Document:

Exhibit 4.7

        

    Execution Version

     

      

     

      

    

    

    

    

  

  

  

  

  ASSET REPRESENTATIONS REVIEW AGREEMENT

  

  

  among

  

  

  TOYOTA AUTO RECEIVABLES 2019-A OWNER TRUST,

      as Issuer,

  

  

  TOYOTA MOTOR CREDIT CORPORATION,

      as Servicer and Administrator,

  

  

  and

  

  

  CLAYTON FIXED INCOME SERVICES LLC,

      as Asset Representations Reviewer

  

  

  Dated as of February 13, 2019

   

    

   
    
 

  

  

  

  

  

  

  
    
      

  

  
  TABLE OF CONTENTS

  	
          ARTICLE I

           

        	
          USAGE AND DEFINITIONS

           

        	
          1

        
	
          Section 1.1.

        	
          Usage and Definitions

        	
          1

        
	
          Section 1.2.

           

            

        	
          Additional Definitions

        	
          1

        
	
          ARTICLE II

           

        	
          ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER

           

        	
          2

        
	
          Section 2.1.

        	
          Engagement; Acceptance

        	
          2

        
	
          Section 2.2.

           

            

        	
          Confirmation of Status

        	
          2

        
	
          ARTICLE III

           

        	
          ASSET REPRESENTATIONS REVIEW PROCESS

           

        	
          3

        
	
          Section 3.1.

        	
          Review Notice and Identification of Review Receivables

        	
          3

        
	
          Section 3.2.

        	
          Review Materials

        	
          3

        
	
          Section 3.3.

        	
          Performance of Reviews

        	
          3

        
	
          Section 3.4.

        	
          Review Reports

        	
          4

        
	
          Section 3.5.

        	
          Review Representatives

        	
          5

        
	
          Section 3.6.

        	
          Dispute Resolution

        	
          5

        
	
          Section 3.7.

           

            

        	
          Limitations on Review Obligations

        	
          5

        
	
          ARTICLE IV

           

        	
          ASSET REPRESENTATIONS REVIEWER

           

        	
          6

        
	
          Section 4.1.

        	
          Representations and Warranties

        	
          6

        
	
          Section 4.2.

        	
          Covenants

        	
          7

        
	
          Section 4.3.

        	
          Fees and Expenses

        	
          7

        
	
          Section 4.4.

        	
          Limitation on Liability

        	
          8

        
	
          Section 4.5.

        	
          Indemnification by Asset Representations Reviewer

        	
          9

        
	
          Section 4.6.

        	
          Indemnification of Asset Representations Reviewer

        	
          9

        
	
          Section 4.7.

        	
          Inspections of Asset Representations Reviewer

        	
          10

        
	
          Section 4.8.

        	
          Delegation of Obligations

        	
          10

        
	
          Section 4.9.

        	
          Confidential Information

        	
          10

        
	
          Section 4.10.

           

            

        	
          Personally Identifiable Information

        	
          12

        
	
          ARTICLE V

           

        	
          RESIGNATION AND REMOVAL; SUCCESSOR ASSET REPRESENTATIONS REVIEWER

           

        	
          14

        
	
          Section 5.1.

        	
          Eligibility Requirements for Asset Representations Reviewer

        	
          14

        
	
          Section 5.2.

        	
          Resignation and Removal of Asset Representations Reviewer

        	
          14

        
	
          Section 5.3.

        	
          Successor Asset Representations Reviewer

        	
          15

        
	
          Section 5.4.

           

            

        	
          Merger, Consolidation or Succession

        	
          15

        
	
          ARTICLE VI

           

        	
          OTHER AGREEMENTS

           

        	
          15

        
	
          Section 6.1.

        	
          Independence of Asset Representations Reviewer

        	
          15

        
	
          Section 6.2.

        	
          No Petition

        	
          16

        
	
          Section 6.3.

        	
          Limitation of Liability of Owner Trustee

        	
          16

        
	
          Section 6.4.

           

            

        	
          Termination of Agreement

        	
          16

        
	
          ARTICLE VII

           

        	
          MISCELLANEOUS PROVISIONS

           

        	
          16

        
	
          Section 7.1.

        	
          Amendments

        	
          16

        
	
          Section 7.2.

        	
          Assignment; Benefit of Agreement; Third Party Beneficiaries

        	
          17

        

  

  

  
    i

    
      

  

  

  

  

  

  	
          Section 7.3.

        	
          Notices

        	
          17

        
	
          Section 7.4.

        	
          GOVERNING LAW

        	
          17

        
	
          Section 7.5.

        	
          WAIVER OF JURY TRIAL

        	
          17

        
	
          Section 7.6.

        	
          No Waiver; Remedies

        	
          18

        
	
          Section 7.7.

        	
          Severability

        	
          18

        
	
          Section 7.8.

        	
          Headings

        	
          18

        
	
          Section 7.9.

        	
          Counterparts

        	
          18

        
	
           

          Schedule A – Review Materials

        	 
	
          Schedule B – Representations, Warranties and Tests

           	 

  

  

  
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  ASSET REPRESENTATIONS REVIEW AGREEMENT, dated as of February 13, 2019 (this “Agreement”), among TOYOTA AUTO RECEIVABLES 2019-A OWNER TRUST, a Delaware statutory trust (the “Issuer”), TOYOTA MOTOR
      CREDIT CORPORATION, a California corporation (“TMCC”), as servicer (in such capacity, the “Servicer”)

      and administrator (in such capacity, the “Administrator”), and CLAYTON FIXED INCOME SERVICES LLC, a Delaware limited liability company (the “Asset Representations Reviewer”).

  WITNESSETH

  WHEREAS, the Issuer desires to engage the Asset Representations Reviewer to perform reviews of certain Receivables
      for compliance with certain representations and warranties made with respect thereto; and

  WHEREAS, the Asset Representations Reviewer desires to perform such reviews of Receivables in accordance with the
      terms of this Agreement.

  NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration,
      the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

  ARTICLE I

      USAGE AND DEFINITIONS

  Section 1.1.      Usage and Definitions.  Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to such terms in the Sale and Servicing Agreement.

  Section 1.2.      Additional Definitions.  The following terms have the meanings given below:

  “Annual Fee” has the meaning stated in
      Section 4.3(a).

  “Annual Period” has the meaning stated
      in Section 4.3(e).

  “Confidential Information” has the
      meaning stated in Section 4.9(b).

  “Contract” means, with respect to any
      Receivable, the original tangible record constituting or forming a part of such Receivable, or a copy or image of such original tangible record, together with (and as modified by) any correction notice issued by the Servicer to the related Obligor
      with respect thereto.

  “Information Recipients” has the meaning
      stated in Section 4.9(a).

  “Indemnified Parties” has the meaning
      stated in Section 4.6(a).

  “Indenture” means the Indenture, dated as of February 13,
      2019, between the Issuer and the Indenture Trustee, as the same may be amended, supplemented or modified from time to time.

  

  

  
    
      

  

  
  

  

  “Indenture Trustee” means U.S. Bank
      National Association, as indenture trustee under the Indenture, and any successor thereto.

  “Issuer PII” has the meaning stated in
      Section 4.10(a).

  “PII” has the meaning stated in Section
      4.10(a).

  “Review” means the performance by the
      Asset Representations Reviewer of the testing procedures for each Test and each Review Receivable according to Section 3.3.

  “Review Fee” has the meaning stated in
      Section 4.3(b).

  “Review Materials” means, for a Review
      and a Review Receivable, the documents and other materials listed in Schedule A.

  “Review Notice” means a notice delivered
      to the Asset Representations Reviewer by the Indenture Trustee pursuant to 12.02 of the Indenture.

  “Review Receivables” means those certain
      Receivables identified by the Servicer to the Asset Representations Reviewer following receipt of a Review Notice as not having been paid in full by the Obligor or purchased from the Issuer in accordance with the terms of the Basic Documents at or
      prior to the date of such Review Notice.

  “Review Report” means, for a Review, the
      report of the Asset Representations Reviewer as described in Section 3.4.

  “Sale and Servicing Agreement” means the
      Sale and Servicing Agreement, dated as of February 13, 2019, among the Issuer, the Seller and TMCC.

  “Test” has the meaning stated in Section
      3.3(a).

  “Test Complete” has the meaning stated
      in Section 3.3(c).

  “Test Fail” has the meaning stated in
      Section 3.3(a).

  “Test Pass” has the meaning stated in
      Section 3.3(a).

  ARTICLE II

      ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER

  Section 2.1.      Engagement; Acceptance.  The Issuer hereby engages Clayton Fixed Income Services LLC to act as the Asset Representations Reviewer for the Issuer.  Clayton Fixed Income Services
      LLC hereby accepts the engagement and agrees to perform the obligations of the Asset Representations Reviewer on the terms set forth in this Agreement.

  Section 2.2.      Confirmation of Status.  The parties confirm that the Asset Representations Reviewer is not responsible for (a) reviewing the Receivables for compliance with the representations
      and warranties under the Basic Documents, except as described in this

  
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  Agreement, or (b) determining whether noncompliance with the representations or warranties constitutes a breach of the Basic Documents.

  ARTICLE III

      ASSET REPRESENTATIONS REVIEW PROCESS

  Section 3.1.      Review Notice and Identification of Review Receivables.  Within ten (10) Business Days after delivery of a Review Notice to the Asset Representations Reviewer, the Servicer will
      deliver a list of the Review Receivables to the Asset Representations Reviewer.  Upon receipt of a Review Notice and the related list of Review Receivables from the Servicer, the Asset Representations Reviewer will start a Review.  Delivery of any
      Review Notice shall be made pursuant to Section 10.03 of the Sale and Servicing Agreement.

  Section 3.2.      Review Materials.

  (a)      Access to Review Materials.  Within sixty (60) days of the delivery of a Review Notice to the Asset Representations Reviewer, the Servicer will give the Asset Representations
      Reviewer access to the Review Materials for all of the Review Receivables in one or more of the following ways, to be determined in the sole discretion of the Servicer: (i) by providing access to the Servicer’s receivables systems, either remotely or
      at an office of the Servicer, (ii) by electronic posting to a password-protected website to which the Asset Representations Reviewer has access, (iii) by providing scanned copies at an office of the Servicer where the Review Materials are located or
      (iv) in another manner agreed to between the Servicer and the Asset Representations Reviewer.  The Servicer may redact or remove PII from the Review Materials, but will use commercially reasonable efforts not to change the meaning or usefulness of
      the Review Materials for the Review.

