<PAGE>
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: September 2, 1999
- ------------------------------
(Date of earliest event reported)
TOYOTA MOTOR CREDIT RECEIVABLES CORPORATION ON BEHALF OF THE
TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
--------------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 333-76505 33-036836
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
19001 South Western Avenue
Torrance, California 90509
----------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 787-3541
ITEM 5. OTHER EVENTS
On July 22, 1999, Toyota Motor Credit Receivables Corporation
("TMCRC") and Toyota Motor Credit Corporation ("TMCC") entered into that certain
Receivables Purchase Agreement dated as of July 1, 1999 (the "Receivables
Purchase Agreement"), pursuant to which TMCC transferred to TMCRC certain retail
installment sales contracts relating to certain new and used automobiles and
light duty trucks (the "Receivables") and related property. On July 22, 1999,
the Toyota Auto Receivables 1999-A Owner Trust, a Delaware business trust
created pursuant to that certain Amended and Restated Trust Agreement dated as
of July 1, 1999 (the "Trust Agreement"), by and between TMCRC, as depositor,
U.S. Bank National Association, as Owner Trustee, and First Union Trust Company,
National Association, as Delaware Co-trustee, (the "Trust"), TMCRC, as seller,
and TMCC, as servicer, entered into that certain Sale and Servicing Agreement
dated as of July 1, 1999 (the "Sale and Servicing Agreement"), pursuant to which
the Receivables and related property were transferred to the Trust. Also on July
22, 1999, the Trust caused the issuance, pursuant to an Indenture dated as of
July 1, 1999 (the "Indenture"), by and between the Trust, as issuer, and U.S.
Bank National Association, as indenture trustee, and pursuant to the Sale and
Servicing Agreement, of the Notes, issued in the following classes: Class A-1,
Class A-2, Class A-3, Class B and Class C (collectively, the "Notes"). The
Notes, with an aggregate scheduled principal balance, as of July 1, 1999, of
$961,976,000., were sold to Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Bear, Stearns & Co., Inc., Credit Suisse First Boston
Corporation, Morgan Stanley & Co. Incorporated, Lehman Brothers Inc., and
Salomon Smith Barney Inc., as underwriters (the "Underwriters"), pursuant to an
Underwriting Agreement dated as of July 13, 1999, by and between TMCRC, TMCC and
the Underwriters. The Notes have been registered pursuant to the Securities Act
of 1933, as amended, under a Registration Statement on Form S-3 (Commission File
No. 333-76505).
Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Sale and Servicing Agreement.
<PAGE>
Attached as Exhibits 4.1, 4.2, 4.3, 4.4 and 4.5 are certain
amended agreements. Attached as Exhibit 4.1 is the Sale and Servicing Agreement,
as Exhibit 4.2 is the Indenture, as Exhibit 4.3 is the Receivables Purchase
Agreement, as Exhibit 4.4 is the Trust Agreement and as Exhibit 4.5 is the
Administration Agreement. These amended Exhibits 4.1, 4.2, 4.3, 4.4 and 4.5
amend and supersede in their entirety the Exhibits 4.1, 4.2, 4.3, 4.4 and 4.5
filed on Form 8-K dated August 6, 1999.
<PAGE>
EXHIBIT INDEX
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
<TABLE>
<CAPTION>
The exhibit number corresponds with Item 601(a) of Regulation S-K.
<S> <C>
EXHIBIT NO. DESCRIPTION
Exhibit 4.1 Sale and Servicing Agreement dated as of July 1,
1999, by and among the Registrant, as issuer, TMCRC,
as seller, and TMCC, as servicer.
Exhibit 4.2 Indenture dated as of July 1, 1999, by and between
the Registrant, as issuer and U.S. Bank National
Association, as indenture trustee.
Exhibit 4.3 Receivables Purchase Agreement dated as of July 1,
1999, between TMCRC, as purchaser and TMCC, as
seller.
Exhibit 4.4 Trust Agreement dated as of July 1, 1999, between
TMCRC, as depositor, U.S. Bank National Association,
as Owner Trustee, and First Union Trust Company,
National Association, as Delaware Co-trustee.
Exhibit 4.5 Administration Agreement dated as of July 1, 1999,
among the Registrant, as issuer, TMCC, as
administrator, U.S. Bank National Association, as
indenture trustee and U.S. Bank National
Association, as owner trustee.
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf of the Registrant
by the undersigned thereunto duly authorized.
TOYOTA MOTOR CREDIT RECEIVABLES CORPORATION
By: /s/ Lloyd Mistele
---------------------------------------
Name: Lloyd Mistele
Title: President
September 2, 1999
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Item 601(a) of Regulation S-K
<S> <C>
EXHIBIT NO. DESCRIPTION
Exhibit 4.1 Sale and Servicing Agreement dated as of July 1, 1999, by
and among the Registrant, as issuer, TMCRC, as seller, and
TMCC, as servicer.
Exhibit 4.2 Indenture dated as of July 1, 1999, by and between the
Registrant, as issuer and U.S. Bank National Association, as
indenture trustee.
Exhibit 4.3 Receivables Purchase Agreement dated as of July 1, 1999,
between TMCRC, as purchaser and TMCC, as seller.
Exhibit 4.4 Trust Agreement dated as of July 1, 1999, between TMCRC, as
depositor, U.S. Bank National Association, as Owner Trustee,
and First Union Trust Company, National Association, as
Delaware Co-trustee.
Exhibit 4.5 Administration Agreement dated as of July 1, 1999, among the
Registrant, as issuer, TMCC, as administrator, U.S. Bank
National Association, as indenture trustee and U.S. Bank
National Association, as owner trustee.
</TABLE>
<PAGE>
EXHIBIT 4.1
SALE AND SERVICING AGREEMENT
among
TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
as Issuer,
TOYOTA MOTOR CREDIT RECEIVABLES CORPORATION,
as Seller,
and
TOYOTA MOTOR CREDIT CORPORATION,
as Servicer
Dated as of July 1, 1999
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
<TABLE>
<CAPTION>
<S> <C>
SECTION 1.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01 Conveyance of Receivables. . . . . . . . . . . . . . . . . . 21
SECTION 2.02 Custody of Receivables Files . . . . . . . . . . . . . . . . 23
SECTION 2.03 Acceptance by Owner Trustee. . . . . . . . . . . . . . . . . 23
ARTICLE III
THE RECEIVABLES
SECTION 3.01 Representations and Warranties of the Seller with Respect
to the Receivables. . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.02 Repurchase upon Breach . . . . . . . . . . . . . . . . . . . 27
SECTION 3.03 Duties of Servicer as Custodian. . . . . . . . . . . . . . . 27
SECTION 3.04 Instructions; Authority To Act . . . . . . . . . . . . . . . 28
SECTION 3.05 Custodian's Indemnification. . . . . . . . . . . . . . . . . 28
SECTION 3.06 Effective Period and Termination . . . . . . . . . . . . . . 28
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01 Duties of Servicer . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.02 Collection and Allocation of Receivable Payments . . . . . . 30
SECTION 4.03 Rebates on Full Prepayments. . . . . . . . . . . . . . . . . 30
SECTION 4.04 Realization upon Receivables . . . . . . . . . . . . . . . . 31
SECTION 4.05 Physical Damage Insurance. . . . . . . . . . . . . . . . . . 31
SECTION 4.06 Maintenance of Security Interests in Financed Vehicles . . . 31
SECTION 4.07 Covenants of Servicer. . . . . . . . . . . . . . . . . . . . 31
SECTION 4.08 Purchase of Receivables upon Breach. . . . . . . . . . . . . 32
SECTION 4.09 Servicing Fee and Expenses . . . . . . . . . . . . . . . . . 32
SECTION 4.10 Servicer's Certificate . . . . . . . . . . . . . . . . . . . 33
SECTION 4.11 Annual Statement as to Compliance; Notice of Default . . . . 33
SECTION 4.12 Annual Accountants' Report . . . . . . . . . . . . . . . . . 33
SECTION 4.13 Access to Certain Documentation and Information
Regarding Receivables. . . . . . . . . . . . . . . . . . . . 34
SECTION 4.14 Appointment of Subservicer . . . . . . . . . . . . . . . . . 34
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 4.15 Amendments to Schedule of Receivables. . . . . . . . . . . . 34
SECTION 4.16 Reports to Securityholders and Rating Agencies . . . . . . . 34
ARTICLE V
ACCOUNTS; PAYMENTS AND DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
SECTION 5.01 Establishment of Collection Account and Payahead Account . . 35
SECTION 5.02 Collections. . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.03 Application of Collections . . . . . . . . . . . . . . . . . 37
SECTION 5.04 Advances . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.05 Additional Deposits. . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.06 Payments and Distributions . . . . . . . . . . . . . . . . . 40
SECTION 5.07 Reserve Account. . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.08 Statements to Certificateholders and Noteholders . . . . . . 46
SECTION 5.09 Net Deposits . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VI
THE SELLER
SECTION 6.01 Representations of Seller. . . . . . . . . . . . . . . . . . 47
SECTION 6.02 Corporate Existence. . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.03 Liability of Seller; Indemnities . . . . . . . . . . . . . . 49
SECTION 6.04 Merger or Consolidation of, or Assumption of the
Obligations of Seller. . . . . . . . . . . . . . . . . . . . 49
SECTION 6.05 Limitation on Liability of Seller and Others . . . . . . . . 50
SECTION 6.06 Seller May Own Certificates or Notes . . . . . . . . . . . . 50
ARTICLE VII
THE SERVICER
SECTION 7.01 Representations of Servicer. . . . . . . . . . . . . . . . . 50
SECTION 7.02 Indemnities of Servicer. . . . . . . . . . . . . . . . . . . 52
SECTION 7.03 Merger or Consolidation of, or Assumption of the
Obligations of Servicer. . . . . . . . . . . . . . . . . . . 53
SECTION 7.04 Limitation on Liability of Servicer and Others . . . . . . . 54
SECTION 7.05 TMCC Not To Resign as Servicer . . . . . . . . . . . . . . . 54
ARTICLE VIII
DEFAULT
SECTION 8.01 Servicer Default . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.02 Appointment of Successor . . . . . . . . . . . . . . . . . . 56
SECTION 8.03 Repayment of Advances. . . . . . . . . . . . . . . . . . . . 57
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 8.04 Notification . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE IX
TERMINATION
SECTION 9.01 Optional Purchase of All Receivables . . . . . . . . . . . . 57
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.02 Protection of Title to Trust . . . . . . . . . . . . . . . . 60
SECTION 10.03 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.04 Assignment by the Seller or the Servicer . . . . . . . . . . 62
SECTION 10.05 Limitations on Rights of Others. . . . . . . . . . . . . . . 62
SECTION 10.06 Severability . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.07 Separate Counterparts. . . . . . . . . . . . . . . . . . . . 62
SECTION 10.08 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.09 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.10 Assignment by Issuer . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.11 Nonpetition Covenants. . . . . . . . . . . . . . . . . . . . 62
SECTION 10.12 Limitation of Liability of Owner Trustee and
Indenture Trustee. . . . . . . . . . . . . . . . . . . . . . 63
SCHEDULE A Schedule of Receivables
EXHIBIT A Form of Servicer's Certificate
</TABLE>
iii
<PAGE>
SALE AND SERVICING AGREEMENT dated as of July 1, 1999, among TOYOTA AUTO
RECEIVABLES 1999-A OWNER TRUST, a Delaware business trust (the "Issuer"), TOYOTA
MOTOR CREDIT RECEIVABLES CORPORATION, a California corporation ("TMCRC" or the
"Seller"), and TOYOTA MOTOR CREDIT CORPORATION, a California corporation ("TMCC"
or the "Servicer").
WHEREAS the Issuer desires to purchase a portfolio of receivables arising
in connection with retail installment sales contracts secured by new or used
automobiles and light duty trucks generated by Toyota Motor Credit Corporation
in the ordinary course of business and sold to the Seller;
WHEREAS the Seller is willing to sell such receivables to the Issuer; and
WHEREAS the Servicer is willing to service such receivables;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. Except as otherwise provided in this
Agreement, whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
"ACTUAL PAYMENT" means, with respect to a Receivable and a
Collection Period, all payments received by the Servicer from or for the account
of the related Obligor on such Receivable during such Collection Period (and, in
the case of the first Collection Period, all payments received by the Servicer
from or for the account of such Obligor since the Cutoff Date through the last
day of such Collection Period), net of any Supplemental Servicing Fees
attributable to such Receivable. Actual Payments do not include Applied
Payments Ahead.
"ACTUARIAL RECEIVABLE" means any Receivable which provides for the
allocation of payments according to the "actuarial" method.
"ADMINISTRATIVE PURCHASE PAYMENT" means, with respect to a Payment
Date and to (1) an Administrative Receivable which is a Precomputed Receivable
purchased by the Servicer as of the close of business on the last day of the
related Collection Period, (a) the sum of (i) all Scheduled Payments on such
Receivable due after the last day of such Collection Period, (ii) an amount
equal to any reimbursement of Outstanding Advances made pursuant to Section
5.04(c) with respect to such Receivable and (iii) all past due Scheduled
Payments for which an Advance has not been made, minus (b) all Payments Ahead
with respect to such Receivable then on deposit in the Payahead Account and (2)
an Administrative Receivable which is a Simple Interest Receivable purchased by
the Servicer during the related Collection Period, the sum of (a) the unpaid
Principal Balance owed by the Obligor in respect of such Receivable plus (b)
interest on
1
<PAGE>
such unpaid Principal Balance at a rate equal to the related APR to the last
day of the related Collection Period.
"ADMINISTRATION AGREEMENT" means the Administration Agreement
dated as of July 1, 1999, among the Administrator, the Issuer and the Indenture
Trustee.
"ADMINISTRATIVE RECEIVABLE" means a Receivable which the Servicer
is required to purchase pursuant to Section 3.02 or 4.08 or which the Servicer
has elected to purchase pursuant to Section 9.01.
"ADMINISTRATOR" means TMCC, or any successor Administrator under
the Administration Agreement.
"ADVANCE" means a Precomputed Advance or Simple Interest Advance.
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control," when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the term "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGGREGATE NET LOSSES" means, with respect to a Collection Period,
an amount equal to the aggregate Principal Balance of all Receivables that
became Defaulted Receivables during such Collection Period minus the sum of (x)
all Net Liquidation Proceeds collected during such Collection Period with
respect to Defaulted Receivables and (y) all amounts received during such
Collection Period in respect of the Receivables liquidated in prior Collection
Periods net of any Liquidation Expenses incurred during such Collection Period
in connection with the recovery of such amounts.
"AGREEMENT" means this Sale and Servicing Agreement among the
Toyota Auto Receivables 1999-A Owner Trust, as Issuer, TMCRC, as seller, and
TMCC, as servicer, as the same may be amended or supplemented from time to time.
"AMOUNT FINANCED" in respect of a Receivable means the aggregate
amount advanced under such Receivable toward the purchase price of the related
Financed Vehicle and any related costs, including but not limited to
accessories, insurance premiums, service and warranty contracts and other items
customarily financed as part of retail automobile and light duty truck
installment sale contracts.
"ANNUAL PERCENTAGE RATE" or "APR" of a Receivable means the annual
rate of finance charges specified in such Receivable.
"APPLIED PAYMENT AHEAD" means, with respect to a Precomputed
Receivable and a Collection Period as to which (a) the Actual Payment is less
than the Scheduled Payment and (b) a Deferred Prepayment is on deposit in the
Payahead Account, an amount equal to the lesser of (i) such Deferred Prepayment
and (ii) the amount by which the Scheduled Payment exceeds the Actual Payment.
2
<PAGE>
"AVAILABLE COLLECTIONS" means, with respect to any Payment Date,
the total of the following amounts received by the Servicer on or in respect of
the Receivables during (or for application with respect to) the related
Collection Period (in the case of the Precomputed Receivables, computed in
accordance with the actuarial method and in the case of the Simple Interest
Receivables, computed in accordance with the simple interest method):
(a) the sum of all (i) collections on or in respect of all
Receivables other than Defaulted Receivables (including Applied Payments Ahead,
but otherwise excluding Payments Ahead), (ii) Net Liquidation Proceeds, (iii)
Advances made by the Servicer, (iv) all Warranty Purchase Payments and (v) all
Administrative Purchase Payments, less
(b) the sum of all (i) amounts received on or in respect of a
particular Receivable (other than a Defaulted Receivable) to the extent of the
aggregate Outstanding Advances in respect of such Receivable, (ii) Net
Liquidation Proceeds with respect to a particular Receivable to the extent of
the aggregate Outstanding Advances in respect of such Receivable, (iii)
recoveries from collections on other Receivables to the extent of Advances made
by the Servicer on a particular Receivable that the Servicer has determined are
Nonrecoverable Advances, (iv) late fees, extension fees and other administrative
fees and expenses or similar charges (which are payable to the Servicer as
Supplemental Servicing Fees) collected by the Servicer and (v) Rebates.
"BASIC DOCUMENTS" means the Receivables Purchase Agreement, the
Trust Agreement, the Certificate of Trust, this Sale and Servicing Agreement,
the Indenture, the Administration Agreement, the Securities Account Control
Agreement, the Note Depository Agreement and the other documents and
certificates delivered in connection herewith and therewith.
"BASIC SERVICING FEE" means the fee payable to the Servicer on
each Payment Date, calculated pursuant to Section 4.09, for services rendered
during the related Collection Period, which shall be equal to one-twelfth of the
Servicing Fee Rate multiplied by the Pool Balance as of the first day of the
related Collection Period or, with respect to the first Payment Date, the
Original Pool Balance.
"BOOK-ENTRY NOTES" means beneficial interests in Notes, ownership
and transfer of which shall be made through book entries by a Clearing Agency as
described in the Trust Agreement and the Indenture, respectively.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, San Francisco,
California, or Chicago Illinois are authorized or obligated by law, executive
order or governmental decree to be closed.
"CERTIFICATE BALANCE" means the Initial Certificate Balance less
any amounts distributed to the holder of the Certificates pursuant to Section
5.06(c)(ii)(F), 5.06(d)(ix) and/or 5.06(e)(ii)(E) hereof (but in no event less
than zero).
"CERTIFICATES" has the meaning assigned in the Trust Agreement.
3
<PAGE>
"CERTIFICATEHOLDERS" has the meaning assigned to such term in the
Trust Agreement.
"CERTIFICATE REGISTER" means the register maintained by the Owner
Trustee pursuant to the Trust Agreement recording the name of each registered
holder of a Certificate.
"CHARGE-OFF RATE" means, with respect to a Collection Period, the
percentage equivalent of a fraction, the numerator of which is the Aggregate Net
Losses for such Collection Period, and the denominator of which is the average
of (i) the aggregate Principal Balance on the last day of the Collection Period
immediately preceding such Collection Period and (ii) the aggregate Principal
Balance on the last day of such Collection Period; such quotient is then
multiplied by twelve to arrive at an annualized percentage.
"CLASS" means any one of the classes of Notes.
"CLASS A-1 FINAL SCHEDULED PAYMENT DATE" means the Payment Date in
July 2000.
"CLASS A-1 INITIAL PRINCIPAL BALANCE" $303,000,000.00.
"CLASS A-1 INTEREST CARRYOVER SHORTFALL" means, with respect to
any Payment Date, the excess, if any, of (x) the Class A-1 Interest
Distributable Amount for such Payment Date and any outstanding Class A-1
Interest Carryover Shortfall from the immediately preceding Payment Date
(together with interest on such outstanding Class A-1 Interest Carryover
Shortfall at the Class A-1 Rate, to the extent lawful, calculated on the same
basis as interest on the Class A-1 Notes for the same period), over (y) the
amount of interest distributed to the Class A-1 Noteholders on such Payment
Date.
"CLASS A-1 INTEREST DISTRIBUTABLE AMOUNT" means the amount of
interest accrued during the related Interest Period (calculated on the basis of
the actual number of days in such Interest Period and a year assumed to consist
of 360 days) on the Class A-1 Principal Balance as of the immediately preceding
Payment Date (after giving effect to payments of principal made on such
immediately preceding Payment Date) at the Class A-1 Rate or, in the case of the
first Payment Date, on the Class A-1 Initial Principal Balance.
"CLASS A-1 NOTE" means any of the 5.365% Asset Backed Notes, Class
A-1, issued under the Indenture.
"CLASS A-1 NOTEHOLDER" means any of the Person in whose name a
Class A-1 Note is registered in the Note Register.
"CLASS A-1 PRINCIPAL BALANCE" as of any date means the Class A-1
Initial Principal Balance less all amounts paid to the holders of Class A-1
Notes in respect of principal pursuant to Section 5.06 hereof.
"CLASS A-1 RATE" means 5.365% per annum.
4
<PAGE>
"CLASS A-2 FINAL SCHEDULED PAYMENT DATE" means the Payment Date in
December 2001.
"CLASS A-2 INITIAL PRINCIPAL BALANCE" $284,000,000.00.
"CLASS A-2 INTEREST CARRYOVER SHORTFALL" means, with respect to
any Payment Date, the excess, if any, of (x) the Class A-2 Interest
Distributable Amount for such Payment Date and any outstanding Class A-2
Interest Carryover Shortfall from the immediately preceding Payment Date
(together with interest on such outstanding Class A-2 Interest Carryover
Shortfall at the Class A-2 Rate, to the extent lawful, calculated on the same
basis as interest on the Class A-2 Notes for the same period), over (y) the
amount of interest distributed to the Class A-2 Noteholders on such Payment
Date.
"CLASS A-2 INTEREST DISTRIBUTABLE AMOUNT" means the amount of
interest accrued during the related Interest Period (calculated on the basis of
such Interest Period being assumed to consist of 30 days and a year assumed to
consist of 360 days) on the Class A-2 Principal Balance as of the immediately
preceding Payment Date (after giving effect to payments of principal made on
such immediately preceding Payment Date) at the Class A-2 Rate or, in the case
of the first Payment Date, on the Class A-2 Initial Principal Balance.
"CLASS A-2 NOTE" means any of the 5.800% Asset Backed Notes, Class
A-2, issued under the Indenture.
"CLASS A-2 NOTEHOLDER" means the Person in whose name a Class A-2
Note is registered in the Note Register.
"CLASS A-2 PRINCIPAL BALANCE" as of any date means the Class A-2
Initial Principal Balance less all amounts paid to the holders of Class A-2
Notes in respect of principal pursuant to Section 5.06 hereof.
"CLASS A-2 RATE" means 5.800% per annum.
"CLASS A-3 FINAL SCHEDULED PAYMENT DATE" means the Payment Date in
August 2004.
"CLASS A-3 INITIAL PRINCIPAL BALANCE" $334,093,000.00.
"CLASS A-3 INTEREST CARRYOVER SHORTFALL" means, with respect to
any Payment Date, the excess, if any, of (x) the Class A-3 Interest
Distributable Amount for such Payment Date and any outstanding Class A-3
Interest Carryover Shortfall from the immediately preceding Payment
Date(together with interest on such outstanding Class A-3 Interest Carryover
Shortfall at the Class A-3 Rate, to the extent lawful, calculated on the same
basis as interest on the Class A-3 Notes for the same period), over (y) the
amount of interest distributed to the Class A-3 Noteholders on such Payment
Date.
"CLASS A-3 INTEREST DISTRIBUTABLE AMOUNT" means the amount of
interest accrued during the related Interest Period (calculated on the basis of
such Interest Period being assumed to consist of 30 days and a year assumed to
consist of 360 days) on the Class A-3 Principal
5
<PAGE>
Balance as of the immediately preceding Payment Date (after giving effect to
payments of principal made on such immediately preceding Payment Date) at the
Class A-3 Rate or, in the case of the first Payment Date, on the Class A-3
Initial Principal Balance.
"CLASS A-3 NOTEHOLDER" means the Person in whose name a Class A-3
Note is registered in the Note Register.
"CLASS A-3 NOTE" means any of the 6.150% Asset Backed Notes, Class
A-3, issued under the Indenture.
"CLASS A-3 PRINCIPAL BALANCE" as of any date means the Class A-3
Initial Principal Balance less all amounts paid to the holders of Class A-3
Notes in respect of principal pursuant to Section 5.06 hereof.
"CLASS A-3 RATE" means 6.150% per annum.
"CLASS B FINAL SCHEDULED PAYMENT DATE" means the Payment Date in
August 2004.
"CLASS B INITIAL PRINCIPAL BALANCE" $26,454,000.00.
"CLASS B INTEREST CARRYOVER SHORTFALL" means, with respect to any
Payment Date, the excess, if any, of (x) the Class B Interest Distributable
Amount for such Payment Date and any outstanding Class B Interest Carryover
Shortfall from the immediately preceding Payment Date (together with interest on
such outstanding Class B Interest Carryover Shortfall at the Class B Rate, to
the extent lawful, calculated on the same basis as interest on the Class B Notes
for the same period), over (y) the amount of interest distributed to the Class B
Noteholders on such Payment Date.
"CLASS B INTEREST DISTRIBUTABLE AMOUNT" means the amount of
interest accrued during the related Interest Period (calculated on the basis of
such Interest Period being assumed to consist of 30 days and a year assumed to
consist of 360 days) on the Class B Principal Balance as of the immediately
preceding Payment Date (after giving effect to payments of principal made on
such immediately preceding Payment Date) at the Class B Rate or, in the case of
the first Payment Date, on the Class B Initial Principal Balance.
"CLASS B NOTE" means any of the 6.300% Asset Backed Notes, Class
B, issued under the Indenture.
"CLASS B NOTEHOLDER" means the Person in whose name a Class B Note
is registered in the Note Register.
"CLASS B PRINCIPAL BALANCE" as of any date means the Class B
Initial Principal Balance less all amounts paid to the holders of Class B Notes
in respect of principal pursuant to Section 5.06 hereof.
"CLASS B RATE" means 6.300% per annum.
6
<PAGE>
"CLASS C FINAL SCHEDULED PAYMENT DATE" means the Payment Date in
August 2004.
"CLASS C INITIAL PRINCIPAL BALANCE" $14,429,000.00.
"CLASS C INTEREST CARRYOVER SHORTFALL" means, with respect to any
Payment Date, the excess, if any, of (x) the Class C Interest Distributable
Amount for such Payment Date and any outstanding Class C Interest Carryover
Shortfall from the immediately preceding Payment Date (together with interest on
such outstanding Class C Interest Carryover Shortfall at the Class C Rate, to
the extent lawful, calculated on the same basis as interest on the Class C Notes
for the same period), over (y) the amount of interest distributed to the Class C
Noteholders on such Payment Date.
"CLASS C INTEREST DISTRIBUTABLE AMOUNT" means the amount of
interest accrued during the related Interest Period (calculated on the basis of
such Interest Period being assumed to consist of 30 days and a year assumed to
consist of 360 days) on the Class C Principal Balance as of the immediately
preceding Payment Date (after giving effect to payments of principal made on
such immediately preceding Payment Date) at the Class C Rate or, in the case of
the first Payment Date, on the Class C Initial Principal Balance.
"CLASS C NOTEHOLDER" means the Person in whose name a Class C Note
is registered in the Note Register.
"CLASS C NOTE" means any of the 6.700% Asset Backed Notes,
ClassC, issued under the Indenture.
"CLASS C PRINCIPAL BALANCE" as of any date means the Class C
Initial Principal Balance less all amounts paid to the holders of Class C Notes
in respect of principal pursuant to Section 5.06 hereof.
"CLASS C RATE" means 6.700% per annum.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means July 22, 1999.
"CODE" means the Internal Revenue Code of 1986, as amended, and
the Treasury Regulations promulgated thereunder.
"COLLECTION ACCOUNT" means the account or accounts designated as
such and established and maintained pursuant to Section 5.01.
7
<PAGE>
"COLLECTION PERIOD" means, with respect to any Payment Date, the
calendar month immediately preceding the month in which such Payment Date occurs
(or, in the case of the first Payment Date, the period of time since the Cutoff
Date through the end of the calendar month immediately preceding the month in
which such first Payment Date occurs).
"COMMISSION" means the Securities and Exchange Commission, and any
successor thereto.
"CURRENT RECEIVABLE" means each Receivable that is not a Defaulted
Receivable or a Liquidated Receivable.
"CUTOFF DATE" means July 1, 1999.
"DEALER" means the dealer of automobile and/or light duty trucks
who sold a Financed Vehicle and who originated and assigned the Receivable
relating to such Financed Vehicle to TMCC under an existing agreement between
such dealer and TMCC.
"DEALER RECOURSE" means, with respect to a Receivable, all
recourse rights against the Dealer which originated the Receivable, and any
successor Dealer.
"DEFAULTED RECEIVABLE" means a Receivable (other than an
Administrative Receivable or a Warranty Receivable) as to which (i) all or any
part of a Scheduled Payment is 150 or more days past due and the Servicer has
not repossessed the related Financed Vehicle, or (ii) the Servicer has, in
accordance with its customary servicing procedures, determined that eventual
payment in full is unlikely and either repossessed and liquidated the related
Financed Vehicle or repossessed and held the related Financed Vehicle in its
repossession inventory for 90 days, whichever occurs first.
"DEFINITIVE CERTIFICATES" and "DEFINITIVE NOTES" shall have the
meanings ascribed thereto in the Trust Agreement and the Indenture,
respectively.
"DEFERRED PREPAYMENT" means, with respect to a Precomputed
Receivable and a Collection Period, the aggregate amount, if any, of Payments
Ahead remitted to the Servicer in respect of such Receivable during one or more
prior Collection Periods and currently held by the Servicer or in the Payahead
Account.
"DELINQUENCY PERCENTAGE" means, with respect to a Collection
Period, the percentage equivalent of a fraction, the numerator of which is the
number of (i) all outstanding Receivables 61 days or more delinquent (after
taking into account permitted extensions) as of the last day of such Collection
Period (excluding Receivables as to which the Financed Vehicle has been
liquidated during that Collection Period), determined in accordance with the
Servicer's normal practices, plus (ii) all repossessed Financed Vehicles that
have not been liquidated (to the extent the related Receivable is not otherwise
reflected in clause (i) above), and the denominator of which is the aggregate
number of Current Receivables on the last day of such Collection Period.
"DEPOSITOR" means the Seller in its capacity as Depositor under
the Trust Agreement.
8
<PAGE>
"DETERMINATION DATE" means, with respect to any Payment Date, the
second Business Day preceding such Payment Date.
"DTC" means The Depository Trust Company, and its successors.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories that signifies
investment grade.
"ELIGIBLE INSTITUTION" means (a) the corporate trust department of
the Indenture Trustee or the Owner Trustee or (b) a depository institution
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), which (i) has either (A) a long-term unsecured debt rating of "AA-" or
better by Standard & Poor's and "Aa3" or better by Moody's or (B) an account or
accounts in which funds will be held therein for 30 days or less which are
maintained with a depository institution or trust company, the short-term
unsecured debt obligations of which are rated "A-1" or better by Standard &
Poor's or if not rated by Standard & Poor's then otherwise approved by Standard
& Poor's and rated "P-1" or better by Moody's, or if not rated by Moody's then
otherwise approved by Moody's, and (ii) whose deposits are insured by the FDIC.
If so qualified, the Indenture Trustee or the Owner Trustee may be considered an
Eligible Institution for the purposes of clause (b) of this definition.
"ELIGIBLE INVESTMENTS" means, at any time, any one or more of the
following obligations and securities:
obligations of, and obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of the United
States;
(i) general obligations of or obligations guaranteed by FNMA, or
(ii) any state of the United States, the District of Columbia or the
Commonwealth of Puerto Rico then rated the highest available credit rating of
each Rating Agency for such obligations;
certificates of deposit issued by any depository institution or
trust company (including the Indenture Trustee) incorporated under the laws of
the United States or of any state thereof, the District of Columbia or the
Commonwealth of Puerto Rico and subject to supervision and examination by
banking authorities of one or more of such jurisdictions, provided that the
short-term unsecured debt obligations of such depository institution or trust
company are then rated the highest available rating of each Rating Agency for
such obligations;
certificates of deposit, demand or time deposits of, bankers'
acceptances issued by, or federal funds sold by, any depository institution or
trust company (including the Indenture Trustee) incorporated under the laws of
the United States or any State and subject to supervision and examination by
federal and/or State banking authorities and the deposits of which are fully
9
<PAGE>
insured by the Federal Deposit Insurance Corporation, so long as at the time of
such investment or contractual commitment providing for such investment either
such depository institution or trust company is an Eligible Institution (or if
such investment will mature after more than one month, the long-term, unsecured
debt of the issuer has the highest available rating from each Rating Agency) or
as to which the Indenture Trustee shall have received a letter from each Rating
Agency to the effect that such investment would not result in the qualification,
downgrading or withdrawal of the ratings then assigned to any Notes issued by
the Issuer;
certificates of deposit issued by any bank, trust company, savings
bank or other savings institution that is an Eligible Institution and is fully
insured by the FDIC (or if such investment will mature after more than one
month, the long-term, unsecured debt of the issuer has the highest available
rating from each Rating Agency);
repurchase obligations held by the Indenture Trustee that are
acceptable to the Indenture Trustee with respect to any security described in
clauses (a), (b) or (g) hereof or any other security issued or guaranteed by any
other agency or instrumentality of the United States, in either case entered
into with a federal agency or a depository institution or trust company (acting
as principal) described in clause (d) above (including the Indenture Trustee);
PROVIDED, HOWEVER, that repurchase obligations entered into with any particular
depository institution or trust company (including the Indenture Trustee) will
not be Eligible Investments to the extent that the aggregate principal amount of
such repurchase obligations with such depository institution or trust company
held by the Indenture Trustee on behalf of the Noteholders or the Seller, as the
case may be, shall exceed 10% of either the Pool Balance or of the principal
balance of all the face amount of all Eligible Investments so held thereby;
securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any State so
long as at the time of such investment or contractual commitment providing for
such investment (i) the long-term, unsecured debt of such corporation has the
highest available rating from each Rating Agency or (ii) the Indenture Trustee
shall have received a letter from each Rating Agency to the effect that such
investment would not result in the qualification, downgrading or withdrawal of
the ratings then assigned to any of the Notes;
money market funds so long as such funds are rated "Aaa" by
Moody's (so long as Moody's is a Rating Agency) and "AAAm" by Standard & Poor's
(so long as Standard & Poor's is a Rating Agency), including any such fund for
which the Indenture Trustee or an Affiliate thereof serves as an investment
advisor, administrator, shareholder servicing agent and/or custodian or
subcustodian, and notwithstanding that (i) such Person charges and collects fees
and expenses from such funds for services rendered, (ii) such Person charges and
collects fees and expenses for services rendered pursuant to the Trust
Agreement, the Indenture or the Securities Account Control Agreement and (iii)
services performed for such funds and pursuant to any such agreement may
converge at any time. Each of the Seller and the Servicer hereby specifically
authorizes the Indenture Trustee, Owner Trustee, Securities Intermediary or an
Affiliate thereof to charge and collect all fees and expenses from such funds
for services rendered to such funds, in addition to any fees and expenses such
Person may charge and collect for services rendered pursuant to any such
Agreement; and
10
<PAGE>
such other investments acceptable to each Rating Agency (as
approved in writing by each Rating Agency) as will not result in the
qualification, downgrading or withdrawal of the ratings then assigned by such
Rating Agency to any of the Notes; provided that each of the foregoing
investments shall mature no later than the day preceding the Payment Date next
succeeding such investment, and shall be required to be held to such maturity.
None of the foregoing will be considered a Eligible Investment if:
it constitutes a certificated security, bankers' acceptance,
commercial paper, negotiable certificate of deposit or other obligation that
constitutes "financial assets" within the meaning of Section 8-102(a)(9)(c) of
the UCC unless a security entitlement with respect to such Eligible Investment
has been created, in favor of the Indenture Trustee or Owner Trustee, as
appropriate, in accordance with Section 8-501(b) of the UCC and the related
securities intermediary has agreed not to comply with entitlement orders of any
secured party other than the Indenture Trustee, Seller or Owner Trustee, as the
case may be; or
it constitutes a book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations, unless, in accordance
with applicable law, (A) a book-entry registration thereof is made to an
appropriate book-entry account maintained with a Federal Reserve Bank by the
Indenture Trustee, Securities Intermediary or Owner Trustee, as appropriate, or
by a custodian therefor, (B) a deposit advice or other written confirmation of
such book-entry registration is issued to such Person, (C) any such custodian
makes entries in its books and records identifying that such book-entry security
is held through the Federal Reserve System pursuant to federal book-entry
regulations and belongs to such trustee and indicating that such custodian holds
such Eligible Investment solely as agent for the Indenture Trustee, Securities
Intermediary or Owner Trustee, as appropriate, (D) the Indenture Trustee,
Securities Intermediary or Owner Trustee, as appropriate, makes entries in its
books and records establishing that it holds such security solely in such
capacity, and (E) any additional or alternative procedures as may hereafter
become necessary to effect complete transfer of ownership thereof to such
trustee are satisfied, consistent with changes in applicable law or regulations
or the interpretation thereof.
Notwithstanding anything to the contrary contained in this
definition, no Eligible Investment may be purchased at a premium and no Eligible
Investment shall be an "interest only" instrument.
For purposes of this definition, any reference to the highest
available credit rating of an obligation shall mean the highest available credit
rating for such obligation (excluding any "+" signs associated with such
rating), or such lower credit rating (as approved in writing by each Rating
Agency) as will not result in the qualification, downgrading or withdrawal of
the rating then assigned by such Rating Agency to any of the Notes. Also for
purposes of this definition, any reference to a Rating Agency refers only to a
Rating Agency that has, at the request of TMCC, rated the Notes.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
11
<PAGE>
"EVENT OF DEFAULT" shall have the meaning specified in the
Indenture.
"EXCESS PAYMENT" means, with respect to a Receivable and a
Collection Period, the amount, if any, by which the Actual Payment exceeds the
sum of (i) the Scheduled Payment, and (ii) any Overdue Payment.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FDIC" means the Federal Deposit Insurance Corporation, and its
successors.
"FIRST PRIORITY PRINCIPAL DISTRIBUTION AMOUNT" means, with
respect to any Payment Date, an amount equal to the excess, if any, of (a)
the Outstanding Amount of the Class A Notes as of the preceding Payment Date
(after giving effect to any principal payments made on such preceding Payment
Date) or Closing Date, as the case may be, over (b) the Pool Balance as of
the close of business on the last day of the related Collection Period;
provided, however, that the First Priority Principal Distribution Amount
shall not exceed the sum of the Outstanding Amount of all the Notes and the
Certificate Balance on such Payment Date (prior to giving effect to any
principal payments made on such Payment Date); and provided further, that (i)
the First Priority Principal Distribution Amount on the Class A-1 Final
Scheduled Payment Date will not be less than the amount that is necessary to
reduce the Outstanding Amount of the Class A-1 Notes to zero; (ii) the First
Priority Principal Distribution Amount on the Class A-2 Final Scheduled
Payment Date will not be less than the amount that is necessary to reduce the
Outstanding Amount of the Class A-2 Notes to zero; and (iii) the First
Priority Principal Distribution Amount on the Class A-3 Final Scheduled
Payment Date will not be less than the amount that is necessary to reduce the
Outstanding Amount of the Class A-3 Notes to zero.
"FNMA" means the Federal National Mortgage Association, and its
successors.
"FINANCED VEHICLE" means, with respect to a Receivable, the
related automobile or light duty truck, as the case may be, together with all
accessions thereto, securing the related Obligor's indebtedness under such
Receivable.
"HOLDER" or "SECURITYHOLDER" means the registered holder of any
Certificate or Note as evidenced by the Certificate Register or Note Register
except that, solely for the purposes of giving certain consents, waivers,
requests or demands pursuant to the Trust Agreement or the Indenture, the
interest evidenced by any Certificate or Note registered in the name of TMCRC or
TMCC, or any Person actually known to a Trust Officer of the Owner Trustee or
the Indenture Trustee to be controlling, controlled by or under common control
with TMCRC or TMCC, shall not be taken into account in determining whether the
requisite percentage necessary to effect any such consent, waiver, request or
demand shall have been obtained.
"INDENTURE" means the Indenture dated as of July 1, 1999, between
the Issuer and the Indenture Trustee.
"INDENTURE TRUSTEE" means the Person acting as Indenture Trustee
under the Indenture, its successors in interest and any successor trustee under
the Indenture.
12
<PAGE>
"INDEPENDENT DIRECTOR" means a director of the Seller who is not
(i) a director, officer or employee of any affiliate of the Seller, (ii) a
natural person related to any director or officer of any affiliate of the
Seller, (iii) a holder (directly or indirectly) of more than 10% of any voting
securities of any affiliate of the Seller, or (iv) a natural person related to a
holder (directly or indirectly) of more than 10% of any voting securities of any
affiliate of the Seller.
"INITIAL CERTIFICATE BALANCE" $586.54.
"INSOLVENCY EVENT" means, with respect to a specified Person, (a)
the filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"INSURANCE POLICY" means, with respect to a Receivable, an
insurance policy covering physical damage, credit life, credit disability,
theft, mechanical breakdown or similar event relating to the related Financed
Vehicle or Obligor.
"INTEREST PERIOD" with respect to any Payment Date and (i) the
Class A-1 Notes, means the period from, and including, the preceding Payment
Date (or, in the case of the initial Interest Period, from and including the
Closing Date) to, but excluding, such Payment Date; and (ii) in the case of each
other Class of Notes, means the period from, and including, the 15th day of the
preceding calendar month (or, in the case of the initial Interest Period, from
and including the Closing Date) to, but excluding, the 15th day of the month in
which such Payment Date occurs.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940,
as amended.
"ISSUER" means Toyota Auto Receivables 1999-A Owner Trust.
"LIEN" means any security interest, lien, charge, pledge, equity
or encumbrance of any kind other than tax liens, mechanics' liens and any liens
that attach to a Receivable or any property, as the context may require, by
operation of law.
"LIQUIDATED RECEIVABLE" means a Receivable that (i) has been the
subject of a Prepayment in full, or (ii) has been paid in full or as to which
the Servicer has determined that the final amounts in respect of such payment
have been paid with respect to a Defaulted
13
<PAGE>
Receivable, regardless of whether all or any part of such payment has been
made by the Obligor under such Receivable, the Seller pursuant to this
Agreement, the Servicer pursuant to this Agreement or pursuant to the
Receivables Purchase Agreement, an insurer pursuant to an Insurance Policy or
otherwise.
"LIQUIDATION EXPENSES" means, with respect to a Defaulted
Receivable, the amount charged by the Servicer, in accordance with its
customary servicing procedures, to or for its account for repossessing,
refurbishing and disposing of the related Financed Vehicle and other
out-of-pocket costs related to such liquidation.
"LIQUIDATION PROCEEDS" means, with respect to a Defaulted
Receivable, all amounts realized with respect to such Receivable from whatever
sources (including, without limitation, proceeds of any Insurance Policy), net
of amounts that are required by law or such Receivable to be refunded to the
related Obligor.
"MONTHLY REMITTANCE CONDITIONS" means, collectively, (i) TMCC is
the Servicer, (ii) either (a) TMCC's short-term unsecured debt is rated P-1 by
Moody's and A-1 by Standard & Poor's (so long as Moody's and Standard & Poor's
are Rating Agencies), or (b) certain arrangements are made that are acceptable
to the Rating Agencies and (iii) no Event of Default or Servicer Default shall
have occurred and be continuing (unless waived by the appropriate Noteholders).
"MOODY'S" means Moody's Investors Service, Inc., or its successor.
"NET LIQUIDATION PROCEEDS" means, with respect to a Defaulted
Receivable, Liquidation Proceeds less Liquidation Expenses.
"NONRECOVERABLE ADVANCE" means any Outstanding Advance as to which
the Servicer determines that any recovery from payments made on or with respect
to such Receivable is unlikely; provided that the Servicer cannot deem any
Outstanding Advance made at the option of the Servicer pursuant to Section 4.02
to be a Nonrecoverable Advance unless it delivers to the Indenture Trustee and
Owner Trustee an Independent Certificate to the effect that such Outstanding
Advance, when made, was reasonably likely to be reimbursed from collections in
respect of interest on the related Receivable representing interest accrued on
such Receivable at the related APR less the sum of the Class C Rate and the
Servicing Fee Rate.
"NOTE" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note,
a Class B Note or a Class C Note.
"NOTE DEPOSITORY AGREEMENT" has the meaning assigned in the
Indenture.
"NOTEHOLDER" means any Holder of a Note.
"NOTE OWNER" has the meaning assigned in the Indenture.
"NOTE POOL FACTOR" means, with respect to each Class of Notes as
of the close of business on any Payment Date, a seven-digit decimal figure equal
to the outstanding principal balance of such Class of Notes (after giving effect
to any reductions thereof to be made on such
14
<PAGE>
Payment Date) divided by the original outstanding principal balance of such
Class of Notes. The Note Pool Factor for each Class of Notes will be
1.0000000 as of the Closing Date; thereafter, the related Note Pool Factor
will decline to reflect reductions in the outstanding principal balance of
such Class of Notes.
"NOTE REGISTER" means the register maintained by the Indenture
Trustee pursuant to the Indenture recording the name of each registered holder
of a Note.
"OBLIGOR" on a Receivable means the purchaser or co-purchasers of
the related Financed Vehicle purchased in part or in whole by the execution and
delivery of such Receivable or any other Person who owes or may be liable for
payments under such Receivable.
"OFFICERS' CERTIFICATE" means a certificate signed by the
President, any Vice President, the Chief Financial Officer, the Chief Accounting
Officer, the Treasurer or any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Issuer, the Seller or the Servicer, as the case may
be.
"OPINION OF COUNSEL" means one or more written opinions of counsel
who may, except as otherwise provided herein, be an employee of or counsel to
the Issuer, the Seller or the Servicer, which counsel shall be acceptable to the
Indenture Trustee, the Owner Trustee or the Rating Agencies, as the case may be.
"OPTIONAL PURCHASE PRICE" means the Outstanding Amount plus all
accrued and unpaid interest on each Class of Notes (including, without
duplication, any Class A-1 Interest Carryover Shortfall, Class A-2 Interest
Carryover Shortfall, Class A-3 Interest Carryover Shortfall, Class B Interest
Carryover Shortfall or Class C interest Carryover Shortfall) through the Payment
Date on which the Owner Trust Estate is to be purchased by the Servicer, or
successor to the Servicer.
"OPTIONAL PURCHASE PERCENTAGE" means 10.00%.
"OUTSTANDING ADVANCES" means, with respect to a Receivable and the
last day of a Collection Period, the sum of all Advances made as of or prior to
such date, minus all payments or collections as of or prior to such date which
are specified in Section 5.04(b) as applied to reimburse all unpaid Advances
with respect to such Receivable.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all
Notes, or, if indicated by the context, all Notes of any Class, outstanding at
the date of determination.
"OVERDUE PAYMENT" means, with respect to any Receivable (other
than an Administrative Receivable or a Warranty Receivable), payments made by or
on behalf of the Obligor which are not Supplemental Servicing Fees and therefor
shall be applied first to reimburse the Servicer for Outstanding Advances made
with respect to such Receivable pursuant to Section 5.03(a).
"OWNER TRUST ESTATE" means all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of this Agreement, all funds on deposit from time to time in the
accounts created pursuant to Section 5.01 of the Sale and
15
<PAGE>
Servicing Agreement (excluding any net investment income with respect to
amounts held in such accounts) and all other property of the Trust from time
to time, including any rights of the Owner Trustee and the Trust pursuant to
this Agreement and the Administration Agreement, and as assignee of the
rights and Interests of the Depositor under the Receivables Purchase
Agreement.
"OWNER TRUSTEE" means the Person acting as Owner Trustee under the
Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.
"PAYAHEAD" on a Receivable that is a Precomputed Receivable means
the amount, as of the close of business on the last day of a Collection Period,
computed in accordance with Section 5.03 with respect to such Receivable.
"PAYAHEAD ACCOUNT" means the account or accounts designated as
such and established and maintained pursuant to Section 5.01.
"PAYMENT AHEAD" means, with respect to a Precomputed Receivable
and a Collection Period, any Excess Payment not representing prepayment in full
of such Precomputed Receivable which the Servicer, in accordance with its
customary servicing practices, will apply towards the payment of Scheduled
Payments in one or more future Collection Periods.
"PAYMENT DATE" means, with respect to a Collection Period, the
fifteenth calendar day of the following calendar month, or if such day is not a
Business Day, the next succeeding Business Day, commencing August 16, 1999.
"PERSON" means any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"POOL BALANCE" means, as of any date, the aggregate Principal
Balance of the Receivables (exclusive of all Administrative Receivables for
which the Servicer has paid the Administrative Purchase Payment, Warranty
Receivables for which the Seller has paid the Warranty Purchase Payment and
Defaulted Receivables) as of the close of business on such date.
"POOL FACTOR" as of any Payment Date, means a seven-digit decimal
figure equal to the Pool Balance as of such Payment Date divided by the Original
Pool Balance.
"PRECOMPUTED ADVANCE" means an advance in respect of principal or
interest on a Precomputed Receivable in the amount determined as set forth in
Section 5.04(a).
"PRECOMPUTED RECEIVABLE" means any Actuarial Receivable or Rule of
78s Receivable.
"PREPAYMENT" means (i) with respect to any Precomputed Receivable
and any Collection Period, any prepayment in full or Excess Payment which the
Servicer, in accordance with its customary servicing practices, will apply
towards the payment of Scheduled Payments due during or prior to such Collection
Period or (ii) with respect to any Simple Interest
16
<PAGE>
Receivable, any prepayment, whether in part or in full, in respect of such
Simple Interest Receivable.
"PRINCIPAL BALANCE" means, with respect to any Receivable as of
any date, the Amount Financed minus the sum of the following amounts: (i) in the
case of a Precomputed Receivable, that portion of all Scheduled Payments due on
or prior to such date allocable to principal, computed in accordance with the
actuarial method, (ii) in the case of a Simple Interest Receivable, that portion
of all Scheduled Payments actually received on or prior to such date allocable
to principal, (iii) any Warranty Purchase Payment or Administrative Purchase
Payment with respect to such Receivable allocable to principal, and (iv) any
Prepayments or other payments applied to reduce the unpaid principal balance of
such Receivable. The Principal Balance of a Defaulted Receivable is zero.
"PRINCIPAL DISTRIBUTION ACCOUNT" means the administrative
subaccount established within the Collection Account by the Indenture Trustee
pursuant to the Indenture and the Trust Agreement.
"RATING AGENCY" means each of Moody's and Standard & Poor's.
"REBATE" means, with respect to a Precomputed Receivable and any
date, the rebate, calculated on an actuarial basis, under such Precomputed
Receivable that is or would be payable to the related Obligor for unearned
finance charges or any other charges subject to rebate if such Obligor were to
prepay such Receivable in full on such date.
"RECEIVABLE" means any retail installment sale contract executed
by an Obligor in respect of a Financed Vehicle, and all proceeds thereof and
payments thereunder, which Receivable shall be identified in the Schedule of
Receivables.
"RECEIVABLE FILE" means the documents specified in Section 2.02
pertaining to a particular Receivable.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables
Purchase Agreement, dated as of July 1, 1999, between the Seller and TMCC.
"RECORD DATE" means, with respect to the Notes of any Class or the
Certificates and each Payment Date, the calendar day immediately preceding such
Payment Date or, if Definitive Notes representing any Class of Notes or
Definitive Certificates representing the Certificates have been issued, the last
day of the month immediately preceding the month in which such Payment Date
occurs. Any amount stated "as of a Record Date" or "on a Record Date" shall
give effect to (i) all applications of collections, and (ii) all payments and
distributions to any party under this Agreement, the Indenture and the Trust
Agreement or to the related Obligor, as the case may be, in each case as
determined as of the opening of business on the related Record Date.
"RECOVERIES" means, with respect to any Receivable that becomes a
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated
17
<PAGE>
Receivable, net of the sum of any amounts expended by the Servicer for the
account of the Obligor and any amounts required by law to be remitted to the
Obligor.
"Regular Principal Distribution Amount" means, with respect to any
Payment Date, an amount not less than zero equal to (i) the excess, if any, of
(a) the sum of the Outstanding Amount of all of the Notes and the Certificate
Balance as of the preceding Payment Date (after giving effect to any principal
payments made on such preceding Payment Date) or Closing Date, as the case may
be, over (b) the Pool Balance as of the close of business on the last day of the
related Collection Period minus (ii) the sum of the First Priority Principal
Distribution Amount, if any, and the Second Priority Principal Distribution
Amount, if any, each with respect to such Payment Date; provided, however, that
the Regular Principal Distribution Amount shall not exceed the sum of the
Outstanding Amount of all the Notes and the Certificate Balance on such Payment
Date (after giving effect to any principal payments made on such Payment Date in
respect of the First Priority Principal Distribution Amount, if any, and the
Second Priority Principal Distribution Amount, if any); and provided further,
that the Regular Principal Distribution Amount on the Class C Final Scheduled
Payment Date will not be less than the amount that is necessary to cause the
aggregate amount paid to Class C Noteholders in respect of principal from the
Closing Date to equal the Class C Initial Principal Balance.
"RELEASED ADMINISTRATIVE AMOUNT" means, with respect to a Payment
Date and to an Administrative Receivable, the Deferred Prepayment, if any, for
such Administrative Receivable.
"RELEASED WARRANTY AMOUNT" means, with respect to a Payment Date
and to a Warranty Receivable, the Deferred Prepayment, if any, for such Warranty
Receivable.
"RELEVANT TRUSTEE" means (i) with respect to the control over or
appropriate designation denoting ownership or control over any property
comprising a portion of the Owner Trust Estate (as defined in the Trust
Agreement) that either is not conveyed or pledged to the Indenture Trustee for
the benefit of the Noteholders and Certificateholders pursuant to the Granting
Clause of the Indenture or that has been released from the lien of the
Indenture, the Owner Trustee, and (ii) with respect to any property comprising a
portion of the Trust Estate (as defined in the Indenture) that has not been
released from the lien of the Indenture, the Indenture Trustee; PROVIDED,
HOWEVER, that with respect to any property that is under the joint or separate
control of a co-trustee or separate trustee under the Trust Agreement or the
Indenture, respectively, "Relevant Trustee" shall refer to either or both of
the Owner Trustee and such co-trustee or separate trustee or to either or both
of the Indenture Trustee and such co-trustee or separate trustee, as the case
may be.
"RESERVE ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 5.07.
"RESERVE ACCOUNT INITIAL DEPOSIT" means $7,214,824.
"RULE OF 78S RECEIVABLE" means any Receivable which provides for
the allocation of payments according to the "sum of periodic balances" or "sum
of monthly payments" method.
18
<PAGE>
"SCHEDULE OF RECEIVABLES" means the schedule of receivables
attached as Schedule A to this Agreement, as it may be amended from time to
time.
"SCHEDULED PAYMENT" means, with respect to any Payment Date and to
a Receivable, the payment set forth in such Receivable as due from the Obligor
in the related Collection Period; provided, however, that in the case of the
first Collection Period, the Scheduled Payment shall include all such payments
due from the Obligor on or after the Cutoff Date.
"Second Priority Principal Distribution Amount" means, with
respect to any Payment Date, an amount not less than zero equal to (i) the
excess, if any, of (a) the Outstanding Amount of the Class A and Class B Notes
as of the preceding Payment Date (after giving effect to any principal payments
made on such preceding Payment Date) or Closing Date, as the case may be, over
(b) the Pool Balance as of the close of business on the last day of the related
Collection Period minus (ii) the First Priority Principal Distribution Amount,
if any, with respect to such Payment Date; provided, however, that the Second
Priority Principal Distribution Amount shall not exceed the sum of the
Outstanding Amount of all of the Notes and the Certificate Balance on such
Payment Date (after giving effect to any principal payments made on such Payment
Date in respect of the First Priority Principal Distribution Amount, if any);
and provided further, that the Second Priority Principal Distribution Amount on
the Class B Final Scheduled Payment Date will not be less than the amount that
is necessary to cause the aggregate amount paid to Class B Noteholders in
respect of principal from the Closing Date to equal the Class B Initial
Principal Balance.
"SECURITIES ACCOUNT CONTROL AGREEMENT" means the Securities
Account Control Agreement dated July 1, 1999, among the Seller, U.S. Bank
National Association, as Securities Intermediary thereunder, and U.S. Bank
National Association, as Indenture Trustee, pursuant to which the Reserve Fund
will be established and maintained.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITYHOLDER" see the definition of "Holder."
"SELLER" means TMCRC, and its successors in interest to the extent
permitted hereunder.
