EXHIBIT 4.1
[Draft - 10/17/97]
NISSAN AUTO RECEIVABLES 1997-A GRANTOR TRUST
[-]% ASSET BACKED CERTIFICATES
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NISSAN AUTO RECEIVABLES CORPORATION
Seller
NISSAN MOTOR ACCEPTANCE CORPORATION
Servicer and in its individual capacity
THE FUJI BANK AND TRUST COMPANY
Trustee
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FORM OF POOLING AND SERVICING AGREEMENT
Dated as of October 1, 1997
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Page
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TABLE OF CONTENTS
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ARTICLE I.
INTRODUCTION.............................. 1
Section 1.01. DEFINITIONS..................................... 1
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Section 1.02. USAGE OF TERMS.................................. 20
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Section 1.03. CUTOFF DATE AND RECORD DATE..................... 20
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Section 1.04. SECTION REFERENCES.............................. 20
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ARTICLE II.
THE TRUST............................... 21
Section 2.01. CREATION OF TRUST............................... 21
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Section 2.02. CONVEYANCE OF RECEIVABLES....................... 21
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Section 2.03. ACCEPTANCE BY TRUSTEE........................... 22
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ARTICLE III.
THE RECEIVABLES............................ 22
Section 3.01. REPRESENTATIONS AND WARRANTIES OF SELLER
.............................................................. 22
Section 3.02. REPURCHASE UPON BREACH.......................... 26
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Section 3.03. CUSTODY OF RECEIVABLE FILES..................... 27
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Section 3.04. DUTIES OF SERVICER AS CUSTODIAN................. 28
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Section 3.05. INSTRUCTIONS; AUTHORITY TO ACT.................. 28
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Section 3.06. CUSTODIAN'S INDEMNIFICATION..................... 28
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Section 3.07. EFFECTIVE PERIOD AND TERMINATION................ 29
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ARTICLE IV.
ADMINISTRATION AND SERVICING OF RECEIVABLES.............. 29
Section 4.01. DUTIES OF SERVICER.................. 29
Section 4.02. COLLECTION OF RECEIVABLE PAYMENTS............... 31
Section 4.03. REALIZATION UPON RECEIVABLES.................... 31
Section 4.04. PHYSICAL DAMAGE INSURANCE....................... 31
Section 4.05. MAINTENANCE OF SECURITY INTERESTS IN
FINANCED VEHICLES........................................... 31
Section 4.06. COVENANTS OF SERVICER........................... 31
Section 4.07. REPURCHASE OF RECEIVABLES UPON BREACH........... 32
Section 4.08. SERVICER FEE.................................... 33
Section 4.09. SERVICER'S CERTIFICATE.......................... 33
Section 4.10. ANNUAL STATEMENT AS TO COMPLIANCE;
NOTICE OF DEFAULT........................................... 34
Section 4.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT'S REPORT......................................... 34
Section 4.12. ACCESS TO CERTAIN DOCUMENTATION AND
INFORMATION REGARDING RECEIVABLES........................... 35
Section 4.13. SERVICER EXPENSES............................... 35
ARTICLE V.
DISTRIBUTIONS; SUBORDINATION SPREAD ACCOUNTS;
STATEMENTS TO CERTIFICATEHOLDERS.................... 36
Section 5.01. ACCOUNTS........................................ 36
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Section 5.02. COLLECTIONS..................................... 36
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Section 5.03. APPLICATION OF COLLECTIONS...................... 38
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Section 5.04. ADVANCES........................................ 38
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Section 5.05. ADDITIONAL DEPOSITS............................. 39
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Section 5.06. DISTRIBUTIONS................................... 39
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Section 5.07. [RESERVED] ..................................... 42
Section 5.08. NET DEPOSITS.................................... 42
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Section 5.09. STATEMENTS TO CERTIFICATEHOLDERS................ 43
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Section 5.10. NO PETITION..................................... 45
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ARTICLE VI.
ADDITIONAL AGREEMENTS......................... 45
Section 6.01. YIELD SUPPLEMENT RESERVE ACCOUNT................ 45
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Section 6.02. CUSTODY AND PLEDGE AGREEMENT. .................. 45
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ARTICLE VII.
THE CERTIFICATES............................ 46
Section 7.01. THE CERTIFICATES................................ 46
Section 7.02. AUTHENTICATION OF CERTIFICATES.................. 46
Section 7.03. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES................................................ 46
Section 7.04. MUTILATED, DESTROYED, LOST, OR STOLEN
CERTIFICATES................................................ 48
Section 7.05. PERSONS DEEMED OWNERS........................... 49
Section 7.06. ACCESS TO LIST OF CERTIFICATEHOLDERS'
NAMES AND ADDRESSES......................................... 49
Section 7.07. MAINTENANCE OF OFFICE OR AGENCY................. 49
Section 7.08. BOOK-ENTRY CERTIFICATES......................... 50
Section 7.09. NOTICES TO CLEARING AGENCY...................... 51
Section 7.10. DEFINITIVE CERTIFICATES......................... 51
ARTICLE VIII.
THE SELLER............................... 52
Section 8.01. REPRESENTATIONS OF SELLER....................... 52
Section 8.02. LIABILITY OF SELLER; INDEMNITIES................ 53
Section 8.03. MERGER OR CONSOLIDATION OF, OR
ASSUMPTION OF THE OBLIGATIONS OF, SELLER.................... 54
Section 8.04. LIMITATION ON LIABILITY OF SELLER AND
OTHERS...................................................... 55
Section 8.05. SELLER MAY OWN CERTIFICATES..................... 55
ARTICLE IX.
THE SERVICER.............................. 58
Section 9.01. REPRESENTATIONS OF SERVICER......... 58
Section 9.02. INDEMNITIES OF SERVICER......................... 59
Section 9.03. MERGER OR CONSOLIDATION OF, OR
ASSUMPTION OF THE OBLIGATIONS OF, SERVICER.................. 61
Section 9.04. LIMITATION ON LIABILITY OF SERVICER AND
OTHERS...................................................... 61
Section 9.05. DELEGATION OF DUTIES............................ 62
ARTICLE X.
DEFAULT................................ 63
Section 10.01. EVENTS OF DEFAULT.................. 63
Section 10.02. APPOINTMENT OF SUCCESSOR....................... 65
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Section 10.03. REPAYMENT OF ADVANCES.......................... 66
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Section 10.04. NOTIFICATION TO CERTIFICATE-HOLDERS............ 66
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Section 10.05. WAIVER OF PAST DEFAULTS........................ 66
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ARTICLE XI.
THE TRUSTEE.............................. 67
SECTION 11.01. DUTIES OF TRUSTEE.............................. 67
Section 11.02. TRUSTEE'S CERTIFICATE.......................... 69
Section 11.03. TRUSTEE'S ASSIGNMENT OF REPURCHASED
RECEIVABLES................................................. 70
Section 11.04. CERTAIN MATTERS AFFECTING THE TRUSTEE.......... 70
Section 11.05. TRUSTEE NOT LIABLE FOR CERTIFICATES OR
RECEIVABLES................................................. 72
Section 11.06. TRUSTEE MAY OWN CERTIFICATES................... 73
Section 11.07. TRUSTEE'S FEES AND EXPENSES.................... 73
Section 11.08. INDEMNITY OF TRUSTEE........................... 74
Section 11.09. ELIGIBILITY REQUIREMENTS FOR TRUSTEE........... 74
Section 11.10. RESIGNATION OR REMOVAL OF TRUSTEE.............. 75
Section 11.11. SUCCESSOR TRUSTEE.............................. 75
Section 11.12. MERGER OR CONSOLIDATION OF TRUSTEE............. 76
Section 11.13. APPOINTMENT OF CO-TRUSTEE OR SEPARATE
TRUSTEE..................................................... 76
Section 11.14. REPRESENTATIONS AND WARRANTIES OF
TRUSTEE..................................................... 78
Section 11.15. TAX RETURNS.................................... 78
Section 11.16. TRUSTEE MAY ENFORCE CLAIMS WITHOUT
POSSESSION OF CERTIFICATES.................................. 79
Section 11.17. SUITS FOR ENFORCEMENT.......................... 79
Section 11.18. RIGHTS OF CERTIFICATEHOLDERS TO DIRECT
TRUSTEE..................................................... 79
Section 11.19. APPOINTMENT OF CUSTODIAN....................... 79
ARTICLE XII.
TERMINATION.............................. 80
Section 12.01. TERMINATION OF THE TRUST....................... 80
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Section 12.02. OPTIONAL PURCHASE OF ALL RECEIVABLES........... 81
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ARTICLE XIII.
MISCELLANEOUS PROVISIONS........................ 82
Section 13.01. AMENDMENT...................................... 82
Section 13.02. PROTECTION OF TITLE TO TRUST................... 83
Section 13.03. LIMITATION ON RIGHTS OF
CERTIFICATEHOLDERS.......................................... 86
Section 13.04. GOVERNING LAW.................................. 87
Section 13.05. NOTICES........................................ 87
Section 13.06. SEVERABILITY OF PROVISIONS..................... 88
Section 13.07. ASSIGNMENT..................................... 88
Section 13.08. CERTIFICATES NONASSESSABLE AND FULLY
PAID........................................................ 88
Section 13.09. FURTHER ASSURANCES............................. 88
Section 13.10. NO WAIVER; CUMULATIVE REMEDIES................. 88
Section 13.11. THIRD-PARTY BENEFICIARIES...................... 89
Section 13.12. ACTIONS BY CERTIFICATEHOLDERS.................. 89
Section 13.13. QUALIFICATION AS GRANTOR TRUST; SEPARATE
ASSETS...................................................... 89
SECTION 13.14. COUNTERPARTS................................... 89
Page
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EXHIBITS
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Exhibit A Class A Certificate
Exhibit B Class B Certificate
Exhibit C Depository Agreement
Exhibit D-1 Trustee's Certificate to Seller
Exhibit D-2 Trustee's Certificate to Servicer
Exhibit E Custody and Pledge Agreement
Exhibit F Yield Supplement Agreement
SCHEDULES
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Schedule A List of Receivables
Schedule B Location of Receivables
FORM OF POOLING AND SERVICING AGREEMENT
This Pooling and Servicing Agreement, dated as of _October 1, 1997, is made
with respect to the formation of the Nissan Auto Receivables 1997-A Grantor
Trust, among NISSAN AUTO RECEIVABLES CORPORATION, a Delaware corporation, as
Seller ("Seller"), NISSAN MOTOR ACCEPTANCE CORPORATION, a California
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corporation, as Servicer ("Servicer") and in its individual capacity ("NMAC"),
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and THE FUJI BANK AND TRUST COMPANY, a bank organized under the laws of New York
(the "Trustee").
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WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
INTRODUCTION
SECTION 1.01. DEFINITIONS. Whenever used in the Agreement, the following
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words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Accrued Interest" on a Receivable, as of the last day of any Collection
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Period, means that amount of interest accrued on the Principal Balance at the
APR but not paid by or on behalf of the Obligor.
"Advance" means the amount, as of the last day of a Collection Period,
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which the Servicer is required to advance on the respective Receivable pursuant
to Section 5.04(a).
"Agreement" means this Agreement and all amendments, amendments and
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restatements, and supplements thereto.
"Amount Financed" with respect to a Receivable means the amount advanced
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under the Receivable toward the purchase price of the Financed Vehicle and any
related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate of
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finance charges stated in the Receivable.
"Annual USAP Report" shall have the meaning specified in Section 4.11.
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"Available Interest" means, for any Distribution Date, the sum of the
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following amounts received during the related Collection Period: (i) that
portion of all collections on Receivables allocable to interest, (ii)
Liquidation Proceeds to the extent allocable to interest due on a Liquidated
Receivable in accordance with the Servicer's customary servicing procedures,
(iii) all Advances made by the Servicer pursuant to Section 5.04, (iv) without
duplication of any amounts described above in clauses (i) and (ii), the
Repurchase Amount of each Receivable that became a Repurchased Receivable during
the related Collection Period to the extent attributable to interest thereon,
and (v) the Yield Supplement Amount received by the Trustee; provided, however,
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that in calculating the Available Interest, amounts paid to the Servicer as
reimbursement for Advances shall be excluded.
"Available Principal" means, for any Distribution Date, the sum of the
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following amounts received during the related Collection Period: (i) that
portion of all collections on Receivables allocable to principal, (ii)
Liquidation Proceeds attributable to principal due on a Liquidated Receivable in
accordance with the Servicer's customary servicing procedures, and (iii) without
duplication of any amounts described above in clauses (i) and (ii), to the
extent attributable to principal, the Repurchase Amount of each Receivable that
became a Repurchased Receivable during such Collection Period.
"Book-Entry Certificates" means a beneficial interest in the Class A
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Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 7.08.
"Business Day" means any day other than a Saturday, a Sunday or a day on
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which banking institutions or trust companies in New York, New York shall be
authorized or obligated by law, executive order or governmental decree to remain
closed.
"Certificate" means a Class A Certificate or a Class B Certificate.
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"Certificate Account" means the account designated as such, established and
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maintained pursuant to Section 5.01.
"Certificateholder" or "Holder" means the Person in whose name a
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Certificate shall be registered in the
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Certificate Register, except that, solely for the purposes of giving any
consent, waiver, request, or demand pursuant to the Agreement, the interest
evidenced by any Class A Certificate registered in the name of the Seller, the
Servicer, or any Person controlling, controlled by, or under common control with
the Seller or the Servicer, 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; provided, that the Trustee shall
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not be liable for the inclusion in any such determination of any interest
evidenced by any Class A Certificate registered in the name of any Person
controlling, controlled by, or under common control with the Seller or the
Servicer unless a Trustee Officer in the Corporate Trust Office with knowledge
hereof and familiarity herewith had actual knowledge that such Person so
controlled, was controlled by, or was under common control with, the Seller or
the Servicer, as the case may be.
"Certificate Owner" shall mean, with respect to a Book-Entry Certificate,
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the Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency) and shall mean, with respect to a
Definitive Certificate, the Certificateholder.
"Certificate Register" and "Certificate Registrar" mean the register
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maintained and the registrar appointed pursuant to Section 7.03.
"Class A Agent" means The Fuji Bank and Trust Company, or any successor.
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"Class A Certificate" means any one of the Certificates executed by the
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Trust and authenticated by the Trustee, in substantially the form set forth in
Exhibit A hereto.
"Class A Certificate Balance" shall equal, initially, the Original Class A
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Certificate Balance and, thereafter, shall equal the Original Class A
Certificate Balance, reduced by all amounts previously distributed to the Class
A Certificateholders and allocable to principal.
"Class A Certificate Factor" means, as of a Distribution Date, a seven-
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digit decimal figure equal to the Class A Certificate Balance as of the close of
business on such Distribution Date divided by the Original Class A Certificate
Balance.
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"Class A Distributable Amount" means, with respect to any Distribution
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Date, the sum of the Class A Principal Distributable Amount and the Class A
Interest Distributable Amount.
"Class A Interest Carryover Shortfall" means, as of the close of business
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on any Distribution Date, the excess, if any, of the Class A Interest
Distributable Amount for such Distribution Date plus any outstanding unpaid
interest owed to holders of Class A Certificates from the preceding Distribution
Date, plus interest on such outstanding unpaid interest amount, to the extent
permitted by law, at the Pass-Through Rate from such preceding Distribution Date
to but not including such current Distribution Date, over the amount of interest
that the holders of the Class A Certificates actually received on such
Distribution Date.
"Class A Interest Distributable Amount" means, with respect to any
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Distribution Date, thirty (30) days of interest at the Pass-Through Rate on the
Class A Certificate Balance as of the close of business on the last day of the
related Collection Period, calculated on the basis of a 360-day year consisting
of twelve 30-day months.
"Class A Percentage" means [_]%
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"Class A Pool Factor" means, as of any Distribution Date, a seven-digit
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decimal figure equal to the Class A Certificate Balance as of the close of
business on such Distribution Date divided by the Original Pool Balance.
"Class A Principal Carryover Shortfall" means, as of the close of business
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on any Distribution Date, the excess, if any, of the Class A Principal
Distributable Amount plus any outstanding unpaid principal owed to holders of
Class A Certificates from preceding Distribution Dates over the amount of
principal that the holders of the Class A Certificates actually received on such
current Distribution Date.
"Class A Principal Distributable Amount" means, with respect to any
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Distribution Date, the Class A Percentage of the sum of: (i) the principal
portion of all payments on Receivables, including prepayments of principal,
received during the related Collection Period, (ii) the aggregate outstanding
principal balance as of the beginning of the related Collection Period of all
Receivables that became Repurchased Receivables under obligations that arose
during a related Collection Period (without duplication of amounts referred to
in clause (i) above) and (iii) the aggregate outstanding principal balance as of
the beginning
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of the related Collection Period of all Receivables that became Liquidated
Receivables during the related Collection Period (without duplication of amounts
referred to in clauses (i) or (ii) above).
"Class A Specified Subordination Spread Account Balance" with respect to
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any Distribution Date shall be $[_]; provided, however, that in the event that
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on any Distribution Date (i) the annualized average for the preceding three
Collection Periods (or such shorter number of Collection Periods as have elapsed
since the Cutoff Date) of the percentage equivalents of the ratios of net losses
(i.e., the net balances of all Liquidated Receivables, less any Liquidation
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Proceeds with respect to such Liquidated Receivables from that or prior
Collection Periods) to the Pool Balance as of the first day of each such
Collection Period exceeds [_]% or (ii) the average for the preceding three
Collection Periods (or such shorter number of Collection Periods as have elapsed
since the Cutoff Date) of the percentage equivalents of the ratios of the number
of Receivables that are delinquent [_] days or more to the outstanding number of
Receivables exceeds [_]%, then the Class A Specified Subordination Spread
Account Balance for such Distribution Date shall be a dollar amount equal to (x)
[_]% of the Pool Balance as of the first day of the related Collection Period
minus (y) the excess of the Pool Balance over the Class A Certificate Balance
both as of the opening of business of the first day of such Collection Period,
but in no event shall the Class A Specified Subordination Spread Account Balance
be more than $[_] or less than $[_]; and provided further, that on any
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Distribution Date on which the aggregate balance of the Class A Certificates is
$[_] or less, after giving effect to the distributions on such Distribution
Date, the Class A Specified Subordination Spread Account Balance shall be the
greater of the balance described above or $[_].
Notwithstanding any contrary practice of the Servicer in accounting for
receivables generally, if a repossessed Financed Vehicle shall remain unsold 90
days after repossession, any remaining balance of the related Receivable shall
be charged off and treated as a net loss for purposes of clause (i) above,
regardless of the Servicer's expectations as to collection or receipt of sale
proceeds.
"Class A Subordination Spread Account" means the account established and
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maintained pursuant to the Custody and Pledge Agreement for the benefit of the
holders of the Class A Certificates.
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"Class B Certificate" means any one of the Certificates executed by the
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Trust and authenticated by the Trustee, in substantially the form set forth in
Exhibit B hereto.
"Class B Certificate Balance" shall equal, initially, the Original Class B
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Certificate Balance and, thereafter, shall equal the amount by which the Pool
Balance on the last day of the related Collection Period exceeds the Class A
Certificate Balance on such Distribution Date.
"Class B Distributable Amount" means, with respect to any Distribution
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Date, the sum of the Class B Principal Distributable Amount and the Class B
Interest Distributable Amount.
"Class B Interest Carryover Shortfall" means, as of the close of business
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on any Distribution Date, the excess, if any, of the Class B Interest
Distributable Amount for such Distribution Date plus any outstanding unpaid
interest owed to holders of Class B Certificates from the preceding Distribution
Date plus interest on such outstanding unpaid interest amount, to the extent
permitted by law, at the Pass-Through Rate from such preceding Distribution Date
to but not including such Distribution Date over the amount of interest that the
holders of the Class B Certificates actually received on such Distribution Date.
"Class B Interest Distributable Amount" means, with respect to any
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Distribution Date, thirty (30) days of interest at the Pass-Through Rate on the
Class B Certificate Balance as of the close of business on the last day of the
related Collection Period.
"Class B Percentage" means [_]%.
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"Class B Principal Carryover Shortfall" means, as of the close of any
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Distribution Date, the excess of the Class B Principal Distributable Amount and
any outstanding unpaid principal owed to holders of Class B Certificates from
the preceding Distribution Date over the amount of principal that the holders of
the Class B Certificates received on such current Distribution Date.
"Class B Principal Distributable Amount" means, with respect to any
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Distribution Date, the Class B Percentage of the sum of: (i) the principal
portion of all payments on Receivables, including prepayments of principal,
received during the related Collection Period, (ii) the aggregate outstanding
principal balance as of the beginning of the related Collection Period of all
Receivables that
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became Repurchased Receivables under an obligation that arose during a related
Collection Period (without duplication of amounts included in clause (i) above)
and (iii) the aggregate outstanding principal balance as of the beginning of the
related Collection Period of all Receivables that become Liquidated Receivables
during the related Collection Period (without duplication of amounts included in
clauses (i) or (ii) above).
"Class B Specified Subordination Spread Account Balance" with respect to
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any Distribution Date shall be equal to $1.00 until such time as the Seller
requests a rating for the Class B Certificates, at which time the Class B
Specified Subordination Spread Account Balance shall be increased to the amount
specified by the rating agencies requested by the Seller to rate the Class B
Certificates.
"Class B Subordination Spread Account" means the account established and
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maintained pursuant to the Custody and Pledge Agreement for the benefit of the
holders of Class B Certificates.
"Clearing Agency" means an organization registered as a "clearing agency"
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pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
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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.
"Collection Account" means the account designated as such, established and
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maintained pursuant to Section 5.01.
"Collection Period" means, with respect to any Distribution Date, the
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preceding calendar month. Any amount stated "as of the close of business of the
last day of a Collection Period" shall give effect to the following calculations
as determined as of the end of the day on such last day: 1) all applications of
collections, 2) all Advances and reductions of Outstanding Advances and 3) all
distributions.
"Corporate Trust Office" means the office of the Trustee, which at the date
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hereof, is located at The Fuji Bank and Trust Company, Two World Trade Center,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Corporate Trust Administration
Department.
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"Custodian" means the party named as such in the Custody and Pledge
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Agreement.
"Custody and Pledge Agreement" means the agreement, substantially in the
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form attached hereto as Exhibit E.
"Cutoff Date" shall be October 1, 1997.
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"Damages" shall have the meaning specified in Section 9.02.
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"Dealer" means the dealer who sold a Financed Vehicle and who originated
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and assigned the respective Receivable to Nissan Motor Acceptance Corporation
under an existing agreement between such dealer and Nissan Motor Acceptance
Corporation.
"Dealer Recourse" means, with respect to a Receivable, all recourse rights
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against the Dealer which originated the Receivable and any successor Dealer.
"Definitive Certificates" shall have the meaning specified in Section 7.08.
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"Delivery" when used with respect to Subordination Spread Account Property
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means:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC and are susceptible of
physical delivery, transfer thereof to the Custodian by physical delivery to the
Custodian indorsed to, or registered in the name of, the Custodian or indorsed
in blank, and, with respect to a certificated security (as defined in Section 8-
102 of the UCC), transfer thereof (i) by delivery of such certificated security
to the Custodian or by delivery of such certificated security to a financial
intermediary indorsed to, or registered in the name of, the Custodian or
indorsed in blank (as defined in Section 8-313 of the UCC) and the making by
such financial intermediary of entries on its books and records identifying such
certificated securities as belonging to the Custodian and the sending by such
financial intermediary of a confirmation of the purchase of such certificated
security by the Custodian, or (ii) by delivery thereof to a "clearing
corporation" (as defined in section 8-102(3) of the UCC) and the making by such
clearing corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the appropriate
securities account of a financial intermediary by the amount
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of such certificated security, the identification by the clearing corporation of
the certificated securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such clearing
corporation or a "custodian bank" (as defined in Section 8-102(4) of the UCC) or
the nominee of either subject to the clearing corporation's exclusive control,
the sending of a confirmation by the financial intermediary of the purchase by
the Custodian of such securities and the making by such financial intermediary
of entries on its books and records identifying such certificated securities as
belonging to the Custodian (all of the foregoing, "Physical Property"), and, in
any event, any such Physical Property in registered form shall be in the name of
the Custodian or its nominee; and such additional or alternative procedures as
may hereafter become appropriate to effect the complete transfer of ownership of
any such Subordination Spread Account Property to the Custodian, consistent with
changes in applicable law or regulations or the interpretation thereof;
(b) with respect to any security issued by the U.S. Treasury, the Federal
Home Loan Mortgage Corporation or by the Federal National Mortgage Association
that is a book-entry security held through the Federal Reserve System pursuant
to Federal book-entry regulations, the following procedures, all in accordance
with applicable law, including applicable federal regulations and Articles 8 and
9 of the UCC: book-entry registration of such Property to an appropriate book-
entry account maintained with a Federal Reserve Bank by a financial intermediary
which is also a "depositary" pursuant to applicable federal regulations and
issuance by such financial intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Custodian of the purchase by
the Custodian of such book-entry securities; the making by such financial
intermediary of entries in its books and records identifying such book-entry
security held through the Federal Reserve System pursuant to Federal book-entry
regulations as belonging to the Custodian and indicating that such financial
intermediary holds such Subordination Spread Account Property solely as agent
for the Custodian; and such additional or alternative procedures as may
hereafter become appropriate to effect complete transfer of ownership of any
such Subordination Spread Account Property to the Custodian, consistent with
changes in applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Subordination Spread Account Property that
is an uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, registration on the books and records of
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the issuer thereof in the name of the financial intermediary, the sending of a
confirmation by the financial intermediary of the purchase by the Custodian of
such uncertificated security and the making by such financial intermediary of
entries on its books and records identifying such uncertificated certificates as
belonging to the Custodian.
"Depository Agreement" means the agreement between the Seller, the
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Custodian and the initial Clearing Agency, dated as of the date of the
Agreement, substantially in the form attached hereto as Exhibit C.
"Determination Date" means the tenth calendar day of each calendar month,
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or if such tenth day is not a Business Day, the next succeeding Business Day.
"Distribution Date" means, for each Collection Period, the 15th day of the
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following month, or if the 15th day is not a Business Day, the next following
Business Day, commencing with November 17, 1997.