  (b)      Missing or Insufficient Review Materials.  The Asset Representations Reviewer will review the Review Materials to determine if any Review Materials are missing or insufficient
      for the Asset Representations Reviewer to perform any Test.  If the Asset Representations Reviewer determines that there are missing or insufficient Review Materials, the Asset Representations Reviewer will notify the Servicer and the Administrator
      promptly, and in any event no less than twenty (20) Business Days before completing the Review.  The Servicer will have fifteen (15) Business Days to give the Asset Representations Reviewer access to the missing Review Materials or other documents or
      information to correct any such insufficiency.  If the missing or insufficient Review Materials or other documents or information have not been provided by the Servicer within such fifteen (15) Business Day period, the related Review Report will
      report a Test Fail for each Test in respect of which such missing or insufficient Review Materials is necessary to determine whether a Test Pass result is appropriate.

  Section 3.3.      Performance of Reviews.

  (a)      Test Procedures.  For a Review, the Asset Representations Reviewer will perform, for each Review Receivable, the procedures listed under “Tests” in Schedule B for each
      representation and warranty (each, a “Test”), using the Review Materials necessary to perform the procedures described for such Test in Schedule B.  For each Test and Review
      Receivable, the

  
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  Asset Representations Reviewer will determine if the Test has been satisfied (a “Test Pass”) or if the Test has not been satisfied (a “Test Fail”).

  (b)        Review Period.  The Asset Representations Reviewer will complete the Review of all of the Review Receivables within sixty (60) days after having received access to the Review
      Materials pursuant to Section 3.2(a).  However, if additional Review Materials are provided to the Asset Representations Reviewer in respect of any Review Receivables pursuant to Section 3.2(b), the Review period will be extended for an additional
      thirty (30) days in respect of any such Review Receivables.

  (c)        Completion of Review for Certain Review Receivables.  Following the delivery of the list of the Review Receivables and before the delivery of the Review Report by the Asset
      Representations Reviewer, the Servicer may notify the Asset Representations Reviewer if a Review Receivable is paid in full by the Obligor or purchased from the Issuer in accordance with the terms of the Basic Documents.  On receipt of such notice,
      the Asset Representations Reviewer will immediately terminate all Tests of the related Review Receivable, and the Review of such Review Receivables will be considered complete (a “Test
          Complete”).  In this case, the related Review Report will indicate a Test Complete for such Review Receivable and the related reason.

  (d)       Previously Reviewed Receivable; Duplicative Tests.  If any Review Receivable was included in a prior Review, the Asset Representations Reviewer will not conduct additional Tests
      on such Review Receivable, but will include the previously reported Test results in the Review Report for the current Review.  If the same Test is required for more than one representation and warranty, the Asset Representations Reviewer will only
      perform the Test once for each Review Receivable, but will report the results of the Test for each applicable representation and warranty on the Review Report.

  (e)      Termination of Review.  If a Review is in process and the Notes will be paid in full on the next Payment Date, the Servicer or the Administrator will notify the Asset
      Representations Reviewer no less than ten (10) days before that Payment Date.  On receipt of such notice, the Asset Representations Reviewer will terminate the Review immediately and will not be obligated to deliver a Review Report.

  Section 3.4.      Review Reports.  Within five (5) days after the end of the applicable Review period under Section 3.3(b), the Asset Representations Reviewer will deliver to the Issuer, the
      Servicer, the Depositor, the Administrator and the Indenture Trustee a Review Report indicating for each Review Receivable whether there was a Test Pass, Test Fail or Test Complete for each related Test.  For each Test Fail or Test Complete, the
      Review Report will indicate the related reason, including (for example) whether the Review Receivable was a Test Fail as a result of missing or incomplete Review Materials.  The Review Report will contain a summary of the Review results to be
      included in the Issuer’s Form 10-D report for the Collection Period in which the Review Report is received.  The Asset Representations Reviewer will ensure that the Review Report does not contain any PII.  On reasonable request of the Servicer or the
      Administrator, the Asset Representations Reviewer will provide additional details on the Test results.

  
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  Section 3.5.      Review Representatives.

  (a)      Servicer Representative.  The Servicer will designate one or more representatives who will be available to assist the Asset Representations Reviewer in performing the Review,
      including responding to requests and answering questions from the Asset Representations Reviewer about access to Review Materials on the Servicer’s originations, receivables or other systems, obtaining missing or insufficient Review Materials and/or
      providing clarification of any Review Materials or Tests.

  (b)      Asset Representations Reviewer Representative.  The Asset Representations Reviewer will designate one or more representatives who will be available to the Issuer, the Servicer
      and the Administrator during the performance of a Review.

  (c)      Questions About Review.  The Asset Representations Reviewer will make appropriate personnel available to respond in writing to written questions or requests for clarification of
      any Review Report from the Indenture Trustee, the Servicer or the Administrator until the earlier of (i) the payment in full of the Notes and (ii) two years after the delivery of the Review Report.  The Asset Representations Reviewer will not be
      obligated to respond to questions or requests for clarification from Noteholders or any other Person and will direct such Persons, and the Indenture Trustee will direct the Noteholders, to submit written questions or requests to the Servicer.

  Section 3.6.      Dispute Resolution.  If a Review Receivable that was the subject of a Review becomes the subject of a dispute resolution proceeding under Section 11.02 of the Sale and Servicing
      Agreement, the Asset Representations Reviewer will participate in the dispute resolution proceeding on request of a party to the proceeding.  The reasonable out-of-pocket expenses of the Asset Representations Reviewer for its participation in any
      dispute resolution proceeding will be considered expenses of the requesting party for the dispute resolution and will be paid by a party to the dispute resolution as determined by the mediator or arbitrator for the dispute resolution according to
      Section 11.02 of the Sale and Servicing Agreement.  If not paid by a party to the dispute resolution, the expenses will be reimbursed by the Issuer according to Section 4.3(d) of this Agreement.

  Section 3.7.      Limitations on Review Obligations.

  (a)      Review Process Limitations.  The Asset Representations Reviewer will have no obligation: (i) to determine whether a Delinquency Trigger has occurred or whether the required
      percentage of Noteholders has voted to direct a Review under the Indenture; (ii) to determine which Receivables are the subject of a Review; (iii) to obtain or confirm the validity of the Review Materials; (iv) to obtain missing or insufficient
      Review Materials; (v) to take any action or cause any other party to take any action under any of the Basic Documents to enforce any remedies for breaches of representations or warranties; or (vi) to establish cause, materiality or recourse for any
      Test Fail as described in Section 3.3.

  (b)      Testing Procedure Limitations.  The Asset Representations Reviewer will only be required to perform the “Tests” described in Schedule B, and will not be obligated to perform
      additional procedures on any Review Receivable other than as specified in this Agreement.

  
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  However, the Asset Representations Reviewer may, in its discretion, (i) perform other tests that it deems reasonable and appropriate in
      determining whether the Review Receivables were in compliance with the representations and warranties made by TMCC and the Seller about the Review Receivables in the Basic Documents as of the Cutoff Date or Closing Date, as applicable, and (ii)
      provide additional information about any Review Receivable that it determines in good faith to be material to the related Review.

  ARTICLE IV

      ASSET REPRESENTATIONS REVIEWER

  Section 4.1.      Representations and Warranties.  The Asset Representations Reviewer represents and warrants to the Issuer as of the Closing Date:

  (a)      Organization and Qualification.  The Asset Representations Reviewer is duly organized and validly existing as a limited liability company in good standing under the laws of
      State of Delaware.  The Asset Representations Reviewer is qualified as a foreign limited liability company in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its properties
      or the conduct of its activities requires the qualification, license or approval, unless the failure to obtain the qualifications, licenses or approvals would not reasonably be expected to have a material adverse effect on the Asset Representations
      Reviewer’s ability to perform its obligations under this Agreement.

  (b)      Power, Authority and Enforceability.  The Asset Representations Reviewer has the power and authority to execute, deliver and perform its obligations under this Agreement.  The
      Asset Representations Reviewer has authorized the execution, delivery and performance of this Agreement.  This Agreement is the legal, valid and binding obligation of the Asset Representations Reviewer enforceable against the Asset Representations
      Reviewer, except as may be limited by insolvency, bankruptcy, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles.

  (c)      No Conflicts and No Violation.  The completion of the transactions  contemplated by this Agreement and the performance of the Asset Representations Reviewer’s obligations under
      this Agreement will not (i) conflict with, or be a breach or default under, any indenture, mortgage, deed of trust, loan agreement, guarantee or similar document under which the Asset Representations Reviewer is a debtor or guarantor, (ii) result in
      the creation or imposition of a Lien on the properties or assets of the Asset Representations Reviewer under the terms of any indenture, mortgage, deed of trust, loan agreement, guarantee or similar document, (iii) violate the organizational
      documents of the Asset Representations Reviewer or (iv) violate a law or, to the Asset Representations Reviewer’s knowledge, an order, rule or regulation of a federal or State court, regulatory body, administrative agency or other governmental
      instrumentality having jurisdiction over the Asset Representations Reviewer or its properties that applies to the Asset Representations Reviewer, which, in each case, would reasonably be expected to have a material adverse effect on the Asset
      Representations Reviewer’s ability to perform its obligations under this Agreement.

  (d)      No Proceedings.  To the Asset Representations Reviewer’s knowledge, there are no proceedings or investigations pending or threatened in writing before a federal or State court,

  
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  regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Asset Representations Reviewer
      or its properties (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the completion of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that would reasonably be expected to have a
      material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under, or the validity or enforceability of, this Agreement.

  (e)      Eligibility.  The Asset Representations Reviewer meets the eligibility requirements in Section 5.1.

  Section 4.2.      Covenants.  The Asset Representations Reviewer covenants and agrees that:

  (a)      Eligibility.  It will notify the Issuer, the Servicer and the Administrator promptly if it no longer meets, or reasonably expects that it will no longer meet, the eligibility
      requirements in Section 5.1.

  (b)      Review Systems; Personnel.  It will maintain business process management and/or other systems necessary to ensure that it can perform each Test and, on execution of this
      Agreement, will load each Test into these systems. The Asset Representations Reviewer will ensure that these systems allow for each Review Receivable and the related Review Materials to be individually tracked and stored as contemplated by this
      Agreement.  The Asset Representations Reviewer will maintain adequate staff that is properly trained to conduct Reviews as required by this Agreement.

  (c)      Maintenance of Review Materials.  It will maintain copies of any Review Materials, Review Reports and other documents relating to a Review, including internal correspondence and
      work papers, for a period of at least two years after any termination of this Agreement.

  (d)      Compliance with Applicable Law.  The Asset Representations Reviewer will act in accordance with all requirements applicable to an asset representations reviewer under applicable
      law (as amended from time to time) and other state or federal securities law applicable to asset representations reviewers in effect during the term of this Agreement.

  Section 4.3.      Fees and Expenses.

  (a)      Annual Fee.  As compensation for its activities hereunder, the Asset Representations Reviewer shall be entitled to receive an annual fee (the “Annual Fee”) with respect to each Annual Period prior to the termination of the Issuer, in an amount equal to $5,000.

