EXHIBIT 4.3
SALE AND SERVICING AGREEMENT
among
TOYOTA AUTO RECEIVABLES 200_-_ OWNER TRUST,
as Issuer,
TOYOTA AUTO FINANCE RECEIVABLES LLC,
as Seller,
and
TOYOTA MOTOR CREDIT CORPORATION,
as Servicer
Dated as of _______, 200_
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ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions......................................................1
SECTION 1.02 Usage of Terms..................................................27
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01 Conveyance of Receivables.......................................27
SECTION 2.02 Custody of Receivables Files....................................29
SECTION 2.03 Acceptance by Owner Trustee.....................................30
ARTICLE III
THE RECEIVABLES
SECTION 3.01 Representations and Warranties of the Seller with Respect
to the Receivables.......................................30
SECTION 3.02 Remedies........................................................33
SECTION 3.03 Duties of Servicer as Custodian.................................34
SECTION 3.04 Instructions; Authority To Act..................................35
SECTION 3.05 Custodian's Indemnification.....................................35
SECTION 3.06 Effective Period and Termination................................35
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01 Duties of Servicer..............................................36
SECTION 4.02 Collection and Allocation of Receivable Payments................37
SECTION 4.03 Rebates on Full Prepayments.....................................37
SECTION 4.04 Realization upon Receivables....................................37
SECTION 4.05 Physical Damage Insurance.......................................38
SECTION 4.06 Maintenance of Security Interests in Financed Vehicles..........38
SECTION 4.07 Covenants of Servicer...........................................38
SECTION 4.08 Remedies........................................................39
SECTION 4.09 Servicing Fee and Expenses......................................39
SECTION 4.10 Servicer's Certificate..........................................40
SECTION 4.11 Annual Statement as to Compliance; Notice of Default............40
SECTION 4.12 Annual Accountants' Report......................................41
SECTION 4.13 Access to Certain Documentation and Information Regarding
Receivables..............................................41
SECTION 4.14 Appointment of Subservicer......................................41
SECTION 4.15 Amendments to Schedule of Receivables...........................42
SECTION 4.16 Reports to Securityholders and Rating Agencies..................42
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ARTICLE V
ACCOUNTS; PAYMENTS AND DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
SECTION 5.01 Establishment of Collection Account and Payahead Account........42
SECTION 5.02 Collections.....................................................44
SECTION 5.03 Application of Collections......................................45
SECTION 5.04 Advances; [Swap Payments].......................................46
SECTION 5.05 Additional Deposits.............................................47
SECTION 5.06 Payments and Distributions......................................48
SECTION 5.07 [Revolving Liquidity Note and Reserve Account]..................51
SECTION 5.08 [Revolving Liquidity Note]......................................53
SECTION 5.09 Statements to Certificateholder, Noteholders, [and
Swap Counterparty]..............................................53
SECTION 5.10 Net Deposits....................................................55
ARTICLE VI
THE SELLER
SECTION 6.01 Representations of Seller.......................................55
SECTION 6.02 Company Existence...............................................56
SECTION 6.03 Liability of Seller; Indemnities................................56
SECTION 6.04 Merger or Consolidation of, or Assumption of the
Obligations of, Seller..........................................57
SECTION 6.05 Limitation on Liability of Seller and Others....................58
SECTION 6.06 Seller May Own Certificates or Notes............................58
ARTICLE VII
THE SERVICER
SECTION 7.01 Representations of Servicer.....................................58
SECTION 7.02 Indemnities of Servicer.........................................59
SECTION 7.03 Merger or Consolidation of, or Assumption of the Obligations
of, Servicer.............................................61
SECTION 7.04 Limitation on Liability of Servicer and Others..................61
SECTION 7.05 TMCC Not To Resign as Servicer..................................62
ARTICLE VIII
DEFAULT
SECTION 8.01 Servicer Default................................................62
SECTION 8.02 Appointment of Successor........................................63
SECTION 8.03 Repayment of Advances; Compensation Payable.....................65
SECTION 8.04 Notification....................................................65
ARTICLE IX
TERMINATION
SECTION 9.01 Optional Purchase of All Receivables............................65
SECTION 9.02 Termination of the Trust Agreement..............................66
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ARTICLE X
MISCELLANEOUS
SECTION 10.01 Amendment......................................................66
SECTION 10.02 Protection of Title to Trust...................................68
SECTION 10.03 Notices........................................................70
SECTION 10.04 Assignment by the Seller or the Servicer.......................70
SECTION 10.05 Limitations on Rights of Others................................70
SECTION 10.06 Severability...................................................70
SECTION 10.07 Separate Counterparts..........................................70
SECTION 10.08 Headings.......................................................70
SECTION 10.09 Governing Law..................................................71
SECTION 10.10 Assignment by Issuer...........................................71
SECTION 10.11 Nonpetition Covenants..........................................71
SECTION 10.12 Limitation of Liability of Owner Trustee and Indenture
Trustee........................................................71
SCHEDULE A Schedule of Receivables
EXHIBIT A Form of Servicer's Certificate
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SALE AND SERVICING AGREEMENT dated as of _______, 200_, among TOYOTA AUTO
RECEIVABLES 200_-_ OWNER TRUST, a Delaware business trust (the "Issuer"), TOYOTA
AUTO FINANCE RECEIVABLES LLC, a Delaware limited liability company ("TAFR LLC"
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.
["Additional Closing Date" means, with respect to any class of Notes
with a Revolving Period, the date on which additional Receivables are sold to
the Issuer as set forth in Section __.]
["Additional Yield Maintenance Amount" means, with respect to any
Payment Date, the amount by which the Required Yield Maintenance Amount exceeds
the Yield Maintenance Amount.]
"Administration Agreement" means the Administration Agreement dated
as of _______, 200_, among the Administrator, the Issuer, the Owner Trustee and
the Indenture Trustee.
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"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 the
Rebate, if any, paid to the Obligor on a Precomputed Receivable on or before the
date of such purchase 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 such unpaid Principal Balance at
a rate equal to [the sum of the Class B Pass Through Rate][or specify other
rate] and the related APR to the last day in the related Collection Period.
"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 200_-_ Owner Trust, as Issuer, TAFR LLC, as seller, and TMCC,
as servicer, as the same may be amended or supplemented from time to time.
["Amortization Period" means, with respect to any class of Notes, a
period following a Revolving Period, during which collections of principal and
other amounts treated as collections of principal are distributed to the holders
of such class of Notes.]
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"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.
"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, [(v) all
Swap Payments Incoming,] [(vi) all Swap Termination Payments made by the Swap
Counterparty to the Issuer] and (vii) 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, (v) all Swap Payments
Outgoing, [(vi) all Swap Termination Payments made by the Issuer to the Swap
Counterparty] and (vii) 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, the Certificate Depository Agreement,
[the Collateral Security Agreement,] [the Revolving Liquidity Note Agreement,]
[the Revolving Liquidity Note,] [the Operating Agreement] and the other
documents and certificates delivered in connection herewith and therewith.
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"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 Certificates" and Book-Entry Notes" mean, respectively,
beneficial interests in Certificates or Notes, as the case may be, ownership and
transfers 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, Chicago, Illinois,
Wilmington, Delaware or San Francisco, California are authorized or obligated by
law, executive order or governmental decree to be closed.
"Certificate" means a certificate evidencing the Subordinated
Seller's Interest.
"Certificateholders" means the registered holder of the Subordinated
Seller's Interest.
"Certificateholders' Distributable Amount" means, with respect to a
Distribution Date, the sum of the Certificateholders' Principal Distributable
Amount and the Certificateholders' Interest Distributable Amount with respect to
such Distribution Date.
"Certificateholder Interest Carryover Shortfall" means, with respect
to any Distribution Date, the excess, if any, of (x) the Certificateholders'
Interest Distributable Amount for such Distribution Date and any outstanding
Certificateholders Interest Carryover Shortfall from the immediately preceding
Distribution Date plus interest on such outstanding Certificateholder Interest
Carryover Shortfall, to the extent permitted by law, at the Pass Through Rate
from such immediately preceding Distribution Date through the current
Distribution Date, over (y) the amount of interest distributed to the
Certificateholders on such Distribution Date.
