UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
October 29, 1997
Nissan Auto Receivables 1997-A Grantor Trust
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(Exact name of registrant as specified in its charter)
Delaware 333-1664 33-0479655
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(State or other Juris- (Commission (I.R.S. Employer
diction of incorporation) Registration Number) Identification Number)
Nissan Auto Receivables 1997-A Grantor Trust
c/o Nissan Motor Acceptance Corporation
900 W. 190th Street
Torrance, California 90502
(310) 719-8013
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(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
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Description of the Certificates and the Receivables
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Pursuant to a Registration Statement on Form S-1 (Registration
File No. 333-1664) declared effective by the Securities and Exchange Commission
on October 20, 1997 (the "Registration Statement"), there were registered under
the Securities Act of 1933, as amended, $755,564,579.00 in aggregate principal
amount of 6.15% Asset Backed Certificates, Class A (the "Class A Certificates"),
representing in the aggregate an undivided ownership interest of 87% of the
Nissan Auto Receivables 1997-A Grantor Trust (the "Trust"). On October 29, 1997,
the Trust issued the Class A Certificates and $112,900,454.86 in aggregate
principal amount of 6.15% Asset Backed Certificates, Class B (the "Class B
Certificates"), representing in the aggregate an undivided ownership interest of
13% of the Trust, to Nissan Auto Receivables Corporation (the "Registrant"). The
Trust was formed pursuant to a Pooling and Servicing Agreement, dated as of
October 1, 1997 (the "Pooling and Servicing Agreement"), attached hereto as
Exhibit 4.1, among the Registrant, as Seller, Nissan Motor Acceptance
Corporation ("NMAC"), in its individual capacity and as Servicer, and The Fuji
Bank and Trust Company ("Fuji"), as Trustee. On October 29, 1997,
$755,564,000.00 in aggregate principal amount of the Class A Certificates were
sold for $755,436,820.95 by the Registrant pursuant to an Underwriting
Agreement, dated October 21, 1997, attached hereto as Exhibit 1.1, among the
Registrant and J.P. Morgan Securities Inc., as Representative of the several
underwriters named therein. The Class B Certificates and $579.00 in aggregate
principal amount of the Class A Certificates have been retained by the
Registrant.
The Trust property primarily includes motor vehicle retail
installment sales contracts originated on or after September 12, 1992, secured
by new and used automobiles and light duty trucks (the "Receivables"), with an
aggregate original principal amount of $868,465,033.86. The Receivables were
sold to the Registrant by NMAC pursuant to a Purchase Agreement, dated as of
October 1, 1997, attached hereto as Exhibit 10.1, between the Registrant, as
Purchaser, and NMAC, as Seller, and were thereafter sold by the Purchaser to the
Trust pursuant to the Pooling and Servicing Agreement.
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A Subordination Spread Account was created pursuant to a
Custody and Pledge Agreement, dated as of October 1, 1997, attached hereto as
Exhibit 4.2, between the Registrant, as Seller, and Fuji, as Custodian for the
benefit of the Class A Certificateholders, and was funded with an initial
deposit by the Registrant of $8,684,650.34.
A Yield Supplement Reserve Account was established by the
Registrant pursuant to a Yield Supplement Agreement, dated as of October 1,
1997, attached hereto as Exhibit 10.2, among the Registrant, NMAC and Fuji, as
Trustee and Class A Agent. The account was funded by the Registrant
with $1,898,666.90, and was pledged to and is maintained by the Class A Agent
for the benefit of the Class A Certificateholders.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
-----------------------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
1.1. Underwriting Agreement, dated October 21, 1997, among Nissan Auto
Receivables Corporation and J.P. Morgan Securities Inc., as Representative of
the several underwriters named therein.
4.1. Pooling and Servicing Agreement, dated as of October 1, 1997,
among Nissan Auto Receivables Corporation, as Seller, Nissan Motor Acceptance
Corporation, in its individual capacity and as Servicer, and The Fuji Bank and
Trust Company, as Trustee.
4.2. Custody and Pledge Agreement, dated as of October 1, 1997, between
Nissan Auto Receivables Corporation, as Seller, and The Fuji Bank and Trust
Company, as Custodian and as Trustee.
10.1. Purchase Agreement, dated as of October 1, 1997, between Nissan
Auto Receivables Corporation, as Purchaser, and Nissan Motor Acceptance
Corporation, as Seller.
