Press was named Director of TMCC in July 1999. He is also a Director and
Executive Vice President of TMS, positions he has held since June, 1996 and
July 1999, respectively. From March 1998 to July 1999, he was a Senior Vice
President of TMS. From April 1995 to March 1998, Mr. Press was Senior Vice
President and General Manager of Lexus. Mr. Press has been employed with TMS,
in various positions, since 1970.
Mr. Yamaguchi was named Director of TMCC and Senior Vice President and
Treasurer of TMS in May 1998. Mr. Yamaguchi became the General Manager of the
Financial Planning and Insurance Department of TMC in January 1997 and became
the General Manager of Funds and Foreign Exchange Management Department in
January 1998. From February 1990 to December 1996, Mr. Yamaguchi worked for
Chairman Shoichiro Toyoda as an Executive Assistant in the Toyota head office.
Mr. Yamaguchi has been employed with TMC, in various positions worldwide, since
1972.
Mr. West was named Director of TMCC and Senior Vice President and Secretary of
TMS in June 1996. From June 1996 to March 1997, Mr. West was also a Senior
Vice President and Secretary of TMCC. From April 1993 to May 1996, Mr. West
was a Group Vice President of TMS. Mr. West has been employed with TMS, in
various positions, since 1982.
Mr. Araki was named Director of TMCC in September 1995. He was named Managing
Director of TMC's Board of Directors in June 1997 and has served on TMC's Board
of Directors since September 1992. Mr. Araki has been employed with TMC, in
various positions, since 1962.
Mr. Deaderick was named Group Vice President - Operations of TMCC in April 1998
and Assistant Secretary in April 1997. From April 1995 to April 1998, Mr.
Deaderick was Vice President - Marketing and Operations of TMCC. From February
1990 to April 1995, Mr. Deaderick was Vice President and General Manager of
TMIS. Mr. Deaderick has been employed with TMCC and TMS, in various positions,
since 1971.
-64-
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table sets forth all compensation awarded to, earned by, or paid
to the Company's Principal Executive Officer and the most highly compensated
executive officers whose salary and bonus for the latest fiscal year exceeded
$100,000, for services rendered in all capacities to the Company for the fiscal
years ended September 30, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
Annual Compensation
--------------------------------------------
Other Annual All
Name and Fiscal Compensation Other
Principal Position Year Salary ($) Bonus ($) ($)<F1> ($)<F2>
- --------------------- ------ ---------- --------- ------------ -------
<S> <C> <C> <C> <C> <C>
George Borst <F3> 1999 $273,400 $162,300 - $8,700
Principal Executive 1998 $237,700 $150,300 - $3,300
Officer 1997 $115,500 $56,700 - $3,300
Nobukazu Tsurumi <F4> 1999 $117,700 $25,300 $23,800 -
Group Vice President 1998 N/A N/A N/A N/A
1997 N/A N/A N/A N/A
Michael Deaderick 1999 $215,300 $120,000 - $7,900
Group Vice President 1998 $193,200 $94,400 - $7,000
1997 $176,600 $81,600 - $6,400
<FN>
- ------------
<F1> The amounts in this column represent housing allowances and relocation
costs.
<F2> The amounts in this column represent the Company's allocated contribution
under the TMS Savings Plan (the "Plan"), a tax-qualified 401(k) Plan.
Participants in the Plan may elect, subject to applicable law, to contribute up
to 15% of their base compensation on a pre-tax basis to which the Company adds
an amount equal to two-thirds of the first 6% of the employee's contribution.
Participants are vested 25% each year with respect to the Company's
contribution and are fully vested after four years. Subject to the limitations
of the Plan, employee and Company contributions are invested in various
investment options at the discretion of the employee. TMS also maintains a
401(k) Excess Plan, a non-qualified deferred compensation plan which has
similar provisions to the Saving Plan.
<F3> Effective April 1, 1997, Mr. Borst was appointed as Principal Executive
Officer. The compensation presented for Mr. Borst in fiscal year 1997 reflects
amounts earned for services to the Company during the partial period of the
fiscal year Mr. Borst served as Principal Executive Officer.
<F4> Effective January 1, 1999, Mr. Tsurumi was appointed as Group Vice
President and Treasurer. The compensation presented for Mr. Tsurumi for fiscal
year 1999 reflects amounts earned for services to the Company during the
partial period of the fiscal year served.
</FN>
</TABLE>
-65-
<PAGE>
Employee Benefit Plan
The following pension plan table presents typical annual retirement benefits
under the TMS Pension Plan for various combinations of compensation and years
of credited service for participants who retire at age 62, assuming no final
average bonus and excluding Social Security offset amounts. The amounts are
subject to Federal statutory limitations governing pension calculations and
benefits.
<TABLE>
<CAPTION>
Annual Benefits for
Final Average Years of Credited Service
Annual ------------------------------------
Compensation 15 20 25
------------- -------- -------- --------
<S> <C> <C> <C>
$50,000 $15,000 $20,000 $25,000
$100,000 $30,000 $40,000 $50,000
$150,000 $45,000 $60,000 $75,000
$200,000 $60,000 $80,000 $100,000
$250,000 $75,000 $100,000 $125,000
$300,000 $90,000 $120,000 $150,000
$350,000 $105,000 $140,000 $175,000
$400,000 $120,000 $160,000 $200,000
$450,000 $135,000 $180,000 $225,000
$500,000 $150,000 $200,000 $250,000
</TABLE>
All full-time employees of the Company are eligible to participate in the TMS
Pension Plan commencing on the first day of the month following hire. Benefits
payable under this non-contributory defined benefit pension plan are based upon
final average compensation, final average bonus and years of credited service.
Final average compensation is defined as the average of the participant's base
rate of pay, plus overtime, during the highest-paid 60 consecutive months prior
to the earlier of termination or normal retirement. Final average bonus is
defined as the highest average of the participant's fiscal year bonus, and
basic seniority-based cash bonus for non-managerial personnel, over a period of
60 consecutive months prior to the earlier of termination or normal retirement.
A participant generally becomes eligible for the normal retirement benefit at
age 62, and may be eligible for early retirement benefits starting at age 55.
The annual normal retirement benefit under the Pension Plan, payable monthly,
is an amount equal to the number of years of credited service (up to 25 years)
multiplied by the sum of (i) 2% of the participant's final average compensation
less 2% of the estimated annual Social Security benefit payable to the
participant at normal retirement and (ii) 1% of the participant's final average
bonus. The normal retirement benefit is subject to reduction for certain
benefits under any union-sponsored retirement plan and benefits attributable to
employer contributions under any defined-contribution retirement plan
maintained by TMS and its subsidiaries or any affiliate that has been merged
into the TMS Pension Plan.
-66-
<PAGE>
The TMS Supplemental Executive Retirement Plan (TMS SERP), a non-qualified non-
contributing benefit plan, authorizes a benefit to be paid to eligible
executives, including Mr. Borst and Mr. Deaderick. Benefits under the TMS
SERP, expressed as an annuity payable monthly, are based on 2% of the
executive's compensation recognized under the plan multiplied by the years of
service credited under the plan (up to a maximum of 30), offset by benefits
payable under the TMS Pension Plan and the executive's primary Social Security
benefit. A covered participant's compensation may include base pay and a
percentage (not in excess of 100%) of bonus pay, depending on the executive's
length of service in certain executive positions. Similarly, years of service
credited under the plan are determined by reference, in part, to the
executive's length of service in certain executive positions. No benefit is
payable under the TMS SERP to an executive unless the executive's termination
of employment occurs on a date, after the executive reaches age 55, that is
agreed in writing by the President of TMS and the executive; and the executive
is vested in benefits under the TMS Pension Plan, or unless the executive
accepts an invitation to retire extended by the President of TMS.
Mr. Borst is a participant in the TMS Pension Plan and the TMS SERP, and had
14 years of total credited service as of September 30, 1999. Based upon years
of credited service allocable to TMCC, Mr. Borst may be entitled to receive
approximately $22,000 in annual pension plan benefits when Mr. Borst reaches
age 62. Mr. Borst also may be entitled to receive pension benefits from TMS
based upon services to and compensation by TMS.
Mr. Deaderick is a participant in the TMS Pension Plan and the TMS SERP, and
had 25 years of total credited service as of September 30, 1999. Based upon
years of credited service allocable to TMCC, Mr. Deaderick may be entitled to
receive approximately $74,000 in annual pension plan benefits when Mr.
Deaderick reaches age 62. Mr. Deaderick also may be entitled to receive
pension benefits from TMS based upon services to and compensation by TMS.
Compensation of Directors
No amounts are paid to members of the TMCC Board of Directors for their
services as directors.
Compensation Committee Interlocks and Insider Participation
Members of the Executive Committee of the Board of Directors, which consists of
the directors of TMCC other than Mr. Araki, participate in decisions regarding
the compensation of the executive officers of the Company. Certain of the
members of the Executive Committee are current or former executive officers of
the Company. Certain of the members of the Executive Committee are also
current executive officers and directors of TMS and its affiliates and
participate in compensation decisions for those entities.
-67-
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
As of the date hereof, all of TMCC's capital stock is owned by TMS.
ITEM 13. CERTAIN RELATIONSHIPS AND TRANSACTIONS.
Transactions between the Company, TMS and TMMNA are included in Note 2,
Note 11, Note 14, Note 15 and Note 16 of the Notes to the Consolidated
Financial Statements as well as Item 1 and Item 7. Certain directors and
executive officers of TMCC are also directors and executive officers of TMS as
described in Item 10.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)(1)Financial Statements
Included in Part II, Item 8 of this Form 10-K. See Index to
Financial Statements on page 29.
(2)Exhibits
The exhibits listed on the accompanying Exhibit Index, starting on
page 70, are filed as part of, or incorporated by reference into,
this Report.
(b)Reports on Form 8-K
There were no reports on Form 8-K filed by the registrant during the
quarter ended September 30, 1999.
-68-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Torrance,
State of California, on the 20th day of December, 1999.
TOYOTA MOTOR CREDIT CORPORATION
By /S/ GEORGE E. BORST
------------------------------
George E. Borst
Senior Vice President
and General Manager
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities indicated on the 20th day of December, 1999.
Signature Title
--------- -----
Senior Vice President and General
Manager and Director
/S/ GEORGE E. BORST (Principal Executive Officer)
- ------------------------------------
George E. Borst
Group Vice President/
Treasurer and Director
/S/ NOBUKAZU TSURUMI (Principal Financial Officer)
- ------------------------------------
Nobukazu Tsurumi
Vice President - Finance
and Administration
/S/ GREGORY WILLIS (Principal Accounting Officer)
- ------------------------------------
Gregory Willis
/S/ JAMES PRESS Director
- ------------------------------------
James Press
/S/ DOUGLAS WEST Director
- ------------------------------------
Douglas West
/S/ ROBERT PITTS Director
- ------------------------------------
Robert Pitts
-69-
<PAGE>
EXHIBIT INDEX
Method
Exhibit of
Number Description Filing
- ------- ----------- --------
3.1(a) Articles of Incorporation filed with the California
Secretary of State on October 4, 1982. (1)
3.1(b) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
January 24, 1984. (1)
3.1(c) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
January 25, 1985. (1)
3.1(d) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
September 6, 1985. (1)
3.1(e) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
February 28, 1986. (1)
3.1(f) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
December 3, 1986. (1)
3.1(g) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
March 9, 1987. (1)
3.1(h) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
December 20, 1989. (2)
3.2 Bylaws as amended through January 16, 1993. (6)
4.1 Issuing and Paying Agency Agreement dated August 1,
1990 between TMCC and Bankers Trust Company. (3)
4.2(a) Indenture dated as of August 1, 1991 between TMCC and
The Chase Manhattan Bank, N.A. (4)
- -----------------
(1) Incorporated herein by reference to the same numbered Exhibit filed
with TMCC's Registration Statement on Form S-1, File No. 33-22440.
(2) Incorporated herein by reference to the same numbered Exhibit filed
with TMCC's Report on Form 10-K for the year ended September 30, 1989,
Commission File number 1-9961.
(3) Incorporated herein by reference to Exhibit 4.2 filed with TMCC's
Report on Form 10-K for the year ended September 30, 1990,
Commission File number 1-9961.
(4) Incorporated herein by reference to Exhibit 4.1(a), filed with TMCC's
Registration Statement on Form S-3, File No. 33-52359.
(6) Incorporated herein by reference to the same numbered Exhibit filed
with TMCC's Report on Form 10-K for the year ended September 30, 1993,
Commission File number 1-9961.
-70-
<PAGE>
EXHIBIT INDEX
Method
Exhibit of
Number Description Filing
- ------- ----------- ------
4.2(b) First Supplemental Indenture dated as of
October 1, 1991 among TMCC, Bankers Trust Company
and The Chase Manhattan Bank, N.A. (5)
4.3(a) Second Amended and Restated Agency Agreement dated
July 24, 1997 among TMCC, The Chase Manhattan Bank
and Chase Manhattan Bank Luxembourg S.A. (19)
4.3(b) Amendment No.1 to Second Amended and Restated Agency
Agreement dated July 24, 1998 among TMCC, The Chase
Manhattan Bank and Chase Manhattan Bank Luxembourg S.A. (21)
4.3(c) Amendment No.2 to Second Amended and Restated Agency Filed
Agreement dated July 23, 1999 among TMCC, The Chase Herewith
Manhattan Bank and Chase Manhattan Bank Luxembourg S.A.
4.4 TMCC has outstanding certain long-term debt as set
forth in Note 8 of the Notes to Consolidated Financial
Statements. Not filed herein as an exhibit, pursuant
to Item 601(b) (4)(iii)(A) of Regulation S-K under
the Securities Act of 1933, is any instrument which
defines the rights of holders of such long-term debt,
where the total amount of securities authorized
thereunder does not exceed 10% of the total assets
of TMCC and its subsidiaries on a consolidated
basis. TMCC agrees to furnish copies of all such
instruments to the Securities and Exchange Commission
upon request.
10.1(a) Operating Agreement dated January 16, 1984 between
TMCC and TMS. (15)
10.1(b) Amendment No. 1 to Operating Agreement dated May 14, 1996
between TMCC and TMS. (11)
10.1(c) Amendment No. 2 to Operating Agreement dated December 1,
1997 between TMCC, TMS and TMMNA (20)
- -----------------
(5) Incorporated herein by reference to Exhibit 4.1 filed with TMCC's
Current Report on Form 8-K dated October 16, 1991, Commission File
No. 1-9961.
(11) Incorporated herein by reference to Exhibit 10.1 filed with TMCC's
Report on Form 10-Q for the quarter ended March 31, 1996, Commission
File No. 1-9961.
(15) Incorporated herein by reference to Exhibit 10.1 filed with TMCC's
Registration Statement on Form S-1, File No. 33-22440.
(19) Incorporated herein by reference to Exhibit 4.3(a) filed with TMCC's
Current Report on Form 10-K for the year ended September 30, 1997,
Commission File No. 1-9961.
(20) Incorporated herein by reference to Exhibit 10.1(c) filed with TMCC's
Current Report on Form 10-K for the year ended September 30, 1997,
Commission File No. 1-9961.
(21) Incorporated herein by reference to Exhibit 4.3(b) filed with TMCC's
Current Report on Form 10-K for the year ended September 30, 1998,
Commission File No. 1-9961.
-71-
<PAGE>
EXHIBIT INDEX
Method
Exhibit of
Number Description Filing
- ------- ----------- ------
10.1(d) Amendment No. 3 to Operating Agreement dated June 1, 1999
between TMCC, TMS and TMMNA (22)
10.4 Form of Indemnification Agreement between TMCC and
its directors and officers. (12)
10.5(a) Three-year Credit Agreement (the "Three-year Agreement")
dated as of September 29, 1994 among TMCC, Morgan
Guaranty Trust Company of New York, as agent, and
Bank of America National Trust and Savings Association,
The Bank of Tokyo, Ltd., The Chase Manhattan Bank, N.A.,
Citicorp USA, Inc. and Credit Suisse, as Co-Agents. (13)
10.5(b) Amendment No. 1 dated September 28, 1995 to the
Three-year Agreement. (14)
10.5(c) Amended and Restated Credit Agreement dated
September 24, 1996 to the Three-year Agreement. (16)
10.5(d) Amended and Restated Credit Agreement dated
September 23, 1997 to the Three-year Agreement. (17)
10.5 (e) Amendment dated March 19, 1999 to the Filed
Three-year Agreement Herewith
10.5(f) Amended and Restated Credit Agreement dated Filed
September 17, 1999 to the Three-year Agreement. Herewith
10.5(g) Fourth Amended and Restated 364-Day Credit Agreement
dated September 17, 1999 among TMCC, Bank of America
N.A. as Administrative Agent, The Chase Manhattan
Bank as Syndication Agent, The Bank of Tokyo-Mitsubishi
Ltd., and Citicorp USA, Inc. as Documentation Agents,
Banc of America Securities LLC as Sole Lead Arranger Filed
and Sole Book Manager and the other Banks named therein. Herewith
- ----------------
(12) Incorporated herein by reference to Exhibit 10.6 filed with TMCC's
Registration Statement on Form S-1, Commission File No. 33-22440.
(13) Incorporated herein by reference to Exhibit 10.10 filed with TMCC's
Report on Form 10-K for the year ended September 30, 1994,
Commission File No. 1-9961.
(14) Incorporated herein by reference to Exhibit 10.10(a) filed
with TMCC's Report on Form 10-K for the year ended September 30, 1995,
Commission File No. 1-9961.
(16) Incorporated herein by reference to Exhibit 10.9(d) filed with TMCC's
Report on Form 10-K for the year ended September 30, 1996, Commission
File No. 1-9961.
(17) Incorporated herein by reference to Exhibit 10.5(f) filed with TMCC's
Report on Form 10-K for the year ended September 30, 1997, Commission
File No. 1-9961.
(22) Incorporated herein by reference to Exhibit 10.1 filed with TMCC's
Report on Form 10-Q for the quarter ended June 30, 1999, Commission
File No. 1-9961.
-72-
<PAGE>
EXHIBIT INDEX
Method
Exhibit of
Number Description Filing
- ------- ----------- ------
10.6 Toyota Motor Sales, U.S.A., Inc. Supplemental
Executive Retirement Plan. * (9)
10.7 Toyota Motor Sales, U.S.A., Inc. 401(k)
Excess Plan. * (10)
10.8 Amended and Restated Trust and Servicing Agreement
dated as of October 1, 1996 by and among TMCC,
TMTT, Inc., as titling trustee and U.S. Bank National
Association, as trust agent. (18)
12.1 Calculation of ratio of earnings to fixed charges. Filed
Herewith
21.1 TMCC's list of subsidiaries. Filed
Herewith
23.1 Consent of Independent Accountants. Filed
Herewith
27.1 Financial Data Schedule. Filed
Herewith
- ----------------
(9) Incorporated herein by reference to Exhibit 10.1 filed with TMCC's
Report on Form 10-Q for the quarter ended December 31, 1995, Commission
File No. 1-9961.
(10) Incorporated herein by reference to Exhibit 10.2 filed with TMCC's
Report on Form 10-Q for the quarter ended December 31, 1995, Commission
File No. 1-9961.
(18) Incorporated herein by reference to Exhibit 4.1 filed with Toyota Auto
Lease Trust 1997-A's Report on Form 8-A dated December 23, 1997,
Commission File No. 333-26717
*- Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to applicable rules of the Securities and
Exchange Commission.
-73-
<PAGE>
Exhibit 4.3(c)
Final
AMENDMENT NO. 2
TO
SECOND AMENDED AND RESTATED AGENCY AGREEMENT
in respect of
TOYOTA MOTOR CREDIT CORPORATION'S
EURO MEDIUM-TERM NOTE PROGRAM
This Amendment No. 2, dated as of July 23, 1999 ("Amendment No. 2"),
is made to the Second Amended and Restated Agency Agreement, dated as of
July 24, 1997, as amended by Amendment No. 1, dated as of July 24, 1998 (as
amended, the "Agreement"), among Toyota Motor Credit Corporation, as Issuer
(the "Company"), The Chase Manhattan Bank, as Agent (the "Agent"), and Chase
Manhattan Bank Luxembourg S.A., as paying agent (the "Paying Agent") in
respect of the Company's Euro Medium-Term Note Program. Except as otherwise
defined herein, capitalized terms used herein shall have the same meanings
ascribed to them in the Agreement.
WHEREAS, the Company, the Agent and the Paying Agent desire to amend
the Agreement to make certain changes to the Agreement.
NOW, THEREFORE, in consideration of the foregoing and for, other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree to amend the Agreement as follows:
A. Clause 1 (Definitions and Interpretation) is amended as follows:
1. The definition of "Cedel Bank" is amended in its entirety as follows:
"Cedel Bank" or "Cedelbank" means Cedelbank.
2. The definition of "Dealer" is amended in its entirety as follows:
"Dealer" means each of Merrill Lynch International, Credit Suisse First
Boston (Europe) Limited, Goldman Sachs International, Lehman Brothers
International (Europe), J.P. Morgan Securities Ltd., Morgan Stanley &
Co. International Limited, Nomura International plc, Paribas and UBS
AG, acting through its division Warburg Dillon Read, and any other
entities appointed as dealers from time to time pursuant to the Program
Agreement;.
3. The definition of "Euro" is amended in its entirety as follows:
"Euro" or "euro" means the currency introduced at the start of the
third stage of European economic and monetary union pursuant to the
Treaty.
4. The definition of "French francs" is amended in its entirety as
follows:
1
<PAGE>
"French francs" or "FRF" means the lawful currency for the time being
of France, in addition to the euro. (Pursuant to the Treaty, French
francs will cease to exist on January 1, 2002.)
5. The definition of "ISDA Definitions" is amended in its entirety as
follows:
"ISDA Definitions" means the 1991 ISDA Definitions, as supplemented by
the 1998 Supplement and the 1998 ISDA Euro Definitions, each as
published by the International Swaps and Derivatives Association, Inc.,
as amended, supplemented or updated from time to time.
6. The definition of "Listing Agent" is amended in its entirety as
follows:
"Listing Agent" means Merrill Lynch International of Ropemaker Place,
25 Ropemaker Street, London EC2Y 9LY (in the case of Notes Listed on
the London Stock Exchange) or such other listing agent as the Company
may from time to time appoint for purposes of liaising with any Stock
Exchange.
7. The definition of "Noteholders" is amended in its entirety as follows.
"Noteholders" means the several persons who are for the time being
holders of outstanding Notes save that for so long as any of the Notes
are represented by a Global Note, each person who is for the time being
shown in the records of Euroclear, Cedelbank or such other applicable
clearing agency as the holder of a particular principal amount of such
Notes (other than a clearing agency (including Cedelbank and Euroclear)
that is itself an account holder of Cedelbank, Euroclear or any other
applicable clearing agency for a Series of Notes) (in which regard any
certificate or other document issued by Euroclear, Cedelbank or such
other applicable clearing agency as to the nominal amount of such Notes
standing to the account of any person shall be conclusive and binding
for all purposes save in the case of manifest error) shall be treated
by the Company, the Agent and any other Paying Agent as a holder of
such nominal amount of such Notes for all purposes other than for the
payment of principal (including premium (if any)) or interest on such
Notes, the right to which shall be vested, as against the Company, the
Agent and any other Paying Agent, solely in the bearer of the Global
Note in accordance with and subject to its terms (and the expressions
"Noteholder", "holder of Notes" and related expressions shall be
construed accordingly).
8. The definition of "Outstanding" is amended in its entirety as follows:
"Outstanding" means, in relation to the Notes, all the Notes issued
other than (a) those which have been redeemed in full in accordance
with this Agreement or the Conditions, (b) those in respect of which
the date for redemption in accordance with the Conditions has occurred
and the redemption moneys therefor (including all interest (if any)
accrued thereon to the date for such redemption and any interest (if
any) payable under the Conditions after such date) have been duly paid
2
<PAGE>
to the Agent as provided herein (and, where appropriate, notice has
been given to the Noteholders in accordance with Condition 16) and
remain available for payment against presentation of Notes, (c) those
which have become void under Condition 15, (d) those which have been
purchased or otherwise acquired and cancelled as provided in Condition
5 and those which have been purchased or otherwise acquired and are
being held by the Company for subsequent resale or reissuance as
provided in Condition 5 during the time so held, (e) those mutilated or
defaced Notes which have been surrendered in exchange for replacement
Notes pursuant to Condition 14, (f) (for the purposes only of
determining how many Notes are outstanding and without prejudice to
their status for any other purpose) those Notes alleged to have been
lost, stolen or destroyed and in respect of which replacement Notes
have been issued pursuant to Condition 14 and (g)temporary Global Notes
to the extent that they shall have been duly exchanged in whole for
Permanent Global Notes or Definitive Notes and Permanent Global Notes
to the extent that they shall have been duly exchanged in whole for
Definitive Notes, in each case pursuant to their respective provisions.
9. The definition of "Series" is amended to add the words "Interest Basis,
Redemption/Payment Basis" after "Maturity Date" in the second line of
the definition and delete the words "and Interest/Payment Basis" from
the second line of the definition.
10. The definition of "Tranche" is amended in its entirety as follows:
"Tranche" means all Notes of the same Series with the same Issue Date
and Interest Commencement Date.
11. The following definition is added to the Agreement:
"Treaty" means the Treaty establishing the European Community, as
amended by the Treaty on Economic Union.
B. Clause 3, subclause (1)(c) is amended in its entirety as follows:
to deliver such Temporary Global Note(s) (i) to the specified common
depositary of Euroclear, Cedelbank and/or such other applicable
clearing agency as is specified in the related Pricing Supplement
against receipt from such common depositary of confirmation that such
common depositary is holding the Temporary Global Note(s) in safe
custody for the account of Euroclear, Cedelbank or such other
applicable clearing agency and to instruct Euroclear, Cedelbank and/or
such other applicable clearing agency (as the case may be) to credit
the Notes represented by such Temporary Global Notes(s), unless
otherwise agreed in writing between the Agent and the Company, to the
Agent's distribution account (or in the case of a syndicated bond
issue, the lead manager's account), or (ii) as otherwise agreed in
writing between the Company and the Agent.
C. Clause 4, subclause (1)(c) is amended in its entirety as follows:
(i) where the Temporary Global Note is being held by a common
depository as aforesaid, to deliver such Permanent Global Note to the
3
<PAGE>
specified common depositary that is holding the Temporary Global Note
for the time being on behalf of Euroclear, Cedelbank and/or such other
applicable clearing agency as is specified in the related Pricing
Supplement in exchange for such Temporary Global Note or, in the case
of a partial exchange, after noting the details of such exchange in the
appropriate spaces on both the Temporary Global Note and the Permanent
Global Note, and in either case against receipt from the common
depositary of confirmation that such common depositary is holding the
Permanent Global Note in safe custody for the account of Euroclear,
Cedelbank and/or such other applicable clearing agency (as the case may
be); or (ii) where the Temporary Global Note is not being held by a
common depository, as otherwise agreed in writing between the Company
and the Agent.
D. Clause (7), subclauses (5) and (6) are amended to add the word "Unless
otherwise agreed in writing between the Company and the Agent," to the
beginning of those subclauses.
E. Clause 8, subclause (2)(a) is amended in its entirety as follows:
(a) a day (other than a Saturday or a Sunday) on which commercial banks
and foreign exchange markets settle payments and are open for general
business (including dealings in foreign exchange and foreign currency
deposits) in London.
F. Clause 8, subclause (2)(b) is amended in its entirety as follows:
(b) either (i) in relation to a payment to be made in a Specified
Currency other than ECU or euro, a day on which commercial banks and
foreign exchange markets settle payments and are open for general
business (including dealings in foreign exchange and foreign currency
deposits) in the principal financial center of the country of the
relevant Specified Currency (if other than London), (ii) in relation
to a payment to made in ECU, an ECU Settlement Day, or (iii) in
relation to a payment to be made in euro, a day on which the TARGET
system is open; and
G. Clause 9, subclauses (9)(a) and (9)(b) are amended to add the word
"Linked" after "Indexed".
H. Clause 13, subclause (1) is amended in its entirety as follows:
All Notes which are purchased or otherwise acquired pursuant to the
Conditions by the Company, together (in the case of Definitive Notes)
with all unmatured Receipts, Coupons or Talons (if any) attached
thereto or purchased therewith, may, at the option of the Company,
either be (i) resold or reissued, or held by the Company for subsequent
resale or reissuance, or (ii) cancelled in which event such Notes,
Receipts and Coupons may not be resold or reissued. Where any Notes,
Receipts, Coupons or Talons are purchased and cancelled, resold or
reissued, or held by the Company for subsequent resale or reissuance,
as aforesaid, the Company shall procure that all relevant details are
promptly given to the Agent and that all Notes, Receipts, Coupons or
Talons so cancelled are delivered to the Agent.
4
<PAGE>
I. Clause 14, subclause (4)(b) is amended in its entirety as follows:
(b) furnished it with such evidence (including evidence as to the
serial number of such Note, Receipt, Coupon or Talon) and indemnity or
other security (which may include a bank guarantee and/or security) or
otherwise as the Company and the Agent may reasonably require; and
J. Clause 19, subclause (3) is amended in its entirety as follows:
The Agent and the Paying Agents hereby undertake to the Company to
perform such obligations and duties, and shall be obliged to perform
such duties and only such duties, as are herein, in the Conditions and
in the Procedures Memorandum specifically set forth, or are otherwise
agreed to in writing by the Company, the Agent and the Paying Agents as
applicable, and no implied duties or obligations shall be read into
this Agreement or the Notes against the Agent and the Paying Agents.
K. Clause 25, subclauses (a) and (b) are amended in their entirety as
follows:
(a) if delivered in person to the relevant address specified on the
signature pages of Amendment No 2 (or to such other address as is
specified in writing and delivered to all parties to this Agreement)
and, if so delivered, shall be deemed to have been delivered at time of
receipt;
(b) if sent by facsimile or telex to the relevant number specified on
the signature pages of Amendment No. 2 (or to such other facsimile or
telex numbers as are specified in writing and delivered to all parties
to this Agreement) and, if so sent, shall be deemed to have been
delivered upon transmission provided such transmission is confirmed by
the answer back of the recipient (in the case of telex) or when an
acknowledgment of receipt is received (in the case of facsimile).
L. The paragraph in Clause 28 appearing before subclause (1) is amended in
its entirety as follows:
For purposes of this Clause 28, the term "outstanding" excludes those
Notes which have been purchased or otherwise acquired and are being
held by the Company for subsequent resale or reissuance as provided in
Condition 5 during the time so held.
M. Clause 33, subclause (1)(a) is amended to add the word "in" after the
word "specified" and before the words "Condition 17(a)(i)" in line 12 of
the subclause.
N. Clause 33, subclauses (1)(e), (f) and (g) are amended in their entirety
as follows:
(e) After the Redenomination Date, "Business Day" in relation to any sum
payable in euro shall mean a day on which commercial banks and foreign
exchange markets settle payments and are open for general business
(including dealings in foreign exchange and foreign currency deposits)
in London and New York and a day on which the TARGET system is open.
5
<PAGE>
After the Redenomination Date, "Payment Business Day" shall mean (A) a
"Business Day" as defined herein and (B) a day on which commercial banks
are open for general business (including dealings in foreign exchange
and foreign currency deposits) in the relevant place of presentation.
(f) If definitive Notes have been issued, after the Redenomination Date,
the amount of interest due in respect of Notes will be calculated by
reference to the aggregate nominal amount of Notes presented (or, as the
case may be, in respect of which Receipts or Coupons are presented) for
payment by the relevant holder and the amount of such payment shall be
rounded down to the nearest euro 0.01. If the Notes are in global form,
after the Redenomination Date, the amount of interest due in respect of
Notes represented by the Global Note will be calculated by reference to
the aggregate nominal amount of such Notes and the amount of such
payment shall be rounded down to the nearest euro 0.01.
(g) The applicable Pricing Supplement will specify any relevant changes
to the provisions relating to interest, including without limitation,
any change to the applicable Day Count Fraction and Business Day
Convention.
O. Clause 33, subclause (2) is amended in its entirety as follows:
Where exchange ("Exchange") is specified in the applicable Pricing
Supplement as being applicable, and unless otherwise specified in the
applicable Pricing Supplement, the Company may, without the consent of
any Noteholder, Receiptholder or Couponholder, on giving prior notice to
Euroclear, Cedelbank and the Agent and at least 30 days' prior notice to
the Noteholders as provided in Condition 16, elect that, with effect
from the Redenomination Date specified in the notice, the Notes shall be
exchangeable for Notes expressed to be denominated in euro in accordance
with such arrangements as the Company may decide, after consultation
with the Agent, and as may be specified in the notice, including
arrangements under which Receipts and Coupons (which expression shall
for this purpose include Coupons to be issued on an exchange of matured
Talons) unmatured at the date so specified become void.
P. Appendix A (Terms and Conditions of the Notes) is amended in its
Entirety in the form of Appendix A attached hereto.
Q. Appendix B (Forms of Global and Definitive Notes, Coupons, Receipts and
Talons) is amended in its entirety in the form attached hereto.
R. Appendix C (Form of Calculation Agency Agreement) is amended as follows:
1. The first sentence of Clause A of the form of Calculation Agency
Agreement is amended in its entirety as follows:
The Company has entered into the Second Amended and Restated Program
Agreement with Merrill Lynch International, Credit Suisse First
Boston (Europe) Limited, Goldman Sachs International, Lehman
Brothers International (Europe), J.P. Morgan Securities Ltd., Morgan
Stanley & Co. International Limited, Nomura International plc,
Paribas and UBS AG, acting through its division Warburg Dillon Read,
6
<PAGE>
dated July 24, 1997, as amended by Amendment No. 1 to the Second
Amended and Restated Program Agreement, dated July 24, 1998, and
Amendment No. 2 to the Second Amended and Restated Program
Agreement, dated July 23, 1999 (as amended, the "Program
Agreement"), under which $16,000,000,000 (or its equivalent in other
currencies) in aggregate principal amount of Notes ("Notes") may be
outstanding.
2. The first sentence of Clause B of the form of Calculation Agency
Agreement is amended in its entirety as follows:
The Notes will be issued subject to and with the benefit of the
Second Amended and Restated Agency Agreement, dated as of July 24,
1997, as amended by Amendment No. 1 to the Second Amended and
Restated Agency Agreement, dated as of July 24, 1998, and Amendment
No. 2 to the Second Amended and Restated Agency Agreement, dated as
of July 23, 1999 (as amended, the "Agency Agreement") among the
Company, The Chase Manhattan Bank (the "Agent," which expression
shall include its successor or successors for the time being under
the Agency Agreement) and Chase Manhattan Bank Luxembourg S.A. (the
"Paying Agent," which expression shall include its successor or
successors for the time being under the Agency Agreement).
3. The notice provisions of Section (7) of the form of Calculation Agency
Agreement relating to the Company are amended as follows:
The Company: TOYOTA MOTOR CREDIT CORPORATION
19001 South Western Avenue FN 17
Torrance, California 90509
Telephone No: (310) 618-4001
Fax No. (310) 787-6194
Attention: Vice President, Treasury
S. The first paragraph of Section 4 of Appendix D (Form of Operating &
Administrative Procedures Memorandum) is amended to add the word
"Linked" after the word "Indexed" in the third line of that paragraph.
T. Annex A (Settlement Procedures) to Appendix D (Form of Operating &
Administrative Procedures Memorandum) is amended as follows:
1. Page D-4 under "Issue Date minus 2 days" is amended by the addition of
the words "or Index Linked Interest Notes" after "Floating Rate Notes"
in the first sentence of the first paragraph.
2. The second paragraph on page D-5 under "Issue Date" is amended in its
entirety as follows:
The Agent pays to the Company the aggregate subscription moneys
received by it to such account as the Company shall notify to the
Agent.
3. On page D-5 under Explanatory Notes to Settlement Procedures, clause
(a) is amended in its entirety as follows:
7
<PAGE>
(a) Each "Day" is a day on which banks and foreign exchange markets
are open for general business in London (including dealings in foreign
exchange and foreign currency deposits), counted in reverse order from
the proposed Issue Date.
4. On page D-5 under Explanatory Notes to Settlement Procedures, clause
(b) is amended in its entirety as follows:
The "Issue Date" must be a Business Day. For the purposes of this
Memorandum, "Business Day" means a day which is both:
a day on which commercial banks and foreign exchange markets
settle payments and are open for general business (including
dealings in foreign exchange and foreign currency deposits) in
London; and
(i) in relation to Notes denominated in a Specified Currency
other than euro, a day on which commercial banks and foreign
exchange markets settle payments and are open for general business
(including dealings in foreign exchange and foreign currency
deposits) in the principal financial center of the country of the
relevant Specified Currency (if other than London), or (ii) in
relation to Notes denominated in euro, a day on which the TARGET
system is open. Unless provided otherwise in the applicable
Pricing Supplement, the principal financial center of any country
shall be as provided in the ISDA Definitions (except in the case
of New Zealand and Australia, where the principal financial center
will be as specified in the Pricing Supplement).
5. On page D-6 under Explanatory Notes to Settlement Procedures, clause
(d) is amended by replacing "Sponsor" with "Company".
U. Annex B (Form of Pricing Supplement) to Appendix D (Form of Operating &
Administrative Procedures Memorandum) is amended in its entirety in the
form of Annex B to Appendix D attached hereto.
V. Annex D (Trading Desk Information) to Appendix D (Form of Operating &
Administrative Procedures Memorandum) is amended in its entirety in the
form of Annex D to Appendix D attached hereto.
W. Appendix E (Form of Notes) is amended in its entirety to the form of
Appendix E attached hereto. The form of the Pricing Supplement referred
to in the Form of Notes is set out in full in Annex B to Appendix D
(Form of Operating & Administrative Procedures Memorandum).
8
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 to
the Second Amended and Restated Agency Agreement as of the date above first
written.
The Company
- -----------
TOYOTA MOTOR CREDIT CORPORATION
19001 South Western Avenue, FN 17
Torrance, California 90509
Telephone: (310) 618-4001
Telefax: (310) 787-6194Attention: Vice President, Treasury
By:
-------------------------------
Name: George E. Borst
Title: Senior Vice President and General Manager
The Agent
- ----------
The Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London E1 9YT
Telephone: 01202 347430
Fax: 01202 347438
Telex: 8954681 CMB G
Attention: Manager, Global Trust Services, Operations
By:
-------------------------------
The Paying Agent
- ----------------
Chase Manhattan Bank Luxembourg S.A.
