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Exhibit 4.10    
  

 
 

REVOLVING LIQUIDITY NOTE AGREEMENT    
  

    TOYOTA AUTO RECEIVABLES 2001-C OWNER TRUST

as Issuer 

and 

TOYOTA
MOTOR CREDIT CORPORATION

as initial Holder 

Dated
as of September 20, 2001 

 

    REVOLVING LIQUIDITY NOTE AGREEMENT (this "Agreement") dated as of September 20, 2001 (this "Agreement"), by and between TOYOTA AUTO RECEIVABLES 2001-C OWNER TRUST,
a Delaware business trust, as issuer (the "Issuer") of the revolving liquidity note (the "Revolving Liquidity Note") issued hereunder, and TOYOTA MOTOR CREDIT CORPORATION, a California corporation
("TMCC"), as the initial holder of the Revolving Liquidity Note. 

W I T N E S S E T H: 

    WHEREAS
Toyota Auto Receivables 2001-C Owner Trust is issuing the Toyota Auto Receivables 2001-C Owner Trust $382,500,000 3.47% Asset Backed Notes,
Class A-1, the Toyota Auto Receivables 2001-C
Owner Trust $462,000,000 3.77% Asset Backed Notes Class A-2, the Toyota Auto Receivables 2001-C Owner Trust $391,000,000 Floating Rate Asset Backed Notes,
Class A-3 and the Toyota Auto Receivables 2001-C Owner Trust $219,500,000 4.72% Asset Backed Notes Class A-4 (collectively, the "Notes") pursuant to
the Indenture dated as of August 1, 2001 (as amended and supplemented from time to time, the "Indenture"), between the Issuer and the Indenture Trustee; 

    WHEREAS
the Issuer desires to enter into a credit and liquidity enhancement arrangement that will provide funding for certain required payments of principal and interest on the Notes
in the event that Available Collections and any amounts on deposit in the Reserve Account that are available to be paid in respect thereof to Noteholders on any Payment Date are insufficient to fund
such payments; 

    WHEREAS
TMCC is willing to provide such credit and liquidity enhancement on the terms described herein against delivery to it of the Revolving Liquidity Note evidencing the obligation
of the Issuer to repay amounts so funded on the terms set forth herein and in the Revolving Liquidity Note; 

    NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows: 

 
 

Article I
  Definitions

    Capitalized
terms used herein and not defined herein shall have the meanings ascribed thereto in the Sale and Servicing Agreement dated as of August 1, 2001, among the Issuer,
Toyota Motor Credit Corporation ("TMCC"), as servicer, and TAFR LLC, as seller (the "Sale and Servicing Agreement"). 

 
 

Article II
  Funding by Holder of Revolving Liquidity Note

    Section 2.1.  General Funding Obligation.  Pursuant to Section 5.06(b) of the Sale and
Servicing Agreement, on each Determination Date, the Servicer shall calculate the amount, if any, by which the amounts to be distributed in respect of interest on or principal of the Notes pursuant to
Sections 5.06(c)(i)(B) and (C) or 5.06(d)(ii) or (iii) of the Sale and Servicing Agreement exceed the amount of Available Collections that will be available to make such payments
and will determine whether amounts on deposit in the Reserve Account, if any, that are available therefor will be sufficient to fund such payments on the related Payment Date. If, in accordance with
the Sale and Servicing Agreement, the Servicer notifies the Indenture Trustee on behalf of the Issuer that it has determined that Available Collections and amounts on deposit in the Reserve Account
that will be available to make such payments will be
insufficient therefor, then the Indenture Trustee on behalf of the Issuer will have the right to request the holder of the Revolving Liquidity Note (the "Holder") to fund such shortfall (such request,
or any request for funding described in Section 2.2 hereof, a "Draw"); provided that the Holder will not be obligated to fund any such shortfall
to the extent that the aggregate of the amounts funded by it hereunder and not previously repaid equals or exceeds $7,500,000 (the parties hereto agreeing that interest accrued on the Revolving
Liquidity Note as described herein will not be considered an amount funded by the Holder for purposes of such calculation). The "Undrawn 

2

 

Amount" of the Revolving Liquidity Note is an amount equal to $7,500,000 less an amount equal to the aggregate of all amounts funded pursuant to any previous Draw Requests (as defined in
Section 2.3) that have not yet been repaid pursuant to Section 2.4 (the parties hereto agreeing that interest accrued on the Revolving Liquidity Note as described herein will not be
considered an amount funded by the Holder for purposes of such calculation, and any amount paid in respect of such accrued interest will not be considered to increase the Undrawn Amount). 

    Section 2.2.  Additional Funding Obligations.  If at any time prior to the Final Payment Date
either (i) the short-term unsecured debt rating of TMCC falls below P-1 by Moody's or A-1+ by S&P (or in either case, such lower ratings as may be permitted
by Moody's and S&P), or (ii) the Holder fails to fund the amount specified in any Draw Request prepared and submitted to the Holder in accordance with Sections 2.1 and 2.3 of this Agreement,
then the Indenture Trustee on behalf of the Issuer will have the right to request that the entire Undrawn Amount of the Revolving Liquidity Note be funded. To the extent the entire Undrawn Amount is
fully funded pursuant to this Section 2.2, the Undrawn Amount shall be reduced to zero and shall no longer be subject to draws. 

    Section 2.3.  Draw Mechanics.  Not fewer than two Business Days prior to the relevant Payment
Date, in the case of a Draw described in Section 2.1, and on any Business Day, in the case of a Draw described in Section 2.2, the Issuer, by action of the Indenture Trustee or of the
Administrator on behalf of the Indenture Trustee (following the assignment of this Agreement to the Indenture Trustee pursuant to Section 2.5 and until the Indenture terminates in accordance
with its provisions), may deliver a written request (each such request, a "Draw Request") for funds in the amount of the shortfall described in Section 2.1 or the entire Undrawn Amount in the
case of a Draw pursuant to Section 2.2. Any such Draw Request may be delivered by facsimile transmission and hard copy to: Toyota Motor Credit Corporation, (310) 468-5715,
Attn: Vice President, Treasury, Re: Toyota Auto Receivables 2001-C Owner Trust Revolving Liquidity Note Draw Request. Not later than 2:00 p.m. on the Business Day following delivery
of any Draw Request, the Holder will fund the indicated draw by wire transfer of immediately available funds to the following account: 

U.S. Bank National Association

ABA No.:091000022

BFN: U.S. Bank Trust

A/C:180121167365

For further credit to: 47300425

Attn: Toyota Auto Rec Tr 2001-C #77093141 

    Section 2.4.  Repayment of Funded Draws.  Subject to the following sentences, the Issuer is
obligated to repay all funded Draws together with interest accrued on the daily outstanding balance of all funded Draws from the date made until the date all funded Draws are repaid at 5.07% per
annum, calculated daily on the basis of a year of 365 or 366 days, as applicable. The parties hereto (and the assignees and third-party beneficiaries hereof, by accepting the assignment of this
Agreement as contemplated in Section 2.5 hereof) agree that Draws will be repaid in part or in whole on any each succeeding Payment Date on which amounts are available therefor in accordance
with the provisions of Section 5.06(c)(i)(E) or 5.06(d)(iv) of the Sale and Servicing Agreement, and interest accrued on the daily outstanding amount of funded Draws will be payable on
and after the Payment Date on which all funded Draws are repaid and on which amounts are available therefore in accordance with the provisions of Section 5.06(F) or 5.06(d)(v) of the
Sale and Servicing Agreement. Payments to the Holder in respect of funded Draws or accrued interest will be made either by (i) netting by TMCC of amounts that would be repayable on any Payment
Date to the extent amounts would be available therefor in accordance with the provisions of Section 5.06(c)(i)(E) and (F) or 5.06(d)(iv) and (v) of the Sale and Servicing
Agreement against amounts it is otherwise required to deposit into the Collection 