"SERVICER" means TMCC, as the servicer of the Receivables, and
each successor to TMCC (in the same capacity) pursuant to Section 7.03 or 8.02.
"SERVICER'S CERTIFICATE" means an Officers' Certificate of the
Servicer delivered pursuant to Section 4.10, substantially in the form attached
hereto as Exhibit A.
"SERVICER DEFAULT" means an event specified in Section 8.01.
"SERVICING FEE RATE" means 1.00% per annum.
"SIMPLE INTEREST ADVANCE" means an advance in respect of interest
on any Simple Interest Receivable in the amount determined as set forth in
Section 5.04(a).
19
<PAGE>
"SIMPLE INTEREST METHOD" means the method of allocating a fixed
level payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed rate
of interest multiplied by the unpaid principal balance multiplied by the period
of time elapsed since the preceding payment of interest was made and the
remainder of such payment is allocable to principal.
"SIMPLE INTEREST RECEIVABLE" means any Receivable which provides
for the allocation of payments according to the simple interest method.
"SPECIFIED RESERVE ACCOUNT BALANCE" means with respect to any
Payment Date, an amount equal to $7,214,824, except that, if on any Payment Date
(i) the average of the Charge-off Rates for the preceding three Collection
Periods exceeds 1.25% or (ii) the average of the Delinquency Percentages for the
preceding three Collection Periods exceeds 1.25% or (iii) any payment of accrued
interest on a Class B or Class C Note is not paid on the Payment Date on which
it is due, and such default remains uncured for five or more days (but this
clause (iii) will cease to be operative on the date on which such default is
cured), then the Specified Reserve Account Balance for such Payment Date will be
an amount equal to the greater of (a) $7,214,824 or (b) 5.50% of the sum of the
Outstanding Amount and the Certificate Balance (in each case, after giving
effect to payments of principal to be made on such Payment Date); PROVIDED,
HOWEVER, that the Specified Reserve Account Balance shall in no event be greater
than the sum of the Outstanding Amount and the Certificate Balance as of such
Payment Date (in each case, after giving effect to payments of principal on such
Payment Date).
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
Division of the McGraw-Hill Companies, and its successors.
"SUCCESSOR SERVICER" means any entity appointed as a successor to
the Servicer pursuant to Section 8.02.
"SUPPLEMENTAL SERVICING FEE" means, with respect to any Payment
Date, all late fees, prepayment charges, extension fees and other administrative
fees and expenses or similar charges allowed by applicable law with respect to
the Receivables received by the Servicer during the related Collection Period.
"TMCC" means Toyota Motor Credit Corporation, and its successors
and assigns.
"TMCRC" means Toyota Motor Credit Receivables Corporation, a
California corporation, or its successors.
"TOTAL SERVICING FEE" means the sum of the Basic Servicing Fee and
the Supplemental Servicing Fee.
"TRUST" means the Issuer.
"TRUST AGREEMENT" means the Amended and Restated Trust Agreement
dated as of July 1, 1999, among the Seller, the Owner Trustee and the Delaware
Trustee.
20
<PAGE>
"TRUST ESTATE" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of this Indenture for the benefit of the Noteholders (including,
without limitation, all property and interests granted to the Indenture Trustee
pursuant to the granting clause of the Indenture), including all proceeds
thereof.
"TRUST OFFICER" means, in the case of the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
"UCC" means the Uniform Commercial Code as in effect in the
relevant jurisdiction.
"UNITED STATES" means the United States of America.
"WARRANTY PURCHASE PAYMENT" means, with respect to a Payment Date
and to (1) a Warranty Receivable which is a Precomputed Receivable repurchased
by the Seller as of the close of business on the last day of the related
Collection Period, (a) the sum of (i) all Scheduled Payments on such Receivable
due after the last day of such Collection Period, (ii) all past due Scheduled
Payments for which an Advance has not been made, (iii) an amount equal to any
reimbursement of Outstanding Advances made pursuant to Section 5.04(b) with
respect to such Receivable and (iv) an amount equal to all other Outstanding
Advances made pursuant to Section 5.04(c) with respect to such Receivable, minus
(b) the sum of (i) any Rebate (except to the extent specified in Section 4.03)
and (ii) any other proceeds in respect of such Receivable previously received
(to the extent applied to reduce the Principal Balance of such Receivable on
such Payment Date), and (2) a Warranty Receivable which is a Simple Interest
Receivable repurchased by the Seller as of the close of business on the last day
of the related Collection Period, the sum of (a) the unpaid principal balance
owed by the Obligor in respect of such Receivable plus (b) interest on such
unpaid principal balance at a rate equal to the related APR to the last day in
the related Collection Period.
"WARRANTY RECEIVABLE" means a Receivable which the Seller is
required to repurchase pursuant to Section 4.08.
SECTION 1.02 USAGE OF TERMS. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
21
<PAGE>
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01 CONVEYANCE OF RECEIVABLES. (a) Upon the execution of
this Agreement by the parties hereto, the Seller, pursuant to the mutually
agreed upon terms contained in this Agreement, shall sell, transfer, assign and
otherwise convey to the Owner Trustee on behalf of the Issuer, without recourse
(but subject to the Seller's obligations in this Agreement), all of its right,
title and interest in and to the Receivables and any proceeds related thereto,
including any Dealer Recourse and such other items as shall be specified in this
Agreement. Concurrently therewith and in exchange therefor, the Issuer shall
deliver to, or to the order of, the Seller the Notes and the Certificates.
(b) In consideration of the foregoing and other good and valuable
consideration to be delivered to the Seller hereunder, on behalf of the Issuer,
the Seller does hereby sell, transfer, assign and otherwise convey to the Owner
Trustee on behalf of the Issuer, in trust for the benefit of the
Certificateholders, without recourse (subject to the Seller's obligations
herein):
(i) all right, title and interest of the Seller in and to the
Receivables and all monies due thereon or paid thereunder or in respect
thereof (including proceeds of the repurchase of Receivables by the
Seller pursuant to Section 3.02 or the purchase of Receivables by the
Servicer pursuant to Section 4.08 or 9.01) on or after the Cutoff Date;
(ii) the interest of the Seller in the security interests
in the Financed Vehicles granted by the Obligors pursuant to the
Receivables and any accessions thereto;
(iii) the interest of the Seller in any proceeds of any physical
damage insurance policies covering Financed Vehicles and in any proceeds
of any credit life or credit disability insurance policies relating to
the Receivables or the Obligors;
(iv) the interest of the Seller in any Dealer Recourse;
(v) the right of the Seller to realize upon any property
(including the right to receive future Liquidation Proceeds) that shall
have secured a Receivable and have been repossessed pursuant to the terms
thereof;
(vi) the rights and interests of the Seller under the
Receivables Purchase Agreement;
(vii) all other assets comprising the Owner Trust Estate; and
(viii) all proceeds of the foregoing.
(c) It is the intention of the Seller that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables from
the Seller to the Issuer and the beneficial interest in and title to the
Receivables shall not be part of the Seller's estate in the event of the filing
of a bankruptcy petition by or against the Seller under any bankruptcy law. The
Seller agrees to execute and file all filings (including filings under the UCC)
necessary in
22
<PAGE>
any jurisdiction to provide third parties with notice of the sale of the
Receivables pursuant to this Agreement and to perfect such sale under the UCC.
(d) Although the parties hereto intend that the transfer and
assignment contemplated by this Agreement be a sale, in the event such transfer
and assignment is deemed to be other than a sale, the parties intend that all
filings described in the foregoing paragraph shall give the Owner Trustee on
behalf of the Issuer a first priority perfected security interest in, to and
under the Receivables, and other property conveyed hereunder and all proceeds of
any of the foregoing. This Agreement shall be deemed to be the grant of a
security interest from the Seller to the Owner Trustee on behalf of the Issuer,
and the Owner Trustee on behalf of the Issuer shall have all the rights, powers
and privileges of a secured party under the UCC.
(e) In connection with the foregoing conveyance, the Servicer shall
maintain its computer system so that, from and after the time of sale of the
Receivables to the Owner Trustee on behalf of the Issuer under this Agreement,
the Servicer's master computer records (including any back-up archives) that
refer to any Receivable indicate clearly the interest of the Issuer in such
Receivables and that the Receivable is owned by the Issuer and controlled by the
Owner Trustee on behalf of the Issuer. Indication of the Issuer's ownership of
a Receivable shall be deleted from or modified on the Servicer's computer
systems when, and only when, the Receivable has been paid in full, repurchased
or assigned pursuant to this Agreement.
(f) Ownership and control of the receivables, as between the Issuer,
the Owner Trustee and the Indenture Trustee (on behalf of the Noteholders and
Certificateholders) shall be governed by the Indenture.
SECTION 2.02 CUSTODY OF RECEIVABLES FILES. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Owner
Trustee on behalf of the Issuer, upon the execution and delivery of this
Agreement, appoints the Servicer, and the Servicer accepts such appointment, to
act as the agent of the Issuer as custodian of the following documents or
instruments which are hereby constructively delivered to the Owner Trustee with
respect to each Receivable:
(a) the fully executed original of the Receivable;
(b) documents evidencing or related to any Insurance Policy;
(c) the original credit application of each Obligor, fully
executed by such Obligor on TMCC's customary form, or on a form approved
by TMCC, for such application;
(d) the original certificate of title (or evidence that such
certificate of title has been applied for) or such documents that the
Servicer shall keep on file, in accordance with TMCC's customary
procedures, evidencing the security interest in the related Financed
Vehicle; and
(e) any and all other documents that the Seller or the
Servicer, as the case may be, shall keep on file, in accordance with its
customary procedures, relating to such Receivable or the related Obligor
or Financed Vehicle.
23
<PAGE>
SECTION 2.03 ACCEPTANCE BY OWNER TRUSTEE. The Owner Trustee hereby
acknowledges its acceptance, on behalf of the Issuer, pursuant to this
Agreement, of all right, title and interest in and to the Receivables conveyed
by the Seller pursuant to this Agreement and declares and shall declare from and
after the date hereof that the Owner Trustee holds and shall hold such right,
title and interest, upon the terms and conditions set forth in this Agreement.
ARTICLE III
THE RECEIVABLES
SECTION 3.01 REPRESENTATIONS AND WARRANTIES OF THE SELLER WITH RESPECT
TO THE RECEIVABLES. The Seller makes the following representations and
warranties as to the Receivables on which the Issuer is deemed to have relied in
acquiring the Receivables. Such representations and warranties speak as of the
execution and delivery of this Agreement and as of the Closing Date, but shall
survive the sale, transfer and assignment of the Receivables to the Issuer, and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) CHARACTERISTICS OF RECEIVABLES. Each Receivable (i) shall
have been originated in the United States by a Dealer for the retail sale
of the related Financed Vehicle in the ordinary course of such Dealer's
business, shall have been fully and properly executed by the parties
thereto, shall have been purchased by TMCC from such Dealer under an
existing agreement with TMCC and shall have been validly assigned by such
Dealer to TMCC in accordance with the terms of such agreement and shall
have been subsequently sold by TMCC to the Seller pursuant to the
Receivables Purchase Agreement, (ii) shall have created or shall create a
valid, subsisting and enforceable first priority security interest in
favor of TMCC in the related Financed Vehicle, which security interest
has been assigned by TMCC to the Seller and shall be assignable, and
shall be so assigned, by the Seller to the Owner Trustee on behalf of the
Issuer hereby, (iii) shall, except as otherwise provided in this
Agreement, provide for monthly payments that fully amortize the Amount
Financed by maturity and provide for a finance charge or yield interest
at its APR, in either case calculated based on the Rule of 78s, the
simple interest method or the actuarial method, (iv) shall contain
customary and enforceable provisions, such that the rights and remedies
of the holder thereof shall be adequate for realization against the
collateral of the benefits of the security and (v) shall provide for, in
the event that such Receivable is prepaid, a prepayment that fully pays
the Principal Balance and includes accrued but unpaid interest.
(b) SCHEDULE OF RECEIVABLES. The information set forth in the
Schedule of Receivables shall be true and correct in all material
respects as of the opening of business on the Cutoff Date, and no
selection procedures adverse to the Securityholders shall have been
utilized in selecting the Receivables from those automobile and light
duty truck receivables of TMCC which met the selection criteria set forth
in this Section and this Agreement.
(c) COMPLIANCE WITH LAW. To the knowledge of the Seller, each
Receivable and each sale of the related Financed Vehicle shall have
complied at the time it was
24
<PAGE>
originated or made, and shall comply at the time of execution of this
Agreement, in all material respects with all requirements of applicable
federal, state and local laws, and regulations thereunder, including
usury laws, the Federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting
Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, Federal Reserve Board
Regulations B, M and Z (to the extent applicable), state adaptations of
the National Consumer Act and of the Uniform Consumer Credit Code and
other consumer credit, equal credit opportunity and disclosure laws,
except with respect to applicable Florida documentary stamp taxes as to
which the effect of noncompliance will not have a material adverse
effect on such Receivable.
(d) BINDING OBLIGATION. Each Receivable shall constitute the
legal, valid and binding payment obligation in writing of the related
Obligor, enforceable by the holder thereof in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights in general and by general principles of
equity, regardless of whether such enforceability shall be considered in
a proceeding in equity or at law.
(e) NO BANKRUPT OBLIGORS. None of the Receivables shall be
due, to the best knowledge of the Seller, from any Obligor who is
presently the subject of a bankruptcy proceeding or is bankrupt or is
insolvent.
(f) NO GOVERNMENT OBLIGORS. None of the Receivables shall be
due from the United States or any state, or from any agency, department
or instrumentality of the United States or any state or local government.
(g) EMPLOYEE OBLIGORS. None of the Receivables shall be due
from any employee of the Seller, TMCC or any of their respective
affiliates.
(h) SECURITY INTEREST IN FINANCED VEHICLES. Immediately prior
to the sale, assignment and transfer thereof, each Receivable shall be
secured by a validly perfected first priority security interest in the
related Financed Vehicle in favor of TMCC as secured party or all
necessary and appropriate action with respect to such Receivable shall
have been taken to perfect a first priority security interest in such
Financed Vehicle in favor of TMCC as secured party.
(i) RECEIVABLES IN FORCE. No Receivable shall have been
satisfied, subordinated or rescinded, nor shall any Financed Vehicle have
been released in whole or in part from the lien granted by the related
Receivable.
(j) NO WAIVERS. No provision of a Receivable shall have been
waived in such a manner that such Receivable fails to meet all of the
other representations and warranties made by the Seller herein with
respect thereto.
(k) NO AMENDMENTS. No Receivable shall have been amended or
modified in such a manner that the total number of Scheduled Payments has
been increased or that the related Amount Financed has been increased or
that such Receivable fails to meet all of the other representations and
warranties made by the Seller herein with respect thereto.
25
<PAGE>
(l) NO DEFENSES. No facts shall be known to the Seller which
would give rise to any right of rescission, setoff, counterclaim or
defense, nor shall the same have been asserted or threatened, with
respect to any Receivable.
(m) NO LIENS. To the knowledge of the Seller, no liens or
claims shall have been filed as of the date of this Agreement, including
liens for work, labor or materials relating to a Financed Vehicle, that
shall be liens prior to, or equal or coordinate with, the security
interest in such Financed Vehicle granted by the related Receivable,
which Liens shall not have been released or satisfied as of the Closing
Date.
(n) NO DEFAULT; NO REPOSSESSION. Except for payment defaults
that, as of the Cutoff Date, have been continuing for a period of not
more than 30 days, no default, breach, violation or event permitting
acceleration under the terms of any Receivable shall have occurred as of
the Cutoff Date; no continuing condition that with notice or the lapse of
time would constitute a default, breach, violation or event permitting
acceleration under the terms of any Receivable shall have arisen; the
Seller shall not have waived any of the foregoing; and no Financed
Vehicle has been repossessed without reinstatement as of the Cutoff Date.
(o) INSURANCE. The terms of each Receivable require the
Obligor to obtain and maintain physical damage insurance covering the
related Financed Vehicle in accordance with TMCC's normal requirements.
The terms of each Receivable allow, but do not require TMCC to (and TMCC,
in accordance with its current normal servicing procedures, does not)
obtain any such coverage on behalf of the Obligor.
(p) GOOD TITLE. It is the intention of the Seller that the
transfer and assignment herein contemplated, taken as a whole, constitute
a sale of the Receivables from the Seller to the Issuer and that the
beneficial interest in and title to the Receivables not be part of the
debtor's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. No Receivable has been
sold, transferred, assigned or pledged by the Seller to any Person other
than the Issuer, and no provision of a Receivable shall have been waived,
except as provided in clause (j) above; immediately prior to the transfer
and assignment herein contemplated, the Seller had good and marketable
title to each Receivable free and clear of all Liens and rights of
others; immediately upon the transfer and assignment thereof, the Issuer
shall have good and marketable title to each Receivable, free and clear
of all Liens and rights of others; and the transfer and assignment herein
contemplated has been perfected under the UCC.
(q) LAWFUL ASSIGNMENT. No Receivable shall have been
originated in, or shall be subject to the laws of, any jurisdiction under
which the sale, transfer and assignment of such Receivable under this
Agreement or pursuant to a transfer of the related certificate of title
shall be unlawful, void or voidable.
(r) ALL FILINGS MADE. As of the Closing Date, all filings
(including UCC filings) necessary in any jurisdiction to provide third
parties with notice of the transfer and assignment herein contemplated,
to perfect the sale of the Receivables from the Seller to
26
<PAGE>
the Owner Trustee and to give the Owner Trustee on behalf of the Issuer
a first priority perfected security interest in the Receivables shall
have been made.
(s) ONE ORIGINAL. There shall be only one original executed
copy of each Receivable.
(t) CHATTEL PAPER. Each Receivable constitutes "chattel paper"
as defined in the UCC.
(u) ADDITIONAL REPRESENTATIONS AND WARRANTIES. (i) Each
Receivable shall have an original number of Scheduled Payments of not
less than 12 nor more than 72 and, as of the Cutoff Date, a remaining
number of Scheduled Payments of not less than 4 nor more than 54; (ii)
each Receivable provides for the payment of a finance charge based on an
APR ranging from 8% to 15%; (iii) each Receivable shall have had an
original principal balance of not less than $1,090.01 and not more than
$50,000 and, as of the Cutoff Date, an unpaid principal balance of not
less than $250 nor more than $50,000; (iv) no Receivable was originated
under a special financing program; (v) no Receivable shall have a
Scheduled Payment that is more than 30 days past due as of the Cutoff
Date; (vi) no Financed Vehicle was subject to force-placed insurance as
of the Cutoff Date; (vii) there is no Receivable as to which payments
ahead of 6 or more Scheduled Payments have been received from or on
behalf of the related Obligor; and (viii) each Receivable is being
serviced by Toyota Motor Credit Corporation.
(v) LOCATION OF RECEIVABLE FILES. Each Receivable File shall
be kept at one of the locations listed in the Schedule of Receivables or
at such other office as shall be specified to the Owner Trustee and the
Indenture Trustee as provided in Section 3.03(b).
SECTION 3.02 REPURCHASE UPON BREACH. The Seller, the Servicer or the
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery of
any breach of the Seller's representations and warranties made pursuant to
Section 3.01 or 6.01 that materially and adversely affects the interests of the
Issuer in any Receivable. As of the last day of the second Collection Period
following the Collection Period in which it discovers or receives notice of such
breach (or, at the Seller's election, the last day of the first Collection
Period following the Collection Period in which it discovers or receives notice
of such breach), the Seller shall, unless such breach shall have been cured in
all material respects, repurchase such Receivable and, if necessary, the Seller
shall enforce the obligation of TMCC under the Receivables Purchase Agreement to
repurchase such Receivable from the Seller. Notwithstanding the foregoing, the
obligation of the Seller to repurchase a Receivable shall not be conditioned on
the performance by TMCC of its obligation to repurchase such Receivable from the
Seller pursuant to the Receivables Purchase Agreement. This repurchase
obligation shall obtain for all representations and warranties of the Seller
contained in this Agreement whether or not the Seller has knowledge of the
breach at the time of the breach or at the time the representations and
warranties were made. In consideration of the repurchase of any such
Receivable, on the Business Day immediately preceding the related Payment Date,
the Seller shall remit the Warranty Purchase Payment of such Receivable to the
Collection Account in the manner specified in Section 5.05 and shall be entitled
to receive the Released Warranty Amount. The sole remedy of the Owner Trustee,
the Issuer, the Indenture
27
<PAGE>
Trustee (by operation of the assignment of the Owner Trustee's rights
hereunder pursuant to the Indenture) or any Securityholder with respect to a
breach of the Seller's representations and warranties pursuant to this
Agreement shall be to require the Seller to repurchase the related Receivable
pursuant to this Section and to enforce TMCC's obligation to the Seller to
repurchase such Receivables pursuant to the Receivables Purchase Agreement.
The Owner Trustee shall have no duty to conduct any affirmative investigation
as to the occurrence of any condition requiring the repurchase of any
Receivable pursuant to this Section. In connection with such repurchase, the
Owner Trustee and Indenture Trustee shall take all steps necessary to effect
a transfer of such Receivable as set forth in Section 9.01(d).
SECTION 3.03 DUTIES OF SERVICER AS CUSTODIAN.
(a) SAFEKEEPING. The Servicer shall hold the Receivable Files as
custodian for the benefit of the Issuer and maintain such accurate and complete
accounts, records and computer systems pertaining to each Receivable File as
shall enable the Issuer to comply with this Agreement. In performing its duties
as custodian the Servicer shall act with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to the receivable
files relating to comparable automotive receivables that the Servicer services
for itself or others. The Servicer shall promptly report to the Issuer and the
Indenture Trustee any failure on its part to hold the Receivable Files and
maintain its accounts, records and computer systems as herein provided and shall
promptly take appropriate action to remedy any such failure. Nothing herein
shall be deemed to require an initial review or any periodic review by the
Issuer, the Owner Trustee or the Indenture Trustee of the Receivable Files.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B or at such
other office as shall be specified to the Issuer and the Indenture Trustee by
written notice not later than 90 days after any change in location. The
Servicer shall make available to the Issuer and the Indenture Trustee or their
respective duly authorized representatives, attorneys or auditors a list of
locations of the Receivable Files and the related accounts, records and computer
systems maintained by the Servicer at such times during normal business hours as
the Issuer or the Indenture Trustee shall instruct with reasonable advance
notice.
(c) RELEASE OF DOCUMENTS. Upon instruction from the Indenture
Trustee, the Servicer shall release any Receivable File to the Indenture
Trustee, the Indenture Trustee's agent or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may designate,
as soon as practicable.
SECTION 3.04 INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Trust Officer of the Owner
Trustee or the Indenture Trustee. A certified copy of a bylaw or of a
resolution of the board of directors of the Owner Trustee or of the Indenture
Trustee shall constitute conclusive evidence of the authority of such Trust
Officer to act, and shall be considered conclusive evidence of the authority of
such Trust Officer to act until receipt by the Servicer of written notice to the
contrary given by the Owner Trustee or Indenture Trustee, as the case may be.
28
<PAGE>
SECTION 3.05 CUSTODIAN'S INDEMNIFICATION. The Servicer as custodian
shall indemnify the Issuer, the Owner Trustee and the Indenture Trustee and each
of their respective officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or asserted
against any of them as the result of any improper act or omission in any way
relating to the maintenance and custody by the Servicer as custodian of the
Receivable Files; PROVIDED, HOWEVER, that the Servicer shall not be liable to
the Owner Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Owner Trustee and the Servicer shall
not be liable to the Indenture Trustee for any portion of any such amount
resulting from the willful misfeasance, bad faith or negligence of the Indenture
Trustee or Owner Trustee.
SECTION 3.06 EFFECTIVE PERIOD AND TERMINATION. The Servicer's
appointment as custodian shall become effective as of the date hereof, and shall
continue in full force and effect until terminated pursuant to this Section. If
TMCC shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 8.01, the appointment of TMCC (as Servicer) as
custodian shall be terminated hereunder without further action by the Indenture
Trustee, Owner Trustee, Noteholders or Certificateholders. The Indenture Trustee
or, with the consent of the Indenture Trustee, the Owner Trustee may terminate
the Servicer's appointment as custodian, with cause, at any time upon written
notification to the Servicer, and without cause upon 30 days' prior written
notification to the Servicer. The Owner Trustee, Indenture Trustee or
Noteholders may terminate the Servicer as custodian hereunder in the same manner
as the Owner Trustee, Indenture Trustee or Noteholders may terminate the rights
and obligations of the Servicer under Section 8.01. As soon as practicable after
any termination of such appointment, the Servicer shall deliver the Receivable
Files to the Relevant Trustee or the agent thereof at such place or places as
the Relevant Trustee may reasonably designate.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01 DUTIES OF SERVICER. The Servicer, for the benefit of the
Issuer and the Securityholders (to the extent provided herein), shall manage,
service, administer and make collections on the Receivables with reasonable
care, using that degree of skill and attention that the Servicer exercises with
respect to comparable automotive receivables that it services for itself or
others. The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of Obligors or by federal, state or local
government authorities with respect to the Receivables, investigating
delinquencies, sending payment information to Obligors, reporting tax
information to Obligors in accordance with its customary practices, accounting
for collections, furnishing monthly and annual statements to the Owner Trustee
and the Indenture Trustee with respect to payments and distributions and making
Advances and performing the other duties specified herein. The Servicer shall
follow its customary standards, policies and procedures as in effect from time
to time and shall have full power and authority, acting alone, to do any and all
things in connection with such managing, servicing, administration and
collection that it may deem necessary or desirable. Nothing in the foregoing or
in any other section of this Agreement
29
<PAGE>
shall be construed to prevent the Servicer from implementing new programs,
whether on an intermediate, pilot or permanent basis, or on a regional or
nationwide basis, or from modifying its standards, policies and procedures as
long as, in each case, the Servicer does or would implement such programs or
modify its standards, policies and procedures in respect of comparable assets
serviced for itself in the ordinary course of business.
Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Securityholders or any of
them, any and all instruments of satisfaction or cancellation, or partial or
full release or discharge, and all other comparable instruments, with respect to
such Receivables and the Financed Vehicles. The Servicer is hereby authorized
to communicate with Obligors in the ordinary course of its servicing of the
Receivables and Financed Vehicles in its own name. The Servicer is hereby
authorized to commence, in its own name or in the name of the Issuer, a legal
proceeding to enforce a Defaulted Receivable or to commence or participate in a
legal proceeding (including without limitation a bankruptcy proceeding) relating
to or involving a Receivable, including a Defaulted Receivable. If the Servicer
shall commence or participate in a legal proceeding to enforce a Receivable, the
Issuer shall thereupon be deemed to have automatically assigned to the Servicer,
solely for the purpose of collection on behalf of the party retaining an
interest in such Receivable, such Receivable and the other property conveyed to
the Issuer hereby with respect to such Receivable for purposes of commencing or
participating in any such proceeding as a party or claimant, and the Servicer is
authorized and empowered by the Owner Trustee to execute and deliver in the
Servicer's name any notices, demands, claims, complaints, responses, affidavits
or other documents or instruments in connection with any such proceeding. If in
any enforcement suit or legal proceeding it shall be held that the Servicer may
not enforce a Receivable on the ground that it shall not be a real party in
interest or a holder entitled to enforce such Receivable, the Owner Trustee on
behalf of the Issuer shall, at the Servicer's expense and direction, take steps
to enforce such Receivable, including bringing suit in its name or the name of
the Owner Trustee, the Indenture Trustee, the Certificateholders and/or the
Noteholders. The Owner Trustee shall furnish the Servicer with any powers of
attorney and other documents and take any other steps which the Servicer may
deem necessary or appropriate to enable the Servicer to carry out its servicing
and administrative duties under this Agreement.
SECTION 4.02 COLLECTION AND ALLOCATION OF RECEIVABLE PAYMENTS. The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables as and when the same shall become
due and shall follow such customary collection procedures as it follows with
respect to comparable automotive receivables that it services for itself or
others. The Servicer shall be authorized to grant extensions, rebates or
adjustments on a Receivable in accordance with the customary servicing standards
of the Servicer without the prior consent of the Owner Trustee, Indenture
Trustee or any Securityholder; provided, however, that if, as a result of any
change in the related APR or the Amount Financed, any increase in the total
number of Scheduled Payments or any extension of payments such that the
Receivable will be outstanding later than the Class C Final Scheduled Payment
Date, the amount of any Scheduled Payment due in a subsequent Collection Period
is reduced, the Servicer shall be obligated to either repurchase such Receivable
pursuant to Section 4.08 or to make an Advance in respect of such Receivable in
each subsequent Collection Period equal to the amount by which such Scheduled
Payment has been reduced. In addition, in the event that any such rescheduling
30
<PAGE>
or extension of a Receivable modifies the terms of such Receivable in such a
manner as to release the security interest in the related Financed Vehicle or
constitute a cancellation of such Receivable and the creation of a new
automobile or light duty truck receivable, the Servicer shall purchase such
Receivable pursuant to Section 4.08, and the receivable created shall not be
included as an asset of the Issuer. The Servicer may, in accordance with its
customary servicing procedures, waive any prepayment charge, late payment charge
or any other fees that may be collected in the ordinary course of servicing the
Receivables.
SECTION 4.03 REBATES ON FULL PREPAYMENTS. In the event that the amount
of a full Prepayment by an Obligor under a Precomputed Receivable, after
adjustment for the applicable Rebate, is less than the amount that would be
payable under the actuarial method if a full Prepayment were made at the end of
the billing month under such Precomputed Receivable, either because the Rebate
calculated under the terms of such Precomputed Receivable is greater than the
amount calculable under the actuarial method or because the Servicer's customary
servicing procedure is to credit a greater Rebate, the Servicer, as part of its
servicing duties, shall remit such difference by deposit into the Collection
Account pursuant to Section 5.05.
SECTION 4.04 REALIZATION UPON RECEIVABLES. On behalf of the Issuer,
the Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise comparably convert the ownership of any
Financed Vehicle that it has reasonably determined should be repossessed or
otherwise converted following a default under the Receivable secured by the
Financed Vehicle (and shall specify such Receivables to the Relevant Trustee no
later than the Determination Date following the end of the Collection Period in
which the Servicer shall have made such determination). The Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be customary and usual in its servicing of automobile and light duty
truck receivables, which practices and procedures may include reasonable efforts
to realize upon any Dealer Recourse, selling the related Financed Vehicle at
public or private sale and other actions to realize upon such a Receivable. The
Servicer shall be entitled to recover its Liquidation Expenses with respect to
each Defaulted Receivable. All Net Liquidation Proceeds realized in connection
with any such action with respect to a Receivable shall be deposited by the
Servicer in the Collection Account in the manner specified in Section 5.02. The
foregoing is subject to the proviso that, in any case in which the Financed
Vehicle shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the repossession of such Financed Vehicle
unless it shall determine in its discretion that such repair and/or repossession
shall increase the Liquidation Proceeds of the related Receivable by an amount
greater than the amount of such expenses.
SECTION 4.05 PHYSICAL DAMAGE INSURANCE. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have delivered proof that it has obtained physical damage insurance
covering the related Financed Vehicle at the date of origination of the related
Receivable, but shall not obtain any such coverage on behalf of any Obligor.
SECTION 4.06 MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.
The Servicer shall, in accordance with its customary servicing procedures and at
its own expense, take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle.
The Issuer hereby authorizes the Servicer to take such steps as
31
<PAGE>
are necessary to again perfect such security interest on behalf of the Issuer
and the Indenture Trustee in the event of the relocation of a Financed
Vehicle or for any other reason. In the event that the assignment of a
Receivable to the Issuer is insufficient, without a notation on the related
Financed Vehicle's certificate of title, to grant to the Issuer a first
priority perfected security interest in the related Financed Vehicle, the
Servicer hereby agrees to serve as the agent of the Issuer for the purpose of
perfecting the security interest of the Issuer in such Financed Vehicle and
agrees that the Servicer's listing as the secured party on the certificate of
title is in this capacity as agent of the Issuer.
SECTION 4.07 COVENANTS OF SERVICER. The Servicer hereby makes the
following covenants to the Issuer on which the Issuer has relied in purchasing
the Receivables and issuing the Certificates, and on which the Indenture Trustee
will rely in undertaking the trusts set forth in the Indenture and issuing the
Notes.
(a) LIENS IN FORCE. Except as contemplated by this Agreement,
the Servicer shall not release in whole or in part any Financed Vehicle
from the security interest securing the related Receivable.
(b) NO IMPAIRMENT. The Servicer shall do nothing to impair the
rights of the Securityholders in the Receivables.
(c) NO AMENDMENTS. Except as provided in Section 4.02, the
Servicer shall not amend or otherwise modify any Receivable such that the
total number of Scheduled Payments, the Amount Financed or the APR is
altered, or extend the maturity of such Receivable beyond the Class C
Final Scheduled Payment Date.
SECTION 4.08 PURCHASE OF RECEIVABLES UPON BREACH. The Servicer or the
Owner Trustee shall inform the other party and the Indenture Trustee promptly,
in writing, upon the actual knowledge of one of its Trust Officers of any breach
pursuant to Section 4.06 or 4.07 that materially and adversely affects the
interests of the Issuer in a Receivable, or if an extension, rescheduling or
modification of a Receivable is made by the Servicer as described in Section
4.02 and the Servicer does not elect to make Advances to cover resulting
reductions in interest accruals as provided in Section 4.02, the party
discovering such event shall give prompt written notice to the others. As of
the last day of the second Collection Period following the Collection Period in
which it discovers or receives notice of such event (or, at the Servicer's
election, the last day of the first Collection Period following the Collection
Period in which it discovers or receives notice of such breach), the Servicer
shall, unless such event shall have been cured in all material respects or such
modification has been rescinded or the Servicer has elected to and does make all
required Advances, purchase from the Issuer such Receivable. In consideration
of the purchase of any such Receivable, on the Business Day immediately
preceding the related Payment Date the Servicer shall remit the Administrative
Purchase Payment to the Collection Account in the manner specified in Section
5.05, and shall be entitled to receive the Released Administrative Amount. Upon
such deposit of the Administrative Purchase Payment, the Servicer shall for all
purposes of this Agreement be deemed to have released all claims for
reimbursement of Outstanding Advances made in respect of such Receivable. The
sole remedy of the Owner Trustee, the Issuer, the Indenture Trustee or any
Securityholders against the Servicer with respect to a breach pursuant to
Section 4.02, 4.06 or 4.07 shall be to require the
32
<PAGE>
Servicer to purchase the related Receivables pursuant to this Section, except
as otherwise provided in Section 7.02. The Owner Trustee shall have no duty
to conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable pursuant to this Section
except as otherwise provided in Section 7.02. In connection with such
repurchase, the Owner Trustee and Indenture Trustee shall take all steps
necessary to effect a transfer of such Receivable to the Servicer as set
forth in Section 9.01(d).
SECTION 4.09 SERVICING FEE AND EXPENSES. As compensation for the
performance of its obligations hereunder, the Servicer shall be entitled to
receive on each Payment Date, out of Available Collections, the Total Servicing
Fee. The Basic Servicing Fee in respect of a Collection Period shall be
calculated based on a 360 day year comprised of twelve 30-day months. Except to
the extent otherwise provided herein, the Servicer shall be required to pay all
expenses incurred by it in connection with its activities under this Agreement
(including fees and disbursements of the Owner Trustee, the Delaware Co-Trustee,
the Administrator and the independent accountants, taxes imposed on the
Servicer, expenses incurred by the Servicer in connection with its preparation
of reports hereunder and all other fees and expenses not expressly stated under
this Agreement to be for the account of the Certificateholders).
SECTION 4.10 SERVICER'S CERTIFICATE. On or before each Determination
Date, the Servicer shall deliver to the Owner Trustee, each Paying Agent, the
Indenture Trustee and the Seller, with a copy to each Rating Agency, a
Servicer's Certificate substantially in the form of Exhibit A hereto, containing
the information necessary to make the payments to be made on the related Payment
Date and the information necessary for the Owner Trustee and the Indenture
Trustee to send statements to the Securityholders pursuant to the Trust
Agreement or Indenture, as the case may be. The Servicer shall also specify
therein the identity of any Receivable that the Servicer or the Seller became
obligated to repurchase or that the Servicer has determined to be a Defaulted
Receivable during the related Collection Period. Receivables purchased or to be
purchased by the Servicer or the Seller and Receivables that the Servicer has
determined during such Collection Period to be Defaulted Receivables and with
respect to which payment of the Administrative Purchase Payment or Warranty
Purchase Payment has been provided from whatever source as of last day of such
Collection Period shall be identified by the related Obligor's account number
(as specified in the Schedule of Receivables).
SECTION 4.11 ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT. (a)
Within 120 days after September 30 of each calendar year (commencing with the
fiscal year ended September 30, 1999), the Servicer shall deliver an Officer's
Certificate to the Owner Trustee and the Indenture Trustee to the effect that a
review of the activities of the Servicer during the prior fiscal year (or since
the Closing Date in the case of the first such Officer's Certificate) has been
made under the supervision of the officer executing such Officer's Certificate
with a view to determining whether during such period the Servicer has performed
and observed all of its obligations under this Agreement, and either (i) stating
that, to the best of his or her knowledge, no default by the Servicer under this
Agreement has occurred and is continuing, or (ii) if such a default has occurred
and is continuing, specifying such default and the nature and status thereof.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, written
notice in an Officer's Certificate of any event which with
33
<PAGE>
the giving of notice or lapse of time, or both, would become a Servicer
Default under Section 8.01(a) or (b).
SECTION 4.12 ANNUAL ACCOUNTANTS' REPORT. Within 120 days after
September 30 of each fiscal year for the Servicer (commencing with the year
ended September 30, 1999), the Servicer shall deliver to the Owner Trustee and
the Indenture Trustee a report prepared by the Independent Accountants of the
Servicer concerning their review of the activities of the Servicer during the
preceding 12-month period ended September 30 (or other applicable period in the
case of the first such report or letter) to the effect that such accountants
have reviewed certain records and documents relating to the servicing of the
Receivables under this Agreement (using procedures specified in such report or
letter) and as a result of such review, and in connection with such procedures,
they are reporting such exceptions, if any, as shall be set forth therein. Such
report or letter shall also indicate that the firm is independent with respect
to the Seller and the Servicer within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants.
In the event such Independent Accountants require the Owner
Trustee or Indenture Trustee to agree to the procedures performed by such firm,
the Servicer shall direct the Owner Trustee or Indenture Trustee in writing to
so agree; it being understood and agreed that the Owner Trustee or Indenture
Trustee will deliver such letter of agreement in conclusive reliance upon the
direction of the Servicer, and the Owner Trustee and Indenture Trustee need make
no independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.
SECTION 4.13 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to the Owner Trustee and Indenture
Trustee reasonable access to the documentation regarding the Receivables as
provided in Section 3.03(b). The Servicer will provide such access to any
Securityholder only in such cases where the Certificateholders or Noteholders
shall be required by applicable statutes or regulations to review such
documentation. In each case, such access shall be afforded without charge, but
only upon reasonable request and during the normal business hours at the
respective offices of the Servicer. Nothing in this Section shall derogate from
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the Servicer
to provide access to information as a result of such obligation shall not
constitute a breach of this Section.
SECTION 4.14 APPOINTMENT OF SUBSERVICER. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder if each Rating Agency has received reasonable advance notice
of the Servicer's intention to do so and has not notified the Servicer that such
an appointment would or might result in the qualification, reduction or
withdrawal of a rating then assigned by such rating Agency to any Class of
Notes; PROVIDED, HOWEVER, that the Servicer shall remain obligated and be liable
to the Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders
and the Noteholders for the servicing and administering of the Receivables in
accordance with the provisions hereof without diminution of such obligation and
liability by virtue of the appointment of such subservicer and to the same
extent and under the same terms and conditions as if the Servicer alone were
servicing and administering the Receivables. The fees and expenses of the
subservicer shall be as agreed
34
<PAGE>
between the Servicer and its subservicer from time to time, and none of the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders or
the Noteholders shall have any responsibility therefor.
SECTION 4.15 AMENDMENTS TO SCHEDULE OF RECEIVABLES. If the Servicer,
during a Collection Period, assigns to a Receivable an account number that
differs from the original account number identifying such Receivable on the
Schedule of Receivables, the Servicer shall deliver to the Issuer, the Owner
Trustee and the Indenture Trustee, on or before the Payment Date relating to
such Collection Period, an amendment to the Schedule of Receivables reporting
the newly assigned account number, together with the old account number of each
such Receivable. The first such delivery of amendments to the Schedule of
Receivables shall include monthly amendments reporting account numbers appearing
on the Schedule of Receivables with the new account numbers assigned to such
Receivables during any prior Collection Period.
SECTION 4.16 REPORTS TO SECURITYHOLDERS AND RATING AGENCIES. The Owner
Trustee shall send a copy of each Officer's Certificate delivered pursuant to
Section 4.11 and each report of independent accountants delivered pursuant to
Section 4.12 to the Rating Agencies within five days of its receipt thereof from
the Servicer or accountants. A copy of any such Officer's Certificate or
accountants report may be obtained by any Certificateholder, Noteholder or Note
Owner by a request in writing to the Owner Trustee addressed as set forth in
Section 10.03 hereof. Upon the telephone request of the Owner Trustee, the
Indenture Trustee will promptly furnish the Owner Trustee a list of Noteholders
as of the date specified by the Owner Trustee.
ARTICLE V
ACCOUNTS; PAYMENTS AND DISTRIBUTIONS;
STATEMENTS TO SECURITYHOLDERS
SECTION 5.01 ESTABLISHMENT OF COLLECTION ACCOUNT AND PAYAHEAD ACCOUNT.
(a) The Servicer on behalf of the Owner Trustee and the Indenture
Trustee, shall establish the Collection Account and Payahead Account in the
name of the Indenture Trustee for the benefit of the Securityholders. Except
as otherwise provided in this Agreement, each such account shall be an
account initially established with the Indenture Trustee and maintained with
the Indenture Trustee so long as (i) the commercial paper or other short-term
unsecured debt obligations of the Indenture Trustee are rated "P-1" or better
by Moody's, or if not rated by Moody's then otherwise approved by Moody's,
and "A-1" or better by Standard & Poor's if rated by Standard & Poor's, or if
not rated by Standard & Poor's then otherwise approved by Standard & Poor's,
in each case at the time of any deposit therein, or (ii) such account is a
segregated trust account located in the corporate trust department of the
Indenture Trustee bearing a designation clearly indicating that the funds
deposited therein (other than interest or investment earnings thereon) are
held in trust for the benefit of the Securityholders, and the Indenture
Trustee has a long-term deposit rating from Moody's (so long as Moody's is a
Rating Agency) of at least "A1" (or such lower rating as Moody's shall
approve in writing) and corporate trust powers under applicable federal and
state laws and is organized under the laws of the United States or any state
thereof, the District of Columbia or the Commonwealth of Puerto Rico. Except
as otherwise provided in this Agreement, in the event that the Indenture
Trustee no
35
<PAGE>
longer meets either of the foregoing requirements, then the Servicer shall,
with the Indenture Trustee's assistance as necessary, cause the Collection
Account and Payahead Account to be moved to a bank or trust company that
satisfies either of such requirements.
(b) For so long as the depository institution or trust company then
maintaining the Collection Account and Payahead Account meets the requirements
of Section 5.01(a)(i) or (a)(ii), all amounts held in these accounts shall, to
the extent permitted by applicable laws, rules and regulations, be invested, as
directed in writing by the Servicer, in Eligible Investments; otherwise such
amounts shall be maintained in cash. Earnings on investment of funds in these
accounts (net of losses and investment expenses) shall be paid to the Servicer
on each Payment Date as servicing compensation, and any losses and investment
expenses shall be charged against the funds on deposit in the related account.
(c) For so long as U.S. Bank National Association is the Relevant
Trustee, the Accounts shall be maintained with U.S. Bank National Association as
described in clause (ii) of the second sentence of Section 5.01(a). In the
event that the long-term debt rating of the Relevant Trustee does not satisfy
clause (ii) of the second sentence of Section 5.01(a), the Servicer shall, with
the assistance of the Relevant Trustee as necessary, cause the Collection
Account and the Payahead Account to be moved to an institution or an account
otherwise satisfying the requirements of Section 5.01(a).
(d) Subject to the foregoing, the Servicer, on behalf of the Owner
Trustee and the Indenture Trustee, shall establish and maintain as the
Collection Account an Eligible Deposit Account in the name of and under the
exclusive control of the Indenture Trustee, bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders and the Certificateholders. On the Closing Date, the Owner Trustee
will transfer, or cause to be transferred, to such Collection Account all funds
or investments on deposit in the Collection Account established pursuant to the
Trust Agreement for the benefit of the Certificateholders, and all of the
proceeds thereof, and will transfer all of its right, title and interest in the
Collection Account, all funds or investments held or to be held therein and all
proceeds thereof, whether or not on behalf of the Certificateholders, to the
Indenture Trustee for the benefit of the Noteholders and Certificateholders.
The Indenture Trustee will be obligated to transfer all amounts remaining on
deposit in the Collection Account on the Payment Date on which the Notes of all
Classes have been paid in full (or substantially all of the Trust Estate is
otherwise released from the lien of the Indenture) to the Collection Account
established pursuant to the Trust Agreement for the benefit of the
Certificateholders, and to take all necessary or appropriate actions to transfer
all of its right, title and interest in the Collection Account, all funds or
investments held or to be held therein and all proceeds thereof, whether or not
on behalf of the Noteholders and Certificateholders, to the Owner Trustee for
the benefit of the Certificateholders, subject to the limitations set forth in
the Indenture with respect to amounts held for payment to Noteholders that do
not promptly deliver a Note for payment on such Payment Date.
(e) With respect to the Collection Account and Payahead Account, and
all property held therein, the Owner Trustee agrees, by its acceptance hereof
that, on the terms and conditions set forth in the Indenture, for so long as
Notes of any Class remain outstanding, the Indenture Trustee shall possess all
right, title and interest therein (excluding interest or
36
<PAGE>
investment income thereon payable to the Servicer or Seller, as the case may
be), and that such accounts shall be under the sole dominion and control of
the Indenture Trustee for the benefit of the Noteholders and the
Certificateholders, as the case may be, as set forth in the Indenture. The
parties hereto agree that the Issuer, Owner Trustee and Certificateholders
have no right, title or interest in the Reserve Account or any amounts on
deposit therein at any time. The parties hereto agree that the Servicer
shall have the power, revocable by the Indenture Trustee or by the Owner
Trustee with the consent of the Indenture Trustee, to instruct the Indenture
Trustee to make withdrawals and payments from the Collection Account and the
Payahead Account for the purpose of permitting the Servicer, Indenture
Trustee or the Owner Trustee to carry out its respective duties hereunder or
under the Indenture or the Trust Agreement, as the case may be.
SECTION 5.02 COLLECTIONS. (a) Except as otherwise provided in this
Agreement, the Servicer shall remit daily to the Collection Account all payments
received by or on behalf of the Obligors on or in respect of the Receivables
(other than, in the case of Precomputed Receivables, payments constituting
Payments Ahead) and all Net Liquidation Proceeds within two Business Days after
receipt thereof. Notwithstanding the foregoing, for so long as the Monthly
Remittance Conditions are satisfied, the Servicer shall not be required to remit
such collections to the Collection Account on the foregoing daily basis but
shall be entitled to retain such collections, without segregation from its other
funds, until the Business Day before each Payment Date at which time the
Servicer shall remit all such collections in respect of the related Collection
Period to the Collection Account in immediately available funds. Commencing
with the first day of the first Collection Period that begins at least two
Business Days after the day on which any Monthly Remittance Condition ceases to
be satisfied and for so long as any Monthly Remittance Conditions is not
satisfied, all collections then held by the Servicer shall be immediately
deposited into the Collection Account and all future collections on or in
respect of the Receivables and all Net Liquidation Proceeds shall be remitted by
the Servicer to the Collection Account on a daily basis within two Business Days
after receipt thereof.
(b) Except as otherwise provided in this Agreement, the Servicer shall
deposit all Payments Ahead in the Collection Account within two Business Days
after receipt thereof, which Payments Ahead shall be transferred to the Payahead
Account pursuant to Section 5.06(a)(ii). Notwithstanding the foregoing, so long
as all Monthly Remittance Conditions are satisfied, the Servicer will not be
required to deposit Payments Ahead in the Payahead Account within two Business
Days after receipt thereof but shall be entitled to retain such Payments Ahead,
without segregation from its other funds, until such time as the Servicer shall
be required to remit Applied Payments Ahead to the Collection Account pursuant
to Section 5.06(a)(i). Commencing with the first day of the first Collection
Period that begins at least two Business Days after the day on which any Monthly
Remittance Condition ceases to be satisfied and for so long as all Monthly
Remittance Conditions are not satisfied, all Payments Ahead then held by the
Servicer shall be immediately deposited into the Payahead Account and all future
Payments Ahead shall be remitted by the Servicer to the Payahead Account within
two Business Days after receipt thereof.
(c) The Servicer shall give the Owner Trustee, the Indenture Trustee
and each Rating Agency written notice of the failure of any Monthly Remittance
Condition (and any subsequent curing of a failed Monthly Remittance Condition)
as soon as practical after the occurrence thereof. Notwithstanding the failure
of any Monthly Remittance Condition, the Servicer may
37
<PAGE>
utilize an alternative collection or Payment Ahead remittance schedule (which
may be the remittance schedule previously utilized prior to the failure of
such Monthly Remittance Condition), if the Servicer provides to the Owner
Trustee and Indenture Trustee written confirmation from each Rating Agency
that such alternative remittance schedule will not result in the
qualification, reduction or withdrawal of the rating then assigned to any
Class of Notes or the Certificates.
SECTION 5.03 APPLICATION OF COLLECTIONS. As of the Business Day
immediately preceding the related Payment Date, all collections for the related
Collection Period shall be applied by the Servicer as follows:
(a) With respect to each Receivable (other than an Administrative
Receivable or a Warranty Receivable), payments made by or on behalf of the
Obligor which are not Supplemental Servicing Fees shall be applied first to
reimburse the Servicer for Outstanding Advances made with respect to such
Receivable (each such payment, an "Overdue Payment"). Next, the amount of any
payment in excess of Supplemental Servicing Fees and Outstanding Advances with
respect to such Receivable shall be applied to the Scheduled Payment with
respect to such Receivable. If the amount of such payment remaining after the
applications described in the two preceding sentences (i) equals (together with
any Deferred Prepayment) the unpaid principal balance of such Receivable, it
shall be applied to prepay the principal balance of such Receivable, or (ii) is
less than the unpaid principal balance of such Receivable, it shall constitute
an Excess Payment with respect to such Receivable.
(b) With respect to each Administrative Receivable and Warranty
Receivable, payments made by or on behalf of the Obligor shall be applied in the
same manner, except that any Released Administrative Amount or Released Warranty
Amount shall be remitted to the Servicer or the Seller, as applicable. A
Warranty Purchase Payment or an Administrative Purchase Payment with respect to
any Receivable shall be applied, first, to reduce Outstanding Advances with
respect to such Receivable and then to the Scheduled Payment, in each case to
the extent that the payments by the Obligor shall be insufficient, and then to
prepay the unpaid principal balance of such Receivable in full.
SECTION 5.04 ADVANCES.
(a) As of the close of business on the last day of each Collection
Period, if the payments by or on behalf of the Obligor on a Precomputed
Receivable (other than an Administrative Receivable or a Warranty Receivable)
after application under Section 5.03(a) shall be less than the Scheduled Payment
(determined as of the Closing Date), whether as a result of any modification or
extension granted to the Obligor or otherwise, then the Deferred Prepayment, if
any, with respect to such Precomputed Receivable shall be applied by the
Servicer to the extent of the shortfall, and such Deferred Prepayment shall be
reduced accordingly. Subject to the provisions of the last sentence of this
paragraph, the Servicer shall deposit an amount equal to such shortfall (each, a
"Precomputed Advance") in the Collection Account on the Business Day immediately
preceding the related Payment Date. In addition, as of the last day of a
Collection Period, if the payments during such Collection Period by or on behalf
of the Obligor on or in respect of a Simple Interest Receivable (other than an
Administrative Receivable or a Warranty Receivable) after application under
Section 5.03(a)
38
<PAGE>
shall be less than the Scheduled Payment (determined as of the Closing Date),
whether as a result of any modification or extension granted to the Obligor
or otherwise, then an amount equal to the product of the principal balance of
such Receivable as of the first day of the related Collection Period and
one-twelfth of its Annual Percentage Rate minus the amount of interest
actually received on such Receivable during the Collection Period (each, a
"Simple Interest Advance") shall be deposited by the Servicer into the
Collection Account on the Business Day immediately preceding the related
Payment Date. If such a calculation in respect of a Simple Interest
Receivable results in a negative number, an amount equal to such negative
amount shall be paid to the Servicer in reimbursement of any outstanding
Simple Interest Advances made with respect to such Receivable. In addition,
in the event that a Simple Interest Receivable becomes a Liquidated
Receivable, the amount of accrued and unpaid interest thereon (but not
including interest for the current Collection Period) shall, up to the amount
of any outstanding Simple Interest Advances made with respect to such
Receivable, be withdrawn from the Collection Account and paid to the Servicer
in reimbursement of such outstanding Simple Interest Advances. No Advances
will be made with respect to the Principal Balance of Simple Interest
Receivables.
The Servicer shall not be required to make an Advance (other than
a Simple Interest Advance in respect of an interest shortfall arising from the
Prepayment of a Simple Interest Receivable) to the extent that the Servicer, in
its sole discretion, shall determine that such Advance is unlikely to be
recovered from subsequent payments made by or on behalf of the related Obligor,
Liquidation Proceeds, by the Administrative Purchase Payment or by the Warranty
Purchase Payment with respect to such Receivable or otherwise.
(b) The Servicer shall be entitled to reimbursement for Outstanding
Advances, without interest, with respect to a Receivable from the following
sources with respect to such Receivable: (i) subsequent payments made by or on
behalf of the related Obligor, (ii) Liquidation Proceeds and (iii) the Warranty
Purchase Payment; PROVIDED, HOWEVER, that in the case of Advances made pursuant
to Section 4.02, the Servicer shall be entitled to reimbursement only from
amounts received in respect of such Receivable that are in excess of the amount
of the Scheduled Payment in the related Collection Period.
(c) To the extent that the Servicer has determined that any
Outstanding Advance is a Nonrecoverable Advance, the Servicer may, in the
relevant Servicer's Certificate, set forth the amount of such Nonrecoverable
Advance, and on the related Payment Date, the Relevant Trustee shall promptly
remit to the Servicer from Actual Payments on deposit in the Collection Account
an amount equal to the amount of such Nonrecoverable Advance. The Servicer's
determination of Available Collections for any Collection Period shall take into
account the amount of Nonrecoverable Advances specified in any such Officer's
Certificate.
(d) For so long as the Monthly Remittance Conditions are satisfied, in
lieu of causing the Servicer first to deposit and then the Relevant Trustee to
remit to the Servicer the amounts described in clauses (i) through (iv) in
Section 5.04(b) reimbursable in respect on Outstanding Advances, or the amounts
described in Section 5.04(c) applicable in respect of Nonrecoverable Advances,
the Servicer may deduct such amounts from deposits otherwise to be made into the
Collection Account.
39
<PAGE>
SECTION 5.05 ADDITIONAL DEPOSITS. (a) The following additional
deposits shall be made to the Collection Account: (i) the Seller shall remit
the aggregate Warranty Purchase Payments with respect to Warranty Receivables
pursuant to Section 3.02, (ii) the Servicer shall remit the aggregate
Administrative Purchase Payments with respect to Administrative Receivables
pursuant to Section 4.08 and the amount required upon any optional purchase of
the Receivables by the Servicer, or any successor to the Servicer, pursuant to
Section 9.01; (iii) the Servicer shall remit (A) the amount required to be
remitted in respect of certain full Prepayments pursuant to Section 4.03 and (B)
the aggregate Advances pursuant to Sections 4.02, 4.03 and 5.04(a), and (C) the
amount of Payaheads and Applied Payaheads withdrawn by the Servicer or Indenture
Trustee at the direction of the Servicer from the Payahead Account for
application with respect to such Collection Period; and (iv) the Indenture
Trustee shall transfer the amounts described in Sections 5.06 and 5.07 from the
Reserve Account to the Collection Account or Principal Distribution Account
pursuant to Section 5.07.