"Eligible Investments" mean book entry securities, negotiable instruments
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or securities represented by instruments in bearer or registered form which
evidence;
(a) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of
America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or State banking or depository institution
authorities; provided, however, that at the time of the investment or
-------- -------
contractual commitment to invest therein, the commercial paper or
other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person
other than such depository institution or trust company) thereof shall
have a credit rating from each of the rating agencies then rating the
Certificates in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
rating agencies
10
then rating the Certificates in the highest investment category
granted thereby;
(d) investments in money market funds having a rating from each
of the rating agencies then rating the Certificates in the highest
investment category granted thereby (including funds for which the
Trustee or any of its affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (b);
(g) repurchase obligations with respect to any security or whole
loan, entered into with (a) a depository institution or trust company
(acting as principal) described in clause (b) above (except that the
rating referred to in the proviso in such clause (b) shall be A-1 or
higher in the case of Standard & Poor's Ratings Services) (such
depository institution or trust company being referred to in this
definition as a "financial institution"), (b) a broker/dealer (acting
as principal) registered as a broker or dealer under Section 15 of the
Securities Exchange Act of 1934, as amended (a "broker/dealer"), the
unsecured short-term debt obligations of which are rated P-1 by
▇▇▇▇▇'▇ Investors Service, Inc. and at least A-1 by Standard & Poor's
Ratings Services at the time of entering into such repurchase
obligation (a "rated broker/dealer"), (c) an unrated broker/dealer (an
"unrated broker/dealer"), acting as principal that is a wholly-owned
subsidiary of a non-bank holding company the unsecured short-term debt
obligations of which are rated P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.
and at least A-1 by Standard & Poor's Ratings Services at the time of
entering into such repurchase obligation (a "Rated Holding Company")
or (d) an unrated subsidiary (a "Guaranteed Counterparty"), acting as
principal, that is a wholly-owned subsidiary of
11
a direct or indirect parent Rated Holding Company, which guarantees
such subsidiary's obligations under such repurchase agreement;
provided that the following conditions are satisfied:
(A) the aggregate amount of funds invested in repurchase
obligations of a financial institution, a rated broker/dealer, an
unrated broker/dealer or Guaranteed Counterparty in respect of
which the unsecured short-term ratings of Standard & Poor's
Ratings Services are A-1 (in the case of an unrated broker/dealer
or Guaranteed Counterparty, such rating being that of the related
Rated Holding Company) shall not exceed 20% of the outstanding
Pool Balance (there being no limit on the amount of funds that
may be invested in repurchase obligations in respect of which
such Standard & Poor's Ratings Services rating is A-1+ (in the
case of an unrated broker/dealer or Guaranteed Counterparty, such
rating being that of the related Rated Holding Company));
(B) in the case of the Subordination Spread Accounts and the
Yield Supplement Reserve Account, the rating from Standard &
Poor's Ratings Services in respect of the unsecured short term
debt obligations of the financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty
(in the case of an unrated broker/dealer or Guaranteed
Counterparty, such rating being that of the related Rated Holding
Company) shall be A-1+;
(C) the repurchase obligation must mature within 30 days of
the date on which the Trustee, the Custodian or the Class A
Agent, as applicable, enters into such repurchase obligation;
(D) the repurchase obligation shall not be subordinated to
any other obligation of the related financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty;
(E) the collateral subject to the repurchase obligation is
held, in the appropriate form, by a custodial bank on
12
behalf of the Trustee, the Custodian or the Class A Agent, as
applicable;
(F) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a Guaranteed
Counterparty, the following conditions shall also be satisfied:
(i) the Trustee, the Custodian or the Class A Agent, as
applicable, shall have received an Opinion of Counsel to the
effect that the guarantee of the related Rated Holding
Company is a legal, valid and binding agreement of the Rated
Holding Company, enforceable in accordance with its terms,
subject as to enforceability to bankruptcy insolvency,
reorganization and moratorium or other similar laws
affecting creditors' rights generally and to general
equitable principles:
(ii) the Trustee, the Custodian or the Class A Agent,
as applicable, shall have received (x) an incumbency
certificate for the signer of such guarantee, certified by
an officer of such Rated Holding Company, and (y) a
resolution, certified by an officer of the Rated Holding
Company, of the board of directors (or applicable committee
thereof) of the Rated Holding Company authorizing the
execution, delivery and performance of such guarantee by the
Rated Holding Company;
(iii) the only conditions to the obligation of such
Rated Holding Company to pay on behalf of the Guaranteed
Counterparty shall be that the Guaranteed Counterparty shall
not have paid under such repurchase obligation when required
(it being understood that no notice to, demand on or other
action in respect of the Guaranteed Counterparty is
necessary) and that the Trustee, the Custodian or the Class
A Agent, as applicable, shall make a demand on the Rated
Holding Company to
13
make the payment due under such guarantee;
(iv) the guarantee of the Rated Holding Company shall
be irrevocable with respect to such repurchase obligation
and shall not be subordinated to any other obligation of the
Rated Holding Company; and
(v) each of the rating agencies then rating the
Certificates has confirmed in writing to the Trustee, the
Custodian or the Class A Agent, as applicable, that it has
reviewed the form of the guarantee of the Rated Holding
Company and has determined that the issuance of such
guarantee will not result in the downgrade or withdrawal of
the ratings assigned to the Certificates
; and
(H) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide
that, upon any failure to maintain such overcollateralization,
the repurchase obligation shall become due and payable, and
unless the repurchase obligation is satisfied immediately, the
collateral subject to the repurchase agreement shall be
liquidated and the proceeds applied to satisfy the unsatisfactory
portion of the repurchase obligation; and
(h) any other investment with respect to which the Servicer has
received written notification from the rating agencies then rating the
Certificates that the acquisition of such investment as an Eligible
Investment will not result in a withdrawal or downgrading of the
ratings on the Certificates.
"Event of Default" means an event specified in Section 10.01.
----------------
"Excess Amounts" means, with respect to each Distribution Date, all
--------------
interest collections on or in respect of the Receivables on deposit in the
Certificate Account in respect of such Distribution Date, after making the
14
distributions to the Servicer and the Certificateholders pursuant to Section
5.06(c).
"Final Scheduled Distribution Date" shall be [_].
---------------------------------
"Financed Vehicle" means a new or used automobile or light truck,
----------------
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
"High-Yield Receivable" means a Receivable that bears interest at a
---------------------
rate which is greater than the sum of the Pass-Through Rate and the Servicing
Rate.
"Lien" means a security interest, lien, charge, pledge, equity or
----
encumbrance of any kind other than (in the case of a Financed Vehicle) tax
liens, mechanics' liens and any liens which attach to the Financed Vehicle by
operation of law.
"Liquidated Receivable" means a Receivable which, by its terms, is
---------------------
delinquent more than 120 days or, with respect to Receivables that are
delinquent less than 120 days, the Servicer has (i) determined, in accordance
with its customary servicing procedures, that eventual payment in full is
unlikely or (ii) repossessed the Financed Vehicle.
"Liquidation Proceeds" means the monies collected from whatever
--------------------
source, during the respective Collection Period, on a Liquidated Receivable, net
of the sum of any amounts expended by the Servicer for the account of the
Obligor, plus any amounts required by law to be remitted to the Obligor.
"Monthly Remittance Condition" has the meaning assigned to such term
----------------------------
in Section 5.02 hereof.
"NMAC" means Nissan Motor Acceptance Corporation, and its successors,
----
in its individual capacity and not as Servicer.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
-------
Financed Vehicle or any other Person who owes payments under the Receivable (not
including any Dealer in respect of Dealer Recourse).
"Officer's Certificate" means a certificate signed by the chairman of
---------------------
the board, the president, any executive vice president, any vice president, the
treasurer, any assistant treasurer or the controller of the Seller or the
Servicer, as appropriate.
15
"Opinion of Counsel" means a written opinion of counsel who may but
------------------
need not be counsel to the Seller or Servicer, and who shall be acceptable to
the Trustee.
"Optional Purchase Percentage" shall be 10%.
----------------------------
"Original Class A Certificate Balance" is $[_].
------------------------------------
"Original Class B Certificate Balance" is $[_].
------------------------------------
"Original Pool Balance" is $868,465,033.86.
---------------------
"Outstanding Advances" on a Receivable means the sum, as of the close
--------------------
of business on the last day of a Collection Period, of all Advances as reduced
by payments made as specified in Section 5.04(a) with respect to such
Receivable.
"Pass-Through Rate" is [_]% per annum.
-----------------
"Person" means any individual, corporation, estate, partnership, joint
------
venture, association, joint stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance" as of the close of business on the last day of a
------------
Collection Period means the aggregate Principal Balance of the Receivables
(excluding Repurchased Receivables and Liquidated Receivables) as of the close
of business on the last day of a Collection Period; provided, however, that
-------- -------
where the Pool Balance is relevant in determining whether the requisite
percentage of Class A Certificateholders necessary to effect any consent,
waiver, request or demand shall have been obtained, the Pool Balance shall be
deemed to be reduced by the amount equal to the portion of the Pool Balance
(before giving effect to this provision) represented by the interests evidenced
by any Class A Certificate registered in the name of the Seller, the Servicer or
any Person controlling, controlled by, or under common control with the Seller
or the Servicer.
"Pool Factor" as of the last day of a Collection Period means a seven-
-----------
digit decimal figure equal to the Pool Balance divided by the Original Pool
Balance.
"Principal Balance" of a Receivable, as of any date of determination,
-----------------
means the Amount Financed minus the sum of (i) all payments on such Receivable
attributable to principal, (ii) any refunded portion of extended warranty
protection plan or service contract costs, or of physical damage, credit life or
disability insurance premiums
16
included in the Amount Financed, (iii) any payment of the Repurchase Amount with
respect to the Receivable allocable to principal and (iv) any Liquidation
Proceeds to the extent allocable to principal.
"Purchase Agreement" is the agreement dated as of October 1, 1997,
------------------
relating to the purchase by the Seller from Nissan Motor Acceptance Corporation
of the Receivables.
"Receivable" means any retail installment sale contract which appears
----------
on Schedule A to the Agreement (which Schedule A may be in the form of
microfiche) and which has not been released by the Trustee from the Trust.
"Receivable Files" means the documents specified in Section 3.03.
----------------
"Record Date" means the fourteenth day of the current calendar month
-----------
or, if Definitive Certificates are issued, the last day of the Collection Period
preceding the related Distribution Date.
"Repurchase Amount" for any Repurchased Receivable as of the close of
-----------------
any Collection Period, means the sum of the Principal Balance thereof as of the
beginning of such Collection Period plus interest accrued thereon through the
due date for the Obligor's payment in such Collection Period, at the APR, after
giving effect to the receipt of monies collected (from whatever source other
than Advances) on such Repurchased Receivable, if any, in such Collection
Period.
"Repurchased Receivable" means a Receivable purchased as of the close
----------------------
of business on the last day of the respective Collection Period by the Servicer
pursuant to Section 4.07 or 12.02 or by the Seller pursuant to Section 3.02.
"Required Deposit Rating," for so long as the Certificates shall be
-----------------------
outstanding, shall be a rating on (i) short-term unsecured debt obligations of
P-1 by ▇▇▇▇▇'▇ Investors Service, Inc. and (ii) short-term unsecured debt
obligations of A-1+ by Standard & Poor's Ratings Services; and any requirement
that short-term unsecured debt obligations have the "Required Deposit Rating"
shall mean that such short-term unsecured debt obligations have the foregoing
required ratings from each of such rating agencies.
"Residual Certificate" has the meaning assigned to such term in
--------------------
Section 7.01 hereof.
17
"Scheduled Payment" on a Receivable means the payment required to be
-----------------
made by the Obligor during each Collection Period, which is sufficient to
amortize the Principal Balance under the Simple Interest Method over the term of
the Receivable and to provide interest at the APR.
"Seller" means Nissan Auto Receivables Corporation as the seller of
------
the Receivables under the Agreement, and each successor to Nissan Auto
Receivables Corporation (in the same capacity) pursuant to Section 8.03.
"Servicer" means Nissan Motor Acceptance Corporation as the servicer
--------
of the Receivables, and each successor to Nissan Motor Acceptance Corporation
(in the same capacity) pursuant to Section 9.03 or 10.02.
"Servicer Fees" means the sum of the Servicing Fee and the
-------------
Supplemental Servicing Fee.
"Servicer's Certificate" means a certificate completed and executed on
----------------------
behalf of the Servicer by any executive vice president, any vice president, the
treasurer, any assistant treasurer, the controller or any assistant controller
of the Servicer pursuant to Section 4.09.
"Servicing Fee" means, with respect to a Collection Period, the fee
-------------
payable to the Servicer for services rendered during such Collection Period,
which shall be equal to one-twelfth of the Servicing Rate multiplied by the Pool
Balance as of the first day of such Collection Period.
"Servicing Rate" means 1.00% per annum.
--------------
"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 quotient
obtained by calculating the period of time elapsed since the preceding payment
of interest was made and dividing such period of time by 365.
"Simple Interest Receivable" means any Receivable under which the
--------------------------
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"State" means any state or commonwealth of the United States of
-----
America or the District of Columbia.
"Subordination Initial Deposit" is $[_].
-----------------------------
18
"Subordination Spread Account Property" has the meaning set forth in
-------------------------------------
the Custody and Pledge Agreement.
"Subordination Spread Accounts" means the Class A Subordination Spread
-----------------------------
Account and the Class B Subordination Spread Account.
"Supplemental Servicing Fee" means the fee payable to the Servicer for
--------------------------
certain services rendered during a Collection Period, determined pursuant to and
defined in Section 4.08.
"Total Available Amount" shall mean, for each Distribution Date, the
----------------------
sum of the Available Interest and the Available Principal.
"Trust" means the Nissan Auto Receivables 1997-A Grantor Trust created
-----
hereunder, the estate of which shall consist of the Receivables (other than
Repurchased Receivables for which the Servicer or the Seller has paid the
Repurchase Amount in accordance with Section 4.07 or 3.02, as the case may be),
and all monies paid thereon, and all monies accrued thereon (other than amounts
accrued thereon as interest on a High-Yield Receivable in excess of the Pass-
Through Rate and the Servicing Rate, which interest shall not be transferred to
the Trust but instead shall be distributed by the Servicer to the Seller and
simultaneously contributed by the Seller to the Servicer for inclusion in the
Collection Account pursuant to Section 5.02), on or after the Cutoff Date;
security interests in the Financed Vehicles and any accessions thereto; funds
deposited in the Collection Account and the Certificate Account; any property
(including the right to receive Liquidation Proceeds) that shall have secured a
Receivable and that shall have been acquired by or on behalf of the Trustee;
proceeds from claims on any physical damage, credit life or disability insurance
policies covering Financed Vehicles or Obligors; any Dealer Recourse; all right,
title and interest of the Seller in and to the Purchase Agreement, the Yield
Supplement Agreement and the Custody and Pledge Agreement; certain rebates of
premiums and other amounts relating to certain insurance policies and other
items financed under the Receivables in effect as of the Cutoff Date; and the
proceeds of any and all of the foregoing.
"Trustee" means the Person acting as Trustee under the Agreement
-------
(which initially shall be The Fuji Bank and Trust Company), its successor in
interest, and any successor trustee appointed pursuant to Section 11.11.
"Trustee Officer" means the chairman or vice-chairman of the board of
---------------
directors, the chairman or
19
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, the controller and any assistant
controller, or any other officer or administrator of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Trustee's Certificate" means a certificate completed and executed on
---------------------
behalf of the Trustee by a Trustee Officer pursuant to Section 11.02,
substantially in the form of, in the case of assignment to the Seller, Exhibit
D-1 and, in the case of an assignment to the Servicer, Exhibit D-2.
"UCC" means the Uniform Commercial Code as in effect in the respective
---
jurisdiction.
"Yield Supplement Agreement" means the agreement, substantially in the
--------------------------
form attached hereto as Exhibit F.
"Yield Supplement Amount" has the meaning set forth in the Yield
-----------------------
Supplement Agreement.
"Yield Supplement Reserve Account" shall have the meaning specified in
--------------------------------
Section 6.01.
SECTION 1.02. USAGE OF TERMS. With respect to all terms in the
--------------
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 the Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
SECTION 1.03. CUTOFF DATE AND RECORD DATE. All references to the
---------------------------
Record Date prior to the first Record Date in the life of the Trust shall be to
the Cutoff Date.
SECTION 1.04. SECTION REFERENCES. All section references shall be to
------------------
Sections in this Agreement.
20
ARTICLE II.
THE TRUST
SECTION 2.01. CREATION OF TRUST. Upon the execu tion of this
-----------------
Agreement by the parties hereto, there is hereby created the Trust.
SECTION 2.02. CONVEYANCE OF RECEIVABLES. In con sideration of the
-------------------------
Trustee's delivery to, or upon the order of, the Seller of Certificates in an
aggregate amount equal to the Original Pool Balance, the Seller does hereby
irrevocably sell, transfer, assign and otherwise convey to the Trustee, in trust
for the benefit of the Certificate holders, without recourse (subject to the
obligations herein):
(i) all right, title, and interest of the Seller in and to the
Receivables listed in Schedule A hereto and all monies paid thereon, on or
after the Cutoff Date;
(ii) the interest of the Seller in the security interests in the
Financed Vehicles granted by Obligors pursuant to the Receivables and any
accessions thereto;
(iii) the interest of the Seller in any proceeds from claims on
any physical damage, credit life, credit disability or other insurance
policies covering Financed Vehicles or Obligors;
(iv) all right, title and interest of the Seller in and to the
Purchase Agreement, including the right of the Seller to cause Nissan Motor
Acceptance Corporation to repurchase Receivables from the Seller under
certain circumstances;
(v) the interest of the Seller in Dealer Recourse;
(vi) the interest of the Seller in certain rebates of premiums and
other amounts relating to insurance policies and other items financed under
the Receivables in effect as of the Cutoff Date;
(vii) all right, title and interest of the Seller under the Yield
Supplement Agreement and the Custody and Pledge Agreement; and
(viii) the proceeds of any and all of the foregoing.
21
SECTION 2.03. ACCEPTANCE BY TRUSTEE. The Trustee does hereby accept
---------------------
all consideration conveyed by the Seller pursuant to Section 2.02, and declares
that the Trustee shall hold such consideration upon the trust herein set forth
for the benefit of all present and future Certificate Owners, subject to the
terms and provisions of this Agreement.
ARTICLE III.
THE RECEIVABLES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF SELLER. The Seller
----------------------------------------
makes the following representations and warranties as to the Receivables on
which the Trustee relies in accepting the Receivables in trust and executing and
authenticating the Certificates. Such representations and warranties speak as
of the execution and delivery of the Agreement, but shall survive the sale,
transfer and assignment of the Receivables to the Trust in accordance with the
terms hereof:
(i) Characteristics of Receivables. Each Receivable (a) has been
------------------------------
originated in the United States of America by a Dealer for the retail sale
of a Financed Vehicle in the ordinary course of such Dealer's business, has
been fully and properly executed by the parties thereto, has been purchased
by the Seller from NMAC pursuant to the Purchase Agreement, which in turn
has purchased such Receivables from such Dealer under an existing dealer
agreement with NMAC, and has been validly assigned by such Dealer to NMAC,
which in turn has been validly assigned pursuant to the Purchase Agreement
by NMAC to the Seller in accordance with its terms, (b) created a valid,
subsisting and enforceable first priority security interest in favor of
NMAC in the Financed Vehicle, which security interest has been assigned
pursuant to the Purchase Agreement by NMAC to the Seller, which in turn has
been assigned by the Seller to the Trustee in accordance with the terms
hereof, (c) contains customary and enforceable provisions such that the
rights and remedies of the holder thereof are adequate for realization
against the collateral of the benefits of the security, and (d) provides
for level monthly payments (provided that the payment in the first or last
month in the life of the Receivable may be minimally different from the
level payment) that fully amortize the Amount Financed over an original
term of no greater than 60 months and yield interest at the Annual
Percentage Rate.
22
(ii) Schedule of Receivables. The information set forth in Schedule
-----------------------
A to the Agreement was true and correct in all material respects as of the
opening of business on the Cutoff Date; the Receivables were selected at
random from NMAC's retail installment sale contracts meeting the criteria
of the Trust set forth in this Agreement; and no selection procedures
believed to be adverse to the Certificateholders were utilized in selecting
the Receivables.
(iii) Compliance with Law. Each Receivable and the sale
-------------------
of the Financed Vehicle complied at the time it was originated or made and
at the execution of the Agreement complies 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 Reporting Act, the
Fair Debt Collection Practices Act, the Federal Trade Commission Act, the
▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Soldiers and Sailors Civil Relief Act of
1940, the Federal Reserve Board's Regulations B and Z, and State
adaptations of the National Consumer Credit Protection Act and of the
Uniform Consumer Credit Code, State "Lemon Laws" designed to prevent fraud
in the sale of automobiles and other consumer credit laws and equal credit
opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable represents the genuine,
------------------
legal, valid and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in accordance with its terms subject to
the effect of bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally.
(v) Security Interest in Financed Vehicle. (a) Immediately prior
-------------------------------------
to the sale, assignment and transfer thereof to the Trust, each Receivable
was secured by a validly perfected first priority security interest in the
Financed Vehicle in favor of NMAC as secured party or all necessary and
appropriate actions shall have been commenced that would result in the
valid perfection of a first priority security interest in the Financed
Vehicle in favor of NMAC as secured party and (b) as of the Cutoff Date,
according to the records of NMAC, no Financed Vehicle has been repossessed
and not reinstated.
(vi) Receivables in Force. No Receivable has been satisfied,
--------------------
subordinated or rescinded, nor has any
23
Financed Vehicle been released from the lien granted by the related
Receivable in whole or in part.
(vii) No Waiver. No provision of a Receivable has been waived.
---------
(viii) No Defenses. No Receivable is subject to any right of
-----------
rescission, setoff, counterclaim or defense, including the defense of
usury, and the operation of any of the terms of any Receivable, or the
exercise of any right thereunder, will not render such Receivable
unenforceable in whole or in part or subject such Receivable to any right
of rescission, setoff, counterclaim or defense, including the defense of
usury, and no such right of rescission, setoff, counterclaim or defense has
been asserted with respect thereto.
(ix) No Liens. To the Seller's knowledge, no liens have been filed
--------
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 the
Financed Vehicle granted by the Receivable.
(x) No Default. Except for payment defaults continuing for a
----------
period of not more than 29 days as of the Cutoff Date, no default, breach,
violation or event permitting acceleration under the terms of any
Receivable has occurred; and 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 has arisen; and
the Seller shall not waive any of the foregoing except as otherwise
permitted hereunder.
(xi) Insurance. NMAC, in accordance with its customary procedures,
---------
has determined that the Obligor has agreed to obtain physical damage
insurance covering the Financed Vehicle and the Obligor is required under
the terms of its Receivable to maintain such insurance.
(xii) Title. It is the intention of the Seller that the transfer
-----
and assignment herein contemplated constitute a sale of the Receivables
from the Seller to the Trust and that the beneficial interest in and title
to the Receivables 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. No Receivable has been sold, transferred, assigned or
pledged by the Seller to any Person other than the Trustee. Immediately
prior to the transfer and
24
assignment herein contemplated, the Seller had good and marketable title to
each Receivable free and clear of all Liens and rights of others and no
offsets, defenses or counterclaims against it had been asserted or
threatened and, immediately upon the transfer thereof, the Trustee, for the
benefit of the Certificateholders, shall have good and marketable title to
each Receivable, free and clear of all Liens and rights of others and no
offsets, defenses or counterclaims against it have been asserted or
threatened; and the transfer has been perfected under the UCC.
(xiii) Lawful Assignment. No Receivable has been originated in,
-----------------
or shall be subject to the laws of, any jurisdiction under which the sale,
transfer and assignment of such Receivable under the Agreement or pursuant
to transfers of the Certificates are unlawful, void or voidable.
(xiv) All Filings Made. All filings (including, without
----------------
limitation, UCC filings) necessary in any jurisdiction to give the Trustee
a first priority perfected ownership interest in the Receivables have been
made.
(xv) Chattel Paper. Each Receivable constitutes "chattel paper" as
-------------
defined in the UCC.
(xvi) Simple Interest Receivables. All of the Receivables are
---------------------------
Simple Interest Receivables.
(xvii) One Original. There is only one original executed copy of
------------
each Receivable.
(xviii) No Amendments. No Receivable has been amended such that
-------------
the amount of the Obligor's Scheduled Payments has been increased.
(xix) APR. The Annual Percentage Rate of each Receivable equals
---
or exceeds 5.0%.
(xx) Maturity. As of the Cutoff Date, each Receivable had a
--------
remaining term to maturity of not less than three months and not greater
than 57 months.
(xxi) Balance. Each Receivable had an original Principal Balance
-------
of not more than $50,000 and, as of the Cutoff Date, had a principal
balance of not less than $298.74 and not more than $47,421.00.
25
(xxii) Delinquency. No Receivable was more than 29 days past due
-----------
as of the Cutoff Date and no Receivable has been extended by more than two
months.
(xxiii) Bankruptcy. No Obligor was the subject of a bankruptcy
----------
proceeding (according to the records of NMAC) as of the Cutoff Date.
(xxiv) Transfer. Each Receivable prohibits the sale or transfer
--------
of the Financed Vehicle without the consent of NMAC.
(xxv) New and Used Vehicles. Each Financed Vehicle was a new or
---------------------
used automobile or light truck at the time the related Obligor executed the
retail installment sale contract.
(xxvi) Origination. Each Receivable has an origina tion date on
-----------
or after September 12, 1992.
(xxvii) Maturity of Receivables. Each Receivable provides for
-----------------------
level monthly payments which provide interest at the APR and fully amortize
the amount financed over an original term no greater than 60 months.
(xxviii) Location of Receivable Files. The Receivable Files shall
----------------------------
be kept at one or more of the locations listed in Schedule B hereto.
(xxix) Rating Agencies. The rating agencies rating the Class A
---------------
Certificates are ▇▇▇▇▇'▇ Investors Service, Inc. and Standard & Poor's
Ratings Services.
(xxx) Forced-Placed Insurance Premiums. No contract relating to
--------------------------------
any Receivable has had forced-placed insurance premiums added to the amount
financed.
(xxxi) No Fraud or Misrepresentation. To the best knowledge of
------------------------------
the Seller, no Receivable was originated by a Dealer and sold by such
Dealer to the Seller with any conduct constituting fraud or
misrepresentation on the part of such Dealer.
