-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wr2+2+wvn/OY2Pa7mmZkJb+X2e5W4b9ISLOIfdtXezujHK3GSB1nylFY2dDOBwr6 WJsALJ71XMthzWOEDC87mA== 0000834071-03-000051.txt : 20031114 0000834071-03-000051.hdr.sgml : 20031114 20031113191648 ACCESSION NUMBER: 0000834071-03-000051 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOYOTA MOTOR CREDIT CORP CENTRAL INDEX KEY: 0000834071 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 953775816 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09961 FILM NUMBER: 03999912 BUSINESS ADDRESS: STREET 1: 19300 GRAMERCY PLACE STREET 2: NORTH BUILDING CITY: TORRANCE STATE: CA ZIP: 90509 BUSINESS PHONE: 3107871310 MAIL ADDRESS: STREET 1: 19300 GRAMERCY PLACE STREET 2: NORTH BUILDING CITY: TORRANCE STATE: CA ZIP: 90509 10-Q 1 form10q.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2003 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------- -------- Commission file number 1-9961 ---------- TOYOTA MOTOR CREDIT CORPORATION - --------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 95-3775816 - ---------------------------------------- ----------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 19001 S. Western Avenue Torrance, California 90509 - ---------------------------------------- ----------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 468-1310 ----------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes No X --- --- As of September 30, 2003, the number of outstanding shares of capital stock, par value $10,000 per share, of the registrant was 91,500, all of which shares were held by Toyota Financial Services Americas Corporation. - 1 - PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. TOYOTA MOTOR CREDIT CORPORATION CONSOLIDATED BALANCE SHEET (Dollars in Millions)
September 30, March 31, 2003 2003 ------------ ------------ (Unaudited) ASSETS ------ Cash and cash equivalents............... $ 684 $ 980 Investments in marketable securities.... 1,818 1,630 Finance receivables, net................ 27,868 26,477 Investments in operating leases, net.... 7,895 8,017 Derivative assets....................... 1,829 1,421 Other assets............................ 589 708 ------- ------- Total Assets................... $40,683 $39,233 ======= ======= LIABILITIES AND SHAREHOLDER'S EQUITY ------------------------------------ Notes and loans payable................. $33,179 $32,099 Derivative liabilities.................. 301 514 Other liabilities....................... 921 869 Income taxes payable.................... 28 26 Deferred income......................... 1,100 996 Deferred income taxes................... 2,009 1,866 ------- ------- Total Liabilities................. 37,538 36,370 ------- ------- Commitments and Contingent Liabilities (See note 8) Shareholder's Equity: Capital stock, $l0,000 par value (100,000 shares authorized; 91,500 issued and outstanding)... 915 915 Retained earnings.................... 2,195 1,930 Accumulated other comprehensive income............................ 35 18 ------- ------- Total Shareholder's Equity........ 3,145 2,863 ------- ------- Total Liabilities and Shareholder's Equity........... $40,683 $39,233 ======= =======
See Accompanying Notes to Consolidated Financial Statements. - 2 - TOYOTA MOTOR CREDIT CORPORATION CONSOLIDATED STATEMENT OF INCOME (Dollars in Millions) (Unaudited)
Three Months Ended Six Months Ended September 30, September 30, ------------------ ----------------- 2003 2002 2003 2002 ------ ------ ------ ------ Financing Revenues: Leasing.................................... $ 613 $ 632 $1,235 $1,253 Retail financing........................... 310 285 600 548 Wholesale and other dealer financing....... 43 42 92 82 ------ ------ ------ ------ Total financing revenues...................... 966 959 1,927 1,883 Depreciation on leases..................... 405 394 863 767 Interest expense........................... 87 332 318 763 ------ ------ ------ ------ Net financing revenues........................ 474 233 746 353 Insurance premiums earned and contract revenues................................... 47 42 92 83 Investment and other income................... 78 17 114 81 ------ ------ ------ ------ Net financing revenues and other revenues..... 599 292 952 517 ------ ------ ------ ------ Expenses: Operating and administrative............... 142 130 278 258 Losses related to Argentine Investment..... - 6 - 11 Provision for credit losses................ 78 127 187 249 Insurance losses and loss adjustment expenses................................ 25 23 50 44 ------ ------ ------ ------ Total expenses................................ 245 286 515 562 ------ ------ ------ ------ Income/(Loss) before income taxes............. 354 6 437 (45) Provision/(Benefit) for income taxes.......... 139 2 172 (20) ------ ------ ------ ------ Net Income/(Loss)............................. $ 215 $ 4 $ 265 $ (25) ====== ====== ====== ======
See Accompanying Notes to Consolidated Financial Statements. - 3 - TOYOTA MOTOR CREDIT CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY (Dollars in Millions) (Unaudited)
Accumulated Other Capital Retained Comprehensive Stock Earnings Income/(Loss) Total ------- -------- ------------- -------- Balance at March 31, 2002........ $ 915 $ 1,820 $ 16 $ 2,751 ------ ------- ---------- ------- Net loss for the six months ended September 30, 2002...... - (25) - (25) Change in net unrealized gain on available-for-sale marketable securities (net of tax).................. - - (16) (16) ------ -------- ---------- ------- Total Comprehensive Loss......... - (25) (16) (41) ------ -------- ---------- ------- Balance at September 30, 2002.... $ 915 $ 1,795 $ - $ 2,710 ====== ======= ========== ======= Balance at March 31, 2003........ $ 915 $ 1,930 $ 18 $ 2,863 ------ ------- ---------- ------- Net income for the six months ended September 30, 2003...... - 265 - 265 Change in net unrealized gain on available-for-sale marketable securities (net of tax).................. - - 17 17 ------ -------- ---------- ------- Total Comprehensive Income....... - 265 17 282 ------ -------- ---------- ------- Balance at September 30, 2003.... $ 915 $ 2,195 $ 35 $ 3,145 ====== ======= ========== =======
See Accompanying Notes to Consolidated Financial Statements. - 4 - TOYOTA MOTOR CREDIT CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in Millions) (Unaudited)
Six Months Ended September 30, ------------------------- 2003 2002 -------- --------- Cash flows from operating activities: Net Income/(Loss)......................................... $ 265 $ (25) -------- --------- Adjustments to reconcile net income to net cash provided by operating activities: Derivative fair value adjustment.................... (45) 338 Depreciation and amortization....................... 914 811 Provision for credit losses......................... 187 249 Gain from securitization of finance receivables..... (42) (33) Gain from sale of marketable securities............. (4) - Loss on impairment of retained interests............ - 11 Loss and reserve related to Argentine Investment.... - 11 Decrease/(increase) in other assets................. 266 (763) Increase in deferred income taxes................... 131 122 (Decrease)/increase in other liabilities............ (56) 602 -------- --------- Total adjustments......................................... 1,351 1,348 -------- --------- Net cash provided by operating activities.................... 1,616 1,323 -------- --------- Cash flows from investing activities: Addition to investments in marketable securities.......... (1,212) (562) Disposition of investments in marketable securities....... 960 545 Acquisition of finance receivables........................ (23,897) (19,804) Liquidation of finance receivables........................ 20,599 15,657 Proceeds from sale of finance receivables................. 1,825 1,549 Addition to investments in operating leases............... (1,637) (1,929) Disposition of investments in operating leases............ 896 1,006 Increase in receivable from affiliate..................... - (12) -------- -------- Net cash used in investing activities........................ (2,466) (3,550) -------- -------- Cash flows from financing activities: Proceeds from issuance of notes and loans payable......... 4,418 4,433 Payments on notes and loans payable....................... (3,904) (2,956) Net increase in commercial paper.......................... 40 468 -------- -------- Net cash provided by financing activities.................... 554 1,945 -------- -------- Net decrease in cash and cash equivalents.................... (296) (282) Cash and cash equivalents at the beginning of the period..... 980 747 -------- -------- Cash and cash equivalents at the end of the period........... $ 684 $ 465 ======== ======== Supplemental disclosures: Interest paid............................................. $ 343 $ 387 Income taxes paid/(received).............................. $ 39 $ (18)
See Accompanying Notes to Consolidated Financial Statements. - 5 - TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Interim Financial Data - ------------------------------- The accompanying information pertaining to the three and six months ended September 30, 2003 and 2002 is unaudited and has been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. In the opinion of management, the unaudited financial information reflects all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods presented. The results of operations for the three and six months ended September 30, 2003 are not necessarily indicative of those expected for any other interim period or for a full year. Certain prior period amounts have been reclassified to conform with the current period presentation. These include the reclassification of the derivative fair value adjustment into interest expense in the consolidated statement of income, made in response to recent Securities and Exchange Commission ("SEC") public announcements related to the income statement presentation of certain derivative activities. These financial statements should be read in conjunction with the consolidated financial statements, significant accounting policies, and other notes to the consolidated financial statements included in Toyota Motor Credit Corporation's 2003 Annual Report to the SEC on Form 10-K. References herein to "TMCC" denote Toyota Motor Credit Corporation and references herein to "the Company" denote Toyota Motor Credit Corporation and its consolidated subsidiaries. Note 2 - Finance Receivables - ---------------------------- Finance receivables, net consisted of the following:
September 30, March 31, 2003 2003 ------------ ------------ (Dollars in Millions) Retail.................................... $19,066 $16,160 Finance leases............................ 5,206 6,078 Wholesale and other dealer loans.......... 4,815 5,608 ------- ------- 29,087 27,846 Unearned income........................... (886) (1,043) ------- ------- Finance receivables, net of unearned income................... 28,201 26,803 Allowance for credit losses............... (333) (326) ------- ------- Finance receivables, net .............. $27,868 $26,477 ======= =======
Finance leases included estimated unguaranteed residual values of $1.5 billion and $1.8 billion at September 30 and March 31, 2003, respectively. The aggregate balances related to finance receivables 60 or more days past due totaled $151 million and $160 million at September 30 and March 31, 2003, respectively. The majority of retail and finance lease receivables do not involve recourse to the dealer in the event of customer default. - 6 - TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 3 - Investments in Operating Leases - ---------------------------------------- Investments in operating leases, net consisted of the following:
September 30, March 31, 2003 2003 ------------ ------------ (Dollars in Millions) Vehicles.................................. $9,739 $9,687 Equipment and other....................... 708 720 ------ ------ 10,447 10,407 Accumulated depreciation.................. (2,389) (2,254) Allowance for credit losses .............. (163) (136) ------ ------ Investments in operating leases, net...... $7,895 $8,017 ====== ======
Note 4 - Allowance for Credit Losses - ------------------------------------ An analysis of the allowance for credit losses follows:
Three Months Ended Six Months Ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 ------- ------- ------- ------- (Dollars in Millions) Allowance for credit losses at beginning of period............... $ 552 $ 351 $ 526 $ 283 Provision for credit losses............. 78 127 187 249 Charge-offs............................. (82) (69) (176) (129) Recoveries.............................. 15 8 26 15 Other adjustments....................... (19) - (19) (1) ------- ------- ------- ------- Allowance for credit losses at end of period..................... $ 544 $ 417 $ 544 $ 417 ======= ======= ======= =======
At September 30, 2003, the allowance for credit losses consisted of $496 million to cover probable losses on the Company's owned portfolio and $48 million to cover probable losses on repossessed collateral in inventory. Total repossessed collateral in inventory at September 30, 2003 was $123 million. Repossessed collateral is included in other assets in the consolidated balance sheet. - 7 - TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 5 - Derivatives and Hedging Activities - ------------------------------------------- In response to recent SEC public announcements related to the income statement presentation of certain derivative activities, the Company's derivative fair value adjustment was reclassified into interest expense in the consolidated statement of income. The following table sets forth the items comprising the Company's derivative fair value adjustment, which is included in interest expense:
Three months ended Six months ended September 30, September 30, 2003 2002 2003 2002 ------ ------ ------ ------ (Dollars in Millions) Net unrealized gain/(loss) on non-designated derivatives................................... $ 82 $ (158) $ 46 $ (392) Net unrealized (loss)/gain on previously designated derivatives that no longer qualify as fair value hedges.................... (10) 2 (18) 2 Net unrealized gain related to the ineffective portion of the Company's fair value hedges..................... 11 32 17 52 ------ ------ ------ ------ Derivative fair value adjustment................. $ 83 $ (124) $ 45 $ (338) ====== ====== ====== ======
- 8 - TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 6 - Notes and Loans Payable - -------------------------------- The following table sets forth the items comprising notes and loans payable and the related weighted average interest rates:
September 30, March 31, September 30, March 31, 2003 2003 2003 2003 --------- ---------- --------- --------- (Dollars in Millions) Short-term debt .............. $ 6,168 $ 4,843 1.06% 1.36% Long-term debt ............... 25,259 26,034 1.23% 1.43% Fair value adjustments ... 1,752 1,222 --------- --------- Notes and loans payable.. $ 33,179 $ 32,099 1.20% 1.42% ========= ========= - -------------------- Includes the effect of certain United States ("U.S.") dollar interest rate swap agreements and cross currency interest rate swap agreements. Adjusts debt to fair market value in accordance with Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" and related amendments ("SFAS 133, as amended").
Included in long-term debt are unsecured notes denominated in various foreign currencies totaling approximately $11.2 billion and $11.4 billion at September 30 and March 31, 2003, respectively. Concurrent with the issuance of these unsecured notes, the Company entered into cross currency interest rate swap agreements to convert these obligations into variable rate U.S. dollar obligations. - 9 - TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 7 - Liquidity Facilities and Letters of Credit - --------------------------------------------------- The following table sets forth the Company's committed and uncommitted facilities at September 30 and March 31, 2003:
Committed Uncommitted Unused Facilities -------------------- -------------------- -------------------- September 30, March 31, September 30, March 31, September 30, March 31, 2003 2003 2003 2003 2003 2003 -------- -------- -------- -------- -------- -------- (Dollars in Millions) 364-day syndicated bank credit facilities........ $ 3,600 $ 2,800 $ - $ - $ 3,600 $ 2,800 5-year syndicated bank credit facility - TMCC... 1,400 1,400 - - 1,400 1,400 Letters of credit facilities - - 60 60 59 59 -------- -------- -------- -------- -------- -------- Total facilities $ 5,000 $ 4,200 $ 60 $ 60 $ 5,059 $ 4,259 ======== ======== ======== ======== ======== ========
During the second quarter of fiscal 2004, Toyota Credit de Puerto Rico Corp. ("TCPR Corp.") established a $400 million, 364-day syndicated bank credit facility, which is restricted to its own use. In addition, a TMCC 364-day syndicated bank credit facility, which is restricted to TMCC's own use, was increased to $3.2 billion and renewed during September 2003 for an additional 364-day period. - 10 - TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 8 - Commitments and Contingent Liabilities - ----------------------------------------------- TMCC has entered into certain guarantees and commitments. As of September 30, 2003, TMCC had not recorded any liabilities under such arrangements. The maximum commitment amounts under the guarantees and commitments as of September 30, 2003 are summarized in the table below:
Maximum Commitment Amount -------------- (Dollars in Millions) Credit facilities with dealers and affiliates................. $ 3,117 Guarantees of affiliate pollution control and solid waste disposal bonds......... 148 Lease commitments......................... 147 Revolving liquidity notes related to securitizations............. 48 Guarantee of Banco Toyota Do Brasil debt("BTB")..................... 30 ------- Total guarantees and commitments............. $ 3,490 =======
The Company maintains credit facilities with dealers and affiliates. These credit facilities may be used for business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements. These loans are typically collateralized with liens on real estate, vehicle inventory, and/or other dealership assets, as appropriate. The Company obtains a personal guarantee from the dealer or corporate guarantee from the dealership when deemed prudent. Although the loans are typically collateralized or guaranteed, the value of the underlying collateral or guarantees may not be sufficient to cover the Company's exposure under such agreements. The Company prices the credit facilities according to the risks assumed in entering into the credit facility. During the first quarter of fiscal 2004, TCPR Corp. extended a $90 million revolving line of credit to Toyota de Puerto Rico Corp., a wholly-owned subsidiary of Toyota Motor Sales, U.S.A., Inc. ("TMS"). This $90 million commitment is included in the table above under credit facilities with dealers and affiliates. The revolving line of credit has a one-year renewable term, with interest due monthly. Any loans outstanding under this revolving line of credit are not guaranteed by TMS. - 11 - TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 8 - Commitments and Contingent Liabilities (Continued) - ------------------------------------------------ TMCC has guaranteed payments of principal, interest, and premiums, if any, on $88 million principal amount of flexible rate demand solid waste disposal revenue bonds issued by Putnam County, West Virginia, of which $40 million matures in June 2028, $28 million matures in August 2029, and $20 million matures in April 2030. The bonds were issued in connection with a West Virginia manufacturing facility of an affiliate. TMCC has guaranteed payments of principal, interest, and premiums, if any, on $60 million principal amount of flexible rate demand pollution control revenue bonds issued by Gibson County, Indiana, of which $10 million matures in October 2027, January 2028, January 2029, January 2030, February 2031, and September 2031, respectively. The bonds were issued in connection with an Indiana manufacturing facility of an affiliate. Under these affiliate bond guarantees, TMCC would be required to perform in the event of any of the following: a) payment of any installment of interest, principal, premium, if any, or purchase price on the bonds is not made when the payment becomes due and payable; b) the occurrence of certain events of bankruptcy involving the benefactor manufacturing facilities or TMCC; c) failure by the benefactor manufacturing facilities to observe or perform any covenant, condition or agreement under the guarantees, other than as referred to in (a) above; d) failure by the bond issuers to observe or perform any covenant, condition or agreement under the guarantees, other than as referred to in (a) above; e) failure by TMCC to observe or perform any covenant, condition, agreement or obligation under the guarantees. These guarantees include provisions whereby TMCC is entitled to reimbursement by the benefactor manufacturing facilities for all principal and interest paid and fees incurred on behalf of the benefactor manufacturing facilities, and to default interest on those amounts. TMCC has not been required to perform under any of these affiliate bond guarantees as of September 30, 2003. During the first quarter of fiscal 2004, the Company entered into a 15-year lease agreement with TMS. The lease agreement is for the Company's new headquarters location in the TMS headquarters complex in Torrance, California. At September 30, 2003, minimum future commitments under lease agreements to which the Company is a lessee, including those under the agreement discussed above, are as follows: fiscal years ending 2004 - $21 million; 2005 - $19 million; 2006 - $17 million; 2007 - $15 million; 2008 - $10 million; 2009 - $9 million; and thereafter - $56 million. - 12 - TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 8 - Commitments and Contingent Liabilities (Continued) - ------------------------------------------------ In certain securitization structures, revolving liquidity notes are used in lieu of reserve funds to provide credit enhancement to the senior securities. Under these revolving liquidity notes, investors may draw upon the notes to cover any shortfall in interest and principal payments. The draws are funded by TMCC and TMCC is entitled to reimbursement of amounts drawn on the liquidity notes. Reimbursement of amounts drawn on the liquidity notes is subordinated to principal and interest payments due on the securities. TMCC must fund the entire amount available under the revolving liquidity notes if TMCC's short-term unsecured debt rating is downgraded below P-1 or A-1 by Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Group a division of The McGraw-Hill Companies, Inc. ("S&P"), respectively. TMCC has guaranteed payments of principal, interest, fees, and expenses with respect to a $30 million offshore bank loan of BTB. This guarantee will remain in effect until the loan is repaid in full, and TMCC elects to terminate the guarantee. The loan matures in fiscal 2005. Under the terms of the guarantee, TMCC would be required to perform on behalf of BTB should BTB default on payments for any reason including, but not limited to, financial insolvency, cross border payment restrictions, and other sovereign restrictions on off-shore payments. TMCC has entered into a separate indemnity agreement with BTB. The indemnity agreement includes provisions whereby TMCC is entitled to reimbursement from BTB. TMCC has not been required to perform under the BTB guarantee as of September 30, 2003. In the ordinary course of business, the Company enters into agreements containing indemnification provisions standard in the industry related to several types of transactions, such as debt funding, derivatives, securitization transactions, and its vendor and supplier agreements. Performance under these indemnities would occur upon a breach of the representations, warranties or covenants made or given, or a third party claim. In addition, the Company has agreed in certain debt and derivative issuances, and subject to certain exceptions, to gross-up payments due to third parties in the event that withholding tax is imposed on such payments. Management periodically evaluates the probability of having to incur such costs. Due to the difficulty in predicting events which could cause a breach of the indemnification provisions or trigger a gross-up obligation, the Company is not able to estimate its maximum exposure to future payments that could result from claims made under such provisions. The Company has not made any material payments in the past as a result of these provisions, and as of September 30, 2003, the Company does not believe it is probable that it will have to make any material payments in the future. As such, no amounts have been recorded under these indemnifications as of September 30, 2003. Various legal actions, governmental proceedings and other claims are pending or may be instituted or asserted in the future against the Company with respect to matters arising in the ordinary course of business. Certain of these actions are or purport to be class action suits, seeking sizeable damages and/or changes in the Company's business operations, policies, and practices. Certain of these actions are similar to suits that have been filed against other financial institutions and captive finance companies. Management and internal and external counsel perform periodic reviews of pending claims and actions to determine the probability of adverse verdicts and resulting amounts of liability. The amounts of liability on pending claims and actions as of September 30, 2003 were not determinable; however, in the opinion of management, the ultimate liability resulting therefrom should not have a material adverse effect on the Company's consolidated financial position or results of operations. - 13 - TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 9 - Related Party Transactions - ----------------------------------- As of September 30, 2003, there have been no material changes to related party agreements or relationships as described in the Company's annual report on Form 10-K for the year ended March 31, 2003, except for the lease agreement with TMS, as described in Note 8. The table below summarizes amounts included in the Company's consolidated balance sheet and statement of income for the periods presented, under various related party agreements or relationships:
September 30, March 31, 2003 2003 ---------- ---------- (Dollars in Millions) Consolidated balance sheet: Accrued credit support fee payable... $ 8 $ 7 Net intercompany payable............. $ 18 $ 59 Notes payable under affiliate MTN program............ $ 1 $ 1 Notes receivable under home loan program................ $ 6 $ 9
Three Months Ended Six Months Ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 ------- ------- ------- ------- (Dollars in Millions) Consolidated statement of income: Credit support fees incurred......... $ (4) $ (3) $ (9) $ (7) Shared services reimbursement........ (21) (9) (44) (21) Rent expense under facilities lease.. (2) (1) (3) (3) Marketing, wholesale support, and other revenues.................. 45 40 93 63 Affiliate insurance premiums and commissions revenue............. 11 10 22 20 Other amounts incurred............... - - (1) - ------- ------- ------- ------- Total.............................. $ 29 $ 37 $ 58 $ 52 ======= ======= ======= =======
Other amounts incurred reflect expenses incurred for vehicles leased from affiliates, partially offset by amounts earned for services TMCC performed on behalf of affiliates. - 14 - TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 10 - Segment Information - ----------------------------- Financial results for the Company's operating segments are summarized below:
At/For At/For Three Months Ended Six Months Ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 ------- ------- ------- ------- (Dollars in Millions) Assets: Financing operations................. $40,055 $36,587 $40,055 $36,587 Insurance operations................. 842 846 842 846 Eliminations/reclassifications....... (214) (179) (214) (179) ------- ------- ------- ------- Total assets....................... $40,683 $37,254 $40,683 $37,254 ======= ======= ======= ======= Gross revenues: Financing operations................. $ 1,037 $ 960 $ 2,025 $ 1,940 Insurance operations................. 54 58 108 107 ------- ------- ------- ------- Total gross revenues............... $ 1,091 $ 1,018 $ 2,133 $ 2,047 ======= ======= ======= ======= Net income/(loss): Financing operations................. $ 204 $ (3) $ 243 $ (42) Insurance operations................. 11 7 22 17 ------- ------- ------- ------- Total net income/(loss)............ $ 215 $ 4 $ 265 $ (25) ======= ======= ======= =======
- 15 - ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS EARNING ASSETS AND CONTRACT VOLUME Net Earning Assets - ------------------ The composition of the Company's net earning assets as of the balance sheet dates reported is summarized below:
September 30, March 31, September 30, 2003 2003 2002 ------------ ------------ ------------ (Dollars in Millions) Vehicle lease earning assets Investment in operating leases, net...... $ 7,594 $ 7,679 $ 7,392 Finance leases, net...................... 4,273 4,997 5,734 ------- ------- ------- Total vehicle lease earning assets........ 11,867 12,676 13,126 Vehicle retail finance receivables, net... 18,850 15,873 16,095 Vehicle wholesale and other financing 5,542 6,407 4,803 Allowance for credit losses .......... (496) (462) (342) ------- ------- ------- Total net earning assets.................. $35,763 $34,494 $33,682 ======= ======= ======= - ---------------------- For purposes of this table, vehicle wholesale and other financing includes wholesale financing, real estate loans, working capital loans, revolving credit lines, and industrial equipment financing. Includes amounts to cover probable losses on the Company's owned portfolio, but excludes amounts related to repossessed collateral in inventory.
Net earning assets at September 30, 2003 increased $1.3 billion or 4% compared to March 31, 2003. The growth in earning assets during this period was driven by the increased volume of vehicle retail financing, partially offset by decreases in vehicle lease financing and vehicle wholesale and other financing. The significant increase in retail finance receivables primarily resulted from the increased volume of new financings continuing to outpace the liquidation of the existing portfolio. The volume achieved was generated in large part by an increased use of marketing incentives sponsored by Toyota Motor Sales, U.S.A., Inc. ("TMS") and higher Toyota and Lexus vehicle sales levels, which increased 9% for the three months ended September 30, 2003 when compared to the same period in the prior year. Vehicle lease earning assets continued to decrease as compared with March 31, 2003 due to a general shift in programs sponsored by TMS from lease to retail as well as the Company's reduced emphasis on leasing, in line with industry trends. Vehicle wholesale and other financing receivables decreased as compared with March 31, 2003 as a result of seasonal fluctuations in the number of dealer-financed units outstanding, partially offset by continued growth in the number of vehicle dealers receiving vehicle wholesale financing. - 16 - Net earning assets at September 30, 2003 increased $2.1 billion or 6% compared to September 30, 2002. The growth in earning assets during this period was driven by the increased volume of vehicle retail financing and vehicle wholesale and other financing, partially offset by a decrease in vehicle lease financing. The significant increase in retail finance receivables primarily resulted from the increased volume of new financings continuing to outpace the liquidation of the existing portfolio. The volume achieved was generated in large part by an increased use of marketing incentives sponsored by TMS and higher Toyota and Lexus vehicle sales levels, which increased 7% for the six months ended September 30, 2003 when compared to the same period in the prior year. Vehicle wholesale and other financing also increased as compared with September 30, 2002 resulting from an increased number of dealer-financed units and growth in the number of vehicle dealers receiving vehicle wholesale financing. Vehicle lease earning assets continued to decrease as compared with September 30, 2003 due to a general shift in programs sponsored by TMS from lease to retail as well as the Company's reduced emphasis on leasing, in line with industry trends. The allowance for credit losses at September 30, 2003 increased $34 million or 7% and $154 million or 45% as compared to March 31, 2003 and September 30, 2002, respectively. Refer to the "Provision for Credit Losses" section of the Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") for further discussion regarding the Company's delinquency and charge-off experience. Contract Volume - --------------- The composition of the Company's contract volume and market share for the three and six months ended September 30, 2003 and 2002 is summarized below:
Three Months Ended Six Months Ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 ------- ------- ------- ------- Total contract volume: Vehicle retail....................... 237,000 195,000 453,000 368,000 Vehicle lease........................ 34,000 44,000 65,000 88,000 ------- ------- ------- ------- Total................................... 271,000 239,000 518,000 456,000 ======= ======= ======= ======= TMS sponsored contract volume: Vehicle retail....................... 71,000 65,000 150,000 88,000 Vehicle lease........................ 11,000 13,000 19,000 15,000 ------- ------- ------- ------- Total................................... 82,000 78,000 169,000 103,000 ======= ======= ======= ======= Market share : Vehicle retail....................... 40.8% 35.6% 40.3% 33.0% Vehicle lease........................ 7.8% 11.2% 8.0% 11.4% ----- ----- ----- ----- Total................................... 48.6% 46.8% 48.3% 44.4% ===== ===== ===== ===== - -------------------- Market share represents penetration of new Toyota and Lexus vehicle financed sales to consumers, excluding fleet sales, sales of Toyota Services de Mexico, S.A. de C.V., Toyota Services de Venezuela, C.A., and a private Toyota distributor.
- 17 - Total contract volume increased 13% and 14% for the three and six months ended September 30, 2003, respectively, when compared to the same periods in the prior year primarily due to increased vehicle retail contract volume. The increase in retail contract volume reflects the continued use of incentives on new vehicles primarily related to retail financing programs sponsored by TMS. In contrast, vehicle lease contract volume decreased 23% and 26% for the three and six months ended September 30, 2003, respectively, when compared with the same periods in the prior year. The decline in lease contract volume is due to a general shift in programs sponsored by TMS from lease to retail as well as the Company's reduced emphasis on leasing, in line with industry trends. The increase in total market share for the three and six months ended September 30, 2003 over the comparable prior year period was attributable to increased levels of marketing incentives sponsored by TMS. RESULTS OF OPERATIONS - --------------------- Net income increased $211 million and $290 million for the three and six months ended September 30, 2003, respectively, when compared to the same periods in the prior year. During both the three and six months ended September 30, 2003, the Company incurred significantly lower interest expense, driven by the impact of net unrealized gains associated with derivative fair value adjustments, while total financing revenues remained essentially level when compared to prior year results. The Company also experienced lower provision for credit losses for the three and six months ended September 30, 2003 when compared to the same periods in the prior year. The more significant fluctuations in the components of net income are discussed within this MD&A section. TOTAL FINANCING REVENUES - ------------------------ Total financing revenues remained essentially level for the three and six months ended September 30, 2003 when compared with the same periods in the prior year. Total financing revenues increased $7 million or 1% and $44 million or 2% for the three and six months ended September 30, 2003, respectively, primarily due to higher retail financing revenues and, to a lesser extent, higher wholesale and other dealer financing revenues. Total financing revenues increased at a lesser rate than the growth in the earning asset portfolio due to reductions in overall portfolio yield, resulting from a general decrease in market interest rates. Overall portfolio yield decreased from 7.73% for the six months ended September 30, 2002 to 6.72% for the six months ended September 30, 2003. - 18 - DEPRECIATION ON LEASES - ---------------------- Straight-line depreciation expense is based upon the difference between a leased vehicle's original book value ("capitalized cost") and the contractual residual value established at lease origination. Additional depreciation expense is recorded ratably over the remaining life of the lease when the residual value at lease maturity is estimated to be less than the contractual residual value. Factors affecting the estimate of residual value include, but are not limited to, new vehicle incentive programs, new vehicle pricing and used vehicle supply. The evaluation of these factors involves significant assumptions, complex analysis, and management judgment. Any difference between the undepreciated value at termination and the proceeds received at sale is recorded as depreciation expense at the time of asset disposal. Depreciation expense increased $11 million or 3% for the three months ended September 30, 2003 when compared to the same period in the prior year. The increase was comprised of a $27 million increase in straight-line depreciation, partially offset by a $16 million decrease in additional depreciation expense when compared to the same period in the prior year. Average capitalized costs have continued to increase while average contractual residual values as a percentage of capitalized cost have declined. This combination has resulted in an overall increase in the depreciable basis of leased vehicles ("depreciable basis") and the resulting increase in straight- line depreciation expense. The decline in additional depreciation expense was primarily due to a decrease in the number of leased vehicles returned at maturity and sold at auction during the period. For the six months ended September 30, 2003, depreciation expense increased $96 million or 13% when compared to the same period in the prior year. The increase was comprised of a $56 million increase in straight-line depreciation and a $40 million increase in additional depreciation expense. Increases in straight-line depreciation expense resulted from the overall increase in the depreciable basis. The increase in the amount of additional depreciation expense recognized during the six months ended September 30, 2003 was attributable to a significant increase in the total number of leased vehicles returned at maturity and sold at auction during the period. - 19 - INTEREST EXPENSE - ---------------- In response to recent SEC public announcements related to the income statement presentation of certain derivative activities, the Company's derivative fair value adjustment was reclassified into interest expense in the consolidated statement of income. Interest expense is comprised of realized and unrealized gains and losses from the Company's derivative activity and interest on notes and loans payable. The following table summarizes the Company's interest expense for the three and six months ended September 30, 2003 and 2002:
Three months ended Six months ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 ------ ------ ------ ------ (Dollars in Millions) Net unrealized gain/(loss) on non-designated derivatives............... $ 82 $ (158) $ 46 $ (392) Net unrealized (loss)/gain on previously designated derivatives that no longer qualify as fair value hedges............. (10) 2 (18) 2 Net unrealized gain related to the ineffective portion of the Company's fair value hedges.............. 11 32 17 52 ------ ------ ------ ------ Derivative fair value adjustment............ 83 (124) 45 (338) Realized derivative gains and losses and interest on notes and loans payable...... (170) (208) (363) (425) ------ ------ ------ ------ Total interest expense...................... $ (87) $ (332) $ (318) $ (763) ====== ====== ====== ======
Interest expense decreased $245 million or 74% and $445 million or 58% during the three and six months ended September 30, 2003, respectively, compared to the same periods in the prior year. The decline was primarily due to the recognition of a net unrealized gain from derivative and hedging activities for the three and six months ended September 30, 2003 in contrast to the recognition of a net unrealized loss for the same periods in the prior year. These unrealized gains and losses are presented as "Derivative fair value adjustment" in the table above. Unrealized gains and losses on non-designated derivatives comprised the largest component of the derivative fair value adjustment. Non-designated derivatives are used to manage interest rate risk on a portfolio basis as part of an overall program of interest rate risk management. Realized derivative gains and losses and interest on notes and loans payable also declined for the three and six months ended September 30, 2003 compared to the same periods in fiscal 2003. A general decrease in market interest rates represented the primary reason for the decline, offset in part by an increase in the average balance outstanding of notes and loans payable. The average balance outstanding of notes and loans payable was $33 billion and $29 billion for the six months ended September 30, 2003 and 2002, respectively. - 20 - INVESTMENT AND OTHER INCOME - --------------------------- The following table summarizes the Company's investment and other income for the three and six months ended September 30, 2003 and 2002:
Three Months Ended Six Months Ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 ------ ------ ------ ------ (Dollars in Millions) Investment and servicing fee income... $ 28 $ 23 $ 54 $ 46 Gain from securitization of finance receivables................ 42 - 42 33 Loss on impairment of retained interests................. - (11) - (11) ------ ------ ------ ------ Investment income-securitizations.. 70 12 96 68 Investment income-marketable securities and other income........ 8 5 18 13 ------ ------ ------ ------ Total investment and other income.. $ 78 $ 17 $ 114 $ 81 ====== ====== ====== ======
Investment and other income increased $61 million or 359% and $33 million or 41% during the three and six months ended September 30, 2003 when compared with the same periods in the prior year. For the quarter ended September 30, 2003, the increase was primarily due to the gain from the securitization of finance receivables initiated during the period. There was no securitization transaction during the comparable prior year period. For the six months ended September 30, 2003, the higher level of investment and other income was primarily due to an increase in the gain from the securitization of finance receivables, and the absence of impairment losses on assets retained in securitization transactions. The size of the pool of assets sold during the six months ended September 30, 2003 was $1.9 billion as compared to $1.6 billion in the comparable prior year period, representing the primary reason for the larger gain. The impairment on retained interests incurred during the six months ended September 30, 2002 was recorded as a result of projected credit losses on the related retail finance receivables exceeding the original credit loss assumptions. No impairment was recognized during the six months ended September 30, 2003. - 21 - LOSSES RELATED TO ARGENTINE INVESTMENT - -------------------------------------- For the three and six months ended September 30, 2002, TMCC recorded a $6 million and $11 million charge against income, respectively, to increase the reserve related to the Company's guarantee of Toyota Credit Argentina S.A.'s ("TCA") offshore outstanding debt to $37 million. During the remainder of fiscal 2003, TMCC satisfied its obligations under the guarantee and terminated the guarantees. As such, no additional charges were recorded during the three or six months ended September 30, 2003. OPERATING AND ADMINISTRATIVE EXPENSES - ------------------------------------- Operating and administrative expenses increased $12 million, or 9% for the three months ended September 30, 2003 as compared with the same period in fiscal 2003. The net increase primarily reflects a $4 million increase in charges related to technology services provided by TMS and a $4 million increase in personnel expenses related to increases in headcount. Operating and administrative expenses increased $20 million, or 8% for the six months ended September 30, 2003 as compared to the same period in fiscal 2003. Approximately $8 million resulted from increases in charges related to technology services provided by TMS. The majority of the remaining increase was comprised of a $4 million increase in personnel expenses associated with increases in headcount and a $3 million loss on disposal of assets in connection with the Company's move to the new headquarters location in the TMS headquarters complex in Torrance, California. - 22 - PROVISION FOR CREDIT LOSSES - --------------------------- The Company is exposed to credit risk on its owned portfolio. Credit risk is the risk that customers will not make required payments to the Company in accordance with their contractual obligation. The Company's level of credit losses is influenced primarily by two factors: the total number of contracts that default ("frequency of occurrence") and loss per occurrence ("loss severity"). The Company maintains an allowance for credit losses to cover probable losses. The following tables provide information related to the Company's credit loss experience:
Three Months Ended Six Months Ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 ------- ------- ------- ------- (Dollars in Millions) Allowance for credit losses at beginning of period............... $ 552 $ 351 $ 526 $ 283 Provision for credit losses............. 78 127 187 249 Charge-offs............................. (82) (69) (176) (129) Recoveries.............................. 15 8 26 15 Other adjustments....................... (19) - (19) (1) ------- ------- ------- ------- Allowance for credit losses at end of period..................... $ 544 $ 417 $ 544 $ 417 ======= ======= ======= =======
September 30, ------------------- 2003 2002 ------ ------ (Dollars in Millions) Net credit losses as a percentage of average earning assets .... 0.83% 0.71% Aggregate balances 60 or more days past due .............................. $ 184 $ 246 Over-60 day delinquencies as a percentage of gross earning assets ...... 0.52% 0.72% Allowance for credit losses as a percentage of gross earning assets .................... 1.50% 1.22% - -------------------- Delinquency and charge-off ratios typically fluctuate over time as a portfolio matures. The information in the preceding table has not been adjusted to eliminate the effect of the Company's portfolio growth. For purposes of this table, "earning assets" include earning assets and repossessed collateral.
