SCHEDULE
TO THE
MASTER AGREEMENT
DATED AS OF OCTOBER 31, 2002
BETWEEN
TOYOTA MOTOR CREDIT CORPORATION.
("PARTY A")
AND
TOYOTA AUTO RECEIVABLES 2002-C OWNER TRUST
("PARTY B")
Part 1. Termination Provisions.
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:
Section 5(a)(v), None
Section 5(a)(vi), None
Section 5(a)(vii), None
Section 5(b)(iv), None
and in relation to Party B for the purpose of:
Section 5(a)(v), None
Section 5(a)(vi), None
Section 5(a)(vii), None
Section 5(b)(iv), None
(b) "SPECIFIED TRANSACTION" has the meaning specified in Section 14.
(c) The "BREACH OF AGREEMENT" provisions of Section 5(a)(ii) will not apply
to Party B.
The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will not
apply to Party A or Party B.
The "MISREPRESENTATION" provisions of Section 5(a)(iv) will not apply
to Party B.
The "DEFAULT UNDER THE SPECIFIED TRANSACTION" provisions of Section
5(a)(v) will not apply to Party A and will not apply to Party B.
The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply to
Party A and will not apply to Party B.
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will not
apply to Party A and will not apply to Party B.
(e) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will apply
to Party A and Party B.
If an Early Termination Date occurs under Section 6(a) as a result of
Automatic Early Termination, the Defaulting Party shall fully indemnify
the Non-defaulting Party on demand
1
against all expense, loss, damage or liability that the Non-defaulting
Party may incur in respect of this Agreement and each Transaction as a
consequence of movements in interest, currency, exchange or other
relevant rates or prices or Market Quotations between the Early
Termination Date and the Local Business Day on which the Non-defaulting
Party first becomes aware that the Early Termination Date has occurred
under Section 6(a). The Non-defaulting Party may for this purpose
convert any expense, loss, damage or liability to the Termination
Currency.
(f) PAYMENTS ON EARLY TERMINATION. "Market Quotation" and "Second Method"
will apply for the purpose of Section 6(e) of this Agreement; provided,
however, in the case of the Additional Termination Event specified
below in Section (h)(i) that occurs other than as a result of an
amendment after the date hereof to the Investment Company Act of 1940,
as amended, or the promulgation of regulations thereunder after the
date hereof, the related Settlement Amount for each Party will be
deemed to be zero.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) ADDITIONAL TERMINATION EVENT will apply. Any of the following shall
constitute an Additional Termination Event:
(i) Investment Company. Party A or Party B becomes subject to
registration as an "investment company" for purposes of the
Investment Company Act of 1940, as amended (in which event
Party A and Party B shall be the Affected Parties and all
Transactions shall be Affected Transactions).
(ii) Event of Default Under Indenture. Any event of default (as
defined in the Indenture) shall occur and be continuing
resulting in acceleration of the Notes in accordance with the
Indenture (in which event Party A and Party B shall be the
Affected Parties and all Transactions shall be Affected
Transactions).
(iii) Replacement Agreement. Upon an event that a replacement
Agreement shall have been entered into between Party B and a
Transferee in accordance with Part 5(f) of this Schedule (in
which event, Party A and Party B shall be Affected Parties and
all Transactions shall be Affected Transactions);
Part 2. Tax Representations
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this
Agreement, each of Party A and Party B makes the following
representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
under this Agreement. In making this representation, it may rely on (i)
the accuracy of any representations made by the other party pursuant to
Section 3(f) of this Agreement, (ii) the satisfaction of the agreement
of the other party contained in Section 4(a)(i) or 4(a)(iii) of this
Agreement and the accuracy and effectiveness of any document provided
by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement and (iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of this Agreement, provided that it
shall not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
2
(b) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the representations specified
below:
(A) Party A makes the following representation: It is a
corporation duly organized and incorporated under the laws of
the State of California.
(B) Party B makes the following representation: It is a
trust organized or formed under the laws of the State of
Delaware.
Part 3. Agreement to Deliver Documents
For the purpose of Section 4(a) of this Agreement, each party agrees to
deliver the following documents as applicable:
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO DATE BY WHICH TO BE
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DELIVERED
---------------- ------------------------- ---------
Party A and Party B Any document required or reasonably requested Promptly upon the earlier of (i)
to allow the other party to make payments reasonable demand by the other
under this Agreement without any deduction or party and (ii) learning that the
withholding for or on account of any Tax or form or document is required.
with such deduction or withholding at a
reduced rate
(b) Other documents to be delivered are:
PARTY REQUIRED TO COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE DELIVERED 3(d) REPRESENTATION
---------------- ------------------------- ----------------------------- -------------------
Party A and Party B Certificate or other documents At or promptly following the execution Yes
evidencing the authority of the of this Agreement, and, if a
party entering into this Agreement Confirmation so requires it on or
and the persons acting on behalf of before the date set forth therein
such party
Party A and Party B Legal Opinions in the form reasonably At or promptly following the No.
