Document:

<PAGE>

                                                                 EXHIBIT 10.39.3

                          THIRD AMENDMENT AND WAIVER TO
                           LOAN AND SECURITY AGREEMENT

         THIS THIRD AMENDMENT AND WAIVER TO LOAN AND SECURITY AGREEMENT dated as
of May 15, 2001 (the "THIRD AMENDMENT"), amends the Loan and Security Agreement
dated as of December 31, 1998, as amended by that certain Amendment to Loan and
Security Agreement dated as of June 30, 2000 and that Second Amendment to Loan
and Security Agreement, dated as of April 13, 2001 (as so amended, the "LOAN
AGREEMENT"), between NTFC Capital Corporation, a Delaware corporation (the
"LENDER"), and Startec Global Communications Corporation, a Delaware corporation
(the "BORROWER"), as the successor by merger to Startec Global Communications
Corporation, a Maryland corporation.

                              W I T N E S S E T H:

         WHEREAS, Borrower has requested that the Loan Agreement be amended to
change the time period for satisfaction of certain covenants contained in
Article VII of the Loan Agreement, and that Lender waive certain Events of
Default arising out of (i) the failure of Borrower to meet the Minimum EBITDA
covenant for the quarter ended March 31, 2001, found in item (a)(4) to Schedule
7.14 to the Loan Agreement and (ii) the failure of Borrower meet the gross
margin covenant for the quarter ended March 31, 2001, found in item (a)(5) to
Schedule 7.14 to the Loan Agreement; and

         WHEREAS, Lender is willing to amend the Loan Agreement to extend the
date for satisfaction of certain covenants contained in Article VII of the Loan
Agreement, as provided for herein in consideration of an amendment fee of
Twenty-Five Thousand Dollars ($25,000) (the "AMENDMENT FEE") and to waive the
Events of Defaults caused by (i) the failure of Borrower to meet the Minimum
EBITDA covenant for the quarter ended March 31, 2001, and (ii) the failure of
Borrower to meet the gross margin covenant for the quarter ended March 31, 2001,
but only on the terms and conditions set forth herein;

         NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereto agree as follows:

                                    ARTICLE I
                          AMENDMENTS TO LOAN AGREEMENT

1.1 AMENDMENT TO SECTION 7.18 OF THE LOAN AGREEMENT. Effective on, and subject
to the occurrence of, the Amendment Effective Date, Section 7.18 of the Loan
Agreement is hereby amended by deleting the date "April 20, 2001" therein and
replacing it with the date "May 18, 2001".

1.2 AMENDMENT TO SECTION 7.19 OF THE LOAN AGREEMENT. Effective on, and subject
to the occurrence of, the Amendment Effective Date, Section 7.19 of the Loan
Agreement is hereby amended by deleting the text of such section in its entirety
and replacing it with the following:

<PAGE>

         "7.19 LANDLORD CONSENTS. Borrower shall obtain and deliver to Lender
         those landlord consents listed on EXHIBIT F to the Second Amendment not
         later than June 12, 2001."

                                   ARTICLE II
                  LIMITED WAIVER OF COVENANTS TO LOAN AGREEMENT

2.1.     LIMITED WAIVER OF ARTICLE IX (EVENTS OF DEFAULT).

         (a) Effective on, and subject to the occurrence of, the Amendment
Effective Date, Lender waives the Event of Default under Section 9.01(c) of
ARTICLE IX of the Loan Agreement caused solely by the failure of Borrower to
comply with the financial covenants required by items (a)(4) (Minimum EBITDA)
and (a)(5) (gross margin) of Schedule 7.14 of the Loan Agreement for the fiscal
quarter ended March 31, 2001.

         (b) Effective on, and subject to the occurrence of, the Amendment
Effective Date, Lender waives the Event of Default under Section 9.01(c) of
ARTICLE IX of the Loan Agreement caused solely by the failure of Borrower to
comply with the covenant found in Section 7.18 of the Loan Agreement (as
modified by that certain Side Letter, dated as of April 20, 2001, between
Borrower and Lender) caused solely by Borrower's failure to deliver the required
legal opinion(s) under Section 7.18 of the Loan Agreement by May 4, 2001.

                                   ARTICLE III
                                  AFFIRMATIONS

3.1.     REAFFIRMATION AND RELEASE.

         (a) Borrower hereby represents, warrants and covenants that (i) the
representations and warranties of Borrower contained in the Loan Agreement and
the other Loan Documents are true and correct in all material respects with the
same effect as if now made (unless stated to relate solely to an earlier date,
in which case such representations and warranties were true and correct as of
such earlier date), (ii) except as set forth on EXHIBIT 4.16 attached hereto,
there has been no Material Adverse Change in the financial condition or results
of operations of Borrower since the date of the projections previously delivered
to Lender on March __, 2001, (iii) on the date hereof no Default or Event of
Default has occurred and is continuing or exists (except for the failure of
Borrower to comply with the financial covenants required by items (a)(4) and
(a)(5) of Schedule 7.14 to the Loan Agreement for the fiscal quarter ended March
31, 2001), or will occur or exist after giving effect to this Third Amendment,
(iii) the execution and terms of this Third Amendment have been duly authorized
by all necessary and appropriate corporate action for Borrower, and (iv)
Borrower's execution of this Third Amendment does not require the consent of or
giving of notice to any other Person other than those consents which Borrower
has already obtained.

         (b) Borrower reaffirms that the Loan Agreement, as amended hereby, and
the other Loan Documents to which it is a party are and remain the valid and
binding obligations of

                                       2
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Borrower, enforceable against Borrower in accordance with their respective
terms. Borrower acknowledges that Lender is not waiving, and Borrower is
required to and shall comply with, the financial covenants for the fiscal
quarter ended March 31, 2001, required by Section 7.14 and Schedule 7.14 of the
Loan Agreement in effect on and after the Amendment Effective Date (other than
the financial covenants required by items (a)(4) and (a)(5) of Schedule 7.14 to
the Loan Agreement for the fiscal quarter ended March 31, 2001).

         (c) Borrower hereby acknowledges and stipulates it has no claims or
causes of action against Lender, and/or its officers, directors, agents, and/or
employees, of any kind whatsoever, and hereby releases Lender and its officers,
directors, agents, and employees from any and all claims, causes of action,
demands and liabilities of any kind whatsoever, whether direct or indirect,
fixed or contingent, liquidated or non-liquidated, disputed or undisputed, known
or unknown, arising under contract, warranty, tort (including negligence),
strict liability or otherwise, which Borrower has now or may acquire in the
future under any event, circumstance, action, failure to act, or otherwise from
any time prior to, and through, the date of this Third Amendment, whether
relating in any way to the Loan Agreement, any other Loan Document(s), any
Collateral or otherwise.

                                   ARTICLE IV
                                  CONSIDERATION

4.1  CONSIDERATION.  In consideration of Lender's agreement to amend the Loan
Agreement pursuant to this Third Amendment, Borrower shall pay Lender the
Amendment Fee.

                                    ARTICLE V
                           CONDITIONS TO EFFECTIVENESS

5.1.  AMENDMENT EFFECTIVE DATE.  This Third Amendment shall become effective as
of the date first above written (the "AMENDMENT EFFECTIVE DATE"), when Lender
shall have received:

         (a)  counterparts of this Third Amendment duly executed by Borrower and
 Lender;

         (b)  a certificate and its attachments (the "OFFICERS' CERTIFICATE")
dated the date first above written executed by a Responsible Officer of Borrower
and a Responsible Officer of each of the Guarantors certifying that the
resolutions attached to the Officers' Certificate are true and correct copies of
all corporate action necessary to be taken by Borrower and the Guarantors to
authorize the execution and delivery of this Third Amendment or Consent thereto,
and such resolutions remain in full force and effect; and the Responsible
Officers of Borrower and of each of the Guarantors whose names, true signatures
and incumbency are set forth therein are authorized to execute and deliver this
Third Amendment or Consent thereto, as applicable; and

         (c) the Amendment Fee and confirmation from Lender's counsel that all
fees and expenses of Lender's counsel outstanding on the date hereof have been
paid in full;

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<PAGE>

                                   ARTICLE VI
                                  MISCELLANEOUS

6.1.  CROSS REFERENCES.  References in this Third Amendment to any article or
section are, unless otherwise specified, to such article or section of this
Third Amendment.

6.2.  INSTRUMENT PURSUANT TO LOAN AGREEMENT.  This Third Amendment is a Loan
Document executed pursuant to the Loan Agreement and shall (unless otherwise
expressly indicated therein) be construed, administered, and applied in
accordance with all of the terms and provisions of the Loan Agreement (including
that it shall be governed by the laws of the State of New York and that Borrower
shall pay, on demand, all out-of-pocket expenses (including reasonable
attorneys' fees) of Lender in connection herewith). Any term or provision of and
any modification or waiver effected by this Third Amendment may be modified in
any manner by an instrument in writing executed by Borrower and Lender. Except
as expressly amended or waived hereby, all of the representations, warranties,
terms, covenants and conditions of the Loan Agreement shall remain unmodified
and unwaived. The modifications and waiver set forth herein shall be limited
precisely as provided for herein to the provisions expressly modified or waived
herein and shall not be deemed to be an amendment of, consent to or modification
or waiver of any other term or provision of the Loan Agreement or any other Loan
Document or of any transaction or further or future action on the part of
Borrower or any Guarantor which could require the consent of Lender under the
Loan Agreement or any other Loan Document. Unless otherwise defined herein or
the context otherwise requires, capitalized terms used in this Third Amendment,
including its preamble and recitals, have the meanings provided in the Loan
Agreement.

6.3.  SUCCESSORS AND ASSIGNS.  This Third Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

6.4.  COUNTERPARTS.  This Third Amendment may be executed by the parties hereto
in several counterparts which shall be executed by Borrower and Lender, as the
case may be, all of which shall be deemed to be an original and which shall
constitute together but one and the same agreement.

6.5.  EVENT OF DEFAULT.  It is understood and agreed that any breach by Borrower
or any Guarantor of any representation, warranty or covenant contained herein or
the Officers' Certificate shall constitute an Event of Default.

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         IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be executed by the respective officers hereunder duly authorized to be
effective as of the day and year first above written.

                                      BORROWER:
                                      --------

                                      STARTEC GLOBAL COMMUNICATIONS CORPORATION

                                      BY: /s/
                                         ---------------------------------------

                                      TITLE:
                                            ------------------------------------

                                      LENDER:
                                      ------

                                      NTFC CAPITAL CORPORATION

                                      BY: /s/
                                         ---------------------------------------

                                      TITLE:
                                            ------------------------------------<PAGE>
                                                                     EXHIBIT 4.1

                          SALE AND SERVICING AGREEMENT

                                      among

                   TOYOTA AUTO RECEIVABLES 2001-B OWNER TRUST,
                                   as Issuer,

                      TOYOTA AUTO FINANCE RECEIVABLES LLC,
                                   as Seller,

                                       and

                        TOYOTA MOTOR CREDIT CORPORATION,
                                   as Servicer

                            Dated as of April 1, 2001

<PAGE>

<TABLE>
                                    ARTICLE I
                                   DEFINITIONS

<S>                                                                                                            <C>
SECTION 1.01  Definitions........................................................................................1
SECTION 1.02  Usage of Terms....................................................................................22

                                   ARTICLE II
                            CONVEYANCE OF RECEIVABLES

SECTION 2.01  Conveyance of Receivables.........................................................................23
SECTION 2.02  Custody of Receivables Files......................................................................24
SECTION 2.03  Acceptance by Owner Trustee.......................................................................25

                                   ARTICLE III
                                 THE RECEIVABLES

SECTION 3.01  Representations and Warranties of the Seller with Respect
              to the Receivables................................................................................25
SECTION 3.02  Repurchase upon Breach............................................................................28
SECTION 3.03  Duties of Servicer as Custodian...................................................................29
SECTION 3.04  Instructions; Authority To Act....................................................................29
SECTION 3.05  Custodian's Indemnification.......................................................................30
SECTION 3.06  Effective Period and Termination..................................................................30

                                   ARTICLE IV
                   ADMINISTRATION AND SERVICING OF RECEIVABLES

SECTION 4.01  Duties of Servicer................................................................................30
SECTION 4.02  Collection and Allocation of Receivable Payments..................................................31
SECTION 4.03  Rebates on Full Prepayments.......................................................................32
SECTION 4.04  Realization upon Receivables......................................................................32
SECTION 4.05  Physical Damage Insurance.........................................................................32
SECTION 4.06  Maintenance of Security Interests in Financed Vehicles............................................33
SECTION 4.07  Covenants of Servicer.............................................................................33
SECTION 4.08  Purchase of Receivables upon Breach...............................................................33
SECTION 4.09  Servicing Fee and Expenses........................................................................34
SECTION 4.10  Servicer's Certificate............................................................................34
SECTION 4.11  Annual Statement as to Compliance; Notice of Default..............................................34
SECTION 4.12  Annual Accountants' Report........................................................................35
SECTION 4.13  Access to Certain Documentation and Information Regarding
              Receivables.......................................................................................35
SECTION 4.14  Appointment of Subservicer........................................................................36
SECTION 4.15  Amendments to Schedule of Receivables.............................................................36
SECTION 4.16  Reports to Securityholders and Rating Agencies....................................................36
</TABLE>

                                       i
<PAGE>

<TABLE>
                                    ARTICLE V
       ACCOUNTS; PAYMENTS AND DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS

<S>                                                                                                            <C>
SECTION 5.01  Establishment of Collection Account and Payahead Account..........................................36
SECTION 5.02  Collections.......................................................................................38
SECTION 5.03  Application of Collections........................................................................39
SECTION 5.04  Advances; Swap Payments...........................................................................40
SECTION 5.05  Additional Deposits...............................................................................41
SECTION 5.06  Payments and Distributions........................................................................42
SECTION 5.07  Reserve Account...................................................................................45
SECTION 5.08  Statements to Certificateholder, Noteholders, and Swap Counterparty...............................46
SECTION 5.09  Net Deposits......................................................................................47

                                   ARTICLE VI
                                   THE SELLER

SECTION 6.01  Representations of Seller.........................................................................47
SECTION 6.02  Corporate Existence...............................................................................48
SECTION 6.03  Liability of Seller; Indemnities..................................................................49
SECTION 6.04  Merger or Consolidation of, or Assumption of the Obligations of, Seller...........................50
SECTION 6.05  Limitation on Liability of Seller and Others......................................................50
SECTION 6.06  Seller May Own Certificate or Notes...............................................................50

                                   ARTICLE VII
                                  THE SERVICER

SECTION 7.01  Representations of Servicer.......................................................................51
SECTION 7.02  Indemnities of Servicer...........................................................................52
SECTION 7.03  Merger or Consolidation of, or Assumption of the Obligations
              of, Servicer......................................................................................53
SECTION 7.04  Limitation on Liability of Servicer and Others....................................................54
SECTION 7.05  TMCC Not To Resign as Servicer....................................................................54

                                  ARTICLE VIII
                                     DEFAULT

SECTION 8.01  Servicer Default..................................................................................55
SECTION 8.02  Appointment of Successor..........................................................................56
SECTION 8.03  Repayment of Advances; Compensation Payable.......................................................57
SECTION 8.04  Notification......................................................................................57

                                   ARTICLE IX
                                   TERMINATION

SECTION 9.01  Optional Purchase of All Receivables..............................................................57
SECTION 9.02  Termination of the Trust Agreement................................................................59
</TABLE>

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<TABLE>
                                    ARTICLE X
                                  MISCELLANEOUS

<S>                                                                                                            <C>
SECTION 10.01  Amendment........................................................................................59
SECTION 10.02  Protection of Title to Trust.....................................................................60
SECTION 10.03  Notices..........................................................................................62
SECTION 10.04  Assignment by the Seller or the Servicer.........................................................62
SECTION 10.05  Limitations on Rights of Others..................................................................62
SECTION 10.06  Severability.....................................................................................62
SECTION 10.07  Separate Counterparts............................................................................62
SECTION 10.08  Headings.........................................................................................63
SECTION 10.09  Governing Law....................................................................................63
SECTION 10.10  Assignment by Issuer.............................................................................63
SECTION 10.11  Nonpetition Covenants............................................................................63
SECTION 10.12  Limitation of Liability of Owner Trustee and Indenture Trustee...................................63

SCHEDULE A      Schedule of Receivables
EXHIBIT A       Form of Servicer's Certificate
</TABLE>

                                      iii
<PAGE>

         SALE AND SERVICING AGREEMENT dated as of April 1, 2001, among TOYOTA
AUTO RECEIVABLES 2001-B OWNER TRUST, a Delaware business trust (the "Issuer"),
TOYOTA AUTO FINANCE RECEIVABLES LLC, a Delaware limited liability company ("TAFR
LLC" or the "Seller"), and TOYOTA MOTOR CREDIT CORPORATION, a California
corporation ("TMCC" or the "Servicer").

         WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with retail installment sales contracts secured by new or
used automobiles and light duty trucks generated by Toyota Motor Credit
Corporation in the ordinary course of business and sold to the Seller;

         WHEREAS the Seller is willing to sell such receivables to the Issuer;
         and

         WHEREAS the Servicer is willing to service such receivables;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

         SECTION 1.01 DEFINITIONS. Except as otherwise provided in this
Agreement, whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:

                  "ACTUAL PAYMENT" means, with respect to a Receivable and a
Collection Period, all payments received by the Servicer from or for the account
of the related Obligor on such Receivable during such Collection Period (and, in
the case of the first Collection Period, all payments received by the Servicer
from or for the account of such Obligor since the Cutoff Date through the last
day of such Collection Period), net of any Supplemental Servicing Fees
attributable to such Receivable. Actual Payments do not include Applied Payments
Ahead.

                  "ACTUARIAL RECEIVABLE" means any Receivable which provides for
the allocation of payments according to the "actuarial" method.

                  "ADMINISTRATIVE PURCHASE PAYMENT" means, with respect to a
Payment Date and to (1) an Administrative Receivable which is a Precomputed
Receivable purchased by the Servicer as of the close of business on the last day
of the related Collection Period, (a) the sum of (i) all Scheduled Payments on
such Receivable due after the last day of such Collection Period, (ii) an amount
equal to any reimbursement of Outstanding Advances made pursuant to Section
5.04(c) with respect to such Receivable and (iii) all past due Scheduled
Payments for which an Advance has not been made, minus (b) all Payments Ahead
with respect to such Receivable then on deposit in the Payahead Account and the
Rebate, if any, paid to the Obligor on a Precomputed Receivable on or before the
date of such purchase and (2) an Administrative Receivable which is a Simple
Interest Receivable purchased by the Servicer during the related Collection
Period, the sum of (a) the unpaid Principal Balance owed by the Obligor in
respect of such Receivable plus

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<PAGE>

(b) interest on such unpaid Principal Balance at a rate equal to the related APR
to the last day in the related Collection Period.

                  "ADMINISTRATION AGREEMENT" means the Administration Agreement
dated as of April 1, 2001, among the Administrator, the Issuer and the Indenture
Trustee.

                  "ADMINISTRATIVE RECEIVABLE" means a Receivable which the
Servicer is required to purchase pursuant to Section 3.02 or 4.08 or which the
Servicer has elected to purchase pursuant to Section 9.01.

                  "ADMINISTRATOR" means TMCC, or any successor Administrator
under the Administration Agreement.

                  "ADVANCE" means a Precomputed Advance or Simple Interest
Advance.

                  "AFFILIATE" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control," when used with
respect to any specified Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the term "controlling" and
"controlled" have meanings correlative to the foregoing.

                  "AGGREGATE NET LOSSES" means, with respect to a Collection
Period, an amount equal to the aggregate Principal Balance of all Receivables
that became Defaulted Receivables during such Collection Period minus the sum of
(x) all Net Liquidation Proceeds collected during such Collection Period with
respect to Defaulted Receivables and (y) all amounts received during such
Collection Period in respect of the Receivables liquidated in prior Collection
Periods net of any Liquidation Expenses incurred during such Collection Period
in connection with the recovery of such amounts.

                  "AGREEMENT" means this Sale and Servicing Agreement among the
Toyota Auto Receivables 2001-B Owner Trust, as Issuer, TAFR LLC, as seller, and
TMCC, as servicer, as the same may be amended or supplemented from time to time.

                  "AMOUNT FINANCED" in respect of a Receivable means the
aggregate amount advanced under such Receivable toward the purchase price of the
related Financed Vehicle and any related costs, including but not limited to
accessories, insurance premiums, service and warranty contracts and other items
customarily financed as part of retail automobile and light duty truck
installment sale contracts.

                  "ANNUAL PERCENTAGE RATE" or "APR" of a Receivable means the
annual rate of finance charges specified in such Receivable.

                  "APPLIED PAYMENT AHEAD" means, with respect to a Precomputed
Receivable and a Collection Period as to which (a) the Actual Payment is less
than the Scheduled Payment and (b) a Deferred Prepayment is on deposit in the
Payahead Account, an amount equal to the lesser of (i) such Deferred Prepayment
and (ii) the amount by which the Scheduled Payment exceeds the Actual Payment.

                                       2
<PAGE>

                  "AVAILABLE COLLECTIONS" means, with respect to any Payment
Date, the total of the following amounts received by the Servicer on or in
respect of the Receivables during (or for application with respect to) the
related Collection Period (in the case of the Precomputed Receivables, computed
in accordance with the actuarial method and in the case of the Simple Interest
Receivables, computed in accordance with the simple interest method):

                  (a) the sum of all (i) collections on or in respect of all
Receivables other than Defaulted Receivables (including Applied Payments Ahead,
but otherwise excluding Payments Ahead), (ii) Net Liquidation Proceeds, (iii)
Advances made by the Servicer, (iv) all Warranty Purchase Payments, (v) all Swap
Payments Incoming, (vi) all Swap Termination Payments made by the Swap
Counterparty to the Issuer and (vii) all Administrative Purchase Payments, less

                  (b) the sum of all (i) amounts received on or in respect of a
particular Receivable (other than a Defaulted Receivable) to the extent of the
aggregate Outstanding Advances in respect of such Receivable, (ii) Net
Liquidation Proceeds with respect to a particular Receivable to the extent of
the aggregate Outstanding Advances in respect of such Receivable, (iii)
recoveries from collections on other Receivables to the extent of Advances made
by the Servicer on a particular Receivable that the Servicer has determined are
Nonrecoverable Advances, (iv) late fees, extension fees and other administrative
fees and expenses or similar charges (which are payable to the Servicer as
Supplemental Servicing Fees) collected by the Servicer, (v) all Swap Payments
Outgoing, (vi) all Swap Termination Payments made by the Issuer to the Swap
Counterparty and (vii) Rebates.