- 23 - Charge-offs, net of recoveries, increased $6 million or 10% and $36 million or 32% for the three and six months ended September 30, 2003, respectively, when compared to the same periods in the prior year. Although charge-offs increased in the most recent fiscal quarter and fiscal year-to-date periods, the provision for credit losses for the three and six months ended September 30, 2003 declined when compared with the same periods in the prior year. The period-to-period declines in the provision for credit losses reflect recent favorable trends in 60-day contractual delinquency from 0.72% at September 30, 2002 to 0.52% at September 30, 2003. Delinquency and Net Credit Loss Experience - ------------------------------------------ The Company's delinquency and net credit loss experience continued to be influenced by the combined impact of the following factors: - - Continued economic uncertainty - - Lower used vehicle prices - - Longer term financing - - Tiered/risk based pricing - - The Company's field restructuring The impact of the listed factors to the Company's current year delinquency and net credit loss experience is consistent with the impact to fiscal 2003 results as discussed in the "Provision for Credit Losses" section of the Company's 2003 Annual Report on Form 10-K, except as discussed below. The impact of the tiered/risk based pricing program ("tiered pricing"), which was fully implemented as of March 2001, continues to diminish as a contributing factor to higher delinquency and credit loss rates. While the implementation of tiered pricing has resulted in increased overall credit loss, the period- to-period effects have lessened over time. Similarly, the impact of the Company's field restructuring, completed in fiscal 2003, is becoming a less significant factor affecting the level of delinquencies due to improvements in operating efficiencies at the recently opened service centers. Although delinquency rates have improved from September 2002 to September 2003, the overall level of delinquency remains high relative to historical experience. While the Company's credit loss rates have declined from historical highs reached during fiscal 2003, credit loss rates remain at elevated levels. Though the impact of certain factors influencing heightened levels of delinquencies and charge-offs over the last several quarters has lessened, management remains cautious regarding the near term economic outlook, used vehicle price trends, and the extent to which significant and sustained favorable trends are expected. - 24 - LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The objective of the Company's liquidity strategy is to ensure access to the capital markets so as to meet obligations and other commitments on a timely and cost-effective basis to support the growth in earning assets. Significant reliance is placed on the Company's ability to obtain debt and securitization funding in the capital markets. Debt issuances have generally been in the form of commercial paper and unsecured term debt. The Company believes that debt issuances and securitization funding, combined with cash provided by operating, investing, and financing activities, will provide sufficient liquidity to meet future funding requirements. Commercial Paper - ---------------- Commercial paper issuances are used to meet short-term funding needs. Commercial paper outstanding under the Company's commercial paper programs ranged from approximately $6.0 billion to $7.7 billion during the quarter ended September 30, 2003, with an average outstanding balance of $6.9 billion. Unsecured Term Debt - ------------------- Long-term funding requirements are met through the issuance of a variety of debt securities underwritten in both the U.S. and international capital markets. Medium term notes ("MTNs") and bonds have provided the Company with significant sources of funding. During the quarter ended September 30, 2003, the Company issued approximately $1.5 billion of MTNs and bonds, all of which had original maturities ranging from greater than one year to approximately ten years. At September 30, 2003, the Company had total MTNs and bonds outstanding of $26.5 billion, of which $11.2 billion was denominated in foreign currencies. The remaining maturities of all MTNs and bonds outstanding at September 30, 2003 ranged from less than one year to approximately ten years. The Company anticipates continued use of MTNs and bonds in both the U.S. and international capital markets. To provide for the issuance of debt securities in the U.S. capital market, the Company maintains a shelf registration with the SEC under which approximately $5.0 billion was available for issuance at October 31, 2003. Under the Company's euro MTN program, which provides for the issuance of debt securities in the international capital markets, the maximum aggregate principal amount authorized to be outstanding at any time is $20.0 billion, of which approximately $6.0 billion was available for issuance at October 31, 2003. The U.S. dollar and euro MTN programs may be expanded from time to time to allow for the continued use of these sources of funding. In addition, the Company may issue bonds in the U.S. and international capital markets that are not issued under its MTN programs. Securitization Funding - ---------------------- TMCC's securitization program allows the Company to access an additional source of funding, further diversifying its investor base to enhance its liquidity position. TMCC's securitization transactions are structured using qualifying special purpose entities (with the exception of one transaction executed in fiscal 2002). The outstanding balance of securitized retail finance receivables which TMCC continues to service totaled $6.6 billion at September 30, 2003. - 25 - In September 2003, the Company sold retail receivables totaling $1.9 billion in connection with securities issued under a shelf registration statement maintained with the SEC. Of the $1.9 billion sold, the Company invested $0.6 billion in purchased and retained senior class and other securities, resulting in $1.3 billion of net funding. As of October 31, 2003, $6.2 billion of securities remained available for issuance under the SEC shelf registration statement. For the past three fiscal years, securitization transactions averaged approximately 29% of the Company's total funding. A reduction or termination of TMCC's securitization activities would cause the Company to seek alternative funding from debt capital markets. Management does not anticipate any changes in the Company's ability to access the securitization market in the foreseeable future. Liquidity Facilities and Letters of Credit - ------------------------------------------ For additional liquidity purposes, the Company maintains syndicated bank credit facilities with banks whose commitments aggregated $5.0 billion at September 30, 2003. No amounts were outstanding under the syndicated bank credit facilities as of September 30, 2003. During the second quarter of fiscal 2004, TCPR Corp. established a $400 million, 364-day syndicated bank credit facility, which is restricted to its own use. In addition, the TMCC 364-day syndicated bank credit facility, which is restricted to its own use, was increased to $3.2 billion and renewed during September 2003 for an additional 364-day period.
Committed Uncommitted Unused Facilities -------------------- -------------------- -------------------- September 30, March 31, September 30, March 31, September 30, March 31, 2003 2003 2003 2003 2003 2003 -------- -------- -------- -------- -------- -------- (Dollars in Millions) 364-day syndicated bank credit facilities........ $ 3,600 $ 2,800 $ - $ - $ 3,600 $ 2,800 5-year syndicated bank credit facility - TMCC... 1,400 1,400 - - 1,400 1,400 Letters of credit facilities - - 60 60 59 59 -------- -------- -------- -------- -------- -------- Total facilities $ 5,000 $ 4,200 $ 60 $ 60 $ 5,059 $ 4,259 ======== ======== ======== ======== ======== ========
- 26 - Credit Ratings - -------------- Effective August 2003, Moody's Investors Service, Inc. ("Moody's") upgraded the long-term ratings of Toyota Motor Corporation ("TMC") and its supported subsidiaries, including TMCC, from Aa1 to Aaa, and retained its stable outlook. As of September 30, 2003, the ratings established by Moody's and Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc. ("S&P") for TMCC were as follows:
Rating Agency Senior Debt Commercial Paper Outlook --------------- ------------- ------------------ --------- S&P AAA A-1+ Negative Moody's Aaa P-1 Stable
CONTRACTUAL OBLIGATIONS AND CREDIT-RELATED COMMITMENTS - ------------------------------------------------------ During the first quarter of fiscal 2004, the Company entered into a 15-year lease agreement with TMS. The lease agreement is for the Company's new headquarters location in the TMS headquarters complex in Torrance, California. At September 30, 2003, minimum future commitments under lease agreements to which the Company is a lessee, including those under the agreement discussed above, are as follows: fiscal years ending 2004 - $21 million; 2005 - $19 million; 2006 - $17 million; 2007 - $15 million; 2008 - $10 million; 2009 - $9 million; and thereafter - $56 million. - 27 - CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 - ------------------------------------------------------------------------ This report contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which include estimates, projections and statements of the Company's beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as "believe", "anticipate", "expect", "estimate", "project", "should", "intend", "will", "may" or words or phrases of similar meaning. The Company cautions that the forward looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results to differ materially from those in the forward looking statements, including, without limitation, the following: decline in demand for Toyota and Lexus products; the effect of economic conditions; the effect of the current political, economic and regulatory risk in Argentina, Mexico, Venezuela, Brazil and other Latin American and South American countries and the resulting effect on their economies and monetary and fiscal policies; a decline in the market acceptability of leasing; the effect of competitive pricing on interest margins; changes in pricing due to the appreciation of the Japanese yen against the U.S. dollar; the effect of governmental actions; changes in tax laws; changes in regulations that affect retail installment lending, leasing or insurance; the effect of competitive pressures on the used car market and residual values and the continuation of the other factors causing an increase in vehicle returns and disposition losses; the continuation of, and if continued, the level and type of special programs offered by TMS; the ability of the Company to successfully access the U.S. and international capital markets; the effects of any rating agency actions; increases in market interest rates; the implementation of new technology systems; the continuation of factors causing increased delinquencies and credit losses; the changes in the fiscal policy of any government agency which increases sovereign risk; monetary policies exercised by the European Central Bank and other monetary authorities; increased costs associated with the Company's debt funding or restructuring efforts; the effect of any military action by or against the U.S., as well as any future terrorist attacks, including any resulting effects on general economic conditions, consumer confidence and general market liquidity; with respect to the effects of litigation matters, the discovery of facts not presently known to the Company or determination by judges, juries or other finders of fact which do not accord with the Company's evaluation of the possible liability from existing litigation; increased losses resulting from default by any dealers to which the Company has a significant credit exposure; default by any counterparty to a derivative contract; and performance under any guaranty or comfort letter issued by the Company. The risks included here are not exhaustive. New risk factors emerge from time to time and it is not possible for the Company to predict all such risk factors, nor to assess the impact such risk factors might have on the Company's business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward looking statements as a prediction of actual results. The Company will not update the forward looking statements to reflect actual results or changes in the factors affecting the forward looking statements. - 28 - ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Value at Risk - ------------- The Company's primary market risk exposure is interest rate risk, in particular risk relating to changes in the U.S. dollar London Interbank Offered Rate ("LIBOR"). The Company uses the value at risk ("VAR") methodology to measure this risk. The VAR provides an overview of the Company's exposure to changes in market factors. VAR represents the potential loss in fair value for the Company's portfolio from adverse changes in market factors for a 30-day holding period within a 95% confidence interval using the Monte Carlo simulation technique. The VAR methodology uses historical interest rate data to assess the potential future loss. The Company's VAR methodology incorporates the impact from adverse changes in market interest rates but does not incorporate the impact from other market changes, such as foreign currency exchange rates, which do not materially affect the value of the Company's portfolio. The VAR methodology is applied to more than 90% of the Company's market risk sensitive positions. Management believes the positions considered in the analysis are representative of the Company's total portfolio. The VAR methodology currently does not consider changes in fair values related to investments in marketable securities and equipment financing. The VAR and the average VAR of the Company's portfolio as of, and for the six months ended September 30, 2003 measured as the potential 30 day loss in fair value from assumed adverse changes in interest rates are as follows:
Average for the As of Six Months Ended September 30, 2003 September 30, 2003 ------------------ ------------------ Mean portfolio value..................... $5.5 billion $5.6 billion VAR...................................... $53 million $43 million Percentage of the mean portfolio value... 0.97% 0.77% Confidence level......................... 95% 95%
The Company's calculated VAR exposure represents an estimate of reasonably possible net losses that would be recognized on its portfolio of financial instruments assuming hypothetical movements in future market rates and is not necessarily indicative of actual results which may occur. It does not represent the maximum possible loss nor any expected loss that may occur, since actual future gains and losses will differ from those estimated, based upon actual fluctuations in market rates, operating exposures, and the timing thereof, and changes in the composition of the Company's portfolio of financial instruments during the year. - 29 - Market Price Risk - ----------------- The Company is also exposed to market price risk related to equity investments included in the investment portfolio of its insurance operations. Investments in marketable securities consist primarily of equity investments in mutual funds. These investments are classified as available for sale in accordance with Statement of Financial Accounting Standards No. 115 "Accounting for Certain Investments in Debt and Equity Securities" ("SFAS 115"). None of the equity investments are considered trading securities within the meaning of SFAS 115. A summary of the sensitivity of the fair market value of the Company's equity investments to an assumed 10% and 20% adverse change in market prices is presented below.
As of September 30, ------------------ 2003 2002 ------ ------ (Dollars in Millions) Cost..................................... $ 158 $ 153 Fair Market Value........................ $ 179 $ 127 Net unrealized gain/(loss)............... $ 21 $ (26) Estimated 10% adverse change in prices... $ (18) $ (13) Estimated 20% adverse change in prices... $ (36) $ (25)
These hypothetical scenarios represent an estimate of reasonably possible net losses that may be recognized on the Company's equity investments assuming hypothetical movements in future market rates and is not necessarily indicative of actual results that may occur. Additionally, the hypothetical scenarios do not represent the maximum possible loss nor any expected loss that may occur, since actual future gains and losses will differ from those estimated, based upon actual fluctuations in market rates. Counterparty Credit Risk - ------------------------ Counterparty credit risk of derivative instruments is represented by the fair value of contracts with a positive fair value at September 30, 2003, reduced by the effects of master netting agreements. At September 30, 2003, aggregate counterparty credit risk as represented by the fair value of the Company's derivative instruments was approximately $1.9 billion on an aggregate notional amount of $46.9 billion. - 30 - Review by Independent Accountants With respect to the unaudited consolidated financial information of Toyota Motor Credit Corporation for the three-month and six-month periods ended September 30, 2003 and 2002, PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated November 14, 2003 appearing herein, states that they did not audit and they do not express an opinion on that unaudited consolidated financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited consolidated financial information because that report is not a "report" or a "part" of the registration statement prepared or certified by PricewaterhouseCoopers within the meaning of Sections 7 and 11 of the Act. ITEM 4. CONTROLS AND PROCEDURES The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934, as amended ("Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified in the Commission's rules and forms. As of the end of the period of this quarterly report, the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") evaluated the effectiveness of such disclosure controls and procedures in place pursuant to Rule 13a-15(b) of the Exchange Act. Based on the evaluation, the CEO and CFO concluded that such disclosure controls and procedures are effective. There has been no change in the Company's internal control over financial reporting during the Company's most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. - 31 - PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Various legal actions, governmental proceedings and other claims are pending or may be instituted or asserted in the future against the Company with respect to matters arising in the ordinary course of business. Certain of these actions are or purport to be class action suits, seeking sizeable damages and/or changes in the Company's business operations, policies, and practices. Certain of these actions are similar to suits that have been filed against other financial institutions and captive finance companies. Management and internal and external counsel perform periodic reviews of pending claims and actions to determine the probability of adverse verdicts and resulting amounts of liability. The amounts of liability on pending claims and actions as of September 30, 2003 were not determinable; however, in the opinion of management, the ultimate liability resulting therefrom should not have a material adverse effect on the Company's consolidated financial position or results of operations. The foregoing is a forward looking statement within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, which represents the Company's expectations and beliefs concerning future events. The Company cautions that its discussion of Legal Proceedings is further qualified by important factors that could cause actual results to differ materially from those in the forward looking statement, including but not limited to the discovery of facts not presently known to the Company or determinations by judges, juries or other finders of fact which do not accord with the Company's evaluation of the possible liability from existing litigation. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS There is nothing to report with regard to this item. ITEM 3. DEFAULTS UPON SENIOR SECURITIES There is nothing to report with regard to this item. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ITEM 5. OTHER INFORMATION There is nothing to report with regard to this item. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The exhibits listed on the accompanying Exhibit Index, on page 34, are filed as part of this report. (b) Reports on Form 8-K The following reports on Form 8-K were filed by the registrant during the quarter ended September 30, 2003: Date of Report Items Reported ----------------- --------------------- August 5, 2003 Item 12. Disclosure of Results of Operations And Financial Condition. July 14, 2003 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. - 32 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TOYOTA MOTOR CREDIT CORPORATION ------------------------------- (Registrant) Date: November 14, 2003 By /S/ GEORGE E. BORST ------------------------------- George E. Borst President and Chief Executive Officer (Principal Executive Officer) Date: November 14, 2003 By /S/ JOHN F. STILLO ------------------------------- John F. Stillo Vice President and Chief Financial Officer (Principal Financial Officer) - 33 - EXHIBIT INDEX Exhibit Method Number Description of Filing - ------- ----------- --------- 4.1 Amendment No. 1 to the Fourth Amended and Restated Filed Agency Agreement, dated September 30, 2003 among, Herewith TMCC, JP Morgan Chase Bank and JP Morgan Bank Luxembourg, S.A. 10.1 364 Day Facility Credit Agreement, dated September Filed 11, 2003 among TCPR, Bank of America, N.A., and Herewith the Other Lenders Party Thereto 10.2 First Amended and Restated 364 Day Facility Filed Credit Agreement, dated September 11, 2003 among Herewith TMCC, Bank of America, N.A., and Other Lenders Party Thereto 12.1 Calculation of Ratio of Earnings to Fixed Charges Filed Herewith 15.1 Report of Independent Accountants Filed Herewith 15.2 Letter regarding unaudited interim financial Filed information Herewith 31.1 Certification of Chief Executive Officer Filed Herewith 31.2 Certification of Chief Financial Officer Filed Herewith 32.1 Certification pursuant to 18 U.S.C. Section 1350 Furnished Herewith 32.2 Certification pursuant to 18 U.S.C. Section 1350 Furnished Herewith - 34 - EX-4 2 ex4_1.txt Exhibit 4.1 AMENDMENT NO. 1 TO THE FOURTH AMENDED AND RESTATED AGENCY AGREEMENT IN RESPECT OF TOYOTA MOTOR CREDIT CORPORATION'S EURO MEDIUM-TERM NOTE PROGRAM This Amendment No. 1, dated September 30, 2003, is made to the Fourth Amended and Restated Agency Agreement, dated October 1, 2002 (the "Agreement"), by and among Toyota Motor Credit Corporation (the "Company"), JPMorgan Chase Bank, as Agent (the "Agent"), and J.P. Morgan Bank Luxembourg S.A., as Paying Agent (the "Paying Agent"), in respect of the Company's Euro Medium-Term Note Program (the "Program"). Except as otherwise defined herein, capitalized terms used herein shall have the same meanings ascribed to them in the Agreement. WHEREAS, the Company, the Agent and the Paying Agent desire to amend the Agreement to make certain changes to the Agreement. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree to amend the Agreement as follows: A. All references to "U.S. $16,000,000,000" in the Agreement, and in Appendix C (Form of Calculation Agency Agreement) and Annex C (Form Letter from Lead Manager/Dealer) to Appendix D (Form of Operating & Administrative Procedures Memorandum) thereto, are hereby amended to read "U.S. $20,000,000,000." B. Clause 1 of the Agreement (Definitions and Interpretations) is hereby amended as follows: 1. The definition of "Dealer" is amended in its entirety as follows: "Dealer" means each of Merrill Lynch International, BNP Paribas, Credit Suisse First Boston (Europe) Limited, Dresdner Bank Aktiengesellschaft, J.P. Morgan Securities Ltd., Morgan Stanley & Co. International Limited, Nomura International plc, and UBS Limited, and any other entities appointed as dealers from time to time pursuant to the Program Agreement. 2. The definition of "ISDA Definitions" is amended in its entirety as follows: "ISDA Definitions" means the 2000 ISDA Definitions published by the International Swaps and Derivatives Association, Inc., as amended, supplemented or updated from time to time. 3. The definition of "Specified Currency" is amended in its entirety as follows: "Specified Currency" means the currency (which expression shall include euro and other currency units) in which Notes are denominated and, in the case of Dual Currency Notes, the currency or currencies in which payment in respect of the Notes is to be made. C. Clause 21(1)(a) of the Agreement is hereby amended in its entirety as follows: so long as any Notes (i) are listed on the London Stock Exchange, there will at all times be a Paying Agent (or the Agent) having a specified office in London; and (ii) are listed on any other Stock Exchange, there will at all times be a Paying Agent in any such location as may be required by the rules and regulations of the relevant Stock Exchange. D. Appendix A (Terms and Conditions of the Notes) is hereby replaced in its entirety with Appendix A attached hereto. E. Appendix B (Forms of Global and Definitive Notes, Coupons, Receipts and Talons) is hereby amended as follows: 1. The second paragraph on page B-1--2 of Appendix B-1 (Form of Temporary Global Note of Toyota Motor Credit Corporation) is amended in its entirety as follows: This Temporary Global Note is issued subject to, and with the benefit of, the Conditions and the Fourth Amended and Restated Agency Agreement dated as of October 1, 2002, as amended by Amendment No. 1 dated September 30, 2003 (the "Agency Agreement," which expression shall be construed as a reference to that agreement as the same may be amended or supplemented from time to time), between the Company and JPMorgan Chase Bank (the "Agent") and the other agents named therein; provided, however, that the reference to the Conditions shall mean the Conditions in effect on the date of this Temporary Global Note and shall not be affected by any amendments to the Conditions which occur thereafter. 2. The first paragraph on page B-1--9 of Schedule Three (Form of Certificate to be Presented by Appropriate Clearing System) of Appendix B-1 (Form of Temporary Global Note of Toyota Motor Credit Corporation) is amended in its entirety as follows: This is to certify that, based solely on certifications we have received in writing, by telex or by electronic transmission 2 satisfying the requirements set forth in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(ii) from member organizations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our "Member Organizations") substantially to the effect set forth in the Agency Agreement, as of the date hereof, [ ] principal amount of above-captioned Securities (i) is owned by persons that are not citizens or residents of the United States, partnerships, corporations or other entities created or organized under the laws of the United States, any estate the income of which is subject to United States federal income taxation regardless of its source, or any trust, if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (b) the trust has in effect a valid election to be treated as a United States person ("United States persons"), (ii) is owned by United States persons that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own account or for resale, or (b) acquired the Securities through foreign branches of United States financial institutions and hold the securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution has agreed, on its own behalf, or through its agent, that we may advise the Company or the Company's agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the U.S. Treasury Regulations thereunder), or (iii) is owned by the United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign financial institutions described in clause (iii) (whether or not also described in clauses (i) or (ii)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. 3. The first paragraph on page B-1--11 of Certificate "A" (Form of Certificate to be Presented to Appropriate Clearing System) of Appendix B-1 (Form of Temporary Global Note of Toyota Motor Credit Corporation) is amended in its entirety as follows: This is to certify that as of the date hereof, and except as set forth below, the above-captioned Securities held by you for our account (i) are owned by persons that are not citizens or residents of the United States, partnerships, corporations or other entities created or 3 organized in the United States or under the law of the United States or of any State thereof, any estate the income of which is subject to United States federal income taxation regardless of its source, or any trust, if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (b) the trust has in effect a valid election to be treated as a United States person ("United States persons"), (ii) are owned by United States person(s) that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own account or for resale, or (b) acquired the Securities through foreign branches of United States financial institutions and hold the Securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the Company or the Company's agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the U.S. Treasury Regulations thereunder), or (iii) are owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is a United States or foreign financial institution described in clause (iii) (whether or not also described in clauses (i) or (ii)) this is further to certify that such financial institution has not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. 4. The second paragraph on page B-2--2 of Appendix B-2 (Form of Permanent Global Note of Toyota Motor Credit Corporation) is amended in its entirety as follows: This Permanent Global Note is issued subject to, and with the benefit of, the Conditions and the Fourth Amended and Restated Agency Agreement dated as of October 1, 2002, as amended by Amendment No. 1 dated September 30, 2003 (the "Agency Agreement," which expression shall be construed as a reference to that agreement as the same may be amended or supplemented from time to time), between the Company and JPMorgan Chase Bank (the "Agent") and the other agents named therein; provided, however, that the reference to the Conditions shall mean the Conditions in effect on the date of issue of the Temporary Global Note that originally represented this Note and shall not be affected by any amendments to the Conditions which occur thereafter. 4 5. The second paragraph on page B-3--2 of Appendix B-3 (Definitive Note of Toyota Motor Credit Corporation) is amended in its entirety as follows: This Note is issued subject to, and with the benefit of, the Conditions and the Fourth Amended and Restated Agency Agreement dated as of October 1, 2002, as amended by Amendment No. 1 dated September 30, 2003 (the "Agency Agreement," which expression shall be construed as a reference to that agreement as the same may be amended or supplemented from time to time), between the Company and JPMorgan Chase Bank (the "Agent") and the other agents named therein; provided, however, that references to the Conditions shall mean the Conditions in effect on the date of issue of the Temporary Global Note that originally represented this Note and shall not be affected by any amendments to the Conditions which occur thereafter. F. Appendix C (Form of Calculation Agency Agreement) is hereby amended by replacing Recitals A and B as follows: WHEREAS: A. The Company has entered into the Fourth Amended and Restated Program Agreement with Merrill Lynch International, BNP Paribas, Credit Suisse First Boston (Europe) Limited, Dresdner Bank Aktiengesellschaft, J.P. Morgan Securities Ltd., Morgan Stanley & Co. International Limited, Nomura International plc, and UBS Limited, dated October 1, 2002, as amended by Amendment No. 1, dated September 30, 2003 (as amended, the "Program Agreement"), under which $20,000,000,000 (or its equivalent in other currencies) in aggregate principal amount of Notes ("Notes") may be outstanding. B. The Notes will be issued subject to and with the benefit of the Fourth Amended and Restated Agency Agreement, dated as October 1, 2002, as amended by Amendment No. 1, dated September 30, 2003 (as amended, the "Agency Agreement") among the Company, JPMorgan Chase Bank (the "Agent," which expression shall include its successor or successors for the time being under the Agency Agreement) and J.P. Morgan Bank Luxembourg S.A. (the "Paying Agent," which expression shall include its successor or successors for the time being under the Agency Agreement). G. Section 2(2) on page D--1 of Appendix D (Form of Operating & Administrative Procedures Memorandum) is hereby replaced in its entirety as follows: 5 In the case of Notes to be listed on a Stock Exchange, the Listing Agent/Authorized Advisor or Lead Manager will be responsible for ensuring compliance with the Listing Rules and obtaining all necessary approvals for listing the Notes on the relevant Stock Exchange. The Company recognizes with respect to this Clause 2(2) its continuing obligation so long as any Notes under the Program are outstanding to apprise the applicable Dealers of any material adverse change in its consolidated financial position or its business operations. H. Annex B (Form of Pricing Supplement) to Appendix D (Form of Operating & Administrative Procedures Memorandum) is hereby replaced in its entirety with Annex B to Appendix D attached hereto. I. Annex D (Trading Desk Information) to Appendix D (Form of Operating & Administrative Procedures Memorandum) is hereby replaced in its entirety with Annex D to Appendix D attached hereto. J. Appendix E (Form of the Notes) is hereby replaced in its entirety with Appendix E attached hereto. 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. The Company - ----------- TOYOTA MOTOR CREDIT CORPORATION 19001 South Western Avenue Torrance, California 90509 Telephone: (310) 468-4001 Fax: (310) 468-6194 Attention: Vice President, Treasury By: /s/ George E. Borst ----------------------------------------- Name: George E. Borst Title: President and Chief Executive Officer S-1 The Agent - --------- JPMorgan Chase Bank Trinity Tower 9 Thomas More Street London E1W 1YT Telephone: 01202 347430 Fax: 01202 347601 Telex: 8954681 CMB G Attention: Manager, Institutional Trust Services By: /s/ Iain Cardew ---------------------------------------------- Name: Iain Cardew Title: Assistant Treasurer The Other Paying Agent - ---------------------- J.P. Morgan Bank Luxembourg S.A. 5 Rue Plaetis L-2338 Luxembourg Telephone: 00 352 4626 85236 Fax: 00 352 4626 85380 Telex: 1233 CHASE LU Attention: Manager, Institutional Trust Services By: /s/ Iain Cardew ---------------------------------------------- Name: Iain Cardew Title: Attorney S-2 APPENDIX A TERMS AND CONDITIONS OF THE NOTES The following are the Terms and Conditions (the "Terms and Conditions" or the "Conditions") of the Notes issued on or after the date of the Offering Circular which (subject to completion and amendment and to the extent applicable) will be attached to or incorporated by reference into each global Note and will be incorporated by reference or endorsed upon each definitive Note. The applicable Pricing Supplement in relation to any Notes may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with the following Terms and Conditions, replace or modify the following Terms and Conditions for the purpose of such Notes. The applicable Pricing Supplement will be endorsed upon, or attached to, each temporary global Note, permanent global Note and definitive Note. Reference should be made to "Form of the Notes" in the Offering Circular dated September 30, 2003 (the "Offering Circular") for the form of Pricing Supplement which will include the definitions of certain terms used in the following Terms and Conditions. This Note is one of a Series (as defined below) of Notes (the "Notes," which expression shall mean (i) in relation to any Notes represented by a global Note, units of the lowest Specified Denomination in the Specified Currency of the relevant Notes, (ii) definitive Notes issued in exchange (or partial exchange) for a temporary or permanent global Note, and (iii) any global Note) issued subject to, and with the benefit of, a Fourth Amended and Restated Agency Agreement dated as of October 1, 2002, as amended by an Amendment No. 1 dated September 30, 2003 (collectively, the "Agency Agreement"), and made between Toyota Motor Credit Corporation ("TMCC", which reference does not include the subsidiaries of TMCC) and JPMorgan Chase Bank, London Office, as issuing agent and (unless specified otherwise in the applicable Pricing Supplement) principal paying agent and (unless specified otherwise in the applicable Pricing Supplement) as calculation agent (the "Agent", which expression shall include any successor agent or any other Calculation Agent specified in the applicable Pricing Supplement) and the other paying agents named therein (together with the Agent, the "Paying Agents", which expression shall include any additional or successor paying agents). Interest-bearing definitive Notes will (unless otherwise indicated in the applicable Pricing Supplement) have interest coupons ("Coupons") and, if indicated in the applicable Pricing Supplement, talons for further Coupons ("Talons") attached on issue. Any reference herein to Coupons or coupons shall, unless the context otherwise requires, be deemed to include a reference to Talons or talons. Definitive Notes repayable in installments will have receipts ("Receipts") for the payment of the installments of principal (other than the final installment) attached on issue. The Notes, Receipts and Coupons have the benefits of certain Credit Support Agreements governed by Japanese law, one between Toyota Motor Corporation ("TMC") and Toyota Financial Services Corporation ("TFS") dated July 14, 2000 and the other between TFS and TMCC, dated October 1, 2000. However, the Credit Support Agreements do not constitute a direct or indirect guarantee by TMC or TFS thereof. As used herein, "Series" means all Notes which are denominated in the same currency and which have the same Maturity Date, Interest Basis, Redemption/Payment Basis and Interest Payment Dates (if any) (all as indicated in the applicable Pricing Supplement) and the terms of Appendix A-1 which (except for the Issue Date or the Interest Commencement Date (as the case may be) and/or the Issue Price (as indicated as aforesaid)) are otherwise identical (including whether or not the Notes are listed) and the expressions "Notes of the relevant Series" and "holders of Notes of the relevant Series" and related expressions shall be construed accordingly. As used herein, "Tranche" means all Notes of the same Series with the same Issue Date and Interest Commencement Date (if applicable). The Pricing Supplement applicable to any particular Note or Notes is attached hereto or endorsed hereon and supplements these Terms and Conditions and may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with these Terms and Conditions, replace or modify these Terms and Conditions for the purposes of such Note or Notes. References herein to the "applicable Pricing Supplement" shall mean the Pricing Supplement attached hereto or endorsed hereon. Copies of the Agency Agreement (which contains the form of Pricing Supplement), the Offering Circular and the Pricing Supplement applicable to any particular Note or Notes (if listed) are available for inspection at the specified offices of the Agent and each of the other Paying Agents. The holders of the Notes (the "Noteholders"), which expression shall, in relation to any Notes represented by a global Note, be construed as provided in Condition 1, the holders of the Coupons (the "Couponholders") and the holders of Receipts (the "Receiptholders") are deemed to have notice of the Agency Agreement, the applicable Pricing Supplement and the Offering Circular, and are entitled to the benefit of all the provisions of the Agency Agreement and the applicable Pricing Supplement, which are binding on them. A temporary or permanent global Note will be exchangeable in whole, but not in part, for security printed definitive Notes with, where applicable, Receipts, Coupons and Talons attached not earlier than the date (the "Exchange Date") which is 40 days after completion of the distribution of the relevant Tranche, provided that certification of non-U.S. beneficial ownership has been received: (i) at the option of TMCC; (ii) unless stated otherwise in the applicable Pricing Supplement, at the option of holders of an interest in the temporary or permanent global Note upon such notice as is specified in the applicable Pricing Supplement from Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") or Clearstream Banking, societe anonyme, ("Clearstream, Luxembourg") (as the case may be) acting on instructions of the holders of interest in the temporary or permanent global Note and/or subject to the payment of costs in connection with the printing and distribution of the definitive Notes, if specified in the applicable Pricing Supplement; (iii) if, after the occurrence of an Event of Default, holders representing at least a majority of the outstanding principal amount of the Notes of a Series, acting together as a single class, advise the Agent through Euroclear and Clearstream, Luxembourg that they wish to receive definitive Notes; or (iv) Euroclear, Clearstream, Luxembourg and any other relevant clearance system for the temporary or permanent global Note are all no longer willing or able to discharge properly their responsibilities with respect to such Notes and the Agent and TMCC are unable to locate a qualified successor. Words and expressions defined in the Agency Agreement, defined elsewhere in the Offering Circular or used in the applicable Pricing Supplement shall have the same meanings where used in these Terms and Conditions unless the context otherwise requires or unless otherwise stated Appendix A-2 and provided that, in the event of inconsistency between the Agency Agreement and the applicable Pricing Supplement, the applicable Pricing Supplement will prevail. 1. FORM, DENOMINATION AND TITLE The Notes in this Series are in bearer form and, in the case of definitive Notes, serially numbered in the Specified Currency (or Currencies in the case of Dual Currency Notes) and in the Specified Denomination(s) specified in the applicable Pricing Supplement. This Note may be a Note bearing interest on a fixed rate basis ("Fixed Rate Note"), a Note bearing interest on a floating rate basis ("Floating Rate Note"), a Note issued on a non-interest bearing basis ("Zero Coupon Note"), a Note with respect to which interest is calculated by reference to an index and/or a formula ("Index Linked Interest Note") or any combination of the foregoing, depending upon the Interest Basis specified in the applicable Pricing Supplement. This Note may be a Note with respect to which principal is calculated by reference to an index and/or a formula ("Index Linked Redemption Note"), a Note redeemable in installments ("Installment Note"), a Note with respect to which principal and/or interest is payable in one or more Specified Currencies other than the Specified Currency in which it is denominated ("Dual Currency Note"), a Note which is issued on a partly paid basis ("Partly Paid Note") or a combination of any of the foregoing, depending on the Redemption/Payment Basis shown in the applicable Pricing Supplement. (Where appropriate in the context, "Index Linked Interest Notes" and "Index Linked Redemption Notes" are referred to collectively as "Index Linked Notes".) The appropriate provisions of these Terms and Conditions will apply accordingly. Notes in definitive form are issued with Coupons attached, unless they are Zero Coupon Notes in which case references to interest (other than interest due after the Maturity Date), Coupons and Couponholders in these Terms and Conditions are not applicable. Wherever Dual Currency Notes or Index Linked Notes are issued to bear interest on a fixed or floating rate basis or on a non-interest bearing basis, the provisions in these Terms and Conditions relating to Fixed Rate Notes, Floating Rate Notes and Zero Coupon Notes, respectively, shall, where the context so admits, apply to such Dual Currency Notes or Index Linked Notes. Except as set out below, title to the Notes, Receipts and Coupons will pass by delivery. The holder of each Coupon or Receipt, whether or not such Coupon or Receipt is attached to a Note, in his capacity as such, shall be subject to and bound by all the provisions contained in the relevant Note. TMCC and any Paying Agent may deem and treat the bearer of any Note, Receipt or Coupon as the absolute owner thereof (whether or not overdue and notwithstanding any notice to the contrary, including any notice of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes but, in the case of any global Note, without prejudice to the provisions set out in the next succeeding paragraph. For so long as any of the Notes are represented by a global Note, each person who is for the time being shown in the records of Euroclear or of Clearstream, Luxembourg as the holder of a particular principal amount of Notes other than a clearing agency (including Clearstream, Luxembourg and Euroclear) that is itself an account holder of Clearstream, Luxembourg or Euroclear (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the nominal amount of such Notes standing to the account of any person shall be conclusive and binding for all purposes except in the case of manifest error) shall be treated Appendix A-3 by TMCC, the Agent and any other Paying Agent as the holder of such nominal amount of such Notes for all purposes other than with respect to the payment of principal (including premium (if any)) or interest on the Notes, the right to which shall be vested, as against TMCC, the Agent and any other Paying Agent solely in the bearer of the relevant global Note in accordance with and subject to its terms (and the expressions "Noteholder" and "holder of Notes" and related expressions shall be construed accordingly). Notes which are represented by a global Note will be transferable only in accordance with the rules and procedures for the time being of Euroclear or of Clearstream, Luxembourg, as the case may be. Any reference herein to Euroclear and/or Clearstream, Luxembourg shall, whenever the context so permits, be deemed to include a reference to any additional or alternative clearance system approved by TMCC and the Agent. If the Specified Currency of this Note is a currency of one of the member states of the European Union which has not adopted the euro, and if specified in the applicable Pricing Supplement, this Note shall permit redenomination and exchange (as referenced in Condition 17 below or in such other manner as set forth in the applicable Pricing Supplement) at the option of TMCC. 2. STATUS OF THE NOTES AND THE CREDIT SUPPORT AGREEMENTS The Notes will be unsecured general obligations of TMCC and will rank pari passu with all other unsecured and unsubordinated indebtedness for borrowed money of TMCC from time to time outstanding. Holders of the Notes, Receipts and Coupons have the benefits of the Credit Support Agreements governed by Japanese law, one between TMC and TFS dated July 14, 2000 and the other between TFS and TMCC dated October 1, 2000. 3. FURTHER ISSUES If indicated in the applicable Pricing Supplement, TMCC may from time to time, without the consent of the holders of Notes, Receipts or Coupons of a Series, create and issue further Notes of the same Series having the same terms and conditions as the Notes (or the same terms and conditions save for the first payment of interest thereon and the Issue Date thereof) so that the same shall be consolidated and form a single Series with the outstanding Notes and references in the Conditions to "Notes" shall be construed accordingly. 