acceptable to the other party execution of this Agreement
3
Part 4. Miscellaneous
(a) ADDRESSES FOR NOTICES: For the purpose of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address: 00000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President, Treasury
Telex No.: 3719707
Facsimile No.: 000-000-0000
Answerback: TMSUSA Z
(For all purposes)
Address for notices or communications to Party B:
Address: Toyota Auto Receivables 0000-X Xxxxx Xxxxx
x/x X.X. Xxxx Trust National Association
000 Xxxxx Xxxxxxxx Xxx., 0xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Vice President
Fax: 000-000-0000
(For all purposes)
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not Applicable
Party B appoints as its Process Agent: Not Applicable
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. Party A will be the Calculation Agent. All
calculations by the Calculation Agent (the "CA") shall be made in good
faith and through the exercise of the CA's commercially reasonable
judgment.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:
Party A: Not Applicable
Party B: Not Applicable
4
(g) CREDIT SUPPORT PROVIDER.
Party A: Not Applicable
Party B: Not Applicable
(h) GOVERNING LAW. This Agreement and each Confirmation will be governed by
and construed in accordance with the laws of the State of New York,
without reference to its choice of law doctrine.
(i) WAIVER OF JURY TRIAL. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury
in respect of any proceedings relating to this Agreement.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
Part 5. Other Provisions
(a) GROSS-UP, LIABILITY. Neither Party A nor Party B will in any
circumstance be required to pay additional amounts in respect of any
Indemnifiable Tax or be under any obligation to pay to the other any
amount in respect of any liability of such other for or on account of
any Tax and, accordingly, Section 2(d)(i)(4) and Section 2(d)(ii) of
this Agreement shall not apply.
(b) EARLY TERMINATION.
(i) Section 6(b)(ii) is hereby amended to read in its entirety as
follows:
Transfer To Avoid Termination Event.
(1) If an Illegality under Section 5(b)(i)(1) or a Tax Event or a Tax
Event Upon Merger occurs, if Party A is the Affected Party it will,
and, if Party B is the Affected Party it will request Party A to, as a
condition to its right, if any, to designate an Early Termination Date
under Section 6(b)(iv), use all reasonable efforts (which will not
require Party A to incur a loss, excluding immaterial, incidental
expenses) to transfer within 20 days after it gives notice under
Section 6(b)(i) all its rights and obligations under this Agreement in
respect of the Affected Transactions to another of its Offices so that
such Termination Event ceases to exist.
If Party A is not able to make such a transfer it will give notice to
Party B to that effect within such 20 day period.
Any such transfer under this Section 6(b)(ii)(1) will be subject to and
conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party's policies in effect
at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(2) No transfer or substitution pursuant to this Section 6(b)(ii) shall
occur unless and until the Indenture Trustee has received the written
affirmation of each of Standard & Poor's and Moody's that such transfer
or substitution shall not adversely affect the then-current ratings of
the Notes.
(c) Section 6(b)(iii) shall not apply.
(d) Section 6(b)(iv) is hereby amended by (i) deleting (A) the words "a
Credit Event Upon Merger" wherever they appear in that provision.
5
(e) Any termination payment payable pursuant to Section 6(e) shall be computed
separately for each Transaction hereunder and any amount owed by either Party A
or Party B with respect to the termination of any such Transaction shall be
netted against other amounts due under this Agreement.