  (b)      Review Fee.  Following the completion of a Review and the delivery of the related Review Report pursuant to Section 3.4, or the termination of a Review according to Section
      3.3(e), and the delivery to the Issuer, the Indenture Trustee, the Servicer and the Administrator of a detailed invoice in respect thereof, the Asset Representations Reviewer will be entitled to a fee of $200 for each Review Receivable for which the
      Review was started (the “Review Fee”).  However, no Review Fee will be charged for any Review Receivable which was

  
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  included in a prior Review or for which no Tests were completed prior to the Asset Representations Reviewer being notified of a
      termination of the Review according to Section 3.3(e) or due to missing or insufficient Review Materials under Section 3.2(b).

  (c)      Reimbursement of Travel Expenses.  If the Servicer provides access to the Review Materials at one of its properties, the Issuer will reimburse the Asset Representations Reviewer
      for its reasonable travel expenses incurred in connection with the Review, following the delivery to the Issuer, the Indenture Trustee, the Servicer and the Administrator of a detailed invoice in respect of such expenses; provided that such
      reimbursable expenses may not exceed $20,000.

  (d)      Dispute Resolution Expenses.  If the Asset Representations Reviewer participates in a dispute resolution proceeding under Section 3.6 of this Agreement and its reasonable
      out-of-pocket expenses for participating in the proceeding are not paid by a party to the dispute resolution within ninety (90) days after the end of the proceeding, the Issuer will reimburse the Asset Representations Reviewer for such expenses after
      receipt of a detailed invoice in respect thereof.

  (e)      Method of Payment.  The initial Annual Fee will become due and payable by TMCC within thirty (30) days of receipt by TMCC of an invoice in respect thereof.  Each other Annual
      Fee, and the amount of any properly invoiced fees, expenses or claims (including any Review Fee) to be reimbursed or paid by the Issuer pursuant to the terms of this Agreement, will become due and payable by the Issuer on the next Payment Date
      occurring at least five (5) Business Days after receipt by the Servicer of the related invoice from the Asset Representations Reviewer, in each case in accordance with the priority of payments set forth in Section 5.06(b) or (c) of the Sale and
      Servicing Agreement, as applicable; provided that, (i) Annual Fees (other than the initial Annual Fee) will not be payable by the Issuer prior to the Payment Date immediately following the end of each annual period occurring on the anniversary of the
      Closing Date (each such period, an “Annual Period”), and (ii) the Asset Representations Reviewer must submit its invoice for any outstanding fees, expenses or claims not
      later than ten (10) Business Days before the final Payment Date.  The Servicer shall provide notice to the Asset Representations Reviewer of the final Payment Date at least fifteen (15) Business Days prior to such Payment Date.  In the event that any
      such properly invoiced fees, expenses or claims are not paid or reimbursed in full by the Issuer on the related Payment Date, TMCC shall promptly pay the Asset Representations Reviewer for any such unpaid amounts.  If, subsequent to any such payment
      by TMCC to the Asset Representations Reviewer described in the immediately preceding sentence, the Asset Representations Reviewer receives payment or reimbursement in respect of the related fee, expense or claim, in part or in full, from the Issuer,
      then the Asset Representations Reviewer shall promptly refund TMCC for the amount of such payment or reimbursement received from the Issuer on such subsequent date.

  Section 4.4.      Limitation on Liability.  The Asset Representations Reviewer will not be liable to any Person for any action taken, or not taken, in good faith under this Agreement or for
      errors in judgment.  However, the Asset Representations Reviewer will be liable for its willful misconduct, bad faith or negligence in performing its obligations under this Agreement.  In no event will the Asset Representations Reviewer be liable for
      special, indirect or consequential

  
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  losses or damages (including lost profit), even if the Asset Representations Reviewer has been advised of the likelihood of the loss or
      damage and regardless of the form of action.

  Section 4.5.      Indemnification by Asset Representations Reviewer .  The Asset Representations Reviewer will indemnify each of the Issuer, the Seller, the Servicer, the Administrator, the
      Owner Trustee and the Indenture Trustee and their respective directors, officers, employees and agents for all fees, expenses, losses, damages and liabilities (including, but not limited to, reasonable legal fees, costs and expenses, and including
      any such reasonable fees, costs and expenses incurred in connection with any enforcement (including any action, claim, or suit brought by such indemnified parties) of any indemnification or other obligation of the Asset Representations Reviewer)
      resulting from (a) the willful misconduct, bad faith or negligence of the Asset Representations Reviewer in performing its obligations under this Agreement and (b) the Asset Representations Reviewer’s breach of any of its representations or
      warranties in this Agreement.  The Asset Representations Reviewer’s obligations under this Section 4.5 will survive the termination of this Agreement, the termination of the Issuer and the resignation or removal of the Asset Representations Reviewer.

  Section 4.6.      Indemnification of Asset Representations Reviewer.

  (a)      Indemnification.  The Issuer will indemnify the Asset Representations Reviewer and its officers, directors, employees and agents (each, an “Indemnified Person”), for all costs, expenses, losses, damages and liabilities resulting from the performance of its obligations under this Agreement (including the fees and expenses of defending
      itself against any loss, damage or liability), but excluding any cost, expense, loss, damage or liability resulting from (i) the Asset Representations Reviewer’s willful misconduct, bad faith or negligence or (ii) the Asset Representations Reviewer’s
      breach of any of its representations or warranties in this Agreement.

  (b)      Proceedings.  Promptly on receipt by an Indemnified Person of notice of a Proceeding against it, the Indemnified Person will, if a claim is to be made under Section 4.6(a),
      notify the Issuer, the Servicer and the Administrator of the Proceeding.  The Issuer, the Servicer and the Administrator may participate in and assume the defense and settlement of a Proceeding at its expense.  If the Issuer, the Servicer or the
      Administrator notifies the Indemnified Person of its intention to assume the defense of the Proceeding with counsel reasonably satisfactory to the Indemnified Person, and so long as the Issuer, the Servicer or the Administrator assumes the defense of
      the Proceeding in a manner reasonably satisfactory to the Indemnified Person, the Issuer, the Servicer and the Administrator will not be liable for fees and expenses of counsel to the Indemnified Person unless there is a conflict between the
      interests of the Issuer, the Servicer or the Administrator, as applicable, and an Indemnified Person.  If there is a conflict, the Issuer, the Servicer or the Administrator will pay for the reasonable fees and expenses of separate counsel to the
      Indemnified Person.  No settlement of a Proceeding may be made without the approval of the Issuer, the Servicer and the Administrator and the Indemnified Person, which approval will not be unreasonably withheld, conditioned or delayed.

  (c)      Survival of Obligations.  The Issuer’s, the Servicer’s and the Administrator’s obligations under this Section 4.6 will survive the resignation or removal of the Asset
      Representations Reviewer and the termination of this Agreement.

  
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  (d)      Repayment.  If the Issuer, the Servicer or the Administrator makes any payment under this Section 4.6 and the Indemnified Person later collects any of the amounts for which the
      payments were made to it from others, the Indemnified Person will promptly repay the amounts to the Issuer, the Servicer or the Administrator, as applicable.

  Section 4.7.      Inspections of Asset Representations Reviewer.  The Asset Representations Reviewer agrees that, with reasonable prior notice not more than once during any year, it will permit
      authorized representatives of the Issuer, the Servicer and the Administrator, during the Asset Representations Reviewer’s normal business hours, to examine and review the books of account, records, reports and other documents and materials of the
      Asset Representations Reviewer relating to (a) the performance of the Asset Representations Reviewer’s obligations under this Agreement, (b) payments of fees and expenses of the Asset Representations Reviewer for its performance and (c) a claim made
      by the Asset Representations Reviewer under this Agreement.  In addition, the Asset Representations Reviewer will permit the Issuer’s, the Servicer’s and the Administrator’s representatives to make copies and extracts of any of those documents and to
      discuss them with the Asset Representations Reviewer’s officers and employees.  Each of the Issuer, the Servicer and the Administrator will, and will cause its authorized representatives to, hold in confidence the information except if disclosure may
      be required by law or if the Issuer, the Servicer or the Administrator reasonably determines that it is required to make the disclosure under this Agreement or the other Basic Documents.  The Asset Representations Reviewer will maintain all relevant
      books, records, reports and other documents and materials for a period of at least two years after the termination of its obligations under this Agreement.

  Section 4.8.      Delegation of Obligations.  The Asset Representations Reviewer may not delegate or subcontract its obligations under this Agreement to any Person without the consent of the
      Issuer, the Servicer and the Administrator.

  Section 4.9.      Confidential Information.

  (a)      Treatment.  The Asset Representations Reviewer agrees to hold and treat Confidential Information given to it under this Agreement in confidence and under the terms and
      conditions of this Section 4.9, and will implement and maintain safeguards to further assure the confidentiality of the Confidential Information.  The Confidential Information will not, without the prior consent of the Issuer, the Servicer and the
      Administrator, be disclosed or used by the Asset Representations Reviewer, or its officers, directors, employees, agents, representatives or affiliates, including legal counsel (collectively, the “Information Recipients”) other than for the purposes of performing Reviews of Review Receivables or performing its obligations under this Agreement.  The Asset Representations Reviewer agrees that it will not, and will cause
      its Affiliates to not (i) purchase or sell securities issued by TMCC, the Issuer or any of their respective Affiliates or special purpose entities formed by any of the foregoing Persons on the basis of Confidential Information or (ii) use the
      Confidential Information for the preparation of research reports, newsletters or other publications or similar communications.

  (b)      Definition.  “Confidential Information” means oral, written and electronic materials (irrespective
      of its source or form of communication) furnished before, on or after the

  
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  date of this Agreement to the Asset Representations Reviewer for the purposes contemplated by this Agreement, including:

  (i)      lists

      of Review Receivables and any related Review Materials;

  (ii)      origination

      and servicing guidelines, policies and procedures, and form contracts; and

  (iii)      notes,

      analyses, compilations, studies or other documents or records prepared by the Servicer or the Administrator, which contain information supplied by or on behalf of the Servicer, the Administrator or their respective representatives.

  However, Confidential Information will not include information that (A) is or becomes generally available to the public other than as a
      result of disclosure by the Information Recipients, (B) was available to, or becomes available to, the Information Recipients on a non-confidential basis from a Person or entity other than the Issuer, the Servicer or the Administrator before its
      disclosure to the Information Recipients who, to the knowledge of the Information Recipient is not bound by a confidentiality agreement with the Issuer, the Servicer or the Administrator and is not prohibited from transmitting the information to the
      Information Recipients, (C) is independently developed by the Information Recipients without the use of the Confidential Information, as shown by the Information Recipients’ files and records or other evidence in the Information Recipients’
      possession or (D) the Issuer, the Servicer or the Administrator provides permission to the applicable Information Recipients to release.