5 Rue Plaetis
L-2338
Luxembourg
Telephone: 00 352 4626 85236
Fax: 00 352 4626 85380
Telex: 1233 CHASE LU
Attention: Manager, Global Trust Services, Operations
By:
-------------------------------
S-1
<PAGE>
APPENDIX A
----------
TERMS AND CONDITIONS OF THE NOTES
---------------------------------
The following are the Terms and Conditions (the "Terms and Conditions" or the
"Conditions") of the Notes issued on or after the date of this Offering
Circular which (subject to completion and amendment and to the extent
applicable) will be attached to or incorporated by reference into each global
Note and which will be incorporated by reference or endorsed upon each
definitive Note. The applicable Pricing Supplement in relation to any Notes
may specify other terms and conditions which shall, to the extent so
specified or to the extent inconsistent with the following Terms and
Conditions, replace or modify the following Terms and Conditions for the
purpose of such Notes. The applicable Pricing Supplement will be endorsed
upon, or attached to, each temporary global Note, permanent global Note and
definitive Note. Reference should be made to "Form of the Notes" in the
Offering Circular dated July 23, 1999 (the "Offering Circular") for the form
of Pricing Supplement which will include the definitions of certain terms
used in the following Terms and Conditions.
This Note is one of a Series (as defined below) of Notes (the "Notes," which
expression shall mean (i) in relation to any Notes represented by a global
Note, units of the lowest Specified Denomination in the Specified Currency of
the relevant Notes, (ii) definitive Notes issued in exchange (or partial
exchange) for a temporary or permanent global Note, and (iii) any global
Note) issued subject to, and with the benefit of, a Second Amended and
Restated Agency Agreement dated as of July 24, 1997, as amended (the "Agency
Agreement"), and made between Toyota Motor Credit Corporation ("TMCC", which
reference does not include the subsidiaries of TMCC) and The Chase Manhattan
Bank, London Office, as issuing agent and (unless specified otherwise in the
applicable Pricing Supplement) principal paying agent and (unless specified
otherwise in the applicable Pricing Supplement) as calculation agent (the
"Agent", which expression shall include any successor agent or any other
Calculation Agent specified in the applicable Pricing Supplement) and the
other paying agents named therein (together with the Agent, the "Paying
Agents", which expression shall include any additional or successor paying
agents).
Interest-bearing definitive Notes will (unless otherwise indicated in the
applicable Pricing Supplement) have interest coupons ("Coupons") and, if
indicated in the applicable Pricing Supplement, talons for further Coupons
("Talons") attached on issue. Any reference herein to Coupons or coupons
shall, unless the context otherwise requires, be deemed to include a
reference to Talons or talons. Definitive Notes repayable in installments
will have receipts ("Receipts") for the payment of the installments of
principal (other than the final installment) attached on issue.
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As used herein, "Series" means all Notes which are denominated in the same
currency and which have the same Maturity Date, Interest Basis,
Redemption/Payment Basis and Interest Payment Dates (if any) (all as
indicated in the applicable Pricing Supplement) and the terms of which
(except for the Issue Date or the Interest Commencement Date (as the case may
be) and/or the Issue Price (as indicated as aforesaid)) are otherwise
identical (including whether or not the Notes are listed) and the expressions
"Notes of the relevant Series" and "holders of Notes of the relevant Series"
and related expressions shall be construed accordingly. As used herein,
"Tranche" means all Notes of the same Series with the same Issue Date and
Interest Commencement Date (if applicable).
The Pricing Supplement applicable to any particular Note or Notes is attached
hereto or endorsed hereon and supplements these Terms and Conditions and may
specify other terms and conditions which shall, to the extent so specified or
to the extent inconsistent with these Terms and Conditions, replace or modify
these Terms and Conditions for the purposes of such Note or Notes.
References herein to the "applicable Pricing Supplement" shall mean the
Pricing Supplement attached hereto or endorsed hereon.
Copies of the Agency Agreement (which contains the form of Pricing
Supplement) and the Pricing Supplement applicable to any particular Note or
Notes (if listed) are available for inspection at the specified offices of
the Agent and each of the other Paying Agents. The holders of the Notes (the
"Noteholders"), which expression shall, in relation to any Notes represented
by a global Note, be construed as provided in Condition 1, the holders of the
Coupons (the "Couponholders") and the holders of Receipts (the
"Receiptholders") are deemed to have notice of, and are entitled to the
benefit of, all the provisions of the Agency Agreement and the applicable
Pricing Supplement, which are binding on them.
A temporary or permanent global Note will be exchangeable in whole, but not
in part, for security printed definitive Notes with, where applicable,
Receipts, Coupons and Talons attached not earlier than the date (the
"Exchange Date") which is 40 days after completion of the distribution of the
relevant Tranche, provided that certification of non-U.S. beneficial
ownership has been received: (i) at the option of TMCC; (ii) unless stated
otherwise in the applicable Pricing Supplement, at the option of holders of
an interest in the temporary or permanent global Note upon such notice as is
specified in the applicable Pricing Supplement from Morgan Guaranty Trust
Company of New York, Brussels office, as operator of the Euroclear System
("Euroclear") or Cedelbank (as the case may be) acting on instructions of the
holders of interest in the temporary or permanent global Note and/or subject
to the payment of costs in connection with the printing and distribution of
the definitive Notes, if specified in the applicable Pricing Supplement;
(iii) if, after the occurrence of an Event of Default, holders representing
at least a majority of the outstanding principal amount of the Notes of a
Series, acting together as a single class, advise the Agent through Euroclear
and Cedelbank that they wish to receive definitive Notes; or (iv) Euroclear,
Cedelbank and any other relevant clearance system for the temporary or
permanent global Note are all no longer willing or able to discharge properly
their responsibilities with respect to such Notes and the Agent and TMCC are
unable to locate a qualified successor.
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Words and expressions defined in the Agency Agreement, defined elsewhere in
the Offering Circular or used in the applicable Pricing Supplement shall have
the same meanings where used in these Terms and Conditions unless the context
otherwise requires or unless otherwise stated and provided that, in the event
of inconsistency between the Agency Agreement and the applicable Pricing
Supplement, the applicable Pricing Supplement will prevail.
A. Form, Denomination and Title
----------------------------
The Notes in this Series are in bearer form and, in the case of definitive
Notes, serially numbered in the Specified Currency (or Currencies in the case
of Dual Currency Notes) and in the Specified Denomination(s) specified in the
applicable Pricing Supplement.
This Note may be a Note bearing interest on a fixed rate basis ("Fixed Rate
Note"), a Note bearing interest on a floating rate basis ("Floating Rate
Note"), a Note issued on a non-interest bearing basis ("Zero Coupon Note"), a
Note with respect to which interest is calculated by reference to an index
and/or a formula ("Indexed Linked Interest Note) or any combination of the
foregoing, depending upon the Interest Basis specified in the applicable
Pricing Supplement. This Note may be a Note with respect to which principal
is calculated by reference to an index and/or a formula ("Index Linked
Redemption Note"), a Note redeemable in installments ("Installment Note"), a
Note with respect to which principal and/or interest is payable in one or
more Specified Currencies other than the Specified Currency in which it is
denominated ("Dual Currency Note"), a Note which is issued on a partly paid
basis ("Partly Paid Note") or a combination of any of the foregoing,
depending on the Redemption/Payment Basis shown in the applicable Pricing
Supplement. (Where appropriate in the context, "Index Linked Interest Notes"
and "Index Linked Redemption Notes" are referred to collectively as "Index
Linked Notes".) The appropriate provisions of these Terms and Conditions will
apply accordingly.
Notes in definitive form are issued with Coupons attached, unless they are
Zero Coupon Notes in which case references to interest (other than interest
due after the Maturity Date), Coupons and Couponholders in these Terms and
Conditions are not applicable. Wherever Dual Currency Notes or Index Linked
Notes are issued to bear interest on a fixed or floating rate basis or on a
non-interest bearing basis, the provisions in these Terms and Conditions
relating to Fixed Rate Notes, Floating Rate Notes and Zero Coupon Notes,
respectively, shall, where the context so admits, apply to such Dual Currency
Notes or Index Linked Notes.
Except as set out below, title to the Notes, Receipts and Coupons will pass
by delivery. The holder of each Coupon or Receipt, whether or not such
Coupon or Receipt is attached to a Note, in his capacity as such, shall be
subject to and bound by all the provisions contained in the relevant Note.
TMCC and any Paying Agent may deem and treat the bearer of any Note, Receipt
or Coupon as the absolute owner thereof (whether or not overdue and
notwithstanding any notice to the contrary, including any notice of ownership
or writing thereon or notice of any previous loss or theft thereof) for all
purposes but, in the case of any global Note, without prejudice to the
provisions set out in the next succeeding paragraph.
A-3
<PAGE>
For so long as any of the Notes are represented by a global Note, each person
who is for the time being shown in the records of Euroclear or of Cedelbank
as the holder of a particular principal amount of Notes other than a clearing
agency (including Cedelbank and Euroclear) that is itself an account holder
of Cedelbank or Euroclear (in which regard any certificate or other document
issued by Euroclear or Cedelbank as to the nominal amount of such Notes
standing to the account of any person shall be conclusive and binding for all
purposes except in the case of manifest error) shall be treated by TMCC, the
Agent and any other Paying Agent as the holder of such nominal amount of such
Notes for all purposes other than with respect to the payment of principal
(including premium (if any)) or interest on the Notes, the right to which
shall be vested, as against TMCC, the Agent and any other Paying Agent solely
in the bearer of the relevant global Note in accordance with and subject to
its terms (and the expressions "Noteholder" and "holder of Notes" and related
expressions shall be construed accordingly). Notes which are represented by
a global Note will be transferable only in accordance with the rules and
procedures for the time being of Euroclear or of Cedelbank, as the case may
be.
Any reference herein to Euroclear and/or Cedelbank shall, whenever the
context so permits, be deemed to include a reference to any additional or
alternative clearance system approved by TMCC and the Agent.
If the Specified Currency of this Note is a currency of one of the member
states participating in European economic and monetary union, and if
specified in the applicable Pricing Supplement, this Note shall permit
Redenomination, Exchange and Consolidation (as defined, and in the manner set
forth, in Condition 17 below or in such other manner as set forth in the
applicable Pricing Supplement) at the option of TMCC.
B. Status of Notes
---------------
The Notes will be unsecured general obligations of TMCC and will rank pari
passu with all other unsecured and unsubordinated indebtedness for borrowed
money of TMCC from time to time outstanding.
C. Further Issues
--------------
If indicated in the applicable Pricing Supplement, TMCC may from time to
time, without the consent of the holders of Notes, Receipts or Coupons of a
Series, create and issue further Notes of the same Series having the same
terms and conditions (or the same terms and conditions save for the first
payment of interest thereon and the Issue Date thereof) with the outstanding
Notes and so that the same shall be consolidated and form a single Series
with the outstanding Notes and references in the Conditions to "Notes" shall
be construed accordingly.
D. Interest
--------
1. Interest on Fixed Rate Notes and Business Day Convention for Notes
other than Floating Rate Notes and Index Linked Interest Notes
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<PAGE>
Each Fixed Rate Note bears interest on its outstanding nominal amount (or if
it is a Partly Paid Note, the amount paid up) from (and including) the
Interest Commencement Date which is specified in the applicable Pricing
Supplement to but excluding the Maturity Date specified in the applicable
Pricing Supplement at the rate(s) per annum equal to the Fixed Rate(s) of
Interest specified in the applicable Pricing Supplement payable in arrears on
the Interest Payment Date(s) in each year and on the Maturity Date so
specified if it does not fall on a Interest Payment Date. Except as provided
in the applicable Pricing Supplement, the amount of interest payable on each
Interest Payment Date in respect of the Fixed Interest Period ending on such
date will amount to the Fixed Coupon Amount as specified in the applicable
Pricing Supplement. Payments of interest on any Interest Payment Date will,
if so specified in the applicable Pricing Supplement, amount to the Broken
Amount(s) so specified. As used in these Conditions, "Fixed Interest Period"
means the period from (and including) an Interest Payment Date (or the
Interest Commencement Date) to (but excluding) the next (or first) Interest
Payment Date or Maturity Date.
Unless specified otherwise in the applicable Pricing Supplement, the
"Following Business Day Convention" will apply to the payment of all Notes
other than Floating Rate Notes or Indexed Linked Interest Notes, meaning that
if the Interest Payment Date or Maturity Date would otherwise fall on a day
which is not a Business Day (as defined in Condition 4(b)(i) below), the
related payment of principal or interest will be made on the next succeeding
Business Day as if made on the date such payment was due. If the "Modified
Following Business Day Convention" is specified in the applicable Pricing
Supplement for any Note (other than a Floating Rate Note or an Index Linked
Interest Note), it shall mean that if the Interest Payment Date or Maturity
Date would otherwise fall on a day which is not a Business Day (as defined in
Condition 4(b)(i) below), the related payment of principal or interest will
be made on the next succeeding Business Day as if made on the date such
payment was due unless it would thereby fall into the next calendar month in
which event the full amount of payment shall be made on the immediately
preceding Business Day as if made on the day such payment was due. Unless
specified otherwise in the applicable Pricing Supplement, the amount of
interest due shall not be changed if payment is made on other than an
Interest Payment Date or the Maturity Date as a result of the application of
a Business Day Convention specified above or other Business Day Convention
specified in the applicable Pricing Supplement.
If interest is required to be calculated for a period ending other than on an
Interest Payment Date (which for this purpose shall not include a period
where a payment is made on a day other than an Interest Payment Date or the
Maturity Date as a result of the application of a Business Day Convention as
provided in the immediately preceding paragraph, unless specified otherwise
in the applicable Pricing Supplement), such interest shall be calculated by
applying the Fixed Rate of Interest to each Specified Denomination,
multiplying such sum by the applicable Fixed Day Count Fraction or other Day
Count Fraction specified in the Pricing Supplement, and rounding the
resultant figure to the nearest sub-unit of the relevant Specified Currency,
half of any such sub-unit being rounded upwards or otherwise in accordance
with applicable market convention.
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<PAGE>
In these Conditions, "Fixed Day Count Fraction" means:
(a) if "Actual/Actual (ISMA)" is specified in the applicable Pricing
Supplement, the number of days in the relevant period from and including the
most recent Interest Payment Date (or, if none, the Interest Commencement
Date) to but excluding the relevant payment date divided by (x) in the case
of Notes where interest is scheduled to be paid only by means of regular
annual payments, the number of days in the period from and including the most
recent Interest Payment Date (or, if none, the Interest Commencement Date) to
but excluding the next scheduled Interest Payment Date or (y) in the case of
Notes where interest is scheduled to be paid other than only by means of
regular annual payments, the product of the number of days in the period from
and including the most recent Interest Payment Date (or, if none, the
Interest Commencement Date) to but excluding the next scheduled Interest
Payment Date and the number of Interest Payment Dates that would occur in one
calendar year assuming interest was to be payable in respect of the whole of
that year;
(b) if "Actual/Actual (ISDA)" is specified in the applicable Pricing
Supplement, the actual number of days in the relevant period divided by 365
(or, if any portion of that period falls in a leap year, the sum of (x) the
actual number of days in that portion of the period falling in a leap year
divided by 366; and (y) the actual number of days in that portion of the
period falling in a non-leap year divided by 365); and
(c) if "30/360" is specified in the applicable Pricing Supplement, the
number of days in the period from and including the most recent Interest
Payment Date (or, if none, the Interest Commencement Date) to but excluding
the relevant payment date (such number of days being calculated on the basis
of 12 30-day months) divided by 360 and, in the case of an incomplete month,
the number of days elapsed; and
(d) "sub-unit" means, with respect to any currency other than euro,
the lowest amount of such currency that is available as legal tender in the
country of such currency and, with respect to euro, means one cent.
2. Interest on Floating Rate Notes and Index Linked Interest Notes
---------------------------------------------------------------
(a) Interest Payment Dates
----------------------
Each Floating Rate Note and Index Linked Interest Note bears interest on its
outstanding nominal amount (or, if it is a Partly Paid Note, the amount paid
up) from (and including) the Interest Commencement Date specified in the
applicable Pricing Supplement and, unless specified otherwise in the
applicable Pricing Supplement, such interest will be payable in arrears on
the Maturity Date and on either:
(1) the Specified Interest Payment Date(s) (each, together with the
Maturity date, an "Interest Payment Date") in each year specified in the
applicable Pricing Supplement; or
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(2) if no Specified Interest Payment Date(s) is/are specified in the
applicable Pricing Supplement, each date (each, together with the Maturity
Date, an "Interest Payment Date") which falls the number of months or other
period specified as the Specified Period in the applicable Pricing Supplement
after the preceding Interest Payment Date or, in the case of the first
Interest Payment Date, after the Interest Commencement Date.
Such interest will be payable in respect of each Interest Period (which
expression shall, in these Terms and Conditions, mean the period from (and
including) an Interest Payment Date (or the Interest Commencement Date) to
(but excluding) the next (or first) Interest Payment Date).
If a Business Day Convention is specified in the applicable Pricing
Supplement and (x) if there is no numerically corresponding day in the
calendar month in which an Interest Payment Date should occur or (y) if any
Interest Payment Date would otherwise fall on a day which is not a Business
Day (as defined below), then, if the Business Day Convention specified is:
(1) in any case where Specified Periods are specified in accordance with
Condition 4(b)(i)(B) above, the Floating Rate Convention, such Interest
Payment Date (i) in the case of (x) above, shall be the last day that is a
Business Day in the relevant month and the provisions of (B) below in this
subparagraph (1) shall apply mutatis mutandis or (ii) in the case of (y)
above, shall be postponed to the next day which is a Business Day unless it
would thereby fall into the next calendar month, in which event (A) such
Interest Payment Date shall be brought forward to the immediately preceding
Business Day and (B) each subsequent Interest Payment Date shall be the last
Business Day in the month which falls the Specified Period after the
preceding applicable Interest Payment Date occurred; or
(2) the Following Business Day Convention, such Interest Payment Date
shall be postponed to the next day which is a Business Day; or
(3) the Modified Following Business Day Convention, such Interest
Payment Date shall be postponed to the next day which is a Business Day
unless it would thereby fall into the next calendar month, in which event
such Interest Payment Date shall be brought forward to the immediately
preceding Business Day; or
(4) the Preceding Business Day Convention, such Interest Payment Date
shall be brought forward to the immediately preceding Business Day.
If the accrual periods for calculating the amount of interest due on any
Interest Payment Date are not to be changed even though an Interest Payment
Date is changed because the originally scheduled Interest Payment Date falls
on a day which is not a Business Day (as defined below), this will be
specified in the Pricing Supplement by the notation "no adjustment for period
end dates."
In these Conditions, "Business Day" means (unless otherwise stated in the
applicable Pricing Supplement) a day which is both:
(1) a day on which commercial banks and foreign exchange markets settle
payments and are open for general business (including dealings in foreign
exchange and foreign currency deposits) in London and any other Applicable
Business Center specified in the applicable Pricing Supplement; and
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(2) either (1) in relation to Notes denominated in a Specified Currency
other than euro, a day on which commercial banks and foreign exchange markets
settle payments and are open for general business (including dealings in
foreign exchange and foreign currency deposits) in the principal financial
center of the country of the relevant Specified Currency (if other than
London and any other Applicable Business Center specified in the applicable
Pricing Supplement), or (2) in relation to Notes denominated in euro, a day
on which the TARGET system (as defined in Condition 17) is open. Unless
otherwise provided in the applicable Pricing Supplement, the principal
financial center of any country for the purpose of these Terms and Conditions
shall be as provided in the 1991 ISDA Definitions, as supplemented by the
1998 Supplement and the 1998 ISDA Euro Definitions (each as published by the
International Swaps and Derivatives Association, Inc.), as amended and
updated as of the Issue Date of the Note (the "ISDA Definitions") (except in
the case of New Zealand and Australia, where the principal financial center
will be as specified in the Pricing Supplement).
(b) Rate of Interest
----------------
The Rate of Interest payable from time to time in respect of each Series of
Floating Rate Notes and Index Linked Interest Notes shall be determined in
the manner specified in the applicable Pricing Supplement.
(c) ISDA Determination
------------------
(1) Where ISDA Determination is specified in the applicable Pricing
Supplement as the manner in which the Rate of Interest is to be determined,
the Rate of Interest for each Interest Period will be the relevant ISDA Rate
plus or minus (as indicated in the applicable Pricing Supplement) the Margin
(if any) as determined by the Agent (or such other Calculation Agent
specified in the applicable Pricing Supplement). For the purposes of this
sub-paragraph (A), "ISDA Rate" for an Interest Period means a rate equal to
the Floating Rate that would be determined under an interest rate swap
transaction for that swap transaction governed by an agreement (regardless of
any event of default or termination event thereunder) in the form of the 1992
ISDA Master Agreement (Multicurrency-Cross Border)(the "ISDA
Agreement")(copyright 1992) and evidenced by a Confirmation (as defined in
the ISDA Agreement) incorporating the ISDA Definitions with the holder of the
relevant Note and under which:
(2) the manner in which the Rate of Interest is to be determined is the
"Floating Rate Option" as specified in the applicable Pricing Supplement;
(3) TMCC is the "Floating Rate Payer";
(4) the Agent or other person specified in the applicable Pricing Supplement
is the "Calculation Agent";
(5) the Interest Commencement Date is the "Effective Date";
(6) the aggregate principal amount of the Series is the "Notional Amount";
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(7) the relevant Interest Period is the "Designated Maturity" as specified in
the applicable Pricing Supplement;
(8) the Interest Payment Dates are the "Floating Rate Payer Payment Dates";
(9) the Margin is the "Spread"; and
(10) the relevant Reset Date is either (i) if the applicable Floating Rate
Option is based on the London inter-bank offered rate ("LIBOR") or on the
Euro-zone inter-bank offered rate ("EURIBOR") for a currency, the first day
of that Interest Period or (ii) in any other case, as specified in the
applicable Pricing Supplement; and
(11) all other terms are as specified in the applicable Pricing Supplement.
When Condition 4(b)(iii)(A) applies, with respect to each relevant Interest
Payment Date:
(1) the amount of interest determined for such Interest Payment Date shall be
the Interest Amount for the relevant Interest Period for the purposes of
these Terms and Conditions as though calculated under Condition 4(b)(vi)
below; and
(2) (i) Floating Rate", "Floating Rate Option", "Floating Rate Payer",
"Effective Date", "Notional Amount", "Floating Rate Payer Payment Dates",
"Spread", "Calculation Agent", "Designated Maturity" and "Reset Date" have
the meanings given to those terms in the ISDA Definitions, (ii) the
definition of "Banking Day" in the ISDA Definitions shall be amended to
insert after the words "are open for" in the second line the word "general"
and (iii) "Euro-zone" means the region comprised of Member States of the
European Union that adopt the single currency in accordance with the Treaty
establishing the European Communities, as amended by the Treaty on European
Union (the "Treaty").
(d) Screen Determination
--------------------
Where Screen Rate Determination is specified in the applicable Pricing
Supplement as the manner in which the Rate of Interest is to be determined,
the Rate of Interest for each Interest Period will, subject as provided
below, be either:
(x) the offered quotation; or
(y) the arithmetic mean (rounded, if necessary, to the fifth decimal place
with 0.000005 being rounded upwards) of the offered quotations,
(expressed as a percentage rate per annum), for the Reference Rate (as
specified in the applicable Pricing Supplement) which appears or appear, as
the case may be, on the Relevant Screen Page (as set forth in the applicable
Pricing Supplement) as at 11:00 a.m. (London time, in the case of LIBOR, or
Brussels time, in the case of EURIBOR) on the Interest Determination Date (as
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defined below) in question plus or minus (as specified in the applicable
Pricing Supplement) the Margin (if any), all as determined by the Agent (or
such other Calculation Agent specified in the applicable Pricing Supplement).
Unless specified otherwise in the applicable Pricing Supplement, if five or
more of such offered quotations are available on the Relevant Screen Page,
the highest (or, if there is more than one such highest quotation, one only
of such quotations) and the lowest (or, if there is more than one such lowest
quotation, one only of such quotations) shall be disregarded by the Agent for
the purpose of determining the arithmetic mean (rounded as provided above) of
such offered quotations. In addition:
(1) if, in the case of (x) above, no such rate appears or, in the case of (y)
above, fewer than two of such offered rates appear at such time or if the
offered rate or rates which appears or appear, as the case may be, as at such
time do not apply to a period of a duration equal to the relevant Interest
Period, the Rate of Interest for such Interest Period shall, subject as
provided below and except as otherwise indicated in the applicable Pricing
Supplement, be the arithmetic mean (rounded, if necessary, to the fifth
decimal place with 0.000005 being rounded upwards) of the offered quotations
(expressed as a percentage rate per annum), of which the Agent (or such other
Calculation Agent specified in the applicable Pricing Supplement) is advised
by all Reference Banks (as defined below) as at 11:00 a.m. (London time) on
the Interest Determination Date plus or minus (as specified in the applicable
Pricing Supplement) the Margin (if any), all as determined by the Agent (or
such other Calculation Agent specified in the applicable Pricing Supplement);
(2) except as otherwise indicated in the applicable Pricing Supplement, if on
any Interest Determination Date to which Condition 4(b)(iv)(A) applies two or
three only of the Reference Banks advise the Agent (or such other Calculation
Agent specified in the applicable Pricing Supplement) of such offered
quotations, the Rate of Interest for the next Interest Period shall, subject
as provided below, be determined as in Condition 4(b)(iv)(A) on the basis of
the rates of those Reference Banks advising such offered quotations;
(3) except as otherwise indicated in the applicable Pricing Supplement, if on
any Interest Determination Date to which Condition 4(b)(iv)(A) applies one
only or none of the Reference Banks advises the Agent (or such other
Calculation Agent specified in the applicable Pricing Supplement) of such
rates, the Rate of Interest for the next Interest Period shall, subject as
provided below and except as otherwise indicated in the applicable Pricing
Supplement, be whichever is the higher of:
(i) the Rate of Interest in effect for the last preceding Interest Period
to which Condition 4(b)(iv)(A) shall have applied (plus or minus (as
specified in the applicable Pricing Supplement), where a different Margin is
to be applied to the next Interest Period than that which applied to the last
preceding Interest Period, the Margin relating to the next Interest Period in
place of the Margin relating to the last preceding Interest Period); or
(ii) the reserve interest rate (the "Reserve Interest Rate") which shall be
the rate per annum which the Agent (or such other Calculation Agent specified
in the applicable Pricing Supplement) determines to be either (x) the
arithmetic mean (rounded, if necessary, to the fifth decimal place with
0.000005 being rounded upwards) of the lending rates for the Specified
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Currency which banks selected by the Agent (or such other Calculation Agent
specified in the applicable Pricing Supplement) in the principal financial
center of the country of the Specified Currency (which, if Australian
dollars, shall be Sydney, if New Zealand dollars, shall be Auckland and if
euro, shall be London, unless specified otherwise in the applicable Pricing
Supplement) are quoting on the relevant Interest Determination Date for the
next Interest Period to the Reference Banks or those of them (being at least
two in number) to which such quotations are, in the opinion of the Agent (or
such other Calculation Agent specified in the applicable Pricing Supplement),
being so made plus or minus (as specified in the applicable Pricing
Supplement) the Margin (if any), or (y) in the event that the Agent (or such
other Calculation Agent specified in the applicable Pricing Supplement) can
determine no such arithmetic mean, the lowest lending rate for the Specified
Currency which banks selected by the Agent (or such other Calculation Agent
specified in the applicable Pricing Supplement) in the principal financial
center of the country of the Specified Currency (which, if Australian
dollars, shall be Sydney, if New Zealand dollars, shall be Auckland and if
euro, shall be London, unless specified otherwise in the applicable Pricing
Supplement) are quoting on such Interest Determination Date to leading
European banks for the next Interest Period plus or minus (as specified in
the applicable Pricing Supplement) the Margin (if any), provided that if the
banks selected as aforesaid by the Agent (or such other Calculation Agent
specified in the applicable Pricing Supplement) are not quoting as mentioned
above, the Rate of Interest shall be the Rate of Interest specified in (1)
above;
(4) the expression "Reference Screen Page" means such page, whatever its
designation, on which the Reference Rate that is for the time being displayed
on the Reuters Monitor Money Rates Service or Dow Jones Markets Limited or
other such service, as specified in the applicable Pricing Supplement;
(5) unless otherwise specified in the applicable Pricing Supplement, the
Reference Banks will be the principal London offices of The Chase Manhattan
Bank, National Westminster Bank PLC, UBS AG and The Bank of Tokyo-Mitsubishi
International PLC. TMCC shall procure that, so long as any Floating Rate
Note or Index Linked Interest Note to which Condition 4(b)(iv)(A) is
applicable remains outstanding, in the case of any bank being unable or
unwilling to continue to act as a Reference Bank, TMCC shall specify the
London office of some other leading bank engaged in the eurodollar market to
act as such in its place;
(6) the expression "Interest Determination Date" means, unless otherwise
specified in the applicable Pricing Supplement, (x) other than in the case of
Condition 4(b)(iv)(A), with respect to Notes denominated in any Specified
Currency other than Sterling or euro, the second Banking Day in London prior
to the commencement of the relevant Interest Period and, in the case of
Condition 4(b)(iv)(A), the second Banking Day in the principal financial
center of the country of the Specified Currency (which, if Australian
dollars, shall be Sydney, if New Zealand dollars, shall be Auckland and if
euro, shall be London) prior to the commencement of the relevant Interest
Period; (y) with respect to Notes denominated in Sterling, the first Banking
Day in London of the relevant Interest Period; and (z) with respect to Notes
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denominated in euro, the second day on which the TARGET system (as defined in
Condition 17(e)) is open prior to the commencement of the relevant Interest
Period.
(7) the expression "Banking Day" means, in respect of any place, any day on
which commercial banks are open for general business (including dealings in
foreign exchange and foreign currency deposits) in that place or, as the case
may be, as indicated in the applicable Pricing Supplement; and
(8) if the Reference Rate from time to time in respect of Floating Rate Notes
or Index Linked Interest Notes is specified in the applicable Pricing
Supplement as being other than LIBOR or EURIBOR, any additional provisions
relevant in determining the Rate of Interest in respect of such Notes will be
set forth in the applicable Pricing Supplement.
(e) Minimum and/or Maximum Rate of Interest
---------------------------------------
If the applicable Pricing Supplement specifies a Minimum Rate of Interest for
any Interest Period, then in no event shall the Rate of Interest for such
Interest Period be less than such Minimum Rate of Interest. If the
applicable Pricing Supplement specifies a Maximum Rate of Interest for any
Interest Period, then in no event shall the Rate of Interest for such
Interest Period be greater than such Maximum Rate of Interest.
(f) Determination of Rate of Interest and Calculation of Interest Amount
--------------------------------------------------------------------
The Agent (or, if the Agent is not the Calculation Agent, the Calculation
Agent specified in the applicable Pricing Supplement) will, at or as soon as
practicable after each time at which the Rate of Interest is to be
determined, determine the Rate of Interest (subject to any Minimum or Maximum
Rate of Interest specified in the applicable Pricing Supplement) and
calculate the amount of interest (the "Interest Amount") payable on the
Floating Rate Notes or Index Linked Interest Notes in respect of each
Specified Denomination for the relevant Interest Period. Each Interest
Amount shall be calculated by applying the Rate of Interest to each Specified
Denomination, multiplying such product by the applicable Day Count Fraction,
as specified in the applicable Pricing Supplement, and rounding the resultant
figure to the nearest sub-unit of the relevant Specified Currency, half of
any sub-unit being rounded upwards or otherwise in accordance with applicable
market convention or as specified in the applicable Pricing Supplement.
"Day Count Fraction" means, in respect of the calculation of an amount of
interest for any Interest Period:
(1) if "Actual/365" or "Actual/Actual" is specified in the applicable
Pricing Supplement, the actual number of days in the Interest Period divided
by 365 (or, if any portion of that Interest Period falls in a leap year, the
sum of (A) the actual number of days in that portion of the Interest Period
falling in a leap year divided by 366 and (B) the actual number of days in
that portion of the Interest Period falling in a non-leap year divided by
365);
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(2) if "Actual/365 (Fixed)" is specified in the applicable Pricing
Supplement, the actual number of days in the Interest Period divided by 365;
(3) if "actual/360" is specified in the applicable Pricing Supplement, the
actual number of days in the Interest Period divided by 360;
(4) if "30/360", "360/360" or "Bond Basis" is specified in the applicable
Pricing Supplement, the number of days in the Interest Period divided by 360
The number of days to be calculated on the basis of a year of 360 days with
12 30-day months (unless (a) the last day in the Interest Period is the 31st
day of a month but the first day of the Interest Period is a day other than
the 30th or 31st day of a month, in which case the month that includes that
last day shall not be considered to be shortened to a 30-day month, or (b)
the last day of the Interest Period is the last day of the month of February,
in which case the month of February shall not be considered to be lengthened
to a 30-day month);
(5) if "30E/360" or "Eurobond Basis" is specified in the applicable Pricing
Supplement, the number of days in the Interest Period divided by 360 (the
number of days to be calculated on the basis of a year of 360 days with 12
30-day months, without regard to the date of the first day or last day of the
Interest Period unless, in the case of an Interest Period ending on the
Maturity Date, the Maturity Date is the last day of the month of February, in
which case the month of February shall not be considered to be lengthened to
a 30-day month); and
(6) if "Sterling/FRN" is specified in the applicable Pricing Supplement,
the number of days in the Interest Period divided by 365 or, in the case of
an Interest Payment Date falling in a leap year, 366.
(g) Notification of Rate of Interest and Interest Amount
----------------------------------------------------
The Agent will notify or cause to be notified TMCC and any stock exchange on
which the relevant Floating Rate Notes or Index Linked Interest Notes are
listed of the Rate of Interest and each Interest Amount for each Interest
Period and the relevant Interest Payment Date and will cause the same to be
published in accordance with Condition 16 as soon as possible after their
determination but in no event later than the fourth London Business Day after
their determination. Each Interest Amount and Interest Payment Date so
notified may subsequently be amended (or appropriate alternative arrangements
made by way of adjustment) without publication as aforesaid or prior notice
in the event of an extension or shortening of the Interest Period in
accordance with the provisions hereof. Each stock exchange on which the
relevant Floating Rate Notes or Index Linked Interest Notes are for the time
being listed will be promptly notified of any such amendment. For the
purposes of this subparagraph (vii), the expression "London Business Day"
means a day (other than a Saturday or a Sunday) on which banks and foreign
exchange markets are open for general business in London.
(h) Certificates to be final
------------------------
All certificates, communications, opinions, determinations, calculations,
quotations and decisions given, expressed, made or obtained for the purposes
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of the provisions of this paragraph (b), whether by the Agent or other
Calculation Agent, shall (in the absence of willful default, bad faith or
manifest error) be binding on TMCC, the Agent, the Calculation Agent the
other Paying Agents and all Noteholders, Receiptholders and Couponholders and
(in the absence as aforesaid) no liability to TMCC, the Noteholders, the
Receiptholders or the Couponholders shall attach to the Agent or the
Calculation Agent in connection with the exercise or non-exercise by it of
its powers, duties and discretions pursuant to such provisions.
(i) Limitations on Interest
-----------------------
In addition to any Maximum Rate of Interest which may be applicable to any
Floating Rate Note or Index Linked Interest Notes pursuant to Condition
4(b)(v) above, the interest rate on Floating Rate Notes or Index Linked
Interest Notes shall in no event be higher than the maximum rate permitted by
New York law, as the same may be modified by United States law of general
application.
(j) Index Linked Notes and Dual Currency Notes
------------------------------------------
In the case of Index Linked Notes or Dual Currency Notes, if the Rate of
Interest or Interest Amount cannot be determined by reference to an index
and/or a formula or, as the case may be, an exchange rate, such Rate of
Interest or Interest Amount payable shall be determined in the manner
specified in the applicable Pricing Supplement.
(k) Zero Coupon Notes
-----------------
When a Zero Coupon Note becomes due and repayable prior to the Maturity Date
and is not paid when due, the amount due and repayable shall be the Amortized
Face Amount of such Note as determined in accordance with Condition
5(f)(iii). As from the Maturity Date, any overdue principal of such Note
shall bear interest at a rate per annum equal to the Accrual Yield set forth
in the applicable Pricing Supplement.
(l) Partly Paid Notes
-----------------
In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero
Coupon Notes), interest will accrue as aforesaid on the paid up nominal
amount of such Notes and otherwise as specified in the applicable Pricing
Supplement.
(m) Accrual of Interest
-------------------
Each Note (or in the case of the redemption in part only of a Note, such part
to be redeemed) will cease to bear interest (if any) from the due date for
its redemption unless, upon due presentation thereof, payment of principal is
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improperly withheld or refused. In such event, interest will continue to
accrue (as well after as before judgment) until whichever is the earlier of
(i) the day on which all sums due in respect of such Note up to that day are
received by or on behalf of the holder of such Note; and (ii) the day on
which the Agent has notified the holder thereof (either in accordance with
Condition 16 or individually) of receipt of all sums due in respect thereof
up to that date.
E. Redemption and Purchase
-----------------------
1. At Maturity
-----------
Unless otherwise indicated in the applicable Pricing Supplement and unless
previously redeemed or purchased and cancelled as specified below, Notes will
be redeemed by TMCC at their Final Redemption Amount specified in, or
determined in the manner specified in, the applicable Pricing Supplement in
the relevant Specified Currency on the Maturity Date specified in the
applicable Pricing Supplement.
2. Redemption for Tax Reasons
--------------------------
TMCC may redeem the Notes of this Series as a whole but not in part at any
time at their Early Redemption Amount, together, if appropriate, with accrued
interest to but excluding the date fixed for redemption, if TMCC shall
determine that as a result of any change in or amendment to the laws (or any
regulations or rulings promulgated thereunder) of the United States of
America or of any political subdivision or taxing authority thereof or
therein affecting taxation, or any change in application or official
interpretation of such laws, regulations or rulings, which amendment or
change is effective on or after the latest Issue Date of the Notes of this
Series, TMCC would be required to pay Additional Amounts, as provided in
Condition 9, on the occasion of the next payment due in respect of the Notes
of this Series.
The Notes of this Series are also subject to redemption as a whole but not in
part in the other circumstances described in Condition 9.