SECTION 3.02. REPURCHASE UPON BREACH. The Seller, the Servicer or
----------------------
the Trustee, as the case may be, shall inform the other parties to the Agreement
promptly, in writing, upon the discovery of any breach of the Seller's
representations and warranties pursuant to Section 3.01. Unless the breach
shall have been cured by the last day of the second Collection Period following
the discovery, the Seller shall be obligated (whether or not such breach was
26
known to the Seller on the Closing Date (as defined in the Purchase Agreement)),
and the Trustee shall enforce the obligation of the Seller under this Agreement,
and, if necessary, the Seller shall enforce the obligation of NMAC under the
Purchase Agreement, to repurchase any Receivable materially and adversely
affected by the breach as of such last day (or, at the Seller's option, the last
day of the first Collection Period following such discovery). A breach of the
representation in Section 3.01(i)(d), (xx) or (xxi) shall be deemed to affect
materially and adversely the interest of Certificateholders. In consideration
of the purchase of the Receivables, the Seller shall remit the Repurchase Amount
in the manner specified in Section 5.05. For purposes of this Section 3.02, the
Repurchase Amount of a Receivable which is not consistent with the Seller's
warranty pursuant to Section 3.01(i)(d) shall include such additional amount as
shall be necessary to provide the full amount of interest as contemplated
therein to the date of repurchase. The sole remedy of the Trustee, the Trust,
or the Certificateholders with respect to a breach of the Seller's
representations and warranties pursuant to Section 3.01 shall be to require the
Seller to repurchase Receivables pursuant to this Section 3.02 or to enforce the
obligation of NMAC to the Seller to repurchase such Receivables pursuant to the
Purchase Agreement.
SECTION 3.03. CUSTODY OF RECEIVABLE FILES. To assure uniform quality
---------------------------
in servicing the Receivables and to reduce administrative costs, the Trustee,
upon the execution and delivery of the Agreement, hereby revocably appoints the
Servicer, and the Servicer hereby accepts such appointment, to act as the agent
of the Trustee as custodian of the following documents or instruments which are
hereby constructively delivered to the Trustee with respect to each Receivable:
(i) The original of the Receivable (or an image thereof that the
Servicer shall keep on file in accordance with its customary procedures)
fully executed by the Obligor;
(ii) The original credit application fully executed by the Obligor (or
a photocopy or other image thereof that the Servicer shall keep on file in
accordance with its customary procedures);
(iii) The original certificate of title or a photocopy or other image
thereof or such documents that the Servicer or NMAC shall keep on file, in
accordance with its customary procedures, evidencing the security interest
of NMAC in the Financed Vehicle; and
27
(iv) Any and all other documents that NMAC or the Seller shall keep on
file, in accordance with its customary procedures, relating to a
Receivable, an Obligor or a Financed Vehicle.
SECTION 3.04. DUTIES OF SERVICER AS CUSTODIAN.
-------------------------------
(i) Safekeeping. The Servicer shall hold the Receivable Files on
-----------
behalf of the Trustee for the use and benefit of all present and future
Certificateholders, and maintain such accurate and complete accounts, records
and computer systems pertaining to each Receivable File as shall enable the
Trustee to comply with the 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 all comparable automotive receivables that the Servicer services for
itself or others. In accordance with its customary practices with respect to
its retail installment sale contracts, the Servicer shall conduct, or cause to
be conducted, periodic audits of the Receivable Files held by it under the
Agreement, and of the related accounts, records and computer systems, in such a
manner as shall enable the Trustee to verify the accuracy of the Servicer's
record keeping. The Servicer shall promptly report to the Trustee any failure
on its part to hold the Receivable Files and maintain its accounts, records and
computer systems as herein provided and 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 Trustee of the Receivable Files.
(ii) Maintenance of and Access to Records. The Servicer shall
------------------------------------
maintain each Receivable File at one of its offices specified in Schedule B to
the Agreement, or at such other office as shall be specified to the Trustee by
written notice not later than 90 days after any change in location. The
Servicer shall make available to the Trustee or its 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 as the Trustee shall instruct.
SECTION 3.05. INSTRUCTIONS; AUTHORITY TO ACT. All instructions from
------------------------------
the Trustee shall be in writing and signed by a Trustee Officer, and the
Servicer shall be deemed to have received proper instructions with respect to
the Receivable Files upon its receipt of such written instructions.
SECTION 3.06. CUSTODIAN'S INDEMNIFICATION. The Servicer, as
---------------------------
custodian, shall indemnify the Trustee for any
28
and all liabilities, obligations, losses, compensatory damages, payments, costs
or expenses of any kind whatsoever that may be imposed on, incurred or asserted
against the Trustee 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 for
-------- -------
any portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Trustee.
SECTION 3.07. EFFECTIVE PERIOD AND TERMINATION. The Servicer's
--------------------------------
appointment as custodian pursuant to Section 3.03 shall become effective as of
the Cutoff Date and shall continue in full force and effect until terminated
pursuant to this Section 3.07. If Nissan Motor Acceptance Corporation shall
resign as Servicer in accordance with the provisions of the Agreement or if all
of the rights and obligations of the Servicer shall have been terminated under
Section 10.01, the appointment of the Servicer as custodian may be terminated by
the Trustee, or by the Holders of Class A Certificates evidencing not less than
25% of the Class A Certificate Balance, in the same manner as the Trustee or
such Holders may terminate the rights and obligations of the Servicer under
Section 10.01. As soon as practicable after any termination of such
appointment, the Servicer shall deliver the Receivable Files and the related
accounts and records maintained by the Servicer to the Trustee or the Trustee's
agent at such place or places as the Trustee may reasonably designate.
ARTICLE IV.
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. DUTIES OF SERVICER. The Servicer 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 all comparable receivables that it services for itself or others.
Except with respect to Liquidated Receivables or Repurchased Receivables, the
Servicer shall not change the amount of or reschedule the due date of any
Scheduled Payment, change the Annual Percentage Rate of, or extend any
Receivable except as provided herein or change any material term of a
Receivable; provided, however, that if a default, breach, violation, delinquency
-------- -------
or event permitting acceleration under the terms of any Receivable shall have
occurred or, in the judgment of the Servicer, is imminent, the Servicer may (i)
extend such Receivable for credit related reasons that would be acceptable to
the Servicer with respect to comparable new or used automobile or light
29
truck receivables that it services for itself, if (a) the final scheduled
payment date of such Receivable as extended would not be later than the
Collection Period preceding the Final Scheduled Distribution Date and (b) the
rescheduling or extension would not modify the terms of such Receivable in such
a manner as to constitute a cancellation of such Receivable and the creation of
a new receivable for federal income tax purposes; or (ii) reduce an Obligor's
monthly payment amount in the event of a prepayment resulting from refunds of
credit life and disability insurance premiums and service contracts and make
similar adjustments in payment terms to the extent required by law. The
Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors on such Receivables, investigating
delinquencies, sending remittance advices to Obligors, reporting tax information
to Obligors, accounting for collections, furnishing monthly and annual
statements to the Trustee with respect to distributions and making Advances
pursuant to Section 5.04. The Servicer shall follow its customary standards,
policies and procedures in performing its duties as Servicer. Without limiting
the generality of the foregoing, the Servicer is authorized and empowered by the
Trustee to execute and deliver, on behalf of itself, the Trust, the
Certificateholders or the Trustee 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 or to the
Financed Vehicles securing such Receivables. If the Servicer shall commence a
legal proceeding to enforce a Receivable, the Trustee (in the case of a
Receivable other than a Repurchased Receivable) shall thereupon be deemed to
have automatically assigned, solely for the purpose of collection, such
Receivable to the Servicer. 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 Trustee shall, at the Servicer's expense and direction, take
steps to enforce the Receivable, including bringing suit in its name or the name
of the Certificateholders. The Trustee shall furnish the Servicer with any
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder. The Servicer, at its expense, shall obtain on behalf of the Trust
all licenses, if any, required by the laws of any jurisdiction to be held by the
Trust in connection with ownership of the Receivables, and shall make all
filings and pay all fees as may be required in connection therewith during the
term hereof.
30
SECTION 4.02. COLLECTION OF RECEIVABLE PAYMENTS. The Servicer shall
---------------------------------
make reasonable efforts to collect all payments called for under the terms and
provisions of such Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all comparable
receivables that it services for itself or others. The Servicer may in its
discretion waive any late payment charge or any other fees that may be collected
in the ordinary course of servicing a Receivable.
SECTION 4.03. REALIZATION UPON RECEIVABLES. On behalf of the Trust,
----------------------------
the Servicer shall use reasonable efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of comparable receivables, which may include
reasonable efforts to realize upon any Dealer Recourse and selling the Financed
Vehicle at public or private sale. The foregoing shall be subject to the
provision that, in any case in which the Financed Vehicle shall have suffered
damage, the Servicer shall not expend funds in connection with the repair or the
repossession of such Financed Vehicle unless it shall determine in its
discretion that such repair and/or repossession will increase the Liquidation
Proceeds by an amount greater than the amount of such expenses.
SECTION 4.04. PHYSICAL DAMAGE INSURANCE. The Servicer, in accordance
-------------------------
with its customary servicing procedures, shall determine that each Obligor has
obtained or agreed to obtain physical damage insurance covering the Financed
Vehicle as of the execution of the Receivable.
SECTION 4.05. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.
------------------------------------------------------
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle. The Trustee hereby
authorizes the Servicer to take such steps as are necessary to re-perfect such
security interest on behalf of the Trust in the event of the relocation of a
Financed Vehicle or for any other reason.
SECTION 4.06. COVENANTS OF SERVICER. (a) The Servicer shall not
---------------------
release the Financed Vehicle securing each Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by or on behalf of the Obligor thereunder or repossession, nor shall the
Servicer impair the rights of
31
the Certificateholders in the Receivables, nor shall the Servicer change the
Annual Percentage Rate with respect to any Receivable.
(b) The Servicer shall not modify the number of payments under a
Receivable, nor increase the Amount Financed under a Receivable, nor extend or
forgive payments on a Receivable, except as specifically provided in Section
4.01. If the Servicer shall determine not to make an Advance related to
delinquency or non-payment of any Receivable pursuant to Section 5.04 because it
determines that such Advance would not be recoverable from subsequent
collections on such Receivable or from subsequent payments of the Servicing Fee,
such Receivable shall be designated by the Servicer to be a Liquidated
Receivable, provided that such Receivable otherwise meets the definition of a
Liquidated Receivable. In the event that at the end of the scheduled term of
any Receivable, the outstanding principal amount thereof is such that the final
payment to be made by the related Obligor is larger than the regularly scheduled
payment of principal and interest made by such Obligor, the Servicer may permit
such Obligor to pay such remaining principal amount in more than one payment of
principal and interest, provided that the last such payment shall be due on or
prior to the Collection Period preceding the Final Scheduled Distribution Date.
SECTION 4.07. REPURCHASE OF RECEIVABLES UPON BREACH. The Servicer or
-------------------------------------
the Trustee shall inform the other party promptly, in writing, upon the
discovery of any breach pursuant to the second sentence of Section 4.01 or
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the last
day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first Collection Period following such
discovery), the Servicer shall (whether or not such breach was known to the
Servicer on the Closing Date (as defined in the Purchase Agreement)) purchase
any Receivable materially and adversely affected by such breach (which shall
include any Receivable as to which a breach of Section 4.06 has occurred). In
consideration of the purchase of such Receivable, the Servicer shall remit the
Repurchase Amount in the manner specified in Section 5.05. For the purposes of
this Section 4.07, the Repurchase Amount shall consist in part of a release by
the Servicer of all rights of reimbursement with respect to Outstanding Advances
of the Receivable. The sole remedy of the Trustee, the Trust or the
Certificateholders with respect to a breach pursuant to the second sentence of
Section 4.01 or Section 4.02, 4.05 or 4.06 shall be to require the Servicer to
purchase Receivables pursuant to this Section 4.07.
32
SECTION 4.08. SERVICER FEE. As additional servicing compensation,
------------
the Servicer shall be entitled to an amount equal to any interest earned on the
amounts deposited in the Collection Account and the Certificate Account or
earned on funds held by the Servicer pending deposit therein during such
Collection Period, plus all late fees, prepayment charges and other
administrative fees and expenses or similar charges allowed by applicable law
with respect to Receivables, collected (from whatever source) on the Receivables
during such Collection Period (the "Supplemental Servicing Fee"). The Servicer
also shall be entitled to the Servicing Fee, as provided herein.
SECTION 4.09. SERVICER'S CERTIFICATE. (a) On or before the tenth
----------------------
day of each month (or, if such tenth day is not a Business Day, then on the next
succeeding Business Day), the Servicer shall deliver to (i) the Trustee (with a
copy to each of the rating agencies requested to provide a rating on the Class A
Certificates or, if applicable, the Class B Certificates), (ii) for so long as
the Custody and Pledge Agreement is in existence, to the Custodian, and (iii) if
any Class B Certificate is held by a Person other than the Seller or any Person
controlling, controlled by or under common control with the Seller, to such
Class B Certificateholder, a Servicer's Certificate containing all information
necessary to make the distributions pursuant to Section 5.06 (including the
amount of the aggregate collections on the Receivables, the aggregate Advances
to be made by the Servicer, if any, and the aggregate Repurchase Amount of
Receivables to be purchased by the Seller or the Servicer) for the Collection
Period preceding the date of such Servicer's Certificate, all information
necessary for the Trustee to send statements to Certificateholders pursuant to
Section 5.09 and, for so long as there is a related Custody and Pledge Agreement
in existence, all information necessary for the Custodian to determine the
amounts necessary to be deposited in the Subordination Spread Accounts and the
amount that may be released to the Seller. Receivables purchased or to be
purchased by the Servicer or the Seller shall be identified by the Servicer by
the Seller's account number with respect to such Receivable (as specified in
Schedule A of the Agreement).
(b) On or before the seventh Business Day of each month, but in no
event later than the tenth calendar day of such month, the Servicer shall
deliver to the underwriters of the Class A Certificates and, if any Class B
Certificate is held by a Person other than the Seller or any Person controlling,
controlled by or under common control with the Seller, to such Class B
Certificateholder, the Class A Certificate Factor as of the close of business on
the Distribution Date occurring in such month.
33
SECTION 4.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
----------------------------------------------------
(a) The Servicer shall deliver to the Trustee and to each of the rating
agencies requested by the Seller or an affiliate to provide a rating on the
Class A Certificates or the Class B Certificates which is then rating the Class
A Certificates or the Class B Certificates, as the case may be, on or before
June 30th of each year beginning June 30, 1998, an Officer's Certificate, dated
as of March 31 of such calendar year (or with respect to the initial
certificate, from the initial issuance of Certificates hereunder to March 31,
1998), stating that (i) a review of the activities of the Servicer during the
preceding 12-month (or shorter) period and of its performance under the
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under the Agreement throughout such twelve-month (or shorter)
period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. A copy of such Officer's Certificate may be obtained by any
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office.
(b) The Servicer shall deliver to the Trustee and to each of the
rating agencies requested by the Seller or an affiliate to provide a rating on
the Class A Certificates or the Class B Certificates which is then rating the
Class A Certificates or the Class B Certificates, as the case may be, 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 of Default or event which with the giving of notice or lapse of time, or
both, would become an Event of Default under Section 10.01. The Seller shall
deliver to the Trustee and to each of such rating agencies then rating such
Certificates, 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 an Event of Default under clause (ii) of Section 10.01 (a) or
of any lowering of the rating described in clause (ii) of the fifth sentence of
Section 5.02.
SECTION 4.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S
------------------------------------------------
REPORT. The Servicer shall cause a firm of independent certified public
accountants, who may also render other services to the Servicer or to the
Seller, to deliver to the Trustee and each of the rating agencies then rating
the Class A Certificates or the Class B Certificates on or before June 30 of
each year beginning June 30, 1998
34
with respect to the prior twelve months ended on March 31 of such year (or with
respect to the initial reports, the initial issuance of Certificates hereunder
to March 31, 1998) the following reports: (a) a report that such firm has
audited the consolidated financial statements of the Servicer in accordance with
generally accepted auditing standards, that such firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants ("AICPA"), and expressing such firm's
opinion thereon; and (b) a report indicating that such firm has examined, in
accordance with standards established by the AICPA, management's assertion about
the Servicer's compliance with the minimum servicing standards identified in the
Mortgage Bankers Association of America's Uniform Single Attestation Program for
--------------------------------------
Mortgage Bankers (USAP) as such standards relate to automobile and light truck
----------------
loans serviced for others, and expressing such firm's opinion on such management
assertion (the "Annual USAP Report"). Upon the request of a Certificate Owner,
the Trustee shall promptly provide such Certificate Owner with a copy of such
Annual USAP Report. For all purposes of the Agreement, the Trustee may rely on
the representation of any Person that it is a Certificate Owner.
SECTION 4.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
-----------------------------------------------
REGARDING RECEIVABLES. The Servicer shall provide to the Certificateholders
---------------------
access to the Receivables Files in such cases where the Certificateholders shall
be required by applicable statutes or regulations to review such documentation.
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 Agreement shall affect the obligation of the Servicer to observe
any applicable law prohibiting disclosure of information regarding the Obligors,
and the failure of the Servicer to provide access to information as a result of
such obligation shall not constitute a breach of this Section 4.12.
SECTION 4.13. SERVICER EXPENSES. The Servicer shall be required to
-----------------
pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants and the Trustee,
taxes imposed on the Servicer, data processing costs and expenses incurred in
connection with distributions and reports to Certificateholders.
ARTICLE V.
DISTRIBUTIONS; SUBORDINATION SPREAD ACCOUNTS;
35
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.01. ACCOUNTS. The Servicer shall establish the Collection
--------
Account and the Certificate Account in the name of the Trustee for the benefit
of the Certificateholders. Each of the Collection Account and the Certificate
Account shall be a segregated trust account initially established with the
Trustee and maintained with the Trustee so long as (i) the deposits of the
Trustee have the Required Deposit Rating or (ii) the Collection Account or the
Certificate Account, as the case may be, is maintained in a segregated trust
account in the trust department of the Trustee; provided, however, that all
-------- -------
amounts held in the Collection Account and Certificate Account shall, to the
extent permitted by applicable laws, rules and regulations and as directed by
the Servicer, be invested by the Trustee in Eligible Investments and such
Eligible Investments shall mature not later than the Business Day preceding the
next Distribution Date, in such manner that such amounts invested shall be
available to make the required distributions on the Distribution Date. Servicer
hereby certifies that any such investment directed by it pursuant to this
Section is authorized by this Section. Should the short-term unsecured debt
obligations of the Trustee no longer have the Required Deposit Rating then,
unless the Collection Account and the Certificate Account are maintained in
segregated trust accounts in the trust department of the Trustee, the Servicer
shall, with the Trustee's assistance as necessary and within ten Business Days
of receipt of notice from the Trustee that the Trustee no longer has the
Required Deposit Rating, cause the Collection Account and the Certificate
Account (i) to be moved to segregated trust accounts in a bank or trust company,
the short-term unsecured debt obligations of which shall have the Required
Deposit Rating or (ii) to be moved to the trust department of the Trustee.
Earnings on investments of funds in the Collection Account and the Certificate
Account shall be paid to the Servicer.
SECTION 5.02. COLLECTIONS. The Servicer shall remit to the
-----------
Collection Account (i) all payments by or on behalf of the Obligors (excluding
payments on Repurchased Receivables) and (ii) all Liquidation Proceeds, not
later than the first Business Day after receipt. Prior to each Distribution
Date, for so long as the Custody and Pledge Agreement or any similar agreement
is in existence, the Servicer shall notify the Custodian that it will be
required to remit to the Collection Account from the (A) Class A Subordination
Spread Account the lesser of (i) the amount of the Class A Subordination Spread
Account and (ii) the amounts, if any, required to be distributed to Class A
Certificateholders from the Class A Subordination Spread
36
Account pursuant to Sections 5.06(c)(ii) and (iii) hereof and (B) Class B
Subordination Spread Account the lesser of (i) the amount of the Class B
Subordination Spread Account and (ii) the amounts, if any, required to be
distributed to Class B Certificateholders, from the Class B Subordination Spread
Account pursuant to Sections 5.06(c)(iv) and (v) hereof and not otherwise
distributable to the Class A Subordination Spread Account. The Servicer shall
be entitled to withhold, however, or to be reimbursed from amounts otherwise
payable into or on deposit in the Collection Account, as the case may be,
amounts previously deposited in the Collection Account but later determined to
have resulted from mistaken deposits or postings. Nissan Motor Acceptance
Corporation, so long as it is acting as the Servicer, may make remittances of
collections on a less frequent basis than that specified in the first sentence
of this paragraph. It is understood that such less frequent remittances may be
made only on the specific terms and conditions set forth below in this Section
5.02 and only for so long as such terms and conditions are fulfilled.
Accordingly, notwithstanding the provisions of the first sentence of this
Section 5.02, the Servicer shall remit collections received during a Collection
Period to the Collection Account in immediately available funds on the Business
Day prior to the related Distribution Date but only for so long as (i) Nissan
Motor Acceptance Corporation is the Servicer, (ii) the rating of the Servicer's
short-term unsecured debt obligations is at least P-1 by ▇▇▇▇▇'▇ Investors
Service, Inc. and the rating of the Servicer's (or, if the Servicer then has no
short-term rating from Standard & Poor's Ratings Services, Nissan Capital of
America, Inc.'s) short-term unsecured debt obligations is at least A-1 by
Standard & Poor's Ratings Services and (iii) no Event of Default shall have
occurred (each a "Monthly Remittance Condition"); except that the requirement in
clause (ii) above shall not apply if the Class A Certificates are not then
outstanding and the Class B Certificates do not have an investment grade rating.
Notwithstanding the foregoing, if a Monthly Remittance Condition is not
satisfied, the Servicer may utilize an alternative remittance schedule (which
may include the remittance schedule utilized by the Servicer before the Monthly
Remittance Condition became unsatisfied), if the Servicer provides to the
Trustee written confirmation from each rating agency which has an outstanding
rating on the Class A Certificates or the Class B Certificates and was requested
by the Seller or an affiliate to rate such Certificates that such alternative
remittance schedule will not result in the downgrading or withdrawal by such
rating agency of the ratings then assigned to such Certificates. The Trustee
shall not be deemed to have knowledge of any event or circumstance under clause
(iii) of the definition
37
of Monthly Remittance Condition that would require daily remittance by the
Servicer to the Collection Account unless the Trustee has received notice of
such event or circumstance from the Seller or the Servicer in an Officer's
Certificate or from the Holders of Class A Certificates evidencing not less than
25% of the Class A Certificate Balance or a Trustee Officer in the Corporate
Trust Office with knowledge hereof or familiarity herewith has actual knowledge
of such event or circumstance. For purposes of this Article V the phrase
"payments by or on behalf of Obligors" shall mean payments made by Persons other
than the Servicer or by other means.
SECTION 5.03. APPLICATION OF COLLECTIONS. Collections with respect
--------------------------
to a Receivable made during a Collection Period shall be applied first to
interest accrued to date, second to principal until the Principal Balance is
brought current, third to reduce the unpaid late charges (if any) as provided in
such Receivable and finally to prepay principal on such Receivable.
SECTION 5.04. ADVANCES. (a) The Servicer shall make a payment with
--------
respect to each Receivable (other than a Liquidated Receivable) equal to the
excess if any, of (x) the product of the Principal Balance of such Receivable as
of the first day of the related Collection Period and its APR (calculated on the
basis of a 360-day year comprised of twelve 30-day months), over (y) the
interest actually received by the Servicer with respect to such Receivable from
the Obligor or from payments of the Repurchase Amount during such Collection
Period. The Servicer will be obligated to make an Advance in respect of a
Receivable only to the extent that the Servicer, in its sole discretion, shall
determine that the Advance (other than an Advance in respect of an interest
shortfall arising from the prepayment of a Receivable) shall be recoverable from
subsequent collections or recoveries on any Receivable. With respect to each
Receivable, the Advance shall increase Outstanding Advances. The Servicer shall
deposit all such Advances into the Collection Account in immediately available
funds no later than 12:00 noon, New York time, on the Business Day immediately
preceding the related Distribution Date. The Servicer may elect not to make any
Advance (other than an Advance in respect of an interest shortfall arising from
the prepayment of a Receivable) with respect to a Receivable to the extent that
the Servicer, in its sole discretion, shall determine that such Advance is not
recoverable from subsequent payments on such Receivable or from subsequent
payments of the Servicing Fee. To the extent that the amount set forth in
clause (y) above with respect to a Receivable is greater than the amount set
forth in clause (x) above with respect thereto, such amount shall be
38
distributed to the Servicer pursuant to Section 5.06(a); provided, however,
-------- -------
that, notwithstanding anything else herein, the Servicer shall not be reimbursed
for any amounts representing an Advance, or any portion thereof, made in respect
of an interest shortfall arising from the prepayment of a Receivable.
(b) In the event that a Receivable becomes a Liquidated Receivable,
the amount of accrued and unpaid interest thereon (but not including interest
from the current Collection Period) shall, up to the amount of aggregate
Advances previously made in respect of such Receivable and to the extent not
previously reimbursed pursuant to the last sentence of (a) above, be withdrawn
from the Collection Account and paid to the Servicer in reimbursement of such
Advances.
SECTION 5.05. ADDITIONAL DEPOSITS. The Servicer shall deposit in the
-------------------
Collection Account the aggregate Advances pursuant to Section 5.04(a). The
Servicer and the Seller shall deposit in the Collection Account the aggregate
Repurchase Amount with respect to Repurchased Receivables and the Servicer shall
deposit therein all amounts to be paid under Sections 12.02, 3.02 and 4.07. All
such deposits with respect to a Collection Period shall be made, in immediately
available funds, by 5:00 p.m., New York time, on the Business Day immediately
preceding the Distribution Date related to such Collection Period.
SECTION 5.06. DISTRIBUTIONS. (a) On each Distribution Date, the
-------------
Trustee shall cause to be made the following transfers and distributions in the
amounts set forth in the Servicer's Certificate for such Distribution Date:
(i) From the Collection Account to the Certificate Account, in
immediately available funds, the entire amount then on deposit in the
Collection Account; provided, however, that in the event that the Servicer
-------- -------
is required to make deposits to the Collection Account on a daily basis
pursuant to Section 5.02, the amount of the funds transferred from the
Collection Account to the Certificate Account will include only those funds
that were deposited in the Collection Account for the Collection Period
related to such Distribution Date.
(ii) From the Certificate Account to the Servicer, in immediately
available funds, from amounts on deposit and allocable to interest, the
amount payable pursuant to Section 5.04 in repayment of Outstanding
Advances pursuant to Section 5.04.