"Certificateholders' Interest Distributable Amount", consisting
of one month's interest at the Pass Through Rate on the Certificate Balance
as of the immediately preceding Distribution Date (after giving effect to
distributions of principal made on such immediately preceding Distribution
Date) or, in the case of the first Distribution Date, the Initial Certificate
Balance. "Certificateholders' Principal Distributable Amount"
"Certificateholder Principal Carryover Shortfall" means, with
respect to any Distribution Date occurring (i) after the Distribution Date on
which the principal amount of the Class A-1 Notes is reduced to zero or (ii) in
____________, will equal the excess of the Certificateholders' Principal
Distributable Amount plus any outstanding Certificateholder Principal Carryover
Shortfall with respect to one or more prior Distribution Dates over the amount
of principal that the holders of the Certificateholders actually received on
such Distribution Date and, with respect to any other Distribution Date, zero.
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"Certificateholders' Percentage" means, with respect to any
Distribution Date, the percentage equivalent of a fraction, (a) the numerator of
which is the Certificate Balance, and (b) the denominator of which is the sum of
the Outstanding Amount plus the Certificate Balance, in each case prior to the
making of any deposits, withdrawals or distributions on such Distribution Date.
"Certificateholders' Principal Distributable Amount" means, with
respect to any Distribution Date, the Certificateholders' Percentage of the
following items: (a) in the case of Precomputed Receivables, the principal
portion of all Scheduled Payments due during the related Collection Period,
computed in accordance with the actuarial method, (b) in the case of Simple
Interest Receivables, the principal portion of all Scheduled Payments actually
received during the related Collection Period, (c) the principal portion of all
Prepayments on Simple Interest Receivables and prepayments in full of
Precomputed Receivables received during the related Collection Period (to the
extent such amounts are not included in clauses (a) and (b) above) and (d) the
Principal Balance of each Receivable that the Servicer became obligated to
purchase, the Seller became obligated to repurchase or that became a Defaulted
Receivable during the related Collection Period (to the extent such amounts are
not included in clauses (a), (b) and (c) above
"Certificate Pool Factor" means, as of the close of business on the
last day of a Collection Period, a seven-digit decimal figure equal to the
Certificate Balance (after giving effect to any reductions therein to be made on
the immediately following Distribution Date) divided by the Initial Certificate
Balance. The Certificate Pool Factor will be 1.0000000 as of the Closing Date;
thereafter, the Certificate Pool Factor will decline to reflect reductions in
the Certificate Balance.
"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 Pool Balance on the last day of the Collection Period immediately
preceding such Collection Period and (ii) the Pool 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 Note Balance" as of any date of determination, means the
aggregate of the outstanding principal balances of the Class A-1 Notes, Class
A-2 Notes, Class A-3 Notes and Class A-4 Notes.
"Class A-1 Final Scheduled Payment Date" means the Payment Date in
_______, 200_.
"Class A-1 Initial Principal Balance" means $__________.
"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
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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 __% Asset Backed Notes, Class A-1,
issued under the Indenture.
"Class A-1 Noteholder" means any 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 __% per annum.
"Class A-2 Final Scheduled Payment Date" means the Payment Date in
_______, 200_.
"Class A-2 Initial Principal Balance" means $___________.
"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
a 360 day year consisting of twelve 30 day months) 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 __% Asset Backed Notes, Class A-2,
issued under the Indenture.
"Class A-2 Noteholder" means any Person in whose name a Class A-2
Note is registered in the Note Register.
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"Class A-2 Notional Balance" means the Class A-2 Principal Balance
as of the first day of the applicable Interest Period.
["Class A-2 Notional Fixed Rate" means __%.]
"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 __% per annum.
"Class A-3 Final Scheduled Payment Date" means the Payment Date in
_______, 200_.
"Class A-3 Initial Principal Balance" means $__________.
"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
the actual number of days in such Interest Period and a year assumed to consist
of 360 days) on the Class A-3 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-3 Rate or, in the case of the
first Payment Date, on the Class A-3 Initial Principal Balance.
"Class A-3 Note" means any of the __% Asset Backed Notes, Class A-3,
issued under the Indenture.
"Class A-3 Noteholder" means any Person in whose name a Class A-3
Note is registered in the Note Register.
"Class A-3 Notional Balance" means the Class A-3 Principal Balance
as of the first day of the applicable Interest Period.
["Class A-3 Notional Fixed Rate" means __%.]
"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 __% per annum.
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"Class A-4 Final Scheduled Payment Date" means the Payment Date in
_______, 200_.
"Class A-4 Initial Principal Balance" means $________.
"Class A-4 Interest Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any, of (x) the Class A-4 Interest Distributable
Amount for such Payment Date and any outstanding Class A-4 Interest Carryover
Shortfall from the immediately preceding Payment Date (together with interest on
such outstanding Class A-4 Interest Carryover Shortfall at the Class A-4 Rate,
to the extent lawful, calculated on the same basis as interest on the Class A-4
Notes for the same period), over (y) the amount of interest distributed to the
Class A-4 Noteholders on such Payment Date.
"Class A-4 Interest Distributable Amount" means the amount of
interest accrued during the related Interest Period (calculated on the basis of
a 360 day year consisting of twelve 30 day months) on the Class A-4 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-4 Rate or, in the case of the first Payment Date, on the Class A-4
Initial Principal Balance.
"Class A-4 Note" means any of the __% Asset Backed Notes, Class A-4,
issued under the Indenture.
"Class A-4 Noteholder" means any Person in whose name a Class A-4
Note is registered in the Note Register.
"Class A-4 Principal Balance" as of any date means the Class A-4
Initial Principal Balance less all amounts paid to the holders of Class A-4
Notes in respect of principal pursuant to Section 5.06 hereof.
"Class A-4 Rate" means __% 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 _______, 200_.
"Code" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.
["Collateral Security Agreement" means the Collateral Security
Agreement dated _______, 200_, by and among the Seller, the Servicer, [third
party] and the Owner Trustee, as collateral agent, pursuant to which [third
party] has conveyed the property and proceeds of the
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Yield Maintenance Account to the Owner Trustee in trust for the benefit of the
Certificateholders as described in Section 5.01(a).]
"Collection Account" means the account or accounts designated as
such and established and maintained pursuant to Section 5.01.
"Collection Period" means, with respect to any Payment Date, the
calendar month immediately preceding the month in which such Payment Date occurs
(and, in the case of the first Collection Period, the period from the Cutoff
Date through the last day of the calendar month immediately preceding the month
in which such 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 _______, 200_ [or, in the case of each
Additional Closing Date, such Additional Closing Date].
"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 Notes" shall have the meaning ascribed thereto in the
Indenture.
"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.
["Delaware Trustee" means the Person acting as Delaware Co-Trustee
under the Trust Agreement, its successors in interest and any successor Delaware
co-trustee under the Trust Agreement.]
"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
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Receivables 60 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.
["Delivery" means, means, when used with respect to the Reserve
Fund:
(i) with respect to certificated securities, bankers' acceptances,
commercial paper, negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of the UCC
and are susceptible of physical delivery (collectively, "Physical Property"),
transfer thereof to the Relevant Trustee or its financial intermediary as
defined in Section 8-313(4) of the UCC (a "Financial Intermediary") in
accordance with Sections 8-313(1)(a), 8-313(1)(d)(i) or 8-313(1)(g) of the UCC,
and evidence that any such Physical Property that is in registrable form has
been registered in the name of the Relevant Trustee, its Financial Intermediary,
its custodian or its nominee;
(ii) with respect to any Reserve Fund property that is a book-entry
security held through the Federal Reserve System pursuant to federal book-entry
regulations, the following procedures, all in accordance with applicable law,
including applicable federal regulations and Articles 8 and 9 of the UCC: (A)
book-entry registration of such property to an appropriate book-entry account
maintained with a Federal Reserve Bank by the Relevant Trustee or by a custodian
and issuance to the Relevant Trustee or to such custodian, as the case may be,
of a deposit advice or other written confirmation of such book-entry
registration, (B) the making by any such custodian of entries in its books and
records identifying such book-entry security held through the Federal Reserve
System pursuant to federal book-entry regulations as belonging to the Relevant
Trustee and indicating that such custodian holds such Reserve Fund property
solely as agent for the Relevant Trustee, and the making by the Relevant Trustee
of entries in its books and records establishing that it holds such Reserve Fund
property solely as Relevant Trustee pursuant to Section 5.01, and (C) such
additional or alternative procedures as may hereafter become necessary to effect
complete transfer of ownership of any such Reserve Fund property to the Relevant
Trustee, consistent with changes in applicable law or regulations or the
interpretation thereof; and
(iii) with respect to any Reserve Fund property that is an
uncertificated security under Article 8 of the UCC and that s not governed by
clause (ii) above, registration of the transfer to, and ownership of such
Reserve Fund property by, the Relevant Trustee, its Financial Intermediary, its
custodian or its nominee by the issuer of such Reserve Fund.]