(b) All deposits required to be made pursuant to this Section
by the Seller or the Servicer, as the case may be, may be made in the form of a
single deposit and shall be made in immediately available funds, no later than
5:00 P.M., New York City time, on the Business Day immediately preceding the
related Payment Date. At the direction of the Servicer, the Relevant Trustee
shall invest such amounts in Eligible Investments maturing not later than 3:00
P.M. New York City Time, on the related Payment Date.
SECTION 5.06 PAYMENTS AND DISTRIBUTIONS.
(a) On each Payment Date, the Indenture Trustee shall cause to be made
the following transfers and distributions in immediately available funds in the
amounts set forth in the Servicer's Certificate for such Payment Date (except
that if the Collection Account, Principal Distribution Account, Payahead Account
and Reserve Fund are not all maintained by the Indenture Trustee, transfers to
be made between such accounts as described in Section 5.05, 5.06 and 5.07 shall
be made on the Business Day immediately preceding each Payment Date):
(i) from the Payahead Account (or directly from the Servicer in
the case of Payments Ahead held by the Servicer pursuant to Section
5.02(a) or (b)) to the Collection Account, the aggregate Applied Payments
Ahead; and
(ii) if the Servicer is not permitted to hold Payments Ahead
pursuant to Section 5.02(a) or (b), from the Collection Account to the
Payahead Account, the aggregate Payments Ahead for the related Collection
Period.
(b) On each Determination Date, the Servicer shall calculate the
Available Collections and the amounts to be paid to Noteholders of each Class
and the Certificateholders pursuant to Section 5.06(c), and all other
distributions, deposits and withdrawals to be made on the related Payment Date.
(c) Subject to Sections 5.06(d) and 5.06(e), on each Payment Date, the
Relevant Trustee shall make the following payments and distributions from the
Collection Account in the following order of priority and in the amounts set
forth in the Servicer's Certificate for such
40
<PAGE>
Payment Date; PROVIDED, HOWEVER, that such payments and distributions shall
be made only from those funds deposited in the Collection Account for the
related Collection Period:
(i) from Available Collections:
(A) to the Servicer, the Total Servicing Fee (including any
unpaid Total Servicing Fees from one or more prior Collection Periods);
(B) on a pro rata basis (based on the amounts distributable
pursuant to this clause to each such Class), to the Holders of the Class
A-1 Notes, the Class A-1 Interest Distributable Amount and any
outstanding Class A-1 Interest Carryover Shortfall, to the Holders of the
Class A-2 Notes, the Class A-2 Interest Distributable Amount and any
outstanding Class A-2 Interest Carryover Shortfall, and to the Holders of
the Class A-3 Notes, the Class A-3 Interest Distributable Amount and any
outstanding Class A-3 Interest Carryover Shortfall;
(C) to the Principal Distribution Account, the First Priority
Principal Distribution Amount;
(D) to the Holders of the Class B Notes, the Class B Interest
Distributable Amount and any outstanding Class B Interest Carryover
Shortfall;
(E) to the Principal Distribution Account, the Second Priority
Principal Distribution Amount;
(F) to the Holders of the Class C Notes, the Class C Interest
Distributable Amount and any outstanding Class C Interest Carryover
Shortfall;
(G) to the Principal Distribution Account, the Regular
Principal Distribution Amount;
(H) to the Reserve Account, the amount, if any, necessary to
cause the balance of funds therein to equal the Specified Reserve Account
Balance; and
(I) any remaining amounts will be distributed to the
Certificateholders.
(ii) from the amounts deposited into the Principal Distribution Account
from the allocations of principal described in clauses (i)(C), (E) and (G)
above, the Issuer will pay principal of the Securities in the following
priority:
(A) to the Holders of Class A-1 Notes, until the total amount
paid to such Holders in respect of principal from the Closing Date is
equal to the Class A-1 Initial Principal Balance;
(B) to the Holders of Class A-2 Notes, until the total amount
paid to such Holders in respect of principal from the Closing Date is
equal to the Class A-2 Initial Principal Balance;
41
<PAGE>
(C) to the Holders of the Class A-3 Notes, the amount required
to reduce the Class A-3 Principal Balance to 89.097% of the excess of the
Pool Balance as of the close of business on the last day of the related
Collection Period over the Certificate Balance as of the open of business
on such Payment Date;
(D) to the Holders of the Class B Notes, the amount required to
reduce the Class B Principal Balance to 7.055% of the excess of the Pool
Balance as of the close of business on the last day of the related
Collection Period over the Certificate Balance as of the open of business
on such Payment Date;
(E) to the Holders of the Class C Notes, the amount required to
reduce the Class C Principal Balance to 3.848% of the excess of the Pool
Balance as of the close of business on the last day of the related
Collection Period over the Certificate Balance as of the open of business
on such Payment Date;
(F) after the total amount paid to Holders of the Class A-3
Notes in respect of principal from the Closing Date is equal to the Class
A-3 Initial Principal Balance, the total amount paid to Holders of the
Class B Notes in respect of principal from the Closing Date is equal to
the Class B Initial Principal Balance and the total amount paid to
Holders of the Class C Notes in respect of principal from the Closing
Date is equal to the Class C Initial Principal Balance, any remaining
funds will be paid to the Certificateholders.
(d) Notwithstanding the provisions of Section 5.06(c), after an Event
of Default relating to (i) the payment of principal to any Holder of Notes or
(ii) the payment of any interest on any Class of Notes that lasts for five or
more days and results in the acceleration of any Class of Notes occurs, or upon
the occurrence of an Insolvency Event relating to the Seller, on each Payment
Date, the Relevant Trustee shall make the following payments and distributions
from the Collection Account in the following order of priority and in the
amounts set forth in the Servicer's Certificate for such Payment Date; PROVIDED,
HOWEVER, that such payments and distributions shall be made only from Available
Collections deposited in the Collection Account for the related Collection
Period:
(i) to the Servicer, the Total Servicing Fee (including any
unpaid Total Servicing Fees from one or more prior Collection Periods);
(ii) on a pro rata basis (based on the amounts distributable
pursuant to this clause to each such Class), to the Holders of the Class
A-1 Notes, the Class A-1 Interest Distributable Amount and any
outstanding Class A-1 Interest Carryover Shortfall, to the Holders of the
Class A-2 Notes, the Class A-2 Interest Distributable Amount and any
outstanding Class A-2 Interest Carryover Shortfall, and to the Holders of
the Class A-3 Notes, the Class A-3 Interest Distributable Amount and any
outstanding Class A-3 Interest Carryover Shortfall;
(iii) to the Holders of Class A-1 Notes, until the total amount
paid to such Holders in respect of principal from the Closing Date is
equal to the Class A-1 Initial Principal Balance;
42
<PAGE>
(iv) to the Holders of Class A-2 Notes and Class A-3 Notes, on a
pro rata basis (based on the Outstanding Amount of each such Class),
until the total amount paid to such Holders in respect of principal from
the Closing Date is equal to the Class A-2 Initial Principal Balance and
the Class A-3 Initial Principal Balance, respectively;
(v) to the Holders of the Class B Notes, the Class B Interest
Distributable Amount and any outstanding Class B Interest Carryover
Shortfall;
(vi) to the Holders of Class B Notes, until the total amount
paid to such Holders in respect of principal from the Closing Date is
equal to the Class B Initial Principal Balance;
(vii) to the Holders of the Class C Notes, the Class C Interest
Distributable Amount and any outstanding Class C Interest Carryover
Shortfall;
(viii) to the Holders of Class C Notes, until the total amount
paid to such Holders in respect of principal from the Closing Date is
equal to the Class C Initial Principal Balance; and
(ix) any remaining amounts will be distributed to the
Certificateholders.
(e) Notwithstanding the provisions of Section 5.06(c), after any Event
of Default not specified in Section 5.06(d) occurs that results in the
acceleration of the Notes, on each Payment Date, the Relevant Trustee shall make
the following payments and distributions from the Collection Account in the
following order of priority and in the amounts set forth in the Servicer's
Certificate for such Payment Date; PROVIDED, HOWEVER, that such payments and
distributions shall be made only from Available Collections deposited in the
Collection Account for the related Collection Period:
(i) from Available Collections:
(A) to the Servicer, the Total Servicing Fee (including any
unpaid Total Servicing Fees from one or more prior Collection Periods);
(B) on a pro rata basis (based on the amounts distributable
pursuant to this clause to each such Class), to the Holders of the Class
A-1 Notes, the Class A-1 Interest Distributable Amount and any
outstanding Class A-1 Interest Carryover Shortfall, to the Holders of the
Class A-2 Notes, the Class A-2 Interest Distributable Amount and any
outstanding Class A-2 Interest Carryover Shortfall, and to the Holders of
the Class A-3 Notes, the Class A-3 Interest Distributable Amount and any
outstanding Class A-3 Interest Carryover Shortfall;
(C) to the Principal Distribution Account, the First Priority
Principal Distribution Amount;
(D) to the Holders of the Class B Notes, the Class B Interest
Distributable Amount and any outstanding Class B Interest Carryover
Shortfall;
43
<PAGE>
(E) to the Principal Distribution Account, the Second Priority
Principal Distribution Amount;
(F) to the Holders of the Class C Notes, the Class C Interest
Distributable Amount and any outstanding Class C Interest Carryover
Shortfall;
(G) to the Principal Distribution Account, the Regular
Principal Distribution Amount;
(H) to the Reserve Account, the amount, if any, necessary to
cause the balance of funds therein to equal the Specified Reserve Account
Balance; and
(I) any remaining amounts will be deposited into the Principal
Distribution Account.
(ii) from the amounts deposited into the Principal Distribution Account
from the allocations of principal described in clauses (i)(C), (E) and (G)
above, the Issuer will pay principal of the securities in the following
priority:
(A) to the Holders of Class A-1 Notes, until the total amount
paid to such Holders in respect of principal from the Closing Date is
equal to the Class A-1 Initial Principal Balance;
(B) to the Holders of Class A-2 Notes and Class A-3 Notes, on a
pro rata basis (based on the Outstanding Amount of each such Class),
until the total amount paid to such Holders in respect of principal from
the Closing Date is equal to the Class A-2 Initial Principal Balance and
the Class A-3 Initial Principal Balance, respectively;
(C) to the Holders of the Class B Notes until the total amount
paid to such Holders in respect of principal from the Closing Date is
equal to the Class B Initial Principal Balance;
(D) to the Holders of the Class C Notes until the total amount
paid to such Holders in respect of principal from the Closing Date is
equal to the Class C Initial Principal Balance;
(E) after the total amount paid to Holders of the Class C Notes
in respect of principal from the Closing Date is equal to the Class C
Initial Principal Balance, any remaining funds will be paid to the
Certificateholders.
(f) For purposes of determining whether an Event of Default pursuant
to Section 5.01(d) of the Indenture has occurred, the amount of principal
required to be paid to the Holders of any Class of Notes on any Payment Date is
the amount available to be paid thereto pursuant to Sections 5.05(c), (d) and
(e); provided however that (i) the Class A-1 Notes are required to be paid in
full on or before the Class A-1 Final Scheduled Payment Date, meaning that
Holders of Class A-1 Notes are entitled to have received on or before such date
payments in respect of principal in an aggregate amount equal to the Class A-1
Initial Principal Balance together with all interest accrued thereon through
such date; (ii) the Class A-2 Notes are required to be paid in
44
<PAGE>
full on or before the Class A-2 Final Scheduled Payment Date, meaning that
Holders of Class A-2 Notes are entitled to have received on or before such
date payments in respect of principal in an aggregate amount equal to the
Class A-2 Initial Principal Balance together with all interest accrued
thereon through such date, (iii) the Class A-3 Notes are required to be paid
in full on or before the Class A-3 Final Scheduled Payment Date, meaning that
Holders of Class A-3 Notes are entitled to have received on or before such
date payments in respect of principal in an aggregate amount equal to the
Class A-3 Initial Principal Balance together with all interest accrued
thereon through such date; (iv) the Class B Notes are required to be paid in
full on or before the Class B Final Scheduled Payment Date, meaning that
Holders of Class B Notes are entitled to have received on or before such date
payments in respect of principal in an aggregate amount equal to the Class B
Initial Principal Balance together with all interest accrued thereon through
such date and (v) the Class C Notes are required to be paid in full on or
before the Class C Final Scheduled Payment Date, meaning that Holders of
Class C Notes are entitled to have received on or before such date payments
in respect of principal in an aggregate amount equal to the Class C Initial
Principal Balance together with all interest accrued thereon through such
date.
(g) Except with respect to the final payment upon retirement of a Note
or Certificate, the Servicer shall on each Payment Date instruct the Relevant
Trustee to pay or distribute to each Securityholder of record on the related
Record Date by check mailed to such Securityholder at the address of such Holder
appearing in the Certificate Register or Note Register, as the case may be, (or,
if DTC, its nominee or a Clearing Agency is the relevant Holder, by wire
transfer of immediately available funds or pursuant to other arrangements), the
amount to be paid or distributed to such Securityholder pursuant to such
Holder's Note or Certificate. With respect to the final payment upon retirement
of a Note or Certificate, the Servicer shall on the relevant final Payment Date
instruct the Relevant Trustee to pay or distribute the amounts due thereon only
upon delivery for cancellation of the certificate representing such Note or
Certificate in accordance with the Indenture or the Trust Agreement, as the case
may be.
45
<PAGE>
SECTION 5.07 RESERVE ACCOUNT. In order to assure that certain amounts
will be available to make required payments to Noteholders, the Seller will,
pursuant to the Securities Account Control Agreement and the Indenture,
establish and maintain with the Indenture Trustee a segregated trust account
(the "Reserve Account") which will include the money and other property
deposited and held therein pursuant to Sections 5.06(c) and (e) and this
Section. On or prior to the Closing Date, the Seller shall deposit an amount
equal to the Reserve Account Initial Deposit into the Reserve Account. As and
to the extent set forth in Section 5.06(c) and (e), as directed in writing by
the Servicer, the Indenture Trustee will deposit Available Collections into the
Reserve Account on each Payment Date, until the amount on deposit therein equals
the Specified Reserve Account Balance. On each Payment Date, to the extent that
Available Collections are insufficient to fully fund the payments and
distributions described in clauses (i)(A) through (F) of Section 5.06(c), in
clauses (i) through (viii) of Section 5.06(d) or clauses (i)(A) through F) of
Section 5.06(e), the Indenture Trustee will withdraw amounts then on deposit in
the Reserve Account (excluding net investment income on Eligible Investments
which amounts are payable to the Seller therefrom), up to the amounts of any
such deficiencies, and deposit such amounts into the Collection Account for
application pursuant to such clauses. Also on each Payment Date, as directed in
writing by the Servicer, the Indenture Trustee will release to the Seller any
amounts remaining on deposit in the Reserve Account in excess of the Specified
Reserve Account Balance. Also, upon the termination of the trusts established
under the Trust Agreement and the Indenture, as directed in writing by the
Servicer, the Indenture Trustee will release to the Seller any amounts remaining
on deposit in the Reserve Account. Upon any such distribution to the Seller,
the Issuer, Owner Trustee, Certificateholders, Indenture Trustee and Noteholders
will have no further rights in, or claims to, such amounts.
All amounts held in the Reserve Account shall be invested by the
Indenture Trustee, as directed in writing by the Servicer, in Eligible
Investments. Earnings on investment of funds in the Reserve Account shall be
paid to the Seller on each Payment Date, and losses and any investment expenses
shall be charged against the funds on deposit therein. The Indenture Trustee
shall incur no liability for the selection of investments or for losses thereon
absent its own negligence or willful misfeasance. The Indenture Trustee shall
have no liability in respect of losses incurred as a result of the liquidation
of any investment prior to its stated maturity date or the failure of the
Servicer to provide timely written investment directions.
Subject to the right of the Indenture Trustee to make withdrawals
therefrom, as directed by the Servicer, for the purposes and in the amounts set
forth in Section 5.06, the Reserve Account and all funds held therein shall be
the property of the Seller and not the property of the Issuer, the Owner Trustee
or the Indenture Trustee. The Issuer, Owner Trustee, Seller and Indenture
Trustee will treat the Reserve Account, all funds therein and all net investment
income with respect thereto as assets of the Seller for federal income tax and
all other purposes.
The Seller will grant to the Indenture Trustee, for the benefit of the
Noteholders, a security interest in all funds (including Eligible Investments)
in the Reserve Account (including the Reserve Account Initial Deposit) and the
proceeds thereof, and the Indenture Trustee shall have all of the rights of a
secured party under the UCC with respect thereto; provided that all income from
the investment of funds in the Reserve Account and the right to receive such
income are retained by the Seller and are not transferred, assigned or otherwise
conveyed hereunder. If for any reason the Reserve Account is no longer an
Eligible Deposit Account, the
46
<PAGE>
Indenture Trustee shall promptly cause the Reserve Account to be moved to
another institution or otherwise changed so that the Reserve Account becomes
an Eligible Deposit Account.
Neither the Owner Trustee nor the Indenture Trustee shall enter into any
subordination or intercreditor agreement with respect to the Reserve Account.
SECTION 5.08 STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS.
(a) On each Payment Date, the Servicer shall provide to the Indenture
Trustee (with a copy to the Rating Agencies and each Paying Agent) for the
Indenture Trustee to forward to each Noteholder of record as of the most recent
Record Date and to the Owner Trustee (with a copy to each Paying Agent) for the
Owner Trustee to forward to each Certificateholder of record as of the most
recent Record Date a statement substantially in the form of Exhibit A, setting
forth at least the following information as to the Notes and the Certificates to
the extent applicable:
(i) the amount paid or distributed in respect of interest in
respect of each Class of Notes;
(ii) the amount paid or distributed in respect of principal on
or with respect to each Class of Notes;
(iii) the amount paid or distributed to the Certificateholders;
(iv) the Pool Balance as of the close of business on the last
day of the preceding Collection Period;
(v) the Outstanding Amount, the Class A-1 Principal Balance,
the Class A-2 Principal Balance, the Class A-3 Principal Balance, the
Class B Principal Balance, the Class C Principal Balance, the Certificate
Balance, the Note Pool Factor for each Class of Notes, in each case after
giving effect to all payments in respect of principal on such Payment
Date;
(vi) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
(vii) the amount of any Class A-1 Interest Carryover Shortfall,
Class A-2 Interest Carryover Shortfall, Class A-3 Interest Carryover
Shortfall, Class B Interest Carryover Shortfall and Class C Interest
Carryover Shortfall after giving effect to all payments of interest on
such Payment Date, and the change in such amounts from the preceding
Payment Date;
(viii) the aggregate amount of Payments Ahead on deposit in the
Payahead Account or held by the Servicer with respect to the related
Receivables and the change in such amount from the immediately preceding
Payment Date;
(ix) the amount of Advances made in respect of the related
Receivables and the related Collection Period and the amount of
unreimbursed Advances on such Payment Date; and
47
<PAGE>
(x) the balance of any Reserve Account on such Payment Date and
the Specified Reserve Account Amount on such Payment Date, after giving
effect to changes thereto on such Payment Date.
SECTION 5.09 NET DEPOSITS. As an administrative convenience, the
Seller, the Servicer, the Owner Trustee and the Indenture Trustee may make any
remittances pursuant to this Article net of amounts to be distributed by the
applicable recipient to such remitting party. Nonetheless, each such party
shall account to the Owner Trustee, the Indenture Trustee, the Noteholders and
the Certificateholders for all of the above described remittances, payments and
distributions as if all deposits, payments, distributions and transfers were
made individually.
ARTICLE VI
THE SELLER
SECTION 6.01 REPRESENTATIONS OF SELLER. The Seller makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Receivables. The representations speak as of the execution and delivery of this
Agreement and as of the Closing Date, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Seller shall have been duly
organized and shall be validly existing as a corporation in good standing under
the laws of the State of California, with corporate power and authority to own
its properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall now have, corporate power, authority and legal right to acquire, own
and sell the Receivables.
(b) DUE QUALIFICATION. The Seller shall be duly qualified to do
business as a foreign corporation in good standing, and shall have obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications and where the failure to so qualify will have a material adverse
effect on the ability of the Seller to conduct its business or perform its
obligations under this Agreement.
(c) POWER AND AUTHORITY. The Seller shall have the corporate power
and authority to execute and deliver this Agreement and to carry out its terms;
the Seller shall have full corporate power and authority to sell and assign the
property to be sold and assigned to and deposited as part of the Owner Trust
Estate or Trust Estate, as the case may be, and shall have duly authorized such
sale and assignment to the Issuer, the Owner Trustee or the Indenture Trustee,
as the case may be; and the execution, delivery and performance of this
Agreement shall have been duly authorized by the Seller by all necessary
corporate action.
(d) VALID SALE; BINDING OBLIGATIONS. This Agreement shall evidence a
valid sale, transfer and assignment of the Receivables, enforceable against
creditors of and purchasers from the Seller; and shall constitute a legal, valid
and binding obligation of the Seller enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
48
<PAGE>
reorganization or other similar laws affecting creditors' rights generally or
by general equity principles.
(e) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms of this Agreement shall not
conflict with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Seller or any indenture, agreement or
other instrument to which the Seller is a party or by which it shall be bound;
nor result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than the Basic Documents), nor violate any law or, to the best of the
Seller's knowledge, any order, rule or regulation applicable to the Seller of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Seller or its
properties which breach, default, conflict, lien or violation would have a
material adverse effect on the earnings, business affairs or business prospects
of the Seller.
(f) NO PROCEEDINGS. There is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign, now pending,
or to the Seller's knowledge, threatened, against or affecting the Seller: (i)
asserting the invalidity of this Agreement, the Trust Agreement, the Indenture,
the Securities Account Control Agreement, the Certificates or the Notes, (ii)
seeking to prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this Agreement, the
Trust Agreement or the Indenture, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement, the
Trust Agreement, the Indenture, the Certificates or the Notes, or (iv) relating
to the Seller and which might adversely affect the federal income tax attributes
of the Issuer, the Certificates or the Notes.
SECTION 6.02 CORPORATE EXISTENCE. During the term of this Agreement,
the Seller will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Basic Documents and each other
instrument or agreement necessary or appropriate to the proper administration of
this Agreement and the transactions contemplated hereby. In addition, all
transactions and dealings between the Seller and its Affiliates (including the
Issuer) will be conducted on an arm's length basis.
SECTION 6.03 LIABILITY OF SELLER; INDEMNITIES. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee and the Servicer and any of the
officers, directors, employees and agents of the Issuer, the Owner Trustee and
the Indenture Trustee from and against any taxes that may at any time be
asserted against any such Person with respect to the transactions contemplated
herein and in the Basic Documents, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but, in the
case of the Issuer,
49
<PAGE>
not including any taxes asserted with respect to, and as of the date of, the
sale of the Receivables to the Issuer or the issuance and original sale of
the Certificates and the Notes, or asserted with respect to ownership of the
Receivables or federal or other income taxes arising out of payments or
distributions on the Certificates or the Notes) and costs and expenses in
defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Issuer, the Certificateholders and
the Noteholders and any of the officers, directors, employees and agents of the
Issuer, the Owner Trustee and the Indenture Trustee from and against any loss,
liability or expense incurred by reason of (i) the Seller's willful misfeasance,
bad faith or negligence in the performance of its duties under this Agreement,
or by reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Seller's or the Issuer's violation of federal or state
securities laws in connection with the offering and sale of the Notes and the
Certificates.
(c) Except as set forth in clause (a) above, the Seller shall pay
any and all taxes levied or assessed upon all or any part of the Owner Trust
Estate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
SECTION 6.04 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, which person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided, however, that (i) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Section 6.01
shall have been breached (except that the representations regarding the due
organization and valid existence of the successor may be deemed to reference
jurisdictions other than California), (ii) the Seller shall have delivered to
the Owner Trustee and the Indenture Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (iii) the Seller shall have given 10 days'
written notice to each Rating Agency of its intent or expectation to enter such
transaction and neither Rating Agency shall have notified the Seller, the Owner
Trustee or the Indenture Trustee that such transaction might or would cause it
to reduce, withdraw or modify its then current rating of any Class of Notes and
(iv) the Seller shall have delivered to the Owner Trustee and the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Owner Trustee and Indenture Trustee,
50
<PAGE>
respectively, in the Receivables and reciting the details of such filings, or
(B) stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interests. Notwithstanding anything
herein to the contrary, the execution of the foregoing agreement of
assumption and compliance with clauses (i), (ii), (iii) and (iv) above shall
be conditions to the consummation of the transactions referred to in clauses
(a), (b) or (c) above.
SECTION 6.05 LIMITATION ON LIABILITY OF SELLER AND OTHERS. The Seller
and any director, officer, employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in, prosecute
or defend any legal action that shall not be incidental to its obligations under
this Agreement and that in its opinion may involve it in any expense or
liability.
SECTION 6.06 SELLER MAY OWN CERTIFICATES OR NOTES. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided in any
Basic Document.
ARTICLE VII
THE SERVICER
SECTION 7.01 REPRESENTATIONS OF SERVICER. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, in the case of the
Initial Receivables, if any, and shall survive the sale of the Receivables to
the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Servicer shall have been duly
organized and shall be validly existing as a corporation in good standing under
the laws of the State of California, with corporate power and authority to own
its properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall now have, corporate power, authority and legal right to acquire, own
and sell the Receivables.
(b) DUE QUALIFICATION. The Servicer shall be duly qualified to do
business as a foreign corporation in good standing, and shall have obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications and where the failure to so qualify will have a material adverse
effect on the ability of the Servicer to conduct its business or perform its
obligations under this Agreement.
(c) POWER AND AUTHORITY. The Servicer shall have the corporate power
and authority to execute and deliver this Agreement and to carry out its terms;
and the execution, delivery and performance of this Agreement have been duly
authorized by the Servicer by all necessary corporate action.
51
<PAGE>
(d) BINDING OBLIGATIONS. This Agreement shall constitute a legal,
valid and binding obligation of the Servicer enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally or by
general equity principles.
(e) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms of this Agreement shall not
conflict with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Servicer or any indenture, agreement
or other instrument to which the Servicer is a party or by which it shall be
bound; nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than this Agreement), nor violate any law or, to the best of
the Servicer's knowledge, any order, rule or regulation applicable to the
Servicer of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Servicer or its properties which breach, default, conflict, lien or violation
would have a material adverse effect on the earnings, business affairs or
business prospects of the Servicer.
(f) NO PROCEEDINGS. There is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign, now pending,
or to the Servicer's knowledge, threatened, against or affecting the Servicer:
(i) asserting the invalidity of this Agreement, the Trust Agreement, the
Indenture, the Certificates or the Notes, (ii) seeking to prevent the issuance
of the Certificates or the Notes or the consummation of any of the transactions
contemplated by this Agreement, the Trust Agreement or the Indenture, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Trust Agreement, the Indenture, the
Certificates or the Notes, or (iv) relating to the Servicer and which might
adversely affect the federal income tax attributes of the Issuer, the
Certificates or the Notes.
SECTION 7.02 INDEMNITIES OF SERVICER. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the Seller,
the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders and any of the officers, directors, employees and agents of
the Seller, the Issuer, the Owner Trustee and the Indenture Trustee from and
against any and all costs, expenses, losses, damages, claims and liabilities,
arising out of or resulting from the use, ownership or operation by the Servicer
or any Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers, directors,
employees and agents from and against all costs, expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties herein and in the Trust
Agreement contained, in the case of the Owner Trustee, and in the Indenture
contained, in the case of the Indenture Trustee, except to the extent that such
cost, expense, loss, claim, damage or
52
<PAGE>
liability: (i) in the case of the Owner Trustee, shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of the
Owner Trustee or, in the case of the Indenture Trustee, shall be due to the
willful misfeasance, bad faith or negligence (except for errors in judgment)
of the Indenture Trustee; or (ii) in the case of the Owner Trustee, shall
arise from the breach by the Owner Trustee of any of its representations or
warranties set forth in Section 7.03 of the Trust Agreement.
(c) The Servicer shall indemnify, defend and hold harmless the Seller,
the Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and
the Noteholders and any of the officers, directors, employees and agents of the
Seller, the Issuer, the Owner Trustee and the Indenture Trustee from and against
any and all costs, expenses, losses, claims, damages and liabilities (including
without limitation reasonable fees and expenses of counsel) to the extent that
such cost, expense, loss, claim, damage or liability arose out of, or is imposed
upon any such Person through, the negligence, willful misfeasance or bad faith
of the Servicer in the performance of its duties under this Agreement or by
reason of reckless disregard of its obligations and duties under this Agreement,
including those that may be incurred by any such indemnified party as a result
of any act or omission by the Servicer in connection with its maintenance and
custody of the Receivables Files.
(d) Promptly after receipt by a party indemnified under this Section
7.02 (an "Indemnified Party") of notice of the commencement of any action, such
Indemnified Party will, if a claim in respect thereof is to be made against the
party providing indemnification under this Section 7.02 (an "Indemnifying
Party"), notify such Indemnifying Party of the commencement thereof. In case
any such action is brought against any Indemnified Party under this Section 7.02
and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party will assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Party (who may, unless there is, as evidenced
by an opinion of counsel to the Indemnified Party stating that there is an
unwaivable conflict of interest, be counsel to the Indemnifying Party), and the
Indemnifying Party will not be liable to such Indemnified Party under this
Section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof, other than reasonable
costs of investigation. The obligations set forth in this Section 7.02 shall
survive the termination of this Agreement or the resignation or removal of the
Servicer, the Owner Trustee or the Indenture Trustee and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter collects any of
such amounts from others, such Person shall promptly repay such amounts to the
Servicer, without interest.
For purposes of this Section, in the event of the termination of the
rights and obligations of TMCC (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture Trustee)
pursuant to Section 8.02.
SECTION 7.03 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER. Any corporation (i) into which the Servicer may be
merged or consolidated, (ii) which may result from any merger, conversion or
consolidation to which the Servicer shall be a party or
53
<PAGE>
(iii) which may succeed to all or substantially all of the business of the
Servicer, which corporation in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Servicer under
this Agreement, shall be the successor to the Servicer under this Agreement
without the execution or filing of any paper or any further act on the part
of any of the parties to this; provided, however, that (i) immediately after
giving effect to such transaction, no representation or warranty made
pursuant to Section 7.01 shall have been breached (except that the
representations regarding the due organization and valid existence of the
successor may be deemed to reference jurisdictions other than California),
and no Servicer Default, and no event which, after notice or lapse of time,
or both, would become a Servicer Default, shall have occurred and be
continuing, (ii) the Servicer shall have delivered to the Owner Trustee and
the Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent
provided for in this Agreement relating to such transaction have been
complied with, (iii) the Servicer shall have given 10 days' written notice to
each Rating Agency of its intent or expectation to enter such transaction and
neither Rating Agency shall have notified the Seller, the Owner Trustee or
the Indenture Trustee that such transaction might or would cause it to
reduce, withdraw or modify its then current rating of any Class of Notes,
(iv) immediately after giving effect to such transaction, the successor to
the Servicer shall become the Administrator under the Administration
Agreement in accordance with Section 8 of such Agreement and (v) the Servicer
shall have delivered to the Owner Trustee and the Indenture Trustee an
Opinion of Counsel stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary fully to preserve and protect
the interest of the Owner Trustee and the Indenture Trustee, respectively, in
the Receivables and reciting the details of such filings or (B) no such
action shall be necessary to preserve and protect such interests.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii),
(iii), (iv) and (v) above shall be conditions to the consummation of the
transactions referred to in clause (a), (b) or (c) above.
SECTION 7.04 LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Seller, the Issuer, the Noteholders
or the Certificateholders, except as provided under this Agreement, for any
action taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any person
respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
PROVIDED, HOWEVER, that the Servicer may (with the written consent of the Owner
Trustee or Indenture Trustee) undertake any reasonable action that it may deem
necessary or desirable in respect of the Basic Documents and the rights and
duties of the parties to the
54
<PAGE>
Basic Documents and the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture. In such event, the
reasonable legal expenses and costs for such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust
Estate (if any Notes are then outstanding) or the Owner Trust Estate (if no
Notes are then outstanding) and the Servicer will be entitled to be
reimbursed therefor solely from Available Collections.
SECTION 7.05 TMCC NOT TO RESIGN AS SERVICER. Subject to the provisions
of Section 7.03, TMCC shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon a determination that
the performance of its duties under this Agreement shall no longer be
permissible under applicable law. Notice of any such determination permitting
the resignation of TMCC shall be communicated to the Owner Trustee, the
Indenture Trustee and each Rating Agency at the earliest practicable time (and,
if such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall have (i) assumed the responsibilities and obligations of TMCC in
accordance with Section 8.02 and (ii) become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
ARTICLE VIII
DEFAULT
SECTION 8.01 Servicer Default. Each of the following events is a
"Servicer Default":
(a) any failure by the Servicer (or the Seller, so long as TMCC is the
Servicer) to deliver to the Relevant Trustee for deposit in the Collection
Account, Payahead Account or Reserve Fund any required payment or to direct the
Relevant Trustee to make any required payment or distribution therefrom, which
failure continues unremedied for a period of three Business Days after discovery
of the failure by an officer of the Servicer or written notice of such failure
is received (i) by the Servicer (or the Seller, so long as TMCC is the Servicer)
from the Owner Trustee or the Indenture Trustee or (ii) to the Seller or the
Servicer, as the case may be, and to the applicable Owner Trustee and Indenture
Trustee by the Holders of Notes evidencing not less than 25% of the Class A
Notes, acting as a single Class (or if the Class A Notes are no longer
outstanding, the Class B Notes, or if the Class A Notes and Class B Notes are no
longer outstanding, the Class C Notes), excluding for purposes of such
calculation and action all Securities held or beneficially owned by TMCC, TMCRC
or any of their affiliates (provided that such event will not be a Servicer
Default if (A) such failure or delay is caused by an event of force majeure, (B)
does not continue for more than 10 Business Days, (C) during such period the
Servicer uses all commercially reasonable efforts to perform its obligations
under this Agreement and (D) the Servicer provides to the Owner Trustee,
Indenture Trustee, Seller and Securityholders prompt notice of such failure or
delay that includes a description of the Servicer's efforts to remedy such
failure or delay);
55
<PAGE>
(b) failure by the Servicer or the Seller, as the case may be, duly
to observe or to perform in any material respect any other covenants or
agreements of the Servicer or the Seller (as the case may be) set forth in
this Agreement, which failure shall materially and adversely affect the
rights of Certificateholders or Noteholders and shall continue unremedied for
a period of 90 days after the date on which written notice of such failure is
received (i) by the Servicer (or the Seller, so long as TMCC is the
Servicer) from the Owner Trustee or the Indenture Trustee or (ii) to the
Seller or the Servicer, as the case may be, and to the Owner Trustee and
Indenture Trustee by the holders of Notes evidencing not less than 25% of the
Class A Notes, acting together as a single Class (or if the Class A Notes are
no longer outstanding, the Class B Notes, or if the Class A Notes and Class B
Notes are no longer outstanding, the Class C Notes), excluding for purposes
of such calculation and action all Securities held or beneficially owned by
TMCC, TMCRC or any of their affiliates; or
(c) the occurrence of an Insolvency Event with respect to the
Servicer.
At any time when a Servicer Default has occurred and is continuing, so long as
the Servicer Default shall not have been remedied, either the Indenture Trustee
or the Holders of Notes evidencing not less than 51% of the Outstanding Amount
of the Class A Notes acting as a single Class (or if the Class A Notes are no
longer outstanding, the Class B Notes, or if the Class A Notes and Class B Notes
are no longer outstanding, the Class C Notes), excluding for purposes of such
calculation and action all Securities held or beneficially owned by TMCC, TMCRC
or any of their affiliates, by notice then given in writing to the Servicer (and
to the Indenture Trustee and the Owner Trustee if given by the Noteholders) may
terminate all the rights and obligations (other than the obligations set forth
in Section 7.02 hereof and the rights set forth in Section 7.04 hereof) of the
Servicer under this Agreement. By the same required vote, the Noteholders
specified in the prior sentence may waive any such Servicer Default (other than
a default in the making any required deposits or payments from or to the
Collection Account, Reserve Account or Payahead Account) for a specified period
or permanently. Upon any such waiver of a past default, such default shall
cease to exist, and any Servicer Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereto.
SECTION 8.02 APPOINTMENT OF SUCCESSOR.
(a) Upon the Servicer's receipt of notice of termination pursuant to
Section 8.01 or the Servicer's resignation in accordance with the terms of this
Agreement, the predecessor Servicer shall continue to perform its functions as
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of (i) the date 45 days from the delivery to the
Owner Trustee and the Indenture Trustee of written notice of such resignation
(or written confirmation of such notice) in accordance with the terms of this
Agreement and (ii) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of the Servicer's termination
hereunder, the Indenture Trustee shall appoint a Successor Servicer, and the
Successor Servicer shall accept its appointment (including its appointment as
Administrator under the Administration Agreement as set forth in Section
8.02(b)) by a written assumption in form acceptable to the Owner Trustee
56
<PAGE>
and the Indenture Trustee. In the event that a Successor Servicer has not
been appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Indenture Trustee without
further action shall automatically be appointed the Successor Servicer and
the Indenture Trustee shall be entitled to the Servicing Fee.
Notwithstanding the above, the Indenture Trustee shall, if it shall be
unwilling or legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint any established institution having a net
worth of not less than $50,000,000 and whose regular business shall include
the servicing of automobile and/or light-duty truck receivables, as the
successor to the Servicer under this Agreement. In connection therewith, the
Indenture Trustee is authorized and empowered to offer such successor
servicer compensation up to, but not in excess of, the Total Servicing Fee
and other servicing compensation specified in this Agreement as payable to
the initial Servicer. Upon such appointment, the Indenture Trustee will be
released from the duties and obligations of acting as Successor Servicer,
such release effective upon the effective date of the servicing agreement
entered into between the Successor Servicer and the Issuer.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall (i) be the successor in all respects
to the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all the
rights granted to the predecessor Servicer by the terms and provisions of this
Agreement and (ii) become the Administrator under the Administration Agreement
in accordance with Section 8 of such Agreement.
(c) On or after the receipt by the Servicer of written notice of
termination pursuant to Section 8.01, all authority and power of the Servicer
under this Agreement, whether with respect to the Notes, the Certificates or the
Receivables or otherwise, shall, without further action, pass to and be vested
in the Indenture Trustee or such Successor Servicer as may be appointed under
this Section 8.02 and, without limitation, the Indenture Trustee and the Owner
Trustee are hereby authorized and empowered to execute and deliver, for the
benefit of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise. The predecessor Servicer shall cooperate
with the Successor Servicer and the Owner Trustee in effecting the termination
of the responsibilities and rights of the predecessor Servicer under this
Agreement, including, without limitation, the transfer to the Successor Servicer
for administration by it of all cash amounts that shall at the time be held by
the predecessor Servicer for deposit, or have been deposited by the predecessor
Servicer, in the Collection Account or Payahead Account or thereafter received
with respect to the Receivables and all Payments Ahead that shall at that time
be held by the predecessor Servicer. All reasonable costs and expenses
(including attorneys' fees) incurred in connection with transferring the
Receivable Files to the Successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section shall be paid by
the predecessor Servicer upon presentation of reasonable documentation of such
costs and expenses. In the event that the Indenture Trustee succeeds to the
rights and obligations of the Servicer hereunder, and a subsequent transfer of
such rights and obligations is effected pursuant to Section 8.01 or this Section
8.02 hereof, the original Servicer hereunder shall reimburse the Indenture
Trustee for all reasonable costs and expenses as described in the immediately
preceding sentence. Upon receipt
57
<PAGE>
of notice of the occurrence of a Servicer Default, the Owner Trustee shall
give notice thereof to the Rating Agencies.
SECTION 8.03 REPAYMENT OF ADVANCES. If the Servicer shall resign or be
terminated, the Servicer shall continue to be entitled to receive reimbursement
for Outstanding Advances pursuant to Sections 5.03 and 5.04 with respect to all
Advances previously made thereby in the manner specified in such Sections.
SECTION 8.04 NOTIFICATION. Upon any termination of, or appointment of
a successor to, the Servicer pursuant to this Article VIII, the Owner Trustee
shall give prompt written notice thereof to Certificateholders, and the
Indenture Trustee shall give prompt written notice thereof to Noteholders and
the Rating Agencies.
ARTICLE IX
TERMINATION
SECTION 9.01 OPTIONAL PURCHASE OF ALL RECEIVABLES.
(a) On each Payment Date following the last day of a Collection Period
as of which the Pool Balance shall be less than the Optional Purchase Percentage
(expressed as a seven-digit decimal figure) multiplied by the Original Pool
Balance, the Servicer, or any successor to the Servicer, shall have the option
to purchase the corpus of the Owner Trust Estate (whether or not such assets
then comprise all or a portion of the Trust Estate) for an amount equal to the
Optional Purchase Price. To exercise such option, the Servicer, or any
successor to the Servicer, shall notify the Owner Trustee and the Indenture
Trustee of its intention to do so in writing, no later than the tenth day of the
month preceding the month in which the Payment Date as of which such purchase is
to be effected and shall, on or before the Payment Date on which such purchase
is to occur, deposit pursuant to Section 5.05 in the Collection Account an
amount equal to the Optional Purchase Price, and shall succeed to all interests
in and to the Trust Estate and the Owner Trust Estate. Amounts so deposited
will be paid and distributed as set forth in Section 5.06 of this Agreement.
Upon such deposit of the amount necessary to purchase the corpus of the Owner
Trust Estate, the Servicer shall for all purposes of this Agreement be deemed to
have released all claims for reimbursement of Outstanding Advances made in
respect of the Receivables.
(b) Notice of any such purchase of the Owner Trust Estate shall be
given by the Owner Trustee and the Indenture Trustee to each Securityholder as
soon as practicable after their receipt of notice thereof from the Servicer.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders under this
Agreement other than Section 5.06 and the Owner Trustee will succeed to the
rights of, and assume the obligations of, the Indenture Trustee provided for in
this Agreement.
(d) Upon the repurchase of any Receivable by the Seller or the
Servicer, pursuant to any provision hereof (including Sections 3.02, 4.08 and
9.01(a)), the Owner Trustee on behalf
58
<PAGE>
of the Issuer and the Certificateholders, and the Indenture Trustee on behalf
of the Noteholders, shall, without further action, be deemed to transfer,
assign, set-over and otherwise convey to the Seller, all right, title and
interest of the Owner Trustee on behalf of the Issuer in, to and under such
repurchased Receivable, all monies due or to become due with respect thereto
and all proceeds thereof and the other property conveyed to the Issuer
hereunder pursuant to Section 2.01 with respect to such Receivable, and all
security and any documents relating thereto, such assignment being an
assignment outright and not for security; and the Seller or the Servicer, as
applicable, shall thereupon own each such Receivable, and all such related
security and documents, free of any further obligation to the Issuer, the
Owner Trustee, the Certificateholders, the Indenture Trustee or the
Noteholders with respect thereto. The Owner Trustee and Indenture Trustee
shall execute such documents and instruments of transfer and assignment and
take such other actions as shall be reasonably requested by the Seller or the
Servicer, as the case may be, to effect the conveyance of such Receivable
pursuant to this Section. If in any enforcement suit or legal proceeding it
is held that the Seller or Servicer may not enforce a repurchased Receivable
on the ground that it is not a real party in interest or a holder entitled to
enforce the Receivable, the Owner Trustee on behalf of the Issuer and the
Certificateholders, and the Indenture Trustee on behalf of the Noteholders
shall, at the written direction and expense of the Seller or Servicer, as
the case may be, take such reasonable steps as the Seller or Servicer deems
necessary to enforce the Receivable, including bringing suit in the name or
names of the Issuer, Certificateholders or Noteholders.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 AMENDMENT. This Agreement may be amended by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee, but
without the consent of any of the Noteholders or the Certificateholders, to cure
any ambiguity, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions in this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholders; PROVIDED, HOWEVER, that such
action shall not, as evidenced by an Opinion of Counsel delivered to the Owner
Trustee and the Indenture Trustee, adversely affect in any material respect the
interests of any Noteholder or Certificateholder. This Agreement may also be
amended by the Seller, the Servicer and the Issuer, with the consent of the
Indenture Trustee, but without the consent of any of the Noteholders or the
Certificateholders for the purpose of changing the formula for determining the
Specified Reserve Account Balance, the manner in which the Reserve Account is
funded (i.e. to allow the deposit of cash therein by any Person, but not to
change any order of priority of payments and distributions specified in Section
5.06 of the Sale and Servicing Agreement), changing the remittance schedule for
the deposit of collections with respect to the Receivables in the Collection
Account or Payahead Account pursuant to Section 5.02 hereof or changing the
definition of Eligible Investment, in each case only if the Indenture Trustee
and/or the Owner Trustee, as the case may be, has received a letter from each
Rating Agency to the effect that such Rating Agency will not qualify, reduce or
withdraw the rating it has currently assigned to any Class of Notes as a result
of such amendment; provided that no such amendment may increase or reduce in any
manner or accelerate or delay the timing of collections on the Receivables or
59
<PAGE>
payments required to be made to any Class of Notes or Certificates without
the consent of all Holders of each effected Class.
This Agreement may also be amended from time to time by the Seller, the
Servicer and the Issuer, with the consent of the Indenture Trustee, the consent
of (A) if the interests of Indenture Trustee or the Noteholders are affected,
the Holders of Notes evidencing not less than 51% of the Outstanding Amount of
the Class A Notes (or if the Class A Notes are no longer outstanding, the Class
B Notes, or if the Class A Notes and Class B Notes are no longer outstanding,
the Class C Notes), excluding for purposes of such calculation and action all
Securities held or beneficially owned by TMCC, TMCRC or any of their affiliates,
and/or (B) if the interests of the Issuer, Owner Trustee or Certificateholders
are affected, the Holders of Certificates evidencing not less than 51% of the
Certificate Balance, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of such Noteholders or Certificateholders;
PROVIDED, HOWEVER, that no such amendment may (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on the related Receivables or payments required to be made to any Class
of Notes or Certificates without the consent of all Holders of each effected
Class of Notes or the Certificates, as the case may be, or (ii) reduce the
aforesaid percentage of the Notes or Certificates required to consent to any
such amendment, without the consent of the holders of each Class of Notes or
Certificates, as the case may be, affected thereby.
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder, the Indenture Trustee and each of the Rating
Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section
10.02. The Owner Trustee and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's or
the Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.
SECTION 10.02 PROTECTION OF TITLE TO TRUST.
(a) The Seller shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain and
protect the interest of the Issuer and of the Indenture Trustee in the
Receivables and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the Owner Trustee and the Indenture Trustee file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.
60
<PAGE>
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC, unless it shall have given the Owner Trustee and the Indenture
Trustee at least five days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed financing statements or
continuation statements.
(c) Each of the Seller and the Servicer shall have an obligation to
give the Owner Trustee and the Indenture Trustee at least 60 days' prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement and shall promptly file any such amendment or new
financing statement. The Servicer shall at all times maintain each office from
which it shall service Receivables, and its principal executive office, within
the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables, the Servicer's
master computer records (including any backup archives) that refer to any
Receivable shall indicate clearly the interest of the Issuer, the Owner Trustee
and the Indenture Trustee in such Receivable and that such Receivable is owned
by the Issuer and has been pledged to the Indenture Trustee. Indication of
these respective interests in a Receivable shall be deleted from or modified on
the Servicer's computer systems when, and only when, the related Receivable
shall have become a Liquidated Receivable or been repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to, any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Issuer and has been pledged to the Indenture Trustee.
(g) Upon request, the Servicer shall furnish to the Owner Trustee or
to the Indenture Trustee, within five Business Days, a list of all Receivables
(by contract number and name of Obligor) then held as part of the Owner Trust
Estate, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Owner Trust Estate.
(h) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
61
<PAGE>
(A) promptly after the execution and delivery of this Agreement
and, if required pursuant to Section 10.01, of each amendment hereto, an
Opinion of Counsel stating that, in the opinion of such counsel, either
(A) all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Indenture Trustee in the
Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) no such
action shall be necessary to preserve and protect such interest, in each
case also specifying any action necessary (as of the date of such
opinion) to be taken in the following year to preserve and protect such
interest; and
(B) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the first Cutoff Date, an Opinion of Counsel, dated as of a date
during such 90-day period, stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Indenture Trustee in the
Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) no such
action shall be necessary to preserve and protect such interest.
SECTION 10.03 NOTICES. All demands, notices, communications and
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Servicer, to Toyota Motor Credit Corporation, 19001 S. Western
Avenue, Torrance, Californian 90509, Attention: Vice President, Treasury ((310)
618-4001), (b) in the case of the Seller, to Toyota Motor Credit Receivables
Corporation, 19300 Gramercy Place, North Building, Attention: President ((310)
468-7332), (c) in the case of the Issuer or the Owner Trustee, at the Corporate
Trust Office (as defined in the Trust Agreement), (d) in the case of the
Indenture Trustee, at the Corporate Trust Office specified in the Indenture, (e)
in the case of Moody's, to Moody's Investors Service, Inc., ABS Monitoring
Department, 99 Church Street, New York, New York 10007, (f) in the case of
Standard & Poor's, to Standard & Poor's Ratings Services, a Division of the
McGraw-Hill Companies, 26 Broadway (15th Floor), New York, New York 10004,
Attention of Asset Backed Surveillance Department; or, as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
SECTION 10.04 ASSIGNMENT BY THE SELLER OR THE SERVICER. Notwithstanding
anything to the contrary contained herein, except as provided in Sections 6.04
and 7.03 of this Agreement and as provided in the provisions of this Agreement
concerning the resignation or termination of the Servicer, this Agreement may
not be assigned by the Seller or the Servicer.
SECTION 10.05 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Seller, the Servicer, the Issuer,
the Owner Trustee, the Certificateholders, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable
62
<PAGE>
right, remedy or claim in the Owner Trust Estate or under or in respect of
this Agreement or any covenants, conditions or provisions contained herein.
SECTION 10.06 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.07 SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.08 HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.09 GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of California, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10.10 ASSIGNMENT BY ISSUER. The Seller hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest by
the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders of all right, title and interest of the Issuer in, to and under
the Receivables and/or the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
SECTION 10.11 NONPETITION COVENANTS.
(a) Notwithstanding any prior termination of this Agreement, the
Servicer and the Seller shall not, prior to the date which is one year and one
day after the termination of this Agreement with respect to the Issuer,
acquiesce, petition or otherwise invoke or cause the Issuer to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce, petition or
otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller under any federal or state bankruptcy, insolvency or similar law,
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Seller.
63
<PAGE>
SECTION 10.12 LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE
TRUSTEE.
Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by U.S. Bank National Association, not in its
individual capacity, but solely in its capacity as Owner Trustee of the Issuer
and in its capacity as Indenture Trustee under the Indenture. In no event shall
U.S. Bank National Association have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered by the Seller or
Servicer, or prepared by the Seller or Servicer for delivery by the Owner
Trustee on behalf of the Issuer, pursuant hereto, as to all of which recourse
shall be had solely to the assets of the Issuer. For all purposes of this
Agreement, in the performance of its duties or obligations hereunder or in the
performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
64
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
By: U.S. Bank National Association,
not in its individual capacity but solely as
Owner Trustee on behalf of the Issuer
By: /S/ Edward F. Kachinski
---------------------------------------
Name: Edward F. Kachinski
Title: Vice President
TOYOTA MOTOR CREDIT RECEIVABLES CORPORATION,
Seller
By: /s/ Lloyd Mistele
---------------------------------------
Name: Lloyd Mistele
Title: President
TOYOTA MOTOR CREDIT CORPORATION, Servicer
By: /S/ George Borst
---------------------------------------
Name: George Borst
Title: Senior Vice President and General
Manager
ACKNOWLEDGED AND ACCEPTED AS OF
THE DAY AND YEAR FIRST ABOVE WRITTEN:
U.S. Bank National Association, not in its
individual capacity but solely as Indenture Trustee
By: /s/ Edward F. Kachinski
------------------------
Name: Edward F. Kachinski
Title: Vice President
S-1
<PAGE>
SCHEDULE A
Schedule of Receivables
(To be Delivered to the Issuer at Closing and supplemented
on each Subsequent Transfer Date for Subsequent Receivables)
SA-1
<PAGE>
EXHIBIT A
Form of Servicer's Certificate
A-1
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
SERVICER'S REPORT -- TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
DISTRIBUTION DATE OF FEBRUARY 15, 0000 FOR THE COLLECTION PERIOD JANUARY 1, 1900
TO JANUARY 31, 0000
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A-1 CLASS A-2 CLASS A-3 CLASS B CLASS C
--------- --------- --------- ------- -------
Total Balance Balance Balance Balance Balance
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
POOL DATA - ORIGINAL DEAL PARAMETERS
Securities Balance
Receivables Pool Balance
Principal Factor
Rate
Targeted Maturity Date
Number of Contracts
Weighted Average Coupon
Weighted Average Remaining Term
Servicing Fee Rate
POOL DATA - PRIOR MONTH
Securities Balance
Receivables Pool Balance
Securities Pool Factor
Number of Contracts
Weighted Average Coupon
Weighted Average Remaining Term
Precompute and Simple Interest Advances
Payahead Account Balance
Supplemental Servicing Fee Received
Interest Shortfall
Principal Shortfall
POOL DATA - CURRENT MONTH
Securities Balance
Receivables Pool Balance
Targeted Principal Balance
Securities Pool Factor
Number of Contracts
Weighted Average Coupon
Weighted Average Remaining Term
Precompute and Simple Interest Advances
Payahead Account Balance
Supplemental Servicing Fee Received
Interest Shortfall
Principal Shortfall
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RESERVE FUND
Initial Deposit Amount
Specified Reserve Fund Percentage
Specified Reserve Fund Amount
Specified Reserve Fund Percentage (IF CONDITION I OR II MET)
Specified Reserve Fund Amount (IF CONDITION I OR II MET)
Beginning Balance
Withdraw for Servicing Fee Due
Withdraw for Class A Interest Due
Withdraw for First Allocation of Principal Due
Withdraw for Class B Interest Due
Withdraw for Second Allocation of Principal Due
Withdraw for Class C Interest Due
Total Withdraw Amount Available for Deposit to the Reserve Fund
Reserve Fund Balance Prior to Release
Reserve Fund Required Amount
Reserve Fund Release to Seller
Ending Reserve Fund Balance
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
LIQUIDATION OF CHARGE-OFFS AND REPOSSESSIONS
Vehicles Amount
-------- ------
<S> <C> <C>
Liquidated Contracts
Gross Principal Balance of Liquidated Receivables
Net Liquidation Proceeds Received During the Collection Period
Recoveries on Previously Liquidated Contracts
Aggregate Credit Losses for the Collection Period
Cumulative Credit Losses for all Periods
Repossessed in Current Period
RATIO OF NET CREDIT LOSSES TO THE AVERAGE POOL BALANCE Annualized Average
FOR EACH COLLECTION PERIOD: Charge-Off Rate
Second Preceding Collection Period
First Preceding Collection Period
Current Collection Period
- ------------------------------------------------------------------------------------------------------
CONDITION (I) (CHARGE-OFF RATE)
Three Month Average
Charge-off Rate Indicator ( > 1.25%) CONDITION NOT MET
- ------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
DELINQUENT AND REPOSSESSED CONTRACTS
Percent Contracts Percent Amount
------- --------- ------- ------
<S> <C> <C> <C> <C>
31-60 Days Delinquent
61-90 Days Delinquent
Over 90 Days Delinquent
------------ ----------------------
Total Delinquencies ============ ======================
Repossessed Vehicle Inventory
* Included with delinquencies above
RATIO OF NUMBER OF CONTRACTS DELINQUENT 60 DAYS OR MORE TO THE OUTSTANDING
NUMBER OF RECEIVABLES AS OF EACH COLLECTION PERIOD (INCLUDES REPOSSESSIONS):
Second Preceding Collection Period
First Preceding Collection Period
Current Collection Period
- ------------------------------------------------------------------------------------------------------
CONDITION (II) (DELINQUENCY PERCENTAGE)
Three Month Average
Delinquency Percentage Indicator ( > 1.25%) CONDITION NOT MET
</TABLE>
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
SERVICER'S REPORT -- TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
DISTRIBUTION DATE OF FEBRUARY 15, 0000 FOR THE COLLECTION PERIOD JANUARY 1, 1900
TO JANUARY 31, 0000
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A-1 CLASS A-2 CLASS A-3 CLASS B CLASS C
--------- --------- --------- ------- -------
Total Balance Balance Balance Balance Balance
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COLLECTIONS
Principal Payments Received
Interest Payments Received
Net Precomputed Payahead Amount
Aggregate Net Liquidation Proceeds Received
Principal on Repurchased Contracts
Interest on Repurchased Contracts
Total Collections
Net Simple Interest Advance Amount
Net Precomputed Advance Amount
Total Available Amount
AMOUNTS DUE
Servicing Fee
Accrued and Unpaid Interest - Class A
First Allocation Principal Distribution
Accrued and Unpaid Interest - Class B
Second Allocation Principal Distribution
Accrued and Unpaid Interest - Class C
Regular Principal Distribution Amount
Deposit to Reserve Fund
Total Amount Due
ACTUAL DISTRIBUTIONS
Servicing Fee
Interest
First Allocation Principal Distribution
Second Allocation Principal Distribution
Regular Principal Distribution Amount
Principal
Deposit to Reserve Fund
Total Amount Distributed
- -------------------------------------------------------------------------------
</TABLE>
I hereby certify to the best of my knowledge that the report
provided is true and correct.