4. INTEREST (a) INTEREST ON FIXED RATE NOTES AND BUSINESS DAY CONVENTION FOR NOTES OTHER THAN FLOATING RATE NOTES AND INDEX LINKED INTEREST NOTES Each Fixed Rate Note bears interest on its outstanding nominal amount (or if it is a Partly Paid Note, the amount paid up) from (and including) the Interest Commencement Date which is specified in the applicable Pricing Supplement (or the Issue Date, if no Interest Commencement Date is separately specified) to but excluding the Maturity Date specified in the applicable Pricing Supplement at the rate(s) per annum equal to the Fixed Rate(s) of Interest specified in the applicable Pricing Supplement payable in arrears on the Interest Payment Date(s) in each year and on the Maturity Date so specified if it does not fall on an Interest Payment Date. Except as provided in the applicable Pricing Supplement, the amount of interest payable on each Interest Payment Date in respect of the Fixed Interest Period ending on such date will amount to the Appendix A-4 Fixed Coupon Amount as specified in the applicable Pricing Supplement. Payments of interest on any Interest Payment Date will, if so specified in the applicable Pricing Supplement, amount to the Broken Amount(s) so specified. As used in these Conditions, "Fixed Interest Period" means the period from (and including) an Interest Payment Date (or the Interest Commencement Date or Issue Date, as applicable) to (but excluding) the next (or first) Interest Payment Date or Maturity Date. Unless specified otherwise in the applicable Pricing Supplement, the "Following Business Day Convention" will apply to the payment of all Notes other than Floating Rate Notes or Index Linked Interest Notes, meaning that if the Interest Payment Date or Maturity Date would otherwise fall on a day which is not a Business Day (as defined in Condition 4(b)(i) below), the related payment of principal or interest will be made on the next succeeding Business Day as if made on the date such payment was due. If the "Modified Following Business Day Convention" is specified in the applicable Pricing Supplement for any Note (other than a Floating Rate Note or an Index Linked Interest Note), it shall mean that if the Interest Payment Date or Maturity Date would otherwise fall on a day which is not a Business Day (as defined in Condition 4(b)(i) below), the related payment of principal or interest will be made on the next succeeding Business Day as if made on the date such payment was due unless it would thereby fall into the next calendar month in which event the full amount of payment shall be made on the immediately preceding Business Day as if made on the day such payment was due. Unless specified otherwise in the applicable Pricing Supplement, the amount of interest due shall not be changed if payment is made on a day other than an Interest Payment Date or the Maturity Date as a result of the application of a Business Day Convention specified above or other Business Day Convention specified in the applicable Pricing Supplement. If interest is required to be calculated for a period ending other than on an Interest Payment Date (which for this purpose shall not include a period where a payment is made on a day other than an Interest Payment Date or the Maturity Date as a result of the application of a Business Day Convention as provided in the immediately preceding paragraph, unless specified otherwise in the applicable Pricing Supplement), such interest shall be calculated by applying the Fixed Rate of Interest to each Specified Denomination, multiplying such sum by the applicable Fixed Day Count Fraction or other Day Count Fraction specified in the Pricing Supplement, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. In these Conditions, "Fixed Day Count Fraction" means: (1) if "Actual/Actual (ISMA)" is specified in the applicable Pricing Supplement, the number of days in the relevant period from and including the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to but excluding the relevant payment date divided by (x) in the case of Notes where interest is scheduled to be paid only by means of regular annual payments, the number of days in the period from and including the most recent Interest Payment Date (or, if none, the Interest Commencement Date or Issue Date, as applicable) to but excluding the next scheduled Interest Payment Date or (y) in the case of Notes where interest is scheduled to be paid other than only by means of regular annual payments, the product of the number of Appendix A-5 days in the period from and including the most recent Interest Payment Date (or, if none, the Interest Commencement Date or Issue Date, as applicable) to but excluding the next scheduled Interest Payment Date and the number of Interest Payment Dates that would occur in one calendar year assuming interest was to be payable in respect of the whole of that year; (2) if "Actual/Actual (ISDA)" is specified in the applicable Pricing Supplement, the actual number of days in the relevant period from and including the most recent Interest Payment Date (or, if none, the Interest Commencement Date or Issue Date, as applicable) to but excluding the next scheduled Interest Payment Date divided by 365 (or, if any portion of that period falls in a leap year, the sum of (x) the actual number of days in that portion of the period falling in a leap year divided by 366; and (y) the actual number of days in that portion of the period falling in a non-leap year divided by 365); and (3) if "30/360" is specified in the applicable Pricing Supplement, the number of days in the period from and including the most recent Interest Payment Date (or, if none, the Interest Commencement Date or Issue Date, as applicable) to but excluding the next scheduled Interest Payment Date (such number of days being calculated on the basis of 12 30-day months) divided by 360 and, in the case of an incomplete month, the number of days elapsed; and "sub-unit" means, with respect to any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, with respect to euro, means one cent. (b) INTEREST ON FLOATING RATE NOTES AND INDEX LINKED INTEREST NOTES (i) Interest Payment Dates Each Floating Rate Note and Index Linked Interest Note bears interest on its outstanding nominal amount (or, if it is a Partly Paid Note, the amount paid up) from (and including) the Interest Commencement Date specified in the applicable Pricing Supplement (or the Issue Date, if no Interest Commencement Date is separately specified) and, unless specified otherwise in the applicable Pricing Supplement, such interest will be payable in arrears on the Maturity Date and on either: (A) the Specified Interest Payment Date(s) (each, together with the Maturity Date, an "Interest Payment Date") in each year specified in the applicable Pricing Supplement; or (B) if no Specified Interest Payment Date(s) is/are specified in the applicable Pricing Supplement, each date (each, together with the Maturity Date, an "Interest Payment Date") which falls the number of months or other period specified as the Specified Period in the applicable Pricing Supplement after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date or Issue Date, as applicable. Such interest will be payable in respect of each Interest Period (which expression shall, in these Terms and Conditions, mean the period from (and including) an Interest Payment Date (or Appendix A-6 the Interest Commencement Date or Issue Date, as applicable) to (but excluding) the next (or first) Interest Payment Date). If a Business Day Convention is specified in the applicable Pricing Supplement and (x) if there is no numerically corresponding day in the calendar month in which an Interest Payment Date should occur or (y) if any Interest Payment Date would otherwise fall on a day which is not a Business Day (as defined below), then, if the Business Day Convention specified is: (1) in any case where Specified Periods are specified in accordance with Condition 4(b)(i)(B) above, the Floating Rate Convention, such Interest Payment Date (i) in the case of (x) above, shall be the last day that is a Business Day in the relevant month and the provisions of (B) below in this subparagraph (1) shall apply mutatis mutandis or (ii) in the case of (y) above, shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event (A) such Interest Payment Date shall be brought forward to the immediately preceding Business Day and (B) each subsequent Interest Payment Date shall be the last Business Day in the month which falls the Specified Period after the preceding applicable Interest Payment Date occurred; or (2) the Following Business Day Convention, such Interest Payment Date shall be postponed to the next day which is a Business Day; or (3) the Modified Following Business Day Convention, such Interest Payment Date shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event such Interest Payment Date shall be brought forward to the immediately preceding Business Day; or (4) the Preceding Business Day Convention, such Interest Payment Date shall be brought forward to the immediately preceding Business Day. (4) the Preceding Business Day Convention, such Interest Payment Date shall be brought forward to the immediately preceding Business Day. If the accrual periods for calculating the amount of interest due on any Interest Payment Date are not to be changed even though an Interest Payment Date is changed because the originally scheduled Interest Payment Date falls on a day which is not a Business Day (as defined below), this will be specified in the Pricing Supplement by the notation "no adjustment for period end dates." In these Conditions, "Business Day" means (unless otherwise stated in the applicable Pricing Supplement) a day which is both: (A) a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in London and any other Applicable Business Center specified in the applicable Pricing Supplement; and (B) either (1) in relation to Notes denominated in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in the principal financial center of the country of the relevant Specified Currency (if other than London and any other Applicable Business Center specified in Appendix A-7 the applicable Pricing Supplement), or (2) in relation to Notes denominated in euro, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System (the "TARGET system") is open. Unless otherwise provided in the applicable Pricing Supplement, the principal financial center of any country for the purpose of these Terms and Conditions shall be as provided in the 2000 ISDA Definitions, (each as published by the International Swaps and Derivatives Association, Inc.), as amended and updated as of the first Issue Date of the Notes of this Series (the "ISDA Definitions") (except in the case of New Zealand and Australia, where the principal financial center will be as specified in the Pricing Supplement). (ii) Rate of Interest The Rate of Interest payable from time to time in respect of each Series of Floating Rate Notes and Index Linked Interest Notes shall be determined in the manner specified in the applicable Pricing Supplement. (iii) ISDA Determination (A) Where ISDA Determination is specified in the applicable Pricing Supplement as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be the relevant ISDA Rate plus or minus (as indicated in the applicable Pricing Supplement) the Margin (if any) as determined by the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement). For the purposes of this sub-paragraph (A), "ISDA Rate" for an Interest Period means a rate equal to the Floating Rate that would be determined under an interest rate swap transaction for that swap transaction under the terms of an agreement (regardless of any event of default or termination event thereunder) incorporating the ISDA Definitions with the holder of the relevant Note and under which: (1) the manner in which the Rate of Interest is to be determined is the "Floating Rate Option" as specified in the applicable Pricing Supplement; (2) TMCC is the "Floating Rate Payer"; (3) the Agent or other person specified in the applicable Pricing Supplement is the "Calculation Agent"; (4) the Interest Commencement Date is the "Effective Date"; (5) the aggregate principal amount of the Series is the "Notional Amount"; (6) the relevant Interest Period is the "Designated Maturity" as specified in the applicable Pricing Supplement; (7) the Interest Payment Dates are the "Floating Rate Payer Payment Dates"; (8) the Margin is the "Spread"; (9) the relevant Reset Date is either (i) if the applicable Floating Rate Option is based on the London inter-bank offered rate ("LIBOR") or on the Euro-zone inter-bank offered rate ("EURIBOR") for a currency, the first day of that Interest Period or (ii) in any other case, as specified in the applicable Pricing Supplement; and (10) all other terms are as specified in the applicable Pricing Supplement. Appendix A-8 (B) When Condition 4(b)(iii)(A) applies, with respect to each relevant Interest Payment Date: (1) the amount of interest determined for such Interest Payment Date shall be the Interest Amount for the relevant Interest Period for the purposes of these Terms and Conditions as though calculated under Condition 4(b)(vi) below; and (2) (i) "Floating Rate", "Floating Rate Option", "Floating Rate Payer", "Effective Date", "Notional Amount", "Floating Rate Payer Payment Dates", "Spread", "Calculation Agent", "Designated Maturity" and "Reset Date" have the meanings given to those terms in the ISDA Definitions; and (ii) "Euro-zone" means the region comprised of Member States of the European Union that adopt the single currency in accordance with the Treaty establishing the European Communities, as amended by the Treaty on European Union (the "Treaty"). (iv) Screen Determination Where Screen Rate Determination is specified in the applicable Pricing Supplement as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will, subject as provided below, be either: (x) the offered quotation; or (y) the arithmetic mean (rounded, if necessary, to the fifth decimal place with 0.000005 being rounded upwards) of the offered quotations, (expressed as a percentage rate per annum), for the Reference Rate (as specified in the applicable Pricing Supplement) which appears or appear, as the case may be, on the Relevant Screen Page (as set forth in the applicable Pricing Supplement) as at 11:00 a.m. (London time, in the case of LIBOR, or Brussels time, in the case of EURIBOR) on the Interest Determination Date (as defined below) in question plus or minus (as specified in the applicable Pricing Supplement) the Margin (if any), all as determined by the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement). Unless specified otherwise in the applicable Pricing Supplement, if five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Agent for the purpose of determining the arithmetic mean (rounded as provided above) of such offered quotations. In addition: (A) if, in the case of (x) above, no such rate appears or, in the case of (y) above, fewer than two of such offered rates appear at such time or if the offered rate or rates which appears or appear, as the case may be, as at such time do not apply to a period of a duration equal to the relevant Interest Period, the Rate of Interest for such Interest Period shall, subject as provided below and except as otherwise indicated in the applicable Pricing Supplement, be the arithmetic mean (rounded, if necessary, to the fifth decimal place with 0.000005 being rounded upwards) of the offered quotations (expressed as a percentage rate per annum), of which the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement) is advised by all Reference Banks (as defined below) as at 11:00 a.m. (London time) on the Interest Determination Date plus or minus (as specified in the applicable Pricing Supplement) Appendix A-9 the Margin (if any), all as determined by the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement); (B) except as otherwise indicated in the applicable Pricing Supplement, if on any Interest Determination Date to which Condition 4(b)(iv)(A) applies two or three only of the Reference Banks advise the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement) of such offered quotations, the Rate of Interest for the next Interest Period shall, subject as provided below, be determined as in Condition 4(b)(iv)(A) on the basis of the rates of those Reference Banks advising such offered quotations; (C) except as otherwise indicated in the applicable Pricing Supplement, if on any Interest Determination Date to which Condition 4(b)(iv)(A) applies one only or none of the Reference Banks advises the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement) of such rates, the Rate of Interest for the next Interest Period shall, subject as provided below and except as otherwise indicated in the applicable Pricing Supplement, be whichever is the higher of: (1) the Rate of Interest in effect for the last preceding Interest Period to which Condition 4(b)(iv)(A) shall have applied (plus or minus (as specified in the applicable Pricing Supplement), where a different Margin is to be applied to the next Interest Period than that which applied to the last preceding Interest Period, the Margin relating to the next Interest Period in place of the Margin relating to the last preceding Interest Period); or (2) the reserve interest rate (the "Reserve Interest Rate") which shall be the rate per annum which the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement) determines to be either (x) the arithmetic mean (rounded, if necessary, to the fifth decimal place with 0.000005 being rounded upwards) of the lending rates for the Specified Currency which banks selected by the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement) in the principal financial center of the country of the Specified Currency (which, if Australian dollars, shall be Sydney, if New Zealand dollars, shall be Auckland and if euro, shall be London, unless specified otherwise in the applicable Pricing Supplement) are quoting on the relevant Interest Determination Date for the next Interest Period to the Reference Banks or those of them (being at least two in number) to which such quotations are, in the opinion of the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement), being so made plus or minus (as specified in the applicable Pricing Supplement) the Margin (if any), or (y) in the event that the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement) can determine no such arithmetic mean, the lowest lending rate for the Specified Currency which banks selected by the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement) in the principal financial center of the country of the Specified Currency (which, if Australian dollars, shall be Sydney, if New Zealand dollars, shall be Auckland and if euro, shall be London, unless specified otherwise in the applicable Pricing Supplement) are quoting on such Interest Determination Date to leading European banks for the next Interest Period plus or minus (as specified in the applicable Pricing Supplement) the Margin (if any), provided that Appendix A-10 if the banks selected as aforesaid by the Agent (or such other Calculation Agent specified in the applicable Pricing Supplement) are not quoting as mentioned above, the Rate of Interest shall be the Rate of Interest specified in (1) above; (D) the expression "Reference Screen Page" means such page, whatever its designation, on which the Reference Rate that is for the time being displayed on the Reuters Monitor Money Rates Service or Dow Jones Markets Limited or other such service, as specified in the applicable Pricing Supplement; (E) unless otherwise specified in the applicable Pricing Supplement, the Reference Banks will be the principal London offices of JPMorgan Chase Bank, National Westminster Bank PLC, UBS Limited and The Bank of Tokyo-Mitsubishi International PLC. TMCC shall procure that, so long as any Floating Rate Note or Index Linked Interest Note to which Condition 4(b)(iv)(A) is applicable remains outstanding, in the case of any bank being unable or unwilling to continue to act as a Reference Bank, TMCC shall specify the London office of some other leading bank engaged in the eurodollar market to act as such in its place; (F) the expression "Interest Determination Date" means, unless otherwise specified in the applicable Pricing Supplement, (x) other than in the case of Condition 4(b)(iv)(A), with respect to Notes denominated in any Specified Currency other than Sterling or euro, the second Banking Day in London prior to the commencement of the relevant Interest Period and, in the case of Condition 4(b)(iv)(A), the second Banking Day in the principal financial center of the country of the Specified Currency (which, if Australian dollars, shall be Sydney, if New Zealand dollars, shall be Auckland and if euro, shall be London) prior to the commencement of the relevant Interest Period; (y) with respect to Notes denominated in Sterling, the first Banking Day in London of the relevant Interest Period; and (z) with respect to Notes denominated in euro, the second day on which the TARGET system is open prior to the commencement of the relevant Interest Period. (G) the expression "Banking Day" means, in respect of any place, any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in that place or, as the case may be, as indicated in the applicable Pricing Supplement; and (H) if the Reference Rate from time to time in respect of Floating Rate Notes or Index Linked Interest Notes is specified in the applicable Pricing Supplement as being other than LIBOR or EURIBOR, any additional provisions relevant in determining the Rate of Interest in respect of such Notes will be set forth in the applicable Pricing Supplement. (v) Minimum and/or maximum Rate of Interest If the applicable Pricing Supplement specifies a Minimum Rate of Interest for any Interest Period, then in no event shall the Rate of Interest for such Interest Period be less than such Minimum Rate of Interest. If the applicable Pricing Supplement specifies a Maximum Rate of Interest for any Interest Period, then in no event shall the Rate of Interest for such Interest Period be greater than such Maximum Rate of Interest. (vi) Determination of Rate of Interest and calculation of Interest Amount Appendix A-11 The Agent (or, if the Agent is not the Calculation Agent, the Calculation Agent specified in the applicable Pricing Supplement) will, at or as soon as practicable after each time at which the Rate of Interest is to be determined, determine the Rate of Interest (subject to any Minimum or Maximum Rate of Interest specified in the applicable Pricing Supplement) and calculate the amount of interest (the "Interest Amount") payable on the Floating Rate Notes or Index Linked Interest Notes in respect of each Specified Denomination for the relevant Interest Period. Each Interest Amount shall be calculated by applying the Rate of Interest to each Specified Denomination, multiplying such product by the applicable Day Count Fraction, as specified in the applicable Pricing Supplement, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any sub-unit being rounded upwards or otherwise in accordance with applicable market convention or as specified in the applicable Pricing Supplement. "Day Count Fraction" means, in respect of the calculation of an amount of interest for any Interest Period: (i) if "Actual/365" or "Actual/Actual" is specified in the applicable Pricing Supplement, the actual number of days in the Interest Period divided by 365 (or, if any portion of that Interest Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Interest Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Interest Period falling in a non-leap year divided by 365); (ii) if "Actual/365 (Fixed)" is specified in the applicable Pricing Supplement, the actual number of days in the Interest Period divided by 365; (iii) if "Actual/360" is specified in the applicable Pricing Supplement, the actual number of days in the Interest Period divided by 360; (iv) if "30/360", "360/360" or "Bond Basis" is specified in the applicable Pricing Supplement, the number of days in the Interest Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (a) the last day in the Interest Period is the 31st day of a month but the first day of the Interest Period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (b) the last day of the Interest Period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month); (v) if "30E/360" or "Eurobond Basis" is specified in the applicable Pricing Supplement, the number of days in the Interest Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months, without regard to the date of the first day or last day of the Interest Period unless, in the case of an Interest Period ending on the Maturity Date, the Maturity Date is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month); and (vi) if "Sterling/FRN" is specified in the applicable Pricing Supplement, the number of days in the Interest Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366. Appendix A-12 (vii) Notification of Rate of Interest and Interest Amount The Agent will notify or cause to be notified TMCC and any stock exchange on which the relevant Floating Rate Notes or Index Linked Interest Notes are listed of the Rate of Interest and each Interest Amount for each Interest Period and the relevant Interest Payment Date and will cause the same to be published in accordance with Condition 16 as soon as possible after their determination but in no event later than the fourth London Business Day after their determination. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without publication as aforesaid or prior notice in the event of an extension or shortening of the Interest Period in accordance with the provisions hereof. Each stock exchange on which the relevant Floating Rate Notes or Index Linked Interest Notes are for the time being listed will be promptly notified of any such amendment. For the purposes of this subparagraph (vii), the expression "London Business Day" means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for general business in London. (viii) Certificates to be final All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this paragraph (b), whether by the Agent or other Calculation Agent, shall (in the absence of willful default, bad faith or manifest error) be binding on TMCC, the Agent, the Calculation Agent the other Paying Agents and all Noteholders, Receiptholders and Couponholders and (in the absence as aforesaid) no liability to TMCC, the Noteholders, the Receiptholders or the Couponholders shall attach to the Agent or the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions. (ix) Limitations on Interest In addition to any Maximum Rate of Interest which may be applicable to any Floating Rate Note or Index Linked Interest Notes pursuant to Condition 4(b)(v) above, the interest rate on Floating Rate Notes or Index Linked Interest Notes shall in no event be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. (c) INDEX LINKED NOTES AND DUAL CURRENCY NOTES In the case of Index Linked Notes or Dual Currency Notes, if the Rate of Interest or Interest Amount cannot be determined by reference to an index and/or a formula or, as the case may be, an exchange rate, such Rate of Interest or Interest Amount payable shall be determined in the manner specified in the applicable Pricing Supplement. (d) ZERO COUPON NOTES When a Zero Coupon Note becomes due and repayable prior to the Maturity Date and is not paid when due, the amount due and repayable shall be the Amortized Face Amount of such Note as determined in accordance with Condition 5(f)(iii). As from the Maturity Date, any overdue principal of such Note shall bear interest at a rate per annum equal to the Accrual Yield set forth in the applicable Pricing Supplement. Appendix A-13 (e) PARTLY PAID NOTES In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero Coupon Notes), interest will accrue as aforesaid on the paid up nominal amount of such Notes and otherwise as specified in the applicable Pricing Supplement. (f) ACCRUAL OF INTEREST Each Note (or in the case of the redemption in part only of a Note, such part to be redeemed) will cease to bear interest (if any) from the due date for its redemption unless, upon due presentation thereof, payment of principal is improperly withheld or refused. In such event, interest will continue to accrue (as well after as before judgment) until whichever is the earlier of (i) the day on which all sums due in respect of such Note up to that day are received by or on behalf of the holder of such Note; and (ii) the day on which the Agent has notified the holder thereof (either in accordance with Condition 16 or individually) of receipt of all sums due in respect thereof up to that date. 5. REDEMPTION AND PURCHASE (a) AT MATURITY Unless otherwise indicated in the applicable Pricing Supplement and unless previously redeemed or purchased and cancelled as specified below, Notes will be redeemed by TMCC at their Final Redemption Amount specified in, or determined in the manner specified in, the applicable Pricing Supplement in the relevant Specified Currency on the Maturity Date specified in the applicable Pricing Supplement. (b) REDEMPTION FOR TAX REASONS TMCC may redeem the Notes of this Series as a whole but not in part at any time at their Early Redemption Amount, together, if appropriate, with accrued interest to but excluding the date fixed for redemption, if TMCC shall determine that as a result of any change in or amendment to the laws (or any regulations or rulings promulgated thereunder) of the United States of America or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in application or official interpretation of such laws, regulations or rulings, which amendment or change is effective on or after the latest Issue Date of the Notes of this Series, TMCC would be required to pay Additional Amounts, as provided in Condition 9, on the occasion of the next payment due in respect of the Notes of this Series. The Notes of this Series are also subject to redemption as a whole but not in part in the other circumstances described in Condition 9. Notice of intention to redeem Notes will be given at least once in accordance with Condition 16 not less than 30 days nor more than 60 days prior to the date fixed for redemption, provided that no such notice of redemption shall be given earlier than 90 days prior to the effective date of such change or amendment and that at the time notice of such redemption is given, such obligation to pay such Additional Amounts remains in effect. From and after any redemption date, if monies for the redemption of Notes shall have been made available for redemption on such redemption date, such Notes shall cease to bear interest, if applicable, and the only right of the holders of such Notes and any Receipts or Coupons appertaining thereto shall be to receive Appendix A-14 payment of the Early Redemption Amount and, if appropriate, all unpaid interest accrued to such redemption date. (c) PRICING SUPPLEMENT The Pricing Supplement applicable to the Notes of this Series shall indicate either: (i) that the Notes of this Series cannot be redeemed prior to their Maturity Date (except as otherwise provided in paragraph (b) above and in Condition 13); or (ii) that such Notes will be redeemable at the option of TMCC and/or the holders of the Notes prior to such Maturity Date in accordance with the provisions of paragraphs (d) and/or (e) below on the date or dates and at the amount or amounts indicated in the applicable Pricing Supplement. (d) REDEMPTION AT THE OPTION OF TMCC If so specified in the applicable Pricing Supplement, TMCC may, having given: (i) not more than 60 nor less than 30 days notice to the holders of the Notes of this Series in accordance with Condition 16, or such other notice as is specified in the applicable Pricing Supplement; and (ii) not less than 5 days before the date the notice referred to in (i) is required to be given (or such other notice as is specified in the applicable Pricing Supplement), notice to the Agent; (which notices shall be irrevocable), repay all or some only of the Notes of this Series then outstanding on the Optional Redemption Date(s) and at the Optional Redemption Amount(s) indicated in the applicable Pricing Supplement together, if appropriate, with accrued interest. In the event of a redemption of some only of such Notes of this Series, such redemption must be for an amount being the Minimum Redemption Amount or a Maximum Redemption Amount, as indicated in the applicable Pricing Supplement. In the case of a partial redemption of definitive Notes of this Series, the Notes of this Series to be repaid will be selected individually by lot not more than 60 days prior to the date fixed for redemption and a list of the Notes of this Series called for redemption will be published in accordance with Condition 16 not less than 30 days prior to such date, or such other period as is specified in the applicable Pricing Supplement. In the case of a partial redemption of Notes which are represented by a global Note, the relevant Notes will be redeemed in accordance with the rules of Euroclear and/or Clearstream, Luxembourg. Unless specified otherwise in the applicable Pricing Supplement, if an Optional Redemption Date would otherwise fall on a day which is not a Business Day (as defined in Condition 4(b)(i)), it shall be subject to adjustment in accordance with the Business Day Convention applicable to the Notes or such other Business Day Convention specified in the applicable Pricing Supplement. (e) REDEMPTION AT THE OPTION OF THE NOTEHOLDERS Unless otherwise specified in the applicable Pricing Supplement, the Notes will not be subject to repayment at the option of the Noteholders. The term of any such option shall be set forth in the applicable Pricing Supplement. Appendix A-15 (f) EARLY REDEMPTION AMOUNTS For the purposes of paragraph (b) above and Condition 13, Notes will be redeemed at an amount (the "Early Redemption Amount") calculated as follows: (i) in the case of Notes with a Final Redemption Amount equal to the Issue Price, at the Final Redemption Amount thereof; or (ii) in the case of Notes (other than Zero Coupon Notes) with a Final Redemption Amount which is or may be greater or less than the Issue Price or which is payable in a Specified Currency other than that in which the Notes are denominated, at the amount set out in, or determined in the manner set out in, the applicable Pricing Supplement or, if no such amount or manner is set out in the applicable Pricing Supplement, at their nominal amount; or (iii) in the case of Zero Coupon Notes, at an amount (the "Amortized Face Amount") equal to: (A) the sum of (x) the Reference Price specified in the applicable Pricing Supplement and (y) the product of the Accrual Yield specified in the applicable Pricing Supplement (compounded annually) being applied to the Reference Price from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Note becomes due and repayable; or (B) if the amount payable in respect of any Zero Coupon Note upon redemption of such Zero Coupon Note pursuant to paragraph (b) above or upon its becoming due and repayable as provided in Condition 13 is not paid or available for payment when due, the amount due and repayable in respect of such Zero Coupon Note shall be the Amortized Face Amount of such Zero Coupon Note calculated as provided above as though the references in sub-paragraph (A) to the date fixed for redemption or the date upon which the Zero Coupon Note becomes due and repayable were replaced by references to the date (the "Reference Date") which is the earlier of: (1) the date on which all amounts due in respect of the Note have been paid; and (2) the date on which the full amount of the moneys repayable has been received by the Agent and notice to that effect has been given in accordance with Condition 16. The calculation of the Amortized Face Amount in accordance with this sub-paragraph (B) will continue to be made, after as well as before judgment, until the Reference Date unless the Reference Date falls on or after the Maturity Date, in which case the amount due and repayable shall be the nominal amount of such Note together with interest at a rate per annum equal to the Accrual Yield. Unless specified otherwise in the applicable Pricing Supplement, where any such calculation is to be made for a period which is not a whole number of years, it shall be made (I) in the case of a Zero Coupon Note other than a Zero Coupon Note payable in euro, on the basis of a 360-day year consisting of 12 months of 30 days each (or 365/366 days in the case of Notes denominated in Sterling) and, in the case of an incomplete month, the number of days elapsed or (II) in the Appendix A-16 case of a Zero Coupon Note payable in euro, on the basis of the actual number of days elapsed divided by 365 (or, if any of the days elapsed falls in a leap year, the sum of (x) the number of those days falling in a leap year divided by 366 and (y) the number of those days falling in a non-leap year divided by 365) or (in either case) on such other calculation basis as may be specified in the applicable Pricing Supplement. (g) INSTALLMENTS Any Note which is repayable in installments will be redeemed in the Installment Amounts and on the Installment Dates specified in the applicable Pricing Supplement. (h) PARTLY PAID NOTES If the Notes are Partly Paid Notes, they will be redeemed, whether at maturity, early redemption or otherwise in accordance with the provisions of this Condition 5 as amended or varied by the applicable Pricing Supplement. (i) PURCHASES TMCC may at any time purchase or otherwise acquire Notes in the open market or otherwise at any price. If purchases are made by tender, tenders must be available to all holders of Notes of a Series alike. (j) CANCELLATION, RESALE OR REISSUANCE AT THE OPTION OF TMCC All Notes redeemed shall be, and all Notes purchased or otherwise acquired as aforesaid (together, in the case of definitive Notes, with all unmatured Coupons or Receipts attached thereto or purchased or acquired therewith) may, at the option of TMCC, either be (i) resold or reissued, or held by TMCC for subsequent resale or reissuance, or (ii) cancelled, in which event such Notes, Receipts and Coupons may not be resold or reissued. 6. PAYMENTS (a) METHOD OF PAYMENT Subject as provided below, payments in a currency other than euro will be made by transfer to an account in the Specified Currency (which, in the case of a payment in Yen to a non-resident of Japan, shall be a non-resident account) maintained by the payee with, or by a check in the Specified Currency drawn on, a bank (which, in the case of a payment in Yen to a non-resident of Japan, shall be an authorized foreign exchange bank) in the principal financial center of the country of such Specified Currency (which, if Australian dollars, shall be Sydney and if New Zealand dollars, shall be Auckland). Payments in euro will be made by credit or transfer to a euro account (or any other account to which euro may be credited or transferred) specified by the payee or by euro check. Notwithstanding the above provisions of this Condition 6(a), a check may not be delivered to an address in, and an amount may not be transferred to an account at a bank located in, the United States of America or its possessions by any office or agency of TMCC, the Agent or any Paying Agent, except as provided in Condition 6(b). Payments will be subject in all cases to any fiscal or other laws and regulations applicable thereto in the place of payment, but without prejudice to the provisions of Condition 9. Appendix A-17 (b) PRESENTATION OF NOTES, RECEIPTS, COUPONS AND TALONS Payments of principal in respect of definitive Notes will (subject as provided below) be made in the Specified Currency in the manner provided in paragraph (a) against presentation and surrender (or, in the case of part payment of a sum due only, endorsement) of definitive Notes and payments of interest in respect of the definitive Notes will (subject as provided below) be made in the Specified Currency in the manner provided in paragraph (a) against presentation and surrender (or, in the case of part payment of a sum due only, endorsement) of Coupons, in each case at the specified office of any Paying Agent outside the United States of America and its possessions. In the case of definitive Notes, payments of principal with respect to installments (if any), other than the final installment, will (subject as provided below) be made in the manner provided in paragraph (a) against presentation and surrender (or, in the case of part payment of a sum due only, endorsement) of the relevant Receipt. Each Receipt must be presented for payment of the relevant installment together with the relevant definitive Note against which the amount will be payable with respect to that installment. If any definitive Note is redeemed or becomes repayable prior to the stated Maturity Date, principal will be payable in the manner provided in paragraph (a) on presentation and surrender of such definitive Note together with all unmatured Receipts appertaining thereto. Receipts presented without the definitive Note to which they appertain and unmatured Receipts do not constitute valid obligations of TMCC. Upon the date on which any definitive Note becomes due and repayable, unmatured Receipts (if any) appertaining thereto (whether or not attached) shall become void and no payment shall be made in respect thereof. Upon the date on which any Fixed Rate Notes in definitive form (other than Dual Currency Notes or Index Linked Notes) become due and repayable, such Notes should be presented for payment together with all unmatured Coupons appertaining thereto (which expression shall for this purpose include Coupons to be issued on exchange of matured Talons) failing which the amount of any missing unmatured Coupon (or, in the case of payment not being made in full, the same proportion of the aggregate amount of such missing unmatured Coupon as the sum so paid bears to the sum due) will be deducted from the sum due for payment. Unless otherwise specified in the applicable Pricing Supplement, each amount of principal so deducted will be paid in the manner mentioned above against surrender of the related missing Coupon at any time before the expiry of five years after the Relevant Date (as defined in Condition 15) in respect of such principal (whether or not such Coupon would otherwise have become void under Condition 15). Upon any Fixed Rate Note becoming due and repayable prior to its Maturity Date, all unmatured Talons (if any) appertaining thereto will become void and no further Coupons will be issued in respect thereof. Upon the date on which any Floating Rate Note, Dual Currency Note or Index Linked Note in definitive form becomes due and repayable, all unmatured Coupons and Talons (if any) relating thereto (whether or not attached) shall become void and no payment or, as the case may be, exchange for further Coupons, shall be made in respect thereof. If the due date for redemption of any Note in definitive form is not an Interest Payment Date, interest (if any) accrued with respect to such Note from and including the preceding Interest Payment Date or, as the case may be, the Interest Commencement Date or Issue Date (as applicable) shall be payable only against surrender of the relevant definitive Note. Appendix A-18 Payments of principal and interest (if any) in respect of Notes of this Series represented by any global Note will (subject as provided below) be made in the manner specified above and otherwise in the manner specified in the relevant global Note against presentation or surrender, as the case may be, of such global Note at the specified office of any Paying Agent located outside the United States except as provided below. A record of each payment made against presentation or surrender of such global Note, distinguishing between any payment of principal and any payment of interest, will be made on such global Note by the Agent and such record shall be prima facie evidence that the payment in question has been made. The holder of the relevant global Note shall be the only person entitled to receive payments in respect of Notes represented by such global Note and TMCC will be discharged by payment to, or to the order of, the holder of such global Note with respect to each amount so paid. Each of the persons shown in the records of Euroclear or Clearstream, Luxembourg as the beneficial holder of a particular nominal amount of Notes must look solely to Euroclear and/or Clearstream, Luxembourg, as the case may be, for his share of each payment so made by TMCC to, or to the order of, the holder of the relevant global Note. No person other than the holder of the relevant global Note shall have any claim against TMCC in respect of payments due on that global Note. Notwithstanding the foregoing, payments in respect of the Notes denominated in U.S. dollars will only be made at the specified office of a Paying Agent in the United States (which expression, as used herein, means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction) if: (i) TMCC has appointed Paying Agents with specified offices outside the United States with the reasonable expectation that such Paying Agents would be able to make payment at such specified offices outside the United States of the full amount owing in respect of the Notes in the manner provided above when due; (ii) payment of the full amount owing in respect of the Notes at such specified offices outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions; and (iii) such payment is then permitted under United States law without involving, in the opinion of TMCC, adverse tax consequences to TMCC. (c) PAYMENT BUSINESS DAY Unless specified otherwise in the applicable Pricing Supplement, if the date for payment of any amount in respect of any Note, Receipt or Coupon is not a Payment Business Day in a place of presentation, the holder thereof shall not be entitled to payment until the next following Payment Business Day in the relevant place and shall not be entitled to further interest or other payment in respect of such delay. For these purposes, unless otherwise specified in the applicable Pricing Supplement, "Payment Business Day" means any day which is: (i) a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in: (A) the relevant place of presentation; Appendix A-19 (B) London; and (C) any other Applicable Business Center specified in the applicable Pricing Supplement; and (ii) either (A) in relation to any sum payable in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in the principal financial center of the country of the relevant Specified Currency (if other than the place of presentation, London and any other Applicable Business Center and which if the Specified Currency is Australian dollars or New Zealand dollars shall be Sydney or Auckland, respectively, unless specified otherwise in the applicable Pricing Supplement) or (B) in relation to any sum payable in euro, a day on which the TARGET system is open. (d) INTERPRETATION OF PRINCIPAL AND INTEREST Any reference in these Terms and Conditions to principal in respect of the Notes shall be deemed to include, as applicable: (i) any Additional Amounts which may be payable under Condition 9 in respect of principal; (ii) the Final Redemption Amount of the Notes; (iii) the Early Redemption Amount of the Notes; (iv) in relation to Notes redeemable in installments, the Installment Amounts; (v) any premium and any other amounts which may be payable under or in respect of the Notes; (vi) in relation to Zero Coupon Notes, the Amortized Face Amount; and (vii) the Optional Redemption Amount(s) (if any) of the Notes. Any reference in these Terms and Conditions to interest in respect of the Notes shall be deemed to include, as applicable, any Additional Amounts which may be payable under Condition 9, except as provided in clause (i) above. 