  (c)      Protection.  The Asset Representations Reviewer will take reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of Confidential Information,
      including those measures that it takes to protect its own confidential information and not less than a reasonable standard of care.  The Asset Representations Reviewer acknowledges that PII is also subject to the additional requirements in Section
      4.10.

  (d)      Disclosure.  If the Asset Representations Reviewer is required by applicable law, regulation, rule or order issued by an administrative, governmental, regulatory or judicial
      authority to disclose part of the Confidential Information, it may disclose the Confidential Information.  However, before a required disclosure, the Asset Representations Reviewer, if permitted by law, regulation, rule or order, will use its
      reasonable efforts to provide the Issuer, the Servicer and the Administrator with notice of the requirement and will cooperate, at the Issuer’s or the Servicer’s expense, as applicable, in the Issuer’s or the Servicer’s pursuit of a proper protective
      order or other relief for the disclosure of the Confidential Information.  If the Issuer or the Servicer is unable to obtain a protective order or other proper remedy by the date that the information is required to be disclosed, the Asset
      Representations Reviewer will disclose only that part of the Confidential Information that it is advised by its legal counsel it is legally required to disclose.

  (e)      Responsibility for Information Recipients.  The Asset Representations Reviewer will be responsible for a breach of this Section 4.9 by its Information Recipients.

  (f)      Violation.  The Asset Representations Reviewer agrees that a violation of this Agreement may cause irreparable injury to the Issuer, the Servicer and the Administrator, and the

  
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  Issuer, the Servicer and the Administrator may seek injunctive relief in addition to legal remedies.  If an action is initiated by the
      Issuer, the Servicer or the Administrator to enforce this Section 4.9, the prevailing party will be reimbursed for its fees and expenses, including reasonable attorney’s fees, incurred for the enforcement.

  Section 4.10.      Personally Identifiable Information.

  (a)      Definitions.  “PII” means information in any format about an identifiable individual, including,
      name, address, phone number, e-mail address, account number(s), identification number(s), any other actual or assigned attribute associated with or identifiable to an individual and any information that when used separately or in combination with
      other information could identify an individual.  “Issuer PII” means PII furnished by the Issuer, the Servicer, the Administrator or their respective Affiliates to the Asset
      Representations Reviewer and PII developed or otherwise collected or acquired by the Asset Representations Reviewer in performing its obligations under this Agreement.

  (b)      Use of Issuer PII.  The Issuer does not grant the Asset Representations Reviewer any rights to Issuer PII except as provided in this Agreement.  The Asset Representations
      Reviewer will use Issuer PII only to perform its obligations under this Agreement or as specifically directed in writing by the Issuer and will only reproduce Issuer PII to the extent necessary for these purposes.  The Asset Representations Reviewer
      must comply with all laws applicable to PII, Issuer PII and the Asset Representations Reviewer’s business, including any legally required codes of conduct, including those relating to privacy, security and data protection.  The Asset Representations
      Reviewer will protect and secure Issuer PII.  The Asset Representations Reviewer will implement privacy or data protection policies and procedures that comply with applicable law and this Agreement.  The Asset Representations Reviewer will implement
      and maintain reasonable and appropriate practices, procedures and systems, including administrative, technical and physical safeguards to (i) protect the security, confidentiality and integrity of Issuer PII, (ii) ensure against anticipated threats
      or hazards to the security or integrity of Issuer PII, (iii) protect against unauthorized access to or use of Issuer PII and (iv) otherwise comply with its obligations under this Agreement.  These safeguards include a written data security plan,
      employee training, information access controls, restricted disclosures, systems protections (e.g., intrusion protection, data storage protection and data transmission protection) and physical security measures.

  (c)      Additional Limitations.  In addition to the use and protection requirements described in Section 4.10(b), the Asset Representations Reviewer’s disclosure of Issuer PII is also
      subject to the following requirements:

  (i)      The

      Asset Representations Reviewer will not disclose Issuer PII to its personnel or allow its personnel access to Issuer PII except (A) for the Asset Representations Reviewer personnel who require Issuer PII to perform a Review, (B) with the prior
      consent of the Issuer or (C) as required by applicable law.  When permitted, the disclosure of or access to Issuer PII will be limited to the specific information necessary for the individual to complete the assigned task.  The Asset Representations
      Reviewer will inform personnel with access to Issuer PII of the

  
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  confidentiality requirements in this Agreement and train its personnel with access to Issuer PII on the proper use
      and protection of Issuer PII.

  (ii)      The

      Asset Representations Reviewer will not sell, disclose, provide or exchange Issuer PII with or to any third party without the prior consent of the Issuer.

  (iii)      Notwithstanding

      anything to the contrary contained in this Agreement, the Asset Representations Reviewer’s use and handling of Issuer PII shall also be subject to the terms and limitations described in that separate letter agreement between TMCC and the Asset
      Representations Reviewer dated October 22, 2015 (the “Letter Agreement”) and, in the event of any conflict between the terms of the Letter Agreement and the terms of this
      Agreement related to the Asset Representations Reviewer’s use and handling of Issuer PII, the most restrictive of such terms shall govern.

  (d)      Notice of Breach.  The Asset Representations Reviewer will notify the Issuer, the Servicer and the Administrator promptly in the event of an actual or reasonably suspected
      security breach, unauthorized access, misappropriation or other compromise of the security, confidentiality or integrity of Issuer PII and, where applicable, immediately take action to prevent any further breach.

  (e)      Return or Disposal of Issuer PII.  Except where return or disposal is prohibited by applicable law, promptly on the earlier of the completion of the Review or the request of the
      Issuer, all Issuer PII in any medium in the Asset Representations Reviewer’s possession or under its control will be (i) destroyed in a manner that prevents its recovery or restoration or (ii) if so directed by the Issuer, returned to the Issuer
      without the Asset Representations Reviewer retaining any actual or recoverable copies, in both cases, without charge to the Issuer.  Where the Asset Representations Reviewer retains Issuer PII, the Asset Representations Reviewer will limit the Asset
      Representations Reviewer’s further use or disclosure of Issuer PII to that required by applicable law.

  (f)      Compliance; Modification.  The Asset Representations Reviewer will cooperate with and provide information to the Issuer, the Servicer and the Administrator regarding the Asset
      Representations Reviewer’s compliance with this Section 4.10.  The Asset Representations Reviewer, the Issuer, the Servicer and the Administrator agree to modify this Section 4.10 as necessary for any party to comply with applicable law.

  (g)      Audit of Asset Representations Reviewer.  The Asset Representations Reviewer will permit the Issuer, the Servicer and the Administrator and their authorized representatives to
      audit the Asset Representations Reviewer’s compliance with this Section 4.10 during the Asset Representations Reviewer’s normal business hours on reasonable advance notice to the Asset Representations Reviewer, and not more than once during any year
      unless circumstances necessitate additional audits.  The Issuer, the Servicer and the Administrator agree to make reasonable efforts to schedule any audit described in this Section 4.10 with the inspections described in Section 4.7.  The Asset
      Representations Reviewer will also permit the Issuer, the Servicer and the Administrator, during normal business hours on reasonable advance written notice, to audit any service providers used by the Asset Representations Reviewer to fulfill the
      Asset Representations Reviewer’s obligations under this Agreement.

  
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  (h)      Affiliates and Third Parties.  If the Asset Representations Reviewer processes the PII of the Issuer’s, the Servicer’s or the Administrator’s Affiliates or a third party when
      performing a Review, and if such Affiliate or third party is identified to the Asset Representations Reviewer, such Affiliate or third party is an intended third-party beneficiary of this Section 4.10, and this Agreement is intended to benefit the
      Affiliate or third party.  The Affiliate or third party may enforce the PII-related terms of this Section 4.10 against the Asset Representations Reviewer as if each were a signatory to this Agreement.

  ARTICLE V

      RESIGNATION AND REMOVAL;

      SUCCESSOR ASSET REPRESENTATIONS REVIEWER

  Section 5.1.      Eligibility Requirements for Asset Representations Reviewer.  The Asset Representations Reviewer must be a Person who (a) is not an Affiliate of TMCC, the Seller, the Issuer,
      the Servicer, the Administrator, the Indenture Trustee or the Owner Trustee and (b) is not an Affiliate of any Person that was engaged by TMCC or any underwriter of the Notes to perform any due diligence on the Receivables prior to the Closing Date.

  Section 5.2.      Resignation and Removal of Asset Representations Reviewer.

  (a)      No Resignation.  The Asset Representations Reviewer will not resign as Asset Representations Reviewer unless it determines it is legally unable to perform its obligations under
      this Agreement and there is no reasonable action that it could take to make the performance of its obligations under this Agreement permitted under applicable law.  In such event, the Asset Representations Reviewer will deliver a notice of its
      resignation to the Issuer, the Servicer and the Administrator, together with an Opinion of Counsel supporting its determination.

  (b)      Removal.  If any of the following events occur, the Issuer, by notice to the Asset Representations Reviewer, may remove the Asset Representations Reviewer and terminate its
      rights and obligations under this Agreement:

  (i)      the

      Asset Representations Reviewer no longer meets the eligibility requirements in Section 5.1;

  (ii)      the

      Asset Representations Reviewer breaches of any of its representations, warranties, covenants or obligations in this Agreement; or

  (iii)      an

      Insolvency Event of the Asset Representations Reviewer occurs.

  (c)      Notice of Resignation or Removal.  The Issuer will notify the Servicer, the Administrator, the Owner Trustee and the Indenture Trustee of any resignation or removal of the Asset
      Representations Reviewer.

  (d)      Continue to Perform After Resignation or Removal.  No resignation or removal of the Asset Representations Reviewer will be effective, and the Asset Representations Reviewer will
      continue to perform its obligations under this Agreement, until a successor Asset Representations Reviewer has accepted its engagement according to Section 5.3(b).

  
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  Section 5.3.      Successor Asset Representations Reviewer .

  (a)      Engagement of Successor Asset Representations Reviewer.  Following the resignation or removal of the Asset Representations Reviewer, the Issuer will engage a successor Asset
      Representations Reviewer who meets the eligibility requirements of Section 5.1.

  (b)      Effectiveness of Resignation or Removal.  No resignation or removal of the Asset Representations Reviewer will be effective until the successor Asset Representations Reviewer
      has executed and delivered to the Issuer, the Servicer and the Administrator an agreement accepting its engagement and agreeing to perform the obligations of the Asset Representations Reviewer under this Agreement or entering into a new agreement
      with the Issuer on substantially the same terms as this Agreement.