- ------------------------------------------
- ------------------------------------------
Holly Pearson
Treasury Manager
- -------------------------------------------------------------------------------
MONTHLY INFORMATION BY TYPE OF LOAN
PRECOMPUTED CONTRACTS
Scheduled Principal Collections
Prepayments in Full
Repurchased Receivables Principal
Payments Behind/Ahead on Repurchased Receivables
Total Collections
Advances - Reimbursement of Previous Advances
Advances - Current Advance Amount
Payahead Account - Payments Applied
Payahead Account - Additional Payaheads
SIMPLE INTEREST CONTRACTS
Collected Principal
Prepayments in Full
Collected Interest
Repurchased Receivables Principal
Repurchased Receivables Interest
Advances - Reimbursement of Previous Advances
Advances - Current Advance Amount
- -------------------------------------------------------------------------------
<PAGE>
EXHIBIT 4.2
INDENTURE
--------------------------------------------------------------
TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
as Issuer
and
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee and
Securities Intermediary
------------------------------------------------------
Dated as of July 1, 1999
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
<TABLE>
PAGE
<S> <C>
SECTION 1.01.Definitions.........................................................................................2
SECTION 1.02.Usage of Terms......................................................................................8
SECTION 1.03.Incorporation by Reference of Trust Indenture Act...................................................8
ARTICLE II
THE NOTES
SECTION 2.01.Form................................................................................................9
SECTION 2.02.Execution, Authentication and Delivery..............................................................9
SECTION 2.03.Temporary Notes....................................................................................10
SECTION 2.04.Registration; Registration of Transfer and Exchange................................................10
SECTION 2.05.Mutilated, Destroyed, Lost or Stolen Notes.........................................................11
SECTION 2.06.Persons Deemed Owners..............................................................................12
SECTION 2.07.Payments of Principal and Interest.................................................................12
SECTION 2.08.Cancellation.......................................................................................12
SECTION 2.09.Release of Collateral..............................................................................13
SECTION 2.10.Book-Entry Notes...................................................................................13
SECTION 2.11.Notices to Clearing Agency.........................................................................14
SECTION 2.12.Definitive Notes...................................................................................14
SECTION 2.13.Tax Treatment......................................................................................14
ARTICLE III
COVENANTS
SECTION 3.01.Payments to Noteholders, Certificateholders, Servicer and Seller...................................15
SECTION 3.02.Maintenance of Office or Agency....................................................................15
SECTION 3.03.Money for Payments To Be Held in Trust.............................................................15
SECTION 3.04.Existence..........................................................................................17
SECTION 3.05.Protection of Trust Estate.........................................................................17
SECTION 3.06.Opinions as to Trust Estate........................................................................18
SECTION 3.07.Performance of Obligations; Servicing of Receivables...............................................18
SECTION 3.08.Negative Covenants.................................................................................20
SECTION 3.09.Annual Statement as to Compliance..................................................................21
SECTION 3.10.Issuer May Consolidate, etc., Only on Certain Terms................................................21
SECTION 3.11.Successor or Transferee............................................................................23
SECTION 3.12.No Other Business..................................................................................23
SECTION 3.13.No Borrowing.......................................................................................23
SECTION 3.14.Servicer's Notice Obligations......................................................................23
</TABLE>
i
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
PAGE
<S> <C>
SECTION 3.15.Guarantees, Loans, Advances and Other Liabilities..................................................23
SECTION 3.16.Capital Expenditures...............................................................................24
SECTION 3.17.Removal of Administrator...........................................................................24
SECTION 3.18.Restricted Payments................................................................................24
SECTION 3.19.Notice of Events of Default........................................................................24
SECTION 3.20.Further Instruments and Actions....................................................................24
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01.Satisfaction and Discharge of Indenture............................................................24
SECTION 4.02.Application of Trust Money.........................................................................25
SECTION 4.03.Repayment of Moneys Held by Paying Agent...........................................................25
ARTICLE V
REMEDIES
SECTION 5.01.Events of Default..................................................................................26
SECTION 5.02.Acceleration of Maturity; Rescission and Annulment.................................................28
SECTION 5.03.Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..........................29
SECTION 5.04.Remedies; Priorities; Insolvency of Seller.........................................................31
SECTION 5.05.Optional Preservation of the Receivables...........................................................33
SECTION 5.06.Limitation of Suits................................................................................34
SECTION 5.07.Unconditional Rights of Noteholders To Receive Principal and Interest..............................34
SECTION 5.08.Restoration of Rights and Remedies.................................................................35
SECTION 5.09.Rights and Remedies Cumulative.....................................................................35
SECTION 5.10.Delay or Omission Not a Waiver.....................................................................35
SECTION 5.11.Control by Noteholders.............................................................................35
SECTION 5.12.Waiver of Past Defaults............................................................................36
SECTION 5.13.Undertaking for Costs..............................................................................36
SECTION 5.14.Waiver of Stay or Extension Laws...................................................................36
SECTION 5.15.Action on Notes....................................................................................37
SECTION 5.16.Performance and Enforcement of Certain Obligations.................................................37
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01.Duties of Indenture Trustee........................................................................38
SECTION 6.02.Rights of Indenture Trustee........................................................................39
SECTION 6.03.Individual Rights of Indenture Trustee.............................................................40
SECTION 6.04.Indenture Trustee's Disclaimer.....................................................................40
</TABLE>
ii
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
PAGE
<S> <C>
SECTION 6.05.Notice of Defaults.................................................................................41
SECTION 6.06.Reports by Indenture Trustee to Holders............................................................41
SECTION 6.07.Compensation and Indemnity.........................................................................42
SECTION 6.08.Replacement of Indenture Trustee...................................................................42
SECTION 6.09.Successor Indenture Trustee by Merger..............................................................43
SECTION 6.10.Appointment of Co-Indenture Trustee or Separate Indenture Trustee..................................44
SECTION 6.11.Eligibility; Disqualification......................................................................45
SECTION 6.12.Preferential Collection of Claims Against Issuer...................................................45
SECTION 6.13.Pennsylvania Motor Vehicle Sales Finance Act Licenses..............................................45
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01.Note Registrar To Furnish Names and Addresses of Noteholders.......................................45
SECTION 7.02.Preservation of Information; Communications to Noteholders.........................................46
SECTION 7.03.Reports by Issuer..................................................................................46
SECTION 7.04.Reports by Indenture Trustee.......................................................................47
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01.Collection of Money................................................................................47
SECTION 8.02.Trust Accounts.....................................................................................47
SECTION 8.03.[Reserved].........................................................................................48
SECTION 8.04.General Provisions Regarding Accounts..............................................................48
SECTION 8.05.Release of Trust Estate............................................................................49
SECTION 8.06.Opinion of Counsel.................................................................................49
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01.Supplemental Indentures Without Consent of Noteholders.............................................50
SECTION 9.02.Supplemental Indentures with Consent of Noteholders................................................51
SECTION 9.03.Limitations on Supplemental Indentures.............................................................51
SECTION 9.04.Execution of Supplemental Indentures...............................................................52
SECTION 9.05.Effect of Supplemental Indenture...................................................................53
SECTION 9.06.Conformity with Trust Indenture Act................................................................53
SECTION 9.07.Reference in Notes to Supplemental Indentures......................................................53
</TABLE>
iii
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
ARTICLE X
TERMINATION OF THE TRUST
<TABLE>
PAGE
<S> <C>
SECTION 10.01 Termination of the Trusts Created by Indenture....................................................53
SECTION 10.02.Optional Purchase of All Receivables..............................................................54
ARTICLE XI
MISCELLANEOUS
SECTION 11.01.Compliance Certificates and Opinions, etc.........................................................55
SECTION 11.02.Form of Documents Delivered to Indenture Trustee..................................................56
SECTION 11.03.Acts of Noteholders...............................................................................57
SECTION 11.04.Notices, etc., to Indenture Trustee, Issuer and Rating Agencies...................................57
SECTION 11.05.Notices to Noteholders; Waiver....................................................................58
SECTION 11.06.Alternate Payment and Notice Provisions...........................................................58
SECTION 11.07.Conflict with Trust Indenture Act.................................................................58
SECTION 11.08.Effect of Headings and Table of Contents..........................................................59
SECTION 11.09.Successors and Assigns............................................................................59
SECTION 11.10.Severability......................................................................................59
SECTION 11.11.Benefits of Indenture.............................................................................59
SECTION 11.12.Governing Law.....................................................................................59
SECTION 11.13.Counterparts......................................................................................59
SECTION 11.14.Recording of Indenture............................................................................59
SECTION 11.15.Trust Obligation..................................................................................60
SECTION 11.16.No Petition.......................................................................................60
SECTION 11.17.Inspection........................................................................................60
EXHIBIT A - Forms of Class A-1 Note, Class A-2 Note, Class A-3 Note, Class B Note and
Class C Note
EXHIBIT B - Form of Note Depository Agreement
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE
(not a part of this Indenture)
<TABLE>
<CAPTION>
TIA Indenture
SECTION SECTION
<S> <C>
Section 310(a) (1).......................................................................................... 6.11
(a) (2)............................................................................................... 6.11
(a) (3)............................................................................................... N.A.
(a) (4)............................................................................................... N.A.
(a) (5)............................................................................................... 6.11
(b) .................................................................................................. 5.04
6.08
6.11
11.04
(c) .................................................................................................. N.A.
Section 311(a).............................................................................................. 6.12
(b) .................................................................................................. 6.12
(c) .................................................................................................. N.A.
Section 312(a).............................................................................................. 7.02
(b) .................................................................................................. 7.02
(c) .................................................................................................. 7.02
Section 313(a).............................................................................................. 7.04
(b) (1)............................................................................................... N.A.
(b) (2)............................................................................................... 7.04
(c) .................................................................................................. 7.04
11.04
(d) .................................................................................................. 7.04
Section 314(a).............................................................................................. 3.09
7.03
11.04
(b) ..................................................................................................11.14
(c) (1)............................................................................................... 3.10
6.02
8.05(b)
6.02
11.01
(c) (2)............................................................................................... 3.06
3.10
6.02
8.05(b)
8.06
(c) (3)............................................................................................... N.A.
(d) .................................................................................................. N.A.
(d) .................................................................................................. N.A.
(e) ..................................................................................................11.05
(f) ..................................................................................................4.01.
Section 315(a).............................................................................................. 6.01
(b) .................................................................................................. 6.05
(c) .................................................................................................. 5.02
5.08
(d) ................................................................................................6.01(c)
(e) .................................................................................................. 5.13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TIA Indenture
SECTION SECTION
<S> <C>
Section 316(a) (last sentence)............................................................................6.01(c)
(a) (1) (A).........................................................................................6.01(c)
(a) (1) (B)........................................................................................... 5.12
(a) (2)............................................................................................... N.A.
(b) .................................................................................................. 5.01
5.04(b)
(c) .................................................................................................. 2.06
Section 317(a) (1).......................................................................................... 5.04
(a) (2).............................................................................................5.03(c)
5.03(d)
(b) .................................................................................................. 4.03
Section 318(a)..............................................................................................11.07
</TABLE>
- ---------
N.A. means not applicable
<PAGE>
INDENTURE dated as of July 1, 1999, between TOYOTA AUTO RECEIVABLES
1999-A OWNER TRUST, a Delaware business trust (the "Issuer"), and U.S. BANK
NATIONAL ASSOCIATION, a national banking association, as trustee and not in its
individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's 5.365% Asset Backed
Notes, Class A-1 (the "Class A-1 Notes"), 5.800% Asset Backed Notes, Class A-2
(the "Class A-2 Notes"), 6.150% Asset Backed Notes, Class A-3 (the "Class A-3
Notes" and, together with the Class A-1 Notes and the Class A-2 Notes, the
"Class A Notes"), 6.300% Asset Backed Notes, Class B (the "Class B Notes") and
6.700% Asset Backed Notes, Class C (the "Class C Notes" and, together with the
Class B Notes and the Class A Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as Indenture Trustee for the benefit of the Holders of the Notes and
Certificates, all of the Issuer's right, title and interest in and to: (i) all
right, title and interest of the Issuer in and to the Receivables and all monies
due thereon or paid thereunder or in respect thereof (including proceeds of the
repurchase of Receivables by the Seller pursuant to Section 3.02 or the purchase
of Receivables by the Servicer pursuant to Section 4.08 or 9.01 of the Sale and
Servicing Agreement) on or after the Cutoff Date; (ii) the interest of the
Issuer in the security interests in the Financed Vehicles granted by the
Obligors pursuant to the Receivables and any accessions thereto; (iii) the
interest of the Issuer in any proceeds of any physical damage insurance policies
covering Financed Vehicles and in any proceeds of any credit life or credit
disability insurance policies relating to the Receivables or the Obligors; (iv)
the interest of the Issuer in any Dealer Recourse; (v) the right of the Issuer
to realize upon any property (including the right to receive future Liquidation
Proceeds) that shall have secured a Receivable and have been repossessed by or
on behalf of the Issuer; (vi) the rights and interests of the Issuer under the
Sale and Servicing Agreement and as assignee (pursuant to the Sale and Servicing
Agreement) of the rights and interests of TMCRC under the Receivables Purchase
Agreement and; (vii) all other assets comprising the Owner Trust Estate; (viii)
all proceeds of the foregoing and (ix) all present and future claims, demands,
causes of action and choses in action in respect of any or all of the foregoing
and all payments on or under of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion thereof,
voluntary or involuntary, into cash or other liquid property, all cash proceeds,
accounts, accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the
"Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, and subject to the subordinate
claims thereon of the Holders of the Certificates, all as provided in this
Indenture.
1
<PAGE>
The Indenture Trustee, as Indenture Trustee on behalf of the Holders of
the Notes and for the benefit of the Certificateholders, acknowledges such
Grant, accepts the trusts under this Indenture in accordance with the provisions
of this Indenture and agrees to perform its duties required in this Indenture to
the best of its ability to the end that the interests of the Holders of the
Notes may be adequately and effectively protected and the rights of the
Certificateholders secured.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS. Except as otherwise specified herein or
in the context may otherwise require, capitalized terms used but not
otherwise defined herein have the meanings ascribed thereto in the Trust
Agreement, the Sale and Servicing Agreement and Securities Account Control
Agreement, as the case may be, for all purposes of this Indenture. Except as
otherwise provided in this Agreement, whenever used herein the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"ACTION" has the meaning specified in Section 11.03(a).
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as
of July 1, 1999, among the Administrator, the Issuer and the Indenture Trustee.
"ADMINISTRATOR" means TMCC, or any successor Administrator under the
Administration Agreement.
"AUTHORIZED OFFICER" means (i) with respect to the Issuer, any officer
of the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer identified as such on any list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee and (ii) with respect to
the Administrator, any Vice President or more senior officer of the
Administrator who is authorized to act for the Administrator in matters relating
to the Issuer and identified as such on any list of Authorized Officers
delivered by the Administrator to the Indenture Trustee.
"BOOK-ENTRY NOTES" means a beneficial interest in the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes, Class B Notes and Class C Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in The City of New York, The
City of San Francisco or the City of Chicago are authorized or obligated by law,
regulation or executive order to remain closed.
"CLASS A-1 RATE" means 5.365% per annum (computed on the basis of the
actual number of days elapsed during the relevant Interest Period and a 360-day
year).
2
<PAGE>
"CLASS A-1 NOTES" means the 5.365% Asset Backed Notes, Class A-1,
substantially in the form attached hereto as Exhibit A.
"CLASS A-2 RATE" means 5.800% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).
"CLASS A-2 NOTES" means the 5.800% Asset Backed Notes, Class A-2,
substantially in the form attached hereto as Exhibit A.
"CLASS A-3 RATE" means 6.150% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).
"CLASS A-3 NOTES" means the 6.150% Asset Backed Notes, Class A-3,
substantially in the form attached hereto as Exhibit A.
"CLASS B RATE" means 6.300% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).
"CLASS B NOTES" means the 6.300% Asset Backed Notes, Class B,
substantially in the form attached hereto as Exhibit A.
"CLASS C RATE" means 6.700% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).
"CLASS C NOTES" means the 6.700% Asset Backed Notes, Class C,
substantially in the form attached hereto as Exhibit A.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means July 22, 1999.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting Clause of this
Indenture.
"CORPORATE TRUST OFFICE" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located at
111 East Wacker Drive, Suite 3000, Chicago, Illinois 60601, or at such other
address as the Indenture Trustee may designate from time to time by notice to
the Noteholders, the Issuer and the Administrator, or the principal corporate
trust office of any successor Indenture Trustee at the address designated by
such successor Indenture Trustee by notice to the Noteholders, the Issuer and
the Administrator.
3
<PAGE>
"DEFAULT" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"DEFINITIVE NOTES" has the meaning specified in Section 2.12.
"EVENT OF DEFAULT" has the meaning specified in Section 5.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the granting party or otherwise, and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note is
registered on the Note Register.
"INDENTURE TRUSTEE" means U.S. Bank National Association, a national
banking association, as Indenture Trustee under this Indenture, or any successor
Indenture Trustee under this Indenture.
"INDEPENDENT" means, when used with respect to any specified Person,
that the Person is in fact independent of the Seller, the Servicer, the
Administrator, the Issuer or any other obligor on the Notes or any Affiliate of
any of the foregoing Persons because, among other things, such Person (a) is not
an employee, officer or director or otherwise controlled thereby or under common
control therewith, (b) does not have any direct financial interest or any
material indirect financial interest therein (whether as holder of securities
thereof or party to contract therewith or otherwise) and (c) is not and has not
within the preceding twelve months been a promoter, underwriter, trustee,
partner, director or person performing similar functions therefor or otherwise
had legal, contractual or fiduciary or other duties to act on behalf of or for
the benefit thereof.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in Section
11.01, made by an Independent appraiser or other expert appointed by an Issuer
Order and approved by the Indenture Trustee in the exercise of reasonable care,
and such opinion or certificate shall state that the signer has read the
4
<PAGE>
definition of "Independent" in this Indenture and that the signer is Independent
within the meaning thereof.
"INSOLVENCY EVENT" with respect to the Seller means the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of the Seller in an involuntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Seller, or ordering the winding-up or liquidation of the
Seller's affairs, and such decree or order shall remain unstayed and in effect
for a period of 90 consecutive days; or the commencement by the Seller of a
voluntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by the Seller to
the entry of an order for relief in an involuntary case under any such law, or
the consent by the Seller to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Seller, or the making by the Seller of any general assignment for the
benefit of creditors, or the failure by the Seller generally to pay its debts as
such debts become due, or the taking of any action by the Seller in furtherance
of any of the foregoing.
"INTEREST PERIOD" means, with respect to the Class A-1 Notes, the
period from (and including) any Payment Date to (but excluding) the next Payment
Date, except that the first interest period will be from (and including) the
Closing Date to (but excluding) August 16, 1999, and, with respect to the Class
A-2 Notes, Class A-3 Notes, Class B Notes and Class C Notes, the period from
(and including) the 15th day of each calendar month to (but excluding) the 15th
day of the succeeding calendar month except that the first interest period will
be from (and including) the Closing Date to (but excluding) August 15, 1999.
"INTEREST RATE" means the Class A-1 Rate, the Class A-2 Rate, the Class
A-3 Rate, the Class B Rate or the Class C Rate, as indicated by the context.
"ISSUER" means Toyota Auto Receivables 1999-A Owner Trust unless and
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the Notes.
"ISSUER ORDER" and "ISSUER REQUEST" mean a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"NOTE" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a
Class B Note or a Class C Note.
"NOTE DEPOSITORY AGREEMENT" means the agreement entitled "Letter of
Representations" dated on or before the Closing Date among the Clearing Agency,
the Issuer and the Indenture Trustee with respect to certain matters relating to
the duties thereof with respect to the Book-Entry Notes, substantially in the
form attached hereto as Exhibit B.
"NOTE OWNER" means, with respect to a Book-Entry Note, any Person who
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a
5
<PAGE>
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"NOTE REGISTER" means the Register of Noteholders' information
maintained by the Note Registrar pursuant to Section 2.04.
"NOTE REGISTRAR" means the Indenture Trustee unless and until a
successor Note Registrar shall have been appointed pursuant to Section 2.04.
"OFFICER'S CERTIFICATE" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to
the Indenture Trustee.
"OPINION OF COUNSEL" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be an employee of
or counsel to the Issuer, the Seller or the Servicer and which counsel shall be
satisfactory to the Owner Trustee, the Indenture Trustee or the Rating Agencies,
as the case may be.
"OUTSTANDING" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(a) Notes theretofore canceled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee or
any Paying Agent in trust for the Holders of such Notes; and
(c) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser; provided, that in determining whether the
Holders of the requisite percentage of the Outstanding Amount of the Notes,
or any Class of Notes, have given any request, demand, authorization,
direction, notice, consent, or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Seller or
any Affiliate of any of the foregoing Persons shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent, or waiver, only Notes that the
Indenture Trustee knows to be so owned shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is
not the Issuer, any other obligor upon the Notes, the Seller or any Affiliate
of any of the foregoing Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes,
or, if indicated by the context, all Notes of any Class, outstanding at the date
of determination.
6
<PAGE>
"OWNER TRUSTEE" means U.S. Bank National Association, not in its
individual capacity but solely as Owner Trustee under the Trust Agreement, or
any successor Owner Trustee under the Trust Agreement.
"OWNER TRUST ESTATE" "OWNER TRUST ESTATE" means all right, title and
interest of the Issuer in and to the property and rights assigned to the Issuer
pursuant to Article II of the Sale and Servicing Agreement, all funds on deposit
from time to time in the accounts created pursuant to Section 5.01 of the Sale
and Servicing Agreement (excluding any net investment income with respect to
amounts held in such accounts) and all other property of the Issuer from time to
time, including any rights of the Owner Trustee and the Issuer pursuant to the
Sale and Servicing Agreement and the Administration Agreement, and as assignee
of the rights and Interests of the Depositor under the Receivables Purchase
Agreement.
"PAYING AGENT" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 that has been authorized by the Issuer to make payments to and
distributions from the Collection Account and the Payahead Account, including
payment of principal of or interest on the Notes on behalf of the Issuer.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"REGISTERED HOLDER" means the Person in whose name a Note is registered
on the Note Register on the applicable Record Date.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement
dated as of July 1, 1999, among the Issuer, Toyota Motor Credit Receivables
Corporation, as Seller, and Toyota Motor Credit Corporation, as Servicer, and as
to which the Indenture Trustee is a third party beneficiary of certain
provisions.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES ACCOUNT CONTROL AGREEMENT" shall have the meaning ascribed
thereto in the Sale and Servicing Agreement.
"SELLER" shall mean Toyota Motor Credit Receivables Corporation, in its
capacity as seller under the Sale and Servicing Agreement, and its successor in
interest.
"SERVICER" shall mean Toyota Motor Credit Corporation in its capacity
as servicer under the Sale and Servicing Agreement, and any Successor Servicer
thereunder.
"SUCCESSOR SERVICER" has the meaning specified in Section 3.07(e).
7
<PAGE>
"TRUST ESTATE" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
this Indenture for the benefit of the Noteholders (including, without
limitation, all property and interests Granted to the Indenture Trustee pursuant
to the Granting Clause), including all proceeds thereof.
"TRUST OFFICER" means, in the case of the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code as in effect in the relevant jurisdiction at the relevant time.
SECTION 1.02. USAGE OF TERMS. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other genders; references to "writing"
include printing, typing, lithography and other means of reproducing words in
a visible form; references to agreements and other contractual instruments
include all subsequent amendments thereto or changes therein entered into in
accordance with their respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and assigns; and the
term "including" means "including without limitation."
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the Securities and Exchange Commission.
"INDENTURE SECURITIES" means the Notes.
"INDENTURE SECURITY HOLDER" means a Noteholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "institutional trustee" means the Indenture
Trustee.
"OBLIGOR" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
8
<PAGE>
All other TIA terms used in this Indenture that are defined in the TIA,
defined in the TIA by reference to another statute or defined by Commission rule
have the meanings so assigned to them.
ARTICLE II
THE NOTES
SECTION 2.01 FORM. The Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class B Notes and the Class C Notes, in each case
together with the Indenture Trustee's certificate of authentication, shall be
in substantially the form set forth in Exhibit A, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as
may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution thereof. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit A are part of the terms of this Indenture.
SECTION 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile. Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes. The Indenture Trustee shall upon
Issuer Order authenticate and deliver Class A-1 Notes for original issue in
an aggregate principal amount of $303,000,000, Class A-2 Notes for original
issue in an aggregate principal amount of $284,000,000, Class A-3 Notes for
original issue in an aggregate principal amount of $334,093,000, Class B
Notes for original issue in an aggregate principal amount of $26,454,000 and
Class C Notes for original issue in an aggregate principal amount of
$14,429,000. The aggregate principal amount of Class A-1 Notes, Class A-2
Notes, Class A-3 Notes, the Class B Notes and the Class C Notes outstanding
at any time may not exceed such respective amounts except as provided in
Section 2.05. The Notes shall be issuable as registered Notes in the minimum
denomination $1,000. Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form included in Exhibit A,
executed by the Indenture Trustee by the manual or facsimile signature of one of
its authorized signatories, and such certificate upon any Note shall be
9
<PAGE>
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.03 TEMPORARY NOTES. Pending the preparation of definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten, mimeographed or otherwise produced, of
the tenor of the definitive Notes in lieu of which they are issued and with
such variations not inconsistent with the terms of this Indenture as the
officers executing such Notes may determine, as evidenced by their execution
of such Notes. If temporary Notes are issued, the Issuer will cause
definitive Notes to be prepared without unreasonable delay. After the
preparation of definitive Notes, the temporary Notes shall be exchangeable
for definitive Notes upon surrender of the temporary Notes at the office or
agency of the Issuer to be maintained as provided in Section 3.02, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Notes, the Issuer shall execute, and the Indenture Trustee shall
authenticate and deliver in exchange therefor, a like principal amount of
definitive Notes of authorized denominations. Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes.
SECTION 2.04 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Note Registrar shall maintain a Note Register in which,
subject to such reasonable regulations as it may prescribe, the Note
Registrar shall provide for the registration of Notes and transfers and
exchanges of Notes as provided in this Indenture. The Indenture Trustee is
hereby initially appointed Note Registrar for the purpose of registering
Notes and transfers and exchanges of Notes as provided in this Indenture. In
the event that, subsequent to the Closing Date, the Indenture Trustee
notifies the Issuer that it is unable to act as Note Registrar, the Issuer
shall appoint another bank or trust company, having an office or agency
located in the Borough of Manhattan, The City of New York, agreeing to act in
accordance with the provisions of this Indenture applicable to it, and
otherwise acceptable to the Indenture Trustee, to act as successor Note
Registrar under this Indenture.
If a Person other than the Indenture Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Holders of the Notes and
the principal amounts and number of such Notes.
(b) Upon the proper surrender for registration of transfer of any
Note at the office or agency of the Issuer to be maintained as provided in
Section 3.02, the Issuer shall execute, and the Indenture Trustee shall
authenticate in the name of the designated transferee or transferees, one or
more new Notes of the same Class in authorized denominations of a like
aggregate principal amount.
(c) At the option of the Holder, Notes may be exchanged for other
Notes of the same Class in any authorized denominations, of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office
or agency. Whenever any Notes are so surrendered for
10
<PAGE>
exchange, the Issuer shall execute, and the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture Trustee, the
Notes which the Noteholder making the exchange is entitled to receive. Every
Note presented or surrendered for registration of transfer or exchange shall
be accompanied by a written instrument of transfer in form satisfactory to
the Indenture Trustee and the Note Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing.
(d) No service charge shall be made for any registration of transfer
or exchange of Notes, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Notes.
(e) All Notes surrendered for registration of transfer or exchange
shall be canceled and subsequently destroyed by the Indenture Trustee.
SECTION 2.05 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note of
the same Class. In connection with the issuance of any new Note under this
Section, the Issuer may require payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto.
If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes of the same Class duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
11
<PAGE>
SECTION 2.06 PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name any Note is registered (as of the day of determination) as the
owner of such Note for the purpose of receiving payments of principal of and
interest, if any, on such Note and for all other purposes whatsoever, and
none of the Issuer, the Indenture Trustee or any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.07 PAYMENTS OF PRINCIPAL AND INTEREST.
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class B Notes and the Class C Notes shall accrue interest during each
Interest Period at the Class A-1 Rate, the Class A-2 Rate, the Class A-3
Rate, the Class B Rate and the Class C Rate, respectively, and such interest
shall be payable on each related Payment Date as specified in such Notes,
pursuant to Section 5.06 of the Sale and Servicing Agreement and Section 3.01
hereof. Any installment of interest or principal payable on any Note that is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date. With respect to Notes
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payment will be made by
wire transfer in immediately available funds to the account designated by
such nominee, except for the final installment of principal payable with
respect to such Note on a Payment Date or on the applicable Final Scheduled
Payment Date, which shall be payable as provided below. Such payment will be
made by check mailed first-class postage prepaid to such Person's address as
it appears on the Note Register on such Record Date or by wire transfer to
the account specified by the registered holder of any Note with a face amount
of at least $10,000,000. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on
each Payment Date pursuant to Section 5.06 of the Sale and Servicing
Agreement and subject to the availability of funds therefor. All principal
payments on each Class of Notes shall be made pro rata to the Noteholders of
such Class entitled thereto. In accordance with Section 10.01, the Indenture
Trustee shall notify the Person in whose name a Note is registered at the
close of business on the Record Date preceding the Payment Date on which the
final installment of principal of and interest on such Note will be paid.
Such notice shall be mailed or transmitted by facsimile not less than 15 nor
more than 30 days prior to such final Payment Date, shall specify that such
final installment will be payable only upon presentation and surrender of
such Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment.
SECTION 2.08 CANCELLATION. All Notes surrendered for payment,
registration of transfer or exchange shall, if surrendered to any Person
other than the Indenture Trustee, be delivered to the Indenture Trustee and
shall be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in
any manner whatsoever, and all Notes so delivered shall be promptly canceled
by the Indenture Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Notes may be held or
12
<PAGE>
disposed of by the Indenture Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall
direct by an Issuer Order that they be destroyed or returned to it; provided,
that such Issuer Order is timely and the Notes have not been previously
disposed of by the Indenture Trustee.
SECTION 2.09 RELEASE OF COLLATERAL. Subject to Sections 10.01 and
11.01 and the terms of the Basic Documents, the Indenture Trustee shall
release property from the lien of this Indenture only upon receipt of an
Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel
and Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(l) or an Opinion of Counsel in lieu of such Independent Certificates
to the effect that the TIA does not require any such Independent Certificates.
SECTION 2.10 BOOK-ENTRY NOTES. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, or a custodian therefor, by, or on behalf of, the Issuer. The
Book-Entry Notes shall be registered initially on the Note Register in the
name of Cede & Co., the nominee of the initial Clearing Agency, and no owner
thereof will receive a definitive Note representing such Note Owner's
interest in such Note, except as provided in Section 2.12. Unless and until
definitive, fully registered Notes (the "Definitive Notes") have been issued
to such Note Owners pursuant to Section 2.12:
(a) the provisions of this Section shall be in full force and effect;
(b) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the authorized
representative of the Note Owners;
(c) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section shall
control;
(d) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreement.
Unless and until Definitive Notes are issued pursuant to Section 2.12, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal of and
interest on the Notes to such Clearing Agency Participants; and
(e) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes or of the Notes
of any Class, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Notes and has delivered such instructions to the Indenture
Trustee.
13
<PAGE>
SECTION 2.11 NOTICES TO CLEARING AGENCY. Whenever a notice or
other communication to the Noteholders is required under this Indenture,
unless and until Definitive Notes shall have been issued to such Note Owners
pursuant to Section 2.12, the Indenture Trustee shall give all such notices
and communications specified herein to be given to Holders of the Notes to
the Clearing Agency and shall be deemed to have been given as of the date of
delivery to the Clearing Agency.
SECTION 2.12 DEFINITIVE NOTES. If (i) the Owner Trustee or the
Administrator advises the Indenture Trustee in writing that the Clearing
Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Notes and the Owner Trustee
and the Administrator are unable to locate a qualified successor (and if the
Administrator has made such determination, the Administrator has given
written notice thereof to the Indenture Trustee), (ii) the Seller or the
Administrator or the Indenture Trustee at its option advises each other such
party in writing that it elects to terminate the book-entry system through
the Clearing Agency or (iii) after the occurrence of an Event of Default or a
Servicer Default, owners of the Book-Entry Notes representing beneficial
interests aggregating at least 51% of the Outstanding Amount of the Notes of
all Classes, advise the Indenture Trustee and the Clearing Agency in writing
that the continuation of a book-entry system through the Clearing Agency or a
successor thereto is no longer in the best interests of the Note Owners
acting together as a single Class, then the Clearing Agency shall notify all
Note Owners and the Indenture Trustee of the occurrence of such event and of
the availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Notes representing the
Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the Holders of the Definitive Notes as Noteholders. The
Indenture Trustee, Issuer and Administrator shall not be liable for any
inability to locate a qualified successor Clearing Agency. From and after the
date of issuance of Definitive Notes, all notices to be given to Noteholders
will be mailed thereto at their addresses of record in the Note Register as
of the relevant Record Date. Such notices will be deemed to have been given
as of the date of mailing.
SECTION 2.13 TAX TREATMENT. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for
federal, state and local income, single business and franchise tax purposes,
the Notes will qualify as indebtedness of the Issuer secured by the Trust
Estate. The Issuer, by entering into this Indenture, and each Noteholder, by
its acceptance of a Note (and each Note Owner by its acceptance of an
interest in the applicable Book-Entry Note), agree to treat the Notes for
federal, state and local income, single business and franchise tax purposes
as indebtedness of the Issuer.
14
<PAGE>
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENTS TO NOTEHOLDERS, CERTIFICATEHOLDERS,
SERVICER AND SELLER. In accordance with the terms of this Indenture, the
Issuer will duly and punctually (i) pay the principal of and interest, if
any, on the Notes in accordance with the terms of the Notes and (ii) release
from the Collection Account, Principal Distribution Account and Payahead
Account all other amounts distributable or payable from the Owner Trust
Estate (including distributions to be made to Certificateholders on any
Payment Date) under the Trust Agreement, Sale and Servicing Agreement and
Administration Agreement. Without limiting the foregoing, and in order to
fulfill such obligations, pursuant to Sections 8.02 and 8.04 hereof, the
Issuer will cause the Servicer to direct the Indenture Trustee to apply all
amounts on deposit in the Collection Account, Payahead Account and Reserve
Account on a Payment Date deposited therein pursuant to the Sale and
Servicing Agreement (i) (a) for the benefit of the Class A-1 Notes, to the
Class A-1 Noteholders, (b) for the benefit of the Class A-2 Notes, to the
Class A-2 Noteholders, (c) for the benefit of the Class A-3 Notes, to the
Class A-3 Noteholders; (d) for the benefit of the Class B Notes, to the Class
B Noteholders and (e) for the benefit of the Class C Notes, to the Class C
Noteholders, (ii) for the benefit of the Certificateholders, to or as
directed by the Owner Trustee or the Administrator, as set forth in Sections
5.06 and 5.07 of the Sale and Servicing Agreement, (iii) for the benefit of
the Servicer, to or as directed by the Servicer pursuant to Section 5.06 of
the Sale and Servicing Agreement; and (iv) for the benefit of the Seller, to
or as directed by the Seller pursuant to Section 5.07 of the Sale and
Servicing Agreement. Amounts properly withheld under the Code by any Person
from a payment to any Noteholder or Certificateholder of interest and/or
principal shall be considered as having been paid by the Issuer to such
Noteholder or Certificateholder for all purposes of this Indenture.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or
agency where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby initially
appoints U.S. Bank National Association to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the Indenture Trustee with the
address thereof, such surrenders, notices and demands may be made or served
at the Corporate Trust Office, and the Issuer hereby appoints the Indenture
Trustee as its agent to receive all such surrenders, notices and demands.
SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. All
payments of amounts due and payable with respect to any Notes or Certificates
that are to be made from amounts withdrawn from the Collection Account,
Principal Distribution Account or Reserve Fund pursuant to Sections 2.07,
3.01, 4.02 and 4.03 shall be made on behalf of the Issuer by the Indenture
Trustee or by a Paying Agent, and no amounts so withdrawn from such accounts
for payments of Notes or Certificates shall be paid over to the Issuer, the
Owner Trustee or the Administrator except as provided in this Section.
15
<PAGE>
On or before each Payment Date, the Issuer shall deposit in the
Collection Account or, in accordance with the Sale and Servicing Agreement,
cause to be deposited (including the provision of instructions to the
Indenture Trustee to make any required withdrawals from the Payahead Account
or Reserve Account and to deposit such amounts in the Collection Account) to
the extent of funds available therefor, an aggregate sum sufficient to pay
the amounts then becoming due under the Notes and Certificates, such sum to
be held in trust for the benefit of the Persons entitled thereto, and (unless
the Paying Agent is the Indenture Trustee) shall promptly notify the
Indenture Trustee of its action or failure so to act.
The Indenture Trustee, as Paying Agent, hereby agrees with the Issuer
that it will, and the Issuer will cause each Paying Agent other than the
Indenture Trustee, as a condition to its acceptance of its appointment as Paying
Agent, to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of amounts due with
respect to the Notes or Certificates or for release to the Issuer for payment
to the Certificates in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and pay or release such sums to such Persons as herein
provided;
(b) give the Indenture Trustee notice of any default by the Issuer
(or any other obligor upon the Notes) of which it has actual knowledge in the
making of any payment required to be made with respect to the Notes or the
release of any amounts to the Issuer to be paid to the Certificateholders;
(c) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(d) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes (or
for release to the Issuer) if at any time it ceases to meet the standards
required to be met by a Paying Agent at the time of its appointment; and
(e) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes or Certificates (or
assisting the Issuer to withhold from payment to the Certificateholders) of
any applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
16
<PAGE>
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed after such
amount has become due and payable and after the Indenture Trustee has taken the
steps described in the next paragraph shall be discharged from such trust and be
paid to the California Special Olympics upon presentation thereto of an Issuer
Request; and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof, and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money shall
thereupon cease.
In the event that any Noteholder shall not surrender its Notes for
retirement within six months after the date specified in the written notice of
final payment described in Section 2.07, the Indenture will give a second
written notice to the registered Noteholders that have not surrendered their
Notes for final payment and retirement. If within one year after such second
notice any Notes have not been surrendered, the Indenture Trustee shall, at the
expense and direction of the Issuer, cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be paid to California Special Olympics. The
Indenture Trustee shall also adopt and employ, at the expense and direction of
the Issuer, any other reasonable means of notification of such repayment
specified by the Issuer or the Administrator.
SECTION 3.04. EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States
of America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate or the Owner Trust
Estate.
SECTION 3.05. PROTECTION OF TRUST ESTATE. The Issuer will from
time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(a) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(b) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(c) enforce any of the Collateral; or
(d) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
17
<PAGE>
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement
or other instrument required to be executed pursuant to this Section 3.05.
SECTION 3.06. OPINIONS AS TO TRUST ESTATE.
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the execution, recording
and filing of this Indenture, any indentures supplemental hereto, any
requisite financing statements and continuation statements and any other
requisite documents necessary to perfect and make effective the lien and
security interest of this Indenture or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security interest
effective.
(b) As and when specified in Section 10.02(h) of the Sale and
Servicing Agreement, the Issuer shall furnish to the Indenture Trustee an
Opinion of Counsel either stating that, in the opinion of such counsel, such
action has been taken with respect to the execution, recording, filing or
re-recording and refiling of this Indenture, any indentures supplemental
hereto, any financing statements and continuation statements and any other
requisite documents necessary to maintain the lien and security interest
created by this Indenture or stating that in the opinion of such counsel no
such action is necessary to maintain such lien and security interest. Such
Opinion of Counsel shall also describe the execution, recording, filing or
re-recording and refiling of this Indenture, any indentures supplemental
hereto, any financing statements and continuation statements and any other
documents that will, in the opinion of such counsel, be required to maintain
the lien and security interest of this Indenture until the date in the
following calendar year on which such Opinion of Counsel must again be
delivered.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING OF RECEIVABLES.
(a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in
the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement,
except in each case as expressly provided in the Basic Documents.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee in an Officer's
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Servicer and the Administrator
to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in the Basic Documents and in the
instruments and agreements included in the Trust Estate, including but not
limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of the Trust
Agreement, this Indenture and the Sale and Servicing Agreement in accordance
with and within the time periods provided for herein and therein.
18
<PAGE>
(d) If an Authorized Officer of the Issuer shall have knowledge of
the occurrence of a Servicer Default under the Sale and Servicing Agreement,
the Issuer shall promptly notify the Indenture Trustee and the Rating
Agencies thereof, and shall specify in such notice the action, if any, the
Issuer is taking with respect of such default. If a Servicer Default shall
arise from the failure of the Servicer to perform any of its duties or
obligations under the Sale and Servicing Agreement with respect to the
Receivables, the Issuer shall take all reasonable steps available to it to
remedy such failure.
(e) As promptly as possible after the giving of notice of
termination to the Servicer of the Servicer's rights and powers pursuant to
Section 8.01 of the Sale and Servicing Agreement, or if the Servicer resigns
in accordance with the terms of the Sale and Servicing Agreement, the
Indenture Trustee shall appoint a successor servicer (the "Successor
Servicer"), and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Indenture Trustee. In the
event that a Successor Servicer has not been appointed and accepted its
appointment as set forth in Section 8.02 of the Sale and Servicing Agreement,
the Indenture Trustee without further action shall automatically be appointed
the Successor Servicer and shall thereafter be entitled to the Servicing Fee.
Notwithstanding the above, the Indenture Trustee shall, if it shall be
unwilling or legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint any established institution having a net
worth of not less than $50,000,000 and whose regular business shall include
the servicing of automobile and/or light-duty truck receivables, as the
successor to the Servicer under the Sale and Servicing Agreement, in
accordance with the provisions of Section 8.02 of the Sale and Servicing
Agreement. Upon such appointment, the Indenture Trustee will be released from
the duties and obligations of acting as Successor Servicer, such release
effective upon the effective date of the servicing agreement entered into
between the Successor Servicer and the Issuer.
In connection with any such appointment, the Indenture Trustee may make
such arrangements for the compensation of such successor as it and such
Successor Servicer shall agree, subject to the limitations set forth below and
in the Sale and Servicing Agreement, and in accordance with Section 8.02 of the
Sale and Servicing Agreement, the Issuer shall enter into an agreement with such
successor for the servicing of the Receivables (such agreement to be in form and
substance satisfactory to the Indenture Trustee). If the Indenture Trustee shall
succeed to the Servicer's duties as servicer of the Receivables as provided
herein, it shall do so in its individual capacity and not in its capacity as
Indenture Trustee and, accordingly, the provisions of Article VI hereof shall be
inapplicable to the Indenture Trustee in its duties as Successor Servicer and
the servicing of the Receivables. In case the Indenture Trustee shall become the
Successor Servicer, the Indenture Trustee shall be entitled to appoint as a
subservicer any one of its affiliates, provided that the Indenture Trustee, in
its capacity as Successor Servicer, shall remain fully liable for the actions
and omissions of such Affiliate.
(f) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not enter into
any amendment, modification, supplement or waiver with respect to any Basic
Document except (i) to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders, and in each case with the consent of the Indenture
19
<PAGE>
Trustee (but without the consent of any of the Noteholders or the
Certificateholders) and delivery of an Opinion of Counsel delivered to the
Owner Trustee and the Indenture Trustee, to the effect that such action will
not adversely affect in any material respect the interests of any Noteholder
or Certificateholder; (ii) for the purpose of changing the formula for
determining the Specified Reserve Account Balance, the manner in which the
Reserve Account is funded, changing the remittance schedule for the deposit
of collections with respect to the Receivables in the Collection Account or
Payahead Account pursuant to Section 5.02 of the Sale and Servicing Agreement
or changing the definition of Eligible Investment, in each case with the
consent of the Indenture Trustee (but without the consent of any of the
Noteholders or the Certificateholders) if the Indenture Trustee and/or the
Owner Trustee, as the case may be, has received a letter from each Rating
Agency to the effect that such Rating Agency will not qualify, reduce or
withdraw the rating it has currently assigned to any Class of Notes as a
result of such amendment (provided that no such amendment may increase or
reduce in any manner or accelerate or delay the timing of collections on the
Receivables or payments required to be made to any Class of Notes or
Certificates without the consent of all Holders of each effected Class); or
(iii) with the consent of the Indenture Trustee and satisfaction of all other
conditions precedent to such action set forth in the related Basic Document.
If any such amendment, modification, supplement or waiver shall be so
consented to by the Indenture Trustee or such Holders, as applicable, the
Issuer agrees, promptly following a request by the Indenture Trustee to agree
to such amendment and to execute and deliver, in its own name and at its own
expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances to
implement such amendment and to cause the relevant Basic Documents, as
amended, to be enforceable against the Issuer.
SECTION 3.08. NEGATIVE COVENANTS. So long as any Notes are
Outstanding, the Issuer shall not:
(a) except as expressly permitted by Basic Documents, sell,
transfer, exchange or otherwise dispose of any of the properties or assets of
the Issuer, including those included in the Trust Estate, unless directed to
do so by the Indenture Trustee;
(b) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Noteholder by reason of the payment of the taxes levied or
assessed upon any part of the Trust Estate;
(c) except as may be expressly permitted hereby and by the Basic
Documents, (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to be
created on or extend to or otherwise arise upon or burden the Trust Estate or
any part thereof or any interest therein or the proceeds thereof (other than
tax liens, mechanics' liens and other liens that arise by operation of law,
in each case on any of the Financed Vehicles and arising solely as a result
of an action or omission of the related Obligor), (C) permit the lien of this
Indenture not to constitute a valid first priority
20
<PAGE>
(other than with respect to any such tax, mechanics' or other lien) security
interest in the Trust Estate or (D) dissolve or liquidate in whole or in
part; or
(d) assume or incur any indebtedness other than the Notes or as
expressly contemplated by this Indenture (in connection with the obligation
to reimburse Advances from the Trust Estate, or to pay expenses from the
Trust Estate) or by the Basic Documents as in effect on the date hereof.
SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
cause the Servicer to deliver to the Indenture Trustee concurrently with its
delivery thereof to the Issuer the annual statement of compliance described
in Section 4.11 of the Sale and Servicing Agreement. In addition, on the same
date annually upon which such annual statement of compliance is to be
delivered by the Servicer, the Issuer shall deliver to the Indenture Trustee
an Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that:
(a) a review of the activities of the Issuer during such year and of
its performance under this Indenture has been made under such Authorized
Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in its
compliance with any such condition or covenant, specifying each such default
known to such Authorized Officer and the nature and status thereof.
SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized
and existing under the laws of the United States of America or any
State or the District of Columbia and shall expressly assumed, by an
Indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee,
the duty to make due and punctual payments of the principal of and
interest on all Notes in accordance with the terms thereof and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all
as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) each Rating Agency shall have notified the Indenture
Trustee and the Owner Trustee that such transaction will not result in
the removal or reduction of the rating then assigned thereby to any
Class of Notes;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
21
<PAGE>
(v) any action that is necessary to maintain each lien and
security interest created by the Trust Agreement, the Sale and
Servicing Agreement or by this Indenture shall have been taken; and
(vi) The Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation or merger and any related supplemental indenture
complies with this Article III and that all conditions precedent
provided for in this Indenture relating to such transaction have
been complied with (including any filing required by the Exchange
Act).
(b) Except as expressly provided in this Indenture or in the Basic
Documents, the Issuer shall not convey or transfer its properties or assets,
including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer such
properties and assets of the Issuer shall (A) be a United States
citizen or a Person organized and existing under the laws of the
United States of America or any State or the District of Columbia,
(B) expressly assume, by an indenture supplemental hereto, executed
and delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee, the duty to make due and punctual payments of the
principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided
herein, (C) expressly agrees by means of such supplemental indenture
that all right, title and interest so conveyed or transferred shall
be subject and subordinate to the rights of Holders of the Notes,
(D) unless otherwise provided in such supplemental indenture,
expressly agrees to indemnify, defend and hold harmless the Issuer,
the Owner Trustee and the Indenture Trustee against and from any
loss, liability or expense arising under or related to this
Indenture and the Notes, and (E) expressly agrees by means of such
supplemental indenture that such Person (or if a group of Persons,
then one specified Person) shall make all filings that counsel
satisfactory to such purchaser or transferee and the Indenture
Trustee determines must be made with (1) the Commission (and any
other appropriate Person) required by the Exchange Act or the
appropriate authorities in any State in which the Notes have been
sold pursuant to any qualification or exemption under the securities
or "blue sky" laws of such State, in connection with the Notes or
(2) the Internal Revenue Service or the relevant state or local
taxing authorities of any jurisdiction;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) each Rating Agency shall notified the Indenture Trustee
and the Owner Trustee that such transaction might or would result in
the removal or reduction of the rating then assigned thereby to any
Class of Notes;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
22
<PAGE>
(v) any action that is necessary to maintain each lien and
security interest created by the Trust Agreement, the Sale and
Servicing Agreement or by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
SECTION 3.11. SUCCESSOR OR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer in accordance
with Section 3.10(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted for,
and may exercise every right and power of, the Issuer under this Indenture
with the same effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties
of the Issuer pursuant to Section 3.10(b), Toyota Auto Receivables 1999-A
Owner Trust will be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the Issuer with respect
to the Notes immediately upon the delivery of written notice to the Indenture
Trustee stating that Toyota Auto Receivables 1999-A Owner Trust is to be so
released.
SECTION 3.12. NO OTHER BUSINESS. Unless and until the Issuer shall
have been released from its duties and obligations hereunder, the Issuer
shall not engage in any business other than financing, purchasing, owning,
selling and managing the Receivables in the manner contemplated by the Basic
Documents and activities incidental thereto.
SECTION 3.13. NO BORROWING. Unless and until the Issuer shall have
been released from its duties and obligations hereunder, the Issuer shall not
issue, incur, assume, guarantee or otherwise become liable, directly or
indirectly, for any indebtedness except for the Notes or other obligations
permitted hereunder (including the obligation to reimburse Advances or
certain expenses of the Servicer) or under another Basic Document (including
indemnification expenses of the Issuer and certain fees and expenses of the
Administrator).
SECTION 3.14. SERVICER'S NOTICE OBLIGATIONS. The Issuer shall cause
the Servicer to comply with all of its duties and obligations with respect to
the preparation of reports, the delivery of Officer's Certificates and
Opinions of Counsel and the giving of instructions and notices under the Sale
and Servicing Agreement (including, but not limited to, under Sections 3.02,
4.08, 4.10, 4.11, 4.12, 4.15, 5.08 and Article X thereof).
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Unless and until the Issuer shall have been released from its duties and
obligations hereunder, except as contemplated by the Sale and Servicing
Agreement, this Indenture or the other Basic Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly
or by an instrument having the effect of assuring another's payment or
performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently
23
<PAGE>
liable, directly or indirectly, in connection with the obligations, stocks or
dividends of, or own, purchase, repurchase or acquire (or agree contingently
to do so) any stock, obligations, assets or securities of, or any other
interest in, or make any capital contribution to, any other Person.
SECTION 3.16. CAPITAL EXPENDITURES. Unless and until the Issuer
shall have been released from its duties and obligations hereunder, the
Issuer shall not make any expenditure (by long-term or operating lease or
otherwise) for capital assets (either realty or personalty).
SECTION 3.17. REMOVAL OF ADMINISTRATOR. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause
unless so instructed by the Owner Trustee or the Indenture Trustee and unless
each Rating Agency shall have received 10 days' written notice thereof and
shall not have notified the Indenture Trustee, the Administrator or the Owner
Trustee that such removal might or would result in the removal or reduction
of the rating then assigned thereby to any Class of Notes or the Certificates.
SECTION 3.18. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Servicer, the Owner Trustee or any Certificateholder or
otherwise with respect to any ownership or equity interest or security in or
of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for value
any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; PROVIDED, HOWEVER, that
the Issuer may make, or cause to be made, distributions or payments to the
Servicer, the Owner Trustee and the Certificateholders as contemplated by,
and to the extent funds are available for such purpose under, the Basic
Documents. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with the Basic
Documents.
SECTION 3.19. NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event
of Default hereunder, each default on the part of the Servicer or the Seller
of its obligations under the Sale and Servicing Agreement and each default on
the part of TMCC of its obligations under the Receivables Purchase Agreement.
The Indenture Trustee shall notify each Noteholder of record in writing of
any Event of Default promptly upon a Trust Officer obtaining actual knowledge
thereof. Such notices will be provided in accordance with Section 2.11 or
2.12, as applicable.
SECTION 3.20. FURTHER INSTRUMENTS AND ACTIONS. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall cease to be of further effect with respect to the Notes
except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
24
<PAGE>
Noteholders to receive payments of principal thereof and interest thereon,
(iv) Section 3.03, (v) the rights, obligations and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.07 and the obligations of the Indenture Trustee under
Sections 3.03 and 4.02), and (vi) the rights of Noteholders and
Certificateholders as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when:
(a) either (1) all Notes theretofore authenticated and delivered
(other than Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.05 and Notes for whose payment
money has theretofore been deposited in trust or segregated and held in trust
by the Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.03) have been delivered to the Indenture
Trustee for cancellation or (2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation have become due and payable or will become
due and payable within one year (either because the Class C Final Scheduled
Payment Date is within one year or because the Indenture Trustee has received
notice of the exercise of the option granted pursuant to Section 9.01 of the
Sale and Servicing Agreement) and the Issuer has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America
(which will mature prior to the date such amounts are payable), in trust for
such purpose, in an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Indenture Trustee
for cancellation when due;
(b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the
Indenture Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 11.01 and,
subject to Section 11.02, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
SECTION 4.02. APPLICATION OF TRUST MONEY. All moneys deposited with
the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust
and (a) applied by it in accordance with the provisions of the Notes and this
Indenture to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for
the payment of which such moneys have been deposited with the Indenture
Trustee, of all sums due and to become due thereon for principal and interest
or (b) released to the Owner Trustee for distribution to the
Certificateholders or application pursuant to the Trust Agreement or Sale and
Servicing Agreement; but such moneys need not be segregated from other funds
except to the extent required herein or in the Sale and Servicing Agreement
or required by law.
SECTION 4.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture with respect
to the Notes, all moneys then held by any Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with
25
<PAGE>
respect to such Notes shall, upon demand of the Issuer, be paid to the
Indenture Trustee to be held and applied according to Section 3.03 or 4.02
and thereupon such Paying Agent shall be released from all further liability
with respect to such moneys.