3

 

Account in its capacity as Servicer in accordance with Section 5.04(f) of the Sale and Servicing Agreement, or by wire transfer of immediately available funds to the following account: 

Bank of America, Concord, California

ABA No. 121-000-358

A/C No. 12351-07564

A/C Toyota Motor Credit Corporation 

    Notwithstanding
the foregoing, if following liquidation of the Owner Trust Estate pursuant to Article IX of the Indenture the Trust has insufficient funds to make required
payments to the Holder of the Revolving Liquidity Note pursuant to Article V of the Sale and Servicing Agreement, then all amounts due under the Revolving Liquidity Note will be deemed to have
been paid in full and this Agreement shall terminate with no further payment owing from the Trust. 

    Section 2.5.  Assignment; Third Party Beneficiaries.  The parties hereto acknowledge and agree
that the right to receive amounts funded by the Holder under the Revolving Liquidity Note and all other rights of
the Issuer under this Agreement will be assigned by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders, and that the Indenture Trustee, on behalf of the
Noteholders, and such Noteholders, are intended to be third-party beneficiaries of this Agreement from and after such assignment and until the Indenture is terminated in accordance with its terms. In
addition, the Holder expressly acknowledges that, pursuant to the Indenture, the Indenture Trustee will exercise its right to request funds hereunder in every circumstance when such request may be
made in accordance with the terms of this Agreement. Nothing in this Agreement or in the Revolving Liquidity Note, whether express or implied, shall be construed to give to any other Person any legal
or equitable right, remedy or claim under or in respect of this Agreement or the Revolving Liquidity Note, or any covenants, conditions or provisions contained herein or therein. 

 
 

Article III
  Revolving Liquidity Note

    Section 3.1.  Issuance of Revolving Liquidity Note.  On the date hereof, the Issuer will execute
and deliver to the Holder a physical certificate evidencing the Revolving Liquidity Note, substantially in the form of Exhibit A hereto. Each Revolving Liquidity Note issued hereunder will
evidence the repayment obligations of the Issuer set forth in Section 2.4 hereof and the funding obligations of the Holder thereof set forth in Section 2.1 and 2.2 hereof, and will be
dated the date of its issuance. 

    Section 3.2.  Terms.  Upon issuance, the Undrawn Amount of the Revolving Liquidity Note shall be
$7,500,000. The Undrawn Amount will be reduced by the amount of each Draw funded by the Holder, and increased by amounts repaid to the Holder pursuant to Section 2.4 up to a maximum of
$7,500,000, excluding interest paid on the Revolving Liquidity Note. Interest will accrue on the average daily outstanding excess of $7,500,000 over the Undrawn Amount from and including the date of
any Draw to but excluding the date on which the Undrawn Amount is reduced to zero. Although the Revolving Liquidity Note is secured by the Owner Trust Estate (excluding assets of the
Sub-Trust as defined in the Amended and Restated Trust Agreement of the Issuer), all payments in respect of funded Draws and interest accrued thereon shall be fully subordinated to
required payments to the Noteholders and to required deposits into the Reserve Account as set forth in the Sale and Servicing Agreement. 

    Section 3.3.  Transfer.  Prior to the termination of the Indenture, the Holder may not transfer,
assign or convey the Revolving Liquidity Note or this Agreement unless: (i) the purported transferee, assignee or recipient of such conveyance has executed a written agreement to be bound by
all of the terms and provisions of this Agreement; (ii) such action shall not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee and the Indenture Trustee, adversely affect
in any material respect the interests of any Noteholder or Certificateholder; and (iii) the Indenture Trustee (x) has received a letter from Standard & Poor's to the effect that
Standard & Poor's will not qualify, reduce 

4

 

or withdraw the rating it has currently assigned to any Class of Notes as a result of such transfer, assignment or conveyance and (y) has provided Moody's with 10 days prior written
notice of such intended transfer, assignment or conveyance and Moody's shall not have notified the Indenture Trustee that such transfer, assignment or conveyance might or would result in the
qualification, reduction or withdrawal of the rating it has currently assigned to any Class of Notes. The Revolving Liquidity Note may not be transferred, assigned or conveyed in part; any transfer,
conveyance or assignment must be in respect of 100% of the Revolving Liquidity Note. The Issuer (or the Administrator on behalf of the Issuer) will maintain a register in which it will record the name
and contact information for each Holder. No transfer, assignment or conveyance of the Revolving Liquidity Note will be effective prior to notice to the Issuer and the Indenture Trustee and recordation
by the Issuer (or the Administrator on behalf of the Issuer) thereof in such register. 

    Section 3.4.  No Set-Off.  Without affecting the provisions of this Agreement
requiring the calculation of payment amounts, all payments under this Agreement will be made without set-off or counterclaims against payments to or from the Swap Counterparty under the
Interest Rate Swap Agreement or other Basic Documents or payments owing to the Servicer under the Basic Documents, and the parties hereto waive any right of set-off or counterclaim that
any such party may have at law or equity. 

 
 

Article IV
  Miscellaneous Provisions

    Section 4.1.  Fees and Expenses.  No party shall receive fees or expenses in connection with this
Agreement. 

    Section 4.2.  Assignment by Issuer.  The Holder hereby acknowledges and consents to any mortgage,
pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of all right, title and interest of the Issuer
to and/or the assignment of any or all of the Issuer's rights and obligations hereunder to the Indenture Trustee. 

    Section 4.3.  Amendment.  Prior to the termination of the Indenture, this Agreement may be amended
by the Issuer and the Holder, with the consent of the Indenture Trustee, but without the consent of any of the Noteholders or the Certificateholder, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of
the Noteholders or the Certificateholder; provided, however, that (i) such action shall not, as
evidenced by an Opinion of Counsel delivered to the Indenture Trustee, adversely affect in any material respect the interests of any Noteholder or Certificateholder, and (ii) the Indenture
Trustee (x) has received a letter from Standard & Poor's to the effect that Standard & Poor's will not qualify, reduce or withdraw the rating it has currently assigned to any
Class of Notes as a result of such amendment and (y) has provided Moody's with 10 days prior written notice of such amendment and Moody's shall not have notified the Indenture Trustee
that such amendment might or would result in the qualification, reduction or withdrawal of the rating it has currently assigned to any Class of Notes. After the termination of the Indenture, this
Agreement may be amended in writing by the Issuer and the Holder without notice to or consent of any other Person. 