                  "BASIC DOCUMENTS" means the Receivables Purchase Agreement,
the Trust Agreement, the Certificate of Trust, this Sale and Servicing
Agreement, the Indenture, the Administration Agreement, the Securities Account
Control Agreement, the Note Depository Agreement and the other documents and
certificates delivered in connection herewith and therewith.

                  "BASIC SERVICING FEE" means the fee payable to the Servicer on
each Payment Date, calculated pursuant to Section 4.09, for services rendered
during the related Collection Period, which shall be equal to one-twelfth of the
Servicing Fee Rate multiplied by the Pool Balance as of the first day of the
related Collection Period or, with respect to the first Payment Date, the
Original Pool Balance.

                  "BOOK-ENTRY NOTES" means beneficial interests in Notes,
ownership and transfer of which shall be made through book entries by a Clearing
Agency as described in the Trust Agreement and the Indenture, respectively.

                  "BUSINESS DAY" means any day other than a Saturday, a Sunday
or a day on which banking institutions in New York, New York, Minneapolis,
Minnesota, Wilmington, Delaware or San Francisco, California are authorized or
obligated by law, executive order or governmental decree to be closed.

                  "CERTIFICATE" has the meaning assigned in the Trust Agreement.

                  "CERTIFICATEHOLDER" has the meaning assigned to such term in
the Trust Agreement.

                                       3
<PAGE>

                  "CHARGE-OFF RATE" means, with respect to a Collection Period,
the percentage equivalent of a fraction, the numerator of which is the Aggregate
Net Losses for such Collection Period, and the denominator of which is the
average of (i) the Pool Balance on the last day of the Collection Period
immediately preceding such Collection Period and (ii) the Pool Balance on the
last day of such Collection Period; such quotient is then multiplied by twelve
to arrive at an annualized percentage.

                  "CLASS" means any one of the classes of Notes.

                  "CLASS A NOTE BALANCE" as of any date of determination, means
the aggregate of the outstanding principal balances of the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes and Class A-4 Notes.

                  "CLASS A-1 FINAL SCHEDULED PAYMENT DATE" means the Payment
Date in May, 2002.

                  "CLASS A-1 INITIAL PRINCIPAL BALANCE" means $417,840,000.00.

                  "CLASS A-1 INTEREST CARRYOVER SHORTFALL" means, with respect
to any Payment Date, the excess, if any, of (x) the Class A-1 Interest
Distributable Amount for such Payment Date and any outstanding Class A-1
Interest Carryover Shortfall from the immediately preceding Payment Date
(together with interest on such outstanding Class A-1 Interest Carryover
Shortfall at the Class A-1 Rate, to the extent lawful, calculated on the same
basis as interest on the Class A-1 Notes for the same period), over (y) the
amount of interest distributed to the Class A-1 Noteholders on such Payment
Date.

                  "CLASS A-1 INTEREST DISTRIBUTABLE AMOUNT" means the amount of
interest accrued during the related Interest Period (calculated on the basis of
the actual number of days in such Interest Period and a year assumed to consist
of 360 days) on the Class A-1 Principal Balance as of the immediately preceding
Payment Date (after giving effect to payments of principal made on such
immediately preceding Payment Date) at the Class A-1 Rate or, in the case of the
first Payment Date, on the Class A-1 Initial Principal Balance.

                  "CLASS A-1 NOTE" means any of the 4.300% Asset Backed Notes,
Class A-1, issued under the Indenture.

                  "CLASS A-1 NOTEHOLDER" means any Person in whose name a Class
A-1 Note is registered in the Note Register.

                  "CLASS A-1 PRINCIPAL BALANCE" as of any date means the Class
A-1 Initial Principal Balance less all amounts paid to the holders of Class A-1
Notes in respect of principal pursuant to Section 5.06 hereof.

                  "CLASS A-1 RATE" means 4.300% per annum.

                  "CLASS A-2 FINAL SCHEDULED PAYMENT DATE" means the Payment
Date in December, 2003.

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<PAGE>

                  "CLASS A-2 INITIAL PRINCIPAL BALANCE" means $500,000,000.00.

                  "CLASS A-2 INTEREST CARRYOVER SHORTFALL" means, with respect
to any Payment Date, the excess, if any, of (x) the Class A-2 Interest
Distributable Amount for such Payment Date and any outstanding Class A-2
Interest Carryover Shortfall from the immediately preceding Payment Date
(together with interest on such outstanding Class A-2 Interest Carryover
Shortfall at the Class A-2 Rate, to the extent lawful, calculated on the same
basis as interest on the Class A-2 Notes for the same period), over (y) the
amount of interest distributed to the Class A-2 Noteholders on such Payment
Date.

                  "CLASS A-2 INTEREST DISTRIBUTABLE AMOUNT" means the amount of
interest accrued during the related Interest Period (calculated on the basis of
the actual number of days in such Interest Period and a year assumed to consist
of 360 days) on the Class A-2 Principal Balance as of the immediately preceding
Payment Date (after giving effect to payments of principal made on such
immediately preceding Payment Date) at the Class A-2 Rate or, in the case of the
first Payment Date, on the Class A-2 Initial Principal Balance.

                  "CLASS A-2 NOTE" means any of the Floating Rate Asset Backed
Notes, Class A-2, issued under the Indenture.

                  "CLASS A-2 NOTEHOLDER" means any Person in whose name a Class
A-2 Note is registered in the Note Register.

                  "CLASS A-2 NOTIONAL BALANCE" means the Class A-2 Principal
Balance as of the first day of the applicable Interest Period.

                  "CLASS A-2 NOTIONAL FIXED RATE" means 4.562%.

                  "CLASS A-2 PRINCIPAL BALANCE" as of any date means the Class
A-2 Initial Principal Balance less all amounts paid to the holders of Class A-2
Notes in respect of principal pursuant to Section 5.06 hereof.

                  "CLASS A-2 RATE" means, with respect to any Interest Period,
one-month LIBOR plus 0.060%.

                  "CLASS A-3 FINAL SCHEDULED PAYMENT DATE" means the Payment
Date in March, 2005.

                  "CLASS A-3 INITIAL PRINCIPAL BALANCE" means $360,000,000.00.

                  "CLASS A-3 INTEREST CARRYOVER SHORTFALL" means, with respect
to any Payment Date, the excess, if any, of (x) the Class A-3 Interest
Distributable Amount for such Payment Date and any outstanding Class A-3
Interest Carryover Shortfall from the immediately preceding Payment Date
(together with interest on such outstanding Class A-3 Interest Carryover
Shortfall at the Class A-3 Rate, to the extent lawful, calculated on the same
basis as interest on the Class A-3 Notes for the same period), over (y) the
amount of interest distributed to the Class A-3 Noteholders on such Payment
Date.

                                       5
<PAGE>

                  "CLASS A-3 INTEREST DISTRIBUTABLE AMOUNT" means the amount of
interest accrued during the related Interest Period (calculated on the basis of
the actual number of days in such Interest Period and a year assumed to consist
of 360 days) on the Class A-3 Principal Balance as of the immediately preceding
Payment Date (after giving effect to payments of principal made on such
immediately preceding Payment Date) at the Class A-3 Rate or, in the case of the
first Payment Date, on the Class A-3 Initial Principal Balance.

                  "CLASS A-3 NOTE" means any of the Floating Rate Asset Backed
Notes, Class A-3, issued under the Indenture.

                  "CLASS A-3 NOTEHOLDER" means any Person in whose name a Class
A-3 Note is registered in the Note Register.

                  "CLASS A-3 NOTIONAL BALANCE" means the Class A-3 Principal
Balance as of the first day of the applicable Interest Period.

                  "CLASS A-3 NOTIONAL FIXED RATE" means 5.018%.

                  "CLASS A-3 PRINCIPAL BALANCE" as of any date means the Class
A-3 Initial Principal Balance less all amounts paid to the holders of Class A-3
Notes in respect of principal pursuant to Section 5.06 hereof.

                  "CLASS A-3 RATE" means, with respect to any Interest Period,
one-month LIBOR plus 0.080%.

                  "CLASS A-4 FINAL SCHEDULED PAYMENT DATE" means the Payment
Date in October, 2007.

                  "CLASS A-4 INITIAL PRINCIPAL BALANCE" means $175,000,000.00.

                  "CLASS A-4 INTEREST CARRYOVER SHORTFALL" means, with respect
to any Payment Date, the excess, if any, of (x) the Class A-4 Interest
Distributable Amount for such Payment Date and any outstanding Class A-4
Interest Carryover Shortfall from the immediately preceding Payment Date
(together with interest on such outstanding Class A-4 Interest Carryover
Shortfall at the Class A-4 Rate, to the extent lawful, calculated on the same
basis as interest on the Class A-4 Notes for the same period), over (y) the
amount of interest distributed to the Class A-4 Noteholders on such Payment
Date.

                  "CLASS A-4 INTEREST DISTRIBUTABLE AMOUNT" means the amount of
interest accrued during the related Interest Period (calculated on the basis of
the actual number of days in such Interest Period and a year assumed to consist
of 360 days) on the Class A-4 Principal Balance as of the immediately preceding
Payment Date (after giving effect to payments of principal made on such
immediately preceding Payment Date) at the Class A-4 Rate or, in the case of the
first Payment Date, on the Class A-4 Initial Principal Balance.

                  "CLASS A-4 NOTE" means any of the Floating Rate Asset Backed
Notes, Class A-4, issued under the Indenture.

                                       6
<PAGE>

                  "CLASS A-4 NOTEHOLDER" means any Person in whose name a Class
A-4 Note is registered in the Note Register.

                  "CLASS A-4 NOTIONAL BALANCE" means the Class A-4 Principal
Balance as of the first day of the applicable Interest Period.

                  "CLASS A-4 NOTIONAL FIXED RATE" means 5.360%.

                   "CLASS A-4 PRINCIPAL BALANCE" as of any date means the Class
A-4 Initial Principal Balance less all amounts paid to the holders of Class A-4
Notes in respect of principal pursuant to Section 5.06 hereof.

                  "CLASS A-4 RATE" means, with respect to any Interest Period,
one-month LIBOR plus 0.100%.

                  "CLEARING AGENCY" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.

                  "CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.

                  "CLOSING DATE" means May 15, 2001.

                  "CODE" means the Internal Revenue Code of 1986, as amended,
and the Treasury Regulations promulgated thereunder.

                  "COLLECTION ACCOUNT" means the account or accounts designated
as such and established and maintained pursuant to Section 5.01.

                  "COLLECTION PERIOD" means, with respect to any Payment Date,
the calendar month immediately preceding the month in which such Payment Date
occurs (and, in the case of the first Collection Period, the period from the
Cutoff Date through the last day of the calendar month immediately preceding the
month in which such Payment Date occurs).

                  "COMMISSION" means the Securities and Exchange Commission, and
any successor thereto.

                  "CURRENT RECEIVABLE" means each Receivable that is not a
Defaulted Receivable or a Liquidated Receivable.

                  "CUTOFF DATE" means April 1, 2001.

                  "DEALER" means the dealer of automobile and/or light duty
trucks who sold a Financed Vehicle and who originated and assigned the
Receivable relating to such Financed Vehicle to TMCC under an existing agreement
between such dealer and TMCC.

                                       7
<PAGE>

                  "DEALER RECOURSE" means, with respect to a Receivable, all
recourse rights against the Dealer which originated the Receivable, and any
successor Dealer.

                  "DEFAULTED RECEIVABLE" means a Receivable (other than an
Administrative Receivable or a Warranty Receivable) as to which (i) all or any
part of a Scheduled Payment is 150 or more days past due and the Servicer has
not repossessed the related Financed Vehicle, or (ii) the Servicer has, in
accordance with its customary servicing procedures, determined that eventual
payment in full is unlikely and either repossessed and liquidated the related
Financed Vehicle or repossessed and held the related Financed Vehicle in its
repossession inventory for 90 days, whichever occurs first.

                  "DEFINITIVE NOTES" shall have the meaning ascribed thereto in
the Indenture.

                  "DEFERRED PREPAYMENT" means, with respect to a Precomputed
Receivable and a Collection Period, the aggregate amount, if any, of Payments
Ahead remitted to the Servicer in respect of such Receivable during one or more
prior Collection Periods and currently held by the Servicer or in the Payahead
Account.

                  "DELINQUENCY PERCENTAGE" means, with respect to a Collection
Period, the percentage equivalent of a fraction, the numerator of which is the
number of (i) all outstanding Receivables 61 days or more delinquent (after
taking into account permitted extensions) as of the last day of such Collection
Period (excluding Receivables as to which the Financed Vehicle has been
liquidated during that Collection Period), determined in accordance with the
Servicer's normal practices, plus (ii) all repossessed Financed Vehicles that
have not been liquidated (to the extent the related Receivable is not otherwise
reflected in clause (i) above), and the denominator of which is the aggregate
number of Current Receivables on the last day of such Collection Period.

                  "DEPOSITOR" means the Seller in its capacity as Depositor
under the Trust Agreement.

                  "DETERMINATION DATE" means, with respect to any Payment Date,
the second Business Day preceding such Payment Date.

                  "DTC" means The Depository Trust Company, and its successors.

                  "ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories that signifies
investment grade.

                  "ELIGIBLE INSTITUTION" means (a) the corporate trust
department of the Indenture Trustee or the Owner Trustee or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), which (i) has either (A) a long-term unsecured debt rating of

                                       8
<PAGE>

"AA-" or better by Standard & Poor's and "Aa3" or better by Moody's or (B) an
account or accounts in which funds will be held therein for 30 days or less
which are maintained with a depository institution or trust company, the
short-term unsecured debt obligations of which are rated "A-1+" or better by
Standard & Poor's or if not rated by Standard & Poor's then otherwise approved
by Standard & Poor's and rated "P-1" or better by Moody's, or if not rated by
Moody's then otherwise approved by Moody's, and (ii) whose deposits are insured
by the FDIC. If so qualified, the Indenture Trustee or the Owner Trustee may be
considered an Eligible Institution for the purposes of clause (b) of this
definition.

                  "ELIGIBLE INVESTMENTS" means, at any time, any one or more of
the following obligations and securities:

         (a)      obligations of, and obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of the United
States;

         (b)      general obligations of or obligations guaranteed by FNMA, or
(ii) any state of the United States, the District of Columbia or the
Commonwealth of Puerto Rico then rated the highest available credit rating of
each Rating Agency for such obligations;

         (c)      certificates of deposit issued by any depository institution
or trust company (including the Indenture Trustee) incorporated under the laws
of the United States or of any state thereof, the District of Columbia or the
Commonwealth of Puerto Rico and subject to supervision and examination by
banking authorities of one or more of such jurisdictions, provided that the
short-term unsecured debt obligations of such depository institution or trust
company are then rated the highest available rating of each Rating Agency for
such obligations;

         (d)      certificates of deposit, demand or time deposits of, bankers'
acceptances issued by, or federal funds sold by, any depository institution or
trust company (including the Indenture Trustee) incorporated under the laws of
the United States or any State and subject to supervision and examination by
federal and/or State banking authorities and the deposits of which are fully
insured by the Federal Deposit Insurance Corporation, so long as at the time of
such investment or contractual commitment providing for such investment either
such depository institution or trust company is an Eligible Institution (or if
such investment will mature after more than one month, the long-term, unsecured
debt of the issuer has the highest available rating from each Rating Agency) or
as to which the Indenture Trustee shall have received a letter from each Rating
Agency to the effect that such investment would not result in the qualification,
downgrading or withdrawal of the ratings then assigned to any Notes issued by
the Issuer;

         (e)      certificates of deposit issued by any bank, trust company,
savings bank or other savings institution that is an Eligible Institution and is
fully insured by the FDIC (or if such investment will mature after more than one
month, the long-term, unsecured debt of the issuer has the highest available
rating from each Rating Agency);

         (f)      repurchase obligations held by the Indenture Trustee that are
acceptable to the Indenture Trustee with respect to any security described in
clauses (a), (b) or (g) hereof or any other security issued or guaranteed by any
other agency or instrumentality of the United States,

                                       9
<PAGE>

in either case entered into with a federal agency or a depository institution or
trust company (acting as principal) described in clause (d) above (including the
Indenture Trustee); PROVIDED, HOWEVER, that repurchase obligations entered into
with any particular depository institution or trust company (including the
Indenture Trustee) will not be Eligible Investments to the extent that the
aggregate principal amount of such repurchase obligations with such depository
institution or trust company held by the Indenture Trustee on behalf of the
Noteholders or the Seller, as the case may be, shall exceed 10% of either the
Pool Balance or of the principal balance of all the face amount of all Eligible
Investments so held thereby;

         (g)      securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States or any State so
long as at the time of such investment or contractual commitment providing for
such investment (i) the long-term, unsecured debt, or if such securities are
commercial paper, the short-term unsecured debt, of such corporation has the
highest available rating from each Rating Agency or (ii) the Indenture Trustee
shall have received a letter from each Rating Agency to the effect that such
investment would not result in the qualification, downgrading or withdrawal of
the ratings then assigned to any of the Notes;

         (h)      money market funds so long as such funds are rated "Aaa" by
Moody's (so long as Moody's is a Rating Agency) and "AAAm" by Standard & Poor's
(so long as Standard & Poor's is a Rating Agency), including any such fund for
which the Indenture Trustee or an Affiliate thereof serves as an investment
advisor, administrator, shareholder servicing agent and/or custodian or
subcustodian, and notwithstanding that (i) such Person charges and collects fees
and expenses from such funds for services rendered, (ii) such Person charges and
collects fees and expenses for services rendered pursuant to the Trust
Agreement, the Indenture or the Securities Account Control Agreement and (iii)
services performed for such funds and pursuant to any such agreement may
converge at any time. Each of the Seller and the Servicer hereby specifically
authorizes the Indenture Trustee, Owner Trustee, Securities Intermediary or an
Affiliate thereof to charge and collect all fees and expenses from such funds
for services rendered to such funds, in addition to any fees and expenses such
Person may charge and collect for services rendered pursuant to any such
Agreement; and

         (i)      such other investments acceptable to each Rating Agency (as
approved in writing by each Rating Agency) as will not result in the
qualification, downgrading or withdrawal of the ratings then assigned by such
Rating Agency to any of the Notes; provided that each of the foregoing
investments shall mature no later than the Payment Date next succeeding such
investment, and shall be required to be held to such maturity.

                  None of the foregoing will be considered a Eligible Investment
if:

                           (1)      it constitutes a certificated security,
         bankers' acceptance, commercial paper, negotiable certificate of
         deposit or other obligation that constitutes "financial assets" within
         the meaning of Section 8-102(a)(9)(c) of the UCC unless a security
         entitlement with respect to such Eligible Investment has been created,
         in favor of the Indenture Trustee or Owner Trustee, as appropriate, in
         accordance with Section 8-501(b) of the UCC and the related securities
         intermediary has agreed not to comply

                                       10
<PAGE>

         with entitlement orders of any secured party other than the Indenture
         Trustee, Seller or Owner Trustee, as the case may be; or

                           (2)      it constitutes a book-entry security held
         through the Federal Reserve System pursuant to federal book-entry
         regulations, unless, in accordance with applicable law, (A) a
         book-entry registration thereof is made to an appropriate book-entry
         account maintained with a Federal Reserve Bank by the Indenture
         Trustee, Securities Intermediary or Owner Trustee, as appropriate, or
         by a custodian therefor, (B) a deposit advice or other written
         confirmation of such book-entry registration is issued to such Person,
         (C) any such custodian makes entries in its books and records
         identifying that such book-entry security is held through the Federal
         Reserve System pursuant to federal book-entry regulations and belongs
         to such trustee and indicating that such custodian holds such Eligible
         Investment solely as agent for the Indenture Trustee, Securities
         Intermediary or Owner Trustee, as appropriate, (D) the Indenture
         Trustee, Securities Intermediary or Owner Trustee, as appropriate,
         makes entries in its books and records establishing that it holds such
         security solely in such capacity, and (E) any additional or alternative
         procedures as may hereafter become necessary to effect complete
         transfer of ownership thereof to such trustee are satisfied, consistent
         with changes in applicable law or regulations or the interpretation
         thereof.

                  Notwithstanding anything to the contrary contained in this
definition, no Eligible Investment may be purchased at a premium and no Eligible
Investment shall be an "interest only" instrument.

                  For purposes of this definition, any reference to the highest
available credit rating of an obligation shall mean the highest available credit
rating for such obligation (excluding any "+" signs associated with such
rating), or such lower credit rating (as approved in writing by each Rating
Agency) as will not result in the qualification, downgrading or withdrawal of
the rating then assigned by such Rating Agency to any of the Notes. Also for
purposes of this definition, any reference to a Rating Agency refers only to a
Rating Agency that has, at the request of TMCC, rated the Notes.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.

                  "EVENT OF DEFAULT" shall have the meaning specified in the
Indenture.

                  "EXCESS PAYMENT" means, with respect to a Receivable and a
Collection Period, the amount, if any, by which the Actual Payment exceeds the
sum of (i) the Scheduled Payment, and (ii) any Overdue Payment.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                  "FDIC" means the Federal Deposit Insurance Corporation, and
its successors.

                  "FNMA" means the Federal National Mortgage Association, and
its successors.

                                       11
<PAGE>

                  "FINANCED VEHICLE" means, with respect to a Receivable, the
related automobile or light duty truck, as the case may be, together with all
accessions thereto, securing the related Obligor's indebtedness under such
Receivable.

                  "HOLDER" or "SECURITYHOLDER" means the registered holder of a
Note as evidenced by the Note Register or the Certificateholder, as the case may
be, except that, solely for the purposes of giving certain consents, waivers,
requests or demands pursuant to the Trust Agreement or the Indenture, the
interest evidenced by the Certificate or any Note registered in the name of TAFR
LLC or TMCC, or any Person actually known to a Trust Officer of the Owner
Trustee or the Indenture Trustee to be controlling, controlled by or under
common control with TAFR LLC or TMCC, shall not be taken into account in
determining whether the requisite percentage necessary to effect any such
consent, waiver, request or demand shall have been obtained.

                  "INDENTURE" means the Indenture dated as of April 1, 2001,
between the Issuer and the Indenture Trustee.

                  "INDENTURE TRUSTEE" means the Person acting as Indenture
Trustee under the Indenture, its successors in interest and any successor
trustee under the Indenture.