Notice of intention to redeem Notes will be given at least once in accordance
with Condition 16 not less than 30 days nor more than 60 days prior to the
date fixed for redemption, provided that no such notice of redemption shall
be given earlier than 90 days prior to the effective date of such change or
amendment and that at the time notice of such redemption is given, such
obligation to pay such Additional Amounts remains in effect. From and after
any redemption date, if monies for the redemption of Notes shall have been
made available for redemption on such redemption date, such Notes shall cease
to bear interest, if applicable, and the only right of the holders of such
Notes and any Receipts or Coupons appertaining thereto shall be to receive
payment of the Early Redemption Amount and, if appropriate, all unpaid
interest accrued to such redemption date.
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3. Pricing Supplement
------------------
The Pricing Supplement applicable to the Notes of this Series shall indicate
either: that the Notes of this Series cannot be redeemed prior to their
Maturity Date (except as otherwise provided in paragraph (b) above and in
Condition 13); orthat such Notes will be redeemable at the option of TMCC
and/or the holders of the Notes prior to such Maturity Date in accordance
with the provisions of paragraphs (d) and/or (e) below on the date or dates
and at the amount or amounts indicated in the applicable Pricing Supplement.
4. Redemption at the Option of TMCC
--------------------------------
If so specified in the applicable Pricing Supplement, TMCC may, having given:
(a) not more than 60 nor less than 30 days notice to the holders of the
Notes of this Series in accordance with Condition 16, or such other notice as
is specified in the applicable Pricing Supplement; and
(b) not less than 15 days before the date the notice referred to in (i) is
required to be given (or such other notice as is specified in the applicable
Pricing Supplement), notice to the Agent;
(which notice shall be irrevocable), repay all or some only of the Notes of
this Series then outstanding on the Optional Redemption Date(s) and at the
Optional Redemption Amount(s) indicated in the applicable Pricing Supplement
together, if appropriate, with accrued interest. In the event of a
redemption of some only of such Notes of this Series, such redemption must be
for an amount being the Minimum Redemption Amount or a Higher Redemption
Amount, as indicated in the applicable Pricing Supplement. In the case of a
partial redemption of definitive Notes of this Series, the Notes of this
Series to be repaid will be selected individually by lot not more than 60
days prior to the date fixed for redemption and a list of the Notes of this
Series called for redemption will be published in accordance with Condition
16 not less than 30 days prior to such date, or such other period as is
specified in the applicable Pricing Supplement. In the case of a partial
redemption of Notes which are represented by a global Note, the relevant
Notes will be redeemed in accordance with the rules of Euroclear and/or
Cedelbank. Unless specified otherwise in the applicable Pricing Supplement,
if an Optional Redemption Date would otherwise fall on a day which is not a
Business Day (as defined in Condition 4(b)(i)), it shall be subject to
adjustment in accordance with the Business Day Convention applicable to the
Notes or such other Business Day Convention specified in the applicable
Pricing Supplement.
5. Redemption at the Option of the Noteholders
-------------------------------------------
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to repayment at the option of the Noteholders. The term
of any such option shall be set forth in the applicable Pricing Supplement.
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6. Early Redemption Amounts
------------------------
For the purposes of paragraph (b) above and Condition 13, Notes will be
redeemed at an amount (the "Early Redemption Amount") calculated as follows:
(a) in the case of Notes with a Final Redemption Amount equal to the Issue
Price, at the Final Redemption Amount thereof; or
(b) in the case of Notes (other than Zero Coupon Notes) with a Final
Redemption Amount which is or may be greater or less than the Issue Price or
which is payable in a Specified Currency other than that in which the Notes
are denominated, at the amount set out in, or determined in the manner set
out in, the applicable Pricing Supplement or, if no such amount or manner is
set out in the applicable Pricing Supplement, at their nominal amount; or
(c) in the case of Zero Coupon Notes, at an amount (the "Amortized Face
Amount") equal to:
(1) the sum of (x) the Reference Price specified in the applicable Pricing
Supplement and (y) the product of the Accrual Yield specified in the
applicable Pricing Supplement (compounded annually) being applied to the
Reference Price from (and including) the Issue Date of the first Tranche of
the Notes to (but excluding) the date fixed for redemption or (as the case
may be) the date upon which such Note becomes due and repayable; or
(2) if the amount payable in respect of any Zero Coupon Note upon
redemption of such Zero Coupon Note pursuant to paragraph (b) above or upon
its becoming due and repayable as provided in Condition 13 is not paid or
available for payment when due, the amount due and repayable in respect of
such Zero Coupon Note shall be the Amortized Face Amount of such Zero Coupon
Note calculated as provided above as though the references in sub-paragraph
(A) to the date fixed for redemption or the date upon which the Zero Coupon
Note becomes due and repayable were replaced by references to the date (the
"Reference Date") which is the earlier of:
(i) the date on which all amounts due in respect of the Note have been
paid; and
(ii) the date on which the full amount of the moneys repayable has been
received by the Agent and notice to that effect has been given in accordance
with Condition 16.
The calculation of the Amortized Face Amount in accordance with this
sub-paragraph (B) will continue to be made, after as well as before judgment,
until the Reference Date unless the Reference Date falls on or after the
Maturity Date, in which case the amount due and repayable shall be the
nominal amount of such Note together with interest at a rate per annum equal
to the Accrual Yield.
Unless specified otherwise in the applicable Pricing Supplement, where any
such calculation is to be made for a period which is not a whole number of
years, it shall be made (I) in the case of a Zero Coupon Note other than a
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Zero Coupon Note payable in euro, on the basis of a 360-day year consisting
of 12 months of 30 days each (or 365/366 days in the case of Notes
denominated in Sterling) and, in the case of an incomplete month, the number
of days elapsed or (II) in the case of a Zero Coupon Note payable in euro, on
the basis of the actual number of days elapsed divided by 365 (or, if any of
the days elapsed falls in a leap year, the sum of (x) the number of those
days falling in a leap year divided by 366 and (y) the number of those days
falling in a non-leap year divided by 365) or (in either case) on such other
calculation basis as may be specified in the applicable Pricing Supplement.
7. Installments
------------
Any Note which is repayable in installments will be redeemed in the
Installment Amounts and on the Installment Dates specified in the applicable
Pricing Supplement.
8. Partly Paid Notes
-----------------
If the Notes are Partly Paid Notes, they will be redeemed, whether at
maturity, early redemption or otherwise in accordance with the provisions of
this Condition 5 as amended or varied by the applicable Pricing Supplement.
9. Purchases
---------
TMCC may at any time purchase or otherwise acquire Notes in the open market
or otherwise at any price. If purchases are made by tender, tenders must be
available to all holders of Notes of a Series alike.
10. Cancellation, Resale or Reissuance at the Option of TMCC
--------------------------------------------------------
All Notes redeemed shall be, and all Notes purchased or otherwise acquired as
aforesaid (together, in the case of definitive Notes, with all unmatured
Coupons or Receipts attached thereto or purchased or acquired therewith) may,
at the option of TMCC, either be (i) resold or reissued, or held by TMCC for
subsequent resale or reissuance, or (ii) cancelled, in which event such
Notes, Receipts and Coupons may not be resold or reissued.
F. Payments
--------
1. Method of Payment
-----------------
Subject as provided below, payments in a currency other than euro will be
made by transfer to an account in the Specified Currency (which, in the case
of a payment in Yen to a non-resident of Japan, shall be a non-resident
account) maintained by the payee with, or by a check in the Specified
Currency drawn on, a bank (which, in the case of a payment in Yen to a non-
resident of Japan, shall be an authorized foreign exchange bank) in the
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principal financial center of the country of such Specified Currency (which,
if Australian dollars, shall be Sydney and if New Zealand dollars, shall be
Auckland).Payments in euro will be made by credit or transfer to a euro
account (or any other account to which euro may be credited or transferred)
specified by the payee or by euro check. Notwithstanding the above
provisions of this Condition 6(a), a check may not be delivered to an address
in, and an amount may not be transferred to an account at a bank located in,
the United States of America or its possessions by any office or agency of
TMCC, the Agent or any Paying Agent, except as provided in Condition 6(b).
Payments will be subject in all cases to any fiscal or other laws and
regulations applicable thereto in the place of payment, but without prejudice
to the provisions of Condition 9.
2. Presentation of Notes, Receipts, Coupons and Talons
---------------------------------------------------
Payments of principal in respect of definitive Notes will (subject as
provided below) be made in the Specified Currency in the manner provided in
paragraph (a) against presentation and surrender (or, in the case of part
payment of a sum due only, endorsement) of definitive Notes and payments of
interest in respect of the definitive Notes will (subject as provided below)
be made in the Specified Currency against presentation and surrender (or, in
the case of part payment of a sum due only, endorsement) of Coupons, in each
case at the specified office of any Paying Agent outside the United States of
America and its possessions.
In the case of definitive Notes, payments of principal with respect to
installments (if any), other than the final installment, will (subject as
provided below) be made in the manner provided in paragraph (a) against
presentation and surrender (or, in the case of part payment of a sum due
only, endorsement) of the relevant Receipt. Each Receipt must be presented
for payment of the relevant installment together with the relevant definitive
Note against which the amount will be payable with respect to that
installment.
If any definitive Note is redeemed or becomes repayable prior to the stated
Maturity Date, principal will be payable in the manner provided in paragraph
(a) on presentation and surrender of such definitive Note together with all
unmatured Receipts appertaining thereto. Receipts presented without the
definitive Note to which they appertain and unmatured Receipts do not
constitute valid obligations of TMCC. Upon the date on which any definitive
Note becomes due and repayable, unmatured Receipts (if any) appertaining
thereto (whether or not attached) shall become void and no payment shall be
made in respect thereof.
Upon the date on which any Fixed Rate Notes in definitive form (other than
Dual Currency Notes or Index Linked Notes) become due and repayable, such
Notes should be presented for payment together with all unmatured Coupons
appertaining thereto (which expression shall for this purpose include Coupons
to be issued on exchange of matured Talons) failing which the amount of any
missing unmatured Coupon (or, in the case of payment not being made in full,
the same proportion of the aggregate amount of such missing unmatured Coupon
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as the sum so paid bears to the sum due) will be deducted from the sum due
for payment. Unless otherwise specified in the applicable Pricing
Supplement, each amount of principal so deducted will be paid in the manner
mentioned above against surrender of the related missing Coupon at any time
before the expiry of five years after the Relevant Date (as defined in
Condition 15) in respect of such principal (whether or not such Coupon would
otherwise have become void under Condition 15). Upon any Fixed Rate Note
becoming due and repayable prior to its Maturity Date, all unmatured Talons
(if any) appertaining thereto will become void and no further Coupons will be
issued in respect thereof.
Upon the date on which any Floating Rate Note, Dual Currency Note or Index
Linked Note in definitive form becomes due and repayable, all unmatured
Coupons and Talons (if any) relating thereto (whether or not attached) shall
become void and no payment or, as the case may be, exchange for further
Coupons, shall be made in respect thereof.
If the due date for redemption of any Note in definitive form is not an
Interest Payment Date, interest (if any) accrued with respect to such Note
from and including the preceding Interest Payment Date or, as the case may
be, the Interest Commencement Date shall be payable only against surrender of
the relevant definitive Note.
Payments of principal and interest (if any) in respect of Notes of this
Series represented by any global Note will (subject as provided below) be
made in the manner specified above and otherwise in the manner specified in
the relevant global Note against presentation or surrender, as the case may
be, of such global Note at the specified office of any Paying Agent located
outside the United States except as provided below. A record of each payment
made against presentation or surrender of such global Note, distinguishing
between any payment of principal and any payment of interest, will be made on
such global Note by the Agent and such record shall be prima facie evidence
that the payment in question has been made.
The holder of the relevant global Note shall be the only person entitled to
receive payments in respect of Notes represented by such global Note and TMCC
will be discharged by payment to, or to the order of, the holder of such
global Note with respect to each amount so paid. Each of the persons shown
in the records of Euroclear or Cedelbank as the beneficial holder of a
particular nominal amount of Notes must look solely to Euroclear and/or
Cedelbank, as the case may be, for his share of each payment so made by TMCC
to, or to the order of, the holder of the relevant global Note. No person
other than the holder of the relevant global Note shall have any claim
against TMCC in respect of payments due on that global Note.
Notwithstanding the foregoing, payments in respect of the Notes denominated
in U.S. dollars will only be made at the specified office of a Paying Agent
in the United States (which expression, as used herein, means the United
States of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction) if:
(a) TMCC has appointed Paying Agents with specified offices outside the
United States with the reasonable expectation that such Paying Agents would
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be able to make payment at such specified offices outside the United States
of the full amount owing in respect of the Notes in the manner provided above
when due;
(b) payment of the full amount owing in respect of the Notes at such
specified offices outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions; and
(c) such payment is then permitted under United States law without
involving, in the opinion of TMCC, adverse tax consequences to TMCC.
3. Payment Business Day
--------------------
Unless specified otherwise in the applicable Pricing Supplement, if the date
for payment of any amount in respect of any Note, Receipt or Coupon is not a
Payment Business Day in a place of presentation, the holder thereof shall not
be entitled to payment until the next following Payment Business Day in the
relevant place and shall not be entitled to further interest or other payment
in respect of such delay. For these purposes, unless otherwise specified in
the applicable Pricing Supplement, "Payment Business Day" means any day which
is:
(a) a day on which commercial banks and foreign exchange markets settle
payments and are open for general business (including dealing in foreign
exchange and foreign currency deposits) in:
(1) the relevant place of presentation;
(2) London;
(3) any other Applicable Financial Center specified in the applicable
Pricing Supplement; and
(b) either (A) in relation to any sum payable in a Specified Currency other
than euro, a day on which commercial banks and foreign exchange markets
settle payments and are open for general business (including dealings in
foreign exchange and foreign currency deposits) in the principal financial
center of the country of the relevant Specified Currency (if other than the
place of presentation, London and any other Applicable Financial Center and
which if the Specified Currency is Australian dollars or New Zealand dollars
shall be Sydney or Auckland, respectively, unless specified otherwise in the
applicable Pricing Supplement) or (B) in relation to any sum payable in euro,
a day on which the TARGET System is open.
4. Interpretation of Principal and Interest
----------------------------------------
Any reference in these Terms and Conditions to principal in respect of the
Notes shall be deemed to include, as applicable:
(a) any Additional Amounts which may be payable under Condition 9 in
respect of principal;
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(b) the Final Redemption Amount of the Notes;
(c) the Early Redemption Amount of the Notes;
(d) in relation to Notes redeemable in installments, the Installment
Amounts;
(e) any premium and any other amounts which may be payable under or in
respect of the Notes;
(f) in relation to Zero Coupon Notes, the Amortized Face Amount; and
(g) the Optional Redemption Amount(s) (if any) of the Notes.
Any reference in these Terms and Conditions to interest in respect of the
Notes shall be deemed to include, as applicable, any Additional Amounts which
may be payable under Condition 9, except as provided in clause (i) above.
G. Agent and Paying Agents
-----------------------
The names of the initial Agent and the other initial Paying Agents and their
initial specified offices are set out on the inside back cover page of the
Offering Circular. In acting under the Agency Agreement, the Agent and the
Paying Agents will act solely as agents of TMCC and do not assume any
obligations or relationships of agency or trust to or with the Noteholders,
Receiptholders or Couponholders, except that (without affecting the
obligations of TMCC to the Noteholders, Receiptholders and Couponholders to
repay Notes and pay interest thereon) funds received by the Agent for the
payment of the principal of or interest on the Notes shall be held in trust
by it for the Noteholders and/or Receiptholders and/or Couponholders until
the expiration of the relevant period of prescription under Condition 15.
TMCC agrees to perform and observe the obligations imposed upon it under the
Agency Agreement and to use its best efforts to cause the Agent and the
Paying Agents to perform and observe the obligations imposed upon them under
the Agency Agreement. The Agency Agreement contains provisions for the
indemnification of the Agent and the Paying Agents and for relief from
responsibility in certain circumstances, and entitles any of them to enter
into business transactions with TMCC without being liable to account to the
Noteholders, Receiptholders or the Couponholders for any resulting profit.
TMCC is entitled to vary or terminate the appointment of any Paying Agent or
any other paying agent appointed under the terms of the Agency Agreement
and/or appoint additional or other paying agents and/or approve any change in
the specified office through which any paying agent acts, provided that:
(a) so long as the Notes of this Series are listed on any stock exchange,
there will at all times be a Paying Agent with a specified office in each
location required by the rules and regulations of the relevant stock
exchange;
(b) there will at all times be a Paying Agent with a specified office in a
city approved by the Agent in continental Europe; and
(c) there will at all times be an Agent.
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In addition, with respect to Notes denominated in U.S. dollars, TMCC shall
forthwith appoint a Paying Agent having a specified office in New York City
in the circumstances described in the final paragraph of Condition 6(b). Any
variation, termination, appointment or change shall only take effect (other
than in the case of insolvency, when it shall be of immediate effect) after
not less than 30 nor more than 45 days prior notice thereof shall have been
given to the Agent and the Noteholders in accordance with Condition 16.
H. Exchange of Talons
------------------
On and after the Interest Payment Date on which the final Coupon comprised in
any Coupon sheet matures, the Talon (if any) forming part of such Coupon
sheet may be surrendered at the specified office of the Agent or any other
Paying Agent in exchange for a further Coupon sheet including (if such
further Coupon sheet does not include Coupons to, and including, the final
date for the payment of interest due in respect of the Note to which it
appertains) a further Talon, subject to the provisions of Condition 15. Each
Talon shall, for the purposes of these Terms and Conditions, be deemed to
mature on the Interest Payment Date on which the final Coupon comprised in
the relative Coupon sheet matures.
I. Payment of Additional Amounts
-----------------------------
TMCC will, subject to certain limitations and exceptions (set forth below),
pay to a Noteholder, Receiptholder or Couponholder who is a United States
Alien (as defined below) such amounts ("Additional Amounts") as may be
necessary so that every net payment of principal or interest in respect of
the Notes, Receipts or Coupons, after deduction or withholding for or on
account of any present or future tax, assessment or other governmental charge
imposed upon such Noteholder, Receiptholder or Couponholder, or by reason of
the making of such payment, by the United States or any political subdivision
or taxing authority thereof or therein, will not be less than the amount
provided for in the Notes, Receipts or Coupons. However, TMCC shall not be
required to make any payment of Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge which would not have
been imposed but for (i) the existence of any present or former connection
between such Noteholder, Receiptholder or Couponholder (or between a
fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a
power over, such Noteholder, Receiptholder or Couponholder, if such
Noteholder, Receiptholder or Couponholder is an estate, trust, partnership or
corporation) and the United States, including, without limitation, such
Noteholder, Receiptholder or Couponholder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a citizen
or resident thereof or being or having been present or engaged in trade or
business therein or having or having had a permanent establishment therein,
or (ii) such Noteholder's, Receiptholder's or Couponholder's past or present
status as a personal holding company, foreign personal holding company or
controlled foreign corporation or a private foundation (as those terms are
defined for United States tax purposes) or as a corporation which accumulates
earnings to avoid United States federal income tax;
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<PAGE>
(b) any estate, inheritance, gift, sales, transfer, personal property or
similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge that would not have
been so imposed but for the presentation of a Note, Receipt or Coupon for
payment on a date more than 15 days after the date on which such payment
became due and payable or the date on which payment thereof is duly provided
for, whichever occurs later;
(d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments of principal or interest in
respect of the Notes, Receipts or Coupons;
(e) any tax, assessment or other governmental charge imposed on interest
received by (i) a 10% shareholder of TMCC within the meaning of Internal
Revenue Code Section 871(h)(3)(b) or Section 881(c)(3)(b) or (ii) a bank
extending credit pursuant to a loan agreement entered into in the ordinary
course of its trade or business;
(f) any tax, assessment or other governmental charge required to be
withheld or deducted by any Paying Agent from any payment of principal or
interest in respect of any Note, Receipt or Coupon, if such payment can be
made without such withholding or deduction by any other Paying Agent with
respect to the Notes in a Western European city;
(g) any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with certification, information,
documentation, or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the Noteholder,
Receiptholder or Couponholder or of the beneficial owner of such Note,
Receipt or Coupon, if such compliance is required by statute or by regulation
of the United States Treasury Department as a precondition to relief or
exemption from such tax, assessment or other governmental charge; or
(h) any combination of items (a), (b), (c), (d), (e), (f) and (g);
nor shall Additional Amounts be paid to any Noteholder, Receiptholder or
Couponholder who is a fiduciary or partnership or other than the sole
beneficial owner of the Note, Receipt or Coupon to the extent a beneficiary
or settlor with respect to such fiduciary or a member of such partnership or
a beneficial owner of the Note, Receipt or Coupon would not have been
entitled to payment of the Additional Amounts had such beneficiary, settlor,
member or beneficial owner been the holder of the Note, Receipt or Coupon.
The term "United States Alien" means any corporation, individual, fiduciary
or partnership that for United States federal income tax purposes is a
foreign corporation, nonresident alien individual, nonresident alien
fiduciary of a foreign estate or trust, or foreign partnership one or more
members of which is a foreign corporation, nonresident alien individual or
nonresident alien fiduciary of a foreign estate or trust.
If TMCC shall determine that any payment made outside the United States by
TMCC or any of its Paying Agents of the full amount of the next scheduled
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<PAGE>
payment of either principal or interest due in respect of any Note, Receipt
or Coupon of this Series would, under any present or future laws or
regulations of the United States affecting taxation or otherwise, be subject
to any certification, information or other reporting requirements of any
kind, the effect of which requirements is the disclosure to TMCC, any of its
Paying Agents or any governmental authority of the nationality, residence or
identity (as distinguished from status as a United States Alien) of a
beneficial owner of such Note, Receipt or Coupon who is a United States Alien
(other than such requirements which (i) would not be applicable to a payment
made to a custodian, nominee or other agent of the beneficial owner, or which
can be satisfied by such a custodian, nominee or other agent certifying to
the effect that such beneficial owner is a United States Alien; provided,
however, in each case that payment by such custodian, nominee or agent to
such beneficial owner is not otherwise subject to any requirements referred
to in this sentence, (ii) are applicable only to payment by a custodian,
nominee or other agent of the beneficial owner to or on behalf of such
beneficial owner, or (iii) would not be applicable to a payment made by any
other paying agent of TMCC), TMCC shall redeem the Notes of this Series as a
whole but not in part at a redemption price equal to the Early Redemption
Amount together, if appropriate, with accrued interest to, but excluding, the
date fixed for redemption, such redemption to take place on such date not
later than one year after the publication of notice of such determination.
If TMCC becomes aware of an event that might give rise to such certification,
information or other reporting requirements, TMCC shall, as soon as
practicable, solicit advice of independent counsel selected by TMCC to
establish whether such certification, information or other reporting
requirements will apply and, if such requirements will apply, TMCC shall give
prompt notice of such determination (a "Tax Notice") in accordance with
Condition 16 stating in such notice the effective date of such certification,
information or other reporting requirements and, if applicable, the date by
which the redemption shall take place. Notwithstanding the foregoing, TMCC
shall not redeem Notes if TMCC shall subsequently determine not less than 30
days prior to the date fixed for redemption that subsequent payments would
not be subject to any such requirements, in which case TMCC shall give prompt
notice of such determination in accordance with Condition 16 and any earlier
redemption notice shall thereby be revoked and of no further effect.
Notwithstanding the foregoing, if and so long as the certification,
information or other reporting requirements referred to in the preceding
paragraph would be fully satisfied by payment of a backup withholding tax or
similar charge, TMCC may elect prior to publication of the Tax Notice to have
the provisions described in this paragraph apply in lieu of the provisions
described in the preceding paragraph, in which case the Tax Notice shall
state the effective date of such certification, information or reporting
requirements and that TMCC has elected to pay Additional Amounts rather than
redeem the Notes. In such event, TMCC will pay as Additional Amounts such
amounts as may be necessary so that every net payment made following the
effective date of such certification, information or reporting requirements
outside the United States by TMCC or any of its Paying Agents of principal or
interest due in respect of a Note, Receipt or Coupon to a holder who
certifies to the effect that the beneficial owner of such Note, Receipt or
Coupon is a United States Alien (provided that such certification shall not
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<PAGE>
have the effect of communicating to TMCC or any of its Paying Agents or any
governmental authority the nationality, residence or identity of such
beneficial owner) after deduction or withholding for or on account of such
backup withholding tax or similar charge (other than a backup withholding tax
or similar charge which (i) is imposed as a result of certification,
information or other reporting requirements referred to in the second
parenthetical clause of the first sentence of the preceding paragraph, or
(ii) is imposed as a result of the fact that TMCC or any of its Paying Agents
has actual knowledge that the holder or beneficial owner of such Note,
Receipt or Coupon is not a United States Alien but is within the category of
persons, corporations or other entities described in clause (a)(i) of the
third preceding paragraph, or (iii) is imposed as a result of presentation of
such Note, Receipt or Coupon for payment more than 15 days after the date on
which such payment becomes due and payable or on which payment thereof is
duly provided for, whichever occurs later), will not be less than the amount
provided for in such Note, such Receipt or such Coupon to be then due and
payable. In the event TMCC elects to pay such Additional Amounts, TMCC will
have the right, at its sole option, at any time, to redeem the Notes of this
Series, as a whole but not in part at a redemption price equal to their Early
Redemption Amount, together, if appropriate, with accrued interest to the
date fixed for redemption including any Additional Amounts required to be
paid under this paragraph. If TMCC has made the determination described in
the preceding paragraph with respect to certification, information or other
reporting requirements applicable to interest only and subsequently makes a
determination in the manner and of the nature referred to in such preceding
paragraph with respect to such requirements applicable to principal, TMCC
will redeem the Notes of this Series in the manner and on the terms described
in the preceding paragraph (except as provided below), unless TMCC elects to
have the provisions of this paragraph apply rather than the provisions of the
immediately preceding paragraph. If in such circumstances the Notes are to
be redeemed, TMCC will be obligated to pay Additional Amounts with respect to
interest, if any, accrued to the date of redemption. If TMCC has made the
determination described in the preceding paragraph and subsequently makes a
determination in the manner and of the nature referred to in such preceding
paragraph that the level of withholding applicable to principal or interest
has been increased, TMCC will redeem the Notes of this Series in the manner
and on the terms described in the preceding paragraph (except as provided
below), unless TMCC elects to have the provisions of this paragraph apply
rather than the provisions of the immediately preceding paragraph. If in
such circumstances the Notes are to be redeemed, TMCC will be obligated to
pay Additional Amounts with respect to the original level of withholding on
principal and interest, if any, accrued to the date of redemption.
J. Negative Pledge
---------------
The Notes will not be secured by any mortgage, pledge or other lien. TMCC
shall not pledge or otherwise subject to any lien any property or assets of
TMCC unless the Notes are secured by such pledge or lien equally and ratably
with all other obligations secured thereby so long as such obligations shall
be so secured; provided, however, that such covenant will not apply to liens
securing obligations which do not in the aggregate at any one time
outstanding exceed 5% of Consolidated Net Tangible Assets (as defined below)
of TMCC and its consolidated subsidiaries and also will not apply to:
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<PAGE>
(a) the pledge of any assets of TMCC to secure any financing by TMCC of
the exporting of goods to or between, or the marketing thereof in, countries
other than the United States in connection with which TMCC reserves the
right, in accordance with customary and established banking practice, to
deposit, or otherwise subject to a lien, cash, securities or receivables, for
the purpose of securing banking accommodations or as the basis for the
issuance of bankers' acceptances or in aid of other similar borrowing
arrangements;
(b) the pledge of receivables payable in currencies other than United
States dollars to secure borrowings in countries other than the United
States;
(c) any deposit of assets of TMCC with any surety company or clerk of any
court, or in escrow, as collateral in connection with, or in lieu of, any
bond on appeal by TMCC from any judgment or decree against it, or in
connection with other proceedings in actions at law or in equity by or
against TMCC or in favor of any governmental bodies to secure progress,
advance or other payments in the ordinary course of TMCC's business;
(d) any lien or charge on any property of TMCC, tangible or intangible,
real or personal, existing at the time of acquisition or construction of such
property
(including acquisition through merger or consolidation) or given to secure
the payment of all or any part of the purchase or construction price thereof
or to secure any indebtedness incurred prior to, at the time of, or within
one year after, the acquisition or completion of construction thereof for the
purpose of financing all or any part of the purchase or construction price
thereof;
(e) any lien in favor of the United States of America or any state
thereof or the District of Columbia, or any agency, department or other
instrumentality thereof, to secure progress, advance or other payments
pursuant to any contract or provisions of any statute;
(f) any lien securing the performance of any contract or undertaking not
directly or indirectly in connection with the borrowing of money, obtaining
of advances or credit or the securing of debt, if made and continuing in the
ordinary course of business;
(g) any lien to secure non-recourse obligations in connection with TMCC's
engaging in leveraged or single-investor lease transactions; and
(h) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any lien, charge or pledge
referred to in clauses (a) through (g) above; provided, however, that the
amount of any and all obligations and indebtedness secured thereby will not
exceed the amount thereof so secured immediately prior to the time of such
extension, renewal or replacement, and that such extension, renewal or
replacement will be limited to all or a part of the property which secured
the charge or lien so extended, renewed or replaced (plus improvements on
such property).
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<PAGE>
"Consolidated Net Tangible Assets" means the aggregate amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles of TMCC and its consolidated subsidiaries, all as set forth on
the most recent balance sheet of TMCC and its consolidated subsidiaries
prepared in accordance with generally accepted accounting principles as
practiced in the United States.
K. Consolidation or Merger
-----------------------
TMCC may consolidate with, or sell, lease or convey all or substantially all
of its assets as an entirety to, or merge with or into any other corporation
provided that in any such case, (i) either TMCC shall be the continuing
corporation, or the successor corporation shall be a corporation organized
and existing under the laws of the United States of America or any state
thereof and such successor corporation shall expressly assume the due and
punctual payment of the principal of and interest (including Additional
Amounts as provided in Condition 9) on all the Notes, Receipts and Coupons,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Note to be performed by TMCC
by an amendment to the Agency Agreement executed by such successor
corporation, TMCC and the Agent, and (ii) immediately after giving effect to
such transaction, no Event of Default under Condition 13, and no event which,
with notice or lapse of time or both, would become such an Event of Default
shall have happened and be continuing. In case of any such consolidation,
merger, sale, lease or conveyance and upon any such assumption by the
successor corporation, such successor corporation shall succeed to and be
substituted for TMCC, with the same effect as if it had been named herein as
TMCC, and the predecessor corporation, except in the event of a conveyance by
way of lease, shall be relieved of any further obligation under this Note and
the Agency Agreement.
L. Meetings, Modifications and Waivers
-----------------------------------
The Agency Agreement contains provisions which, unless otherwise provided in
the Pricing Supplement, are binding on TMCC, the Noteholders, the
Receiptholders and the Couponholders, for convening meetings of holders of
Notes, Receipts and Coupons to consider matters affecting their interests,
including the modification or waiver of the Terms and Conditions applicable
to the Notes.
The Agency Agreement, the Notes and any Receipts and Coupons attached to the
Notes may be amended by TMCC (and, in the case of the Agency Agreement, the
Agent) (i) for the purpose of curing any ambiguity, or for curing, correcting
or supplementing any defective provision contained therein, or to evidence
the succession of another corporation to TMCC as provided in Condition 11,
(ii) to make any further modifications of the terms of the Agency Agreement
necessary or desirable to allow for the issuance of any additional Notes
(which modifications shall not be materially adverse to holders of
outstanding Notes) or (iii) in any manner which TMCC (and, in the case of the
Agency Agreement, the Agent) may deem necessary or desirable and which shall
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not materially adversely affect the interests of the holders of the Notes,
Receipts and Coupons, to all of which each holder of Notes, Receipts and
Coupons shall, by acceptance thereof, consent. In addition, with the written
consent of the holders of not less than a majority in aggregate principal
amount of the Notes then outstanding affected thereby, or by a resolution
adopted by a majority in aggregate principal amount of such outstanding Notes
affected thereby present or represented at a meeting of such holders at which
a quorum is present, as provided in the Agency Agreement (provided that such
resolution shall be approved by the holders of not less than 25 percent of
the aggregate principal amount of Notes affected thereby then outstanding),
TMCC and the Agent may from time to time and at any time enter into
agreements modifying or amending the Agency Agreement or the terms and
conditions of the Notes, Receipts and Coupons for the purpose of adding any
provisions to or changing in any manner or eliminating any provisions of the
Agency Agreement or of modifying in any manner the rights of the holders of
Notes, Receipts and Coupons; provided, however, that no such agreement shall,
without the consent or the affirmative vote of the holder of each Note
affected thereby, (i) change the stated maturity of the principal of or any
installment of interest on any Note, (ii) reduce the principal amount of or
interest on any Note, (iii) change the obligation of TMCC to pay Additional
Amounts as provided in Condition 9, (iv) reduce the percentage in principal
amount of outstanding Notes the consent of the holders of which is necessary
to modify or amend the Agency Agreement or the terms and conditions of the
Notes or to waive any future compliance or past default, or (v) reduce the
percentage in principal amount of outstanding Notes the consent of the
holders of which is required at any meeting of holders of Notes at which a
resolution is adopted. The quorum at any meeting called to adopt a
resolution will be persons holding or representing a majority in aggregate
principal amount of the Notes at the time outstanding affected thereby and at
any adjourned meeting will be one or more persons holding or representing 25
percent in aggregate principal amount of such Notes at the time outstanding
affected thereby. Any instrument given by or on behalf of any holder of a
Note in connection with any consent to any such modification, amendment or
waiver will be irrevocable once given and will be conclusive and binding on
all subsequent holders of such Note. Any modifications, amendments or
waivers to the Agency Agreement or to the terms and conditions of the Notes,
Receipts and Coupons will be conclusive and binding on all holders of Notes,
Receipts and Coupons, whether or not they have given such consent or were
present at any meeting, and whether or not notation of such modifications,
amendments or waivers is made upon the Notes, Receipts and Coupons. It shall
not be necessary for the consent of the holders of Notes under this Condition
12 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof.
Notes authenticated and delivered after the execution of any amendment to the
Agency Agreement, Notes, Receipts or Coupons may bear a notation in form
approved by the Agent as to any matter provided for in such amendment to the
Agency Agreement.
New Notes so modified as to conform, in the opinion of the Agent and TMCC, to
any modification contained in any such amendment may be prepared by TMCC,
authenticated by the Agent and delivered in exchange for the Notes then
outstanding.
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<PAGE>
For the purposes of this Condition 12 and Condition 13 below, the term
"outstanding" means, in relation to the Notes, all Notes issued under the
Agency Agreement other than (i) those which have been redeemed in full in
accordance with the Agency Agreement or these Terms and Conditions, (ii)
those in respect of which the date for redemption in accordance with these
Terms and Conditions has occurred and the redemption moneys therefor
(including all interest (if any) accrued thereon to the date for such
redemption and any interest (if any) payable under these Terms and Conditions
after such date) have been duly paid to the Agent as provided in the Agency
Agreement (and, where appropriate, notice has been given to the Noteholders
in accordance with Condition 16) and remain available for payment against
presentation of the Notes, (iii) those which have become void under Condition
15, (iv) those which have been purchased or otherwise acquired and cancelled
as provided in Condition 5, and those which have been purchased or otherwise
acquired and are being held by TMCC for subsequent resale or reissuance as
provided in Condition 5 during the time so held, (v) those mutilated or
defaced Notes which have been surrendered in exchange for replacement Notes
pursuant to Condition 14, (vi) (for the purposes only of determining how many
Notes are outstanding and without prejudice to their status for any other
purpose) those Notes alleged to have been lost, stolen or destroyed and in
respect of which replacement Notes have been issued pursuant to Condition 14
and (vii) temporary global Notes to the extent that they shall have been duly
exchanged in whole for permanent global Notes or definitive Notes and
permanent global Notes to the extent that they shall have been duly exchanged
in whole for definitive Notes, in each case pursuant to their respective
provisions.
M. Default and Acceleration
------------------------
1. In the event that (each an "Event of Default"):
(a) default shall be made in the payment when due of any installment of
interest or any Additional Amounts on any of the Notes continued for a period
of 30 days after the date when due; or
(b) default shall be made for more than three days in the payment when
due of the principal of any Note (whether at maturity or upon redemption or
otherwise);or
(c) default in the deposit of any sinking fund payment with respect to
any Note when and as due;
(d) or
(e) TMCC shall fail to perform or observe any other term, covenant or
agreement contained in the Terms and Conditions applicable to any of the
Notes orin the Agency Agreement for a period of 60 days after the date on
which written notice of such failure, requiring TMCC to remedy the same,
first shall have been given to the Agent and TMCC by the holders of at least
25 percent in aggregate principal amount of the Notes then outstanding; or
(f) there is an acceleration of, or failure to pay when due and payable,
any indebtedness for money borrowed of TMCC exceeding $10,000,000 and such
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<PAGE>
acceleration is not rescinded or annulled, or such indebtedness is not
discharged, within 10 days after written notice thereof has first been given
to TMCC and the Agent by the holders of not less than 10 percent in aggregate
principal amount of Notes then outstanding; or
(g) the entry by a court having competent jurisdiction of (a) a decree or
order granting relief in respect of TMCC in an involuntary proceeding under
any applicable bankruptcy, insolvency, reorganization or other similar law
and such decree or order shall remain unstayed and in effect for a period of
60 consecutive days; or (b) a decree or order adjudging TMCC to be insolvent,
or approving a petition seeking reorganization, arrangement, adjustment or
composition of TMCC and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (c) a final and nonappealable
order appointing a custodian, receiver, liquidator, assignee, trustee or
other similar official of TMCC or of any substantial part of the property of
TMCC, or ordering up the winding up or liquidation of the offices of TMCC; or
(h) the commencement by TMCC of a voluntary proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or of
a voluntary proceeding seeking to be adjudicated insolvent or the consent of
TMCC to the entry of a decree or order for relief in an involuntary
proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any insolvency proceedings
against it, or the filing by TMCC of a petition or answer or consent seeking
reorganization or relief under any applicable law, or the consent by TMCC to
the filing of such petition or to the appointment of or taking possession by
a custodian, receiver, liquidator, assignee, trustee or similar official of
TMCC or any substantial part of the property of TMCC or the making by TMCC of
an assignment for the benefit of creditors, or the taking of corporate action
by TMCC in furtherance of any such action; then the holder of any Note may,
at its option, declare the principal of such Note and the interest, if any,
accrued thereon to be due and payable immediately by written notice to TMCC
and the Agent at its main office in London, and unless all such defaults
shall have been cured by TMCC prior to receipt of such written notice, the
principal of such Note and the interest, if any, accrued thereon shall become
and be immediately due and payable.