    Section 4.4.  Notices.  All demands, notices, communications and instructions upon or to the
Issuer, the initial Holder, the Owner Trustee, the Indenture Trustee or the Rating Agencies under this Agreement shall be in writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the case of the initial Holder, to Toyota Motor Credit Corporation, 19001 S. Western Avenue, Torrance, California
90509, Attention: Vice President, Treasury, (310) 468-4001, (b) in the case of the Issuer or the Owner Trustee, at the Corporate Trust Office (as defined in the Trust
Agreement), (c) in the case of the Indenture 

5

 

Trustee, at the Corporate Trust Office specified in the Indenture, (d) in the case of Moody's, to Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York,
New York 10007, (f) in the case of Standard & Poor's, to Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, 55 Water Street, New York, New
York 10041, Attention of Asset Backed Surveillance Department; or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. 

    Section 4.5.  Holder's Nonpetition Covenant. 

    Notwithstanding
any prior termination of this Agreement, the Holder will not, prior to the date which is one year and one day after the termination of this Agreement with respect to
the Issuer or Seller, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against
the Issuer or Seller under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or Seller or any substantial part of the property of either of them, or ordering the winding up or liquidation of the affairs of the Issuer or Seller. 

    Section 4.6.  No Proceedings.  There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or to the Holder's knowledge, threatened, against or affecting the Holder: (i) asserting the invalidity of this Agreement or the
Revolving Liquidity Note, (ii) seeking to prevent the issuance of the Revolving Liquidity Note or the consummation of any of the transactions contemplated by this Agreement,
(iii) seeking any determination or ruling that might materially and adversely affect the performance by the Holder of its obligations under, or the validity or enforceability of, this
Agreement, or (iv) relating to the Holder and which might adversely affect the federal income tax attributes of the Issuer or the Revolving Liquidity Note. 

    Section 4.7.  Severability.  Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 

    Section 4.8.  Termination.  This Agreement shall terminate upon the termination of the Amended and
Restated Trust Agreement pursuant to Article IX of the Amended and Restated Trust Agreement. 

    Section 4.9.  Separate Counterparts.  This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 

    Section 4.10.  Headings.  The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or provisions hereof. 

    Section 4.11.  Limitation on Liability.  Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by U.S. Bank Trust National Association, not in its individual capacity, but solely in its capacity as Owner Trustee on behalf of the Issuer. In no
event shall U.S. Bank Trust National Association in its individual capacity have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered by the Holder, or prepared by the Holder for delivery by the Owner Trustee on behalf of the Issuer, pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of its duties or obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust Agreement. 

    Section 4.12.  Governing Law.  This Agreement shall be construed in accordance with the laws of
the State of California, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. 

[Remainder of this page intentionally left blank] 

6

 
    IN WITNESS WHEREOF, the Issuer and the initial Holder have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. 

	 	 	 	 	 
	 	 	TOYOTA AUTO RECEIVABLES 2001-C OWNER TRUST,

as Issuer
	

 	
 	

 	

 	

 
	 	 	By:	U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely in its capacity as Owner Trustee
	

 	
 	

 	

 	

 
	 	 	By:	/s/  Melissa A. Rosal

	 	 	 	Name:	Melissa A. Rosal
	 	 	 	Title:	Vice President
	

 	
 	

 	

 	

 
	 	 	TOYOTA MOTOR CREDIT CORPORATION,

as Holder
	

 	
 	

 	

 	

 
	 	 	By:	/s/  George E. Borst

	 	 	 	Name:	George E. Borst
	 	 	 	Title:	President and Chief Executive Officer

S–1

  

 
 

EXHIBIT A
  
    FORM OF REVOLVING LIQUIDITY NOTE    
  

THIS
REVOLVING LIQUIDITY NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION IN RELIANCE ON EXEMPTIONS PROVIDED BY THE 1933 ACT AND SUCH STATE OR FOREIGN SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF THIS REVOLVING LIQUIDITY NOTE SHALL BE MADE EXCEPT IN
COMPLIANCE WITH SECTION 3.3 OF THE REVOLVING LIQUIDITY NOTE AGREEMENT AND EITHER (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR (ii) IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS. 

THE
PRINCIPAL OF THIS REVOLVING LIQUIDITY NOTE IS PAYABLE SOLELY FROM FUNDS AVAILABLE THEREFOR PURSUANT TO ARTICLE V OF THE SALE AND SERVICING AGREEMENT REFERRED TO HEREIN. THE HOLDER HEREOF IS
REQUIRED TO FUND CERTAIN DRAWS REQUESTED BY THE ISSUER HEREOF (OR BY CERTAIN OTHER PERSONS REFERRED TO HEREIN) UP TO A MAXIMUM PRINCIPAL AMOUNT OUTSTANDING AT ANY TIME OF $7,500,000. THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS REVOLVING LIQUIDITY NOTE AT ANY TIME MAY BE LESS THAN SUCH MAXIMUM AMOUNT. REPAYMENT OF THE OUTSTANDING PRINCIPAL AMOUNT OF THIS REVOLVING LIQUIDITY NOTE, AND OF INTEREST
ACCRUED HEREON, IS SUBJECT TO THE AVAILABILITY OF FUNDS FOR SUCH PURPOSE AS SET FORTH IN ARTICLE V OF THE SALE AND SERVICING AGREEMENT REFERRED TO HEREIN, AND IS FULLY SUBORDINATED TO THE PAYMENT OF
INTEREST ON AND PRINCIPAL OF CERTAIN OTHER SECURITIES ISSUED BY THE ISSUER HEREOF AND TO THE DEPOSIT INTO THE RESERVE ACCOUNT REFERRED TO HEREIN OF AMOUNTS REQUIRED TO BE DEPOSITED THEREIN. 

THIS
REVOLVING LIQUIDITY NOTE IS NOT AN OBLIGATION OF, AND WILL NOT BE INSURED OR GUARANTEED BY, ANY GOVERNMENTAL AGENCY, TOYOTA MOTOR CREDIT CORPORATION, TOYOTA AUTO FINANCE RECEIVALBES LLC, THE
OWNER TRUSTEE, THE INDENTURE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. 