                  "INDEPENDENT MANAGER" means a director of the Seller who is
not (i) a director, officer or employee of any Affiliate of the Seller, (ii) a
natural person related to any director or officer of any Affiliate of the
Seller, (iii) a holder (directly or indirectly) of more than 10% of any voting
securities of any Affiliate of the Seller, or (iv) a natural person related to a
holder (directly or indirectly) of more than 10% of any voting securities of any
Affiliate of the Seller.

                  "INSOLVENCY EVENT" means, with respect to a specified Person,
(a) the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of such Person or any substantial part of its property
in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.

                  "INSURANCE POLICY" means, with respect to a Receivable, an
insurance policy covering physical damage, credit life, credit disability,
theft, mechanical breakdown or similar event relating to the related Financed
Vehicle or Obligor.

                                       12
<PAGE>

                  "INTEREST DETERMINATION DATE" means the second London Banking
Day prior to the Interest Reset Date for the related Interest Period.

                  "INTEREST PERIOD" with respect to any Payment Date and (i)
the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and the Class A-4 Notes,
means the period from, and including, the preceding Payment Date (or, in the
case of the initial Interest Period, from and including the Closing Date) to,
but excluding, such Payment Date.

                  "INTEREST RATE SWAP AGREEMENT" means 1992 ISDA Master
Agreement dated as of May 15, 2001, including all schedules and confirmations
thereto, between the Issuer and the Swap Counterparty, as the same may be
amended, supplemented, renewed, extended or replaced from time to time.

                  "INTEREST RESET DATE" means, with respect to the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes and the Class A-4 Notes, the first day
of the applicable Interest Period.

                  "INVESTMENT COMPANY ACT" means the Investment Company Act of
1940, as amended.

                  "ISSUER" means Toyota Auto Receivables 2001-B Owner Trust.

                  "LIBOR" means the rate for deposits in U.S. dollars for a
one-month period which appears on the Telerate Page 3750 as of 11:00 a.m.,
London time, on the Interest Determination Date; provided that, the following
procedures will be followed if LIBOR cannot be determined as described above:

                  (a)   With respect to an Interest Determination Date on which
no rate appears on Telerate Page 3750, LIBOR for the applicable Interest
Determination Date will be the rate calculated by the Calculation Agent (as
defined in the Interest Rate Swap Agreement) as the arithmetic mean of at least
two quotations obtained by the Calculation Agent after requesting the principal
London offices of each of four major reference banks in the London interbank
market, which may include the Calculation Agent and its affiliates, as selected
by the Calculation Agent, to provide the Calculation Agent with its offered
quotation for deposits in U.S. dollars for a one-month period, commencing on the
second London Banking Day immediately following the applicable Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such Interest Determination Date and
in a principal amount that is representative for a single transaction in U.S.
dollars in that market at that time. If at least two such quotations are
provided, LIBOR determined on the applicable Interest Determination Date will be
the arithmetic mean of the quotations.

                  (b)   If fewer than two quotations referred to in clause (a)
above are provided, LIBOR determined on the applicable Interest Determination
Date will be the rate calculated by the Calculation Agent as the arithmetic mean
of the rates quoted at approximately 11:00 a.m. in New York on the applicable
Interest Determination Date by three major banks, which may include the
Calculation Agent and its affiliates, in New York, selected by the Calculation
Agent for loans in U.S. dollars to leading European banks, having a maturity of
one-month and in a principal amount that is representative for a single
transaction in U.S. dollars in that market at that time.

                                       13
<PAGE>

                  (c)   If the banks so selected by the Calculation Agent are
not quoting as mentioned in clause (b) above, LIBOR for the applicable Interest
Determination Date will be LIBOR in effect on the applicable Interest
Determination Date.

                  "LIEN" means any security interest, lien, charge, pledge,
equity or encumbrance of any kind other than tax liens, mechanics' liens and any
liens that attach to a Receivable or any property, as the context may require,
by operation of law.

                  "LIQUIDATED RECEIVABLE" means a Receivable that (i) has been
the subject of a Prepayment in full, or (ii) has been paid in full or as to
which the Servicer has determined that the final amounts in respect of such
payment have been paid with respect to a Defaulted Receivable, regardless of
whether all or any part of such payment has been made by the Obligor under such
Receivable, the Seller pursuant to this Agreement, the Servicer pursuant to this
Agreement or pursuant to the Receivables Purchase Agreement, an insurer pursuant
to an Insurance Policy or otherwise.

                  "LIQUIDATION EXPENSES" means, with respect to a Defaulted
Receivable, the amount charged by the Servicer, in accordance with its customary
servicing procedures, to or for its account for repossessing, refurbishing and
disposing of the related Financed Vehicle and other out-of-pocket costs related
to such liquidation.

                  "LIQUIDATION PROCEEDS" means, with respect to a Defaulted
Receivable, all amounts realized with respect to such Receivable from whatever
sources (including, without limitation, proceeds of any Insurance Policy), net
of amounts that are required by law or such Receivable to be refunded to the
related Obligor.

                   "LONDON BANKING DAY" means any day on which commercial banks
in London are open for general business (including dealing in foreign exchange
and foreign currency deposits).

                  "MONTHLY REMITTANCE CONDITIONS" means, collectively, (i) TMCC
is the Servicer, (ii) either (a) TMCC's short-term unsecured debt is rated P-1
by Moody's and A-1 by Standard & Poor's (so long as Moody's and Standard &
Poor's are Rating Agencies), or (b) certain arrangements are made that are
acceptable to the Rating Agencies and (iii) no Event of Default or Servicer
Default shall have occurred and be continuing (unless waived by the appropriate
Noteholders).

                  "MOODY'S" means Moody's Investors Service, Inc., or its
successor.

                  "NET LIQUIDATION PROCEEDS" means, with respect to a Defaulted
Receivable, Liquidation Proceeds less Liquidation Expenses.

                  "NONRECOVERABLE ADVANCE" means any Outstanding Advance as to
which the Servicer determines that any recovery from payments made on or with
respect to such Receivable is unlikely; provided that the Servicer cannot deem
any Outstanding Advance made at the option of the Servicer pursuant to Section
4.02 to be a Nonrecoverable Advance unless it delivers to the Indenture Trustee
and Owner Trustee an Officer's Certificate to the effect that such Outstanding
Advance, when made, was reasonably likely to be reimbursed from collections

                                       14
<PAGE>

in respect of interest on the related Receivable representing interest accrued
on such Receivable at the related APR less the Servicing Fee Rate.

                  "NOTE" means a Class A-1 Note, a Class A-2 Note, a Class A-3
Note or a Class A-4 Note.

                  "NOTE DEPOSITORY AGREEMENT" has the meaning assigned in the
Indenture.

                  "NOTEHOLDER" means any Holder of a Note.

                  "NOTE OWNER" has the meaning assigned in the Indenture.

                  "NOTE POOL FACTOR" means, with respect to each Class of Notes
as of the close of business on any Payment Date, a seven-digit decimal figure
equal to the outstanding principal balance of such Class of Notes (after giving
effect to any reductions thereof to be made on such Payment Date) divided by the
original outstanding principal balance of such Class of Notes. The Note Pool
Factor for each Class of Notes will be 1.0000000 as of the Closing Date;
thereafter, the related Note Pool Factor will decline to reflect reductions in
the outstanding principal balance of such Class of Notes.

                  "NOTE REGISTER" means the register maintained by the Indenture
Trustee pursuant to the Indenture recording the name of each registered Holder
of a Note.

                  "OBLIGOR" on a Receivable means the purchaser or co-purchasers
of the related Financed Vehicle purchased in part or in whole by the execution
and delivery of such Receivable or any other Person who owes or may be liable
for payments under such Receivable.

                  "OFFICER'S CERTIFICATE" means a certificate signed by the
President, any Vice President, the chief financial officer, the chief accounting
officer, the Treasurer or any Assistant Treasurer, or the Secretary or any
Assistant Secretary of the Issuer, the Seller or the Servicer, as the case may
be.

                  "OPINION OF COUNSEL" means one or more written opinions of
counsel who may, except as otherwise provided herein, be an employee of or
counsel to the Issuer, the Seller or the Servicer, which counsel shall be
acceptable to the Indenture Trustee, the Owner Trustee or the Rating Agencies,
as the case may be.

                  "OPTIONAL PURCHASE PRICE" means an amount equal to the
aggregate Administrative Purchase Payments for the Receivables (including
Receivables that became Defaulted Receivables in the Collection Period preceding
the Payment Date on which that purchase is effected), plus the appraised value
of any other property held by the Trust, such value to be determined by an
appraiser mutually agreed upon by the Servicer, the Owner Trustee and the
Indenture Trustee, and shall succeed to all interests in and to the Trust (less
liquidated expenses); PROVIDED, HOWEVER, that the Optional Purchase Price shall
be equal to or greater than the Outstanding Amount plus all accrued and unpaid
interest on each Class of Notes (including, without duplication, any Class A-1
Interest Carryover Shortfall, Class A-2 Interest Carryover Shortfall, Class A-3
Interest Carryover Shortfall or Class A-4 Interest Carryover Shortfall) through
the Payment Date on which the Owner Trust Estate is to be purchased by the
Servicer, or

                                       15
<PAGE>

successor to the Servicer plus any amounts payable by the Issuer to the Swap
Counterparty under the Interest Rate Swap Agreement.

                  "OPTIONAL PURCHASE PERCENTAGE" means 10%.

                  "OUTSTANDING ADVANCES" means, with respect to a Receivable and
the last day of a Collection Period, the sum of all Advances made as of or prior
to such date, minus all payments or collections as of or prior to such date
which are specified in Section 5.04(b) as applied to reimburse all unpaid
Advances with respect to such Receivable.

                  "OUTSTANDING AMOUNT" means the aggregate principal amount of
all Notes, or, if indicated by the context, all Notes of any Class, outstanding
at the date of determination.

                  "OVERDUE PAYMENT" means, with respect to any Receivable (other
than an Administrative Receivable or a Warranty Receivable), payments made by or
on behalf of the Obligor which are not Supplemental Servicing Fees and therefor
shall be applied first to reimburse the Servicer for Outstanding Advances made
with respect to such Receivable pursuant to Section 5.03(a).

                  "OWNER TRUST ESTATE" means all right, title and interest of
the Trust in and to the property and rights assigned to the Trust pursuant to
Article II of this Agreement, all funds on deposit from time to time in the
accounts created pursuant to Section 5.01 of this Agreement (excluding any net
investment income with respect to amounts held in such accounts) and all other
property of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to this Agreement and the Administration
Agreement, and as assignee of the rights and interests of the Depositor under
the Receivables Purchase Agreement.

                  "OWNER TRUSTEE" means the Person acting as Owner Trustee under
the Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.

                  "PAYAHEAD ACCOUNT" means the account or accounts designated as
such and established and maintained pursuant to Section 5.01.

                  "PAYMENT AHEAD" means, with respect to a Precomputed
Receivable and a Collection Period, any Excess Payment not representing
prepayment in full of such Precomputed Receivable which the Servicer, in
accordance with its customary servicing practices, will apply towards the
payment of Scheduled Payments in one or more future Collection Periods.

                  "PAYMENT DATE" means, with respect to a Collection Period, the
fifteenth calendar day of the following calendar month, or if such day is not a
Business Day, the next succeeding Business Day, commencing June 15, 2001.

                  "PERSON" means any legal person, including any individual,
corporation, partnership, limited liability company, joint venture, association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.

                                       16
<PAGE>

                  "POOL BALANCE" means, as of any date, the aggregate Principal
Balance of the Receivables (exclusive of all Administrative Receivables for
which the Servicer has paid the Administrative Purchase Payment, Warranty
Receivables for which the Seller has paid the Warranty Purchase Payment and
Defaulted Receivables) as of the close of business on such date.

                  "POOL FACTOR" as of any Payment Date, means a seven-digit
decimal figure equal to the Pool Balance as of such Payment Date divided by the
Original Pool Balance.

                  "PRECOMPUTED ADVANCE" means an advance in respect of principal
or interest on a Precomputed Receivable in the amount determined as set forth in
Section 5.04(a).

                  "PRECOMPUTED RECEIVABLE" means any Actuarial Receivable or
Rule of 78s Receivable.

                  "PREPAYMENT" means (i) with respect to any Precomputed
Receivable and any Collection Period, any prepayment in full or Excess Payment
which the Servicer, in accordance with its customary servicing practices, will
apply towards the payment of Scheduled Payments due during or prior to such
Collection Period or (ii) with respect to any Simple Interest Receivable, any
prepayment, whether in part or in full, in respect of such Simple Interest
Receivable.

                  "PRINCIPAL BALANCE" means, with respect to any Receivable as
of any date, the Amount Financed minus the sum of the following amounts: (i) in
the case of a Precomputed Receivable, that portion of all Scheduled Payments due
on or prior to such date allocable to principal, computed in accordance with the
actuarial method, (ii) in the case of a Simple Interest Receivable, that portion
of all Scheduled Payments actually received on or prior to such date allocable
to principal, (iii) any Warranty Purchase Payment or Administrative Purchase
Payment with respect to such Receivable allocable to principal, and (iv) any
Prepayments or other payments applied to reduce the unpaid principal balance of
such Receivable. The Principal Balance of a Defaulted Receivable is zero.

                  "PRINCIPAL DISTRIBUTION ACCOUNT" means the administrative
subaccount established within the Collection Account by the Indenture Trustee
pursuant to the Indenture and the Trust Agreement.

                  "PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to any
Payment Date, an amount equal to the excess, if any, of (a) the Pool Balance as
of the end of the Collection Period preceding the related Collection Period, or,
as of the Cutoff Date, in the case of the first Collection Period, over (b) the
Pool Balance as of the end of the related Collection Period together with any
portion of the Principal Distribution Amount that would have been required to be
deposited into the Principal Distribution Account on any prior Payment Date had
there been sufficient funds available to make such deposit; provided, however,
that the Principal Distribution Amount shall not exceed the outstanding
principal amount of all the Notes on such Payment Date (prior to giving effect
to any principal payments made on such Payment Date), together with any portion
of the Principal Distribution Amount that was to be deposited into the Principal
Distribution Account on any prior Payment Date but was not because sufficient
funds were not available to make the deposit; and provided, further, that (i)
the Principal Distribution Amount on the Class A-1 Final Scheduled Payment Date
shall not be less than the amount that is necessary to reduce the outstanding
principal amount of the Class A-1 Notes to zero; (ii) the Principal Distribution
Amount on the Class A-2 Final Scheduled Payment Date shall not be less than the
amount that is necessary to reduce the outstanding principal amount of the Class
A-2 Notes to zero; (iii), the Principal Distribution

                                       17
<PAGE>

Amount on the Class A-3 Final Scheduled Payment Date shall not be less than the
amount that is necessary to reduce the outstanding principal amount of the Class
A-3 Notes to zero; and (iv) the Principal Distribution Amount on the Class A-4
Final Scheduled Payment Date shall not be less than the amount that is necessary
to reduce the outstanding principal amount of the Class A-4 Notes to zero.

                  "RATING AGENCY" means either or each of Moody's and Standard &
Poor's, as indicated by the context.

                  "REBATE" means, with respect to a Precomputed Receivable and
any date, the rebate, calculated on an actuarial basis, under such Precomputed
Receivable that is or would be payable to the related Obligor for unearned
finance charges or any other charges subject to rebate if such Obligor were to
prepay such Receivable in full on such date.

                  "RECEIVABLE" means any retail installment sale contract
executed by an Obligor in respect of a Financed Vehicle, and all proceeds
thereof and payments thereunder, which Receivable shall be identified in the
Schedule of Receivables.

                  "RECEIVABLE FILE" means the documents specified in Section
2.02 pertaining to a particular Receivable.

                  "RECEIVABLES PURCHASE AGREEMENT" means that certain
Receivables Purchase Agreement, dated as of April 1, 2001, between the Seller
and TMCC.

                  "RECORD DATE" means, with respect to the Notes of any Class
and each Payment Date, the calendar day immediately preceding such Payment Date
or, if Definitive Notes representing any Class of Notes have been issued, the
last day of the month immediately preceding the month in which such Payment Date
occurs. Any amount stated "as of a Record Date" or "on a Record Date" shall give
effect to (i) all applications of collections, and (ii) all payments and
distributions to any party under this Agreement, the Indenture and the Trust
Agreement or to the related Obligor, as the case may be, in each case as
determined as of the opening of business on the related Record Date.

                  "RECOVERIES" means, with respect to any Receivable that
becomes a Liquidated Receivable, monies collected in respect thereof, from
whatever source, during any Collection Period following the Collection Period in
which such Receivable became a Liquidated Receivable, net of the sum of any
amounts expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.

                  "RELEASED ADMINISTRATIVE AMOUNT" means, with respect to a
Payment Date and to an Administrative Receivable, the Deferred Prepayment, if
any, for such Administrative Receivable.

                                       18
<PAGE>

                  "RELEASED WARRANTY AMOUNT" means, with respect to a Payment
Date and to a Warranty Receivable, the Deferred Prepayment, if any, for such
Warranty Receivable.

                  "RELEVANT TRUSTEE" means (i) with respect to the control over
or appropriate designation denoting ownership or control over any property
comprising a portion of the Owner Trust Estate (as defined in the Trust
Agreement) that either is not conveyed or pledged to the Indenture Trustee for
the benefit of the Noteholders and Certificateholder pursuant to the Granting
Clause of the Indenture or that has been released from the lien of the
Indenture, the Owner Trustee, and (ii) with respect to any property comprising a
portion of the Trust Estate (as defined in the Indenture) that has not been
released from the lien of the Indenture, the Indenture Trustee; PROVIDED,
HOWEVER, that with respect to any property that is under the joint or separate
control of a co-trustee or separate trustee under the Trust Agreement or the
Indenture, respectively, "Relevant Trustee" shall refer to either or both of the
Owner Trustee and such co-trustee or separate trustee or to either or both of
the Indenture Trustee and such co-trustee or separate trustee, as the case may
be.

                  "RESERVE ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 5.07.

                  "RESERVE ACCOUNT INITIAL DEPOSIT" means $3,744,458.

                  "RULE OF 78s RECEIVABLE" means any Receivable which provides
for the allocation of payments according to the "sum of periodic balances" or
"sum of monthly payments" method.

                  "SCHEDULE OF RECEIVABLES" means the schedule of receivables
attached as Schedule A to this Agreement, as it may be amended from time to
time.

                  "SCHEDULED PAYMENT" means, with respect to any Payment Date
and to a Receivable, the payment set forth in such Receivable as due from the
Obligor in the related Collection Period; provided, however, that in the case of
the first Collection Period, the Scheduled Payment shall include all such
payments due from the Obligor on or after the Cutoff Date.

                  "SECURITIES ACCOUNT CONTROL AGREEMENT" means the Securities
Account Control Agreement dated April 1, 2001, among the Seller, Wells Fargo
Bank Minnesota, National Association, as Securities Intermediary thereunder, and
Wells Fargo Bank Minnesota, National Association, as Indenture Trustee, pursuant
to which the Reserve Fund will be established and maintained.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended.

                  "SECURITYHOLDER" see the definition of "Holder."

                  "SELLER" means TAFR LLC, and its successors in interest to the
extent permitted hereunder.

                  "SERVICER" means TMCC, as the servicer of the Receivables, and
each successor to TMCC (in the same capacity) pursuant to Section 7.03 or 8.02.

                                       19
<PAGE>

                  "SERVICER'S CERTIFICATE" means an Officer's Certificate of the
Servicer delivered pursuant to Section 4.10, substantially in the form attached
hereto as Exhibit A.

                  "SERVICER DEFAULT" means an event specified in Section 8.01.

                  "SERVICING FEE RATE" means 1.00% per annum.

                  "SIMPLE INTEREST ADVANCE" means an advance in respect of
interest on any Simple Interest Receivable in the amount determined as set forth
in Section 5.04(a).

                  "SIMPLE INTEREST METHOD" means the method of allocating a
fixed level payment to principal and interest, pursuant to which the portion of
such payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid principal balance multiplied by the
period of time elapsed since the preceding payment of interest was made and the
remainder of such payment is allocable to principal.

                  "SIMPLE INTEREST RECEIVABLE" means any Receivable which
provides for the allocation of payments according to the simple interest method.

                  "SPECIFIED RESERVE ACCOUNT BALANCE" means with respect to any
Payment Date, an amount equal to the greater of 0.75% of the outstanding
Principal Balance of the Receivables as of the end of the related Collection
Period or (b) $7,488,915 (0.50% of the outstanding Principal Balance of the
Receivables as of the Cutoff Date); provided however, that if, on any Payment
Date (x) the average of the Charge-off Rates for the three preceding Collection
Periods exceeds 1.25% or (y) the average of the Delinquency Percentages for the
three preceding Collection Periods exceeds 1.25%, the Specified Reserve Account
Balance will be the greatest of (a) 0.75% of the outstanding Principal Balance
of the Receivables as of the end of the related Collection Period (b) $7,488,915
(0.50% of the outstanding principal balance of the Receivables as of the Cutoff
Date) and (c) 5.50% of the Class A Note Balance as of such Payment Date (after
giving effect to any principal payments made on the Notes on such Payment Date);
provided further, that the Specified Reserve Balance with respect to any date
shall not exceed the sum of the Class A Note Balance as of the preceding Payment
Date (after giving effect to any principal payments made on the Notes on such
preceding Payment Date).

                  "STANDARD & POOR'S" means Standard & Poor's Ratings Services,
a Division of the McGraw-Hill Companies, and its successors.

                  "SUCCESSOR SERVICER" means any entity appointed as a successor
to the Servicer pursuant to Section 8.02.

                  "SUPPLEMENTAL SERVICING FEE" means, with respect to any
Payment Date, all late fees, prepayment charges, extension fees and other
administrative fees and expenses or similar charges allowed by applicable law
with respect to the Receivables received by the Servicer during the related
Collection Period.

                  "SWAP COUNTERPARTY" shall mean Toyota Motor Credit
Corporation, as swap counterparty under the Interest Rate Swap Agreement, or any
successor or replacement swap counterparty from time to time under the Interest
Rate Swap Agreement.

                                       20
<PAGE>

                  "SWAP EVENT OF DEFAULT" means (i) the failure of the Issuer or
the Swap Counterparty to pay any amount when due under the Interest Rate Swap
Agreement after giving effect to any applicable grace period; (ii) the
occurrence of certain events of insolvency or bankruptcy of the Issuer or the
Swap Counterparty as specified in the Interest Rate Swap Agreement and (iii)
certain other standard events of default under the 1992 ISDA Master Agreement as
specified in the Interest Rate Swap Agreement including "Breach of Agreement"
(not applicable to the Issuer), "Misrepresentation" (not applicable to the
Issuer) and "Merger without Assumption," as described in Sections 5(a)(ii),
5(a)(iv) and 5(a)(viii) of the 1992 ISDA Master Agreement.