At any time after such a declaration of acceleration with respect to the
Notes has been made and before a judgment or decree for payment of the money
due with respect to any Note has been obtained by any Noteholder, such
declaration and its consequences may be rescinded and annulled upon the
written consent of holders of a majority in aggregate principal amount of the
Notes then outstanding, or by resolution adopted by a majority in aggregate
principal amount of the Notes present or represented at a meeting of holders
of the Notes at which a quorum is present, as provided in the Agency
Agreement, if:
(i) TMCC has paid or deposited with the Agent a sum sufficient to pay
(1) all overdue installments of interest on the Notes, and
(2) the principal of Notes which has become due otherwise than by such
declaration of acceleration; and
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(3) all Events of Default with respect to the Notes, other than the
non-payment of the principal of such Notes which has become due solely by
such declaration of acceleration, have been cured or waived as provided in
paragraph (b) below.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
(b) Any Events of Default by TMCC, other than the events described in
paragraph (a)(i) or (a)(ii) above or in respect of a covenant or provision
which cannot be modified and amended without the written consent of the
holders of all outstanding Notes, may be waived by the written consent of
holders of a majority in aggregate principal amount of the Notes then
outstanding affected thereby, or by resolution adopted by the holders of a
majority in aggregate principal amount of such Notes then outstanding present
or represented at a meeting of holders of the Notes affected thereby at which
a quorum is present, as provided in the Agency Agreement.
N. Replacement of Notes, Receipts, Coupons and Talons
--------------------------------------------------
Should any Note, Receipt, Coupon or Talon be mutilated, defaced or destroyed
or be lost or stolen, it may be replaced at the specified office of the Agent
in London (or such other place outside the United States as may be notified
to the Noteholders), in accordance with all applicable laws and regulations,
upon payment by the claimant of the expenses incurred by TMCC and the Agent
in connection therewith and on such terms as to evidence, indemnity, security
or otherwise as TMCC and the Agent may require. Mutilated or defaced Notes,
Receipts, Coupons or Talons must be surrendered before replacements will be
issued.
O. Prescription
------------
Unless provided otherwise in the applicable Pricing Supplement, the Notes,
Receipts and Coupons will become void unless presented for payment within a
period of five years from the Relevant Date (as defined below) relating
thereto. Any moneys paid by TMCC to the Agent for the payment of principal
or interest in respect of the Notes and remaining unclaimed for a period of
one year shall forthwith be repaid to TMCC and holders shall thereafter look
only to TMCC for payment thereof. All liability with respect thereto shall
cease when the Notes, Receipts and Coupons become void.
As used herein, the "Relevant Date" means:
1. the date on which such payment first becomes due; or
2. if the full amount of the moneys payable has not been received by the
Agent on or prior to such due date, the date on which the full amount of such
moneys having been so received, notice to that effect shall have been given
to the Noteholders in accordance with Condition 16.
A-32
<PAGE>
P. Notices
-------
All notices regarding the Notes shall be published in one leading English
language daily newspaper with circulation in London (which is expected to be
the Financial Times in London) or, if this is not practicable, one other such
English language newspaper as TMCC, in consultation with the Agent, shall
decide. TMCC shall also ensure that notices are duly published in a manner
which complies with the rules and regulations of any stock exchange on which
the Notes are for the time being listed. Any such notice shall be deemed to
have been given on the date of the first publication. Any notice published
as aforesaid shall be deemed to have been given on the date of such
publication or, if published more than once, on the date of the first such
publication. Receiptholders and Couponholders will be deemed for all
purposes to have notice of the contents of any notice given to the holders of
the Notes in accordance with this Condition. Until such time as any
definitive Notes are issued, there may, so long as the global Notes for this
Series are held in their entirety on behalf of Euroclear and Cedelbank, be
substituted for such publication in such newspaper the delivery of the
relevant notice to Euroclear and Cedelbank for communication by them to the
holders of the Notes of this Series. Any such notice shall be deemed to have
been given to the holders of the Notes of this Series on the seventh day
after the day on which the said notice was given to Euroclear and
Cedelbank, or on such other day as is specified in the applicable Pricing
Supplement.
Notices to be given by any holder of the Notes of this Series shall be in
writing and given by lodging the same, together with the relevant Note or
Notes, with the Agent. While any of the Notes of this Series are represented
by a global Note, such notice may be given by any holder of a Note of this
Series to the Agent via Euroclear and/or Cedelbank, as the case may be, in
such manner as the Agent and Euroclear and/or Cedelbank, as the case may be,
may approve for this purpose.
Q. Redenomination, Exchange and Consolidation
------------------------------------------
1. Redenomination
--------------
Where redenomination ("Redenomination") is specified in the applicable
Pricing Supplement as being applicable, and unless otherwise specified in the
applicable Pricing Supplement, TMCC may, without the consent of any
Noteholder, Receiptholder or Couponholder, on giving prior notice to
Euroclear, Cedelbank and the Agent and at least 30 days' prior notice to
Noteholders as provided in Condition 16 above, designate a Redenomination
Date. With effect from the Redenomination Date, notwithstanding the other
provisions of these Terms and Conditions:
(a) The Notes and Receipts shall (unless already so provided by mandatory
provisions of applicable law) be deemed to be redenominated in euro in the
denomination of euro 0.01 with a principal amount for each Note and Receipt
equal to the principal amount of the Note or Receipt in the original
A-33
<PAGE>
Specified Currency, converted into euro at the Established Rate, and the
Specified Currency shall be deemed to be euro; provided that, if TMCC
determines, after consultation with the Agent, that the then market practice
in respect of the redenomination into euro of internationally offered
securities is different from the provisions specified above in this Condition
17(a)(i), such provisions shall be deemed to be amended so as to comply with
such market practice and TMCC shall promptly notify the Noteholders, the
stock exchange (if any) on which the Notes may be listed and the Agent and
Paying Agents of such deemed amendments.
(b) If definitive Notes are required to be issued after the Redenomination
Date, they shall be issued at the expense of TMCC in the denominations of
euro 1,000, euro 10,000 and euro 100,000 and (but only to the extent of any
remaining amounts less than euro 1,000 or such smaller denominations as the
Agent may approve) euro 0.01 and such other denominations as TMCC, after
consultation with the Agent, shall determine and notify to Noteholders.
(c) If definitive Notes have been issued, all unmatured Coupons and
Receipts denominated in the original Specified Currency (whether or not
attached to the Notes) will become void and no payments will be made in
respect of them with effect from the date on which TMCC gives notice (the
"Exchange Notice") that euro-denominated Notes, Receipts and Coupons are
available for exchange (provided that such securities are so available). New
certificates in respect of euro-denominated Notes, Receipts and Coupons will
be issued in exchange for Notes, Receipts and Coupons in the original
Specified Currency in such manner as TMCC, after consultation with the Agent,
may specify and shall be notified to Noteholders in the Exchange Notice. No
Exchange Notice may be given less than 15 days prior to any date for payment
of principal or interest on the Notes.
(d) After the Redenomination Date, all payments in respect of the Notes,
the Receipts and the Coupons (other than, unless the Redenomination Date is
on or after such date as the original Specified Currency ceases to be a
subdivision of the euro, payments of interest in respect of periods
commencing before the Redenomination Date) will be made solely in euro as
though references in the Notes, the Receipts and the Coupons to the Specified
Currency were to euro. Such payments will be made in euro by credit or
transfer to a euro account (or any other account to which euro may be
credited or transferred) specified by the payee or by euro check; provided,
however, that a check may not be delivered to an address in, and an amount
may not be transferred to an account at a bank located in, the United States
of America or its possessions except as provided in Condition 6(b) above.
(e) after the Redenomination Date, "Business Day" in relation to any sum
payable in euro shall mean a day on which commercial banks and foreign
exchange markets settle payments and are open for general business (including
dealings in foreign exchange and foreign currency deposits) in London and New
York and a day on which the TARGET system is open. After the Redenomination
Date, "Payment Business Day" shall mean (A) a "Business Day" as defined in
this Condition 17(a)(v) and (B) a day on which commercial banks are open for
general business (including dealings in foreign exchange and foreign currency
deposits) in the relevant place of presentation.
(f) If definitive Notes have been issued, after the Redenomination Date,
A-34
<PAGE>
the amount of interest due in respect of Notes will be calculated by
reference to the aggregate nominal amount of Notes presented (or, as the case
may be, in respect of which Receipts or Coupons are presented) for payment by
the relevant holder and the amount of such payment shall be rounded down to
the nearest euro 0.01. If the Notes are in global form, after the
Redenomination Date, the amount of interest due in respect of Notes
represented by the global Note will be calculated by reference to the
aggregate nominal amount of such Notes and the amount of such payment shall
be rounded down to the nearest euro 0.01.
(g) The applicable Pricing Supplement will specify any relevant changes to
the provisions relating to interest, including without limitation, any
changes to the applicable Day Count Fraction and Business Day Convention.
2. Exchange
--------
Where exchange ("Exchange") is specified in the applicable Pricing Supplement
as being applicable, and unless otherwise specified in the applicable Pricing
Supplement, TMCC may, without the consent of any Noteholder, Receiptholder or
Couponholder, on giving prior notice to Euroclear, Cedelbank and the Agent
and at least 30 days' prior notice to the Noteholders as provided in
Condition 16 above, elect that, with effect from the Redenomination Date
specified in the notice, the Notes shall be exchangeable for Notes expressed
to be denominated in euro in accordance with such arrangements as TMCC may
decide, after consultation with the Agent, and as may be specified in the
notice, including arrangements under which Receipts and Coupons (which
expression shall for this purpose include Coupons to be issued on an exchange
of matured Talons) unmatured at the date so specified become void.
3. Consolidation
-------------
Where consolidation ("Consolidation") is specified in the applicable Pricing
Supplement as being applicable, and unless otherwise specified in the
applicable Pricing Supplement, TMCC may from time to time, without the
consent of any Noteholder, Receiptholder or Couponholder, on giving not less
than 30 days' prior notice to Noteholders (which notice shall set forth the
manner in which Consolidation shall be effected), consolidate the Notes with
one or more issues of other Notes ("Other Notes") issued by it, whether or
not originally issued in the Specified Currency of the Notes, in euro or in
another currency that has been replaced by euro, provided that the Notes and
such Other Notes have been redenominated into euro (if not originally
denominated in euro or ECU) and otherwise have, in respect of all periods
subsequent to such Consolidation, the same Terms and Conditions and Agent.
TMCC may exercise its rights referred to above in this Condition 17(c) if it
determines, after consultation with the Agent, that the Notes and Other Notes
which it proposes to consolidate will, with effect from their Consolidation,
be cleared and settled on an interchangeable basis with the same
International Securities Identification Number through each Relevant Clearing
System through which the Notes or the relevant Other Notes were cleared and
settled immediately prior to such Consolidation.
A-35
<PAGE>
Subject to the provisions of this Condition 17(c), TMCC may consolidate Notes
and Other Notes, which are listed on different stock exchanges and/or cleared
through different clearing systems, into a single Series of Notes listed on
only one or more of the stock exchanges on which either the Notes or any of
the Other Notes were listed immediately prior to Consolidation, and/or
cleared through only one or more of the clearing systems through which either
the Notes or any of the Other Notes were cleared immediately prior to
Consolidation.
4. Amendments and Modifications
----------------------------
The applicable Pricing Supplement in relation to any Notes may specify other
terms and conditions which shall, to the extent so specified or to the extent
inconsistent with the provisions of this Condition 17, replace or modify the
provisions of this Condition 17 for the purpose of such Notes. In addition,
TMCC and the Agent may make any changes, without the consent of, but with
notification to (in accordance with Condition 16 above and this Condition
17), any Noteholder, Receiptholder or Couponholder, to the Agency Agreement
necessary to implement the provisions of this Condition 17. Notwithstanding
anything to the contrary contained in this Condition 17, if TMCC determines,
after consultation with the Agent, that the then market practice in respect
of the redenomination into euro of internationally offered securities or
euro-denominated internationally offered securities is different from that
specified in this Condition 17, TMCC may (but shall not be required
to) amend the provisions of this Condition 17 and any other provision of
these Terms and Conditions, as applicable, so as to comply with such market
practice, and TMCC shall promptly notify Noteholders, the stock exchange (if
any) on which the Notes may be listed, the Paying Agents and the Agent of
such deemed amendments. Such changes will not take effect until after they
have been notified to Noteholders in accordance with Condition 16 above and
this Condition 17.
5. Definitions
-----------
In this Condition 17, the following expressions have the following meanings:
"Established Rate" means the rate for the conversion of the Specified
Currency (including compliance with rules relating to roundings in accordance
with applicable European Community regulations) into euro established by the
Council of the European Union pursuant to Article 1091(4) of the Treaty.
"euro" means the currency to be introduced at the start of the third stage of
European economic and monetary union pursuant to the Treaty.
"Redenomination Date" means in the case of interest bearing Notes any date
for payment of interest under the Notes or in the case of Zero Coupon Notes
any date, in each case specified by TMCC in the notice given to the
Noteholders pursuant to paragraph (a), (b), (c) or (d) of this Condition 17
and which falls on or after the start of the third stage of European economic
and monetary union pursuant to the Treaty or, if the country of the Specified
Currency is not one of the countries then participating in such third stage,
A-36
<PAGE>
which falls on or after such later date as it does so participate and which
falls before the date on which the Specified Currency ceases to be a sub-
division of the Euro.
"Relevant Clearing System" means:
(A) Morgan Guaranty Trust Company of New York, Brussels office, as operator
of the Euroclear System and Cedelbank;
(B) any clearing system which is a central securities depositary for the
Notes or relevant Other Notes; or
(C) the principal clearing system (if any) in the country of the original
Specified Currency of the Notes or the relevant Other Notes if the Notes or
the relevant Other Notes were clearing and settling in such clearing system
immediately prior to Consolidation.
"TARGET system" means the Trans-European Automated Real-time Gross Settlement
Express Transfer System.
R. Governing Law
-------------
The Agency Agreement and the Notes, the Receipts and the Coupons are governed
by, and shall be construed in accordance with, the laws of the State of New
York, United States of America, applicable to agreements made and to be
performed wholly within such jurisdiction.
A-37
<PAGE>
APPENDIX B-1
------------
FORMS OF GLOBAL AND DEFINITIVE NOTES,
-------------------------------------
COUPONS, RECEIPTS AND TALONS
-----------------------------
[THE ISSUER IS NOT AN INSTITUTION AUTHORIZED UNDER THE BANKING ACT 1987
(EXEMPT TRANSACTIONS) REGULATIONS 1997 (THE "BANKING ACT OF 1987") AND THIS
IS A [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY] 1 ISSUED IN
ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987.
REPAYMENT OF THE PRINCIPAL AND THE PAYMENT OF ANY INTEREST IN CONNECTION WITH
THIS [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY] 1 1 HAVE NOT BEEN
GUARANTEED.] 2
ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.3
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
TEMPORARY GLOBAL NOTE
Representing
[Specified Currency and Principal Amount of Series]
EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Serial No. [ ]
The Notes represented by this Temporary Global Note are listed
on The London Stock Exchange Limited
(the "London Stock Exchange") 4
- -----------------------------------------------------------------------------
1 Use the term "Shorter Term Debt Security" in the case of Notes with a
maturity of one year to two years and 364 days and use the term "Longer Term
Debt Security" in the case of Notes with a maturity of three years or more.
2 Delete entire paragraph in the case of all Notes other than Notes
denominated in Sterling and Notes of which the issue proceeds are accepted by
the Company in the United Kingdom.
3 Use this legend in the case of Notes with a maturity of more than 183
days. In the case of Notes with a maturity of 183 days or less, the
following legend should be used: By accepting this obligation, the holder
represents and warrants that it is not a United States person (other
than an exempt recipient described in Section 6049(b)(4) of the Internal
Revenue Code and the regulations thereunder) and that it is not acting for or
on behalf of a United States person (other than an exempt recipient described
in Section 6049(b)(4) of the Internal Revenue Code and the regulations
thereunder).
4 Delete in the case of all Notes other than Notes listed on the London
Stock Exchange, or add reference to any other Stock Exchange, if applicable.
B 1-1
<PAGE>
This Note is a Temporary Global Note in respect of a duly authorized issue of
[Specified Currency and Principal Amount of Series] Euro Medium-Term Notes
Dues [Year of Maturity] (the "Notes") of [Specified Currency and Specified
Denomination] each of Toyota Motor Credit Corporation (the "Company").
References herein to the Conditions shall be to the Terms and Conditions of
the Notes (the "Conditions") as set out in Appendix A to the Agency Agreement
(as defined below) as modified and supplemented by the information set out in
the Pricing Supplement (the "Pricing Supplement") (which is attached hereto),
provided that, in the event of any conflict between the provisions of the
Conditions and the information set out in the Pricing Supplement, the latter
shall prevail. Words and expressions defined in the Conditions and the
Pricing Supplement and not otherwise defined herein shall have the same
meanings when used herein.
This Temporary Global Note is issued subject to, and with the benefit of, the
Conditions and the Second Amended and Restated Agency Agreement (the "Agency
Agreement," which expression shall be construed as a reference to that
agreement as the same may be amended or supplemented from time to time) dated
as of July 24, 1997, between the Company and The Chase Manhattan Bank (the
"Agent") and the other agents named therein; provided, however, that the
reference to the Conditions shall mean the Conditions in effect on the date
of this Temporary Global Note and shall not be affected by any amendments to
the Conditions which occur thereafter.
This Temporary Global Note is to be held by a common depositary for Morgan
Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear"), Cedelbank and/or such other relevant clearing
agency as is specified in the related Pricing Supplement on behalf of account
holders which have the Notes represented by this Temporary Global Note
credited to their respective securities accounts therewith from time to time.
For value received, the Company, subject to and in accordance with the
Conditions, promises to pay to the bearer hereof on [each Installment Date
the relevant Installment Amount] the [Maturity Date], or on such earlier date
as the Notes may become due and repayable in accordance with the Conditions,
the amount payable under the Conditions on redemption of the Notes then
represented by this Temporary Global Note and to pay interest (if any) on the
principal amount of the Notes from time to time represented by this Temporary
Global Note calculated and payable as provided in the Conditions together
with any other sums payable under the Conditions, upon presentation and, at
maturity, surrender of this Temporary Global Note at the principal office of
the Agent in London, England, or at the offices of any of the other paying
agents located outside the United States (as defined below) (except as
provided in the Conditions) from time to time appointed by the Company in
respect of the Notes, but in each case subject to the requirements as to
certification provided herein. Any monies paid by the Company to the Agent
for the payment of or interest on any Notes and remaining unclaimed at the
end of one year after such principal or interest shall have become due and
payable (whether at maturity, upon call for redemption or otherwise) shall
then be repaid to the Company and upon such repayment all liability of the
Agent with respect thereto shall thereupon cease, without, however, limiting
in any way any obligation the Company may have to pay the principal of or
B 1-2
<PAGE>
interest on this Note as the same shall become due. On any payment of an
installment or interest being made, details of such payment shall be entered
by or on behalf of the Company in Schedule One hereto and the relevant space
in Schedule One hereto recording any such payment shall be signed by or on
behalf of the Company.
On any redemption or purchase and cancellation of any of the Notes
represented by this Temporary Global Note, details of such redemption or
purchase and cancellation shall be entered by or on behalf of the Company in
Schedule Two hereto and the relevant space in Schedule Two hereto recording
any such redemption or purchase and cancellation shall be signed by or on
behalf of the Company. Upon any such redemption or purchase and
cancellation, the principal amount of this Temporary Global Note and the
Notes represented by this Temporary Global Note shall be reduced by the
principal amount so redeemed or purchased and canceled.
Prior to the Exchange Date (as defined below), all payments (if any) on this
Temporary Global Note will only be made to the bearer hereof to the extent
that there is presented to the Agent by Euroclear, Cedelbank and/or such
other relevant clearing agency, a certificate, substantially in the form set
out in Schedule Three hereto, to the effect that it has received from or in
respect of a person entitled to a particular principal amount of the Notes
(as shown by its records) a certificate from such person in or substantially
in the form of Certificate "A" as set out in Schedule Three hereto. After
the Exchange Date the holder of this Temporary Global Note will not be
entitled to receive any payment of interest hereon.
On or after the date which is 40 days after the Issue Date (the "Exchange
Date"), this Temporary Global Note may, under the circumstances set forth in
the Conditions and the Pricing Supplement (including, without limitation,
certification that the distribution of the Notes of this Series has been
completed), be exchanged, in whole or in part for either Definitive Notes and
(if applicable) Receipts, Coupons and Talons in or substantially in the forms
set out in Appendices B-3, B-4, B-5 and B-6, respectively, to the Agency
Agreement (on the basis that all appropriate details have been included on
the face of such Definitive Notes and (if applicable) Receipts, Coupons and
Talons and the Pricing Supplement (or the relevant provisions of the Pricing
Supplement) have either been endorsed on or attached to such Definitive
Notes) and/or, a Permanent Global Note in the form set out in Appendix B-2 to
the Agency Agreement (together with the Pricing Supplement attached thereto)
upon presentation of this Temporary Global Note by the bearer hereof at the
offices of the Agent in London, England (or at such other place outside the
United States of America, its territories and possessions, any State of the
United States and the District of Columbia (the "United States") as the Agent
may agree). As specified in the Pricing Supplement, the exchange of this
Temporary Global Note for Definitive Notes may also require written notice
being given to the Agent by Euroclear, Cedel Bank or other relevant clearing
agency on behalf of holders of Notes and/or the payment of certain costs each
of which shall be specified in the Pricing Supplement. Definitive Notes or
the Permanent Global Note shall be so issued and delivered in exchange for
only that portion of this Temporary Global Note in respect of which there
shall have been presented to the Agent by Euroclear, Cedel Bank and/or such
B 1-3
<PAGE>
other relevant clearing agency, a certificate, substantially in the form set
out in Schedule Three hereto, to the effect that it has received from or in
respect of a person entitled to a particular principal amount of the Notes
(as shown by its records) a certificate from such person in or substantially
in the form of Certificate "A" as set out in Schedule Three hereto and, in
the case of Definitive Notes, subject to such notice period and payment of
costs as may be specified in the Pricing Supplement. If Definitive Notes and
(if applicable) Receipts, Coupons and Talons have already been issued in
exchange for all the Notes represented for the time being by the Permanent
Global Note, then this Temporary Global Note may only thereafter be exchanged
for Definitive Notes and (if applicable) Receipts, Coupons and Talons
pursuant to the terms hereof.
On an exchange of the whole of this Temporary Global Note, this Temporary
Global Note shall be surrendered to the Agent. On an exchange of part only
of this Temporary Global Note, details of such exchange shall be entered by
or on behalf of the Company in Schedule Two hereto and the relevant space in
Schedule Two hereto recording such exchange shall be signed by or on behalf
of the Company. If, following the issue of a Permanent Global Note in
exchange for some of the Notes represented by this Temporary Global Note,
further Notes represented by this Temporary Global Note are to be exchanged
pursuant to this paragraph, such exchange may be effected, without the issue
of a new Permanent Global Note, by the Company or its agent endorsing
Schedule Two of the Permanent Global Note previously issued to reflect an
increase in the aggregate principal amount of the Permanent Global Note which
would otherwise have been issued on such exchange.
Until the exchange of the whole of this Temporary Global Note as aforesaid,
the bearer hereof shall in all respects (except as otherwise provided herein)
be entitled to the same benefits as if it were bearer of Definitive Notes,
Coupons and Receipts in the form set out in Appendices B-3, B-4, and B-5 to
the Agency Agreement.
[The Company has complied with its obligations under the relevant rules (as
defined in the Banking Act 1987 (Exempt Transactions) Regulations 1997 (the
"Regulations") and under rules made under Section 142(6) of the Financial
Services Act 1986 in respect of its debt securities listed on the London
Stock Exchange. Since information was last provided in compliance with those
obligations, the Company, having made all reasonable enquiries, has not
become aware of any change in circumstances which could reasonably be
regarded as significantly and adversely affecting its ability to meet its
obligations in respect hereof as they fall due.] 5
This Temporary Global Note is governed by, and shall be construed in
accordance with, the laws of the State of New York, United States of America,
applicable to agreements made and to be performed wholly within such
jurisdiction. This Temporary Global Note shall not be valid unless
authenticated by the Agent. This Temporary Global Note may be duly executed
on behalf of the Company by manual or facsimile signature.
- -----------------------------------------------------------------------------
5 Delete in the case of all Notes other than Notes denominated in Sterling
and Notes in respect of which the issue proceeds are accepted by the Company
in the United Kingdom.
B 1-4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Temporary Global Note to be
duly executed on its behalf.
Dated: TOYOTA MOTOR CREDIT CORPORATION
By:
-------------------------------
George Borst
Senior Vice President
and General Manager
FISCAL AGENT'S CERTIFICATE ATTEST:
AUTHENTICATION
This is one of the Temporary --------------------------------
Global Notes described in the Robert Pitts
within mentioned Agency Agreement Secretary
By or on behalf of
THE CHASE MANHATTAN BANK
as Fiscal Agent
By: -----------------------
Authorized Signatory)
B 1-5
<PAGE>
SCHEDULE ONE
------------
PART I
------
INTEREST PAYMENTS
-----------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Confirmation of
Total Amount payment by or
Interest Date of of Interest Amount of on behalf of
Payment Date Payment Payable Interest Paid the Company
- ------------ ------- ------------- ------------- ---------------
First ------- ------------- ------------- ---------------
Second ------- ------------- ------------- ---------------
</TABLE>
B 1-6
<PAGE>
SCHEDULE ONE
------------
PART II
-------
INSTALLMENT PAYMENTS
--------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Confirmation of
Total Amount Amount of payment by or
Interest Date of of Installments Installments on behalf of
Payment Date Payment Payable Paid the Company
- ------------ ------- --------------- ------------- ---------------
First ------- --------------- ------------- ---------------
Second ------- --------------- ------------- ---------------
</TABLE>
B 1-7
<PAGE>
SCHEDULE TWO
------------
SCHEDULE OF EXCHANGES
---------------------
FOR NOTES REPRESENTED BY A PERMANENT GLOBAL NOTE OR
---------------------------------------------------
DEFINITIVE NOTES, OR REDEMPTIONS OR PURCHASES AND CANCELLATIONS
---------------------------------------------------------------
The following exchanges of a part of this Temporary Global Note for Notes
represented by a Permanent Global Note or Definitive Notes or redemptions or
purchases and cancellation of this Temporary Global Note have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Part of
principal
amount of this Temporary
Globe Note
exchanged for Remaining Remaining
Notes principal amount payable
represented by amount of this under this
a Permanent Temporary Temporary
Global Note or Global Note Global Note
Date of Definitive following such following such
exchange, or Notes or exchange, or exchange, or Notation made
redemption or redeemed or redemption or redemption or by or on
purchase and purchase and purchase and purchase and behalf of the
cancellation canceled cancellation cancellation Company
- ------------- ------------- -------------- -------------- -------------
- ------------- ------------- -------------- -------------- -------------
- ------------- ------------- -------------- -------------- -------------
- ------------- ------------- -------------- -------------- -------------
</TABLE>
B 1-8
<PAGE>
SCHEDULE THREE
--------------
FORM OF CERTIFICATE TO BE PRESENTED BY
--------------------------------------
APPROPRIATE CLEARING SYSTEM
---------------------------
TOYOTA MOTOR CREDIT CORPORATION
-------------------------------
(the "Securities")
This is to certify that, based solely on certifications we have received in
writing, by telex or by electronic transmission from member organizations
appearing in our records as persons being entitled to a portion of the
principal amount set forth below (our "Member Organizations") substantially
to the effect set forth in the Agency Agreement, as of the date hereof, [ ]
principal amount of above-captioned Securities (i) is owned by persons that
are not citizens or residents of the United States, partnerships,
corporations or other entities created or organized under the laws of the
United States or any estate or trust the income of which is subject to United
States federal income taxation regardless of its source ("United States
persons"), (ii) is owned by United States persons that (a) are foreign
branches of United States financial institutions (as defined in U.S. Treasury
Regulations Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing
for their own account or for resale, or (b) acquired the Securities through
foreign branches of United States financial institutions and hold the
securities through such United States financial institutions on the date
hereof (and in either case (a) or (b), each such United States financial
institution has agreed, or its own behalf, or through its agent, that we may
advise the Company or the Company's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code
of 1986, as amended, and the U.S. Treasury Regulations thereunder), or (iii)
is owned by the United States or foreign financial institutions for purposes
of resale during the restricted period (as defined in U.S. Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the further effect that
United States or foreign financial institutions described inn clause (iii)
(whether or not also described in clauses (i) or (ii)) have certified that
they have not acquire the Securities for purposes of resale directly or
indirectly to a United States person or to a person within the United States
or its possessions.
As used herein, "United States" means the United States of America (including
the States and the District of Columbia); and its "possessions" include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and
the Northern Mariana Islands.
We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest) any
portion of the temporary global Security excepted in such Member Organization
certifications and (ii) that as of the date hereof we have not received any
notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any portion of
the part submitted herewith for exchange (or, if relevant, exercise of any
rights or collection of any interest) are no longer true and cannot be relied
upon at the date hereof.
B 1-9
<PAGE>
We will retain all certificates received from Member Organizations for the
period specified in U.S. Treasury Regulation Section 1.163-
5(c)(2)(i)(D)(3)(i)(C).
We understand that this certification is required in connection with certain
tax laws of the United States. In connection therewith, if administrative
and legal proceeds are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to
produce this certification to any interested party in such proceedings.
Dated:
Yours faithfully,
[APPROPRIATE CLEARING SYSTEM]
By:
--------------------------
* This certificate is not to be dated earlier than five days prior to the
Exchange Date or relevant payment date, as applicable.
B 1-10
<PAGE>
CERTIFICATE "A"
---------------
FORM OF CERTIFICATE TO BE PRESENTED TO
--------------------------------------
APPROPRIATE CLEARING SYSTEM
---------------------------
TOYOTA MOTOR CREDIT CORPORATION
-------------------------------
(the "Securities")
This is to certify that as of the date hereof, and except as set forth below,
the above-captioned Securities held by you for our account (i) are owned by
person(s) that are not citizens or residents of the United states,
partnerships, corporations or other entities created or organized in the
United States or under the law of the United States or of any State thereof,
or any estate or trust the income of which is subject to United States
federal income taxation regardless of its source ("United States person(s)"),
(ii) are owned by United States person(s) that (a) are foreign branches of
United States financial institutions (as defined in U.S. Treasury Regulations
Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing for their
own account or for resale, or (b) acquired the Securities through foreign
branches of United States financial institutions and hold the Securities
through such United States financial institutions on the date hereof (and in
either case (a) or (b), each such United States financial institution hereby
agrees, on its own behalf or through its agent, that you may advise the
Company or the Company's agent that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the U.S. Treasury Regulations thereunder), or (iii) are owned by
United States or foreign financial institutions for purposes of resale during
the restricted period (as defined in U.S. Treasury Regulations Section 1.163-
5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is a United
States or foreign financial institution described in clause (iii) (whether or
not also described in clauses (i) or (ii)) this is further to certify that
such financial institution has not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
As used herein, "United States" means the United States of America (including
the States and the District of Columbia); and its "possessions" include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and
the Northern Mariana Islands.
We undertake to advise you promptly by tested telex or facsimile on or prior
to the date on which you intend to submit your certification relating to the
Securities held by you for our account in accordance with your documented
procedures if any applicable statement herein is not correct on such date,
and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certification excepts and does not relate to [ ] of such interest in
the above Securities in respect of which we are not able to certify and as to
which we understand exchange and delivery of definitive Securities and/or an
interest in a Permanent Global Note (or, if relevant, exercise of any right
or collection of any interest) cannot be made until we do so certify.
B 1-11
<PAGE>
We understand that this certification is required in connection with certain
tax laws of the United States. In connection therewith, if administrative
and legal proceedings are commenced or threatened in connection with which
this certification is or would be relevant, we irrevocably authorize you to
produce this certification to any interested party in such proceedings.
Dated:
Yours faithfully,
[Name of Person Making Certification]
By:
----------------------------------
* This certificate is not to be dated earlier than fifteen days prior to the
Exchange Date or relevant payment date, as applicable.
B 1-12
<PAGE>
APPENDIX B-2
------------
FORM OF PERMANENT GLOBAL NOTE OF
--------------------------------
TOYOTA MOTOR CREDIT CORPORATION
-------------------------------
[THE ISSUER IS NOT AN INSTITUTION AUTHORIZED UNDER THE BANKING ACT 1987
(EXEMPT TRANSACTIONS) REGULATIONS 1997 (THE "BANKING ACT OF 1987") AND THIS
IS A [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY]6 ISSUED IN
ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987.
REPAYMENT OF THE PRINCIPAL AND THE PAYMENT OF ANY INTEREST IN CONNECTION WITH
THIS [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY]61 HAVE NOT BEEN
GUARANTEED.]7
ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNATIONAL REVENUE CODE.8
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
PERMANENT GLOBAL NOTE
representing
[Specified Currency and Principal Amount of Series]
[EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Series No. [ ]
The Notes represented by this Permanent Global Note are listed
on The London Stock Exchange Limited
(the "London Stock Exchange")9
- ------------------------------------------------------------------------
6 Use the term "Shorter Term Debt Security" in the case of Notes with a
maturity of one year to two years and 364 days and use the term "Longer Term
Debt Security" in the case of Notes with a maturity of three years or more.
7 Delete entire paragraph in the case of all Notes other than Notes
denominated in Sterling and Notes in respect of which the issue proceeds are
accepted by the Company in the United Kingdom.
8 Use this legend in the case of Notes with a maturity of more than 183
days. In the case of Notes with a maturity of 183 days or less, the
following legend should be used: By accepting this obligation, the holder
represents and warrants that it is not a United States person (other
than an exempt recipient described in Section 6049(b)(4) of the Internal
Revenue Code and the regulations thereunder) and that it is not acting for or
on behalf of a United States person (other than an exempt recipient described
in Section 6049(b)(4) of the Internal Revenue Code and the regulations
thereunder).
9 Delete in the case of all Notes other than Notes listed on the London
Stock Exchange, or add reference to other Stock Exchange, if applicable.
B 2-1
<PAGE>
This Note is a Permanent Global Note in respect of a duly authorized issue of
[Specified Currency and Principal Amount of Series] Euro Medium-Term Note Due
[Year of Maturity] (the "Notes") of [Specified Currency and Specified
Denomination] each of Toyota Motor Credit Corporation (the "Company").
References herein to the Conditions shall be to the Terms and Conditions of
the Notes (the "Conditions") as set forth out in Appendix A to the Agency
Agreement (as defined below) as modified and supplemented by the information
set out in the Pricing Supplement (the "Pricing Supplement") (which is
attached hereto) and, in the event of any conflict between the provisions of
the Conditions and the information set out in the Pricing Supplement, the
latter shall prevail. Words and expressions defined in the Conditions and
the Pricing Supplement and not otherwise defined herein shall have the same
meanings when used herein.
This Permanent Global Note is issued subject to, and with the benefit of, the
Conditions and the Second Amended and Restated Agency Agreement (the "Agency
Agreement," which expression shall be construed as a reference to that
agreement as the same may be amended or supplemented from time to time) dated
as of July 24, 1997, between the Company and The Chase Manhattan Bank (the
"Agent") and the other agents named herein; provided, however, that the
reference to the Conditions shall mean the Conditions in effect on the date
of issue of the Temporary Global Note that originally represented this Note
and shall not be affected by any amendments to the Conditions which occur
thereafter.
This Permanent Global Note is to be held by a common depositary for Morgan
Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear"), Cedelbank and/or such other relevant clearing
agency as is specified in the related Pricing Supplement on behalf of account
holders which have the Notes represented by this Permanent Global Note
credited to their respective securities accounts therewith from time to time.
For value received, the Company, subject to and in accordance with the
Conditions, promises to pay to the bearer hereof on [each Installment Date
the relevant Installment Amount] the [Maturity Date], or on such earlier date
as the Notes may become due and repayable in accordance with the Conditions,
the amount payable under the Condition on redemption of the Notes then
represented by this Permanent Global Note and to pay interest (if any) on the
principal amount of the Notes from time to time represented by this Permanent
Global Note calculated and payable as provided in the Conditions together
with any other sums payable under the Conditions, upon presentation and, at
maturity, surrender of this Permanent Global Note at the principal office of
the Agent in London, England, or at the offices of any of the other paying
agents located outside of the United States (as defined below) (except as
provided in the Condition) from time to time appointed by the Company in
respect of the Notes. Any monies paid by the Company to the Agent for the
payment of or interest on any Notes and remaining unclaimed at the end of one
year after such principal or interest shall have become due and payable
(whether at maturity, upon call for redemption or otherwise) shall then be
repaid to the Company and upon such repayment all liability of the Agent with
respect thereto shall thereupon cease, without, limiting in any way any
obligation the Company may have to pay the principal of or interest on this
Note as the same shall become due. On any payment of an installment or
interest being made details of such payment shall be entered by or on behalf
of the Company in Schedule One hereto and the relevant space in Schedule One
hereto recording any such payment shall be signed by or on behalf of the
Company.
B 2-2
<PAGE>
On any redemption or purchase and cancellation of any of the Notes
represented by this Permanent Global Note, details of such redemption or
purchase and cancellation shall be entered by or on behalf of the Company in
Schedule Two hereto and the relevant space in Schedule Two hereto recording
any such redemption or purchase and cancellation shall be signed by or on
behalf of the Company. Upon any such redemption or purchase and
cancellation, the principal amount of this Permanent Global Note and the
Notes represented by this Permanent Global Note shall be reduced by the
principal amount so redeemed or purchased and canceled.
The Notes represented by this Permanent Global Note were originally
represented by a Temporary Global Note. Unless such Temporary Global Note
was exchanged in whole on the issue hereof, such Temporary Global Note may be
further exchanged, on the terms and conditions set out therein, for this
Permanent Global Note. If any such exchange occurs following the issue
hereof, the Company or its agent shall endorse Schedule Two hereto to reflect
the increase in the aggregate principal amount of this Permanent Global Note
due to each such exchange, whereupon the principal amount hereof shall be
increased for all purposes by the amount so exchanged and endorsed.