THIS
REVOLVING LIQUIDITY NOTE, OR A BENEFICIAL INTEREST HEREIN, MAY NOT BE TRANSFERRED UNLESS THE TRUSTEE HAS RECEIVED (I) A CERTIFICATE FROM THE TRANSFEREE TO THE EFFECT THAT SUCH TRANSFEREE
IS NOT AN EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN DEFINED IN SECTION 3(32) OF ERISA OR SECTION 414(d) OF THE CODE SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW") (EACH, A "BENEFIT PLAN") AND IS NOT AN ENTITY INCLUDING AN INSURANCE COMPANY SEPARATE ACCOUNT OR AN INSURANCE COMPANY GENERAL
ACCOUNT IF THE ASSETS IN ANY SUCH ACCOUNTS CONSTITUTE "PLAN ASSETS" FOR PURPOSES OF REGULATION SECTION 2510.3-101 OF ERISA WHOSE UNDERLYING ASSETS INCLUDE BENEFIT PLAN ASSETS BY REASON OF
A BENEFIT PLAN'S INVESTMENT IN THE ENTITY (SUCH BENEFIT PLAN OR ENTITY, A "BENEFIT PLAN INVESTOR") AND (II) A CERTIFICATE TO THE EFFECT THAT IF THE TRANSFEREE IS A PARTNERSHIP, GRANTOR TRUST OR
S CORPORATION FOR FEDERAL 

Exhibit A–1

 

INCOME TAX PURPOSES (A "FLOW-THROUGH ENTITY"), ANY REVOLVING LIQUIDITY NOTES OWNED BY SUCH FLOW-THROUGH ENTITY WILL REPRESENT LESS THAN 50% OF THE VALUE OF ALL THE ASSETS OWNED
BY SUCH FLOW-THROUGH ENTITY AND NO SPECIAL ALLOCATION OF INCOME, GAIN, LOSS, DEDUCTION OR CREDIT FROM SUCH REVOLVING LIQUIDITY NOTES WILL BE MADE AMONG THE BENEFICIAL OWNERS OF SUCH
FLOW-THROUGH ENTITY. 

IN
ADDITION, NO RESALE OR OTHER TRANSFER OF THIS REVOLVING LIQUIDITY NOTE OR ANY INTEREST THEREIN SHALL BE PERMITTED UNLESS IMMEDIATELY AFTER GIVING EFFECT TO SUCH RESALE OR OTHER TRANSFER, THERE
WOULD BE FEWER THAN 100 REVOLVING LIQUIDITY NOTEHOLDERS. 

Exhibit A–2

 

TOYOTA AUTO RECEIVABLES OWNER TRUST 2001-C 

REVOLVING
LIQUIDITY NOTE 

Representing
a

Maximum Amount of Funded Draws

outstanding at any time not to exceed

$7,500,000 

    This
certifies that TOYOTA MOTOR CREDIT CORPORATION (the "Holder") is the registered owner of this Revolving Liquidity Note representing the right to receive the payment of certain
Draws funded as described in the Revolving Liquidity Note Agreement (the "Revolving Liquidity Note Agreement") dated as of September 20, 2001, between Toyota Auto Receivables Owner Trust
2001-C, as issuer (the "Issuer") and Toyota Motor Credit Corporation as initial holder hereof. Capitalized terms used herein and not defined herein shall have the meanings ascribed thereto
in the Revolving Liquidity Note Agreement and in the Sale and Servicing Agreement dated as of August 1, 2001, among the Issuer, Toyota Motor Credit Corporation ("TMCC"), as servicer, and TAFR
LLC, as seller (the "Sale and Servicing Agreement"). 

    This
Revolving Liquidity Note represents a 100% undivided interest in the right of the Holder to receive repayment in full of the aggregate amount of funded Draws and interest accrued
thereon as and to the extent such amounts are payable in accordance with the Revolving Liquidity Note Agreement. All of the provisions of the Revolving Liquidity Note Agreement and Sale and Servicing
Agreement are incorporated by reference and comprise integral parts of this Revolving Liquidity Note. The following summary of certain provisions thereof is not and does not purport to be complete. By
its acceptance hereof, the holder of this Revolving Liquidity Note (the "Holder") assents to and is bound by the terms, provisions and conditions of the Revolving Liquidity Note Agreement, including
the provisions thereof (i) setting forth the obligation of the Holder of this Revolving Liquidity Note to fund Draws as and when properly requested pursuant to Article II thereof,
(ii) specifying that this Revolving Liquidity Note is secured only by certain assets of the Issuer and is payable only from certain collections in respect thereof that are available for such
purpose in accordance with the priority of payments set forth in Article V of the Sale and Servicing Agreement, and (iii) specifying that all payments in respect of funded Draws and
interest accrued thereon shall be fully subordinated to required payments to the holders of certain other securities issued by the Issuer and to required deposits into a specified reserve account
established for the benefit of the holders of such other securities in accordance with the Sale and Servicing Agreement. 

    The
"Undrawn Amount" of the Revolving Liquidity Note is an amount equal to $7,500,000 less an amount equal to the aggregate of all amounts funded pursuant to any previous Draw
Requests that have not yet been repaid pursuant to Section 2.4 of the Revolving Liquidity Note Agreement, and increased by amounts repaid to the Holder pursuant to Section 2.4 of the
Revolving Liquidity Note Agreement up to a maximum of $7,500,000 (interest accrued on the Revolving Liquidity Note not being considered an amount funded by the Holder for purposes of such calculation,
and any amount paid in respect of such accrued interest will not be considered to increase the Undrawn Amount). To the extent the entire Undrawn Amount is fully funded pursuant to Section 2.2
of the Revolving Liquidity Note Agreement, the Undrawn Amount shall be reduced to zero and shall no longer be subject to draws. Interest will accrue on the average daily outstanding excess of
$7,500,000 over the Undrawn Amount from and including the date of any Draw to but excluding the date on which the Undrawn Amount is reduced to zero at 5.07% per annum, calculated daily on the basis of
a year of 365 or 366 days, as applicable. 

    Subject
to the more detailed provisions concerning payments to be made to the Holder of the Revolving Liquidity Note set forth in the Revolving Liquidity Note Agreement and the Sale
and Servicing Agreement, generally, repayment of Draws previously funded by the (or a) Holder of the Revolving Liquidity Note, and interest accrued thereon as described below, will be made on
the 15th 

Exhibit A–3

 

day of each calendar month, or if such day is not a Business Day, then on the next succeeding Business Day, to the extent funds are available therefor. Notwithstanding the foregoing, if following
liquidation of the Owner Trust Estate pursuant to Article IX of the Indenture the Trust has insufficient funds to make required payments to the Holder of the Revolving Liquidity Note pursuant
to Article V of the Sale and Servicing Agreement, then all amounts due under the Revolving Liquidity Note will be deemed to have been paid in full and this Agreement shall terminate with no
further payment owing from the Trust. 

    Prior
to the termination of the Indenture, this Agreement may be amended by the Issuer and the Holder, with the consent of the Indenture Trustee, but without the consent of any of the
Noteholders or the Certificateholder, to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholder; provided,  however,
 that (i) such action shall not, as evidenced by an Opinion of Counsel delivered to the Indenture Trustee, adversely affect in any
material respect the interests of any Noteholder or Certificateholder, and (ii) the Indenture Trustee (x) has received a letter from Standard & Poor's to the effect that
Standard & Poor's will not qualify, reduce or withdraw the rating it has currently assigned to any Class of Notes as a result of such amendment and (y) has provided Moody's with
10 days prior written notice of such amendment and Moody's shall not have notified the Indenture Trustee that such amendment might or would result in the qualification, reduction or withdrawal
of the rating it has currently assigned to any Class of Notes. After the termination of the Indenture, this Agreement may be amended in writing by the Issuer and the Holder without notice to or
consent of any other Person. 