  (c)      Transition and Expenses.  If the Asset Representations Reviewer resigns or is removed, the Asset Representations Reviewer will cooperate with the Issuer, the Servicer and the
      Administrator and take all actions reasonably requested to assist the Issuer in making an orderly transition of the Asset Representations Reviewer’s rights and obligations under this Agreement to the successor Asset Representations Reviewer.  The
      Asset Representations Reviewer will pay the reasonable expenses of transitioning the Asset Representations Reviewer’s obligations under this Agreement and preparing the successor Asset Representations Reviewer to take on the obligations on receipt of
      an invoice with reasonable detail of the expenses from the Issuer, the Servicer, the Administrator or the successor Asset Representations Reviewer. To the extent expenses incurred by the Asset Representations Reviewer in connection with the
      replacement of the Asset Representations Reviewer are not paid by the Asset Representations Reviewer that is being replaced, the Issuer will pay such expenses in accordance with the priority of payments set forth in Section 5.06(b) or (c) of the Sale
      and Servicing Agreement, as applicable.

  Section 5.4.      Merger, Consolidation or Succession.  Any Person (a) into which the Asset Representations Reviewer is merged or consolidated, (b) resulting from any merger or consolidation to
      which the Asset Representations Reviewer is a party or (c) succeeding to the business of the Asset Representations Reviewer, if that Person meets the eligibility requirements in Section 5.1, will be the successor to the Asset Representations Reviewer
      under this Agreement.  Such Person will execute and deliver to the Issuer, the Servicer and the Administrator an agreement to assume the Asset Representations Reviewer’s obligations under this Agreement (unless the assumption happens by operation of
      law).

  ARTICLE VI

      OTHER AGREEMENTS

  Section 6.1.      Independence of Asset Representations Reviewer.  The Asset Representations Reviewer will be an independent contractor and will not be subject to the supervision of the Issuer
      for the manner in which it accomplishes the performance of its obligations under this Agreement.  Unless authorized by the Issuer, the Servicer or the Administrator, the Asset Representations Reviewer will have no authority to act for or represent
      the Issuer, the Servicer or the Administrator, respectively, and will not be considered an agent of any such Person.  Nothing in this Agreement will make the Asset Representations Reviewer and

  
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  the Issuer, the Servicer or the Administrator members of any partnership, joint venture or other separate entity or impose any liability
      as such on any of them.

  Section 6.2.      No Petition.  Each of the parties agrees that, before the date that is one year and one day (or, if longer, any applicable preference period) after payment in full of all
      securities issued by the Seller, the Issuer or by a trust for which the Seller was a depositor, it will not start or pursue against, or join any other Person in starting or pursuing against the Seller or the Issuer, any bankruptcy, reorganization,
      arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy or similar law.  This Section 6.2 will survive the termination of this Agreement.

  Section 6.3.      Limitation of Liability of Owner Trustee.  This Agreement has been signed on behalf of the Issuer by Wilmington Trust, National Association, not in its individual capacity but
      solely in its capacity as Owner Trustee of the Issuer.  In no event will Wilmington Trust, National Association in its individual capacity or a beneficial owner of the Issuer be liable for the Issuer’s obligations under this Agreement.  For all
      purposes under this Agreement, the Owner Trustee will be subject to, and entitled to the benefits of, the Trust Agreement.

  Section 6.4.      Termination of Agreement.  This Agreement will terminate, except for the obligations under Section 4.6, on the earlier of (a) the payment in full of all outstanding Notes and
      the satisfaction and discharge of the Indenture and (b) the date the Issuer is terminated under the Trust Agreement.

  ARTICLE VII

      MISCELLANEOUS PROVISIONS

  Section 7.1.      Amendments.  The parties may amend this Agreement:

  (i)      to
      clarify an ambiguity, correct an error or correct or supplement any term of this Agreement that may be defective or inconsistent with the other terms of this Agreement or to provide for, or facilitate the acceptance of this Agreement by, a successor
      Asset Representations Reviewer, in each case without the consent of the Noteholders or any other Person;

  (ii)      to

      add, change or eliminate terms of this Agreement, in each case without the consent of the Noteholders or any other Person, if the Administrator delivers an Officer’s Certificate to the Issuer, the Owner Trustee and the Indenture Trustee stating that
      the amendment will not have a material adverse effect on the Noteholders; or

  (iii)      to

      add, change or eliminate terms of this Agreement for which an Officer’s Certificate is not or cannot be delivered under Section 7.1(ii), with the consent of a majority of the principal amount of the Notes of the Controlling Class then outstanding,
      acting together as a single class.

  
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  Section 7.2.      Assignment; Benefit of Agreement; Third Party Beneficiaries.

  (a)      Assignment.  Except as stated in Section 5.4, this Agreement may not be assigned by the Asset Representations Reviewer without the consent of the Issuer, the Servicer and the
      Administrator.

  (b)      Benefit of Agreement; Third-Party Beneficiaries.  This Agreement is for the benefit of and will be binding on the parties and their permitted successors and assigns.  The Owner
      Trustee and the Indenture Trustee, for the benefit of the Noteholders, will be third-party beneficiaries of this Agreement and may enforce this Agreement against the Asset Representations Reviewer, the Servicer and the Administrator.  No other Person
      will have any right or obligation under this Agreement.

  Section 7.3.      Notices.

  (a)      Notices to Parties.  All notices, requests, demands, consents, waivers or other communications to or from the parties must be in writing and will be considered given:

  (i)      for

      overnight mail, on delivery or, for registered first class mail, postage prepaid, three (3) days after deposit in the mail;

  (ii)      for

      a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient;

  (iii)      for

      an email, when receipt is confirmed by telephone or reply email from the recipient; and

  (iv)      for

      an electronic posting to a password-protected website to which the recipient has access, on delivery of an email (without the requirement of confirmation of receipt) stating that the electronic posting has occurred.

  (b)      Notice Addresses.  Any notice, request, demand, consent, waiver or other communication will be addressed as stated in the Sale and Servicing Agreement or the Administration
      Agreement, as applicable, or to another address as a party may give by notice to the other parties.

  Section 7.4.      GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
        ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
        BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

  Section 7.5.      WAIVER OF JURY TRIAL.  EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
        PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN LEGAL PROCEEDING RELATING TO THIS AGREEMENT.

  
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  Section 7.6.      No Waiver; Remedies.  No party’s failure or delay in exercising a power, right or remedy under this Agreement will operate as a waiver.  No single or partial exercise of a
      power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other power, right or remedy.  The powers, rights and remedies under this Agreement are in addition to any powers, rights and
      remedies under law.

  Section 7.7.      Severability.  If a part of this Agreement is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining Agreement and will not affect the
      validity, legality or enforceability of the remaining Agreement.

  Section 7.8.      Headings.  The headings in this Agreement are included for convenience and will not affect the meaning or interpretation of this Agreement.

  Section 7.9.      Counterparts.  This Agreement may be executed in multiple counterparts. Each counterpart will be an original and all counterparts will together be one document.

  [Remainder of Page Left Blank]

  
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  IN WITNESS WHEREOF, the Issuer, the Servicer, the Administrator and the Asset Representations Reviewer have caused their
      names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.

  TOYOTA AUTO RECEIVABLES 2019-A OWNER TRUST, as Issuer

  By:      Wilmington Trust, National Association, not in its individual capacity, but solely as
      Owner Trustee

  

  

  By:    /s/ Drew
          Davis                                                    

      Name:  Drew Davis

      Title:    Vice President

    

  

  

  TOYOTA MOTOR CREDIT CORPORATION,

      as Servicer and Administrator

  

  

  By:    /s/ Cindy Wang                                                    

        Name:  Cindy Wang

      Title:    Group Vice President - Treasury

    

  

  

  CLAYTON FIXED INCOME SERVICES LLC,

      as Asset Representations Reviewer

  

  

  By:     /s/ Robert A. Harris                                          

      Name:  Robert A. Harris

      Title:    Secretary

    

  
    
      

  

  
  Schedule A

  Review Materials

  “Review Materials” means, with respect to each Receivable:

  
    
      	

            	(a)	
              the Contract;

            

    

  

  
    
      	

            	(b)	
              the original credit application executed by the related Obligor (or a photocopy or other image or electronic record thereof;

            

    

  

  
    
      	

            	(c)	
              the original certificate of title (or evidence that such certificate of title has been applied for), or a photocopy or other image thereof, and of such documents that the
                  Servicer shall keep on file evidencing the security interest in the related Financed Vehicle;

            

    

  

  
    
      	

            	(d)	
              an electronic data tape describing certain characteristics of the Receivables as of the Cutoff Date or such other applicable date of determination (the “Data Tape”);

            

    

  

  
    
      	

            	(e)	
              a list of approved contract forms for the Review Receivables, as provided by TMCC; and

            

    

  

  
    
      	

            	(f)	
              such other documentation or information (whether tangible or electronic, and including, without limitation, screen prints or reports of the Servicer’s receivables and
                  securitization systems) as the Servicer, as the case may be, may maintain and which the Servicer shall have determined to be relevant to any Test with respect to such Receivable.

            

    

  

  
    Sch. A-1

    
      

  

  
  Schedule B

  Representations, Warranties and Tests

  	
          Representations and Warranties

          Made as of the Cutoff Date and the Closing Date

           (unless otherwise specified)

        	
          Tests

        
	
          1.        Origination.  Each Receivable was originated in the United States by a Dealer for the retail sale of the related Financed Vehicle in the ordinary course of such Dealer’s business, has
              been fully and properly executed or electronically authenticated by the parties thereto, has been purchased by TMCC from such Dealer under an existing agreement with TMCC and has been validly assigned by such Dealer to TMCC.

           

        	
          Test 1-1: Dealer Address

          Confirm the Dealer address on the Contract is a United States address.

          Test 1-2: Contract Signed

          Confirm the Obligor(s) and Dealer signed the Contract.

          Test 1-3: Valid Assignee

          Confirm TMCC, or a name included in the list of acceptable name variations, is identified as the assignee in either the Assignment
              section of the Contract or separate assignment document.

          Test 1-4: Valid Assignor
                  Signature

          Confirm the Contract was completed electronically or if completed on paper, confirm the Dealer signature is present as assignor on
              the Contract or separate assignment document.

           

        
	
          2.        Security Interest.  With respect to each Receivable, as of the Closing Date, TMCC has, or has started procedures that will result in TMCC having, a perfected, first priority security
              interest in the related Financed Vehicle, which security interest was validly created and is assignable by the Seller to the Purchaser, and by the Purchaser to the Issuer.

           

        	
          Test 2-1: Lienholder

          Confirm the title documents identify either TMCC, or a name included in the list of acceptable name variations, as the first
              lienholder.

          Test 2-2:  Obligor Name

          Confirm the Obligor name(s) on the Contract, taking into account any amendments or correction notices, match(es) the name(s) on the
              title documents.

