Exhibit 10.4
Master Services Agreement
This Master Services Agreement (the "Agreement") is made and entered into
as of this 19th day of November, 2004 (the "Effective Date"), by and between
Toyota Motor Credit Corporation, a California corporation (hereinafter referred
to as "Affiliate"), and Toyota Financial Savings Bank, a Nevada thrift company
(hereinafter referred to as "Bank") (collectively Affiliate and Bank are
hereinafter referred to as the "Parties").
WHEREAS, Affiliate and Bank are affiliates as defined in Section 23 of the
Federal Reserve Act, which is applicable to the Bank under the Federal Deposit
Insurance Act, and each of the parties desires to comply with the provisions of
Section 23B and Regulation W governing transactions between a bank and its
affiliates; and
WHEREAS, Bank wishes Affiliate to provide to Bank certain services (as
described below) (hereinafter referred to as the "Services"); and
WHEREAS, Affiliate is willing to provide the Services to Bank upon the
terms and conditions set forth herein; and
WHEREAS, in connection with the Services, Bank is willing to provide
certain financial products and services to Affiliates' customers and dealers, at
rates which Bank would charge to an unaffiliated person on an arms' length
basis, in support of Affiliate's customer loyalty strategy and programs;
NOW THEREFORE, in consideration for these promises, and of the mutual
covenants and promises set forth herein, the Parties agree to the following:
1. Services. Affiliate shall provide to Bank all of the Services, as set
forth in Attachment A or otherwise specified from time to time in the form of a
Statement of Work for each respective service. The Services may be amended at
any time and from time to time by written agreement of the Parties.
2. Fee. Bank shall pay to Affiliate the fees as indicated in Attachment A
or an applicable Statement of Work (the "Services Fees"). It is acknowledged and
agreed by the Parties that at all times the Services Fees shall not exceed the
amount which Affiliate would charge to an unaffiliated sophisticated entity on
an arms' length basis. The Services Fees may be amended at any time and from
time to time by written agreement of the Parties.
3. Fees for TMCC Subcontractors-Vendors.
(a) As of the date of this Agreement, any TMCC Service which is being
performed for TMCC by a subcontractor or other vendor or by TMS ("TMCC Service
Vendor") is or shall be identified as such on Attachment A attached hereto or by
a written notice thereof ("Vendor Function"). TMCC and BANK shall agree at a
later date if any of the fees and costs currently charged by any TMCC Service
Vendor ("Vendor Fees") for any TMCC
Services as of the date of this Agreement shall be paid for by the BANK. Upon
written request, TMCC shall disclose to BANK in writing the terms of any
provisions allowing an increase in such Vendor Fees ("Preexisting Vendor Fee
Increase").
(b) In the event there is to be any change in the Vendor Fees that BANK
has agreed to pay, for any TMCC Service procured by TMCC hereunder, TMCC shall
notify BANK in writing in advance of the change to such Vendor Fee(s) prior to
the effective date of the new Vendor Fee, and TMCC shall notify BANK in writing
of any Preexisting Vendor Fee Increase within a reasonable period of time after
receiving notice of the increase, but in no event later than 30 days after
receiving such notice of any Preexisting Vendor Fee Increase.
(c) If any of the following would have a material negative or adverse
impact on BANK, then TMCC shall not, without BANK's prior written consent: (i)
make a material change in the terms of any Vendor Function, (ii) accept any
increase in any Vendor Fee for any existing Vendor Function, or (iii) assign or
allow any TMCC Service Vendor to assign its obligation to perform any TMCC
Service or any Vendor Function to any third party.
4. Expansion or Contraction of Services. At any time during the term of
this Agreement, Bank may request Affiliate to provide additional or different
Services or to cease providing one or more Services then being provided. Upon
any such request, the Parties shall discuss in good faith, without obligation,
an appropriate adjustment to the Services Fees to reflect such additional or
different Services or termination of such Services, after which, the party that
suggested such change or termination shall notify the other party in writing
whether it shall accept such additional Services or termination of Services and,
upon acceptance, such adjustments shall become effective. Notwithstanding the
foregoing, Bank is not obligated to utilize any of the Services offered by
Affiliate pursuant to this Agreement and may terminate any of the Services
provided by affiliate or elect to purchase products or services from any other
source at any time and for any reason in the sole discretion of Bank management.