    Prior
to the termination of the Indenture, the Holder may not transfer, assign or convey this Revolving Liquidity Note or the Revolving Liquidity Note Agreement unless: (i) the
purported transferee, assignee or recipient of such conveyance has executed a written agreement to be bound by all of the terms and provisions of the Revolving Liquidity Note Agreement;
(ii) such action shall not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee and the Indenture Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder; and (iii) the Indenture Trustee (x) has received a letter from Standard & Poor's to the effect that Standard & Poor's will not qualify,
reduce or withdraw the rating it has currently assigned to any Class of Notes as a result of such transfer, assignment or conveyance and (y) has provided Moody's with 10 days prior
written notice of such intended transfer, assignment or conveyance and Moody's shall not have notified the Indenture Trustee that such transfer, assignment or conveyance might or would result in the
qualification, reduction or withdrawal of the rating it has currently assigned to any Class of Notes. The Revolving Liquidity Note may not be transferred, assigned or conveyed in part; any transfer,
conveyance or assignment must be in respect of 100% of this Revolving Liquidity Note. The Issuer (or the Administrator on behalf of the Issuer) will maintain a register in which it will record the
name and contact information for each Holder. No transfer, assignment or conveyance of this Revolving Liquidity Note will be effective prior to notice to the Issuer and the Indenture Trustee and
recordation by the Issuer (or the Administrator on behalf of the Issuer) thereof in such register. 

    No
recourse may be taken, directly or indirectly, with respect to the obligations of the Holder of this Revolving Liquidity Note under the Revolving Liquidity Note Agreement or other
writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any Certificateholder or other owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity,
any Certificateholder or other owner of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner Trustee, in their 

Exhibit A–4

 

capacities as such, have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. 

    By
its acceptance of this Revolving Liquidity Note, the Holder agrees that it will not, prior to the date which is one year and one day after the termination of the Revolving
Liquidity Note Agreement with respect to the Issuer or Seller, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer or Seller under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or Seller or any substantial part of the property of either of them, or ordering the winding up or liquidation of the affairs of the Issuer or
Seller. 

    THIS
REVOLVING LIQUIDITY NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA. 

Exhibit A–5

 

    IN WITNESS WHEREOF, the Issuer has caused this Revolving Liquidity Note to be duly executed. 

	 	 	 	 	 
	 	 	TOYOTA AUTO RECEIVABLES 2001-C

OWNER TRUST, as Issuer
	

 	
 	

 	

 	

 
	 	 	By:	U.S. BANK TRUST NATIONAL ASSOCIATION,

not in its individual capacity but solely

in its capacity as Owner Trustee
	

 	
 	

 	

 	

 
	 	 	By:	 	 
	 	 	 	

	 	 	 	Name:	 
	 	 	 	Title:	 
	Dated:  September 20, 2001	 	 	 	 

Exhibit A–6

   EXHIBIT B

FORM OF REVOLVING LIQUIDITY NOTE DRAW REQUEST
  Toyota Auto Receivables 2001-C Owner Trust

c/o U.S. Bank Trust National Association

400 North Michigan Avenue, 2nd Floor

Chicago, Illinois 60611-4181 

Toyota
Motor Credit Corporation

19001 South Western Avenue

Torrance, California 90509

Attn: Vice President, Treasury

Facsimile: (310) 468-5715 

    Re:
Toyota Auto Receivables 2001-C Owner Trust Revolving Liquidity Note Draw Request 

Ladies
and Gentlemen: 

    This
notice confirms the Issuer's request for a draw on the Revolving Liquidity Note pursuant to Section [2.1] [2.2] of the Revolving
Liquidity Note Agreement in the principal amount of $            . Please advance the requested drawn amount as set forth in Section 2.3 of the Revolving Liquidity Note Agreement.

    Please
acknowledge receipt of this notice by executing below and returning to the above-listed address. 

	 	 	 	 	 
	

 	
 	

Very truly yours,

[Administrator] [Indenture Trustee]
	

 	
 	

 	

 	

 
	 	 	By:	

	 	 	 	Name:	 
	 	 	 	Title:	 

ACKNOWLEDGED:

Toyota Motor Credit Corporation 

	 	 	 	 
	By:	
	 
	 	Name:	 	 
	 	Title:	 	 

Exhibit B–1

QuickLinks

Exhibit 4.10

REVOLVING LIQUIDITY NOTE AGREEMENT

Article I Definitions

Article II Funding by Holder of Revolving Liquidity Note

Article III Revolving Liquidity Note

Article IV Miscellaneous Provisions

EXHIBIT A FORM OF REVOLVING LIQUIDITY NOTE<PAGE>   1

                                                                   EXHIBIT 10.17

                       FORM OF STANDBY PURCHASE AGREEMENT

            THIS STANDBY PURCHASE AGREEMENT (the "Agreement"), made and entered
into as of ____________, 2001 by and between Gunther International, Ltd., a
Delaware corporation with its principal place of business located in Norwich,
Connecticut (the "Company") and Gunther Partners, LLC, a Delaware limited
liability company (the "Purchaser").

                              W I T N E S S E T H:

            WHEREAS, the Company anticipates issuing to the holders (the
"Stockholders") of its issued and outstanding shares of common stock, $.001 par
value per share ( the "Common Stock"), of record at the close of business on
September 4, 2001 (the "Record Date") certain subscription rights (the "Basic
Subscription Rights"), with oversubscription privileges ("Oversubscription
Rights", together with the Basic Subscription Rights, the "Rights"), to
subscribe for and purchase additional shares of Common Stock at a per share
price of $.50 (the "Subscription Price"), on the basis of 3.728 Rights for each
share of Common Stock held of record on such date (such transaction generally
being herein referred to as the "Rights Offering");

            WHEREAS, the Purchaser is the holder of shares of Common Stock as of
the Record Date; and, as such, will receive Rights in the Rights Offering; and

            WHEREAS, the Purchaser desires to serve as a Standby Purchaser for a
specified amount of shares of Common Stock at the Subscription Price (the
"Standby Shares") that have not been subscribed for by holders of Rights prior
to the expiration of the Rights Offering at 5:00 p.m., New York city time, on
____________, 2001 (the "Expiration Time");

            NOW, THEREFORE, in and for consideration of the premises, and other
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

      1.    Purchase and Delivery of Standby Shares.

      (a) Concurrently with the execution of this Agreement, the Company is
commencing the Rights Offering in which the Company is offering 16,000,000
shares of Common Stock to its Stockholders for purchase on or before the
Expiration Time. In the event that the Stockholders other than the Purchaser do
not subscribe for and purchase all 16,000,000 shares of Common Stock offered in
the Rights Offering through the exercise of their Basic Subscription Rights and
Oversubscription Rights (the "Unsubscribed Shares") on or before the Expiration
Time, subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to the Purchaser and the Purchaser hereby agrees to subscribe
for and purchase from the Company, pursuant to its exercise of its
Oversubscription Rights, a number of shares equal to 16,000,000 less the number
of shares subscribed for and purchased by Stockholders other than the Purchaser
in the Rights Offering, up to a maximum of 14,000,000 shares. Priorities for the
purchase of
<PAGE>   2
additional shares by Stockholders (including the Purchaser) electing to exercise
Oversubscription Rights shall be made on the basis specified in the Registration
Statement and the Prospectus.