39
(b) The Servicer shall calculate on each Determination Date the Total
Available Amount, the Available Interest, the Available Principal, the Class A
Distributable Amount and the Class B Distributable Amount and, based on the
Total Available Amount and the other distributions to be made on such
Distribution Date, determine the amount distributable to Certificateholders of
each Class.
(c) The rights of the Class B Certificateholders to receive
distributions in respect of the Class B Certificates shall be and hereby are
subordinated to the rights of the Class A Certificateholders to receive
distributions in respect of the Class A Certificates in the event of delinquency
or defaults on the Receivables as provided below. On each Distribution Date,
the Trustee (based on the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 4.09) shall make
the following distributions (after payment of the Supplemental Servicing Fee, to
the extent collected) from the Certificate Account in the following order of
priority:
(i) first, to the Servicer, from Available Interest, the Servicing
Fee and all unpaid Servicing Fees from prior Collection Periods, if any;
provided, however, that, if acceptable to each rating agency then rating
-------- -------
the Certificates and without resulting in a reduction or withdrawal of the
rating on such Certificates, the Servicing Fee in respect of the current
Collection Period (together with any unpaid Servicing Fees from prior
Collection Periods) shall be paid at the beginning of such Collection
Period;
(ii) second, to the Class A Certificateholders, from the Class A
Percentage of Available Interest (as such Available Interest has been
reduced by Servicer Fee payments), an amount equal to the sum of the Class
A Interest Distributable Amount and any outstanding Class A Interest
Carryover Shortfall as of the close of business on the preceding
Distribution Date, and if the Class A Percentage of Available Interest is
insufficient, from the Class B Percentage of Available Interest, and, if
such amounts are insufficient, from monies on deposit in the Class A
Subordination Spread Account and, if such amounts are insufficient, from
the Class B Percentage of Available Principal;
(iii) third, to the Class A Certificateholders, from the Class A
Percentage of Available Principal, an amount equal to the sum of the Class
A Principal Distributable Amount and any outstanding Class A Principal
Carryover Shortfall (as such Available
40
Principal has been reduced as described in clause (ii) above) as of the
close of business on the preceding Distribution Date, and if the Class A
Percentage of Available Principal is insufficient, from the Class B
Percentage of Available Principal, and if such amounts are insufficient,
from monies on deposit in the Class A Subordination Spread Account and, if
such amounts are insufficient, from Available Interest (as such Available
Interest has been reduced as described in clauses (i) and (ii) above);
(iv) fourth, to the Class B Certificateholders, from Available
Interest (as such Available Interest has been reduced by the distributions
described above in clauses (i), (ii) and (iii) above), an amount equal to
the sum of the Class B Interest Distributable Amount and any outstanding
Class B Interest Carryover Shortfall as of the close of business on the
preceding Distribution Date, and, if such Available Interest is
insufficient, from monies on deposit in the Class B Subordination Spread
Account;
(v) fifth, to the Class B Certificateholders, from Available
Principal, an amount equal to the sum of the Class B Principal
Distributable Amount and any outstanding Class B Principal Carryover
Shortfall (as such Available Principal has been reduced as described in
clauses (ii) and (iii) above) as of the close of business on the preceding
Distribution Date; and if such Available Principal is insufficient, from
Available Interest (as such Available Interest has been reduced as
described in clauses (i), (ii), (iii) and (iv) above) and, if such amounts
are insufficient, from monies on deposit in the Class B Subordination
Spread Account; and
(vi) sixth, to the Seller, any Excess Amounts, except to the extent
required to be deposited in the Subordination Spread Accounts pursuant to
the Custody and Pledge Agreement;
provided, however, that amounts otherwise distributable to the holders of Class
-------- -------
B Certificates pursuant to clauses (iv) and (v) above shall be deposited by the
Trustee on behalf of such holders in the Class A Subordination Spread Account to
the extent of any deficiency in the Class A Specified Subordination Spread
Account Balance. For purposes of all of the provisions of this Agreement, all
such amounts deposited in the Class A Subordination Spread Account shall be
deemed to have been distributed pro rata to the holders of Class B Certificates
and contributed by such holders to
41
the Class A Subordination Spread Account pursuant to the Custody and Pledge
Agreement.
Notwithstanding anything herein to the contrary, no amount shall be
paid to the Certificateholders in respect of any Yield Supplement Amount with
respect to a Receivable, except to the extent of amounts withdrawn from the
Yield Supplement Reserve Account and deposited in the Certificate Account or
paid to the Certificate Account by the Seller pursuant to the Yield Supplement
Agreement; provided, however, that, if an insufficiency of funds in the Yield
-------- -------
Supplement Reserve Account would result in a shortfall of interest, the amount
of such shortfall shall be withdrawn from the Class A Subordination Spread
Account and deposited in the Certificate Account prior to such Distribution
Date.
(d) For so long as the Custody and Pledge Agreement or any similar
agreement is in existence, to the extent that the Custodian is instructed to
withdraw any amounts from the Subordination Spread Accounts pursuant to Section
5.06(c), recoveries from subsequent payments on a Receivable of amounts with
respect to which such withdrawal has been made shall be delivered to the
Custodian for deposit in the Class A Subordination Spread Account or the Class B
Subordination Spread Account, as the case may be.
(e) Subject to Section 12.01 respecting the final payment upon
retirement of each Certificate, the Servicer shall on each Distribution Date
instruct the Trustee to distribute to each Certificateholder of any Class of
record on the preceding Record Date either by wire transfer, in immediately
available funds to the account of such holder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder is the Seller or a
Clearing Agency and shall have provided to the Trustee appropriate instructions
prior to such Distribution Date, or, if not, by check mailed to such
Certificateholder (such check to be mailed as soon as reasonably practicable on
or after such Distribution Date) at the address of such holder appearing in the
Certificate Register, the amounts to be distributed to such Certificateholder
pursuant to such holder's Certificates.
SECTION 5.07. [RESERVED]
SECTION 5.08. NET DEPOSITS. For so long as each Monthly Remittance
------------
Condition is satisfied, Nissan Motor Acceptance Corporation (in whatever
capacity) may make the remittances pursuant to Sections 5.02 and 5.05 above, net
of amounts to be distributed to Nissan Motor Acceptance Corporation (in whatever
capacity) pursuant to Section 5.06(c) or Section 5.06(a)(ii). In addition, the
Seller
42
agrees that such remittances may be made net of amounts to be distributed to the
Seller hereunder and under the Custody and Pledge Agreement, if any. Accounts
between the Seller and Nissan Motor Acceptance Corporation will be adjusted
accordingly. Nonetheless, the Servicer shall account for all of the above
described remittances and distributions (except for the Supplemental Servicing
Fee to the extent that the Servicer is entitled to retain such amounts) in the
Servicer's Certificate as if the amounts were deposited and/or transferred
separately.
SECTION 5.09. STATEMENTS TO CERTIFICATEHOLDERS.
--------------------------------
(a) On each Distribution Date, the Trustee shall include with each
distribution to each Class A Certificateholder, and, if the Class B
Certificateholder is not the Seller or any Person controlling, controlled by or
under the common control with the Seller, to the Class B Certificateholder, a
statement (which statement shall also be provided to each rating agency then
rating such Certificates) based on information in the Servicer's Certificate
furnished pursuant to Section 4.09, setting forth for the Collection Period
relating to such Distribution Date the following information:
(i) the amount of such distribution allocable to principal;
(ii) the amount of such distribution allocable to interest;
(iii) the amount of such distribution allocable to the Yield
Supplement Amount;
(iv) the amount on deposit in the Yield Supplement Reserve
Account;
(v) the Pool Balance as of the close of business on the last
day of the related Collection Period;
(vi) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period, the Class A Certificateholder's
or the Class B Certificateholder's Class A Percentage or Class B
Percentage, as the case may be, of the Servicing Fees, the amount of any
unpaid Servicing Fees and the change in such amount from that of the prior
Distribution Date and any additional servicing compensation paid to the
Servicer with respect to the related Collection Period, if any;
43
(vii) the amount of the Class A Interest Carryover Shortfall
and the Class A Principal Carryover Shortfall (and the Class B Interest
Carryover Shortfall and the Class B Principal Carryover Shortfall, as the
case may be), if any, on such Distribution Date and the change in such
amounts from the preceding Distribution Date;
(viii) the Class A Certificate Balance, the Class A
Certificate Factor, the Class A Pool Factor and Class B Certificate Balance
as of such Distribution Date;
(ix) the amounts otherwise distributable to the Class B
Certificateholders that are distributed to Class A Certificateholders
and/or deposited in the Class A Subordination Spread Account on such
Distribution Date;
(x) f or so long as there is a related Custody and Pledge
Agreement in existence, the balance of the Class A Subordination Spread
Account or the Class B Subordination Spread Account, as the case may be, on
such Distribution Date, after giving effect to distributions made on such
Distribution Date, and the change in such balance from the preceding
Distribution Date; and
(xi) the amount of Advances made in respect of the related
Collection Period and the amount of the unreimbursed Advances on such
Distribution Date.
(b) Each amount set forth pursuant to subclauses (i), (ii), (vi) and
(vii) above shall be expressed in the aggregate and as a dollar amount per
$1,000 of original principal balance of a Class A Certificate or Class B
Certificate, as the case may be.
(c) Copies of such statements may be obtained by Certificate Owners
from the Trustee by a request in writing. The Trustee shall provide such copies
promptly after such requests.
(d) Within the prescribed period of time for tax reporting purposes
after the end of each calendar year during the term of the Agreement, but not
later than the latest date permitted by law, the Trustee shall mail to each
Person who at any time during such calendar year shall have been a holder of a
Class A Certificate or a holder of a Class B Certificate (other than the Seller
or any Person controlling, controlled by or under common control with the
Seller) a statement containing the sum of the amounts or the amount as of the
end of such calendar year, as the case may be, set forth in clauses (i), (ii),
(iii), (v), (vi) and
44
(vii) and such other information, if any, as the Servicer determines is
necessary to ascertain the Certificateholder's share of the gross income and
deductions of the Trust (exclusive of the Supplemental Servicing Fee) or is
otherwise necessary under applicable law for the preparation of the federal
income tax returns by Certificateholders, for such calendar year or, in the
event such Person shall have been a holder of a Certificate during a portion of
such calendar year, for the applicable portion of such year, for the purposes of
such Certificateholder's preparation of federal income tax returns.
SECTION 5.10. NO PETITION. The Trustee covenants and agrees that,
-----------
prior to the date which is one year and one day after the date upon which the
Certificates are paid in full, the Trustee will not institute against, or join
any other person in instituting against, the Seller any bankruptcy,
reorganization arrangement, insolvency or liquidation proceeding or other
proceedings under any Federal or state bankruptcy or similar law. This Section
5.10 shall survive the termination of the Agreement.
ARTICLE VI.
ADDITIONAL AGREEMENTS
SECTION 6.01. YIELD SUPPLEMENT RESERVE ACCOUNT. Pursuant to the
--------------------------------
Yield Supplement Agreement, the Seller shall establish and maintain with the
Class A Agent for the benefit of the Class A Certificateholders a separate trust
account in the name of the Class A Agent (the "Yield Supplement Reserve
Account"), or such other account as may be acceptable to the rating agencies
then rating the Class A Certificates. The Yield Supplement Reserve Account (or
such other account acceptable to the rating agencies then rating the Class A
Certificates) shall not be part of the Trust. Subject to the limitations set
forth in the Yield Supplement Agreement, the Seller hereby conveys and transfers
to the Trustee (and its successors and assigns), as Class A Agent, the Yield
Supplement Reserve Account, all funds on deposit therein and all proceeds
thereof.
Section 6.02. CUSTODY AND PLEDGE AGREEMENT. The Seller and the
----------------------------
Trustee, as Custodian, shall enter into the Custody and Pledge Agreement or
otherwise provide such partial credit support, if any, as may be necessary for
each rating agency requested to provide a rating on the Class A Certificates
(and/or, if applicable, the Class B Certificates) to provide that rating
necessary to satisfy the related condition precedent to the underwriters'
obligation to purchase the Class A Certificates.
45
SECTION 6.03. LIMITATIONS ON THE TRUST. The Trust shall not (a)
------------------------
incur any indebtedness or obligations or (b) engage in any business activity
other than acquiring and holding the assets of the Trust, issuing the
Certificates and making payments thereon, each in accordance with the terms of
the Agreement.
ARTICLE VII.
THE CERTIFICATES
SECTION 7.01. THE CERTIFICATES. The Class A Certificates shall be
----------------
issued in denominations of $1,000; the Class B Certificates shall be issued in
denominations of $100,000 or in any amount in excess thereof, in each case in
fully registered form and integral multiples thereof; provided, however, that
-------- -------
one Class A Certificate and one Class B Certificate may be issued in a
denomination equal to the residual amount (the "Residual Certificate"). The
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of a Trustee Officer of the Trustee. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be valid and binding obligations of the Trust, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates.
SECTION 7.02. AUTHENTICATION OF CERTIFICATES. The Trustee shall
------------------------------
cause the Certificates to be executed on behalf of the Trust, authenticated and
delivered to or upon the written order of the Seller, signed by its chairman of
the board, its president or any vice president, without further corporate action
by the Seller, in authorized denominations, pursuant to the Agreement. No
Certificate shall entitle its holder to any benefit under the Agreement, or
shall be valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit A
or Exhibit B hereto executed by the Trustee by manual signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
SECTION 7.03. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
-----------------------------------------------------
(a) The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 7.07, a Certificate Register
46
in which, subject to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall be the initial
Certificate Registrar.
(b) The Class B Certificates shall initially be retained by the
Seller. No transfer of a Class B Certificate shall be made unless
(i) the registration requirements of the Securities Act of 1933, as amended, and
any applicable State securities laws are complied with, (ii) such transfer is
exempt from the registration requirements under said Act and laws or (iii) the
prospective transferee of the Class B Certificate certifies in writing to the
Seller and the Trustee, to the Seller's satisfaction, that such transferee is a
Qualified Institutional Buyer (as defined in Rule 144A under said Act);
provided, however, that no such transfer pursuant to clause (i), (ii) or (iii)
-------- -------
shall be made (x) if such transfer would result in a downgrading or withdrawal
of the rating of any rating agency then rating the Class A Certificates or (y)
if such transfer would cause the Trust or any arrangements identified in the
Custody and Pledge Agreement to be characterized as an association taxable as a
corporation or otherwise adversely affect the federal, state or local income tax
status of the Trust and (z) unless the Custody and Pledge Agreement is amended,
in form and substance satisfactory to the Trustee and the Seller, in order to
reflect such transfer and cause such transferee to be bound by the obligations
thereunder. In the event that a transfer is to be made in reliance upon an
exemption from said Act or laws to a Person other than a Qualified Institutional
Buyer, the Class B Certificateholder desiring to effect such transfer and such
Certificateholder's prospective transferee must each certify in writing to the
Seller and the Trustee the facts surrounding such transfer and, at the request
of the Seller, provide both the Seller and the Trustee with an Opinion of
Counsel in form and substance satisfactory to the Seller that such transfer may
be made pursuant to an exemption from said Act or laws and such transfer will
not result in the Trust or any arrangements identified in the Custody and Pledge
Agreement from being characterized as an association taxable as a corporation or
otherwise adversely affect the federal, state or local income tax status of the
Trust, which Opinion of Counsel shall not be an expense of the Seller or the
Trustee. Neither the Seller nor the Trustee is under an obligation to register
the Class B Certificates under said Act or any other securities law.
(c) Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the
47
Trustee shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate amount dated the date of authentication by the
Trustee. At the option of a Holder, Certificates may be exchanged for other
Certificates of authorized denominations of a like aggregate amount upon
surrender of the Certificates to be exchanged at the Corporate Trust Office.
(d) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder or his attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer or exchange shall be cancelled and
subsequently disposed of by the Trustee.
(e) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
SECTION 7.04. MUTILATED, DESTROYED, LOST, OR STOLEN CERTIFICATES. If
--------------------------------------------------
(a) any mutilated Certificate shall be surrendered to the Certificate Registrar,
or if the Certificate Registrar shall receive evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (b) there shall be
delivered to the Certificate Registrar and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then in the
absence of notice that such Certificate shall have been acquired by a bona fide
purchaser, the Trustee on behalf of the Trust shall execute and the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination. In connection with the issuance of any new Certificate
under this Section 7.04, the Trustee and the Certificate Registrar may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section 7.04 shall constitute conclusive evidence of ownership
in the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
48
SECTION 7.05. PERSONS DEEMED OWNERS. Prior to due presentation of a
---------------------
certificate for registration of transfer, the Trustee or the Certificate
Registrar shall treat the Person in whose name any Certificate shall be
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 5.06 and for all other purposes whatsoever,
and neither the Trustee nor the Certificate Registrar shall be bound by any
notice to the contrary.
SECTION 7.06. ACCESS TO LIST OF CERTIFICATE HOLDERS' NAMES AND
------------------------------------------------
ADDRESSES. The Trustee shall furnish or cause to be furnished to the Servicer,
---------
within 15 days after receipt by the Trustee of a request therefor from the
Servicer in writing, a list, in such form as the Servicer may reasonably
require, of the names and addresses of all Certificateholders as of the most
recent Record Date. If three or more Certificateholders, or one or more Holders
of Class A Certificates aggregating not less than 25% of the Class A Certificate
Balance, apply in writing to the Trustee, and such application states that the
applicants desire to communicate with other Certificateholders of such Class
with respect to their rights under the Agreement or under the Certificates and
such application shall be accompanied by a copy of the communication that such
applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, request from the Clearing Agency and
make available to such Certificateholders access during normal business hours to
the current list of Certificateholders. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed to hold neither the Servicer nor the
Trustee accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 7.07. MAINTENANCE OF OFFICE OR AGENCY. The Trustee shall
-------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or offices
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates and the Agreement may be served. The Trustee
initially designates the Corporate Trust Office as its office for such purposes.
The Trustee shall give prompt written notice to the Servicer and to
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
49
SECTION 7.08. BOOK-ENTRY CERTIFICATES. The Class A Certificates,
-----------------------
upon original issuance (except for the Residual Certificate), will be issued in
the form of typewritten Certificates representing the Book-Entry Certificates,
to be delivered to The Depository Trust Company, the initial Clearing Agency,
by, or on behalf of, the Seller. The Class A Certificates delivered to The
Depository Trust Company shall initially be registered on the Certificate
Register in the name of CEDE & Co., the nominee of the initial Clearing Agency,
and no Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Class A Certificates, except as provided in
Section 7.10. Unless and until definitive, fully registered Certificates (the
"Definitive Certificates") have been issued to Certificate Owners pursuant to
------------------------
Section 7.10:
(i) the provisions of this Section 7.08 shall be in full force and
effect;
(ii) the Seller, the Servicer, the Certificate Registrar and the
Trustee may deal with the Clearing Agency for all purposes (including the
making of distributions on the Class A Certificates) as the authorized
representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section 7.08 conflict
with any other provisions of this Agreement, the provisions of this Section
7.08 shall control;
(iv) the rights of Certificate Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency and/or
the Clearing Agency Participants. Pursuant to the Depository Agreement,
unless and until Definitive Certificates are issued pursuant to Section
7.10, the initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions of
principal and interest on the Class A Certificates to such Clearing Agency
Participants; and
(v) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Class A Certificates
evidencing a specified percentage of the Class A Certificate Balance, the
Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Certificate
Owners and/or Clearing Agency Participants
50
owning or representing, respectively, such required percentage of the
beneficial interest in Class A Certificates and has delivered such
instructions to the Trustee. The Trustee shall have no obligation to
ascertain whether the Clearing Agency has in fact received any such
instructions.
SECTION 7.09. NOTICES TO CLEARING AGENCY. Whenever notice or other
--------------------------
communication to the Class A Certificateholders is required under this
Agreement, other than to the Holder of the Residual Certificate, unless and
until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 7.10, the Trustee and the Servicer shall give all such
notices and communications specified herein to be given to Holders of the Class
A Certificates to the Clearing Agency.
SECTION 7.10. DEFINITIVE CERTIFICATES. If (i)(A) the Seller advises
-----------------------
the Trustee in writing that the Clearing Agency is no longer willing or able
properly to discharge its responsibilities under the Depository Agreement, and
(B) the Trustee or the Seller is unable to locate a qualified successor, (ii)
the Seller, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency, or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than 51% of the Class A Certificate Balance
advise the Trustee and the Clearing Agency through the Clearing Agency
Participants in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interests of the Certificate Owners,
then the Trustee shall notify the Clearing Agency and request that the Clearing
Agency notify all Certificate Owners of the occurrence of any such event and of
the availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the Class A Certificates by the Clearing
Agency, accompanied by registration instructions from the Clearing Agency for
registration, the Trustee shall issue the Definitive Certificates and deliver
such Definitive Certificates in accordance with the instructions of the Clearing
Agency. Neither the Seller, the Certificate Registrar nor the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Certificates, the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder. The Trustee shall not
be liable if the Trustee or the Seller is unable to locate a qualified successor
Clearing Agency.
51
ARTICLE VIII.
THE SELLER
SECTION 8.01. REPRESENTATIONS OF SELLER. The Seller makes the
-------------------------
following representations on which the Trustee relies in accepting the
Receivables in trust and executing and authenticating the Certificates. The
representations speak as of the execution and delivery of the Agreement and
shall survive the sale of the Receivables to the Trustee:
(i) Organization and Good Standing. The Seller has been duly
------------------------------
organized and is validly existing as a corporation 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 are currently
owned and such business is presently conducted, and had at all relevant
times, and has, power, authority and legal right to acquire and own the
Receivables.
(ii) Due Qualification. The Seller is duly qualified to do business
-----------------
as a foreign corporation in good standing, and has 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.
(iii) Power and Authority. The Seller has the power and authority to
-------------------
execute and deliver the Agreement and to carry out its terms. The Seller
has full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trustee as part of the Trust and has
duly authorized such sale and assignment to the Trustee by all necessary
corporate action; and the execution, delivery and performance of the
Agreement has been duly authorized by the Seller by all necessary corporate
action.
(iv) Valid Sale; Binding Obligations. The Agreement evidences a valid
-------------------------------
sale, transfer and assignment of the Receivables, enforceable against
creditors of and purchasers from the Seller (other than a good faith
purchaser for value in the ordinary course of business who takes actual
possession of one or more Receivables); and the Agreement is a legal, valid
and binding obligation of the Seller enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy or similar
laws.
52
(v) No Violation. The consummation of the transactions contemplated
------------
by the Agreement and the fulfillment of the terms hereof do 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 by-laws 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 Agreement); 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.
(vi) No Proceedings. There are no proceedings or investigations
--------------
pending, or (to the best of the Seller's knowledge) threatened, before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties: A)
asserting the invalidity of the Agreement or the Certificates; B) seeking
to prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by the Agreement; C) 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, the Agreement or the Certificates; or D) relating to the
Seller and which might adversely affect the federal or any state income tax
attributes of the Certificates.
SECTION 8.02. 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 the Agreement.
(i) The Seller shall indemnify, defend and hold harmless the Trustee
and the Trust from and against any taxes that may at any time be asserted
against the Trustee or the Trust with respect to, and as of the date of,
the sale of the Receivables to the Trust or the issuance and original sale
of the Certificates, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but,
in the case of the Trust, not including any taxes asserted with respect to
ownership of the Receivables or federal or other income taxes
53
arising out of the transactions contemplated by the Agreement) and costs
and expenses in defending against the same.
(ii) The Seller shall indemnify, defend and hold harmless the Trustee
from and against any loss, liability or expense incurred by reason of (a)
the Seller's willful misfeasance, bad faith or negligence (other than
errors in judgment) in the performance of its duties under the Agreement,
or by reason of reckless disregard of its obligations and duties under the
Agreement and (b) the Seller's violation of federal or state securities
laws in connection with the registration or the sale of the Certificates.
Indemnification under this Section 8.02 shall survive the termination of the
Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation. If the Seller shall have made any indemnity payment to the
Trustee pursuant to this Section 8.02 and the Trustee thereafter shall collect
any of such amounts from others, the Trustee shall repay such amounts to the
Seller, without interest (except to the extent the recipient collects interest
from others).
SECTION 8.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
------------------------------------------------
OBLIGATIONS OF, SELLER. Subject to Section 8.06, any Person (i) into which the
----------------------
Seller may be merged or consolidated, (ii) resulting from any merger, conversion
or consolidation to which the Seller shall be a party, (iii) succeeding to the
business of the Seller or (iv) that is a corporation more than 50% of the voting
stock of which is owned directly or indirectly by Nissan Motor Co., Ltd., which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Seller under this Agreement, will be the
successor to the Seller under this Agreement without the execution or filing of
any document or any further act on the part of any of the parties to this
Agreement; provided, however, that (x) immediately after giving effect to such
-------- -------
transaction, no representation or warranty made pursuant to Section 3.01 shall
have been breached and no Event of Default, and no event that, after notice or
lapse of time, or both, would become an Event of Default, shall have happened
and be continuing, (y) the Seller shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement or assumption comply with
this Section 8.03 and that all conditions precedent, if any, provided for in the
Agreement relating to such transaction have been complied with and (z) the
Seller shall have delivered to the Trustee an Opinion of Counsel either
54
(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 Trustee 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 interest. The Seller shall provide notice of any merger,
consolidation or succession pursuant to this Section 8.03 to each rating agency
then providing a rating for the Certificates. Notwithstanding anything herein
to the contrary, the execution of the foregoing agreement of assumption and
compliance with clauses (x), (y) and (z) above shall be conditions to the
consummation of the transactions referred to in clauses (i), (ii), (iii) or (iv)
above.
SECTION 8.04. LIMITATION ON LIABILITY OF SELLER AND OTHERS. The
--------------------------------------------
Seller and any director or officer or 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 the Agreement, and that in its opinion may involve it in any
expense or liability.
SECTION 8.05. SELLER MAY OWN CERTIFICATES. The Seller and any Person
---------------------------
controlling, controlled by or under common control with the Seller may in its
individual or any other capacity become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Seller or an affiliate
thereof, except as otherwise provided in the definition of "Certificateholder"
specified in Section 2.01 and except as otherwise specifically provided herein.
Certificates so owned by or pledged to the Seller or such controlling or
commonly controlled Person shall have an equal and proportionate benefit under
the provisions of the Agreement, without preference, priority or distinction as
among all of the Certificates, except as otherwise expressly provided in the
Agreement.