10.2. Yield Supplement Agreement, dated as of October 1, 1997, among
Nissan Auto Receivables Corporation, Nissan Motor Acceptance Corporation, and
The Fuji Bank and Trust Company, as Trustee and Class A Agent.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
NISSAN AUTO RECEIVABLES 1997-A
GRANTOR TRUST
By: Nissan Motor Acceptance
Corporation, as Servicer
By: /s/ Katsumi Ishii
---------------------------
Name: Katsumi Ishii
Title: Vice President, Finance
Date: November 12, 1997
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EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
1.1 Underwriting Agreement, dated
October 21, 1997, among Nissan
Auto Receivables Corporation and
J.P. Morgan Securities Inc., as
Representative of the several
underwriters named therein.
4.1 Pooling and Servicing Agreement,
dated as of October 1, 1997,
among Nissan Auto Receivables
Corporation, as Seller, Nissan
Motor Acceptance Corporation, in
its individual capacity and as
Servicer, and The Fuji Bank and
Trust Company, as Trustee.
4.2 Custody and Pledge Agreement,
dated as of October 1, 1997,
between Nissan Auto Receivables
Corporation, as Seller, and The
Fuji Bank and Trust Company, as
Custodian and Trustee.
10.1 Purchase Agreement, dated as of
October 1, 1997, between Nissan
Auto Receivables Corporation, as
Purchaser, and Nissan Motor
Acceptance Corporation, as
Seller.
10.2 Yield Supplement Agreement, dated
as of October 1, 1997, among
Nissan Auto Receivables
Corporation, Nissan Motor
Acceptance Corporation, and The
Fuji Bank and Trust Company, as
Trustee and Class A Agent.
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NYFS11...:\95\65595\0025\1856\FRM02097.R4A
EXHIBIT 1.1
Execution Copy
NISSAN AUTO RECEIVABLES 1997-A GRANTOR TRUST
6.15% ASSET BACKED CERTIFICATES, CLASS A
NISSAN AUTO RECEIVABLES CORPORATION
(SELLER)
October 21, 1997
Underwriting Agreement
J.P. Morgan Securities Inc.,
As Representative of the
Several Underwriters,
60 Wall Street
New York, NY 10260
Dear Sirs:
1.Introductory Nissan Auto Receivables Corporation, a Delaware
corporation (the "Seller"), proposes to sell $755,564,579 principal amount of
6.15% Asset Backed Certificates, Class A (the "Class A Certificates"), issued by
the Nissan Auto Receivables 1997-A Grantor Trust (the "Trust"). Each Class A
Certificate will represent a fractional undivided interest in the Trust. The
assets of the Trust will include, among other things, a pool of retail
installment sale contracts secured by new and used automobiles and light trucks
(the "Receivables") and certain monies due thereunder on or after October 1,
1997 (the "Cutoff Date"), such Receivables to be sold to the Trust by the Seller
and to be serviced for the Trust by Nissan Motor Acceptance Corporation, a
California corporation (the "Servicer"). The Class A Certificates will be issued
in an aggregate principal amount of $755,564,579, which is equal to 87% of the
aggregate principal balance of the Receivables as of the Cutoff Date.
Simultaneously with the issuance and sale of the Class A Certificates as
contemplated herein, the Trust will also issue the 6.15% Asset Backed
Certificates, Class B (the "Class B Certificates", and together with the Class A
Certificates, the "Certificates"), evidencing an undivided ownership interest of
13% in the Trust, payments in respect of which are, to the extent specified in
the Pooling and Servicing Agreement (as defined below), subordinated to the
rights of the holders of the Class A Certificates. The Certificates will be
issued pursuant to
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a Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") to be
dated as of October 1, 1997, among the Seller, Nissan Motor Acceptance
Corporation, in its individual capacity and as the Servicer, and The Fuji
Bank and Trust Company (the "Trustee").
Capitalized terms used herein and not otherwise defined shall
have the meanings given them in the Pooling and Servicing Agreement.
2.Representations and Warranties of the Seller. The Seller
represents and warrants to and agrees with the several underwriters named in
Schedule I hereto (the "Underwriters") that:
(a)A registration statement (No. 333-1664), including a form
of prospectus, relating to the Class A Certificates has been filed with the
Securities and Exchange Commission (the "Commission") and either (i) has been
declared effective under the Securities Act of 1933, as amended (the "Act"), and
is not proposed to be amended or (ii) is proposed to be amended by amendment or
post-effective amendment. If the Seller does not propose to amend such
registration statement and if any post-effective amendment to such registration
statement has been filed with the Commission prior to the execution and delivery
of this Agreement, the most recent such amendment has been declared effective by
the Commission. For purposes of this Agreement, "Effective Time" means (i) if
the Seller has advised the Representative that it does not propose to amend such
registration statement, the date and time as of which such registration
statement, or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared effective by
the Commission, or (ii) if the Seller has advised the Representative that it
proposes to file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement, as amended
by such amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. "Effective Date" means the date of the Effective
Time. Such registration statement, as amended at the Effective Time, including
all information (if any) deemed to be a part of such registration statement as
of the Effective Time pursuant to Rule 430A(b) under the Act, is hereinafter
referred to as the "Registration Statement", and the form of prospectus relating
to the Class A Certificates, as first filed with the Commission pursuant to and
in accordance with Rule 424(b) ("Rule 424(b)") under
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the Act or (if no such filing is required) as included in the Registration
Statement, is hereinafter referred to as the "Prospectus".