This Permanent Global Note may (under the circumstances set forth in the
Conditions and the Pricing Supplement, be exchanged, in whole, but not in
part, for security-printed Definitive Notes and (if applicable) Receipts,
Coupons and Talons in or substantially in the forms set out in Appendices B-
3, B-4, B-5 and B-6, respectively, of the Agency Agreement (on the basis that
all appropriate details have been included on the face of such Definitive
Notes and (if applicable) Receipts, Coupons and Talons and the Pricing
Supplement (or the relevant provisions of the Pricing Supplement) have been
either endorsed on or attached to such Definitive Notes) in denominations of
[Specified Currency and Specified Denomination] each. As specified in the
Pricing Supplement, such exchange may also require written notice being given
to the Agent by Euroclear, Cedelbank or such other relevant clearing agency
on behalf of the holders of the Notes and/or the payment of certain costs,
each of which shall be specified in the pricing Supplement. Such exchange,
if any, will be made upon presentation of this Permanent Global Note by the
bearer hereof on any day (other than a Saturday or a Sunday) on which banks
are open for business in London at the principal office of the Agent in
London, England; provided, however, the first notice given tot he Agent by
Euroclear, Cedelbank and/or such other relevant clearing agency shall give
rise to the issue of Definitive Notes for the total amount of Notes
represented by this Global Note. The aggregate principal amount of
Definitive Notes issued upon an exchange of this Permanent Global Note will
be equal to the aggregate principal amount of this Permanent Global Note
submitted by the bearer hereof for exchange (to the extent that such
principal amount does not exceed the aggregate principal amount of this
Permanent Global Note, as adjusted, as shown in Schedule Two hereto). On an
exchange of the whole of this Permanent Global Note, this Permanent Global
Note shall be surrendered to the Agent.
Until the exchange of the whole of this Permanent Global Note as aforesaid,
the bearer hereof shall in all respects be entitled to the same benefits as
if it were the bearer of Definitive Notes, Coupons, Receipts and Talons in
the form set out in Appendices B-3, B-4, B-5 and B-6, respectively, to the
Agency Agreement.
B 2-3
<PAGE>
[The Company has complied with its obligations under the relevant rules (as
defined in the Banking Act 1987 (Exempt Transactions) Regulations 1997 (the
"Regulations") and under rules made under Section 142(6) of the Financial
Services Act 1986 in respect of its debt securities listed on the London
Stock Exchange. Since information was last provided in compliance with those
obligations, the Company, having made all reasonable enquiries, has not
become aware of any change in circumstances which could reasonably be
regarded as significantly and adversely affecting its ability to meet its
obligations in respect hereof as they fall due.]10
This Permanent Global Note is governed by, and shall be construed in
accordance with, the laws of the State of New York, United States of America,
applicable to agreements made and to be performed wholly within such
jurisdiction.
This Permanent Global Note shall not be valid unless authenticated by the
Agent. This Permanent Global Note may be duly executed on behalf of the
Company by manual or facsimile signature.
- -----------------------------------------------------------------------------
10 Delete in the case of all Notes other than Notes denominated in Sterling
and Notes in respect of which the proceeds are accepted by the Company in the
United Kingdom.
B 2-4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Permanent Global Note to be
duly executed on its behalf.
Dated: TOYOTA MOTOR CREDIT CORPORATION
By:
----------------------------
George Borst
Senior Vice President
and General Manager
FISCAL AGENT'S CERTIFICATE ATTEST:
AUTHENTICATION
This is one of the Permanent --------------------------------
Global Notes described in the Robert Pitts
within mentioned Agency Agreement Secretary
By or on behalf of
THE CHASE MANHATTAN BANK
as Fiscal Agent
By:
-------------------------
(Authorized Signatory)
B 2-5
<PAGE>
SCHEDULE ONE
------------
PART I
------
INTEREST PAYMENTS
-----------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Confirmation of
Total Amount payment by or
Interest Date of of Interest Amount of on behalf of
Payment Date Payment Payable Interest Paid the Company
- ------------ ------- ------------- ------------- ---------------
First ------- ------------- ------------- ---------------
Second ------- ------------- ------------- ---------------
</TABLE>
B 2-6
<PAGE>
SCHEDULE ONE
------------
PART II
-------
INSTALLMENT PAYMENTS
--------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Confirmation of
Total Amount Amount of payment by or
Interest Date of of Installments Installments on behalf of
Payment Date Payment Payable Paid the Company
- ------------ ------- --------------- ------------- ---------------
First ------- --------------- ------------- ---------------
Second ------- --------------- ------------- ---------------
</TABLE>
B 2-7
<PAGE>
SCHEDULE TWO
------------
SCHEDULE OF EXCHANGES OF A TEMPORARY
------------------------------------
GLOBAL NOTE AND FOR DEFINITIVE NOTES
------------------------------------
OR REDEMPTIONS OR PURCHASES AND CANCELLATIONS
---------------------------------------------
The following increases of this Permanent Global Note, exchanges of this
Permanent Global Note for Definitive Notes or redemptions or purchases and
cancellations of this Permanent Global Note have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Remaining
Increase in Part of principal amount payable
principal amount amount of this under this
of this Permanent Permanent Permanent
Global Note due Global Note Global Note
Date of to exchange of a exchanged for following such Notation
exchange, or Temporary Definitive Notes exchange, or made by or
redemption or Global Note for or redeemed or redemption or on behalf
purchase and this Permanent purchased and purchased and of the
cancellation Global Note canceled cancellation Company
- ------------- ---------------- ----------------- -------------- ---------
- ------------- ---------------- ----------------- -------------- ---------
- ------------- ---------------- ----------------- -------------- ---------
- ------------- ---------------- ----------------- -------------- ---------
- ------------- ---------------- ----------------- -------------- ---------
</TABLE>
B 2-8
<PAGE>
APPENDIX B-3
------------
DEFINITIVE NOTE OF
------------------
TOYOTA MOTOR CREDIT CORPORATION
-------------------------------
[THE ISSUER IS NOT AN INSTITUTION AUTHORIZED UNDER THE BANKING ACT 1987
(EXEMPT TRANSACTIONS) REGULATIONS 1997 (THE "BANKING ACT OF 1987") AND THIS
IS A [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY]11 ISSUED IN
ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987.
REPAYMENT OF THE PRINCIPAL AND THE PAYMENT OF ANY INTEREST IN CONNECTION WITH
THIS [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY]11 HAVE NOT BEEN
GUARANTEED.]12
ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. 13
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
representing
[Specified Currency and Principal Amount of Series]
[EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Series No. [ ]
The Notes represented by this Definitive Note are listed
on The London Stock Exchange Limited
(the "London Stock Exchange")14
- -----------------------------------------------------------------------------
11 Use the term "Shorter Term Debt Securities" in the case of Notes with a
maturity of one year to two years and 364 days and use the term "Longer Term
Debt Security" in the case of Notes with a maturity of three years or more.
12 Delete entire paragraph in the case of all Notes other than Notes
denominated in Sterling and Notes of which the issue proceeds are accepted by
the Company in the United Kingdom.
13 Use this legend in the case of Notes with a maturity of more than 183
days. In the case of Notes with a maturity of 183 days or less, the
following legend should be used: By accepting this obligation, the holder
represents and warrants that it is not a United States person (other
than an exempt recipient described in Section 6049(b)(4) of the Internal
Revenue Code and the regulations thereunder) and that it is not acting for or
on behalf of a United States person (other than an exempt recipient described
in Section 6049(b)(4) of the Internal Revenue Code and the regulations
thereunder.
14 Delete in the case of all Notes other than Notes listed on the London
Stock Exchange, or add reference to other Stock Exchange, if applicable.
B 3-1
<PAGE>
This Note is one of the series of notes of [Specified Currency and Principal
Amount of Series] ("Notes") each of Toyota Motor Credit Corporation (the
"Company"). References herein to the Conditions shall be to the Terms and
Conditions of the Notes (the "Conditions") as set out in Appendix A to the
Agency Agreement (as defined below) as modified and supplemented by the
information set out in the Pricing Supplement (the "Pricing Supplement")
(which is reproduced on the reverse hereof) and, in the event of any conflict
between the provisions of the Conditions and the information set out in the
Pricing Supplement, the latter shall prevail. Words and expressions defined
in the Conditions and the Pricing Supplement and not otherwise defined herein
shall have the same meanings when used herein.
This Note is issued subject to, and with the benefit of, the Conditions and
the Second Amended and Restated Agency Agreement (the "Agency Agreement."
which expression shall be construed as a reference to that agreement as the
same may be amended or supplemented from time to time) dated as of July 24,
1997, between the Company and The Chase Manhattan Bank (the "Agent") and the
other agents named therein; provided, however, that the reference to the
Conditions shall mean the Conditions in effect on the date of issue of the
Temporary Global Note that originally represented this Note and shall not be
affected by any amendments to the Conditions which occur thereafter.
For value received, the Company, subject to and in accordance with the
Conditions, promises to pay to the bearer hereof on [each Installment Date
the relevant Installment Amount] the [Maturity Date], or on such earlier date
as the Notes may become due and repayable in accordance with the Conditions,
the amount payable on redemption of this Note and to pay interest (if any) on
the principal amount of this Note calculated and payable as provided in the
Conditions.
Title to this Note and to any Coupon, Talon or Receipt appertaining, hereto
shall pass by delivery. The Company may treat the bearer hereof as the
absolute owner of this Note for all purposes (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or writing hereof or
notice of any previous loss or theft thereof).
[The Company has complied with its obligations under the relevant rules (as
defined in the Banking Act 1987 (Exempt Transactions) Regulations 1997 (the
"Regulations") and under rules made under Section 142(6) of the Financial
Services Act 1986 in respect of its debt securities listed on the London
Stock Exchange Limited. Since information was last provided in compliance
with those obligations, the Company, having made all reasonable inquiries,
has not become aware of any change in circumstances which could reasonably be
regarded as significantly and adversely affecting its ability to meet its
obligations in respect hereof as they fall due.] 15
This Note is governed by, and shall be construed in accordance with, the laws
of the State of New York, United States of America, applicable to agreements
made and to be performed wholly within such jurisdiction.
This Note may be duly executed on behalf of the Company by manual or
facsimile signature.
- -----------------------------------------------------------------------------
15 Delete in the case of all Notes other than Notes denominated in Sterling
and Notes in respect of which the issue proceeds are accepted by the Company
in the United Kingdom.
B 3-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed on
its behalf.
Dated: TOYOTA MOTOR CREDIT CORPORATION
By:
----------------------------
George Borst
Senior Vice President
and General Manager
FISCAL AGENT'S CERTIFICATE ATTEST:
AUTHENTICATION
This is one of the Notes -------------------------------
described in the within Robert Pitts
mentioned Agency Agreement Secretary
By or on behalf of
THE CHASE MANHATTAN BANK
as Fiscal Agent
By:
------------------------
(Authorized Signatory)
[Reverse Of Note - Terms And Conditions Of The Notes]
B 3-3
<PAGE>
APPENDIX B-4
------------
FORM OF COUPON
--------------
PART A
------
(Face of Coupon)
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
[Specified Currency and Principal Amount of Series]
EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Series No. [ ]
Part A
- ------
(Revenue of Coupon)
For Fixed Rate Notes:
<TABLE>
<CAPTION>
<S> <C>
This Coupon is payable to bearer, Coupon No. F
separately negotiable and subject to Coupon for [ ]
the Terms and Conditions of the Note due on [ ]
to which it appertains [19[ ]/2-[ ]]
- ------------------------------------ ------------------------------------
[SEAL]
[ATTEST] TOYOTA MOTOR CREDIT CORPORATION
By: By:
-------------------------- -----------------------------
Authorized Officer Authorized Officer
</TABLE>
ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. 16
- -----------------------------------------------------------------------------
16 Use this legend in the case of Notes with a maturity of more than 183
days. In the case of Notes with a maturity of 183 days or less, the
following legend should be used: By accepting this obligation, the holder
represents and warrants that it is not a United States person (other
than an exempt recipient described in Section 6049(b)(4) of the Internal
Revenue Code and the regulations thereunder) and that it is not acting for or
on behalf of a United States person (other than an exempt recipient described
in Section 6049(b)(4) of the Internal Revenue Code and the regulations
thereunder).
B 4-1
<PAGE>
APPENDIX B-4
------------
FORM OF COUPON
--------------
PART B
------
(Face of Coupon)
ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.1 1
For Floating Rate, Dual Currency and Indexed Notes:
<TABLE>
<CAPTION>
<S> <C>
Coupon for the amount due in accordance Coupon No. F
with the Terms and Conditions of the Coupon due in
said Notes. This Coupon is payable to [ ]
bearer, separately negotiable and [19[ ]/20[ ]]
subject to such Terms and Conditions of
the Note to which it appertains, under
which it may become void before its due
date.
- --------------------------------------- ---------------------------
[SEAL]
ATTEST TOYOTA MOTOR CREDIT
CORPORATION
By: By:
---------------------- ------------------------
Authorized Officer Authorized Officer
</TABLE>
- -----------------------------------------------------------------------------
1 Use this legend in the case of Notes with a maturity of more than 183
days. In the case of Notes with a maturity of 183 days or less, the
following legend should be used: By accepting this obligation, the holder
represents and warrants that it is not a United States person (other
than an exempt recipient described in Section 6049(b)(4) of the Internal
Revenue Code and the regulations thereunder) and that it is not acting for or
on behalf of a United States person (other than an exempt recipient described
in Section 6049(b)(4) of the Internal Revenue Code and the regulations
thereunder).
B 4-2
<PAGE>
(Reverse of Coupon)
ISSUING AND PRINCIPAL PAYING AGENT
----------------------------------
The Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London E1 9YT
ENGLAND
PAYING AGENT
------------
Chase Manhattan Bank Luxembourg S.A.
5 Rue Plaetis
L-2338
Luxembourg
and/or such other or further Agent and other or further Paying Agents and/or
specified offices as may from time to time be duly appointed by the Company
and notice of which has been given to the Noteholders.
B 4-3
<PAGE>
APPENDIX B-5
------------
FORM OF RECEIPT
---------------
(On the front)
ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. 17
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
[Specified Currency and Principal Amount of Series]
EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Series No. [ ]
Receipt for the sum of [ ] being the installment of principal payable
in accordance with the Terms and Conditions endorsed on the Note to which
this Receipt appertains (the "Conditions") on [ ].
This Receipt is issued subject to and in accordance with the Conditions which
shall be binding upon the holder of this Receipt (whether or not it is for
the time being attached to such Note) and is payable at the specified office
of any of the Paying Agents set out on the reverse of the Note to which this
Receipt appertains (and/or any other or further Paying Agents and/or
specified offices as may from time to time be duly appointed and notified to
the Noteholders).
- -----------------------------------------------------------------------------
17 Use this legend in the case of Notes with a maturity of more than 183
days. In the case of Notes with a maturity of 183 days or less, the
following legend should be used: By accepting this obligation, the holder
represents and warrants that it is not a United States person (other than an
exempt recipient described in Section 6049(b)(4) of the Internal Revenue Code
and the regulations thereunder) and that it is not acting for or on behalf of
a United States person (other than an exempt recipient described in Section
6049(b)(4) of the Internal Revenue Code and the regulations thereunder).
B 5-1
<PAGE>
This Receipt must be presented for payment together with the Note to which it
appertains. The Company shall have no obligation in respect of any Receipt
presented without the Note to which it appertains or any unmatured Receipts.
[SEAL]
ATTEST TOYOTA MOTOR CREDIT
CORPORATION
By: By:
---------------------- ------------------------
Authorized Officer Authorized Officer
B 5-2
<PAGE>
APPENDIX B-6
------------
FORM OF TALON
-------------
(On the front)
ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS
165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
[Specified Currency and Principal Amount of Series]
EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Series No. [ ]
On and after [ ] further Coupons [and a further Talon] appertaining
to the Note to which this Talon appertains will be issued at the specified
office of any of the Paying Agents set out on the reverse hereof (and/or any
other or further Paying Agents and/or specified offices as may from time to
time be duly appointed notified to the Noteholders) upon production and
surrender of this Talon.
This Talon may, in certain circumstances, become void under the Terms and
Conditions endorsed on the Notes to which this Talon appertains.
[SEAL]
ATTEST TOYOTA MOTOR CREDIT
CORPORATION
By: By:
---------------------- ------------------------
Authorized Officer Authorized Officer
B 6-1
<PAGE>
(Reverse of Talon)
ISSUING AND PRINCIPAL PAYING AGENT
The Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London E1 9YT
ENGLAND
PAYING AGENT
Chase Manhattan Bank Luxembourg S.A.
5 Rue Plaetis
L-2338
Luxembourg
and/or such other or further Agent and other or further Paying Agents and/or
specified offices as may from time to time be duly appointed by the Company
and notice of which has been given to the Noteholders.
B 6-2
<PAGE>
ANNEX B
-------
FORM OF PRICING SUPPLEMENT
--------------------------
(to be completed by the head Manager/
-------------------------------------
Dealer and executed by the Company)
-----------------------------------
PRICING SUPPLEMENT
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated as a California corporation)
U.S. $16,000,000,000
Euro Medium-Term Note Program
for the issue of Notes
with maturities of 1 month or longer
Series No.
[aggregate nominal amount of issue]
[title and due date of Notes]
Issue price: [ ] per cent
[Dealer name]
The date of this Pricing Supplement is [ ]
A B-1
<PAGE>
Toyota Motor Credit Corporation
Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]
under the U.S. $16,000,000,000
Euro Medium-Term Note Program
[The Notes constitute [commercial paper/shorter term debt securities/longer
term debt securities]* issued in accordance with regulations made under
section 4 of the Banking Act 1987. The Issuer of the Notes is not an
authorized institution or a European authorized institution (as such terms
are defined in the Banking Act 1987 (Exempt Transactions) Regulations 1997).
Repayment of the principal and payment of any interest or premium in
connection with the Notes has not been guaranteed].**
This document constitutes the Pricing Supplement relating to the issue of
Notes described herein. Terms used herein shall be deemed to be defined as
such for the purposes of the Terms and Conditions set forth in the Offering
Circular dated July 23, 1999. This Pricing Supplement must be read in
conjunction with such Offering Circular, including all documents incorporated
by reference therein.
- -----------------------------------------------------------------------
* Include "commercial paper" if Notes must be redeemed before their first
anniversary. Include "shorter term debt securities" if Notes may not be
redeemed before their first anniversary but must be redeemed before their
third anniversary. Include "longer term debt securities" if Notes may not be
redeemed before their third anniversary.
** Unless otherwise permitted, text to be included for all Notes (including
Notes denominated in Sterling) in respect of which the issue proceeds are
accepted by TMCC in the United Kingdom.
A B-2
<PAGE>
[Include whichever of the following apply or specify as "Not Applicable"
(N/A). Note that the numbering should remain as set out below, even if "Not
Applicable" is indicated for individual paragraphs or sub-paragraphs. Italics
denote directions for completing the Pricing Supplement.]
<TABLE>
<S> <C>
1. [(i)] Series Number: [ ]
[(ii)] Tranche Number: [Delete if not applicable]
(If fungible with an existing
Series, details of that Series,
including the date on which the
Notes become fungible)
2. Specified Currency (or Currencies in
the case of Dual Currency Notes): [ ]
3. Aggregate Nominal Amount
[i] Series: [ ]
[ii] Tranche: [Delete if not applicable]
4. Issue Price of Tranche: [ ] per cent.
5. Specific Denominations: [ ]
6. [(i)] Issue Date: [ ]
[(ii)] Interest Commencement Date
(if different from Issue Date): [ ]
7. Maturity Date: [ ]
8. Interest Basis: [Fixed Rate]
[Floating Rate]
[Zero Coupon]
[Index Linked Interest]
[specify other]
(further particulars
specified below)
9. Redemption/Payment Basis: [Redemption at par]
[Index Linked Redemption]
[Dual Currency]
[Partly Paid]
[Installment]
[specify other]
10. Change of Interest Basis or [Specify details of any provision
Redemption/Payment Basis: for change of Notes into another
Interest Basis or
Redemption/Payment Basis]
</TABLE>
A B-3
<PAGE>
<TABLE>
<S> <C>
11. Listing: [London/specify other/None]
12. Method of distribution: [Syndicated/Non-syndicated]
PROVISIONS RELATING TO INTEREST (IF ANY)PAYABLE
13. Fixed Rate Note Provisions (and, to
the extent applicable, Dual Currency [Applicable/Not Applicable]
Notes, Index Linked Redemption (If not applicable, delete the
Notes, Partly Paid Notes and remaining sub-paragraphs of this
Installment Notes): paragraph)
(i) Fixed Rate[(s)] of Interest: [ ] per cent. per annum
[payable annually/semi-annually/
quarterly] in arrear]
(ii) Interest Payment Date(s): [ ] in each year
(iii) Fixed Coupon Amount (s): [ ] per [ ]
in nominal amount
(iv) Broken Amount (s): [Insert particulars of anyinitial
or final broken interest amounts
which do not correspond with the
Fixed Coupon Amount]
(v) Fixed Day Count Fraction: [30/360 or Actual/Actual (ISMA)
or Actual/Actual (ISDA) or
specify other]
(vi) Business Day Convention: [Following Business Day
Convention/Modified Following
Business Day Convention/specify
other]
(vii) Applicable Business Centers
for purposes of "Business Day"
Definition: [London/specify others]
(viii) Other terms relating to the
method of calculating interest
for Fixed Rate Notes: [None/Give details]
14. Floating Rate Note Provisions (and,
to the extent applicable, Dual [Applicable/Not Applicable]
Currency Notes, Index Linked (If not applicable, delete the
Redemption Notes, Partly Paid Notes remaining sub-paragraphs of this
and Installment Notes): paragraph)
(i) Specified Period(s)/Specified
Interest Payment Dates: [ ]
</TABLE>
A B-4
<PAGE>
<TABLE>
<S> <C>
(ii) Business Day Convention: [Floating Rate
Convention/Following
Business Day Convention/Modified
Following Business Day
Convention/Preceding Business Day
Convention/ [specify other]]
(iii) Applicable Business Centers
for purposes of "Business Day"
Definition: [London/specify others]
(iv) Manner in which the Rate of
Interest and Interest Amount [Screen Rate Determination/ISDA
is to be determined: Determination/[specify others]]
(v) Calculation Agent responsible
for calculating the Rate of
Interest and Interest Amount
(if not the Agent): [ ]
(vi) Screen Rate Determination
- Reference Rate [ ]
(Either LIBOR, EURIBOR or other,
although additional information
may be required if other -
including any amendment to
fallback provisions in the
Conditions)
- Relevant Screen Page: [ ]
(In the case of EURIBOR, if not
Telerate 248 ensure it is a page
which shows a composite rate)
- Applicable "Reference Banks"
definition (if different
from that in Condition [Same as Condition
4(b)(iv)(E): 4(b)(iv)(E)/specify other]
- Applicable "Interest
Determination Date"
definition (if different
from that in Condition [Same as Condition
4(b)(iv)(F)): 4(b)(iv)(F))/specify other]
(vii) ISDA Determination
- Floating Rate Option: [ ]
- Designated Maturity: [ ]
- Reset Date: [ ]
</TABLE>
A B-5
<PAGE>
<TABLE>
(viii) Margin(s): [+/-][ ] per cent. per
annum
(ix) Minimum Rate of Interest: [ ] per cent. per
annum
(x) Maximum Rate of Interest: [ ] per cent. per
annum
<S> <C>
(xi) Day Count Fraction: [Actual/365, Actual/Actual,
Actual/365(Fixed), Actual/360,
30/360, 360/360, Bond Basis,
30E/360 or Eurobond Basis or
specify other]
(xii) Rounding provisions and any
other terms relating to the
method of calculating interest
on Floating Rate Notes, if
different from those set out
in the Conditions: [ ]
15. Zero Coupon Note Provisions: [Applicable/Not Applicable]
(If not applicable, delete the
remaining sub-paragraphs of this
paragraph)
(i) Accrual Yield: [ ] per cent. per
annum
(ii) Reference Price: [ ]
(iii) Any other formula/basis of
determining amount payable: [ ]
(iv) Business Day Convention: [Following Business Day
Convention/Modified Following
Business Day Convention/specify
other]
(v) Applicable Business Centers
for purposes of "Business Day"
Definition: [London/specify others]
(vi) Calculation Agent responsible
for calculating the amount due
(if not the Agent): [ ]
</TABLE>
A B-6
<PAGE>
<TABLE>
<S> <C>
16. Index Linked Interest [Applicable/Not Applicable]
Note Provisions:
(If not applicable, delete the
remaining sub-paragraphs of this
paragraph)
(i) Index/Formula: [give or annex details]
(ii) Calculation Agent responsible
for calculating the principal
and/or interest due
(if not the Agent): [ ]
(iii) Provisions for determining Coupon
where calculation by reference to
Index and/or Formula is
Impossible or impracticable: [ ]
(iv) Specified Period(s)/Specified
Interest Payment Dates: [ ]
(v) Business Day Convention: [Floating Rate Convention/
Following Business Day
Convention/Modified Following
Business Day Convention/Preceding
Business Day Convention/specify
other]
(vi) Applicable Business Centers
for purposes of "Business Day"
definition: [London/specify other]
(vii) Minimum Rate of Interest: [ ] per cent. per
annum
(x) Maximum Rate of Interest: [ ] per cent. per
annum
(xi) Day Count Fraction: [ ]
17. Index Linked Redemption Note [Applicable/Not Applicable]
Provisions: (If not applicable, delete the
remaining sub-paragraphs of this
paragraph)
(i) Index/Formula: [give or annex details]
(ii) Calculation Agent responsible
for calculating the principal
and/or interest due
(if not the Agent): [ ]
</TABLE>
A B-7
<PAGE>
<TABLE>
<S> <C>
(iii) Provisions for determining
payments where calculation by
reference to Index and/or Formula
is impossible or impractical: [ ]
18. Dual Currency Note Provisions: [Applicable/Not Applicable]
(If not applicable, delete the
remaining sub-paragraphs of this
paragraph)
(i) Rate of Exchange/method of
calculating Rate of Exchange: [give details]
(ii) Calculation Agent, if any,
responsible for calculating the
principal and/or interest
payable (if not the Agent): [ ]
(iii) Provisions applicable where
calculation by reference to
Rate(s) of Exchange impossible
or impractical: [ ]
(iv) Person at whose option Specified
Currency(ies) is/are payable: [ ]
PROVISIONS RELATING TO REDEMPTION
19. TMCC's Optional Redemption: [Yes/No]
(If not applicable, delete the
remaining sub-paragraphs of this
paragraph)
(i) Optional Redemption Date(s): [ ]
(ii) Optional Redemption Amount(s)
and method, if any, of
calculation of such amount(s): [ ]
(iii) If redeemable in part:
(a) Minimum Redemption Amount: [ ]
(b) Higher Redemption Amount: [ ]
(iv) The applicable period for notice
to Noteholders (if different from [Same as Condition 5(d)/specify
that set out in Condition 5(d)): other]
(v) The applicable period for notice
to the Agent (if different from [Same as Condition 5(d)/specify
that set out in Condition 5(d)): other]
</TABLE>
A B-8
<PAGE>
<TABLE>
<S> <C>
20. Redemption at the option of the [Yes/No]
Noteholders: (If not applicable, delete the
remaining sub-paragraphs of this
paragraph)
(i) Optional Redemption Date(s): [ ]
(ii) Optional Redemption Amount(s)
and method, if any, of
calculation of such amount(s): [ ]
(iii) Other details: [ ]
21. Final Redemption Amount: [Par/specify other/see Appendix]
22. Early Redemption Amount(s) payable on
redemption for taxation reasons or on
event of default and/or the method of
calculating the same (if required or
if different from that set out
in Condition 5(f)): [ ]
GENERAL PROVISIONS APPLICABLE TO THE NOTES
23. Form of Notes: [Temporary global Note
exchangeable for a permanent
global Note which is
exchangeable for definitive
Notes [only if (as described
more fully in the Conditions)
(a) there should be an Event of
Default; (b) Euroclear,
Cedelbank and any other relevant
clearance system are all no
longer willing or able to
properly discharge their
responsibilities and the Agent
and TMCC are unable to locate a
qualified successor; (c) upon
the election of TMCC; or (d)
upon 90 days written notice of
any Noteholder, all as set forth
more fully in the
Conditions/specify other]
[Temporary Global Note
exchangeable for Definitive
Notes on and after the Exchange
Date.]
24. Other special provisions relating to
Payment Dates: [Not Applicable/give details]
</TABLE>
A B-9
<PAGE>
<TABLE>
<S> <C>
25. Talons for future Coupons to be attached
to definitive Notes (and dates on which
such Talons mature): [Yes/No. If yes, give details]
26. Details relating to Partly Paid Notes:
including, without limitation, amount
of each payment comprising the Issue
Price and date on which each payment
is to be made and consequences (if any)
of failure to pay, including any right
of TMCC to forfeit the Notes and
interest due on late payment: [Not Applicable/give details]
27. Details relating to Installment Notes: [Applicable/Not Applicable]
(If not applicable, delete the
remaining subparagraphs of this
paragraph)
(i) Installment Amounts: [ ]
(ii) Installment Dates: [ ]
(iii) Other details: [ ]
28. Whether the Notes will be subject to [Yes/No](If yes, specify
Redenomination, Consolidation or particular provision(s)
Exchange into euro: applicable and provide
details if different from that
set out in Condition 17)
29. Whether Notes are convertible at
option of TMCC/Holder into Notes of
another Interest/Payment Basis, Date
of Conversion or Option Exercise/Interest
Payment Basis/other relevant terms: [ ]
30. Further Issues and Consolidation: [TMCC may from time to time,
without the consent of the
holders of Notes, Receipts or
Coupons of this Series, create
and issue further Notes of this
Series having the same terms
and conditions as the Notes (or
the same terms and conditions
save for the first payment of
interest thereon and the Issue
Date thereof) with the
outstanding Notes and so that
the same shall be consolidated
</TABLE>
A B-10
<PAGE>
<TABLE>
<S> <C>
and form a single Series with
the outstanding Notes and
references in the Conditions to
"Notes" shall be construed
accordingly.]
31. Cost, if any, to be borne by
Noteholders in connection with
exchanges for security printed
definitive Notes: [ ]
32. Other terms or special conditions: [Not Applicable/give details]
DISTRIBUTION
33. (i) If syndicated, names of Managers: [Not Applicable/give names]
(ii) Stabilizing Manager (if any): [Not Applicable/give names]
34. If non-syndicated, name of relevant
Dealer: [ ]
35. Additional selling restrictions: Selling restrictions, including
those applicable to the United
States and United Kingdom are
set out in the Offering
Circular and Appendix B to
the Second Amended and Restated
Program Agreement dated July
24, 1997, as amended [and the
Syndicate Purchase Agreement
dated [ ], among the Dealers
and the Company].
OPERATIONAL INFORMATION
36. Any clearing system(s) other than
Euroclear and Cedelbank and the [Not Applicable/give name(s)
relevant identification numbers(s): and number(s)]
37. Delivery: Delivery [against/free of]
payment
38. Additional Paying Agent(s) (if any): [ ]
39. Purchaser's account number with
[Euroclear/Cedelbank] to which the
Notes are to be credited: [ ]
</TABLE>
A B-11
<PAGE>
40. The text set out below is required only for Notes in respect of which the
issue proceeds are accepted by TMCC in the United Kingdom and which are
to be listed on the London Stock Exchange. The text set out below may be
deleted if TMCC is relying on any of Regulation 13(4)(c) to (g) of the
Banking Act 1987 (Exempt Transactions) Regulations 1997.
TMCC confirms that:
a) as of the date hereof, it has complied with its obligations under the
relevant rules (as defined in the Banking Act 1987 (Exempt
Transactions) Regulations 1997) in relation to the admission to and
continuing listing of the Program and of any previous issues made
under it and listed on the same exchange as the Program;
b) it will have complied with its obligations under the relevant rules in
relation to the admission to listing of the Notes by the time when the
Notes are so admitted; and
c) as of the date hereof, it has not, since the last publication, if any,
in compliance with the relevant rules of information about the
Program, any previous issues made under it and listed on the same
exchange as the Program, or the Notes, having made all reasonable
enquires, become aware of any change in circumstances which could
reasonably be regarded as significantly and adversely affecting its
ability to meet its obligations as issuer in respect of the Notes as
they fall due.
ISIN: [ ]
Common Code: [ ]
A B-12
<PAGE>
Acceptance on behalf of TMCC
of the terms of the Pricing Supplement
as of the date above first written:
TOYOTA MOTOR CREDIT CORPORATION
By:
--------------------------
The following information is to be included only in the version of the
Pricing Supplement which is submitted to the London Stock Exchange in the
case of Notes to be listed on the London Stock Exchange:
Application is hereby made to list this issue of Notes pursuant to the
listing of the U.S. $16,000,000,000 Euro Medium-Term Note Program of Toyota
Motor Credit Corporation (as from [insert date of or prior to Settlement date
for the issuance of the Notes]).
THE CHASE MANHATTAN BANK
(As Agent)
By:
--------------------------
cc: The Chase Manhattan Bank
A B-13
<PAGE>
ANNEX D
-------
TRADING DESK INFORMATION
------------------------
The Company
TOYOTA MOTOR CREDIT CORPORATION
19001 South Western Avenue FN17
Torrance, California 90509
Telephone No: (310) 618-4001; Fax No: (310) 787-6194
Attention: Vice President, Treasury
The Dealers
- -----------
<TABLE>
<S> <C> <C>
PARIBAS GOLDEN SACHS LEHMAN BROTHERS
10 Harewood Avenue INTERNATIONAL INTERNATIONAL (EUROPE)
London NW1 6AA Peterborough Court One Broadgate
Telephone: 0171 595 133 Fleet Street London EC2M 7HA
2000 London EC4A 2BB Telephone: 0171 256 8256
Telefax: 0171 595 Telephone: 0171 744 Telefax: 0171 260 2778
2555 1000 Attn: MTN Trading Desk
Attn: Euro Medium
Term Note Desk
MERRILL LYNCH NOMURA INTERNATIONAL UBS AG
INTERNATIONAL PLC 1 Finsbury Avenue
Ropemaker Place Nomura House London EC2M 2PP
25 Ropemaker Street 1 St. Martin'sle-Grand Telephone: 0171 711 2479
London EC2Y 9LY London EC1A 4NP Telefax: 0171 711 2411
Telephone: 0171 867 Telephone: 0171 236 Attn: MTN Group
3995 8056
TeleFax: 0171 867 Telefax: 0171 521 2616
4327 Attn: MTN Trading
Attn: EMTN Trading
and Distribution Desk
CREDIT SUISSE FIRST J.P. MORGAN MORGAN STANLEY & CO.
BOSTON SECURITIES LTD INTERNATIONAL LIMITED
(EUROPE) LIMITED 60 Victoria Embarkment 25 Cabot Square
One Cabot Square London EC4Y 0JP Canary Wharf
Canary Wharf Telephone: 0171 779 London E14 4QA
London E14 4QJ 3469 Telefax: 0171 425 4397
Telephone: 0171 888 Attn: Euro Medium Term Attn: Head of
4021 Note Desk Transaction Management
Telefax: 0171 888 Group
3719
</TABLE>
A D-1
<PAGE>
APPENDIX E
----------
FORM OF THE NOTES
-----------------
Each Tranche of Notes will initially be represented by one or more temporary
global Notes, without receipts, interest coupons or talons, which will be
delivered to a common depositary for Euroclear and Cedelbank.
While any Note is represented by a temporary global Note, payments of
principal and interest (if any) due prior to the Exchange Date (as defined
below) will be made against presentation of the temporary global Note only to
the extent that certification of non-U.S. beneficial ownership (in the form
set out in the temporary global Note) has been received by Euroclear or
Cedelbank. Interests in the temporary global Note will be exchangeable for
interests in a permanent global Note and/or for security printed definitive
Notes (as specified under "Terms and Conditions of the Notes" and in the
applicable Pricing Supplement) not earlier than the date (the "Exchange
Date") which is 40 days after completion of the distribution of the relevant
Tranche, provided that certification of non-U.S. beneficial ownership has
been received. No interest or principal payments will be made on a temporary
global Note after the Exchange Date.
Payments of principal or interest (if any) in respect of a permanent global
Note will be made through Euroclear and Cedelbank against presentation or
surrender, as the case may be, of the permanent global Note without any
requirement for further certification. A permanent global Note will be
exchangeable in whole, but not in part, for security printed definitive Notes
with, where applicable, receipts, interest coupons and talons attached not
earlier than the Exchange Date (i) at the option of TMCC; (ii) at the option
of Noteholders, unless specified otherwise in the applicable Pricing
Supplement and (iii) under certain other limited circumstances set forth
under "Terms and Conditions of the Notes". If a portion of the Notes
continue to be represented by the temporary global Note after the issuance of
definitive Notes, the temporary global Note shall thereafter be exchangeable
only for definitive Notes, subject to certification of non-U.S. beneficial
ownership.
Unless specified in the applicable Pricing Supplement, investors shall have
the right to require the delivery of definitive Notes; provided, however,
that such delivery may be conditioned on written notice, as specified in the
applicable Pricing Supplement, from Euroclear or Cedelbank (as the case may
be) acting on instructions of the holders of interest in the temporary or
permanent global Note and/or on the payment of costs in connection with the
printing and distribution of the definitive Notes. No definitive Note
delivered in exchange for a permanent or temporary global Note shall be
mailed or otherwise delivered to any locations in the United States of
America in connection with such exchange. Temporary and permanent global
Notes and definitive Notes will be issued by The Chase Manhattan Bank, London
Office, as issuing and (unless specified otherwise in the applicable Pricing
Supplement) principal paying agent and, unless specified otherwise in the
applicable Pricing Supplement, as calculation agent (the "Agent", which
expression includes any successor agents or any other Calculation Agent
E-1
<PAGE>
specified in the applicable Pricing Supplement) pursuant to a Second Amended
and Restated Agency Agreement dated as of July 24, 1997, as amended (the
"Agency Agreement"), and made between TMCC, the Agent and the other paying
agents named therein (together with the Agent, the "Paying Agents", which
expression includes any additional or successor paying agents).
If specified in the applicable Pricing Supplement, other clearance systems
capable of complying with the certification requirements set forth in the
temporary global Note may be used in addition to or in lieu of Euroclear and
Cedelbank, and any reference herein to Euroclear and/or Cedelbank shall,
whenever the context so permits, be deemed to include such other additional
or alternative clearing system.
The Pricing Supplement will contain such information (if any) as is necessary
to comply with the Banking Act 1987 (Exempt Transactions) Regulations 1997.