ARTICLE V
REMEDIES
SECTION 5.01. EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(a) default in the payment of any interest on any Class A Note when
the same becomes due and payable, and such default shall continue for a
period of five days (so long as any Class A Notes are Outstanding, each
Holder of any Class B and Class C Note or the Note Owner of any such Note by
such Holder's acceptance of such Note or beneficial interest therein, as the
case may be, shall be deemed to have consented to the delay in payment of
interest on such Class of Notes and to have waived its right to institute
suit for enforcement of any such payment); or
(b) after the Class A Notes have been paid in full, default in the
payment of any interest on any Class B Note when the same becomes due and
payable, and such default shall continue for a period of five days (so long
as the Class B Notes are outstanding, each Holder of any Class C Note or the
Note Owner of any such note by such Holder's acceptance of such Note or
beneficial interest therein, as the case may be, shall be deemed to have
consented to the delay in payment of interest on such Class of Notes and to
have waived its right to institute suit for enforcement of any such payment);
or
(c) after the Class B Notes have been paid in full, default in the
payment of any interest on any Class C Note when the same becomes due and
payable, and such default shall continue for a period of five days (so long
as the Class C Notes are outstanding); or
(d) default in the payment of the principal of or any installment of
the principal of any Note when the same becomes due and payable; or
(e) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with) which shall continue or not be cured
for a period of 90 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer and
the Indenture Trustee by the Holders of at least 25% of the Outstanding
Amount of the Notes acting together as a single class, a written notice
specifying such default and requiring it to be remedied and stating that such
notice is a notice of Default hereunder;
26
<PAGE>
(f) any representation or warranty of the Issuer made in this
Indenture or in any certificate or other writing delivered pursuant hereto or
in connection herewith shall prove to have been incorrect in any material
respect as of the time when the same shall have been made, and such default
shall continue or not be cured, or the circumstance or condition in respect
of which such misrepresentation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 30 days after there shall have
been given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Holders of at least
25% of the Outstanding Amount of the Notes acting together as a single class,
a written notice specifying such incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice of
Default hereunder; or
(g) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part
of the Trust Estate in an involuntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part of
the Trust Estate, or ordering the winding-up or liquidation of the Issuer's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 90 consecutive days; or
(h) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an order
for relief in an involuntary case under any such law, or the consent by the
Issuer to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Issuer
or for any substantial part of the Trust Estate, or the making by the Issuer
of any general assignment for the benefit of creditors, or the failure by the
Issuer generally to pay its debts as such debts become due, or the taking of
any action by the Issuer in furtherance of any of the foregoing.
For purposes of determining whether an Event of Default pursuant to
Section 5.01(d) has occurred, the amount of principal required to be paid to the
Holders of any Class of Notes on any Payment Date is the amount available to be
paid thereto pursuant to Sections 5.05(c), (d) and (e) of the Sale and Servicing
Agreement; provided however that (i) the Class A-1 Notes are required to be paid
in full on or before the Class A-1 Final Scheduled Payment Date, meaning that
Holders of Class A-1 Notes are entitled to have received on or before such date
payments in respect of principal in an aggregate amount equal to the Class A-1
Initial Principal Balance together with all interest accrued thereon through
such date; (ii) the Class A-2 Notes are required to be paid in full on or before
the Class A-2 Final Scheduled Payment Date, meaning that Holders of Class A-2
Notes are entitled to have received on or before such date payments in respect
of principal in an aggregate amount equal to the Class A-2 Initial Principal
Balance together with all interest accrued thereon through such date, (iii) the
Class A-3 Notes are required to be paid in full on or before the Class A-3 Final
Scheduled Payment Date, meaning that Holders of Class A-3 Notes are entitled to
have received on or before such date payments in respect of principal in an
aggregate amount equal to the Class A-3 Initial Principal Balance together with
all interest accrued thereon through such date; (iv) the Class B Notes are
required to be paid in full on or before the Class B Final Scheduled Payment
Date, meaning that Holders of Class B Notes are entitled to have received on or
before such date payments in respect of principal in an aggregate amount equal
to the Class B Initial Principal Balance together with all
27
<PAGE>
interest accrued thereon through such date and (v) the Class C Notes are
required to be paid in full on or before the Class C Final Scheduled Payment
Date, meaning that Holders of Class C Notes are entitled to have received on
or before such date payments in respect of principal in an aggregate amount
equal to the Class C Initial Principal Balance together with all interest
accrued thereon through such date.
The Issuer shall deliver to the Indenture Trustee, within five days
after the occurrence thereof, written notice in the form of an Officer's
Certificate of any Default which with the giving of notice or the lapse of time
would become an Event of Default under clause (e), the status of such Default
and any action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If
an Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee or (i) the Holders of at least 51% of the
Outstanding Amount of the Class A Notes acting together as a single Class
(without the consent of the Class B Notes or the Class C Notes) or (ii) after
the Class A Notes have been paid in full, the Holders of at least 51% of the
outstanding principal amount of Class B Notes (without the consent of any
holder of the Class C Notes) or (iii) after the Class B Notes have been paid
in full, the Holders of at least 51% of the outstanding principal amount of
Class C Notes (in each case excluding for such purposes the outstanding
principal amount of any Notes held of record or beneficially owned by TMCC,
TMCRC or any of their Affiliates), may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately
due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided: (i)
the Holders of Class A Notes representing at least 51% of the Outstanding Amount
of the Class A Notes, acting together as a single Class, without the consent of
any Holder of the Class B Notes or Class C Notes or (ii) after the Class A Notes
have been paid in full, the Holders of the Class B Notes representing a majority
of the Outstanding Amount of the Notes, without the consent of any Holder of the
Class C Notes or (iii) after the Class B Notes have been paid in full, the
Holders of the Class C Notes representing a majority of the Outstanding Amount
of the Notes, without the consent of any Holder of the Certificates; in each
case, by written notice to the Issuer and the Indenture Trustee, may rescind and
annul such declaration and its consequences if:
(a) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(i) all payments of principal of and interest on the
respective Class of Notes and all other amounts that would then be due
hereunder or in accordance with the terms of the Notes if the Event of
Default giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel; and
28
<PAGE>
(b) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration, have
been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY INDENTURE TRUSTEE.
(a) The Issuer covenants that if (i) Default is made (A) in the
payment of any interest on any Class A Note, so long as any amounts remain
unpaid with respect to the Class A Notes or (B) in the payment of any
interest on any Class B Note, after the Class A Notes have been paid in full
or (C) in the payment of any interest on any Class C Note, after the Class B
Notes have been paid in full, when the same becomes due and payable, and such
default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note
when the same becomes due and payable (as described in the penultimate
paragraph of Section 5.01 hereof), the Issuer will, upon demand of the
Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Holders of the Notes, the whole amount then due and payable on such Class of
Notes for principal and interest, with interest upon the overdue principal
and, to the extent payment at such rate of interest shall be legally
enforceable, upon overdue installments of interest at the rate borne by the
Notes and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee
and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so
due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer or other obligor upon
such Notes and collect in the manner provided by law out of the property of
the Issuer or other obligor upon such Notes, wherever situated, the moneys
adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its
discretion, proceed to protect and enforce its rights and the rights of the
Noteholders and, incidentally thereto, the Certificateholders, by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken
29
<PAGE>
possession of the Issuer or its property or such other obligor or Person, or
in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the
Issuer or such other obligor, then, irrespective of whether the principal of
any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee
shall have made any demand pursuant to the provisions of this Section, the
Indenture Trustee shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the
Notes and Certificates, and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable compensation
to the Indenture Trustee and each predecessor Indenture Trustee, and
their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence or bad faith)
and of the Noteholders or Certificateholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee,
a standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Noteholders or
Certificateholders and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee or the Holders of Notes allowed in
any judicial proceedings relative to the Issuer, its creditors and
its property; and any trustee, receiver, liquidator, custodian or
other similar official in any such Proceeding is hereby authorized
by each of such Noteholders to make payments to the Indenture
Trustee and, in the event that the Indenture Trustee shall consent
to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt
on behalf of any Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof or to authorize the Indenture Trustee to vote in respect of the claim
of any Noteholder in any such proceeding except, as aforesaid, to vote for
the election of a trustee in bankruptcy or similar Person.
30
<PAGE>
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture
Trustee without the possession of any of the Notes or the production thereof
in any trial or other Proceedings relative thereto, and any such action or
Proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Notes and,
incidentally thereto, for the benefit of the Certificateholders.
(g) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Noteholders, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.04. REMEDIES; PRIORITIES; INSOLVENCY OF SELLER.
(a) If (i) an Event of Default under Section 5.01(a) shall have
occurred and be continuing, (ii) an Event of Default under Section 5.01(b),
(c) or (d) shall have occurred and be continuing which results in the
acceleration of the Notes, or (iii) an Insolvency Event with respect to the
Seller shall have occurred and be continuing (whether or not the Trust Estate
is sold in one or more public or private sales as provided in Section
5.04(e)), the Indenture Trustee will make payments on the Notes and
Certificates as set forth in Section 5.06(d) of the Sale and Servicing
Agreement, rather than pursuant to Section 5.06(c).
(b) If an Event of Default under Section 5.01(e), (f), (g) or (h)
shall have occurred and be continuing which results in the acceleration of
the Notes (whether or not the Trust Estate is sold in one or more public or
private sales as provided in Section 5.04(d)(iv)), the Indenture Trustee will
make payments on the Notes and Certificates as set forth in Section 5.06(e)
of the Sale and Servicing Agreement, rather than pursuant to Section 5.06(c).
(c) If the Indenture Trustee, in compliance with Section 5.04(a) or
(b) is deemed to have a conflict of interest under the TIA and is required to
resign as Indenture Trustee hereunder, the Indenture Trustee, pursuant to
Section 6.10, may appoint one or more indenture trustees to act separately
hereunder for each Class of Notes (in the case of the Class A Notes, such
indenture trustee shall act for all Class A Notes as if they comprised a
single Class). In the event separate indenture trustees are appointed for one
or more Classes of Notes:
(i) so long as any amounts remain unpaid with respect to
the Class A Notes, only the Indenture Trustee for the Class A
Noteholders shall be entitled to waive any Event of Default or
Servicer Default or exercise any remedies under this Indenture;
(ii) after the Class A Notes have been paid in full, only
the Indenture Trustee for the Class B Noteholders shall be entitled
to waive any Event of Default or Servicer Default or exercise any
remedies under this Indenture; and
31
<PAGE>
(iii) after the Class B Notes have been paid in full, the
Indenture Trustee for the Class C Noteholders shall be entitled to
waive any Event of Default or Servicer Default or exercise any
remedies under this Indenture.
(d) In accordance with Section 5.03, if an Event of Default shall have
occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable on
the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes moneys
adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to
the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights
or interest therein, at one or more public or private sales called
and conducted in any manner permitted by law; PROVIDED, HOWEVER,
that, notwithstanding anything in this Indenture to the contrary,
the Indenture Trustee may not sell or otherwise liquidate the Trust
Estate following an Event of Default, other than an Event of Default
described in Section 5.01(a), (b), (c) or (d), unless (A) the
Holders of 100% of the Outstanding Amount of the (a) Class A Notes
so long as any amounts remain unpaid with respect to such Notes or
(b) after the Class A Notes have been paid in full, the Class B
Notes or (c) after the Class B Notes have been paid in full, the
Class C Notes, consent thereto or (B) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon such Notes
for principal and interest or (C) the Indenture Trustee determines
that the Trust Estate will not continue to provide sufficient funds
on an ongoing basis to make all payments of principal of and
interest on the Notes as they would have become due if the Notes had
not been declared due and payable, and the Indenture Trustee obtains
the consent of Holders of 66-2/3% of the Outstanding Amount of the
Class A Notes (acting together as a single class) if any amounts
remain unpaid with respect to such Notes or after the Class A Notes
have been paid in full, the Class B Notes or after the Class B Notes
have been paid in full, the Class C Notes. In determining such
sufficiency or insufficiency with respect to clause (B) and (C), the
Indenture Trustee may, but need not, obtain and rely upon an opinion
of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the related record date, payment date and amount to be
paid.
32
<PAGE>
(e) If an Insolvency Event occurs with respect to the Seller, the
Indenture Trustee (or the Indenture Trustee for the relevant Class of Notes,
pursuant to Section 5.04(c)) will sell the Trust Estate or any portion
thereof or rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law and in a commercially
reasonable manner and on commercially reasonable terms in accordance with the
provisions of Section 9.02 of the Trust Agreement; PROVIDED, HOWEVER, that
the Indenture Trustee (or the Indenture Trustee for the relevant Class of
Notes, pursuant to Section 5.04(c)) may not sell or otherwise liquidate the
Trust Estate in connection with such event if, prior to the termination of
the Trust Agreement pursuant to Section 9.02 of the Trust Agreement, the
Holders of at least 51% of the Outstanding Amount of the (a) Class A Notes so
long as any amounts remain unpaid with respect to such Notes or (b) after the
Class A Notes have been paid in full, the Class B Notes or (c) after the
Class B Notes have been paid in full, the Class C Notes, (in each case
excluding from such action and calculation all Notes held by TMCC, TMCRC or
any of their Affiliates) notify the Indenture Trustee in writing that they
disapprove of such sale or liquidation and the termination of trusts created
hereby in connection therewith; and PROVIDED, FURTHER, that in connection
with any such sale the Indenture Trustee will afford the Holders of each
Class of Notes adequate advance notice and information as to the conduct of
such sale such that any such Holders (acting individually, as Classes, as a
single Class or otherwise) will be reasonably able to submit bids for the
purchase of the assets to be liquidated, and that the Indenture Trustee will
consider any and all such bids on the same bases that it considers any other
bids submitted by any other party or parties. The proceeds of such sale or
liquidation (net of the expenses incurred by the Indenture Trustee in
connection with the conduct thereof, which will be retained by the Indenture
Trustee from such proceeds) will be treated as collections and deposited into
the Collection Account by the Indenture Trustee for distribution to the
Noteholders and Certificateholders in accordance with the priorities
specified in Section 5.06(d) of the Sale and Servicing Agreement. The
Indenture Trustee will have no liability with respect to the amount of such
proceeds or the adequacy thereof to make payments in full of any Class of
Notes or the Certificates. The Indenture Trustee may, but need not, obtain
and rely upon an opinion of an Independent investment banking or accounting
firm of national reputation as to the commercial reasonableness of the
conduct of any such sale or liquidation and as to the expenses incurred by
the Indenture Trustee in connection therewith, the costs of obtaining which
may be retained by the Indenture Trustee from the proceeds of such sale or
liquidation.
SECTION 5.05. OPTIONAL PRESERVATION OF THE RECEIVABLES. Except as
provided in Section 5.04(d)(iv), if the Notes have been declared to be due
and payable under Section 5.02 following an Event of Default and such
declaration and its consequences have not been rescinded and annulled, the
Indenture Trustee may, unless otherwise directed by the Holders of at least
51% of the Outstanding Amount of the (a) Class A Notes (acting together as a
single Class) so long as any amounts remain unpaid with respect to such Notes
or (b) after the Class A Notes have been paid in full, the Class B Notes or
(c) after the Class B Notes have been paid in full, the Class C Notes, (in
each case excluding from such action and calculation all Notes held by TMCC,
TMCRC or any of their Affiliates), but need not, elect to maintain possession
of the Trust Estate and direct the Issuer, Servicer and Administrator not to
take steps to liquidate the Receivables. It is the desire of the parties
hereto and the Noteholders that there be at all times sufficient funds for
the payment of principal of and interest on the Notes, and the Indenture
Trustee shall take such desire into account when determining whether or not
to maintain
33
<PAGE>
possession of the Trust Estate. In determining whether to maintain possession
of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely
upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
SECTION 5.06. LIMITATION OF SUITS. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such Holder has previously given written
notice to the Indenture Trustee of a continuing Event of Default, and:
(a) the Event of Default arises from the Servicer's failure to
remit payments when due or
(b) the Holders of not less than 25% of the Outstanding Amount of
the (i) Class A Notes, so long as any Class A Notes remain Outstanding
(acting together as a single class) or (ii) Class B Notes, after the Class A
Notes have been paid in full or (iii) Class C Notes, after the Class B Notes
have been paid in full, have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own name
as Indenture Trustee hereunder and have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request and the Indenture Trustee for 30 days
after its receipt of such notice, request and offer of indemnity has failed
to institute such Proceedings.
It is understood and intended that no one or more Holders of Notes
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided.
SECTION 5.07. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST. Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any,
on such Note on or after the respective due dates thereof expressed in such
Note and in this Indenture (in each case with reference to the calculations
to be made pursuant to the Sale and Servicing Agreement) and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder; provided that each Holder or
Owner of a Class B Note will be deemed to have consented to any delay in the
payment thereto of any interest due thereon that is in accordance with the
payment of amounts pursuant to Section 5.06 of the Sale and Servicing
Agreement and to have waived its right to institute suit for enforcement of
any such payment for so long as any Class A Note is Outstanding, and each
Holder or Owner of a Class C Note will be deemed to have consented to any
delay in the payment thereto of any interest due thereon that is in
accordance with the payment of amounts pursuant to Section 5.06 of the Sale
and Servicing Agreement and to have waived its right to institute suit for
enforcement of any such payment for so long as any Class B Note is
Outstanding.
34
<PAGE>
SECTION 5.08. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
SECTION 5.09. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission
of the Indenture Trustee or any Holder of any Note to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.11. CONTROL BY NOTEHOLDERS. The Holders of at least 51% of
the Outstanding Amount of the (i) Class A Notes, so long as any Class A Notes
remain Outstanding (acting together as a single class) or (ii) Class B Notes,
after the Class A Notes have been paid in full or (iii) Class C Notes, after
the Class B Notes have been paid in full, shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available
to the Indenture Trustee with respect to the Notes or exercising any trust or
power conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule
of law or with this Indenture;
(ii) any direction to the Indenture Trustee to sell or
liquidate the Trust Estate shall be by Holders of Notes representing
not less than percentages of the Outstanding Amount of the Notes of
the relevant Class set forth in Section 5.04 or 5.05, as applicable
(excluding for such purposes the outstanding principal amount of any
Notes held of record or beneficially owned by TMCC, TMCRC or any of
their Affiliates); and
(iii) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction.
Notwithstanding the rights of Noteholders set forth in this Section,
subject to Sections 5.07 and 6.01, the Indenture Trustee need not take any
action that it determines would be illegal
35
<PAGE>
or may not lawfully be taken, might subject it to personal liability or would
be unduly prejudicial to the rights of any Noteholders not consenting to such
action.
SECTION 5.12. WAIVER OF PAST DEFAULTS. Prior to the declaration of
the acceleration of the maturity of the Notes as provided in Section 5.02 or
the liquidation or sale of the Trust Estate pursuant to Section 5.04, (i) the
Holders of Class A Notes representing at least 51% of the Outstanding Amount
of the Class A Notes (acting together as a single Class), without the consent
of any Holder of the Class B Notes or Class C Notes or (ii) after the Class A
Notes have been paid in full, the Holders of the Class B Notes representing
at least 51% of the Outstanding Amount of the Notes, without the consent of
any Holder of the Class C Notes or (iii) after the Class B Notes have been
paid in full, the Holders of the Class C Notes representing at least 51% of
the Outstanding Amount of the Notes, without the consent of any Holder of the
Certificates (excluding for such purposes the outstanding principal amount of
any Notes held of record or beneficially owned by TMCC, TMCRC or any of their
Affiliates); may waive any past Default, Event of Default or Servicer Default
and its consequences except a (a) Servicer Default in the deposit of
collections or other required amounts into the Collection Account, Principal
Distribution Account, Payahead Account or Reserve Fund, or (b) Default in
respect of a covenant or provision hereof that cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such
waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall
be restored to their former positions and rights hereunder, respectively; but
no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Note or Note Owner by such Holder's acceptance
of such Note or beneficial interest therein, as the case may be, shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to (a) any suit instituted
by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group
of Noteholders, in each case holding in the aggregate more than 25% of the
Outstanding Amount of Notes, or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture.
SECTION 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead or in any manner whatsoever, claim or take the benefit
or advantage of, any stay or extension law
36
<PAGE>
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Issuer (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 5.15. ACTION ON NOTES. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion
of the Trust Estate or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied in accordance
with Section 5.04.
SECTION 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee to do so
and at the Administrator's expense, the Issuer shall take all such lawful
action as the Indenture Trustee may request to compel or secure the
performance and observance by the Seller and the Servicer, as applicable, of
each of their obligations to the Issuer under or in connection with the Sale
and Servicing Agreement or by the Seller of its remedies under or in
connection with the Receivables Purchase Agreement, and to exercise any and
all rights, remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Sale and Servicing Agreement to the extent
and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Seller or the Servicer
thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by the Seller or the Servicer of
each of their respective obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing or by telephone, confirmed in writing promptly thereafter) of the
Holders of 66-2/3% of the Outstanding Amount of the (1) Class A Notes, so
long as any Class A Notes remain Outstanding (acting together as a single
class) or (2) Class B Notes, after the Class A Notes have been paid in full
or (3) Class C Notes, after the Class B Notes have been paid in full
(excluding for such purposes the outstanding principal amount of any Notes
held of record or beneficially owned by TMCC, TMCRC or any of their
Affiliates), shall exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Seller or the Servicer under or in
connection with the Sale and Servicing Agreement, against the Seller under or
in connection with the Receivables Purchase Agreement, or against the
Administrator under the Administration Agreement, including the right or
power to take any action to compel or secure performance or observance by the
Seller, the Servicer or the Administrator, of each of their obligations to
the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension, or waiver thereunder and any right of the Issuer to take
such action shall be suspended.
37
<PAGE>
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE.
(a) The Indenture Trustee, both prior to and after the occurrence of a
Servicer Default under the Sale and Servicing Agreement, undertakes to
perform such duties and only such duties as are specifically set forth in
this Indenture.
(b) The Indenture Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Indenture Trustee that shall be specifically
required to be furnished pursuant to any provision of this Indenture, shall
examine them to determine whether they conform on their face to the
requirements of this Indenture.
(c) No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own
negligent failure to act, its own bad faith or its own willful misfeasance;
PROVIDED, HOWEVER, that:
(i) the duties and obligations of the Indenture Trustee shall be
determined solely by the express provisions of this Indenture, the
Indenture Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture,
no implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee, the permissive right of the Indenture
Trustee to do things enumerated in this Indenture shall not be construed
as a duty and, in the absence of bad faith on the part of the Indenture
Trustee, the Indenture Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Indenture Trustee and
conforming on their face to the requirements of this Indenture;
(ii) the Indenture Trustee shall not be personally liable for an
error of judgment made in good faith by a Trust Officer, unless it shall
be proved that the Indenture Trustee was negligent in performing its
duties in accordance with the terms of this Indenture; and
(iii) the Indenture Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken in good
faith in accordance with the direction of (i) the Holders of at least
51% of the Outstanding Amount of the Class A Notes (acting together as a
single Class), without the consent of the Class B Notes or the Class C
Notes, or (ii) after the Class A Notes have been paid in full, the
Holders of at least 51% of the outstanding principal amount of Class B
Notes, without the consent of any holder of the Class C Notes or (iii)
after the Class B Notes have been paid in full, the Holders of at least
51% of the outstanding principal amount of Class C Notes (in each case
excluding for such purposes the outstanding principal amount of any
Notes held of record or beneficially owned by TMCC, TMCRC or any of
their Affiliates) relating to the time, method and place of conducting
any proceeding for any remedy available to the
38
<PAGE>
Indenture Trustee, or exercising any trust or power conferred upon the
Indenture Trustee under this Indenture. Moreover, if more than one
Indenture Trustee has been appointed, each Indenture Trustee shall owe any
and all fiduciary duties only to the Class or Classes of Notes on whose
behalf it shall have been appointed.
(d) The Indenture Trustee shall not be required to expend or risk its
own funds or otherwise incur financial liability in the performance of any of
its duties under this Indenture, or in the exercise of any of its rights or
powers, if there shall be reasonable grounds for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) All information obtained by the Indenture Trustee regarding the
Obligors and the Receivables contained in the Trust, whether upon the
exercise of its rights under this Indenture or otherwise, shall be maintained
by the Indenture Trustee in confidence and shall not be disclosed to any
other Person, unless such disclosure is required by any applicable law or
regulation or pursuant to subpoena.
(f) Pursuant to Sections 3.02 and 4.08 of the Sale and Servicing
Agreement, in the event that a Trust Officer of the Indenture Trustee
discovers that a representation or warranty with respect to a Receivable was
incorrect as of the time specified with respect to such representation and
warranty or that a covenant of the Servicer has been breached, and such
incorrectness or breach materially and adversely affects the interests of the
Issuer, the Indenture Trustee shall give prompt written notice to the
Servicer and the Owner Trustee of such incorrectness.
SECTION 6.02. RIGHTS OF INDENTURE TRUSTEE.
(a) Except as otherwise provided in Section 6.01:
(i) the Indenture Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate,
certificate of an authorized signatory, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) the Indenture Trustee may consult with counsel and any Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it under this
Indenture in good faith and in accordance with such Opinion of Counsel;
(iii) the Indenture Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture or
the Sale and Servicing Agreement, or to institute, conduct or defend any
litigation under this Indenture, or in relation to this Indenture or the
Sale and Servicing Agreement, at the request, order or direction of any
of the Noteholders pursuant to the provisions of this Indenture or the
Sale and Servicing Agreement, unless such Noteholders shall have offered
to the Indenture Trustee
39
<PAGE>
reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby;
(iv) the Indenture Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture;
(v) the Indenture Trustee shall not be bound to recalculate,
reverify, or make any investigation into the facts of matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by Holders of Notes
evidencing not less than 25% of the aggregate Outstanding Amount of the
(1) Class A Notes, so long as any Class A Notes remain Outstanding
(acting together as a single class) or (2) Class B Notes, after the
Class A Notes have been paid in full or (3) Class C Notes, after the
Class B Notes have been paid in full (excluding for such purposes the
outstanding principal amount of any Notes held of record or beneficially
owned by TMCC, TMCRC or any of their Affiliates); PROVIDED, HOWEVER,
that if the payment within a reasonable time to the
Indenture Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of
the Indenture Trustee, not reasonably assured to the Indenture Trustee
by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such cost,
expense or liability as a condition to so proceeding; the reasonable
expense of every such examination shall be paid by the Administrator or,
if paid by the Indenture Trustee, shall be reimbursed by the
Administrator upon demand; and nothing in this clause shall derogate
from the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors; and
(vi) the Indenture Trustee may execute any of the trusts or powers
under this Indenture or perform any duties under this Indenture either
directly or by or through agents or attorneys or a custodian.
(b) No Noteholder will have any right to institute any proceeding with
respect to this Indenture except upon satisfying the conditions set
forth in Section 5.06.
SECTION 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the Holder,
beneficial owner or pledgee of Notes and may otherwise deal with the Issuer
or its Affiliates with the same rights it would have if it were not Indenture
Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent
may do the same with like rights. However, in so doing the Indenture Trustee
must comply with Sections 6.11 and 6.12.
SECTION 6.04. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
makes no representations as to the validity or sufficiency of this Indenture
or of the Notes (other than the execution by the Indenture Trustee on behalf
of the Trust of, and the certificate of authentication on, the Notes), or of
the Certificates. The Indenture Trustee shall have no obligation to perform
any of the duties of the Servicer or the Administrator unless explicitly set
forth in this Indenture. The Indenture Trustee shall at no time have any
responsibility or liability for or with respect to
40
<PAGE>
the legality, validity and enforceability of the Notes or any Receivable, any
ownership interest in any Financed Vehicle, or the maintenance of any such
ownership interest, or for or with respect to the efficacy of the Trust or
its ability to generate the payments to be distributed to Noteholders under
this Indenture, including without limitation the validity of the assignment
of the Receivables to the Trust or of any intervening assignment; the
existence, condition, location and ownership of any Receivable or Financed
Vehicle; the existence and enforceability of any physical damage or credit
life or credit disability insurance; the existence and contents of any retail
installment sales contract or any computer or other record thereof; the
completeness of any retail installment sales contract; the performance or
enforcement of any retail installment sales contract; the compliance by the
Issuer with any covenant or the breach by the Issuer, Seller or Servicer of
any warranty or representation made under this Indenture or in any Basic
Document or other related document and the accuracy of any such warranty or
representation prior to the Indenture Trustee's receipt of notice or other
discovery of any noncompliance therewith or any breach thereof; the acts or
omissions of the Issuer, Seller or the Servicer; or any action by the
Indenture Trustee taken at the instruction of the Servicer, PROVIDED,
HOWEVER, that the foregoing shall not relieve the Indenture Trustee of its
obligation to perform its duties under this Indenture. Except with respect to
a claim based on the failure of the Indenture Trustee to perform its duties
under this Indenture or based on the Indenture Trustee's willful misconduct,
bad faith or negligence, no recourse shall be had for any claim based on any
provision of this Indenture, the Notes or Certificate or assignment thereof
against the institution serving as the Indenture Trustee in its individual
capacity. The Indenture Trustee shall not have any personal obligation,
liability or duty whatsoever to any Noteholder or any other Person with
respect to any such claim, and any such claim shall be asserted solely
against the Trust or any indemnitor who shall furnish indemnity as provided
in this Indenture. The Indenture Trustee shall not be accountable for the use
or application by the Issuer of any of the Notes or of the proceeds of such
Notes, or for the use or application of any funds paid to the Servicer in
respect of the Notes.
SECTION 6.05. NOTICE OF DEFAULTS. If a Trust Officer of the Indenture
Trustee knows that a Default has occurred and is continuing, the Indenture
Trustee shall mail to each Noteholder notice of such Default within 10 days
of the occurrence thereof. Except in the case of a Default in payment of
principal of or interest on any Note, the Indenture Trustee may withhold such
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
SECTION 6.06. REPORTS BY INDENTURE TRUSTEE TO HOLDERS. The Indenture
Trustee shall deliver or cause to be delivered annually to each Noteholder of
record such information as may be required to enable such holder to prepare
its federal and state income tax returns. The Indenture Trustee shall also
deliver or cause to be delivered annually to each Noteholder of record a
report relating to its eligibility and qualification to continue as Indenture
Trustee under this Indenture, any amounts advanced by it under this
Indenture, the amount, interest rate and maturity date of certain
indebtedness owed by the Trust to such Indenture Trustee, in its individual
capacity, the property and funds physically held by such Indenture Trustee in
its capacity as such, and any action taken by it that materially affects the
Notes and that has not been previously reported.
41
<PAGE>
SECTION 6.07. COMPENSATION AND INDEMNITY. The Issuer shall pay or shall
cause the Servicer to pay to the Indenture Trustee from time to time
reasonable compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of
an express trust. The Issuer shall reimburse or shall cause the Servicer to
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture
Trustee's agents, counsel, accountants and experts. The Administrator shall
indemnify or shall cause the Servicer to indemnify the Indenture Trustee
against any and all loss, liability or expense (including reasonable
attorneys' fees) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Administrator and the Servicer promptly of any claim for
which it may seek indemnity. Failure by the Indenture Trustee to so notify
the Administrator and the Servicer shall not relieve the Administrator or the
Servicer of its obligations hereunder. In case any such action is brought
against the Indenture Trustee under this Section 6.07 and it notifies the
Administrator of the commencement thereof, the Administrator will assume the
defense thereof, with counsel reasonably satisfactory to the Indenture
Trustee (who may, unless there is, as evidenced by an opinion of counsel to
the Indenture Trustee stating that there is an unwaivable conflict of
interest, be counsel to the Administrator), and neither the Administrator nor
the Servicer will be liable to the Indenture Trustee under this Section for
any legal or other expenses subsequently incurred by the Indenture Trustee in
connection with the defense thereof, other than reasonable costs of
investigation. Neither the Administrator nor the Servicer need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
The Administrator's payment obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this Indenture. When
the Indenture Trustee incurs expenses after the occurrence of a Default
specified in Section 5.01(g) or (h) or the Seller incurs expenses after the
occurrence of an Insolvency Event with respect to the Seller, the expenses
are intended to constitute expenses of administration under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
SECTION 6.08. REPLACEMENT OF INDENTURE TRUSTEE. The Indenture Trustee
may resign at any time by providing written notice of its resignation to the
Issuer. The Administrator, on behalf of the Issuer, may remove the Indenture
Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(d) the Indenture Trustee otherwise becomes legally or practically
incapable of fulfilling its duties hereunder.
42
<PAGE>
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the
Administrator, on behalf of the Issuer, shall promptly appoint a successor
Indenture Trustee. No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee shall become effective until the
acceptance of appointment by the successor Indenture Trustee pursuant to this
Section 6.08.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, to the Servicer and to the
Administrator. Thereupon the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall
have all the rights, powers and duties of the Indenture Trustee under this
Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
If a successor Indenture Trustee does not take office within 30 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Administrator or the Holders of a majority in
Outstanding Amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may at any time thereafter petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of
a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.07 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another Person,
the resulting, surviving or transferee corporation without any further act
shall be the successor Indenture Trustee if such surviving Person or
transferee corporation or bank shall be otherwise qualified and eligible
under Section 6.11. The Indenture Trustee shall provide the Issuer, the
Servicer and the Rating Agencies reasonable prior written notice of any such
transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes
or in this Indenture provided that the certificate of the Indenture Trustee
shall have.
43
<PAGE>
SECTION 6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE
INDENTURE TRUSTEE.
(a) Notwithstanding any other provisions of this Indenture, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the Trust, and
to vest in such Person or Persons, in such capacity and for the benefit of
the Noteholders, such title to the Trust Estate, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under
Section 6.11 and no notice to Noteholders of the appointment of any
co-trustee or separate trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(c) all rights, powers, duties and obligations conferred or imposed upon
the Indenture Trustee shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Indenture Trustee joining in and/or
directing such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Indenture Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Indenture Trustee;
(i) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(ii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(d) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts thereupon conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, including every provision of
this Indenture relating to the conduct of, affecting the liability of, or
affording protection to, the Indenture Trustee. Every such instrument shall
be filed with the Indenture Trustee.
44
<PAGE>
(e) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition and it or
its parent shall have a long-term debt rating of Baa3 or better by Moody's or
shall otherwise be acceptable to Moody's. The Indenture Trustee shall comply
with TIA Section 310(b), including the optional provision permitted by the
second sentence of TIA Section 310(b)(9); provided, however, that there shall
be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). An Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
SECTION 6.13. PENNSYLVANIA MOTOR VEHICLE SALES FINANCE ACT LICENSES. The
Indenture Trustee shall use its best efforts to maintain the effectiveness of
all licenses required under the Pennsylvania Motor Vehicle Sales Finance Act
in connection with this Indenture and the transactions contemplated hereby
until the lien and security interest of this Indenture shall no longer be in
effect in accordance with the terms hereof.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. NOTE REGISTRAR TO FURNISH NAMES AND ADDRESSES OF
NOTEHOLDERS. The Note Registrar shall furnish or cause to be furnished to the
Indenture Trustee, Owner Trustee, Servicer or Administrator, within 15 days
after receipt by the Note Registrar of a written request therefrom, a list of
the names and addresses of the Noteholders of any Class as of the most recent
Record Date. If three or more Holders of Notes of any Class, or one or more
Holders of such Notes evidencing not less than 25% of the Outstanding Amount
of such Notes (hereinafter referred to as "Applicants"), apply in writing to
the Indenture Trustee, and such application states that the Applicants desire
to communicate with other Noteholders with respect to their rights under this
Indenture or under the Notes and such application is accompanied by a copy of
the communication that such Applicants propose to transmit, then the
Indenture Trustee shall, within five Business Days after the receipt of such
application, afford such Applicants access, during normal business hours, to
the current list of Noteholders. Such Indenture Trustee may elect not to
afford the requesting Noteholders access to the list of Noteholders if it
agrees to
45
<PAGE>
mail the desired communication by proxy, on behalf of and at the expense of
the requesting Noteholders, to all Noteholders. Every Noteholder, by
receiving and holding a Note, agrees with the Indenture Trustee and the
Issuer that none of the Indenture Trustee, the Owner Trustee, the Issuer, the
Servicer or the Administrator shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Noteholders under this Indenture, regardless of the source from which such
information was derived.
If the Indenture Trustee shall cease to be the Note Registrar, then
thereafter the Administrator will furnish or cause to be furnished to the
Indenture Trustee not more than five days after the most recent Record Date
or at such other times as the Indenture Trustee reasonably may request in
writing, a list, in such form as the Indenture Trustee reasonably may
require, of the names and addresses of the Holders of Notes as of such Record
Date.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under
the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 3.12(c).
SECTION 7.03. REPORTS BY ISSUER.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with the rules and regulations prescribed from time to time
by the Commission such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time by such
rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses
46
<PAGE>
(i) and (ii) of this Section 7.03(a) and by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on September 30 of each year.
SECTION 7.04. REPORTS BY INDENTURE TRUSTEE. If required by TIA Section
313(a), within 60 days after each September 30 beginning with 1999, the
Indenture Trustee shall mail to each Noteholder as required by TIA Section
313(c) a brief report dated as of such date that complies with TIA Section
313(a). The Indenture Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable
to or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it as provided in
this Indenture. Except as otherwise expressly provided in this Indenture, if
any default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Trust Estate, the Indenture
Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim
a Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
SECTION 8.02. TRUST ACCOUNTS.
(a) On or prior to the Closing Date, the Issuer shall cause the Servicer
to establish and maintain, in the name of the Indenture Trustee, for the
benefit of the Noteholders and, to the extent set forth herein, the
Certificateholders, the Collection Account and Payahead Account as provided
in Section 5.01 of the Sale and Servicing Agreement.
(b) On or prior to the Closing Date, the Seller shall, pursuant to the
Securities Account Control Agreement, establish and maintain with the
Indenture Trustee, for the benefit of the Noteholders, the Reserve Account as
provided in Section 5.07 of the Sale and Servicing Agreement. Upon the
execution and delivery by the parties hereto of this Indenture, the Indenture
Trustee will deliver to the Securities Intermediary the Prohibition Notice
provided for in the Securities Account Control Agreement. In connection with
the termination of this
47
<PAGE>
Indenture, the Indenture Trustee will deliver to the Securities Intermediary
the Rescission of Prohibition Notice provided for in the Securities Account
Control Agreement.
SECTION 8.03. [Reserved].
SECTION 8.04. GENERAL PROVISIONS REGARDING ACCOUNTS.
(a) So long as no Default or Event of Default shall have occurred and be
continuing, all or a portion of the funds in the Collection Account and
Payahead Account shall be invested in Eligible Investments and reinvested by
the Indenture Trustee at the written direction of the Servicer, subject to
the provisions of Section 5.01 of the Sale and Servicing Agreement. All
income or other gain from investments of moneys deposited in the Collection
Account and Payahead Account shall be deposited by the Indenture Trustee in
the Collection Account and paid to the Servicer as servicing compensation on
each Payment Date, and any loss resulting from such investments in excess of
such income or gain (against which such losses will first be applied) shall
be charged to such account. The Servicer will not direct the Indenture
Trustee to make any investment of any funds or to sell any investment held in
the Collection Account or Payahead Account unless the security interest
granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Servicer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) So long as no Default or Event of Default shall have occurred and be
continuing, all or a portion of the funds in the Reserve Account shall be
invested in Eligible Investments and reinvested by the Indenture Trustee (by
delivery to the Securities Intermediary of appropriate Entitlement Orders) at
the written direction of the Seller, subject to the provisions of Section
5.07 of the Sale and Servicing Agreement and the provisions of the Securities
Account Control Agreement. All income or other gain from investments of
moneys deposited in the Reserve Account shall be paid by the Indenture
Trustee to the Seller on each Payment Date (by delivery to the Securities
Intermediary of appropriate Entitlement Orders). Subject to the right of the
Indenture Trustee to make withdrawals therefrom, as directed by the Servicer,
for the purposes and in the amounts set forth in Section 5.06 of the Sale and
Servicing Agreement, the Reserve Account and all funds held therein shall be
the property of the Seller and not the property of the Trust, the Owner
Trustee or the Indenture Trustee. The Seller will grant to the Indenture
Trustee, for the benefit of the Noteholders, a security interest in all funds
(including Eligible Investments, but not the income from such investments) in
the Reserve Account (including the Reserve Account Initial Deposit) and the
proceeds thereof, and the Indenture Trustee shall have all of the rights of a
secured party under the UCC with respect thereto; provided that all income
from the investment of funds in the Reserve Account and the right to receive
such income are retained by the Seller and are not transferred, assigned or
otherwise conveyed hereunder. The Seller will not direct the Indenture
Trustee to make any investment of any funds or to sell any investment held in
the Reserve Account unless the security interest granted and perfected in
such account will continue to be perfected in such investment or the proceeds
of such sale, in either case without any further action by any Person, and,
in connection with any direction to the Indenture Trustee to make any such
investment or sale, if requested by the Indenture Trustee, the
48
<PAGE>
Seller shall deliver to the Indenture Trustee an Opinion of Counsel,
acceptable to the Indenture Trustee, to such effect.
(c) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in the Collection Account,
Payahead Account or Reserve Account resulting from any loss on any Eligible
Investment included therein at the direction of the Servicer or Seller, as
the case may be, except for losses attributable to the Indenture Trustee's
failure to make payments on such Eligible Investments issued by the Indenture
Trustee, in its commercial capacity as principal obligor and not as trustee,
in accordance with the terms thereof.
(d) If (i) the Servicer or Seller shall have failed to give investment
directions for any funds on deposit in the Collection Account, Payahead
Account and Reserve Account, as the case may be, to the Indenture Trustee by
11:00 a.m. Eastern Time (or such other time as may be agreed by the Issuer
and Indenture Trustee) on any Business Day or (ii) a Default or Event of
Default shall have occurred and be continuing with respect to the Notes but
the Notes shall not have been declared due and payable pursuant to Section
5.02 or (iii) if such Notes shall have been declared due and payable
following an Event of Default, but amounts collected or receivable from the
Trust Estate are being applied in accordance with Section 5.05 as if there
had not been such a declaration, then the Indenture Trustee shall, to the
fullest extent practicable, invest and reinvest funds in the Trust Accounts
in one or more Eligible Investments specified in clause (h) of the definition
of Eligible Investments provided in the Sale and Servicing Agreement.
SECTION 8.05. RELEASE OF TRUST ESTATE.
(a) Subject to the payment of its fees and expenses pursuant to Section
6.07, the Indenture Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the lien of
this Indenture, or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances that are not inconsistent with the provisions
of this Indenture. No party relying upon an instrument executed by the
Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
outstanding and all sums due the Indenture Trustee pursuant to Section 6.07
have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture and release to or to the
order of the Issuer or, in the case of the Reserve Account, to the Seller,
entitled thereto any funds then on deposit in the Collection Account,
Payahead Account and Reserve Account, as the case may be. The Indenture
Trustee shall release property from the lien of this Indenture pursuant to
this Section 8.05(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.01.
SECTION 8.06. OPINION OF COUNSEL. The Indenture Trustee shall receive at
least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.05(a),
49
<PAGE>
accompanied by copies of any instruments involved, and the Indenture Trustee
shall also require, as a condition to such action, an Opinion of Counsel, in
form and substance satisfactory to the Indenture Trustee, stating the legal
effect of any such action, outlining the steps required to complete the same,
and concluding that all conditions precedent to the taking of such action
have been complied with and such action will not materially and adversely
impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; provided, however, that
such Opinion of Counsel shall not be required to express an opinion as to the
fair value of the Trust Estate. Counsel rendering any such opinion may rely,
without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in
connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
Subject to Section 9.03, without the consent of the Holders of any Notes but
with prior notice to the Rating Agencies, the Issuer and the Indenture
Trustee, when authorized by an Issuer Order, at any time and from time to
time, may enter into one or more indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as in force at the date
of the execution thereof), in form satisfactory to the Indenture Trustee, for
any of the following purposes:
(a) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(b) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by any
such successor of the covenants of the Issuer herein and in the Notes
contained;
(c) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(d) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee;
(e) to cure any ambiguity, to correct or supplement any provision herein
or in any supplemental indenture that may be inconsistent with any other
provision herein or in any supplemental indenture or to make any other
provisions with respect to matters or questions arising under this Indenture
or in any supplemental indenture to the extent such action shall not
adversely affect the interests of the Holders of the Notes or the
Certificates;
(f) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this
50
<PAGE>
Indenture as shall be necessary to facilitate the administration of the
trusts hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(g) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
Subject to Section 9.03, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, also may, with prior notice to the Rating
Agencies and with the consent of (i) the Holders of at least 51% of the
Outstanding Amount of the Class A Notes (without the consent of the Class B
Notes or the Class C Notes), acting together as a single Class, or (ii) after
the Class A Notes have been paid in full, the Holders of at least 51% of the
outstanding principal amount of Class B Notes (without the consent of any
holder of the Class C Notes) or (iii) after the Class B Notes have been paid
in full, the Holders of at least 51% of the outstanding principal amount of
Class C Notes (in each case excluding for such purposes the outstanding
principal amount of any Notes held of record or beneficially owned by TMCC,
TMCRC or any of their Affiliates), by Action of such Holders delivered to the
Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be adversely affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The
Indenture Trustee shall not be liable for any such determination made in good
faith.
It shall not be necessary for any Action of Noteholders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Action shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. LIMITATIONS ON SUPPLEMENTAL INDENTURES. The Issuer and the
Indenture Trustee, in accordance with Sections 9.01 and 9.02 above, may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in
51
<PAGE>
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the Interest
Rate thereon, change the provisions of this Indenture relating to the
application of collections on, or the proceeds of the sale of, the Trust
Estate to payment of principal of or interest on the Notes, or change any
place of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of the provisions of this Indenture, to the extent provided in
Article V, requiring the application of funds available therefor to the
payment of any such amount due on the Notes on or after the respective due
dates thereof;
(b) reduce the percentage of the Outstanding Amount of the Notes (or the
Notes of any Class, as applicable), the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders
of which is required for any waiver of compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of
the term "Outstanding" or;
(d) reduce the percentage of the Outstanding Amount of the Notes (or the
Notes of any Class, as applicable) required to direct the Indenture Trustee
to direct the Issuer to sell or liquidate the Trust Estate pursuant to
Section 5.04;
(e) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional provisions
of this Indenture or the Basic Documents cannot be modified or waived without
the consent of the Holder of each Outstanding Note affected thereby;
(f) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the amount of any payment of interest or principal
due on any Note on any Payment Date (including the calculation of any of the
individual components of such calculation);
(g) permit the creation of any lien ranking prior to or on a parity with
the lien of this Indenture with respect to any part of the Trust Estate or,
except as otherwise permitted or contemplated herein, terminate the lien of
this Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien of this Indenture; or
(h) modify or alter the provisions hereof regarding the voting of Notes
held by the Indenture Trustee, the Owner Trustee, TMCC or any of its
affiliates or the Trust.
SECTION 9.04. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the
52
<PAGE>
modification thereby of the trusts created by this Indenture, the Indenture
Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02,
shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Indenture Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Indenture
Trustee's own rights, duties, liabilities or immunities under this Indenture
or otherwise.
SECTION 9.05. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any
and all purposes.
SECTION 9.06. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.07. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
TERMINATION OF THE TRUST
SECTION 10.01. TERMINATION OF THE TRUSTS CREATED BY INDENTURE.
(a) The trusts created hereby and the respective obligations and
responsibilities of the Issuer, the Administrator and the Indenture Trustee
shall terminate upon (i) the purchase as of any Payment Date by the Servicer,
or any successor to the Servicer, at its option of the Receivables primarily
comprising the corpus of the Owner Trust Estate as described in Section
10.02, (ii) the payment to the Noteholders of all amounts required to be paid
to them pursuant to this Agreement and the release to the Owner Trustee of
all remaining amounts or investments on deposit in the Collection Account or
Payahead Account and the release to the Seller of the amounts held in the
Reserve Account or (iii) the maturity or liquidation of the last Receivable
and the disposition of all property held as part of the Owner Trust Estate;
provided, however, that
53
<PAGE>
in no event shall the trust created by this Indenture continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of Joseph P. Kennedy, the late ambassador of the United States to the Court
of St. James, living on the date of this Indenture. The Owner Trustee shall
promptly notify the Indenture Trustee and each Rating Agency of any
prospective termination pursuant to this Section.
(b) Notice of any termination, specifying the Payment Date upon which
the Noteholders must surrender their Notes to the Indenture Trustee for
payment of the final distribution and retirement of the Notes, shall be given
promptly by the Indenture Trustee (at the written direction of the
Administrator) by letter to Noteholders mailed not later than the 15th day
and not earlier than the 30th day prior to the date on which such final
distribution is expected to occur specifying (i) the Payment Date upon which
final payment of the Notes shall be made upon presentation and surrender of
Notes at the office of the Indenture Trustee therein specified, (ii) the
amount of any such final payment and (iii) if applicable, that the Record
Date otherwise applicable to such Payment Date is not applicable, payments
being made only upon presentation and surrender of the Notes at the office of
the Indenture Trustee therein specified. The Indenture Trustee shall give
such notice to the Note Registrar (if other than the Indenture Trustee) at
the time such notice is given to Noteholders. In the event such notice is
given, the Seller, the Servicer, or any successor to the Servicer, or the
Trustee, as the case may be, shall make deposits into the Collection Account
in accordance with Section 5.02 of the Sale and Servicing Agreement, or, in
the case of an optional purchase of Receivables pursuant to Section 10.02,
shall deposit the amount specified in Section 10.02. Upon presentation and
surrender of the Notes, the Indenture Trustee shall cause to be distributed
to Noteholders amounts distributable on such Payment Date pursuant to Section
5.06 of the Sale and Servicing Agreement.
SECTION 10.02. OPTIONAL PURCHASE OF ALL RECEIVABLES. If the Servicer, or
any successor to the Servicer, shall notify the Owner Trustee and the
Indenture Trustee of its intention to exercise the option granted to it in
the Sale and Servicing Agreement to repurchase the outstanding Receivables
primarily comprising the Owner Trust Estate, then the Owner Trustee and
Indenture Trustee shall give written notice thereof to each Securityholder
and the Rating Agencies as soon as practicable after their receipt of notice
from the Servicer. Upon deposit by the Servicer or successor to the Servicer
of the amount necessary to effect such purchase of the corpus of the Owner
Trust Estate, the Indenture Trustee shall make the final distributions to the
Noteholders and Certificateholders as set forth in Section 5.06 of the Sale
and Servicing Agreement and Section 10.01 hereof and shall promptly transfer
all of its right, title and interest in and to any amounts or investments
remaining on deposit in the Trust Accounts (excluding any portion thereof
necessary to make distributions to Noteholders described in Section 3.03) to
the Owner Trustee for the benefit of the Certificateholders and release from
the lien of this Indenture all of the remaining Collateral. The Indenture
Trustee shall execute, deliver and file all agreements, certificates,
instruments or other documents necessary or reasonably requested by the Owner
Trustee in order to effect such release and the transfer to the Owner Trustee
of the Collateral.
54
<PAGE>
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall, upon written request therefor from the Indenture Trustee, furnish to
the Indenture Trustee (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any,
have been complied with and (iii) (if required by the TIA) an Independent
Certificate from a firm of certified public accountants meeting the
applicable requirements of this Section, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no such written
request from the Indenture Trustee need be furnished (and only such expressly
required documents need be delivered in connection therewith).
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for
the release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.01(a) or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or
other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signatory thereof as to the
55
<PAGE>
matters described in clause (i) above, the Issuer shall also deliver
to the Indenture Trustee an Independent Certificate as to the same
matters, if the fair value to the Issuer of the securities to be so
deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then-current
fiscal year of the Issuer, as set forth in the certificates delivered
pursuant to clause (i) above and this clause (ii), is 10% or more of
the Outstanding Amount of the Notes, but such a certificate need not
be furnished with respect to any securities so deposited, if the fair
value thereof to the Issuer as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the
Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person
the proposed release will not impair the security under this Indenture
in contravention of the provisions hereof.
SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller, the Issuer or the
Administrator, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such
56
<PAGE>
application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion
contained in any such document as provided in Article VI.
SECTION 11.03. ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Action" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.04. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND
RATING AGENCIES. Any request, demand, authorization, direction, notice,
consent, waiver or Action of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Action of Noteholders is
to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Indenture Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to: Toyota Auto
Receivables 1999-A Owner Trust, 19001 South Western Avenue, Torrance,
California 90509, Attention: Treasury Department, Vice President, Treasury,
or at any other address previously furnished in writing to the Indenture
Trustee by the Issuer or the Administrator. The Issuer shall promptly
transmit any notice received by it from the Noteholders to the Indenture
Trustee.
57
<PAGE>
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, to (i) in the case of
Moody's, at the following address: Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York 10007, (ii) in the
case of Standard & Poor's, at the following address: Standard & Poor's Ratings
Group, 26 Broadway (15th Floor), New York, New York 10004, Attention of Asset
Backed Surveillance Department; or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
SECTION 11.05. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) (a) in the
case of Book-Entry Notes, upon delivery to the Clearing Agency in writing and
(b) in the case of definitive Notes, when mailed, first-class, postage
prepaid to each Noteholder affected by such event, at his address as it
appears on the Note Register, in each case being delivered or mailed, as the
case may be, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Noteholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Noteholder
shall affect the sufficiency of such notice with respect to other
Noteholders, and any notice that is mailed in the manner herein provided
shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the
Indenture Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture
Trustee shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default
or Event of Default.
SECTION 11.06. ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for
in this Indenture for such payments or notices. The Issuer will furnish to
the Indenture Trustee a copy of each such agreement and the Indenture Trustee
will cause payments to be made and notices to be given in accordance with
such agreements.
SECTION 11.07. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this
58
<PAGE>
Indenture by any of the provisions of the Trust Indenture Act, such required
provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
SECTION 11.09. SUCCESSORS AND ASSIGNS. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this Indenture shall be for any reason
whatsoever held invalid or unenforceable in any jurisdiction, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Indenture and
shall in no way affect the validity or enforceability of the other provisions
of this Indenture or of the Notes or the Certificates or the rights of the
Holders thereof.
SECTION 11.11. BENEFITS OF INDENTURE. Nothing in this Indenture or
in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the Administrator, the
Servicer and the Noteholders, and any other party secured hereunder, and any
other Person with an ownership interest in any part of the Trust Estate, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 11.12. GOVERNING LAW. This indenture shall be governed by
and construed in accordance with the laws of the state of New York, without
reference to its conflict of law provisions, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
SECTION 11.13. COUNTERPARTS. This Indenture may be executed
simultaneously in any number of counterparts, each of which shall be deemed
to be an original, and all of which shall constitute but one and the same
instrument.
SECTION 11.14. RECORDING OF INDENTURE. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is
to be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any
other Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.
59
<PAGE>
SECTION 11.15. TRUST OBLIGATION. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or Certificates or under this
Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any Certificateholder or other owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Indenture Trustee or the
Owner Trustee in its individual capacity, any Certificateholder or other
owner of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee, in their capacities as such, have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any
unpaid consideration for stock, unpaid capital contribution or failure to pay
any installment or call owing to such entity. For all purposes of this
Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Article VI, VII and VIII of the
Trust Agreement.
SECTION 11.16. NO PETITION. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Seller or the
Issuer, or join in any institution against the Seller or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Certificates or any of the Basic Documents.
SECTION 11.17. INSPECTION. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee,
during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause (at the expense of the requesting party) such
books to be audited by Independent certified public accountants, and to
discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at
such reasonable times and as often as may be reasonably requested. The
Indenture Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment
are unavailing) and except to the extent that the Indenture Trustee may
reasonably determine that such disclosure is consistent with its obligations
hereunder.
60
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
TOYOTA AUTO RECEIVABLES 1999-A OWNER
TRUST
By: U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By: /S/ EDWARD F. KACHINSKI
-----------------------------------
Name: Edward F. Kachinski
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
By: /S/ EDWARD F. KACHINSKI
-----------------------------------
Name: Edward F. Kachinski
Title: Vice President
S-1
<PAGE>
STATE OF ____________________
COUNTY OF __________________
BEFORE ME, the undersigned authority, a Notary Public in and for
said county and state, on this day personally appeared, known to me to be
the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said U.S. BANK
NATIONAL ASSOCIATION, not in its individual capacity but as Owner Trustee of
the TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST, a Delaware business trust,
and that such person executed the same as the act of said business trust for
the purpose and consideration therein expressed, and in the capacities
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of July, 1999.
Notary Public in and for the State of ____________
(Seal)
My commission expires:
__________________________
<PAGE>
STATE OF ____________________
COUNTY OF __________________
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared, known to me to be the person
and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said U.S. BANK NATIONAL
ASSOCIATION, not in its individual capacity but as Indenture Trustee and
Securities Intermediary in connection with the Toyota Auto Receivables 1999-A
Owner Trust, a Delaware business trust, and that such person executed the same
as the act of said business trust for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of July, 1999.