SECTION 8.06. ADDITIONAL COVENANTS. (a) The Seller agrees with the
--------------------
Certificate Owners and each nationally recognized rating agency which has been
requested by the Seller or an affiliate to rate the Certificates issued pursuant
to this Agreement and which is then rating such Certificates that it shall not
issue any additional securities that could reasonably be expected to affect
materially and adversely the rating of such Certificates issued pursuant to this
Agreement unless it shall have first
55
obtained the written consent of each such rating agency to the effect that such
issuance will not adversely affect such rating. The Seller shall provide a copy
of any such consent to the Trustee.
(b) The Seller shall not do any of the following (without the prior
written consent of each nationally recognized rating agency which has been
requested by the Seller or an affiliate to rate the Certificates and which is
then rating such Certificates (which consent shall be to the effect that the
acts set forth below shall not affect adversely such rating) and, upon the
Seller's receipt of such written consent from each such rating agency, the
Trustee shall, without any exercise of its own discretion, also provide its
written consent to the Seller):
(i) engage in any business or activity other than those set
forth in Article Three of the Seller's Certificate of Incorporation,
as amended;
(ii) incur any indebtedness, or assume or guaranty any
indebtedness of any other entity, other than (A) any indebtedness
incurred in con nection with any Certificates or Notes (as defined in
the Seller's Certificate of Incorporation), provided that any such
future indebtedness incurred in connection with any Certificates or
Notes must be rated at least with the same ratings given the
outstanding Certificates or Notes by each nationally recognized rating
agency that has rated the outstanding Certificates or Notes or, prior
to the issuing of such future indebtedness incurred in connection with
any Certificates or Notes, the Seller shall have received confirmation
from each nationally recognized rating agency that has rated the
outstanding Certificates or Notes that the ratings of the outstanding
Certificates or Notes will not be adversely affected by the issuing of
such future indebtedness and (B) any indebtedness to Nissan Motor
Acceptance Corporation or any affiliate thereof incurred in connection
with the acquisition of receivables, which indebtedness shall be
subordinated to all other obligations of the Seller and shall be
nonrecourse debt of the Seller, except with respect to proceeds of the
receivables in excess of such proceeds necessary to pay all
obligations in relation to the Certificates or the Notes ("Excess
Proceeds"), and shall not constitute a claim against the Seller to the
extent that Excess Proceeds are insufficient to pay such indebtedness;
56
(iii) dissolve or liquidate, in whole or in part; consolidate or
merge with or into any other entity or convey or transfer its
properties and assets substantially as an entirety to any entity,
unless:
(A) the entity (if other than the Seller) formed or
surviving the consolidation or merger or which acquires the properties
and assets of the Seller is organized and existing under the laws of
the State of Delaware, expressly assumes the due and punctual payment
of, and all obliga tions of the Seller, including those obligations of
the Seller under this Agreement, and has a Certificate of
Incorporation containing provisions identical to the provisions of
Article Three, Article Four and Article Fifteen of the Seller's
Certificate of Incorporation, as amended; and
(B) immediately after giving effect to the transaction, no
default or event of default has occurred and is continuing under any
indebt edness of the Seller or any agreements relating to such
indebtedness; and
(C) the entity (if other than the Seller) formed or
surviving the consolidation or merger or which acquires the properties
and assets of the Seller agrees that (i) it shall maintain its funds
or assets as identifiable and not commingle its funds or assets with
those of any direct or ultimate parent of such entity and pay from its
assets all obligations and indebtedness of any kind incurred by it,
(ii) it shall maintain bank accounts, corporate records and books of
account separate from those of any direct or ultimate parent of such
entity and (iii) the business affairs of such entity will be managed
by or under the direction of its Board of Directors and it will
conduct its business from an office separate from any direct or
ultimate parent of such entity; and
(D) each nationally recognized rating agency which has
rated any issue of certificates pursuant to any agreement or any
series or class of certificates shall confirm in writing that the
rating of such certificates shall not be adversely affected by such
consolidation or merger; or
(iv) Without the affirmative vote of 100% of the members of the
Board of Directors of the
57
Seller, the Seller shall not institute proceedings to be adjudicated
bankrupt or insolvent, or consent to the institution of bankruptcy or
insolvency proceedings against it, or file a petition seeking or
consent to reorganization or relief under any applicable federal or
state law relating to bankruptcy, or consent to the appoint ment of a
receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the corporation or a substantial part of its
property, or make any assignment for the benefit of credi tors, or
admit in writing its inability to pay its debts generally as they
become due, or take cor porate action in furtherance of any such
action.
ARTICLE IX.
THE SERVICER
SECTION 9.01. REPRESENTATIONS OF SERVICER. The Servicer makes the
---------------------------
following representations on which the Trustee relies in accepting the
Receivables in trust and executing and authenticating the Certificates. The
representations speak as of the execution and delivery of the Agreement and
shall survive the sale of the Receivables to the Trust:
(i) Organization and Good Standing. The Servicer is duly organized
------------------------------
and is validly existing as a corporation in good standing under the laws of
the state of its incorporation, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, power, authority and legal right to acquire, own, sell and
service the Receivables and to hold the Receivable Files as custodian on
behalf of the Trustee;
(ii) 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 relating to
the servicing of the Receivables as required by the Agreement shall require
such qualifications;
(iii) Power and Authority. The Servicer has the power and authority to
-------------------
execute and deliver the Agreement and to carry out its terms; and the
execution, delivery and performance of the Agreement
58
have been duly authorized by the Servicer by all necessary corporate
action;
(iv) Binding Obligation. The Agreement constitutes a legal, valid and
------------------
binding obligation of the Servicer enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy or similar
laws;
(v) No Violation. The consummation of the transactions contemplated
------------
by the Agreement and the fulfillment of the terms hereof do 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 by-laws 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 the Agreement); nor violate any
law or 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; and
(vi) No Proceedings. There are no proceedings or investigations
--------------
pending, or, to the Servicer's best knowledge, threatened, before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties:
A) asserting the invalidity of the Agreement or the Certificates; B)
seeking to prevent the issuance of the Certificates or the consummation of
any of the transactions contemplated by the Agreement; C) 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, the Agreement or the Certificates; or D) relating to the
Servicer and which might adversely affect the federal or any state income
tax attributes of the Certificates.
SECTION 9.02. INDEMNITIES OF SERVICER. The Servicer shall be liable
-----------------------
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under the Agreement.
(i) The Servicer shall defend, indemnify and hold harmless the
Trustee, the Trust and the Certificateholders from and against any and all
costs,
59
expenses, losses, damages, claims and liabilities (collectively, "Damages")
arising out of or resulting from the use, ownership or operation by the
Servicer or any affiliate thereof of a Financed Vehicle.
(ii) The Servicer shall indemnify, defend and hold harmless the
Trustee, the Trust and the Certificateholders from and against any and all
Damages to the extent that such Damage arose out of, or was imposed upon
the Trustee, the Trust or the Certificateholders through the negligence,
willful misfeasance or bad faith of the Servicer in the performance of its
duties under the Agreement or by reason of reckless disregard of its
obligations and duties under the Agreement.
(iii) The Servicer shall indemnify, defend and hold harmless the
Trustee from and against all Damages arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein contained, except to the extent that such Damage: (a) shall be due
to the willful misfeasance, bad faith, or negligence (except for errors in
judgment) of the Trustee; (b) relates to any tax other than the taxes with
respect to which the Seller shall be required to indemnify the Trustee; (c)
shall arise from the Trustee's breach of any of its representations or
warranties set forth in Section 11.14; (d) shall be one as to which the
Seller is required to indemnify the Trustee and as to which the Trustee has
received payment of indemnity from the Seller; or (e) shall arise out of or
be incurred in connection with the performance by the Trustee of the duties
of successor Servicer hereunder.
In addition to the foregoing indemnities, if the Trustee is entitled to
indemnification by the Seller pursuant to Section 8.02 and the Seller is unable
for any reason to provide such indemnification to the Trustee, then the Servicer
shall be liable for any indemnification that the Trustee is entitled to under
Section 8.02.
Indemnification under this Section 9.02 by Nissan Motor Acceptance Corporation
(or any successor thereto pursuant to Section 9.03) as Servicer, with respect to
the period such Person was the Servicer, shall survive the termination of such
Person as Servicer or a resignation by such Person as Servicer as well as the
termination of the Agreement 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 recipient thereafter
collects any of such amounts from
60
others, the recipient shall promptly repay such amounts to the Servicer, without
interest (except to the extent the recipient collects interest from others).
SECTION 9.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
------------------------------------------------
OBLIGATIONS OF, SERVICER. Any Person (i) into which the Servicer may be merged
------------------------
or consolidated, (ii) resulting from any merger, conversion or consolidation to
which the Servicer shall be a party, (iii) succeeding to the business of the
Servicer, or (iv) so long as Nissan Motor Acceptance Corporation acts as
Servicer, that is a corporation more than 50% of the voting stock of which is
owned directly or indirectly by Nissan Motor Co., Ltd., which Person in any of
the foregoing cases executes an agreement of assumption to perform every
obligation of the Servicer under this Agreement, will 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 (x) immediately after giving effect to such transaction, no Event
-------
of Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing, (y) the
Servicer shall have delivered to the 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 9.03 and that all
conditions precedent provided for in the Agreement relating to such transaction
have been complied with and (z) the Servicer shall have delivered to the 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 Trustee 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 interest. The Servicer shall
provide notice of any merger, consolidation or succession pursuant to this
Section 9.03 to each rating agency then providing a rating for the Certificates.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (x), (y) and (z) above shall
be conditions to the consummation of the transactions referred to in clauses
(i), (ii), (iii) or (iv) above.
SECTION 9.04. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. (a)
----------------------------------------------
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Trust or the
Certificateholders, except as provided under the Agreement,
61
for any action taken or for refraining from the taking of any action pursuant to
the 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 (except for errors in judgment) in the performance of duties or by
reason of reckless disregard of obligations and duties under the Agreement. The
Servicer and any director, officer or employee or agent of the Servicer may rely
in good faith on any Opinion of Counsel or on any Officer's Certificate or
certificate of auditors believed to be genuine and to have been signed by the
proper party in respect of any matters arising under the Agreement.
(b) Except as provided in the 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 the Agreement, and that in its opinion may cause it to incur any expense or
liability; provided, however, that the Servicer may undertake any reasonable
-------- -------
action that it may deem necessary or desirable in respect of the Agreement and
the rights and duties of the parties to the Agreement and the interests of the
Certificateholders under the Agreement. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Servicer and the Servicer will not be entitled to
be reimbursed therefor.
SECTION 9.05. DELEGATION OF DUTIES. So long as Nissan Motor
--------------------
Acceptance Corporation acts as Servicer, the Servicer may at any time without
notice or consent subcontract substantially all its duties under the Agreement
to any corporation more than 50% of the voting stock of which is owned, directly
or indirectly, by Nissan Motor Co., Ltd. The Servicer may at any time perform
specific duties as servicer under the Agreement through other subcontractors;
provided, however, that no such delegation or subcontracting shall relieve the
-------- -------
Servicer of its responsibilities with respect to such duties as to which the
Servicer shall remain primarily responsible with respect thereto.
SECTION 9.06. NISSAN MOTOR ACCEPTANCE CORPORATION NOT TO RESIGN AS
----------------------------------------------------
SERVICER. Subject to Section 9.03 hereof, Nissan Motor Acceptance Corporation
--------
shall not resign from the obligations and duties hereby imposed on it as
Servicer under this Agreement except upon 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 Nissan
62
Motor Acceptance Corporation shall be communicated to the Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writ ing at the earliest practicable time) and any such determi
nation shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Trustee or a successor Servicer
shall (i) have taken the actions required by Section 10.01(b) of the Agreement
to effect the termination of the responsibilities and rights of the predecessor
Servicer under the Agreement, including 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 shall thereafter be received with
respect to a Receivable and the delivery of the Receivable Files, and the
related accounts and records maintained by the Servicer, and (ii) have assumed
the responsibilities and obligations of Nissan Motor Acceptance Corporation as
Servicer under the Agreement in accordance with Section 10.02 of the Agreement.
ARTICLE X.
DEFAULT
SECTION 10.01. EVENTS OF DEFAULT. (a) If any one of the following
-----------------
events ("Events of Default") shall occur and be continuing:
(i) Any failure (A) by the Servicer to deliver to the Trustee for
distribution to Certificateholders or (B) by the Seller to deliver, for so
long as the Custody and Pledge Agreement or similar agreement is in
existence, to the Custodian for deposit in the Subordination Spread
Accounts any proceeds or payment required to be so delivered under the
terms of the Certificates, the Agreement or the Custody and Pledge
Agreement, as the case may be, that shall continue unremedied for a period
of three Business Days after written notice of such failure is received by
the Servicer or the Seller, as the case may be, from the Trustee or
Custodian, as the case may be, or after discovery of such failure by an
officer of the Servicer or the Seller, as the case may be; or
(ii) Failure on the part of the Servicer or the Seller duly to observe
or to perform in any material respect any other covenant or agreement of
the Servicer or the Seller (as the case may be) set forth in the
Certificates or in the Agreement, which failure shall (a) materially and
adversely affect the rights of
63
Certificateholders and (b) continue unremedied for a period of 90 days
after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given (1) to the Servicer or the Seller (as
the case may be), by the Trustee, or (2) to the Servicer or the Seller (as
the case may be), and to the Trustee by the Holders of Class A Certificates
evidencing not less than 25% of the Class A Certificate Balance; or
(iii) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator for the Servicer in
any insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding up or liquidation of its
respective affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 90 consecutive days; or
(iv) The consent by the Servicer to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating
to the Servicer or relating to substantially all of its property; or the
Servicer shall admit in writing its inability to pay its debts generally as
they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of
its creditors or voluntarily suspend payment of its obligations;
then, and in each and every case, so long as an Event of Default shall not have
been remedied, either the Trustee, or the Holders of the Class A Certificates
evidencing not less than 25% of the Class A Certificate Balance, by notice then
given in writing to the Servicer (and to the Trustee if given by the
Certificateholders) may terminate all of the rights and obligations of the
Servicer under the Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under the Agreement,
whether with respect to the Certificates or the Receivables or otherwise, shall,
without further action, pass to and be vested in the Trustee or such successor
Servicer as may be appointed under Section 10.02; and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf 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,
64
whether to complete the transfer and endorsement of the Receivables and related
documents, or otherwise.
(b) The predecessor Servicer shall cooperate with the successor
Servicer and the Trustee in effecting the termination of the responsibilities
and rights of the predecessor Servicer under the Agreement, including 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 shall
thereafter be received with respect to a Receivable and the delivery of the
Receivable Files, and the related accounts and records maintained by the
Servicer. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the Receivable Files to the successor
Servicer and amending the Agreement to reflect such succession as Servicer
pursuant to this Section 10.01 shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of an Event of Default, the Trustee shall give notice thereof
to each of the rating agencies then rating the Certificates.
SECTION 10.02. APPOINTMENT OF SUCCESSOR. (a) Upon the Servicer's
------------------------
receipt of notice of termination pursuant to Section 10.01 or the Servicer's
resignation in accordance with the terms of the Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under the
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
(x) the date 45 days from the delivery to the Trustee of written notice of such
resignation (or written confirmation of such notice) in accordance with the
terms of the Agreement and (y) 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
resignation or termination hereunder, the Trustee shall appoint a successor
Servicer, and the successor Servicer shall accept its appointment by a written
assumption in form acceptable to the 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 10.02, the Trustee
without further action shall automatically be appointed the successor Servicer.
Notwithstanding the above, the 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
$100,000,000 and whose regular business shall
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include the servicing of automotive receivables, as the successor to the
Servicer under the Agreement.
(b) Upon appointment, the successor Servicer shall 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, subject to the
arrangements referred to in paragraph (c) below, to the Servicer Fees and all of
the rights granted to the predecessor Servicer, by the terms and provisions of
the Agreement.
(c) In connection with such appointment, the Trustee may make such
arrangements for the compensation of such successor Servicer out of payments on
Receivables as it and such successor Servicer shall agree; provided, however,
-------- -------
that no such compensation shall be in excess of that permitted the predecessor
Servicer under the Agreement. The Trustee and such successor Servicer shall
take such action, consistent with the Agreement, as shall be necessary to
effectuate any such succession.
SECTION 10.03. REPAYMENT OF ADVANCES. If the identity of the
---------------------
Servicer shall change, the predecessor Servicer shall be entitled to receive, to
the extent of available funds, reimbursement for Outstanding Advances pursuant
to Section 5.04 and 5.05, in the manner specified in Section 5.06, with respect
to all Advances made by the predecessor Servicer.
SECTION 10.04. NOTIFICATION TO CERTIFICATE-HOLDERS. Upon any
-----------------------------------
termination of, or appointment of a successor to, the Servicer pursuant to this
Article X, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register and to each of the rating agencies then rating the Certificates.
SECTION 10.05. WAIVER OF PAST DEFAULTS. The Holders of Class A
-----------------------
Certificates evidencing not less than 51% of the Class A Certificate Balance
may, on behalf of all Holders of Certificates, waive any default by the Servicer
in the performance of its obligations hereunder and its consequences, except a
default in making any required deposits to or payments from the Collection
Account or the Certificate Account in accordance with the Agreement. Upon any
such waiver of a past default, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been remedied for every
purpose of the Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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ARTICLE XI.
THE TRUSTEE
SECTION 11.01. DUTIES OF TRUSTEE. The Trustee, both prior to the
-----------------
occurrence of an Event of Default and after an Event of Default shall have been
cured or waived, shall undertake to perform such duties as are specifically set
forth in the Agreement. If an Event of Default shall have occurred and shall
not have been cured or waived and, in the case of an Event of Default described
in clause (i) of Section 10.01(a), the Trustee has received notice of such Event
of Default pursuant to Section 4.10(b), the Trustee shall exercise such of the
rights and powers vested in it by the Agreement, and shall use the same degree
of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs; provided, however,
-------- -------
that if the Trustee shall assume the duties of the Servicer pursuant to Section
10.02, the Trustee in performing such duties shall use the degree of skill and
attention customarily exercised by a servicer with respect to automobile
receivables that it services for itself or others.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that shall be specifically required to be furnished pursuant to any
provision of the Agreement, shall examine them to determine whether they conform
to the requirements of the Agreement.
The Trustee shall take and maintain custody of the List of Receivables included
as a Schedule to the Agreement and shall retain all Servicer's Certificates
identifying Receivables that become Repurchased Receivables.
No provision of the Agreement shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act (other
than errors in judgment) or its own bad faith; provided, however, that:
-------- -------
(i) Prior to the occurrence of an Event of Default (or, in the case
of an Event of Default described in clause (i) of Section 10.01(a), before
the Trustee has received notice thereof pursuant to Section 4.10(b)), and
after the curing or waiving of all such Events of Default that may have
occurred, (A) the duties and obligations of the Trustee shall be determined
solely by the express provisions of the Agreement, (B) the Trustee shall
not be liable except for the performance of such duties and obligations as
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shall be specifically set forth in the Agreement, (C) no implied covenants
or obligations shall be read into the Agreement against the Trustee and (D)
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely on the truth of the statements and the correctness of the
opinions expressed upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of the Agreement;
(ii) The Trustee shall not be liable for an error of judgment made in
good faith by a Trustee Officer, unless it shall be proved that the Trustee
shall have been negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken in good faith in accordance with the
Agreement or at the direction of the Holders of Class A Certificates
evidencing not less than 25% of the Class A Certificate Balance relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under the Agreement;
(iv) The Trustee shall not be charged with knowledge of any failure by
the Servicer to comply with the obligations of the Servicer referred to in
Section 10.01, or of any failure by the Seller to comply with the
obligations of the Seller referred to in Section 10.01, unless a Trustee
Officer assigned to the Trustee's Trust Administration Department obtains
actual knowledge of such failure (it being understood that knowledge of the
Servicer or the Servicer as custodian, in its capacity as agent for the
Trustee, is not attributable to the Trustee) or the Trustee receives
written notice of such failure from the Servicer or the Seller, as the case
may be, or the Holders of Class A Certificates evidencing not less than 25%
of the Class A Certificate Balance; and
(v) Without limiting the generality of this Section 11.01 or Section
11.04, the Trustee shall have no duty (i) to see to any recording, filing
or depositing of the Agreement, any agreement referred to therein, or any
financing statement or continuation statement evidencing a security
interest in the Receivables or the Financed Vehicles, or to see to the
maintenance of any such recording, filing or depositing or to any
rerecording, refiling or redepositing of any thereof, (ii) to see to any
insurance of the Financed Vehicles or Obligors or to effect or maintain any
such
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insurance, (iii) to see to the payment or discharge of any tax, assessment
or other governmental charge or any Lien or encumbrance of any kind owing
with respect to, assessed or levied against, any part of the Trust, (iv) to
confirm or verify the contents of any reports or certificates of the
Servicer delivered to the Trustee pursuant to the Agreement believed by the
Trustee to be genuine and to have been signed or presented by the proper
party or parties or (v) to inspect the Financed Vehicles at any time or
ascertain or inquire as to the performance or observance of any of the
Seller's or the Servicer's representations, warranties or covenants or the
Servicer's duties and obligations as Servicer and as custodian of the
Receivable Files under the Agreement.
The Trustee shall not be required to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if there shall be reasonable
ground for believing that the repayment of such funds or adequate indemnity
against such risk or liability shall not be reasonably assured to it, and none
of the provisions contained in the Agreement shall in any event require the
Trustee to perform, or be responsible for the manner of performance of, any of
the obligations of the Servicer under the Agreement except during such time, if
any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
the Agreement.
SECTION 11.02. TRUSTEE'S CERTIFICATE. Upon request of the Seller or
---------------------
Servicer, on or as soon as practicable after each Distribution Date on which
Receivables shall be assigned to the Seller or the Servicer, as applicable,
pursuant to Section 11.03, the Trustee shall execute a Trustee's Certificate
based on (i) the information contained in the Servicer's Certificate for the
related Collection Period, (ii) amounts deposited to the Certificate Account and
(iii) notices received pursuant to the Agreement, identifying the Receivables
repurchased by the Seller pursuant to Section 3.02 or purchased by the Servicer
pursuant to Sections 4.07 or 12.02 during such Collection Period, and shall
deliver such Trustee's Certificate, accompanied by a copy of the Servicer's
Certificate for such Collection Period, to the Seller or the Servicer, as the
case may be. The Trustee's Certificate submitted with respect to such
Distribution Date shall operate, as of such Distribution Date, as an assignment,
without recourse, representation or warranty, to the Seller or the Servicer, as
the case may be, of all the Trustee's right, title and interest in and to such
repurchased Receivable, and all
69
security and documents relating thereto, such assignment being an assignment
outright and not for security.
SECTION 11.03. TRUSTEE'S ASSIGNMENT OF REPURCHASED RECEIVABLES. With
-----------------------------------------------
respect to all Receivables repurchased by the Seller pursuant to Section 3.02 or
purchased by the Servicer pursuant to Sections 4.07 or 12.02, the Trustee shall
by a Trustee's Certificate assign, without recourse, representation or warranty,
to the Seller or the Servicer (as the case may be) all the Trustee's right,
title and interest in and to such Receivables, and all security and documents
relating thereto. 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 the Receivable,
the Trustee shall, at the Servicer's expense, take such steps as the Trustee
deems necessary to enforce the Receivable, including bringing suit in its name
or in the name of the Certificateholders.
SECTION 11.04. CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
-------------------------------------
otherwise provided in Section 11.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
Servicer's Certificate, certificate of auditors, or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it under the Agreement in good faith
and in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by the Agreement, or to institute, conduct or
defend any litigation under the Agreement or in relation to the Agreement,
at the request, order or direction of any of the Certificateholders
pursuant to the provisions of the Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities that may be incurred therein or
thereby; provided, however, that nothing contained in the Agreement shall
-------- -------
relieve the Trustee of the obligations, upon the
70
occurrence of an Event of Default (that shall not have been cured or
waived), to exercise such of the rights and powers vested in it by the
Agreement, and to use the same degree of care and skill in its exercise as
a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
(iv) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by the
Agreement.
(v) Prior to the occurrence of an Event of Default (or in the case of
an Event of Default described in clause (i) of Section 10.01(a), before the
Trustee has received notice of such Event of Default pursuant to Section
4.10(b)) and after the curing or waiving of all Events of Default that may
have occurred, the Trustee shall not be bound to make any investigation
into the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
Holders of Class A Certificates evidencing not less than 25% of the Class A
Certificate Balance; provided, however, that if the payment within a
-------- -------
reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation shall be, in the
opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of the Agreement, the Trustee may
require reasonable indemnity against such cost, expense or liability as a
condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee, shall
be reimbursed by the Servicer upon demand. Nothing in this clause (v)
shall affect the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors.
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties under the Agreement either directly or by or through
agents or attorneys or a custodian. The Trustee shall not be responsible
for any misconduct or negligence of any such agent or custodian appointed
with due care by it hereunder or of the Servicer in its capacity as
Servicer or custodian.
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(vii) Subsequent to the sale of the Receivables by the Seller to the
Trustee, the Trustee shall have no duty of independent inquiry, except as
may be required by Section 11.01, and the Trustee may rely upon the
representations and warranties and covenants of the Seller and the Servicer
contained in the Agreement with respect to the Receivables and the
Receivable Files.
SECTION 11.05. TRUSTEE NOT LIABLE FOR CERTIFICATES OR RECEIVABLES.