"Depositor" means the Seller in its capacity as Depositor under the
Trust Agreement.
"Determination Date" means, with respect to any Payment Date, the
second Business Day preceding such Payment Date.
10
"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:
(a) 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;
(b) 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;
(c) 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;
(d) 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
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
11
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;
(e) 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);
(f) 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;
(g) 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, or if such securities are
commercial paper, the short-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;
(h) money market funds so long as such funds are rated "Aaa" by Moody's (so
long as ▇▇▇▇▇'▇ 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
12
(i) 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 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:
(1) 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
(2) 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.
13
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"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.
"FNMA" means the Federal National Mortgage Association, and its
successors.
"Final Scheduled Maturity Date" means the Payment Date in
________, 200_.
["Financial Intermediary" shall have the meaning specified in the
definition of the term "Delivery."]
"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 a Note as evidenced by the Note Register or the
Certificateholder, as the case may be, 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 any
Note registered in the name of TAFR LLC 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 TAFR LLC 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 _______, 200_, 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.
"Initial Certificate Balance" shall have the meaning set forth in
the Trust Agreement.
"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
14
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 Determination Date" means the second London Banking Day
prior to the Interest Reset Date for the related Interest Period.
["Interest Period" with respect to any Payment Date and (i) the
Class A-1 and Class A-3 Notes means the period from (and including) a Payment
Date to (but excluding) the next Payment Date, except that the first interest
accrual period will be from (and including) the Closing Date to (but excluding)
_______, 200_; and (ii) the Class A-2 and Class A-4 Notes means 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 accrual
period will be from (and including) the Closing Date to (but excluding) _______,
200_.]
["Interest Rate Swap Agreement" means the 1992 ISDA Master Agreement
dated as of _______, 200_, including all schedules and confirmations thereto,
between the Issuer and the Swap Counterparty, as the same may be amended,
supplemented, renewed, extended or replaced from time to time.]
"Interest Reset Date" means, with respect to the Class A-3 Notes,
the first day of the applicable Interest Period.
"Investment Company Act" means the Investment Company Act of 1940,
as amended.
"Issuer" means Toyota Auto Receivables 200_-_ Owner Trust.
["LIBOR" means the rate for deposits in U.S. dollars for a one-month
period which appears on the Telerate Page 3750 as of 11:00 a.m., London time, on
the Interest Determination Date; provided that, the following procedures will be
followed if LIBOR cannot be determined as described above:
(a) With respect to an Interest Determination Date on which no rate
appears on Telerate Page 3750, LIBOR for the applicable Interest Determination
Date will be the rate calculated by the Calculation Agent (as defined in the
Interest Rate Swap Agreement) as the arithmetic mean of at least two quotations
obtained by the Calculation Agent after requesting the
15
principal London offices of each of four major reference banks in the London
interbank market, which may include the Calculation Agent and its affiliates, as
selected by the Calculation Agent, to provide the Calculation Agent with its
offered quotation for deposits in U.S. dollars for a one-month period,
commencing on the second London Banking Day immediately following the applicable
Interest Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such Interest Determination Date and
in a principal amount that is representative for a single transaction in U.S.
dollars in that market at that time. If at least two such quotations are
provided, LIBOR determined on the applicable Interest Determination Date will be
the arithmetic mean of the quotations.
(b) If fewer than two quotations referred to in clause (a) above are
provided, LIBOR determined on the applicable Interest Determination Date will be
the rate calculated by the Calculation Agent as the arithmetic mean of the rates
quoted at approximately 11:00 a.m. in New York on the applicable Interest
Determination Date by three major banks, which may include the Calculation Agent
and its affiliates, in New York, selected by the Calculation Agent for loans in
U.S. dollars to leading European banks, having a maturity of one-month and in a
principal amount that is representative for a single transaction in U.S. dollars
in that market at that time.
(c) If the banks so selected by the Calculation Agent are not
quoting as mentioned in clause (b) above, LIBOR for the applicable Interest
Determination Date will be LIBOR in effect on the applicable Interest
Determination Date.]
"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 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.
16
"London Banking Day" means any day on which commercial banks in
London are open for general business (including dealings in foreign exchange and
foreign currency deposits).
"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 ▇▇▇▇▇'▇ Investors Service, 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 Officer's 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 Servicing Fee Rate.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note or
a Class A-4 Note.
"Note Depository Agreement" has the meaning assigned in the
Indenture.
"Noteholder" means any Holder of a Note.
"Noteholder's Percentage" for any Payment Date means ___% except
that on the Payment Date following (a) the cessation of a period during which
either the Specified Delinquency Percentage or Specified Charge-off Rate
Percentage exceeded ___% or (b) the rescission of an acceleration of the Notes
after an Event of Default, the Noteholders' Percentage is the lesser of (x) the
percentage equivalent of a fraction the numerator of which is the aggregate of
the outstanding principal balances of the Class A-2, Class A-3 and Class A-4
Notes as of the Payment Date (prior to making any distributions on such Payment
Date) and the denominator of which is the Pool Balance as of the last day of the
related Collection Period and (y) the Noteholders' Percentage for the previous
Payment Date.
"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 Payment Date) divided by the original
outstanding principal balance of such Class of Notes. The
17
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.
"Officer's 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, or 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 Percentage" means 10%.
"Optional Purchase Price" means an amount equal to the aggregate
Administrative Purchase Payments for the Receivables (including Receivables that
became Defaulted Receivables in the Collection Period preceding the Payment Date
on which that purchase is effected), plus the appraised value of any other
property held by the Trust, such value to be determined by an appraiser mutually
agreed upon by the Servicer, the Owner Trustee and the Indenture Trustee, and
shall succeed to all interests in and to the Trust (less liquidated expenses);
provided, however, that the Optional Purchase Price shall be equal to or greater
than 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 or Class A-4 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 [plus any amounts payable by the Issuer to the Swap Counterparty
under the Interest Rate Swap Agreement and any amounts due to Toyota Motor
Credit Corporation under the Revolving Liquidity Note.]
"Original Pool Balance" means $________.
"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.
18
"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 this 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[, rights of the Owner Trustee and the Trust pursuant to the Revolving
Liquidity Note Agreement and Revolving Liquidity Note,] and as assignee of the
rights and interests of the Depositor under the Receivables Purchase Agreement.
[The Owner Trust Estate does not include the Sub-Trust Assets, as described in
the Amended and Restated Trust Agreement and the Sub-Trust Supplement.]
"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.
"Pass Through Rate" means __% per annum.
"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 _______, 200_.
"Person" means any legal person, including any individual,
corporation, partnership, limited liability company, 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.