Notary Public in and for the State of ____________
(Seal)
My commission expires:
<PAGE>
EXHIBIT A
(Form of Class A-1 Note, Class A-2 Note, Class A-3 Note, Class B Note and Class
C Note)
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE IS NOT AN OBLIGATION OF, AND WILL NOT BE INSURED OR
GUARANTEED BY, ANY GOVERNMENTAL AGENCY OR TOYOTA MOTOR CREDIT RECEIVABLES
CORPORATION, TOYOTA MOTOR CREDIT CORPORATION, TOYOTA MOTOR SALES, U.S.A., INC.,
ANY TRUSTEE OR ANY OF THEIR AFFILIATES. THE PRINCIPAL AND INTEREST ON THIS NOTE
IS PAYABLE SOLELY FROM PAYMENTS ON THE RECEIVABLES AND AMOUNTS ON DEPOSIT IN THE
RESERVE ACCOUNT.
No._____ $__________
TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
CLASS [A-1][A-2][A-3][B][C] ____% ASSET BACKED NOTES
Toyota Auto Receivables 1999-A Owner Trust, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of _______________ DOLLARS ($__________)
payable on each Payment Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $[INSERT INITIAL PRINCIPAL
AMOUNT OF NOTE] and the denominator of which is $[INSERT INITIAL CLASS BALANCE]
by (ii) the aggregate amount, if any, payable from the Collection Account or
Principal Distribution Account in respect of principal on the Class
[A-1][A-2][A-3][B][C] Notes pursuant to Section 3.01 of the Indenture dated as
of July 1, 1999, between the Issuer and U.S. Bank National Association, a
national banking association, as Indenture Trustee
A-1
<PAGE>
(the "Indenture Trustee") and Sections 5.06(c), (d) and (e) of the Sale and
Servicing Agreement dated as of July 1, 1999, between the Issuer, TMCRC, as
Seller, and TMCC, as Servicer (which amounts will be limited to the portion
of Available Collections available to make the payments specified in such
Sections); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Payment Date occurring in
_______ (the "Class [A-1][A-2][A-3][B][C] Final Scheduled Payment Date") and
the Payment Date described in Section 10.01 of the Indenture. Capitalized
terms used but not defined herein have the meanings ascribed thereto in the
Indenture and the Sale and Servicing Agreement, as the case may be.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Payment Date (after giving effect to all payments of principal made on
the preceding Payment Date), subject to certain limitations contained in Section
3.01 of the Indenture. Interest on this Note will accrue for each Payment Date
during the calendar month preceding such Payment Date (or, in the case of the
first Payment Date, from the Closing Date). Interest will be computed on the
basis specified in the Indenture for each Interest Period. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note is payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: July 22, 1999
TOYOTA AUTO RECEIVABLES 1999-A
OWNER TRUST
By: U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement,
By:
---------------------------------------
Authorized Signatory
A-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: July 22, 1999
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee,
By:
----------------------------------------
Authorized Signatory
A-4
<PAGE>
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ____% Asset Backed Notes, Class [A-1][A-2][A-3][B][C] (herein
called the "Class [A-1][A-2][A-3] Notes"), all issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Class
[A-1][A-2][A-3][B][C] Notes are subject to all terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class B Notes and the Class C Notes (collectively, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class [A-1][A-2][A-3][B][C] Notes will be payable on
each Payment Date in an amount described in the Indenture. "Payment Date" means
the fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing August 16, 1999.
Notwithstanding the foregoing, the entire unpaid principal amount of
the Notes shall be due and payable on the date on which an Event of Default
shall have occurred and be continuing and the Indenture Trustee or (i) the
Holders of at least 51% of the Outstanding Amount of the Class A Notes, acting
together as a single class (without the consent of the Class B Notes or the
Class C Notes) or (ii) after the Class A Notes have been paid in full, the
Holders of at least 51% of the outstanding principal amount of Class B Notes
(without the consent of any holder of the Class C Notes) or (iii) after the
Class B Notes have been paid in full, the Holders of at least 51% of the
outstanding principal amount of Class C Notes (in each case excluding for such
purposes the outstanding principal amount of any Notes held of record or
beneficially owned by TMCC, TMCRC or any of their Affiliates) have declared the
Notes to be immediately due and payable in the manner provided in Section 5.02
of the Indenture or following the termination or liquidation of the Trust Estate
in connection with the exercise by the Servicer of its option to purchase the
Receivables pursuant to Section 9.01 of the Sale and Servicing Agreement and
Section 10.02 of the Indenture or within 90 days of certain Insolvency Events
with respect to TMCRC. All principal payments on the Class [A-1][A-2][A-3][B][C]
Notes shall be made pro rata to the Class [A-1][A-2][A-3][B][C] Noteholders
entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note (or
one or more Predecessor Notes) is registered on the Record Date. With respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee, except for the final installment of principal payable with respect to
such Note on a Payment Date or on the applicable Final Scheduled Payment Date,
which shall be payable as provided below. Such payment will be made by check
mailed first-class postage prepaid to such Person's address as it appears on the
Note Register on such Record Date or by wire transfer to the account specified
by the registered holder of any Note with a face amount of at least $10,000,000.
Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu
A-5
<PAGE>
hereof, whether or not noted hereon. If funds are expected to be available,
as provided in the Indenture, for payment in full of the then remaining
unpaid principal amount of this Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was the Registered Holder hereof as of the Record Date preceding such
Payment Date by notice mailed or transmitted by facsimile prior to such
Payment Date, and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Indenture Trustee's principal
Corporate Trust Office or at the office of the Indenture Trustee's agent
appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class [A-1][A-2][A-3][B][C] Rate to the extent lawful.
[FOR CLASS B AND CLASS C NOTES] Default in the payment of interest on
this Class [B][C] Note is not an Event of Default under the Indenture so long as
any Class [A][B] Notes are Outstanding. By acceptance of this Class [B][C] Note
or any beneficial interest herein, you are deemed to have consented to the delay
in payment of interest on such Class [B][C] Note and waived your rights to
institute suit for enforcement of any such payment to the extent described in
the Indenture.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee as set forth in Section 2.04 of the Indenture, and thereupon
one or more new Notes of authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Note, but the Issuer may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee, in their capacities as such, have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
A-6
<PAGE>
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each
Note Owner by acceptance of a beneficial interest in a Note), agrees to treat
the Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture, in some
cases without the consent of the Holders of any Class of Notes and in other
cases with the consent of Holders of only certain Classes of Notes. Section 5.12
of the Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes of the
Class or Classes specified therein, on behalf of the Holders of all the Notes,
to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
A-7
<PAGE>
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this
Note at the times, place and rate, and in the coin or currency herein
prescribed.
A-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
- -------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints , attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: */
- -----------------------------
Signature Guaranteed:
*/
- -----------------------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
A-9
<PAGE>
EXHIBIT B
(Form of Note Depository Agreement)
<PAGE>
EXHIBIT 4.3
RECEIVABLES PURCHASE AGREEMENT
TOYOTA MOTOR CREDIT CORPORATION,
as Seller
and
TOYOTA MOTOR CREDIT RECEIVABLES CORPORATION,
as Purchaser
Dated as of July 1, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I.
DEFINITIONS
SECTION 1.01 Definitions........................................................................... 1
SECTION 1.02 Other Definitional Provisions......................................................... 4
ARTICLE II.
CONVEYANCE OF RECEIVABLES
SECTION 2.01 Conveyance of Receivables............................................................. 4
SECTION 2.02 Representations and Warranties of the Seller and the Purchaser........................ 5
SECTION 2.03 Representations and Warranties of the Seller as to the Receivables.................... 8
SECTION 2.04 Covenants of the Seller............................................................... 12
ARTICLE III.
PAYMENT OF RECEIVABLES PURCHASE PRICE
SECTION 3.01 Payment of Receivables Purchase Price................................................ 13
ARTICLE IV.
TERMINATION
SECTION 4.01 Termination.......................................................................... 13
ARTICLE V.
MISCELLANEOUS PROVISIONS
SECTION 5.01 Amendment............................................................................ 13
SECTION 5.02 Protection of Right, Title and Interest to Receivables............................... 13
SECTION 5.03 Governing Law........................................................................ 14
SECTION 5.04 Notices.............................................................................. 14
SECTION 5.05 Severability of Provisions........................................................... 14
SECTION 5.06 Assignment........................................................................... 14
SECTION 5.07 Further Assurances................................................................... 15
SECTION 5.08 No Waiver; Cumulative Remedies....................................................... 15
SECTION 5.09 Counterparts......................................................................... 15
SECTION 5.10 Third-Party Beneficiaries............................................................ 15
SECTION 5.11 Merger and Integration............................................................... 15
SECTION 5.12 Headings............................................................................. 15
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
SECTION 5.13 Indemnification...................................................................... 15
SECTION 5.14 Merger or Consolidation of, or Assumption of the Obligations of the Seller........... 16
Schedule A - Schedule of Receivables.................................................................. A-1
</TABLE>
ii
<PAGE>
RECEIVABLES PURCHASE AGREEMENT, dated as of July 1, 1999, between Toyota
Motor Credit Corporation, a California corporation, as seller, and Toyota
Motor Credit Receivables Corporation, a California corporation, as purchaser.
In consideration of the premises and mutual agreements herein contained,
each party agrees as follows for the benefit of the other party and for the
benefit of the Purchaser, Issuer and Indenture Trustee:
ARTICLE I.
DEFINITIONS
SECTION 1.01 DEFINITIONS. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:
"AGREEMENT" shall mean this Receivables Purchase Agreement and all
amendments hereof and supplements hereto.
"AMOUNT FINANCED" in respect of a Receivable means the aggregate amount
advanced under such Receivable toward the purchase price of the related
Financed Vehicle and any related costs, including but not limited to
accessories, insurance premiums, service and warranty contracts and other
items customarily financed as part of retail automobile and light duty truck
installment sale contracts.
"ANNUAL PERCENTAGE RATE" or "APR" of a Receivable means the annual rate
of finance charges specified in such Receivable.
"CLOSING DATE" shall mean July 22, 1999.
"CUTOFF DATE" shall mean July 1, 1999.
"DEALER RECOURSE" means, with respect to a Receivable, all recourse
rights against the Dealer which originated the Receivable, and any successor
Dealer.
"DEFERRED PREPAYMENT" means, with respect to a Precomputed Receivable
and a Collection Period, the aggregate amount, if any, of Payments Ahead
remitted to the Servicer in respect of such Receivable during one or more
prior Collection Periods and currently held by the Servicer or in the
Payahead Account.
"FINANCED VEHICLE" means, with respect to a Receivable, the related
automobile or light duty truck, as the case may be, together with all accessions
thereto, securing the related Obligor's indebtedness under such Receivable.
"INDENTURE TRUSTEE" shall mean U.S. Bank National Association, as
indenture trustee under the Indenture, or any successor trustee thereunder.
1
<PAGE>
"LIEN" means any security interest, lien, charge, pledge, equity or
encumbrance of any kind other than tax liens, mechanics' liens and any liens
that attach to a Receivable or any property, as the context may require, by
operation of law.
"LIQUIDATION PROCEEDS" means, with respect to a Defaulted Receivable,
all amounts realized with respect to such Receivable from whatever sources
(including, without limitation, proceeds of any Insurance Policy), net of
amounts that are required by law or such Receivable to be refunded to the
related Obligor.
"OBLIGOR" on a Receivable means the purchaser or co-purchasers of the
related Financed Vehicle purchased in part or in whole by the execution and
delivery of such Receivable or any other Person who owes or may be liable for
payments under such Receivable.
"OWNER TRUSTEE" shall mean U.S. Bank National Association, as owner
trustee under the Trust Agreement, or any successor trustee thereunder.
"PURCHASER" shall mean Toyota Motor Credit Receivables Corporation, in
its capacity as purchaser of the Receivables under this Agreement, and its
successors and assigns.
"RECEIVABLE" means any retail installment sale contract executed by an
Obligor in respect of a Financed Vehicle, and all proceeds thereof and payments
thereunder, which Receivable shall be identified in the Schedule of Receivables.
"RECEIVABLE FILE" means with respect to each Receivable:
(a) the fully executed original of the Receivable;
(b) documents evidencing or related to any Insurance Policy;
(c) the original credit application of each Obligor, fully
executed by such Obligor on TMCC's customary form, or on a form
approved by TMCC, for such application;
(d) the original certificate of title (or evidence that such
certificate of title has been applied for) or such documents that the
Servicer shall keep on file, in accordance with TMCC's customary
procedures, evidencing the security interest in the related Financed
Vehicle; and
(e) any and all other documents that the Seller or the Servicer,
as the case may be, shall keep on file, in accordance with its customary
procedures, relating to such Receivable or the related Obligor or
Financed Vehicle.
"RECEIVABLES PURCHASE PRICE" shall mean $984,068,241.84.
"RELEASED WARRANTY AMOUNT" means, with respect to a Payment Date and to
a Warranty Receivable, the Deferred Prepayment, if any, for such Warranty
Receivable.
2
<PAGE>
"SALE AND SERVICING AGREEMENT" shall mean the Sale and Servicing
Agreement dated as of July 1, 1999, by and among Toyota Auto Receivables
1999-A Owner Trust, as issuer, Toyota Motor Credit Receivables Corporation,
as seller, and Toyota Motor Credit Corporation, as servicer, and, as to
which, the Indenture Trustee is a third party beneficiary.
"SECURITIES ACCOUNT CONTROL AGREEMENT" shall have the meaning ascribed
thereto in the Sale and Servicing Agreement.
"SELLER" shall mean Toyota Motor Credit Corporation, in its capacity as
seller of the Receivables under this Agreement, and its successors and
assigns.
"SCHEDULE OF RECEIVABLES" means the schedule of receivables described in
Section 2.01(a) and attached as Schedule A hereto.
"TRUST" means the Toyota Auto Receivables 1999-A Owner Trust, a Delaware
business trust.
"TRUST AGREEMENT" means the Amended and Restated Trust Agreement dated
as of July 1, 1999, by and between Toyota Motor Credit Receivables
Corporation, as depositor, U.S. Bank National Association, as Owner Trustee,
and First Union Trust Company, National Association, as Delaware Co-trustee.
"WARRANTY PURCHASE PAYMENT" means, with respect to a Payment Date and to
(1) a Warranty Receivable which is a Precomputed Receivable repurchased by
the Seller as of the close of business on the last day of the related
Collection Period, (a) the sum of (i) all Scheduled Payments on such
Receivable due after the last day of such Collection Period, (ii) all past
due Scheduled Payments for which an Advance has not been made, (iii) an
amount equal to any reimbursement of Outstanding Advances made pursuant to
Section 5.04(b) of the Sale and Servicing Agreement with respect to such
Receivable and (iv) an amount equal to all other Outstanding Advances made
pursuant to Section 5.04(c) of the Sale and Servicing Agreement with respect
to such Receivable, minus (b) the sum of (i) any Rebate (except to the extent
specified in Section 4.03) and (ii) any other proceeds in respect of such
Receivable previously received (to the extent applied to reduce the Principal
Balance of such Receivable on such Payment Date), and (2) a Warranty
Receivable which is a Simple Interest Receivable repurchased by the Seller as
of the close of business on the last day of the related Collection Period,
the sum of (a) the unpaid principal balance owed by the Obligor in respect of
such Receivable plus (b) interest on such unpaid principal balance at a rate
equal to the related APR to the last day in the related Collection Period.
"WARRANTY RECEIVABLE" means a Receivable purchased by the Seller
pursuant to Section 2.03(c).
3
<PAGE>
SECTION 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) All capitalized terms not otherwise defined in this Agreement
shall have the defined meanings used in the Sale and Servicing Agreement or
Trust Agreement, as the case may be.
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section,
subsection and Schedule references contained in this Agreement are references
to Sections, subsections and Schedules in or to this Agreement unless
otherwise specified; and the word "including" means including without
limitation.
ARTICLE II.
CONVEYANCE OF RECEIVABLES
SECTION 2.01 CONVEYANCE OF RECEIVABLES.
(a) Subject to the terms and conditions of this Agreement, on the
Closing Date the Seller agrees to sell to the Purchaser, and the Purchaser
agrees to purchase from the Seller, without recourse (subject to the Seller's
obligations hereunder):
(i) all right, title and interest of the Seller in and to the
Receivables listed in the Schedule of Receivables and all monies due
thereon or paid thereunder or in respect thereof (including proceeds of
the repurchase of Receivables by the Seller pursuant to Section 2.03(c))
on or after the Cutoff Date;
(ii) the interest of the Seller in the security interests in the
Financed Vehicles granted by the Obligors pursuant to the Receivables and
any accessions thereto;
(iii) the interest of the Seller in any proceeds of any physical
damage insurance policies covering Financed Vehicles and in any proceeds
of any credit life or credit disability insurance policies relating to the
Receivables or the Obligors;
(iv) the interest of the Seller in any Dealer Recourse;
(v) the right of the Seller to realize upon any property (including
the right to receive future Liquidation Proceeds) that shall have secured
a Receivable and have been repossessed in accordance with the terms
thereof; and
(vi) all proceeds of the foregoing.
It is the intention of the Seller that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables
from the Seller to the Purchaser and the beneficial interest in and title to
the Receivables shall not be part of the Seller's estate in the event of the
filing of a bankruptcy petition by or against the Seller under any bankruptcy
law. The Seller agrees to execute and file all filings (including filings
under the UCC) necessary in
4
<PAGE>
any jurisdiction to provide third parties with notice of the sale of the
Receivables pursuant to this Agreement and to perfect such sale under the UCC.
(b) In connection with the foregoing conveyance, the Seller agrees
to record and file in California, at its own expense, a financing statement
with respect to the Receivables necessary to provide third parties with
notice of the conveyance hereunder and to perfect the sale of the Receivables
to the Purchaser, and the proceeds thereof (and any continuation statements
as are required by applicable state law), and to deliver a file-stamped copy
of each such financing statement (or continuation statement) or other
evidence of such filings (which may, for purposes of this Section, consist of
telephone confirmation of such filing with the file stamped copy of each such
filing to be provided to the Purchaser in due course), as soon as is
practicable after receipt by the Seller thereof.
In connection with the foregoing conveyance, the Seller further agrees,
at its own expense, on or prior to the Closing Date (i) to annotate and
indicate in its computer files that the Receivables have been transferred to
the Purchaser pursuant to this Agreement, (ii) to deliver to the Purchaser a
computer file or printed or microfiche list containing a true and complete
list of all such Receivables, identified by account number and by the
Principal Balance of each Receivable as of the Cutoff Date, which file or
list shall be marked as Schedule A to this Agreement and is hereby
incorporated into and made a part of this Agreement and (iii) to deliver the
Receivable Files to or upon the order of the Purchaser.
SECTION 2.02 REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE
PURCHASER.
(a) The Seller hereby represents and warrants to the Purchaser as
of the date of this Agreement and the Closing Date that:
(i) ORGANIZATION AND GOOD STANDING. The Seller shall have been duly
organized and shall be validly existing as a corporation in good standing
under the laws of the State of California, with corporate power and
authority to own its properties and to conduct its business as such
properties shall be currently owned and such business is presently
conducted, and had at all relevant times, and shall now have, corporate
power, authority and legal right to acquire, own and sell the Receivables.
(ii) DUE QUALIFICATION. The Seller shall be duly qualified to do
business as a foreign corporation in good standing, and shall have
obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of property or the conduct of its business
shall require such qualifications and where the failure to so qualify will
have a material adverse effect on the ability of the Seller to conduct
its business or perform its obligations under this Agreement.
(iii) POWER AND AUTHORITY. The Seller shall have the corporate power
and authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery and performance of this Agreement shall
have been duly authorized by the Seller by all necessary corporate action.
5
<PAGE>
(iv) BINDING OBLIGATION. This Agreement shall constitute a legal,
valid and binding obligation of the Seller enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights generally or by general principles of equity.
(v) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof shall not
conflict with, result in any breach of any of the terms and provisions of,
nor constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or bylaws of the Seller, or conflict with or
breach any of the material terms or provisions of, or constitute (with or
without notice or lapse of time) a default under, any indenture, agreement
or other instrument to which the Seller is a party or by which it shall be
bound; nor result in the creation or imposition of any lien upon any of
its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than the Basic Documents); nor violate any law or,
to the best of the Seller's knowledge, any order, rule or regulation
applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties;
which breach, default, conflict, lien or violation would have a material
adverse effect on the earnings, business affairs or business prospects of
the Seller.
(vi) NO PROCEEDINGS. There is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign, now
pending, or to the Seller's knowledge, threatened, against or affecting
the Seller: (i) asserting the invalidity of this Agreement, (ii) seeking
to prevent the consummation of any of the transactions contemplated by
this Agreement or (iii) seeking any determination or ruling that might
materially and adversely effect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement.
(b) The Purchaser hereby represents and warrants to the Seller as of
the date of this Agreement and the Closing Date that:
(i) ORGANIZATION AND GOOD STANDING. The Purchaser shall have been
duly organized and shall be validly existing as a corporation in good
standing under the laws of the State of California, and has corporate
power and authority to own its properties and to conduct its business
as such properties shall be currently owned and such business is
presently conducted, and had at all relevant times, and shall now have,
corporate power, authority and legal right to acquire and own the
Receivables.
(ii) DUE QUALIFICATION. The Purchaser shall be duly qualified to
do business as a foreign corporation in good standing, and shall have
obtained all necessary licenses and approvals in all jurisdictions
in which the ownership or lease of property or the conduct of its
business shall require such qualifications and where
6
<PAGE>
the failure to so qualify will have a material adverse effect on the
ability of the Purchaser to conduct its business or perform its
obligations under this Agreement.
(iii) POWER AND AUTHORITY. The Purchaser shall have the corporate
power and authority to execute and deliver this Agreement and to
carry out its terms; the Purchaser shall have full corporate power
and authority to purchase the property to be purchased and shall
have duly authorized such purchase; and the execution, delivery and
performance of this Agreement shall have been duly authorized by the
Purchaser by all necessary corporate action.
(iv) BINDING OBLIGATION. This Agreement shall constitute a legal,
valid and binding obligation of the Purchaser enforceable in
accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally or by general
principles of equity.
(v) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of
time) a default under, the articles of incorporation or bylaws of
the Purchaser, or conflict with or breach any of the material terms
or provisions of, or constitute (with or without notice or lapse of
time) a default under, any indenture, agreement or other instrument
to which the Purchaser is a party or by which it shall be bound; nor
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or
other instrument (other than the Basic Documents), nor violate any
law or, to the best of the Purchaser's knowledge, any order, rule or
regulation applicable to the Purchaser of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Purchaser
or its properties; which breach, default, conflict, Lien or
violation would have a material adverse affect on the earnings,
business affairs or business prospects of the Purchaser.
(vi) NO PROCEEDINGS. There is no action, suit or proceeding
before or by any court or governmental agency or body, domestic or
foreign, now pending, or to the Purchaser's knowledge, threatened,
against or affecting the Purchaser: (i) asserting the invalidity of
this Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that might materially and adversely affect
the performance by the Purchaser of its obligations under, or the
validity or enforceability of, this Agreement.
(c) The representations and warranties set forth in this Section
shall survive the sale of the Receivables by the Seller to the Purchaser
pursuant to this Agreement and the sale of the Receivables by the Purchaser
to the Issuer pursuant to the Sale and Servicing Agreement. Upon discovery by
the Seller, the Purchaser or the Owner Trustee of a breach of any of the
7
<PAGE>
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the others.
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO THE
RECEIVABLES.
(a) ELIGIBILITY OF RECEIVABLES. The Seller hereby represents and
warrants as of the Cutoff Date that:
(i) CHARACTERISTICS OF RECEIVABLES. Each Receivable (A) shall have
been originated in the United States by a Dealer for the retail sale of
the related Financed Vehicle in the ordinary course of such Dealer's
business, shall have been fully and properly executed by the parties
thereto, shall have been purchased by the Seller from such Dealer under
an existing agreement with the Seller and shall have been validly
assigned by such Dealer to the Seller in accordance with the terms of
such agreement, (B) shall have created or shall create a valid,
subsisting and enforceable first priority security interest in favor of
the Seller in the related Financed Vehicle, which security interest
shall be assignable and has been assigned by the Seller to the
Purchaser, (C) shall provide for monthly payments that fully amortize
the Amount Financed by maturity and provide for a finance charge or
yield interest at its APR, in either case calculated based on the Rule
of 78s, the simple interest method or the actuarial method, (D) shall
contain customary and enforceable provisions such that the rights and
remedies of the holder thereof shall be adequate for realization against
the collateral of the benefits of the security and (E) shall provide
for, in the event that such Receivable is prepaid, a prepayment that
fully pays the Principal Balance and includes accrued but unpaid
interest.
(ii) SCHEDULE OF RECEIVABLES. The information set forth in the
Schedule of Receivables shall be true and correct in all material
respects as of the opening of business on the Cutoff Date, the
Receivables were selected at random from the retail installment sale
contracts included in the portfolio of the Seller meeting the selection
criteria set forth in this Section and no selection procedures believed
to be adverse to the interests of any Securityholders shall have been
utilized in selecting the Receivables.
(iii) COMPLIANCE WITH LAW. To the knowledge of the Seller, each
Receivable and each sale of the related Financed Vehicle shall have
complied at the time it was originated or made, and shall comply at the
time of execution of this Agreement in all material respects with all
requirements of applicable federal, state and local laws, and
regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Magnuson-Moss
Warranty Act, Federal Reserve Board Regulations B, M and Z, to the
extent applicable, state adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code and other consumer credit, equal credit
opportunity and disclosure laws, except with respect to applicable
Florida documentary stamp taxes as to which the effect of noncompliance
will not have a material adverse effect on such Receivable.
8
<PAGE>
(iv) BINDING OBLIGATION. Each Receivable shall constitute the
legal, valid and binding payment obligation in writing of the related
Obligor, enforceable by the holder thereof in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights in general and by general principles of
equity, regardless of whether such enforceability shall be considered in
a proceeding in equity or at law.
(v) NO BANKRUPT OBLIGORS. None of the Receivables shall be due, to
the best knowledge of the Seller, from any Obligor who is presently the
subject of a bankruptcy proceeding or is insolvent.
(vi) NO GOVERNMENT OBLIGORS. None of the Receivables shall be due
from the United States or any state, or from any agency, department or
instrumentality of the United States or any state or local government.
(vii) EMPLOYEE OBLIGORS. None of the Receivables shall be due from
any employee of the Seller, the Purchaser or any of their respective
affiliates.
(viii) SECURITY INTEREST IN FINANCED VEHICLES. Immediately prior to
the sale, assignment and transfer thereof pursuant hereto, each
Receivable shall be secured by a validly perfected first priority
security interest in the related Financed Vehicle in favor of the Seller
as secured party or all necessary and appropriate action with respect to
such Receivable shall have been taken to perfect a first priority
security interest in such Financed Vehicle in favor of the Seller as
secured party.
(ix) RECEIVABLES IN FORCE. No Receivable shall have been satisfied,
subordinated or rescinded, nor shall any Financed Vehicle have been
released in whole or in part from the lien granted by the related
Receivable.
(x) NO WAIVERS. No provision of a Receivable shall have been waived
in such a manner that such Receivable fails to meet all of the other
representations and warranties made by the Seller herein with respect
thereto.
(xi) NO AMENDMENTS. No Receivable shall have been amended or
modified in such a manner that the total number of Scheduled Payments
has been increased or that the related Amount Financed has been
increased or that such Receivable fails to meet all of the other
representations and warranties made by the Seller herein with respect
thereto.
(xii) NO DEFENSES. No facts shall be known to the Seller which
would give rise to any right of rescission, setoff, counterclaim or
defense, nor shall the same have been asserted or threatened, with
respect to any Receivable.
(xiii) NO LIENS. To the knowledge of the Seller, no liens or claims
shall have been filed as of the date of this Agreement, including liens
for work, labor or materials relating to a Financed Vehicle, that shall
be liens prior to, or equal or coordinate with, the
9
<PAGE>
security interest in such Financed Vehicle granted by the related
Receivable, which Liens shall not have been released or satisfied as of
the Closing Date.
(xiv) NO DEFAULTS; NO REPOSSESSION. Except for payment defaults
that, as of the Cutoff Date, have been continuing for a period of not
more than 30 days, no default, breach, violation or event permitting
acceleration under the terms of any Receivable shall have occurred as of
the Cutoff Date; no continuing condition that with notice or the lapse
of time would constitute a default, breach, violation or event
permitting acceleration under the terms of any Receivable shall have
arisen; the Seller shall not have waived any of the foregoing; and no
Financed Vehicle has been repossessed without reinstatement as of the
Cutoff Date.
(xv) INSURANCE. The terms of each Receivable require the Obligor to
obtain and maintain physical damage insurance covering the related
Financed Vehicle in accordance with TMCC's normal requirements. The
terms of each Receivable allow, but do not require TMCC to (and TMCC, in
accordance with its current normal servicing procedures, does not)
obtain any such coverage on behalf of the Obligor.
(xvi) GOOD TITLE. It is the intention of the Seller that the
transfer and assignment herein contemplated, taken as a whole,
constitute a sale of the Receivables from the Seller to the Purchaser
and that the beneficial interest in and title to the Receivables not be
part of the debtor's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy law. No
Receivable has been sold, transferred, assigned or pledged by the Seller
to any Person other than the Purchaser, and no provision of a Receivable
shall have been waived, as provided in clause (x) above; immediately
prior to the transfer and assignment herein contemplated, the Seller had
good and marketable title to each Receivable free and clear of all Liens
and rights of others; immediately upon the transfer and assignment
thereof, the Purchaser shall have good and marketable title to each
Receivable, free and clear of all Liens and rights of others; and the
transfer and assignment herein contemplated has been perfected under the
UCC.
(xvii) LAWFUL ASSIGNMENT. No Receivable shall have been originated
in, or shall be subject to the laws of, any jurisdiction under which the
sale, transfer and assignment of such Receivable under this Agreement or
pursuant to transfers of the related certificates of title shall be
unlawful, void or voidable.
(xviii) ALL FILINGS MADE. As of the Closing Date, all filings
(including UCC filings) necessary in any jurisdiction to provide third
parties with notice of the transfer and assignment herein contemplated,
to perfect the sale of the receivables from the Seller to the Purchaser
and to give the Purchaser a first priority perfected security interest
in the Receivables shall have been made.
(xix) ONE ORIGINAL. There shall be only one original executed copy
of each Receivable.
10
<PAGE>
(xx) CHATTEL PAPER. Each Receivable constitutes "chattel paper" as
defined in the UCC.
(xxi) ADDITIONAL REPRESENTATIONS AND WARRANTIES. (A) Each
Receivable shall have an original number of Scheduled Payments of not
less than 12 nor more than 72 and, as of the Cutoff Date, a remaining
number of Scheduled Payments of not less than 4 nor more than 54; (ii)
each Receivable provides for the payment of a finance charge based on an
APR ranging from 8% to 15%; (iii) each Receivable shall have had an
original principal balance of not less than $1,090.01 and not more than
$50,000 and, as of the Cutoff Date, an unpaid principal balance of not
less than $250 nor more than $50,000; (iv) no Receivable was originated
under a special financing program; (v) no Receivable shall have a
Scheduled Payment that is more than 30 days past due as of the Cutoff
Date; (vi) no Financed Vehicle was subject to force-placed insurance as
of the Cutoff Date; (vii) there is no Receivable as to which payments
ahead of 6 or more Scheduled Payments have been received from or on
behalf of the related Obligor; and (viii) each Receivable is being
serviced by Toyota Motor Credit Corporation.
(b) NOTICE OF BREACH. The representations and warranties set forth
in this Section shall speak as of the execution and delivery of this
Agreement, but shall survive the sale, transfer and assignment of the
Receivables to the Purchaser and any subsequent assignment or transfer
pursuant to Article Two of the Sale and Servicing Agreement. The Purchaser,
the Seller or the Owner Trustee, as the case may be, shall inform the other
parties promptly, in writing, upon discovery of any breach of the Seller's
representations and warranties pursuant to this Section which materially and
adversely affects the interests of the Purchaser (or any assignee thereof) in
any Receivable.
(c) REPURCHASE OF RECEIVABLES. In the event of a breach of any
representation or warranty set forth in Section 2.03(a) which materially and
adversely affects the interest of the Purchaser (or any assignee thereof) in
any Receivable, unless such breach shall have been cured in all material
respects, the Seller shall repurchase such Receivable by the last day of the
second Collection Period following the Collection Period in which the
discovery of the breach is made or notice is received, as the case may be
(or, at the option of the Seller, the last day in the first Collection Period
following the Collection Period in which such discovery is made or such
notice received). This repurchase obligation shall obtain for all
representations and warranties of the Seller contained in this Agreement
whether or not the Seller has knowledge of the breach at the time of the
breach or at the time the representations and warranties were made. In
consideration of the purchase of any such Receivable, the Seller shall remit
an amount equal to the Warranty Purchase Payment in respect of such
Receivable to the Purchaser, and the Seller shall be entitled to receive the
Released Warranty Amount from (or on behalf of) the Purchaser. The sole
remedy of the Purchaser (or any assignee thereof) with respect to a breach of
the Seller's representations and warranties pursuant to this Agreement shall
be to require the Seller to repurchase the related Receivable pursuant to
this Section. Upon any such repurchase, the Purchaser shall, without further
action, be deemed to transfer, assign, set-over and otherwise convey to the
Seller, without recourse, representation or warranty, all the right, title
and interest of the Purchaser in, to and under such repurchased Receivable,
all monies due or to become due with respect thereto and all proceeds
thereof. The Purchaser or the Owner Trustee, as applicable,
11
<PAGE>
shall execute such documents and instruments of transfer or assignment and
take such other actions as shall reasonably be requested by the Seller to
effect the conveyance of such Receivable pursuant to this Section.
SECTION 2.04 COVENANTS OF THE SELLER. The Seller hereby covenants that:
(a) SECURITY INTERESTS. Except for the conveyances hereunder, the
Seller will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on any Receivable,
whether now existing or hereafter created, or any interest therein, the
Seller will immediately notify the Purchaser of the existence of any Lien on
any Receivable and, in the event that the interests of the Purchaser (or any
assignee thereof) in such Receivable are materially and adversely affected,
such Receivable shall be repurchased from the Purchaser by the Seller in the
manner and with the effect specified in Section 2.03(c), and the Seller shall
defend the right, title and interest of the Purchaser in, to and under the
Receivables, whether now existing or hereafter created, against all claims of
third parties claiming through or under the Seller; provided, however, that
nothing in this subsection shall prevent or be deemed to prohibit the Seller
from suffering to exist upon any of the Receivables, Liens for municipal or
other local taxes if such taxes shall not at the time be due and payable or
if the Seller shall currently be contesting the validity of such taxes in
good faith by appropriate proceedings and shall have set aside on its books
adequate reserves with respect thereto.
(b) DELIVERY OF PAYMENTS. The Seller agrees to deliver in kind upon
receipt to the Servicer under the Sale and Servicing Agreement (if other than
the Seller) all payments received by the Seller in respect of the Receivables
as soon as practicable after receipt thereof by the Seller from and after the
appointment of the Servicer as Servicer under the Sale and Servicing
Agreement with respect to the Toyota Auto Receivables 1999-A Owner Trust.
(c) CONVEYANCE OF RECEIVABLES. The Seller covenants and agrees that
it will not convey, assign, exchange or otherwise transfer the Receivables to
any Person prior to the termination of this Agreement pursuant to Article
Four hereof.
(d) NO IMPAIRMENT. The Seller shall take no action, nor omit to take
any action, which would impair the rights of the Purchaser in any Receivable,
nor shall it, except as expressly provided in this Agreement or the Sale and
Servicing Agreement, reschedule, revise or defer payments due on any
Receivable.
(e) DELIVERY OF OPINION OF COUNSEL. On the Closing Date, the Seller
will obtain and deliver to the Purchaser an Opinion of Counsel to the effect
that all of the Receivables originated in the State of California are
enforceable under California law and applicable federal laws, subject to
customary exceptions.
ARTICLE III.
PAYMENT OF RECEIVABLES PURCHASE PRICE
12
<PAGE>
SECTION 3.01 PAYMENT OF RECEIVABLES PURCHASE PRICE. In consideration of
the sale of the Receivables from the Seller to the Purchaser as provided in
Section 2.01, on the Closing Date the Purchaser agrees to pay the Seller an
amount equal to the Receivables Purchase Price. The Receivables Purchase
Price shall be paid in the form of (i) $951,998,567.84, the net cash proceeds
from the public offering by the Purchaser of the Notes (less amounts retained
to pay expenses of the Purchaser and to fund the Reserve Account Initial
Deposit), and (ii) $32,069,674 evidenced by a subordinated non-recourse
promissory note.
ARTICLE IV.
TERMINATION
SECTION 4.01 TERMINATION. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall
terminate, except for the indemnity obligations of the Seller as provided
herein, upon the termination of the Trust Agreement and dissolution of the
Issuer as provided in Article IX of the Trust Agreement.
ARTICLE V.
MISCELLANEOUS PROVISIONS
SECTION 5.01 AMENDMENT.
(a) This Agreement may be amended from time to time by the Purchaser
and the Seller to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to add
any other provision with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this
Agreement or the Trust Agreement and Sale and Servicing Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel to
the Purchaser delivered to the Owner Trustee, adversely affect in any
material respect the interests of the Issuer as assignee of the Purchaser's
rights and interests hereunder.
(b) This Agreement may also be amended from time to time by the
Purchaser and the Seller with the consent of the Owner Trustee for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement.
SECTION 5.02 PROTECTION OF RIGHT, TITLE AND INTEREST TO RECEIVABLES.
(a) The Seller at its expense shall cause this Agreement, all
amendments hereto and/or all financing statements and continuation statements
and any other necessary documents covering the Purchaser's right, title and
interest to the Receivables and other property conveyed by the Seller to the
Purchaser hereunder to be promptly recorded, registered and filed, and at all
times to be kept recorded, registered and filed, all in such manner and in
such places as may be required by law fully to preserve and protect the
right, title and interest of the Purchaser hereunder to all of the
Receivables and such other property. The Seller shall deliver to the
Purchaser file-stamped copies of, or filing receipts for, any document
recorded, registered or
13
<PAGE>
filed as provided above, as soon as available following such recording,
registration or filing. The Purchaser and the Owner Trustee shall cooperate
fully with the Seller in connection with the obligations set forth above and
will execute any and all documents reasonably required to fulfill the intent
of this subsection.
(b) Within 30 days after the Seller makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9402(7) of the UCC as in effect in
the applicable state, the Seller shall give the Purchaser notice of any such
change and shall execute and file such financing statements or amendments as
may be necessary to continue the perfection of the Purchaser's security
interest in the Receivables and the proceeds thereof.
(c) The Seller will give the Purchaser prompt written notice of any
relocation of any office from which the Seller keeps records concerning the
Receivables or of its principal executive office and whether, as a result of
such relocation, the applicable provisions of the UCC would require the
filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall execute and file such
financing statements or amendments as may be necessary to continue the
perfection of the interest of the Purchaser in the Receivables and the
proceeds thereof.
SECTION 5.03 GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
SECTION 5.04 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, return receipt requested, to (a)
in the case of the Purchaser, to Toyota Motor Credit Receivables Corporation,
19001 South Western Avenue, Torrance, California 90501, Attention: President;
(b) in the case of Toyota Motor Credit Corporation, 19001 South Western
Avenue, Torrance, California 90501, Attention: Treasury Department, Vice
President, Treasury; and (c) in the case of the Owner Trustee or the
Indenture Trustee, to U.S. Bank National Association, 111 East Wacker Drive,
Suite 3000, Chicago, Illinois 60601; or, as to any of such Persons, at such
other address as shall be designated by such Person in a written notice to
the other Persons.
SECTION 5.05 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions and terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement.
SECTION 5.06 ASSIGNMENT. This Agreement may not be assigned by the
Purchaser or the Seller except as contemplated by this Section and the Trust
Agreement and Sale and Servicing Agreement; provided, however, that
simultaneously with the execution and delivery of this Agreement, the
Purchaser shall assign all of its right, title and interest herein to the
Owner
14
<PAGE>
Trustee for the benefit of any Securityholders as provided in Section 2.01 of
the Sale and Servicing Agreement, to which the Seller hereby expressly
consents. The Seller also acknowledges that the Issuer will further assign
the rights and interests of the Purchaser hereunder to the Indenture Trustee
for the benefit of the Noteholders pursuant to the Indenture. The Seller
agrees to perform its obligations hereunder for the benefit of the Issuer,
and agrees that the Owner Trustee or the Indenture trustee, as applicable,
may enforce the provisions of this Agreement, exercise the rights of the
Purchaser and enforce the obligations of the Seller hereunder without the
consent of the Purchaser.
SECTION 5.07 FURTHER ASSURANCES. The Seller and the Purchaser agree to
do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the other party
hereto or by the Owner Trustee more fully to effect the purposes of this
Agreement, including, without limitation, the execution of any financing
statements, amendments, continuation statements or releases relating to the
Receivables for filing under the provisions of the UCC or other law of any
applicable jurisdiction.
SECTION 5.08 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of the Purchaser, the Owner Trustee, the
Indenture Trustee or the Seller, of any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exhaustive of any rights, remedies, powers
and privileges provided by law.
SECTION 5.09 COUNTERPARTS. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one
and the same instrument.
SECTION 5.10 THIRD-PARTY BENEFICIARIES. This Agreement will inure to the
benefit of and be binding upon the parties signatory hereto, and the Owner
Trustee for the benefit of any Securityholders, which shall be considered to
be a third-party beneficiary hereof. Except as otherwise provided in this
Agreement, no other Person will have any right or obligation hereunder.
SECTION 5.11 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 5.12 HEADINGS. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 5.13 INDEMNIFICATION. The Seller shall indemnify and hold
harmless the Purchaser, the Issuer, the Owner Trustee and the Securityholders
from and against any and all costs, expenses, losses, claims, damages, injury
and liabilities to the extent that such cost,
15
<PAGE>
expense, loss, claim, damage or liability arose out of, and was imposed upon
such Person through the willful misconduct or negligence of the Seller in the
performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement, including, but
not limited to, any judgment, award, settlement, reasonable attorneys' fees
and other costs or expenses incurred in connection with the defense of any
actual or threatened action, proceeding or claim; provided, however, that the
Seller shall not indemnify any such Person if such acts, omissions or alleged
acts or omissions constitute negligence or willful misconduct by the
Purchaser, the Owner Trustee or any Securityholders. In case any such action
is brought against a party indemnified under this Section 5.13 and it
notifies the Seller of the commencement thereof, the Seller will assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party (who may, unless there is, as evidenced by an Opinion of Counsel
stating that there is an unwaivable conflict of interest, be counsel to the
Seller), and the Seller will not be liable to such indemnified party under
this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, other than
reasonable costs of investigation.
SECTION 5.14 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SELLER.
(a) The Seller shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as
an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into which the
Seller is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Seller substantially as an entirety
shall be organized and existing under the laws of the United States or
any State or the District of Columbia, and, if the Seller is not the
surviving entity, shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Purchaser and the Owner Trustee,
in form reasonably satisfactory to the Purchaser and the Owner Trustee,
the performance of every covenant and obligation of the Seller hereunder
and shall benefit from all the rights granted to the Seller hereunder in
all material respects; and
(ii) The Seller shall have delivered to the Purchaser and the Owner
Trustee an Officer's Certificate of the Seller and an Opinion of Counsel
each stating that such consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
(b) The obligations of the Seller hereunder shall not be assignable
nor shall any Person succeed to the obligations of the Seller hereunder
except in each case in accordance with the provisions of the foregoing
paragraph and of Section 5.06.
16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first
above written.
TOYOTA MOTOR CREDIT CORPORATION,
as Seller
By: /s/ George Borst
---------------------------------
Name: George Borst
Title: Senior Vice President and
General Manager
TOYOTA MOTOR CREDIT RECEIVABLES
CORPORATION,
as Purchaser
By: /s/ Lloyd Mistele
---------------------------------
Name: Lloyd Mistele
Title: President
ACCEPTED:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Owner Trustee
and as Indenture Trustee
By: /s/ Edward F. Kachinski
------------------------------
Name: Edward F. Kachinski
Title: Vice President
S-1
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
Omitted -- originals on file at the offices
of the Seller, the Purchaser and the Owner Trustee
A-1
<PAGE>
EXHIBIT 4.4
TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
(a Delaware Business Trust)
--------------------------------------
AMENDED AND RESTATED TRUST AGREEMENT
between
TOYOTA MOTOR CREDIT RECEIVABLES CORPORATION,
as Depositor,
U.S. BANK NATIONAL ASSOCIATION,
as Owner Trustee
and
(For certain limited purposes only)
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
as Delaware Co-trustee
----------------------------------------------
Dated as of July 1, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions...........................................................................1
SECTION 1.02 Usage of Terms........................................................................4
ARTICLE II
CREATION OF TRUST
SECTION 2.01 Creation of Trust.....................................................................4
SECTION 2.02 Office................................................................................4
SECTION 2.03 Purposes and Powers...................................................................4
SECTION 2.04 Power of Attorney.....................................................................5
SECTION 2.05 Declaration of Trust..................................................................5
SECTION 2.06 Liability of the Certificateholders and TMCC..........................................6
SECTION 2.07 Title to Trust Property...............................................................6
SECTION 2.08 Situs of Trust........................................................................6
SECTION 2.09 Representations and Warranties of the Depositor.......................................7
SECTION 2.10 Federal Income Tax Allocations........................................................8
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.01 The Certificates......................................................................8
SECTION 3.02 Authentication of Certificates........................................................9
SECTION 3.03 Registration of Transfer and Exchange of Certificates.................................9
SECTION 3.04 Mutilated, Destroyed, Lost or Stolen Certificates....................................11
SECTION 3.05 Persons Deemed Certificateholders....................................................11
SECTION 3.06 Access to List of Certificateholders' Names and Addresses............................11
SECTION 3.07 Maintenance of Office or Agency......................................................12
SECTION 3.08 Appointment of Paying Agent..........................................................12
ARTICLE IV
ACTIONS BY OWNER TRUSTEE OR CERTIFICATEHOLDERS
SECTION 4.01 Prior Notice to Certificateholders with Respect to Certain Matters...................13
SECTION 4.02 Action by Certificateholders with Respect to Certain Matters.........................13
SECTION 4.03 Action with Respect to Bankruptcy....................................................13
SECTION 4.04 Restrictions on Certificateholders' Power............................................14
SECTION 4.05 Majority Control.....................................................................14
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.01 Establishment of Collection Account and Payahead Account.............................14
SECTION 5.02 Application of Amounts in Trust Accounts.............................................15
SECTION 5.03 Method of Payment....................................................................16
SECTION 5.04 Accounting and Reports to the Noteholders, Certificateholders, the Internal Revenue
Service and Others...................................................................16
SECTION 5.05 Signature on Returns; Tax Matter Partner.............................................16
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01 General Authority....................................................................17
SECTION 6.02 General Duties.......................................................................17
SECTION 6.03 Duties of Owner Trustee..............................................................17
SECTION 6.04 No Duties Except as Specified in this Agreement or in Instructions...................18
SECTION 6.05 No Action Except Under Specified Documents or Instructions...........................19
SECTION 6.06 Restrictions.........................................................................19
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.01 Rights of Owner Trustee..............................................................19
SECTION 7.02 Furnishing of Documents..............................................................20
SECTION 7.03 Representations and Warranties.......................................................20
SECTION 7.04 Reliance; Advice of Counsel..........................................................21
SECTION 7.05 Not Acting in Individual Capacity....................................................21
SECTION 7.06 Owner Trustee Not Liable for Certificates or Receivables.............................22
SECTION 7.07 Owner Trustee May Own Certificates and Notes.........................................22
SECTION 7.08 Pennsylvania Motor Vehicle Sales Finance Act Licenses................................22
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.01 Owner Trustee's Fees and Expenses....................................................23
SECTION 8.02 Indemnification......................................................................23
SECTION 8.03 Payments to the Owner Trustee........................................................23
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.01 Termination of Trust Agreement.......................................................24
SECTION 9.02 Dissolution upon Insolvency of the Depositor.........................................25
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.01 Eligibility Requirements for Owner Trustee...........................................26
SECTION 10.02 Resignation or Removal of Owner Trustee..............................................26
SECTION 10.03 Successor Owner Trustee..............................................................27
SECTION 10.04 Merger or Consolidation of Owner Trustee.............................................27
SECTION 10.05 Appointment of Co-Trustee or Separate Trustee........................................27
ARTICLE XI
AUTHORITY AND DUTIES OF DELAWARE CO-TRUSTEE
SECTION 11.01 General Authority of Delaware Co-trustee.............................................29
SECTION 11.02 Duties of Delaware Co-trustee........................................................29
SECTION 11.03 Representations and Warranties of Delaware Co-trustee................................30
SECTION 11.04 Compensation of Delaware Co-trustee..................................................31
SECTION 11.05 Indemnification of Delaware Co-trustee...............................................31
SECTION 11.06 Resignation or Removal of Delaware Co-trustee........................................31
SECTION 11.07 Payments to the Delaware Co-Trustee..................................................31
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 Supplements and Amendments...........................................................32
SECTION 12.02 No Legal Title to Owner Trust Estate in Certificateholders...........................33
SECTION 12.03 Limitations on Rights of Others......................................................33
SECTION 12.04 Notices..............................................................................34
SECTION 12.05 Severability.........................................................................34
SECTION 12.06 Counterparts.........................................................................34
SECTION 12.07 Successors and Assigns...............................................................34
SECTION 12.08 No Petition..........................................................................34
SECTION 12.09 No Recourse..........................................................................35
SECTION 12.10 Headings.............................................................................35
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C>
SECTION 12.11 GOVERNING LAW........................................................................35
SECTION 12.12 TMCC Payment Obligation..............................................................35
</TABLE>
-iv-
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT dated as of July 1, 1999,
between Toyota Motor Credit Receivables Corporation, a California corporation,
as depositor, U.S. Bank National Association, a national banking association,
not in its individual capacity but solely as Owner Trustee, and, for the limited
purposes set forth herein, First Union Trust Company, National Association, a
national banking association, not in its individual capacity but solely as
Delaware Co-trustee, amending and restating in its entirety the Trust Agreement
dated as of July 1, 1999, among the same parties, and herein referred to as the
"Trust Agreement" or this "Agreement".
IN CONSIDERATION of the mutual agreements herein contained,
and of other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. Except as otherwise specified herein or if
the context may otherwise require, capitalized terms used but not otherwise
defined herein have the meanings ascribed thereto in the Sale and Servicing
Agreement and the Indenture for all purposes of this Trust Agreement. Except
as otherwise provided in this Agreement, whenever used herein the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as
of July 1, 1999, by and between the Trust as issuer, TMCC as Administrator, the
Indenture Trustee and the Owner Trustee pursuant to which TMCC undertakes to
perform certain of the duties and obligations of the Trust and the Owner Trustee
hereunder, under the Sale and Servicing Agreement and under the Indenture.
"ADMINISTRATOR" means TMCC acting in its capacity as Administrator
under the Administration Agreement.
"AGREEMENT" means this Amended and Restated Trust Agreement, as the
same may be amended and supplemented from time to time.
"BASIC DOCUMENTS" means the Receivables Purchase Agreement, this
Agreement, the Certificate of Trust, the Sale and Servicing Agreement, the
Indenture, the Administration Agreement and the Securities Account Control
Agreement and the other documents and certificates delivered in connection
herewith and therewith.
"BUSINESS TRUST STATUTE" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as the same may be amended from time to
time.
"CERTIFICATE" means a certificate evidencing a beneficial ownership
interest in the Trust, substantially in the form attached hereto as Exhibit A.
1
<PAGE>
"CERTIFICATE BALANCE" means the Initial Certificate Balance provided
that the Certificate Balance will be reduced to zero on the date that final
assets in the Owner Trust Estate are distributed to the Certificateholders upon
termination of the Trust.
"CERTIFICATE OF TRUST" means the Certificate of Trust filed with
respect to the formation of the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"CERTIFICATE REGISTER" means the register maintained pursuant to
Section 3.03.
"CERTIFICATEHOLDER" or "HOLDER" means a Person in whose name a
Certificate is registered in the Certificate Register.
"CERTIFICATE REGISTRAR" means the Owner Trustee unless and until a
successor thereto is appointed pursuant to Section 3.03. The Certificate
Registrar initially designates its offices at 111 East Wacker Drive, Suite 3000,
Chicago, Illinois 60601, as its offices for purposes of Section 3.03.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.
"CORPORATE TRUST OFFICE" means, with respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee located at 111 East Wacker
Drive, Suite 3000, Chicago, Illinois 60601; or at such other address as the
Owner Trustee may designate by notice to the Certificateholders, or the
principal corporate trust office of any successor Owner Trustee (the address of
which the successor owner trustee will notify the Certificateholders).
"DELAWARE CO-TRUSTEE" means First Union Trust Company, National
Association, a national banking association, not in its individual capacity but
solely as Delaware co-trustee under this Agreement, and any successor Delaware
co-trustee hereunder.
"DEPOSITOR" means TMCRC in its capacity as depositor hereunder.
"EXPENSES" shall have the meaning assigned to such term in Section
8.02.
"INDENTURE" means the Indenture dated as of July 1, 1999, entered into
between the Trust and U.S. Bank National Association, the Indenture Trustee
named therein, pursuant to which a series of Notes are issued.
"INITIAL CERTIFICATE BALANCE" means $586.54.
"NON-U.S. PERSON" means any Person who is not (i) a citizen or resident
of the United States who is a natural person, (ii) a corporation or partnership
(or an entity treated as a corporation or partnership) organized in or under the
laws of the United States or any state thereof, including the District of
Columbia (unless, in the case of a partnership, Treasury Regulations are adopted
that provide otherwise), (iii) an estate, the income of which is subject to
United States Federal income taxation, regardless of its source or (iv) a trust,
if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States persons (as such
term is defined in the Code and Treasury Regulations)
2
<PAGE>
have the authority to control all substantial decisions of the trust; except
that, to the extent provided in Treasury Regulations, certain trusts in
existence prior to August 20, 1996 which elected to be treated as United
States Persons prior to such date also shall be U.S. Persons.
"NOTES" means the notes issued by the Trust pursuant to the Indenture,
having the payment and other terms set forth in such Indenture.
"OWNER TRUST ESTATE" means all right, title and interest of the Trust
in and to the property and rights assigned to the Trust pursuant to Article II
of the Sale and Servicing Agreement, all funds on deposit from time to time in
the accounts created pursuant to Section 5.01 of the Sale and Servicing
Agreement (excluding any net investment income with respect to amounts held in
such accounts) and all other property of the Trust from time to time, including
any rights of the Owner Trustee and the Trust pursuant to the Sale and Servicing
Agreement and the Administration Agreement, and as assignee of the rights and
Interests of the Depositor under the Receivables Purchase Agreement.
"OWNER TRUSTEE" means U.S. Bank National Association, a national
banking association, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"PAYING AGENT" means any paying agent or co-paying agent appointed
pursuant to Section 3.08, and shall initially be U.S. Bank National Association.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables
Purchase Agreement, dated as of the July 1, 1999, between TMCC, as Seller, and
TMCRC, as Purchaser of the Receivables.
"RECORD DATE" means, with respect to the Notes of any Class or the
Certificates and each Payment Date, the calendar day immediately preceding such
Payment Date or, if Definitive Notes representing any Class of Notes have been
issued, the last day of the month immediately preceding the month in which such
Payment Date occurs. Any amount stated "as of a Record Date" or "on a Record
Date" shall give effect to (i) all applications of collections, and (ii) all
payments and distributions to any party under this Agreement, the Indenture and
the Trust Agreement or to the related Obligor, as the case may be, in each case
as determined as of the opening of business on the related Record Date.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement
dated as of July 1, 1999, among the Trust, TMCRC, as seller, and TMCC, as
servicer.
"SECRETARY OF STATE" means the Secretary of State of the State of
Delaware.
"SECURITIES ACCOUNT CONTROL AGREEMENT" shall have the meaning ascribed
thereto in the Sale and Servicing Agreement.
"TMCC" means Toyota Motor Credit Corporation, a California corporation,
its successors and assigns.
3
<PAGE>
"TMCRC" means Toyota Motor Credit Receivables Corporation, a California
corporation, its successors and assigns.
"TREASURY REGULATIONS" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"TRUST" means the Toyota Auto Receivables 1999-A Owner Trust, formed as
a Delaware business trust pursuant to this Agreement and the filing of the
Certificate of Trust.
SECTION 1.02 USAGE OF TERMS. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other genders; references to "writing"
include printing, typing, lithography and other means of reproducing words in
a visible form; references to agreements and other contractual instruments
include all subsequent amendments thereto or changes therein entered into in
accordance with their respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and assigns; and the
term "including" means "including without limitation."