          Test 2-3:  Valid VIN

          Confirm the vehicle identification number on the Contract, taking into account any amendments or correction notices, matches the
              vehicle identification number on the title documents.

           

        
	
          3.        Simple Interest.  Each Receivable provides for scheduled monthly payments that fully amortize the Amount Financed by maturity (except for minimally different payments in the first or
              last month in the life of the Receivable) and provide for a finance charge or yield interest at its APR, in either case calculated based on the Simple Interest Method.

           

        	
          Test 3-1: Payments

          Review the Contract and confirm it reflects a level monthly payment except for the first and final payment, if any.  Sum the first
              payment (if any), the product of the number of payments (or the number of regular payments, if there is a first or final payment) and the Payment Amount and the final payment (if any) and confirm that this amount is equal to the Total of
              Payments in the Truth in Lending section of the Contract.

          Test 3-2: Simple Interest

          Observe the Contact and confirm it is a Simple Interest Method Contract.

           

        

  

  

  

  

  
    Sch. B-1

    
      

  

  
    	
            Representations and Warranties

            Made as of the Cutoff Date and the Closing Date

             (unless otherwise specified)

          	
            Tests

          

  

   

  	
          4.         Prepayment.  Each Receivable allows for prepayment without penalty.

           

        	
          Test 4-1: Prepayment

          Confirm the Contract provides a prepayment disclosure that does not require a penalty.

           

        
	
          5.        Compliance with Law.  To the Seller’s knowledge, each Receivable complied in all material respects at the time it was originated with all requirements of applicable federal, state and
              local laws, and regulations thereunder.

           

        	
          Test 5-1: Complete Contract

          Confirm the Contract was completed electronically or if completed on paper, confirm the Contract form number and revision date are
              approved for use according to TMCC internal documentation.

           

        
	
          6.        Binding Obligation.  Each Receivable is on a form contract containing customary and enforceable provisions that includes rights and remedies allowing the holder to enforce the
              obligation and realize on the related Financed Vehicle and represents the legal, valid and binding payment obligation in writing of the related Obligor, enforceable by the holder thereof in accordance with its terms, except as enforceability
              may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity and consumer protection laws, regardless of whether such
              enforceability is considered in a proceeding in equity or at law.

           

        	
          Test 6-1:  Valid Contract
                  Form

          Confirm the Contract was completed electronically or if completed on paper, confirm the Contract form number and revision date are
              approved for use according to TMCC internal documentation.

          Test 6-2: Contract Executed

          Confirm the Obligor(s) signed the Contract.

           

        
	
          7.        No Government Obligors.  None of the Receivables is due from the United States or any state or local government, or from any agency, department or instrumentality of the United States
              or any state or local government.

           

        	
          Test 7-1: Personal Use

          Review the Obligor section on the Contract and confirm the Obligor name(s)  is that of a natural person.

          Test 7-2: No Government
                  Obligor

          If the Obligor section on the Contract does not report a natural person’s name or an obvious non-governmental business, confirm
              internet search results show no indication of the Obligor(s) to be a government agency, department, political subdivision or instrumentality.

           

        
	
          8.        Receivables in Force.  As of the Cutoff Date, no Receivable has been satisfied, nor has any Financed Vehicle been released in whole or in part from the lien granted by the related
              Receivable.

           

        	
          Test 8-1: Active Account

          Observe the Receivable in TMCC’s Data Tape, and confirm it was an active account on the Cutoff Date.

           

        

  

  

  
    Sch. B-2

    
      

  

  
    	
            Representations and Warranties

            Made as of the Cutoff Date and the Closing Date

             (unless otherwise specified)

          	
            Tests

          

  

   

  	
          9.        No Amendments or Waivers.  As of the Cutoff Date, no material provision of a Receivable has been amended, modified or waived in a manner that is prohibited by the provisions of the Sale
              and Servicing Agreement.

           

        	
          Test 9-1: Contract Form

          Confirm the Contract was completed electronically or if completed on paper, confirm the Contract form number and revision date are
              approved for use according to TMCC internal documentation.

          Test 9-2: Modification

          Review the Data Tape and the Contract (as amended by any related correction notice, if any) and confirm that, as of the Cutoff Date,
              there is no revision to the following terms:

          i.            APR

          ii.            Original Contract Term

          iii.            Monthly Payment

          iv.            Total Amount Financed

          v.            Make / Model / Model Year

          vi.            Simple Interest Method Loan

           

           

        
	
          10.     No Defenses.  To the Seller’s knowledge, as of the Closing Date, no Receivable is subject to any right of rescission, setoff, counterclaim or defense, nor has any such right been
              asserted or threatened with respect to any Receivable.

           

        	
          Test 10-1: No Litigation

          Review the Review Materials and confirm there is no evidence of litigation or other attorney involvement as of the Closing Date.

           

        
	
          11.     No Payment Default.  Except for payment delinquencies that have been continuing for a period of not more than 29 days, no payment default under the terms of any Receivable exists as of
              the Cutoff Date.

           

        	
          Test 11-1: Delinquency

          Observe TMCC’s Data Tape and confirm the Receivable was not more than 29 days delinquent as of the Cutoff Date.

           

           

        
	
          12.     No Repossession.  No Financed Vehicle has been repossessed without reinstatement as of the Cutoff Date.

           

        	
          Test 12-1: Repossession
                  Inventory

          Observe TMCC’s receivables systems and confirm the Receivable was not held in repossession inventory as of the Cutoff Date.

           

        
	
          13.    Insurance.  The terms of each Receivable require the related Obligor to obtain and maintain physical damage insurance covering the related Financed Vehicle in accordance with TMCC’s
              normal requirements.  No Financed Vehicle was subject to force-placed insurance.

           

        	
          Test 13-1: Physical Damage
                  Covered

          Confirm the Contract contains language that required the Obligor to obtain and maintain insurance against physical damage to the
              Financed Vehicle.

          Test 13-2: No Force-Placed Insurance

          Confirm the Review Materials contain no evidence the Financed Vehicle was subject to force-placed insurance.

           

           

        

  

  

  
    Sch. B-3

    
      

  

  
    	
            Representations and Warranties

            Made as of the Cutoff Date and the Closing Date

             (unless otherwise specified)

          	
            Tests

          

  

   

  	
          14.    Good Title.  Immediately prior to the transfer and assignment herein contemplated, the Seller had good and marketable title to each Receivable free and clear of all Liens and rights of
              others (other than pursuant to the Basic Documents) and, immediately upon the transfer and assignment thereof, the Purchaser will have good and marketable title to each Receivable, free and clear of all Liens and rights of others (other than
              pursuant to the Basic Documents).

           

        	
          Test 14-1: Sole Lienholder

          Confirm the title documents designate TMCC, or a name included in the list of acceptable name variations as the sole lien holder and
              that no other lien holder is listed.

          Test 14-2: No Transfer of Title

          Confirm the title documents indicate the Receivable has not been sold, assigned, or transferred to any other entity.

           

        
	
          15.    Lawful Assignment.  No Receivable has been originated in, or is subject to the laws of, any jurisdiction under which the sale, transfer and assignment of such Receivable under this
              Agreement, or pursuant to the Sale and Servicing Agreement or the pledge of such Receivable under the Indenture are unlawful, void or voidable.  The terms of each Receivable do not limit the right of the owner of such Receivable to sell such
              Receivable.

           

        	
          Test 15-1: Contract Form

          Confirm the Contract was completed electronically or if completed on paper, confirm the Contract form number and revision date are
              approved for use according to TMCC internal documentation.

          Test 15-2: Assignability

          Confirm the Contract does not contain language that limits the sale or transfer of the Receivable.

           

        
	
          16.     Additional Representations and Warranties.  (A) Each Receivable is being serviced by TMCC as of the Closing Date; (B) each Receivable is secured by a new or used car, minivan,
              light-duty truck or sport utility vehicle; (C) no Receivable was more than 29 days past due as of the Cutoff Date; and (D) as of the Cutoff Date, no Receivable was noted in the records of TMCC or the Servicer as being the subject of a
              bankruptcy proceeding or insolvency proceeding.

           

        	
          Test 16(A):  Servicing

          Confirm the Review Materials show the Receivable was being serviced by TMCC as of the Closing Date.

          Test 16(B):  Financed
                  Vehicle

          Review the Contract and confirm the Financed Vehicle is a new or used car, minivan, light-duty truck or sport utility vehicle.

          Test 16(C):  Delinquency

          Confirm the Data Tape shows the Receivable is not more than 29 days past due as of the Cut-off Date.

          Test 16(D):  No Bankruptcy

          Confirm the Data Tape shows the Obligor was not noted as being the subject of any bankruptcy or insolvency proceeding as of the
              Cutoff Date.

           

        

  

  

  

  

  Sch. B-4Exhibit

Exhibit 10.1 
February 12, 2019
 
Mr. Louis A. Hoch
Vice-Chairman & Chief Executive Officer
Payment Data Systems, Inc.
3611 Paesanos Parkway, Suite 300
San Antonio, TX  78231

Dear Mr. Hoch:
 
This letter (the “Agreement”) constitutes the agreement between Maxim Group LLC (“Maxim” or the “Placement Agent”) and Payment Data Systems, Inc., a company incorporated under the laws of the State of Nevada (the “Company”), that Maxim shall serve as the placement agent for the Company, on a “reasonable best efforts” basis, in connection with the proposed placement (the “Placement”) of common stock (the “Shares”) of the Company, par value $0.001 per share (“Common Stock”). The terms of the Placement and the Shares shall be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”) and nothing herein constitutes that Maxim would have the power or authority to bind the Company or any Purchaser or an obligation for the Company to issue any Shares or complete the Placement. This Agreement and the documents executed and delivered by the Company and the Purchasers in connection with the Placement, including but not limited to the Purchase Agreement (as defined below) shall be collectively referred to herein as the “Transaction Documents.” The date of the closing of the Placement shall be referred to herein as the “Closing Date.”  The Company expressly acknowledges and agrees that Maxim’s obligations hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does not constitute a commitment by Maxim to purchase the Shares and does not ensure the successful placement of the Shares or any portion thereof or the success of Maxim with respect to securing any other financing on behalf of the Company. The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Placement.  The sale of the Shares to any Purchaser will be evidenced by a share purchase agreement (the “Purchase Agreement”) between the Company and such Purchaser in a form reasonably acceptable to the Company and Maxim.  Capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Purchase Agreement.  Prior to the signing of any Purchase Agreement, officers of the Company will be available to answer inquiries from prospective Purchasers.
 
SECTION 1.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY. 