19
"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 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 Amount" means, with respect to any Payment
Date, an amount equal to the excess, if any, of (a) the Pool Balance as of the
end of the Collection Period preceding the related Collection Period, or, as of
the Cutoff Date, in the case of the first Collection Period, over (b) the Pool
Balance as of the end of the related Collection Period together with any portion
of the Principal Distribution Amount that would have been required to be
[deposited into the Principal Distribution Account] paid pursuant to Section
5.06(c)(iii) on any prior Payment Date had there been sufficient funds available
[to make such deposit] therefor; provided, however, [that the Principal
Distribution Amount shall not exceed the outstanding principal amount of all the
Notes on such Payment Date (prior to giving effect to any principal payments
made on such Payment Date), together with any portion of the Principal
Distribution Amount that was to be deposited into the Principal Distribution
Account on any prior Payment Date but was not because sufficient funds were not
available to make the deposit; and provided, further,] that (i) the Principal
Distribution Amount on the Class A-1 Final Scheduled Payment Date shall not be
less than the amount that is necessary to reduce the outstanding principal
amount of the Class A-1 Notes to zero; (ii) the Principal Distribution Amount on
the Class A-2 Final Scheduled Payment Date shall not be less than the amount
that is necessary to reduce the outstanding principal amount of the Class A-2
Notes to zero; (iii), the Principal Distribution Amount on the Class A-3 Final
Scheduled Payment Date shall not be less than the amount that is necessary to
reduce the outstanding principal amount of the Class A-3 Notes to zero; and (iv)
the Principal Distribution Amount on the Class A-4 Final Scheduled Payment Date
shall not be less than the amount that is necessary to reduce the outstanding
principal amount of the Class A-4 Notes to zero.
20
"Rating Agency" means either or each of Moody's and Standard &
Poor's, as indicated by the context.
"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 _______, 200_, between the Seller and TMCC.
"Record Date" means, with respect to the Notes of any Class 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.
"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 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.
"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
21
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.
"Required Rate" means, with respect to each Collection Period, [the
sum of the Servicing Fee Rate] and the [Class A-3 Rate][Pass Through Rate][other
rate][or specify other rate].
"Required Rating" means a rating of Prime-1 by Moody's and A-1+ by
Standard & Poor's.
"Required Yield Maintenance Amount" means, with respect to any
Distribution Date, an amount equal to [the aggregate amount by which (i) the
aggregate amount of interest that would accrue on the Principal Balance of each
Receivable that is an asset of the Trust Estate (as defined in the Indenture) or
the Owner Trust Estate (as defined in the Trust Agreement), as the case may be,
for the period commencing on the last day of the related Collection Period and
ending on the last day of the Collection Period during which such Receivable is
scheduled to mature if such Receivable bore interest at the Required Rate
(assuming that all subsequent payments on such Receivable are made as scheduled
and no prepayments are made in respect thereof) exceeds (ii) the aggregate
amount of interest that would accrue thereon for the same period at the related
APR][or specify other formula][specify discounting factors].
"Reserve Account" means the account designated as such, established
and maintained pursuant to Section 5.07.
"Reserve Fund Initial Deposit" means $___.
["Revolving Liquidity Note" means the Revolving Liquidity Note
issued pursuant to the Revolving Liquidity Note Agreement.]
["Revolving Liquidity Note Agreement" means that certain Revolving
Liquidity Note Agreement, dated as of ________, 200_, between the Seller, TMCC
and the Owner Trustee.]
["Revolving Period" means, with respect to any class of Notes, a
period during which collections of principal and other amounts treated as
collections of principal are accumulated in an account utilized for the purpose
of acquiring additional Receivables for the benefit of such class of Notes.]
"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.
"Schedule of Receivables" means the schedule of receivables attached
as Schedule A to this Agreement, as it may be amended from time to time.
22
"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.
"Scheduled Surplus" means, with respect to any Distribution Date for
any Receivable having an APR which exceeds the sum of the [Required Rate][Class
A-3 Rate][Pass Through Rate][specify other rate], the product of (i) the
interest portion of the related Scheduled Payment (in the case of any
Precomputed Receivable, determined in accordance with the actuarial method), and
(ii) the remainder of (a) one minus (b) a fraction, the numerator of which
equals the sum of the [Required Rate][Class A-3 Rate][Pass Through Rate][specify
other rate] and the denominator of which equals such APR.
"Securities Account Control Agreement" means the Securities Account
Control Agreement dated _______, 200_, among the Seller, __________, as
Securities Intermediary thereunder, and ___________, 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 TAFR LLC, 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 Officer's 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 __% 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).
"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.
23
"Specified Charge-off Rate Percentage" means on any Payment Date the
average of the Charge-off Rates for the three preceding Collection periods.
"Specified Delinquency Percentage" means on any Payment Date the
average of the Delinquency Percentages for the three preceding Collection
Periods.
"Specified Reserve Account Balance" means with respect to any
Payment Date zero, except (i) for any Payment Date on which the conditions set
forth in Section[s 5.07(a) and] 5.08(b) require deposits into the Reserve
Account, in which case the Specified Reserve Account Balance shall be $__ (__%
of the original outstanding Principal Balance of the Receivables as of the
Cutoff Date), or, (ii) either the Specified Delinquency Percentage or the
Specified Charge-off Rate Percentage exceeds __% on any Payment Date, the
Specified Reserve Account Balance shall be (A) the greater of (a) $__ (__% of
the outstanding principal balance of the Receivables as of the Cutoff Date) and
(c) __% of the Class A Note Balance as of such Payment Date (after giving effect
to any principal payments made on the Notes on such Payment Date), [less (B) so
long as none of the events described in the second paragraph of Section 5.08(b)
has occurred, an amount equal to the principal balance of the Revolving
Liquidity Note that has not been drawn (plus any portion thereof drawn but
reimbursed) on or prior to such date of determination]; provided further, that
(x) if the circumstances described in clauses (i) and (ii) are both applicable,
the provisions of clause (ii) shall apply and (y) the Specified Reserve Balance
with respect to any date shall not exceed the sum of the Class A Note Balance as
of the preceding Payment Date (after giving effect to any principal payments
made on the Notes on such preceding Payment Date).
"Standard & Poor's" means Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Subordinated Seller's Interest" means the undivided interest in the
Trust evidenced by the certificate issued pursuant to Section 3.02 of the Trust
Agreement that includes the right to receive (to the extent of amounts available
therefor) payments of principal pursuant to Section 5.06(c)(vii) and of certain
additional amounts pursuant to Section 5.06(c)(viii) and Section 5.06(d)(vi)
herein. The Subordinated Seller's Interest shall be deemed to have a principal
balance of $________ as of the Closing Date, which will be reduced by amounts
distributed in respect of the Subordinated Seller's Interest pursuant to Section
5.06(c)(vii) as described herein.
"Subordinated Seller's Interest Percentage" for any Payment Date is
100% minus the Noteholders' Percentage for such Payment Date.
"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.
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["Swap Counterparty" shall mean Toyota Motor Credit Corporation, as
swap counterparty under the Interest Rate Swap Agreement, or any successor or
replacement swap counterparty from time to time under the Interest Rate Swap
Agreement.]
["Swap Event of Default" means (i) the failure of the Issuer or the
Swap Counterparty to pay any amount when due under the Interest Rate Swap
Agreement after giving effect to any applicable grace period; (ii) the
occurrence of certain events of insolvency or bankruptcy of the Issuer or the
Swap Counterparty as specified in the Interest Rate Swap Agreement and (iii)
certain other standard events of default under the 1992 ISDA Master Agreement as
specified in the Interest Rate Swap Agreement including "Breach of Agreement"
(not applicable to the Issuer), "Misrepresentation" (not applicable to the
Issuer) and "Merger without Assumption," as described in Sections 5(a)(ii),
5(a)(iv) and 5(a)(viii) of the 1992 ISDA Master Agreement.]
["Swap Payments Incoming" means on any Payment Date the net amount,
if any, then payable by a Swap Counterparty to the Issuer, excluding any Swap
Termination Payments.]
["Swap Payments Outgoing" means on any Payment Date the net amount,
if any, then payable by the Issuer to the Swap Counterparty, excluding any Swap
Termination Payments.]
["Swap Termination Event" means (i) certain events of insolvency of
bankruptcy of the Issuer or the Swap Counterparty as specified in the Interest
Rate Swap Agreement; (ii) any Event of Default under the Indenture that results
in the acceleration of the Notes or involving an uncured payment default; (iii)
the Issuer or Swap Counterparty becomes subject to registration as an
"investment company" under the Investment Company Act of 1940; and (iv) certain
standard termination events under the 1992 ISDA Master Agreement as specified in
the Interest Rate Swap Agreement including "Illegality," "Tax Event" and "Tax
Event Upon Merger," each as more fully described in Sections 5(b)(i), 5(b)(ii)
and 5(b)(iii) of the 1992 ISDA Master Agreement.]