ARTICLE II
CREATION OF TRUST
SECTION 2.01 CREATION OF TRUST. There is hereby formed in accordance
with the provisions of the Delaware Act, a Delaware business trust to be
known as the Toyota Auto Receivables 1999-A Owner Trust. The Owner Trustee is
hereby authorized and vested with the power and authority to make and execute
contracts, instruments, certificates, agreements and other writings on behalf
of the Trust as set forth herein and to sue and be sued on behalf of the
Trust.
The Owner Trustee does hereby accept and agree to hold in trust, for
the benefit of the Certificateholders and such other Persons as may become
beneficiaries hereunder from time to time, all of the Owner Trust Estate
conveyed or to be conveyed to the Trust, and all monies and proceeds that may
be received with respect thereto, subject to the terms of this Agreement.
SECTION 2.02 OFFICE. The principal place of business of the
Trust for purposes of Delaware law shall be in care of the Delaware
Co-trustee. The Trust may establish additional offices located at such place
or places inside or outside of the State of Delaware as the Owner Trustee may
designate from time to time in written notice to each Certificateholder and
the Servicer. Initially, the Trust shall establish one such additional office
at the offices of the Owner Trustee set forth in Section 12.04.
SECTION 2.03 PURPOSES AND POWERS.
(a) The purpose of the Trust is to engage in the following
activities:
4
<PAGE>
(i) to issue Notes pursuant to the Indenture and Certificates
pursuant to this Agreement;
(ii) to acquire the Receivables and related property from the
Depositor in exchange for the Notes and Certificates pursuant to the
Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey
the Trust Estate pursuant to, and on the terms and conditions set
forth in, the Indenture and to hold, manage and distribute to the
Certificateholders pursuant to the terms of the Sale and Servicing
Agreement any portion of the Trust Estate released from the Lien of,
and remitted to the Trust pursuant to, the Indenture as set forth
therein and in the Sale and Servicing Agreement;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Certificateholders and the Noteholders and in respect of
amounts to be released to the Depositor, the Servicer, the
Administrator and third parties, if any.
The Trust is hereby authorized to engage in the foregoing activities.
The Trust shall not engage in any activity other than in connection with the
foregoing and as required or authorized by the terms of the Basic Documents.
SECTION 2.04 POWER OF ATTORNEY. Pursuant to the Administration
Agreement, the Owner Trustee has authorized the Administrator to perform
certain of its administrative duties hereunder, including duties with respect
to the management of the Owner Trust Estate, and in connection therewith
hereby grants the Administrator its revocable power of attorney. Each
Certificateholder by such Holder's acceptance of any Certificate or
beneficial interest therein, as the case may be, shall be deemed to have
granted power of attorney to the Administrator for purposes of actions taken
or to be taken with respect to the Certificates.
SECTION 2.05 DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business trust. It is
the intention of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall be treated as a partnership for any period during
which the beneficial ownership interests in the Trust are held by more than
one person, with the assets of the partnership being the Receivables and
other assets held by the Trust, and the Notes being debt of the partnership.
The parties agree that for any such period, unless otherwise required by
5
<PAGE>
appropriate tax authorities, the Trust will file or cause to be filed annual
or other necessary returns, reports and other forms consistent with the
characterization of the Trust as a partnership for such tax purposes.
Effective as of the date hereof, the Owner Trustee shall have all rights,
powers and duties set forth herein and in the Business Trust Statute with
respect to accomplishing the purposes of the Trust. At the direction of the
Depositor, the Owner Trustee shall file or cause to be filed a certificate of
trust for the Issuer pursuant to the Delaware Act and such amendments thereto
as shall be necessary or appropriate to satisfy the purposes of this
agreement and as shall be consistent with the provisions hereof.
SECTION 2.06 LIABILITY OF THE CERTIFICATEHOLDERS AND TMCC.
(a) The Administrator shall be liable directly to and will, in
accordance with the Administration Agreement and the following provisions,
indemnify and hold harmless the Owner Trustee, any co-trustee, the Delaware
Co-trustee and the Indenture Trustee for any loss, liability, claim, action,
suit, cost or expense of the Trust (including Expenses, to the extent not
paid out of the Owner Trust Estate) to the extent that TMCC would be liable
if the Trust were a partnership under the Delaware Revised Uniform Limited
Partnership Act in which TMCC were a general partner; PROVIDED, HOWEVER, that
the Administrator shall not be liable for any losses incurred by a
Certificateholder in the capacity of an investor in the Certificates or a
Noteholder in the capacity of an investor in the Notes and will not and shall
not be deemed hereby to have indemnified the Owner Trustee, any co-trustee,
the Delaware Co-trustee or Indenture Trustee against any loss liability or
expense resulting from such trustee's own willful misfeasance, bad faith or
negligence or by reason of a breach of representation or warranty thereof
contained herein or in the Indenture, as the case may be. In addition, any
third party creditors of the Trust (other than in connection with the
obligations described in the provisions in the preceding sentence for which
TMCC shall not be liable) shall be deemed to be third party beneficiaries of
this paragraph.
(b) No Certificateholder shall have any personal liability for any
liability or obligation of the Trust, solely by reason of it being a
Certificateholder.
SECTION 2.07 TITLE TO TRUST PROPERTY. Legal title to all of the
Owner Trust Estate shall be vested at all times in the Trust as a separate
legal entity except where applicable law in any jurisdiction requires title
to any part of the Owner Trust Estate to be vested in a trustee or trustees,
in which case title shall be deemed to be vested in the Owner Trustee, a
co-trustee and/or a separate trustee, as the case may be.
SECTION 2.08 SITUS OF TRUST. The Trust will be located in Delaware
and administered in the state of Illinois. All bank accounts maintained by
the Owner Trustee on behalf of the Trust shall be located in the State of
Delaware or the State of New York or the State of Illinois. The Trust shall
not have any employees in any state other than Delaware; PROVIDED, HOWEVER,
that nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware. Payments will be received
by the Trust only in Delaware or New York or Illinois, and payments will be
made by the Trust only from Delaware or New York or Illinois. The principal
office of the Trust will be at the Corporate Trust Office in Delaware.
6
<PAGE>
SECTION 2.09 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
(a) The Depositor hereby represents and warrants to the Owner
Trustee and the Delaware Co-trustee that as of the Closing Date:
(i) The Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of California,
with corporate power and authority to own its properties and to conduct
its business as such properties are currently owned and such business
is presently conducted, and had at all relevant times and has corporate
power, authority and legal right to acquire, own and sell the
Receivables.
(ii) The Depositor is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications and where the failure to so qualify will have a
material adverse effect on the ability of the Depositor to conduct
its business or perform its obligations under this Agreement.
(iii) The Depositor has the corporate power and authority to
execute and deliver this Agreement and to carry out its terms and the
execution, delivery and performance of this Agreement has been duly
authorized by the Depositor by all necessary corporate action.
(iv) This Agreement shall constitute a legal, valid and
binding obligation of the Depositor enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally or by general principles
of equity.
(v) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or bylaws of the Depositor or conflict
with or breach any of the terms or provisions of a certificate (with
or without notice or lapse of time) a default under any indenture,
agreement or other instrument to which the Depositor is a party or by
which it is bound, nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the
Basic Documents); nor violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to
the Depositor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties which breach,
default, conflict, lien or violation would have a material adverse
effect on the earnings, business affairs or business prospects of the
Depositor.
(vi) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending, or to the Depositor's knowledge, threatened, against or
affecting the Depositor: (i) asserting the invalidity of
7
<PAGE>
this Agreement, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement, (iii) seeking any
determination or ruling that might materially and adversely affect
the performance by the Depositor of its obligations under, or the
validity or enforceability of, this Agreement relating to the
Depositor and which might adversely affect the federal income tax
attributes of the Trust or the Certificates or Notes.
SECTION 2.10 FEDERAL INCOME TAX ALLOCATIONS. Net income of the Trust
for any month as determined for Federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof) shall
be allocated:
(a) in an amount equal to any amount distributed to the
Certificateholders pursuant to the Sale and Servicing Agreement (to the
extent not previously allocated pursuant to this clause); and
(b) to the Depositor, to the extent of any remaining net income. If
the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated
to make up such shortfall before being allocated as provided in the preceding
sentence. Net losses of the Trust, if any, for any month as determined for
Federal income tax purposes (and each item of income, gain, loss and
deduction entering into the computation thereof) shall be allocated to the
Depositor to the extent the Depositor has agreed hereunder and under the Sale
and Servicing Agreement and the Indenture to bear the economic burden of such
net losses, and any remaining net losses shall be allocated among the
Certificateholders as of the first Payment Date following the end of such
month in proportion to their ownership of principal amount of Certificates as
of the close of business on such Payment Date. The Depositor is authorized to
modify the allocations in this paragraph if necessary or appropriate, in its
sole discretion, for the allocations to fairly reflect the economic income,
gain or loss to the Depositor or to the Certificateholders, or as otherwise
required by the Code.
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.01 THE CERTIFICATES. The Certificates shall be issued in
minimum denominations of $.01 and in integral multiples of $.01 in excess
thereof. The Certificates shall be executed on behalf of the Trust by manual
or facsimile signature of a Trust Officer of the Owner Trustee and
authenticated on behalf of the Owner Trustee by the manual or facsimile
signature of a Trust Officer. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall
have been affixed, authorized to sign on behalf of the Trust, shall be valid
and binding obligations of the Trust, notwithstanding that such individuals
or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices
at the date of authentication and delivery of such Certificates.
8
<PAGE>
The Certificates may be printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination in the form
of Exhibit A hereto.
A transferee of a Certificate shall become a Certificateholder, and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder, upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 3.03.
SECTION 3.02 AUTHENTICATION OF CERTIFICATES. Concurrently with the
initial sale of the Receivables to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause to be executed,
authenticated and delivered on behalf of the Trust to or upon the written
order of the Depositor, Certificates in an aggregate principal amount equal
to the Initial Certificate Balance and evidencing the entire ownership of the
Trust. No Certificate shall entitle its holder to any benefit under this
Agreement or be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set
forth in Exhibit A, executed by the Owner Trustee or the Owner Trustee's
authenticating agent, by manual or facsimile signature of a Trust Officer,
and such authentication shall constitute conclusive evidence, and the only
evidence, that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
SECTION 3.03 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.07, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Owner Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Owner Trustee
shall be the initial Certificate Registrar. In the event that the Certificate
Registrar shall for any reason become unable to act as Certificate Registrar,
the Certificate Registrar shall promptly give written notice to such effect
to the Depositor, the Owner Trustee and the Servicer. Upon receipt of such
notice, the Servicer shall appoint another bank or trust company, having an
office or agency located in the Chicago, Illinois or The City of New York,
and that shall agree to act in accordance with the provisions of this
Agreement applicable to it, and otherwise acceptable to the Owner Trustee, to
act as successor Certificate Registrar under this Agreement.
(b) Upon surrender for registration of transfer of any Certificate
at the office or agency maintained pursuant to Section 3.07, the Owner
Trustee shall execute, authenticate and deliver (or shall cause its
authenticating agent to authenticate and deliver), in the name of the
designated transferee or transferees, one or more new Certificates in
authorized denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent. At the
option of a Holder, Certificates may be exchanged for other Certificates of
authorized denominations of a like aggregate amount upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.07. The preceding provisions of this Section notwithstanding, the
Owner Trustee shall not make and the Certificate Registrar shall not register
transfer or exchanges of Certificates for a period of 15 days preceding the
due date for any payment with respect to the Certificates.
9
<PAGE>
(c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder or his attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or exchange shall be
cancelled and disposed of by the Owner Trustee in accordance with its
customary practice.
No transfer of a Certificate shall be made unless the Owner Trustee
shall have received:
(1) a representation from the transferee of such Certificate acceptable
to and in form and substance satisfactory to the Owner Trustee substantially in
the form of Exhibit B to the effect that:
(i) such transferee is not a Non-U.S. Person;
(ii) such transferee (A) is not an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code (a "Plan"), nor a person acting on behalf of
a Plan nor using the assets of a Plan to effect such transfer, and (B)
is not an insurance company purchasing a Certificate with funds
contained in an "insurance company general account" (as defined in
Section V(e) of Prohibited Transaction Class Exemption 95-60
("PTCE 95-60")) as to which there is a Plan with respect to which the
amount of such general account's reserves and liabilities for the
contracts held by or on behalf of such Plan and all other Plans
maintained by the same employer (or affiliate thereof as defined in
Section V(a)(1) of PTCE 95-60) or by the same employee organization
exceed 10% of the total of all reserves and liabilities of such
general account (as such amounts are determined under Section I(a) of
PTCE 95-60) at the date of acquisition; or
(iii) is a Plan or is an insurance company purchasing a
Certificate with funds contained in an insurance company general
account, having attached thereto an opinion of counsel satisfactory
to the Owner Trustee, which opinion shall not be an expense of either
the Owner Trustee or the Trust, addressed to the Owner Trustee, to
the effect that the purchase or holding of such Certificate will not
result in the assets of the Owner Trust Estate being deemed to be
"plan assets" and subject to the prohibited transaction provisions of
ERISA and the Code and will not subject the Owner Trustee to any
obligation in addition to those expressly undertaken in this Agreement
or to any liability.
Notwithstanding anything else to the contrary herein, any purported transfer of
a Certificate to or on behalf of an employee benefit plan subject to ERISA or to
the Code or to an insurance company purchasing with funds from a general account
not exempt pursuant to PTCE 95-60 without the delivery to the Owner Trustee of
an opinion of counsel satisfactory to the Owner Trustee as described in clause
(iii) above shall be void and of no effect;
(2) a representation from the transferor of such Certificate acceptable
to and in form and substance satisfactory to the Owner Trustee substantially in
the form of Exhibit C; and
(3) an opinion of counsel to the Owner Trustee that the transfer of
such Certificate is being made pursuant to an effective registration under the
Securities Act of 1933 or is exempt from the registration requirements of the
Securities Act.
10
<PAGE>
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Owner Trustee shall be under no liability to any Person
for any registration of transfer of any Certificate that is in fact not
permitted by this Section 3.03(c) or for making any payments due on such
Certificate to the Certificateholder thereof or taking any other action with
respect to such Holder under the provisions of this Trust Agreement or the Sale
and Servicing Agreement so long as the transfer was registered by the
Certificate Registrar or the Owner Trustee in accordance with the foregoing
requirements.
(d) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
SECTION 3.04 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b)
there shall be delivered to the Certificate Registrar and the Owner Trustee
such security or indemnity as may be required by them to save each of them
harmless, then in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust
shall execute and the Owner Trustee, or the Owner Trustee's authenticating
agent, shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination. In connection with the issuance of any new
Certificate under this Section, the Owner Trustee or the Certificate
Registrar may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at
any time.
SECTION 3.05 PERSONS DEEMED CERTIFICATEHOLDERS. Prior to due
presentation of a Certificate for registration of transfer, the Owner Trustee
or the Certificate Registrar may treat the Person in whose name any
Certificate shall be registered in the Certificate Register as the owner of
such Certificate for the purpose of receiving distributions pursuant to
Section 5.02 and for all other purposes whatsoever, and neither the Owner
Trustee nor the Certificate Registrar shall be bound by any notice to the
contrary.
SECTION 3.06 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Certificate Registrar shall furnish or cause to be furnished
to the Owner Trustee, the Servicer or the Depositor, as the case may be,
within 15 days after its receipt of a request therefor from the Owner
Trustee, the Servicer or the Depositor in writing, a list, in such form as
the Owner Trustee, the Servicer or the Depositor may reasonably require, of
the names and addresses of the Certificateholders as of the most recent
Record Date. If three or more Certificateholders or one or more Holders of
Certificates evidencing, in the aggregate, not less than 25% of the
Certificate Balance apply in writing to the Owner Trustee, and such
application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Owner
Trustee shall, within five Business Days after the receipt of such
application, afford such applicants access during
11
<PAGE>
normal business hours to the current list of Certificateholders. Each Holder,
by receiving and holding a Certificate, shall be deemed to have agreed not to
hold any of the Depositor, the Servicer, the Certificate Registrar or the
Owner Trustee accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 3.07 MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee
shall maintain in Chicago, Illinois or The City of New York, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Certificates and the Basic Documents may
be served. The Owner Trustee initially designates U.S. Bank National
Association, 111 East Wacker Drive, Suite 3000, Chicago, Illinois 60601, as
its principal corporate trust office for such purposes. The Owner Trustee
shall give prompt written notice to the Depositor and to the
Certificateholders of any change in the location of the Certificate Register
or any such office or agency.
SECTION 3.08 APPOINTMENT OF PAYING AGENT. Except during any period
when the Indenture Trustee is authorized and directed to do so under the
Indenture (i.e. prior to the termination of the Indenture), the Paying Agent
shall make distributions to Certificateholders from the Collection Account
pursuant to Section 5.02 and shall report the amounts of such distributions
to the Owner Trustee. Any Paying Agent shall have the revocable power to
withdraw funds from the Collection Account for the purpose of making the
distributions referred to above. The Owner Trustee may revoke such power and
remove the Paying Agent if the Owner Trustee determines in its sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Agreement in any material respect. The Paying Agent shall
initially be the Owner Trustee, and any co-paying agent chosen by the Owner
Trustee, and acceptable to the Owner Trustee. The Owner Trustee shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Owner
Trustee. In the event that the Owner Trustee shall no longer be the Paying
Agent, the Owner Trustee shall appoint a successor to act as Paying Agent
(which shall be a bank or trust company). The Owner Trustee shall cause such
successor Paying Agent or any additional Paying Agent appointed by the Owner
Trustee to execute and deliver to the Owner Trustee an instrument in which
such successor Paying Agent or additional Paying Agent shall agree with the
Owner Trustee that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders.
The Paying Agent shall return all unclaimed funds to the Owner Trustee and
upon removal of a Paying Agent such Paying Agent shall also return all funds
in its possession to the Owner Trustee. The provisions of Sections 7.01,
7.03, 7.04, 8.01 and 8.02 shall apply to the Owner Trustee also in its role
as Paying Agent, for so long as the Owner Trustee shall act as Paying Agent
and, to the extent applicable, to any other paying agent appointed hereunder.
Any reference in this Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.
12
<PAGE>
ARTICLE IV
ACTIONS BY OWNER TRUSTEE OR CERTIFICATEHOLDERS
SECTION 4.01 PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. With respect to the following matters, the Owner Trustee shall not
take action unless at least 30 days before the taking of such action (or such
shorter period as shall be agreed to in writing by all Certificateholders),
the Owner Trustee shall have notified the Certificateholders in writing of
the proposed action and the Certificateholders shall not have notified the
Owner Trustee in writing prior to the 30th day (or such agreed upon shorter
period) after such notice is given that such Certificateholders have withheld
consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of the Receivables) and
the compromise of any action, claim or lawsuit brought by or against the
Trust (except with respect to the aforementioned claims or lawsuits for
collection of the Receivables);
(b) the election by the Trust to file an amendment to the Certificate of
Trust (unless such amendment is required to be filed under the Business Trust
Statute);
(c) the amendment of the Indenture, whether or not by a Supplemental
Indenture, in circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture, whether or not by a Supplemental
Indenture, in circumstances where the consent of any Noteholder is not
required but such amendment materially adversely affects the interest of the
Certificateholders;
(e) the amendment, change or modification of the Administration
Agreement, other than to cure any ambiguity or to amend or supplement any
provision in a manner or add any provision that would not materially
adversely affect the interests of the Certificateholders; or
(f) the appointment (i) pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee, (ii) pursuant to this Agreement
of a successor Certificate Registrar or (iii) any consent by the Note
Registrar, Paying Agent or Indenture Trustee or Certificate Registrar to the
assignment of its respective obligations under the Indenture or this
Agreement, as applicable.
SECTION 4.02 ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. The Owner Trustee shall not have the power, except upon the
direction of the Certificateholders, to (a) remove the Administrator pursuant
to Section 8 of the Administration Agreement, (b) appoint a successor
Administrator pursuant to Section 8 of the Administration Agreement, (c)
remove the Servicer pursuant to Section 8.01 of the Sale and Servicing
Agreement or (d) except as expressly provided in the Basic Documents, sell
the Receivables after the termination of the Indenture. The Owner Trustee
shall take the actions referred to in the preceding sentence only upon
written instructions signed by the authorized representative of 100% of the
Certificateholders.
SECTION 4.03 ACTION WITH RESPECT TO BANKRUPTCY. The Owner Trustee shall
not have the power to commence a voluntary proceeding in bankruptcy relating
to the Trust without the
13
<PAGE>
unanimous prior approval of all Certificateholders and the delivery to the
Owner Trustee by each such Certificateholder certifying that such
Certificateholder reasonably believes that the Trust is insolvent.
SECTION 4.04 RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any
obligations of the Trust or of the Owner Trustee under any of the Basic
Documents or would be contrary to Section 2.03 nor shall the Owner Trustee be
obligated to follow any such direction, if given.
SECTION 4.05 MAJORITY CONTROL. Except as otherwise expressly provided
herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by the Holders of Certificates evidencing not less
than 51% of the Certificate Balance. Except as expressly provided herein, any
written notice of the Certificateholders delivered pursuant to this Agreement
shall be effective if signed by Holders of Certificates evidencing not less
than 51% of the Certificate Balance at the time of the delivery of such
notice.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.01 ESTABLISHMENT OF COLLECTION ACCOUNT AND PAYAHEAD ACCOUNT.
(a) The Owner Trustee, for the benefit of the Certificateholders, shall
establish and maintain, or shall cause to be established and maintained, in
the name of the Trust (or in such other name as shall be specified in the
Sale and Servicing Agreement), the Collection Account and the Payahead
Account. Each such account shall be established and maintained as an Eligible
Deposit Account, and, subject to provisions of the Sale and Servicing
Agreement and the Indenture, bearing a designation clearly indicating that,
subject to Section 5.01(b), the funds deposited therein are held by the Trust
for the benefit of the Certificateholders, in each case in accordance with
Section 5.01 in the Sale and Servicing Agreement.
Subject to Section 5.01(b), the Owner Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the
Collection Account and the Payahead Account and in all proceeds thereof
(other than any net investment earnings on Eligible Investments held
therein). Except as otherwise expressly provided herein, the Collection
Account and the Payahead Account shall be under the sole dominion and control
of the Owner Trustee for the benefit of the Certificateholders. If, at any
time, the Collection Account or the Payahead Account ceases to be an Eligible
Deposit Account, the Owner Trustee (or the Administrator on behalf of the
Owner Trustee, if the Collection Account is not then held by the Owner
Trustee or an affiliate thereof) shall within 10 Business Days establish a
new equivalent Eligible Deposit Account and shall transfer any cash and/or
any investments to such new account.
(b) Notwithstanding the foregoing, concurrently with, the execution and
delivery of any Indenture pursuant to which the Notes are issued, the
Servicer shall establish and maintain, or shall cause to be established and
maintained, at the direction of the Depositor, Trust Accounts in the name of
and under the control of the Indenture Trustee for the benefit of the
Securityholders,
14
<PAGE>
in each case in accordance with Section 5.01 of the Sale and Servicing
Agreement. The Owner Trustee shall thereupon promptly transfer any cash
and/or investments then on deposit in the equivalent Trust Accounts
maintained by it pursuant to Section 5.01(a) to the newly established Trust
Accounts on the terms and conditions set forth in the Sale and Servicing
Agreement and the Indenture. The Indenture Trustee will be obligated to
transfer back to the equivalent Trust Accounts established pursuant to
Section 5.01(a) all funds or investments held or to be held in the Trust
Accounts established pursuant to this Section 5.01(b) on the Payment Date on
which the Notes of all Classes have been paid in full or the Indenture is
otherwise terminated (excluding any amounts to be retained for distribution
in respect of Notes that are not promptly delivered for payment on such
Payment Date), and to take all necessary or appropriate actions to transfer
all right, title and interest of the Indenture Trustee in such funds or
investments and all proceeds thereof, to the Owner Trustee for the benefit of
the Certificateholders.
SECTION 5.02 APPLICATION OF AMOUNTS IN TRUST ACCOUNTS.
(a) For so long as any Notes are outstanding, on each Payment Date, the
Owner Trustee will take reasonable steps to determine that the Servicer has
properly delivered the Servicer's Certificate identifying how amounts on
deposit in the Trust Accounts are to be allocated and distributed and will
instruct the Indenture Trustee, or cause the Indenture Trustee to be
instructed, to distribute to Certificateholders, on a pro rata basis, the
amounts distributable thereto pursuant to Section 5.06 of the Sale and
Servicing Agreement and Section 3.01 of the Indenture. From and after the
date on which the Notes of all Classes have been paid in full, on each
Payment Date the Owner Trustee shall distribute to Certificateholders, on a
pro rata basis, amounts on deposit in the Collection Account that are
distributable to the Certificateholders in accordance with the instructions
of the Servicer pursuant to Sections 5.06(c), (d) and (e) of the Sale and
Servicing Agreement. Upon the release from the Lien of the Indenture of
amounts on deposit in any of the Trust Accounts or any other portion of the
Owner Trust Estate, the Owner Trustee will cause such property to be properly
deposited into Trust Accounts under the control of the Owner Trustee or
distributed to the Certificateholders on a pro rata basis in accordance with
the provisions of this Agreement, as the case may be.
(b) On each Payment Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 5.08 of the Sale and Servicing Agreement with respect to
such Payment Date.
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section. The Owner Trustee is hereby authorized and
directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is
legally owed by the Trust (but such authorization shall not prevent the Owner
Trustee from contesting any such tax in appropriate proceedings, and
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings). The amount of any withholding tax imposed with respect to
an Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax
is payable with respect to any distribution (such as any distribution to a
Non-U.S. Person), the Owner Trustee may in its sole discretion withhold such
amounts in
15
<PAGE>
accordance with this paragraph (c). In the event that a Certificateholder
wishes to apply for a refund of any such withholding tax, the Owner Trustee
shall reasonably cooperate with such Certificateholder in making such claim
so long as such Certificateholder agrees to reimburse the Owner Trustee for
any out-of-pocket expenses incurred.
SECTION 5.03 METHOD OF PAYMENT. Subject to Section 9.01(c),
distributions required to be made to Certificateholders on any Payment Date
shall be made to each Certificateholder of record on the related Record Date
either by check mailed to such Certificateholder at the address of such
holder appearing in the Certificate Register or by wire transfer, in
immediately available funds, to the account of any Certificateholder at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five Business Days prior to such
Payment Date.
SECTION 5.04 ACCOUNTING AND REPORTS TO THE NOTEHOLDERS,
CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. The Owner
Trustee shall (a) maintain (or cause to be maintained) the books of the Trust
on a calendar year basis on the accrual method of accounting, (b) deliver to
each Owner, as may be required by the Code and applicable Treasury
Regulations, such information as may be required (including Schedule K-1) to
enable each Owner to prepare its federal and state income tax returns, (c)
file any tax and information returns, and fulfill any other reporting
requirements, relating to the Trust, as may be required by the Code and
applicable Treasury Regulations (including Treasury Regulation Section
1.6049-7), (d) for any period during which the beneficial ownership interests
in the Trust are held by more than one person, make such elections as may
from time to time be required or appropriate under any applicable state or
federal statute or rule or regulation thereunder so as to maintain the
Trust's characterization as a partnership for federal income tax purposes,
(e) cause such tax returns to be signed in the manner required by law and (f)
collect or cause to be collected any withholding tax as described in and in
accordance with Section 5.02(c) with respect to income or distributions to
Certificateholders. The Owner Trustee shall elect under Section 1278 of the
Code to include in income currently any market discount that accrues with
respect to the Receivables. The Owner Trustee shall not make the election
provided under Section 754 of the Code.
SECTION 5.05 SIGNATURE ON RETURNS; TAX MATTER PARTNER.
(a) The Owner Trustee shall sign on behalf of the Trust the tax returns
of the Trust, unless applicable law requires a Certificateholder to sign such
documents, in which case such documents shall be signed by the Administrator,
pursuant to the power-of-attorney granted thereto pursuant to Section 2.04.
(b) For any period during which the beneficial ownership interests of
the Trust are held by more than one person, the Certificateholder holding
Certificates evidencing the largest portion of the Initial Certificate
Balance shall be designated the "tax matters partner" of the Trust pursuant
to Section 6231(a)(7)(A) of the Code and applicable Treasury Regulations, but
hereby delegates its powers and duties as such to the Administrator pursuant
to the power-of-attorney granted thereto pursuant to Section 2.04.
16
<PAGE>
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01 GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to
be a party and each certificate or other document attached as an exhibit to
or contemplated by the Basic Documents to which the Trust is to be a party
and any amendment thereto, and, on behalf of the Trust, to direct the
Indenture Trustee to authenticate and deliver Class A-1 Notes in the
aggregate principal amount of $303,000,000, Class A-2 Notes in the aggregate
principal amount of $284,000,000, Class A-3 Notes in the aggregate principal
amount of $334,093,000, Class B Notes in the aggregate principal amount of
$26,454,000 and Class C Notes in the aggregate principal amount of
$14,429,000. In addition to the foregoing, the Owner Trustee is authorized,
but shall not be obligated, to take all actions required of the Trust,
pursuant to the Basic Documents.
SECTION 6.02 GENERAL DUTIES. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant
to the terms of this Agreement and the Basic Documents to which the Trust is
a party and to administer the Trust in accordance with the provisions hereof
and of the Basic Documents and in the interest of the Certificateholders.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be
held liable for the default or failure of the Administrator to carry out such
obligations or fulfill such duties under the Administration Agreement.
SECTION 6.03 DUTIES OF OWNER TRUSTEE.
(a) Subject to Article IV and in accordance with the terms of the Basic
Documents, the Certificateholders may by written instruction direct the Owner
Trustee in the management of the Trust. Such direction may be exercised at
any time by written instruction of the Certificateholders pursuant to Article
IV.
(b) The Owner Trustee, accepts the trusts hereby created and agrees to
perform its duties hereunder with respect to such trusts but only upon the
terms of this Agreement.
(c) The Owner Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Owner Trustee that shall be specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement.
(d) No provision of this Agreement shall be construed to relieve the
Owner Trustee from liability for its own negligent action, its own negligent
failure to act, its own bad faith or its own willful misfeasance; PROVIDED,
HOWEVER, that:
(i) the duties and obligations of the Owner Trustee shall be
determined solely by the express provisions of this Agreement, the
Owner Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
17
<PAGE>
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Owner Trustee, the permissive right of the Owner
Trustee to do things enumerated in this Agreement shall not be
construed as a duty and, in the absence of bad faith on the part of
the Owner Trustee, the Owner Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Owner
Trustee and conforming on their face to the requirements of this
Agreement;
(ii) the Owner Trustee shall not be personally liable for
an error of judgment made in good faith by a Trust Officer, unless it
shall be proved that the Owner Trustee was negligent in performing its
duties in accordance with the terms of this Agreement; and
(iii) the Owner Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken in good
faith in accordance with the direction of the Certificateholders
representing at least a majority of the outstanding denominations of
Certificates held by Certificateholders (or such larger percentage as
may be required by any other provision of this Agreement or the other
Basic Documents).
(e) The Owner Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties under this Agreement, or in the exercise of any of its rights or
powers, if there shall be reasonable grounds for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(f) All information obtained by the Owner Trustee regarding the Obligors
and the Receivables contained in the Trust, whether upon the exercise of its
rights under this Agreement or otherwise, shall be maintained by the Owner
Trustee in confidence and shall not be disclosed to any other Person, unless
such disclosure is required by any applicable law or regulation or pursuant
to subpoena.
(g) Pursuant to Section 3.02 of the Sale and Servicing Agreement, in the
event that the Owner Trustee discovers that a representation or warranty with
respect to a Receivable was incorrect as of the time specified with respect
to such representation and warranty and such incorrectness materially and
adversely affects the interests of the Trust in such Receivable, the Owner
Trustee shall give prompt written notice to the Servicer, the Depositor and
the Indenture Trustee of such incorrectness. Pursuant to Section 4.08 of the
Sale and Servicing Agreement, in the event that the Owner Trustee discovers
that any covenant of the Servicer set forth in Section 4.06 or 4.07 of the
Sale and Servicing Agreement has been breached by the Servicer and such
incorrectness materially and adversely affects the interests of the Trust in
any Receivable, the Owner Trustee shall give prompt written notice to the
Servicer, the Depositor and the Indenture Trustee of such breach.
SECTION 6.04 NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, any Basic
18
<PAGE>
Document or otherwise contemplated hereby to which the Owner Trustee is a
party, except as expressly provided by the terms of this Agreement, any Basic
Document to which the Trust is a party or in any document or written
instruction received by the Owner Trustee pursuant to section 6.03. No
implied duties or obligations shall be read into this Agreement or any Basic
Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any
public office at any time or otherwise to perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to prepare or
file any Securities and Exchange Commission filing for the Trust or to record
this Agreement or any Basic Document. The Owner Trustee nevertheless agrees
that it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any liens on any part of the Owner Trust Estate that
result from actions by, or claims against, the Owner Trustee that are not
related to the ownership or the administration of the Owner Trust Estate.
SECTION 6.05 NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR INSTRUCTIONS.
The Owner Trustee shall not manage, control, use, sell, dispose of or
otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the Basic
Documents and (iii) in accordance with any document or instruction delivered
to the Owner Trustee pursuant to Section 6.03.
SECTION 6.06 RESTRICTIONS. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section
2.03 or (b) that, to the actual knowledge of the Owner Trustee, would result
in the Trust's becoming taxable as a corporation for Federal income tax
purposes. The Certificateholders shall not have the authority to and, by
acceptance of an ownership interest in any Certificate shall thereby be
deemed to have covenanted not to, direct the Owner Trustee to take action
that would violate the provisions of this Section.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.01 RIGHTS OF OWNER TRUSTEE. Except as otherwise provided in
Article VI:
(a) in accordance with Section 7.04, the Owner Trustee may rely and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of an authorized signatory, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Administrator, as provided in the Administration Agreement, or the
Certificateholders, as provided herein;
(c) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement or the Sale and Servicing
Agreement, or to institute, conduct or defend any litigation under this
Agreement, or in relation to this Agreement or the Sale and
19
<PAGE>
Servicing Agreement, at the request, order or direction of any of the
Securityholders pursuant to the provisions of this Agreement or the Sale and
Servicing Agreement, unless such Securityholders shall have offered to the
Owner Trustee reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be bound to recalculate, reverify, or
make any investigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless requested
in writing to do so by Certificateholders representing not less than 25%
based on outstanding denomination of Certificates held by Certificateholders;
PROVIDED, HOWEVER, that if the payment within a reasonable time to the Owner
Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Owner Trustee, not
reasonably assured to the Owner Trustee by the security afforded to it by the
terms of this Agreement, the Owner Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the
Administrator or, if paid by the Owner Trustee, shall be reimbursed by the
Administrator upon demand; and nothing in this clause shall derogate from the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors; and
(f) the Owner Trustee shall not be liable for the default or misconduct
of the Administrator, the Servicer, the Depositor or the Indenture Trustee
under any of the Basic Documents or otherwise, and the Owner Trustee shall
have no obligation or liability to perform the obligations of the Trust under
the Basic Documents that are required to be performed by the Administrator
under the Administration Agreement, the Indenture Trustee under the Indenture
or the Servicer under the Sale and Servicing Agreement.
SECTION 7.02 FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
(a) to the Certificateholders promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents and (b) to Noteholders promptly upon
written request therefor, copies of the Sale and Servicing Agreement, the
Administration Agreement and the Trust Agreement.
SECTION 7.03 REPRESENTATIONS AND WARRANTIES. The Owner Trustee hereby
represents and warrants to the Depositor and for the benefit of the
Certificateholders, that:
(a) It is a national banking association duly organized and existing and
in good standing under the laws of the United States. It has full power,
authority and right to execute, deliver and perform its obligations under
this Agreement and each other Basic Document.
(b) It has taken all corporate action necessary to authorize the
execution and delivery of this Agreement and each other Basic Document, and
this Agreement and each other Basic
20
<PAGE>
Document has been executed and delivered by one of its officers duly
authorized to execute and deliver this Agreement and each other Basic
Document on its behalf.
(c) This Agreement constitutes the legal, valid and binding obligation
of the Owner Trustee, enforceable against it in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity.
(d) It is authorized to exercise trust powers in the State of Delaware
as and to the extent contemplated herein or has appointed a Delaware trustee
that is so authorized and it has a principal place of business in the State
of Delaware or has appointed a Delaware trustee that has such a principal
place of business.
SECTION 7.04 RELIANCE; ADVICE OF COUNSEL.
(a) The Owner Trustee shall incur no liability to anyone in acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond, or other document or paper believed by it
to be genuine and believed by it to be signed by the proper party or parties.
The Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive
evidence that such resolution has been duly adopted by such body and that the
same is in full force and effect. As to any fact or matter the method of the
determination of which is not specifically prescribed herein, the Owner
Trustee may for all purposes hereof rely on a Certificate, signed by the
president or any vice president or by the treasurer or other authorized
officers or agents of the relevant party, as to such fact or matter and such
certificate shall constitute full protection to the Owner Trustee for any
action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under the Basic Documents, the
Owner Trustee (i) may act directly or through its agents or attorneys
pursuant to agreements entered into with any of them, and the Owner Trustee
shall not be liable for the conduct or misconduct of such agents or attorneys
if such agents or attorneys shall have been selected by the Owner Trustee
with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the written opinion or advice of any
such counsel, accountants or other such persons and not contrary to this
Agreement or any Basic Document.
SECTION 7.05 NOT ACTING IN INDIVIDUAL CAPACITY. In accepting the trusts
hereby created, U.S. Bank National Association acts solely as Owner Trustee
hereunder and not in its individual capacity. Except with respect to a claim
based on the failure of the Owner Trustee to perform its duties under this
Agreement or based on the Owner Trustee's willful misconduct, bad faith or
negligence, no recourse shall be had for any claim based on any provision of
this Agreement, the Notes or Certificates, or based on rights obtained
through the assignment of any of the foregoing, against the institution
serving as the Owner Trustee in its individual capacity. The Owner Trustee
shall not have any personal obligation, liability or duty whatsoever to any
Securityholder or any other Person with respect to any such claim, and any
such claim shall be
21
<PAGE>
asserted solely against the Trust or any indemnitor who shall furnish
indemnity as provided in this Indenture.
SECTION 7.06 OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR RECEIVABLES.
The Owner Trustee makes no representations as to the validity or sufficiency
of this Agreement or of the Certificates or of the Notes (other than the
execution by the Owner Trustee on behalf of the Trust of, and the certificate
of authentication on, the Certificates, and the direction of the Owner
Trustee, on behalf of the Trust, to the Indenture Trustee relating to the
execution of the Notes). The Owner Trustee shall have no obligation to
perform any of the duties of the Servicer or Administrator unless explicitly
set forth in this Agreement.
The Owner Trustee shall at no time have any responsibility
or liability for or with respect to the legality, validity and enforceability
of the Certificates, the Notes or any Receivable, any ownership interest in
any Financed Vehicle, or the maintenance of any such ownership interest, or
for or with respect to the efficacy of the Trust or its ability to generate
the payments to be distributed to Securityholders under this Agreement and
the Indenture, including without limitation the validity of the assignment of
the Receivables to the Trust or of any intervening assignment; the existence,
condition, location and ownership of any Receivable or Financed Vehicle; the
existence and enforceability of any physical damage or credit life or credit
disability insurance; the existence and contents of any retail installment
sales contract or any computer or other record thereof; the completeness of
any retail installment sales contract; the performance or enforcement of any
retail installment sales contract; the compliance by the Trust with any
covenant or the breach by the Trust of any warranty or representation made
under this Agreement or in any related document and the accuracy of any such
warranty or representation prior to the Owner Trustee's receipt of notice or
other discovery of any noncompliance therewith or any breach thereof; the
acts or omissions of the Trust or the Servicer; or any action by the Owner
Trustee taken at the instruction of the Certificateholders, PROVIDED,
HOWEVER, that the foregoing shall not relieve the Owner Trustee of its
obligation to perform its duties under this Agreement.
The Owner Trustee shall not be accountable for the use or
application by the Issuer of any of the Certificates or of the proceeds of
such Certificates, of any of the Notes or of the proceeds of such Notes, or
for the use or application of any funds paid to the Servicer in respect of
the Certificates.
SECTION 7.07 OWNER TRUSTEE MAY OWN CERTIFICATES AND NOTES. The Owner
Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates or Notes and may deal with the Depositor, the
Company, the Administrator, the Indenture Trustee and the Servicer in banking
or other transactions with the same rights as it would have if it were not
Owner Trustee.
SECTION 7.08 PENNSYLVANIA MOTOR VEHICLE SALES FINANCE ACT LICENSES. The
Owner Trustee, in its individual capacity, shall use its best efforts to
maintain, and the Owner Trustee, as Owner Trustee, shall cause the Trust to
use its best efforts to maintain, the effectiveness of all licenses required
under the Pennsylvania Motor Vehicle Sales Finance Act in connection with
this Agreement and the Basic Documents and the transactions contemplated
hereby and thereby until such time as the Trust shall terminate in accordance
with the terms hereof.
22
<PAGE>
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.01 OWNER TRUSTEE'S FEES AND EXPENSES. The Trust shall pay or
shall cause the Servicer to pay to the Owner Trustee from time to time
compensation for its services as have been separately agreed upon before the
date hereof, and the Owner Trustee shall be entitled to be reimbursed by the
Administrator for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder.
SECTION 8.02 INDEMNIFICATION. The Administrator shall, pursuant to the
Administration Agreement and the following provisions, reimburse the Owner
Trustee for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Owner Trustee's agents, counsel,
accountants and experts directly related to its services hereunder
("Expenses") The Administrator shall indemnify or shall cause the Servicer to
indemnify the Owner Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder. The
Owner Trustee shall notify the Administrator and the Servicer promptly of any
claim for which it may seek indemnity. Failure by the Owner Trustee to so
notify the Administrator and the Servicer shall not relieve the Administrator
or the Servicer of its obligations hereunder, where such failure shall affect
the Administrator's or Servicer's defenses in respect thereof. In case any
such action is brought against the Owner Trustee under this Section 8.02 and
it notifies the Administrator of the commencement thereof, the Administrator
will assume the defense thereof, with counsel reasonably satisfactory to the
Owner Trustee (who may, unless there is, as evidenced by an opinion of
counsel to the Owner Trustee stating that there is an unwaivable conflict of
interest, be counsel to the Administrator), and the Administrator will not be
liable to the Owner Trustee under this Section for any legal or other
expenses subsequently incurred by the Owner Trustee in connection with the
defense thereof, other than reasonable costs of investigation. Neither the
Administrator nor the Servicer need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Owner Trustee through
the Owner Trustee's own willful misconduct, negligence or bad faith.
SECTION 8.03 PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the
Owner Trustee pursuant to this Article VIII from assets in the Owner Trust
Estate shall be deemed not to be a part of the Owner Trust Estate immediately
after such payment.
23
<PAGE>
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.01 TERMINATION OF TRUST AGREEMENT.
(a) This Agreement (other than Article VIII) shall terminate and the
Trust shall dissolve and be of no further force or effect, upon the earliest
of (i) the maturity or other liquidation of the last Receivable (or other
asset) in the Owner Trust Estate and the final distribution by the Owner
Trustee of all moneys or other property or proceeds of the Owner Trust Estate
in accordance with the terms of this Agreement, the Indenture and the Sale
and Servicing Agreement (including, but not limited to, any property and
proceeds to be deposited in the Collection Account pursuant to Sections 3.02,
4.08, 5.02, 5.04, 5.05, 5.06 or 9.01 of the Sale and Servicing Agreement or
to be released by the Indenture Trustee from the Lien of the Indenture
pursuant to Section 10.01 or 10.02 of the Indenture), (ii) the payment or
distribution to all Securityholders of all amounts specified in Sections
3.02, 4.08, 5.02, 5.04, 5.05, 5.06 or 9.01 of the Sale and Servicing
Agreement or (iii) the dissolution of the Trust that results from the
occurrence of an Insolvency Event with respect to the Depositor as provided
in Section 9.02. The bankruptcy, liquidation, dissolution, death or
incapacity of any Certificateholder other than the Depositor shall not (x)
operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
to take any action or proceeding in any court for a partition or winding up
of all or any part of the Trust or Owner Trust Estate nor (z) otherwise
affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which the Certificateholders shall surrender their Certificates to the
Paying Agent for payment of the final distributions and cancellation, shall
be given by the Owner Trustee to Certificateholders mailed within five
Business Days of receipt of notice of such termination from the Servicer
given pursuant to Section 10.03 of the Sale and Servicing Agreement, stating
(i) the Payment Date upon or with respect to which final payment of the
Certificates shall be made upon presentation and surrender of the
Certificates at the office of the Paying Agent therein designated, (ii) the
amount of any such final payment and (iii) that payment to be made on such
Payment Date will be made only upon presentation and surrender of the
Certificates at the office of the Paying Agent therein specified. The Owner
Trustee shall give such notice to the Certificate Registrar (if other than
the Owner Trustee) and the Paying Agent (if other than the Owner Trustee) at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Paying Agent shall cause to be distributed
to Certificateholders amounts distributable on such Payment Date pursuant to
Section 5.02.
In the event that one or more of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the
date specified in the above mentioned written notice, the Owner Trustee shall
give a second written notice to the remaining Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the
Certificates shall not have
24
<PAGE>
been surrendered for cancellation, the Owner Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed by the Owner Trustee to the
Depositor.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with
the provisions of Section 3820 of the Business Trust Statute.
SECTION 9.02 DISSOLUTION UPON INSOLVENCY OF THE DEPOSITOR. In the event
that an Insolvency shall occur with respect to the Depositor, this Agreement
shall be terminated in accordance with Section 9.01 90 days after the date of
such Insolvency Event, unless, before the end of such 90-day period, the
Owner Trustee shall have received written instructions from (A) the Indenture
Trustee (or the Indenture Trustee acting on behalf of the Class A Notes
pursuant to Section 5.04(c) of the Indenture) or the Holders of at least 51%
of the Outstanding Amount of the Class A Notes acting together as a single
Class (without the consent of the Class B Notes or the Class C Notes) or (B)
after the Class A Notes have been paid in full, the Indenture Trustee (or the
Indenture Trustee acting on behalf of the Class B Notes pursuant to Section
5.04(c) of the Indenture) or the Holders of at least 51% of the Outstanding
Amount of the Class B Notes (without the consent of any Holder of the Class C
Notes) or (C) after the Class B Notes have been paid in full, the Indenture
Trustee (or the Indenture Trustee acting on behalf of the Class C Notes
pursuant to Section 5.04(c) of the Indenture) or the Holders of at least 51%
of the Outstanding Amount of the Class C Notes (in each case excluding for
such purposes the outstanding principal amount of any Notes held of record or
beneficially owned by TMCC, TMCRC or any of their Affiliates), or if only
Certificates are then outstanding, Holders of at least 51% of the Certificate
Balance, to the effect that the Receivables should not be liquidated and the
Trust should not be terminated. Promptly after the occurrence of any
Insolvency Event with respect to the Depositor, (A) the Depositor shall give
the Indenture Trustee, the Owner Trustee and each Rating Agency written
notice of such Insolvency Event and (B) upon the receipt of such written
notice from the Depositor, the Indenture Trustee and Owner Trustee,
respectively, shall give prompt written notice thereof to the Noteholders and
Certificateholders; PROVIDED, HOWEVER, that any failure to give a notice
required by this sentence to a party not then entitled to instruct the Owner
Trustee that the dissolution should not occur shall not prevent or delay, in
any manner, a termination of the Trust pursuant to the first sentence of this
Section 9.02. Upon a termination pursuant to this Section 9.02, the Owner
Trustee promptly shall, or if any Notes are outstanding, the Indenture
Trustee (or relevant Indenture Trustee for the relevant Class or Classes of
Notes pursuant to Section 5.04(e) of the Indenture) shall, promptly sell the
assets of the Trust (other than funds on deposit in the Collection Account,
Payahead Account and Reserve Fund) in a commercially reasonable manner and on
commercially reasonable terms and, if any Notes are outstanding, in
accordance with the terms of the Indenture. The proceeds of such a sale of
the assets of the Trust shall be treated as collections under the Sale and
Servicing Agreement and shall be deposited in the Collection Account and
distributed pursuant to the terms of Section 5.06 of the Sale and Servicing
Agreement.
25
<PAGE>
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.01 ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be an entity having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal
or state authorities. If such entity shall publish reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section
10.01, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. In case at any time the Owner Trustee shall cease
to be eligible in accordance with the provisions of this Section, the Owner
Trustee shall resign immediately in the manner and with the effect specified
in Section 10.02.
SECTION 10.02 RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Depositor, the Servicer and the
Indenture Trustee. If at any time the Owner Trustee is deemed to have a
conflict of interest under the TIA, because of its roles as both Owner
Trustee hereunder and Indenture Trustee under the Indenture, the Owner
Trustee shall resign as Owner Trustee hereunder. U.S. Bank National
Association, in its capacity as Owner Trustee, shall also resign as Owner
Trustee hereunder if any Event of Default under the Indenture occurs and is
necessary to eliminate any conflict of interest under the TIA with the
Indenture Trustee or any other trustee under the Indenture. Upon receiving
such notice of resignation, the Servicer shall promptly appoint a successor
Owner Trustee by written instrument, in duplicate, one copy of which shall be
delivered to each of the resigning Owner Trustee and the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed or shall
not have accepted such appointment within 30 days after the giving of such
notice of resignation, the resigning Owner Trustee may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign
promptly, or if at any time the Owner Trustee shall be legally unable to act,
or shall be adjudged bankrupt or insolvent, or a receiver of the Owner
Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Owner Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the
Administrator may remove the Owner Trustee by written instrument to such
effect delivered to the Owner Trustee, the Depositor and the Indenture
Trustee. If the Administrator shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Servicer shall promptly
appoint a successor Owner Trustee by written instrument in duplicate, one
copy of which instrument shall be delivered to each of the outgoing Owner
Trustee so removed the successor Owner Trustee and payment of all fees,
expenses and other compensation owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.03 and payment of all fees and expenses
owed to the outgoing Owner Trustee. The Administrator shall
26
<PAGE>
provide notice of such resignation or removal of the Owner Trustee to each of
the Rating Agencies.
SECTION 10.03 SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Administrator and to its predecessor Owner Trustee an instrument
accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become
effective and such successor Owner Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties,
and obligations of its predecessor under this Agreement, with like effect as
if originally named as Owner Trustee. The predecessor Owner Trustee shall
upon payment of its fees and expenses deliver to the successor Owner Trustee
all documents and statements and monies held by it under this Agreement; and
the Administrator and the predecessor Owner Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor Owner Trustee all
such rights, powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee
shall meet the criteria for eligibility set forth in Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Administrator shall mail notice of the successor of such
Owner Trustee to all Certificateholders, the Indenture Trustee, the
Noteholders and the Rating Agencies. If the Administrator fails to mail such
notice within 10 days after acceptance of appointment by the successor Owner
Trustee, the successor Owner Trustee shall cause such notice to be mailed at
the expense of the Administrator.
SECTION 10.04 MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any corporation
into which the Owner Trustee may be merged or converted or with which it may
be consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder,
provided such corporation shall be eligible pursuant to Section 10.01,
without the execution or filing of any instrument or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding; PROVIDED, FURTHER, that the Owner Trustee shall mail notice
of such merger or consolidation to the Rating Agencies.
SECTION 10.05 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Financed Vehicle may at the time be
located, the Administrator and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Owner Trustee to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any
part of the Owner Trust Estate, and to vest in such Person, in such capacity,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and
trusts as the Administrator and the Owner Trustee may consider necessary or
desirable. If the Administrator shall not have
27
<PAGE>
joined in such appointment within 25 days after the receipt by it of a
request so to do, the Owner Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee pursuant to
Section 10.01 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provision and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised
or performed by the Owner Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee
or co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are to
be performed, the Owner Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers,
duties, and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Administrator and the Owner Trustee acting jointly may
at any time accept the resignation of or remove any separate trustee
or co-trustee.
Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as if given to each of them. Each separate trustee and
co-trustee, upon its acceptance of the powers and duties conferred thereto
under this Agreement, shall be vested with the estates or specified in its
instrument of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating
to the conduct of, affecting the liability of, or affording protection to,
the Owner Trustee. Each such instrument shall be filed with the Owner Trustee
and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
28
<PAGE>
ARTICLE XI
AUTHORITY AND DUTIES OF DELAWARE CO-TRUSTEE
SECTION 11.01 GENERAL AUTHORITY OF DELAWARE CO-TRUSTEE. The Delaware
Co-Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this
Agreement. In accordance with the terms of the Basic Documents, the
Certificateholders may by written instruction direct the Delaware Co-Trustee
in the execution of its duties under this Agreement. Such direction may be
exercised at any time by written instruction of the Certificateholders to the
Delaware Co-Trustee.
SECTION 11.02 DUTIES OF DELAWARE CO-TRUSTEE.
(a) It is understood and agreed that the duties and responsibilities of
the Delaware Co-Trustee shall be limited to (a) accepting legal process
served on the Trust in the State of Delaware and (b) the execution and
delivery of all documents, and the maintenance of all records, necessary to
form and maintain the existence of the Trust under the Business Trust Statute.
(b) Except as otherwise expressly required by Section 11.02(a) above,
the Delaware Co-Trustee shall not have any duty or liability with respect to
the administration of the Trust, the investment of the Owner Trust Estate or
the Trust Estate or the payment of dividends or other distributions of income
or principal to the Certificateholders or any of the Trust's beneficiaries.
(c) The Delaware Co-Trustee shall not be liable for the acts or
omissions of the Owner Trustee, the Indenture Trustee or the Administrator,
nor shall the Delaware Co-Trustee be liable for supervising or monitoring the
performance of the duties and obligations of the Owner Trustee, the Indenture
Trustee, the Administrator or the Trust or duties and obligations of any of
the foregoing under any of the Basic Documents. The Delaware Co-Trustee shall
not be personally liable under any circumstances, except for its own willful
misconduct or gross negligence. In particular, but not by way of limitation:
(a) The Delaware Co-Trustee shall not be personally liable for
any error of judgment made in good faith;
(b) No provision of this Agreement shall require the Delaware
Co-Trustee to expend or risk its personal funds or otherwise incur any
financial liability in the performance of its rights or powers hereunder, if
the Delaware Co-Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assures or provided to it;
(c) Under no circumstance shall the Delaware Co-Trustee be
personally liable for any representation, warranty, covenant, agreement, or
indebtedness of the Trust;
(d) The Delaware Co-Trustee shall not be personally responsible
for or in respect of the validity or sufficiency of this Agreement or for the
due execution hereof by the Owner Trustee or the Depositor;
29
<PAGE>
(e) The Delaware Co-Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of an authorized signatory, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(f) the Delaware Co-Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
instructions of the Administrator, as provided in the Administration
Agreement, or the Certificateholders, as provided herein;
(g) In the exercise or administration of the Trusts hereunder,
the Delaware Co-Trustee (i) may act directly or through agents or attorneys
pursuant to agreements entered into with any of them, and the Delaware
Co-Trustee shall not be liable for the default or misconduct of such agents
or attorneys if such agents or attorneys shall have been selected by the
Delaware Co-Trustee in good faith and (ii) may consult with counsel,
accountants and other skilled persons to be selected in good faith and
employed by it, and it shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the advice or such Opinion of
Counsel, accountants or other skilled persons;
(h) The Delaware Co-Trustee shall be entitled to all of the
other benefits and protection provided to the Owner Trustee in this
Agreement; and
(i) Except as expressly provided in this Section 11.02, in
accepting and performing the Trust hereby created the Delaware Co-Trustee
acts solely as co-trustee hereunder and not in its individual capacity, and
all persons having any claim against the Delaware Co-Trustee by reason of the
transactions contemplated by this Agreement shall look only to the
Administrator for payment or satisfaction thereof.
SECTION 11.03 REPRESENTATIONS AND WARRANTIES OF DELAWARE CO-TRUSTEE. The
Delaware Co-trustee hereby represents and warrants to the Depositor and for
the benefit of the Certificateholders, that:
(a) It is a national banking association duly organized and existing and
in good standing under the laws of the United States. It has full power,
authority and right to execute, deliver and perform its obligations under
this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery of this Agreement, and this Agreement has been
executed and delivered by one of its officers duly authorized to execute and
deliver this Agreement on its behalf.