(b)If the Effective Time is prior to the execution and
delivery of this Agreement: (i) on the Effective Date, the Registration
Statement conformed in all respects to the requirements of the Act and the rules
and regulations of the Commission (the "Rules and Regulations") and did not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and (ii) on the date of this Agreement, the Registration
Statement conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b), the Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading. If
the Effective Time is subsequent to the execution and delivery of this
Agreement: on the Effective Date, the Registration Statement and the Prospectus
will conform in all respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents will include any untrue statement of
a material fact or will omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The two
preceding sentences do not apply to statements in or omissions from the
Registration Statement or Prospectus based upon written information furnished to
the Seller by any Underwriter through the Representative specifically for use
therein.
(c)The Seller has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with full corporate power and authority to own its properties and
conduct its business as described in the Prospectus, and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or the ownership of its property requires such
qualification.
(d)The consummation of the transactions contemplated by this
Agreement, the Purchase Agreement, the Pooling and Servicing Agreement and the
Yield Supplement Agreement, and the fulfillment of the terms thereof, will not
conflict with or result in a breach of any of the terms
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or provisions of, or constitute a default under, or result in the creation of
any lien, charge, or encumbrance upon any of the property or assets of the
Seller pursuant to the terms of, any indenture, mortgage, deed of trust, loan
agreement, guarantee, lease financing agreement, or similar agreement or
instrument under which the Seller is a debtor or guarantor.
(e)No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required to be obtained or
made by the Seller for the consummation of the transactions contemplated by this
Agreement except such as have been obtained and made under the Act, such as may
be required under state securities laws and the filing of any financing
statements required to perfect the Trust's interest in the Receivables.
(f)The Seller is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any agreement or
instrument to which it is a party or by which it or its properties are bound
which could have a material adverse effect on the transactions contemplated
herein, in the Purchase Agreement, in the Pooling and Servicing Agreement or in
the Yield Supplement Agreement. The execution, delivery and performance of this
Agreement, the Purchase Agreement and the Pooling and Servicing Agreement and
the issuance and sale of the Certificates and compliance with the terms and
provisions thereof will not, subject to obtaining any consents or approvals as
may be required under the securities or "blue sky" laws of various
jurisdictions, result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule, regulation or
order of any governmental agency or body or any court having jurisdiction over
the Seller or its properties or any agreement or instrument to which it is a
party or by which it is bound or to which any of its properties is subject, or
its certificate of incorporation or by-laws, and it has full corporate power and
authority to enter into this Agreement, the Purchase Agreement, the Pooling and
Servicing Agreement and the Yield Supplement Agreement and to consummate the
transactions contemplated hereby and thereby.
(g)This Agreement, the Purchase Agreement, the Pooling and
Servicing Agreement and the Yield Supplement Agreement have been duly
authorized, executed and delivered by, and (assuming due authorization and
delivery thereof by
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the other parties hereto and thereto) constitute valid and binding obligations
of the Seller, enforceable against the Seller in accordance with their terms,
except as limited by bankruptcy, insolvency, reorganization or other similar
laws relating to or affecting the enforcement of creditors' rights generally and
by general equitable principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(h)The Class A Certificates have been duly authorized and,
when executed and authenticated by the Trustee in accordance with the Pooling
and Servicing Agreement and delivered and paid for pursuant to this Agreement,
the Class A Certificates will constitute valid and binding obligations of the
Trust entitled to the benefits provided by the Pooling and Servicing Agreement.
(i)There are no legal or governmental proceedings pending to
which the Seller or the Servicer is a party or of which any property of the
Seller or the Servicer is the subject, and to the Seller's knowledge no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others, (A) that are required to be disclosed in the Registration
Statement or (B)(1) asserting the invalidity of all or part of this Agreement,
the Indemnification Agreement, the Purchase Agreement, the Pooling and Servicing
Agreement or the Yield Supplement Agreement, (2) seeking to prevent the issuance
of the Certificates, (3) that could materially and adversely affect the Seller's
obligations under this Agreement, the Purchase Agreement, the Pooling and
Servicing Agreement or the Yield Supplement Agreement or the Servicer's
obligations under the Indemnification Agreement, the Purchase Agreement, the
Pooling and Servicing Agreement or the Yield Supplement Agreement, or (4)
seeking to affect adversely the federal or state income tax attributes of the
Class A Certificates.