7. AGENT AND PAYING AGENTS The names of the initial Agent and the other initial Paying Agent and their initial specified offices are set out on the inside back cover page of the Offering Circular. In acting under the Agency Agreement, the Agent and the Paying Agents will act solely as agents of TMCC and do not assume any obligations or relationships of agency or trust to or with the Noteholders, Receiptholders or Couponholders, except that (without affecting the obligations of TMCC to the Noteholders, Receiptholders and Couponholders to repay Notes and pay interest thereon) funds received by the Agent for the payment of the principal of or interest on the Notes shall be held in trust by it for the Noteholders and/or Receiptholders and/or Couponholders until the expiration of the relevant period of prescription under Condition 15. TMCC agrees to perform and observe the obligations imposed upon it under the Agency Agreement and to use its best efforts to cause the Agent and the Paying Agents to perform and observe the obligations imposed upon them under the Agency Agreement. The Agency Agreement contains provisions for the indemnification of the Agent and the Paying Agents and for relief from responsibility in certain Appendix A-20 circumstances, and entitles any of them to enter into business transactions with TMCC without being liable to account to the Noteholders, Receiptholders or the Couponholders for any resulting profit. TMCC is entitled to vary or terminate the appointment of any Paying Agent or any other Paying Agent appointed under the terms of the Agency Agreement and/or appoint additional or other Paying Agents and/or approve any change in the specified office through which any Paying Agent acts, provided that: (i) so long as the Notes of this Series are listed on any stock exchange, there will at all times be a Paying Agent with a specified office in each location required by the rules and regulations of the relevant stock exchange or listing authority; (ii) there will at all times be a Paying Agent with a specified office in a city approved by the Agent in continental Europe; (iii) there will at all times be an Agent; and (iv) if any tax, assessment or other governmental charge required to be withheld or deducted by any Paying Agent from any payment of principal or interest in respect of any Note, Receipt or Coupon, where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to any European Union Directive on the taxation of savings implementing the conclusions of the ECOFIN Council meeting of 26th-27th November 2000 or any law implementing or complying with, or introduced to conform to, such Directive, TMCC will ensure that it maintains, if possible, a Paying Agent in a Member State of the European Union that will not be obliged to withhold or deduct tax pursuant to any such Directive or law. In addition, with respect to Notes denominated in U.S. dollars, TMCC shall forthwith appoint a Paying Agent having a specified office in New York City in the circumstances described in the final paragraph of Condition 6(b). Any variation, termination, appointment or change shall only take effect (other than in the case of insolvency, when it shall be of immediate effect) after not less than 30 nor more than 45 days prior notice thereof shall have been given to the Agent and the Noteholders in accordance with Condition 16. 8. EXCHANGE OF TALONS On and after the Interest Payment Date on which the final Coupon comprised in any Coupon sheet matures, the Talon (if any) forming part of such Coupon sheet may be surrendered at the specified office of the Agent or any other Paying Agent in exchange for a further Coupon sheet including (if such further Coupon sheet does not include Coupons to, and including, the final date for the payment of interest due in respect of the Note to which it appertains) a further Talon, subject to the provisions of Condition 15. Each Talon shall, for the purposes of these Terms and Conditions, be deemed to mature on the Interest Payment Date on which the final Coupon comprised in the relative Coupon sheet matures. 9. PAYMENT OF ADDITIONAL AMOUNTS TMCC will, subject to certain limitations and exceptions (set forth below), pay to a Noteholder, Receiptholder or Couponholder who is a United States Alien (as defined below) such amounts ("Additional Amounts") as may be necessary so that every net payment of Appendix A-21 principal or interest in respect of the Notes, Receipts or Coupons, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge ("Tax") imposed upon such Noteholder, Receiptholder or Couponholder, or by reason of the making of such payment, by the United States or any political subdivision or taxing authority thereof or therein, will not be less than the amount provided for in the Notes, Receipts or Coupons. However, TMCC shall not be required to make any payment of Additional Amounts for or on account of: (a) any Tax which would not have been imposed but for (i) the existence of any present or former connection between such Noteholder, Receiptholder or Couponholder or any beneficial owner of a Note, Receipt, or Coupon (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Noteholder, Receiptholder, Couponholder or beneficial owner, if such Noteholder, Receiptholder, Couponholder or beneficial owner is an estate, trust, partnership or corporation) and the United States, including, without limitation, being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein, or (ii) such Noteholder's, Receiptholder's, Cou-ponholder's or beneficial owner's past or present status as a personal holding company, passive foreign investment company, foreign personal holding company, controlled foreign corporation or a private foundation (as those terms are defined for United States tax purposes) or as a corporation which accumulates earnings to avoid United States federal income tax; (b) any estate, inheritance, gift, sales, transfer, personal property or similar Tax; (c) any Tax that would not have been so imposed but for the presentation of a Note, Receipt or Coupon for payment on a date more than 15 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later; (d) any Tax which is payable otherwise than by withholding from payments of principal or interest in respect of the Notes, Receipts or Coupons; (e) any Tax imposed on interest received by (i) a 10% shareholder of TMCC within the meaning of Internal Revenue Code Section 871(h)(3)(b) or Section 881(c)(3)(b) or (ii) a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business; (f) any Tax required to be withheld or deducted by any Paying Agent from any payment of principal or interest in respect of any Note, Receipt or Coupon, if such payment can be made without such withholding or deduction by any other Paying Agent with respect to the Notes; (g) any Tax which would not have been imposed but for the failure to comply with certification, information, documentation, or other reporting requirements concerning the nationality, residence, identity or connection with the United States of the Noteholder, Receiptholder or Couponholder or of the beneficial owner of such Note, Receipt or Coupon, if such compliance is required by statute or by regulation of the United States Treasury Department as a precondition to relief or exemption from such Tax; Appendix A-22 (h) any Tax required to be withheld or deducted by any Paying Agent from any payment of principal or interest in respect of any Note, Receipt or Coupon, where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to any European Union Directive on the taxation of savings implementing the conclusions of the ECOFIN Council meeting of 26th-27th November 2000 or any law implementing or complying with, or introduced to conform to, such Directive; or (i) any combination of items (a), (b), (c), (d), (e), (f), (g) and (h) above; nor shall Additional Amounts be paid to any Noteholder, Receiptholder or Couponholder who is a fiduciary or partnership or other than the sole beneficial owner of the Note, Receipt or Coupon to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner of the Note, Receipt or Coupon would not have been entitled to payment of the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the holder of the Note, Receipt or Coupon. The term "United States Alien" means any corporation, individual, fiduciary or partnership that for United States federal income tax purposes is a foreign corporation, nonresident alien individual, nonresident alien fiduciary of a foreign estate or trust, or foreign partnership one or more members of which is a foreign corporation, nonresident alien individual or nonresident alien fiduciary of a foreign estate or trust. If TMCC shall determine that any payment made outside the United States by TMCC or any of its Paying Agents of the full amount of the next scheduled payment of either principal or interest due in respect of any Note, Receipt or Coupon of this Series would, under any present or future laws or regulations of the United States affecting taxation or otherwise, be subject to any certification, information or other reporting requirements of any kind, the effect of which requirements is the disclosure to TMCC, any of its Paying Agents or any governmental authority of the nationality, residence or identity (as distinguished from status as a United States Alien) of a beneficial owner of such Note, Receipt or Coupon who is a United States Alien (other than such requirements which (i) would not be applicable to a payment made to a custodian, nominee or other agent of the beneficial owner, or which can be satisfied by such a custodian, nominee or other agent certifying to the effect that such beneficial owner is a United States Alien; provided, however, in each case that payment by such custodian, nominee or agent to such beneficial owner is not otherwise subject to any requirements referred to in this sentence, (ii) are applicable only to payment by a custodian, nominee or other agent of the beneficial owner to or on behalf of such beneficial owner, or (iii) would not be applicable to a payment made by any other paying agent of TMCC), TMCC shall redeem the Notes of this Series as a whole but not in part at a redemption price equal to the Early Redemption Amount together, if appropriate, with accrued interest to, but excluding, the date fixed for redemption, such redemption to take place on such date not later than one year after the publication of notice of such determination. If TMCC becomes aware of an event that might give rise to such certification, information or other reporting requirements, TMCC shall, as soon as practicable, solicit advice of independent counsel selected by TMCC to establish whether such certification, information or other reporting requirements will apply and, if such requirements will apply, TMCC shall give prompt notice of such determination (a "Tax Notice") in accordance with Condition 16 stating in such notice the effective date of such certification, information or other reporting requirements and, if applicable, the date by which the redemption shall take place. Notwithstanding the foregoing, Appendix A-23 TMCC shall not redeem Notes if TMCC shall subsequently determine not less than 30 days prior to the date fixed for redemption that subsequent payments would not be subject to any such requirements, in which case TMCC shall give prompt notice of such determination in accordance with Condition 16 and any earlier redemption notice shall thereby be revoked and of no further effect. Notwithstanding the foregoing, if and so long as the certification, information or other reporting requirements referred to in the preceding paragraph would be fully satisfied by payment of a backup withholding tax or similar charge, TMCC may elect prior to publication of the Tax Notice to have the provisions described in this paragraph apply in lieu of the provisions described in the preceding paragraph, in which case the Tax Notice shall state the effective date of such certification, information or reporting requirements and that TMCC has elected to pay Additional Amounts rather than redeem the Notes. In such event, TMCC will pay as Additional Amounts such amounts as may be necessary so that every net payment made following the effective date of such certification, information or reporting requirements outside the United States by TMCC or any of its Paying Agents of principal or interest due in respect of a Note, Receipt or Coupon to a holder who certifies to the effect that the beneficial owner of such Note, Receipt or Coupon is a United States Alien (provided that such certification shall not have the effect of communicating to TMCC or any of its Paying Agents or any governmental authority the nationality, residence or identity of such beneficial owner) after deduction or withholding for or on account of such backup withholding tax or similar charge (other than a backup withholding tax or similar charge which (i) is imposed as a result of certification, information or other reporting requirements referred to in the second parenthetical clause of the first sentence of the preceding paragraph, or (ii) is imposed as a result of the fact that TMCC or any of its Paying Agents has actual knowledge that the holder or beneficial owner of such Note, Receipt or Coupon is not a United States Alien but is within the category of persons, corporations or other entities described in clause (a)(i) of the third preceding paragraph, or (iii) is imposed as a result of presentation of such Note, Receipt or Coupon for payment more than 15 days after the date on which such payment becomes due and payable or on which payment thereof is duly provided for, whichever occurs later), will not be less than the amount provided for in such Note, such Receipt or such Coupon to be then due and payable. In the event TMCC elects to pay such Additional Amounts, TMCC will have the right, at its sole option, at any time, to redeem the Notes of this Series, as a whole but not in part at a redemption price equal to their Early Redemption Amount, together, if appropriate, with accrued interest to the date fixed for redemption including any Additional Amounts required to be paid under this paragraph. If TMCC has made the determination described in the preceding paragraph with respect to certification, information or other reporting requirements applicable to interest only and subsequently makes a determination in the manner and of the nature referred to in such preceding paragraph with respect to such requirements applicable to principal, TMCC will redeem the Notes of this Series in the manner and on the terms described in the preceding paragraph (except as provided below), unless TMCC elects to have the provisions of this paragraph apply rather than the provisions of the immediately preceding paragraph. If in such circumstances the Notes are to be redeemed, TMCC will be obligated to pay Additional Amounts with respect to interest, if any, accrued to the date of redemption. If TMCC has made the determination described in the preceding paragraph and subsequently makes a determination in the manner and of the nature referred to in such preceding paragraph that the level of withholding applicable to principal or interest has been Appendix A-24 increased, TMCC will redeem the Notes of this Series in the manner and on the terms described in the preceding paragraph (except as provided below), unless TMCC elects to have the provisions of this paragraph apply rather than the provisions of the immediately preceding paragraph. If in such circumstances the Notes are to be redeemed, TMCC will be obligated to pay Additional Amounts with respect to the original level of withholding on principal and interest, if any, accrued to the date of redemption. 10. NEGATIVE PLEDGE The Notes will not be secured by any mortgage, pledge or other lien. TMCC shall not pledge or otherwise subject to any lien, any property or assets of TMCC unless the Notes are secured by such pledge or lien equally and ratably with all other obligations secured thereby so long as such obligations shall be so secured; provided, however, that such covenant will not apply to liens securing obligations which do not in the aggregate at any one time outstanding exceed 5 percent of Consolidated Net Tangible Assets (as defined below) of TMCC and its consolidated subsidiaries and also will not apply to: (a) the pledge of any assets of TMCC to secure any financing by TMCC of the exporting of goods to or between, or the marketing thereof in, countries other than the United States in connection with which TMCC reserves the right, in accordance with customary and established banking practice, to deposit, or otherwise subject to a lien, cash, securities or receivables, for the purpose of securing banking accommodations or as the basis for the issuance of bankers' acceptances or in aid of other similar borrowing arrangements; (b) the pledge of receivables payable in currencies other than United States dollars to secure borrowings in countries other than the United States; (c) any deposit of assets of TMCC with any surety company or clerk of any court, or in escrow, as collateral in connection with, or in lieu of, any bond on appeal by TMCC from any judgment or decree against it, or in connection with other proceedings in actions at law or in equity by or against TMCC or in favor of any governmental bodies to secure progress, advance or other payments in the ordinary course of TMCC's business; (d) any lien or charge on any property of TMCC, tangible or intangible, real or personal, existing at the time of acquisition or construction of such property (including acquisition through merger or consolidation) or given to secure the payment of all or any part of the purchase or construction price thereof or to secure any indebtedness incurred prior to, at the time of, or within one year after, the acquisition or completion of construction thereof for the purpose of financing all or any part of the purchase or construction price thereof; (e) any lien in favor of the United States of America or any state thereof or the District of Columbia, or any agency, department or other instrumentality thereof, to secure progress, advance or other payments pursuant to any contract or provisions of any statute; (f) any lien securing the performance of any contract or undertaking not directly or indirectly in connection with the borrowing of money, obtaining of advances or credit or the securing of debt, if made and continuing in the ordinary course of business; Appendix A-25 (g) any lien to secure non-recourse obligations in connection with TMCC's engaging in leveraged or single- investor lease transactions; and (h) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any lien, charge or pledge referred to in clauses (a) through (g) above; provided, however, that the amount of any and all obligations and indebtedness secured thereby will not exceed the amount thereof so secured immediately prior to the time of such extension, renewal or replacement, and that such extension, renewal or replacement will be limited to all or a part of the property which secured the charge or lien so extended, renewed or replaced (plus improvements on such property). "Consolidated Net Tangible Assets" means the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (i) all current liabilities and (ii) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles of TMCC and its consolidated subsidiaries, all as set forth on the most recent balance sheet of TMCC and its consolidated subsidiaries prepared in accordance with generally accepted accounting principles as practiced in the United States. 11. CONSOLIDATION OR MERGER TMCC may consolidate with, or sell, lease or convey all or substantially all of its assets as an entirety to, or merge with or into any other corporation provided that in any such case, (i) either TMCC shall be the continuing corporation, or the successor corporation shall be a corporation organized and existing under the laws of the United States of America or any state thereof and such successor corporation shall expressly assume the due and punctual payment of the principal of and interest (including Additional Amounts as provided in Condition 9) on all the Notes, Receipts and Coupons, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Note to be performed by TMCC by an amendment to the Agency Agreement executed by such successor corporation, TMCC and the Agent, and (ii) immediately after giving effect to such transaction, no Event of Default under Condition 13, and no event which, with notice or lapse of time or both, would become such an Event of Default shall have happened and be continuing. In case of any such consolidation, merger, sale, lease or conveyance and upon any such assumption by the successor corporation, such successor corporation shall succeed to and be substituted for TMCC, with the same effect as if it had been named herein as TMCC, and the predecessor corporation, except in the event of a conveyance by way of lease, shall be relieved of any further obligation under this Note and the Agency Agreement. 12. MEETINGS, MODIFICATIONS AND WAIVERS The Agency Agreement contains provisions which, unless otherwise provided in the Pricing Supplement, are binding on TMCC, the Noteholders, the Receiptholders and the Couponholders, for convening meetings of holders of Notes, Receipts and Coupons to consider matters affecting their interests, including the modification or waiver of the Terms and Conditions applicable to the Notes. The Agency Agreement, the Notes and any Receipts and Coupons attached to the Notes may be amended by TMCC (and, in the case of the Agency Agreement, the Agent) (i) for the purpose of curing any ambiguity, or for curing, correcting or supplementing any defective provision Appendix A-26 contained therein, or to evidence the succession of another corporation to TMCC as provided in Condition 11, (ii) to make any further modifications of the terms of the Agency Agreement necessary or desirable to allow for the issuance of any additional Notes (which modifications shall not be materially adverse to holders of outstanding Notes) or (iii) in any manner which TMCC (and, in the case of the Agency Agreement, the Agent) may deem necessary or desirable and which shall not materially adversely affect the interests of the holders of the Notes, Receipts and Coupons, to all of which each holder of Notes, Receipts and Coupons shall, by acceptance thereof, consent. In addition, with the written consent of the holders of not less than a majority in aggregate principal amount of the Notes then outstanding affected thereby, or by a resolution adopted by a majority in aggregate principal amount of such outstanding Notes affected thereby present or represented at a meeting of such holders at which a quorum is present, as provided in the Agency Agreement (provided that such resolution shall be approved by the holders of not less than 25 percent of the aggregate principal amount of Notes affected thereby then outstanding), TMCC and the Agent may from time to time and at any time enter into agreements modifying or amending the Agency Agreement or the terms and conditions of the Notes, Receipts and Coupons for the purpose of adding any provisions to or changing in any manner or eliminating any provisions of the Agency Agreement or of modifying in any manner the rights of the holders of Notes, Receipts and Coupons; provided, however, that no such agreement shall, without the consent or the affirmative vote of the holder of each Note affected thereby, (i) change the stated maturity of the principal of or any installment of interest on any Note, (ii) reduce the principal amount of or interest on any Note, (iii) change the obligation of TMCC to pay Additional Amounts as provided in Condition 9, (iv) reduce the percentage in principal amount of outstanding Notes the consent of the holders of which is necessary to modify or amend the Agency Agreement or the terms and conditions of the Notes or to waive any future compliance or past default, or (v) reduce the percentage in principal amount of outstanding Notes the consent of the holders of which is required at any meeting of holders of Notes at which a resolution is adopted. The quorum at any meeting called to adopt a resolution will be persons holding or representing a majority in aggregate principal amount of the Notes at the time outstanding affected thereby and at any adjourned meeting will be one or more persons holding or representing 25 percent in aggregate principal amount of such Notes at the time outstanding affected thereby. Any instrument given by or on behalf of any holder of a Note in connection with any consent to any such modification, amendment or waiver will be irrevocable once given and will be conclusive and binding on all subsequent holders of such Note. Any modifications, amendments or waivers to the Agency Agreement or to the terms and conditions of the Notes, Receipts and Coupons will be conclusive and binding on all holders of Notes, Receipts and Coupons, whether or not they have given such consent or were present at any meeting, and whether or not notation of such modifications, amendments or waivers is made upon the Notes, Receipts and Coupons. It shall not be necessary for the consent of the holders of Notes under this Condition 12 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. Notes authenticated and delivered after the execution of any amendment to the Agency Agreement, Notes, Receipts or Coupons may bear a notation in form approved by the Agent as to any matter provided for in such amendment to the Agency Agreement. Appendix A-27 New Notes so modified as to conform, in the opinion of the Agent and TMCC, to any modification contained in any such amendment may be prepared by TMCC, authenticated by the Agent and delivered in exchange for the Notes then outstanding. For the purposes of this Condition 12 and Condition 13 below, the term "outstanding" means, in relation to the Notes, all Notes issued under the Agency Agreement other than (i) those which have been redeemed in full in accordance with the Agency Agreement or these Terms and Conditions, (ii) those in respect of which the date for redemption in accordance with these Terms and Conditions has occurred and the redemption moneys therefor (including all interest (if any) accrued thereon to the date for such redemption and any interest (if any) payable under these Terms and Conditions after such date) have been duly paid to the Agent as provided in the Agency Agreement (and, where appropriate, notice has been given to the Noteholders in accordance with Condition 16) and remain available for payment against presentation of the Notes, (iii) those which have become void under Condition 15, (iv) those which have been purchased or otherwise acquired and cancelled as provided in Condition 5, and those which have been purchased or otherwise acquired and are being held by TMCC for subsequent resale or reissuance as provided in Condition 5 during the time so held, (v) those mutilated or defaced Notes which have been surrendered in exchange for replacement Notes pursuant to Condition 14, (vi) (for the purposes only of determining how many Notes are outstanding and without prejudice to their status for any other purpose) those Notes alleged to have been lost, stolen or destroyed and in respect of which replacement Notes have been issued pursuant to Condition 14 and (vii) temporary global Notes to the extent that they shall have been duly exchanged in whole for permanent global Notes or definitive Notes and permanent global Notes to the extent that they shall have been duly exchanged in whole for definitive Notes, in each case pursuant to their respective provisions. 13. DEFAULT AND ACCELERATION (a) In the event that (each an "Event of Default"): (i) default shall be made in the payment when due of any installment of interest or any Additional Amounts on any of the Notes continued for a period of 30 days after the date when due; or (ii) default shall be made for more than three days in the payment when due of the principal of any Note (whether at maturity or upon redemption or otherwise); or (iii) default in the deposit of any sinking fund payment with respect to any Note when and as due; or (iv) TMCC shall fail to perform or observe any other term, covenant or agreement contained in the Terms and Conditions applicable to any of the Notes or in the Agency Agreement for a period of 60 days after the date on which written notice of such failure, requiring TMCC to remedy the same, first shall have been given to the Agent and TMCC by the holders of at least 25 percent in aggregate principal amount of the Notes then outstanding; or (v) there is an acceleration of, or failure to pay when due and payable, any indebtedness for money borrowed of TMCC exceeding $10,000,000 and such acceleration is not rescinded or annulled, or such indebtedness is not discharged, within 10 days after Appendix A-28 written notice thereof has first been given to TMCC and the Agent by the holders of not less than 10 percent in aggregate principal amount of Notes then outstanding; or (vi) the entry by a court having competent jurisdiction of (a) a decree or order granting relief in respect of TMCC in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) a decree or order adjudging TMCC to be insolvent, or approving a petition seeking reorganization, arrangement, adjustment or composition of TMCC and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (c) a final and non-appealable order appointing a custodian, receiver, liquidator, assignee, trustee or other similar official of TMCC or of any substantial part of the property of TMCC, or ordering up the winding up or liquidation of the offices of TMCC; or (vii) the commencement by TMCC of a voluntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or of a voluntary proceeding seeking to be adjudicated insolvent or the consent of TMCC to the entry of a decree or order for relief in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any insolvency proceedings against it, or the filing by TMCC of a petition or answer or consent seeking reorganization or relief under any applicable law, or the consent by TMCC to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or similar official of TMCC or any substantial part of the property of TMCC or the making by TMCC of an assignment for the benefit of creditors, or the taking of corporate action by TMCC in furtherance of any such action; then the holder of any Note may, at its option, declare the principal of such Note and the interest, if any, accrued thereon to be due and payable immediately by written notice to TMCC and the Agent at its main office in London, and unless all such defaults shall have been cured by TMCC prior to receipt of such written notice, the principal of such Note and the interest, if any, accrued thereon shall become and be immediately due and payable. At any time after such a declaration of acceleration with respect to the Notes has been made and before a judgment or decree for payment of the money due with respect to any Note has been obtained by any Noteholder, such declaration and its consequences may be rescinded and annulled upon the written consent of holders of a majority in aggregate principal amount of the Notes then outstanding, or by resolution adopted by a majority in aggregate principal amount of the Notes present or represented at a meeting of holders of the Notes at which a quorum is present, as provided in the Agency Agreement, if: (1) TMCC has paid or deposited with the Agent a sum sufficient to pay (A) all overdue installments of interest on the Notes, and (B) the principal of Notes which has become due otherwise than by such declaration of acceleration; and (2) all Events of Default with respect to the Notes, other than the non-payment of the principal of such Notes which has become due solely by such declaration of acceleration, have been cured or waived as provided in paragraph (b) below. Appendix A-29 No such rescission shall affect any subsequent default or impair any right consequent thereon. (b) Any Events of Default by TMCC, other than the events described in paragraph (a)(i) or (a)(ii) above or in respect of a covenant or provision which cannot be modified and amended without the written consent of the holders of all outstanding Notes, may be waived by the written consent of holders of a majority in aggregate principal amount of the Notes then outstanding affected thereby, or by resolution adopted by the holders of a majority in aggregate principal amount of such Notes then outstanding present or represented at a meeting of holders of the Notes affected thereby at which a quorum is present, as provided in the Agency Agreement. 14. REPLACEMENT OF NOTES, RECEIPTS, COUPONS AND TALONS Should any Note, Receipt, Coupon or Talon be mutilated, defaced or destroyed or be lost or stolen, it may be replaced at the specified office of the Agent in London (or such other place outside the United States as may be notified to the Noteholders), in accordance with all applicable laws and regulations, upon payment by the claimant of the expenses incurred by TMCC and the Agent in connection therewith and on such terms as to evidence, indemnity, security or otherwise as TMCC and the Agent may require. Mutilated or defaced Notes, Receipts, Coupons or Talons must be surrendered before replacements will be issued. 15. PRESCRIPTION Unless provided otherwise in the applicable Pricing Supplement, the Notes, Receipts and Coupons will become void unless presented for payment within a period of five years from the Relevant Date (as defined below) relating thereto. Any moneys paid by TMCC to the Agent for the payment of principal or interest in respect of the Notes and remaining unclaimed for a period of five years shall forthwith be repaid to TMCC and holders shall thereafter look only to TMCC for payment thereof. All liability with respect thereto shall cease when the Notes, Receipts and Coupons become void. As used herein, the "Relevant Date" means: (A) the date on which such payment first becomes due; or (B) if the full amount of the moneys payable has not been received by the Agent on or prior to such due date, the date on which the full amount of such moneys having been so received, notice to that effect shall have been given to the Noteholders in accordance with Condition 16. 16. NOTICES All notices regarding the Notes shall be published in one leading English language daily newspaper with circulation in the United Kingdom (which is expected to be the Financial Times) or, if this is not practicable, one other such English language newspaper as TMCC, in consultation with the Agent, shall decide. TMCC shall also ensure that notices are duly published in a manner which complies with the rules and regulations of any stock exchange on which the Notes are for the time being listed or any other relevant authority. Any notice published as aforesaid shall be deemed to have been given on the date of such publication or, if published more than once, on the date of the first such publication. Receiptholders and Couponholders will Appendix A-30 be deemed for all purposes to have notice of the contents of any notice given to the holders of the Notes in accordance with this Condition. Until such time as any definitive Notes are issued, so long as the global Notes for this Series are held in their entirety on behalf of Euroclear and Clearstream, Luxembourg, there may be substituted for such publication in such newspaper the delivery of the relevant notice to Euroclear and Clearstream, Luxembourg for communication by them to the holders of the Notes of this Series; provided that, for so long as the Notes are listed on a stock exchange or are admitted to listing by another relevant authority and the rules of that stock exchange or relevant authority so require, such notice will be published in a daily newspaper of general circulation in the place or places required by that stock exchange (or that relevant authority). Any notice delivered to Euroclear and Clearstream, Luxembourg shall be deemed to have been given to the holders of the Notes of this Series on the seventh day after the day on which the said notice was given to Euroclear and Clearstream, Luxembourg, or on such other day as is specified in the applicable Pricing Supplement. Notices to be given by any holder of the Notes of this Series shall be in writing and given by lodging the same, together with the relevant Note or Notes, with the Agent. While any of the Notes of this Series are represented by a global Note, such notice may be given by any holder of a Note of this Series to the Agent via Euroclear and/or Clearstream, Luxembourg, as the case may be, in such manner as the Agent and Euroclear and/or Clearstream, Luxembourg, as the case may be, may approve for this purpose. 17. REDENOMINATION AND EXCHANGE TMCC may (if so specified in the applicable Pricing Supplement) without the consent of the holder of any Note, Receipt, Coupon or Talon, redenominate into euro all, but not some only, of the Notes of any Series on or after the date on which the member state of the European Union in whose national currency such Notes are denominated has become a participant member in the third stage of the European economic and monetary union as more fully set out in the applicable Pricing Supplement. TMCC may (if so specified in the applicable Pricing Supplement) without the consent of the holder of any Note, Receipt, Coupon or Talon, elect that the Notes shall be exchangeable for Notes expressed to be denominated in euro in accordance with such arrangements as TMCC may decide. 18. GOVERNING LAW The Agency Agreement and the Notes, the Receipts and the Coupons are governed by, and shall be construed in accordance with, the laws of the State of New York, United States of America, applicable to agreements made and to be performed wholly within such jurisdiction. Appendix A-31 ANNEX B TO APPENDIX D FORM OF PRICING SUPPLEMENT (TO BE COMPLETED BY THE HEAD MANAGER /DEALER AND EXECUTED BY THE COMPANY) PRICING SUPPLEMENT DATED TOYOTA MOTOR CREDIT CORPORATION ISSUE OF [AGGREGATE NOMINAL AMOUNT OF TRANCHE] [TITLE OF NOTES] UNDER THE U.S. $20,000,000,000 EURO MEDIUM-TERM NOTE PROGRAM This document constitutes the Pricing Supplement relating to the issue of Notes described herein. Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions set forth in the Offering Circular dated September 30, 2003. This Pricing Supplement contains the final terms of the Notes and must be read in conjunction with such Offering Circular, including all documents incorporated by reference therein. The following alternative language applies if the first tranche of an issue which is being increased was issued under an Offering Circular with an earlier date. Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the "Conditions") set forth in the Offering Circular dated [original date]. This Pricing supplement contains the final terms of the Notes and must be read in conjunction with the Offering Circular dated [current date] [and the supplemental Offering Circular dated __________________ ], save in respect of the terms and conditions which are extracted from the Offering Circular dated [original date] and are attached hereto.] [Include whichever of the following apply or specify as "Not Applicable" (N/A). Note that the numbering should remain as set out below, even if "Not Applicable" is indicated from individual paragraphs or sub-paragraphs. Italics denote directions for completing the Pricing Supplement.] 1. [(i)] Series Number: [ ] [(ii) Tranche Number:] (If fungible with an [Delete if not applicable] existing Series, details of that Series, including the date on which the Notes become fungible) 2. Specified Currency (or Currencies in the case of [ ] Dual Currency Notes): 3. Aggregate Nominal Amount [i] Series: [ ] [ii Tranche:] [Delete if not applicable] 4. [i] Issue Price: [ ] per cent of the Aggregate Nominal Amount [plus accrued interest from [insert date] (in the case of fungible issues only, if applicable) [(ii) Net proceeds: [ ] (Required only for listed issues) 5. Specified Denominations: [ ](1)
- ---------- (1) Notes (including Notes denominated in Sterling) in respect of which the issue proceeds are to be accepted by the issuer in the United Kingdom or whose issue otherwise constitutes a contravention of S 19 of FSMA and which have a maturity of less than one year must have a minimum redemption value of (pound)100,000 (or its equivalent in other currencies). Appendix D-1 6. [(i)] Issue Date: [ ] [(ii) Interest Commencement Date (if [ ] different from the Issue Date):] 7. Maturity Date: [ ] 8. Interest Basis: [ % Fixed Rate] [specify reference rate] 3 /3 % Floating Rate] [Zero Coupon] [Index Linked Interest] [Other (specify)] (further particulars specified below) 9. Redemption/Payment Basis: [Redemption at par] [Index Linked Redemption] [Dual Currency] [Partly Paid] [Installment] [Other (specify)] 10. Change of Interest Basis or Redemption/Payment [Specify details of any provision for Basis: convertibility of Notes into another Interest Basis or Redemption/Payment Basis] 11. Listing: [London/specify other/None] 12. Method of distribution: [Syndicated/Non-syndicated] PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE 13. Fixed Rate Note Provisions (and, to the extent [Applicable/Not Applicable] applicable, Dual Currency Notes, Index Linked (If not applicable, delete the remaining Redemption Notes, Partly Paid Notes and sub-paragraphs of this paragraph) Installment Notes): (i) Fixed Rate[(s)] of Interest: [ ] per cent. per annum [payable [annually/ semi-annually/quarterly/monthly] in arrear] (ii) Interest Payment Date(s): [ ] in each year (iii) Fixed Coupon Amount[(s)]: [ ] per [ ] in Nominal Amount (iv) Broken Amount(s): [Insert particulars of any initial or final broken interest amounts which do not correspond with the Fixed Coupon Amount[(s)]] (v) Fixed Day Count Fraction: [30/360 or Actual/Actual (ISMA) or Actual/Actual (ISDA) or specify other] (vi) Business Day Convention: [Following Business Day Convention/Modified Following Business Day Convention/specify other] (vii) Applicable Business Centers [London/specify others] for purposes of "Business Day" Definition: (viii) Determination Dates: [ ] in each year (insert regular interest payment dates, ignoring issue date or maturity date in the case of a long or short first or last coupon. N.B. only relevant where Day Count Fraction is Actual/Actual (ISMA)) (ix) Other terms relating to the [Not Applicable/give details] method of calculating interest for Fixed Rate Notes: 14. Floating Rate Note Provisions (and, to the [Applicable/Not Applicable] extent applicable, Dual Currency Notes, Index (If not applicable, delete the remaining Linked Notes, Partly Paid Notes and Installment sub-paragraphs of this paragraph) Notes): (i) Specified Period(s)/Specified [ ] Interest Payment Dates: Appendix D-2 (ii) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention/Other (give details)] (iii) Applicable Business Centers for [London/specify others] purposes of "Business Day" Definition: (iv) Manner in which the Rate(s) of [Screen Rate Determination/ISDA Interest and Interest Amount is/are Determination/Other (give details)] to be determined: (v) Calculation Agent responsible for [ ] calculating the Rate(s) of Interest and Interest Amount(s) (if not the Agent): (vi) Screen Rate Determination --Reference Rate: [ ] (Either LIBOR, EURIBOR or other, although additional information may be required if other --including any amendment to fallback provisions in the Conditions) --Relevant Screen Page: [ ] (In the case of EURIBOR, if not Telerate 248 ensure it is a page which shows a composite rate) --Applicable "Interest Determination [Same as Condition 4(b)(iv)(F)/specify other] Date" definition (if different from that in Condition 4(b)(iv)(F)): (vii) ISDA Determination --Floating Rate Option: [ ] --Designated Maturity: [ ] --Reset Date: [ ] (viii) Margin(s): [+/-][ ] per cent. per annum (ix) Minimum Rate of Interest: [ ] per cent. per annum (x) Maximum Rate of Interest: [ ] per cent. per annum (xi) Day Count Fraction: [Actual/365, Actual/Actual, Actual/365(Fixed), Actual/360, 30/360, 360/360, Bond Basis, 30E/360 or Eurobond Basis/Other (give details)] (xii) Fall back provisions, rounding [ ] [ ] provisions, denominator and any other terms relating to the method of calculating interest on Floating Rate Notes, if different from those set out in the Conditions: 15. Zero Coupon Note Provisions: [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Accrual Yield: [ ] per cent. per annum (ii) Reference Price: [ ] (iii) Any other formula/basis of [ ] determining amount payable: (iv) Business Day Convention: [Following Business Day Convention/Modified Following Business Day Convention/specify other] (v) Applicable Business Centers for [London/specify others] purposes of "Business Day" Definition: (vi) Calculation Agent responsible for [ ] calculating the amount due (if not the Agent): Appendix D-3 16. Index Linked Interest Note Provisions: [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Index/Formula: [Give or annex details] (ii) Calculation Agent responsible for [ ] calculating the principal and/or interest due (if not the Agent): (iii) Provisions for determining Coupon [ ] where calculation by reference to Index and/or Formula is impossible or impracticable: (iv) Specified Period(s)/Specified [ ] Interest Payment Dates: (v) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention/Other (give details)] (vi) Applicable Business Centers for [London/specify other] purposes of "Business Day" definition: (vii) Minimum Rate of Interest: [ ] per cent. per annum (viii) Maximum Rate of Interest: [ ] per cent. per annum (ix) Day Count Fraction: [ ] 17. Index Linked Redemption Note Provisions: [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Index/Formula: [Give or annex details] (ii) Calculation Agent responsible for [ ] calculating the principal and/or interest due (if not the Agent): (iii) Provisions for determining payments [ ] where calculation by reference to Index and/or Formula is impossible or impractical: 18. Dual Currency Note Provisions: [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Rate of Exchange/method of [Give details] calculating Rate of Exchange: (ii) Calculation Agent, if any, [ ] responsible for calculating the principal and/or interest due (if not the Agent): (iii) Provisions applicable where [ ] calculation by reference to Rate(s) of Exchange is impossible or impractical: (iv) Person at whose option Specified [ ] Currency(ies) is/are payable: PROVISIONS RELATING TO REDEMPTION Appendix D-4 19. TMCC's Optional Redemption: [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Optional Redemption Date(s): [ ] (ii) Optional Redemption Amount(s) of each [ ] Note and method, if any, of calculation of such amount(s): (iii) If redeemable in part: (a) Minimum Redemption Amount: [ ] (b) Maximum Redemption Amount: [ ] (iv) The applicable period for notice to [Same as Condition 5(d)/specify other] Noteholders (if different from that set out in Condition 5(d)): (v) The applicable period for notice to [Same as Condition 5(d)/specify other] the Agent (if different from that set out in Condition 5(d)): 20. Redemption at the option of the Noteholders: [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Optional Redemption Date(s): [ ] (ii) Optional Redemption Amount(s) of each [ ] per Note of [ ] specified Note and method, if any, of denomination calculation of such amount(s): (iii) Notice Period [ ] (iv) Other details: [ ] 21. Final Redemption Amount of each Note: [ ] per Note of [ ] specified denomination/other/see Appendix] 22. Early Redemption Amount(s) of each Note payable [ ] on redemption for taxation reasons or on event of default and/or the method of calculating the same (if required or if different from that set out in Condition 5(f)): GENERAL PROVISIONS APPLICABLE TO THE NOTES 23 Form of Notes: [Temporary global Note exchangeable for a permanent global Note which is exchangeable for definitive Notes [only if (as described more fully in the Conditions) (a) there should be an Event of Default; (b) Euroclear, Clearstream, Luxem-bourg and any other relevant clearance system are all no longer willing or able to properly discharge their responsibilities and the Agent and TMCC are unable to locate a qualified successor; (c) upon the election of TMCC; or (d) upon 90 days written notice of any Noteholder, all as set forth more fully in the Conditions/ Other (give details)] [Temporary Global Note exchangeable for definitive notes on and after the Exchange Date.] Appendix D-5 24. Financial Center(s) or other special provisions [Not Applicable/give details. Note that this relating to Payment Dates: item relates to the date and place of payment, and not interest period end dates, to which items [13(ii), 14(ii) and 16(v) relates] ] 25. Talons for future Coupons or Receipts to be [Yes/No] attached to definitive Notes (and dates on which (If yes, give details) such Talons mature): 26. Details relating to Partly Paid Notes: [Not Applicable/give details] including, without limitation, amount of each payment comprising the Issue Price and date on which each payment is to be made and consequences (if any) of failure to pay, including any right of TMCC to forfeit the Notes and interest due on late payment: 27. Details relating to Installment Notes: amount of [Not Applicable/give details] each installment, date on which each payment is to be made 28. Whether the Notes will be subject to [Yes/No] redenomination or exchange into euro: (If yes, specify particular provision(s) applicable in full) 29. Whether Notes are convertible at option of TMCC/ [ ] Holder into Notes of another Interest/Payment Basis, Date of Conversion or Option Exercise/ Interest Payment Basis/other relevant terms: 30. Further Issues and Consolidation: [TMCC may from time to time, without the consent of the holders of Notes, Receipts or Coupons of this Series, create and issue further Notes of this Series having the same terms and conditions as the Notes (or the same terms and conditions save for the first payment of interest thereon and the Issue Date thereof) so that the same shall be consolidated and form a single Series with the outstanding Notes and references in the Conditions to "Notes" shall be construed accordingly.] 31. Cost, if any, to be borne by Noteholders in [ ] connection with exchanges for security printed definitive Notes: 32. Other terms or special conditions: [Not Applicable/give details] DISTRIBUTION 33. (i) If syndicated, names of Managers: [Not Applicable/give names] (ii) Stabilizing Manager (if any): [Not Applicable/give name] 34. If non-syndicated, name of Dealer: [ ] 35. Additional selling restrictions: Selling restrictions, including those applicable to the United States and United Kingdom are set out in the Offering Circular and Appendix B to the Fourth Amended and Restated Program Agreement dated October 1, 2002, as amended by Amendment No. 1 dated September 30, 2003 [and the Syndicate Purchase Agreement dated [ ], among the Dealers and the Company]. OPERATIONAL INFORMATION 36. ISIN Code: [ ] Appendix D-6 37. Common Code: [ ] 38. Any clearing system(s) other than Euroclear Bank [Not Applicable/give name(s) and number(s)] S.A./ N.V. and Clearstream Banking societe anonyme and the relevant identification numbers(s): 39. Delivery: Delivery [against/free of] payment 40. Additional Paying Agent(s) (if any): [ ]