(c) This Agreement constitutes the legal, valid and binding obligation
of the Delaware Co-Trustee, enforceable against it in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity.
(d) It is authorized to exercise trust powers in the State of Delaware
as and to the extent contemplated herein and it has a principal place of
business in the State of Delaware.
30
<PAGE>
SECTION 11.04 COMPENSATION OF DELAWARE CO-TRUSTEE. The Trust shall pay or
shall cause the Servicer to pay to the Delaware Co-Trustee from time to time
compensation for its services as have been separately agreed upon before the
date hereof, and the Delaware Co-Trustee shall be entitled to be reimbursed
by the Administrator for its other reasonable expenses hereunder, including
the reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Delaware Co-Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder.
SECTION 11.05 INDEMNIFICATION OF DELAWARE CO-TRUSTEE. The Administrator
shall, pursuant to the Administration Agreement and the following provisions,
reimburse the Delaware Co-Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Delaware
Co-Trustee's agents, counsel, accountants and experts directly related to its
services hereunder The Administrator shall indemnify or shall cause the
Servicer to indemnify the Delaware Co-Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Delaware Co-Trustee shall notify the Administrator and the
Servicer promptly of any claim for which it may seek indemnity. Failure by
the Delaware Co-Trustee to so notify the Administrator and the Servicer shall
not relieve the Administrator or the Servicer of its obligations hereunder,
where such failure shall affect the Administrator's or Servicer's defenses in
respect thereof. In case any such action is brought against the Delaware
Co-Trustee covered by this Section 11.05 or any action for which the Delaware
Co-Trustee is entitled to indemnification by the Administrator under the
Administration Agreement, and it notifies the Administrator of the
commencement thereof, the Administrator will assume the defense thereof, with
counsel reasonably satisfactory to the Delaware Co-Trustee (who may, unless
there is, as evidenced by an opinion of counsel to the Delaware Co-Trustee
stating that there is an unwaivable conflict of interest, be counsel to the
Administrator), and the Administrator will not be liable to the Delaware
Co-Trustee under this Section for any legal or other expenses subsequently
incurred by the Delaware Co-Trustee in connection with the defense thereof,
other than reasonable costs of investigation. Neither the Administrator nor
the Servicer need reimburse any expense or indemnify against any loss,
liability or expense incurred by the Delaware Co-Trustee through the Delaware
Co-Trustee's own willful misconduct, negligence or bad faith.
SECTION 11.06 RESIGNATION OR REMOVAL OF DELAWARE CO-TRUSTEE. The Delaware
Co-trustee may resign upon thirty days notice to the Owner Trustee and the
Certificateholders; PROVIDED, HOWEVER, that a successor Delaware Co-trustee
satisfactory to the Owner Trustee and the Certificateholders shall have been
appointed and agreed to serve. If a successor Delaware Co-Trustee shall not
have been appointed within such thirty day period, the Delaware Co-Trustee
may apply to the Court of Chancery of the State of Delaware for the
appointment of a successor Delaware Co-Trustee.
SECTION 11.07 PAYMENTS TO THE DELAWARE CO-TRUSTEE. Any amounts paid to
the Delaware Co-Trustee pursuant to this Article VIII from assets in the
Owner Trust Estate shall be deemed not to be a part of the Owner Trust Estate
immediately after such payment.
31
<PAGE>
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 SUPPLEMENTS AND AMENDMENTS. This Agreement may be amended
by the Depositor, the Owner Trustee and the Delaware Co-trustee, with prior
written notice to the Rating Agencies, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
in this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders, if (a) the Indenture Trustee and Owner Trustee
receive an Opinion of Counsel to the effect that such action will not
adversely affect in any material respect the interests of any Noteholder or
Certificateholder, or (b) the Indenture Trustee or Owner Trustee, as the case
may be, have received the consent of (i) the Holders of at least 51% of the
Outstanding Amount of the Class A Notes acting as a single Class (without the
consent of the Class B Notes or the Class C Notes) or (ii) after the Class A
Notes have been paid in full, the Holders of at least 51% of the outstanding
principal amount of Class B Notes (without the consent of any holder of the
Class C Notes) or (iii) after the Class B Notes have been paid in full, the
Holders of at least 51% of the outstanding principal amount of Class C Notes
(in each case excluding for such purposes the outstanding principal amount of
any Notes held of record or beneficially owned by TMCC, TMCRC or any of their
Affiliates) or (iv) if the Class C Notes have been paid in full, the Holders
of Certificates evidencing not less than 51% of the Certificate Balance
PROVIDED, HOWEVER, that no such amendment made pursuant to clause (b) above
shall (i) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, collections of payments on Receivables or distributions
that shall be required to be made for the benefit of the Noteholders or the
Certificateholders or (ii) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance required to consent to any
such amendment, without the consent of the Holders of all the affected Notes
and Certificates.
This Agreement may also be amended from time to time by the Depositor,
the Owner Trustee, the Delaware Co-Trustee and the Indenture Trustee without
the consent of any of the Noteholders or the Certificateholders for purposes
of changing the formula for determining the Specified Reserve Account
Balance, the manner in which the Reserve Account is funded (i.e. to allow the
deposit of cash therein by any Person, but not to change any order of
priority of payments and distributions specified in Section 5.06 of the Sale
and Servicing Agreement) changing the remittance schedule for the deposit of
collections in the Collection Account or Payahead Account or changing the
definition of Eligible Investments, if (a) the Owner Trustee and Indenture
Trustee have received from each Rating Agency that has rated any outstanding
Class of Notes of its written confirmation that such amendment will not
result in the qualification, withdrawal or modification of the rating then
assigned by such Rating Agency to any Class of Notes, without the consent of
any of the Noteholders or the Certificateholders, or (b) the Indenture
Trustee or Owner Trustee, as the case may be, have received the consent of
(i) the Holders of at least 51% of the Outstanding Amount of the Class A
Notes (without the consent of the Class B Notes or the Class C Notes) or (ii)
after the Class A Notes have been paid in full, the Holders of at least 51%
of the outstanding principal amount of Class B Notes (without the consent of
any holder of the Class C Notes) or (iii) after the Class B Notes have been
paid in full, the Holders of at least 51% of the outstanding principal amount
of Class C Notes (in each
32
<PAGE>
case excluding for such purposes the outstanding principal amount of any
Notes held of record or beneficially owned by TMCC, TMCRC or any of their
Affiliates) or (iv) if the Class C Notes have been paid in full, the Holders
of Certificates evidencing not less than 51% of the Certificate Balance or
(c) the Indenture Trustee has received the consent of Holders of at least 51%
of the Outstanding Amount of all Notes and the Certificate Balance, voting as
a single Class (in each case excluding for such purposes the outstanding
principal amount of any Notes or Certificates held of record or beneficially
owned by TMCC, TMCRC or any of their Affiliates); PROVIDED, HOWEVER, that no
such amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (b) reduce the aforesaid percentage
of the Outstanding Amount of the Notes and the Certificate Balance required
to consent to any such amendment, without the consent of the Holders of all
the effected Notes and Certificates.
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment
or consent to each Certificateholder, the Indenture Trustee and each of the
Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Indenture Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Certificateholders
provided for in this Agreement or in any other Basic Document) and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as the Owner Trustee may
prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. Neither the Owner Trustee nor the
Delaware Co-trustee shall be obligated to, enter into any such amendment
which affects the Owner Trustee's or Delaware Co-trustee's own rights, duties
or immunities under this Agreement or otherwise.
SECTION 12.02 NO LEGAL TITLE TO OWNER TRUST ESTATE IN
CERTIFICATEHOLDERS. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided ownership interest
therein only in accordance with Articles V and IX. No transfer, by operation
of law or otherwise, of any right, title, or interest of the
Certificateholders to and in their ownership interest in the Owner Trust
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal
title to any part of the Owner Trust Estate.
SECTION 12.03 LIMITATIONS ON RIGHTS OF OTHERS. Except for Section 2.06,
the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Delaware Co-
33
<PAGE>
Trustee, the Depositor, TMCC, the Certificateholders, the Administrator and,
to the extent expressly provided herein the Indenture Trustee, the
Noteholders, and nothing in this Agreement, (other than Section 2.06),
whether express or implied, shall be construed to give to any other Person
any legal or equitable right, remedy or claim in the Owner Trust Estate or
under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 12.04 NOTICES.
(a) Unless otherwise expressly specified or permitted by the terms
hereof, all notices shall be in writing and shall be deemed given upon
receipt by the intended recipient or three Business Days after mailing if
mailed by certified mail, postage prepaid (except that notice to the Owner
Trustee shall be deemed given only upon actual receipt by the Owner Trustee),
if to the Owner Trustee, addressed to the Corporate Trust Office; if to the
Delaware Co-Trustee, addressed to First Union Trust Company, National
Association, One Rodney Square, Suite 102, 920 King Street, Wilmington,
Delaware 19801; if to the Depositor, addressed to Toyota Motor Credit
Receivables Corporation, 19300 Gramercy Place, North Building, Torrance,
California 90509, Attention: President; if, to the Trust, addressed to Toyota
Auto Receivables Owner Trust 1999-A, 19001 South Western Avenue, Torrance,
California 90509, Attention: Treasury Department: Vice President, Treasury;
or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party.
(b) Any notice required or permitted to be given a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
SECTION 12.05 SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid or unenforceable in any jurisdiction, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 12.06 COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed
to be an original, and all of which shall constitute but one and the same
instrument.
SECTION 12.07 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Depositor, the Company, the Owner Trustee and its successors and each Owner
and its successors and permitted assigns, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action by
an Owner shall bind the successors and assigns of such owner.
SECTION 12.08 NO PETITION. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement,
hereby covenants and agrees, and each Certificateholder, by accepting a
Certificate, and the Indenture Trustee and any Noteholder
34
<PAGE>
by accepting the benefits of this Agreement, are thereby deemed to covenant
and agree that they will not at any time institute against the Depositor or
the Trust, or join in any institution against the Depositor or the Trust of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or
similar law. This Section 11.09 shall survive the termination of this
Agreement or the termination of the Owner Trustee under this Agreement.
SECTION 12.09 NO RECOURSE. Each Certificateholder by accepting an
interest in a Certificate acknowledges that such Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Depositor, TMCC (in any capacity), the Administrator, the
Owner Trustee, the Indenture Trustee or any Affiliate thereof and no recourse
may be had against such parties or their assets, except as may be expressly
set forth or contemplated in the Certificates or the Basic Documents.
SECTION 12.10 HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 12.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 12.12 TMCC PAYMENT OBLIGATION. The parties hereto acknowledge
and agree that, pursuant to the Sale and Servicing Agreement and the
following provisions, the Servicer shall be responsible for payment of the
Administrator's fees under the Administration Agreement and shall reimburse
the Administrator for all expenses and liabilities of the Administrator
incurred thereunder. In addition, the parties hereto acknowledge and agree
that, pursuant to the Sale and Servicing Agreement and the following
provisions, the Servicer shall be responsible for the payment of all fees and
expenses of the Trust, the Owner Trustee and the Indenture Trustee paid by
any of them in connection with any of their obligations under the Basic
Documents to obtain or maintain any required license under the Pennsylvania
Motor Vehicle Sales Finance Act. The parties hereto covenant and agree that
neither of them shall look to the other for payment of any such fees or
expenses.
35
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
TOYOTA MOTOR CREDIT RECEIVABLES CORPORATION,
Depositor
By: /s/ LLOYD MISTELE
------------------------------------------
Name: Lloyd Mistele
Title: President
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By: /s/ EDWARD F. KACHINSKI
------------------------------------------
Name: Edward F. Kachinski
Title: Vice President
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Delaware Co-trustee
By: /s/ STERLING C. CORREIA
------------------------------------------
Name: Sterling C. Correia
Title: Vice President
S-1
<PAGE>
------------
EXHIBIT A
------------
(FORM OF CERTIFICATE)
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST
IN THE DEPOSITOR, THE OWNER TRUSTEE, THE SERVICER, THE ADMINISTRATOR, TMCC,
TMCRC OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL NOT BE INSURED OR
GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON THAT THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE 1933 ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904
OF REGULATION S UNDER THE 1933 ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), OR (4) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) OF REGULATION D OF THE 1933 ACT AND (B) IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE OWNER
TRUSTEE SHALL HAVE RECEIVED A REPRESENTATION FROM THE TRANSFEREE HEREOF IN
FORM AND SUBSTANCE SATISFACTORY TO THE OWNER TRUSTEE TO THE EFFECT THAT: (1)
SUCH TRANSFEREE (A) IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO
SECTION 406 OF ERISA OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE (A
"PLAN"), NOR A PERSON ACTING ON BEHALF OF A PLAN NOR USING THE ASSETS OF A
PLAN TO EFFECT SUCH TRANSFER, AND (B) IS NOT AN INSURANCE COMPANY PURCHASING
THIS CERTIFICATE WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL
ACCOUNT" (AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60 ("PTCE 95-60")) AS TO WHICH THERE IS A PLAN WITH RESPECT TO
WHICH THE AMOUNT OF SUCH GENERAL ACCOUNT'S RESERVES AND LIABILITIES FOR THE
CONTRACTS HELD BY OR ON BEHALF OF SUCH PLAN AND
A-1
<PAGE>
ALL OTHER PLANS MAINTAINED BY THE SAME EMPLOYER (OR AFFILIATE THEREOF AS
DEFINED IN SECTION V(A)(1) OF PTCE 95-60) OR BY THE SAME EMPLOYEE
ORGANIZATION EXCEED 10% OF THE TOTAL OF ALL RESERVES AND LIABILITIES OF SUCH
GENERAL ACCOUNT (AS SUCH AMOUNTS ARE DETERMINED UNDER SECTION I(A) OF PTCE
95-60) AT THE DATE OF ACQUISITION; OR (2) SUCH TRANSFEREE IS A PLAN OR IS AN
INSURANCE COMPANY PURCHASING THIS CERTIFICATE WITH FUNDS CONTAINED IN AN
INSURANCE COMPANY GENERAL ACCOUNT, BUT HAVING ATTACHED THERETO AN OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE, WHICH OPINION SHALL NOT BE AN EXPENSE OF
EITHER THE OWNER TRUSTEE OR THE TRUST, ADDRESSED TO THE OWNER TRUSTEE, TO THE
EFFECT THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE WILL NOT RESULT IN
THE ASSETS OF THE OWNER TRUST ESTATE BEING DEEMED TO BE "PLAN ASSETS" AND
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND
WILL NOT SUBJECT THE OWNER TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE
EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO ANY LIABILITY.
NUMBER $____________
R-1 CUSIP NO. N/A
TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below,
the property of which includes a pool of retail installment sale contracts
secured by new and used automobiles and light duty trucks and sold to the
Trust by Toyota Motor Credit Receivables Corporation ("TMCRC").
(This Certificate does not represent an interest in or obligation of TMCRC,
Toyota Motor Credit Corporation ("TMCC"), Toyota Motor Sales, U.S.A., Inc. or
any of their respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT TOYOTA MOTOR CREDIT CORPORATION is the
registered owner of $586.54 DOLLARS nonassessable, fully-paid, fractional
undivided interest in Toyota Auto Receivables 1999-A Owner Trust (the
"Trust") formed by TMCRC.
The Trust was created pursuant to a Trust Agreement dated as of July
1, 1999, (as amended and supplemented from time to time, including the
Amended and Restated Trust Agreement dated as of July 1, 1999, the "Trust
Agreement"), between TMCRC, as depositor (the "Depositor"), U.S. Bank
National Association, as owner trustee (the "Owner Trustee") and First Union
Trust Company, National Association, as Delaware Co-trustee, a summary of
certain of the pertinent provisions of which is set forth below. Capitalized
terms used herein and not otherwise defined have the meanings ascribed
thereto in the Trust Agreement, the Indenture or in the Sale and Servicing
Agreement dated as of July 1, 1999 (the "Sale and Servicing Agreement"),
among the Trust, the Depositor and TMCC, as servicer (the "Servicer"), as
applicable.
A-2
<PAGE>
This Certificate is one of the duly authorized Certificates
designated as "Asset Backed Certificates" (the "Certificates") issued
pursuant to the Trust Agreement. Certain debt instruments evidencing
obligations of the Trust have been issued under an Indenture dated as of July
1, 1999, between the Trust and U.S. Bank National Association, as indenture
trustee (the "Indenture Trustee"), consisting of five classes of Notes
designated as "Class A-1 5.365% Asset Backed Notes", "Class A-2 5.800% Asset
Backed Notes", "Class A-3 6.150% Asset Backed Notes", "Class B 6.300% Asset
Backed Notes" and "Class C 6.700% Asset Backed Notes" (collectively, the
"Notes"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement to which Trust Agreement the
holder of this Certificate by virtue of the acceptance hereof assents and by
which such holder is bound. The property of the Trust includes a pool of
retail installment sale contracts secured by new and used automobiles and
light duty trucks (the "Receivables", all monies due thereunder on or after
July 1, 1999, in the case of Precomputed Receivables or received after such
date in the case of Simple Interest Receivables, security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof,
proceeds from claims on certain insurance policies and certain other rights
under the Trust Agreement and the Sale and Servicing Agreement and all
proceeds of the foregoing.
Under the Trust Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next Business
Day, (each, a "Payment Date"), commencing on August 16, 1999, to the person
in whose name this Certificate is registered at the close of business on the
related Record Date, such Certificateholder's pro rata portion of the amounts
to be distributed to Certificateholders on such Payment Date in respect of
amounts distributable to the Certificateholders pursuant to Section 5.06 of
the Sale and Servicing Agreement.
The holder of this Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement and the Indenture.
It is the intent of the Depositor, TMCC and the Certificateholders
that, for purposes of federal income tax, state and local income tax, any
state single business tax and any other income taxes, the Trust will be
treated as a partnership, and the Certificateholders will be treated as
partners in that partnership, for any period during which the beneficial
ownership interests in the Trust are held by more than one person. Each
Certificateholder by acceptance of a Certificate or any beneficial interest
on a Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates as partnership interests in the Trust for such
tax purposes.
Each Certificateholder or Certificate Owner, by its acceptance of a
Certificate or any beneficial interest in a Certificate, covenants and agrees
that such Certificateholder or Certificate Owner, as the case may be, will
not at any time institute against the Depositor or the Trust, or join in any
institution against the Depositor or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar
law in connection with any obligations relating to the Certificates, the
Notes, the Trust Agreement or any of the Basic Documents.
A-3
<PAGE>
Distributions on this Certificate will be made as provided in the
Trust Agreement by the Owner Trustee by wire transfer or check mailed to each
Certificateholder of record without the presentation or surrender of this
Certificate or the making of any notation hereon. Except as otherwise
provided in the Trust Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Owner
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency maintained for the
purpose by the Owner Trustee in Chicago, Illinois or the Borough of
Manhattan, The City of New York.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Certificate to be duly
executed.
TOYOTA AUTO RECEIVABLES 1999-A
OWNER TRUST
By: U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
Dated: July 22, 1999 By:
---------------------------------
Authorized Signatory
A-4
<PAGE>
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
U.S. Bank National Association,
as Owner Trustee
By:
---------------------------------------
Authorized Signatory
A-5
<PAGE>
(REVERSE OF CERTIFICATE)
The Certificates do not represent an obligation of, or an interest
in, TMCC, TMCRC, Toyota Motor Sales, U.S.A., Inc. or any of their Affiliates
and no recourse may be had against such parties or their assets, except as
may be expressly set forth or contemplated herein or in the Trust Agreement
or the Basic Documents. In addition, this Certificate is not guaranteed by
any governmental agency or instrumentality and is limited in right of payment
to certain collections with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Sale and
Servicing Agreement. A copy of each of the Sale and Servicing Agreement and
the Trust Agreement may be examined during normal business hours at the
principal office of the Depositor, and at such other places, if any,
designated by the Depositor, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under
the Trust Agreement at any time by (i) the Depositor, the Owner Trustee and
the Delaware Co-Trustee, with prior written notice to the Rating Agencies,
without the consent of any of the Noteholders or the Certificateholders, to
cure any ambiguity, to correct or supplement any provisions in this Agreement
or for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders, if (a) the
Indenture Trustee and Owner Trustee receive an Opinion of Counsel to the
effect that such action will not adversely affect in any material respect the
interests of any Noteholder or Certificateholder, or (b) the Indenture
Trustee or Owner Trustee, as the case may be, have received the consent of
(i) the Holders of at least 51% of the Outstanding Amount of the Class A
Notes acting as a single Class (without the consent of the Class B Notes or
the Class C Notes) or (ii) after the Class A Notes have been paid in full,
the Holders of at least 51% of the Outstanding Amount of the Class B Notes
(without the consent of any holder of the Class C Notes) or (iii) after the
Class B Notes have been paid in full, the Holders of at least 51% of the
Outstanding Amount of the Class C Notes (in each case excluding for such
purposes the outstanding principal amount of any Notes held of record or
beneficially owned by TMCC, TMCRC or any of their Affiliates) or (iv) if the
Class C Notes have been paid in full, the Holders of Certificates evidencing
not less than 51% of the Certificate Balance PROVIDED, HOWEVER, that no such
amendment made pursuant to clause (b) above shall (i) increase or reduce in
any manner the amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions that shall be required to be made
for the benefit of the Noteholders or the Certificateholders or (ii) reduce
the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance required to consent to any such amendment, without the
consent of the Holders of all the affected Notes and Certificates.
The Trust Agreement may also be amended from time to time by the
Depositor, the Owner Trustee, the Delaware Co-trustee and the Indenture
Trustee for purposes of changing the formula for determining the Specified
Reserve Account Balance, the manner in which the Reserve Account is funded
(i.e. to allow the deposit of cash therein by any Person, but not to change
any order of priority of payments and distributions specified in Section 5.06
of the Sale and Servicing Agreement) changing the remittance schedule for the
deposit of collections in the Collection Account or Payahead Account or
changing the definition of Eligible Investments, if (a) the Owner Trustee and
Indenture Trustee have received from each Rating Agency that has
A-6
<PAGE>
rated any outstanding Class of Notes of its written confirmation that such
amendment will not result in the qualification, withdrawal or modification of
the rating then assigned by such Rating Agency to any Class of Notes, without
the consent of any of the Noteholders or the Certificateholders, or (b) the
Indenture Trustee or Owner Trustee, as the case may be, have received the
consent of (i) the Holders of at least 51% of the Outstanding Amount of the
Class A Notes (without the consent of the Class B Notes or the Class C Notes)
or (ii) after the Class A Notes have been paid in full, the Holders of at
least 51% of the Outstanding Amount of the Class B Notes (without the consent
of any holder of the Class C Notes) or (iii) after the Class B Notes have
been paid in full, the Holders of at least 51% of the Outstanding Amount of
the Class C Notes (in each case excluding for such purposes the outstanding
principal amount of any Notes held of record or beneficially owned by TMCC,
TMCRC or any of their Affiliates) or (iv) if the Class C Notes have been paid
in full, the Holders of Certificates evidencing not less than 51% of the
Certificate Balance or (c) the Indenture Trustee has received the consent of
Holders of at least 51% of the Outstanding Amount of all Notes and the
Certificate Balance, voting as a single Class (in each case excluding for
such purposes the outstanding principal amount of any Notes or Certificates
held of record or beneficially owned by TMCC, TMCRC or any of their
Affiliates); PROVIDED, HOWEVER, that no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be
required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance required to consent to any
such amendment, without the consent of the Holders of all the effected Notes
and Certificates.
As provided in the Trust Agreement, and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Owner Trustee in Chicago, Illinois or the Borough
of Manhattan in The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of
authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee or transferees. The initial
Certificate Registrar appointed under the Trust Agreement is U.S. Bank
National Association, 111 East Wacker Drive, Suite 3000, Chicago, Illinois
60601.
The Certificates are issuable only as registered Certificates
without coupons in denominations of $.01 and in integral multiples of $.01 in
excess thereof. As provided in the Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but
the Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the
A-7
<PAGE>
owner hereof for all purposes and none of the Owner Trustee, the Certificate
Registrar or any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of
all property held as part of the Owner Trust Estate. TMCC, as servicer of the
Receivables under the Sale and Servicing Agreement, or any successor
servicer, may at its option purchase the corpus of the Trust at a price
specified in the Sale and Servicing Agreement, and any such purchase of the
Receivables and other property of the Trust will effect early retirement of
the Certificates; however, such right of purchase is exercisable only after
the last day of the Collection Period as of which the Pool Balance is less
than or equal to 10% of the Original Pool Balance.
A-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- -------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- -------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
Attorney to
- ------------------------------------------------------------------
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated:
------------------
------------------------------*/
Signature Guaranteed:
------------------------------*/
- ------------------
*/ NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must
be guaranteed by a member firm of the New York Stock Exchange or a commercial
bank or trust company.
A-9
<PAGE>
EXHIBIT B
TRANSFEREE REPRESENTATION LETTER
Toyota Auto Receivables 1999-A Owner Trust
U.S. Bank National Association, not in its individual
capacity but solely as Owner Trustee
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
U.S. Bank National Association,
as Certificate Registrar
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Corporate Trust Services -- Toyota Auto Receivables
1999-A Owner Trust
Re: TRANSFER OF TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
CERTIFICATE
Ladies and Gentlemen:
This letter is delivered pursuant to section 3.03 of the
Amended and Restated Trust Agreement dated as of July 1, 1999 (the "Trust
Agreement") between Toyota Motor Credit Receivables Corporation, as Depositor,
U.S. Bank National Association, as Owner Trustee (the "Owner Trustee") and First
Union Trust Company, National Association, as Delaware Co-trustee, in connection
with the transfer by _______________________________________ (the "Seller") to
the undersigned (the "Purchaser") of $__________________________ balance of
Certificates (the "Certificates"). Capitalized terms used and not otherwise
defined herein have the meanings ascribed thereto in the Trust Agreement.
In connection with such transfer, the undersigned hereby
represents and warrants to you and the addressees hereof as follows:
/ / I am not a Non-U.S. Person as defined in the Trust
Agreement; and
/ / I am not (i) an employee benefit plan subject to the
fiduciary responsibility provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or a governmental plan (as
defined in Section 3(32) of ERISA) subject to any federal, state or local law
("Similar Law") which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code (each a "Plan") or (ii) a person acting on
behalf of or using the assets of any such Plan (including an entity whose
underlying assets include Plan assets by reason of investment in the entity
by such Plan and the application of Department of Labor Regulation Section
2510.3-101), other than an insurance company using the assets of its general
account under circumstances whereby the purchase and holding of such Class of
Certificates by such insurance company would be exempt
B-1
<PAGE>
from the prohibited transaction provisions of ERISA and the Code under
Prohibited Transaction Class Exemption 95-60; or
/ / I am delivering herewith an Opinion of Counsel in form
and substance satisfactory to the Certificate Registrar and the Depositor to
the effect that the acquisition and holding of such Certificate by such
purchaser or transferee will not result in the assets of the Trust Fund being
deemed to be "plan assets" and subject to the fiduciary responsibility
provisions of ERISA, the prohibited transaction provisions of the Code or the
provisions of any Similar Law, will not constitute or result in a "prohibited
transaction" within the meaning of ERISA, Section 4975 of the Code or any
Similar Law, and will not subject the Owner Trustee, the Certificate
Registrar, the Servicer, the Administrator, the Owner or the Depositor to any
obligation or liability (including obligations or liabilities under ERISA,
Section 4975 of the Code or any such Similar Law).
[Signature appears on next page]
B-2
<PAGE>
IN WITNESS WHEREOF, the Purchaser hereby executes this
Transferee Representation Letter on the ___ day of _______________, _____.
Very truly yours,
-----------------------------,
The Purchaser
By:
---------------------------
Name:
Title:
B-3
<PAGE>
EXHIBIT C
TRANSFEROR REPRESENTATION LETTER
Toyota Auto Receivables 1999-A Owner Trust
U.S. Bank National Association, not in its individual
capacity but solely as Owner Trustee
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
U.S. Bank National Association,
as Certificate Registrar
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Corporate Trust Services -- Toyota Auto Receivables 1999-A
Owner Trust
Re: TRANSFER OF TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
CERTIFICATE
Ladies and Gentlemen:
This letter is delivered pursuant to section 3.03 of the
Amended and Restated Trust Agreement dated as of July 1, 1999 (the "Trust
Agreement") between Toyota Motor Credit Receivables Corporation, as Depositor,
U.S. Bank National Association, as Owner Trustee (the "Owner Trustee") and First
Union Trust Company, National Association, as Delaware Co-Trustee, in connection
with the transfer by _______________________________________ (the "Purchaser")
to the undersigned (the "Seller") of $__________________________ balance of
Certificates (the "Certificates"). Capitalized terms used and not otherwise
defined herein have the meanings ascribed thereto in the Trust Agreement. The
Transferor hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. The Transferor is the lawful owner of the Transferred
Certificates with the full right to transfer such Certificates free
from any and all claims and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has
(a) offered, transferred, pledged, sold or otherwise disposed of any
Transferred Certificate, any interest in any Transferred Certificate or
any other similar security to any person in any manner, (b) solicited
any offer to buy or accept a transfer, pledge or other disposition of
any Transferred Certificate, any interest in any Transferred
Certificate or any other similar security from any person in any
manner, (c) otherwise approached or negotiated with respect to any
Transferred Certificate, any interest in any Transferred Certificate or
any other similar security with any person in any manner, (d) made any
general solicitation by means of general advertising or in any other
manner, or (e) taken any other action, which (in the case of any of the
acts described in clauses (a) through (e) hereof) would constitute a
distribution of any Transferred Certificate under the Securities Act of
C-1
<PAGE>
1933, as amended (the "Securities Act"), or would render the
disposition of any Transferred Certificate a violation of Section 5 of
the Securities Act or any state securities laws, or would require
registration or qualification of any Transferred Certificate pursuant
to the Securities Act or any state securities laws.
Very truly yours,
-----------------------------------------
(Transferor)
By:
--------------------------------------
Name:
------------------------------------
Title:
----------------------------------
C-2
<PAGE>
ADMINISTRATION AGREEMENT
among
TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST,
as Issuer
TOYOTA MOTOR CREDIT CORPORATION,
as Administrator
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee
and
U.S. BANK NATIONAL ASSOCIATION,
as Owner Trustee
Dated as of July 1, 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
1. Duties of the Administrator.. . . . . . . . . . . . . . . . . . . . . . . . . .2
2. Records.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
4. Additional Information to be Furnished to the Issuer. . . . . . . . . . . . . .9
5. Independence of the Administrator.. . . . . . . . . . . . . . . . . . . . . . .9
6. No Joint Venture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
7. Other Activities of Administrator.. . . . . . . . . . . . . . . . . . . . . . .9
8. Term of Agreement; Resignation and Removal of Administrator.. . . . . . . . . 10
9. Action upon Termination, Resignation or Removal.. . . . . . . . . . . . . . . 11
10. Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12. Successor and Assigns.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13. Governing Law.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
14. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
15. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
16. Severability of Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . 13
17. Not Applicable to TMCC in Other Capacities. . . . . . . . . . . . . . . . . . 13
18. Limitation of Liability of Owner Trustee and Indenture Trustee. . . . . . . . 13
19. Limitation on Liability of Administrator. . . . . . . . . . . . . . . . . . . 13
</TABLE>
-i-
<PAGE>
ADMINISTRATION AGREEMENT dated as of July 1, 1999, among TOYOTA AUTO
RECEIVABLES 1999-A OWNER TRUST, a Delaware business trust (the "Issuer"),
TOYOTA MOTOR CREDIT CORPORATION, a California corporation, as administrator
(the "Administration"), U.S. BANK NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as Indenture Trustee
(the "Indenture Trustee") and U.S. BANK NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity but solely as Owner
Trustee (the "Owner Trustee").
W I T N E S S E T H:
WHEREAS beneficial ownership interests in the Issuer represented by the
Toyota Auto Receivables 1999-A Owner Trust Asset Backed Certificates (the
"Certificates") have been issued in connection with the formation of the
Issuer pursuant to the Amended and Restated Trust Agreement dated as of July
1, 1999 (the "Trust Agreement"), between Toyota Motor Credit Receivables
Corporation ("TMCRC"), a California corporation, as depositor, U.S. Bank
National Association, as owner trustee (the "Owner Trustee") and First Union
Trust Company, National Association, as Delaware co-trustee (the "Delaware
Co-trustee"), to the owners thereof (the "Owners");
WHEREAS the Issuer is issuing the Toyota Auto Receivables 1999-A Owner
Trust 5.365% Asset Backed Notes Class A-1, the Toyota Auto Receivables 1999-A
Owner Trust 5.800% Asset Backed Notes Class A-2, the Toyota Auto Receivables
1999-A Owner Trust 6.150% Asset Backed Notes Class A-3, the Toyota Auto
Receivables 1999-A Owner Trust 6.300% Asset Backed Notes Class B and the
Toyota Auto Receivables 1999-A Owner Trust 6.700% Asset Backed Notes Class C
(collectively, the "Notes") pursuant to the Indenture dated as of July 1,
1999 (as amended and supplemented from time to time, the "Indenture"),
between the Issuer and the Indenture Trustee (capitalized terms used herein
and not defined herein shall have the meanings ascribed thereto in the
Indenture, the Trust Agreement or the Sale and Servicing Agreement dated as
of July 1, 1999, among the Issuer, Toyota Motor Credit Corporation ("TMCC"),
as servicer, and TMCRC, as seller (the "Sale and Servicing Agreement"), as
the case may be);
WHEREAS the Issuer has entered into certain agreements in connection
with the issuance of the Certificates and the Notes, including the
Receivables Purchase Agreement dated as of July 1, 1999 (the Receivables
Purchase Agreement"), among TMCC, as seller, and TMCRC, as purchaser, the
Trust Agreement, the Indenture, the Administration Agreement and the Sale and
Servicing Agreement (collectively, the "Basic Documents");
WHEREAS, pursuant to the Basic Documents, the Issuer, the Owner Trustee
and the Indenture Trustee are required to perform certain duties in
connection with the Certificates, the Notes and the Collateral;
WHEREAS the Issuer, the Owner Trustee and the Indenture Trustee desire
to appoint TMCC as administrator to perform certain of the duties of the
Issuer, the Owner Trustee and the Indenture Trustee under the Basic Documents
and to provide such additional services consistent
<PAGE>
with the terms of this Agreement and the Basic Documents as the Issuer and
the Owner Trustee may from time to time request; and
WHEREAS the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and
the Owner Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
1. DUTIES OF THE ADMINISTRATOR.
(a) Duties with respect to the Note Depository Agreement and
the Indenture.
(i) The Administrator agrees to perform all its duties
as Administrator and the duties of the Issuer under the Depository
Agreement. In addition, the Administrator shall consult with the
Owner Trustee regarding the duties of the Issuer under the Indenture
and the Depository Agreement. The Administrator shall monitor the
performance of the Issuer and shall advise the Owner Trustee when
action by the Issuer or the Owner Trustee is necessary to comply with
the Issuer's duties under the Indenture and the Depository Agreement.
The Administrator shall prepare for execution by the Issuer or shall
cause the preparation by other appropriate persons of all such
documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Issuer to prepare, file or deliver
pursuant to the Indenture and the Depository Agreement. In
furtherance of the foregoing, the Administrator shall take all
appropriate action that is the duty of the Issuer to take pursuant to
the Indenture including, without limitation, such of the foregoing as
are required with respect to the following matters under the Indenture
(references are to sections of the Indenture):
(A) causing the Note Register to be kept and giving
the Indenture Trustee notice of any appointment of a new Note
Registrar and the location, or change in location, of the Note
Register (Section 2.04);
(B) preparing the notification to Noteholders of the
final principal payment on their Notes (Section 2.07(b));
(C) fixing or causing to be fixed any specified record
date and the notification of the Indenture Trustee and
Noteholders with respect to special payment dates, if any
(Section 5.04(d));
2
<PAGE>
(D) preparing or obtaining the documents and
instruments required for the proper authentication of Notes and
delivering the same to the Indenture Trustee (section 2.02);
(E) preparing, obtaining and/or filing of all
instruments, opinions and certificates and other documents
required for the release of collateral (Section 2.09);
(F) maintaining an office in the Borough of Manhattan,
City of New York, for the registration of transfer or exchange of
Notes (Section 3.02);
(G) causing newly appointed Paying Agents, if any, to
deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 3.03);
(H) directing the Indenture Trustee to deposit moneys
with Paying Agents, if any, other than the Indenture Trustee
(Section 3.03);
(I) obtaining and preserving the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity
and enforceability of the Indenture, the Notes, the Collateral
and each other instrument and agreement included in the Trust
Estate (Section 3.04);
(J) preparing all supplements, amendments, financing
statements, continuation statements, instruments of further
assurance and other instruments, in accordance with Section 3.05
of the Indenture, necessary to protect the Trust Estate (Section
3.05);
(K) delivering the required Opinions of Counsel on the
Closing Date and annually, in accordance with Section 3.06 of the
Indenture, and delivering the annual Officers' Certificates and
certain other statements as to compliance with the Indenture, in
accordance with Section 3.09 of the Indenture (Sections 3.06 and
3.09);
(L) identifying to the Indenture Trustee in an
Officers' Certificate any Person with whom the Issuer has
contracted to perform its duties under the Indenture (Section
3.07(b));
(M) notifying the Indenture Trustee and the Rating
Agencies of any Servicer Default pursuant to the Sale and
Servicing Agreement and, if such Servicer Default arises from the
failure of the Servicer to perform any of its duties under the
Sale and Servicing
3
<PAGE>
Agreement, taking all reasonable steps available to remedy such
failure (Section 3.07(d));
(N) preparing and obtaining documents and instruments
required for the release of the Issuer from its obligations under
the Indenture (Section 3.10(b));
(O) delivering notice to the Indenture Trustee of each
Event of Default and each other default by the Servicer or the
Seller under the Sale and Servicing Agreement (Section 3.19);
(P) monitoring the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation
of an Officer's Certificate and obtaining the Opinion of Counsel
and the Independent Certificate (as defined in the Indenture)
related thereto (Section 4.01);
(Q) complying with any written directive of the
Indenture Trustee with respect to any sale of any portion of the
Trust Estate in connection with any Event of Default (Section
5.04);
(R) preparing and delivering of notice to Noteholders
of any removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee (Section 6.08);
(S) preparing all written instruments required to
confirm the authority of any co-trustee or separate trustee and
any written instruments necessary in connection with the
resignation or removal of any co-trustee or separate trustee
(Sections 6.08 and 6.10);
(T) furnishing the Indenture Trustee with the names
and addresses of Noteholders during any period when the Indenture
Trustee is not the Note Registrar (Section 7.01);
(U) preparing and, after execution by the Issuer and
the Indenture Trustee, filing with the Commission and any
applicable state agencies of documents required to be filed on a
periodic basis with the Commission and any applicable state
agencies (including any summaries thereof required by rules and
regulations prescribed thereby), and transmitting of such
summaries to the Noteholders (Section 7.03);
(V) preparing and, after execution by the Indenture
Trustee, delivering to Noteholders and filing with the
Commission, any reports required by TIA Sections 313(a), (b) and
(c); provided, that the Administrator will not be required to
prepare reports required by TIA Sections 313(a)(1) and (a)(2)
unless specifically directed
4
<PAGE>
in writing to do so by the Indenture Trustee and the Indenture
Trustee provides the Administrator with all information necessary
to prepare such reports (Section 7.04);
(W) preparing the related Issuer Orders and all other
actions necessary with respect to investment and reinvestment of
funds in the Trust Accounts (Section 8.04);
(X) preparing any Issuer Request and Officers'
Certificates and obtaining any Opinions of Counsel and
Independent Certificates necessary for the release of the Trust
Estate (Sections 8.05 and 8.06);
(Y) preparing Issuer Orders and obtaining Opinions of
Counsel with respect to the execution of any supplemental
indentures, and mailing notices to the Noteholders with respect
thereto (Sections 9.01, 9.02 and 9.03);
(Z) executing and delivering new Notes conforming to
the provisions of any supplemental indenture, as appropriate
(Section 9.06);
(AA) notifying Noteholders of any redemption of the
Notes or causing the Indenture Trustee to provide such notice
(Section 10.02);
(BB) preparing all Officers' Certificates, Opinions of
Counsel and Independent Certificates with respect to any requests
by the Issuer of the Indenture Trustee to take any action under
the Indenture (Section 11.01(a));
(CC) preparing and delivering Officers' Certificates
and obtaining Independent Certificates, if necessary, for the
release of property from the lien of the Indenture (Section
11.01(b));
(DD) notifying the Rating Agencies, upon any failure of
the Indenture Trustee to give such notification, of the
information required pursuant to Section 11.04 of the Indenture
(Section 11.04);
(EE) preparing and delivering to Noteholders and the
Indenture Trustee any agreements with respect to alternate
payment and notice provisions (Section 11.06);
(FF) recording the Indenture, if applicable (Section
11.14); and
5
<PAGE>
(ii) The Administrator also will:
(A) pay the Indenture Trustee from time to time the
reasonable compensation provided for in the Indenture with
respect to services rendered by the Indenture Trustee under the
Indenture (which compensation shall not be limited by any
provision of law in regard to the compensation of a Trustee of an
express trust);
(B) reimburse the Indenture Trustee upon its request
for all reasonable expenses, disbursements and advances incurred
or made by the Indenture Trustee in accordance with any provision
of the Indenture (including the reasonable compensation, expenses
and disbursements of its agents and counsel) to the extent the
Indenture Trustee is entitled to such reimbursement by the Issuer
under the Indenture;
(C) indemnify the Indenture Trustee for, and hold it
harmless against, any losses, liability or expense incurred
without negligence or bad faith on the part of the Indenture
Trustee, arising out of or in connection with the acceptance or
administration of the trusts and duties contemplated by the
Indenture, including the reasonable costs and expenses of
defending themselves against any claim or liability in connection
therewith to the extent the Indenture Trustee is entitled to such
indemnification from the Issuer under the Indenture;
(D) indemnify the Owner Trustee for, and hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Owner Trustee, arising
out of or in connection with the acceptance or administration of
the transactions contemplated by the Trust Agreement, the
Indenture, the Depository Agreement or this Administration
Agreement, including the reasonable costs and expenses of
defending themselves against any claim or liability in connection
with the exercise or performance of any of their powers or duties
under the Trust Agreement in accordance with the provisions of
Section 8.02 of the Sale and Servicing Agreement; and
(E) indemnify the Delaware Co-trustee for, and hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Delaware Co-trustee,
arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Trust
Agreement, including the reasonable costs and expenses of
defending themselves against any claim or liability in connection
with the exercise or performance of any of their powers or duties
under the Trust Agreement in accordance with the provisions of
Section 11.05 of the Sale and Servicing Agreement.
6
<PAGE>
(b) Additional Duties.
(i) In addition to the duties of the Administrator set
forth above, the Administrator shall perform such calculations, and
shall prepare for execution by the Issuer or the Owner Trustee or
shall cause the preparation by other appropriate persons of all such
documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Issuer or the Owner Trustee to prepare,
file or deliver pursuant to the Basic Documents, and at the request of
the Owner Trustee shall take all appropriate action that it is the
duty of the Issuer or the Owner Trustee to take pursuant to the Basic
Documents. Subject to Section 5 of this Agreement, and in accordance
with the reasonable written directions of the Owner Trustee, the
Administrator shall administer, perform or supervise the performance
of such other activities in connection with the Collateral (including
the Basic Documents) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator. Such
responsibilities shall include, obtaining and maintaining any licenses
required to be obtained or maintained by the Trust under the
Pennsylvania Motor Vehicle Sales Finance Act. In addition, the
Administrator shall promptly notify the Indenture Trustee and the
Owner Trustee in writing of any amendment to the Pennsylvania Motor
Vehicle Sales Finance Act that would affect the duties or obligations
of the Indenture Trustee, or the Owner Trustee under any Basic
Document and shall assist the Indenture Trustee or the Owner Trustee
in obtaining and maintaining any licenses required to be obtained or
maintained by the Indenture Trustee or the Owner Trustee thereunder.
In connection therewith, the Administrator shall pay all fees and
expenses under such Act.
(ii) Notwithstanding anything in this Agreement or the
Basic Documents to the contrary, the Administrator shall be
responsible for promptly notifying the Owner Trustee in the event that
any withholding tax is imposed on the Issuer's payments (or
allocations of income) to an Owner as contemplated in Section 5.02(c)
of the Trust Agreement. Any such notice shall specify the amount of
any withholding tax required to be withheld by the Owner Trustee
pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or
the Basic Documents to the contrary, the Administrator shall be
responsible for performance of the duties of the Owner Trustee set
forth in Sections 5.04(a), (b), (c) and (d) of the Trust Agreement
with respect to, among other things, accounting and reports to Owners;
provided, however, that the Owner Trustee shall remain exclusively
responsible for the distribution of the Schedule K-1s necessary to
enable each Owner to prepare its federal and state income tax returns.
(iv) The Administrator shall satisfy its obligations
with respect to clauses (ii) and (iii) above by retaining, at the
expense of the Issuer
7
<PAGE>
payable by the Administrator, a firm of independent public
accountants (the "Accountants") acceptable to the Owner Trustee
which shall perform the obligations of the Administrator
thereunder. In connection with paragraph (ii) above, the
Accountants will provide prior to August 16, 1999, a letter in form
and substance satisfactory to the Owner Trustee as to whether any
tax withholding is then required and, if required, the procedures
to be followed with respect thereto to comply with the requirements
of the Code. The Accountants shall be required to update the
letter in each instance that any additional tax withholding is
subsequently required or any previously required tax withholding
shall no longer be required.
(v) The Administrator shall perform the duties of the
Administrator specified in Section 10.02 of the Trust Agreement
required to be performed in connection with the resignation or removal
of the Owner Trustee, and any other duties expressly required to be
performed by the Administrator under the Trust Agreement.
(vi) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Administrator may enter
into transactions with or otherwise deal with any of its affiliates;
provided, however, that the terms of any such transactions or dealings
shall be in accordance with any directions received from the Issuer
and shall be, in the Administrator's opinion, no less favorable to the
Issuer than would be available from unaffiliated parties.
(c) Non-Ministerial Matters.
(i) With respect to matters that in the reasonable
judgment of the Administrator are non-ministerial, the Administrator
shall not take any action unless within a reasonable time before the
taking of such action the Administrator shall have notified the Owner
Trustee of the proposed action and the Owner Trustee shall not have
withheld consent or provided an alternative direction. For the
purpose of the preceding sentence, "non-ministerial matters" shall
include, without limitation:
(A) the amendment of the Indenture or execution of any
supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or lawsuit brought
by or against the Issuer (other than in connection with the
collection of the Receivables);
(C) the amendment, change or modification of any of
the Basic Documents;
8
<PAGE>
(D) the appointment of successor Note Registrars,
successor Paying Agents or successor Indenture Trustees pursuant
to the Indenture or the appointment of successor Administrators
or Successor Servicers, or the consent to the assignment by the
Note Registrar, Paying Agent or Indenture Trustee of its
obligations, under the Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this
Agreement, the Administrator shall not be obligated to, and shall not,
(x) make any payments to the Noteholders under the Basic Documents,
(y) sell the Trust Estate pursuant to Section 5.04 of the Indenture or
(z) take any other action that the Issuer directs the Administrator
not to take on its behalf.
2. RECORDS. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer, the Owner
Trustee and the Indenture Trustee at any time during normal business hours upon
reasonable advance written notice.
3. COMPENSATION. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to a fee of
$200.00 per month which shall be solely an obligation of the Servicer.
4. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall, reasonably request.
5. INDEPENDENCE OF THE ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer, the Owner Trustee or the Indenture
Trustee with respect to the manner in which it accomplishes the performance of
its obligations hereunder. Unless expressly authorized by the Issuer hereunder
or otherwise, the Administrator shall have no authority to act for or represent
the Issuer, the Owner Trustee or the Indenture Trustee, and shall not otherwise
be or be deemed an agent of the Issuer, the Owner Trustee or the Indenture
Trustee.
6. NO JOINT VENTURE. Nothing contained in this Agreement shall (i)
constitute the Administrator and any of the Issuer, the Owner Trustee or the
Indenture Trustee as members of any partnership, joint venture, association,
syndicate, unincorporated business or other separate entity, (ii) be construed
to impose any liability as such on any of them or (iii) be deemed to confer on
any of them any express, implied or apparent authority to incur any obligation
or liability on behalf of the others.
7. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other businesses or, in its
or their sole discretion,
9
<PAGE>
from acting as an administrator for any other person or entity, or in a
similar capacity therefor, even though such person or entity may engage in
business activities similar to those of the Issuer, the Owner Trustee or the
Indenture Trustee.
8. TERM OF AGREEMENT; RESIGNATION AND REMOVAL OF ADMINISTRATOR.
(a) This Agreement shall continue in force until the
dissolution of the Issuer, upon which event this Agreement shall
automatically terminate.
(b) Subject to Sections 8(e) and 8(f), the Administrator may
resign its duties hereunder by providing the Issuer with at least 30
days, prior written notice.
(c) Subject to Sections 8(e) and 8(f), the Issuer may remove
the Administrator without cause by providing the Administrator with at
least 30 days prior written notice.
(d) Subject to Sections 8(e) and 8(f), at the sole option of
the Issuer, the Administrator may be removed immediately upon written
notice of termination from the Issuer to the Administrator if any of the
following events shall occur:
(i) the Administrator shall fail to perform in any
material respect any of its duties under this Agreement and,
after notice of such default, shall not cure such default within
10 days (or, if such default cannot be cured in such time, shall
not give within such 10 days such assurance of timely and complete
cure as shall be reasonably satisfactory to the Issuer);
(ii) the entry of a decree or order by a court or agency
or supervisory authority having jurisdiction in the premises for
the appointment of a trustee in bankruptcy, conservator, receiver
or liquidator for the Administrator (or, so long as the
Administrator is TMCC, the Seller) in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of their
respective affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 90 consecutive days; or
(iii) the consent by the Administrator (or, so long as the
Administrator is TMCC, the Seller) to the appointment of a trustee
in bankruptcy, conservator or receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the
Administrator (or, so long as the Administrator is TMCC, the
Seller) of or relating to substantially all of their property, or
the Administrator (or, so long as the Administrator is TMCC, the
Seller) shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations.
10
<PAGE>
The Administrator agrees that if any of the events
specified in clauses (ii) or (iii) of this Section shall occur, it
shall give written notice thereof to the Issuer, the Owner Trustee
and the Indenture Trustee within seven days after the happening of
such event.
(e) No resignation or removal of the Administrator pursuant to
this Section shall be effective until (i) a successor Administrator
shall have been appointed by the Issuer and (ii) such successor
Administrator shall have agreed in writing to be bound by the terms of
this Agreement in the same manner as the Administrator is bound
hereunder.
(f) The appointment of any successor Administrator shall be
effective only after each Rating Agency has provided to the Owner
Trustee and the Indenture Trustee written notice that the proposed
appointment will not result in the reduction or withdrawal of any rating
then assigned by such Rating Agency to any Class of Notes or the
Certificates.
(g) Subject to Section 8(e) and 8(f), the Administrator
acknowledges that upon the appointment of a Successor Servicer pursuant
to the Sale and Servicing Agreement, the Administrator shall immediately
resign and such Successor Servicer shall automatically succeed to the
rights, duties and obligations of the Administrator under this Agreement.
9. ACTION UPON TERMINATION, RESIGNATION OR REMOVAL. Promptly upon
the effective date of termination of this Agreement pursuant to Section 8(a)
or the resignation or removal of the Administrator pursuant to Section 8(b),
(c) or (d), respectively, the Administrator shall be entitled to be paid all
fees and reimbursable expenses accruing to it to the date of such
termination, resignation or removal. The Administrator shall forthwith upon
such termination pursuant to Section 8(a) deliver to or to the order of the
Issuer all property and documents of or relating to the Collateral then in
the custody of the Administrator. In the event of the resignation or removal
of the Administrator pursuant to Section 8(b), (c) or (d), respectively, the
Administrator shall cooperate with the Issuer and take all reasonable steps
requested to assist the Issuer in making an orderly transfer of the duties of
the Administrator.
10. NOTICES. Any notice, report or other communication given
hereunder shall be in writing and addressed as follows:
(a) if to the Issuer or the Owner Trustee, to:
Toyota Auto Receivables 1999-A Owner Trust
In care of: U.S. Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Toyota Auto Receivables 1999-A Owner Trust
(b) if to the Administrator, to:
11
<PAGE>
Toyota Motor Credit Corporation
19001 South Western Avenue
Torrance, California 90509
Attention: Treasury Department, Vice President, Treasury
(c) if to the Indenture Trustee, to:
U.S. Bank National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Toyota Auto Receivables 1999-A Owner Trust
or to such other address as any party shall have provided to the other
parties in writing. Any notice required to be in writing hereunder shall be
deemed given if such notice is mailed by certified mail, postage prepaid, or
hand delivered to the address of such party as provided above.
11. AMENDMENTS. This Agreement may be amended from time to time by
a written amendment duly executed and delivered by the Issuer, the
Administrator, the Owner Trustee and the Indenture Trustee, without the
consent of any Noteholders or the Certificateholders, for the purpose of
adding any provisions to or modifying or changing in any manner or
eliminating any of the provisions of this Agreement; provided that such
amendment does not and will not, in the Opinion of Counsel satisfactory to
the Indenture Trustee, materially and adversely affect the interest of any
Noteholder or Certificateholder.
12. SUCCESSOR AND ASSIGNS. This Agreement may not be assigned by
the Administrator unless such assignment is consented to in writing by the
Issuer, the Owner Trustee and the Indenture Trustee, and the conditions
precedent to appointment of a successor Administrator set forth in Section 8
are satisfied. An assignment with such consent and satisfaction, if accepted
by the assignee, shall bind the assignee hereunder in the same manner as the
Administrator is bound hereunder. Notwithstanding the foregoing, this
Agreement may be assigned by the Administrator without the consent of the
Issuer, the Owner Trustee and the Indenture Trustee to a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator, provided that such successor organization
executes and delivers to the Issuer, the Owner Trustee and the Indenture
Trustee an agreement in which such corporation or other organization agrees
to be bound hereunder by the terms of said assignment in the same manner as
the Administrator is bound hereunder. Subject to the foregoing, this
Agreement shall bind any successors or assigns of the parties hereto.
13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
14. HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
12
<PAGE>
15. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which when so executed shall together constitute but one and the same
agreement.
16. SEVERABILITY OF PROVISIONS. If any one or more of the
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid or unenforceable in any jurisdiction, then such
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way affect the validity or enforceability of the other provisions of this
Agreement or the other rights of the parties hereto.
17. NOT APPLICABLE TO TMCC IN OTHER CAPACITIES. Nothing in this
Agreement shall affect any obligation, right or benefit TMCC may have in any
other capacity or under any Basic Document.
18. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE TRUSTEE.
Notwithstanding anything contained herein to the contrary, this instrument
has been countersigned by U.S. Bank National Association, not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and as Indenture Trustee under the Indenture and in no event shall U.S. Bank
National Association in its individual capacity or any Owner have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer.
19. LIMITATION ON LIABILITY OF ADMINISTRATOR. Neither the
Administrator nor any of the directors, officers, employees or agents of the
Administrator shall be under any liability to the Seller, the Issuer, the
Noteholders or the Certificateholders, except as provided under this
Administration Agreement, for any action taken or for refraining from the
taking of any action pursuant to this Administration Agreement or for errors
in judgment; provided, however, that this provision shall not protect the
Administrator or any such person against any liability that would otherwise
be imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Administration Agreement. The Administrator and any
director, officer, employee or agent of the Administrator may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any person respecting any matters arising under this Administration
Agreement.
13
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
TOYOTA AUTO RECEIVABLES 1999-A OWNER TRUST
By: U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as Owner
Trustee
By: /s/ Edward F. Kachinski
-----------------------------------------------------
Name: Edward F. Kachinski
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as Indenture
Trustee
By: /s/ Edward F. Kachinski
-----------------------------------------------------
Name: Edward F. Kachinski
Title: Vice President
TOYOTA MOTOR CREDIT CORPORATION,
as Administrator
By: /s/ George Borst
-----------------------------------------------------
Name: George Borst
Title: Senior Vice President and General Manager
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as Owner Trustee
By: /s/ Edward F. Kachinski
-----------------------------------------------------
Name: Edward F. Kachinski
Title: Vice President
S-1