                  "SWAP PAYMENTS INCOMING" means on any Payment Date the net
amount, if any, then payable by a Swap Counterparty to the Issuer, excluding any
Swap Termination Payments.

                  "SWAP PAYMENTS OUTGOING" means on any Payment Date the net
amount, if any, then payable by the Issuer to the Swap Counterparty, excluding
any Swap Termination Payments.

                  "SWAP TERMINATION EVENT" means (i) certain events of
insolvency of bankruptcy of the Issuer or the Swap Counterparty as specified in
the Interest Rate Swap Agreement; (ii) any Event of Default under the Indenture
that results in the acceleration of the Notes or involving an uncured payment
default; (iii) the Issuer or Swap Counterparty becomes subject to registration
as an "investment company" under the Investment Company Act of 1940; and (iv)
certain standard termination events under the 1992 ISDA Master Agreement as
specified in the Interest Rate Swap Agreement including "Illegality," "Tax
Event" and "Tax Event Upon Merger," each as more fully described in Sections
5(b)(i), 5(b)(ii) and 5(b)(iii) of the 1992 ISDA Master Agreement.

                   "SWAP TERMINATION PAYMENT" means any termination payment
payable by the Issuer to the Swap Counterparty or by the Swap Counterparty to
the Issuer under the Interest Rate Swap Agreement.

                  "TAFR LLC" means Toyota Auto Finance Receivables LLC, a
Delaware limited liability company, or its successors.

                   "TMCC" means Toyota Motor Credit Corporation, a California
corporation, and its successors and assigns.

                  "TOTAL SERVICING FEE" means the sum of the Basic Servicing Fee
and the Supplemental Servicing Fee.

                  "TRUST" means the Issuer.

                  "TRUST AGREEMENT" means the Amended and Restated Trust
Agreement, dated as of April 1, 2001, by and among the Seller and the Owner
Trustee.

                  "TRUST ESTATE" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of this Indenture for the benefit of the Noteholders (including,
without limitation, all property and interests granted to the

                                       21
<PAGE>

Indenture Trustee pursuant to the granting clause of the Indenture), including
all proceeds thereof.

                  "TRUST OFFICER" means, in the case of the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.

                  "UCC" means the Uniform Commercial Code as in effect in the
relevant jurisdiction.

                  "UNITED STATES" means the United States of America.

                  "WARRANTY PURCHASE PAYMENT" means, with respect to a Payment
Date and to (1) a Warranty Receivable which is a Precomputed Receivable
repurchased by the Seller as of the close of business on the last day of the
related Collection Period, (a) the sum of (i) all Scheduled Payments on such
Receivable due after the last day of such Collection Period, (ii) all past due
Scheduled Payments for which an Advance has not been made, (iii) an amount equal
to any reimbursement of Outstanding Advances made pursuant to Section 5.04(b)
with respect to such Receivable and (iv) an amount equal to all other
Outstanding Advances made pursuant to Section 5.04(c) with respect to such
Receivable, minus (b) the sum of (i) the Rebate, if any, paid to the Obligor on
a Precomputed Receivable on or before the date of such purchase (except to the
extent specified in Section 4.03) and (ii) any other proceeds in respect of such
Receivable received during any Collection Period prior to or during such
Collection Period (to the extent applied to reduce the Principal Balance of such
Receivable on such Payment Date), and (2) a Warranty Receivable which is a
Simple Interest Receivable repurchased by the Seller as of the close of business
on the last day of the related Collection Period, the sum of (a) the unpaid
principal balance owed by the Obligor in respect of such Receivable plus (b)
interest on such unpaid principal balance at a rate equal to the related APR to
the last day in the related Collection Period.

                  "WARRANTY RECEIVABLE" means a Receivable which the Seller is
required to repurchase pursuant to Section 4.08.

         SECTION 1.02 USAGE OF TERMS. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."

                                       22
<PAGE>

                                   ARTICLE II

                            CONVEYANCE OF RECEIVABLES

SECTION 2.01 CONVEYANCE OF RECEIVABLES. (a) Upon the execution of this Agreement
by the parties hereto, the Seller, pursuant to the mutually agreed upon terms
contained in this Agreement, shall sell, transfer, assign and otherwise convey
to the Owner Trustee on behalf of the Issuer, without recourse (but subject to
the Seller's obligations in this Agreement), all of its right, title and
interest in and to the Receivables and any proceeds related thereto, including
any Dealer Recourse and such other items as shall be specified in this
Agreement. Concurrently therewith and in exchange therefor, the Issuer shall
deliver to, or to the order of, the Seller the Notes and the Certificate.

         (b) In consideration of the foregoing and other good and valuable
consideration to be delivered to the Seller hereunder, on behalf of the Issuer,
the Seller does hereby sell, transfer, assign and otherwise convey to the Owner
Trustee on behalf of the Issuer, in trust for the benefit of the
Certificateholder, without recourse (subject to the Seller's obligations
herein):

                  (i)      all right, title and interest of the Seller in and to
         the Receivables and all monies due thereon or paid thereunder or in
         respect thereof (including proceeds of the repurchase of Receivables by
         the Seller pursuant to Section 3.02 or the purchase of Receivables by
         the Servicer pursuant to Section 4.08 or 9.01) on or after the Cutoff
         Date;

                  (ii)     the interest of the Seller in the security interests
         in the Financed Vehicles granted by the Obligors pursuant to the
         Receivables and any accessions thereto;

                  (iii)    the interest of the Seller in any proceeds of any
         physical damage insurance policies covering Financed Vehicles and in
         any proceeds of any credit life or credit disability insurance policies
         relating to the Receivables or the Obligors;

                  (iv)     the interest of the Seller in any Dealer Recourse;

                  (v)      the right of the Seller to realize upon any property
         (including the right to receive future Liquidation Proceeds) that shall
         have secured a Receivable and have been repossessed pursuant to the
         terms thereof;

                  (vi)     the rights and interests of the Seller under the
         Receivables Purchase Agreement;

                  (vii)    all other assets comprising the Owner Trust Estate;
         and

                  (viii)   all proceeds of the foregoing.

         (c)      It is the intention of the Seller that the transfer and
assignment contemplated by this Agreement shall constitute a sale of the
Receivables from the Seller to the Issuer and the beneficial interest in and
title to the Receivables shall not be part of the Seller's estate in the event
of the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. The Seller agrees to execute and file all filings (including
filings under the UCC) necessary in

                                       23
<PAGE>

any jurisdiction to provide third parties with notice of the sale of the
Receivables pursuant to this Agreement and to perfect such sale under the UCC.

         (d)      Although the parties hereto intend that the transfer and
assignment contemplated by this Agreement be a sale, in the event such transfer
and assignment is deemed to be other than a sale, the parties intend that all
filings described in the foregoing paragraph shall give the Owner Trustee on
behalf of the Issuer a first priority perfected security interest in, to and
under the Receivables, and other property conveyed hereunder and all proceeds of
any of the foregoing. This Agreement shall be deemed to be the grant of a
security interest from the Seller to the Owner Trustee on behalf of the Issuer,
and the Owner Trustee on behalf of the Issuer shall have all the rights, powers
and privileges of a secured party under the UCC.

         (e)      In connection with the foregoing conveyance, the Servicer
shall maintain its computer system so that, from and after the time of sale of
the Receivables to the Owner Trustee on behalf of the Issuer under this
Agreement, the Servicer's master computer records (including any back-up
archives) that refer to any Receivable indicate clearly the interest of the
Issuer in such Receivable and that the Receivable is owned by the Issuer and
controlled by the Owner Trustee on behalf of the Issuer. Indication of the
Issuer's ownership of a Receivable shall be deleted from or modified on the
Servicer's computer systems when, and only when, the Receivable has been paid in
full, repurchased or assigned pursuant to this Agreement.

         (f)      Ownership and control of the Receivables, as between the
Issuer, the Owner Trustee and the Indenture Trustee (on behalf of the
Noteholders and Certificateholder) shall be governed by the Indenture.

         SECTION 2.02 CUSTODY OF RECEIVABLES FILES. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Owner Trustee
on behalf of the Issuer, upon the execution and delivery of this Agreement,
appoints the Servicer, and the Servicer accepts such appointment, to act as the
agent of the Issuer as custodian of the following documents or instruments (the
parties hereto expressly acknowledging and agreeing that the Servicer may
appoint a third party to act as the agent of the Servicer to maintain possession
of such documents or instruments as contemplated by Sections 3.01(v) and 3.03(b)
of this Agreement) which are hereby constructively delivered to the Owner
Trustee with respect to each Receivable:

                  (a)      the fully executed original of the Receivable;

                  (b)      documents evidencing or related to any Insurance
         Policy;

                  (c)      the original credit application of each Obligor,
         fully executed by such Obligor on TMCC's customary form, or on a form
         approved by TMCC, for such application;

                  (d)      the original certificate of title (or evidence that
         such certificate of title has been applied for) or such documents that
         the Servicer shall keep on file, in accordance with TMCC's customary
         procedures, evidencing the security interest in the related Financed
         Vehicle; and

                                       24
<PAGE>

                  (e)      any and all other documents that the Seller or the
         Servicer, as the case may be, shall keep on file, in accordance with
         its customary procedures, relating to such Receivable or the related
         Obligor or Financed Vehicle.

         SECTION 2.03 ACCEPTANCE BY OWNER TRUSTEE. The Owner Trustee hereby
acknowledges its acceptance, on behalf of the Issuer, pursuant to this
Agreement, of all right, title and interest in and to the Receivables conveyed
by the Seller pursuant to this Agreement and declares and shall declare from and
after the date hereof that the Owner Trustee holds and shall hold such right,
title and interest, upon the terms and conditions set forth in this Agreement.

                                  ARTICLE III

                                 THE RECEIVABLES

         SECTION 3.01 REPRESENTATIONS AND WARRANTIES OF THE SELLER WITH RESPECT
TO THE RECEIVABLES. The Seller makes the following representations and
warranties as to the Receivables on which the Issuer is deemed to have relied in
acquiring the Receivables. Such representations and warranties speak as of the
execution and delivery of this Agreement and as of the Closing Date, but shall
survive the sale, transfer and assignment of the Receivables to the Issuer, and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.

                  (a)      CHARACTERISTICS OF RECEIVABLES. Each Receivable (i)
         shall have been 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, shall have been fully and properly executed by
         the parties thereto, shall have been purchased by TMCC from such Dealer
         under an existing agreement with TMCC and shall have been validly
         assigned by such Dealer to TMCC in accordance with the terms of such
         agreement and shall have been subsequently sold by TMCC to the Seller
         pursuant to the Receivables Purchase Agreement, (ii) shall have created
         or shall create a valid, subsisting and enforceable first priority
         security interest in favor of TMCC in the related Financed Vehicle,
         which security interest has been assigned by TMCC to the Seller and
         shall be assignable, and shall be so assigned, by the Seller to the
         Owner Trustee on behalf of the Issuer hereby, (iii) shall, except as
         otherwise provided in this Agreement, provide for 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 Rule of 78s, the simple
         interest method or the actuarial method, (iv) shall contain customary
         and enforceable provisions, such that the rights and remedies of the
         holder thereof shall be adequate for realization against the collateral
         of the benefits of the security and (v) shall provide for, in the event
         that such Receivable is prepaid, a prepayment that fully pays the
         Principal Balance and includes accrued but unpaid interest.

                  (b)      SCHEDULE OF RECEIVABLES. The information set forth in
         the Schedule of Receivables shall be true and correct in all material
         respects as of the opening of business on the Cutoff Date, and no
         selection procedures adverse to the Securityholders shall have been
         utilized in selecting the Receivables from those automobile and light
         duty truck

                                       25
<PAGE>

         receivables of TMCC which met the selection criteria set forth in this
         Section and this Agreement.

                  (c)      COMPLIANCE WITH LAW. To the knowledge of the Seller,
         each Receivable and each sale of the related Financed Vehicle shall
         have complied at the time it was originated or made, and shall comply
         at the time of execution of this Agreement, in all material respects
         with all requirements of applicable federal, state and local laws, and
         regulations thereunder, including usury laws, the Federal
         Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
         Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
         Practices Act, the Federal Trade Commission Act, the Magnuson-Moss
         Warranty Act, Federal Reserve Board Regulations B, M and Z (to the
         extent applicable), state adaptations of the National Consumer Act and
         of the Uniform Consumer Credit Code and other consumer credit, equal
         credit opportunity and disclosure laws, except with respect to
         applicable Florida documentary stamp taxes as to which the effect of
         noncompliance will not have a material adverse effect on such
         Receivable.

                  (d)      BINDING OBLIGATION. Each Receivable shall constitute
         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, regardless of whether such enforceability shall
         be considered in a proceeding in equity or at law.

                  (e)      NO BANKRUPT OBLIGORS. None of the Receivables shall
         be due, to the best knowledge of the Seller, from any Obligor who is
         presently the subject of a bankruptcy proceeding or is bankrupt or is
         insolvent.

                  (f)      NO GOVERNMENT OBLIGORS. None of the Receivables shall
         be due from the United States or any state, or from any agency,
         department or instrumentality of the United States or any state or
         local government.

                  (g)      EMPLOYEE OBLIGORS. None of the Receivables shall be
         due from any employee of the Seller, TMCC or any of their respective
         Affiliates.

                  (h)      SECURITY INTEREST IN FINANCED VEHICLES. Immediately
         prior to the sale, assignment and transfer thereof, each Receivable
         shall be secured by a validly perfected first priority security
         interest in the related Financed Vehicle in favor of TMCC as secured
         party or all necessary and appropriate action with respect to such
         Receivable shall have been taken to perfect a first priority security
         interest in such Financed Vehicle in favor of TMCC as secured party.

                  (i)      RECEIVABLES IN FORCE. No Receivable shall have been
         satisfied, subordinated or rescinded, nor shall any Financed Vehicle
         have been released in whole or in part from the lien granted by the
         related Receivable.

                  (j)      NO WAIVERS. No provision of a Receivable shall have
         been waived in such a manner that such Receivable fails to meet all of
         the other representations and warranties made by the Seller herein with
         respect thereto.

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<PAGE>

                  (k)      NO AMENDMENTS. No Receivable shall have been amended
         or modified in such a manner that the total number of Scheduled
         Payments has been increased or that the related Amount Financed has
         been increased or that such Receivable fails to meet all of the other
         representations and warranties made by the Seller herein with respect
         thereto.

                  (l)      NO DEFENSES. No facts shall be known to the Seller
         which would give rise to any right of rescission, setoff, counterclaim
         or defense, nor shall the same have been asserted or threatened, with
         respect to any Receivable.

                  (m)      NO LIENS. To the knowledge of the Seller, no liens or
         claims shall have been filed as of the date of this Agreement,
         including liens for work, labor or materials relating to a Financed
         Vehicle, that shall be liens prior to, or equal or coordinate with, the
         security interest in such Financed Vehicle granted by the related
         Receivable, which Liens shall not have been released or satisfied as of
         the Closing Date.

                  (n)      NO DEFAULT; NO REPOSSESSION. Except for payment
         defaults that, as of the Cutoff Date, have been continuing for a period
         of not more than 30 days, no default, breach, violation or event
         permitting acceleration under the terms of any Receivable shall have
         occurred as of the Cutoff Date; no continuing condition that with
         notice or the lapse of time would constitute a default, breach,
         violation or event permitting acceleration under the terms of any
         Receivable shall have arisen; the Seller shall not have waived any of
         the foregoing; and no Financed Vehicle has been repossessed without
         reinstatement as of the Cutoff Date.

                  (o)      INSURANCE. The terms of each Receivable require the
         Obligor to obtain and maintain physical damage insurance covering the
         related Financed Vehicle in accordance with TMCC's normal requirements.
         The terms of each Receivable allow, but do not require TMCC to (and
         TMCC, in accordance with its current normal servicing procedures, does
         not) obtain any such coverage on behalf of the Obligor.

                  (p)      GOOD TITLE. It is the intention of the Seller that
         the transfer and assignment herein contemplated, taken as a whole,
         constitute a sale of the Receivables from the Seller to the Issuer and
         that the beneficial interest in and title to the Receivables not be
         part of the debtor's estate in the event of the filing of a bankruptcy
         petition by or against the Seller under any bankruptcy law. No
         Receivable has been sold, transferred, assigned or pledged by the
         Seller to any Person other than the Issuer, and no provision of a
         Receivable shall have been waived, except for a waiver that would not
         violate clause (j) above; 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; immediately upon the transfer and assignment thereof, the
         Issuer shall have good and marketable title to each Receivable, free
         and clear of all Liens and rights of others; and the transfer and
         assignment herein contemplated has been perfected under the UCC.

                  (q)      LAWFUL ASSIGNMENT. No Receivable shall have been
         originated in, or shall be subject to the laws of, any jurisdiction
         under which the sale, transfer and assignment of such Receivable under
         this Agreement or pursuant to a transfer of the related certificate of
         title shall be unlawful, void or voidable.

                                       27
<PAGE>

                  (r)      ALL FILINGS MADE. As of the Closing Date, all filings
         (including UCC filings) necessary in any jurisdiction to provide third
         parties with notice of the transfer and assignment herein contemplated,
         to perfect the sale of the Receivables from the Seller to the Owner
         Trustee and to give the Owner Trustee on behalf of the Issuer a first
         priority perfected security interest in the Receivables shall have been
         made.

                  (s)      ONE ORIGINAL. There shall be only one original
         executed copy of each Receivable.

                  (t)      CHATTEL PAPER. Each Receivable constitutes "chattel
         paper" as defined in the UCC.

                  (i)      ADDITIONAL REPRESENTATIONS AND WARRANTIES. (i) Each
         Receivable shall have an original number of Scheduled Payments of not
         less than 12 nor more than 72 and, as of the Cutoff Date, a remaining
         number of Scheduled Payments of not less than 5 nor more than 72; (ii)
         each Receivable provides for the payment of a finance charge based on
         an APR ranging from 6% to 15%; (iii) each Receivable shall have had an
         original principal balance of not less than $811 and not more than
         $80,617 and, as of the Cutoff Date, an unpaid principal balance of not
         less than $401 nor more than $49,988; (iv) no Receivable was originated
         under a special financing program; (v) no Receivable shall have a
         Scheduled Payment that is more than 30 days past due as of the Cutoff
         Date; (vi) no Financed Vehicle was subject to force-placed insurance as
         of the Cutoff Date; (vii) there is no Receivable as to which payments
         ahead of more than 6 Scheduled Payments have been received from or on
         behalf of the related Obligor; and (viii) each Receivable is being
         serviced by Toyota Motor Credit Corporation.

                  (u)      LOCATION OF RECEIVABLE FILES. Each Receivable File
         shall be kept at one of the locations listed in the Schedule of
         Receivables or at such other office as shall be specified to the Owner
         Trustee and the Indenture Trustee as provided in Section 3.03(b).

         SECTION 3.02 REPURCHASE UPON BREACH. The Seller, the Servicer or the
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery of
any breach of the Seller's representations and warranties made pursuant to
Section 3.01 or 6.01 that materially and adversely affects the interests of the
Issuer in any Receivable. As of the last day of the second Collection Period
following the Collection Period in which it discovers or receives notice of such
breach (or, at the Seller's election, the last day of the first Collection
Period following the Collection Period in which it discovers or receives notice
of such breach), the Seller shall, unless such breach shall have been cured in
all material respects, repurchase such Receivable and, if necessary, the Seller
shall enforce the obligation of TMCC under the Receivables Purchase Agreement to
repurchase such Receivable from the Seller. Notwithstanding the foregoing, the
obligation of the Seller to repurchase a Receivable shall not be conditioned on
the performance by TMCC of its obligation to repurchase such Receivable from the
Seller pursuant to the Receivables Purchase Agreement. This repurchase
obligation shall obtain for all representations and warranties of the Seller
contained in this Agreement whether or not the Seller has knowledge of the
breach at the time of the breach or at the time the representations and
warranties were made. In consideration of the repurchase of any such Receivable,
on the Business Day immediately preceding the related

                                       28
<PAGE>

Payment Date, the Seller shall remit the Warranty Purchase Payment of such
Receivable to the Collection Account in the manner specified in Section 5.05 and
shall be entitled to receive the Released Warranty Amount. The sole remedy of
the Owner Trustee, the Issuer, the Indenture Trustee (by operation of the
assignment of the Owner Trustee's rights hereunder pursuant to the Indenture) or
any Securityholder with respect to a breach of the Seller's representations and
warranties pursuant to this Agreement shall be to require the Seller to
repurchase the related Receivable pursuant to this Section and to enforce TMCC's
obligation to the Seller to repurchase such Receivables pursuant to the
Receivables Purchase Agreement. The Owner Trustee shall have no duty to conduct
any affirmative investigation as to the occurrence of any condition requiring
the repurchase of any Receivable pursuant to this Section. In connection with
such repurchase, the Owner Trustee and Indenture Trustee shall take all steps
necessary to effect a transfer of such Receivable as set forth in Section
9.01(d).

         SECTION 3.03 DUTIES OF SERVICER AS CUSTODIAN.

         (a)      SAFEKEEPING. The Servicer shall hold the Receivable Files as
custodian for the benefit of the Issuer and maintain such accurate and complete
accounts, records and computer systems pertaining to each Receivable File as
shall enable the Issuer to comply with this Agreement. In performing its duties
as custodian the Servicer shall act with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to the receivable
files relating to comparable automotive receivables that the Servicer services
for itself or others. The Servicer shall promptly report to the Issuer and the
Indenture Trustee any failure on its part to hold the Receivable Files and
maintain its accounts, records and computer systems as herein provided and shall
promptly take appropriate action to remedy any such failure. Nothing herein
shall be deemed to require an initial review or any periodic review by the
Issuer, the Owner Trustee or the Indenture Trustee of the Receivable Files.

         (b)      MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B or
at such other office of the Servicer or a third party agent retained by the
Servicer as shall be specified to the Issuer and the Indenture Trustee by
written notice not later than 90 days after any change in location. The Servicer
shall make available to the Issuer, the Swap Counterparty and the Indenture
Trustee or their respective duly authorized representatives, attorneys or
auditors a list of locations of the Receivable Files and the related accounts,
records and computer systems maintained by the Servicer at such times during
normal business hours as the Issuer or the Indenture Trustee shall instruct with
reasonable advance notice.

         (c)      RELEASE OF DOCUMENTS. Upon instruction from the Indenture
Trustee, the Servicer shall release any Receivable File to the Indenture
Trustee, the Indenture Trustee's agent or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may designate,
as soon as practicable.