      (b) The Purchaser shall fulfill its standby purchase commitment under this
Section by executing and delivering to the Company prior to the Expiration Time
an executed subscription certificate in the form attached to the Registration
Statement as Exhibit 4.1 thereto, a copy of which is attached to this Agreement
as Exhibit A (the "Purchaser Subscription Certificate"). The Company
acknowledges and agrees that the Purchaser shall not be required to tender
payment for the Standby Shares at the time of its delivery of the Purchaser
Subscription Certificate to the Company, in accordance with the provisions of
Section 1 of the "Instructions for Use of Subscription Certificates" adopted by
the Company for the Rights Offering (the "Subscription Instructions"). In the
event of any inconsistency between the terms of (i) the Purchaser Subscription
Certificate and the Subscription Instructions and (ii) the terms of this
Agreement, the terms of this Agreement shall govern.

      (c) The Company will not extend the closing date of the Rights Offering
beyond December 31, 2001 without the prior written consent of the Purchaser.

      2.    The Closing.

            As soon as practicable following its determination of the number of
Unsubscribed Shares, the Company shall notify the Purchaser of the number of
Standby Shares, if any, to be purchased by the Purchaser pursuant to Section 1
of the Agreement. The delivery of the payment for the Standby Shares shall take
place at the office of Murtha Cullina LLP in connection with the consummation of
the Rights Offering, which shall be designated by the Company by oral
communication or written notice to the Purchaser (such time and date being
referred to as the "Closing Time", the date of the Closing Time being referred
to as the "Closing Date" and the consummation of the transaction being referred
to as the "Closing").

      3.    Representation and Warranties.

      (a)   The Company hereby represents and warrants to the Purchaser as
follows:

            (i) The Company has been duly incorporated and is validly existing
      as a corporation in good standing under the laws of the State of Delaware.

            (ii) The execution, delivery and performance of this Agreement by
      the Company and the consummation by the Company of the transactions
      contemplated hereby have been duly authorized by all necessary corporate
      action of the Company, and this Agreement, when duly executed and
      delivered by the Purchaser, will constitute a valid and legally binding
      instrument of the Company enforceable in accordance with its terms,
      subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and similar laws of general applicability relating to or
      affecting creditors' rights and to general equity principles.

                                      -5-
<PAGE>   3
            (iii) The Standby Shares have been duly authorized by all necessary
      corporate action of the Company, and when issued in accordance with such
      authorization and delivered by the Company against payment therefor will
      be validly issued, fully paid and nonassessable; and the Stockholders have
      no preemptive rights with respect to the Standby Shares. The Rights have
      been duly authorized by all necessary corporate action of the Company, and
      when issued in accordance with such authorization and delivered by the
      Company, will constitute legal, valid, binding and enforceable obligations
      of the Company, subject to bankruptcy, insolvency, fraudulent transfer,
      reorganization, moratorium and similar laws of general applicability
      relating to or affecting creditors' rights and to general equity
      principles.

            (iv) The execution and delivery of this Agreement, the consummation
      by the Company of the transactions herein contemplated and the compliance
      by the Company with the terms hereof do not and will not conflict with, or
      result in a breach or violation of any of the terms or provisions of, or
      constitute a default under, the certificate of incorporation or bylaws of
      the Company, or any indenture, mortgage, deed or trust, loan agreement or
      other agreement or instrument to which the Company is a party or by which
      any of its properties or assets are bound, with such exceptions as would
      not have a material adverse effect on the financial condition of the
      Company, or any applicable law, rule, regulation, judgment, order or
      decree of any government, governmental instrumentality or court having
      jurisdiction over the Company or any of its properties or assets; and no
      consent, approval, authorization, order, registration or qualification of
      or with any such governmental instrumentality or court is required for the
      valid authorization, execution, delivery and performance by the Company of
      this Agreement, the issuance of the Rights, the issuance of the shares of
      Common Stock upon the exercise of the Rights, except such as have been
      obtained under the rules and regulations of the Securities and Exchange
      Commission (the "Commission") and such consents, approvals,
      authorizations, registrations or qualifications as may be required under
      state securities or "blue sky" laws.

            (v) A registration statement, including a prospectus, relating to
      the Common Stock of the Company has been filed with the Commission and may
      be amended. Such registration statement, as it may be amended at the time
      when it becomes effective is hereinafter referred to as the "Registration
      Statement", and such prospectus, as then amended, including all material
      incorporated by reference therein, as the "Prospectus". When the
      Registration Statement becomes effective (the "Effective Time"), the
      Registration Statement and Prospectus will conform in all respects to the
      requirements of the Securities Act of 1933 (the "Act") and the rules and
      regulations of the Commission, and neither of such documents will include
      any untrue statement of a material fact or omit to state any material fact
      required to be stated therein or necessary to make the statements therein
      not misleading, except that the foregoing does not apply to statements or
      omissions in either of such documents based upon written information
      furnished to the Company by the Purchaser specifically for use therein.

      (b)   The Purchaser hereby represents and warrants to the Company as
follows:

                                      -6-
<PAGE>   4
            (i) The Purchaser has been duly organized and exists in good
      standing as a limited liability company under the laws of the State of
      Delaware.

            (ii) The execution, delivery and performance of this Agreement by
      the Purchaser and the consummation by the Purchaser of the transactions
      contemplated hereby have been duly authorized by all necessary action of
      the Purchaser, and this Agreement, when duly executed and delivered by the
      Purchaser, will constitute a valid and legally binding instrument,
      enforceable in accordance with its terms, subject to bankruptcy,
      insolvency, fraudulent transfer, reorganization, moratorium and similar
      laws of general applicability relating to or affecting creditors' rights
      and to general equity principles.

            (iii) The Purchaser has sufficient cash resources on hand to
      purchase the Standby Shares on the terms and conditions contained in this
      Agreement.

            (iv) No state, federal or foreign regulatory approvals, permits,
      licenses, or consents or other contractual or legal obligations are
      required in order for the Purchaser to enter into this Agreement or
      purchase the Standby Shares.

            (v) The execution and delivery of this Agreement, the consummation
      by the Purchaser of the transactions herein contemplated and the
      compliance by the Purchaser with the terms hereof do not and will not
      conflict with, or result in a breach or violation of any of the terms or
      provisions of, or constitute a default under, the constituent documents of
      the Purchaser or any indenture, mortgage, deed of trust, loan agreement or
      other agreement or instrument to which the Purchaser is a party or by
      which any of the Purchaser's properties or assets are bound, or any
      applicable law, rule, regulation, judgment, order or decree of any
      government, governmental jurisdiction over the Purchaser or any of
      Purchaser's properties or assets; and no consent, approval, authorization,
      government, governmental instrumentality or court, domestic or foreign, is
      required for the valid authorization, execution, delivery and performance
      by the Purchaser of this Agreement or the consummation by the Purchaser of
      the transactions contemplated by this Agreement.

            (vi) The Purchaser's commitment under this Agreement is not
      contingent on the commitment of any other Stockholder or on any minimum
      number of shares being issued in the Rights Offering.

            (vii) At the Effective Time, the information furnished to the
      Company by the Purchaser specifically for use in the Registration
      Statement and Prospectus will not include any untrue statement of a
      material fact or omit to state any material fact required to be stated
      therein or necessary to make the statements therein not misleading.