Temporary and permanent global Notes and definitive Notes will be issued in
bearer form only. The following legend will appear on all global Notes,
definitive Notes, receipts and interest coupons for Notes with a maturity of
more than 183 days:
"Any United States person (as defined in the Internal Revenue Code of the
United States) who holds this obligation will be subject to limitations under
the United States income tax laws, including the limitations provided in
sections 165(j) and 1287(a) of the Internal Revenue Code."
The following legend will appear on all global Notes, definitive Notes,
receipts and interest coupons for Notes with maturities at issuance of 183
days or less: "By accepting this obligation, the holder represents and
warrants that it is not a United States person (other than an exempt
recipient described in Section 6049(b)(4) of the Internal Revenue Code and
the regulations thereunder) and that it is not acting for or on behalf of a
United States person (other than an exempt recipient described in Section
6049(b)(4) of the Internal Revenue Code and the regulations thereunder)."
The sections referred to provide that United States holders, with certain
exceptions, will not be entitled to deduct any loss on Notes, receipts or
interest coupons and will not be entitled to capital gains treatment of any
gain on any sale, disposition or payment of principal in respect of Notes,
receipts or interest coupons.
Applicable Pricing Supplement
Set out below is the form of Pricing Supplement which will be completed for
each Tranche of Notes issued under the Program.
[See Annex B to Appendix D (Form of Operating & Administrative Procedures
Memorandum) for the form of Pricing Supplement]
E-2
<PAGE>
EXHIBIT 10.5 (e)
CONFORMED COPY
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT dated as of March 19, 1999 among TOYOTA MOTOR CREDIT
CORPORATION (the "Borrower"), the BANKS listed on the signature pages
hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Three-
Year Credit Agreement dated as of September 29, 1994, as amended as of
September 28, 1995, as amended and restated as of September 24, 1996
and as amended and restated as of September 23, 1997 (collectively the
"Agreement"); and
WHEREAS, the parties hereto desire to make an amendment to terminate
the Commitment of The Long-Term Credit Bank of Japan, Limited, Los
Angeles Agency ("LTCB") and as a result of the termination, reduce the
aggregate principal amount of the total Commitments by the amount of
LTCB's Commitment;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other
similar reference contained in the agreement shall from and after the
date hereof refer to the Agreement as amended hereby.
Section 2. Termination of Commitment and Withdrawal of Bank. With
effect from and including the date this Amendment becomes effective:
(a) LTCB shall cease to be a Bank under the Agreement and LTCB's
Commitment under the Agreement shall therefore terminate; provided that
the provisions of Sections 8.03 and 9.03 of the Agreement shall
continue to inure to the benefit of LTCB; and
(b) All accrued fees and other amounts payable under the Agreement
for the account of LTCB shall be due and payable on such date.
Section 3. Representations and Warranties. The Borrower hereby
represents and warrants that as of the date hereof and after giving
effect hereto:
(a) no Default has occurred and is continuing; and
(b) each representation and warranty of the Borrower set forth in the
Agreement after giving effect to this Amendment is true and correct as
though made on and as of such date.
<PAGE>
Section 4. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
Section 5. Counterparts; Effectiveness. This Amendment may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Amendment shall become effective as of
the date hereof when the Agent shall have received duly executed
counterparts hereof signed by the Borrower and each of the Banks (or, in
the case of any party as to which an executed counterpart shall
not have been received, the Agent shall have received telegraphic, telex
or other written confirmation from such party of execution of a
counterpart hereof by such party).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed by their respective
authorized officers as of the day and year first above
written.
TOYOTA MOTOR CREDIT CORPORATION
By: /s/ George E. Borst
-------------------------------
Title: Senior Vice President &
General Manager
<PAGE>
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/ Robert Bottamedi
--------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By: /s/ David A. Rosso
--------------------------
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI,
LTD. LOS ANGELES BRANCH
By: /s/ Masato Sekino
--------------------------
Title: Deputy General
Manager
THE CHASE MANHATTAN BANK
By: /s/ Frances L. Bonham
--------------------------
Title: Managing Director
CITICORP USA, INC.
By: /s/ Brian Ike
-------------------------
Title: Attorney-in-fact
CREDIT SUISSE FIRST BOSTON
By: /s/ Jeffrey Ulmer
-------------------------
Title: Vice President
By: /s/ Robert N. Finney
-------------------------
Title: Managing Director
<PAGE>
ABN AMRO BANK N.V.
By: /s/ John A. Miller
-------------------------
Title: Group Vice
President
By: /s/ Paul K. Stimpfl
--------------------------
Title: Group Vice President
PARIBAS
By: /s/ Nicholas C. Mast
-------------------------
Title: Regional General
Manager
By: /s/ Brian F. Hewett
-------------------------
Title: Vice President
BARCLAYS BANK PLC
By: /s/ L. Peter Yetman
--------------------------
Title: Associate Director
DEUTSCHE BANK AG, NEW YORK BRANCH /
CAYMAN ISLANDS BRANCH
By: /s/ Wolf A. Kluge
-------------------------------
Title: Vice President
By: /s/ Oliver Schwarz
------------------------------
Title: Assistant Vice President
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY
By: /s/ Yoshiaki Kozano
-------------------------------
Title: Deputy General Manager
<PAGE>
THE SAKURA BANK, LIMITED
By: /s/ Tadashi Kawai
------------------------------
Title: Senior Vice President &
Assistant General Manager
THE SANWA BANK, LIMITED,
LOS ANGELES BRANCH
By: /s/ Zenichi Muramoto
------------------------------
Title: Senior Vice President &
Deputy General Manager
THE TOKAI BANK, LIMITED
By: /s/ Satoru Kojima
------------------------------
Title: Senior Vice President
and Assistant General Manager
UBS AG, STAMFORD BRANCH
By: /s/ Gregory Raue
------------------------------
Title: Director
By: /s/ Robert Mendeles
------------------------------
Title: Director
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /s/ Robert Bottamedi
------------------------------
Title: Vice President
<PAGE>
EXHIBIT 10.5 (f)
CONFORMED COPY
THIRD AMENDED AND RESTATED THREE-YEAR CREDIT AGREEMENT
THIRD AMENDED AND RESTATED THREE-YEAR CREDIT AGREEMENT dated as of
September 17, 1999 (this "Agreement") among TOYOTA MOTOR CREDIT CORPORATION,
the BANKS listed on the signature pages hereof and BANK OF AMERICA, N.A., as
Agent.
W I T N E S S E T H:
WHEREAS, the parties hereto have heretofore entered into a Three-Year
Credit Agreement dated as of September 29, 1994, as amended as of
September 28, 1995, amended and restated as of September 24, 1996 and
September 23, 1997 and amended as of March 19, 1999 (collectively the
"Existing Agreement"); and
WHEREAS, Morgan Guaranty Trust Company of New York desires to resign as
Agent under the Existing Agreement and the Banks desire to appoint Bank of
America, N.A. (and Bank of America N.A. desires to accept such appointment)
to succeed to and become vested with all the rights and duties of the
retiring Agent under the Existing Agreement effective upon the Effective Date
(as defined below); and
WHEREAS, no Loans are outstanding under the Existing Agreement at the
date hereof; and
WHEREAS, the parties hereto desire to amend the Existing Agreement as set
forth herein and to restate the Existing Agreement in its entirety to read as
set forth in the Existing Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions; References. Unless otherwise specifically defined
herein, each term used herein which is defined in the Existing Agreement
shall have the meaning assigned to such term in the Existing Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other
similar reference contained in the Existing Agreement shall from and after
the date hereof refer to the Existing Agreement as amended hereby.
Section 2. Replacement of the Agent. By executing this Agreement, effective
on the Effective Date, Morgan Guaranty Trust Company of New York shall resign
as Agent under the Existing Agreement, each of the Banks shall appoint Bank
of America, N.A., as Agent, and Bank of America, N.A. shall thereupon succeed
to and become vested with all the rights and duties of Morgan Guaranty Trust
Company of New York as Agent under the Existing Agreement, and Morgan
Guaranty Trust Company of New York shall be discharged from its duties and
obligations as Agent thereunder. Morgan Guaranty Trust Company of New York
shall continue as a Bank party to the Agreement after its resignation as
Agent
<PAGE>
Section 3. Amendment of the Existing Agreement
(a) The name "Morgan Guaranty Trust Company of New York" appearing in
the definitions of "Agent", "CD Reference Banks", "Euro-Dollar Reference
Banks" and "Federal Funds Rate" is changed to "Bank of America, N.A.".
(b) The definition of "Domestic Business Day" is amended to read in its
entirety as follows:
"Domestic Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in New York City or San Francisco are authorized by
law to close.
(c) The definition of "Prime Rate" is amended to read in its entirety as
follows:
"Prime Rate" means the rate of interest in effect for such day as
publicly announced from time to time by Bank of America, N.A. as its "prime
rate." Such rate is a rate set by Bank of America, N.A. based upon various
factors including Bank of America, N.A.'s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America, N.A. shall take
effect at the opening of business on the day specified in the public
announcement of such change.
(d) Sections 7.1, 7.2, 7.3, 7.6, 7.7 and 7.8 are amended in their
entirety to read as follows:
Section 7.1 Appointment and Authorization. Each Bank irrevocably appoints
and authorizes the Agent to take such action as Agent on its behalf and to
exercise such powers under this Agreement and the Notes as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as
are reasonably incidental thereto. Notwithstanding any provision to the
contrary contained elsewhere in this Agreement, the Agent shall not have or
be deemed to have any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against the Agent.
Without limiting the generality of the foregoing sentence, the use of the
term "agent" in this Agreement with reference to the Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as
a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
Section 7.2 Agent and Affiliates. Bank of America, N.A. shall have the same
rights and powers under this Agreement as any other Bank and may exercise or
refrain from exercising the same as though it were not the Agent, and Bank of
America, N.A. and its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any Subsidiary
or affiliate of the Borrower as if it were not the Agent hereunder. The
Banks acknowledge that, pursuant to such activities, Bank of America, N.A. or
its affiliates may receive information regarding the Borrower or its
affiliates (including information that may be subject to confidentiality
obligations in favor of the Borrower or such affiliate) and acknowledge that
the Agent shall be under no obligation to provide such information to them.
<PAGE>
Section 7.3 Action by Agent. The obligations of the Agent hereunder are only
those expressly set forth herein. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or under the
Notes unless it shall first receive such advice or concurrence of the
Required Banks as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Required Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
Section 7.6 Indemnification. Each Bank shall, ratably in accordance with its
Commitment, indemnify the Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by
the Borrower) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct
provided, however, that no action taken in accordance with the directions of
the Required Banks shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section) that such indemnitees may suffer or
incur in connection with this Agreement, the Existing Agreement, the
Commitments, the use or contemplated use of the proceeds of any Loan, the
relationship of the Borrower, the Agent and the Banks under this Agreement or
any action taken or omitted by such indemnitees hereunder.
Section 7.7 Credit Decision; Disclosure of Information by Agent. Each Bank
acknowledges that it has, independently and without reliance upon the Agent
or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Agent or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking any action under
this Agreement.
Except for notices, reports and other documents expressly herein required to
be furnished to the Banks by the Agent herein, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other
information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower or any of
its Subsidiaries which may come into the possession of the Agent.
Section 7.8 Successor Agent. The Agent may resign at any time by giving
notice thereof to the Banks and the Borrower. Upon any such resignation, the
Required Banks shall have the right to appoint a successor Agent with the
written consent of the Borrower, which shall not be unreasonably withheld.
If no successor Agent shall have been so appointed by the Required Banks with
the consent of the Borrower, and shall have accepted such appointment, within
30 days after the retiring Agent gives notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a commercial bank organized or licensed under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least $1,000,000,000. Upon the acceptance of its appointment
as Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
<PAGE>
(e) The following provisions are added to Article 7 of the Existing
Agreement as Sections 7.10 and 7.11:
Section 7.10 Delegation of Duties. The Agent may execute any of its duties
under this Agreement by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects with reasonable
care.
Section 7.11 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and
fees required to be paid to the Agent for the account of the Banks, unless
Agent shall have received written notice from a Bank or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". The Agent will notify the
Banks and the Borrower of its receipt of any such notice. The Agent shall
take such action with respect to such Default or Event of Default as may be
requested by the Required Banks in accordance with Article 6; provided,
however, that unless and until the Agent has received any such request, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable or in the best interest of the Agent or the Banks.
Section 4. Governing Law This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
Section 5 Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective on the date (the "Effective Date")
when the Agent shall have received (i) duly executed counterparts hereof
signed by the Borrower and the Banks (or, in the case of any party as to
which an executed counterpart shall not have been received, the Agent shall
have received telegraphic, telex or other written confirmation from such
party of execution of a counterpart hereof by such party) and (ii) an opinion
of the General Counsel of the Borrower (or such other counsel for the
Borrower as may be acceptable to the Agent) substantially in the form of
Exhibit E to the Existing Agreement with reference to this Agreement and the
Existing Agreement as amended and restated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
TOYOTA MOTOR CREDIT CORPORATION
By: /s/ George E. Borst
---------------------------
Title: Senior Vice President and
General Manager
<PAGE>
Commitments
- -----------
$100,000,000 BANK OF AMERICA, N.A.
By: /s/ Alan H. Roche
---------------------------
Title: Vice President
$100,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW
YORK
By: /s/ Robert Bottamedi
---------------------------
Title: Vice President
$100,000,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
LOS ANGELES BRANCH
By: /s/ Masato Sekino
---------------------------
Title: Deputy General Manager
$100,000,000 THE CHASE MANHATTAN BANK
By: /s/ Frances L. Bonham
---------------------------
Title: Managing Director
$100,000,000 CITICORP USA, INC.
By: /s/ Candi M. Halbert
---------------------------
Title:
$100,000,000 CREDIT SUISSE FIRST BOSTON
By: /s/ Robert N. Finney
---------------------------
Title: Managing Director
By: /s/ Jeffrey B. Ulmer
---------------------------
Title: Vice President
<PAGE>
$40,000,000 ABN AMRO BANK N.V.
By: /s/ John A. Miller
---------------------------
Title: Group Vice President
By: /s/ Ellen M. Coleman
---------------------------
Title: Vice President
$40,000,000 PARIBAS
By: /s/ Carol Simon
---------------------------
Title: Head, NY Credit Risk
Financial Markets
By: /s/ Jean Wehner
---------------------------
Title: Senior Credit Officer
$40,000,000 BARCLAYS BANK PLC
By: /s/ L. Peter Yetman
---------------------------
Title: Director
$40,000,000 DEUTSCHE BANK AG, NEW YORK BRANCH
/CAYMAN ISLAND BRANCH
By: /s/ Oliver Schwarz
--------------------------
Title: Assistant Vice President
By: /s/ Stefan Hafke
---------------------------
Title: Vice President
$40,000,000 THE SAKURA BANK, LIMITED
By: /s/ Sumio Tanaka
---------------------------
Title: Joint General Manager
$40,000,000 THE SANWA BANK, LIMITED,
LOS ANGELES BRANCH
By: /s/ Zenichi Muramoto
---------------------------
Title: Senior Vice President &
Deputy General Manager
<PAGE>
$40,000,000 THE TOKAI BANK, LIMITED
By: /s/ Kosuke Furukawa
---------------------------
Title: Joint General Manager
$80,000,000 UBS AG, STAMFORD BRANCH
By: /s/ Gregory Raue
---------------------------
Title: Director
By: /s/ Wilfred Saint
---------------------------
Title: Associate Director
Loan Portfolio Support, US
- -----------------
Total Commitments
$960,000,000
=================
BANK OF AMERICA, N.A., as Agent
By: /s/ David Price
---------------------------
Title: Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as retiring Agent
By: /s/ Robert Bottamedi
---------------------------
Title: Vice President
<PAGE>
Exhibit 10.5(g)
CONFORMED COPY
FOURTH AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT
dated as of
September 17, 1999
among
Toyota Motor Credit Corporation
The Banks Listed Herein
and
Bank of America, N.A.,
as Administrative Agent
-------------------------
The Chase Manhattan Bank,
as Syndication Agent
The Bank of Tokyo-Mitsubishi, Ltd. and Citicorp USA, Inc.,
as Documentation Agents
Banc of America Securities LLC,
as Sole Lead Arranger and Sole Book Manager
<PAGE>
FOURTH AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT
FOURTH AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT (this
"Agreement") dated as of September 17, 1999 among TOYOTA MOTOR CREDIT
CORPORATION, the BANKS listed on the signature pages hereof and BANK OF
AMERICA, N.A., as Administrative Agent.
WHEREAS, the parties hereto have heretofore entered into a 364-Day
Credit Agreement dated as of September 29, 1994, as amended as of
September 28, 1995 and as amended and restated as of September 24, 1996,
September 23, 1997 and September 22, 1998 (collectively the "Existing
Agreement"); and
WHEREAS, no Loans are outstanding under the Existing Agreement on the
date hereof; and
WHEREAS, certain Persons listed on the signature pages hereof which are
not parties to the Existing Agreement desire to become Banks party to this
Agreement;
WHEREAS, certain Persons which are party to the Existing Agreement as
"Banks" thereunder do not desire to be Banks party to this Agreement;
WHEREAS, Morgan Guaranty Trust Company of New York desires to resign as
agent under the Existing Agreement and the Banks desire to appoint Bank of
America, N.A. (and Bank of America, N.A. desires to accept such appointment)
to succeed to and become vested with all the rights and duties of the
retiring agent under the Existing Agreement effective upon the Effective Date
(as defined below);
WHEREAS, the parties hereto desire to further amend the Existing
Agreement as set forth herein and to restate the Existing Agreement in its
entirety to read as set forth below;
NOW, THEREFORE, the parties hereto agree to amend and restate the
Existing Agreement as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. The following terms, as used herein, have the
-----------------------
following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.3.
"Adjusted CD Rate" has the meaning set forth in Section 2.7(b).
1
<PAGE>
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.7(c).
"Administrative Agent" means Bank of America, N.A. in its capacity as
Administrative Agent for the Banks hereunder, and its successors in such
capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Arranger" means Banc of America Securities LLC, in its capacity as
sole lead arranger and sole book manager.
"Assessment Rate" has the meaning set forth in Section 2.7(b).
"Assignee" has the meaning set forth in Section 9.6(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.6(c), and their
respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a Base
Rate Loan in accordance with the applicable Notice of Committed Borrowing or
pursuant to Article 8.
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer
Plan and which is maintained or otherwise contributed to by any member of the
ERISA Group.
"Borrower" means Toyota Motor Credit Corporation, a California
corporation, and its successors.
"Borrower's 1998 Form 10-K" means the Borrower's annual report on Form
10-K for 1998, as filed with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934.
"Borrower's Latest Form 10-Q" means the Borrower's quarterly report on
Form 10-Q for the quarter ended June 30, 1999, as filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"Borrowing" has the meaning set forth in Section 1.3.
2
<PAGE>
"CD Base Rate" has the meaning set forth in Section 2.7(b).
"CD Loan" means a Committed Loan to be made by a Bank as a CD Loan in
accordance with the applicable Notice of Committed Borrowing.
"CD Margin" has the meaning set forth in Section 2.7(b).
"CD Reference Banks" means Credit Suisse First Boston, Deutsche Bank AG
and Bank of America, N.A.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof or, if the
Commitments are increased pursuant to Section 2.16, such amount for such Bank
set forth on the most recent schedule distributed by the Administrative Agent
pursuant to Section 2.16(g), as such amount may be reduced from time to time
pursuant to Section 2.9.
"Committed Loan" means a loan made by a Bank pursuant to Section 2.1.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower
in its consolidated financial statements if such statements were prepared as
of such date.
"Continuation" and "Continue" mean, with respect to any Committed Loan,
the continuation of such Committed Loan as a Base Rate Loan, CD Loan or Euro-
Dollar Loan, as the case may be.
"Conversion" and "Convert" mean (i) with respect to any Committed Loan,
the conversion of such Committed Loan from or into another Type of Committed
Loan and (ii) with respect to any Money Market Loan, the conversion of such
Money Market Loan into a Committed Loan of any Type.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City or San Francisco are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such
other office as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Administrative Agent; provided that
any Bank may so designate separate Domestic Lending Offices for its Base Rate
Loans, on the one hand, and its CD Loans, on the other hand, in which case
all references herein to the Domestic Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may
require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
3
<PAGE>
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.7(b).
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.1.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its Euro-
Dollar Lending Office) or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Euro-Dollar Lending Office by notice to
the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a
Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section 2.7(c).
"Euro-Dollar Reference Banks" means the principal London offices of
Credit Suisse First Boston, Deutsche Bank AG and Bank of America, N.A.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.7(c).
"Event of Default" has the meaning set forth in Section 6.1.
"Extended Maturity Date" means the date that is one calendar year from
the Termination Date.
4
<PAGE>
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business
Day next succeeding such day; provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to Bank of America, N.A.
on such day by each of three leading brokers of Federal funds transactions in
New York City selected by the Administrative Agent.
"Fee Letter" has the meaning set forth in Section 7.11.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money Market
Loans (excluding Money Market LIBOR Loans bearing interest at the Base Rate
pursuant to Section 8.1(b)) or any combination of the foregoing.
"Indemnitee" has the meaning set forth in Section 9.3(b).
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing or Continuation of or Conversion to a Euro-Dollar Loan, the period
commencing on the date of such Borrowing or on the last day of the preceding
Interest Period applicable thereto, as the case may be, and ending one, two,
three or six months thereafter, as the Borrower may elect in the applicable
Notice of Borrowing or Notice of Continuation/Conversion; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall, subject to clause (c)
below, be extended to the next succeeding Euro-Dollar Business Day
unless
such Euro-Dollar Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-
Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
(2) with respect to each CD Borrowing or Continuation of or
Conversion to a CD Loan, the period commencing on the date of such Borrowing
or on the last day of the preceding Interest Period applicable thereto, as
the case may be, and ending 30, 60, 90 or 180 days thereafter, as the
Borrower may elect in the applicable Notice of Borrowing or Notice of
Continuation/Conversion; provided that:
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(a) any Interest Period which would otherwise end on a day
which is not a Domestic Business Day shall, subject to clause (b)
below,
be extended to the next succeeding Domestic Business Day; and
(b) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
(3) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending such whole number of
months thereafter as the Borrower may elect in accordance with Section 2.3;
provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall, subject to clause (c)
below, be extended to the next succeeding Euro-Dollar Business Day
unless
such Euro-Dollar Business Day falls in another calendar month, in
which
case such Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market Absolute Rate Borrowing, the
period commencing on the date of such Borrowing and ending such number of
days thereafter (but not less than 14 days) as the Borrower may elect in
accordance with Section 2.3; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Domestic Business Day shall, subject to clause (b)
below,
be extended to the next succeeding Domestic Business Day; and
(b)any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
Notwithstanding the foregoing, the Borrower may select an Interest Period for
a CD Loan or a Euro-Dollar Loan which would end after the Termination Date
only if it has previously delivered, or delivers concurrently with the
applicable Notice of Borrowing or Notice of Continuation/Conversion, a
request for an extension of the Termination Date pursuant to Section 2.15.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"LIBOR Auction" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.3.
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"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money Market
Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money Market
Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.7(c).
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000.
"Maturity Date" means the Termination Date or, if extended pursuant to
Section 2.15, the Extended Maturity Date.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.3(d).
"Money Market Absolute Rate Loan" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Money Market Lending Office by notice to the
Borrower and the Administrative Agent; provided that any Bank may from time
to time by notice to the Borrower and the Administrative Agent designate
separate Money Market Lending Offices for its Money Market LIBOR Loans, on
the one hand, and its Money Market Absolute Rate Loans, on the other hand, in
which case all references herein to the Money Market Lending Office of such
Bank shall be deemed to refer to either or both of such offices, as the
context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant to
a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 8.1).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.3(d).
"Money Market Quote" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.3.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group
during such five year period.
"New Banks" has the meaning set forth in Section 2.16(d).
"Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued
hereunder.
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"Notice of Borrowing" means a Notice of Committed Borrowing (as defined
in Section 2.2) or a Notice of Money Market Borrowing (as defined in
Section 2.3(f)).
"Notice of Continuation/Conversion" means a Notice of
Continuation/Conversion (as defined in Section 2.4).
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for employees of any
Person which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest in effect for such day as
publicly announced from time to time by Bank of America, N.A. as its "prime
rate." Such rate is a rate set by Bank of America, N.A. based upon various
factors including Bank of America, N.A.'s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America, N.A. shall take
effect at the opening of business on the day specified in the public
announcement of such change.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any
one of such Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulatory Change" has the meaning set forth in Section 8.3(a).
"Required Banks" means at any time Banks having at least 66 2/3% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 66 2/3% of the aggregate unpaid
principal amount of the Loans.
"Significant Subsidiary" means any Subsidiary which would meet the
definition of "Significant Subsidiary" contained in Regulation S-X (or
similar successor provision) of the Securities and Exchange Commission.
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"Subsidiary" means, as to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such
Person; unless otherwise specified, "Subsidiary" means a Subsidiary of the
Borrower.
"Termination Date" means September 15, 2000 or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"TMC Consolidated Subsidiary" means at any date a Subsidiary or other
entity the accounts of which would be consolidated with those of Toyota Motor
Corporation in its consolidated financial statements if such statements were
prepared as of such date.
"Type" refers to whether a Committed Loan is a Base Rate Loan, CD Loan
or Euro-Dollar Loan, each of which constitutes a Type.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed
by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair
market value of all Plan assets allocable to such liabilities under Title IV
of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
Section 1.2 Accounting Terms and Determinations . Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from
time to time, applied on a basis consistent (except for changes concurred in
by the Borrower's independent public accountants) with the most recent
audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks.
Section 1.3 Types of Borrowings . The term "Borrowing"
denotes the aggregation of Loans of one or more Banks to be made to the
Borrower pursuant to Article 2 on a single date and, in the case of a Fixed
Rate Loan, for a single Interest Period. Borrowings are classified for
purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article
2 under which participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.1 in which all Banks participate in
proportion to their Commitments, while a "Money Market Borrowing" is a
Borrowing under Section 2.3 in which the Bank participants are determined on
the basis of their bids in accordance therewith).
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ARTICLE 2
THE CREDITS
Section 2.1 Commitments to Lend; Changes in Commitments.
(a) From time to time prior to the Termination Date, each Bank
severally
agrees, on the terms and conditions set forth in this Agreement, to make
loans to the Borrower pursuant to this Section from time to time in amounts
such that (i) the aggregate principal amount of Committed Loans by such Bank
at any one time outstanding shall not exceed the amount of its Commitment and
(ii) the aggregate principal amount of all Committed Loans and Money Market
Loans at any one time outstanding shall not exceed the aggregate Commitments
of all the Banks at such time. Each Borrowing under this Section shall be in
an aggregate principal amount of $50,000,000 or any larger multiple of
$5,000,000 (except that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.2(b)) and shall be made from the
several Banks ratably in proportion to their respective Commitments. Within
the foregoing limits, the Borrower may borrow under this Section, repay, or
to the extent permitted by Section 2.11, prepay Loans and reborrow at any
time prior to the Termination Date under this Section.
(b) From and after the Effective Date, (i) each Person listed on the
signature pages hereof which is not a party to the Existing Agreement shall
become a Bank party to this Agreement, (ii) the Commitment of each Bank party
hereto shall be the amount set forth opposite the name of such Bank on the
signature pages hereof and (iii) each Person which is a party to the Existing
Agreement as a "Bank" thereunder whose name is not set forth on the signature
pages hereof shall not be a Bank party hereto and all accrued but unpaid fees
and other amounts payable to such Person under the Existing Agreement shall
be due and payable on the Effective Date, provided that the provisions of
Section 9.03 of the Existing Agreement shall continue to inure to the benefit
of each such Person.
Section 2.2 Notice of Committed Borrowing. The Borrower
shall give the Administrative Agent notice (a "Notice of Committed
Borrowing") not later than 9:00 A.M. (Pacific time) on (x) the date of each
Base Rate Borrowing, (y) the second Domestic Business Day before each CD
Borrowing and (z) the third Euro-Dollar Business Day before each Euro-Dollar
Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be CD Loans,
Base Rate Loans or Euro-Dollar Loans, and
(d) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
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Section 2.3 Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.1, the Borrower may, as set forth in this Section,
request the Banks prior to the Termination Date to make offers to make Money
Market Loans in United States Dollars to the Borrower; provided that the
aggregate principal amount of all Committed Loans and Money Market Loans at
any one time outstanding shall not exceed the aggregate Commitments of all
the Banks at such time. The Banks may, but shall have no obligation to, make
such offers and the Borrower may, but shall have no obligation to, accept any
such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to
the Administrative Agent by telex or facsimile transmission a Money Market
Quote Request substantially in the form of Exhibit B hereto so as to be
received no later than 9:00 A.M. (Pacific time) on (x) the fourth Euro-Dollar
Business Day prior to the date of Borrowing proposed therein, in the case of
a LIBOR Auction or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not
later than the date of the Money Market Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be effective)
specifying:
(i) the proposed date of Borrowing, which shall be a Euro-
Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$50,000,000 or a larger multiple of $5,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
(iv) whether the Money Market Quotes requested are to set forth
a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more
than one Interest Period in a single Money Market Quote Request. No Money
Market Quote Request shall be given within five Euro-Dollar Business Days (or
such other number of days as the Borrower and the Administrative Agent may
agree) of any other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Administrative Agent shall send to the Banks
by telex or facsimile transmission an Invitation for Money Market Quotes
substantially in the form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money Market Quotes
offering to make the Money Market Loans to which such Money Market Quote
Request relates in accordance with this Section.
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(d) Submission and Contents of Money Market Quotes. Each Bank
may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Administrative Agent by telex or
facsimile transmission at its offices specified in or pursuant to Section 9.1
not later than (x) 1:00 P.M. (Pacific time) on the fourth Euro-Dollar
Business Day prior to the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) 9:00 A.M. (Pacific time) on the proposed date of Borrowing, in
the case of an Absolute Rate Auction (or, in either case, such other time or
date as the Borrower and the Administrative Agent shall have mutually agreed
and shall have notified to the Banks not later than the date of the Money
Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for
which such change is to be effective); provided that Money Market Quotes
submitted by the Administrative Agent (or any affiliate of the Administrative
Agent) in the capacity of a Bank may be submitted, and may only be submitted,
if the Administrative Agent or such affiliate notifies the Borrower of the
terms of the offer or offers contained therein not later than 15 minutes
prior to the deadline for the other Banks. Subject to Articles 3 and 6, any
Money Market Quote so made shall be irrevocable except with the written
consent of the Administrative Agent given on the instructions of the
Borrower.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for
which each such offer is being made, which principal amount (w)
may be greater than or less than the Commitment of the quoting
Bank, (x) must be $5,000,000 or a larger multiple of $1,000,000,
(y) may not exceed the principal amount of Money Market Loans for
which offers were requested and (z) may be subject to an
aggregate limitation as to the principal amount of Money Market
Loans for which offers being made by such quoting Bank may be
accepted,
(C) in the case of a LIBOR Auction, the margin above or
below the applicable London Interbank Offered Rate (the "Money
Market Margin") offered for each such Money Market Loan,
expressed as a percentage (specified to the nearest 1/10,000th of
1%) to be added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%)
(the "Money Market Absolute Rate") offered for each such Money
Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the related
Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
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(A) is not substantially in conformity with Exhibit D
hereto or does not specify all of the information required by
subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in
subsection (d)(i).
(e) Notice to Borrower. The Administrative Agent shall promptly
notify the Borrower of the terms (x) of any Money Market Quote submitted by a
Bank that is in accordance with subsection (d) and (y) of any Money Market
Quote that amends, modifies or is otherwise inconsistent with a previous
Money Market Quote submitted by such Bank with respect to the same Money
Market Quote Request. Any such subsequent Money Market Quote shall be
disregarded by the Administrative Agent unless such subsequent Money Market
Quote is submitted solely to correct a manifest error in such former Money
Market Quote. The Administrative Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Money Market Loans for which
offers have been received for each Interest Period specified in the related
Money Market Quote Request, (B) the respective principal amounts and Money
Market Margins or Money Market Absolute Rates, as the case may be, so offered
and (C) if applicable, limitations on the aggregate principal amount of Money
Market Loans for which offers in any single Money Market Quote may be
accepted.
(f) Acceptance and Notice by Borrower. Not later than 9:00 A.M.
(Pacific time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not
later than the date of the Money Market Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be effective),
the Borrower shall notify the Administrative Agent of its acceptance or non-
acceptance of the offers so notified to it pursuant to subsection (e). In
the case of acceptance, such notice (a "Notice of Money Market Borrowing")
shall specify the aggregate principal amount of offers for each Interest
Period that are accepted. The Borrower may accept any Money Market Quote in
whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related
Money Market Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$50,000,000 or a larger multiple of $5,000,000, and
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be.
(g) Allocation by Agent. If offers are made by two or more Banks
with the same Money Market Margins or Money Market Absolute Rates, as the
case may be, for a greater aggregate principal amount than the amount in
respect of which such offers are accepted for the
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related Interest Period, the principal amount of Money Market Loans in
respect of which such offers are accepted shall be allocated by the
Administrative Agent among such Banks as nearly as possible (in multiples of
$1,000,000, as the Administrative Agent may deem appropriate) in proportion
to the aggregate principal amounts of such offers. Determinations by the
Administrative Agent of the amounts of Money Market Loans shall be conclusive
in the absence of manifest error.
Section 2.4 Continuation and Conversion Elections. The
Borrower may elect by giving the Administrative Agent notice (a "Notice of
Continuation/Conversion") on or before 9:00 A.M. Pacific time, on (x) the
date of each Conversion of a Loan to a Base Rate Loan, (y) the second
Domestic Business Day before each Continuation of a CD Loan or Conversion of
a Loan to a CD Loan and (z) the third Euro-Dollar Business Day before each
Continuation of a Euro-Dollar Loan or Conversion of a Loan to a Euro-Dollar
Loan, to Convert all or any portion of any Committed Loan of one Type into a
Committed Loan of another Type, to Convert all or any portion of any Money
Market Loan into a Committed Loan of any Type or to Continue all or any
portion of any Committed Loan of one Type as a Committed Loan of the same
Type; provided, however, that (i) each such Conversion or Continuation shall
be pro rated among the applicable outstanding Loans of all Banks, (ii) each
such Conversion or Continuation shall be in a minimum principal amount not
less than the minimum amount specified in Section 2.1(a), (iii) no portion of
the outstanding principal amount of any Loan may be Continued or Converted
when any Default or Event of Default has occurred and is continuing and (iv)
in the absence of delivery of a timely Notice of Continuation/Conversion with
respect to any Loan as set forth above, such Loan shall automatically Convert
to, or Continue as, a Base Rate Loan on the last day of the then current
Interest Period in the case of Fixed Rate Loans. Each Base Rate Loan shall
automatically Continue without any action on the part of any Person until the
earliest of (x) the Maturity Date, (y) the date such Base Rate Loan is
prepaid and (z) the date such Base Rate Loan is Converted into a Loan of
another Type. Such Notice of Continuation/Conversion shall specify:
(a) the date of such Continuation or Conversion, which shall be (i)
in the case of Fixed Rate Loans, the last day of the then current Interest
Period of the Loans to be Continued or Converted and (ii) in the case of Base
Rate Loans, the date specified in such Notice of Continuation/Conversion,
(b) the aggregate amount of the Loans to be Continued or Converted,
(c) whether the Loans to be Continued or Converted are to remain or
become CD Loans, Base Rate Loans or Euro-Dollar Loans, and
(d) in the case of a Continuation or Conversion to a Fixed Rate Loan,
the duration of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
Section 2.5 Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing or a Notice of
Continuation/Conversion, the Administrative Agent shall promptly notify each
Bank of the contents thereof and of such
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Bank's share (if any) of such Borrowing, Continuation or Conversion and such
Notice of Borrowing or Notice of Continuation/Conversion shall not thereafter
be revocable by the Borrower.
(b) Not later than 12:00 Noon (Pacific time) on the date of each
Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing,
in Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 9.1. Unless the
Administrative Agent determines that any applicable condition specified in
Article 3 has not been satisfied, the Administrative Agent will make the
funds so received from the Banks available to the Borrower at the
Administrative Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to
the Administrative Agent as provided in subsection (b), or remitted by the
Borrower to the Administrative Agent as provided in Section 2.12, as the case
may be.
(d) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing (or, in the case of a Base Rate
Borrowing or a Money Market Absolute Rate Borrowing, prior to 9:00 A.M.
(Pacific time) on the date of such Borrowing) that such Bank will not make
available to the Administrative Agent such Bank's share of such Borrowing,
the Administrative Agent may assume that such Bank has made such share
available to the Administrative Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.5 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that
such Bank shall not have so made such share available to the Administrative
Agent, such Bank and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at the Federal Funds Rate. If such Bank shall repay to
the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan included in such Borrowing for purposes of
this Agreement.
Section 2.6 Notes. (a) The Loans of each Bank shall be evidenced by a
single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Administrative
Agent, request that its Loans of a particular type be evidenced by a separate
Note in an amount equal to the aggregate unpaid principal amount of such
Loans. Each such Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it evidences solely
Loans of the relevant type. Each reference in this Agreement to the "Note"
of such Bank shall be deemed to refer to and include any or all of such
Notes, as the context may require.
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(c) Upon receipt of each Bank's Note pursuant to Section 3.1(b), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it and the
date and amount of each payment of principal made by the Borrower with
respect thereto, and may, if such Bank so elects in connection with any
transfer or enforcement of its Note, endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided that the failure of any
Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes. Each Bank is
hereby irrevocably authorized by the Borrower so to endorse its Note and to
attach to and make a part of its Note a continuation of any such schedule as
and when required.
(d) The Administrative Agent will upon request of the Borrower from
time to time furnish information to the Borrower as to the types and amounts
of Loans outstanding hereunder.
Section 2.7 Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from
the date such Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day. Such interest shall be payable on the last
Domestic Business Day of each calendar quarter. Any overdue principal of or
interest on any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto,
at a rate per annum equal to the sum of the CD Margin plus the Adjusted CD
Rate applicable to such Interest Period; provided that if any CD Loan shall,
as a result of clause (2)(b) of the definition of Interest Period, have an
Interest Period of less than 30 days, such CD Loan shall bear interest during
such Interest Period at the rate applicable to Base Rate Loans during such
period. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than 90 days, at intervals
of 90 days after the first day thereof. Any overdue principal of or interest
on any CD Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2% plus the higher of (i) the
sum of the CD Margin plus the Adjusted CD Rate applicable to the Interest
Period for such Loan and (ii) the rate applicable to Base Rate Loans for such
day.
"CD Margin" means 0.235% per annum.