--------------------------------------------------
The recitals contained herein and in the Certificates (other than the
certificate of authentication on the Certificates) shall be taken as the
statements of the Seller or the Servicer, as the case may be, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee shall make
no representations as to the validity or sufficiency of the Agreement or of the
Certificates (other than the certificate of authentication on the Certificates),
or of any Receivable or related document. The Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any security interest in any Financed Vehicle or any
Receivable, or the perfection and priority of such a security interest or the
maintenance of any such perfection and priority, or for or with respect to the
efficacy of the Trust or its ability to generate the payments to be distributed
to Certificateholders under the Agreement, including (i) the existence,
condition, location and ownership of any Financed Vehicle; (ii) the review of
any Receivable File therefor; (iii) the existence and enforceability of any
physical damage insurance thereon; (iv) the existence and contents of any
Receivable or any Receivable File or any computer or other record thereof; (v)
the validity of the assignment of any Receivable to the Trust or of any
intervening assignment; (vi) the completeness of any Receivable or any
Receivable File; (vii) the performance or enforcement of any Receivable; (viii)
the compliance by the Seller or the Servicer with any warranty or representation
made under the Agreement or in any related document and the accuracy of any such
warranty or representation prior to the Trustee's receipt of notice or other
discovery of any noncompliance therewith or any breach thereof; (ix) any
investment of monies by the Servicer or any loss resulting therefrom (it being
understood that the Trustee shall remain responsible for any Trust property that
it may hold); (x) the acts or omissions of the Seller, the Servicer or any
Obligor; (xi) any action of the Servicer taken in the name of the Trustee; or
(xii) any action by the Trustee taken at the instruction of the Servicer;
provided, however, that the foregoing shall not relieve the Trustee of its
-------- -------
obligation to perform its duties under the Agreement. Except with respect to a
claim based on the failure of the Trustee to perform its duties
72
under the Agreement or based on the Trustee's negligence or willful misconduct,
no recourse shall be had for any claim based on any provision of the Agreement,
the Certificates or any Receivable or assignment thereof against the Trustee in
its individual capacity and the Trustee shall not have any personal obligation,
liability or duty whatsoever to any Certificateholder or any other Person with
respect to any such claim, and any such claim shall be asserted solely against
the Trust or any indemnitor who shall furnish indemnity as provided in the
Agreement. The Trustee shall not be accountable for the use or application by
the Seller of any of the Certificates or of the proceeds of such Certificates,
or for the use or application of any funds paid to the Servicer in respect of
the Receivables. Any obligation of the Trustee to give any notice or statement
to any rating agency hereunder shall constitute only a best efforts obligation
and such notice or statement shall be so provided only as a matter of courtesy
and accommodation, the Trustee having no liability to any rating agency or any
other Person for any failure to so provide such notice or statement.
SECTION 11.06. TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Certificates
and may deal with the Seller and the Servicer in banking transactions with the
same rights as it would have if it were not Trustee.
SECTION 11.07. TRUSTEE'S FEES AND EXPENSES. The Servicer shall pay
---------------------------
to the Trustee, and the Trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts created by the Agreement and in the exercise and
performance of any of the Trustee's powers and duties under the Agreement, and
the Servicer shall pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) incurred or made by the Trustee in
accordance with any provisions of the Agreement, except any such expense,
disbursement or advance as may be attributable to the Trustee's willful
misfeasance, negligence, or bad faith, and the Servicer shall indemnify the
Trustee for, and hold it harmless against any loss, liability or expense
incurred without willful misfeasance, negligence or bad faith on the Trustee's
part, arising out of or in connection with the acceptance or administration of
the Trust, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of
73
any of its powers or duties under the Agreement. Additionally, the Seller,
pursuant to Section 8.02, and the Servicer, pursuant to Section 9.02,
respectively, shall indemnify the Trustee with respect to certain matters, and
the Certificateholders, pursuant to Section 11.04, shall, upon the circumstances
therein set forth, indemnify the Trustee under certain circumstances. The
provisions of this Section 11.07 shall survive the termination of the Agreement.
SECTION 11.08. INDEMNITY OF TRUSTEE. The Trustee shall be
--------------------
indemnified by the Servicer and held harmless against any loss, liability, fee,
disbursement or expense (including any compensation or expense referred to in
Section 11.07) arising out of or incurred in connection with the acceptance or
performance of the trusts and duties contained in the Agreement to the extent
that (i) the Trustee shall not be entitled to indemnity for such loss,
liability, fee, disbursement or expense by the Seller pursuant to Section 8.02,
the Servicer pursuant to Section 9.02, or the Certificateholders pursuant to
Section 11.04; (ii) such loss, liability, fee, disbursement or expense shall not
have been incurred by reason of the Trustee's willful misfeasance, bad faith or
negligence; and (iii) such loss, liability, fee, disbursement or expense shall
not have been incurred by reason of the Trustee's breach of its representations
and warranties pursuant to Section 11.14.
SECTION 11.09. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
------------------------------------
under the Agreement shall at all times be a corporation having an office in the
same state as the location of the Corporate Trust Office as specified in the
Agreement, organized and doing business under the laws of such state or the
United States of America, authorized under such laws to exercise corporate trust
powers and having a combined capital and surplus of at least $50,000,000 and a
long-term rating from ▇▇▇▇▇'▇ Investors Service, Inc. of at least Baa3 (or
having a corporate parent with at least such rating) and subject to supervision
or examination by federal or state authorities. If such corporation shall
publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 11.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.09, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.10.
74
SECTION 11.10. RESIGNATION OR REMOVAL OF TRUSTEE. The Trustee may at
---------------------------------
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor Trustee. If no successor
Trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
▇▇▇▇▇▇▇.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of Section 11.09 and shall fail to resign after written request
therefor by the Servicer, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation, or liquidation, then the Servicer may remove the
Trustee. If it shall remove the Trustee under the authority of the immediately
preceding sentence, the Servicer shall promptly appoint a successor Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor Trustee and
shall promptly pay all fees owed to the outgoing Trustee.
Any resignation or removal of the Trustee and appointment of a successor Trustee
pursuant to any of the provisions of this Section 11.10 shall not become
effective until acceptance of appointment by the successor Trustee pursuant to
Section 11.11 and payment of all fees and expenses owed and any other amounts
due hereunder to the outgoing Trustee. The Servicer shall provide notice of
such resignation or removal of the Trustee to each of the rating agencies then
rating the Certificates.
SECTION 11.11. SUCCESSOR TRUSTEE. Any successor Trustee appointed
-----------------
pursuant to Section 11.10 shall execute, acknowledge and deliver to the Servicer
and to its predecessor Trustee an instrument accepting such appointment under
the Agreement, and thereupon the resignation or removal of the predecessor
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor under the Agreement, with like effect
as if originally named as Trustee. The predecessor Trustee shall upon payment
of its
75
fees and expenses and any other amounts due it hereunder deliver to the
successor Trustee all documents and statements and monies held by it under the
Agreement; and the Servicer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Trustee all such
rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section 11.11
unless at the time of such acceptance such successor Trustee shall be eligible
pursuant to Section 11.09.
Upon acceptance of appointment by a successor Trustee pursuant to this Section
11.11, the Servicer shall mail notice of such successor Trustee to all
Certificateholders at their addresses as shown in the Certificate Register and
to the rating agencies then rating the Certificates. If the Servicer shall fail
to mail such notice within 10 days after acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed at
the expense of the Servicer.
SECTION 11.12. MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation
----------------------------------
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 11.09, without the execution
or filing of any instrument or any further act on the part of any of the parties
hereto; anything herein to the contrary notwithstanding.
SECTION 11.13. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
---------------------------------------------
Notwithstanding any other provisions of the Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholders, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 11.13,
such powers, duties, obligations, rights and trusts as the Servicer and the
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Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee under the Agreement shall be required to meet the
terms of eligibility as a successor trustee pursuant to Section 11.09 and no
notice of a successor trustee shall be required pursuant to Section 11.11.
Each separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee under the Agreement or as
successor to the Servicer under the Agreement), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) No trustee under the Agreement shall be personally liable by
reason of any act or omission of any other trustee under the Agreement;
(iii) The Servicer and the Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee; and
(iv) All duties owed hereunder to the Trustee by the Servicer shall be
deemed to be owed to each separate trustee and co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed to
have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to the Agreement and the conditions
of this Article XI. Each separate
77
trustee and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided therein,
subject to all the provisions of the Agreement, specifically including every
provision of the Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Each such instrument shall be
filed with the Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Trustee, its
agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of the Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee. Notwithstanding anything to the contrary in the Agreement,
the appointment of any separate trustee or co-trustee shall not relieve the
Trustee of its obligations and duties thereunder.
SECTION 11.14. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The
-----------------------------------------
Trustee shall make the following representations and warranties on which the
Seller and Certificateholders shall rely:
(i) The Trustee is a banking corporation duly organized, and validly
existing, under the laws of the State of New York and authorized to conduct
and engage in a banking and trust business under such laws;
(ii) The Trustee has full corporate power, authority and legal right
to execute, deliver and perform the Agreement, and has taken all necessary
action to authorize the execution, delivery and performance by it of the
Agreement; and
(iii) The Agreement has been duly executed and delivered by the
Trustee.
SECTION 11.15. TAX RETURNS. The Servicer shall prepare or shall
-----------
cause to be prepared any tax or information returns required to be filed by the
Trust and shall remit or cause to be remitted such returns to the Trustee for
signature at least five days before such returns are due to be filed. The
Trustee, upon request, will furnish the Servicer with all such information known
to the Trustee as may be reasonably required in connection with the
78
preparation of all tax or information returns of the Trust, and shall, upon
request, execute such returns.
SECTION 11.16. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
------------------------------------------------
CERTIFICATES. All rights of action and claims under this Agreement or the
------------
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.
SECTION 11.17. SUITS FOR ENFORCEMENT. If an Event of Default shall
---------------------
occur and be continuing, the Trustee, in its discretion may, subject to the
provisions of Section 11.01, proceed to protect and enforce its rights and the
rights of the Certificateholders under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy as the Trustee, being advised by
counsel, shall deem most effectual to protect and enforce any of the rights of
the Trustee or the Certificateholders.
SECTION 11.18. RIGHTS OF CERTIFICATEHOLDERS TO DIRECT TRUSTEE.
----------------------------------------------
Holders of Class A Certificates evidencing not less than 51% of the Class A
Certificate Balance shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, however, that, subject to
-------- -------
Section 11.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in good faith shall, by a
Trustee Officer, determine that the proceedings so directed would be illegal or
subject it to personal liability or be unduly prejudicial to the rights of
Certificateholders not parties to such direction; and provided further that
-------- -------
nothing in this Agreement shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction by the Certificateholders.
SECTION 11.19. APPOINTMENT OF CUSTODIAN. For so long as the Custody
------------------------
and Pledge Agreement or any similar agreement is in existence, the Trustee shall
appoint the
79
Custodian in accordance with the terms hereof including satisfying the
requirements for eligibility of the Trustee pursuant to Section 11.09 hereof.
The Custodian may, but is not required to, be the Trustee. In the event that
the Trustee is not the Custodian, the Trustee shall pay any Custodian fees out
of the Trustee's fees and not out of assets of the Trust.
ARTICLE XII.
TERMINATION
SECTION 12.01. TERMINATION OF THE TRUST. The respective obligations
------------------------
and responsibilities of the Seller, the Servicer and the Trustee (except for the
obligations contained in Sections 5.09(d) and 11.15) created hereby and the
Trust created by the Agreement shall terminate upon (i) the purchase as of the
last day of any Collection Period by the Servicer at its option, pursuant to
Section 12.02, of the corpus of the Trust and the subsequent distribution to
Certificateholders pursuant to Section 5.06 of the amount required to be
deposited pursuant to Section 12.02, (ii) the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the Trust or (iii) the maturity or
other liquidation of the last Receivable and the disposition of any amounts
received upon liquidation of any remaining Receivables; provided, however, that
-------- -------
in no event shall the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
▇▇▇▇ ▇▇▇▇▇▇▇, formerly of Massachusetts, living on the date of the Agreement.
The Servicer shall promptly notify the Trustee of any prospective termination
pursuant to this Section 12.01.
Notice of any termination, specifying the Distribution Date upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee by letter to Certificateholders mailed not earlier than the 15th day
and not later than the 25th day of the month next preceding the specified
Distribution Date stating (A) the Distribution Date upon which final payment of
the Certificates shall be made upon presentation and surrender of the
Certificates at the office of the Trustee therein designated, (B) the amount of
any such final payment and (C) if applicable, that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Trustee
therein specified. The Trustee shall give such notice to
80
the Certificate Registrar (if other than the Trustee) at the time such notice is
given to Certificateholders. Upon presentation and surrender of the
Certificates, the Trustee shall cause to be distributed to Certificateholders
amounts distributable on such Distribution Date pursuant to Section 5.06.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to the Agreement. Subject to any applicable law, any funds remaining in
the Trust after exhaustion of such remedies shall be distributed by the Trustee
to the Childrens Hospital Los Angeles.
SECTION 12.02. OPTIONAL PURCHASE OF ALL RECEIVABLES. On the last day
------------------------------------
of any Collection Period as of which the Pool Factor shall be less than the
Optional Purchase Percentage (after giving effect to the then current Collection
Period's collections), the Servicer shall have the option to purchase the corpus
of the Trust. To exercise such option, the Servicer shall deposit pursuant to
Section 5.05 in the Collection Account an amount equal to the aggregate
Repurchase Amount for the Receivables, 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 and the Trustee, and shall succeed to all interests
in and to the Trust; provided, however, that the Servicer shall not effect any
-------- -------
such purchase so long as the rating of Nissan Motor Acceptance Corporation, or
if such corporation shall then be unrated by such agency, then the rating of
Nissan Capital of America, Inc., is less than Baa3 by ▇▇▇▇▇'▇ Investors Service,
Inc. unless the Trustee shall have received an Opinion of Counsel to the effect
that such purchase shall not constitute a fraudulent conveyance, subject to such
assumptions as to factual matters as may be contained therein.
81
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.01. AMENDMENT. The Agreement may be amended from time to
---------
time by the Seller, the Servicer, NMAC (so long as NMAC has any rights or
obligations thereunder) and the Trustee, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, to correct or supplement any
provision in the Agreement which may be inconsistent with any other provision
therein, or to add any other provisions with respect to matters or questions
arising under the Agreement that shall not be inconsistent with the provisions
of the Agreement; provided, however, that such action shall not, as evidenced by
-------- -------
an Opinion of Counsel, materially and adversely affect the interests of any
Certificateholder; (ii) to change the formula for determining the Class A
Specified Subordination Spread Account Balance, provided that each rating agency
then rating Class A Certificates delivers a letter to the Trustee to the effect
that the use of such new formulation will not result in a qualification,
reduction or withdrawal of its then-current rating of the Class A Certificates;
and (iii) upon approval of each rating agency then rating the Class B
Certificates, if any, to change the Class B Specified Subordination Spread
Account Balance.
The Agreement may also be amended from time to time by the Seller, the
Servicer, NMAC (so long as NMAC has any rights or obligations thereunder) and
the Trustee with the consent of the Holders of Class A Certificates and Class B
Certificates, each voting as a separate Class (which consent of any Holder of a
Certificate given pursuant to this Section or pursuant to any other provision of
this Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate and of any Certificate issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Certificate), evidencing not less than 51% of the
Class A Certificate Balance and Class B Certificate Balance, respectively, for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Agreement, or of modifying in any manner the rights
of the Holders of Certificates; provided, however, that no such amendment shall
-------- -------
(a) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall be
required to be made on any Certificate or change the Pass-Through Rate, the
Specified Subordinated Spread Account Balance or the Class B Specified
Subordination Spread Account Balance (except as described in
82
clauses (ii) and (iii) above) without the consent of each adversely affected
Certificateholder or (b) reduce the aforesaid percentage of the Class A
Certificate Balance or Class B Certificate Balance which is required to consent
to any such amendment, without the consent of the Holders of all Certificates of
such Class then outstanding. Notwithstanding the foregoing, no amendment
referred to in clause (a) of the preceding proviso will be made unless each
rating agency then rating the Certificates confirms that such amendment will not
result in a reduction or withdrawal of its rating of the Certificates of such
class.
Prior to the execution of any such amendment or consent pursuant to
this Section 13.01, the Servicer will provide and the Trustee shall distribute
written notification of the substance of such amendment or consent to each of
the rating agencies then rating the Certificates at least ten Business Days
prior to the execution thereof.
Promptly after the execution of any such amendment or consent, the
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder.
It shall not be necessary for the consent of Certificateholders
pursuant to this Section 13.01 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement) and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe, including
the establishment of record dates pursuant to paragraph number 2 of the
Depository Agreement.
Prior to the execution of any amendment to the Agreement, the 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 the Agreement and
the Opinion of Counsel referred to in Section 13.02(i)(1). The Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Trustee's own rights, duties or immunities under the Agreement or otherwise.
SECTION 13.02. 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
83
and protect the interest of the Certificateholders and the Trustee in the
Receivables and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the 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 by the Seller in
accordance with paragraph (a) above seriously misleading within the meaning of
(S) 9-402(7) of the UCC, unless it shall have given the 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) The Seller and the Servicer shall give the 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 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. 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 Certificate
Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under the Agreement of the Receivables to the Trust,
the Servicer's master computer records (including any back-up archives) that
refer to a Receivable shall indicate clearly the interest of the particular
grantor trust in such Receivable and that such Receivable is owned by the Trust.
Indication of the Trust's ownership of a Receivable shall be deleted from or
modified on the Servicer's computer systems when, and only when, the Receivable
shall have been paid in full or repurchased.
84
(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 print-outs (including any restored from back-up
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
Trust.
(g) The Servicer shall permit the Trustee and its agents at any time
during normal business hours to inspect, audit and make copies of and abstracts
from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Trustee, within
20 Business Days, a list of all Receivables (by contract number and name of
Obligor) then held as part of the Trust, together with a reconciliation of the
List of Receivables attached hereto as Schedule A and to each of the Servicer's
Certificates furnished before such request indicating removal of Receivables
from the Trust.
(i) The Servicer shall deliver to the Trustee:
(1) promptly after the execution and delivery of the Agreement
and of each amendment thereto, an Opinion of Counsel either (A)
stating that, in the opinion of such Counsel, all financing statements
and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the 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)
stating that, in the opinion of such Counsel, no such action shall be
necessary to preserve and protect such interest; and
(2) 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, either (A) stating that, in the
opinion of such Counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of
85
the 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) stating that, in the opinion of such
Counsel, no such action shall be necessary to preserve and protect
such interest.
Each Opinion of Counsel referred to in clause (i)(1) or (i)(2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause
the Certificates to be registered with the Securities and Exchange Commission
pursuant to Section 12(b) or Section 12(g) of the Securities Exchange Act of
1934 within the time periods specified in such sections.
SECTION 13.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death
------------------------------------------
or incapacity of any Certificateholder shall not operate to terminate the
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties to
the Agreement or any of them.
No Certificateholder shall have any right to vote (except as
specifically provided herein) or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties to the Agreement,
nor shall anything in the Agreement set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken pursuant to any provision of the Agreement.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of the Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to the Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of default and of the continuance thereof, and unless also (i) the default
arises from the Seller's or the Servicer's failure to remit payments when due
hereunder, or (ii) the Holders of Class A Certificates evidencing not less than
25% of the Class A Certificate Balance shall have made written request upon the
86
Trustee to institute such action, suit or proceeding in its own name as Trustee
under the Agreement and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 30 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and during such 30-day period no
request or waiver inconsistent with such written request has been given to the
Trustee pursuant to this Section 13.03 or Section 10.05; no one or more Holders
of Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of the Agreement to affect,
disturb or prejudice the rights of the Holders of any other of the Certificates,
or to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right, under the Agreement except in the manner
provided in the Agreement and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 13.03, each Certificateholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
SECTION 13.04. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
-------------
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 13.05. NOTICES. All demands, notices, and communications
-------
upon or to the Seller, the Servicer, the Trustee or any rating agency under the
Agreement shall be (i) in writing, personally delivered or mailed by certified
mail, return receipt requested, or (ii) by facsimile, at its facsimile number,
and shall be deemed to have been duly given upon receipt (a) in the case of the
Seller or the Servicer, to ▇▇▇ ▇▇▇▇▇, General Counsel, Nissan Motor Acceptance
Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, telephone: (310) 719-
8024, facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, (b) in the case of the Trustee, at the
Corporate Trust Office, (c) in the case of ▇▇▇▇▇'▇ Investors Service, Inc., at
the following address: ▇▇▇▇▇'▇ Investors Service, Inc., ABS Monitoring
Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (d) in the case of
Standard & Poor's Ratings Services, at the following address: Standard & Poor's
Ratings Services, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Asset Backed Surveillance Department. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register.
Any notice so mailed within the
87
time prescribed in the Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder shall receive such notice.
SECTION 13.06. SEVERABILITY OF PROVISIONS. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of the Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of the Agreement and shall in no way affect the validity or
enforceability of the other provisions of the Agreement or of the Certificates
or the rights of the Holders thereof.
SECTION 13.07. ASSIGNMENT. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Sections 8.03 and 9.03 and as provided
in the provisions of the Agreement concerning the resignation of the Servicer,
the Agreement may not be assigned by the Seller or the Servicer without the
prior written consent of the Trustee and the Holders of Class A Certificates
evidencing not less than 66-2/3% of the Class A Certificate Balance.
SECTION 13.08. CERTIFICATES NONASSESSABLE AND FULLY PAID.
-----------------------------------------
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and, upon
authentication thereof by the Trustee pursuant to Section 7.02 or Section 7.03,
Certificates shall be deemed fully paid.
SECTION 13.09. FURTHER ASSURANCES. The Seller and the Servicer agree
------------------
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of this Agreement, including the execution of any
financing statements or continuation statements relating to the Receivables for
filing under the provisions of the Uniform Commercial Code of any applicable
jurisdiction.
SECTION 13.10. NO WAIVER; CUMULATIVE REMEDIES. No failure to
------------------------------
exercise and no delay in exercising, on the part of the Trustee or the
Certificateholders, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges therein provided are
88
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION 13.11. THIRD-PARTY BENEFICIARIES. This Agreement will inure
-------------------------
to the benefit of and be binding upon the parties hereto, the Certificateholders
and their respective successors and permitted assigns. Except as otherwise
provided in this Article XIII, no other person will have any right or obligation
hereunder.
SECTION 13.12. ACTIONS BY CERTIFICATEHOLDERS.
-----------------------------
(a) Wherever in this Agreement a provision is made that an action may
be taken or a notice, demand or instruction given by Certificateholders, such
action, notice or instruction may be taken or given by any Certificateholder,
unless such provision requires a specific percentage of Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind such Certificateholder and
every subsequent holder of such Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.
SECTION 13.13. QUALIFICATION AS GRANTOR TRUST; SEPARATE ASSETS.
-----------------------------------------------
The Trust created hereunder is intended to be a separate grantor trust within
the meaning of Subpart E of Part I of Subchapter J of the Internal Revenue Code
of 1986, as amended. Those assets held pursuant to the Custody and Pledge
Agreement and pursuant to the Yield Supplement Agreement shall not be considered
to be owned by such Trust but instead, (i) with respect to the Custody and
Pledge Agreement, shall be considered to be owned by the Seller and/or by the
holders of the Class B Certificates, as the case may be, as set forth in the
Custody and Pledge Agreement, and to be pledged to the Trust and (ii) with
respect to the Yield Supplement Agreement, shall be considered owned by the
Seller, as set forth in the Yield Supplement Agreement, and to be pledged to the
Trust. Each agreement should be interpreted accordingly.
SECTION 13.14. COUNTERPARTS. For the purpose of facilitating the
------------
execution of the Agreement and for other purposes, the Agreement may be executed
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
89
IN WITNESS WHEREOF, the Seller, Servicer, NMAC and the Trustee have
caused this Pooling and Servicing Agreement to be duly executed by their
respective officers as of the ___ day of __________ 1997.
NISSAN AUTO RECEIVABLES
CORPORATION, as Seller
By:________________________________
Name:
Title:
NISSAN MOTOR ACCEPTANCE
CORPORATION, as Servicer
By:________________________________
Name:
Title:
NISSAN MOTOR ACCEPTANCE
CORPORATION, in its individual
capacity
By:________________________________
Name:
Title:
THE FUJI BANK AND TRUST COMPANY, as
Trustee
By:________________________________
Name:
Title:
90
SCHEDULE A
[LIST OF RECEIVABLES DELIVERED TO TRUSTEE AT CLOSING]
SCHEDULE B
LOCATION OF RECEIVABLES
1. NISSAN MOTOR ACCEPTANCE CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
2. Nissan Motor Acceptance Corporation
Massachusetts Office
Four Cambridge Center
Cambridge, Massachusetts 02142
3. Kestrel Records Management
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT A: FORM OF CLASS A CERTIFICATE SEE REVERSE FOR
CERTAIN DEFINITIONS
[the following legend to be inserted if this Certificate is issued to CEDE &
Co.:]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
NISSAN AUTO RECEIVABLES 1997-A GRANTOR TRUST
[_]% ASSET BACKED CERTIFICATE
CLASS A
evidencing a fractional undivided interest in the Trust, as defined below,
the property of which includes a pool of retail installment sale contracts
secured by new and used automobiles and light trucks and sold to the Trust
by Nissan Auto Receivables Corporation.
(This Certificate does not represent an interest in or obligation of Nissan
Auto Receivables Corporation or Nissan Motor Acceptance Corporation or any
of their respective affiliates thereof, except to the extent described
below.)
NUMBER CUSIP ___________
R
$________________
THIS CERTIFIES THAT is the registered owner of
a dollars nonassessable, fully-paid, fractional undivided interest
in the Nissan Auto Receivables 1997-A Grantor Trust (the "Trust") formed by
Nissan Auto Receivables Corporation, a Delaware corporation (the "Seller"). The
Trust was created pursuant to a Pooling and Servicing Agreement dated as of
October 1, 1997 (the "Agreement"), among the Seller, Nissan Motor Acceptance
A-1
Corporation, as Servicer (the "Servicer") and in its individual capacity, and
The Fuji Bank and Trust Company, as Trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is one of the duly
authorized Certificates designated as "[_]% Asset Backed Certificates, Class A"
(herein called the "Class A Certificates"). Also issued under the Agreement are
Certificates designated as "[_]% Asset Backed Certificates, Class B" (the "Class
B Certificates"). The Class B Certificates and the Class A Certificates are
hereinafter collectively called the "Certificates." The aggregate undivided
interest in the Trust evidenced by all Class A Certificates is [_]%. This Class
A Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the holder of this Class A
Certificate, by virtue of the acceptance hereof, assents and by which such
holder is bound. The property of the Trust includes (as more fully described in
the Agreement) a pool of retail installment sale contracts of new and used
automobiles and light trucks (the "Receivables"), certain monies paid thereon on
or after October 1, 1997, security interests in the vehicles financed thereby,
certain bank accounts and the proceeds thereof, property (including the right to
receive Liquidation Proceeds) securing the Receivables and held by the Trustee,
proceeds from claims on physical damage, credit life and disability insurance
policies covering vehicles financed thereby and the obligors thereunder, certain
interests of the Seller in Dealer Recourse, all right, title and interest of the
Seller in and to the Purchase Agreement, the Yield Supplement Agreement and the
Custody and Pledge Agreement and any and all proceeds of the foregoing.