A.Representations of the Company.  Each of the representations and warranties (together with any related disclosure schedules thereto) and covenants made by the Company to the Purchasers in the Purchase Agreement in connection with the Placement is hereby incorporated herein by reference into this Agreement (as though fully restated herein) and is, as of the date of this Agreement and as of the Closing Date, hereby made to, and in favor of, the Placement Agent. In addition to the foregoing, the Company represents and warrants that:

1.The Company has prepared and filed with the Commission (the registration statement on Form S-3 (Registration No. 333-221178), and amendments thereto, and related preliminary prospectuses, for the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the Shares, which registration statement, as so amended (including post-effective amendments, if any) became 

1

effective on December 6, 2017, for the registration under the Securities Act of the Shares.  At the time of such filing, the Company met the requirements of Form S-3 under the Securities Act. Such registration statement meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with said Rule. The Company will file with the Commission pursuant to Rule 424(b) under the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the Commission promulgated thereunder, a supplement to the form of prospectus included in such registration statement relating to the placement of the Shares and the plan of distribution thereof and has advised the Placement Agent of all further information (financial and other) with respect to the Company required to be set forth therein. Such registration statement, including the exhibits thereto, as amended at the date of this Agreement, is hereinafter called the “Registration Statement”; such prospectus in the form in which it appears in the Registration Statement is hereinafter called the “Base Prospectus”; and the supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant to Rule 424(b) (including the Base Prospectus as so supplemented) is hereinafter called the “Prospectus Supplement.” Any reference in this Agreement to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All references in this Agreement to financial statements and schedules and other information which is “contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement, the Base Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated or, to the Company’s knowledge, is threatened by the Commission. For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act and the “Time of Sale Prospectus” means the preliminary prospectus, if any, together with the free writing prospectuses, if any, used in connection with the Placement, including any documents incorporated by reference therein.
 
2.The Registration Statement (and any further documents to be filed with the Commission) contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the Securities Act and the applicable Rules and Regulations and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, each as of its respective date, comply in all material respects with the Securities Act and the applicable Rules and Regulations. Each of the Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they 

2

were made, not misleading. The Incorporated Documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations, and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein (with respect to Incorporated Documents incorporated by reference in the Base Prospectus or Prospectus Supplement), in the light of the circumstances under which they were made not misleading; and any further documents so filed and incorporated by reference in the Base Prospectus, the Time of Sale Prospectus or Prospectus Supplement, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required to be filed with the Commission. There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required to be described in the Base Prospectus, the Time of Sale Prospectus or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement, which (x) have not been described or filed as required or (y) will not be filed within the requisite time period.

3.There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the knowledge of the Company, any five percent (5.0%) or greater stockholder of the Company, except as set forth in the Registration Statement and SEC Reports.

B.Covenants of the Company. The Company has delivered, or will as promptly as practicable deliver, to the Placement Agent complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the Placement Agent reasonably requests. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Shares pursuant to the Placement other than the Base Prospectus, the Time of Sale Prospectus, the Prospectus Supplement, the Registration Statement, copies of the documents incorporated by reference therein and any other materials permitted by the Securities Act.
 
SECTION 2.       REPRESENTATIONS OF MAXIM. Maxim represents and warrants that it (i) is a member in good standing of FINRA, (ii) is registered as a broker/dealer under the Exchange Act, (iii) is licensed as a broker/dealer under the laws of the States applicable to the offers and sales of the Shares by Maxim, (iv) is and will be a body corporate validly existing under the laws of its place of incorporation, and (v) has full power and authority to enter into and perform its obligations under this Agreement. Maxim will immediately notify the Company in writing of any change in its status as such. Maxim covenants that it will use its reasonable best efforts to conduct the Placement hereunder in compliance with the provisions of this Agreement and the requirements of applicable law.  
 
SECTION 3.        COMPENSATION.  In consideration of the services to be provided for hereunder, the Company shall pay to the Placement Agent or their respective designees or their respective designees 

3

their pro rata portion (based on the Shares placed) of the following compensation with respect to the Shares which they are placing:

A.A cash fee (the “Cash Fee”) equal to an aggregate of six percent (6.0%) of the aggregate gross proceeds raised in the Placement.  The Cash Fee shall be paid at the Closing of the Placement.

B.Subject to compliance with FINRA Rule 5110(f)(2)(D), the Company also agrees to reimburse Maxim for all reasonable travel and other out-of-pocket expenses, including the fees of legal counsel, in an amount not to exceed $40,000.  The Company will reimburse Maxim directly out of the Closing of the Placement.  In the event this Agreement shall terminate prior to the consummation of the Placement, Maxim shall be entitled to reimbursement for actual expenses; provided, however, such expenses shall not exceed $40,000.  

C.The Placement Agent reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Placement Agent’s aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
 
SECTION 4.       INDEMNIFICATION. The Company agrees to the indemnification and other agreements set forth in the Indemnification Provisions (the “Indemnification”) attached hereto as Addendum A, the provisions of which are incorporated herein by reference and shall survive the termination or expiration of this Agreement.
 
SECTION 5.       ENGAGEMENT TERM. Maxim’s engagement hereunder shall be until the earlier of (i) the final closing date of the Placement and (ii) the date a party terminates the engagement according to the terms of the next sentence (such date, the “Termination Date” and the period of time during which this Agreement remains in effect is referred to herein as the “Term”).  After an initial period of one (1) month(s) from the date hereof, the engagement may be terminated at any time by either party upon 10 days written notice to the other party, effective upon receipt of written notice to that effect by the other party. If the Company elects to terminate for any reason, other than Maxim's material failure to provide the placement services, even though Maxim was prepared to proceed with the Placement reasonably within the intent of this Agreement and, if within six (6) months following such termination, the Company completes any financing of equity, equity-linked or debt or other capital raising activity of the Company (other than the exercise by any person or entity of any options, warrants or other convertible securities) with any of the investors contacted by Maxim during the term of this Agreement, then the Company will pay Maxim upon the closing of such financing the compensation set forth in Section 1 herein. Notwithstanding anything to the contrary contained herein, the provisions concerning the Company’s obligation to pay any fees actually earned pursuant to Section 3 hereof and the provisions concerning confidentiality, indemnification and contribution contained herein and the Company’s obligations contained in the Indemnification Provisions will survive any expiration or termination of this Agreement. If this Agreement is terminated prior to the completion of the Placement, all fees due to the Placement Agent shall be paid by the Company to the Placement Agent on or before the Termination Date (in the event such fees are earned or owed as of the Termination Date). Maxim agrees not to use any confidential information concerning the Company provided to the Placement Agent by the Company for any purposes other than those contemplated under this Agreement. 
 
SECTION 6.      MAXIM INFORMATION. The Company agrees that any information or advice rendered by Maxim in connection with this engagement is for the confidential use of the Company only in 

4

their evaluation of the Placement and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice or information in any manner without Maxim’s prior written consent.
 
SECTION 7.       NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable by any person or entity not a party hereto, except those entitled hereto by virtue of the Indemnification Provisions hereof. The Company acknowledges and agrees that Maxim is not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of Maxim hereunder, all of which are hereby expressly waived.

SECTION 8.       CLOSING. The obligations of the Placement Agent, and the closing of the sale of the Shares hereunder are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company and its Subsidiaries contained herein and in the Purchase Agreement, to the accuracy of the statements of the Company and its Subsidiaries made in any certificates pursuant to the provisions hereof, to the performance by the Company and its Subsidiaries of their obligations hereunder, and to each of the following additional terms and conditions, except as otherwise disclosed to and acknowledged and waived by the Placement Agent by the Company:
 
A.No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the Commission, and any request for additional information on the part of the Commission (to be included in the Registration Statement, the Prospectus, the Prospectus Supplement or otherwise) shall have been complied with to the reasonable satisfaction of the Placement Agent. Any filings required to be made by the Company in connection with the Placement shall have been timely filed with the Commission.

B.The Placement Agent shall not have discovered and disclosed to the Company on or prior to the Closing Date that the Registration Statement, the Prospectus, the Prospectus Supplement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the Placement Agent, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading.

C.All corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each of this Agreement, the Shares, the Registration Statement, the Prospectus and the Prospectus Supplement and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Placement Agent, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.

D.The Placement Agent shall have received from outside counsels to the Company such counsels’ written opinion, addressed to the Placement Agent and the Purchasers and dated as of the Closing Date, in form and substance reasonably satisfactory to the Placement Agent and substantially identical to that provided to the Purchasers.

E.Neither the Company nor any of its Subsidiaries (i) shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Registration Statement, the Prospectus and the Prospectus Supplement, any loss or interference with its business from fire, explosion, flood, terrorist act or other calamity, whether or not covered by insurance, or from any labor 

5

dispute or court or governmental action, order or decree, otherwise than as set forth in or contemplated by the Registration Statement, the Prospectus and the Prospectus Supplement and (ii) since such date there shall not have been any change in the capital stock or long-term debt of the Company or any of its Subsidiaries or any change, or any development involving a prospective change, in or affecting the business, general affairs, management, financial position, stockholders' equity, results of operations or prospects of the Company and its Subsidiaries, otherwise than as set forth in or contemplated by the Registration Statement, the Prospectus and the Prospectus Supplement, the effect of which, in any such case described in clause (i) or (ii), is, in the judgment of the Placement Agent, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the Shares on the terms and in the manner contemplated by the Prospectus.

F.The Common Stock is registered under the Exchange Act and, as of the Closing Date, the Shares shall be listed and admitted and authorized for trading on the Trading Market or other applicable U.S. national exchange and satisfactory evidence of such action shall have been provided to the Placement Agent. The Company shall have taken no action designed to, or likely to have the effect of terminating the registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from the Trading Market or other applicable U.S. national exchange, nor has the Company received any information suggesting that the Commission or the Trading Market or other U.S. applicable national exchange is contemplating terminating such registration or listing.

G.No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Shares or materially and adversely affect or potentially and adversely affect the business or operations of the Company; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Shares or materially and adversely affect or potentially and adversely affect the business or operations of the Company.

H.The Company shall have prepared and filed with the Commission a Current Report on Form 8-K with respect to the Placement, including as an exhibit thereto this Agreement.

I.The Company shall have entered into a Purchase Agreement with each of the Purchasers and such agreements shall be in full force and effect and shall contain representations, warranties and covenants of the Company as agreed between the Company and the Purchasers.

J.FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition, the Company shall, if requested by the Placement Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, any filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110 with respect to the Placement and pay all filing fees required in connection therewith.

K.Prior to the Closing Date, the Company shall have furnished to the Placement Agent such further information, certificates and documents as the Placement Agent may reasonably request.
 

6

If any of the conditions specified in this Section 8 shall not have been fulfilled when and as required by this Agreement, or if any of the certificates, opinions, written statements or letters furnished to the Placement Agent or to Placement Agent’s counsel pursuant to this Section 8 shall not be reasonably satisfactory in form and substance to the Placement Agent and to Placement Agent’s counsel, all obligations of the Placement Agent hereunder may be cancelled by the Placement Agent at, or at any time prior to, the consummation of the Closing. Notice of such cancellation shall be given to the Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.
 