["Swap Termination Payment" means any termination payment payable
by the Issuer to the Swap Counterparty or by the Swap Counterparty to the Issuer
under the Interest Rate Swap Agreement.]
"TAFR LLC" means Toyota Auto Finance Receivables LLC, a Delaware
limited liability company, or its successors.
"TMCC" means Toyota Motor Credit Corporation, a California
corporation, and its successors and assigns.
"Total Servicing Fee" means the sum of the Basic Servicing Fee and
the Supplemental Servicing Fee.
"Trust" means the Issuer.
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"Trust Agreement" means the Trust Agreement dated as of ________,
200_, as amended by the Amended and Restated Trust Agreement, dated as of
________, 200_, by and among the Seller, the Owner Trustee[ and the Delaware
Trustee].
"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) the Rebate, if any, paid to the Obligor on a Precomputed
Receivable on or before the date of such purchase (except to the extent
specified in Section 4.03) and (ii) any other proceeds in respect of such
Receivable received during any Collection Period prior to or during such
Collection Period (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.
26
"Yield Maintenance Account" means the segregated trust account
established and maintained for the benefit of the Certificateholders as a
reserve fund pursuant to Section 5.01(a).
"Yield Maintenance Agreement" means the Yield Maintenance Agreement
dated , among the Servicer, the Seller [, third party] and the Issuer,
pursuant to which Additional Yield Maintenance Amounts are to be deposited in
the Yield Maintenance Account on each Distribution Date.
"Yield Maintenance Amount" means, with respect to any Distribution
Date, the aggregate amount on Deposit in the Yield Maintenance Account after
giving effect to the withdrawal therefrom of the related Yield Maintenance
Deposit and without regard to any amounts on deposit therein in respect of
interest or investment earnings earned on the investment of amounts on deposit
therein in Eligible Investments for any period.
"Yield Maintenance Account Initial Deposit" means an amount equal to
[the aggregate amount by which (i) the aggregate amount of interest that would
accrue on the Principal Balance of each Receivable that is an asset of the Trust
Estate (as defined in the Indenture) or, following the termination of the
Indenture or other release of the Trust Estate from the lien thereof, the Owner
Trust Estate (as defined in the Trust Agreement), for the period commencing on
the last day of the first Collection Period and ending on the last day of the
Collection Period during which such Receivable is scheduled to mature if such
Receivable bore interest at the Required Rate (assuming that all subsequent
payments on such Receivable are made as scheduled and no prepayments are made in
respect thereof) exceeds (ii) the aggregate amount of interest that would accrue
thereon for the same period at the related APR][or specify other
formula][specify discounting factors].
"Yield Maintenance Deposit" means, with respect to any Distribution
Date, the amount by which (i) the aggregate amount of interest that would have
been due during the related Collection Period on all Receivables that have APRs
less than the Required Rate if such Receivables bore interest at the Required
Rate exceeds (ii) the amount of interest accrued on such receivables at their
respective APRs and due during such Collection Period.
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
CONVEYANCE OF RECEIVABLES
SECTION 2.01 Conveyance of Receivables. (a) Upon the execution of this
Agreement by the parties hereto [or on any Additional Closing Date], the Seller,
pursuant to the mutually agreed upon terms contained in this Agreement, shall
sell, transfer, assign and otherwise convey
27
to 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
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 (other
than the Revolving Liquidity Note and Revolving Liquidity Note Agreement,
which are assets of the Owner Trust Estate but are not sold by the
Seller)];
(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,
tangible 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").
28
(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 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 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 Issuer, and 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 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 Receivable and that the Receivable is
owned and controlled by 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 and
the Indenture Trustee (on behalf of the Noteholders and Certificateholders)
shall be governed by the Indenture.
[During a Revolving Period relating to any class of Notes, the Seller may
designate additional Receivables for sale to the Issuer, and the Owner Trustee
on behalf of the Issuer may agree to purchase such Receivables during the
Revolving Period and subject to the same conditions set forth in this
Agreement.]
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 (the
parties hereto expressly acknowledging and agreeing that the Servicer may
appoint a third party to act as the agent of the Servicer to maintain possession
of such documents or instruments as contemplated by Sections 3.01(v) and 3.03(b)
of this Agreement) which are hereby constructively delivered to the Issuer with
respect to each Receivable:
(a) the fully executed original of the Receivable;
(b) documents evidencing or related to any Insurance Policy;
29
(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.
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 [or any Additional
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 Issuer hereby, (iii) shall, except as
otherwise provided in this Agreement, provide for monthly payments that
fully amortize the Amount Financed by maturity (except for minimally
different payments in the first or last month in the life of the
Receivable) 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
30
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, including each form of contract used to originate each
Receivable and each sale of the related Financed Vehicle, shall have
complied at the time such form of contract was used or such sale 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
▇▇▇▇▇▇▇▇-▇▇▇▇ 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 and applicable Texas Finance Code form of
contract provisions 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.
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(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.
(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 [or Additional
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
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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 for a waiver that would not violate 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 [or any Additional
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 Issuer and to give 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 "tangible 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 __ nor
more than __ and, as of the Cutoff Date, a remaining number of Scheduled
Payments of not less than __ nor more than __; (ii) each Receivable
provides for the payment of a finance charge based on an APR ranging from
__% to __%; (iii) each Receivable shall have had an original principal
balance of not less than $__ and not more than $__ and, as of the Cutoff
Date, an unpaid principal balance of not less than $__ nor more than $__;
(iv) no Receivable was originated under a special financing program; (v) no
Receivable shall have a Scheduled Payment that is more than __ 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 more than __ 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 Remedies. 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
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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. Except as
described below, the sole remedy of the Owner Trustee, the Issuer, the Indenture
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). [The Seller hereby indemnifies the Issuer for any
civil liabilities that arise under Texas Finance Code [ss.]349.003 as a result
of the use of the Law 9/99R and Lexus 10/99 forms of contract to originate the
Receivables in Texas, and for any civil liabilities relating to a determination
that the disclosures in the forms of contracts used to originate Receivables in
Massachusetts violate Massachusetts General Laws Chapter 255B, Section 14, or
Massachusetts General Laws Chapter 140D and the regulations promulgated by the
Division of Banks thereunder with respect to Truth-in-Lending appearing at 209
CMR 32.00.]
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
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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 of the Servicer or a third party agent retained by the Servicer 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[, the Swap Counterparty] 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.
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 or Indenture 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 the Certificateholders. The Indenture Trustee or, with
the consent of the Indenture Trustee, the Owner Trustee may terminate the
Servicer's appointment as custodian,
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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 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
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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 A-4 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 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
37
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. The Servicer
shall be required to monitor the maintenance by any Obligor of such insurance
only to the same extent, if any, that the Servicer monitors such maintenance by
obligors with respect to retail automobile sales contracts that are held for the
account of TMCC.
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 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 acting for
the Noteholders.
(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.
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(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 Final Scheduled Payment
Date.
(d) Enforcement of Contractual Provisions. The Servicer will not seek
to enforce against any obligor under any retail installment contract or
interpose as a defense to any claim by any obligor the provision in any
Texas contract relating to Texas Finance Code ss.348.412, in which the
obligor agreed not to assert against a subsequent holder or assignee of the
contract any claims or defenses the obligor may have against the seller or
manufacturer of the vehicle.
SECTION 4.08 Remedies. The Servicer shall inform the Owner Trustee and
Indenture Trustee promptly, in writing, upon the actual knowledge of one of its
officers of, and the Owner Trustee shall inform the Servicer 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. Except
as otherwise provided in Section 7.02, 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 Servicer to purchase the related Receivables pursuant to this Section. 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 to the Servicer as set forth in Section 9.01(d). The Servicer
hereby indemnifies the Purchaser for any civil liabilities that arise for breach
of the covenant set forth in Section 4.07(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
39
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 Indenture Trustee, the Delaware 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, expenses incurred by the Indenture Trustee in connection
with a sale or liquidation of the Trust Estate under Section 5.04(c) of the
Indenture 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 Swap
Counterparty (unless TMCC or an Affiliate thereof is the Servicer and the Swap
Counterparty at the time of delivery),] 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 March 31 of each calendar year (commencing with the fiscal
year ended March 31, 2003), the Servicer shall deliver an Officer's Certificate
to the Owner Trustee, [the Swap Counterparty (unless TMCC or an Affiliate
thereof is the Servicer and the Swap Counterparty at the time of delivery)] 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, [the Swap Counterparty (unless TMCC or an Affiliate thereof is the
Servicer and the Swap Counterparty at the time of delivery)] 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 the giving of notice or lapse of time, or
both, would become a Servicer Default under Section 8.01(a) or (b).