Under the Agreement, there will be distributed on the 15th day of each
month or, if such 15th day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on November 17, 1997, to the person in whose
name this Class A Certificate is registered at the close of business on the
Record Date (as determined pursuant to the Agreement), such Class A
Certificateholder's fractional undivided interest of the amounts to be
distributed to the Class A Certificateholders as determined pursuant to the
Agreement.
Distributions on this Class A Certificate will be made by the Trustee
by check or money order mailed to the Class A Certificateholder of record in the
Certificate Register without the presentation or surrender of this Class
A-2
A Certificate or the making of any notation hereon except that with respect to
Class A Certificates registered in the name of Cede & Co., the nominee for the
Clearing Agency, distributions will be made in the form of immediately available
funds. Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Class A Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Class A Certificate at the office or agency
maintained for that purpose by the Trustee in the Borough of Manhattan, The City
of New York. The Record Date otherwise applicable to such distribution shall
not be applicable.
Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class A Certificate shall not entitle the holder hereof to any benefit under the
Agreement or be valid for any purpose.
A-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this Class A Certificate to be duly executed.
NISSAN AUTO RECEIVABLES
1997-A
GRANTOR TRUST
BY THE FUJI BANK AND TRUST COMPANY,
as Trustee
By
-------------------------------------
DATED:
[SEAL]
ATTEST:
----------------------------
Trustee Officer
This is one of the Class A Certificates referred to
in the within-mentioned Agreement.
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By
-----------------------------------
Authorized Officer
A-4
[Reverse of Certificate]
The Certificates do not represent an obligation of, or an interest in,
the Seller, Nissan Motor Acceptance Corporation, the Trustee or any affiliate of
any of them. The Certificates are limited in right of payment to certain
collections and recoveries respecting the Receivables, all as more specifically
set forth in the Agreement. A copy of the Agreement may be examined during
normal business hours at the principal office of the Seller, and at such other
places, if any, designated by the Seller, by any Certificate Owner upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Agreement at any time
by the Seller, the Servicer, NMAC and the Trustee with the consent of the
Holders of Class A Certificates and Class B Certificates, each voting as a
Class, evidencing not less than 51% of the Class A Certificate Balance and Class
B Certificate Balance, respectively. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and on all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Trustee in its capacity as
Certificate Registrar, or by any successor Certificate Registrar, in the Borough
of Manhattan, The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee.
The Class A Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof;
however, one
A-5
Certificate may be issued in a denomination equal to the residual amount. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denomination
evidencing the same aggregate denomination, as requested by the holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or governmental charges payable in connection therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar shall treat the person in whose name this Class A
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Certificate Registrar, nor any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the Trust. The Servicer of the
Receivables may at its option purchase the corpus of the Trust at a price
specified in the Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Certificates; however,
such right of purchase is exercisable only as of a Record Date as of which the
Pool Balance is less than 10% of the original aggregate principal balance of the
Receivables.
The recitals contained herein (other than the certificate of
authentication herein) shall be taken as the statements of the Seller or the
Servicer, as the case may be, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representations as to the validity or
sufficiency of this Certificate (other than the certificate of authentication
herein), or of any Receivable or related document.
A-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
--------------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
____________________________*
Signature Guaranteed:
____________________________*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
A-7
EXHIBIT B: FORM OF CLASS B CERTIFICATE SEE REVERSE FOR
CERTAIN DEFINITIONS
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT
TO THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE TRANSFERRED OR SOLD TO
A PERSON OTHER THAN A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE ACT) THAT CERTIFIES AS SUCH TO THE SATISFACTION OF THE SELLER, UNLESS
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED AND THE SATISFACTION OF CERTAIN OTHER
SIGNIFICANT REQUIREMENTS SPECIFIED IN THE AGREEMENT (AS DEFINED BELOW).
Nissan Auto Receivables 1997-A Grantor Trust
[_]% ASSET BACKED CERTIFICATE
CLASS B
evidencing a fractional undivided interest in the Trust, as defined below,
the property of which includes a pool of retail installment sale contracts
secured by new and used automobiles and light trucks and sold to the Trust
by Nissan Auto Receivables Corporation.
(This Certificate does not represent an interest in or obligation of Nissan
Auto Receivables Corporation or Nissan Motor Acceptance Corporation or any
of their respective affiliates thereof, except to the extent described
below.)
NUMBER
US$____________
THIS CERTIFIES THAT is the registered owner of
a dollars nonassessable, fully-paid, fractional
undivided interest in the Nissan Auto Receivables 1997-A Grantor Trust (the
"Trust") formed by Nissan Auto Receivables Corporation, a Delaware corporation
(the "Seller"). The Trust was created pursuant to a Pooling and Servicing
Agreement dated as of October 1, 1997 (the "Agreement"), among the Seller,
Nissan Motor Acceptance Corporation, as Servicer (the "Servicer") and in its
individual capacity, and The Fuji Bank and Trust Company, as Trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To
B-1
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Agreement. This Certificate is one of the
duly authorized Certificates designated as "[_]% Asset Backed Certificates,
Class B" (herein called the "Class B Certificates"). Also issued under the
Agreement are Certificates designated as "[_]% Asset Backed Certificates, Class
A" (the "Class A Certificates"). The Class B Certificates and the Class A
Certificates are hereinafter collectively called the "Certificates." The
aggregate undivided interest in the Trust evidenced by all Class B Certificates
is [_]%. This Class B Certificate is issued under and is subject to the terms,
provisions, and conditions of the Agreement, to which Agreement the holder of
this Class B Certificate, by virtue of the acceptance hereof, assents and by
which such holder is bound. The property of the Trust includes (as more fully
described in the Agreement) a pool of retail installment sale contracts for new
and used automobiles and light trucks (the "Receivables"), certain monies paid
thereon on or after October 1, 1997, security interests in the vehicles financed
thereby, certain bank accounts and the proceeds thereof, property (including the
right to receive Liquidation Proceeds) securing the Receivables, proceeds from
claims on physical damage, credit life and disability insurance policies
covering vehicles financed thereby and the obligors thereunder, certain
interests of the Seller in Dealer Recourse, all right, title and interest of the
Seller in and to the Purchase Agreement, the Yield Supplement Agreement and the
Custody and Pledge Agreement and any and all proceeds of the foregoing. The
rights of the holders of the Class B Certificates are subordinated to the rights
of the holders of the Class A Certificates, as set forth in the Agreement.
Under the Agreement, there will be distributed on the 15th day of each
or, if such 15th day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on November 17, 1997, to the person in whose
name this Class B Certificate is registered at the close of business on the
Record Date (as determined pursuant to the Agreement), such Class B
Certificateholder's fractional undivided interest in the amounts to be
distributed to the Class B Certificateholders as determined pursuant to the
Agreement; provided, however, that under certain circumstances specified in the
-------- -------
Agreement, amounts otherwise distributable to the Class B Certificateholders
will be deposited in the Class A Subordination Spread Account.
B-2
Distributions on this Class B Certificate will be made by the Trustee
by wire transfer, check or money order mailed to the Class B Certificateholder
of record in the Certificate Register without the presentation or surrender of
this Class B Certificate or the making of any notation hereon. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Class B Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Class B Certificate at the office or agency maintained for
that purpose by the Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Class B
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class B Certificate shall not entitle the holder hereof to any benefit under the
Agreement or be valid for any purpose.
B-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this Class B Certificate to be duly executed.
NISSAN AUTO RECEIVABLES 1997-A GRANTOR TRUST
THE FUJI BANK AND TRUST COMPANY,
as Trustee
DATED: __________ By ________________________________
[SEAL]
ATTEST:
______________________
Trustee Officer
This is one of the Class B Certificates referred
to in the within-mentioned Agreement.
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By ________________________________
Authorized Officer
B-4
[Reverse of Certificate]
The Certificates do not represent an obligation of, or an interest in,
the Seller, Nissan Motor Acceptance Corporation, the Trustee or any affiliate of
any of them. The Certificates are limited in right of payment to certain
collections and recoveries respecting the Receivables, all as more specifically
set forth in the Agreement. A copy of the Agreement may be examined during
normal business hours at the principal office of the Seller, and at such other
places, if any, designated by the Seller, by any Certificate Owner upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Agreement at any time
by the Seller, the Servicer, NMAC and the Trustee with the consent of the
Holders of Class A Certificates and Class B Certificates, each voting as a
Class, evidencing not less than 51% of the Class A Certificate Balance and Class
B Certificate Balance, respectively. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and on all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain significant
limitations on transfer therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Trustee in
its capacity as Certificate Registrar, or by any successor Certificate
Registrar, in the Borough of Manhattan, The City of New York, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee.
The Class B Certificates are issuable only as registered Certificates
without coupons in denominations of
B-5
$100,000 or in any amount in excess thereof; however, one Certificate may be
issued in a denomination representing or including any residual amount. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same aggregate denomination, as requested by the holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or governmental charges payable in connection therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar shall treat the person in whose name this Class B
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Certificate Registrar, nor any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the Trust. The Servicer of the
Receivables may at its option purchase the corpus of the Trust at a price
specified in the Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Certificates; however,
such right of purchase is exercisable only as of a Record Date as of which the
Pool Balance is less than 10% of the original aggregate principal balance of the
Receivables.
The recitals contained herein (other than the certificate of
authentication herein) shall be taken as the statements of the Seller or the
Servicer, as the case may be, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representations as to the validity or
sufficiency of this Certificate (other than the certificate of authentication
herein), or of any Receivable or related document.
B-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
--------------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
__________________________________*
Signature Guaranteed:
__________________________________*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
B-7
EXHIBIT C
[LOGO]
-----------------------------------------------------------
BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)
(WITHOUT OWNER OPTION TO REDEEM)/
OTHER ASSET-BACKED SECURITIES/AND PASS-THROUGH CERTIFICATES
-----------------------------------------------------------
Letter of Representations
(To be Completed by Issuer and Trustee)
------------------------------------
(Name of Issuer)
------------------------------------
(Name of Trustee)
-------------
(Date)
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: ____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
(Issue Description)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Trustee will act as
trustee with respect to the Securities pursuant to a trust indenture dated ____
__________________, 199_ (the "Document"). _______________________________ is
("Underwriter")
distributing the Securities through The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC, and
to act in accordance with its Rules with respect to the Securities, Issuer and
Trustee make the following representations to DTC:
1. Prior to closing on the Securities on ______________, 199_, there shall
be deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede & Co., for each stated maturity of the Securities in the face
amounts set forth on Schedule A hereto, the total of
which represents 100% of the principal amount of such Securities. If, however,
the aggregate principal amount of any maturity exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal amount
and an additional certificate will be issued with respect to any remaining
principal amount. Each Security certificate shall bear the following legend:
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
2. In the event of any solicitation of consents from or voting by holders of
the Securities, Issuer or Trustee shall establish a record date for such
purposes (with no provision for revocation of consents or votes by subsequent
holders) and shall send notice of such record date to DTC not less than 15
calendar days in advance of such record date. Notices to DTC pursuant to this
Paragraph by telecopy shall be sent to DTC's Reorganization Department at (212)
709-6896 or (▇▇▇) ▇▇▇-▇▇▇▇, and receipt of such notices shall be confirmed by
telephoning (▇▇▇) ▇▇▇-▇▇▇▇. Notices to DTC pursuant to this Paragraph by mail or
by any other means shall be sent to DTC's Reorganization Department as indicated
in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee shall
send a notice to DTC specifying: (a) the amount of the redemption or refunding;
(b) in the case of a refunding, the maturity date(s) established under the
refunding; and (c) the date such notice is to be mailed to Security holders or
published (the "Publication Date"). Such notice shall be sent to DTC by a secure
means (e.g., legible telecopy, registered or certified mail, overnight delivery)
in a timely manner designed to assure that such notice is in DTC's possession no
later than the close of business on the business day before or, if possible, two
business days before the Publication Date. Issuer or Trustee shall forward such
notice either in a separate secure transmission for each CUSIP number or in a
secure transmission for multiple CUSIP numbers (if applicable) which includes a
manifest or list of each CUSIP number submitted in that transmission. (The party
sending such notice shall have a method to verify subsequently the use of such
means and the timeliness of such notice.) The Publication Date shall be not less
than 30 days nor more than 60 days prior to the redemption date or, in the case
of an advance refunding, the date that the proceeds are deposited in escrow.
Notices to DTC pursuant to this Paragraph by telecopy shall be sent to DTC's
Call Notification Department at (▇▇▇) ▇▇▇-▇▇▇▇ or (▇▇▇) ▇▇▇-▇▇▇▇. If the party
sending the notice does not receive a telecopy receipt from DTC confirming that
the notice has been received, such party shall telephone (▇▇▇) ▇▇▇-▇▇▇▇. Notices
to DTC pursuant to this Paragraph by mail or by any other means shall be sent
to:
Manager: Call Notification Department
The Depository Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
4. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Trustee
to Security holders specifying the terms of the tender and the Publication Date
of such notice shall be sent to DTC by a secure means in the manner set forth in
the preceding Paragraph. Notices to DTC pursuant to this Paragraph and notices
of other corporate actions by telecopy shall be sent to DTC's Reorganization
Department at (▇▇▇) ▇▇▇-▇▇▇▇
-2-
or (▇▇▇) ▇▇▇-▇▇▇▇, and receipt of such notices shall be confirmed by telephoning
(▇▇▇) ▇▇▇-▇▇▇▇. Notices to DTC pursuant to the above by mail or by any other
means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar amount
per $1,000 original face value (or other minimum authorized denomination if less
than $1,000 face value) payable on each payment date allocated as to the
interest and principal portions thereof preferably 5, but not less than 2,
business days prior to such payment date. Such notices, which shall also contain
the current pool factor, any special adjustments to principal/interest rates
(e.g., adjustments due to deferred interest or shortfall), and Trustee contact's
name and telephone number, shall be sent by telecopy to DTC's Dividend
Department at (▇▇▇) ▇▇▇-▇▇▇▇, or if by mail or by any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
7. [NOTE: ISSUER, MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS OUT THE
OTHER:] [The interest accrual period is record date to record date.][The
interest accrual period is payment date to payment date.]
8. Trustee must provide DTC, no later than noon (Eastern Time) on the
payment date, CUSIP numbers for each issue for which payment is being sent, as
well as the dollar amount of the payment for each issue. Notification of payment
details should be sent using automated communications.
9. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in sameday funds, no later than 2:30 p.m.
(Eastern Time) on each payment date (in accordance with existing arrangements
between Issuer or Trustee and DTC). Absent any other arrangements between Issuer
or Trustee and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA ▇▇▇▇▇▇▇▇▇
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Trustee shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no such
service exists, Issuer or Trustee shall provide interest payment information
directly to DTC in advance of the interest payment date as soon as the
information is available. This information should be conveyed directly to DTC
electronically. If electronic transmission is not available, absent any other
arrangements between Trustee and DTC, such information should be sent by
telecopy to DTC's Dividend Department at (▇▇▇) ▇▇▇-▇▇▇▇ or
-3-
(▇▇▇) ▇▇▇-▇▇▇▇, and receipt of such notices shall be confirmed by telephoning
(▇▇▇) ▇▇▇-▇▇▇▇. Notices to DTC pursuant to the above by mail or by any other
means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
10. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30 p.m.
(Eastern Time). Absent any other arrangements between Trustee and DTC, such
payments shall be wired as follows:
The Chase Manhattan Bank
ABA ▇▇▇▇▇▇▇▇▇
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously
been furnished to Trustee.
11. DTC shall receive all reorganization payments and CUSIP-level detail
resulting from corporate actions (such as tender offers, remarketings, or
mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between Trustee and DTC, such payments
shall be wired as follows:
The Chase Manhattan Bank
ABA ▇▇▇▇▇▇▇▇▇
For credit to A/C The Depository Trust Company
Redemption Account 066-027608
12. DTC may direct Issuer or Trustee to use any other number or address as
the number or address to which notices or payments of interest or principal may
be sent.
13. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or Trustee's
invitation) necessitating a reduction in the aggregate principal amount of
Securities outstanding or an advance refunding of part of the Securities
outstanding, DTC, in its discretion: (a) may request Issuer or Trustee to issue
and authenticate a new Security certificate; or (b) may make an appropriate
notation on the Security certificate indicating the date and amount of such
reduction in principal except in the case of final maturity, in which case the
certificate will be presented to Issuer or Trustee prior to payment, if
required.
14. In the event that Issuer determines that beneficial owners of Securities
shall be able to obtain certificated Securities, Issuer or Trustee shall notify
DTC of the availability of certificates. In such event, Issuer or Trustee shall
issue, transfer, and exchange certificates in appropriate amounts, as required
by DTC and others.
15. DTC may discontinue providing its services as securities depository with
respect to the Securities at any time by giving reasonable notice to Issuer or
Trustee (at which time DTC will confirm with Issuer or Trustee the aggregate
principal amount of Securities outstanding). Under such circumstances, at DTC's
request Issuer and Trustee shall cooperate fully with DTC by taking
-4-
appropriate action to make available one or more separate certificates
evidencing Securities to any DTC Particpant having Securities credited to its
DTC accounts.
16. Issuer: (a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificates by virtue of submission of such certificate(s) to DTC.
17. Nothing herein shall be deemed to require Trustee to advance funds on
behalf of Issuer.
NOTES: Very truly yours,
------
A. If there is a Trustee (as
defined in this Letter of
Representions). Trustee as
well as Issuer must sign this
Letter. If there is no Trustee,
in signing this Letter Issuer
itself undertakes to perform ------------------------------------
all of the obligations set (Issuer)
forth herein.
B. Schedule B contains state- By:
ments that DTC believes ---------------------------------
accurately describe DTC, the (Authorized Officer's Signature)
method of effecting book-
entry transfers of securities
distributed through DTC, and
certain related matters. ------------------------------------
(Trustee)
By:
--------------------------------
Received and Accepted: (Authorized Officer's Signature)
THE DEPOSITORY TRUST COMPANY
By:
-----------------------------
cc: Underwriter
Underwriter's Counsel
-5-
SCHEDULE A
----------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Describe Issue)
CUSIP Number Principal Amount Maturity Date Interest Rate
------------ ---------------- ------------- -------------
SCHEDULE B
----------
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
-----------------------------------
(Prepared by DTC--bracketed material may be applicable only to certain issues)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities
will be issued as fully-registered securities registered in the name of Cede &
Co. (DTC's partnership nominee). One fully-registered Security certificate will
be issued for [each issue of] the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the
aggregate principal amount of [any] issue exceeds $200 million, one certificate
will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Securities,
except in the event that use of the book-entry system for the Securities is
discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. If less than all of
the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
issued to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as
soon as possible after the record date. The Omnibus Proxy assigns Cede
& Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on payable date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on payable date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in " street name," and
will be the responsibility of such Participant and not of DTC, Trustee, or
Issuer, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal and interest to DTC is the
responsibility of Issuer or Trustee, disbursement of such payments to Direct
Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its
Securities purchased or tendered, through its Participant, to Trustee [or
Tender/Remarketing Agent], and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trustee [or Tender/Remarketing Agent]. The
requirement for physical delivery of Securities in connection with an optional
tender or a mandatory purchase will be deemed satisfied when the ownership
rights in the Securities are transferred by Direct participants on DTC's records
and followed by a book-entry credit of tendered Securities to Trustee [or
Tender/Remarketing Agent's] DTC account.]
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Agent. Under such circumstances, in the event that a successor securities
depository is not obtained, Security certificates are required to be printed and
delivered.
11. Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable, but
Issuer takes no responsibility for the accuracy thereof.
LOGO
REPRESENTATIONS FOR ERISA-RESTRICTED SECURITIES --
to be included in DTC Letter of Representations
-----------------------------------------------
Issuer and Trustee recognize that DTC does not in any way undertake to,
and shall not have any responsibility to, monitor or ascertain whether a
transfer of Securities could give rise to a transaction prohibited or not
otherwise permissible under the Employee Retirement Income Security Act of 1974
or under Section 4975 of the Internal REvenue Code of 1986. Issuer and Trustee
acknowledge that: a) so long as Cede & Co. is the sole record owner of the
Securities, it shall be entitled to all voting rights in respect thereof and to
receive the full amount of all principal, premium, if any, and interest payable
with respect thereto; and b) DTC shall treat any DTC Participant having
Securities credited to its DTC accounts as entitled to the full benefits of
ownership of such Securities even if the crediting of such Securities to the DTC
accounts of such Participant results from transfers or failures to transfer in
violation of such laws. (The treatment by DTC of the effects of the crediting by
it of Securities to the accounts of DTC Participants shall not affect the rights
of Issuer or purchasers, sellers, or holders of Securities against any DTC
Participant.)
Exhibit D-1
Trustee's Certificate
pursuant to Section 11.03
of the Pooling and Servicing
Agreement
The Fuji Bank and Trust Company, as trustee (the "Trustee") of the
Nissan Auto Receivables 1997-A Grantor Trust created pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") dated as of October
1, 1997, among Nissan Auto Receivables Corporation, as Seller (the "Seller"),
Nissan Motor Acceptance Corporation, as Servicer and in its individual capacity,
and the Trustee, does hereby sell, transfer, assign and otherwise convey to the
Seller, without recourse, representation or warranty, all of the Trustee's
right, title and interest in and to all of the Receivables (as defined in the
Pooling and Servicing Agreement) identified in the attached Servicer's
Certificate as "Repurchased Receivables," which are to be repurchased by the
Seller pursuant to Section 3.02, and all security and documents relating
thereto.
IN WITNESS WHEREOF I have hereunto set my hand this ____ day of
__________ , 1997.
______________________________
Exhibit D-2
Trustee's Certificate
pursuant to Section 11.03
of the Pooling and Servicing
Agreement
The Fuji Bank and Trust Company, as trustee (the "Trustee") of the
Nissan Auto Receivables 1997-A Grantor Trust created pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") dated as of October
1, 1997, among Nissan Auto Receivables Corporation, as Seller, Nissan Motor
Acceptance Corporation, as Servicer (the "Servicer") and in its individual
capacity and the Trustee, does hereby sell, transfer, assign and otherwise
convey to the Servicer, without recourse, representation or warranty, all of the
Trustee's right, title and interest in and to all of the Receivables (as defined
in the Pooling and Servicing Agreement) identified in the attached Servicer's
Certificate as "Repurchased Receivables," which are to be purchased by the
Servicer pursuant to Section 4.07 or 12.02, and all security and documents
relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this ___ day of
_________ , 19__.
______________________________
EXHIBIT E
[Draft - 10/17/97]
FORM OF CUSTODY AND PLEDGE AGREEMENT
CUSTODY AND PLEDGE AGREEMENT, dated as of October 1, 1997 entered into
among Nissan Auto Receivables Corporation, a Delaware corporation (the
"Seller"), The Fuji Bank and Trust Company, as custodian (the "Custodian"), and
The Fuji Bank and Trust Company, as trustee (the "Trustee").
W I T N E S S E T H
-------------------
WHEREAS, the Seller is a party to that certain Pooling and Servicing
Agreement dated as of the date hereof, (the "Pooling and Servicing Agreement,"
and capitalized terms used herein not otherwise defined shall have the meanings
assigned to them in the Pooling and Servicing Agreement), among the Seller,
Nissan Motor Acceptance Corporation, as Servicer and in its individual capacity,
and the Trustee, pursuant to which, among other things, the Certificates
representing ownership interests in the Trust were issued;
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Seller
is required to establish a Class A Subordination Spread Account and a Class B
Subordination Spread Account or otherwise make funds available to make payments
to the holders of the Class A Certificates and Class B Certificates,
respectively;
WHEREAS, the parties hereto desire to establish two separate trust
accounts in order to effectuate and secure the obligations of the Seller as
described in the Pooling and Servicing Agreement and as provided herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. OBLIGATION SECURED. In consideration of the purchase of the
------------------
Certificates, the Seller agrees to cause payment of the Certificates from funds
available in the Subordination Spread Accounts (as hereinafter defined) and from
receipt of Excess Amounts and Recapture Amounts (as hereinafter defined), as and
to the extent set forth herein. Such obligation is non-recourse in respect of
the Seller, and recourse may only be had to the Subordination Spread Accounts,
the Excess Amounts and the Recapture Amounts.
Neither the Subordination Spread Accounts, the Excess Amounts nor the Recapture
Amounts shall be part of the Trust.
SECTION 2. PLEDGE. In order to validly perfect its pledge, Seller hereby
------
conveys and transfers all of its right, title and interest in the Excess Amounts
and in the distributions to which it is entitled to under Section 5.06 of the
Pooling and Servicing Agreement as initial holder of the Class B Certificates
(the "Recapture Amounts") to the Custodian for the benefit of the
Certificateholders to have and to hold all such property in trust for the uses
and purposes, and subject to the terms and provisions, set forth in Section 5,
and grants to the Custodian for the benefit of the Certificateholders a first
priority security interest in the Excess Amounts, the Recapture Amounts and any
and all proceeds thereof. The Custodian hereby acknowledges such transfer and
accepts the trust hereunder and shall hold and distribute the Excess Amounts,
the Recapture Amounts and the proceeds thereof in accordance with the terms and
provisions of Section 5. The Custodian shall possess all right, title and
interest in and to all of the items from time that comprise the Excess Amounts
and the Recapture Amounts and their proceeds. The Excess Amounts and the
Recapture Amounts shall be under the sole dominion and control of the Custodian.
Neither the Seller nor any Person or entity claiming by, through or under the
Seller shall have any right, title or interest in, any control over the use of,
or any right to withdraw from amounts from, the Excess Amounts or the Recapture
Amounts. All Excess Amounts and Recapture Amounts shall be applied by the
Custodian as specified in Section 5.
SECTION 3. APPOINTMENT OF CUSTODIAN. The Trustee, with the consent of the
------------------------
Seller, hereby appoints the Custodian as custodian for, and agent of, the
Certificateholders to hold the property pledged and assigned hereunder and to
maintain the Subordination Spread Accounts and the Custodian hereby accepts such
appointment.
SECTION 4. THE SUBORDINATION SPREAD ACCOUNTS. Upon the execution of this
---------------------------------
Agreement by the parties hereto, there is hereby created (i) a trust account for
the benefit of the Class A Certificateholders (the "Class A Subordination Spread
Account") to include the money and other property deposited and held therein and
(ii) a trust account for the benefit of the Class B Certificateholders (the
"Class B Subordination Spread Account," and collectively with the
2
Class A Subordination Spread Account, the "Subordination Spread Accounts") to
include the money and other property deposited and held therein, each as
described herein. On the date hereof, the Seller shall deposit the
Subordination Initial Deposit into the Class A Subordination Spread Account and
the Class B Specified Subordination Spread Account Balance into the Class B
Subordination Spread Account.