SECTION 9.    DELIVERY OF COLD COMFORT LETTER.  On the date of this Agreement and on the Closing Date, the Placement Agent shall have received a “comfort” letter from Akin, Doherty, Klein & Feuge, PC as of each such date, addressed to the Placement Agent and in form and substance satisfactory in all respects to the Placement Agent and Placement Agent’s counsel.

SECTION 10.    RIGHT OF PARTICIPATION. Upon the Closing of a Placement, for a period of one (1) month from the commencement of sales of the Offering, the Company grants Maxim the right of first refusal to act as a co-placement agent or co-manager, with at least 25% of the economics, for any and all future public and private equity, equity-linked, debt offerings or other capital raising activity of the Company (other than the exercise by any person or entity of any options, warrants or other convertible securities), or any successor to or any subsidiary of the Company, during such one (1) month period.
 
SECTION 11.     GOVERNING LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State. This Agreement may not be assigned by either party without the prior written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any transaction or conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought into the courts of the State of New York or into the Federal Court located in New York, New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. 
  
SECTION 12.     ENTIRE AGREEMENT/MISC. This Agreement (including the attached Indemnification Provisions) embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by both Maxim and the Company. The representations, warranties, agreements and covenants contained herein shall survive the closing of the Placement and delivery of the Shares. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party 

7

and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof. 
 
SECTION 13.    CONFIDENTIALITY.  Maxim (i) will keep the Confidential Information (as such term is defined below) confidential and will not (except as required by applicable law or stock exchange requirement, regulation or legal process), without the Company’s prior written consent, disclose to any person any Confidential Information, and (ii) will not use any Confidential Information other than in connection with the Placement.  Maxim further agrees to disclose the Confidential Information only to its Representatives (as such term is defined below) who need to know the Confidential Information for the purpose of the Placement, and who are informed by Maxim of the confidential nature of the Confidential Information. The term “Confidential Information” shall mean, all confidential, proprietary and non-public information (whether written, oral or electronic communications) furnished by the Company to Maxim or its Representatives in connection with Maxim’s evaluation of the Placement. The term “Confidential Information” will not, however, include information which (i) is or becomes publicly available other than as a result of a disclosure by Maxim or its Representatives in violation of this Agreement, (ii) is or becomes available to Maxim or any of its Representatives on a non-confidential basis from a third-party, (iii) is known to Maxim or any of its Representatives prior to disclosure by the Company or any of its Representatives, (iv) is or has been independently developed by Maxim and/or the Representatives without use of any Confidential Information furnished to it by the Company, or (v) is required to be disclosed pursuant to applicable legal or regulatory authority. The term “Representatives” shall mean Maxim’s directors, board committees, officers, employees, financial advisors, attorneys and accountants. This provision shall be in full force until the earlier of (a) the date that the Confidential Information ceases to be confidential and (b) two years from the date hereof.
SECTION 14.     NOTICES. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is sent to the email address on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the third business day following the date of mailing, if sent by U.S. internationally recognized air courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages hereto.

SECTION 15.    PRESS ANNOUNCEMENTS. The Company agrees that the Placement Agent shall, from and after any Closing, have the right to reference the Placement and the Placement Agent’s role in connection therewith in the Placement Agent’s marketing materials and on its website and to place advertisements in financial and other newspapers and journals, in each case at its own expense.
 
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8

9

Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Maxim the enclosed copy of this Agreement.
 
	
			
	 
	Very truly yours,

	 
	 

	 
	MAXIM GROUP LLC

	 
	 

	 
	By:
	/s/ Clifford A. Teller

	 
	 
	Name: Clifford A. Teller

	 
	 
	Title:    Executive Managing Director, 
Investment Banking

	 
	 

	 
	Address for notice:

	 
	405 Lexington Avenue

	 
	New York, NY 10174

	 
	Attention: James Siegel, General Counsel
Email: jsiegel@maximgrp.com

 
Accepted and Agreed to as of
the date first written above:
 
	
				
	PAYMENT DATA SYSTEMS, INC.

	 
	 

	By:
	/s/ Louis A. Hoch
	 

	 
	Name: Louis A. Hoch
	 

	 
	Title:  Vice-Chairman & Chief Executive Officer
	 

 
Address for notice:
3611 Paesanos Parkway, Suite 300
San Antonio, TX  78231
Attn: Louis A. Hoch
Email: louis.hoch@ficentive.com

 
 
[Signature Page to Placement Agency Agreement
Between Payment Data Systems, Inc. and Maxim Group LLC]

    

ADDENDUM A
INDEMNIFICATION PROVISIONS
 
 Capitalized terms used in this Addendum shall have the meanings ascribed to such terms in the Agreement to which this Addendum is attached.

In addition to and without limiting any other right or remedy available to the Placement Agent and the Indemnified Parties (as hereinafter defined), the Company agrees to indemnify and hold harmless Placement Agent and each of the other Indemnified Parties from and against any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements, and any and all actions, suits, proceedings and investigations in respect thereof and any and all legal and other costs, expenses and disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing, pursing or defending any such action, suit, proceeding or investigation (whether or not in connection with litigation in which any Indemnified Party is a party)) (collectively, “Losses”), directly or indirectly, caused by, relating to, based upon, arising out of, or in connection with, Placement Agent’s acting for the Company, including, without limitation, any act or omission by Placement Agent in connection with its acceptance of or the performance or non-performance of its obligations under the Agreement between the Company and Placement Agent to which these indemnification provisions are attached and form a part, any breach by the Company of any representation, warranty, covenant or agreement contained in the Agreement (or in any instrument, document or agreement relating thereto, including the engagement letter between the Placement Agent and the Company, dated February __, 2019), or the enforcement by Placement Agent of its rights under the Agreement or these indemnification provisions, except to the extent that any such Losses are found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from the gross negligence or willful misconduct of the Indemnified Party seeking indemnification hereunder.  

The Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement of Placement Agent by the Company or for any other reason, except to the extent that any such liability is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from such Indemnified Party’s gross negligence or willful misconduct.

These Indemnification Provisions shall extend to the following persons (collectively, the “Indemnified Parties”):  Placement Agent, its present and former affiliated entities, managers, members, officers, employees, legal counsel, agents and controlling persons (within the meaning of the federal securities laws), and the officers, directors, partners, shareholders, members, managers, employees, legal counsel, agents and controlling persons of any of them.  These indemnification provisions shall be in addition to any liability, which the Company may otherwise have to any Indemnified Party.

If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall notify the Company with reasonable promptness; provided, however, that any failure by an Indemnified Party to notify the Company shall not relieve the Company from its obligations hereunder except to the extent that such failure or delay causes actual material harm to the Company, or materially prejudices its ability to defend such action, suit, proceeding or investigation on behalf of such Indemnified Party.  In case any such action is brought against any Indemnified Party and such Indemnified Party notifies the Company of the commencement thereof, the Company may elect to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Party, and an Indemnified Party may employ counsel to participate in the defense of any such action provided, that the employment of 

    

such counsel shall be at the Indemnified Party’s own expense, unless (i) the employment of such counsel has been authorized in writing by the Company, (ii) the Indemnified Party has reasonably concluded (based upon advice of counsel to the Indemnified Party) that there are legal defenses available to the Indemnification Party that are not available to the Company, or that there exists a conflict or potential conflict of interest (based upon advice of counsel to the Indemnified Party) between the Indemnified Party and the Company that makes it impossible or inadvisable for counsel to the Company to conduct the defense of both parties (in which case the Company will not have the right to direct the defense of such action on behalf of the Indemnified Party), or (iii) the Company has not in fact employed counsel reasonably satisfactory to the Indemnified Party to assume the defense of such action within a reasonable time after receiving notice of the action, suit or proceeding, in each of which cases the reasonable fees, disbursements and other charges of such counsel will be at the expense of the Company; provided, further, that in no event shall the Company be required to pay fees and expenses for more than one firm of attorneys (and local counsel) representing Indemnified Parties.  Any such counsel shall, to the extent consistent with its professional responsibilities, cooperate with the Company and any counsel designated by the Company.  

The Company shall be liable for any settlement of any claim against any Indemnified Party made with the Company’s written consent.  The Company shall not, without the prior written consent of Placement Agent, settle or compromise any claim, or permit a default or consent to the entry of any judgment in respect thereof, unless such settlement, compromise or consent (i) includes, as an unconditional term thereof, the giving by the claimant to all of the Indemnified Parties of an unconditional release from all liability in respect of such claim, and (ii) does not contain any factual or legal admission by or with respect to an Indemnified Party or an adverse statement with respect to the character, professionalism, expertise or reputation of any Indemnified Party or any action or inaction of any Indemnified Party.

In order to provide for just and equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Company shall contribute to the Losses to which any Indemnified Party may be subject (i) in accordance with the relative benefits received by the Company and its shareholders, subsidiaries and affiliates, on the one hand, and the Indemnified Party, on the other hand, and (ii) if (and only if) the allocation provided in clause (i) of this sentence is not permitted by applicable law, in such proportion as to reflect not only the relative benefits, but also the relative fault of the Company, on the one hand, and the Indemnified Party, on the other hand, in connection with the statements, acts or omissions which resulted in such Losses as well as any relevant equitable considerations.  No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for fraudulent misrepresentation.  The relative benefits received (or anticipated to be received) by the Company and its shareholders, subsidiaries and affiliates shall be deemed to be equal to the aggregate consideration payable or receivable by such parties in connection with the transaction or transactions to which the Agreement relates relative to the amount of fees actually received by Placement Agent in connection with such transaction or transactions.  Notwithstanding the foregoing, in no event shall the amount contributed by all Indemnified Parties exceed the amount of fees previously received by Placement Agent pursuant to the Agreement.

Neither termination nor completion of the Agreement shall affect these Indemnification Provisions which shall remain operative and in full force and effect.  The Indemnification Provisions shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Indemnified Parties and their respective successors, assigns, heirs and personal representatives.

[The remainder of this page has been intentionally left blank.] 

    

	
						
	 
	MAXIM GROUP LLC

	 
	 

	 
	By:
	/s/ Clifford A. Teller

	 
	 
	Name: Clifford A. Teller

	 
	 
	Title:   Executive Managing Director, 
Investment Banking

	 
	 

	PAYMENT DATA SYSTEMS, INC.

	 
	 

	By:
	/s/ Louis A. Hoch
	 

	 
	Name: Louis A. Hoch
	 

	 
	Title:   Vice-Chairman & Chief Executive Officer
	 

 
 

 
[Signature Page to Indemnification Provisions
Pursuant to Placement Agency Agreement
between Payment Data Systems, Inc. and Maxim Group LLC]

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