The "Adjusted CD Rate" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
ACDR = [CDBR]* + AR
-----------
[1.00-DRP]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
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----------------
* The amount in brackets being rounded upward, if
necessary,
to the next higher 1/100 of 1%.
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates
per annum bid at 8:00 A.M. (Pacific time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the purchase at
face value from each CD Reference Bank of its certificates of deposit in an
amount comparable to the principal amount of the CD Loan of such CD Reference
Bank to which such Interest Period applies and having a maturity comparable
to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars
in respect of new non-personal time deposits in dollars in New York City
having a maturity comparable to the related Interest Period and in an amount
of $100,000 or more. The Adjusted CD Rate shall be adjusted automatically on
and as of the effective date of any change in the Domestic Reserve
Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or
a comparable successor assessment risk classification) within the meaning of
12 C.F.R. 327.3(e) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted automatically on and
as of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin plus
the Adjusted London Interbank Offered Rate applicable to such Interest
Period. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof.
"Euro-Dollar Margin" means 0.11% per annum.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward,
if necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable
London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per
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annum at which deposits in dollars are offered to each of the Euro-Dollar
Reference Banks in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of
the Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars
in respect of "Eurocurrency liabilities" (or in respect of any other category
of liabilities which includes deposits by reference to which the interest
rate on Euro-Dollar Loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered
Rate shall be adjusted automatically on and as of the effective date of any
change in the Euro-Dollar Reserve Percentage.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin
plus the Adjusted London Interbank Offered Rate applicable to the Interest
Period for such Loan and (ii) the sum of 2% plus the Euro-Dollar Margin plus
the quotient obtained (rounded upward, if necessary, to the next higher 1/100
of 1%) by dividing (x) the average (rounded upward, if necessary, to the next
higher 1/16 of 1%) of the respective rates per annum at which one day (or, if
such amount due remains unpaid more than three Euro-Dollar Business Days,
then for such other period of time not longer than six months as the
Administrative Agent may select) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the Euro-Dollar
Reference Banks are offered to such Euro-Dollar Reference Bank in the London
interbank market for the applicable period determined as provided above by
(y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.1 shall exist, at a rate per
annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for
such day).
(e) Subject to Section 8.1(a), each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance
with Section 2.7(c) as if the related Money Market LIBOR Borrowing were a
Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section 2.3. Each
Money Market Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the Money Market Absolute Rate quoted by the Bank
making such Loan in accordance with Section 2.3. Such interest shall be
payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of three months
after the first day thereof. Any overdue principal of or interest on any
Money Market Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2% plus the Base Rate for such
day.
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(f) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the participating Banks of each rate of
interest so determined, and its determination thereof shall be conclusive in
the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If
any Reference Bank does not furnish a timely quotation, the Administrative
Agent shall determine the relevant interest rate on the basis of the
quotation or quotations furnished by the remaining Reference Bank or Banks
or, if none of such quotations is available on a timely basis, the provisions
of Section 8.1 shall apply.
Section 2.8 Facility Fee. The Borrower shall pay to the
Administrative Agent for the account of the Banks (including each New Bank
from and after the date it becomes a Bank under this Agreement pursuant to
Section 2.16) ratably a facility fee at the rate of 0.04% per annum. Such
facility fee shall accrue (i) from and including the Effective Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the
Commitments (whether used or unused) and (ii) from and including the
Termination Date (or such earlier date of termination) to but excluding the
Maturity Date or any earlier date on which the Loans shall be repaid in their
entirety, on the daily aggregate outstanding principal amount of the Loans.
Accrued fees under this Section shall be payable on the last Domestic
Business Day of each calendar quarter and on the Maturity Date (and, if
later, the date the Loans shall be repaid in their entirety).
Section 2.9 Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Domestic Business Days' notice to
the Administrative Agent, (i) terminate the Commitments at any time, if no
Loans are outstanding at such time or (ii) ratably reduce from time to time
by an aggregate amount of $25,000,000 or any larger multiple of $5,000,000,
the aggregate amount of the Commitments in excess of the aggregate
outstanding principal amount of the Loans.
Section 2.10 Scheduled Termination of Commitments; Maturity of
Loans. The Commitments shall terminate on the Termination Date, and
any Loans then outstanding (together with accrued interest thereon) shall be
due and payable on the Termination Date or, if extended pursuant to Section
2.15, the Extended Maturity Date.
Section 2.11 Optional Prepayments. The Borrower may, upon at least
one Domestic Business Day's notice to the Administrative Agent, prepay any
Base Rate Borrowing (or any Money Market Borrowing bearing interest at the
Base Rate pursuant to Section 8.1(a)), in whole at any time, or from time to
time in part in amounts aggregating $50,000,000 or any larger multiple of
$5,000,000, by paying the principal amount to be prepaid. The interest
accrued on such Borrowing to the date of prepayment shall be payable as set
forth in Section
2.7(a). Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Banks included in such Borrowing.
(b) Except as provided in Section 2.11(a), the Borrower may not
prepay all or any portion of the principal amount of any Money Market Loan
prior to the maturity thereof.
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(c) Subject to Section 2.13, the Borrower may, upon at least three
Euro-Dollar Business Days' notice to the Administrative Agent, prepay any
Euro-Dollar Borrowing, or upon at least three Domestic Business Days' notice
to the Administrative Agent, prepay any CD Borrowing, in each case in whole
at any time, or from time to time in part in amounts aggregating $50,000,000
or any larger multiple of $5,000,000, by paying the principal amount to be
prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Loans of
the several Banks included in such Borrowing.
(d) Upon receipt of a notice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share (if any) of such prepayment and such
notice shall not thereafter be revocable by the Borrower.
Section 2.12 General Provisions as to Payments. The
Borrower shall make each payment of principal of, and interest on, the Loans
and of fees hereunder, not later than 12:00 Noon (Pacific time) on the date
when due, in Federal or other funds immediately available in San Francisco,
to the Administrative Agent at its address referred to in Section 9.1. The
Administrative Agent will promptly distribute to each Bank its ratable share
of each such payment received by the Administrative Agent for the account of
the Banks. Whenever any payment of principal of, or interest on, the
Domestic Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-
Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. Whenever any payment
of principal of, or interest on, the Money Market Loans shall be due on a day
which is not a Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day. If the date for
any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each Bank
on such due date an amount equal to the amount then due such Bank. If and to
the extent that the Borrower shall not have so made such payment, each Bank
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from
the date such amount is distributed to such Bank until the date such Bank
repays such amount to the Administrative Agent, at the Federal Funds Rate.
Section 2.13 Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan (pursuant to Article
2, 6 or 8 or otherwise, except pursuant to Section 8.2) on any day other than
the last day of the Interest Period applicable thereto, or if the Borrower
fails to borrow or prepay any Fixed Rate Loans after notice has been given to
any
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Bank in accordance with Section 2.5(a) or 2.11(c), or if the Borrower
fails to continue or convert any Loan into a CD Loan or a Euro-Dollar Loan
after notice has been given to any Bank in accordance with Section 2.5(a),
the Borrower shall reimburse each Bank within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing or, in the case
of a Money Market Loan, prospective Participant in the related Loan),
including (without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period after any such payment or failure to borrow or prepay, provided that
such Bank shall have delivered to the Borrower a certificate as to the amount
of such loss or expense, setting forth in reasonable detail the calculation
of such amount, which certificate shall be conclusive if prepared reasonably
and in good faith.
Section 2.14 Computation of Interest and Fees. Interest
based on the Prime Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other
interest and all facility fees shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed (including the first
day but excluding the last day).
Section 2.15 Extension of Maturity Date. At least 30 days
prior to the Termination Date, the Borrower, by written notice to the
Administrative Agent, may elect to extend the maturity of the Loans by one
calendar year from the Termination Date; provided that for such extension to
be effective, no Default shall have occurred and then be continuing on the
date of such notice and on the Termination Date. In addition, if the
Borrower delivers a Notice of Borrowing or Notice of Continuation/Conversion
pursuant to which it selects an Interest Period for a Fixed Rate Loan which
would end after the Termination Date, as required by the definition of
"Interest Period", concurrently with such Notice of Borrowing or Notice
of Continuation/Conversion, the Borrower, by written notice to the
Administrative Agent, shall elect to extend the maturity of the Loans by one
calendar year from the Termination Date, subject to the proviso in the
preceding sentence. The Administrative Agent shall promptly notify each of
the Banks of any extension of the maturity of the Loans made pursuant to this
Section.
Section 2.16 Increases in Commitments.
(a) Provided that no Default shall have occurred and be continuing,
the Borrower may at any time prior to the Termination Date request in writing
that the then existing Commitments be increased by an amount which is not
greater than $300,000,000 in the aggregate since the Effective Date in
accordance with the provisions of this Section. Any request under this
Section shall be submitted by the Borrower to the Banks through the
Administrative Agent not less than 45 days prior to the proposed increase and
shall specify the proposed effective date and amount of such increase and be
accompanied by a certificate of an authorized officer of the Borrower,
stating that no Default exists as of the date of the request or will result
from the requested increase. The consent of the Banks shall not be required
for an increase in the amount of the Commitments pursuant to this Section,
except that each Bank shall have the right to consent to an increase in the
amount of its Commitment as set forth in this Section 2.16.
(b) Each Bank may approve or reject the Borrower's request in its
sole and absolute discretion and, absent an affirmative written response
within 30 days after receipt of the
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Borrower's request, shall be deemed to have rejected the Borrower's request.
The rejection of the Borrower's request by any number of Banks shall not
affect the Borrower's right to increase the Commitments pursuant to this
Section. No Bank which rejects the Borrower's request for an increase in the
Commitments shall be subject to removal as a Bank under Section 8.6.
(c) In responding to the Borrower's request, each Bank that is
willing to increase the amount of its Commitment shall specify the amount of
the proposed increase to which it is willing to commit.
(d) If the aggregate principal amount offered to be committed to by
the consenting Banks is less than the amount requested by the Borrower, the
Borrower may (i) reject the proposed increase in its entirety, (ii) accept
the offered amounts or (iii) designate new lenders who are reasonably
acceptable to the Administrative Agent as additional Banks hereunder in
accordance with clause (f) of this Section (each, a "New Bank"), which New
Banks may commit to the amount of the increase in the Commitments that has
not been committed to by the increasing Banks; provided that the amount of
the increase in the Commitments committed to by the increasing Banks and the
New Banks shall not be greater than $300,000,000 in the aggregate since the
Effective Date and provided further that the minimum Commitment of each New
Bank shall be not less than the lowest Commitment of an existing Bank prior
to the proposed increase in Commitments.
(e) If the aggregate principal amount offered to be committed to by
the consenting Banks is more than the amount requested by the Borrower, the
Administrative Agent, in consultation with the Borrower, shall allocate the
increase in Commitments among the consenting Banks.
(f) Each New Bank designated by the Borrower and reasonably
acceptable to the Administrative Agent shall become an additional party
hereto as a New Bank concurrently with the effectiveness of the proposed
increase in the Commitments upon its execution of an instrument of joinder to
this Agreement which is in form and substance reasonably acceptable to the
Administrative Agent and which, in any event, contains the representations,
warranties, indemnities and other protections afforded to the Administrative
Agent and the other Banks by an Assignment and Acceptance Agreement.
(g) Subject to the foregoing, any increase requested by the Borrower
shall be effective as of the date agreed to by the Borrower, the
Administrative Agent, the increasing Banks and the New Banks (if any) and
shall be in the principal amount equal to (i) the amount which the consenting
Banks are willing to commit to as increases to the amount of their
Commitments plus (ii) the amount offered by any New Banks. Upon the
effectiveness of any such increase, the Borrower shall issue replacement
Notes to each affected Bank and new Notes to each New Bank, and the
Commitments of each Bank will be adjusted to give effect to the increase in
the Commitments and set forth in a new schedule issued by the Administrative
Agent.
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ARTICLE 3
CONDITIONS
Section 3.1 Effectiveness. The amendment and restatement of the
Existing Agreement shall become effective on the date that each of the
following conditions shall have been satisfied:
(a) receipt by the Administrative Agent of counterparts hereof signed
by each of the parties hereto (or, in the case of any party as to which an
executed counterpart shall not have been received, receipt by the
Administrative Agent in form satisfactory to it of telegraphic, telex or
other written confirmation from such party of execution of a counterpart
hereof by such party);
(b) receipt by the Administrative Agent of a duly executed Note for
the account of each Bank dated on or before the Effective Date complying with
the provisions of Section 2.6;
(c) receipt by the Administrative Agent of an opinion of the General
Counsel of the Borrower, substantially in the form of Exhibit E hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) receipt by the Administrative Agent of an opinion of Orrick,
Herrington & Sutcliffe LLP, special counsel for the Administrative Agent,
substantially in the form of Exhibit F hereto and covering such additional
matters relating to the transactions contemplated hereby as the
Administrative Agent or the Required Banks may reasonably request;
(e) receipt by the Administrative Agent of all documents the
Administrative Agent may reasonably request relating to the existence of the
Borrower, the corporate authority for and the validity of this Agreement and
the Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent;
(f) receipt and review by the Administrative Agent and the Banks,
with results reasonably satisfactory to the Administrative Agent and the
Banks, of information confirming that (i) the Borrower and its Subsidiaries
are taking all necessary and appropriate steps to ascertain the extent of,
and to quantify and successfully address, business and financial risks facing
the Borrower and its Subsidiaries as a result of the "Year 2000 Problem"
(i.e., the inability of certain computer applications to recognize correctly
and perform date-sensitive functions involving certain dates prior to and
after December 31, 1999), including risks resulting from the failure of key
vendors and customers of the Borrower and its Subsidiaries to successfully
address the "Year 2000 Problem", (ii) the Borrower's and its Subsidiaries'
material computer applications will, on a timely basis, adequately address
the "Year 2000 Problem" in all material respects and (iii) the material
computer applications of the key vendors and customers of Borrower and its
Subsidiaries will on a timely basis adequately address the "Year 2000
Problem" in all material respects or the Borrower and its Subsidiaries will
develop contingency plans to adequately address such failure of any such
vendors and customers in all material respects;
(g) there shall have been no material disruption of or a material
adverse change in the financial, banking or capital markets which the
Administrative Agent or the Arranger deem material in their sole discretion;
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(h) all accrued but unpaid fees under the Existing Agreement shall
have been paid in full; and
(i) receipt by the Administrative Agent of evidence satisfactory to
it of the effectiveness of the Fourth Amended and Restated 364-Day Credit
Agreement of even date herewith among Toyota Motor Sales, U.S.A., Inc., the
banks listed therein and Bank of America, N.A., as Administrative Agent for
such banks;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied or waived
by all the Banks not later than September 21, 1999. The Administrative Agent
shall promptly notify the Borrower and the Banks of the Effective Date, and
such notice shall be conclusive and binding on all parties hereto.
Section 3.2 Borrowings; Continuations; Conversions. The obligation
of any Bank to make, Continue or Convert a Loan on the occasion of
any Borrowing, Continuation or Conversion is subject to the satisfaction of
the following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing or a
Notice of Continuation/Conversion as required by Section 2.2, 2.3 or 2.4, as
the case may be;
(b) the fact that, immediately after such Borrowing, Continuation or
Conversion, the aggregate outstanding principal amount of the Loans will not
exceed the aggregate amount of the Commitments;
(c) the fact that, immediately before and after such Borrowing,
Continuation or Conversion, no Default shall have occurred and be continuing;
and
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement (except, in the case of a Continuation or
Conversion of a Committed Loan, the representations and warranties set forth
in Sections 4.4(c), 4.5 and 4.12 as to any matter which has theretofore been
disclosed in writing by the Borrower to the Banks) shall be true on and as of
the date of such Borrowing, Continuation or Conversion.
Each Borrowing, Continuation or Conversion hereunder shall be deemed to
be a representation and warranty by the Borrower on the date of such
Borrowing, Continuation or Conversion, as to the facts specified in clauses
(b), (c) and (d) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
Section 4.1 Corporate Existence and Power. The Borrower is
a corporation duly incorporated, validly existing and in good standing under
the laws of California, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted.
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Section 4.2 Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower
of this Agreement and the Notes are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the articles of incorporation or bylaws
of the Borrower or of any agreement, judgment, injunction, order, decree or
other instrument binding upon the Borrower or any of its Subsidiaries.
Section 4.3 Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower and each Note, when executed and
delivered in accordance with this Agreement, will constitute a valid and
binding obligation of the Borrower, in each case enforceable in accordance
with its terms.
Section 4.4 Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 30, 1998 and the related
consolidated statements of income and cash flows for the fiscal year then
ended, reported on by independent public accountants and set forth in the
Borrower's 1998 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of June 30, 1999 and the related unaudited
consolidated statements of income and cash flows for the nine months then
ended, set forth in the Borrower's Latest Form 10-Q, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with generally
accepted accounting principles applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section, except as
stated therein, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such nine-month period (subject to normal year-
end adjustments).
(c) Since September 30, 1998, there has been no material adverse
change in the business, financial position, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries, considered as a
whole.
Section 4.5 Litigation. There is no action, suit or
proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could
materially adversely affect the business, consolidated financial position or
consolidated results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole, or which in any manner draws into
question the validity of this Agreement or the Notes.
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Section 4.6 Compliance with ERISA. Each member of the
ERISA Group has fulfilled its obligations under the minimum funding standards
of ERISA and the Internal Revenue Code with respect to each Plan and is in
compliance in all material respects with the presently applicable provisions
of ERISA and the Internal Revenue Code with respect to each Plan. No member
of the ERISA Group has (i) sought a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code in respect of any Plan,
(ii) failed to make any contribution or payment to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement, or made any amendment to any
Plan or Benefit Arrangement, which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security under ERISA
or the Internal Revenue Code or (iii) incurred any liability under Title IV
of ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.
Section 4.7 Environmental Matters. In the ordinary course
of its business, the Borrower conducts a review of the effect of
Environmental Laws on the business, operations and properties of the Borrower
and its Subsidiaries. On the basis of this review, the Borrower has
reasonably concluded that the costs of compliance with Environmental Laws,
including associated liabilities, are unlikely to have a material adverse
effect on the business, financial condition, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries, considered as a
whole.
Section 4.8 Taxes. The Borrower and its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the
Borrower or any Subsidiary. The charges, accruals and reserves on the books
of the Borrower and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrower, adequate.
Section 4.9 Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
Section 4.10 Not an Investment Company. The Borrower is not
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
Section 4.11 Full Disclosure. All information heretofore
furnished by the Borrower to the Administrative Agent or any Bank for
purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by the
Borrower to the Administrative Agent or any Bank will be, true, accurate and
complete in all material respects on the date as of which such information is
stated or certified.
Section 4.12 Year 2000. The Borrower has (a) initiated a
review and assessment of its and each of its Subsidiaries' critical business
and operations (including those affected by customers and vendors) that could
be adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications and devices containing imbedded computer chips used by
the Borrower or any of its Subsidiaries (or their respective customers and
vendors) may be unable to
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recognize and perform properly date-sensitive functions involving certain
dates
prior to and any date after December 31, 1999), (b) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (c) to
date, implemented that plan in accordance with that timetable as it may be
modified from time to time as appropriate to complete implementation prior to
January 1, 2000. Based on the foregoing, the Borrower believes that all of
the Borrower's and its Subsidiaries' computer applications and devices
containing imbedded computer chips ("Y2K Applications") that are material to
its or any of its Subsidiaries' business and operations are reasonably
expected on a timely basis to be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000 (that is, to be
"Year 2000 Compliant"), except to the extent that a failure to do so is not
reasonably expected to have a material adverse effect on the business,
financial condition, results of operations or prospects of the Borrower and
its Consolidated Subsidiaries considered as a whole (a "Material Adverse
Affect"). In addition, the Borrower has surveyed the material customers and
vendors of it and its Subsidiaries (the "Material Third Parties") and, based
solely on the information provided by the Material Third Parties , either (i)
Borrower believes that all Y2K Applications that are material to the Material
Third Parties' business and operations are
reasonably expected on a timely basis to be Year 2000 Compliant except to the
extent that a failure to do so is not reasonably expected to have a Material
Adverse Effect; or (ii) to the extent Borrower does not so believe, Borrower
is or will develop contingency plans to respond to any such failure of a
Material Third Party to be Year 2000 Compliant so that no Material Adverse
Effect will occur.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
Section 5.1 Information. The Borrower will deliver to the
Administrative Agent and each of the Banks:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of income and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on in a manner acceptable to the
Securities and Exchange Commission by independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the Borrower,
a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of income and cash flows for such quarter and for the portion of
the Borrower's fiscal year ended at the end of such quarter, setting forth in
the case of such statements of income and cash flows in comparative form the
figures for the corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year;
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(c) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a certificate of the chief
financial officer or the chief accounting officer of the Borrower stating
whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto;
(d) within five days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate
of the chief financial officer or the chief accounting officer of the
Borrower setting forth the details thereof and the action which the Borrower
is taking or proposes to take with respect thereto;
(e) promptly upon the filing thereof, copies of all registration
statements (other than exhibits thereto, pricing supplements and any
registration statements (x) on Form S-8 or its equivalent or (y) in
connection with asset securitization transactions) and reports on Forms 10-K,
10-Q and 8-K (or their equivalents) which the Borrower shall have filed with
the Securities and Exchange Commission;
(f) within five days after any officer of the Borrower at any time
obtains knowledge that any representation or warranty set forth in
Section 4.6 would not be true if made at such time, a certificate of the
chief financial officer or the chief accounting officer of the Borrower
setting forth the details thereof and the action which the Borrower is taking
or proposes to take with respect thereto; and
(g) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Administrative Agent, at the request of any Bank, may reasonably request.
Section 5.2 Maintenance of Property; Insurance.
(a) The Borrower will keep, and will cause each Significant
Subsidiary to keep, all material property useful and necessary in its
business in good working order and condition, ordinary wear and tear
excepted.
(b) The Borrower will maintain, and will cause each Significant
Subsidiary to maintain with financially sound and reputable insurance
companies, insurance in at least such amounts and against at least such risks
(and with such risk retention) as are usually insured against by companies of
established repute engaged in the same or similar business as the Borrower or
such Significant Subsidiary, and the Borrower will promptly furnish to the
Administrative Agent and the Banks such information as to insurance carried
as may be reasonably requested in writing by the Administrative Agent.
Section 5.3 Conduct of Business and Maintenance of Existence.
The Borrower will continue, and will cause each Significant Subsidiary to
continue, to engage in business of the same general type as now conducted by
the Borrower and its Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each Significant Subsidiary to preserve,
renew and keep in full force and effect their respective corporate existence
and their respective rights, privileges and franchises necessary or desirable
in the normal conduct of business; provided that nothing in this Section 5.3
shall prohibit (i) any merger or consolidation involving
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the Borrower which is permitted by Section 5.6, (ii) the merger of a
Significant Subsidiary into the Borrower or the merger or consolidation of a
Significant Subsidiary with or into another Person if the corporation
surviving such consolidation or merger is a Significant Subsidiary and if, in
each case, after giving effect thereto, no Default shall have occurred and be
continuing or (iii) the termination of the corporate existence of any
Significant Subsidiary if the
Borrower in good faith determines that such termination is in the best
interest of the Borrower and is not materially disadvantageous to the Banks.
Section 5.4 Compliance with Laws. The Borrower will
comply, and cause each Significant Subsidiary to comply, in all material
respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder) except
where the necessity of compliance therewith is contested in good faith by
appropriate proceedings.
Section 5.5 Negative Pledge. The Borrower will not pledge
or otherwise subject to any lien any property or assets of the Borrower
unless the Notes and the obligations of the Borrower under this Agreement are
secured by such pledge or lien equally and ratably with all other obligations
secured thereby so long as such other obligations shall be so secured;
provided, however, that such covenant will not apply to liens securing
obligations which do not in the aggregate at any one time outstanding exceed
5% of Consolidated Net Tangible Assets (as defined below) of the Borrower and
its Consolidated Subsidiaries and also will not apply to:
(a) the pledge of any assets of the Borrower to secure any financing
by the Borrower of the exporting of goods to or between, or the marketing
thereof in, countries other than the United States in connection with which
the Borrower reserves the right, in accordance with customary and established
banking practice, to deposit, or otherwise subject to a lien, cash,
securities or receivables, for the purpose of securing banking accommodations
or as the basis for the issuance of bankers' acceptances or in aid of other
similar borrowing arrangements;
(b) the pledge of receivables of the Borrower payable in currencies
other than United States dollars to secure borrowings in countries other than
the United States;
(c) any deposit of assets of the Borrower with any surety company or
clerk of any court, or in escrow, as collateral in connection with, or in
lieu of, any bond on appeal by the Borrower from any judgment or decree
against it, or in connection with other proceedings in actions at law or in
equity by or against the Borrower or in favor of any governmental bodies to
secure progress, advance or other payments in the ordinary course of the
Borrower's business;
(d) any lien or charge on any property of the Borrower, tangible or
intangible, real or personal, existing at the time of acquisition or
construction of such property (including acquisition through merger or
consolidation) or given to secure the payment of all or any part of the
purchase or construction price thereof or to secure any indebtedness incurred
prior to, at the time of, or within one year after, the acquisition or
completion of construction thereof for the purpose of financing all or any
part of the purchase or construction price thereof;
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(e) any lien in favor of the United States of America or any State
thereof or the District of Columbia, or any agency, department or other
instrumentality thereof, to secure progress, advance or other payments
pursuant to any contract or provision of any statute;
(f) any lien securing the performance of any contract or undertaking
not directly or indirectly in connection with the borrowing of money,
obtaining of advances or credit or the securing of debt, if made and
continuing in the ordinary course of business;
(g) any lien to secure nonrecourse obligations in connection with the
Borrower's engaging in leveraged or single-investor lease transactions; and
(h) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any lien, charge or pledge
referred to in the foregoing clauses (a) to (g), inclusive, of this
Section 5.5; provided, however, that the amount of any and all obligations
and indebtedness secured thereby shall not exceed the amount thereof so
secured immediately prior to the time of such extension, renewal or
replacement and that such extension, renewal or replacement shall be limited
to all or a part of the property which secured the charge or lien so
extended, renewed or replaced (plus improvements on such property).
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after
deducting therefrom (i) all current liabilities and (ii) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other
like intangibles of the Borrower and its Consolidated Subsidiaries all as set
forth on the most recent balance sheet of the Borrower and its Consolidated
Subsidiaries prepared in accordance with generally accepted accounting
principles as practiced in the United States.
Section 5.6 Consolidations, Mergers and Sales of Assets.
The Borrower shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into
which
the Borrower is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Borrower
substantially as an entirety shall be a corporation or entity organized
and existing under the laws of the United States of America, any State
thereof or the District of Columbia (the "Successor Corporation") and
shall expressly assume, by an amendment or supplement to this
Agreement, signed by the Borrower and such Successor Corporation and
delivered to the Administrative Agent, the Borrower's obligation with
respect to the due and punctual payment of the principal of and
interest on all the Notes and the due and punctual payment of all other
amounts payable by the Borrower hereunder and the performance or
observance of every covenant herein on the part of the Borrower to be
performed or observed;
(ii) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Borrower
as a result of such transaction as having been incurred by the Borrower
at the time of such transaction, no Default shall have happened and be
continuing;
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(iii) if, as a result of any such consolidation or merger
or such conveyance, transfer or lease, properties or assets of the
Borrower would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not be permitted by
Section 5.5 hereof, the Borrower or the Successor Corporation, as the
case may be, take such steps as shall be necessary effectively to
secure the Notes and the obligations of the Borrower under this
Agreement equally and ratably with (or prior to) all indebtedness
secured thereby; and
(iv) the Borrower has delivered to the Administrative Agent a
certificate signed by an executive officer and a written opinion or
opinions of counsel satisfactory to the Administrative Agent (who may
be counsel to the Borrower), each stating that such amendment or
supplement to this Agreement complies with this Section 5.6 and that
all conditions precedent herein provided for relating to such
transaction have been complied with.
(b) Upon any consolidation or merger or any conveyance, transfer or
lease of the properties and assets of the Borrower substantially as an
entirety in accordance with Section 5.6(a), the Successor Corporation shall
succeed to, and be substituted for, and may exercise every right and power
of, the Borrower under this Agreement and the Notes with the same effect as
if the Successor Corporation had been named as the Borrower therein and
herein, and thereafter, the Borrower, except in the case of a lease of the
Borrower's properties and assets, shall be released from its liability as
obligor on any of the Notes and under this Agreement.
Section 5.7 Use of Proceeds. The proceeds of the Loans
made under this Agreement will be used by the Borrower for its general
corporate purposes including, without limitation, the refunding of its
maturing commercial paper. None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of Regulation U.
ARTICLE 6
DEFAULTS
Section 6.1 Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan
or shall fail to pay within five days of the due date thereof any interest on
any Loan, any fees or any other amount payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Section 5.5, 5.6 or 5.7;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by
clause (a) or (b) above) for 30 days after notice thereof has been given to
the Borrower by the Administrative Agent at the request of any Bank;
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(d) any representation, warranty, certification or statement made by
the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(e) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Borrower or any Subsidiary or under
any mortgage, indenture, fiscal agency agreement or instrument under which
there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Borrower or any Subsidiary and owing
to a Person other than the Borrower or a Subsidiary, whether such
indebtedness now exists or shall hereafter be created, which default shall
constitute a failure to pay any portion of the indebtedness when due and
payable after the expiration of the greater of five days or any applicable
grace period with respect thereto or shall have resulted in indebtedness
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable, and the amount of such
indebtedness in the aggregate exceeds $10,000,000;
(f) the Borrower or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Borrower or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Borrower or any Significant Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(h) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $10,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed to administer any
Material Plan; or a condition shall exist by reason of which the PBGC would
be entitled to obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal from, or a
default, within the meaning of Section 4219(c)(5) of ERISA, with respect to,
one or more Multiemployer Plans which could cause one or more members of the
ERISA Group to incur a current payment obligation in excess of $25,000,000;
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(i) judgments or orders for the payment of money in excess of
$10,000,000 in the aggregate shall be rendered against the Borrower or any
Significant Subsidiary and such judgments or orders shall continue
unsatisfied and unstayed for a period of 30 days; or
(j) the Borrower shall cease to be a TMC Consolidated Subsidiary;
then, and in every such event, the Administrative Agent shall (i) if
requested by Banks having more than 50% in aggregate amount of the
Commitments, by notice to the Borrower terminate the Commitments and they
shall thereupon terminate, and (ii) if requested by Banks holding Notes
evidencing more than 50% in aggregate principal amount of the Loans, by
notice to the Borrower declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower; provided that in the case of any
of the Events of Default specified in clause (f) or (g) above with respect to
the Borrower, without any notice to the Borrower or any other act by the
Administrative Agent or the Banks, the Commitments shall thereupon terminate
and the Notes (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
Section 6.2 Notice of Default. The Administrative Agent
shall give notice to the Borrower under Section 6.1(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE 7
THE ADMINISTRATIVE AGENT
Section 7.1 Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Administrative Agent to take such
action as Administrative Agent on its behalf and to exercise such powers
under this Agreement and the Notes as are delegated to the Administrative
Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement, the Administrative Agent shall not
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing
sentence, the use of the term "agent" in this Agreement with reference to the
Administrative Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market
custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
Section 7.2 Delegation of Duties. The Administrative Agent
may execute any of its duties under this Agreement by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
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Section 7.3 Agent and Affiliates. Bank of America, N.A.
shall have the same rights and powers under this Agreement as any other Bank
and may exercise or refrain from exercising the same as though it were not
the Administrative Agent, and Bank of America, N.A. and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or affiliate of the Borrower as
if it were not the Administrative Agent hereunder. The Banks acknowledge
that, pursuant to such activities, Bank of America, N.A. or its affiliates
may receive information regarding the Borrower or its affiliates (including
information that may be subject to confidentiality obligations in favor of
the Borrower or such affiliate) and acknowledge that the Administrative Agent
shall be under no obligation to provide such information to them.
Section 7.4 Action by Agent. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
The Administrative Agent shall be fully justified in failing or refusing to
take any action under this Agreement or under the Notes unless it shall first
receive such advice or concurrence of the Required Banks as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Required Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any
such action.
Section 7.5 Consultation with Experts. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
Section 7.6 Liability of Agent. Neither the Administrative
Agent nor any of its affiliates nor any of their respective directors,
officers, agents or employees shall be liable for any action taken or not
taken by it in connection herewith (i) vis-a-vis any Bank, with the consent
or at the request of the Required Banks or (ii) vis-a-vis any Person, in the
absence of its own gross negligence or willful misconduct. Neither the
Administrative Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified
in Article 3, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Administrative Agent shall not incur any liability
by acting in reliance upon any notice, consent, certificate, statement, or
other writing (which may be a bank wire, telex, facsimile transmission or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
Section 7.7 Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Administrative Agent, its
affiliates and their respective directors, officers, agents and employees (to
the extent not reimbursed by the Borrower) against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from such indemnitees' gross negligence or
willful misconduct provided, however, that no action taken in accordance with
the directions of the Required Banks shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section) that
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such indemnitees may suffer or incur in connection with this Agreement, the
Existing Agreement, the Commitments, the use or contemplated use of the
proceeds of any Loan, the relationship of the Borrower, the Administrative
Agent and the Banks under this Agreement or any action taken or omitted by
such indemnitees hereunder.
Section 7.8 Credit Decision; Disclosure of Information by
Administrative Agent. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any action
under this Agreement. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Administrative
Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower or any of its Subsidiaries
which may come into the possession of the Administrative Agent.
Section 7.9 Notice of Default. The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults in the payment
of principal, interest and fees required to be paid to the Administrative
Agent for the account of the Banks, unless the Administrative Agent shall
have received written notice from a Bank or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Administrative Agent will notify the
Banks and the Borrower of its receipt of any such notice. The Administrative
Agent shall take such action with respect to such Default or Event of Default
as may be requested by the Required Banks in accordance with Article 6;
provided, however, that unless and until the Administrative Agent has
received any such request, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable or in
the best interest of the Administrative Agent or the Banks.
Section 7.10 Successor Agent. The Administrative Agent may
resign at any time by giving notice thereof to the Banks and the Borrower.
Upon any such resignation, the Required Banks shall have the right to appoint
a successor Agent with the written consent of the Borrower, which shall not
be unreasonably withheld. If no successor Agent shall have been so appointed
by the Required Banks with the consent of the Borrower, and shall have
accepted such appointment, within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $1,000,000,000.
Upon the acceptance of its appointment as Administrative Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After
any retiring Agent's resignation hereunder as Administrative Agent, the
provisions of this Article
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shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent.
Section 7.11 Agent's Fee. The Borrower shall pay to the
Administrative Agent for its own account all fees referred to in the letter
agreement (the "Fee Letter") among the Borrower, the Administrative Agent and
the Arranger dated August 13, 1999 and as otherwise may be agreed to in
writing between the Borrower and the Administrative Agent, in each case at
the times and in the amounts set forth in the Fee Letter or such other
agreement.
Section 7.12 Syndication Agents; Documentation Agents; Sole Lead
Managers and Sole Book Managers. None of the Banks identified on the
facing page or signature pages of this Agreement as a "documentation agent",
"syndication agent" or "sole lead manager and sole book manager" shall have
any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all the Banks as such. Without
limiting the foregoing, none of the Banks so identified as a "documentation
agent", "syndication agent" or "sole lead manager and sole book manager"
shall have or be deemed to have any fiduciary relationship with any Bank.
Each Bank acknowledges that it has not relied, and will not rely, on any of
the Banks so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.1 Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any
Fixed Rate Borrowing:
(a) the Administrative Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to the
Reference Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or more of
the aggregate amount of the Commitments advise the Administrative Agent that
the Adjusted CD Rate or the Adjusted London Interbank Offered Rate, as the
case may be, as determined by the Administrative Agent will not adequately
and fairly reflect the cost to such Banks of funding their CD Loans or Euro-
Dollar Loans, as the case may be, for such Interest Period, the
Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower
that the circumstances giving rise to such suspension no longer exist (which
notice the Administrative Agent shall promptly give at such time), the
obligations of the Banks to make or continue CD Loans or Euro-Dollar Loans,
as the case may be, shall be suspended. Unless the Borrower notifies the
Administrative Agent at least one Domestic Business Day before the date of
any Fixed Rate Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market
LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
Bear
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interest for each day from and including the first day to but excluding
the last day of the Interest Period applicable thereto at the Base Rate for
such day.
Section 8.2 Illegality. If, on or after the date of this
Agreement, any Regulatory Change shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-
Dollar Loans and such Bank shall so notify the Administrative Agent, the
Administrative Agent shall give notice thereof to the other Banks and the
Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist (which notice such Bank shall promptly give at such time), the
obligation of such Bank to make or continue Euro-Dollar Loans shall be
suspended. Before giving any notice to the Administrative Agent pursuant to
this Section, such Bank shall designate a different Euro-Dollar Lending
Office if such designation will avoid the need for giving such notice and
will not, in the judgment of such Bank, be otherwise disadvantageous to such
Bank. If such Bank shall determine that it may not lawfully continue to
maintain and fund any of its outstanding Euro-Dollar Loans to maturity and
shall so specify in such notice, the Borrower shall immediately prepay in
full the then outstanding principal amount of each such Euro-Dollar Loan,
together with accrued interest thereon. Concurrently with prepaying each
such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal
principal amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Banks), and such Bank shall make such a Base Rate Loan.