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SECTION 4.12 Annual Accountants' Report. Within 120 days after March 31 of
each fiscal year for the Servicer (commencing with the fiscal year ended March
31, 2003), 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 March 31 (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 Swap Counterparty,] 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 Certificateholder 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 Swap
Counterparty,] 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 Servicer has appointed such a subservicer to perform its title
and administration services. The fees and expenses of the subservicer shall be
as agreed between the Servicer and its subservicer from time
41
to time, and none of the Issuer, the Owner Trustee, the Indenture Trustee, [the
Swap Counterparty,] 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. [The Schedule of Receivables shall be updated upon
the purchase of any additional Receivables pursuant to Section __.]
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 so 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 so 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 ▇▇▇▇▇'▇ 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
42
Rico. Except as otherwise provided in this Agreement, in the event that the
Indenture Trustee no 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 __________ or ___________ is the Relevant Trustee, the
Collection Account and Payahead Account shall be maintained with __________ 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
Certificateholder. 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 Certificateholder, 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 Certificateholder, to the Indenture Trustee for
the benefit of the [Swap Counterparty,] the Noteholders, [the holder of the
Revolving Liquidity Note] and Certificateholder. 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[,
the Revolving Liquidity Note has been paid in full and the Interest Rate Swap
Agreement has been terminated and all Swap Payments Outgoing and all Swap
Termination Payments payable to the Swap Counterparty have been paid] (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 Certificateholder, 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 Swap Counterparty,] [the
holder of the Revolving Liquidity Note or] the Noteholders and the
Certificateholder, to the Owner Trustee for the benefit of the
Certificateholder, subject to the limitations set forth in the Indenture with
respect to amounts held for payment [to the Swap Counterparty,] [the holder of
the Revolving Liquidity Note or] Noteholders that do not promptly deliver a Note
for payment on such Payment Date.
43
(e) With respect to the Collection 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[, the
Revolving Liquidity Note] [or the Interest Rate Swap Agreement] remain
outstanding, the Indenture Trustee shall possess all right, title and interest
therein (excluding interest or investment income thereon payable to the
Servicer), and that such account shall be under the sole dominion and control of
the Indenture Trustee for the benefit of [the Swap Counterparty,] [the holder of
the Revolving Liquidity Note and] the Noteholders and the Certificateholder, as
the case may be, as set forth in the Indenture. 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 Payahead
Account and all funds held therein shall be the property of the Servicer 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 Payahead
Account, all funds therein and all net investment income with respect thereto as
assets of the Servicer for federal income tax and all other purposes. 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.
[In the case of any class of Notes issued with a Revolving Period,
the Servicer on behalf of the Owner Trustee and the Indenture Trustee shall
establish an account for the accumulation of principal and purchase of
additional Receivables.]
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 Condition 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
44
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 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.
[In the event that any class of Notes is issued with a Revolving Period,
Collections designated for payment of principal on such class of Notes shall be
deposited in an account established by the Servicer pursuant to Section 5.1 for
the purpose of purchase of additional Receivables.]
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
45
the extent that the payments by the Obligor shall be insufficient, and then to
prepay the unpaid principal balance of such Receivable in full.
[In the event that any class of Notes is issued with a Revolving Period,
Collections designated for payment of principal on such class of Notes and
deposited in an account established by the Servicer pursuant to Section 5.1
shall be applied by the Issuer to the purpose of purchase of additional
Receivables.]
SECTION 5.04 Advances; Swap Payments.
(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) 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
46
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 (iii) 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.
(e) [In addition, for so long as the Monthly Remittance Conditions are
satisfied and TMCC or an Affiliate thereof is both the Servicer and the Swap
Counterparty, the Servicer may (i) deduct any Swap Payments Outgoing and Swap
Termination Payments owed by the Issuer to the Swap Counterparty from deposits
otherwise to be made into the Collection Account by the Servicer and (ii) add
any Swap Payments Incoming and Swap Termination Payments owed by the Swap
Counterparty to the Issuer to deposits otherwise to be made into the Collection
Account by the Servicer, and any such payments will be deemed to satisfy the
Swap Counterparty's or the Issuer's (as applicable) payment obligations to the
Issuer and the Swap Counterparty, respectively, under the Interest Rate Swap
Agreement.]
(f) [In addition, for so long as the Monthly Remittance Conditions are
satisfied and TMCC or any Affiliate thereof is the Servicer and TMCC is the
holder of the Revolving Liquidity Note, the Servicer may (i) deduct any amounts
payable to the holder of the Revolving Liquidity Note to the extent amounts
would be available therefor pursuant to Sections 5.06(c)(v) or (vi) or Section
5.06(d)(iv) or (v) from deposits otherwise to be made into the Collection
Account by the Servicer and (ii) add any amounts required to be drawn on the
Revolving Liquidity Note by the Issuer to deposits otherwise to be made into the
Collection Account by the Servicer, and any such payments will be deemed to
satisfy the obligations of the holder of the Revolving Liquidity Note to fund
such draws by the Issuer pursuant to the Revolving Liquidity Note and Revolving
Liquidity Note Agreement.]
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
47
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, (B)
the aggregate Advances pursuant to Sections 4.02, 5.03 and 5.04(a), (C) the
amount of Payments Ahead and Applied Payments Ahead 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 (D) all Swap Payments
Incoming and Swap Termination Payments received from the Swap Counterparty]; and
(iv) the Indenture Trustee shall deposit the amounts described in Sections 5.06,
5.07 and 5.08 [drawn on the Revolving Liquidity Note or] withdrawn from the
Reserve Account into the Collection Account, pursuant to Sections 5.06, 5.07 and
5.08.
(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, 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.
[In addition, on each Payment Date, the Indenture Trustee shall
cause to be paid from the Collection Account any Swap Payments Outgoing and Swap
Termination Payment payable by the Issuer to the Swap Counterparty under the
Interest Rate Swap Agreement, provided that such amounts were not deducted from
amounts remitted to the Collection Account by the Servicer pursuant to Section
5.04(e).]
(b) On each Determination Date, the Servicer shall calculate (i) the
Available Collections and the amounts to be paid to Noteholders of each Class
and the Certificateholder pursuant to Section 5.06(c) or 5.06(d), as the case
may be, [(ii) the Swap Payments Outgoing, the Swap Payments Incoming, and any
Swap Termination Payments,] [(iii) the amount, if any, to be drawn under the
Revolving Liquidity Note or paid to the holder thereof (including in respect of
interest accrued thereon) or withdrawn from or required to be deposited into the
Reserve
48
Account] and (iv) all other distributions, deposits and withdrawals to be made
on the related Payment Date.