         SECTION 3.04 INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Trust Officer of the Owner
Trustee or the Indenture Trustee. A certified copy of a bylaw or of a resolution
of the board of directors of the Owner Trustee or of the Indenture Trustee shall
constitute conclusive evidence of the authority of such Trust Officer to

                                       29
<PAGE>

act, and shall be considered conclusive evidence of the authority of such Trust
Officer to act until receipt by the Servicer of written notice to the contrary
given by the Owner Trustee or Indenture Trustee, as the case may be.

         SECTION 3.05 CUSTODIAN'S INDEMNIFICATION. The Servicer as custodian
shall indemnify the Issuer, the Owner Trustee and the Indenture Trustee and each
of their respective officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or asserted
against any of them as the result of any improper act or omission in any way
relating to the maintenance and custody by the Servicer as custodian of the
Receivable Files; PROVIDED, HOWEVER, that the Servicer shall not be liable to
the Owner Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Owner Trustee or Indenture Trustee
and the Servicer shall not be liable to the Indenture Trustee for any portion of
any such amount resulting from the willful misfeasance, bad faith or negligence
of the Indenture Trustee or Owner Trustee.

         SECTION 3.06 EFFECTIVE PERIOD AND TERMINATION. The Servicer's
appointment as custodian shall become effective as of the date hereof, and shall
continue in full force and effect until terminated pursuant to this Section. If
TMCC shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 8.01, the appointment of TMCC (as Servicer) as
custodian shall be terminated hereunder without further action by the Indenture
Trustee, Owner Trustee, Noteholders or the Certificateholder. The Indenture
Trustee or, with the consent of the Indenture Trustee, the Owner Trustee may
terminate the Servicer's appointment as custodian, with cause, at any time upon
written notification to the Servicer, and without cause upon 30 days' prior
written notification to the Servicer. The Owner Trustee, Indenture Trustee or
Noteholders may terminate the Servicer as custodian hereunder in the same manner
as the Owner Trustee, Indenture Trustee or Noteholders may terminate the rights
and obligations of the Servicer under Section 8.01. As soon as practicable after
any termination of such appointment, the Servicer shall deliver the Receivable
Files to the Relevant Trustee or the agent thereof at such place or places as
the Relevant Trustee may reasonably designate.

                                   ARTICLE IV

                   ADMINISTRATION AND SERVICING OF RECEIVABLES

         SECTION 4.01 DUTIES OF SERVICER. The Servicer, for the benefit of the
Issuer and the Securityholders (to the extent provided herein), shall manage,
service, administer and make collections on the Receivables with reasonable
care, using that degree of skill and attention that the Servicer exercises with
respect to comparable automotive receivables that it services for itself or
others. The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of Obligors or by federal, state or local
government authorities with respect to the Receivables, investigating
delinquencies, sending payment information to Obligors, reporting tax
information to Obligors in accordance with its customary practices, accounting
for collections, furnishing monthly and annual statements to the Owner Trustee
and the Indenture Trustee with respect to payments and distributions and making
Advances and performing the other duties

                                       30
<PAGE>

specified herein. The Servicer shall follow its customary standards, policies
and procedures as in effect from time to time and shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable. Nothing in the foregoing or in any other section of this Agreement
shall be construed to prevent the Servicer from implementing new programs,
whether on an intermediate, pilot or permanent basis, or on a regional or
nationwide basis, or from modifying its standards, policies and procedures as
long as, in each case, the Servicer does or would implement such programs or
modify its standards, policies and procedures in respect of comparable assets
serviced for itself in the ordinary course of business.

         Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Securityholders or any of
them, any and all instruments of satisfaction or cancellation, or partial or
full release or discharge, and all other comparable instruments, with respect to
such Receivables and the Financed Vehicles. The Servicer is hereby authorized to
communicate with Obligors in the ordinary course of its servicing of the
Receivables and Financed Vehicles in its own name. The Servicer is hereby
authorized to commence, in its own name or in the name of the Issuer, a legal
proceeding to enforce a Defaulted Receivable or to commence or participate in a
legal proceeding (including without limitation a bankruptcy proceeding) relating
to or involving a Receivable, including a Defaulted Receivable. If the Servicer
shall commence or participate in a legal proceeding to enforce a Receivable, the
Issuer shall thereupon be deemed to have automatically assigned to the Servicer,
solely for the purpose of collection on behalf of the party retaining an
interest in such Receivable, such Receivable and the other property conveyed to
the Issuer hereby with respect to such Receivable for purposes of commencing or
participating in any such proceeding as a party or claimant, and the Servicer is
authorized and empowered by the Owner Trustee to execute and deliver in the
Servicer's name any notices, demands, claims, complaints, responses, affidavits
or other documents or instruments in connection with any such proceeding. If in
any enforcement suit or legal proceeding it shall be held that the Servicer may
not enforce a Receivable on the ground that it shall not be a real party in
interest or a holder entitled to enforce such Receivable, the Owner Trustee on
behalf of the Issuer shall, at the Servicer's expense and direction, take steps
to enforce such Receivable, including bringing suit in its name or the name of
the Owner Trustee, the Indenture Trustee, the Certificateholder and/or the
Noteholders. The Owner Trustee shall furnish the Servicer with any powers of
attorney and other documents and take any other steps which the Servicer may
deem necessary or appropriate to enable the Servicer to carry out its servicing
and administrative duties under this Agreement.

         SECTION 4.02 COLLECTION AND ALLOCATION OF RECEIVABLE PAYMENTS. The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables as and when the same shall become
due and shall follow such customary collection procedures as it follows with
respect to comparable automotive receivables that it services for itself or
others. The Servicer shall be authorized to grant extensions, rebates or
adjustments on a Receivable in accordance with the customary servicing standards
of the Servicer without the prior consent of the Owner Trustee, Indenture
Trustee or any Securityholder; provided, however, that if, as a result of any
change in the related APR or the Amount Financed, any increase in the total
number of Scheduled Payments or any extension of payments such that the
Receivable will be outstanding later than the Class A-4 Final Scheduled Payment
Date, the amount of any

                                       31
<PAGE>

Scheduled Payment due in a subsequent Collection Period is reduced, the Servicer
shall be obligated to either repurchase such Receivable pursuant to Section 4.08
or to make an Advance in respect of such Receivable in each subsequent
Collection Period equal to the amount by which such Scheduled Payment has been
reduced. In addition, in the event that any such rescheduling or extension of a
Receivable modifies the terms of such Receivable in such a manner as to release
the security interest in the related Financed Vehicle or constitute a
cancellation of such Receivable and the creation of a new automobile or light
duty truck receivable, the Servicer shall purchase such Receivable pursuant to
Section 4.08, and the receivable created shall not be included as an asset of
the Issuer. The Servicer may, in accordance with its customary servicing
procedures, waive any prepayment charge, late payment charge or any other fees
that may be collected in the ordinary course of servicing the Receivables.

         SECTION 4.03 REBATES ON FULL PREPAYMENTS. In the event that the amount
of a full Prepayment by an Obligor under a Precomputed Receivable, after
adjustment for the applicable Rebate, is less than the amount that would be
payable under the actuarial method if a full Prepayment were made at the end of
the billing month under such Precomputed Receivable, either because the Rebate
calculated under the terms of such Precomputed Receivable is greater than the
amount calculable under the actuarial method or because the Servicer's customary
servicing procedure is to credit a greater Rebate, the Servicer, as part of its
servicing duties, shall remit such difference by deposit into the Collection
Account pursuant to Section 5.05.

         SECTION 4.04 REALIZATION UPON RECEIVABLES. On behalf of the Issuer, the
Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise comparably convert the ownership of any
Financed Vehicle that it has reasonably determined should be repossessed or
otherwise converted following a default under the Receivable secured by the
Financed Vehicle (and shall specify such Receivables to the Relevant Trustee no
later than the Determination Date following the end of the Collection Period in
which the Servicer shall have made such determination). The Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be customary and usual in its servicing of automobile and light duty
truck receivables, which practices and procedures may include reasonable efforts
to realize upon any Dealer Recourse, selling the related Financed Vehicle at
public or private sale and other actions to realize upon such a Receivable. The
Servicer shall be entitled to recover its Liquidation Expenses with respect to
each Defaulted Receivable. All Net Liquidation Proceeds realized in connection
with any such action with respect to a Receivable shall be deposited by the
Servicer in the Collection Account in the manner specified in Section 5.02. The
foregoing is subject to the proviso that, in any case in which the Financed
Vehicle shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the repossession of such Financed Vehicle
unless it shall determine in its discretion that such repair and/or repossession
shall increase the Liquidation Proceeds of the related Receivable by an amount
greater than the amount of such expenses.

         SECTION 4.05 PHYSICAL DAMAGE INSURANCE. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have delivered proof that it has obtained physical damage insurance
covering the related Financed Vehicle at the date of origination of the related
Receivable, but shall not obtain any such coverage on behalf of any Obligor. The
Servicer shall be required to monitor the maintenance by any Obligor of such

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<PAGE>

insurance only to the same extent, if any, that the Servicer monitors such
maintenance by obligors with respect to retail automobile sales contracts that
are held for the account of TMCC.

         SECTION 4.06 MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.
The Servicer shall, in accordance with its customary servicing procedures and at
its own expense, take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle.
The Issuer hereby authorizes the Servicer to take such steps as are necessary to
again perfect such security interest on behalf of the Issuer and the Indenture
Trustee in the event of the relocation of a Financed Vehicle or for any other
reason. In the event that the assignment of a Receivable to the Issuer is
insufficient, without a notation on the related Financed Vehicle's certificate
of title, to grant to the Issuer a first priority perfected security interest in
the related Financed Vehicle, the Servicer hereby agrees to serve as the agent
of the Issuer for the purpose of perfecting the security interest of the Issuer
in such Financed Vehicle and agrees that the Servicer's listing as the secured
party on the certificate of title is in this capacity as agent of the Issuer.

         SECTION 4.07 COVENANTS OF SERVICER. The Servicer hereby makes the
following covenants to the Issuer on which the Issuer has relied in purchasing
the Receivables and issuing the Certificate, and on which the Indenture Trustee
will rely in undertaking the trusts set forth in the Indenture and issuing the
Notes.

                  (a)      LIENS IN FORCE. Except as contemplated by this
         Agreement, the Servicer shall not release in whole or in part any
         Financed Vehicle from the security interest securing the related
         Receivable.

                  (b)      NO IMPAIRMENT. The Servicer shall do nothing to
         impair the rights of the Securityholders in the Receivables.

                  (c)      NO AMENDMENTS. Except as provided in Section 4.02,
         the Servicer shall not amend or otherwise modify any Receivable such
         that the total number of Scheduled Payments, the Amount Financed or the
         APR is altered, or extend the maturity of such Receivable beyond the
         Class A-4 Final Scheduled Payment Date.

         SECTION 4.08 PURCHASE OF RECEIVABLES UPON BREACH. The Servicer shall
inform the Owner Trustee and Indenture Trustee promptly, in writing, upon the
actual knowledge of one of its officers of, and the Owner Trustee shall inform
the Servicer and the Indenture Trustee promptly, in writing, upon the actual
knowledge of one of its Trust Officers of, any breach pursuant to Section 4.06
or 4.07 that materially and adversely affects the interests of the Issuer in a
Receivable, or if an extension, rescheduling or modification of a Receivable is
made by the Servicer as described in Section 4.02 and the Servicer does not
elect to make Advances to cover resulting reductions in interest accruals as
provided in Section 4.02, the party discovering such event shall give prompt
written notice to the others. As of the last day of the second Collection Period
following the Collection Period in which it discovers or receives notice of such
event (or, at the Servicer's election, the last day of the first Collection
Period following the Collection Period in which it discovers or receives notice
of such breach), the Servicer shall, unless such event shall have been cured in
all material respects or such modification has been rescinded or the Servicer
has elected to and does make all required Advances, purchase from the Issuer
such

                                       33
<PAGE>

Receivable. In consideration of the purchase of any such Receivable, on the
Business Day immediately preceding the related Payment Date the Servicer shall
remit the Administrative Purchase Payment to the Collection Account in the
manner specified in Section 5.05, and shall be entitled to receive the Released
Administrative Amount. Upon such deposit of the Administrative Purchase Payment,
the Servicer shall for all purposes of this Agreement be deemed to have released
all claims for reimbursement of Outstanding Advances made in respect of such
Receivable. Except as otherwise provided in Section 7.02, the sole remedy of the
Owner Trustee, the Issuer, the Indenture Trustee or any Securityholders against
the Servicer with respect to a breach pursuant to Section 4.02, 4.06 or 4.07
shall be to require the Servicer to purchase the related Receivables pursuant to
this Section. The Owner Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Receivable pursuant to this Section. In connection with such repurchase, the
Owner Trustee and Indenture Trustee shall take all steps necessary to effect a
transfer of such Receivable to the Servicer as set forth in Section 9.01(d).

         SECTION 4.09 SERVICING FEE AND EXPENSES. As compensation for the
performance of its obligations hereunder, the Servicer shall be entitled to
receive on each Payment Date, out of Available Collections, the Total Servicing
Fee. The Basic Servicing Fee in respect of a Collection Period shall be
calculated based on a 360 day year comprised of twelve 30-day months. Except to
the extent otherwise provided herein, the Servicer shall be required to pay all
expenses incurred by it in connection with its activities under this Agreement
(including fees and disbursements of the Owner Trustee, the Indenture Trustee,
the Administrator and the independent accountants, taxes imposed on the
Servicer, expenses incurred by the Servicer in connection with its preparation
of reports hereunder and all other fees and expenses not expressly stated under
this Agreement to be for the account of the Certificateholder).

         SECTION 4.10 SERVICER'S CERTIFICATE. On or before each Determination
Date, the Servicer shall deliver to the Owner Trustee, each Paying Agent, the
Swap Counterparty (unless TMCC or an Affiliate thereof is the Servicer and the
Swap Counterparty at the time of delivery), the Indenture Trustee and the
Seller, with a copy to each Rating Agency, a Servicer's Certificate
substantially in the form of Exhibit A hereto, containing the information
necessary to make the payments to be made on the related Payment Date and the
information necessary for the Owner Trustee and the Indenture Trustee to send
statements to the Securityholders pursuant to the Trust Agreement or Indenture,
as the case may be. The Servicer shall also specify therein the identity of any
Receivable that the Servicer or the Seller became obligated to repurchase or
that the Servicer has determined to be a Defaulted Receivable during the related
Collection Period. Receivables purchased or to be purchased by the Servicer or
the Seller and Receivables that the Servicer has determined during such
Collection Period to be Defaulted Receivables and with respect to which payment
of the Administrative Purchase Payment or Warranty Purchase Payment has been
provided from whatever source as of last day of such Collection Period shall be
identified by the related Obligor's account number (as specified in the Schedule
of Receivables).

         SECTION 4.11 ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT. (a)
Within 120 days after March 31 of each calendar year (commencing with the fiscal
year ended March 31, 2002), the Servicer shall deliver an Officer's Certificate
to the Owner Trustee, the Swap Counterparty (unless TMCC or an Affiliate thereof
is the Servicer and the Swap Counterparty at

                                       34
<PAGE>

the time of delivery) and the Indenture Trustee to the effect that a review of
the activities of the Servicer during the prior fiscal year (or since the
Closing Date in the case of the first such Officer's Certificate) has been made
under the supervision of the officer executing such Officer's Certificate with a
view to determining whether during such period the Servicer has performed and
observed all of its obligations under this Agreement, and either (i) stating
that, to the best of his or her knowledge, no default by the Servicer under this
Agreement has occurred and is continuing, or (ii) if such a default has occurred
and is continuing, specifying such default and the nature and status thereof.

         (b)      The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, the Swap Counterparty (unless TMCC or an Affiliate thereof is the
Servicer and the Swap Counterparty at the time of delivery) and the Rating
Agencies, promptly after having obtained knowledge thereof, but in no event
later than five Business Days thereafter, written notice in an Officer's
Certificate of any event which with the giving of notice or lapse of time, or
both, would become a Servicer Default under Section 8.01(a) or (b).

         SECTION 4.12 ANNUAL ACCOUNTANTS' REPORT. Within 120 days after March 31
of each fiscal year for the Servicer (commencing with the year ended March 31,
2002), the Servicer shall deliver to the Owner Trustee and the Indenture Trustee
a report prepared by the Independent Accountants of the Servicer concerning
their review of the activities of the Servicer during the preceding 12-month
period ended March 31 (or other applicable period in the case of the first such
report or letter) to the effect that such accountants have reviewed certain
records and documents relating to the servicing of the Receivables under this
Agreement (using procedures specified in such report or letter) and as a result
of such review, and in connection with such procedures, they are reporting such
exceptions, if any, as shall be set forth therein. Such report or letter shall
also indicate that the firm is independent with respect to the Seller and the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.

                  In the event such Independent Accountants require the Owner
Trustee or Indenture Trustee to agree to the procedures performed by such firm,
the Servicer shall direct the Owner Trustee or Indenture Trustee in writing to
so agree; it being understood and agreed that the Owner Trustee or Indenture
Trustee will deliver such letter of agreement in conclusive reliance upon the
direction of the Servicer, and the Owner Trustee and Indenture Trustee need make
no independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.

         SECTION 4.13 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to the Swap Counterparty, the Owner
Trustee and Indenture Trustee reasonable access to the documentation regarding
the Receivables as provided in Section 3.03(b). The Servicer will provide such
access to any Securityholder only in such cases where the Certificateholder or
Noteholders shall be required by applicable statutes or regulations to review
such documentation. In each case, such access shall be afforded without charge,
but only upon reasonable request and during the normal business hours at the
respective offices of the Servicer. Nothing in this Section shall derogate from
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and

                                       35
<PAGE>

the failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section.

         SECTION 4.14 APPOINTMENT OF SUBSERVICER. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder if each Rating Agency has received reasonable advance notice
of the Servicer's intention to do so and has not notified the Servicer that such
an appointment would or might result in the qualification, reduction or
withdrawal of a rating then assigned by such rating Agency to any Class of
Notes; PROVIDED, HOWEVER, that the Servicer shall remain obligated and be liable
to the Issuer, the Owner Trustee, the Indenture Trustee, the Swap Counterparty,
the Certificateholder and the Noteholders for the servicing and administering of
the Receivables in accordance with the provisions hereof without diminution of
such obligation and liability by virtue of the appointment of such subservicer
and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Receivables. The fees and
expenses of the subservicer shall be as agreed between the Servicer and its
subservicer from time to time, and none of the Issuer, the Owner Trustee, the
Indenture Trustee, the Swap Counterparty, the Certificateholder or the
Noteholders shall have any responsibility therefor.

         SECTION 4.15 AMENDMENTS TO SCHEDULE OF RECEIVABLES. If the Servicer,
during a Collection Period, assigns to a Receivable an account number that
differs from the original account number identifying such Receivable on the
Schedule of Receivables, the Servicer shall deliver to the Issuer, the Owner
Trustee and the Indenture Trustee, on or before the Payment Date relating to
such Collection Period, an amendment to the Schedule of Receivables reporting
the newly assigned account number, together with the old account number of each
such Receivable. The first such delivery of amendments to the Schedule of
Receivables shall include monthly amendments reporting account numbers appearing
on the Schedule of Receivables with the new account numbers assigned to such
Receivables during any prior Collection Period.

         SECTION 4.16 REPORTS TO SECURITYHOLDERS AND RATING AGENCIES. The Owner
Trustee shall send a copy of each Officer's Certificate delivered pursuant to
Section 4.11 and each report of independent accountants delivered pursuant to
Section 4.12 to the Rating Agencies within five days of its receipt thereof from
the Servicer or accountants. A copy of any such Officer's Certificate or
accountants report may be obtained by any Certificateholder, Noteholder or Note
Owner by a request in writing to the Owner Trustee addressed as set forth in
Section 10.03 hereof. Upon the telephone request of the Owner Trustee, the
Indenture Trustee will promptly furnish the Owner Trustee a list of Noteholders
as of the date specified by the Owner Trustee.

                                   ARTICLE V

                      ACCOUNTS; PAYMENTS AND DISTRIBUTIONS;
                          STATEMENTS to SECURITYHOLDERS

         SECTION 5.01  ESTABLISHMENT OF COLLECTION ACCOUNT AND PAYAHEAD ACCOUNT.

         (a)      The Servicer on behalf of the Owner Trustee and the Indenture
Trustee, shall establish the Collection Account and Payahead Account in the name
of the Indenture Trustee for the benefit of the Securityholders. Except as
otherwise provided in this Agreement, each such

                                       36
<PAGE>

account shall be an account initially established with the Indenture Trustee and
maintained with the Indenture Trustee so long as (i) the commercial paper or
other short-term unsecured debt obligations of the Indenture Trustee are rated
"P-1" or better by Moody's, or if not so rated by Moody's then otherwise
approved by Moody's, and "A-1+" or better by Standard & Poor's if rated by
Standard & Poor's, or if not so rated by Standard & Poor's then otherwise
approved by Standard & Poor's, in each case at the time of any deposit therein,
or (ii) such account is a segregated trust account located in the corporate
trust department of the Indenture Trustee bearing a designation clearly
indicating that the funds deposited therein (other than interest or investment
earnings thereon) are held in trust for the benefit of the Securityholders, and
the Indenture Trustee has a long-term deposit rating from Moody's (so long as
Moody's is a Rating Agency) of at least "A1" (or such lower rating as Moody's
shall approve in writing) and corporate trust powers under applicable federal
and state laws and is organized under the laws of the United States or any state
thereof, the District of Columbia or the Commonwealth of Puerto Rico. Except as
otherwise provided in this Agreement, in the event that the Indenture Trustee no
longer meets either of the foregoing requirements, then the Servicer shall, with
the Indenture Trustee's assistance as necessary, cause the Collection Account
and Payahead Account to be moved to a bank or trust company that satisfies
either of such requirements.

         (b)      For so long as the depository institution or trust company
then maintaining the Collection Account and Payahead Account meets the
requirements of Section 5.01(a)(i) or (a)(ii), all amounts held in these
accounts shall, to the extent permitted by applicable laws, rules and
regulations, be invested, as directed in writing by the Servicer, in Eligible
Investments; otherwise such amounts shall be maintained in cash. Earnings on
investment of funds in these accounts (net of losses and investment expenses)
shall be paid to the Servicer on each Payment Date as servicing compensation,
and any losses and investment expenses shall be charged against the funds on
deposit in the related account.