Section 8.3 Increased Cost and Reduced Return. If on
or after (x) the date hereof, in the case of any Committed Loan or any
obligation to make Committed Loans or (y) the date of the related Money
Market Quote, in the case of any Money Market Loan, the adoption of any
applicable law, rule or regulation, or any change in any applicable law, rule
or regulation, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Bank (or
its Applicable Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency (a "Regulatory Change") shall impose, modify or deem applicable any
reserve (including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding (i) with
respect to any CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (ii) with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar Reserve Percentage),
special deposit, insurance assessment (excluding, with respect to any CD
Loan, any such requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Bank (or its Applicable Lending Office) or shall
impose on any Bank (or its Applicable Lending Office) or on the United States
market for certificates of deposit or the London interbank market any other
condition affecting its Fixed Rate Loans, its Note or its obligation to make
Fixed Rate Loans and the result of any of the foregoing is to increase the
cost to such Bank (or its Applicable Lending Office) of making or maintaining
any Fixed Rate Loan, or to reduce the amount of any sum received or
receivable by such Bank (or its Applicable Lending Office) under this
Agreement or under its Note with respect thereto, by an amount deemed by such
Bank to be material, then, within 15 days after demand by such Bank (with a
copy to the Administrative Agent), the Borrower shall pay to such
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Bank such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency (including any determination by any such
authority, central bank or comparable agency that, for purposes of capital
adequacy requirements, the Commitments hereunder do not constitute
commitments with an original maturity of one year or less, which shall be
deemed a change in the interpretation and administration of such
requirements), has or would have the effect of reducing the rate of return on
capital of such Bank (or its Parent) as a consequence of such Bank's
Commitment hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by
an amount deemed by such Bank to be material, then from time to time, within
15 days after demand by such Bank (with a copy to the Administrative Agent),
the Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Bank to compensation pursuant to
this Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder and the calculation thereof in reasonable
detail shall be conclusive if prepared reasonably and in good faith. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods. Notwithstanding the foregoing subsections (a) and
(b) of this Section 8.3, the Borrower shall only be obligated to compensate
any Bank for any amount arising or accruing during (i) subject to clause (ii)
below, any time or period commencing not more than 180 days prior to the date
on which such Bank notifies the Administrative Agent and the Borrower that it
proposes to demand such compensation and identifies to the Administrative
Agent and the Borrower the statute, regulation or other basis upon which the
claimed compensation is or will be based and (ii) any time or period during
which, because of the retroactive application of such statute, regulation or
other basis, such Bank did not know that such amount would arise or accrue.
Section 8.4 Taxes. For purposes of this Section 8.4,
the following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
the Borrower pursuant to this Agreement or under any Note, and all
liabilities with respect thereto, excluding (i) in the case of each Bank and
the Administrative Agent, taxes imposed on its income, and franchise or
similar taxes imposed on it, by a jurisdiction under the laws of which such
Bank or the Administrative
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Agent (as the case may be) is organized or in which its principal executive
office is located or, in the case of each Bank, in which its Applicable
Lending Office is located and (ii) in the case of each Bank, any United
States withholding tax imposed on such payments but only to the extent that
such Bank is subject to United States withholding tax (x) as to amounts
payable in respect of any Money Market Loan, at the date of the related Money
Market Quote and (y) as to any other amounts payable hereunder or under the
Notes, at the time such Bank first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or
from the execution or delivery of, or otherwise with respect to, this
Agreement or any Note; provided that any such taxes applicable to a Money
Market Loan shall constitute Other Taxes only to the extent attributable to a
Regulatory Change on or after the date of the related Money Market Quote.
(b) Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the
Borrower shall be required by law to deduct any Taxes or Other Taxes from any
such payments, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 8.4) such Bank or the
Administrative Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions, (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law and (iv) the Borrower shall furnish to the Administrative
Agent, at its address referred to in Section 9.1, the original or a certified
copy of a receipt evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction
on amounts payable under this Section 8.4) paid by such Bank or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be paid within 15 days after such Bank or the
Administrative Agent (as the case may be) makes demand therefor.
(d) Each Bank (including each New Bank) organized under the laws of a
jurisdiction outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each Bank listed on
the signature pages hereof and on or prior to the date on which it becomes a
Bank in the case of each other Bank, and from time to time thereafter as
required by law (but only so long as such Bank remains lawfully able to do
so), shall provide the Administrative Agent and the Borrower with Internal
Revenue Service Form W-8BEN, W-8ECI, 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that
such Bank is entitled to benefits under an income tax treaty to which the
United States is a party which exempts the Bank from United States
withholding tax or reduces the rate of withholding tax on payments of
interest for the account of such Bank or certifying in
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conformity with applicable legal requirements that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a
trade or business in the United States.
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.4(d) (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Bank shall not be entitled to indemnification under
Section 8.4(b) or 8.4(c) with respect to Taxes imposed by the United States;
provided that if a Bank, which is otherwise exempt from or subject to a
reduced rate of withholding tax, becomes subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such
steps as such Bank shall reasonably request (at the expense of such Bank) to
assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.4, then such Bank will
change the jurisdiction of its Applicable Lending Office if, in the judgment
of such Bank, such change (i) will eliminate or reduce any such additional
payment which may thereafter accrue and (ii) is not otherwise disadvantageous
to such Bank.
Section 8.5 Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has
been suspended pursuant to Section 8.2 or (ii) any Bank has demanded
compensation under Section 8.3 or 8.4 with respect to its CD Loans or Euro-
Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business
Days' prior notice to such Bank through the Administrative Agent, have
elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances
giving rise to such suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as CD Loans
or Euro-Dollar Loans, as the case may be, shall be made instead as Base Rate
Loans (on which interest and principal shall be payable contemporaneously
with the related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may
be, has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its Base
Rate Loans instead.
Section 8.6 Substitution of Bank. If any Bank (i) has
demanded compensation or other payment pursuant to Section 8.3 or 8.4 or
(ii) has determined that the making, maintenance or funding of any Euro-
Dollar Loan has become unlawful or impermissible pursuant to Section 8.2 and,
in the case of clause (i), similar demand for compensation or payment has not
been made by all of the Banks, the Borrower shall have the right to designate
an Assignee to purchase for cash, pursuant to an Assignment and Assumption
Agreement in substantially the form of Exhibit G hereto, the outstanding
Loans and Commitment of such Bank and to assume all of such Bank's other
rights and obligations hereunder without recourse to or warranty by, or
expense to, such Bank, for a purchase price equal to the principal amount of
all of such Bank's outstanding Loans plus any accrued but unpaid interest
thereon and the accrued but unpaid facility fees in respect of such Bank's
Commitment hereunder plus such amount, if any, as would be payable pursuant
to
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Section 2.13 if the outstanding Loans of such Bank were prepaid in their
entirety on the date of consummation of such assignment.
Section 8.7 Consultation. Prior to giving notice pursuant
to Section 8.2 or to demanding compensation or other payment pursuant to
Section 8.3 or 8.4, each Bank shall consult with the Borrower and the
Administrative Agent with reference to the circumstances giving rise thereto;
provided that nothing in this Section 8.7 shall limit the right of any Bank
to require full performance by the Borrower of its obligations under such
Sections.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such party:
(x) in the case of the Borrower or the Administrative Agent, at its address,
facsimile number or telex number set forth on the signature pages hereof, (y)
in the case of any Bank, at its address, facsimile number or telex number set
forth in its Administrative Questionnaire or (z) in the case of any party,
such other address, facsimile number or telex number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and
the Borrower. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate answerback is received,
(ii) if given by facsimile transmission, when transmitted to the facsimile
number specified in this Section and confirmation of receipt is received,
(iii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid or (iv) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under Article 2 or
Article 8 shall not be effective until received.
Section 9.2 No Waivers. No failure or delay by the
Administrative Agent or any Bank in exercising any right, power or privilege
hereunder or under any Note shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
Section 9.3 Expenses; Indemnification. The Borrower
shall pay (i) all out-of-pocket expenses of the Administrative Agent,
including fees and disbursements of special counsel for the Administrative
Agent, in connection with the preparation and administration of this
Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (ii) if an Event of Default occurs,
all out-of-pocket expenses incurred by the Administrative Agent and each
Bank, including (without duplication, but subject to Section 9.3(c)) the fees
and disbursements of outside counsel or the allocated cost of internal
counsel, in connection with such Event of Default and collection, bankruptcy,
insolvency and other enforcement proceedings resulting therefrom.
(b) Subject to Section 9.3(c), the Borrower agrees to indemnify the
Administrative Agent, the Arranger and each Bank, their respective affiliates
and the respective directors,
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officers, agents and employees of the foregoing (each an "Indemnitee") and
hold each Indemnitee harmless from and against any and all liabilities,
losses, claims, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of outside counsel (or the
allocated cost of internal counsel) and settlement costs, which may be
incurred by such Indemnitee in connection with any investigative,
administrative or judicial proceeding (whether or not such Indemnitee shall
be designated a party thereto) brought or threatened relating to or arising
out of this Agreement or any actual or proposed use of proceeds of Loans or
Commitments hereunder; provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
(c) The Borrower shall not, in connection with any single proceeding
or series of related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm or internal legal department
(in addition to any local counsel) for all Indemnitees, such firm or internal
legal department to be selected by the Administrative Agent; provided that if
the an Indemnitee shall have reasonably concluded that (i) there may be legal
defenses available to it which are different from or additional to those
available to other Indemnitees and may conflict therewith or (ii) the
representation of such Indemnitee and the other Indemnitees by the same
counsel would otherwise be inappropriate under applicable principles of
professional responsibility, such Indemnitee shall have the right to select
and retain separate counsel to represent such Indemnitee in connection with
such proceeding(s) at the expense of the Borrower.
Section 9.4 Sharing of Set-offs. Each Bank agrees that if
it shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other Bank,
the Bank receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Banks shall be
shared by the Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or counterclaim
it may have and to apply the amount subject to such exercise to the payment
of indebtedness of the Borrower other than its indebtedness hereunder. The
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-
off or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
Section 9.5 Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of the Administrative Agent are
affected thereby, by the Administrative Agent); provided that no such
amendment or waiver shall, unless signed by all the Banks, (i) increase or
decrease the Commitment of any Bank (except for a ratable decrease in the
Commitments of all Banks or an assignment made in accordance with Section
9.6(c)) or subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or any fees hereunder,
(iii) postpone the date fixed for
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any payment of principal of or interest on any Loan or any fees hereunder or
for any reduction or termination of any Commitment or (iv) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Notes or the number of Banks which shall be required for the Banks or any
of them to take any action under this Section or any other provision of this
Agreement. Notwithstanding the foregoing, increases in the Commitments in
accordance with Section 2.16 shall not require the consent of any Bank other
than the right of each Bank to consent to an increase in the amount of its
Commitment as set forth in Section 2.16.
Section 9.6 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks and any attempted or purported
assignment or transfer by the Borrower without the prior written consent of
all Banks shall be null and void.
(b) Subject to any limitations imposed by applicable law, any Bank
may at any time grant to one or more banks or other institutions (each a
"Participant") participating interests in its Commitment or any or all of its
Loans. In the event of any such grant by a Bank of a participating interest
to a Participant, whether or not upon notice to the Borrower and the
Administrative Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement. Any agreement
pursuant to which any Bank may grant such a participating interest shall
provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such participation agreement may
provide that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clause (i), (ii), (iii) or (iv) of
Section 9.5 without the consent of the Participant. The Borrower agrees that
each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Article 8 with respect to its
participating interest; provided that no Participant shall be entitled to
receive any greater payment under Section 8.3 or 8.4 than the grantor Bank
would have been entitled to receive. An assignment or other transfer which
is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (which
proportionate part shall be in an amount at least equal to $25,000,000) of
all, of its rights and obligations under this Agreement and the Notes, and
such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit G
hereto executed by such Assignee and such transferor Bank, with (and subject
to) the subscribed consent of the Borrower, which shall not be unreasonably
withheld, and the Administrative Agent; provided that if an Assignee is an
affiliate of such transferor Bank or was a Bank immediately prior to such
assignment, no such consent shall be required; and provided further that such
assignment may, but need not, include rights of the transferor Bank in
respect of outstanding Money Market Loans. Upon execution and delivery of
such instrument and payment by such Assignee to such
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transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to
this Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required.
Upon the consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Bank shall
pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $2,500. If the Assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to the Borrower and the Administrative Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.4.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee or other transferee of any Bank's rights shall be
entitled to receive any greater payment under Section 8.3 or 8.4 than such
Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent (with disclosure to the Borrower at the time of the transfer of any
greater payment which the transferee would then be entitled to demand under
either Section 8.3 or 8.4) or by reason of the provisions of Section 8.2, 8.3
or 8.4 requiring such Bank to designate a different Applicable Lending Office
under certain circumstances.
Section 9.7 Collateral. Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith is
not relying upon any "margin stock" (as defined in Regulation U) as
collateral in the extension or maintenance of the credit provided for in this
Agreement.
Section 9.8 Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance
with the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in New
York City for purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. The Borrower
irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
Section 9.9 Counterparts; Integration. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject
matter hereof.
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Section 9.10 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
45
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TOYOTA MOTOR CREDIT CORPORATION
By: /s/ George E. Borst
----------------------
Title: Senior Vice President and
General Manager
19001 South Western Avenue
P.O. Box 2991
Torrance, California 90509-2991
Telex number: 37719707
Facsimile number: 310-787-6194
<PAGE>
Commitment Bank
- ---------- ----
$190,000,000 BANK OF AMERICA, N.A.
By: /s/ Alan H. Roche
-------------------
Title: Vice President
$180,000,000 THE CHASE MANHATTAN BANK
By: /s/ Frances L. Bonham
-----------------------
Title: Managing Director
$180,000,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ Masato Sekino
------------------
Title: Deputy General Manager
$180,000,000 CITICORP USA, INC.
By: /s/ Candi M. Halbert
--------------------
Title: Vice President
$140,000,000 CREDIT SUISSE FIRST BOSTON
By: /s/ Robert N. Finney
---------------------
Title: Managing Director
By: /s/ Jeffrey B. Ulmer
---------------------
Title: Vice President
$80,000,000 UBS AG, STAMFORD BRANCH
By: /s/ Gregory Raue
-----------------
Title: Director
By: /s/ Wilfred Saint
------------------
Title: Associate Director
Loan Portfolio Support, US
<PAGE>
$80,000,000 ABN AMRO BANK N.V.
By: /s/ John A. Miller
-------------------
Title: Group Vice President
By: /s/ Ellen M. Coleman
---------------------
Title: Vice President
$80,000,000 PARIBAS
By: /s/ Carol Simon
-----------------
Title: Head, NY Credit Risk
Financial Markets
By: /s/ Jean Wehner
-----------------
Title: Senior Credit Officer
$80,000,000 BARCLAYS BANK PLC
By: /s/ L. Peter Yetman
--------------------
Title: Director
$80,000,000 BBL INTERNATIONAL (U.K.) LIMITED
By: /s/ M-C Swinnen
----------------
Title: Authorised Signatory
$80,000,000 MELLON BANK, N.A.
By: /s/ John N. Cate
-----------------
Title: Vice President
$70,000,000 DEUTSCHE BANK AG,
NEW YORK BRANCH/CAYMAN ISLANDS
BRANCH
By: /s/ Oliver Schwarz
-------------------
Title: Assistant Vice President
By: /s/ Stefan Hafke
-----------------
Title: Vice President
<PAGE>
$40,000,000 THE SAKURA BANK, LIMITED,
LOS ANGELES AGENCY
By: /s/ Sumio Tanaka
-----------------
Title: Joint General Manager
$40,000,000 THE SANWA BANK, LIMITED,
LOS ANGELES BRANCH
By: /s/ Zenichi Muramoto
--------------------
Title: Senior Vice President &
Deputy General Manager
$40,000,000 THE TOKAI BANK, LIMITED,
LOS ANGELES AGENCY
By: /s/ Kosuke Furukawa
-------------------
Title: Joint General Manager
$40,000,000 THE BANK OF NEW YORK
By: /s/ Jonathan Rollins
---------------------
Title: Vice President
$40,000,000 WELLS FARGO BANK, N.A.
By: /s/ Donald A Hartman
---------------------
Title: Senior Vice President
By: /s/ Catherine M. Wallace
-------------------------
Title: Vice President
$40,000,000 HSBC BANK USA
By: /s/ John Rynne
---------------
Title: Assistant Vice President
<PAGE>
$40,000,000 BANK ONE, NA
By: /s/ Noburo Hashimoto
---------------------
Title: First Vice President
Total Commitments
$1,700,000,000
- --------------
- --------------
BANK OF AMERICA, N.A.,
as Administrative Agent
By:/s/ David Price
----------------
Title: Vice President
Attention: David Price
1455 Market Street, 12th Floor
Mail Code CA5-701-12-09
San Francisco, California 94103
Phone number: (415) 436-3496
Facsimile number: (415) 503-5011
Email: [email protected]
<PAGE>
The undersigned hereby agrees that, effective on the Effective Date, the
undersigned shall resign as agent under the Existing Agreement and Bank of
America, N.A. shall thereupon succeed to and become vested with all the
rights and duties of the undersigned as agent under the Existing Agreement,
and the undersigned shall be discharged from its duties and obligations
thereunder.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent under the
Existing Agreement
By: /s/ Robert Bottamedi
---------------------
Title: Vice President
<PAGE>
EXHIBIT A
NOTE
Los Angeles, California
19
------------------, --
For value received, Toyota Motor Credit Corporation, a California
corporation (the "Borrower"), promises to pay to the order of
-----------
(the "Bank"), for the account of its Applicable Lending Office, on the
Maturity Date (as defined in the Credit Agreement referred to below) the
unpaid principal amount of each Loan made by the Bank to the Borrower
pursuant to the Credit Agreement referred to below. The Borrower promises to
pay interest on the unpaid principal amount of each such Loan on the dates
and at the rate or rates provided for in the Credit Agreement. All such
payments of principal and interest shall be made in lawful money of the
United States in Federal or other immediately available funds at the office
of Bank of America, N.A., Agency Administrative Services 5596, 1850 Gateway
Blvd., Mail Code CA4-706-05-09, Concord, California 94520-3282.
All Loans made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank
and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding may be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Bank to make any
such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Fourth Amended and
Restated 364-Day Credit Agreement dated as of September 17, 1999 among the
Borrower, the banks listed on the signature pages thereof and Bank of
America, N.A., as Administrative Agent (as the same may be amended from time
to time, the "Credit Agreement"). Terms defined in the Credit Agreement are
used herein with the same meanings. Reference is made to the Credit
Agreement for provisions for the prepayment hereof and the acceleration of
the maturity hereof.
TOYOTA MOTOR CREDIT CORPORATION
By:
----------------------------
Title:
A-1
<PAGE>
Note (cont'd)
SCHEDULE OF LOANS
Amount
Paid,
Date Made, Prepaid,
Continued Principal Duration Continued Unpaid Notation
or Amount Type of Interest of Interest or Principal Made
Converted of Loan Loan Rate Period Converted Amount By
- --------- ------- ------- ------ ------ --------- ------ ---
A-2
<PAGE>
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Bank of America, N.A., as Administrative Agent
(the "Administrative Agent")
From: Toyota Motor Credit Corporation
Re: Fourth Amended and Restated 364-Day Credit Agreement (the "Credit
Agreement") dated as of September 17, 1999 among the Borrower, the
Banks listed on the signature pages thereof and the Administrative
Agent
We hereby give notice pursuant to Section 2.3 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing:
------------------
Principal Amount1 Interest Period2
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
TOYOTA MOTOR CREDIT CORPORATION
By:
----------------------------
Title:
- ---------------------------
1 Amount must be $50,000,000 or a larger multiple of $5,000,000.
2 Not less than one month (LIBOR Auction)or not less than 14 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest
Period.
B-1
<PAGE>
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to Toyota Motor Credit Corporation
(the "Borrower")
Pursuant to Section 2.3 of the Fourth Amended and Restated 364-Day
Credit Agreement dated as of September 17, 1999 among the Borrower, the Banks
parties thereto and the undersigned, as Administrative Agent, we are pleased
on behalf of the Borrower to invite you to submit Money Market Quotes to the
Borrower for the following proposed Money Market Borrowing(s):
Date of Borrowing:
------------------
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Please respond to this invitation by no later than [1:00 P.M.] [9:00
A.M.] (Pacific time) on [date].
BANK OF AMERICA, N.A., as Administrative
Agent
By:
--------------------------
Authorized Officer
C-1
<PAGE>
EXHIBIT D
Form of Money Market Quote
To: Bank of America, N.A.,
as Administrative Agent
Re: Money Market Quote to Toyota Motor Credit Corporation (the "Borrower")
In response to your invitation on behalf of the Borrower dated
19 , we hereby make the following Money Market Quote on the
- ------------, ---
following terms:
1. Quoting Bank:
--------------------------------
2. Person to contact at Quoting Bank:
- ---------------------------
3. Date of Borrowing: *
--------------------
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount** Period [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed $ .]**
------------
- ----------------
*As specified in the related Invitation.
**Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offer exceeds the amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
***Not less than one month or less than 14 days, as specified in the related
Invitation. No more than five bids are permitted for each Interest Period.
****Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/100,000 of
1%) and specify whether "PLUS" or "MINUS".
*****Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
D-1
<PAGE>
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Fourth Amended
and Restated 364-Day Credit Agreement dated as of September 17, 1999 among
the Borrower, the Banks listed on the signature pages thereof and yourselves,
as Administrative Agent, irrevocably obligates us to make the Money Market
Loan(s) for which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated: By:
--------------- --------------------------
Authorized Officer
D-2
<PAGE>
EXHIBIT E
OPINION OF
COUNSEL FOR THE BORROWER
To the Banks and the Administrative Agent
Referred to Below
c/o Bank of America, N.A., as Administrative Agent
Attention: David Price
1455 Market Street, 12th Floor
Mail Code CA5-701-12-09
San Francisco, California 94103
Re: Credit Agreement
Ladies and Gentlemen:
I and my staff have acted as counsel for Toyota Motor Credit
Corporation (the "Borrower") in connection with the Fourth Amended and
Restated 364-Day Credit Agreement (the "Credit Agreement") dated as of
September 17, 1999 among the Borrower, the banks listed on the signature
pages thereof and Bank of America, N.A., as Administrative Agent. Terms
defined in the Credit Agreement are used herein as therein defined. This
opinion is being rendered to you pursuant to Section 3.1(c) of the Credit
Agreement.
I am General Counsel of the Borrower and as such I, or members of my
staff, have participated in the negotiation of the Credit Agreement. I, or
members of my staff, have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents, corporate
records, certificates of public official and other instruments and have
conducted such other investigations of fact and law as we have deemed
necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing and in reliance thereon, I am of the
opinion, subject to the assumptions and limitations set forth herein, that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of California, and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the articles of incorporation or bylaws
of the Borrower or of any debt instrument or any other material agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower or any of its Subsidiaries.
E-1
<PAGE>
3. The Credit Agreement and the Notes are governed, by their terms,
by New York law. I express no opinion on the enforceability of the Loan
Documents under New York law. If California law were to apply, the Credit
Agreement would constitute a valid and binding agreement of the Borrower and
each Note would constitute a valid and binding obligation of the Borrower, in
each case enforceable in accordance with its terms.
4. There is no action, suit or proceeding pending against, or to the
best of my knowledge threatened against or affecting, the Borrower or any of
its Subsidiaries before any court or arbitrator or any governmental body,
agency or official, in which there is a reasonable possibility of an adverse
decision which could materially adversely affect the business, consolidated
financial position or consolidated results of operations of the Borrower and
its consolidated Subsidiaries, considered as a whole or which in any manner
draws into question the validity of the Credit Agreement or the Notes.
5. Each of the Borrower's corporate Subsidiaries is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
The opinion set forth in paragraph 3 is subject to: (i) the effect of
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or other similar laws of general application relating to or
affecting the enforcement of creditors' rights generally, (ii) limitations on
the remedy of specific performance and injunctive and other forms of
equitable relief due to the possible existence of equitable defenses or due
to the discretion of the court before which any proceeding therefor may be
brought, (iii) the unenforceability under certain circumstances of provisions
to the effect that failure to exercise, or delay in exercising, rights or
remedies will not operate as a waiver of any such right or remedy,
(iv) limitations based upon statutes or upon public policy limiting a
person's right to waive the benefits of statutory provisions or of a common
law right, (v) limitations on the right of a lender to exercise remedies or
impose penalties for late payments or other defaults by a borrower, if it is
determined that (a) either the defaults are not material, such penalties bear
no reasonable relation to the damage suffered by the lender as a result of
such delinquencies or defaults, or it cannot be demonstrated that the
enforcement of such restrictions or burdens is reasonably necessary for the
protection of the creditor, or (b) the creditor's enforcement of such
covenants or provisions under the circumstances would violate the creditor's
implied covenant of good faith and fair dealing, (vi) the unenforceability
under certain circumstances, under California or federal law or court
decisions, of provisions releasing a party from, or indemnifying a party
against, liability for its own wrongful or negligent acts or where such
release or indemnification is contrary to public policy, (vii) the effect of
California law, which provides that a court may refuse to enforce, or may
limit the application of, a contract or any clause of a contract which the
court finds to have been unconscionable at the time it was made, or an unfair
portion of an adhesion contract, (viii) the effect of California law, which
provides that when a contract permits one party to a contract to recover
attorneys' fees, the prevailing party in any action to enforce any provision
of the contract shall be entitled to recover its reasonable attorneys' fees,
(ix) compliance with, and limitations imposed by, procedural requirements of
state law, including California Commercial Code Sections 951 et seq.,
relating to the exercise of remedies by a lender; and (x) limitations under
California law as to the right to retain or collect unearned interest. The
foregoing
E-2
<PAGE>
limitations, however, do not render the Credit Agreement and the
Notes invalid as a whole, and there exists, in the Credit Agreement and the
Notes or pursuant to applicable law, legally adequate remedies for the
realization of the principal benefits intended to be provided by the Credit
Agreement and the Notes.
I am a member of the Bar of the State of California and the foregoing
opinion is limited to the laws of the State of California and the federal
laws of the United States of America. In giving the foregoing opinion, (i) I
express no opinion as to the effect (if any) of any law of any jurisdiction
(except the State of California) in which any Bank is located which limits
the rate of interest that such Bank may charge or collect; (ii) I have
assumed, without independent investigation, that the execution, delivery and
performance by the Banks of the Credit Agreement and the Notes are within the
Bank's corporate powers and have been duly authorized by all necessary
corporate action; and (iii) I have assumed, without independent
investigation, that each of the Banks is a "bank" within the meaning of
Article XV, Section 1 of the Constitution of the State of California.
The references in this opinion to facts based on the "best of my
knowledge" refer only to my own actual, present knowledge and the knowledge
of the members of my staff who have given substantive consideration to the
matters referred to herein.
This opinion is furnished by me as General Counsel for the Borrower to
you in connection with the Credit Agreement, is solely for your benefit and
may not be relied upon by any other person without my prior written consent.
Respectfully submitted,
Alan Cohen
General Counsel
E-3
<PAGE>
EXHIBIT F
OPINION OF
ORRICK, HERRINGTON & SUTCLIFFE LLP, SPECIAL COUNSEL
FOR THE ADMINISTRATIVE AGENT
To the Banks and the Administrative Agent
Referred to Below
c/o Bank of America, N.A., as Administrative Agent
Attention: David Price
1455 Market Street, 12th Floor
Mail Code CA5-701-12-09
San Francisco, California 94103
Dear Sirs:
We have participated in the preparation of the Fourth Amended and
Restated 364-Day Credit Agreement (the "Credit Agreement") dated as of
September 17, 1999 among Toyota Motor Credit Corporation, a California
corporation (the "Borrower"), the banks listed on the signature pages thereof
(the "Banks") and Bank of America, N.A., as Administrative Agent (the
"Administrative Agent"), and have acted as special counsel for the
Administrative Agent for the purpose of rendering this opinion pursuant to
Section 3.1(d) of the Credit Agreement. Terms defined in the Credit
Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that the Credit
Agreement constitutes a valid and binding agreement of the Borrower and each
Note constitutes a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms, except as the same may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws
of the United States of America. In giving the foregoing opinion, (i) we
express no opinion as to the effect (if any) of any law of any jurisdiction
(except the State of New York) in which any Bank is located which limits the
rate of interest that such Bank may charge or collect and (ii) we have
assumed, without independent investigation, that the execution, delivery and
performance by the Borrower of the Credit Agreement and the Notes are within
the Borrower's corporate powers and have been duly authorized by all
necessary corporate action.
F-1
<PAGE>
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without our prior written consent.
Very truly yours,
F-2
<PAGE>
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of 19 among [ASSIGNOR] (the
---------, --
"Assignor"), [ASSIGNEE] (the "Assignee"), TOYOTA MOTOR CREDIT CORPORATION
(the "Borrower") and BANK OF AMERICA, N.A., as Administrative Agent (the
"Administrative Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Fourth Amended and Restated 364-Day Credit Agreement dated as
of September 17, 1999 among the Borrower, the Assignor and the other Banks
party thereto, as Banks, and the Administrative Agent (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an aggregate principal amount at
any time outstanding not to exceed $ ;
----------
WHEREAS, Committed Loans made to the Borrower by the Assignor under the
Credit Agreement in the aggregate principal amount of $ are
----------
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of
its Commitment thereunder in an amount equal to $__________ (the "Assigned
----------
Amount"), together with a corresponding portion of its outstanding Committed
Loans, and the Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the
Assignor under the Credit Agreement to the extent of the Assigned Amount,
including the purchase from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by the Assignor outstanding at
the date hereof. Upon the execution and delivery hereof by the Assignor, the
Assignee[, the Borrower and the Administrative Agent] and the payment of the
amounts specified in Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights and be obligated
to perform the obligations of a Bank under the Credit Agreement with a
Commitment in an amount equal to the Assigned Amount, and (ii) the Commitment
of the Assignor shall, as of the date hereof, be
G-1
<PAGE>
reduced by a like amount and the Assignor released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee. The assignment provided for herein shall be without recourse to
the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between them1.
It is understood that commitment and/or facility fees accrued to the date
hereof are for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under
the Credit Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the extent of
such other party's interest therein and shall promptly pay the same to such
other party.
[SECTION 4. Consent of the Borrower and the Administrative Agent.
This Agreement is conditioned upon the consent of the Borrower and the
Administrative Agent pursuant to Section 9.6(c) of the Credit Agreement. The
execution of this Agreement by the Borrower and the Administrative Agent is
evidence of this consent. Pursuant to Section 9.6(c) the Borrower agrees to
execute and deliver a Note payable to the order of the Assignee to evidence
the assignment and assumption provided for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of the Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and without reliance on
the Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
- -----------
1 Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula
rather than as a fixed sum.
G-2
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By
----------------------
Title:
[ASSIGNEE]
By
----------------------
Title:
TOYOTA MOTOR CREDIT CORPORATION
By
----------------------
Title:
BANK OF AMERICA, N.A., as Administrative
Agent
By
----------------------
Title:
G-3
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 Definitions 1
Section 1.1 Definitions 1
Section 1.2 Accounting Terms and Determinations 9
Section 1.3 Types of Borrowings 9
ARTICLE 2 THE CREDITS 10
Section 2.1 Commitments to Lend; Changes in Commitments 10
Section 2.2 Notice of Committed Borrowing 10
Section 2.3 Money Market Borrowings 10
Section 2.4 Continuation and Conversion Elections 13
Section 2.5 Notice to Banks: Funding of Loans 14
Section 2.6 Notes 15
Section 2.7 Interest Rates 16
Section 2.8 Facility Fee 18
Section 2.9 Optional Termination or Reduction of Commitments 19
Section 2.10 Scheduled Termination of Commitments; Maturity of Loans19
Section 2.11 Optional Prepayments 19
Section 2.12 General Provisions as to Payments 20
Section 2.13 Funding Losses 20
Section 2.14 Computation of Interest and Fees 20
Section 2.15 Extension of Maturity Date 21
Section 2.16 Increases in Commitments 21
ARTICLE 3 CONDITIONS 22
Section 3.1 Effectiveness 22
Section 3.2 Borrowings; Continuations; Conversions 23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES 24
Section 4.1 Corporate Existence and Power 24
Section 4.2 Corporate and Governmental Authorization; No
Contravention 24
Section 4.3 Binding Effect 24
Section 4.4 Financial Information 25
Section 4.5 Litigation 25
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 4.6 Compliance with ERISA 25
Section 4.7 Environmental Matters 25
Section 4.8 Taxes 26
Section 4.9 Subsidiaries 26
Section 4.10 Not an Investment Company 26
Section 4.11 Full Disclosure 26
Section 4.12 Year 2000 26
ARTICLE 5 COVENANTS 27
Section 5.1 Information 27
Section 5.2 Maintenance of Property; Insurance 28
Section 5.3 Conduct of Business and Maintenance of Existence 28
Section 5.4 Compliance with Laws 28
Section 5.5 Negative Pledge 28
Section 5.6 Consolidations, Mergers and Sales of Assets 30
Section 5.7 Use of Proceeds 31
ARTICLE 6 DEFAULTS 31
Section 6.1 Events of Default 31
Section 6.2 Notice of Default 33
ARTICLE 7 THE ADMINISTRATIVE AGENT 33
Section 7.1 Appointment and Authorization 33
Section 7.2 Delegation of Duties 33
Section 7.3 Agent and Affiliates 33
Section 7.4 Action by Agent 33
Section 7.5 Consultation with Experts 34
Section 7.6 Liability of Agent 34
Section 7.7 Indemnification 34
Section 7.8 Credit Decision; Disclosure of Information by Administrative
Agent 34
Section 7.9 Notice of Default 35
Section 7.10 Successor Agent 35
Section 7.11 Agent's Fee 35
-ii-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 7.12 Syndication Agents; Documentation Agents; Sole Lead Managers
and Sole Book Managers 35
ARTICLE 8 CHANGE IN CIRCUMSTANCES 36
Section 8.1 Basis for Determining Interest Rate Inadequate or
Unfair 36
Section 8.2 Illegality 36
Section 8.3 Increased Cost and Reduced Return 37
Section 8.4 Taxes 38
Section 8.5 Base Rate Loans Substituted for Affected Fixed Rate
Loans 40
Section 8.6 Substitution of Bank 40
Section 8.7 Consultation 40
ARTICLE 9 MISCELLANEOUS 40
Section 9.1 Notices 40
Section 9.2 No Waivers 41
Section 9.3 Expenses; Indemnification 41
Section 9.4 Sharing of Set-offs 42
Section 9.5 Amendments and Waivers 42
Section 9.6 Successors and Assigns 42
Section 9.7 Collateral 44
Section 9.8 Governing Law; Submission to Jurisdiction 44
Section 9.9 Counterparts; Integration 44
Section 9.10 WAIVER OF JURY TRIAL 44
Schedule I - Designated Credit Facilities 1
Exhibit A - Note A-1
Exhibit B - Money Market Quote Request B-1
Exhibit C - Invitation for Money Market Quotes C-1
Exhibit D - Money Market Quote D-1
Exhibit E - Opinion of Counsel for the Borrower E-1
Exhibit F - Opinion of Special Counsel for the Administrative Agent F-1
Exhibit G - Assignment and Assumption Agreement G-1
-iii-
<PAGE>
<PAGE>
EXHIBIT 12.1
TOYOTA MOTOR CREDIT CORPORATION
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Years Ended September 30,
------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
(Dollars in Millions)
<S> <C> <C> <C> <C> <C>
Consolidated income
before income taxes...... $ 230 $ 251 $ 283 $ 260 $ 300
------ ------ ------ ------ ------
Fixed Charges
Interest................. 940 994 918 820 716
Portion of rent expense
representative of the
interest factor (deemed
to be one-third)....... 6 5 4 4 2
------ ------ ------ ------ ------
Total fixed charges......... 946 999 922 824 718
------ ------ ------ ------ ------
Earnings available
for fixed charges........ $1,176 $1,250 $1,205 $1,084 $1,018
====== ====== ====== ====== ======
Ratio of earnings to
fixed charges<F1>........ 1.24 1.25 1.31 1.32 1.42
==== ==== ==== ==== ====
<FN>
- -----------------
<F1> TMCC has guaranteed certain obligations of affiliates and subsidiaries
as discussed in Note 16 of the Consolidated Financial Statements. As of
September 30, 1999, TMCC has not incurred any fixed charges in connection
with
such guarantees and no amount is included in any ratio of earnings to fixed
charges. The ratio of earnings to fixed charges for TMS and subsidiaries was
1.89, 1.99, 1.92, 1.49 and 1.74 for the years ended September 30, 1999, 1998,
1997, 1996 and 1995, respectively. The ratio of earnings to fixed charges
for
TMMNA and subsidiaries was 22.37 and 78.19 for the years ended September 30,
1999 and 1998, respectively.
</FN>
</TABLE>
<PAGE>
EXHIBIT 21.1
TOYOTA MOTOR CREDIT CORPORATION
LIST OF SUBSIDIARIES
State of
Subsidiary Incorporation
- ---------- -------------
Toyota Motor Insurance Services, Inc. California
Toyota Motor Insurance Company Iowa
Toyota Motor Life Insurance Company (1) Iowa
Toyota Motor Insurance Corporation of Vermont Vermont
Toyota Motor Insurance Agency of Ohio, Inc. Ohio
Toyota Motor Insurance Services of Kentucky, Inc. Kentucky
Toyota Motor Insurance Agency of Massachusetts, Inc. Massachusetts
Toyota Motor Insurance Services of Rhode Island, Inc. Rhode Island
Toyota Motor Insurance Services of Wyoming, Inc. Wyoming
Toyota Motor Credit Receivables Corporation California
Toyota Credit De Puerto Rico Corp. California
Toyota Leasing, Inc. California
(1) On October 4, 1999, Toyota Motor Insurance Services entered into an
agreement for the sale of Toyota Motor Life Insurance Company which will
be effective on December 31, 1999.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-3 (Nos. 333-60913,
333-76505 and 333-89659) of Toyota Motor Credit Corporation of our report dated
October 29, 1999 appearing on page 30 of this Form 10-K.
/S/ PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
December 20, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TOYOTA
MOTOR CREDIT CORPORATION'S SEPTEMBER 30, 1999 FINANCIAL STATEMENTS AND NOTES
THERETO AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> SEP-30-1999
<CASH> 180
<SECURITIES> 450
<RECEIVABLES> 22,663<F1>
<ALLOWANCES> 202
<INVENTORY> 0
<CURRENT-ASSETS> 0<F2>
<PP&E> 0
<DEPRECIATION> 0<F3>
<TOTAL-ASSETS> 24,578
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 18,565
0
0
<COMMON> 915
<OTHER-SE> 1,450
<TOTAL-LIABILITY-AND-EQUITY> 24,578
<SALES> 0
<TOTAL-REVENUES> 3,356
<CGS> 0
<TOTAL-COSTS> 2,604<F3>
<OTHER-EXPENSES> 439
<LOSS-PROVISION> 83
<INTEREST-EXPENSE> 0<F3>
<INCOME-PRETAX> 230
<INCOME-TAX> 98
<INCOME-CONTINUING> 132
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 132
<EPS-BASIC> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include Investments in Operating Leases net of Accumulated
Depreciation and Finance Receivables net of Unearned Income.
<F2>Toyota Motor Credit Corporation's Balance Sheet is not classified into
Current and Long-Term Assets and Liabilities.
<F3>Total Costs includes Interest Expense and Depreciation on Leases.
</FN>
</TABLE>