SECTION 5. ADDITIONAL PLEDGE OF DISTRIBUTIONS; ETC.
---------------------------------------
(a) In order to provide for prompt payment to the Certificateholders
and the Servicer, in accordance with Section 5.06(c) of the Pooling and
Servicing Agreement, and to assure availability of the amounts maintained in the
Subordination Spread Accounts, subject to the limitations set forth below, and
solely for the purpose of providing for payment of the Class A Distributable
Amount and the Class B Distributable Amount provided for in Section 5.06 of the
Pooling and Servicing Agreement and this Section 5, the Seller, on behalf of
itself and its successors and assigns, hereby conveys and transfers to the
Custodian and its successors and assigns (A) for the benefit of the Class A
Certificateholders, (x) all of its right, title and interest in and to the Class
A Subordination Spread Account, and all proceeds of the foregoing, including,
without limitation, all amounts and investments held from time to time in the
Class A Subordination Spread Account (whether in the form of deposit accounts,
physical property, book-entry securities, uncertificated securities or
otherwise); and (y) the Subordination Initial Deposit and all proceeds thereof
and (B) for the benefit of the Class B Certificateholders, (x) all of its right,
title and interest in and to the Class B Subordination Spread Account and all
proceeds of the foregoing, including, without limitation, all amounts and
investments held from time to time in the Class B Subordination Spread Account
(whether in the form of deposit accounts, physical property, book-entry
securities, uncertificated securities or otherwise); and (y) the Class B
Specified Subordination Spread Account Balance, as the same may be adjusted from
time to time in accordance with the terms of the Pooling and Servicing
Agreement, and all proceeds, thereof (all of the foregoing described in clauses
(A) and (B), subject to the limitations set forth below, the "Subordination
Spread Account Property"), to have and to hold all the aforesaid property,
rights and privileges in trust for the uses and purposes, and subject to the
terms and provisions, set forth in this Section 5, and grants to
3
the Custodian for the benefit of the Certificateholders a first priority
security interest in the Subordination Spread Account Property and any and all
proceeds thereof. The Custodian hereby acknowledges such transfer and accepts
the trust hereunder and shall hold and distribute the Subordination Spread
Account Property in accordance with the terms and provisions of this Section 5.
(b) The Custodian shall release to the Trustee by 5:00 p.m. on the
day preceding each Distribution Date (for deposit in the Certificate Account on
such Distribution Date), from funds available in the Subordination Spread
Accounts, if any, the amount required to be paid from the Class A Subordination
Spread Account and the Class B Subordination Spread Account pursuant to Section
5.06 of the Pooling and Servicing Agreement.
(c) On each Distribution Date, if the amount of the respective
Subordination Spread Accounts (after giving effect to all payments to be made
from the Subordination Spread Accounts, in accordance with the Pooling and
Servicing Agreement on such Distribution Date) is less than the Class A
Specified Subordination Spread Account Balance or the Class B Specified
Subordination Spread Account Balance, as the case may be, for such Distribution
Date, the Trustee, after payment of any amounts required to be distributed to
the Class A Certificateholders and the Servicer, shall withhold the Excess
Amounts and the Recapture Amounts otherwise distributable to the Seller (in its
individual capacity and as initial holder of the Class B Certificates), and not
otherwise distributed to the Class A Certificateholders or the Servicer and
shall deposit the Excess Amounts and the Recapture Amounts in the following
order of priority: first, to the Class A Subordination Spread Account, until
the amount on deposit therein equals the Class A Specified Subordination Spread
Account Balance; second, from the Excess Amounts only, to the Class B
Subordination Spread Account, until the amount on deposit therein equals the
Class B Specified Subordination Spread Account Balance; and finally, to the
Seller. If the amount of the Class A Subordination Spread Account (after taking
into account any deposits and withdrawals therefrom on such Distribution Date in
accordance with the Pooling and Servicing Agreement) is greater than the Class A
Specified Subordination Spread Account Balance for such Distribution Date, the
Custodian shall release and distribute the amount of such excess first, to the
extent of any previously contributed and not yet recovered Recapture Amounts, to
the
4
holders of Class B Certificates, second to the Class B Subordination Spread
Account until the amount on deposit therein equals the Class B Specified
Subordination Spread Account Balance, and finally, to the Seller. Amounts
properly distributed to the Seller or the Class B Certificateholders pursuant to
this Section 5(c) shall be deemed released from the trust and security interest
established by this Agreement, and the Seller and the Class B Certificateholders
shall in no event thereafter be required to refund any such distributed amounts.
(d) (i) Amounts held in the Class A Subordination Spread Account
shall be invested in the manner specified in Section 5.01 of the Pooling and
Servicing Agreement in the same manner as amounts in the Collection Account and
Certificate Account are invested; provided however, that (A) if permitted by the
-------- -------
rating agencies then rating the Certificates, monies on deposit in the Class A
Subordination Spread Account may be invested in obligations or securities that
mature later than the Business Day immediately preceding the next Distribution
Date, and (B) such investments shall be made in accordance with written
instructions from the Seller rather than the Servicer. Prior to the rating, if
any, of the Class B Certificates by the rating agencies, amounts held in the
Class B Subordination Spread Account shall be invested in the discretion of the
Seller upon its written instructions. From and after the time, if any, that the
Class B Certificates are rated, amounts held in the Class B Subordination Spread
Account shall be invested in obligations or securities permitted by the rating
agencies then rating such Class B Certificates, in accordance with the written
instructions of the Seller. Such investments shall not be sold or disposed of
prior to their respective maturities. All investments in the Subordination
Spread Accounts shall be made in the name of the Custodian or its nominee and
all income and gain realized thereon shall be solely for the benefit of the
Seller and shall be payable by the Custodian to the Seller in accordance with
subparagraph (iv) below.
(ii) With respect to the Class A Subordination Spread Account
Property, the Seller, on behalf of itself and its successors and assigns, and
the Custodian agree that:
(A) Any Subordination Spread Account Property that is held in
deposit accounts shall be held
5
solely in the name of the Custodian at one or more depository institutions.
Each such deposit account shall be subject to the exclusive custody and
control of the Custodian, and the Custodian shall have sole signature
authority with respect thereto;
(B) Any Subordination Spread Account Property that constitutes
physical property shall be delivered to the Custodian in accordance with
paragraph (a) of the definition of "Delivery" contained in the Pooling and
Servicing Agreement and shall be held, pending maturity or disposition,
solely by the Custodian or a financial intermediary (as such term is
defined in Section [8-313(4)] of the UCC) acting solely for the Custodian;
(C) Any Subordination Spread Account Property that is a book-
entry security held through the Federal Reserve System pursuant to federal
book-entry regulations shall be delivered in accordance with paragraph (b)
of the definition of "Delivery" contained in the Pooling and Servicing
Agreement and shall be maintained by the Custodian, pending maturity or
disposition, through continued book-entry registration of such
Subordination Spread Account Property as described in such paragraph; and
(D) Any Subordination Spread Account Property that is an
"uncertificated security" under Article VIII of the UCC and that is not
governed by clause (C) above shall be delivered to the Custodian in
accordance with paragraph (c) of the definition of "Delivery" contained in
the Pooling and Servicing Agreement and shall be maintained by the
Custodian, pending maturity or disposition, through continued registration
of the Custodian's (or its nominee's) ownership of such security.
Effective upon Delivery of any Subordination Spread Account Property
in the form of physical property, book-entry securities or uncertificated
securities, the Custodian shall be deemed to have purchased such Subordination
Spread Account Property for value, in good faith, and without notice of any
adverse claim thereto.
(iii) Each of the Seller and the Servicer agrees to take or cause to
be taken such further action, to execute, deliver and file or cause to be
executed, delivered
6
and filed such further documents and instruments (including, without limitation,
any UCC financing statements) as may be determined to be necessary in order to
perfect the interests created by this Section 5 and otherwise fully to
effectuate the purposes, terms and conditions of this Agreement. The Seller
shall:
(A) promptly execute, deliver and file any financing statements,
amendments, continuation statements, assignments, certificates and other
documents with respect to such interests and perform all such other acts as
may be necessary in order to perfect or to maintain the perfection of the
Custodian's security interest; and
(B) make the necessary filings of financing statements or
amendments thereto within five (5) days after the occurrence of any of the
following: (1) any change in its corporate name or any trade name; (2) any
change in the location of its chief executive office or principal place of
business; or (3) any merger or consolidation or other change in its
identity or corporate structure and promptly notify the Custodian of any
such filings.
(iv) Investment earnings attributable to the Subordination Spread
Account Property and proceeds therefrom shall be held by the Custodian for the
benefit of the Seller with respect to the Subordination Initial Deposit and the
Excess Amounts and the Class B Certificateholders with respect to Recapture
Amounts, and shall be allocated monthly on a pro rata basis. Subject to the
immediately preceding sentence, investment earnings attributable to the
Subordination Spread Account Property shall not be subject to any claims or
rights of the Certificateholders or the Servicer. The Custodian shall cause all
investment earnings attributable to the Subordination Spread Accounts to be
distributed on each Distribution Date to the Seller or the Class B
Certificateholders, as the case may be. Realized losses, if any, on investment
of the Subordination Spread Account Property shall be charged first against
undistributed investment earnings attributable to the Subordination Spread
Account Property and then against the Subordination Spread Account Property.
(v) The Custodian shall not enter into any subordination or
intercreditor agreement with respect to the Subordination Spread Account
Property.
7
(e) If the Servicer pursuant to Section 5.04 of the Pooling and
Servicing Agreement is required to make an Advance with respect to any
Distribution Date and does not do so from its own funds, the Custodian shall
withdraw funds from the Class A Subordination Spread Account and remit them to
the Trustee to cover any shortfall. Such payment shall be deemed to have been
made by the Servicer pursuant to Section 5.04 of the Pooling and Servicing
Agreement for purposes of making distributions pursuant to this Agreement, but
shall not otherwise satisfy the Servicer's obligation to deliver the amount of
the Advances to the Custodian, and the Servicer shall within two Business Days
replace any funds in the Class A Subordination Spread Account so used.
SECTION 6. INDEMNITY; SUCCESSOR CUSTODIAN; ETC. The Custodian shall be
------------------------------------
entitled to, and is hereby granted, immunities, indemnities, exculpations and
protections of the same scope and extent as those provided to the Trustee
pursuant to the Pooling and Servicing Agreement as if no Event of Default has
occurred and is continuing. If the Trustee shall resign or be removed pursuant
to Section 11.10 of the Pooling and Servicing Agreement, the Custodian shall be
released from its duties hereunder and the successor Trustee shall appoint a new
Custodian or assume the duties and the responsibilities of the Custodian
hereunder. The Custodian shall not otherwise resign without the consent of the
Trustee and the Servicer.
SECTION 7. TERMINATION. This Agreement shall terminate concurrently upon
-----------
the earlier of payment in full of the Certificates and the termination of the
Pooling and Servicing Agreement pursuant to Article XII of the Pooling and
Servicing Agreement. Upon such termination, all Excess Amounts and Recapture
Amounts in the Subordination Spread Accounts and the Certificate Account shall
be distributed first, to the extent of any previously contributed and not yet
recovered Recapture Amounts, to the holders of Class B Certificates, and any
remaining amounts to the Seller, and all such distributed amounts shall be
released from the liens of this Agreement and the trusts created hereunder.
SECTION 8. ASSIGNMENT. Notwithstanding anything to the contrary contained
----------
herein, except as provided in Section 6 hereof and in the Pooling and Servicing
Agreement, neither this Agreement nor any of the rights or obligations hereunder
may be assigned.
8
SECTION 9. SUBSTITUTION OF COLLATERAL. The Custodian shall release and
--------------------------
deliver to the Seller or the Class B Certificateholders, as the case may be, the
Subordination Initial Deposit, the Excess Amounts or the Recapture Amounts upon
delivery to the Custodian of substitute collateral, provided that the Seller or
the Class B Certificateholders, as the case may be, at such party's own expense,
shall have provided the Custodian with a letter (in form and substance
reasonably acceptable to the Trustee) from each rating agency which has an
outstanding rating on the Certificates and which was requested by the Seller or
an affiliate to rate such Certificates to the effect that the substitution of
the substitute collateral for the Subordination Initial Deposit, the Excess
Amounts or the Recapture Amounts, as the case may be, will not cause such rating
agency to downgrade or withdraw the rating then assigned to such Certificates.
SECTION 10. FEES. Other than the fees that the Custodian, in its capacity
----
as Trustee, will receive pursuant to the Pooling and Servicing Agreement, the
Custodian will not be paid any additional fees for its duties hereunder;
provided that, if at any time the Custodian is a different corporate entity than
the Trustee, the Trustee shall pay to the Custodian such custodial fee as to
which the Trustee and the Custodian shall separately agree. In no event shall
such fee be paid from the Subordination Spread Accounts.
SECTION 11. TAXES. It is the intent of the parties that the
-----
Subordination Spread Account Property be treated as property of the Seller or,
if the Class B Certificates are transferred by the Seller, by the Seller and the
transferee thereof in direct proportion to their respective contributions of
such property, for all federal, state and local income and franchise tax
purposes. The provisions of this Agreement should be interpreted accordingly.
Further, the Seller (and any such transferee) shall include all income earned on
the Subordination Spread Accounts and from any and all Subordination Spread
Account Property in its (or their) gross income, pro rata, for all such tax
purposes.
SECTION 12. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Custodian or the Certificateholders, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
9
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 13. THIRD-PARTY BENEFICIARIES. This Agreement will inure to the
-------------------------
benefit of and be binding upon the parties hereto, the Certificateholders, the
Trustee, the Servicer and their respective successors and permitted assigns.
Except as otherwise provided in this Section, no other Person will have any
right or obligation hereunder.
SECTION 14. AMENDMENTS, ETC. No amendment or waiver of any provision of
---------------
this Agreement, and no consent to any departure by the Seller herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Seller, the Custodian and the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. This Agreement may be amended from time to time by the Seller, the
Trustee and the Custodian, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provision in the Agreement
which may be inconsistent with any other provision therein, including making
such amendments as may be necessary in the event the Seller transfers any amount
of Class B Certificates, or to add any other provisions with respect to matters
or questions arising under this Agreement that shall not be inconsistent with
the provisions of this Agreement; provided, however, that such action shall not,
-------- -------
as evidenced by an Opinion of Counsel, materially and adversely affect the
interests of any Certificateholder.
This Agreement may also be amended from time to time by the Seller,
the Trustee and the Custodian with the consent of the Holders of Class A
Certificates (which consent of any Holder of a Class A Certificate given
pursuant to this Section or pursuant to any other provision of this Agreement
shall be conclusive and binding on such Holder and on all future Holders of such
Certificate and of any Certificate issued upon the transfer thereof or in
exchange thereof or in lieu thereof whether or not notation of such consent is
made upon such Certificate), evidencing not less than 51% of the Class A
Certificate Balance for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Holders of Certificates; provided,
--------
however, that no such amendment shall (a) increase or reduce in any manner the
-------
10
amount of the Class A Specified Subordination Spread Account Balance or the
Class B Specified Subordination Spread Account Balance (unless such changes are
made in accordance with the terms of the Pooling and Servicing Agreement), or
accelerate or delay the timing of payments from the Subordination Spread
Accounts, without the consent of each adversely affected Certificateholder, or
(b) reduce the aforesaid percentage of the Class A Certificate Balance which is
required to consent to any such amendment, without the consent of the Holders of
all Class A Certificates then outstanding. Notwithstanding the foregoing, no
such amendment pursuant to clause (a) of the preceding proviso shall be made
unless the rating agencies then rating the Certificates confirm that such
amendment will not result in a reduction on or withdrawal of its rating of the
Certificates of such class.
Prior to the execution of any such amendment or consent, the Seller
shall provide, and the Trustee shall distribute, written notification of the
substance of such amendment or consent to each of the rating agencies then
rating the Certificates at least ten Business Days prior to the execution
thereof.
Promptly after the execution of any such amendment or consent, the
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder.
It shall not be necessary for the consent of Certificateholders
pursuant to this Section 14 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement) and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Custodian may prescribe,
including the establishment of record dates pursuant to paragraph number 2 of
the Depository Agreement.
Prior to the execution of any amendment to this Agreement, the
Custodian 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 13.02(i)(1) of the
Pooling and Servicing Agreement. The Custodian may, but shall not be obligated
to, enter into any
11
such amendment which affects the Custodian's own rights, duties or immunities
under this Agreement or otherwise.
SECTION 15. ADDRESSES FOR NOTICES. All notices and other communications
---------------------
hereunder shall be made at the addresses, in the manner and with the effect
provided in Section 13.05 of the Pooling and Servicing Agreement; provided,
--------
however, for purposes of giving notice pursuant to this Agreement, notices to
-------
the Custodian may be addressed to the Corporate Trust Office specified in the
Pooling and Servicing Agreement.
SECTION 16. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY,
--------------------
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 17. COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts and
may be delivered by facsimile signatures or by hand, each of which when executed
and delivered shall be an original, but all of which together shall constitute
one and the same instrument.
12
IN WITNESS WHEREOF, the Seller, the Trustee and the Custodian have
caused this Agreement to be duly executed and delivered by their duly elected
officers as of the ___ day of __________ 1997.
NISSAN AUTO RECEIVABLES CORPORATION,
as Seller and as initial holder of the
Class B Certificates
By:
-----------------------------------
Name:
Title:
THE FUJI BANK AND TRUST COMPANY,
as Custodian
By:
-----------------------------------
Name:
Title:
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By:
-----------------------------------
Name:
Title:
Acknowledged and Agreed:
-----------------------
NISSAN MOTOR ACCEPTANCE CORPORATION,
as Servicer
By:
----------------------------------
Name:
Title:
13
EXHIBIT F
[Draft - 10/17/97]
FORM OF YIELD SUPPLEMENT AGREEMENT
Nissan Auto Receivables Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dated as of
October 1, 1997
YIELD SUPPLEMENT AGREEMENT
The Fuji Bank and Trust Company
Two World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Nissan Auto Receivables Corporation (the "Company") hereby confirms
arrangements made as of the date hereof with you, as Class A Agent for the
benefit of the Class A Certificateholders ("Class A Agent"), to be effective
upon (i) receipt by the Company of the enclosed copy of this letter agreement
(the "Yield Supplement Agreement"), executed by Class A Agent, (ii) execution of
the Purchase Agreement dated as of the date hereof (the "Purchase Agreement")
between the Company and Nissan Motor Acceptance Corporation ("NMAC"), (iii)
receipt by NMAC of the payment by the Company of the purchase price under the
Purchase Agreement and (iv) the receipt by the Company of the capital
contribution of NMAC in connection with the payment of the purchase price under
the Purchase Agreement. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings given to them in the Pooling and
Servicing Agreement, dated as of the date hereof, among NMAC, in its individual
capacity and as Servicer, the Company and The Fuji Bank and Trust Company, in
its capacity as Trustee (the "Pooling and Servicing Agreement").
1. On or prior to the fifth calendar day before each Distribution Date,
the Servicer shall notify the Company of the "Yield Supplement Amount" for such
Distribution Date and the amount on deposit in the Yield Supplement Reserve
Account (as defined below). The "Yield Supplement Amount" means, with respect
to any Distribution
Date, the sum of all Receivable Yield Supplement Amounts for all Receivables.
"Receivable Yield Supplement Amount" means, with respect to any Receivable
(other than a Liquidated Receivable, after the Collection Period in which such
Receivable became a Liquidated Receivable) for any Collection Period, the amount
(only if positive) calculated by the Servicer equal to one-twelfth times (i)
interest at a rate equal to the sum of (a) the Pass-Through Rate and (b) the
Servicing Rate minus (ii) interest on such Receivable at its Annual Percentage
Rate on such Receivable's Principal Balance as of the first day of such
Collection Period.
2. On or before the Closing Date (as defined in the Purchase Agreement),
the Company shall establish and maintain with the Class A Agent for the benefit
of the Class A Certificateholders a separate trust account in the name of the
Class A Agent (the "Yield Supplement Reserve Account"), or such other account as
may be acceptable to the rating agencies then rating the Class A Certificates,
and the Company hereby grants to the Class A Agent for the benefit of the
Certificateholders a first priority security interest in the monies on deposit
and the other property that from time to time comprise the Yield Supplement
Reserve Account, and any and all proceeds thereof (collectively, the "Yield
Supplement Property"). The Class A Agent shall possess all right, title and
interest in the Yield Supplement Property and its proceeds. The Yield
Supplement Property and the Yield Supplement Reserve Account shall be under the
sole dominion and control of the Class A Agent. Neither the Seller nor any
Person claiming by, through or under the Seller shall have any right, title or
interest in, any control over the use of, or any right to withdraw from amounts
from, the Yield Supplement Property or the Yield Supplement Reserve Account.
All Yield Supplement Property in the Yield Supplement Reserve Account shall be
applied by the Class A Agent as specified in this Yield Supplement Agreement and
the Pooling and Servicing Agreement. The Class A Agent shall, not later than
12:00 noon on the Business Day preceding each Distribution Date, withdraw from
the Yield Supplement Reserve Account and deposit in the Certificate Account an
amount equal to the Yield Supplement Amount for such Distribution Date. On the
date of issuance of the Certificates, the Company shall deposit [$_________]
(the "Initial Yield Supplement Reserve Amount") into the Yield Supplement
Reserve Account. The amount required to be on deposit in the Yield Supplement
Reserve Account on the date of issuance of the Certificates and from time to
time thereafter (the "Required Yield Supplement Reserve Account
2
Balance"), as determined by the Servicer and notified to the Class A Agent, will
be the lesser of, (i) the maximum Yield Supplement Amount that will become due
on all future Distribution Dates under this Yield Supplement Agreement, assuming
that payments on the Receivables are made on their scheduled due dates, that no
Receivable is prepaid in full or accelerated and that no related Financed
Vehicle underlying such Receivable is repossessed or becomes a total loss, and
(ii) the Initial Yield Supplement Reserve Amount. The Class A Agent shall have
no duty or liability to determine the Required Yield Supplement Reserve Account
Balance and may fully rely on the determination thereof by the Servicer. If, on
any Distribution Date, the funds in the Yield Supplement Reserve Account are in
excess of the Required Yield Supplement Reserve Account Balance for such
Distribution Date after giving effect to all distributions to be made on such
Distribution Date, the Class A Agent shall pay the Company the amount of such
excess. The Yield Supplement Reserve Account shall not be part of the Trust. It
is the intent of the parties that the Yield Supplement Property be treated as
property of the Company for all federal, state and local income and franchise
tax purposes. The provisions of this Yield Supplement Agreement should be
interpreted accordingly. Further, the Company shall include in its gross income
all income earned on the Yield Supplement Property and the Yield Supplement
Reserve Account.
3. All or a portion of the Yield Supplement Reserve Account may be
invested and reinvested in the manner specified in Section 5.01 of the Pooling
and Servicing Agreement with respect to monies in the Collection Account and
Certificate Account in accordance with written instructions from the Servicer;
provided that, if permitted by the rating agencies then rating the Class A
--------
Certificates, monies on deposit therein may be invested in obligations or
securities specified in Section 5.01 that mature later than the Business Day
preceding the next Distribution Date. All such investments shall be made in the
name of the Class A Agent and all income and gain realized thereon shall be
solely for the benefit of the Company and shall be payable by the Class A Agent
to the Company on each Distribution Date from time to time upon the Company's
request to the Class A Agent. Upon termination of the Pooling and Servicing
Agreement, or in the event that the Company otherwise satisfies the requirements
established by the agencies initially rating the Class A Certificates, as
evidenced by the written reaffirmation by such agencies of
3
the initial rating of the Class A Certificates, any amounts on deposit in the
Yield Supplement Reserve Account shall be paid to the Company.
4. All payments to the Company pursuant hereto shall be made by federal
wire transfer (same day funds) or immediately available funds, to such account
as the Company, or any assignee of the Company referred to in Section 6 hereof,
may designate in writing to the Class A Agent, prior to the relevant
Distribution Date.
5. Our agreements set forth in this Yield Supplement Agreement are our
primary obligations and such obligations are irrevocable, absolute and
unconditional, shall not be subject to any counterclaim, setoff or defense
(other than full and strict compliance by us with our obligations hereunder) and
shall remain in full force and effect without regard to, and shall not be
released, discharged or in any way affected by, any circumstances or condition
whatsoever.
6. In order to more fully protect the interests of the Certificateholders,
the Company will transfer, assign and convey its interest in this Yield
Supplement Agreement to the Nissan Auto Receivables 1997-A Grantor Trust
established under the Pooling and Servicing Agreement (the "Trust"). Following
such transfer, assignment and conveyance, this Yield Supplement Agreement shall
not be amended, modified or terminated without the consent of The Fuji Bank and
Trust Company, in its capacity as trustee for the Trust, except in accordance
with the provisions for amendments, modifications and terminations of the
Pooling and Servicing Agreement as set forth in Section 13.01 of the Pooling and
Servicing Agreement.
7. THIS YIELD SUPPLEMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
8. Except as otherwise provided herein, all notices pursuant to this Yield
Supplement Agreement shall be in writing, personally delivered, sent by
telecopier, sent by courier or mailed by certified mail, return receipt
requested, and shall be effective upon receipt thereof. All notices shall be
directed as set forth below, or to such other address or telecopy number or to
the attention of such
4
other person as the relevant party shall have designated for such purpose in a
written notice.
The Company:
Nissan Auto Receivables Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Facsimile No.: [▇▇▇-▇▇▇-▇▇▇▇]
Class A Agent:
The Fuji Bank and Trust Company
Two World Trade Center
New York, New York 10048
Attention: Trust Administration Department
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
9. This Yield Supplement Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, all
of which shall be deemed to be one and the same document.
5
If the foregoing satisfactorily sets forth the terms and conditions of our
agreement, please indicate your acceptance thereof by signing in the space
provided below and returning to us the enclosed duplicate original of this
letter.
Very truly yours,
NISSAN AUTO RECEIVABLES CORPORATION
By: __________________________
Name: ____________________
Title: ___________________
Agreed and accepted as of __________ ___, 1997
NISSAN MOTOR ACCEPTANCE CORPORATION
By:__________________________
Name:_____________________
Title:____________________
THE FUJI BANK AND TRUST COMPANY, AS TRUSTEE
AND CLASS A AGENT
By: _______________________________
Name:__________________________
Title:_________________________
6