5. Independent Contractor. Affiliate shall perform all Services hereunder
as an independent contractor, and nothing contained herein shall be deemed to
create a partnership, or relationship of principal and agent between the Parties
or any of their Affiliates or subsidiaries, or to provide either party with the
right, power or authority, whether express or implied, to create any such duty
or obligation on behalf of the other party. Affiliate shall have no authority to
perform any Services other than those indicated herein or such other Services as
the Parties may agree upon from time to time in writing (except that Affiliate
shall have the authority to perform those acts incidental and necessary to its
performance hereunder subject to the terms of the Agreement).
6. Indemnification. Unless otherwise indicated in an applicable and
mutually executed exhibit specifying the Statement of Work for Services, each
party shall indemnify, defend and hold the other party, its controlling persons
(if any), its directors, officers, employees, agents and permitted assigns
harmless from and against all liabilities, claims, damages, losses or expenses,
including, but not limited to, court costs, reasonable
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attorneys' fees and any special, indirect, incidental or consequential damages
(collectively, "Losses"), of any kind or nature, to the extent that such Losses
are caused by, relate to or arise in connection with the gross negligence or
willful misconduct of a party in connection with its performance of Services
hereunder. In the event that an indemnified party knows of a claim that may be
the subject of indemnification under this paragraph, it shall promptly notify
the indemnifying party of such claim, who in its sole discretion, may defend,
settle, or otherwise litigate such claim.
7. Employment Taxes, Workers Compensation and Liability Insurance. In
conjunction with the specific requirements set forth below, Affiliate agrees and
acknowledges that Bank has no obligation whatsoever, to provide liability or
health insurance, or any other benefit provided to employees, for Affiliate or
Affiliate's employees, and Affiliate shall not claim benefits from Bank under
applicable workers compensation laws for injuries sustained by Affiliate or its
employees while providing Services.
Affiliate accepts exclusive liability for all payroll taxes and contributions
imposed by federal and state retirement benefits and unemployment insurance acts
as to persons employed by and performing work for Affiliate under this
Agreement, and Affiliate shall file all tax returns and pay all taxes when due,
as required by law.
Affiliate shall obtain and keep in force coverage for its employees to the full
extent required and permitted by the workers compensation laws of all localities
where the Services are performed, whether coverage under such laws is compulsory
or elective. If such coverage of any Affiliate employees is not permitted by the
applicable workers compensation laws, Affiliate shall secure and keep in force
employer's liability insurance coverage in the amount of $1,000,000 for
protection against claims for injury to such employees not covered by workers
compensation. Affiliate shall submit to Bank evidence satisfactory to Bank of
coverage under the workers compensation laws and certificates of insurance
showing other coverage to the full extent provided in this Section. All such
insurance policies covering Affiliate, whether issued under workers compensation
laws or otherwise, shall provide for at least thirty (30) days prior written
notice to Bank in event of cancellation or termination.
8. Insurance. Affiliate shall obtain and maintain, at Affiliate's expense,
at least the following coverage: (i) Commercial General Liability insurance,
including contractual liability insurance with a limit of $2,000,000 per
occurrence and $5,000,000 in the aggregate. All liability coverage limit
requirements may be met through combinations of primary and umbrellas and/or
excess policy limit coverage; and (ii) Crime: limit $1,000,000 single loss,
$2,000,000 in the aggregate.
All such policies must (i) be obtained from an insurance company licensed to do
business in the United States with an A.M. Best rating of A- or better; (ii) be
primary and occurrence coverage; (iii) provide that the policy shall not be
terminated or materially changed without at least thirty (30) days prior written
notice to Bank; and (iv) list Bank as an additional insured on the general
liability coverages.
The certificate of insurance identifying the coverages set forth herein must be
provided to Bank within thirty (30) days of the effective date of this
Agreement. Failure to procure any of
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the insurance coverage as set forth above will constitute a material breach of
this Agreement.
9. Confidentiality. Each party agrees to regard and preserve as
confidential all information related to the business and activities of the other
party, its subsidiaries, Affiliates and related companies, their customers,
clients, suppliers and other entities with whom a party, its subsidiaries,
Affiliates and related companies do business, that may be obtained by either
party or may be developed as a result of this Agreement ("Confidential
Information"). The receiving party agrees to hold such Confidential Information
in trust and confidence for the disclosing party and not to disclose such
information to any person, firm or enterprise, or use, directly or indirectly,
any such information for its own benefit or the benefit of any other party,
unless authorized by the disclosing party in writing, and even then, to limit
access to and disclosure of such confidential information to the receiving
party's employees on a "need to know" basis only.