(f) Section 7 is hereby amended to read in its entirety as follows:
Except as stated under Section 6(b)(ii) and as provided in this Section
7, and except for the assignment by way of security in favor of the
Indenture Trustee under the Indenture, neither Party A nor Party B is
permitted to assign, novate or transfer as a whole or in part any of
its rights, obligations or interests under this Agreement. Party A may
transfer this Agreement to another party (the "Transferee"), on ten
(10) Business Days' prior written notice, provided that (i) such notice
shall be accompanied by a guarantee by Party A of such Transferee's
obligations in form and substance reasonably satisfactory to the
Indenture Trustee; (ii) Party A delivers an opinion of independent
counsel of recognized standing in form and substance reasonably
satisfactory to the Indenture Trustee confirming that as of the date of
such transfer the Transferee will not, as a result of such transfer, be
required to withhold or deduct on account of tax under this Agreement;
(iii) a Termination Event or Event of Default does not occur under this
Agreement as a result of such transfer and (iv) the Indenture Trustee
has received written affirmation of Standard & Poor's and Moody's (or
their successors) that such transfer shall not adversely affect the
then-current ratings of the Notes. In addition, in the event the
long-term debt rating of Party A is reduced to a level below "Aa3" by
Moody's (or its successor) or "AA-" by Standard & Poor's (or its
successor) or the short-term debt rating of Party A is reduced to a
level below "P-1" by Moody's or "A-1" by Standard Poor's, or in either
case, such lower ratings as may be permitted by Moody's and Standard &
Poor's without causing a downgrade in the ratings applicable to the
Notes), Party A may, but shall not be required to, (A) post Eligible
Collateral in an amount equal to the Credit Support Amount with Party
B, provided that (i) a Termination Event or Event of Default does not
occur under this Agreement as a result of such collateralization and
(ii) if Party A posts collateral, the ratings assigned to the Notes
after the posting of such Eligible Collateral will be at least equal to
the ratings assigned by Moody's and Standard & Poor's (or their
successors) to the Notes at the time of such reduction of the rating of
Party A's long-term debt or (B) assign this Agreement to another party
(or otherwise obtain a replacement swap agreement on substantially the
same terms as this Agreement) and thereby be released from its
obligations under this Agreement, provided that, in the case of an
assignment or an implementation of a replacement swap pursuant to
clause (B), (i) the Transferee, by a written instrument, accepts all of
the obligations of Party A under this Agreement to the reasonable
satisfaction of the Indenture Trustee or enters into a replacement swap
agreement providing for substantially the same obligations as this
Agreement, (ii) Party A delivers an opinion of independent counsel of
recognized standing in form and substance reasonably satisfactory to
the Indenture Trustee confirming that as of the date of such transfer
the Transferee will not, as a result of such transfer, be required to
withhold or deduct on account of tax under this Agreement, (iii) a
Termination Event or Event of Default does not occur under this
Agreement as a result of such transfer and (iv) the ratings assigned to
the Notes after such assignment and release will be at least equal to
the ratings assigned by Moody's and Standard & Poor's (or their
successors) to the Notes at the time of such reduction of the rating of
Party A's long-term debt. Any cost of such transfer will be borne by
Party A or such Transferee and not by Party B. Upon successful
consummation of any such transfer or the implementation of a
replacement swap, Party B shall release its security interest in, and
return to Party A, at the expense of Party A, any then-posted
collateral. In addition, in the event that Party A does not elect to
post collateral, assign this Agreement or obtain a replacement swap
agreement after such a reduction in rating, Party A may (but shall not
be obligated to) establish any other arrangement satisfactory to
Moody's and Standard & Poor's
6
such that the ratings of the Notes by the applicable rating agency
will not be withdrawn or reduced.
(g) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding at
the end thereof the following Subparagraphs:
(g) It is entering into this Agreement and any other documentation
relating to this Agreement as principal (and not as agent or in any
other capacity, fiduciary or otherwise).
(h) It is an "eligible contract participant" as defined in Section
1a(12) of the Commodity Exchange Act, as amended, and the material
terms of the Agreement have been, and the material terms of each
Transaction will be, subject to individual negotiations by the parties.
(i) It hereby acknowledges and agrees that this Agreement and each
Transaction hereunder or thereunder is intended to be a "swap
agreement" as that term is defined in the U.S. Bankruptcy Code (as
amended from time to time) and that the rights granted to each party
under Section 6 include a contractual right to terminate a "swap
agreement" and to offset and net out termination values and payment
amounts in connection therewith.
(h) NO PETITION. Section 4 of this Agreement is hereby amended by the
addition thereto of the following new clause (f):
(f) Party A hereby covenants and agrees that notwithstanding any prior
termination of this Agreement, prior to the date which is one year and
one day after the termination of this Agreement, it will not institute
against Party B or Toyota Auto Finance Receivables LLC ("TAFR LLC"), or
join in any institution against Party B or TAFR LLC of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings under any federal or state bankruptcy or similar law,
or invoke the process of any court or government authority for the
purpose of appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of Party B or TAFR
LLC or any part substantial part of their property, and that this
covenant and agreement will survive the termination of this Agreement.
Party B hereby covenants and agrees that it will not institute against
Party A, or join in any institution against Party A of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings under any federal or state bankruptcy or similar law,
and that this covenant and agreement will survive the termination of
this Agreement.
(i) AMENDMENTS. Section 9(b) of this Agreement is hereby amended to read:
Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing and executed by each of
the parties and the parties (i) have received a written affirmation
from Standard & Poor's, that such amendments, modifications or waivers
shall not adversely affect the then-current ratings of the Notes and
(ii) have provided Moody's with ten (10) days prior written notice of
such amendments, modifications or waivers and Moody's shall not have
notified the parties that such amendment, modifications or waivers
would adversely affect then-current ratings of the Notes.
(j) CONFIRMATIONS. Each Confirmation supplements, forms part of, and will
be read and construed as one with this Agreement.