(c) Subject to Section 5.06(d), 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 those funds deposited in the
Collection Account for the related Collection Period and available therefore as
Available Collections:
(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, 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, and to the Holders of the Class
A-4 Notes, the Class A-4 Interest Distributable Amount and any outstanding
Class A-4 Interest Carryover Shortfall;
(iii) to the Class A-1 Notes until the principal amount thereof is
reduced to zero, an amount equal to the Principal Distribution Amount; and
after the principal amount of the Class A-1 Notes is reduced to zero, to
the Class A-2 Notes until the principal amount of the Class A-2 Notes is
reduced to zero, then to the Class A-3 Notes until the principal amount of
the Class A-3 Notes is reduced to zero, and then to the Class A-4 Notes
until the principal amount of the Class A-4 Notes is reduced to zero,
either (x) an amount sufficient to reduce the aggregate outstanding
principal amount of Class A Notes to an amount equal to the product of the
Noteholders' Percentage and the Pool Balance as of the last day of the
related Collection Period or (y) if either the Specified Delinquency
Percentage or Specified Charge-off Rate Percentage exceeds [2.25%] as of
such Payment Date, all remaining amounts up to the Principal Distribution
Amount;
(iv) if the amount on deposit in the Reserve Account is less than
the related Specified Reserve Account Balance on such Payment Date, to the
Reserve Account, the amount necessary to cause the balance of funds
therein to equal the Specified Reserve Account Balance;
(v) [to the holder of the Revolving Liquidity Note, the amount of
any unreimbursed draw previously funded thereunder in accordance with the
Revolving Liquidity Note Agreement (to the extent such amount has not been
netted by the Servicer from deposits into the Collection Account pursuant
to Section 5.04(f))];
(vi) [to the holder of the Revolving Liquidity Note, the amount of
any accrued and unpaid interest on any draw previously funded thereunder
in accordance with the
49
Revolving Liquidity Note Agreement (to the extent such amount has not been
netted by the Servicer from deposits into the Collection Account pursuant
to Section 5.04(f))]; and
(vii) to the Certificateholder, except on any Payment Date that
occurs after the Class A Notes are accelerated unless or until such
acceleration has been rescinded or during a period in which either the
Specified Delinquency Percentage or the Specified Charge-off Rate
Percentage exceeds [2.25%], an amount sufficient to reduce the aggregate
outstanding principal balance of the Certificate to an amount equal to the
product of the Subordinated Seller's Interest Percentage and the Pool
Balance as of the last day of the related Collection Period; and
(viii) any remaining amounts will be distributed to the
Certificateholders.
(d) Notwithstanding the provisions of Section 5.06(c), after an Event of
Default occurs that results in the acceleration of the Notes and unless and
until such acceleration has been rescinded, 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, 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, and to the Holders of the Class
A-4 Notes, the Class A-4 Interest Distributable Amount and any outstanding
Class A-4 Interest Carryover Shortfall;
(iii) to the Holders of Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and the Class A-4 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-1 Initial Principal Balance, Class A-2 Initial Principal Balance,
the Class A-3 Initial Principal Balance, and the Class A-4 Initial
Principal Balance, respectively;
(iv) [to the holder of the Revolving Liquidity Note, the amount of
any unreimbursed draw previously funded thereunder in accordance with the
Revolving Liquidity Note Agreement (to the extent such amount has not been
netted by the Servicer from deposits into the Collection Account pursuant
to Section 5.04(f));]
(v) [to the holder of the Revolving Liquidity Note, the amount of
any accrued and unpaid interest on any draw previously funded thereunder
in accordance with the
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Revolving Liquidity Note Agreement (to the extent such amount has not been
netted by the Servicer from deposits into the Collection Account pursuant
to Section 5.04(f));] and
(vi) any remaining funds will be distributed to the
Certificateholders by the Indenture Trustee.
(e) For purposes of determining whether an Event of Default pursuant to
Section 5.01(b) 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 5.06(c)(iii) or
5.06(d)(iii); 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; and (iv) the Class A-4 Notes are
required to be paid in full on or before the Class A-4 Final Scheduled Payment
Date, meaning that Holders of Class A-4 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-4 Initial Principal Balance together with all interest
accrued thereon through such date.
(f) 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 Note Register, or herein (in the case of the Certificate) (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 of the 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.
SECTION 5.07 Reserve Account.
(a) 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 any money
and other property deposited and held therein pursuant to Section 5.06(c)(iv)
and this Section. [Under the circumstances specified in Section 5.08(b), the
holder of the Revolving Liquidity Note will be obligated to fund a draw of the
entire amount available to be drawn thereunder, which amounts will be applied by
the Indenture
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Trustee pursuant to the written direction of the Servicer to fund certain
shortfalls as described in Section 5.08 and be deposited into the Reserve
Account until the amount on deposit therein equals the Specified Reserve Account
Balance.] On any Payment Date on which the amount on deposit in the Reserve
Account is less than the Specified Reserve Account Balance (which may be the
case whether or not any of the circumstances specified in Section 5.08 has
occurred and is continuing), the Indenture Trustee will, as directed in writing
by the Servicer in accordance with Section 5.06(c)(iv), deposit into the Reserve
Account Available Collections 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) through (iii) of Section 5.06(c) or in
clauses (i) through (iii) of Section 5.06(d), 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 apply any amounts remaining on deposit in the Reserve Account in
excess of the Specified Reserve Account Balance first to repay any unreimbursed
draws on the Revolving Liquidity Note and any interest accrued thereon (in that
order), and then] will release to the Seller any remaining amounts in excess of
the Specified Reserve Account Balance. 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 [repay any unreimbursed draws on the
Revolving Liquidity Note and any interest accrued thereon (in that order) and
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,
Certificateholder, Indenture Trustee, [holder of the Revolving Liquidity Note]
and Noteholders will have no further rights in, or claims to, such amounts[,
except to the extent that funds may be drawn again pursuant to the terms of the
Revolving Liquidity Note Agreement].
(b) Any 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.
(c) 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.
(d) The Seller will grant to the Indenture Trustee, for the benefit of the
Noteholders, a security interest in any funds (including Eligible Investments)
in the Reserve
52
Account 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 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 [Revolving Liquidity Note.
(a) Pursuant to the Revolving Liquidity Note Agreement, the Seller will
issue a Revolving Liquidity Note, with a maximum draw amount of $________to be
initially held by TMCC. On the Business Day preceding each Payment Date with
respect to which Available Collections are insufficient to fund any payment to
be made to the Noteholders pursuant to Section 5.06(c)(ii) or (iii) or 5.06(d)
(ii) or (iii), the Relevant Trustee will be entitled to make draw requests (to
the maximum draw amount) in the amount of any such shortfalls that are not
funded from amounts on deposit in the Reserve Account and that are therefore to
be funded by the holder of the Revolving Liquidity Note. Amounts so funded by
the holder of the Revolving Liquidity Note will be applied by the Indenture
Trustee pursuant to the written direction of the Servicer to fund such
shortfalls in the order of priority of payments specified in Section 5.06.
(b) In addition, if the Servicer's short-term unsecured debt rating falls
below P-1 by ▇▇▇▇▇'▇ or A-1+ by S&P (or in either case, such lower ratings as
may be permitted by ▇▇▇▇▇'▇ and S&P) or if the Servicer fails to fund any amount
drawn under the Revolving Liquidity Note, then the Relevant Trustee shall demand
payment of the entire undrawn amount of the Revolving Liquidity Note. Amounts so
funded by TMCC will be applied by the Indenture Trustee pursuant to the written
direction of the Servicer, first, to fund any shortfalls described in Section
5.08(a) in the order of priority of payments specified in Section 5.06, and then
shall be deposited into the Reserve Account until the amount on deposit therein
equals the Specified Reserve Account Balance. From and after the occurrence of
any event described in this Section 5.08(b), the Reserve Account must be
maintained as detailed in Section 5.7.]
SECTION 5.09 Statements to Certificateholder, Noteholders[, and Swap
Counterparty].
(a) On or prior to 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 on such Payment Date 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, [to the Swap Counterparty (unless TMCC or an Affiliate
thereof is the Servicer and the Swap Counterparty at the time of delivery)] [and
to the holder of the Revolving Liquidity Note (unless TMCC or an Affiliate
thereof is the holder of the Revolving Liquidity Note at the time of delivery)],
setting forth at least the following information as to the Notes and the
Certificate to the extent applicable:
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(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 Certificateholder in
respect of principal on or with respect to the Subordinated Seller's
Interest;
(iv) any excess amounts paid or distributed to the Certificateholder;
(v) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(vi) the Outstanding Amount, the Class A-1 Principal Balance, the
Class A-2 Principal Balance, the Class A-3 Principal Balance, the Class A-4
Principal Balance, and 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;
(vii) [the amounts allocated to a principal accumulation account with
respect to any class of Notes with a Revolving Period;]
(viii) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
(ix) the amount of any Class A-1 Interest Carryover Shortfall, Class
A-2 Interest Carryover Shortfall, Class A-3 Interest Carryover Shortfall
and Class A-4 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;
(x) 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;
(xi) 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;
(xii) [the amount of draws made under the Revolving Liquidity Note
Agreement;]
(xiii) the balance of any Reserve Account on such Payment Date and the
Specified Reserve Account Balance on such Payment Date, after giving effect
to changes thereto on such Payment Date; and
(xiv) [the Class A-3 Notional Balance, the Class A-3 Rate, the Swap
Payments Incoming, the Swap Payments Outgoing and the Swap Termination
Payment.]