(a) Affiliate expressly understands and acknowledges that BANK's
Confidential Information disclosed to Affiliate hereunder includes (or may
include) "non-public personal information" about Bank's customers, as such
information is defined in Title V of the Federal ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and any
state statutes adopted to comply therewith, the FTC Regulations promulgated
pursuant thereto, ▇▇ ▇▇▇ ▇▇▇, and any state regulations promulgated under such
state statutes or in compliance with the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act (hereinafter the
"Privacy Act and Regulations"), the disclosure of which to Affiliate hereunder
constitutes a disclosure to a "nonaffiliated third party" under an exception to
certain restrictions on such disclosures contained in the Privacy Act and
Regulations. "Non-public personal information" includes personally identifiable
financial information that is not publicly available, and any list, description
or other grouping of consumers (including publicly available information
pertaining to them) that is derived using any personally identifiable financial
information that is not publicly available. Notwithstanding any other provision
hereof, Affiliate shall not use or disclose the "non-public personal
information" it receives for purposes other than those necessary to carry out
the activity permitted under the applicable exception to restrictions on
disclosures to nonaffiliated parties contained in the Privacy Act and
Regulations. Without limiting the foregoing, "non-public personal information"
shall not need to be prominently identified as "BANK Confidential Information"
to be considered as such under this Agreement.
(b) In addition to the other requirements of this Section, Affiliate will
adhere to the terms and conditions of any BANK data security plan that may be
provided by BANK, as amended by BANK from time to time, and shall otherwise
maintain the confidentiality of the Confidential Information to the same extent
as would be required for BANK to satisfy legal requirements. Without limiting
the foregoing, Affiliate will implement and maintain appropriate measures
designed to meet the following objectives: (i) to ensure the security and
confidentiality of BANK Confidential Information; (ii) to protect against any
anticipated threats or hazards to the security or integrity of BANK Confidential
Information; and (iii) to protect against unauthorized access to or use of BANK
Confidential Information. These measures shall include, but not be limited to,
the maintenance of appropriate safeguards to restrict access to the BANK
Confidential Information to those employees, agents or service
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providers of Affiliate who need such information to carry out the purpose(s) for
which the BANK Confidential Information was disclosed to TMCC. For information
disclosed in electronic form, Affiliate agrees that such safeguards must include
electronic barriers (e.g., "firewalls" or similar barriers) and password
protected access to the BANK Confidential Information. For information disclosed
in written form, Affiliate agrees that such safeguards must include secured
storage of BANK Confidential Information. Affiliate also shall establish and
maintain any additional physical, electronic and procedural controls and
safeguards to protect the BANK Confidential Information from unwarranted
disclosure as may be required for BANK to comply with all applicable Federal and
state laws and regulations now in effect or hereafter imposed, passed or
promulgated. Upon the request of BANK, Affiliate will have an independent audit
conducted by a mutually acceptable auditor and make available to BANK copies of
audits and test result information sufficient to assure BANK that Affiliate
implements information security measures that are consistent with its
obligations under this Agreement
(c) The parties further acknowledge that during the term of this
Agreement, Affiliate may come into possession of personal information relating
to Bank's customers ("Customer Information"). Customer Information will be
treated as Confidential Information, and in addition, Affiliate further agrees:
(i) to only use such Customer Information for the purposes for which it was
originally disclosed or obtained; only as expressly permitted by the terms and
conditions of this Agreement; and subject to applicable provisions of any law or
regulation governing the use and/or reuse of Customer Information; (ii) to
establish a security program designed to protect the security, confidentiality,
and integrity of the Customer Information and ensure that access to Customer
Information shall be restricted to those employees, officers, subcontractors and
other third parties whose access Affiliate deems appropriate for the performance
of the services or functions that Affiliate is contractually obligated to
perform for Bank; (iii) to instruct all relevant employees as to proper use of
the Customer Information; (iv) that such Customer Information shall be subject
to the confidentiality provisions of this Agreement indefinitely; (v) to notify
Bank immediately in the event Affiliate experiences a security breach which
results in any Customer Information being compromised; and (vi) upon termination
of this Agreement, to deliver to Bank all materials containing any portion of
the Customer Information. Affiliate agrees to make available to Bank reports
sufficient to allow Bank to monitor compliance with this obligation.