Acceptance on behalf of TMCC of the terms of the Pricing Supplement as of the date above first written: TOYOTA MOTOR CREDIT CORPORATION By cc: JPMorgan Chase Bank [The following information is to be included only in the version of the Pricing Supplement which is submitted to the UK Listing Authority and the London Stock Exchange in the case of Notes to be listed on the Official List and admitted for trading by the London Stock Exchange: Application is hereby made to list this issue of Notes pursuant to the listing of the U.S. $20,000,000,000 Euro Medium-Term Note Program of Toyota Motor Credit Corporation (as from [insert date]). JPMORGAN CHASE BANK (As Agent) By: ] ------------------------------------------------------ Appendix D-7 ANNEX D ------- TRADING DESK INFORMATION THE COMPANY ----------- TOYOTA MOTOR CREDIT CORPORATION 19001 South Western Avenue Torrance, California 90509 Telephone No: (310) 468-4001; Fax No: (310) 468-6194 Attention: Vice President, Treasury THE DEALERS ----------- MERRILL LYNCH INTERNATIONAL BNP PARIBAS CREDIT SUISSE FIRST BOSTON Merrill Lynch Financial Centre 10 Harewood Avenue (EUROPE) LIMITED 2 King Edward Street London NW1 6AA One Cabot Square London EC1A 1HQ Telephone: 0207 595 2000 Canary Wharf Telephone: 0207 995 3995 Telefax: 0207 595 2555 London E14 4QJ Telefax: 0207 995 4327 Attn: Euro Medium Term Note Desk Telephone: 0207 888 4021 Attn: EMTN Trading and Telefax: 0207 888 3719 Distribution Desk Attn: MTN Trading Desk DRESDNER BANK AKTIENGESELLSCHAFT J.P. MORGAN SECURITIES LTD. MORGAN STANLEY & CO. INTERNATIONAL Jurgen-Ponto-Platz 1 125 London Wall LIMITED 60301 Frankfurt am Main London EC2Y 5AJ 25 Cabot Square Federal Republic of Germany Telephone: 0207 779 3469 Canary Wharf Telephone: 0207 475 4375 Telefax: 0207 777 9153 London E14 4QA Telefax: 0207 475 6051 Attn: Euro Medium Term Note Desk Telephone: 0207 677 7799 Attn: MTN-Desk Telefax: 0207 677 7999 Attn: Debt Capital Markets--Head of Transaction Management Group NOMURA INTERNATIONAL PLC UBS LIMITED Nomura House 100 Liverpool Street 1 St. Martin's-le-Grand London EC2M 2RH London EC1A 4NP Telephone: 0207 567 2479 Telephone: 0207 236 8056 Telefax: 0207 568 3349 Telefax: 0207 521 2616 Attn: MTNs and Private Placements Attn: MTN Trading
Appendix D-8 APPENDIX E ---------- FORM OF THE NOTES ----------------- Each Tranche of Notes will initially be represented by one or more temporary global Notes, without receipts, interest coupons or talons, which will be delivered to a common depositary for Euroclear and Clearstream, Luxembourg. While any Note is represented by a temporary global Note, payments of principal and interest (if any) due prior to the Exchange Date (as defined below) will be made against presentation of the temporary global Note only to the extent that certification of non-U.S. beneficial ownership (in the form set out in the temporary global Note) has been received from Euroclear or Clearstream, Luxembourg. Interests in the temporary global Note will be exchangeable for interests in a permanent global Note and/or for security printed definitive Notes (as specified under "Terms and Conditions of the Notes" and in the applicable Pricing Supplement) not earlier than the date (the "Exchange Date") which is 40 days after completion of the distribution of the relevant Tranche, provided that certification of non-U.S. beneficial ownership has been received. No interest or principal payments will be made on a temporary global Note after the Exchange Date. Payments of principal or interest (if any) in respect of a permanent global Note will be made through Euroclear and Clearstream, Luxembourg, against presentation or surrender, as the case may be, of the permanent global Note without any requirement for further certification. A permanent global Note will be exchangeable in whole, but not in part, for security printed definitive Notes with, where applicable, receipts, interest coupons and talons attached not earlier than the Exchange Date (i) at the option of TMCC; (ii) at the option of Noteholders, unless specified otherwise in the applicable Pricing Supplement and (iii) under certain other limited circumstances set forth under "Terms and Conditions of the Notes". If a portion of the Notes continue to be represented by the temporary global Note after the issuance of definitive Notes, the temporary global Note shall thereafter be exchangeable only for definitive Notes, subject to certification of non-U.S. beneficial ownership. Unless specified in the applicable Pricing Supplement, investors shall have the right to require the delivery of definitive Notes; provided, however, that such delivery may be conditioned on written notice, as specified in the applicable Pricing Supplement, from Euroclear or Clearstream, Luxembourg (as the case may be) acting on instructions of the holders of interest in the temporary or permanent global Note and/or on the payment of costs in connection with the printing and distribution of the definitive Notes. No definitive Note delivered in exchange for a permanent or temporary global Note shall be mailed or otherwise delivered to any locations in the United States of America in connection with such exchange. Temporary and permanent global Notes and definitive Notes will be issued by JPMorgan Chase Bank, London Office, as issuing and (unless specified otherwise in the applicable Pricing Supplement) principal paying agent and, unless specified otherwise in the applicable Pricing Supplement, as calculation agent (the "Agent", which expression includes any successor agents or any other Calculation Agent specified in the applicable Pricing Supplement) pursuant to a Fourth Amended and Restated Agency Agreement dated as of October 1, 2002, as amended by an Amendment No. 1 dated September 30, 2003 (collectively, the "Agency Agreement"), and made between TMCC, the Agent and the other Appendix E-1 paying agents named therein (together with the Agent, the "Paying Agents", which expression includes any additional or successor paying agents). If specified in the applicable Pricing Supplement, other clearance systems capable of complying with the certification requirements set forth in the temporary global Note may be used in addition to or in lieu of Euroclear and Clearstream, Luxembourg, and any reference herein to Euroclear and/or Clearstream, Luxembourg shall, whenever the context so permits, be deemed to include such other additional or alternative clearing system. Temporary and permanent global Notes and definitive Notes will be issued in bearer form only. The following legend will appear on all global Notes, definitive Notes, receipts and interest coupons for Notes with a maturity of more than 183 days: "Any United States person (as defined in the Internal Revenue Code of the United States) who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred to in such legend provide that United States Noteholders, with certain exceptions, will not be entitled to deduct any loss on Notes, receipts or interest coupons and will not be entitled to capital gains treatment of any gain on any sale, disposition or payment of principal in respect of Notes, receipts or interest coupons. The following legend will appear on all global Notes, definitive Notes, receipts and interest coupons for Notes with maturities at issuance of 183 days or less: "By accepting this obligation, the holder represents and warrants that it is not a United States person (other than an exempt recipient described in Section 6049(b)(4) of the Internal Revenue Code and the regulations thereunder) and that it is not acting for or on behalf of a United States person (other than an exempt recipient described in Section 6049(b)(4) of the Internal Revenue Code and the regulations thereunder)." This legend is required by the United States information reporting and backup withholding rules. Appendix E-2 EX-10 3 ex10_1.txt ================================================================================ Exhibit 10.1 CREDIT AGREEMENT (364 DAY FACILITY) Dated as of September 11, 2003 among TOYOTA CREDIT DE PUERTO RICO CORP., as the Borrower, BANK OF AMERICA, N.A., as Administrative Agent, and The Other Lenders Party Hereto -------------------------------------------- BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole Book Manager --------------------------------------------- JPMORGAN CHASE BANK, as Syndication Agent ---------------------------------------------- THE BANK OF TOKYO-MITSUBISHI, LTD. and CITIBANK, N.A., as Documentation Agents ================================================================================
TABLE OF CONTENTS ----------------- Page ---- ARTICLE I DEFINITIONS..........................................................................................1 Section 1.1 Definitions.........................................................................1 ARTICLE II THE CREDITS .......................................................................................13 Section 2.1 Committed Loans....................................................................13 Section 2.2 Borrowings, Conversions and Continuations of Committed Loans.......................13 Section 2.3 Money Market Loans.................................................................15 Section 2.4 Prepayments........................................................................17 Section 2.6 Repayment of Loans.................................................................18 Section 2.7 Interest...........................................................................19 Section 2.8 Fees...............................................................................19 Section 2.9 Computation of Interest and Fees...................................................20 Section 2.10 Evidence of Debt...................................................................20 Section 2.11 Payments Generally.................................................................20 Section 2.12 Sharing of Payments................................................................22 Section 2.13 Extension of Maturity Date.........................................................22 Section 2.14 Increase in Commitments............................................................24 ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY............................................................25 Section 3.1 Taxes..............................................................................25 Section 3.2 Illegality.........................................................................26 Section 3.3 Inability to Determine Rates.......................................................26 Section 3.4 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans ........................................................................26 Section 3.5 Funding Losses.....................................................................27 Section 3.6 Matters Applicable to all Requests for Compensation................................28 ARTICLE IV CONDITIONS ........................................................................................29 Section 4.1 Effectiveness......................................................................29 Section 4.2 Conditions to all Loans............................................................30 ARTICLE V REPRESENTATIONS AND WARRANTIES......................................................................31 Section 5.1 Corporate Existence and Power......................................................31 Section 5.2 Corporate and Governmental Authorization: No Contravention.........................31 Section 5.3 Binding Effect.....................................................................31 Section 5.4 Financial Information..............................................................31 Section 5.5 Litigation.........................................................................31 Section 5.6 Compliance with ERISA..............................................................32 Section 5.7 Environmental Matters..............................................................32 Section 5.8 Taxes..............................................................................32 Section 5.9 Subsidiaries.......................................................................32 Section 5.10 Not an Investment Company..........................................................32 Section 5.11 Disclosure.........................................................................32 i Section 5.12 Tax Shelter Regulations............................................................32 ARTICLE VI COVENANTS .........................................................................................33 Section 6.1 Information........................................................................33 Section 6.2 Maintenance of Property; Insurance.................................................34 Section 6.3 Conduct of Business and Maintenance of Existence...................................34 Section 6.4 Compliance with Laws...............................................................34 Section 6.5 Negative Pledge....................................................................34 Section 6.6 Consolidations.....................................................................36 Section 6.7 Use of Proceeds....................................................................36 Section 6.8 Credit Support Agreement...........................................................37 ARTICLE VII DEFAULTS .........................................................................................37 Section 7.1 Events of Default..................................................................37 Section 7.2 Application of Funds...............................................................38 ARTICLE VIII THE ADMINISTRATIVE AGENT.........................................................................39 Section 8.1 Appointment and Authorization of Administrative Agent..............................39 Section 8.2 Delegation of Duties...............................................................39 Section 8.3 Liability of Administrative Agent..................................................40 Section 8.4 Reliance by Administrative Agent...................................................40 Section 8.5 Notice of Default..................................................................40 Section 8.6 Credit Decision; Disclosure of Information by Administrative Agent.................41 Section 8.7 Indemnification of Administrative Agent............................................41 Section 8.8 Administrative Agent in its Individual Capacity....................................42 Section 8.9 Successor Administrative Agent.....................................................42 Section 8.10 Administrative Agent May File Proofs of Claim......................................42 Section 8.11 Other Agents, Arrangers and Managers...............................................43 ARTICLE IX MISCELLANEOUS .....................................................................................43 Section 9.1 Amendments, Etc....................................................................43 Section 9.2 Notices and Other Communications; Facsimile Copies.................................44 Section 9.3 No Waiver; Cumulative Remedies.....................................................46 Section 9.4 Attorney Costs, Expenses and Taxes.................................................46 Section 9.5 Indemnification by the Borrower....................................................46 Section 9.6 Payments Set Aside.................................................................47 Section 9.7 Successors and Assigns.............................................................47 Section 9.8 Confidentiality....................................................................50 Section 9.9 Set-off............................................................................51 Section 9.10 Interest Rate Limitation...........................................................51 Section 9.11 Counterparts.......................................................................51 Section 9.12 Integration........................................................................51 Section 9.13 Survival of Representations and Warranties.........................................52 Section 9.14 Severability.......................................................................52 Section 9.15 Tax Forms..........................................................................52 Section 9.16 Replacement of Lenders.............................................................54 Section 9.17 Governing Law......................................................................54 ii Section 9.18 Waiver of Right to Trial by Jury...................................................54 SCHEDULE 2.1 COMMITMENTS AND PRO RATA SHARES.....................................................1 SCHEDULE 9.2 ADMINISTRATIVE AGENT'S OFFICE, CERTAIN ADDRESSES FOR NOTICES........................1 EXHIBIT A FORM OF COMMITTED LOAN NOTICE.......................................................1 EXHIBIT B FORM OF NOTE........................................................................1 EXHIBIT C FORM OF COMPLIANCE CERTIFICATE......................................................1 EXHIBIT D ASSIGNMENT AND ASSUMPTION...........................................................1 EXHIBIT E FORM OF MONEY MARKET QUOTE REQUEST..................................................1 EXHIBIT F FORM OF INVITATION FOR MONEY MARKET QUOTES..........................................1 EXHIBIT G FORM OF MONEY MARKET QUOTE..........................................................1 EXHIBIT H FORM OF OPINION OF COUNSEL FOR THE BORROWER.........................................1 EXHIBIT I FORM OF OPINION OF PIETRANTONI MENDEZ & ALVAREZ LLP.........................................................................1 EXHIBIT J FORM OF OPINION OF MORRISON & FOERSTER LLP..........................................1
iii CREDIT AGREEMENT (364 DAY FACILITY) THIS CREDIT AGREEMENT (364 Day Facility) (this "Agreement") dated as of September 11, 2003 is made among TOYOTA CREDIT DE PUERTO RICO CORP., a corporation organized under the laws of the Commonwealth of Puerto Rico (the "Borrower"), each lender from time to time party hereto (collectively, the "Lenders" and, individually, a "Lender"), BANK OF AMERICA, N.A., as Administrative Agent, BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole Book Manager, JPMORGAN CHASE BANK, as Syndication Agent, and THE BANK OF TOKYO-MITSUBISHI, LTD. and CITIBANK, N.A., as Documentation Agents. WHEREAS, the Borrower has requested that the Lenders provide a revolving credit facility that may be converted to a term facility, and the Lenders are willing to do so on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows: ARTICLE I DEFINITIONS Section 1.1 Definitions. The following terms, as used herein, have the following meanings: "Absolute Rate Auction" means a solicitation of Money Market Quotes setting forth Money Market Absolute Rates pursuant to Section 2.3. "Administrative Agent" means Bank of America, N.A. in its capacity as Administrative Agent for the Lenders hereunder, and its successors in such capacity. "Administrative Agent's Office" means the Administrative Agent's address and, as appropriate, account as set forth on Schedule 9.2, or such other address or account as the Administrative Agent may from time to time notify the Borrower and the Lenders. "Administrative Questionnaire" means, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative Agent (with a copy to the Borrower) duly completed by such Lender. "Affiliate" means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and "Controlled" have meanings correlative thereto. 1 "Agent-Related Persons" means the Administrative Agent, together with its Affiliates (including, in the case of Bank of America in its capacity as the Administrative Agent, the Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates. "Aggregate Commitments" means the Commitments of all the Lenders. "Agreement" means this Credit Agreement. "Applicable Rate" means the following percentages per annum: Applicable Rate Facility Fee Eurodollar Rate Base Rate - ----------------------------- --------------------------- ---------------------- 0.04% 0.11% 0.00% If the Borrower converts the Loans to term Loans pursuant to Section 2.13(c), the "Applicable Rate" shall be 0.10% greater than the Applicable Rate indicated above during the period after the Revolving Maturity Date. "Arranger" means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager. "Assignment and Assumption" means an Assignment and Assumption substantially in the form of Exhibit D. "Attorney Costs" means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel and, without duplication, the reasonable allocated cost of internal legal services and all expenses and disbursements of internal counsel. "Audited Financial Statements" means (i) the audited consolidated balance sheet of Holdings and its Consolidated Subsidiaries for the fiscal year ended March 31, 2003 and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year of Holdings and its Consolidated Subsidiaries, including the notes thereto or (ii) if delivered for a subsequent fiscal year of the Borrower pursuant to this Agreement, the audited balance sheet of the Borrower and its Consolidated Subsidiaries for such fiscal year and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year of the Borrower and its Consolidated Subsidiaries, including the notes thereto. "Availability Period" means the period from and including the Closing Date to the earliest of (a) the Revolving Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.5, and (c) the date of termination of the commitment of each Lender to make Loans pursuant to Section 7.1. "Bank of America" means Bank of America, N.A. and its successors. 2 "Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate." The "prime rate" is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. "Base Rate Committed Loan" means a Committed Loan that is a Base Rate Loan. "Base Rate Loan" means a Loan that bears interest based on the Base Rate. "Benefit Arrangement" means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group. "Borrower" means Toyota Credit de Puerto Rico Corp. "Borrowing" means a Committed Borrowing or a Money Market Borrowing. "Business Day" means (i) any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, any of the following: the state where the Administrative Agent's Office is located, California, New York, and San Juan, Puerto Rico and (ii) if such day relates to any Eurodollar Rate Loan or Money Market LIBOR Loan, any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market. "Closing Date" means the first date all the conditions precedent in Section 4.1 are satisfied or waived in accordance with Section 4.1 (or, in the case of Section 4.1(b), waived by the Person entitled to receive the applicable payment). "Code" means the Internal Revenue Code of 1986, as amended and any successor statute. "Commitment" means, as to each Lender, its obligation to make Committed Loans to the Borrower pursuant to Section 2.1 in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 2.1 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. "Committed Borrowing" means a borrowing consisting of simultaneous Committed Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.1. "Committed Loan" means a loan made by a Lender pursuant to Section 2.1. 3 "Committed Loan Notice" means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other and (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.2(a), which, if in writing, shall be substantially in the form of Exhibit A. A Committed Loan Notice for a Eurodollar Rate Loan with an Interest Period extending beyond the Revolving Maturity Date may only be delivered concurrently with a notice of election by the Borrower to extend the Maturity Date to the Term Maturity Date pursuant to Section 2.13(c). "Compliance Certificate" means a certificate substantially in the form of Exhibit C. "Consolidated Subsidiary" means, with respect to any Person, at any date any Subsidiary or other entity the accounts of which would be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date. "Control" has the meaning specified in the definition of "Affiliate." "Debt Rating" means, as of any date of determination, the rating as determined by either S&P or Moody's (collectively, the "Debt Ratings") of the Borrower's unsecured short-term debt credit enhanced in accordance with Section 6.8. "Debtor Relief Law" means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally. "Default" means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Default Rate" means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan or Money Market Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws. "Defaulting Lender" means any Lender that (a) has failed to fund any portion of the Committed Loans required to be funded by it hereunder within three Business Days of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding. "Dollar" and "$" mean lawful money of the United States. "Eligible Assignee" has the meaning specified in Section 9.7(g). 4 "Environmental Laws" means any and all Laws relating to the environment, the effect of the environment on human health or to emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or other remediation thereof. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute. "ERISA Group" means the Borrower, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any Subsidiary, are treated as a single employer under Section 414 of the Code. "Eurodollar Base Rate" has the meaning set forth in the definition of Eurodollar Rate. "Eurodollar Rate" means for any Interest Period with respect to any Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula: Eurodollar Rate = Eurodollar Base Rate ----------------------------------------- 1.00 minus Eurodollar Reserve Percentage Where, "Eurodollar Base Rate" means, for such Interest Period: (a) the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or (b) if the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or (c) if the rates referenced in the preceding clauses (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the rate of interest at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by the 5 Administrative Agent and with a term equivalent to such Interest Period would be offered by the Administrative Agent's London Branch to major banks in the London interbank eurodollar market at their request at approximately 4:00 p.m. (London time) two Business Days prior to the first day of such Interest Period. "Eurodollar Rate Loan" means a Committed Loan that bears interest at a rate based on the Eurodollar Rate. "Eurodollar Reserve Percentage" means, for any date during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirements) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage. "Event of Default" has the meaning set forth in Section 7.1. "Exempt Lender" means a Lender that is any of the following: (i) a Corporate Lender organized under the Laws of Puerto Rico, (ii) a Corporate Lender organized under the Laws of a jurisdiction other than Puerto Rico that is engaged in the conduct of a trade or business in Puerto Rico, or (iii) a Corporate Lender organized under the Laws of a jurisdiction other than Puerto Rico that is not engaged in the conduct of a trade or business in Puerto Rico and that is not a "related person" to the Borrower for purposes of Section 1231(a)(1)(A)(i) of the Puerto Rico Code by reason of the fact that such Lender does not own, directly or indirectly in accordance with the attribution rules of Section 1231(a)(3) of the Puerto Rico Code, 50% or more of the value of the stock of the Borrower. As used in this definition, "Corporate Lender" means a Lender that is or would be taxable as a corporation under the Puerto Rico Code. "Federal Funds Rate" means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent. "Fee Letter" means a letter, dated July 17, 2003 among the Borrower, the Administrative Agent and the Arranger. "FRB" means the Board of Governors of the Federal Reserve System of the United States. 6 "GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, consistently applied. "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, central bank or other entity exercising executive, legislative, taxing, regulatory or administrative powers or functions of or pertaining to government. "Holdings" means TCPR Holdings, Inc., a California corporation. "Indemnified Liabilities" has the meaning set forth in Section 9.5. "Indemnitees" has the meaning set forth in Section 9.5. "Interest Payment Date" means, (a) as to any Eurodollar Rate Loan or Money Market Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan or Money Market Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Committed Loan, the last Business Day of each March, June, September and December, the Revolving Maturity Date, and, if later than the Revolving Maturity Date, the Maturity Date. "Interest Period" means, (a) as to each Eurodollar Rate Loan, the period commencing on the date such Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Committed Loan Notice, (b) as to each Money Market LIBOR Loan, the period commencing on the date such Loan is disbursed and ending on the date that is such whole number of months thereafter as the Borrower may elect in accordance with Section 2.3, and (c) as to each Money Market Absolute Rate Loan, the period commencing on the date such Loan is disbursed and ending on the date that is such number of days thereafter as the Borrower may elect in accordance with Section 2.3; provided that: (i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day; (ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and (iii) no Interest Period for a Eurodollar Rate Loan shall extend beyond the Maturity Date, and no Interest Period for Money Market Loans shall extend beyond the Revolving Maturity Date. 7 Notwithstanding the foregoing, the Borrower may select an Interest Period for a Eurodollar Rate Loan which would end after the Revolving Maturity Date only if it has previously delivered, or delivers concurrently with the applicable Committed Loan Notice, an election to extend the Maturity Date to the Term Maturity Date pursuant to Section 2.13(c). "Invitation for Money Market Quotes" means an Invitation for Money Market Quotes substantially in the form of Exhibit F hereto. "IRS" means the United States Internal Revenue Service. "Laws" means, collectively, all federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders of any Governmental Authority. "Lender" has the meaning specified in the introductory paragraph hereto. "Lending Office" means, as to any Lender, the office or offices of such Lender described as such in such Lender's Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent. "LIBOR Auction" means a solicitation of Money Market Quotes setting forth Money Market Margins based on the Eurodollar Rate pursuant to Section 2.3. "Loan" means an extension of credit by a Lender to the Borrower under Article II in the form of a Committed Loan or a Money Market Loan, including a Loan converted to a term Loan pursuant to Section 2.13(c). "Loan Documents" means this Agreement, each Note, and the Fee Letter. "Material Plan" means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $25,000,000. "Maturity Date" means the Revolving Maturity Date, or if the Loans are converted to term Loans pursuant to Section 2.13, the Term Maturity Date. "Maximum Aggregate Commitments" means $500,000,000. "Money Market Absolute Rate" has the meaning set forth in Section 2.3(d)(ii). "Money Market Absolute Rate Loan" means a loan to be made by a Lender pursuant to an Absolute Rate Auction. "Money Market Borrowing" means a borrowing consisting of simultaneous Money Market Loans of the same Type and, in the case of Money Market LIBOR Loans bearing interest 8 calculated based on the Eurodollar Rate, having the same Interest Period made by a Lender pursuant to Section 2.3. "Money Market LIBOR Loan" means a loan to be made by a Lender pursuant to a LIBOR Auction (including such a loan bearing interest at the Base Rate pursuant to Section 3.2). "Money Market Loan" means a Money Market LIBOR Loan or a Money Market Absolute Rate Loan. "Money Market Margin" has the meaning set forth in Section 2.3(d)(ii). "Money Market Quote" means an offer, substantially in the form of Exhibit G hereto, by a Lender to make a Money Market Loan in accordance with Section 2.3. "Money Market Quote Request" means a Money Market Quote Request substantially in the form of Exhibit E hereto. "Moody's" means Moody's Investors Service, Inc. and any successor thereto. "Multiemployer Plan" means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period. "Note" or "Notes" means a promissory note or promissory notes made by the Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit B. "Obligations" means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Borrower of any proceeding under any Debtor Relief Laws naming the Borrower as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. "Organization Documents" means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any jurisdiction other than the United States or Puerto Rico); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity. 9 "Other Taxes" means any and all present or future stamp or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document, excluding taxes, charges and levies payable in respect of any Money Market Loan for any reason except a Regulatory Change occurring after the date that the Money Market Quote for such Money Market Loan was delivered. "Outstanding Amount" means, with respect to Committed Loans and Money Market Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowing and prepayments or repayments of Committed Loans and Money Market Loans, as the case may be, occurring on such date. "Parent" means, with respect to any Lender, any Person controlling such Lender. "Participant" has the meaning set forth in Section 9.7(d). "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. "Plan" means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group. "Pro Rata Share" means, with respect to each Lender at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitment of such Lender at such time and the denominator of which is the amount of the Aggregate Commitments at such time; provided that if the commitment of each Lender to make Loans has been terminated pursuant to Section 7.1 or if the Loans have been converted to term Loans pursuant to Section 2.13(c), then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such termination or conversion and after giving effect to any subsequent assignments made pursuant to the terms hereof. The initial Pro Rata Share of each Lender is set forth opposite the name of such Lender on Schedule 2.1 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable. "Puerto Rico" means the Commonwealth of Puerto Rico. "Puerto Rico Code" means the Puerto Rico Internal Revenue Code of 1994, as amended and any successor statute. 10 "Rating Agency" means S&P or Moody's. "Register" has the meaning set forth in Section 9.7(c). "Regulatory Change" shall mean, with respect to any Lender, the introduction of or any change in or in the interpretation of any Law, or such Lender's compliance therewith. "Request for Loans" means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice and (b) with respect to a Money Market Borrowing, a Notice of Money Market Borrowing (as defined in Section 2.3(f)). "Required Lenders" means, as of any date of determination, Lenders having more than 50% of the Aggregate Commitments or, if the commitment of each Lender to make Loans has been terminated pursuant to Section 7.1 or if the Loans have been converted to term Loans pursuant to Section 2.13(c), Lenders holding in the aggregate more than 50% of the Total Outstandings; provided that the Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders. "Regulation U" means Regulation U of the FRB, as in effect from time to time. "Responsible Officer" means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of the Borrower as set forth in a written notice from the Borrower to the Administrative Agent. The Administrative Agent may conclusively rely on each such notice unless and until a subsequent writing shall be delivered by the Borrower to the Administrative Agent that identifies the prior writing that is to be superseded and stating that it is to be so superseded. Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate action on the part of the Borrower. "Revolving Maturity Date" means the later of (a) September 10, 2004, and (b) if maturity is extended pursuant to Section 2.13(b), such extended revolving maturity date as determined pursuant to such Section. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto. "SEC" means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions. "Significant Subsidiary" means, with respect to any Subsidiary of the Borrower, a Subsidiary which would meet the definition of "Significant Subsidiary" contained in Regulation S-X (or similar successor provision) of the Securities and Exchange Commission ("Regulation S-X") if the Borrower were a registrant, as such term is defined in Regulation S-X. "Subsidiary" means, as to any Person, any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly 11 owned by such Person; unless otherwise specified, "Subsidiary" means a Subsidiary of the Borrower. "Taxes" means, with respect to any payment by the Borrower under this Agreement or any other Loan Document, any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, (i) in the case of the Administrative Agent and each Lender, taxes imposed on or measured by its overall net income, and franchise and similar taxes imposed on it, by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender, as the case may be, is organized or where the Administrative Agent's Office or a Lender's Lending Office is located and (ii) any United States or Puerto Rico withholding tax imposed on payments by the Borrower under this Agreement or any other Loan Document to a Lender that is subject to such withholding tax (x) with respect to payments on a Money Market Loan, on the date that such Lender delivers a Money Market Quote for such Money Market Loan and (y) with respect to all other payments, on the date such Lender becomes a party to this Agreement. "Term Maturity Date" means the date that is one year from the Revolving Maturity Date upon conversion of the Loans to term Loans in accordance with Section 2.13(c). "TMC Consolidated Subsidiary" means, at any date, a Subsidiary or other entity the accounts of which would be consolidated with those of Toyota Motor Corporation in its consolidated financial statements if such statements were prepared as of such date. "Total Outstandings" means the aggregate Outstanding Amount of all Loans. "Type" means, with respect to a Loan, its character as a Base Rate Loan, a Eurodollar Rate Loan, a Money Market LIBOR Loan or a Money Market Absolute Rate Loan. "Unfunded Liabilities" means, with respect to any Plan at any time, the amount (if any) by which (i) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA. "United States" and "U.S." means the United States of America, including the States and the District of Columbia, but excluding its territories and possessions. Section 1.2 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. 12 (b) (i) The words "herein," "hereto," "hereof" and "hereunder" and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof. (ii) Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears. (iii) The term "including" is by way of example and not limitation. (iv) The term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form. (c) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including;" the words "to" and "until" each mean "to but excluding;" and the word "through" means "to and including." (d) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document. Section 1.3 Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements. Section 1.5 References to Agreements and Laws. Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law. Section 1.6 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable). ARTICLE II THE CREDITS Section 2.1 Committed Loans. Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a "Committed Loan") to the Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender's Commitment; provided, however, that after giving effect to any Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the 13 Committed Loans of any Lender shall not exceed such Lender's Commitment. Within the limits of each Lender's Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.1, prepay under Section 2.4, and, unless converted to a term Loan pursuant to Section 2.13(c), reborrow under this Section 2.1. Committed Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein. Section 2.2 Borrowings, Conversions and Continuations of Committed Loans. (a) Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower's irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 10:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans, and (ii) on the requested date of any Borrowing of or conversion of Eurodollar Rate Loans to Base Rate Committed Loans. Each telephonic notice by the Borrower pursuant to this Section 2.2(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer or any other Person designated in writing by a Responsible Officer of the Borrower to the Administrative Agent. Each Borrowing of, conversion to or continuation of Loans shall be in a principal amount of $50,000,000 or a whole multiple of $5,000,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. (b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the contents thereof and the amount of its Pro Rata Share of the applicable Committed Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection. In the case of a Committed Borrowing, each Lender shall make the amount of its Committed Loan available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.2, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of 14 America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower. (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders. (d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. The determination of the Eurodollar Rate by the Administrative Agent shall be conclusive in the absence of manifest error. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America's prime rate used in determining the Base Rate promptly following the public announcement of such change. (e) After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than ten (10) Interest Periods in effect with respect to Committed Loans. Section 2.3 Money Market Loans. (a) In addition to Committed Loans pursuant to Section 2.1, the Borrower may, as set forth in this Section, request the Lenders during the Availability Period to make offers to make Money Market Loans in United States Dollars to the Borrower; provided, however, that after giving effect to any Money Market Borrowing the Total Outstandings shall not exceed the Aggregate Commitments. The Lenders may, but shall have no obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any such offers in the manner set forth in this Section. (b) When the Borrower wishes to request offers to make Money Market Loans under this Section, it shall transmit to the Administrative Agent by facsimile transmission a Money Market Quote Request, appropriately completed and signed by a Responsible Officer or any other Person designated in writing by a Responsible Officer of the Borrower to the Administrative Agent, so as to be received no later than 9:00 a.m. on (x) the fourth Business Day prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Business Day next preceding the date of Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Lenders not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective) specifying: (i) the proposed date of Borrowing, which shall be a Business Day, (ii) the aggregate amount of such Borrowing, which shall be $50,000,000 or a larger multiple of $5,000,000, (iii) the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period, and (iv) whether the Money Market Quotes requested are to set forth a Money Market Margin or a Money Market Absolute Rate. The Borrower may request offers to make Money Market Loans for more than one Interest Period in 15 a single Money Market Quote Request. No Money Market Quote Request shall be given within five Business Days (or such other number of days as the Borrower and the Administrative Agent may agree) of any other Money Market Quote Request. (c) Promptly upon receipt of a Money Market Quote Request, the Administrative Agent shall send to the Lenders by telex or facsimile transmission an Invitation for Money Market Quotes, which shall constitute an invitation by the Borrower to each Lender to submit Money Market Quotes offering to make the Money Market Loans to which such Money Market Quote Request relates in accordance with this Section. (d) (i) Each Lender may submit a Money Market Quote containing an offer or offers to make Money Market Loans in response to any Invitation for Money Market Quotes. Each Money Market Quote must comply with the requirements of this subsection (d) and must be submitted to the Administrative Agent by telex or facsimile transmission at the Administrative Agent's Office not later than (x) 1:00 p.m. on the fourth Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:00 a.m. on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Lenders not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective); provided that Money Market Quotes submitted by the Administrative Agent (or any Affiliate of the Administrative Agent) in the capacity of a Lender may be submitted, and may only be submitted, if the Administrative Agent or such Affiliate notifies the Borrower of the terms of the offer or offers contained therein not later than 15 minutes prior to the deadline for the other Lenders. Subject to Articles IV and VII, any Money Market Quote so made shall be irrevocable except with the written consent of the Administrative Agent given on the instructions of the Borrower. (ii) Each Money Market Quote shall specify (A) the proposed date of Borrowing; (B) the principal amount of the Money Market Loan for which each such offer is being made, which principal amount (w) may be greater than or less than the Commitment of the quoting Lender, (x) must be $5,000,000 or a larger multiple of $l,000,000, (y) may not exceed the principal amount of Money Market Loans for which offers were requested and (z) may be subject to an aggregate limitation as to the principal amount of Money Market Loans for which offers being made by such quoting Lender may be accepted; (C) in the case of a LIBOR Auction, the margin above or below the applicable Eurodollar Rate (the "Money Market Margin") offered for each such Money Market Loan, expressed as a percentage (specified to the nearest 1/10,000th of 1%) to be added to or subtracted from such base rate; (D) in the case of an Absolute Rate Auction, the rate of interest per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market Absolute Rate") offered for each such Money Market Loan; and (E) the identity of the quoting Lender. A Money Market Quote may set forth up to five separate offers by the quoting Lender with respect to each Interest Period specified in the related Invitation for Money Market Quotes. 16 (iii) Any Money Market Quote shall be disregarded if it (A) is not substantially in conformity with the definition thereof or does not specify all of the information required by subsection (d)(ii); (B) contains qualifying, conditional or similar language; (C) proposes terms other than or in addition to those set forth in the applicable Invitation for Money Market Quotes; or (D) arrives after the time set forth in subsection (d)(i). (e) The Administrative Agent shall promptly notify the Borrower of the terms (i) of any Money Market Quote submitted by a Lender that is in accordance with subsection (d) and (ii) of any Money Market Quote that amends, modifies or is otherwise inconsistent with a previous Money Market Quote submitted by such Lender with respect to the same Money Market Quote Request. Any such subsequent Money Market Quote shall be disregarded by the Administrative Agent unless such subsequent Money Market Quote is submitted solely to correct a manifest error in such former Money Market Quote. The Administrative Agent's notice to the Borrower shall specify (i) the aggregate principal amount of Money Market Loans for which offers have been received for each Interest Period specified in the related Money Market Quote Request, (ii) the respective principal amounts and Money Market Margins or Money Market Absolute Rates, as the case may be, so offered and (iii) if applicable, limitations on the aggregate principal amount of Money Market Loans for which offers in any single Money Market Quote may be accepted. (f) Not later than 9:00 a.m. on the third Business Day prior to the proposed date of Borrowing of Money Market LIBOR Loans or 10:00 a.m. on the Business Day of the proposed date of Borrowing of Money Market Absolute Rate Loans (or such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Lenders not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective), the Borrower shall notify the Administrative Agent of its acceptance or non-acceptance of the offers so notified to it pursuant to subsection (e). In the case of acceptance, such notice (a "Notice of Money Market Borrowing") shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The Borrower may accept any Money Market Quote in whole or in part; provided that (i) the aggregate principal amount of each Money Market Borrowing may not exceed the applicable amount set forth in the related Money Market Quote Request; (ii) the principal amount of each Money Market Borrowing must be $50,000,000 or a larger multiple of $5,000,000; and (iii) acceptance of offers may only be made on the basis of ascending Money Market Margins or Money Market Absolute Rates, as the case may be. (g) If offers are made by two or more Lenders with the same Money Market Margins or Money Market Absolute Rates, as the case may be, for a greater aggregate principal amount than the amount in respect of which such offers are accepted for the related Interest Period, the principal amount of Money Market Loans in respect of which such offers are accepted shall be allocated by the Administrative Agent among such Lenders as nearly as possible (in multiples of $1,000,000, as the Administrative Agent may deem appropriate) in proportion to the aggregate principal amounts of such offers. Determinations by the Administrative Agent of the amounts of Money Market Loans shall be conclusive in the absence of manifest error. Section 2.4 Prepayments. 17 (a) The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Money Market Loans bearing interest at the Base Rate pursuant to Section 3.2 and Committed Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 10:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate Committed Loans or Money Market Loans bearing interest at the Base Rate pursuant to Section 3.2; and (ii) any prepayment of Loans shall be in a principal amount of $50,000,000 or a whole multiple of $5,000,000 in excess thereof. Except as provided in the preceding sentence, the Borrower may not prepay all or any portion of the principal amount of any Money Market Loan prior to the last day of the Interest Period therefor. Each such notice shall specify the date and amount of such prepayment, whether the Loans to be prepaid are Committed Loans or Money Market Loans, and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice and the contents thereof with respect to Committed Loans, and of the amount of such Lender's Pro Rata Share of such prepayment of such Committed Loans. The Administrative Agent will promptly notify each Lender that has made a Money Market Loan that is to be prepaid of the receipt by the Administrative Agent of each notice and the contents thereof with respect to such Money Market Loan and the contents thereof and of the amount of such prepayment of such Money Market Loan. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.5. Each such prepayment of Committed Loans shall be applied to the Committed Loans of the Lenders in accordance with their respective Pro Rata Shares. Each such prepayment of Money Market Loans shall be applied ratably to the Money Market Loans of the Lenders that made such Loans. (b) If for any reason the Total Outstandings at any time exceed the Aggregate Commitments then in effect, the Borrower shall immediately prepay Loans in an aggregate amount equal to such excess. Section 2.5 Termination or Reduction of Commitments. The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Commitments, or from time to time permanently reduce the Aggregate Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 10:00 a.m. three Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $25,000,000 or any whole multiple of $5,000,000 in excess thereof, and (iii) the Borrower shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Commitments. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Pro Rata Share. All facility fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination. Section 2.6 Repayment of Loans. 18 (a) The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of Loans outstanding on such date. (b) The Borrower shall repay each Money Market Loan on the earlier to occur of (i) the last day of the Interest Period therefor and (ii) the Revolving Maturity Date. Section 2.7 Interest. (a) Subject to the provisions of subsection (b) below, (i) subject to Section 3.2, each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each Base Rate Committed Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; (iii) subject to Section 3.2, each Money Market LIBOR Loan shall bear interest on the outstanding principal amount thereof for the Interest Period applicable thereto at a rate per annum equal to the sum of the Eurodollar Rate for such Interest Period plus or minus the Money Market Margin quoted by the Lender making such Loan; and (iv) each Money Market Absolute Rate Loan shall bear interest on the outstanding principal amount thereof for the Interest Period applicable thereto at a rate per annum equal to the Money Market Absolute Rate quoted by the Lender making such Loan. (b) If any amount payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. Furthermore, upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable on demand. (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law. Section 2.8 Fees. (a) Facility Fee. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share, a facility fee equal to the Applicable Rate times the actual daily amount of the Aggregate Commitments, regardless of usage (or, if the Aggregate Commitments have terminated, on the Outstanding Amount of all Loans). The facility fee shall accrue at all times during the Availability Period (and thereafter so long as any Loans remain outstanding), including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur 19 after the Closing Date, and on the Maturity Date (and, if applicable, thereafter on demand). The facility fee shall be calculated quarterly in arrears. (b) Other Fees. (i) The Borrower shall pay to the Arranger and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever. (ii) The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever. Section 2.9 Computation of Interest and Fees. All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America's "prime rate" shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.11(a), bear interest for one day. Section 2.10 Evidence of Debt. The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower under the Loan Documents to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender's Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto. Section 2.11 Payments Generally. (a) All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than 12:00 noon on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like 20 funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after 12:00 noon shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. (b) If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be. (c) Unless the Borrower or any Lender has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that the Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then: (i) if the Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds at the Federal Funds Rate from time to time in effect; and (ii) if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the "Compensation Period") at a rate per annum equal to the Federal Funds Rate from time to time in effect. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent may make a demand therefor upon the Borrower, and the Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or the Borrower may have against any Lender as a result of any default by such Lender hereunder. A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (c) shall be conclusive, absent manifest error. (d) If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to 21 the applicable Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest, on the succeeding Business Day. (e) The obligations of the Lenders hereunder to make Committed Loans are several and not joint. The failure of any Lender to make any Committed Loan on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Committed Loan. (f) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner. Section 2.12 Sharing of Payments. If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Committed Loans made by it, any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Committed Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Committed Loans pro rata with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 9.6 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender's ratable share (according to the proportion of (i) the amount of such paying Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon. The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by Law, exercise all of its rights of payment (including any right of set-off, but subject to Section 9.9) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased. Section 2.13 Extension of Maturity Date. (a) Not earlier than 60 days prior to, nor later than 45 days prior to, the Revolving Maturity Date then in effect, the Borrower may, upon notice to the Administrative Agent (which shall promptly notify the Lenders), request a 364-day extension of the Revolving Maturity Date 22 then in effect. Within 30 days of delivery of such notice, each Lender shall notify the Administrative Agent whether or not it consents to such extension (which consent may be given or withheld in such Lender's sole and absolute discretion). Any Lender not responding within the above time period shall be deemed not to have consented to such extension. The Administrative Agent shall promptly notify the Borrower and the Lenders of the Lenders' responses. If any Lender declines, or is deemed to have declined, to consent to such extension, the Borrower may cause any such Lender to be replaced as a Lender pursuant to Section 9.16. The Borrower shall be deemed to have withdrawn any request to extend the Revolving Maturity Date if it delivers or is required to deliver a notice of election to convert the Loans to term Loans pursuant to Section 2.13(c). (b) The Revolving Maturity Date shall be extended only if all Lenders (after giving effect to any replacements of Lenders permitted herein) (the "Consenting Lenders") have consented thereto. If so extended, the Revolving Maturity Date, as to the Consenting Lenders, shall be extended to a date 364 days from the Revolving Maturity Date then in effect, effective as of the Revolving Maturity Date then in effect (such existing Revolving Maturity Date being the "Revolving Extension Effective Date"). The Administrative Agent and the Borrower shall promptly confirm to the Lenders such extension and the Revolving Extension Effective Date. As a condition precedent to such extension, the Borrower shall deliver to the Administrative Agent a certificate of the Borrower dated as of the Revolving Extension Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of the Borrower (i) certifying and attaching the resolutions adopted by the Borrower approving or consenting to such extension and (ii) in the case of the Borrower, certifying that, before and after giving effect to such extension, (A) the representations and warranties contained in Article V and the other Loan Documents are true and correct on and as of the Revolving Extension Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Section 2.13, the representations and warranties contained in subsections (a) and (b) of Section 5.4 shall be deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.1, and (B) no Default exists. The Borrower shall prepay any Committed Loans outstanding on the Revolving Extension Effective Date (and pay any additional amounts required pursuant to Section 3.5) to the extent necessary to keep outstanding Committed Loans ratable with any revised and new Pro Rata Shares of all the Lenders. (c) Not later than 30 days prior to the Revolving Maturity Date, the Borrower may, upon notice to the Administrative Agent (which shall promptly notify the Lenders), elect to convert the Loans into term Loans payable on the date (the "Term Maturity Date") one year from the Revolving Maturity Date. Concurrently with delivering any Request for Loans relating to Eurodollar Rate Loans with an Interest Period ending after the Revolving Maturity Date the Borrower shall deliver a notice to the Administrative Agent that it elects to convert the Loans into term Loans in accordance with the preceding sentence. If the Borrower so elects to convert the Loans to term Loans, subject to the satisfaction of the conditions precedent contained in this Section 2.13(c), the Maturity Date shall automatically be extended to the Term Maturity Date effective as of the Revolving Maturity Date then in effect (such existing Revolving Maturity Date being the "Term Extension Effective Date"), and, on and after the Term Extension Effective Date, the Loans shall be term Loans that (a) may not be reborrowed once repaid, (b) may be converted from Base Rate Loans to Eurodollar Rate Loans and from Eurodollar Rate Loans to 23 Base Rate Loans, and (c) are payable in full on the Term Maturity Date. The Administrative Agent and the Borrower shall promptly confirm to the Lenders such extension and the Term Extension Effective Date. As conditions precedent to such extension, (i) the Borrower shall deliver to the Administrative Agent a certificate of the Borrower dated as of the Term Extension Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of the Borrower certifying that no Default exists, and (ii) as of the Term Extension Effective Date, any outstanding Money Market Loans shall have been prepaid, to the extent permitted by Section 2.4(a), or repaid in accordance with this Agreement, and if such prepayment or repayment is to be made in whole or in part from Committed Loans, such Committed Loans shall have been made at least one Business Day prior to the Term Extension Effective Date. (d) This Section shall supersede any provisions in Section 2.12 or Section 9.1 to the contrary. Section 2.14 Increase in Commitments. (a) Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may from time to time, request an increase in the Aggregate Commitments to an amount (for all such requests) not exceeding the Maximum Aggregate Commitments. At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than 10 Business Days from the date of delivery of such notice to the Lenders). Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its Pro Rata Share of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment. The Administrative Agent shall notify the Borrower and each Lender of the Lenders' responses to each request made hereunder. To achieve the full amount of a requested increase, the Borrower may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel. The consent of the Lenders is not required to increase the amount of the Aggregate Commitments pursuant to this Section, except that each Lender shall have the right to consent to an increase in the amount of its Commitment as set forth in this Section 2.14(a). If the Lenders and Eligible Assignees do not agree to increase the Aggregate Commitments by the amount requested by the Borrower pursuant to this Section 2.14(a), the Borrower may (i) withdraw its request for an increase in its entirety or (ii) accept, in whole or in part, the increases that have been offered. (b) If the Aggregate Commitments are increased in accordance with this Section, the Administrative Agent and the Borrower shall determine the effective date (the "Increase Effective Date") and the final allocation of such increase. The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Increase Effective Date. As a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent a certificate of the Borrower dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of the Borrower certifying that no Default exists. The Borrower shall prepay any Committed Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to Section 3.5) to the 24 extent necessary to keep the outstanding Committed Loans ratable with any revised Pro Rata Shares arising from any nonratable increase in the Commitments under this Section. (c) This Section shall supersede any provisions in Sections 2.12 or 9.1 to the contrary. ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY Section 3.1 Taxes. (a) Any and all payments by the Borrower to or for the account of the Administrative Agent or any Lender under any Loan Document shall be made free and clear of and without deduction for any and all present or future Taxes. If the Borrower shall be required by any Laws to deduct any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), each of the Administrative Agent and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within 30 days after the date of such payment, the Borrower shall furnish to the Administrative Agent (which shall forward the same to such Lender) the original or a certified copy of a receipt evidencing payment thereof. (b) In addition, the Borrower agrees to pay to each Lender Other Taxes incurred by such Lender. (c) If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, the Borrower shall also pay to the Administrative Agent or to such Lender, as the case may be, at the time interest is paid, such additional amount that the Administrative Agent or such Lender specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) that the Administrative Agent or such Lender would have received if such Taxes or Other Taxes had not been imposed. (d) The Borrower agrees to indemnify the Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Administrative Agent and such Lender, (ii) amounts payable under Section 3.1(c) and (iii) any liability (including additions to tax, penalties, interest and expenses) arising therefrom or with respect thereto. Payment under this subsection (d) shall be made within 15 days after the date the Lender or the Administrative Agent makes a demand therefor. 25 Section 3.2 Illegality. If any Lender determines that any Regulatory Change occurring on or after the date of this Agreement has made it unlawful, or that any Governmental Authority has asserted that it is unlawful as a result of such Regulatory Change, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans or Money Market LIBOR Loans, or to determine or charge interest rates based upon the Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar Rate Loans or to make a Money Market LIBOR Loan for which a Money Market Quote has been delivered shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist (and such Lender shall give such notice promptly upon receiving knowledge that such circumstances no longer exist). If a Lender shall determine that it may not lawfully continue to maintain and fund any of its outstanding Eurodollar Rate Loans or Money Market LIBOR Loans to maturity and shall so specify in a notice pursuant to the preceding sentence, upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans or Money Market LIBOR Loans, as the case may be, of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans or Money Market LIBOR Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender. Section 3.3 Inability to Determine Rates. If the Required Lenders determine that for any reason adequate and reasonable means do not exist for determining the Eurodollar Base Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or that the Eurodollar Base Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice (which revocation shall be made promptly upon such instruction from the Required Lenders). Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Committed Borrowing of Base Rate Loans in the amount specified therein. Section 3.4 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans. (a) If on or after (i) the date hereof, in the case of Eurodollar Rate Loans, or (ii) the date that a Money Market Quote is given for a Money Market LIBOR Loan, any Lender determines that as a result of a Regulatory Change, there shall be a material increase in the cost to such Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Loans or 26 Money Market LIBOR Loan, or a reduction in the amount received or receivable by such Lender in connection with any Eurodollar Rate Loan or Money Market LIBOR Loan (excluding for purposes of this subsection (a) any such increased costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section 3.1 shall govern), (ii) changes in the basis of taxation of overall net income or overall gross income by the United States, Puerto Rico or any foreign jurisdiction or any political subdivision of either thereof under the Laws of which such Lender is organized or has its Lending Office, and (iii) reserve requirements utilized in the determination of the Eurodollar Rate), then from time to time within 15 days of demand by such Lender (with a copy of such demand to the Administrative Agent), subject to Section 3.4(c), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction. (b) If any Lender determines that the introduction of any Law after the date hereof regarding capital adequacy or any change therein or in the interpretation thereof, or compliance by such Lender (or its Lending Office) therewith (including determination that, for purposes of capital adequacy requirements, the Commitment of such Lender does not constitute a commitment with an original maturity of one year or less), has the effect of materially reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender's desired return on capital), then from time to time upon demand of such Lender (with a copy of such demand to the Administrative Agent), subject to Section 3.4(c),the Borrower shall pay within 15 days of demand by such Lender such additional amounts as will compensate such Lender for such reduction. (c) Promptly after receipt of knowledge of any Regulatory Change or other event that will entitle any Lender to compensation under this Section 3.4, such Lender shall give notice thereof to the Borrower and the Administrative Agent certifying the basis for such request for compensation in accordance with Section 3.6(a) and designate a different Lending Office if such designation will avoid, or reduce the amount of, compensation payable under this Section 3.4 and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender. Notwithstanding anything in Sections 3.4(a) or 3.4(b) to the contrary, the Borrower shall not be obligated to compensate any Lender for any amount arising or accruing before the earlier of (i) 180 days prior to the date on which such Lender gives notice to the Borrower and the Administrative Agent under this Section 3.4(c) or (ii) the date such amount arose or began accruing (and such Lender did not know such amount was arising or accruing) as a result of the retroactive application of Regulatory Change or other event giving rise to the claim for compensation. Section 3.5 Funding Losses. Within 15 days after delivery of the certificate described in the Section 3.6(a) by any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of each of the following (except to the extent incurred by any Lender as a result of any action taken pursuant to Section 3.2): 27 (a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); (b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; or (c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 9.16; including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained but excluding loss of margin for the period after which any such payment or failure to convert, borrow or prepay. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing. For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.5, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded. Section 3.6 Matters Applicable to all Requests for Compensation. (a) A certificate of the Administrative Agent or any Lender claiming compensation under this Article III and setting forth in reasonable detail the additional amount or amounts to be paid to it hereunder shall be conclusive if prepared reasonably and in good faith. In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging and attribution methods. (b) If (i) the obligation of any Lender to make Eurodollar Rate Loans shall be suspended pursuant to Section 3.2 or (ii) any Lender has demanded compensation under Section 3.1 or Section 3.4 with respect to Eurodollar Rate Loans, the Borrower may give notice to such Lender through the Administrative Agent that, unless and until such Lender notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist, effective 5 Business Days after the date of such notice from the Borrower (A) all Loans which would otherwise be made by such Lender as Eurodollar Rate Loans shall be made instead as Base Rate Loans (on which interest and principal shall be payable contemporaneously with the related Eurodollar Rate Loans of the other Lenders), and (B) after each of such Lender's Eurodollar Rate Loans has been repaid, all payments of principal which would otherwise be applied to Eurodollar Rate Loans shall be applied to repay such Lender's Base Rate Loans instead. (c) If any Lender makes a claim for compensation or other payment under Section 3.1 or Section 3.4 or if any Lender determines that it is unlawful or impermissible for it to make, 28 maintain or fund Eurodollar Rate Loans or Money Market LIBOR Loans pursuant to Section 3.2, the Borrower may replace such Lender in accordance with Section 9.16. (d) Prior to giving notice pursuant to Section 3.2 or to demanding compensation or other payment pursuant to Section 3.1 or Section 3.4, each Lender shall consult with the Borrower and the Administrative Agent with reference to the circumstances giving rise thereto; provided that nothing in this Section 3.6(d) shall limit the right of any Lender to require full performance by the Borrower of its obligations under such Sections. ARTICLE IV CONDITIONS Section 4.1 Effectiveness. This Agreement shall become effective on the date that each of the following conditions shall have been satisfied: (a) Receipt by the Administrative Agent of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the Borrower, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and its legal counsel: (i) executed counterparts of this Agreement, sufficient in number for distribution to the Administrative Agent, each Lender and the Borrower; (ii) a Note executed by the Borrower in favor of each Lender requesting a Note; (iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of the Borrower as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents; (iv) such documents and certifications as the Administrative Agent may reasonably require to evidence that the Borrower is duly organized or formed, and that the Borrower is validly existing, in good standing and qualified to engage in business in Puerto Rico and each other jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to cause a materially adverse change in the business, financial position, results of operations or prospects of the Borrower; (v) a favorable opinion of the General Counsel of the Borrower, addressed to the Administrative Agent and each Lender, as to the matters and in the form set forth in Exhibit H; 29 (vi) a favorable opinion of Pietrantoni Mendez & Alvarez LLP, counsel to the Administrative Agent, addressed to the Administrative Agent and each Lender, as to the matters and in the form set forth in Exhibit I; (vii) a favorable opinion of Morrison & Foerster LLP, counsel to the Administrative Agent, addressed to the Administrative Agent and each Lender, as to the matters and in the form set forth in Exhibit J; (viii) such other assurances, certificates, documents or consents as the Administrative Agent or the Required Lenders reasonably may require. (b) Any fees required to be paid on or before the Closing Date shall have been paid. (c) Unless waived by the Administrative Agent, the Borrower shall have paid all Attorney Costs of the Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such additional amounts of Attorney Costs as shall constitute its reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent). Section 4.2 Conditions to all Loans. The obligation of each Lender to honor any Request for Loans (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions precedent: (a) The representations and warranties of the Borrower contained in Article V (except for the representations and warranties set forth in Section 5.4(b), the accuracy of which it is expressly agreed shall not be a condition to making Loans) shall be true and correct on and as of the date of such Loan, except (A) to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and (B) except that for purposes of this Section 4.2, the representations and warranties contained in Section 5.4(a) shall be deemed to refer to the most recent statements furnished from time to time pursuant to Section 6.1(a). (b) No Default shall exist, or would result from such proposed Loan. (c) The Administrative Agent shall have received a Request for Loans in accordance with the requirements hereof. Each Request for Loans (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.2(a) and (b) have been satisfied on and as of the date of the applicable Loans. 30 ARTICLE V REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants to the Administrative Agent and the Lenders that: Section 5.1 Corporate Existence and Power. The Borrower is a corporation duly incorporated, validly existing and in good standing under the Laws of Puerto Rico, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. The Borrower is in compliance with all Laws except (i) where failure to be so could not reasonably be expected to cause a material adverse change in the business, financial position, results of operations or prospects of the Borrower and its Consolidated Subsidiaries considered as a whole or (ii) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted. Section 5.2 Corporate and Governmental Authorization: No Contravention. The execution, delivery and performance by the Borrower of this Agreement and each other Loan Document are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any Governmental Authority and do not contravene, or constitute a default under, any provision of applicable Law or of the Organization Documents of the Borrower or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower. Section 5.3 Binding Effect. This Agreement constitutes a valid and binding agreement of the Borrower and each other Loan Document, when executed and delivered in accordance with this Agreement, will constitute a valid and binding obligation of the Borrower, in each case enforceable in accordance with its terms. Section 5.4 Financial Information. (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein and (ii) fairly present, in conformity with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly provided therein, (A) for the fiscal year ending March 31, 2003 the consolidated financial position of Holdings and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year or (B) for any other fiscal year, the financial position of the Borrower and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year. (b) Since the date of the Audited Financial Statements, there has been no material adverse change in the business, financial position, results of operations or prospects of the Borrower and its Consolidated Subsidiaries, considered as a whole. Section 5.5 Litigation. There is no action, suit or proceeding pending against, or to the knowledge of the Borrower threatened against or affecting, the Borrower or any of its Subsidiaries before any court, arbiter, or Governmental Authority in which there is a reasonable 31 possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, considered as a whole or which in any manner draws into question the validity of this Agreement or any Loan Document. Section 5.6 Compliance with ERISA. Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA, the Internal Revenue Code and the Puerto Rico Code with respect to each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which has resulted or could result in the imposition of a lien or the posting of a bond or other security under ERISA or the Internal Revenue Code or (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA. Section 5.7 Environmental Matters. In the ordinary course of its business, the Borrower conducts a review of the effect of Environmental Laws on the business, operations and properties of the Borrower and its Subsidiaries. On the basis of this review, the Borrower has reasonably concluded that the costs of compliance with Environmental Laws, including associated liabilities, are unlikely to have a material adverse effect on the business, financial condition, results of operations or prospects of the Borrower and its Consolidated Subsidiaries, considered as a whole. Section 5.8 Taxes. The Borrower and its Subsidiaries have filed all income tax returns required to be filed under the Code and the Puerto Rico Code and all other material tax returns which are required to be filed by it and has paid all taxes, assessments, fees and other governmental charges due pursuant to such returns or pursuant to any assessment received by the Borrower or any Subsidiary. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate. Section 5.9 Subsidiaries. As of March 31, 2003, the Borrower was a Consolidated Subsidiary of Holdings. As of April 1, 2003, Holdings made a capital contribution to the Borrower composed of all of Holdings' operating assets. As of the Closing Date, the Borrower does not have any Subsidiaries, but any Subsidiary that the Borrower may have is a Person duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation, and has all organizational powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as initially conducted or intended to be conducted. Section 5.10 Not an Investment Company. The Borrower is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. Section 5.11 Disclosure. All information heretofore furnished by the Borrower to the Administrative Agent or any Lender for purposes of or in connection with this Agreement or any 32 transaction contemplated hereby is, and all such information hereafter furnished by the Borrower to the Administrative Agent or any Lender will be, true, accurate and complete in all material respects on the date as of which such information is stated or certified. Section 5.12 Tax Shelter Regulations. If the Borrower determines that the Loans qualify as a "reportable transaction" (within the meaning of Treasury Regulation Section 1.6011-4), it shall promptly notify the Administrative Agent thereof. If the Borrower so notifies the Administrative Agent, the Borrower acknowledges that one or more of the Lenders may treat its Loans as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain the lists and other records required by such Treasury Regulation. ARTICLE VI COVENANTS The Borrower agrees that, so long as any Lender has any Commitment hereunder or any Loan or any Obligation hereunder shall remain unpaid or unsatisfied: Section 6.1 Information. The Borrower will deliver to the Administrative Agent and each of the Lenders: (a) as soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of income and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of nationally recognized standing; (b) as soon as available and in any event within 60 days after the end of each of the first three quarters of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such quarter and the related consolidated statements of income and cash flows for such quarter and for the portion of the Borrower's fiscal year ended at the end of such quarter setting forth in the case of such statements of income and cash flow in comparative form the figures for the corresponding quarter and the corresponding portion of the Borrower's fiscal year; (c) simultaneously with the delivery of each set of financial statements referred to in subsection (a) above, a Compliance Certificate; (d) within 5 days after any officer of the Borrower obtains knowledge of any Default, if such Default is then continuing, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; (e) within 15 days after any officer of the Borrower at any time obtains knowledge that any representation or warranty set forth in Section 5.6 would not be true if made at such 33 time, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; and (f) from time to time such additional information regarding the financial position or business of the Borrower as the Administrative Agent, at the request of any Lender, may reasonably request. Documents required to be delivered pursuant to Section 6.1(a) or (b) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower's website on the Internet at the website address listed on Schedule 9.2; or (ii) on which such documents are posted on the Borrower's behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify (which may be by facsimile or electronic mail) the Administrative Agent, which shall notify the Lenders, of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents. Section 6.2 Maintenance of Property; Insurance. (a) The Borrower will keep, and will cause each Significant Subsidiary to keep, all material property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted. (b) The Borrower will maintain, and will cause each Significant Subsidiary to maintain, with financially sound and reputable insurance companies insurance in at least such amounts and against at least such risks (and with such risk retention) as are usually insured against by companies of established repute engaged in the same or similar business as the Borrower or such Significant Subsidiary, and the Borrower will promptly furnish to the Administrative Agent and the Lenders such information as to insurance carried as may be reasonably requested in writing by the Administrative Agent. Section 6.3 Conduct of Business and Maintenance of Existence. The Borrower will continue, and will cause each Significant Subsidiary to continue, to engage in business of the same general type as conducted by the Borrower on the Closing Date, and will preserve, renew and keep in full force and effect, and will cause each Significant Subsidiary to preserve, renew and keep in full force and effect their respective, corporate existence and their respective rights, privileges and franchises necessary or desirable in the normal conduct of business; provided that nothing in this Section 6.3 shall prohibit (i) any merger or consolidation involving the Borrower 34 which is permitted by Section 6.6, (ii) the merger of a Significant Subsidiary into the Borrower or the merger or consolidation of a Significant Subsidiary with or into another Person if the corporation surviving such consolidation or merger is a Significant Subsidiary and if, in each case, after giving effect thereto, no Default shall have occurred and be continuing, or (iii) the termination of the corporate existence of any Significant Subsidiary if the Borrower in good faith determines that such termination is in the best interest of the Borrower and is not materially disadvantageous to the Lenders.. Section 6.4 Compliance with Laws. The Borrower will comply, and cause each Significant Subsidiary to comply, in all material respects with all applicable Laws (including, without limitation, Environmental Laws and ERISA and the rules and regulations thereunder) except where the necessity of compliance therewith is contested in good faith by appropriate proceedings. Section 6.5 Negative Pledge. The Borrower will not pledge or otherwise subject to any lien any property or assets of the Borrower unless the Loans and the Obligations of the Borrower under this Agreement are secured by such lien equally and ratably with all other obligations secured thereby so long as such other obligations shall be so secured; provided, however, that such covenant will not apply to liens securing obligations which do not in the aggregate at any one time outstanding exceed 5% of Consolidated Net Tangible Assets (as defined below) of the Borrower and its Consolidated Subsidiaries and also will not apply to: (a) the pledge of any assets of the Borrower to secure any financing by the Borrower of the exporting of goods to or between, or the marketing thereof in, jurisdictions other than the United States and Puerto Rico in connection with which the Borrower reserves the right, in accordance with customary and established banking practice, to deposit, or otherwise subject to a lien, cash, securities or receivables, for the purpose of securing banking accommodations or as the basis for the issuance of bankers' acceptances or in aid of other similar borrowing arrangements; (b) the pledge of receivables of the Borrower payable in currencies other than United States dollars to secure borrowings in jurisdictions other than the United States and Puerto Rico; (c) any deposit of assets of the Borrower with any surety company or clerk of any court, or in escrow, as collateral in connection with, or in lieu of, any bond on appeal by the Borrower from any judgment or decree against it, or in connection with other proceedings in actions at law or in equity by or against the Borrower or in favor of any Governmental Authority to secure progress, advance or other payments in the ordinary course of the Borrower's business; (d) any lien or charge on any property of the Borrower, tangible or intangible, real or personal, existing at the time of acquisition or construction of such property (including acquisition through merger or consolidation) or given to secure the payment of all or any part of the purchase or construction price thereof or to secure any indebtedness incurred prior to, at the time of, or within one year after, the acquisition or completion of construction thereof for the purpose of financing all or any part of the purchase or construction price thereof; 35 (e) any lien in favor of the United States, any State thereof, the District of Columbia, or Puerto Rico or any agency, department or other instrumentality thereof, to secure progress, advance or other payments pursuant to any contract or provision of any statute; (f) any lien securing the performance of any contract or undertaking not directly or indirectly in connection with the borrowing of money, obtaining of advances or credit or the securing of debt, if made and continuing in the ordinary course of business; (g) any lien to secure nonrecourse obligations in connection with the Borrower's engaging in leveraged or single-investor lease transactions; and (h) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any lien, charge or pledge referred to in the foregoing clauses (a) to (g), inclusive, of this Section 6.5; provided, however, that the amount of any and all obligations and indebtedness secured thereby shall not exceed the amount thereof so secured immediately prior to the time of such extension, renewal or replacement and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the charge or lien so extended, renewed or replaced (plus improvements on such property). "Consolidated Net Tangible Assets" means the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (i) all current liabilities and (ii) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles of the Borrower and its Consolidated Subsidiaries all as set forth on the most recent balance sheet of the Borrower and its Consolidated Subsidiaries prepared in accordance with GAAP. Section 6.6 Consolidations. Mergers and Sales of Assets. (a) The Borrower shall not consolidate with or merge into any other Person or convey, transfer or lease (whether in one transaction or in a series of transactions) all or substantially all of its properties and assets to any Person, unless: (i) the Person formed by such consolidation or into which the Borrower is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of the Borrower shall be a Person organized and existing under the Laws of the United States of America, any State thereof, the District of Columbia or Puerto Rico (the "Successor Corporation") and shall expressly assume, by an amendment or supplement to this Agreement, signed by the Borrower and such Successor Corporation and delivered to the Administrative Agent, the Borrower's obligation with respect to the due and punctual payment of the principal of and interest on all the Loans and the due and punctual payment of all other Obligations payable by the Borrower hereunder and the performance or observance of every covenant herein on the part of the Borrower to be performed or observed; (ii) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Borrower as a result of such transaction as having been incurred by the Borrower at the time of such transaction, no Default shall have happened and be continuing; 36 (iii) if, as a result of any such consolidation or merger or such conveyance, transfer or lease, properties or assets of the Borrower would become subject to a mortgage, pledge, lien, security interest or other encumbrance which would not be permitted by Section 6.5 hereof, the Borrower or the Successor Corporation, as the case may be, takes such steps as shall be necessary effectively to secure the Loans and the Obligations of the Borrower under this Agreement equally and ratably with (or prior to) all indebtedness secured thereby; and (iv) the Borrower has delivered to the Administrative Agent a certificate signed by an executive officer and a written opinion or opinions of counsel satisfactory to the Administrative Agent (who may be counsel to the Borrower), each stating that such amendment or supplement to this Agreement complies with this Section 6.6 and that all conditions precedent herein provided for relating to such transaction have been complied with. (b) Upon any consolidation or merger or any conveyance, transfer or lease of all or substantially all of the properties and assets of the Borrower in accordance with Section 6.6(a), the Successor Corporation shall succeed to, and be substituted for, and may exercise every right and power of, the Borrower under this Agreement and the Loans with the same effect as if the Successor Corporation had been named as the Borrower therein and herein, and thereafter, the Borrower, except in the case of a lease of the Borrower's properties and assets, shall be released from its liability as obligor on any of the Loans and under this Agreement. Section 6.7 Use of Proceeds. The proceeds of the Loans made under this Agreement will be used by the Borrower for its general corporate purposes including, without limitation, the refunding of its maturing commercial paper. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate of buying or carrying any "margin stock" within the meaning of Regulation U. During the Availability Period, subject to the other terms and conditions of this Agreement, the Borrower may request and use the proceeds of Loans of one Type to repay outstanding Loans of another Type. Section 6.8 Credit Support Agreement. The Borrower agrees to cause (i) Toyota Financial Services Corporation and/or any other Affiliate of the Borrower at all times to maintain in effect for short term and long term indebtedness, if any, of the Borrower that is rated by any Rating Agency support agreements that are in form and substance satisfactory to the Rating Agency providing such rating and (ii) the Borrower's short-term Debt Ratings from S&P and Moody's to be not less than A-2 and P-2, respectively. ARTICLE VII DEFAULTS Section 7.1 Events of Default. If one or more of the following events ("Events of Default") shall have occurred and be continuing: 37 (a) the Borrower shall fail to pay when due any principal of any Loan or shall fail to pay within 5 days of the due date thereof any interest on any Loan, any fees or any other amount payable hereunder; (b) the Borrower shall fail to observe or perform any covenant contained in Section 6.5, Section 6.6 or Section 6.7; (c) the Borrower shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those covered by clause (a) or (b) above) for 30 days after notice thereof has been given to the Borrower by the Administrative Agent at the request of any Lender; (d) any representation, warranty, certification or statement made by the Borrower in this Agreement or in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect in any material respect when made (or deemed made); (e) indebtedness for borrowed money of the Borrower or any of its Subsidiaries in an aggregate amount in excess of $10,000,000 shall not be paid when due or shall be accelerated prior to its stated maturity date and, within 10 days after written notice thereof is given to the Borrower by the Administrative Agent, such indebtedness shall not be discharged or such acceleration shall not be rescinded or annulled; (f) the Borrower or any Significant Subsidiary shall commence or consent to the commencement of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; (g) any member of the ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $10,000,000 which it shall have become liable to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of the ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more members of the ERISA Group to incur a current payment obligation in excess of $25,000,000; 38 (h) judgments or orders for the payment of money in excess of $10,000,000 in the aggregate shall be rendered against the Borrower or any Significant Subsidiary and such judgments or orders shall continue unsatisfied and unstayed for a period of 30 days; or (i) the Borrower shall cease to be a TMC Consolidated Subsidiary; then, and in every such event, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders and after notice to the Borrower (i) terminate the commitment of each Lender to make Loans, and they shall thereupon terminate, and (ii) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable. Section 7.2 Application of Funds. After the exercise of remedies provided for in Section 7.1 (or after the Loans have automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order: First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including Attorney Costs and amounts payable under Article III) payable to the Administrative Agent in its capacity as such; Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including Attorney Costs and amounts payable under Article III), ratably among them in proportion to the amounts described in this clause Second payable to them; Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them; Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them; and Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law. ARTICLE VIII THE ADMINISTRATIVE AGENT 39 Section 8.1 Appointment and Authorization of Administrative Agent. Each Lender hereby irrevocably appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term "agent" herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. Section 8.2 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct. Section 8.3 Liability of Administrative Agent. No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by the Borrower or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of the Borrower or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of the Borrower or any Affiliate thereof. Section 8.4 Reliance by Administrative Agent. (a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail 40 message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrower), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders. (b) For purposes of determining compliance with the conditions specified in Section 4.1, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto. Section 8.5 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default and stating that such notice is a "notice of default." The Administrative Agent will notify the Lenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Default as may be directed by the Required Lenders in accordance with Article VII; provided, however, that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable or in the best interest of the Lenders. Section 8.6 Credit Decision; Disclosure of Information by Administrative Agent. Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of the Borrower or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession. Each Lender acknowledges that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and its Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder. Each Lender also acknowledges that it will, 41 independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent herein, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower or any of its Affiliates which may come into the possession of any Agent-Related Person. Section 8.7 Indemnification of Administrative Agent. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of the Borrower and without limiting the obligation of the Borrower to do so), pro rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Agent-Related Person's own gross negligence or willful misconduct; provided, however, that no action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower. The undertaking in this Section shall survive termination of the Aggregate Commitments, the payment of all other Obligations and the resignation of the Administrative Agent. Section 8.8 Administrative Agent in its Individual Capacity. Bank of America and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Borrower and its Affiliates as though Bank of America were not the Administrative Agent hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of America or its Affiliates may receive information regarding the Borrower or any of its Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to its Loans, Bank of America shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent, and the terms "Lender" and "Lenders" include Bank of America in its individual capacity. 42 Section 8.9 Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 30 days' notice to the Lenders. If the Administrative Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor administrative agent for the Lenders, which successor administrative agent shall be consented to by the Borrower in writing at all times other than during the existence of an Event of Default (which consent of the Borrower shall not be unreasonably withheld). If no successor administrative agent is so appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Borrower, a successor administrative agent from among the Lenders. Upon the acceptance of its appointment as successor administrative agent hereunder, the Person acting as such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term "Administrative Agent" shall mean such successor administrative agent, and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shall be terminated. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article VIII and Sections 9.4 and 9.5 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date which is 30 days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. Section 8.10 Administrative Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Section 2.8 and Section 9.4) allowed in such judicial proceeding; and (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making 43 of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 2.8 and Section 9.4. Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding. Section 8.11 Other Agents, Arrangers and Managers. None of the Lenders or other Persons identified on the facing page or signature pages of this Agreement as a "syndication agent," "documentation agent," "co-agent," "book manager," "lead manager," "arranger," "lead arranger" or "co-arranger" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, in the case of such Lenders, those applicable to all Lenders as such. Without limiting the foregoing, none of the Lenders or other Persons so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder. ARTICLE IX MISCELLANEOUS Section 9.1 Amendments, Etc. Except as otherwise set forth in the last sentence of this Section, no amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall: (a) waive any condition set forth in Section 4.1(a) without the written consent of each Lender; (b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 7.1) without the written consent of such Lender; (c) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; (d) reduce the principal of, or the rate of interest specified herein on, any Loan, or any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the 44 Required Lenders shall be necessary to amend the definition of "Default Rate" or to waive any obligation of the Borrower to pay interest at the Default Rate; (e) change Section 2.12 or Section 7.2 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender; (f) change any provision of this Section or the definition of "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; ;provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (ii) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, any amendment or waiver of any term of any Money Market Loan (except the increase in the principal amount thereof or the extension of any Interest Period until after the Revolving Maturity Date) made by a Lender hereunder shall be effective if signed by such Lender and the Borrower and acknowledged by the Administrative Agent and (ii) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender. Section 9.2 Notices and Other Communications; Facsimile Copies. (a) General. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission). All such written notices shall be mailed, faxed or delivered to the applicable address, facsimile number or (subject to subsection (c) below) electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows: (i) if to the Borrower or the Administrative Agent, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 9.2 or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties; and (ii) if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the Borrower and the Administrative Agent. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail 45 (which form of delivery is subject to the provisions of subsection (c) below), when delivered; provided, however, that notices and other communications to the Administrative Agent pursuant to Article II shall not be effective until actually received by such Person. In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder. (b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on the Borrower, the Administrative Agent and the Lenders. The Borrower may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. (c) Limited Use of Electronic Mail. Electronic mail and Internet and intranet websites may be used only to distribute routine communications, such as financial statements and other information as provided in Section 6.1, and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose. (d) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices) purportedly given by or on behalf of a Responsible Officer of the Borrower or any other Person designated in writing by a Responsible Officer to the Administrative Agent even if (i) such notices were not otherwise made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify each Agent-Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of a Responsible Officer of the Borrower or any other Person designated in writing by a Responsible Officer to the Administrative Agent. All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording. Section 9.3 No Waiver; Cumulative Remedies. No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Law. Section 9.4 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the Administrative Agent for all costs and expenses incurred in connection with the development, preparation, negotiation and execution of this Agreement and the other Loan Documents and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, 46 including all Attorney Costs, and (b) to pay or reimburse the Administrative Agent and each Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any "workout" or restructuring in respect of the Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall include all search and filing charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Administrative Agent and the cost of independent public accountants and other outside experts retained by the Administrative Agent or any Lender. All amounts due under this Section 9.4 shall be payable within ten Business Days after delivery to the Borrower of a certificate setting forth in reasonable detail the basis for the amounts demanded. The agreements in this Section shall survive the termination of the Aggregate Commitments and repayment of all other Obligations. Section 9.5 Indemnification by the Borrower. Whether or not the transactions contemplated hereby are consummated, the Borrower shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the "Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment, Loan or the use or proposed use of the proceeds therefrom, or (c) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified Liabilities"); provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall any Indemnitee have any liability for any indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date). All amounts due under this Section 9.5 shall be payable within 10 Business Days after the Borrower receives demand therefor setting forth in reasonable detail the basis for such demand. The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations. Notwithstanding the foregoing, the Borrower shall not, in connection with any single proceeding or series of related proceedings in the same jurisdiction, be liable for the fees and expenses of 47 more than one separate firm or internal legal department (in addition to any local counsel) for all Indemnitees, such firm or internal legal department to be selected by the Administrative Agent; provided that if an Indemnitee shall have reasonably concluded that (i) there may be legal defenses available to it which are different from or additional to those available to other Indemnitees and may conflict therewith or (ii) the representation of such Indemnitee and the other Indemnitees by the same counsel would otherwise be inappropriate under applicable principles of professional responsibility, such Indemnitee shall have the right to select and retain separate counsel to represent such Indemnitee in connection with such proceeding(s) at the expense of the Borrower. Section 9.6 Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises any right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. Section 9.7 Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement. (b) Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Committed Loans at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and the Committed Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund (as defined in subsection (f) of this Section) with 48 respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Committed Loans outstanding thereunder) subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $10,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement with respect to the Committed Loans or the Commitment assigned; (iii) any assignment of a Commitment must be approved by the Administrative Agent (which approval shall not be unreasonably withheld or delayed) unless the Person that is the proposed assignee is itself a Lender or an Affiliate of a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500. Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.1, 3.4, 3.5, 9.4 and 9.5 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section. If the Eligible Assignee is required to deliver documents pursuant to Section 9.15, it shall deliver those documents to the Borrower and the Administrative Agent in accordance with Section 9.15. (c) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent's Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. (d) Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the 49 Borrower or any of the Borrower's Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 9.1 that directly affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.4 and 3.5 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 9.9 as though it were a Lender, provided such Participant agrees to be subject to Section 2.12 as though it were a Lender. (e) A Participant shall not be entitled to receive any greater payment under Section 3.1 or Section 3.4 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant unless the sale of the participation to such Participant is made with the Borrower's prior written consent. A Participant shall not be entitled to the benefits of Section 3.1 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 9.15 as though it were a Lender. (f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. (g) As used herein, the following terms have the following meanings: "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall not include the Borrower or any of the Borrower's Affiliates or Subsidiaries. "Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business. 50 "Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender. (h) Section 9.8 Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by any regulatory authority; (c) to the extent required by applicable Laws or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty's or prospective counterparty's professional advisor) to any securitization or credit derivative transaction relating to obligations of the Borrower; (g) with the consent of the Borrower; (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower; or (i) to the National Association of Insurance Commissioners or any other similar organization. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Administrative Agent and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the Loans. For the purposes of this Section, "Information" means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified in writing at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Notwithstanding anything herein to the contrary, "Information" shall not include, and any party to this Agreement may disclose without limitation of any kind, any information with respect to the "tax treatment" and "tax structure" (in each case, within the meaning of Treasury Regulation Section 1.6011-4) that are provided to any such party relating to such tax treatment and tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or 51 similar item that relate to the tax treatment or tax structure of the Loans and transactions contemplated hereby. Section 9.9 Set-off. Upon the occurrence and during the continuance of any Event of Default, nothing in this Agreement shall preclude any Lender, at any time and from time to time, from exercising any right of set off, counterclaim, or other rights it may have otherwise than under this Agreement and or from applying amounts realized against any and all Obligations owing to such Lender hereunder or under any other Loan Document, now or hereafter existing. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. Section 9.10 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. Section 9.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 9.12 Integration. This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof. Section 9.13 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Borrowing and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding. Section 9.14 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and 52 enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 9.15 Tax Forms. (a) (i) As of the date that each Lender becomes a Lender under this Agreement, each such Lender represents and warrants to the Administrative Agent and the Borrower that it is an Exempt Lender and agrees that, if Puerto Rico or United States taxing authorities at any time after the date of this Agreement require that such Lender deliver any certificate, statement or form as a condition to exemption from, or reduction of, withholding taxes under the Puerto Rico Code or the Code on any payments by the Borrower to such Lender under this Agreement, such Lender shall deliver such certificate, statement or form to the Administrative Agent prior to becoming a party to this Agreement (or upon accepting an assignment of an interest herein). Thereafter and from time to time, each such Lender shall (A) promptly submit to the Administrative Agent such duly completed and signed certificates, statements or forms as shall be adopted from time to time by the relevant Puerto Rico or United States taxing authorities and such other evidence as is satisfactory to the Borrower and the Administrative Agent of any available exemption from, or reduction of, Puerto Rico and United States withholding taxes in respect of all payments to be made to such Lender by the Borrower pursuant to this Agreement, (B) promptly notify the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (C) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that the Borrower make any deduction or withholding for taxes from amounts payable to such Lender. (ii) Each Lender, to the extent it does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Lender under any of the Loan Documents (for example, in the case of a typical participation by such Lender), shall deliver to the Administrative Agent on the date when such Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and at such other times as may be necessary in the determination of the Administrative Agent (in the reasonable exercise of its discretion), (A) two duly signed completed copies of the certificates, statements or forms required to be provided by such Lender as set forth above, to establish the portion of any such sums paid or payable with respect to which such Lender acts for its own account that is not subject to Puerto Rico or United States withholding tax and (B) any information such Lender chooses to transmit with such certificates, statements or forms, and any other certificate or statement of exemption required under the Puerto Rico Code or the Code, to establish that such Lender is not acting for its own account with respect to a portion of any such sums payable to such Lender. 53 (iii) The Borrower shall not be required to pay any additional amount to any Lender under Section 3.1 (A) with respect to any Taxes required to be deducted or withheld on the basis of the information, certificates or statements of exemption such Lender transmits pursuant to this Section 9.15(a) or (B) if such Lender shall have failed to satisfy the foregoing provisions of this Section 9.15(a); provided that if such Lender shall have satisfied the requirement of this Section 9.15(a) on the date such Lender became a Lender or ceased to act for its own account with respect to any payment under any of the Loan Documents, nothing in this Section 9.15(a) shall relieve the Borrower of its obligation to pay any amounts pursuant to Section 3.1 in the event that, as a result of any change in any applicable Law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender or other Person for the account of which such Lender receives any sums payable under any of the Loan Documents is not subject to withholding or is subject to withholding at a reduced rate. (iv) The Administrative Agent may, without reduction, withhold any Taxes required to be deducted and withheld from any payment under any of the Loan Documents with respect to which the Borrower is not required to pay additional amounts under this Section 9.15(a). (b) If any Governmental Authority asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including Attorney Costs) of the Administrative Agent. The obligation of the Lenders under this Section shall survive the termination of the Aggregate Commitments, repayment of all other Obligations hereunder and the resignation of the Administrative Agent. Section 9.16 Replacement of Lenders. Under any circumstances set forth herein providing that the Borrower shall have the right to replace a Lender as a party to this Agreement, the Borrower may, upon notice to such Lender and the Administrative Agent, replace such Lender by causing such Lender to assign its Commitment (with the assignment fee to be paid by the Borrower in such instance) pursuant to Section 9.7(b) to one or more other Lenders or Eligible Assignees procured by the Borrower; provided, however, that if the Borrower elects to exercise such rights with respect to any Lender pursuant to Section 3.6(c), it shall be obligated to replace all Lenders that have made similar requests for compensation pursuant to Section 3.1 or 3.4. The Borrower shall (y) pay in full all principal, interest, fees and other amounts owing to such Lender through the date of replacement (including any amounts payable pursuant to Section 3.5) and (z) release such Lender from its obligations under the Loan Documents. Any Lender being replaced shall execute and deliver an Assignment and Assumption with respect to such Lender's Commitment and outstanding Loans. Section 9.17 Governing Law. 54 (a) THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, the LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE COUNTY OF NEW YORK IN THE CITY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. Section 9.18 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 55 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. TOYOTA CREDIT DE PUERTO RICO CORP. By: /s/ George Borst ------------------------------------------- Name: George Borst ----------------------------------------- Title: President and Chief Executive Officer ---------------------------------------- S-1 BANK OF AMERICA, N.A., as Administrative Agent By: /s/ Anthea Del Bianco -------------------------------------- Name: Anthea Del Bianco ----------------------------------- Title: Vice President ----------------------------------- S-2 BANK OF AMERICA, N.A., as a Lender By: /s/ Alan Roche --------------------------------------- Name: Alan Roche ------------------------------------- Title: Managing Director ------------------------------------ S-3 THE BANK OF TOKYO-MITSUBISHI, LTD., as Documentation Agent and a Lender By: /s/ Hiroshi Jinza --------------------------------------- Name: Hiroshi Jinza ------------------------------------- Title: Deputy General Manager ------------------------------------ S-4 CITICORP USA, INC., as Documentation Agent and a Lender By: /s/ Brian Ike ------------------------------------------ Name: Brian Ike ---------------------------------------- Title: Vice President --------------------------------------- S-5 JPMORGAN CHASE BANK, as Syndication Agent and a Lender By: /s/ James W. Peterson ------------------------------------ Name: James W. Peterson ---------------------------------- Title: Vice President --------------------------------- S-6 DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender By:/s/ Oliver Schwarz ------------------------------------- Name: Oliver Schwarz ----------------------------------- Title: Vice President ---------------------------------- By: /s/ Hans-Joseph Thiele ------------------------------------- Name: Hans-Joseph Thiele ----------------------------------- Title: Director ---------------------------------- S-7 HSBC BANK USA, as a Lender By: /s/ Christopher Samms ---------------------------------------- Name: Christopher Samms -------------------------------------- Title: First Vice President, Officer # 9426 ------------------------------------- S-8 MERRILL LYNCH BANK USA, as a Lender By:/s/ Frank K. Stepan ------------------------------------- Name: Frank K. Stepan ----------------------------------- Title: Vice President ---------------------------------- S-9 MORGAN STANLEY BANK, as a Lender By: /s/ Jaap L. Tonckens ------------------------------------- Name: Jaap L. Tonckens ----------------------------------- Title: Vice President ---------------------------------- S-10 SUMITOMO MITSUI BANKING CORPORATION, LOS ANGELES BRANCH, as a Lender By: /s/ Yoshimi Miura ------------------------------------- Name: Yoshimi Miura ----------------------------------- Title: General Manager ---------------------------------- S-11 UFJ BANK LIMITED, LOS ANGELES BRANCH, as a Lender By: /s/ Hideki Kishimoto ------------------------------------- Name: Hideki Kishimoto -------------------------------- Title: SVP & Deputy General Manager ------------------------------- S-12 ABN AMRO BANK N.V., as a Lender By: /s/ Angela Noique ------------------------------------- Name: Angela Noique ----------------------------------- Title: Group Vice President ---------------------------------- By: /s/ John M. Pastore ------------------------------------- Name: John M. Pastore ----------------------------------- Title: Vice President ---------------------------------- S-13 BANK ONE N.A., as a Lender By: /s/ Tohru Yasumaru ------------------------------------- Name: Tohru Yasumaru ----------------------------------- Title: Director ---------------------------------- S-14 BARCLAYS BANK PLC, as a Lender By: /s/ Alison McGuigan ------------------------------------- Name: Alison McGuigan ----------------------------------- Title: Associate Director ---------------------------------- S-15 BNP PARIBAS, as a Lender By: /s/ Pierre Nicholas Rogers ------------------------------------- Name: Pierre Nicholas Rogers ----------------------------------- Title: Managing Director ---------------------------------- By: /s/ Katherine Wolfe ------------------------------------- Name: Katherine Wolfe ----------------------------------- Title: Director ---------------------------------- S-16 CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH, as a Lender By: /s/ Mark E. Gleason ------------------------------------- Name: Mark E. Gleason ----------------------------------- Title: Director ---------------------------------- By: /s/ Joshua Parrish ------------------------------------- Name: Joshua Parrish ----------------------------------- Title: Associate ---------------------------------- S-17 DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES, as a Lender By: /s/ J. Curtin Beaudouin ------------------------------------ Name: J. Curtin Beaudouin ------------------------------------ Title: Director ------------------------------------ By: /s/ Stephen Kovach ------------------------------------ Name: Stephen Kovach ------------------------------------ Title: Vice President ------------------------------------ S-18 ING LUXEMBOURG SA, as a Lender By: /s/ Vincent Vermeire ------------------------------------ Name: Vincent Vermeire ----------------------------------- Title: Senior Manager/ Corporate and Institutional Banking --------------------------------- By: /s/ Yves Verhulst ------------------------------------ Name: Yves Verhulst ----------------------------------- Title: Manager/ Corporate and Institutional Banking ---------------------------------- S-19 LEHMAN BROTHERS BANK, FSB, as a Lender By: /s/ Gary T. Taylor ------------------------------------ Name: Gary T. Taylor ----------------------------------- Title: Vice President ---------------------------------- S-20 UBS AG, CAYMAN ISLANDS BRANCH, as a Lender By: /s/ Patricia O'Kicki --------------------------------------- Name: Patricia O'Kicki ------------------------------------- Title: Director ------------------------------------ By: /s/ Wilfred V. Saint --------------------------------------- Name: Wilfred V. Saint ------------------------------------- Title: Associate Director ------------------------------------ S-21 MIZUHO CORPORATE BANK, LTD., as a Lender By: /s/ Shinji Yamada ------------------------------------ Name: Shinji Yamada ----------------------------------- Title: Joint General Manager ---------------------------------- S-22 PNC BANK, NA, as a Lender By: /s/ Dorothy G.W. Brailer ------------------------------------ Name: Dorothy G.W. Brailer ----------------------------------- Title: Vice President ---------------------------------- S-23 THE BANK OF NEW YORK, as a Lender By: /s/ Mehrasa Raygani ------------------------------------ Name: Mehrasa Raygani ----------------------------------- Title: Vice President ---------------------------------- S-24 MELLON BANK, N.A., as a Lender By: /s/ Lawrence C. Ivey ------------------------------------ Name: Lawrence C. Ivey ----------------------------------- Title: First Vice President ---------------------------------- S-25 SCHEDULE 2.1
COMMITMENTS AND PRO RATA SHARES LENDER COMMITMENT PRO RATA SHARE - ------------------------------------------------------ ------------------------------------ -------------------------- Bank of America, N.A. $29,444,444.42 7.361111% The Bank of Tokyo-Mitsubishi, Ltd. $27,777,777.78 6.944444% Citicorp USA, Inc. $27,777,777.78 6.944444% JPMorgan Chase Bank $27,777,777.78 6.944444% Deutsche Bank AG New York Branch $19,444,444.44 4.861111% HSBC Bank USA $19,444,444.44 4.861111% Merrill Lynch Bank USA $19,444,444.44 4.861111% Morgan Stanley Bank $19,444,444.44 4.861111% Sumitomo Mitsui Banking Corporation, Los Angeles $19,444,444.44 4.861111% Branch UFJ Bank Limited, Los Angeles Branch $19,444,444.44 4.861111% ABN Amro Bank N.V. $15,555,555.56 3.888889% Bank One N.A. $15,555,555.56 3.888889% Barclays Bank PLC $15,555,555.56 3.888889% BNP Paribas $15,555,555.56 3.888889% Credit Suisse First Boston, Cayman Islands Branch $15,555,555.56 3.888889% Dresdner Bank AG New York and Grand Cayman Branches $15,555,555.56 3.888889% ING Luxembourg SA $15,555,555.56 3.888889% Lehman Brothers Bank, FSB $15,555,555.56 3.888889% UBS AG, Cayman Islands Branch $15,555,555.56 3.888889% Mizuho Corporate Bank, Ltd. $11,111,111.11 2.777778% PNC Bank, NA $8,333,333,.33 2.083333% The Bank of New York $5,555,555.56 1.388889% Mellon Bank, N.A. $5,555,555.56 1.388889% Total $400,000,000.00 100.000000%
1 SCHEDULE 9.2 ADMINISTRATIVE AGENT'S OFFICE, CERTAIN ADDRESSES FOR NOTICES BORROWER: TOYOTA CREDIT DE PUERTO RICO CORP. Borrower's Address - ------------------ (for all purposes) Toyota Credit de Puerto Rico Corp. c/o Toyota Motor Credit Corporation Attn: Treasury 19001 South Western Avenue P.O. Box 2991 Mail Stop NF-10 Torrance, Ca. 90509 Attention: Jeff Carter, National Treasury Manager Telephone: (310) 468-6197 Facsimile: (310) 381-6655 (With a copy to): Toyota Motor Credit Corporation 19001 South Western Avenue P.O. Box 2991 Mail Stop NF-10 Torrance, Ca. 90509 Attention: Janet Rydell, Cash Manager Telephone: (310) 468-6176 Facsimile: (310) 381-5219 ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A. Administrative Agent's Office - ----------------------------- (for Notices of Payments and Requests for Loans): Bank of America, N.A. 1850 Gateway Blvd., 5th Floor Concord, CA 94520 Mail Code: CA4-706-05-09 Attention: Kristine Kelleher Telephone: (925) 675-8373 Facsimile: (800) 969-2414 1 (for Payments): Bank of America, N.A. Dallas, TX Account No.: 3750836479 Ref: Toyota Credit de Puerto Rico Corp. ABA# 111000012 (Other Notices as Administrative Agent): Bank of America, N.A. Japan-Financial Institutions Mail Code: 771-623-15-01 Sanno Park Tower 15F 2-11-1 Nagatacho, Chiyoda-Ku Tokyo 100-6115 Japan Attention: Mashiko Ando Telephone: 81-3-3508-5907 Facsimile: 81-3-3508-5922 Electronic Mail: masahiko.ando@bankofamerica.com (With a Copy to): Bank of America, N.A. Agency Management Mail Code: CA5-701-05-19 1455 Market Street San Francisco, CA 94103-1399 Attention: Anthea Del Bianco Telephone: (415) 436-2776 Facsimile: (415) 503-5101 Electronic Mail: anthea.del_bianco@bankofamerica.com 2 EXHIBIT A FORM OF COMMITTED LOAN NOTICE Date: ___________, _____ To: Bank of America, N.A., as Administrative Agent Ladies and Gentlemen: Reference is made to that certain Credit Agreement (364 Day Facility), dated as of September 11, 2003 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Agreement;" the terms defined therein being used herein as therein defined), among Toyota Credit de Puerto Rico Corp., a corporation organized under the laws of Puerto Rico (the "Borrower"), the Lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, JPMorgan Chase Bank, as Syndication Agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Citibank, N.A., as Documentation Agents. The undersigned hereby requests (select one):
[ ] A Borrowing of Committed Loans [ ] A conversion or continuation of Loans 1. On (a Business Day). -------------------------------------------------- 2. In the amount of $ . ---------------------------------- 3. Comprised of .[Type of Committed Loan requested] --------------------------------------- 4. For Eurodollar Rate Loans: with an Interest Period of months. --------
[The Committed Borrowing requested herein complies with the proviso to the first sentence of Section 2.1 of the Agreement.] TOYOTA CREDIT DE PUERTO RICO CORP. By: -------------------------------- Name: ------------------------------ Title: ----------------------------- A-1 Form of Committed Loan Notice EXHIBIT B FORM OF NOTE September 11, 2003 FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to pay, without setoff or counterclaim, to _____________________ or registered assigns (the "Lender"), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Loan from time to time made by the Lender to the Borrower under that certain Credit Agreement (364 Day Facility), dated as of September 11, 2003(as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Agreement;" the terms defined therein being used herein as therein defined), among the Borrower, the Lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, JPMorgan Chase Bank, as Syndication Agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Citibank, N.A., as Documentation Agents. The Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent's Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement. This Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto. B-1 Form of Note THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. TOYOTA CREDIT DE PUERTO RICO CORP. By: ------------------------------------ Name: ----------------------------------- Title: ---------------------------------- B-2 Form of Note LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF OUTSTANDING PRINCIPAL OR PRINCIPAL TYPE OF LOAN AMOUNT OF LOAN END OF INTEREST INTEREST PAID BALANCE THIS DATE MADE MADE PERIOD THIS DATE DATE NOTATION MADE BY - -------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------- --------------- -------------- -------------- -------------- ------------- -------------- - ---------------- --------------- -------------- -------------- -------------- ------------- -------------- - ---------------- --------------- -------------- -------------- -------------- ------------- -------------- - ---------------- --------------- -------------- -------------- -------------- ------------- -------------- - ---------------- --------------- -------------- -------------- -------------- ------------- -------------- - ---------------- --------------- -------------- -------------- -------------- ------------- -------------- - ---------------- --------------- -------------- -------------- -------------- ------------- -------------- - ---------------- --------------- -------------- -------------- -------------- ------------- -------------- - ---------------- --------------- -------------- -------------- -------------- ------------- -------------- - ---------------- --------------- -------------- -------------- -------------- ------------- --------------
B-3 Form of Note EXHIBIT C FORM OF COMPLIANCE CERTIFICATE As required by Section 6.1(c) of the Credit Agreement (364 Day Facility) dated as of September 11, 2003 by and among Toyota Credit de Puerto Rico Corp., the Lenders party thereto, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, JPMorgan Chase Bank, as Syndication Agent, and The Bank of Tokyo Mitsubishi, Ltd. and Citibank, N.A., as Documentation Agents (the "Agreement"), I, __________________, do hereby certify that I am the chief financial officer of Toyota Credit de Puerto Rico Corp., a corporation organized under the laws of Puerto Rico (the "Company"), and further certify on behalf of the Company that, to the best of my knowledge, no Default (as defined in the Agreement) under the Agreement exists as of the date of this Certificate. Certified this _____ day of ______________, 200_ -------------------------------------- Name: --------------------------------- C-1 Form of Compliance Certificate EXHIBIT D ASSIGNMENT AND ASSUMPTION This Assignment and Assumption (this "Assignment and Assumption") is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the "Assignee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (the "Credit Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full. For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor's rights and obligations as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable Law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at Law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the "Assigned Interest"). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor. 1. Assignor: ______________________________ 2. Assignee: ______________________________ [and is an Affiliate/Approved Fund of [identify Lender]1] 3. Borrower(s): Toyota Credit de Puerto Rico Corp. 4. Administrative Agent: ______________________, as the administrative agent under the Credit Agreement 5. Credit Agreement: Credit Agreement (364 Day Facility), dated as of September 11, 2003 among Toyota Credit de Puerto Rico Corp., the Lenders parties thereto, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, JPMorgan Chase Bank, as Syndication Agent, and The Bank of Tokyo- - ------------------------------ (1) Select as applicable. D-1 Assignment and Assumption Mitsubishi, Ltd. and Citibank, N.A., as Documentation Agents 6. Assigned Interest:(1)
- ------------------------------ ------------------------------- ----------------------------- -------------------------- Aggregate Amount of Amount of Percentage Commitment/Loans Commitment/Loans Assigned of Facility Assigned for all Lenders* Assigned* Commitment/Loans(2) ----------------- --------------- -------- ---------------- - ------------------------------ ------------------------------- ----------------------------- -------------------------- Commitment/Committed Loans $________________ $________________ ______________% being assigned - ------------------------------ ------------------------------- ----------------------------- --------------------------