            (viii) The Purchaser will be purchasing any shares of Common Stock
      purchased pursuant to the terms hereof as a passive investment in the
      ordinary course of the Purchaser's business.

                                      -7-
<PAGE>   5
            (ix)  The Purchaser has reviewed a copy of the Registration
      Statement and Prospectus.

      4. Closing Conditions. The respective obligations of the Purchaser and the
Company to consummate the purchase and sale of the Standby Shares shall be
subject in the discretion of the Company or the Purchaser, as the case may be,
to the condition that all representations and warranties and other statements of
the other party are, at and as of the Closing Time, true and correct in all
material respects, the condition that the other party shall have performed all
of its obligations hereunder theretofore to be performed in all material
respects, and the following additional conditions precedent:

      (a) The Effective Time of the Registration Statement shall be no later
than 5:30 p.m., New York time, on the date of this Agreement or such later date
as shall have been consented by the Purchaser; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Company or the Purchaser, shall be contemplated by the Commission.

      (b) The Purchaser shall have received a letter, dated the date of delivery
thereof (which if the Effective Time of the Registration Statement is prior to
the execution and delivery of this Agreement, shall be on or prior to the date
of this Agreement or, if the Effective Time of the Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be prior to
the filing of the amendment or post-effective amendment to the Registration
Statement to be filed shortly prior to such Effective Time), of Ernst & Young
LLP confirming that they are independent public accountants within the meaning
of the Act and the applicable published rules and regulations thereunder and
stating to the effect that:

            (i) In their opinion the financial statements examined by them and
      incorporated by reference in the Registration Statement comply as to form
      in all material respects with the applicable accounting requirements of
      the Act and the related published rules and regulations;

            (ii) They have performed the procedures specified by the American
      Institute of Certified Public Accountants for a review of interim
      financial information as described in Statement of Auditing Standards No.
      71, Interim Financial Information, on the unaudited financial statements
      incorporated by reference in the Registration Statement; and

            (iii) On the basis of the review referred to in clause (ii) above, a
      reading of the latest available interim financial statements of the
      Company, inquiries of officials of the Company who have responsibility for
      financial and accounting matters and other specified procedures, nothing
      came to their attention that caused them to believe that:

                                      -8-
<PAGE>   6
            (A) The unaudited financial statements incorporated by reference in
            the Registration Statement do not comply as to form in all material
            respects with the applicable accounting requirements of the Act and
            the related published rules and regulations or any material
            modifications should be made to such unaudited financial statements
            for them to be in conformity with accounting principles generally
            accepted in the United States;

            (B) At the date of the latest available balance sheet read by such
            accountants, or at a subsequent specified date not more than three
            business days prior to the date of this Agreement, there was any
            change in the capital stock or any increase in short-term
            indebtedness or long-term debt of the Company and its consolidated
            subsidiaries or, at the date of the latest available balance sheet
            read by such accountants, there was any decrease in consolidated net
            current assets, as compared with amounts shown on the latest balance
            sheet incorporated by reference in the Registration Statement; or

            (C) For the period from the closing date of the latest statement of
            operations incorporated by reference in the Registration Statement
            to the closing date of the latest available statement of operations
            read by such accountants there were any decreases, as compared with
            the corresponding period of the previous year and with the period of
            corresponding length ended the date of the latest statement of
            operations incorporated by reference in the Registration Statement,
            in consolidated net sales, net operating income or in the total or
            per share amounts of income before extraordinary items or net
            income;

      except in all cases set forth in clauses (A) , (B) and (C) above for
      changes, increases or decreases which the Prospectus discloses have
      occurred or may occur or which are described in such letter.

      (c) The Purchaser shall have received an opinion, dated such Closing Date,
of Murtha Cullina LLP, counsel for the Company, to the effect that:

            (i) The Company is an existing corporation in good standing under
      the laws of the State of Delaware, with corporate power and authority to
      own its properties and conduct its business as described in the
      Prospectus;

            (ii) The Standby Shares delivered on such Closing Date have been
      duly authorized and validly issued and are fully paid and nonassessable;
      and the Stockholders have no preemptive rights with respect to the Standby
      Shares;

            (iii) No consent, approval, authorization or order of, or filing
      with, any governmental agency or body or any court is required for the
      consummation of the transactions contemplated by this Agreement in
      connection with the issuance or sale of the Standby Shares by the Company,
      except such as have been obtained and made under the Act and such as may
      be required under state securities laws;

                                      -9-
<PAGE>   7
            (iv) The execution, delivery and performance of this Agreement and
      the issuance and sale of the Standby Shares will not result in a breach or
      violation of any of the terms and provisions of, or constitute a default
      under: (A) any statute, any rule, regulation or order of any governmental
      agency or body or any court having jurisdiction over the Company or any
      subsidiary of the Company or any of their properties; (B) any material
      agreement or instrument filed by the Company with the Commission as an
      exhibit to the Company's Annual Report on Form 10-KSB for the fiscal year
      ended March 31, 2001 (as amended) and any subsequent periodic reports of
      the Company filed under the Securities Exchange Act of 1934, to which the
      Company or any such subsidiary is a party or by which the Company or any
      such subsidiary is bound or to which any of the properties of the Company
      or any such subsidiary is subject; or (C) the charter or by-laws of the
      Company or any such subsidiary. The Company has full corporate power and
      authority to authorize, issue and sell the Standby Shares as contemplated
      by this Agreement;

            (v) The Registration Statement was declared effective under the Act
      as of the date and time specified in such opinion, the Prospectus either
      was filed with the Commission pursuant to the subparagraph of Rule 424(b)
      specified in such opinion on the date specified therein or was included in
      the Registration Statement, and, to the best of the knowledge of such
      counsel, no stop order suspending the effectiveness of a Registration
      Statement or any part thereof has been issued and no proceedings for that
      purpose have been instituted or are pending or contemplated under the Act,
      and each of the Registration Statement and the Prospectus, and each
      amendment or supplement thereto, as of their respective effective or issue
      dates, complied as to form in all material respects with the requirements
      of the Act and the rules and regulations; such counsel have no reason to
      believe that any part of the Registration Statement or any amendment
      thereto, as of its effective date or as of such Closing Date, contained
      any untrue statement of a material fact or omitted to state any material
      fact required to be stated therein or necessary to make the statements
      therein not misleading or that the Prospectus or any amendment or
      supplement thereto, as of its issue date or as of such Closing Date,
      contained any untrue statement of a material fact or omitted to state any
      material fact necessary in order to make the statements therein, in the
      light of the circumstances under which they were made, not misleading; the
      descriptions in the Registration Statement and Prospectus of statutes,
      legal and governmental proceedings and contracts and other documents are
      accurate and fairly present the information required to be shown; and such
      counsel do not know of any legal or governmental proceedings required to
      be described in the Registration Statement or the Prospectus which are not
      described as required or of any contracts or documents of a character
      required to be described in the Registration Statement or the Prospectus
      or to be filed as exhibits to the Registration Statement which are not
      described and filed as required; it being understood that such counsel
      need express no opinion as to the financial statements or other financial
      data contained in the Registration Statement or the Prospectus; and

                                      -10-
<PAGE>   8
            (vi)  This Agreement has been duly authorized, executed and
      delivered by the Company.