(d) Information shall not be considered confidential to the extent, but
only to the extent, that such information is: (i) already known to the receiving
party free of any restriction at the time it is obtained from the other party;
(ii) subsequently learned from an independent third party not known by the
receiving party to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the disclosing
party or any other party with respect to such information; (iii) is or becomes
publicly available through no wrongful act of either party; or (iv) is
independently developed by one party without reference to information which is
Confidential Information of the other. Each party shall be permitted to disclose
any Confidential Information as required by law or regulation or requested by
any governmental agency or other regulatory authority (including any
self-regulatory organization having or claiming to have jurisdiction) or in
connection with
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any legal proceedings. Each party agrees that it will notify the other party as
soon as practical in the event of any such disclosure (other than as a result of
an examination by any regulatory agency), unless such notification shall be
prohibited by applicable law or legal process.
10. Information. Subject to applicable law and privileges, each party
hereto covenants and agrees to: (a) provide the other party with all information
regarding itself and transactions under this Agreement that the other party
reasonably believes are required to comply with all applicable federal, state,
and local laws, ordinances, regulations and codes, including, but not limited
to, securities laws and regulations (collectively, "Law"); (b) provide notice to
the other party of any inquiry, audit or other investigation by a regulatory
body or similar entity that is in any way connected with the receipt or
provision of the Services (an "Audit"); and (c) assist and cooperate with the
other party in responding to an Audit.
11. Compliance with Laws; Supervision. Affiliate warrants that the
Services will be performed in compliance with applicable Law.
12. Audit Rights. Affiliate acknowledges that Bank shall have the right to
monitor and audit Affiliate to ensure it is in compliance with the terms and
conditions of this Agreement.
13. Term. This Agreement shall continue in force and effect until
terminated by the Parties (the "Term"). Either party hereto may terminate this
Agreement upon thirty (30) days written notice unless otherwise indicated in an
applicable and mutually executed exhibit or Statement of Work for specified
Services.
14. Assignment. Except as otherwise provided herein, neither party may
assign or transfer any of its rights or duties under this Agreement to any third
person or entity without the prior written consent of the other party. Either
party may assign, without prior written consent, its rights and obligations
under this Agreement to a successor in interest due to such party's acquisition,
merger or reorganization. All terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the Parties, and their successors and
permitted assigns, including successors by reason of amalgamation or other
corporate changes.
15. Notices. Any notice, instruction, direction or demand under the terms
of this Agreement is required to be in writing and will be deemed given upon
delivery (if delivered by hand, facsimile transmission, courier, or regular or
intercompany mail), or five (5) days after posting if sent by mail, to the
following addresses:
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If to Toyota Financial Savings Bank: If to Toyota Motor Credit Corporation:
----------------------------------- -------------------------------------
Attn: ▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇
President and CEO Corporate Controller
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other addresses as either party may have furnished to the other in
writing in accordance with this Section 11.
16. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of California without reference to
conflict of laws.
17. Severability. If any provision of this Agreement is invalid or
unenforceable, such invalidity or unenforceability shall not render the entire
Agreement invalid. Rather, the Agreement shall be construed as if it did not
contain the particular invalid or unenforceable provision, and the rights and
obligations of each party shall be construed and enforced accordingly.
18. Rights Upon Termination; Survival. Upon termination or expiration of
this Agreement or any of the Services described herein, each party shall, upon
request, return to the other party all Confidential Information, reports,
papers, materials of the other party and any other information required to be
provided to the other party by this Agreement or by Law. Notwithstanding any
termination of this Agreement, the obligations of the Parties to make payments
hereunder and the provisions of Sections 4, 5, 8, 14, 15, and 17 shall survive.
19. Amendment. This Agreement may only be amended by a written agreement
executed by the Parties.
20. Entire Agreement. This Agreement, including the exhibits hereto,
constitutes the entire agreement between the Parties with respect to the subject
matter hereof, and supersedes all prior agreements, representations,
negotiations, statements or proposals related to the subject matter hereof.