[7. Trade Date: __________________](3) Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.] The terms set forth in this Assignment and Assumption are hereby agreed to: ASSIGNOR -------- [NAME OF ASSIGNOR] By: -------------------------------- Title: ASSIGNEE -------- [NAME OF ASSIGNEE] By: -------------------------------- Title: - ------------------------------- * Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. (1) The reference to "Loans" in the table should be used only if the Credit Agreement provides for Term Loans. (2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. (3) To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. D-2 Assignment and Assumption [Consented to and](1) Accepted: [NAME OF ADMINISTRATIVE AGENT], as Administrative Agent By: ------------------------------------------- Title: [Consented to:](2) By: ------------------------------------------- Title: - ------------------------------ (1) To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. (2) To be added only if the consent of the Borrower and/or other parties is required by the terms of the Credit Agreement. D-3 Assignment and Assumption ANNEX 1 TO ASSIGNMENT AND ASSUMPTION (CREDIT AGREEMENT (364 DAY FACILITY) DATED AS OF SEPTEMBER 11, 2003 AMONG TOYOTA CREDIT CORPORATION, AS THE BORROWER, THE LENDERS PARTIES THERETO, BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, BANC OF AMERICA SECURITIES LLC, AS SOLE LEAD ARRANGER AND SOLE BOOK MANAGER, JPMORGAN CHASE BANK, AS SYNDICATION AGENT, AND THE BANK OF TOKYO-MITSUBISHI, LTD. AND CITIBANK, N.A., AS DOCUMENTATION AGENTS) STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION 1. Representations and Warranties. ------------------------------ 1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim created by the Assignor and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower or any of its Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, or any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document. 1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) attached hereto is any withholding tax documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan D-4 Assignment and Assumption Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. 2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to or on or after the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the Law of the State of New York. D-5 Assignment and Assumption EXHIBIT E FORM OF MONEY MARKET QUOTE REQUEST Date: ___________, _____ To: Bank of America, N.A., as Administrative Agent Ladies and Gentlemen: Reference is made to that certain Credit Agreement (364 Day Facility), dated as of September 11, 2003 (as amended , extended, supplemented or otherwise modified in writing from time to time, the "Agreement;" the terms defined therein being used herein as therein defined), among Toyota Credit de Puerto Rico Corp. (the "Borrower"), the Lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, JPMorgan Chase Bank, as Syndication Agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Citibank, N.A., as Documentation Agents. The undersigned hereby requests Money Market Quotes for (select one): [ ] Money Market Absolute Rate for [ ] Money Market Margin for Money Market Absolute Rate Loans Money Market LIBOR Loans 1. On (a Business Day). -------------------------------------------- 2. In the amount of $ . ----------------------------- 3. For an Interest Period of . --------------------- The Money Market Loans for which Money Market Quotes are requested herein would comply with the proviso to the first sentence of Section 2.3(a) of the Agreement. TOYOTA CREDIT DE PUERTO RICO CORP. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- E-1 Form of Money Market Quote Request EXHIBIT F FORM OF INVITATION FOR MONEY MARKET QUOTES Date: ___________, _____ To: Lenders party to the Agreement (as defined below) Ladies and Gentlemen: Reference is made to that certain Credit Agreement (364 Day Facility), dated as of September 11, 2003 (as amended , extended, supplemented or otherwise modified in writing from time to time, the "Agreement;" the terms defined therein being used herein as therein defined), among Toyota Credit de Puerto Rico Corp. (the "Borrower"), the Lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, JPMorgan Chase Bank, as Syndication Agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Citibank, N.A., as Documentation Agents. On behalf of the Borrower, you are invited to submit Money Market Quotes for (select one): [ ] Money Market Absolute Rate for [ ] Money Market Margin for Money Market Absolute Rate Loans Money Market LIBOR Loans 1. On (a Business Day). -------------------------------------- 2. In the amount of $ . ----------------------- 3. For an Interest Period of . --------------- Please respond to this invitation by no later than [1 :00 p.m.] [9:00 a.m.] on [date]. BANK OF AMERICA, N.A., as Administrative Agent By: -------------------------------------------- Authorized Officer F-1 Form of Invitation for Money Market Quotes EXHIBIT G FORM OF MONEY MARKET QUOTE Date: ___________, _____ To: Bank of America, N.A., as Administrative Agent Ladies and Gentlemen: Reference is made to that certain Credit Agreement (364 Day Facility), dated as of September 11, 2003 (as amended , extended, supplemented or otherwise modified in writing from time to time, the "Agreement;" the terms defined therein being used herein as therein defined), among Toyota Credit de Puerto Rico Corp. (the "Borrower"), the Lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, JPMorgan Chase Bank, as Syndication Agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Citibank, N.A., as Documentation Agents. In response to your invitation on behalf of the Borrower dated ______________, 20__, we hereby make the following Money Market Quote on the following terms: 1. Quoting Lender: ________________________ 2. Person to contact at Quoting Lender: Name: _______________ Tel: _______________ Fax: _______________ email: _______________ 3. Date of Borrowing: _______________(1) 4. We hereby offer to make Money Market Loan(s) in the following principal amounts, for the following Interest Periods and at the following rates: Principal Interest [Money Market Amount(2) Period(3) Margin](4) [Absolute Rate11(5)] $ $ - ---------------------------- (1) As specified in the related Invitation. (2) Principal amount bid for each Interest Period may not exceed principal amount requested. Specify aggregate limitation if the sum of the individual offer exceeds the amount the Lender is willing to lend. Bids must be made for $5,000,000 or larger multiple of $1,000,000. (3) Not less than one month or not less than 14 days, as specified in the related invitation. No more than five bids are permitted for each Interest Period. (4) Margin over or under the Eurodollar Rate determined for the applicable Interest Period. Specify percentage (to the nearest 1/100,000 of 1%) and specify whether "PLUS" or "MINUS." (5) Specify rate of interest per annum (to the nearest 1/10,000th of 1%). G-1 Form of Money Market Quote The Money Market Loans for which Money Market Quotes are submitted herein comply with the requirements of the Agreement. We understand and agree that the offer(s) set forth above, subject to the satisfaction of the applicable conditions set forth in the Agreement, irrevocably obligates us to make the Money Market Loan(s) for which any offer(s) are accepted, in whole or in part. Very truly yours, [NAME OF LENDER] Dated: By: ------------------------------ ----------------------------- Authorized Officer G-2 Form of Money Market Quote EXHIBIT H FORM OF OPINION OF COUNSEL FOR THE BORROWER To the Lenders and the Administrative Agent Referred to Below c/o Bank of America, N.A., as Administrative Agent CA4-706-05-09 1850 Gateway Blvd., 5th Floor Concord, CA 94520 Re: Credit Agreement Ladies and Gentlemen: I and my staff have acted as counsel for Toyota Credit de Puerto Rico Corp. (the "Borrower") in connection with the Credit Agreement (364 Day Facility) (the "Credit Agreement") dated as of September 11, 2003 among the Borrower, the Lenders listed on the signature pages thereof, Bank of America, N.A., as Administrative Agent, Banc of America Securities, LLC, as Sole Lead Arranger and Sole Book Manager, JPMorgan Chase Bank, as Syndication Agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Citibank, N.A., as Documentation Agents. Terms defined in the Credit Agreement are used herein as therein defined. This opinion is being rendered to you pursuant to Section 4.1(a)(v) of the Credit Agreement. I am General Counsel of the Borrower and as such I, or members of my staff, have participated in the negotiation of the Credit Agreement. I, or members of my staff, have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and Law as we have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing and in reliance thereon, I am of the opinion, subject to the assumptions and limitations set forth herein, that: 1. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes do not contravene, or constitute a default under, any debt instrument or any other material agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower. As to debt instruments or agreements which, by their terms, are or may be governed by the Law of a jurisdiction other than California, I have assumed that such debt instruments and agreements are governed by the Law of California for purposes of the opinion expressed in this paragraph. H-1 Form of Opinion of Counsel to the Borrower 2. There is no action, suit or proceeding pending against, or to the best of my knowledge threatened against or affecting, the Borrower before any court or arbitrator or any Governmental Authority, in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, financial position or results of operations of the Borrower or which in any manner draws into question the validity of the Credit Agreement or the Notes. I am a member of the Bar of the State of California and the foregoing opinion is limited to the Laws of the State of California and the federal Laws of the United States of America. The references in this opinion to facts based on the "best of my knowledge" refer only to my own actual, present knowledge and the knowledge of the members of my staff who have given substantive consideration to the matters referred to herein. This opinion is furnished by me as General Counsel for the Borrower to you in connection with the Credit Agreement, is solely for your benefit and may not be relied upon by any other person, other than an Eligible Assignee or Participant pursuant to Section 9.7 of the Credit Agreement, without my prior written consent. Notwithstanding the foregoing grant of permission to Eligible Assignees to rely on this opinion, we express no opinion with respect to the effect of any such Eligible Assignee failing to comply with any legal requirement in order for it to enforce the Credit Agreement. We express no opinion as to enforceability of the Documents by a Participant. Respectfully submitted, Alan Cohen General Counsel H-2 Form of Opinion of Counsel to the Borrower EXHIBIT I FORM OF OPINION Of PIETRANTONI MENDEZ & ALVAREZ LLP To the Lenders and the Administrative Agent Referred to Below c/o Bank of America, N.A., as Administrative Agent CA4-706-05-09 1850 Gateway Blvd., 5th Floor Concord, CA 94520 Re: Credit Agreement Ladies and Gentlemen: We have acted as special Commonwealth of Puerto Rico counsel for Bank of America, N.A., as Administrative Agent (the "Administrative Agent"), in connection with the Credit Agreement (364 Day Facility) (the "Credit Agreement") dated as of September 11, 2003 among the Toyota Credit de Puerto Rico Corp., as the Borrower (the "Borrower"), the Lenders listed on the signature pages thereof, the Administrative Agent, Banc of America Securities, LLC, as Sole Lead Arranger and Sole Book Manager, JPMorgan Chase Bank, as Syndication Agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Citibank, N.A., as Documentation Agents. Terms defined in the Credit Agreement are used herein as therein defined. This opinion is being rendered to you pursuant to Section 4.1(a)(vi) of the Credit Agreement. We have participated in the negotiation of the Credit Agreement and have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and Law as we have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing and in reliance thereon, we are of the opinion, subject to the assumptions and limitations set forth herein, that: 1. The Borrower is a corporation duly incorporated, validly existing and in good standing under the Laws of Puerto Rico, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. 2. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or I-1 Form of Opinion of Pietrantoni Mendez & Alvarez LLP filing with, any Governmental Authority and do not contravene, or constitute a default under, any provision of applicable Law or of the articles of incorporation or bylaws of the Borrower. 3. The Credit Agreement and the Notes are governed, by their terms, by New York Law. We express no opinion on the enforceability of the Loan Documents under New York Law. Assuming that the substantive Law of New York is the same as the substantive Law of Puerto Rico, the Credit Agreement constitutes a valid and binding agreement of the Borrower and each Note constitutes a valid and binding obligation of the Borrower, in each case enforceable in accordance with its terms. The opinion set forth in paragraph 3 is subject to: (i) the effect of applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or other similar Laws of general application relating to or affecting the enforcement of creditors' rights generally, (ii) limitations on the remedy of specific performance and injunctive and other forms of equitable relief due to the possible existence of equitable defenses or due to the discretion of the court before which any proceeding therefor may be brought, (iii) the unenforceability under certain circumstances of provisions to the effect that failure to exercise, or delay in exercising, rights or remedies will not operate as a waiver of any such right or remedy, (iv) limitations based upon statutes or upon public policy limiting a Person's right to waive the benefits of statutory provisions or of a common law right, (v) limitations on the right of a creditor to exercise remedies or impose penalties for late payments or other defaults by a borrower, if it is determined that (a) either the defaults are not material, such penalties bear no reasonable relation to the damage suffered by the creditor as a result of such delinquencies or defaults, or it cannot be demonstrated that the enforcement of such restrictions or burdens is reasonably necessary for the protection of the creditor, or (b) the creditor's enforcement of such covenants or provisions under the circumstances would violate the creditor's implied covenant of good faith and fair dealing, (vi) the unenforceability under certain circumstances, under the Law of Puerto Rico or federal Law or court decisions, of provisions releasing a party from, or indemnifying a party against, liability for its own wrongful or negligent acts or where such release or indemnification is contrary to public policy, (vii) the effect of the Law of Puerto Rico, which provides that a court may refuse to enforce, or may limit the application of, a contract or any clause of a contract which the court finds to have been unconscionable at the time it was made, or an unfair portion of an adhesion contract, (viii) compliance with, and limitations imposed by, procedural requirements of the Law of Puerto Rico; and (ix) limitations under the Law of Puerto Rico as to the right to retain or collect unearned interest. The foregoing limitations, however, do not render the Credit Agreement and the Notes invalid as a whole, and there exists, in the Credit Agreement and the Notes or pursuant to applicable Law, legally adequate remedies for the realization of the principal benefits intended to be provided by the Credit Agreement and the Notes. We are members of the Bar of the Commonwealth of Puerto Rico and the foregoing opinion is limited to the Laws of Puerto Rico and the federal Laws of the United States of America. In giving the foregoing opinion, (i) we express no opinion as to the effect (if any) of any Law of any jurisdiction (except Puerto Rico) in which any I-2 Form of Opinion of Pietrantoni Mendez & Alvarez LLP Lender is located which limits the rate of interest that such Lender may charge or collect; and (ii) we have assumed, without independent investigation, that the execution, delivery and performance by the Lenders of the Credit Agreement and the Notes are within the Lenders' powers and have been duly authorized by all necessary action.. This opinion is furnished to you in connection with the Credit Agreement, is solely for your benefit and may not be relied upon by, nor may copies be delivered to, any other person, other than an Eligible Assignee or Participant pursuant to Section 9.7 of the Credit Agreement, without our prior written consent. Notwithstanding the foregoing grant of permission to Eligible Assignees to rely on this opinion, we express no opinion with respect to the effect of any such Eligible Assignee failing to comply with any legal requirement in order for it to enforce the Credit Agreement. Respectfully submitted, I-3 Form of Opinion of Pietrantoni Mendez & Alvarez LLP EXHIBIT J FORM OF OPINION OF MORRISON & FOERSTER LLP September 11, 2003 To the Lenders and the Administrative Agent Referred to Below c/o Bank of America, N.A., as Administrative Agent CA4-706-05-09 1850 Gateway Blvd., 5th Floor Concord, CA 94520 Re: Toyota Credit de Puerto Rico Corp. Mesdames and Gentlemen: We have acted as counsel for Bank of America, N.A. (the "Administrative Agent") in connection with the transactions contemplated by the Credit Agreement (364 Day Facility) dated as of September 11, 2003 (the "Credit Agreement") among Toyota Credit de Puerto Rico Corp., as the Borrower (the "Borrower"), the Administrative Agent, and the Lenders and other parties thereto. This opinion is furnished to the Lenders (as such term and all other capitalized terms used but not otherwise defined herein are defined in the Credit Agreement) pursuant to Section 4.1(a)(vii) of the Credit Agreement. We have examined originals or copies of the Credit Agreements and Notes, all dated as of September 11, 2003 (collectively, the "Documents"). In addition, we have examined such records, documents, certificates of public officials and of the Borrower, made such inquiries of officials of the Borrower, and considered such questions of law as we have deemed necessary for the purpose of rendering the opinions set forth herein. We have assumed the genuineness of all signatures and the authenticity of all items submitted to us as originals and the conformity with originals of all items submitted to us as copies. In making our examination of the Documents, we have assumed that each party to one or more of the Documents is duly organized, validly existing, and in good standing in each jurisdiction where required by applicable law, has the power and authority to execute and deliver, and to perform and observe the provisions of, the Documents, and has duly authorized, executed and delivered such Documents, and, except in the case of the Borrower, that such Documents constitute the legal, valid and binding obligations of such party. J-1 Form of Opinion of Morrison & Foerster LLP We have assumed that the Lenders are acquiring the Notes with no present intention of distributing the same other than in compliance with the requirements, if any, of all applicable state and federal securities laws. The opinion hereinafter expressed is subject to the following further qualifications and exceptions: (1) The effect of bankruptcy, insolvency, reorganization, arrangement, moratorium or similar laws relating to or affecting the rights of creditors generally, including, without limitation, laws relating to preferences and equitable subordination. (2) Limitations imposed by general principles of equity upon the availability of equitable remedies or the enforcement of provisions of the Documents, and the effect of judicial decisions which have held that certain provisions are unenforceable where their enforcement would violate the implied covenant of good faith and fair dealing, or would be commercially unreasonable, or where a default under the Documents is not material. (3) The effect of statutes or judicial decisions rendering ineffective or limiting the enforceability of certain provisions contained in the Documents. However, in our opinion, such statutes and decisions do not operate to prevent the Lenders from accelerating the maturity of the Borrower's Obligations under the Documents upon a material breach by the Borrower of a material covenant contained in the Documents. (4) The effect of judicial decisions permitting the introduction of extrinsic evidence to supplement the terms or aid in the interpretation of the Documents. (5) We express no opinion as to the effect on the opinion expressed herein of (i) the compliance or non-compliance of any party to the Documents with any law, regulation or order applicable to it, or (ii) the legal or regulatory status or the nature of the business of any such party. (6) We have assumed that no provision of the Documents violates the Federal laws of the United States and/or the public policy of any jurisdiction other than the State of New York having a substantial relationship to the transaction contemplated by the Documents, and that no provision of the law of the State of New York applicable to the Documents violates the public policy of any such other jurisdiction. (7) We express no opinion as to whether the provision of the Credit Agreement under which the Borrower submits to the jurisdiction of federal courts located in the State of New York is subject to application of the doctrine of forum non conveniens or a similar statutory principle. Based upon and subject to the foregoing, we are of the opinion that the Documents constitute valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms. J-2 Form of Opinion of Morrison & Foerster LLP We express no opinion as to matters governed by any laws other than the substantive laws of the State of New York and federal laws of the United States (without reference to any choice-of-law rules other than Section 5-1401 of the General Obligations Law of the State of New York). We express no opinion as to the effect on the opinions expressed herein of any laws other than the laws of the State of New York and Federal laws of the United States. This opinion is solely for the Lenders' benefit and may not be relied upon by, nor may copies be delivered to, any other person, other than an Eligible Assignee or Participant pursuant to Section 9.7 of the Credit Agreement, without my prior written consent. Notwithstanding the foregoing grant of permission to Eligible Assignees to rely on this opinion, I express no opinion with respect to the effect of any such Eligible Assignee failing to comply with any legal requirement in order for it to enforce the Credit Agreement. I express no opinion as to enforceability of the Documents by a Participant. Very truly yours, Morrison & Foerster LLP J-3 Form of Opinion of Morrison & Foerster LLP EX-10 4 ex10_2.txt ================================================================================ Exhibit 10.2 FIRST AMENDED AND RESTATED CREDIT AGREEMENT (364 DAY FACILITY) Dated as of September 11, 2003 among TOYOTA MOTOR CREDIT CORPORATION. as the Borrower, BANK OF AMERICA, N.A., as Administrative Agent, and The Other Lenders Party Hereto -------------------------------------------- BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole Book Manager --------------------------------------------- JPMORGAN CHASE BANK, as Syndication Agent ---------------------------------------------- THE BANK OF TOKYO-MITSUBISHI, LTD. and CITIBANK, N.A., as Documentation Agents FIRST AMENDED AND RESTATED CREDIT AGREEMENT (364 DAY FACILITY) THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT (364 Day Facility) (this "Amendment and Restatement") dated as of September 11, 2003 is made among TOYOTA MOTOR CREDIT CORPORATION, a California corporation (the "Borrower"), each lender from time to time party hereto (collectively, the "Lenders" and, individually, a "Lender"), BANK OF AMERICA, N.A., as Administrative Agent, BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole Book Manager, JPMORGAN CHASE BANK, as Syndication Agent, and THE BANK OF TOKYO-MITSUBISHI, LTD. and CITIBANK, N.A., as Documentation Agents. WHEREAS, the Borrower is party to a Credit Agreement (364 Day Facility) dated as of September 12, 2002 (the "Existing Credit Agreement") with the lenders party thereto and Bank of America, as Administrative Agent for the Lenders. Capitalized terms not otherwise defined in this Amendment and Restatement shall have the meanings specified in the Existing Credit Agreement. WHEREAS, the parties to this Amendment and Restatement desire to amend the Existing Credit Agreement as set forth herein and to restate the Existing Credit Agreement in its entirety to read as set forth in the Existing Credit Agreement with the amendments set forth in this Amendment and Restatement. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows: ARTICLE I AMENDMENTS Effective as of the date of this Amendment and Restatement and subject to the satisfaction of the conditions precedent set forth in Article 2, the Existing Credit Agreement is amended as follows: Section 1.1 Cover Page. The cover page of the Existing Credit Agreement is replaced with the cover page to this Amendment and Restatement. Section 1.2 Definitions. The definitions of "Audited Financial Statements," "Fee Letter," "Maximum Aggregate Commitments," and "Revolving Maturity Date" in Section 1.1 of the Existing Credit Agreement are amended and restated to read as follows: "`Audited Financial Statements' means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended March 31, 2003 (or such later date for which audited financial statements are delivered pursuant to this Agreement) and the related consolidated statements of income or operations, shareholders' equity and cash 1 flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto. "`Fee Letter' means a letter, dated July 17, 2003 among the Borrower, the Administrative Agent and the Arranger. "`Maximum Aggregate Commitments' means (a) $5,000,000,000 minus (b) the Five Year Facility Aggregate Commitments. "`Revolving Maturity Date' means the later of (a) September 10, 2004, and (b) if maturity is extended pursuant to Section 2.13(b), such extended revolving maturity date as determined pursuant to such Section." Section 1.3 Tax Shelter Representations. A new Section 5.12 is added to the Existing Credit Agreement immediately after Section 5.11 to read as follows: "Section 5.12 Tax Shelter Regulations. If the Borrower determines that the Loans qualify as a `reportable transaction' (within the meaning of Treasury Regulation Section 1.6011-4), it shall promptly notify the Administrative Agent thereof. If the Borrower so notifies the Administrative Agent, the Borrower acknowledges that one or more of the Lenders may treat its Loans as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain the lists and other records required by such Treasury Regulation." Section 1.4 Confidentiality. Section 9.8 of the Existing Credit Agreement is amended to add at the end thereof: "Notwithstanding anything herein to the contrary, `Information' shall not include, and any party to this Agreement may disclose without limitation of any kind, any information with respect to the `tax treatment' and `tax structure' (in each case, within the meaning of Treasury Regulation Section 1.6011-4) that are provided to any such party relating to such tax treatment and tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the Loans and transactions contemplated hereby." Section 1.5 Schedule 2.1. Schedule 2.1 of the Existing Credit Agreement is amended and restated to read as set forth on Schedule 2.1 to this Amendment and Restatement. Section 1.6 Schedule 9.2. Schedule 9.2 of the Existing Credit Agreement is amended and restated to read as set forth on Schedule 9.2 to this Amendment and Restatement. 2 ARTICLE II CONDITIONS Section 2.1 Effectiveness. This Amendment and Restatement shall become effective on the date (the "Restatement Effectiveness Date") that each of the following conditions shall have been satisfied: (a) Receipt by the Administrative Agent of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the Borrower, each dated the Restatement Effectiveness Date (or, in the case of certificates of governmental officials, a recent date before the Restatement Effectiveness Date) and each in form and substance satisfactory to the Administrative Agent and its legal counsel: (i) executed counterparts of this Amendment and Restatement, sufficient in number for distribution to the Administrative Agent, each Lender and the Borrower; (ii) a Note executed by the Borrower in favor of each Lender requesting a Note; (iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of the Borrower as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment and Restatement and the other Loan Documents; (iv) such documents and certifications as the Administrative Agent may reasonably require to evidence that the Borrower is in good standing and qualified to engage in business in California; (v) a favorable opinion of the General Counsel of the Borrower, addressed to the Administrative Agent and each Lender, as to the matters and in the form set forth in Exhibit H to the Existing Credit Agreement but with such modifications as are required to address the Existing Credit Agreement, as amended by this Amendment and Restatement; (vi) a favorable opinion of Morrison & Foerster LLP, counsel to the Administrative Agent, addressed to the Administrative Agent and each Lender, as to the matters and in the form set forth in Exhibit I to the Existing Credit Agreement but with such modifications as are required to address the Existing Credit Agreement, as amended by this Amendment and Restatement; (vii) a copy of a notice from the Borrower to the Administrative Agent dated at least three Business Days prior to the Restatement Effective Date terminating the Commitments (as defined in, the Existing Credit Agreement) no later than the Restatement Effective Date and requests for Borrowing in an amount sufficient to repay 3 any amounts outstanding under the Existing Credit Agreement on the Restatement Effectiveness Date; (viii) such other assurances, certificates, documents or consents as the Administrative Agent or the Required Lenders reasonably may require. (b) Any fees required to be paid on or before the Restatement Effectiveness Date shall have been paid. (c) Unless waived by the Administrative Agent, the Borrower shall have paid all Attorney Costs of the Administrative Agent to the extent invoiced prior to or on the Restatement Effectiveness Date, plus such additional amounts of Attorney Costs as shall constitute its reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent). (d) The representations and warranties of the Borrower contained in Article V of the Existing Credit Agreement as amended hereby shall be true and correct on and as of the date of the Restatement Effectiveness Date, except to the extent that such representations and warranties specifically refer to an earlier date. (e) No Default shall exist. ARTICLE III REFERENCES TO AND EFFECT ON EXISTING CREDIT AGREEMENT AND NOTES 3.1 Interpretation Generally. On and after the effectiveness of this Amendment and Restatement, each reference in the Existing Credit Agreement and in the exhibits thereto to "this Agreement," "hereunder," "hereof" or words of like import referring to the Existing Credit Agreement, and each reference in the Notes to "the Credit Agreement", "thereunder", "thereof" or words of like import referring to the Existing Credit Agreement, shall mean and be a reference to the Existing Credit Agreement, as amended by this Amendment and Restatement. 3.2 Effectiveness of Existing Credit Agreement, Notes. The Existing Credit Agreement and the Notes, as specifically amended by this Amendment and Restatement, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. ARTICLE IV REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants to the Administrative Agent and the Lenders that: Section 4.1 Corporate Existence and Power. The Borrower is a corporation duly incorporated, validly existing and in good standing under the Laws of California, and has all 4 corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. Section 4.2 Corporate and Governmental Authorization: No Contravention. The execution and delivery by the Borrower of this Amendment and Restatement and the performance by the Borrower of this Amendment and Restatement and the Existing Credit Agreement and the other Loan Documents as amended hereby are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any Governmental Authority and do not contravene, or constitute a default under, any provision of applicable Law or of the Organization Documents of the Borrower or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower or any of its Subsidiaries. Section 4.3 Binding Effect. Each of this Amendment and Restatement and the Existing Credit Agreement and other Loan Documents as amended hereby constitutes a valid and binding agreement of the Borrower enforceable in accordance with its terms. ARTICLE V MISCELLANEOUS Section 5.1 Counterparts. This Amendment and Restatement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. SECTION 5.2 GOVERNING LAW. THIS AMENDMENT AND RESTATEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. Section 5.3 Existing Credit Agreement. Except as herein provided, the Existing Credit Agreement shall remain unchanged and in full force and effect. 5 IN WITNESS WHEREOF, the parties hereto have caused this Amendment and Restatement to be duly executed as of the date first above written. TOYOTA MOTOR CREDIT CORPORATION By: /s/ George Borst ------------------------------------- Name: George Borst ------------------------------------- Title: President and Chief Executive Officer ------------------------------------- S-1 BANK OF AMERICA, N.A., as Administrative Agent By: /s/ Anthea Del Bianco ------------------------------------ Name: Anthea Del Bianco ------------------------------------ Title: Vice President ------------------------------------ S-2 BANK OF AMERICA, N.A., as a Lender By: /s/ Alan Roche ------------------------------------ Name: Alan Roche ------------------------------------ Title: Managing Director ------------------------------------ S-3 THE BANK OF TOKYO-MITSUBISHI, LTD., as Documentation Agent and a Lender By: /s/ Hiroshi Jinza ------------------------------------ Name: Hiroshi Jinza ------------------------------------ Title: Deputy General Manager ------------------------------------ S-4 CITICORP USA, INC., as Documentation Agent and a Lender By: /s/ Brian Ike ------------------------------------ Name: Brian Ike ------------------------------------ Title: Vice President ------------------------------------ S-5 JPMORGAN CHASE BANK, as Syndication Agent and a Lender By: /s/ James W. Peterson ------------------------------------ Name: James W. Peterson ------------------------------------ Title: Vice President ------------------------------------ S-6 DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender By: /s/ Oliver Schwarz ------------------------------------ Name: Oliver Schwarz ------------------------------------ Title: Vice President ------------------------------------ By: /s/ Hans-Joseph Thiele ------------------------------------ Name: Hans-Joseph Thiele ------------------------------------ Title: Director ------------------------------------ S-7 HSBC BANK USA, as a Lender By: /s/ Christopher Samms ------------------------------------ Name: Christopher Samms ------------------------------------ Title: First Vice President, Officer # 9426 ------------------------------------ S-8 MERRILL LYNCH BANK USA, as a Lender By: /s/ Frank K. Stepan ------------------------------------ Name: Frank K. Stepan ------------------------------------ Title: Vice President ------------------------------------ S-9 MORGAN STANLEY BANK, as a Lender By: /s/ Jaap L. Tonckens ------------------------------------ Name: Jaap L. Tonckens ------------------------------------ Title: Vice President ------------------------------------ S-10 SUMITOMO MITSUI BANKING CORPORATION, LOS ANGELES BRANCH, as a Lender By: /s/ Yoshimi Miura ------------------------------------ Name: Yoshimi Miura ------------------------------------ Title: General Manager ------------------------------------ S-11 UFJ BANK LIMITED, LOS ANGELES BRANCH, as a Lender By: /s/ Hideki Kishimoto ------------------------------------ Name: Hideki Kishimoto ------------------------------------ Title: SVP & Deputy General Manager ------------------------------------ S-12 ABN AMRO BANK N.V., as a Lender By: /s/ Angela Noique ------------------------------------ Name: Angela Noique ------------------------------------ Title: Group Vice President ------------------------------------ By: /s/ John M. Pastore ------------------------------------ Name: John M. Pastore ------------------------------------ Title: Vice President ------------------------------------ S-13 BANK ONE N.A., as a Lender By: /s/ Tohru Yasumaru ------------------------------------ Name: Tohru Yasumaru ------------------------------------ Title: Director ------------------------------------ S-14 BARCLAYS BANK PLC, as a Lender By: /s/ Alison McGuigan ------------------------------------ Name: Alison McGuigan ------------------------------------ Title: Associate Director ------------------------------------ S-15 BNP PARIBAS, as a Lender By: /s/ Pierre Nicholas Rogers ------------------------------------ Name: Pierre Nicholas Rogers ------------------------------------ Title: Managing Director ------------------------------------ By: /s/ Katherine Wolfe ------------------------------------ Name: Katherine Wolfe ------------------------------------ Title: Director ------------------------------------ S-16 CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH, as a Lender By: /s/ Mark E. Gleason ------------------------------------ Name: Mark E. Gleason ------------------------------------ Title: Director ------------------------------------ By: /s/ Joshua Parrish ------------------------------------ Name: Joshua Parrish ------------------------------------ Title: Associate ------------------------------------ S-17 DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES, as a Lender By: /s/ J. Curtin Beaudouin ------------------------------------ Name: J. Curtin Beaudouin ------------------------------------ Title: Director ------------------------------------ By: /s/ Stephen Kovach ------------------------------------ Name: Stephen Kovach ------------------------------------ Title: Vice President ------------------------------------ S-18 ING LUXEMBOURG SA, as a Lender By: /s/ Vincent Vermeire ------------------------------------ Name: Vincent Vermeire ------------------------------------ Title: Senior Manager/Corporate and Institutional Banking ------------------------------------ By: /s/ Yves Verhulst ------------------------------------ Name: Yves Verhulst ------------------------------------ Title: Manager/ Corporate and Institutional Banking ------------------------------------ S-19 LEHMAN BROTHERS BANK, FSB, as a Lender By: /s/ Gary T. Taylor ------------------------------------ Name: Gary T. Taylor ------------------------------------ Title: Vice President ------------------------------------ S-20 UBS AG, CAYMAN ISLANDS BRANCH, as a Lender By: /s/ Patricia O'Kicki ------------------------------------ Name: Patricia O'Kicki ------------------------------------ Title: Director ------------------------------------ By: /s/ Wilfred V. Saint ------------------------------------ Name: Wilfred V. Saint ------------------------------------ Title: Associate Director ------------------------------------ S-21 MIZUHO CORPORATE BANK, LTD., as a Lender By: /s/ Shinji Yamada ------------------------------------ Name: Shinji Yamada ------------------------------------ Title: Joint General Manager ------------------------------------ S-22 PNC BANK, NA, as a Lender By: /s/ Dorothy G.W. Brailer ------------------------------------ Name: Dorothy G.W. Brailer ------------------------------------ Title: Vice President ------------------------------------ S-23 THE BANK OF NEW YORK, as a Lender By: /s/ Mehrasa Raygani ------------------------------------ Name: Mehrasa Raygani ------------------------------------ Title: Vice President ------------------------------------ S-24 MELLON BANK, N.A., as a Lender By: /s/ Lawrence C. Ivey ------------------------------------ Name: Lawrence C. Ivey ------------------------------------ Title: First Vice President ------------------------------------ S-25 SCHEDULE 2.1 COMMITMENTS AND PRO RATA SHARES
LENDER COMMITMENT PRO RATA SHARE - ------------------------------------------------------ ------------------------------------ -------------------------- Bank of America, N.A. $235,555,555.58 7.361111% The Bank of Tokyo-Mitsubishi, Ltd. $222,222,222.22 6.944444% Citicorp USA, Inc. $222,222,222.22 6.944444% JPMorgan Chase Bank $222,222,222.22 6.944444% Deutsche Bank AG New York Branch $155,555,555.56 4.861111% HSBC Bank USA $155,555,555.56 4.861111% Merrill Lynch Bank USA $155,555,555.56 4.861111% Morgan Stanley Bank $155,555,555.56 4.861111% Sumitomo Mitsui Banking Corporation, Los Angeles $155,555,555.56 4.861111% Branch UFJ Bank Limited, Los Angeles Branch $155,555,555.56 4.861111% ABN Amro Bank N.V. $124,444,444.44 3.888889% Bank One N.A. $124,444,444.44 3.888889% Barclays Bank PLC $124,444,444.44 3.888889% BNP Paribas $124,444,444.44 3.888889% Credit Suisse First Boston, Cayman Islands Branch $124,444,444.44 3.888889% Dresdner Bank AG New York and Grand Cayman Branches $124,444,444.44 3.888889% ING Luxembourg SA $124,444,444.44 3.888889% Lehman Brothers Bank, FSB $124,444,444.44 3.888889% UBS AG, Cayman Islands Branch $124,444,444.44 3.888889% Mizuho Corporate Bank, Ltd. $88,888,888.89 2.777778% PNC Bank, NA $66,666,666.67 2.083333% The Bank of New York $44,444,444.44 1.388889% Mellon Bank, N.A. $44,444,444.44 1.388889% Total $3,200,000,000.00 100%
SCHEDULE 9.2 ADMINISTRATIVE AGENT'S OFFICE, CERTAIN ADDRESSES FOR NOTICES BORROWER: TOYOTA MOTOR CREDIT CORPORATION Borrower's Address - ------------------ (for all purposes) Toyota Motor Credit Corporation 19001 South Western Avenue P.O. Box 2991 Mail Stop NF-10 Torrance, Ca. 90509 Attention: Jeff Carter, National Treasury Manager Telephone: (310) 468-6197 Facsimile: (310) 381-6655 (With a copy to): Toyota Motor Credit Corporation 19001 South Western Avenue P.O. Box 2991 Mail Stop NF-10 Torrance, Ca. 90509 Attention: Janet Rydell, Cash Manager Telephone: (310) 468-6176 Facsimile: (310) 381-5219 ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A. Administrative Agent's Office - ----------------------------- (for Notices of Payments and Requests for Loans): Bank of America, N.A. 1850 Gateway Blvd., 5th Floor Concord, CA 94520 Mail Code: CA4-706-05-09 Attention: Kristine Kelleher Telephone: (925) 675-8373 Facsimile: (800) 969-2414 (for Payments): Bank of America, N.A. Dallas, TX Account No.: 3750836479 Ref: Toyota Motor Credit Corporation ABA# 111000012 (Other Notices as Administrative Agent): Bank of America, N.A. Japan-Financial Institutions Mail Code: 771-623-15-01 Sanno Park Tower 15F 2-11-1 Nagatacho, Chiyoda-Ku Tokyo 100-6115 Japan Attention: Mashiko Ando Telephone: 81-3-3508-5907 Facsimile: 81-3-3508-5922 Electronic Mail: masahiko.ando@bankofamerica.com (With a Copy to): Bank of America, N.A. Agency Management Mail Code: CA5-701-05-19 1455 Market Street San Francisco, CA 94103-1399 Attention: Anthea Del Bianco Telephone: (415) 436-2776 Facsimile: (415) 503-5101 Electronic Mail: anthea.del_bianco@bankofamerica.com EX-12 5 ex12-1.txt EXHIBIT 12.1 TOYOTA MOTOR CREDIT CORPORATION CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
Three Months Ended Six Months Ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 ------ ------ ------ ------ (Dollars in Millions) Consolidated income/(loss) before income taxes $ 354 $ 6 $ 437 $ (45) ------ ------ ------ ------ Fixed charges: Interest.............................. 87 332 318 763 Portion of rent expense representative of the interest factor (deemed to be one-third)....................... 2 2 4 4 ------ ------ ------ ------ Total fixed charges.......................... 89 334 322 767 ------ ------ ------ ------ Earnings available for fixed charges......................... $ 443 $ 340 $ 759 722 ====== ====== ====== ====== Ratio of earnings to fixed charges......................... 4.98 1.02 2.36 -* ====== ====== ====== ====== * The ratio of earnings to fixed charges was less than 1:1 ratio for the six months ended September 30, 2002. The deficiency in the ratio for the six months ended September 30, 2002 was primarily due to a decrease in net income from financing operations due to an unfavorable fair value adjustment related to the application of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities", and related amendments. The Company would have required an additional $45 million in net income to attain a 1:1 ratio. - ----------------- For the three and six months ended September 30, 2003, interest expense included net unrealized gains associated with derivative fair value adjustments of $83 million and $45 million, respectively. For the three and six months ended September 30, 2002, interest expense included net unrealized losses associated with derivative fair value adjustments of $124 million and $338 million, respectively. Toyota Motor Credit Corporation ("TMCC") has guaranteed certain obligations of affiliates as discussed in Note 8 - Commitments and Contingent Liabilities of the Consolidated Financial Statements. For the three and six month periods ended September 30, 2003 and 2002, TMCC has not incurred any fixed charges in connection with such guarantees and no amounts have been included in any ratio of earnings to fixed charges.
EX-15 6 ex15-1.txt EXHIBIT 15.1 Report of Independent Accountants --------------------------------- To the Board of Directors and Shareholder of Toyota Motor Credit Corporation We have reviewed the accompanying consolidated balance sheet of Toyota Motor Credit Corporation and its subsidiaries as of September 30, 2003, and the related consolidated statements of income for each of the three-month and six- month periods ended September 30, 2003 and 2002 and the consolidated statements of shareholder's equity and of cash flows for the six-month periods ended September 30, 2003 and 2002. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. We previously audited in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet as of March 31, 2003, and the related consolidated statements of income, of shareholder's equity, and of cash flows for the year then ended (not presented herein), and in our report dated April 8, 2003 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of March 31, 2003, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /S/ PRICEWATERHOUSECOOPERS LLP Los Angeles, California November 14, 2003 EX-15 7 ex15-2.txt EXHIBIT 15.2 November 14, 2003 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Commissioners: We are aware that our report dated November 14, 2003 on our review of interim financial information of Toyota Motor Credit Corporation (the "Company") as of and for the three-month and six-month periods ended September 30, 2003 and included in the Company's quarterly report on Form 10-Q for the quarter then ended is incorporated by reference in the Prospectuses constituting part of the Registration Statements on Form S-3 (Nos. 333-84692,333-103406 and 333- 103406-01). Yours very truly, /S/ PRICEWATERHOUSECOOPERS LLP EX-31 8 ex31-1.txt Exhibit 31.1 CERTIFICATION I, George E. Borst, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Toyota Motor Credit Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 14, 2003 By /s/ GEORGE E. BORST ------------------------ George E. Borst President and Chief Executive Officer EX-31 9 ex31-2.txt Exhibit 31.2 CERTIFICATION I, John F. Stillo, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Toyota Motor Credit Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 14, 2003 By /s/ JOHN F. STILLO ------------------------ John F. Stillo Vice President and Chief Financial Officer EX-32 10 ex32-1.txt Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 * In connection with the Quarterly Report of Toyota Motor Credit Corporation (the "Company") on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, George E. Borst, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ George E. Borst George E. Borst Chief Executive Officer November 14, 2003 - ---------------- * A signed original of this written statement required by Section 906 has been provided to Toyota Motor Credit Corporation and will be retained by Toyota Motor Credit Corporation and furnished to the Securities and Exchange Commission or its staff upon request EX-32 11 ex32-2.txt Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 * In connection with the Quarterly Report of Toyota Motor Credit Corporation (the "Company") on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John F. Stillo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ John F. Stillo John F. Stillo Chief Financial Officer November 14, 2003 - ---------------- * A signed original of this written statement required by Section 906 has been provided to Toyota Motor Credit Corporation and will be retained by Toyota Motor Credit Corporation and furnished to the Securities and Exchange Commission or its staff upon request -----END PRIVACY-ENHANCED MESSAGE-----