         (c)      For so long as Wells Fargo Bank Minnesota, National
Association is the Relevant Trustee, the Collection Account and Payahead Account
shall be maintained with Wells Fargo Bank Minnesota, National Association as
described in clause (ii) of the second sentence of Section 5.01(a). In the event
that the long-term debt rating of the Relevant Trustee does not satisfy clause
(ii) of the second sentence of Section 5.01(a), the Servicer shall, with the
assistance of the Relevant Trustee as necessary, cause the Collection Account
and the Payahead Account to be moved to an institution or an account otherwise
satisfying the requirements of Section 5.01(a).

         (d)      Subject to the foregoing, the Servicer, on behalf of the Owner
Trustee and the Indenture Trustee, shall establish and maintain as the
Collection Account an Eligible Deposit Account in the name of and under the
exclusive control of the Indenture Trustee, bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders and the Certificateholder. On the Closing Date, the Owner Trustee
will transfer, or cause to be transferred, to such Collection Account all funds
or investments on deposit in the Collection Account established pursuant to the
Trust Agreement for the benefit of the Certificateholder, and all of the
proceeds thereof, and will transfer all of its right, title and interest in the
Collection Account, all funds or investments held or to be held therein and all
proceeds thereof, whether or not on behalf of the Certificateholder, to the
Indenture Trustee for the benefit of the Swap Counterparty, the Noteholders and
Certificateholder. The Indenture Trustee will be obligated to transfer all
amounts remaining on deposit in the Collection Account

                                       37
<PAGE>

on the Payment Date on which the Notes of all Classes have been paid in full and
the Interest Rate Swap Agreement has been terminated and all Swap Payments
Outgoing and all Swap Termination Payments payable to the Swap Counterparty have
been paid (or substantially all of the Trust Estate is otherwise released from
the lien of the Indenture) to the Collection Account established pursuant to the
Trust Agreement for the benefit of the Certificateholder, and to take all
necessary or appropriate actions to transfer all of its right, title and
interest in the Collection Account, all funds or investments held or to be held
therein and all proceeds thereof, whether or not on behalf of the Swap
Counterparty or the Noteholders and the Certificateholder, to the Owner Trustee
for the benefit of the Certificateholder, subject to the limitations set forth
in the Indenture with respect to amounts held for payment to the Swap
Counterparty or to Noteholders that do not promptly deliver a Note for payment
on such Payment Date.

         (e)      With respect to the Collection Account and all property held
therein, the Owner Trustee agrees, by its acceptance hereof that, on the terms
and conditions set forth in the Indenture, for so long as Notes of any Class or
the Interest Rate Swap Agreement remain outstanding, the Indenture Trustee shall
possess all right, title and interest therein (excluding interest or investment
income thereon payable to the Servicer), and that such account shall be under
the sole dominion and control of the Indenture Trustee for the benefit of the
Swap Counterparty and the Noteholders and the Certificateholder, as the case may
be, as set forth in the Indenture. Subject to the right of the Indenture Trustee
to make withdrawals therefrom, as directed by the Servicer, for the purposes and
in the amounts set forth in Section 5.06, the Payahead Account and all funds
held therein shall be the property of the Servicer and not the property of the
Issuer, the Owner Trustee or the Indenture Trustee. The Issuer, Owner Trustee,
Seller and Indenture Trustee will treat the Payahead Account, all funds therein
and all net investment income with respect thereto as assets of the Servicer for
federal income tax and all other purposes. The parties hereto agree that the
Servicer shall have the power, revocable by the Indenture Trustee or by the
Owner Trustee with the consent of the Indenture Trustee, to instruct the
Indenture Trustee to make withdrawals and payments from the Collection Account
and the Payahead Account for the purpose of permitting the Servicer, Indenture
Trustee or the Owner Trustee to carry out its respective duties hereunder or
under the Indenture or the Trust Agreement, as the case may be.

         SECTION 5.02 COLLECTIONS. (a) Except as otherwise provided in this
Agreement, the Servicer shall remit daily to the Collection Account all payments
received by or on behalf of the Obligors on or in respect of the Receivables
(other than, in the case of Precomputed Receivables, payments constituting
Payments Ahead) and all Net Liquidation Proceeds within two Business Days after
receipt thereof. Notwithstanding the foregoing, for so long as the Monthly
Remittance Conditions are satisfied, the Servicer shall not be required to remit
such collections to the Collection Account on the foregoing daily basis but
shall be entitled to retain such collections, without segregation from its other
funds, until the Business Day before each Payment Date at which time the
Servicer shall remit all such collections in respect of the related Collection
Period to the Collection Account in immediately available funds. Commencing with
the first day of the first Collection Period that begins at least two Business
Days after the day on which any Monthly Remittance Condition ceases to be
satisfied and for so long as any Monthly Remittance Condition is not satisfied,
all collections then held by the Servicer shall be immediately deposited into
the Collection Account and all future collections on or in respect of

                                       38
<PAGE>

the Receivables and all Net Liquidation Proceeds shall be remitted by the
Servicer to the Collection Account on a daily basis within two Business Days
after receipt thereof.

         (b)      Except as otherwise provided in this Agreement, the Servicer
shall deposit all Payments Ahead in the Collection Account within two Business
Days after receipt thereof, which Payments Ahead shall be transferred to the
Payahead Account pursuant to Section 5.06(a)(ii). Notwithstanding the foregoing,
so long as all Monthly Remittance Conditions are satisfied, the Servicer will
not be required to deposit Payments Ahead in the Payahead Account within two
Business Days after receipt thereof but shall be entitled to retain such
Payments Ahead, without segregation from its other funds, until such time as the
Servicer shall be required to remit Applied Payments Ahead to the Collection
Account pursuant to Section 5.06(a)(i). Commencing with the first day of the
first Collection Period that begins at least two Business Days after the day on
which any Monthly Remittance Condition ceases to be satisfied and for so long as
all Monthly Remittance Conditions are not satisfied, all Payments Ahead then
held by the Servicer shall be immediately deposited into the Payahead Account
and all future Payments Ahead shall be remitted by the Servicer to the Payahead
Account within two Business Days after receipt thereof.

         (c)      The Servicer shall give the Owner Trustee, the Indenture
Trustee and each Rating Agency written notice of the failure of any Monthly
Remittance Condition (and any subsequent curing of a failed Monthly Remittance
Condition) as soon as practical after the occurrence thereof. Notwithstanding
the failure of any Monthly Remittance Condition, the Servicer may utilize an
alternative collection or Payment Ahead remittance schedule (which may be the
remittance schedule previously utilized prior to the failure of such Monthly
Remittance Condition), if the Servicer provides to the Owner Trustee and
Indenture Trustee written confirmation from each Rating Agency that such
alternative remittance schedule will not result in the qualification, reduction
or withdrawal of the rating then assigned to any Class of Notes.

         SECTION 5.03 APPLICATION OF COLLECTIONS. As of the Business Day
immediately preceding the related Payment Date, all collections for the related
Collection Period shall be applied by the Servicer as follows:

         (a)      With respect to each Receivable (other than an Administrative
Receivable or a Warranty Receivable), payments made by or on behalf of the
Obligor which are not Supplemental Servicing Fees shall be applied first to
reimburse the Servicer for Outstanding Advances made with respect to such
Receivable (each such payment, an "Overdue Payment"). Next, the amount of any
payment in excess of Supplemental Servicing Fees and Outstanding Advances with
respect to such Receivable shall be applied to the Scheduled Payment with
respect to such Receivable. If the amount of such payment remaining after the
applications described in the two preceding sentences (i) equals (together with
any Deferred Prepayment) the unpaid principal balance of such Receivable, it
shall be applied to prepay the principal balance of such Receivable, or (ii) is
less than the unpaid principal balance of such Receivable, it shall constitute
an Excess Payment with respect to such Receivable.

         (b)      With respect to each Administrative Receivable and Warranty
Receivable, payments made by or on behalf of the Obligor shall be applied in the
same manner, except that any Released Administrative Amount or Released Warranty
Amount shall be remitted to the

                                       39
<PAGE>

Servicer or the Seller, as applicable. A Warranty Purchase Payment or an
Administrative Purchase Payment with respect to any Receivable shall be applied,
first, to reduce Outstanding Advances with respect to such Receivable and then
to the Scheduled Payment, in each case to the extent that the payments by the
Obligor shall be insufficient, and then to prepay the unpaid principal balance
of such Receivable in full.

         SECTION 5.04 ADVANCES; SWAP PAYMENTS.

         (a)      As of the close of business on the last day of each Collection
Period, if the payments by or on behalf of the Obligor on a Precomputed
Receivable (other than an Administrative Receivable or a Warranty Receivable)
after application under Section 5.03(a) shall be less than the Scheduled Payment
(determined as of the Closing Date), whether as a result of any modification or
extension granted to the Obligor or otherwise, then the Deferred Prepayment, if
any, with respect to such Precomputed Receivable shall be applied by the
Servicer to the extent of the shortfall, and such Deferred Prepayment shall be
reduced accordingly. Subject to the provisions of the last sentence of this
paragraph, the Servicer shall deposit an amount equal to such shortfall (each, a
"Precomputed Advance") in the Collection Account on the Business Day immediately
preceding the related Payment Date. In addition, as of the last day of a
Collection Period, if the payments during such Collection Period by or on behalf
of the Obligor on or in respect of a Simple Interest Receivable (other than an
Administrative Receivable or a Warranty Receivable) after application under
Section 5.03(a) shall be less than the Scheduled Payment (determined as of the
Closing Date), whether as a result of any modification or extension granted to
the Obligor or otherwise, then an amount equal to the product of the principal
balance of such Receivable as of the first day of the related Collection Period
and one-twelfth of its Annual Percentage Rate minus the amount of interest
actually received on such Receivable during the Collection Period (each, a
"Simple Interest Advance") shall be deposited by the Servicer into the
Collection Account on the Business Day immediately preceding the related Payment
Date. If such a calculation in respect of a Simple Interest Receivable results
in a negative number, an amount equal to such negative amount shall be paid to
the Servicer in reimbursement of any outstanding Simple Interest Advances made
with respect to such Receivable. In addition, in the event that a Simple
Interest Receivable becomes a Liquidated Receivable, the amount of accrued and
unpaid interest thereon (but not including interest for the current Collection
Period) shall, up to the amount of any outstanding Simple Interest Advances made
with respect to such Receivable, be withdrawn from the Collection Account and
paid to the Servicer in reimbursement of such outstanding Simple Interest
Advances. No Advances will be made with respect to the Principal Balance of
Simple Interest Receivables. The Servicer shall not be required to make an
Advance (other than a Simple Interest Advance in respect of an interest
shortfall arising from the Prepayment of a Simple Interest Receivable) to the
extent that the Servicer, in its sole discretion, shall determine that such
Advance is unlikely to be recovered from subsequent payments made by or on
behalf of the related Obligor, Liquidation Proceeds, by the Administrative
Purchase Payment or by the Warranty Purchase Payment with respect to such
Receivable or otherwise.

         (b)      The Servicer shall be entitled to reimbursement for
Outstanding Advances, without interest, with respect to a Receivable from the
following sources with respect to such Receivable: (i) subsequent payments made
by or on behalf of the related Obligor, (ii) Liquidation Proceeds and (iii) the
Warranty Purchase Payment; PROVIDED, HOWEVER, that in the

                                       40
<PAGE>

case of Advances made pursuant to Section 4.02, the Servicer shall be entitled
to reimbursement only from amounts received in respect of such Receivable that
are in excess of the amount of the Scheduled Payment in the related Collection
Period.

         (c)      To the extent that the Servicer has determined that any
Outstanding Advance is a Nonrecoverable Advance, the Servicer may, in the
relevant Servicer's Certificate, set forth the amount of such Nonrecoverable
Advance, and on the related Payment Date, the Relevant Trustee shall promptly
remit to the Servicer from Actual Payments on deposit in the Collection Account
an amount equal to the amount of such Nonrecoverable Advance. The Servicer's
determination of Available Collections for any Collection Period shall take into
account the amount of Nonrecoverable Advances specified in any such Officer's
Certificate.

         (d)      For so long as the Monthly Remittance Conditions are
satisfied, in lieu of causing the Servicer first to deposit and then the
Relevant Trustee to remit to the Servicer the amounts described in clauses (i)
through (iii) in Section 5.04(b) reimbursable in respect on Outstanding
Advances, or the amounts described in Section 5.04(c) applicable in respect of
Nonrecoverable Advances, the Servicer may deduct such amounts from deposits
otherwise to be made into the Collection Account.

         (e)      In addition, for so long as the Monthly Remittance Conditions
are satisfied and TMCC or an Affiliate thereof is both the Servicer and the Swap
Counterparty, the Servicer may (i) deduct any Swap Payments Outgoing and Swap
Termination Payments owed by the Issuer to the Swap Counterparty from deposits
otherwise to be made into the Collection Account by the Servicer and (ii) add
any Swap Payments Incoming and Swap Termination Payments owed by the Swap
Counterparty to the Issuer to deposits otherwise to be made into the Collection
Account by the Servicer, and any such payments will be deemed to satisfy the
Swap Counterparty's or the Issuer's (as applicable) payment obligations to the
Issuer and the Swap Counterparty, respectively, under the Interest Rate Swap
Agreement.

         SECTION 5.05 ADDITIONAL DEPOSITS. (a) The following additional deposits
shall be made to the Collection Account: (i) the Seller shall remit the
aggregate Warranty Purchase Payments with respect to Warranty Receivables
pursuant to Section 3.02, (ii) the Servicer shall remit the aggregate
Administrative Purchase Payments with respect to Administrative Receivables
pursuant to Section 4.08 and the amount required upon any optional purchase of
the Receivables by the Servicer, or any successor to the Servicer, pursuant to
Section 9.01; (iii) the Servicer shall remit (A) the amount required to be
remitted in respect of certain full Prepayments pursuant to Section 4.03, (B)
the aggregate Advances pursuant to Sections 4.02, 5.03 and 5.04(a), (C) the
amount of Payments Ahead and Applied Payments Ahead withdrawn by the Servicer or
Indenture Trustee at the direction of the Servicer from the Payahead Account for
application with respect to such Collection Period, and (D) all Swap Payments
Incoming and Swap Termination Payments received from the Swap Counterparty; and
(iv) the Indenture Trustee shall transfer the amounts described in Sections 5.06
and 5.07 from the Reserve Account to the Collection Account or Principal
Distribution Account pursuant to Section 5.07.

                  (b)      All deposits required to be made pursuant to this
Section by the Seller or the Servicer, as the case may be, may be made in the
form of a single deposit and shall be made in immediately available funds, no
later than 5:00 P.M., New York City time, on the Business

                                       41
<PAGE>

Day immediately preceding the related Payment Date. At the direction of the
Servicer, the Relevant Trustee shall invest such amounts in Eligible Investments
maturing not later than 3:00 P.M. New York City Time, on the related Payment
Date.

         SECTION 5.06 PAYMENTS AND DISTRIBUTIONS.

         (a)      On each Payment Date, the Indenture Trustee shall cause to be
made the following transfers and distributions in immediately available funds in
the amounts set forth in the Servicer's Certificate for such Payment Date
(except that if the Collection Account, Principal Distribution Account, Payahead
Account and Reserve Fund are not all maintained by the Indenture Trustee,
transfers to be made between such accounts as described in Section 5.05, 5.06
and 5.07 shall be made on the Business Day immediately preceding each Payment
Date):

                  (i)      from the Payahead Account (or directly from the
         Servicer in the case of Payments Ahead held by the Servicer pursuant to
         Section 5.02(a) or (b)) to the Collection Account, the aggregate
         Applied Payments Ahead; and

                  (ii)     if the Servicer is not permitted to hold Payments
         Ahead pursuant to Section 5.02(a) or (b), from the Collection Account
         to the Payahead Account, the aggregate Payments Ahead for the related
         Collection Period.

                  In addition, on each Payment Date, the Indenture Trustee shall
cause to be paid from the Collection Account any Swap Payments Outgoing and Swap
Termination Payment payable by the Issuer to the Swap Counterparty under the
Interest Rate Swap Agreement, provided that such amounts were not deducted from
amounts remitted to the Collection Account by the Servicer pursuant to Section
5.04(e).

         (b)      On each Determination Date, the Servicer shall calculate (i)
the Available Collections and the amounts to be paid to Noteholders of each
Class and the Certificateholder pursuant to Section 5.06(c) or 5.06(d), as the
case may be, (ii) the Swap Payments Outgoing, the Swap Payments Incoming, and
any Swap Termination Payments and (iii) all other distributions, deposits and
withdrawals to be made on the related Payment Date.

         (c)      Subject to Section 5.06(d), on each Payment Date, the Relevant
Trustee shall make the following payments and distributions from the Collection
Account in the following order of priority and in the amounts set forth in the
Servicer's Certificate for such Payment Date; PROVIDED, HOWEVER, that such
payments and distributions shall be made only from those funds deposited in the
Collection Account for the related Collection Period and available therefore as
Available Collections:

         (i)      from Available Collections:

                  (A)      to the Servicer, the Total Servicing Fee (including
         any unpaid Total Servicing Fees from one or more prior Collection
         Periods);

                  (B)      on a pro rata basis (based on the amounts
         distributable pursuant to this clause to each such Class), to the
         Holders of the Class A-1 Notes, the Class A-1 Interest Distributable
         Amount and any outstanding Class A-1 Interest Carryover Shortfall, to
         the Holders of the Class A-2 Notes, the Class A-2 Interest
         Distributable Amount and any outstanding Class A-2 Interest Carryover
         Shortfall, to the

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<PAGE>

         Holders of the Class A-3 Notes, the Class A-3 Interest Distributable
         Amount and any outstanding Class A-3 Interest Carryover Shortfall, and
         to the Holders of the Class A-4 Notes, the Class A-4 Interest
         Distributable Amount and any outstanding Class A-4 Interest Carryover
         Shortfall;

                  (C)      to the Principal Distribution Account, the Principal
         Distribution Amount;

                  (D)      to the Reserve Account, the amount, if any, necessary
         to cause the balance of funds therein to equal the Specified Reserve
         Account Balance; and

                  (E)      any remaining amounts will be distributed to the
         Certificateholder.

         (ii)     from the amounts deposited into the Principal Distribution
Account from the allocations of principal described in clause (i)(C) above, the
Issuer will pay principal of the Securities in the following priority:

                  (A)      to the Holders of Class A-1 Notes, until the total
         amount paid to such Holders in respect of principal from the Closing
         Date is equal to the Class A-1 Initial Principal Balance;

                  (B)      to the Holders of Class A-2 Notes, until the total
         amount paid to such Holders in respect of principal from the Closing
         Date is equal to the Class A-2 Initial Principal Balance;

                  (C)      to the Holders of Class A-3 Notes, until the total
         amount paid to such Holders in respect of principal from the Closing
         Date is equal to the Class A-3 Initial Principal Balance;

                  (D)      to the Holders of Class A-4 Notes, until the total
         amount paid to such Holders in respect of principal from the Closing
         Date is equal to the Class A-4 Initial Principal Balance; and

                  (E)      after the total amount paid to Holders of the Class
         A-4 Notes in respect of principal from the Closing Date is equal to the
         Class A-4 Initial Principal Balance, any remaining funds will be paid
         to the Certificateholder.

         (d)      Notwithstanding the provisions of Section 5.06(c), after an
Event of Default occurs that results in the acceleration of the Notes and unless
and until such acceleration has been rescinded, on each Payment Date, the
Relevant Trustee shall make the following payments and distributions from the
Collection Account in the following order of priority and in the amounts set
forth in the Servicer's Certificate for such Payment Date; PROVIDED, HOWEVER,
that such payments and distributions shall be made only from Available
Collections deposited in the Collection Account for the related Collection
Period:

                  (i)      to the Servicer, the Total Servicing Fee (including
         any unpaid Total Servicing Fees from one or more prior Collection
         Periods);

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<PAGE>

                  (ii)     on a pro rata basis (based on the amounts
         distributable pursuant to this clause to each such Class), to the
         Holders of the Class A-1 Notes, the Class A-1 Interest Distributable
         Amount and any outstanding Class A-1 Interest Carryover Shortfall, to
         the Holders of the Class A-2 Notes, the Class A-2 Interest
         Distributable Amount and any outstanding Class A-2 Interest Carryover
         Shortfall, to the Holders of the Class A-3 Notes, the Class A-3
         Interest Distributable Amount and any outstanding Class A-3 Interest
         Carryover Shortfall, and to the Holders of the Class A-4 Notes, the
         Class A-4 Interest Distributable Amount and any outstanding Class A-4
         Interest Carryover Shortfall;

                  (iii)    to the Holders of Class A-1 Notes, Class A-2 Notes,
         Class A-3 Notes and the Class A-4 Notes, on a pro rata basis (based on
         the Outstanding Amount of each such Class), until the total amount paid
         to such Holders in respect of principal from the Closing Date is equal
         to the Class A-1 Initial Principal Balance, Class A-2 Initial Principal
         Balance, the Class A-3 Initial Principal Balance, and the Class A-4
         Initial Principal Balance, respectively;

                  (iv)     after the total amount paid to such Holders in
         respect of principal from the Closing Date is equal to the Class A-1
         Initial Principal Balance, Class A-2 Initial Principal Balance, the
         Class A-3 Initial Principal Balance, and the Class A-4 Initial
         Principal Balance, respectively, any remaining funds will be paid to
         the Certificateholder.

         (e)      For purposes of determining whether an Event of Default
pursuant to Section 5.01(b) of the Indenture has occurred, the amount of
principal required to be paid to the Holders of any Class of Notes on any
Payment Date is the amount available to be paid thereto pursuant to Sections
5.06(c)(i)(C) and 5.06(d)(iii); provided however that (i) the Class A-1 Notes
are required to be paid in full on or before the Class A-1 Final Scheduled
Payment Date, meaning that Holders of Class A-1 Notes are entitled to have
received on or before such date payments in respect of principal in an aggregate
amount equal to the Class A-1 Initial Principal Balance together with all
interest accrued thereon through such date; (ii) the Class A-2 Notes are
required to be paid in full on or before the Class A-2 Final Scheduled Payment
Date, meaning that Holders of Class A-2 Notes are entitled to have received on
or before such date payments in respect of principal in an aggregate amount
equal to the Class A-2 Initial Principal Balance together with all interest
accrued thereon through such date, (iii) the Class A-3 Notes are required to be
paid in full on or before the Class A-3 Final Scheduled Payment Date, meaning
that Holders of Class A-3 Notes are entitled to have received on or before such
date payments in respect of principal in an aggregate amount equal to the Class
A-3 Initial Principal Balance together with all interest accrued thereon through
such date; and (iv) the Class A-4 Notes are required to be paid in full on or
before the Class A-4 Final Scheduled Payment Date, meaning that Holders of Class
A-4 Notes are entitled to have received on or before such date payments in
respect of principal in an aggregate amount equal to the Class A-4 Initial
Principal Balance together with all interest accrued thereon through such date.