54
SECTION 5.10 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 limited liability company in good
standing under the laws of the State of Delaware, with 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, 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 limited liability company 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 power and authority to
execute and deliver this Agreement and to carry out its terms; the Seller shall
have full 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 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,
reorganization or other similar laws affecting creditors' rights generally or by
general equity principles.
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(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 Certificate of
Formation or limited liability company agreement 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 Certificate 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 Certificate 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 Company Existence. During the term of this Agreement, the
Seller will keep in full force and effect its existence, rights and franchises
as a limited liability company under the laws of the jurisdiction of its
formation 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 from and against any taxes
that may at any time be asserted against any such Person with respect to, as of
the date hereof, the sale of the Receivables to the Issuer or the issuance and
original sale of the Notes and the Certificates, including any sales, gross
receipts, general corporation, tangible personal property, privilege or license
taxes (but, in the case of the Issuer, 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 or any of the Notes, or
asserted with respect to ownership of the Receivables or
56
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 any of the Notes or
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.
(d) Promptly after receipt by a party indemnified under this Section 6.03
or Section 3.02 (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 6.03 or Section
3.02 (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 6.03 or Section 3.02 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 6.03 and Section 3.02 shall survive the termination of
this Agreement or the resignation or removal of the Owner Trustee or the
Indenture Trustee 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 collects 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] [Delaware]), (ii) the Seller shall have
delivered to the Owner Trustee and the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
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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, 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 will own the
Certificates, and the Seller and any Affiliate thereof may in its individual or
any other capacity become the owner or pledgee of the Notes of any class 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 [and any Additional 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 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
58
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.
(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
59
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 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, the Indenture Trustee and the
Certificateholder 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
or Section 4.08 (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 or 4.08 (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 or 4.08 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 and
Section 4.08 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
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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 (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger, conversion or consolidation
to which the Servicer shall be a party or (c) 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 Agreement; 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 Officer's 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 Indenture Trustee,
the Owner Trustee, 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
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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 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
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evidencing not less than 25% of the Class A Notes, acting as a single Class,
excluding for purposes of such calculation and action all Securities held or
beneficially owned by TMCC, TAFR LLC 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);
(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, excluding for purposes of such calculation and action all
Securities held or beneficially owned by TMCC, TAFR LLC 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, excluding for purposes of such
calculation and action all Securities held or beneficially owned by TMCC, TAFR
LLC 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 of 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
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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 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 Certificate 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
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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 of notice of the occurrence of a Servicer
Default, the Indenture Trustee shall give notice thereof to the Rating Agencies.
SECTION 8.03 Repayment of Advances; Compensation Payable. 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, and shall continue to be entitled to all accrued and
unpaid compensation payable to the Servicer through the date of such termination
as specified in Section 4.09 of this Agreement.
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 Certificateholder, and the Indenture
Trustee shall give prompt written notice thereof to Noteholders, the Swap
Counterparty 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 Swap Counterparty,] 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 [and the Swap
Counterparty] as soon as practicable after their receipt of notice thereof from
the Servicer.
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(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes [and of the
Revolving Liquidity Note], 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 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 or
the Servicer, as the case may be, 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, [the Swap Counterparty,] [the holder of the Revolving
Liquidity Note] 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.
SECTION 9.02 Termination of the Trust Agreement. The respective obligations
and responsibilities of the Issuer, the Seller and the Servicer under this
Agreement shall terminate upon the termination of the Trust Agreement pursuant
to Article IX of the Trust Agreement.
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
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Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder [or the holder of the Revolving Liquidity Note].
This Agreement may also be amended by the Seller, the Servicer and the Issuer,
with the consent of the Indenture Trustee [and the holder of the Revolving
Liquidity Note], 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, (i) has received a letter from
Standard & Poor's to the effect that Standard & Poor's will not qualify, reduce
or withdraw the rating it has currently assigned to any Class of Notes as a
result of such amendment and (ii) has provided Moody's with 10 days prior
written notice of such amendment and Moody's shall not have notified the
Indenture Trustee and/or the Owner Trustee, as the case may be, that such
amendment might or would result in the qualification, reduction or withdrawal of
the rating it has currently assigned to any Class of Notes; 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
Holders of any Class of Notes or of the Certificates without the consent of all
Holders of each affected Class or the Certificateholders, if affected.
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 Principal
Balance of each affected Class of Notes, acting as a single Class but excluding
for purposes of such calculation and action all Securities held or beneficially
owned by TMCC, TAFR LLC or any of their Affiliates, (B) if the interests of the
Issuer, Owner Trustee or Certificateholder are affected, the Holder of the
Certificate, [(C) if the interests of the Swap Counterparty are affected, the
Swap Counterparty,] [and/or (D) if the interests of the holder of the Revolving
Liquidity Note are affected, the holder of the Revolving Liquidity Note, 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, Certificateholders or the holder of the Revolving Liquidity
Note]; 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 Holders
of any Class of Notes, the Certificateholders [or the holder of the Revolving
Liquidity Note] without the consent of all Holders of each affected Class of
Notes, the Certificateholders [or the holder of the Revolving Liquidity Note],
as the case may be, or (ii) reduce the aforesaid percentage of the Notes, the
aforesaid Certificateholders [or the aforesaid holder of the Revolving Liquidity
Note] required to consent to any such amendment, without the consent of the
Holders of each Class of Notes, the Certificates [or the Revolving Liquidity
Note], 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 Noteholder, Certificateholder, the Indenture Trustee, [the Swap
Counterparty (unless TMCC or an Affiliate
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thereof is the Servicer, the Swap Counterparty] [and/or the holder of the
Revolving Liquidity Note] at the time of delivery) and each of the Rating
Agencies.
It shall not be necessary for the consent of the Certificateholders,
Noteholders [or holder of the Revolving Liquidity Note] 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 or cause to be filed 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.
(b) Neither the Seller nor the Servicer shall change (i) its location of
organization under Section 9-307(e) of the UCC or (ii) 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 9-507 and 9-508 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
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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 (or any subservicer appointed
by 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 or cause to be furnished 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:
(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
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
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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, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President, Treasury, (310)
468-4001, (b) in the case of the Seller, to Toyota Auto Finance Receivables LLC,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
President, (▇▇▇) ▇▇▇-▇▇▇▇, (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 ▇▇▇▇▇'▇ Investors Service, Inc., ABS
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (f) in the
case of Standard & Poor's, to Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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.
[Insert any caveats necessary regarding third party rights under the Yield
Maintenance Agreement or the Collateral Security Agreement.]
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 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.
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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[, under the Interest Rate Swap Agreement] [or under the
Revolving Liquidity Note Agreement] 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.
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 __________, not in its individual capacity,
but solely in its capacity as Owner Trustee on behalf of the Issuer, and by
____________, not in its individual capacity, but solely in its capacity as
Indenture Trustee under the Indenture. In no event shall ___________ in its
individual capacity or __________ in its individual capacity 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.
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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 200_-_ OWNER TRUST
By: _____________________,
not in its individual capacity but solely as
Owner Trustee on behalf of the Issuer
By:_________________________________________
Name:
Title:
TOYOTA AUTO FINANCE RECEIVABLES LLC,
Seller
By:_________________________________________
Name:
Title:
TOYOTA MOTOR CREDIT CORPORATION, Servicer
By:_________________________________________
Name:
Title:
ACKNOWLEDGED AND ACCEPTED AS OF
THE DAY AND YEAR FIRST ABOVE WRITTEN:
_______________________________, not in its
individual capacity but solely as Indenture Trustee
By:_________________________________________
Name:
Title:
S-1
SCHEDULE A
Schedule of Receivables
(Omitted - Originals on file at the office of the Seller and Owner Trustee)
SA-1
EXHIBIT A
Form of Servicer's Certificate
(See Attached)
A-1