21. Force Majeure. The Parties shall be excused for delays in performing
and failures to perform the obligations of this Agreement to the extent that any
such delay or failure results from any cause beyond their reasonable control,
including, solely by way of example and without limitation, delays caused by the
other party, acts of God, strikes, and other labor disputes, civil disorder,
catastrophes of nature, fire, explosion, natural or man-made floods or any
severe weather, war, failure of a communications or computer system, nuclear
attack, embargoes, actions or inactions of governmental authorities. Each party
agrees to make reasonable efforts to prevent such occurrences from affecting the
performance of this Agreement. Affiliate acknowledges that it has an adequate
business resumption and contingency plan (the "Plan") in place and that such
Plan is subject to
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review by Bank. If Bank determines the Plan is inadequate, the Parties agree to
revise the Plan to the satisfaction of both Parties.
22. Paragraph Heading. Paragraph headings are provided for convenience of
reference and do not constitute a part of this Agreement.
23. Counterparts. This Agreement may be executed in separate counterparts,
each of which shall be deemed an original and all of which, when taken together,
shall constitute one agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by
their duly authorized representatives.
AGREED TO AND ACCEPTED BY: AGREED TO AND ACCEPTED BY:
Toyota Financial Savings Bank Toyota Motor Credit Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------- ------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------ ----------------------------
Title: President & CEO Title: President & CEO
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Date: 11/16/04 Date: 11/19/04
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ATTACHMENT A: TMCC SERVICES
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TMCC Service Responsible TMCC Department Fee Methodology
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Human Resources/Payroll Human Resources Dept. No charge to BANK for administration of BANK
Administration employee compensation and benefits during the
first three years of the Term. Thereafter,
o Employee compensation and Corporate Finance & Accounting fees for these Services shall be mutually
benefits agreed upon in accordance with Section 2
hereof.
o HR Systems and Support
No charge for processing and supporting BANK
o Payroll payroll during the first three years of the
Term. Thereafter, fees for these Services
shall be mutually agreed upon in accordance
with Section 2 hereof.
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Back Office Support Corporate Finance & Accounting No charge for back office BANK support
functions or the BANK's use of back office
systems, including processing BANK checks or
accounts payable support functions, during the
first three years of the Term. Thereafter,
fees for these Services shall be mutually
agreed upon in accordance with Section 2
hereof.
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Legal Services Legal Department No charge to BANK for legal services during
the first three years of the Term. Thereafter,
fees for these Services shall be mutually
agreed upon in accordance with Section 2
hereof.
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Information Systems: IS Dept. No charge to BANK for IS services and support
during the first three years of the Term.
o Administration of architecture Thereafter, fees for these Services shall be
and infrastructure for mutually agreed upon in accordance with
telecommunications, network, Section 2 hereof.
mainframe systems and production
services and support
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Marketing Support Marketing Department BANK will pay for marketing materials and
production costs. No charge to BANK for
marketing administration during the first
three years of the Term. Thereafter, fees for
these Services shall be mutually agreed upon
in accordance with Section 2 hereof.
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Internal Audit Corporate Finance and Accounting No charge to BANK for internal audit services
during the first three years of the Term.
Thereafter, fees for these Services shall be
mutually agreed upon in accordance with
Section 2 hereof.
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Insurance Corporate Finance and Accounting No charge to BANK for insurance policies,
procurement and administration during the
first three years of the Term. Thereafter,
fees for these Services shall be mutually
agreed upon in accordance with Section 2
hereof.
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Tax Administration, Corporate Tax No charge to BANK for tax preparation or
processing and reporting services during the first three years of the
Term. Thereafter, fees for these Services
shall be mutually agreed upon in accordance
with Section 2 hereof.
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Commercial Real Estate Loan Marketing and origination of Servicing Fee at or below comparable market
Origination and Servicing commercial real estate loans for rates. 30 days prior to commencement of
automotive dealers in any state or commercial real estate loan origination, BANK
commonwealth of the United States; will determine comparable market rates through
documentation of such loan upon independent market analysis.
terms approved and authorized by
BANK; and servicing (including
record keeping, billing and any
collection efforts needed for said
loan). Any such loan is subject
entirely to credit approval by
BANK, which shall establish
acceptable terms and, conditions of
said loan. Any such loan shall be
originated by BANK at its offices
in Nevada and carried on the books
of BANK.
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