         (f)      Except with respect to the final payment upon retirement of a
Note or Certificate, the Servicer shall on each Payment Date instruct the
Relevant Trustee to pay or distribute to each Securityholder of record on the
related Record Date by check mailed to such Securityholder at the address of
such Holder appearing in the Note Register, or herein (in the case of the
Certificate) (or, if DTC, its nominee or a Clearing Agency is the relevant
Holder, by wire

                                       44
<PAGE>

transfer of immediately available funds or pursuant to other arrangements), the
amount to be paid or distributed to such Securityholder pursuant to such
Holder's Note or Certificate. With respect to the final payment upon retirement
of a Note or of the Certificate, the Servicer shall on the relevant final
Payment Date instruct the Relevant Trustee to pay or distribute the amounts due
thereon only upon delivery for cancellation of the certificate representing such
Note or Certificate in accordance with the Indenture or the Trust Agreement, as
the case may be.

         SECTION 5.07 RESERVE ACCOUNT. (a) In order to assure that certain
amounts will be available to make required payments to Noteholders, the Seller
will, pursuant to the Securities Account Control Agreement and the Indenture,
establish and maintain with the Indenture Trustee a segregated trust account
(the "Reserve Account") which will include the money and other property
deposited and held therein pursuant to Section 5.06(c)(i)(D) and this Section.
On or prior to the Closing Date, the Seller shall deposit an amount equal to the
Reserve Account Initial Deposit into the Reserve Account. As and to the extent
set forth in Section 5.06(c)(i)(D), as directed in writing by the Servicer, the
Indenture Trustee will deposit Available Collections into the Reserve Account on
each Payment Date, until the amount on deposit therein equals the Specified
Reserve Account Balance. On each Payment Date, to the extent that Available
Collections are insufficient to fully fund the payments and distributions
described in clauses (i)(A) through (C) of Section 5.06(c) or in clauses (i)
through (iii) of Section 5.06(d), the Indenture Trustee will withdraw amounts
then on deposit in the Reserve Account (excluding net investment income on
Eligible Investments which amounts are payable to the Seller therefrom), up to
the amounts of any such deficiencies, and deposit such amounts into the
Collection Account for application pursuant to such clauses. Also on each
Payment Date, as directed in writing by the Servicer, the Indenture Trustee will
release to the Seller any amounts remaining on deposit in the Reserve Account in
excess of the Specified Reserve Account Balance. Also, upon the termination of
the trusts established under the Trust Agreement and the Indenture, as directed
in writing by the Servicer, the Indenture Trustee will release to the Seller any
amounts remaining on deposit in the Reserve Account. Upon any such distribution
to the Seller, the Issuer, Owner Trustee, Certificateholder, Indenture Trustee
and Noteholders will have no further rights in, or claims to, such amounts.

         (b) All amounts held in the Reserve Account shall be invested by the
Indenture Trustee, as directed in writing by the Servicer, in Eligible
Investments. Earnings on investment of funds in the Reserve Account shall be
paid to the Seller on each Payment Date, and losses and any investment expenses
shall be charged against the funds on deposit therein. The Indenture Trustee
shall incur no liability for the selection of investments or for losses thereon
absent its own negligence or willful misfeasance. The Indenture Trustee shall
have no liability in respect of losses incurred as a result of the liquidation
of any investment prior to its stated maturity date or the failure of the
Servicer to provide timely written investment directions.

         (c) Subject to the right of the Indenture Trustee to make withdrawals
therefrom, as directed by the Servicer, for the purposes and in the amounts set
forth in Section 5.06, the Reserve Account and all funds held therein shall be
the property of the Seller and not the property of the Issuer, the Owner Trustee
or the Indenture Trustee. The Issuer, Owner Trustee, Seller and Indenture
Trustee will treat the Reserve Account, all funds therein and all net investment
income with respect thereto as assets of the Seller for federal income tax and
all other purposes.

                                       45
<PAGE>

         (d) The Seller will grant to the Indenture Trustee, for the benefit of
the Noteholders, a security interest in all funds (including Eligible
Investments) in the Reserve Account (including the Reserve Account Initial
Deposit) and the proceeds thereof, and the Indenture Trustee shall have all of
the rights of a secured party under the UCC with respect thereto; provided that
all income from the investment of funds in the Reserve Account and the right to
receive such income are retained by the Seller and are not transferred, assigned
or otherwise conveyed hereunder. If for any reason the Reserve Account is no
longer an Eligible Deposit Account, the Indenture Trustee shall promptly cause
the Reserve Account to be moved to another institution or otherwise changed so
that the Reserve Account becomes an Eligible Deposit Account.

         Neither the Owner Trustee nor the Indenture Trustee shall enter into
any subordination or intercreditor agreement with respect to the Reserve
Account.

         SECTION 5.08 STATEMENTS TO CERTIFICATEHOLDER, NOTEHOLDERS, AND SWAP
COUNTERPARTY.

         (a)      On each Payment Date, the Servicer shall provide to the
Indenture Trustee (with a copy to the Rating Agencies and each Paying Agent) for
the Indenture Trustee to forward to each Noteholder of record as of the most
recent Record Date and to the Owner Trustee (with a copy to each Paying Agent)
for the Owner Trustee to forward to each Certificateholder of record as of the
most recent Record Date a statement substantially in the form of Exhibit A and
to the Swap Counterparty (unless TMCC or an Affiliate thereof is the Servicer
and the Swap Counterparty at the time of delivery), setting forth at least the
following information as to the Notes and the Certificate to the extent
applicable:

                  (i)      the amount paid or distributed in respect of interest
         in respect of each Class of Notes;

                  (ii)     the amount paid or distributed in respect of
         principal on or with respect to each Class of Notes;

                  (iii)    the amount paid or distributed to the
         Certificateholder;

                  (iv)     the Pool Balance as of the close of business on the
         last day of the preceding Collection Period;

                  (v)      the Outstanding Amount, the Class A-1 Principal
         Balance, the Class A-2 Principal Balance, the Class A-3 Principal
         Balance, the Class A-4 Principal Balance, and the Note Pool Factor for
         each Class of Notes, in each case after giving effect to all payments
         in respect of principal on such Payment Date;

                  (vi)     the amount of the Servicing Fee paid to the Servicer
         with respect to the related Collection Period;

                  (vii)    the amount of any Class A-1 Interest Carryover
         Shortfall, Class A-2 Interest Carryover Shortfall, Class A-3 Interest
         Carryover Shortfall and Class A-4 Interest Carryover Shortfall after
         giving effect to all payments of interest on such Payment Date, and the
         change in such amounts from the preceding Payment Date;

                                       46
<PAGE>

                  (viii)   the aggregate amount of Payments Ahead on deposit in
         the Payahead Account or held by the Servicer with respect to the
         related Receivables and the change in such amount from the immediately
         preceding Payment Date;

                  (ix)     the amount of Advances made in respect of the related
         Receivables and the related Collection Period and the amount of
         unreimbursed Advances on such Payment Date;

                  (x)      the balance of any Reserve Account on such Payment
         Date and the Specified Reserve Account Amount on such Payment Date,
         after giving effect to changes thereto on such Payment Date; and

                  (xi)     the Class A-2 Notional Balance, the A-3 Notional
         Balance, the Class A-4 Notional Balance, the Class A-2 Rate, the Class
         A-3 Rate, the Class A-4 Rate, the Swap Payments Incoming, the Swap
         Payments Outgoing and the Swap Termination Payment.

         SECTION 5.09 NET DEPOSITS. As an administrative convenience, the
Seller, the Servicer, the Owner Trustee and the Indenture Trustee may make any
remittances pursuant to this Article net of amounts to be distributed by the
applicable recipient to such remitting party. Nonetheless, each such party shall
account to the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholder for all of the above described remittances, payments and
distributions as if all deposits, payments, distributions and transfers were
made individually.

                                   ARTICLE VI

                                   THE SELLER

         SECTION 6.01 REPRESENTATIONS OF SELLER. The Seller makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Receivables. The representations speak as of the execution and delivery of this
Agreement and as of the Closing Date, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.

         (a)      ORGANIZATION AND GOOD STANDING. The Seller shall have been
duly organized and shall be validly existing as a limited liability company in
good standing under the laws of the State of Delaware, with power and authority
to own its properties and to conduct its business as such properties shall be
currently owned and such business is presently conducted, and had at all
relevant times, and shall now have, power, authority and legal right to acquire,
own and sell the Receivables.

         (b)      DUE QUALIFICATION. The Seller shall be duly qualified to do
business as a foreign limited liability company in good standing, and shall have
obtained all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall require such
qualifications and where the failure to so qualify will have a material adverse
effect on the ability of the Seller to conduct its business or perform its
obligations under this Agreement.

                                       47
<PAGE>

         (c)      POWER AND AUTHORITY. The Seller shall have the power and
authority to execute and deliver this Agreement and to carry out its terms; the
Seller shall have full power and authority to sell and assign the property to be
sold and assigned to and deposited as part of the Owner Trust Estate or Trust
Estate, as the case may be, and shall have duly authorized such sale and
assignment to the Issuer, the Owner Trustee or the Indenture Trustee, as the
case may be; and the execution, delivery and performance of this Agreement shall
have been duly authorized by the Seller by all necessary action.

         (d)      VALID SALE; BINDING OBLIGATIONS. This Agreement shall evidence
a valid sale, transfer and assignment of the Receivables, enforceable against
creditors of and purchasers from the Seller; and shall constitute a legal, valid
and binding obligation of the Seller enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally or by
general equity principles.

         (e)      NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms of this
Agreement shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time) a
default under, the Certificate of Formation or limited liability company
agreement of the Seller or any indenture, agreement or other instrument to which
the Seller is a party or by which it shall be bound; nor result in the creation
or imposition of any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement or other instrument (other than the Basic
Documents), nor violate any law or, to the best of the Seller's knowledge, any
order, rule or regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties which
breach, default, conflict, lien or violation would have a material adverse
effect on the earnings, business affairs or business prospects of the Seller.

         (f)      NO PROCEEDINGS. There is no action, suit or proceeding before
or by any court or governmental agency or body, domestic or foreign, now
pending, or to the Seller's knowledge, threatened, against or affecting the
Seller: (i) asserting the invalidity of this Agreement, the Trust Agreement, the
Indenture, the Securities Account Control Agreement, the Certificate or the
Notes, (ii) seeking to prevent the issuance of the Certificate or the Notes or
the consummation of any of the transactions contemplated by this Agreement, the
Trust Agreement, or the Indenture, (iii) seeking any determination or ruling
that might materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement, the
Trust Agreement, the Indenture, the Certificate or the Notes, or (iv) relating
to the Seller and which might adversely affect the federal income tax attributes
of the Issuer, the Certificate or the Notes.

         SECTION 6.02 COMPANY EXISTENCE. During the term of this Agreement, the
Seller will keep in full force and effect its existence, rights and franchises
as a limited liability company under the laws of the jurisdiction of its
formation and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of the Basic Documents and each other instrument or
agreement necessary or appropriate to the proper administration of this
Agreement and the transactions

                                       48
<PAGE>

contemplated hereby. In addition, all transactions and dealings between the
Seller and its Affiliates (including the Issuer) will be conducted on an arm's
length basis.

         SECTION 6.03 LIABILITY OF SELLER; INDEMNITIES. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.

         (a)      The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee and the Servicer from and
against any taxes that may at any time be asserted against any such Person with
respect to, as of the date hereof, the sale of the Receivables to the Issuer or
the issuance and original sale of the Notes and the Certificates, including any
sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of the Issuer, not including any
taxes asserted with respect to, and as of the date of, the sale of the
Receivables to the Issuer or the issuance and original sale of the Certificate
or any of the Notes, or asserted with respect to ownership of the Receivables or
federal or other income taxes arising out of payments or distributions on the
Certificate or the Notes) and costs and expenses in defending against the same.

         (b)      The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Issuer, the
Certificateholder and the Noteholders and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee and the Indenture Trustee
from and against any loss, liability or expense incurred by reason of (i) the
Seller's willful misfeasance, bad faith or negligence in the performance of its
duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement and (ii) the Seller's or the
Issuer's violation of federal or state securities laws in connection with the
offering and sale of any of the Notes or the Certificate.

         (c)      Except as set forth in clause (a) above, the Seller shall pay
any and all taxes levied or assessed upon all or any part of the Owner Trust
Estate.

         (d)      Promptly after receipt by a party indemnified under this
Section 6.03 (an "Indemnified Party") of notice of the commencement of any
action, such Indemnified Party will, if a claim in respect thereof is to be made
against the party providing indemnification under this Section 6.03 (an
"Indemnifying Party"), notify such Indemnifying Party of the commencement
thereof. In case any such action is brought against any Indemnified Party under
this Section 6.03 and it notifies the Indemnifying Party of the commencement
thereof, the Indemnifying Party will assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Party (who may, unless there is, as
evidenced by an opinion of counsel to the Indemnified Party stating that there
is an unwaivable conflict of interest, be counsel to the Indemnifying Party),
and the Indemnifying Party will not be liable to such Indemnified Party under
this Section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof, other than reasonable
costs of investigation. The obligations set forth in this Section 6.03 shall
survive the termination of this Agreement or the resignation or removal of the
Owner Trustee or the Indenture Trustee and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Seller shall have made
any indemnity payments pursuant to this Section and the Person to or on behalf
of whom such payments are made

                                       49
<PAGE>

thereafter collects any of such amounts from others, such Person shall promptly
repay such amounts to the Seller, without interest.

         SECTION 6.04 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, which person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided, however, that (i) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Section 6.01
shall have been breached (except that the representations regarding the due
organization and valid existence of the successor may be deemed to reference
jurisdictions other than California), (ii) the Seller shall have delivered to
the Owner Trustee and the Indenture Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (iii) the Seller shall have given 10 days'
written notice to each Rating Agency of its intent or expectation to enter such
transaction and neither Rating Agency shall have notified the Seller, the Owner
Trustee or the Indenture Trustee that such transaction might or would cause it
to reduce, withdraw or modify its then current rating of any Class of Notes and
(iv) the Seller shall have delivered to the Owner Trustee and the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Owner Trustee and Indenture Trustee, respectively,
in the Receivables and reciting the details of such filings, or (B) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interests. Notwithstanding anything herein to the
contrary, the execution of the foregoing agreement of assumption and compliance
with clauses (i), (ii), (iii) and (iv) above shall be conditions to the
consummation of the transactions referred to in clauses (a), (b) or (c) above.

         SECTION 6.05 LIMITATION ON LIABILITY OF SELLER AND OTHERS. The Seller
and any director, officer, employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in, prosecute
or defend any legal action that shall not be incidental to its obligations under
this Agreement and that in its opinion may involve it in any expense or
liability.

         SECTION 6.06 SELLER MAY OWN CERTIFICATE OR NOTES. The Seller will own
the Certificate, and the Seller and any Affiliate thereof may in its individual
or any other capacity become the owner or pledgee of the Notes of any class with
the same rights as it would have if it were not the Seller or an Affiliate
thereof, except as expressly provided in any Basic Document.

                                       50
<PAGE>

                                  ARTICLE VII

                                  THE SERVICER

         SECTION 7.01 REPRESENTATIONS OF SERVICER. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date and shall survive the sale
of the Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.

         (a)      ORGANIZATION AND GOOD STANDING. The Servicer shall have been
duly organized and shall be validly existing as a corporation in good standing
under the laws of the State of California, with corporate power and authority to
own its properties and to conduct its business as such properties shall be
currently owned and such business is presently conducted, and had at all
relevant times, and shall now have, corporate power, authority and legal right
to acquire, own and sell the Receivables.

         (b)      DUE QUALIFICATION. The Servicer shall be duly qualified to do
business as a foreign corporation in good standing, and shall have obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications and where the failure to so qualify will have a material adverse
effect on the ability of the Servicer to conduct its business or perform its
obligations under this Agreement.

         (c)      POWER AND AUTHORITY. The Servicer shall have the corporate
power and authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery and performance of this Agreement have been
duly authorized by the Servicer by all necessary corporate action.

         (d)      BINDING OBLIGATIONS. This Agreement shall constitute a legal,
valid and binding obligation of the Servicer enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally or by
general equity principles.

         (e)      NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms of this
Agreement shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or bylaws of the Servicer or any
indenture, agreement or other instrument to which the Servicer is a party or by
which it shall be bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than this Agreement), nor violate any law
or, to the best of the Servicer's knowledge, any order, rule or regulation
applicable to the Servicer of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties which breach, default,
conflict, lien or violation would have a material adverse effect on the
earnings, business affairs or business prospects of the Servicer.

                                       51
<PAGE>

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

         SECTION 7.02 INDEMNITIES OF SERVICER. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:

         (a)      The Servicer shall indemnify, defend and hold harmless the
Seller, the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders
and the Certificateholder and any of the officers, directors, employees and
agents of the Seller, the Issuer, the Owner Trustee and the Indenture Trustee
from and against any and all costs, expenses, losses, damages, claims and
liabilities, arising out of or resulting from the use, ownership or operation by
the Servicer or any Affiliate thereof of a Financed Vehicle.

         (b)      The Servicer shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against all costs, expenses, losses,
claims, damages and liabilities arising out of or incurred in connection with
the acceptance or performance of the trusts and duties herein and in the Trust
Agreement contained, in the case of the Owner Trustee, and in the Indenture
contained, in the case of the Indenture Trustee, except to the extent that such
cost, expense, loss, claim, damage or liability: (i) in the case of the Owner
Trustee, shall be due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Owner Trustee or, in the case of the
Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Indenture Trustee; or (ii) in
the case of the Owner Trustee, shall arise from the breach by the Owner Trustee
of any of its representations or warranties set forth in Section 7.03 of the
Trust Agreement.

         (c)      The Servicer shall indemnify, defend and hold harmless the
Seller, the Issuer, the Owner Trustee, the Indenture Trustee, the
Certificateholder and the Noteholders and any of the officers, directors,
employees and agents of the Seller, the Issuer, the Owner Trustee, the Indenture
Trustee and the Certificateholder from and against any and all costs, expenses,
losses, claims, damages and liabilities (including without limitation reasonable
fees and expenses of counsel) to the extent that such cost, expense, loss,
claim, damage or liability arose out of, or is imposed upon any such Person
through, the negligence, willful misfeasance or bad faith of the Servicer in the
performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement, including those
that may be incurred by any such indemnified party as a result of any act or
omission by the Servicer in connection with its maintenance and custody of the
Receivables Files.

                                       52
<PAGE>

         (d)      Promptly after receipt by a party indemnified under this
Section 7.02 (an "Indemnified Party") of notice of the commencement of any
action, such Indemnified Party will, if a claim in respect thereof is to be made
against the party providing indemnification under this Section 7.02 (an
"Indemnifying Party"), notify such Indemnifying Party of the commencement
thereof. In case any such action is brought against any Indemnified Party under
this Section 7.02 and it notifies the Indemnifying Party of the commencement
thereof, the Indemnifying Party will assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Party (who may, unless there is, as
evidenced by an opinion of counsel to the Indemnified Party stating that there
is an unwaivable conflict of interest, be counsel to the Indemnifying Party),
and the Indemnifying Party will not be liable to such Indemnified Party under
this Section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof, other than reasonable
costs of investigation. The obligations set forth in this Section 7.02 shall
survive the termination of this Agreement or the resignation or removal of the
Servicer, the Owner Trustee or the Indenture Trustee and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter collects any of
such amounts from others, such Person shall promptly repay such amounts to the
Servicer, without interest.

         For purposes of this Section, in the event of the termination of the
rights and obligations of TMCC (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture Trustee)
pursuant to Section 8.02.

         SECTION 7.03 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER. Any corporation (a) into which the Servicer may be
merged or consolidated, (b) which may result from any merger, conversion or
consolidation to which the Servicer shall be a party or (c) which may succeed to
all or substantially all of the business of the Servicer, which corporation in
any of the foregoing cases executes an agreement of assumption to perform every
obligation of the Servicer under this Agreement, shall be the successor to the
Servicer under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties to this Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 7.01 shall have been
breached (except that the representations regarding the due organization and
valid existence of the successor may be deemed to reference jurisdictions other
than California), and no Servicer Default, and no event which, after notice or
lapse of time, or both, would become a Servicer Default, shall have occurred and
be continuing, (ii) the Servicer shall have delivered to the Owner Trustee and
the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with,
(iii) the Servicer shall have given 10 days' written notice to each Rating
Agency of its intent or expectation to enter such transaction and neither Rating
Agency shall have notified the Seller, the Owner Trustee or the Indenture
Trustee that such transaction might or would cause it to reduce, withdraw or
modify its then current rating of any Class of Notes, (iv) immediately after
giving effect to such transaction, the successor to the Servicer shall become
the Administrator under the Administration Agreement in

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accordance with Section 8 of such Agreement and (v) the Servicer shall have
delivered to the Owner Trustee and the Indenture Trustee an Opinion of Counsel
stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of the
Owner Trustee and the Indenture Trustee, respectively, in the Receivables and
reciting the details of such filings or (B) no such action shall be necessary to
preserve and protect such interests. Notwithstanding anything herein to the
contrary, the execution of the foregoing agreement of assumption and compliance
with clauses (i), (ii), (iii), (iv) and (v) above shall be conditions to the
consummation of the transactions referred to in clause (a), (b) or (c) above.

         SECTION 7.04 LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Seller, the Issuer, the Indenture
Trustee, the Owner Trustee, the Noteholders or the Certificateholder, except as
provided under this Agreement, for any action taken or for refraining from the
taking of any action pursuant to this Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Servicer or any
such person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties under this Agreement. The
Servicer and any director, officer, employee or agent of the Servicer may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any person respecting any matters arising under this Agreement.

         Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
PROVIDED, HOWEVER, that the Servicer may (with the written consent of the Owner
Trustee or Indenture Trustee) undertake any reasonable action that it may deem
necessary or desirable in respect of the Basic Documents and the rights and
duties of the parties to the Basic Documents and the interests of the
Certificateholder under this Agreement and the Noteholders under the Indenture.
In such event, the reasonable legal expenses and costs for such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Estate (if any Notes are then outstanding) or the Owner Trust Estate (if
no Notes are then outstanding) and the Servicer will be entitled to be
reimbursed therefor solely from Available Collections.