      (d) The Purchaser shall have received a certificate, dated such Closing
Date, of the President or any Vice President and a principal financial or
accounting officer of the Company in which such officers, to the best of their
knowledge after reasonable investigation, shall state that: the representations
and warranties of the Company in this Agreement are true and correct; the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to such Closing Date; no
stop order suspending the effectiveness of any Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission; and, subsequent to the date of the most recent
financial statements in the Prospectus, there has been no material adverse
change, nor any development or event involving a prospective material adverse
change, in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole except as set
forth in or contemplated by the Prospectus or as described in such certificate.

      (e) The Purchaser shall have received a letter, dated such Closing Date,
of Ernst & Young LLP which meets the requirements of subsection (b) of this
Section, except that the specified date referred to in such subsection will be a
date not more than three days prior to such Closing Date for the purposes of
this subsection.

      The Company will furnish the Purchaser with such conformed copies of such
opinions, certificates, letters and documents as the Purchaser reasonably
requests.

      5.    Indemnification.

      (a) The Company will indemnify and hold harmless the Purchaser and each
person, if any, who controls the Purchaser within the meaning of the Act against
any losses, claims, damages or liabilities, joint or several, to which such
Purchaser or such controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the Prospectus, any amendment or supplement thereto, any related preliminary
prospectus or any document incorporated by reference in any of the foregoing, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse the Purchaser and each
such controlling person for any legal or other expenses reasonably incurred by
the Purchaser or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any of such documents in reliance upon and in conformity with information
furnished to the Company by the Purchaser specifically for use therein. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.

                                      -11-
<PAGE>   9
            Insofar as the foregoing indemnity agreement, or the representations
and warranties contained in this Agreement, may permit indemnification for
liabilities under the Act of the Purchaser or a member or controlling person of
the Purchaser within the meaning of Section 15 of the Act and who, at the date
of this Agreement, is a director, officer or controlling person of the Company,
the Company has been advised that in the opinion of the Commission such
provisions may be broad enough to contravene Federal public policy as expressed
in the Act and may therefore be unenforceable. In the event that a claim for
indemnification under such agreement or such representations and warranties for
any such liabilities (except insofar as such agreement provides for the payment
by the Company of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such a person, the Company will submit to a court of appropriate
jurisdiction (unless in the opinion of counsel for the Company the matter has
already been settled by controlling precedent) the question of whether or not
indemnification by it for such liabilities is against public policy as expressed
in the Act and therefore unenforceable, and the Company will be governed by the
final adjudication of such issue.

      (b) The Purchaser will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement
and each person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages or liabilities to which the Company or any
such director, officer or controlling person may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with information furnished to the Company by the Purchaser
specifically for use therein; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action. This indemnity agreement will be in addition to any
liability which the Purchaser may otherwise have.

      (c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such

                                      -12-
<PAGE>   10
indemnified party (who shall not, except with the consent of the indemnified
party be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.

      (d) If recovery is not available under the foregoing indemnification
provisions of this Section, for any reason other than as specified therein, the
parties entitled to indemnification by the terms thereof shall be entitled to
contribution to liabilities and expenses, except to the extent that contribution
is not permitted under Section 11(f) of the Act. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by each party from the transactions
contemplated by this Agreement, the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The Company and
the Purchaser agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation. Neither the
Purchaser or nor any person controlling the Purchaser shall be obligated to make
contribution hereunder which in the aggregate exceeds the total Subscription
Price of the Common Stock purchased by the Purchaser pursuant to this Agreement,
less the aggregate amount of any damages which the Purchaser and its controlling
persons have otherwise been required to pay in respect of the same claim or any
substantially similar claim.

      6.    Termination.

      (a) Either of the parties hereto may terminate this Agreement (i) if the
transactions contemplated hereby are not consummated by December 31, 2001
through no fault of the Purchaser or (ii) in the event that the Company is
unable to obtain any required approvals for the transactions contemplated hereby
to be undertaken by it on conditions reasonably satisfactory to it despite its
reasonable efforts to obtain such approvals. In addition, this Agreement shall
terminate upon mutual consent of the parties hereto.

      (b) The Company and the Purchaser hereby agree that any termination of
this Agreement pursuant to Section 6(a), or the termination of the Rights
Offering for any reason whatsoever by the Company (other than termination in the
event of a breach of this Agreement by the Purchaser or misrepresentation of any
of the statements made herein by the Purchaser) shall be without liability of
the Company or the Purchaser.

      7.    Notices.

      All communications hereunder shall be in writing and, if to the Company,
shall be mailed, delivered or telecopied and confirmed to it at:

            Gunther International, Ltd.

                                      -13-
<PAGE>   11
            One Winnenden Road
            Norwich, Connecticut  06360
            Attention:  Michael M. Vehlies, Chief Financial Officer
            Facsimile No.:  (860) 886-8889

            with a copy to:

            Murtha Cullina LLP
            Cityplace I, 185 Asylum Street
            Hartford, Connecticut  06103
            Attention:  Richard S. Smith, Jr.
            Facsimile No.:  (860) 240-6150

            And if to the Purchaser, shall be mailed, delivered or telecopied
and confirm to it at:

            Gunther Partners, LLC
            667 Madison Avenue
            New York, New York  10021
            Attention:  Thomas J. Tisch
            Facsimile No.:  (212) 521-2540

            with a copy to:

            Sullivan & Cromwell
            125 Broad Street
            New York, New York  10004
            Attention:  Richard R. Howe
            Facsimile No.:  (212) 558-3588

      8.    Binding Effects.

            This Agreement shall be binding upon, and shall inure solely to the
benefit of, each of the parties hereto, and each of their respective heirs,
executors, administrators, successors and permitted assigns, and no other Person
shall acquire or have any right under or by virtue of this Agreement. The
Purchaser may not assign its rights and obligations hereunder.

      9.    GOVERNING LAW.

                                      -14-
<PAGE>   12
            THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK IN EFFECT AT THE TIME OF THE EXECUTION
HEREOF.

      10.   Entire Agreement.

            This Agreement represents the entire understanding of the parties
with respect to the matters addressed herein and supersedes all prior written
and oral understandings concerning the subject matter herein.

      11.   Execution in Counterparts.

            This Agreement may be executed in any number of counterparts, each
of which counterparts when so executed and delivered shall be deemed to be an
original, but all such respective counterparts shall together constitute but one
and the same instrument.

                 [Rest of This Page Intentionally Left Blank]

                                      -15-
<PAGE>   13
      IN WITNESS WHEREOF, and intending to be legally bound thereby, each of the
Purchaser and the Company has signed or caused to be signed its name as of the
day and year first above written.

                                    GUNTHER INTERNATIONAL, LTD.

                                    By:
                                       ---------------------------------
                                       Name:
                                       Title:

                                    GUNTHER PARTNERS, LLC

                                    By:
                                       ---------------------------------
                                       Name:
                                       Title:

                                      -16-

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