(k) ADDITIONAL DEFINITIONS. Terms defined or referred to in the Indenture
shall bear the same respective meanings herein.
7
(i) "INDENTURE" shall mean the indenture pursuant to which Party B
will issue the Notes, dated as of October 1, 2002, between
Party B and The Bank of New York, as indenture trustee and
securities intermediary. "Indenture Trustee" shall mean The
Bank of New York, in its capacity as indenture trustee under
the Indenture.
(ii) "NOTES" means the Class A-1, Class A-2, Class A-3 and Class
A-4 Notes issued by Party B pursuant to the Indenture.
(iii) "CREDIT SUPPORT AMOUNT" means, as of the determination date,
an amount equal to the termination payment payable pursuant to
Section 6(e) if this Agreement was terminated as of such
determination date.
(iv) The following items will qualify as "ELIGIBLE COLLATERAL" for
Party A:
Valuation
Percentage
(A) Cash 100%
(B) Direct registered obligations of, and registered obligations 100%
the timely payment of principal of and interest on which is
fully and expressly guaranteed by, the United States of
America, or any agency or instrumentality of the United
States of America the obligations of which are backed by the
full faith and credit of the United States of America.
(C) Demand and time deposit in, certificates of deposit of, or 100%
federal funds sold by any depository institution or trust
company (including the Trustee) incorporated under the laws
of the United States of America or any state thereof and
subject to supervision and examination by federal and/or
state banking authorities so long as the commercial paper
and/or other debt obligations of such depository institution
or trust company (or, in the case of the principal
depository institution in a holding company system, the
commercial paper or debt obligation of such holding company)
at the time of such investment or the contractual commitment
providing for such investment have a credit rating of "Aa2"
and "AAA" in the case of debt obligations other than
commercial paper, or "P-1" or better and "A-1+" or better,
in the case of commercial paper, by Moody's and Standard &
Poor's, respectively.
provided, however, that Eligible Collateral shall include only
such obligations or securities that mature no later than the
next Payment Date (as defined in the Indenture); and provided
further, that none of the foregoing obligations or securities
shall constitute Eligible Collateral if all, or substantially
all, of the remaining amounts payable thereunder shall consist
of interest and not principal payments, if such security is
purchased at a price in excess of 100% of par, or if such
security is subject to substantial non-credit related risk.
8
(l) INTEREST RATE AND CURRENCY EXCHANGES DEFINITIONS. Reference is hereby
made to the 2000 ISDA Definitions as supplemented by the Annex to the
2000 ISDA Definitions, each published by the International Swaps and
Derivatives Association, Inc. (collectively, the "Definitions"), which
are hereby incorporated by reference herein without regard to any
revision or subsequent edition thereof.
(m) NO SET-OFF. Without affecting the provisions of this Agreement
requiring the calculation of certain net payment amounts, all payments
under this Agreement will be made without set-off or counterclaims.
(n) INCONSISTENCY. In the event of an inconsistency among or between any of
the following documents, the relevant document first listed below shall
govern.
(i) Confirmation;
(ii) Schedule;
(iii) Definitions;
(iv) Sections 1 through 14 of this Agreement.
(o) DEFAULT INTEREST; OTHER AMOUNTS. Section 2(e) of this Agreement is
hereby amended by adding the following at the end of the first sentence
thereof:
; provided, however, that this Section 2(e) shall not apply to either
Party A or Party B if its failure to pay is caused solely by such party
becoming required to deduct or withhold on account of any Tax as set
out in Section 2(d)(i).
(p) SCOPE OF OBLIGATIONS OF THE OWNER TRUSTEE. The parties hereto agree
that:
(i) This Agreement is executed and delivered by U.S. Bank Trust,
National Association, not individually or personally but
solely in its capacity as Owner Trustee on behalf of the
Trust, in the exercise of the powers and authority conferred
and vested in the Owner Trustee under the Trust Agreement.
(ii) Each of the representations, undertakings and agreements
herein made on the part of the Trust is made and intended not
as a personal representation, undertaking or agreement by the
Owner Trustee but is made and intended for the purpose of
binding only the Trust.
(iii) The Owner Trustee shall not be required to expend or risk its
own funds or otherwise incur any liability in connection with
this Agreement, and Party A shall not bring any claim
whatsoever against the Owner Trustee in its individual
capacity or against the assets of the Owner Trustee (other
than the assets of the Trust).
9
IN WITNESS WHEREOF, the parties have executed this Schedule by
their duly authorized officers as of October 31, 2002.
TOYOTA MOTOR CREDIT CORPORATION
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
Confirmed as of the date first written:
TOYOTA AUTO RECEIVABLES 2002-C OWNER TRUST
By: U.S. BANK TRUST NATIONAL ASSOCIATION, not in
its individual capacity but solely as Owner
Trustee
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
S-1