         SECTION 7.05 TMCC NOT TO RESIGN AS SERVICER. Subject to the provisions
of Section 7.03, TMCC shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon a determination that
the performance of its duties under this Agreement shall no longer be
permissible under applicable law. Notice of any such determination permitting
the resignation of TMCC shall be communicated to the Owner Trustee, the
Indenture Trustee and each Rating Agency at the earliest practicable time (and,
if such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall have (i) assumed the responsibilities and obligations of TMCC in
accordance with Section

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<PAGE>

8.02 and (ii) become the Administrator under the Administration Agreement in
accordance with Section 8 of such Agreement.

                                  ARTICLE VIII

                                     DEFAULT

         SECTION 8.01 SERVICER DEFAULT. Each of the following events is a
"Servicer Default":

         (a)      any failure by the Servicer (or the Seller, so long as TMCC is
the Servicer) to deliver to the Relevant Trustee for deposit in the Collection
Account, Payahead Account or Reserve Fund any required payment or to direct the
Relevant Trustee to make any required payment or distribution therefrom, which
failure continues unremedied for a period of three Business Days after discovery
of the failure by an officer of the Servicer or written notice of such failure
is received (i) by the Servicer (or the Seller, so long as TMCC is the Servicer)
from the Owner Trustee or the Indenture Trustee or (ii) to the Seller or the
Servicer, as the case may be, and to the applicable Owner Trustee and Indenture
Trustee by the Holders of Notes evidencing not less than 25% of the Class A
Notes, acting as a single Class, excluding for purposes of such calculation and
action all Securities held or beneficially owned by TMCC, TAFR LLC or any of
their Affiliates (provided that such event will not be a Servicer Default if (A)
such failure or delay is caused by an event of force majeure, (B) does not
continue for more than 10 Business Days, (C) during such period the Servicer
uses all commercially reasonable efforts to perform its obligations under this
Agreement and (D) the Servicer provides to the Owner Trustee, Indenture Trustee,
Seller and Securityholders prompt notice of such failure or delay that includes
a description of the Servicer's efforts to remedy such failure or delay);

         (b)      failure by the Servicer or the Seller, as the case may be,
duly to observe or to perform in any material respect any other covenants or
agreements of the Servicer or the Seller (as the case may be) set forth in this
Agreement, which failure shall materially and adversely affect the rights of
Certificateholder or Noteholders and shall continue unremedied for a period of
90 days after the date on which written notice of such failure is received (i)
by the Servicer (or the Seller, so long as TMCC is the Servicer) from the Owner
Trustee or the Indenture Trustee or (ii) to the Seller or the Servicer, as the
case may be, and to the Owner Trustee and Indenture Trustee by the holders of
Notes evidencing not less than 25% of the Class A Notes, acting together as a
single Class, excluding for purposes of such calculation and action all
Securities held or beneficially owned by TMCC, TAFR LLC or any of their
Affiliates; or

         (c)      the occurrence of an Insolvency Event with respect to the
Servicer.

At any time when a Servicer Default has occurred and is continuing, so long as
the Servicer Default shall not have been remedied, either the Indenture Trustee
or the Holders of Notes evidencing not less than 51% of the Outstanding Amount
of the Class A Notes acting as a single Class, excluding for purposes of such
calculation and action all Securities held or beneficially owned by TMCC, TAFR
LLC or any of their Affiliates, by notice then given in writing to the Servicer
(and to the Indenture Trustee and the Owner Trustee if given by the Noteholders)
may terminate all the rights and obligations (other than the obligations set
forth in Section 7.02 hereof and the rights set forth in Section 7.04 hereof) of
the Servicer under this Agreement. By the

                                       55
<PAGE>

same required vote, the Noteholders specified in the prior sentence may waive
any such Servicer Default (other than a default in the making of any required
deposits or payments from or to the Collection Account, Reserve Account or
Payahead Account) for a specified period or permanently. Upon any such waiver of
a past default, such default shall cease to exist, and any Servicer Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto.

         SECTION 8.02 APPOINTMENT OF SUCCESSOR.

         (a)      Upon the Servicer's receipt of notice of termination pursuant
to Section 8.01 or the Servicer's resignation in accordance with the terms of
this Agreement, the predecessor Servicer shall continue to perform its functions
as Servicer under this Agreement, in the case of termination, only until the
date specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of (i) the date 45 days from the delivery to the
Owner Trustee and the Indenture Trustee of written notice of such resignation
(or written confirmation of such notice) in accordance with the terms of this
Agreement and (ii) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of the Servicer's termination
hereunder, the Indenture Trustee shall appoint a Successor Servicer, and the
Successor Servicer shall accept its appointment (including its appointment as
Administrator under the Administration Agreement as set forth in Section
8.02(b)) by a written assumption in form acceptable to the Owner Trustee and the
Indenture Trustee. In the event that a Successor Servicer has not been appointed
at the time when the predecessor Servicer has ceased to act as Servicer in
accordance with this Section, the Indenture Trustee without further action shall
automatically be appointed the Successor Servicer and the Indenture Trustee
shall be entitled to the Servicing Fee. Notwithstanding the above, the Indenture
Trustee shall, if it shall be unwilling or legally unable so to act, appoint or
petition a court of competent jurisdiction to appoint any established
institution having a net worth of not less than $50,000,000 and whose regular
business shall include the servicing of automobile and/or light-duty truck
receivables, as the successor to the Servicer under this Agreement. In
connection therewith, the Indenture Trustee is authorized and empowered to offer
such successor servicer compensation up to, but not in excess of, the Total
Servicing Fee and other servicing compensation specified in this Agreement as
payable to the initial Servicer. Upon such appointment, the Indenture Trustee
will be released from the duties and obligations of acting as Successor
Servicer, such release effective upon the effective date of the servicing
agreement entered into between the Successor Servicer and the Issuer.

         (b)      Upon appointment, the successor Servicer (including the
Indenture Trustee acting as successor Servicer) shall (i) be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement and (ii) become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.

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<PAGE>

         (c)      On or after the receipt by the Servicer of written notice of
termination pursuant to Section 8.01, all authority and power of the Servicer
under this Agreement, whether with respect to the Notes, the Certificate or the
Receivables or otherwise, shall, without further action, pass to and be vested
in the Indenture Trustee or such Successor Servicer as may be appointed under
this Section 8.02 and, without limitation, the Indenture Trustee and the Owner
Trustee are hereby authorized and empowered to execute and deliver, for the
benefit of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise. The predecessor Servicer shall cooperate
with the Successor Servicer and the Owner Trustee in effecting the termination
of the responsibilities and rights of the predecessor Servicer under this
Agreement, including, without limitation, the transfer to the Successor Servicer
for administration by it of all cash amounts that shall at the time be held by
the predecessor Servicer for deposit, or have been deposited by the predecessor
Servicer, in the Collection Account or Payahead Account or thereafter received
with respect to the Receivables and all Payments Ahead that shall at that time
be held by the predecessor Servicer. All reasonable costs and expenses
(including attorneys' fees) incurred in connection with transferring the
Receivable Files to the Successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section shall be paid by
the predecessor Servicer upon presentation of reasonable documentation of such
costs and expenses. In the event that the Indenture Trustee succeeds to the
rights and obligations of the Servicer hereunder, and a subsequent transfer of
such rights and obligations is effected pursuant to Section 8.01 or this Section
8.02 hereof, the original Servicer hereunder shall reimburse the Indenture
Trustee for all reasonable costs and expenses as described in the immediately
preceding sentence. Upon receipt of notice of the occurrence of a Servicer
Default, the Indenture Trustee shall give notice thereof to the Rating Agencies.

         SECTION 8.03 REPAYMENT OF ADVANCES; COMPENSATION PAYABLE. If the
Servicer shall resign or be terminated, the Servicer shall continue to be
entitled to receive reimbursement for Outstanding Advances pursuant to Sections
5.03 and 5.04 with respect to all Advances previously made thereby in the manner
specified in such Sections, and shall continue to be entitled to all accrued and
unpaid compensation payable to the Servicer through the date of such termination
as specified in Section 4.09 of this Agreement.

         SECTION 8.04 NOTIFICATION. Upon any termination of, or appointment of a
successor to, the Servicer pursuant to this Article VIII, the Owner Trustee
shall give prompt written notice thereof to Certificateholder, and the Indenture
Trustee shall give prompt written notice thereof to Noteholders, the Swap
Counterparty and the Rating Agencies.

                                   ARTICLE IX

                                   TERMINATION

         SECTION 9.01 OPTIONAL PURCHASE OF ALL RECEIVABLES.

         (a)      On each Payment Date following the last day of a Collection
Period as of which the Pool Balance shall be less than the Optional Purchase
Percentage (expressed as a seven-digit

                                       57
<PAGE>

decimal figure) multiplied by the Original Pool Balance, the Servicer, or any
successor to the Servicer, shall have the option to purchase the corpus of the
Owner Trust Estate (whether or not such assets then comprise all or a portion of
the Trust Estate) for an amount equal to the Optional Purchase Price. To
exercise such option, the Servicer, or any successor to the Servicer, shall
notify the Swap Counterparty, the Owner Trustee and the Indenture Trustee of its
intention to do so in writing, no later than the tenth day of the month
preceding the month in which the Payment Date as of which such purchase is to be
effected and shall, on or before the Payment Date on which such purchase is to
occur, deposit pursuant to Section 5.05 in the Collection Account an amount
equal to the Optional Purchase Price, and shall succeed to all interests in and
to the Trust Estate and the Owner Trust Estate. Amounts so deposited will be
paid and distributed as set forth in Section 5.06 of this Agreement. Upon such
deposit of the amount necessary to purchase the corpus of the Owner Trust
Estate, the Servicer shall for all purposes of this Agreement be deemed to have
released all claims for reimbursement of Outstanding Advances made in respect of
the Receivables.

         (b)      Notice of any such purchase of the Owner Trust Estate shall be
given by the Owner Trustee and the Indenture Trustee to each Securityholder and
the Swap Counterparty as soon as practicable after their receipt of notice
thereof from the Servicer.

         (c)      Following the satisfaction and discharge of the Indenture and
the payment in full of the principal of and interest on the Notes, the
Certificateholder will succeed to the rights of the Noteholders under this
Agreement other than Section 5.06 and the Owner Trustee will succeed to the
rights of, and assume the obligations of, the Indenture Trustee provided for in
this Agreement.

         (d)      Upon the repurchase of any Receivable by the Seller or the
Servicer, pursuant to any provision hereof (including Sections 3.02, 4.08 and
9.01(a)), the Owner Trustee on behalf of the Issuer and the Certificateholder,
and the Indenture Trustee on behalf of the Noteholders, shall, without further
action, be deemed to transfer, assign, set-over and otherwise convey to the
Seller or the Servicer, as the case may be, all right, title and interest of the
Owner Trustee on behalf of the Issuer in, to and under such repurchased
Receivable, all monies due or to become due with respect thereto and all
proceeds thereof and the other property conveyed to the Issuer hereunder
pursuant to Section 2.01 with respect to such Receivable, and all security and
any documents relating thereto, such assignment being an assignment outright and
not for security; and the Seller or the Servicer, as applicable, shall thereupon
own each such Receivable, and all such related security and documents, free of
any further obligation to the Issuer, the Owner Trustee, the Certificateholder,
the Indenture Trustee or the Noteholders with respect thereto. The Owner Trustee
and Indenture Trustee shall execute such documents and instruments of transfer
and assignment and take such other actions as shall be reasonably requested by
the Seller or the Servicer, as the case may be, to effect the conveyance of such
Receivable pursuant to this Section. If in any enforcement suit or legal
proceeding it is held that the Seller or Servicer may not enforce a repurchased
Receivable on the ground that it is not a real party in interest or a holder
entitled to enforce the Receivable, the Owner Trustee on behalf of the Issuer
and the Certificateholder, and the Indenture Trustee on behalf of the
Noteholders shall, at the written direction and expense of the Seller or
Servicer, as the case may be, take such reasonable steps as the Seller or
Servicer deems necessary to enforce the Receivable, including bringing suit in
the name or names of the Issuer, Certificateholder or Noteholders.

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<PAGE>

         SECTION 9.02 TERMINATION OF THE TRUST AGREEMENT. The respective
obligations and responsibilities of the Issuer, the Seller and the Servicer
under this Agreement shall terminate upon the termination of the Trust Agreement
pursuant to Article IX of the Trust Agreement.

                                   ARTICLE X

                                  MISCELLANEOUS

         SECTION 10.01 AMENDMENT. This Agreement may be amended by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee, but
without the consent of any of the Noteholders or the Certificateholder, to cure
any ambiguity, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions in this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholder; PROVIDED, HOWEVER, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee
and the Indenture Trustee, adversely affect in any material respect the
interests of any Noteholder or Certificateholder. This Agreement may also be
amended by the Seller, the Servicer and the Issuer, with the consent of the
Indenture Trustee, but without the consent of any of the Noteholders or the
Certificateholder for the purpose of changing the formula for determining the
Specified Reserve Account Balance, the manner in which the Reserve Account is
funded (i.e. to allow the deposit of cash therein by any Person, but not to
change any order of priority of payments and distributions specified in Section
5.06 of the Sale and Servicing Agreement), changing the remittance schedule for
the deposit of collections with respect to the Receivables in the Collection
Account or Payahead Account pursuant to Section 5.02 hereof or changing the
definition of Eligible Investment, in each case only if the Indenture Trustee
and/or the Owner Trustee, as the case may be, (i) has received a letter from
Standard & Poor's to the effect that Standard & Poor's will not qualify, reduce
or withdraw the rating it has currently assigned to any Class of Notes as a
result of such amendment and (ii) has provided Moody's with 10 days prior
written notice of such amendment and Moody's shall not have notified the
Indenture Trustee and/or the Owner Trustee, as the case may be, that such
amendment might or would result in the qualification, reduction or withdrawal of
the rating it has currently assigned to any Class of Notes; provided that no
such amendment may increase or reduce in any manner or accelerate or delay the
timing of collections on the Receivables or payments required to be made to
Holders of any Class of Notes or of the Certificate without the consent of all
Holders of each affected Class or the Certificateholder, if affected.

         This Agreement may also be amended from time to time by the Seller, the
Servicer and the Issuer, with the consent of the Indenture Trustee, the consent
of (A) if the interests of Indenture Trustee or the Noteholders are affected,
the Holders of Notes evidencing not less than 51% of the outstanding Principal
Balance of each affected Class of Notes, acting as a single Class but excluding
for purposes of such calculation and action all Securities held or beneficially
owned by TMCC, TAFR LLC or any of their Affiliates, (B) if the interests of the
Issuer, Owner Trustee or Certificateholder are affected, the Holder of the
Certificate and/or (C) if the interests of the Swap Counterparty are affected,
the Swap Counterparty, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement

                                       59
<PAGE>

or of modifying in any manner the rights of such Noteholders or of the
Certificateholder; PROVIDED, HOWEVER, that no such amendment may (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on the related Receivables or payments required to be
made to Holders of any Class of Notes or the Certificateholder without the
consent of all Holders of each affected Class of Notes or the Certificateholder,
as the case may be, or (ii) reduce the aforesaid percentage of the Notes or the
aforesaid Certificateholder required to consent to any such amendment, without
the consent of the Holders of each Class of Notes or of the Certificate, as the
case may be, affected thereby.

         Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee, the Swap
Counterparty (unless TMCC or an Affiliate thereof is the Servicer and the Swap
Counterparty at the time of delivery) and each of the Rating Agencies.

         It shall not be necessary for the consent of the Certificateholder or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.

         Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section
10.02. The Owner Trustee and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's or
the Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.

         SECTION 10.02 PROTECTION OF TITLE TO TRUST.

         (a)      The Seller shall execute and file such financing statements
and cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of the Issuer and of the Indenture Trustee in the
Receivables and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the Owner Trustee and the Indenture Trustee file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.

         (b)      Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC, unless it shall have given the Owner Trustee and the Indenture
Trustee at least five days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed financing statements or
continuation statements.

         (c)      Each of the Seller and the Servicer shall have an obligation
to give the Owner Trustee and the Indenture Trustee at least 60 days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC

                                       60
<PAGE>

would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
any such amendment or new financing statement. The Servicer shall at all times
maintain each office from which it shall service Receivables, and its principal
executive office, within the United States of America.

         (d)      The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.

         (e)      The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables, the
Servicer's master computer records (including any backup archives) that refer to
any Receivable shall indicate clearly the interest of the Issuer, the Owner
Trustee and the Indenture Trustee in such Receivable and that such Receivable is
owned by the Issuer and has been pledged to the Indenture Trustee. Indication of
these respective interests in a Receivable shall be deleted from or modified on
the Servicer's computer systems when, and only when, the related Receivable
shall have become a Liquidated Receivable or been repurchased.

         (f)      If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
automotive receivables to, any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Issuer and has been pledged to the Indenture Trustee.

         (g)      Upon request, the Servicer shall furnish to the Owner Trustee
or to the Indenture Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Owner Trust Estate, together with a reconciliation of such list to the Schedule
of Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Owner Trust Estate.

         (h)      The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee:

                  (A)      promptly after the execution and delivery of this
         Agreement and, if required pursuant to Section 10.01, of each amendment
         hereto, an Opinion of Counsel stating that, in the opinion of such
         counsel, either (A) all financing statements and continuation
         statements have been executed and filed that are necessary fully to
         preserve and protect the interest of the Owner Trustee and the
         Indenture Trustee in the Receivables, and reciting the details of such
         filings or referring to prior Opinions of Counsel in which such details
         are given, or (B) no such action shall be necessary to preserve and
         protect such interest, in each case also specifying any action
         necessary (as of the date of such opinion) to be taken in the following
         year to preserve and protect such interest; and

                                       61
<PAGE>

                  (B)      within 90 days after the beginning of each calendar
         year beginning with the first calendar year beginning more than three
         months after the Cutoff Date, an Opinion of Counsel, dated as of a date
         during such 90-day period, stating that, in the opinion of such
         counsel, either (A) all financing statements and continuation
         statements have been executed and filed that are necessary fully to
         preserve and protect the interest of the Owner Trustee and the
         Indenture Trustee in the Receivables, and reciting the details of such
         filings or referring to prior Opinions of Counsel in which such details
         are given, or (B) no such action shall be necessary to preserve and
         protect such interest.

         SECTION 10.03 NOTICES. All demands, notices, communications and
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Servicer, to Toyota Motor Credit Corporation, 19001 S. Western
Avenue, Torrance, California 90509, Attention: Vice President, Treasury, (310)
468-4001, (b) in the case of the Seller, to Toyota Auto Finance Receivables LLC,
19300 Gramercy Place, North Building, Torrance, California 90509, Attention:
President, (310) 468-7333, (c) in the case of the Issuer or the Owner Trustee,
at the Corporate Trust Office (as defined in the Trust Agreement), (d) in the
case of the Indenture Trustee, at the Corporate Trust Office specified in the
Indenture, (e) in the case of Moody's, to Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York 10007, (f) in the
case of Standard & Poor's, to Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, 55 Water Street, New York, New York 10041, Attention
of Asset Backed Surveillance Department; or, as to each of the foregoing, at
such other address as shall be designated by written notice to the other
parties.

         SECTION 10.04 ASSIGNMENT BY THE SELLER OR THE SERVICER. Notwithstanding
anything to the contrary contained herein, except as provided in Sections 6.04
and 7.03 of this Agreement and as provided in the provisions of this Agreement
concerning the resignation or termination of the Servicer, this Agreement may
not be assigned by the Seller or the Servicer.

         SECTION 10.05 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Seller, the Servicer, the Issuer,
the Owner Trustee, the Certificateholder, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.

         SECTION 10.06 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         SECTION 10.07 SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

                                       62
<PAGE>

         SECTION 10.08 HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

         SECTION 10.09 GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of California, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.

         SECTION 10.10 ASSIGNMENT BY ISSUER. The Seller hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest by
the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders of all right, title and interest of the Issuer in, to and under
the Receivables and/or the assignment of any or all of the Issuer's rights and
obligations hereunder or under the Interest Rate Swap Agreement to the Indenture
Trustee.

         SECTION 10.11 NONPETITION COVENANTS.

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

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

         SECTION 10.12 LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE
TRUSTEE.

                  Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by First Union Trust Company, National
Association, not in its individual capacity, but solely in its capacity as Owner
Trustee on behalf of the Issuer, and by Wells Fargo Bank Minnesota, National
Association, not in its individual capacity, but solely in its capacity as
Indenture Trustee under the Indenture. In no event shall First Union Trust
Company, National Association in its individual capacity or Wells Fargo Bank
Minnesota, National Association in its individual capacity have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Issuer hereunder or in any of the certificates, notices or agreements
delivered by the Seller or Servicer, or prepared by the Seller or Servicer for
delivery

                                       63
<PAGE>

by the Owner Trustee on behalf of the Issuer, pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer. For all purposes
of this Agreement, in the performance of its duties or obligations hereunder or
in the performance of any duties or obligations of the Issuer hereunder, the
Owner Trustee shall be subject to, and entitled to the benefits of, the terms
and provisions of Articles VI, VII and VIII of the Trust Agreement.

                                       64
<PAGE>

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

                              TOYOTA AUTO RECEIVABLES 2001-B OWNER TRUST

                              By:  First Union Trust Company, National
                              Association,
                              not in its individual capacity but solely as
                              Owner Trustee on behalf of the Issuer

                              By: /s/ Sterling C. Correia
                                 -----------------------------------------------
                              Name: Sterling C. Correia

                              Title: Vice President

                              TOYOTA AUTO FINANCE RECEIVABLES LLC, Seller

                              By:  /s/ Lloyd Mistele
                                 -----------------------------------------------
                              Name:     Lloyd Mistele
                              Title:    President

                              TOYOTA MOTOR CREDIT CORPORATION, Servicer

                              By:  /s/ George E. Borst
                                 -----------------------------------------------
                              Name:     George E. Borst
                              Title:    President and Chief Executive Officer

ACKNOWLEDGED AND ACCEPTED AS OF
THE DAY AND YEAR FIRST ABOVE WRITTEN:

WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as Indenture Trustee

By: /s/ Marianna Stershic
   ---------------------------------------------------
Name: Marianna C. Stershic
Title: Vice President

                                      S-1
<PAGE>

                                   SCHEDULE A

                             Schedule of Receivables

   (Omitted - Originals on file at the office of the Seller and Owner Trustee)

                                      SA-1
<PAGE>

                                    EXHIBIT A

                         Form of Servicer's Certificate

                                 (SEE ATTACHED)

                                       A-1

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