(j)Any taxes, fees and other governmental charges that have
been assessed and are known to the Seller to be due in connection with the
execution, delivery and issuance of this Agreement, the Purchase Agreement, the
Pooling and Servicing Agreement and the Yield Supplement Agreement shall have
been paid by the Seller or the Servicer at or prior to the closing date.
(k)Each of the Seller and the Servicer possesses all material
licenses, certificates, authorizations or permits issued by the appropriate
state,
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federal or foreign regulatory agencies or bodies, the absence of which would
have a material adverse effect on the ability of the Seller or the Servicer to
perform its duties under the Pooling and Servicing Agreement, and neither of the
Seller or Servicer has received notice of proceedings relating to the revocation
or modification of any such license, certificate, authorization or permit which,
singly or in the aggregate, if the subject of any unfavorable decision, ruling
or finding, would materially and adversely affect the conduct of the business,
operations, financial condition or income of the Seller or the Servicer.
(l)As of the Closing Date, the Trustee (for the benefit of the
Certificateholders) will have good title, free and clear of all prior liens,
charges and encumbrances, to the Receivables and such other items comprising the
corpus of the Trust transferred to the Trust pursuant to the Pooling and
Servicing Agreement.
(m)As of the Closing Date, the Certificates will conform in
all material respects to the description thereof contained in the Prospectus.
(n)Deloitte & Touche LLP are independent public accountants
with respect to the Seller within the meaning of the Act and the Rules and
Regulations.
3.Purchase, Sale and Delivery of Certificates. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Seller agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Seller, the aggregate principal amounts of the Class A Certificates set
forth opposite the names of the Underwriters in Schedule I hereto. The Class A
Certificates are to be purchased at the purchase price of 99.744001% of the
aggregate principal amount thereof plus accrued interest at the Pass-Through
Rate (as defined in the Prospectus) calculated from (and including) October 15,
1997, to (but excluding) the Closing Date.
Against payment of the purchase price by wire transfer of
immediately available funds to the Seller, the Seller will deliver the Class A
Certificates to the Representative, for the account of the Underwriters, at the
office of Weil, Gotshal & Manges LLP, at 767 Fifth Avenue, New York, New York,
on October 29, 1997, at 10:00 a.m., New
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York time, or at such other time not later than seven full business days
thereafter as the Representative and the Seller determine, such time being
herein referred to as the "Closing Date". The Class A Certificates to be so
delivered will be initially represented by one or more Class A Certificates
registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC"). The interests of beneficial owners of the Class A Certificates
will be represented by book entries on the records of DTC and participating
members thereof. Definitive Class A Certificates will be available only under
the limited circumstances set forth in the Pooling and Servicing Agreement.
4.Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Class A Certificates for sale to the public as
set forth in the Prospectus.
5.Covenants of the Seller. The Seller covenants and agrees
with the several Underwriters that:
(a)If the Effective Time is prior to the execution and
delivery of this Agreement, the Seller will file the Prospectus with the
Commission pursuant to and in accordance with subparagraph (1) (or, if
applicable and if consented to by you, subparagraph (4)) of Rule 424(b) not
later than the earlier of (i) the second business day following the execution
and delivery of this Agreement or (ii) the fifth business day after the
Effective Date. The Seller will advise the Representative promptly of any such
filing pursuant to Rule 424(b).
(b)The Seller will advise the Representative promptly of any
proposal to amend or supplement the registration statement as filed or the
related prospectus or the Registration Statement or the Prospectus, and will not
effect such amendment or supplementation without the Representative's consent;
and the Seller will also advise the Representative promptly of the effectiveness
of the Registration Statement (if the Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of the Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of the
Registration Statement and will use its best efforts to prevent the issuance of
any such stop order and to obtain as soon as possible its lifting, if issued.
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(c)The Seller will arrange for the qualification of the Class
A Certificates for offering and sale under the securities laws of such
jurisdictions in the United States as the Representative may reasonably
designate and to continue such qualifications in effect so long as necessary
under such laws for the distribution of such Class A Certificates, provided that
in connection therewith the Seller shall not be required to qualify as a foreign
corporation to do business, or to file a general consent to service of process,
in any jurisdiction.
(d)If, at any time when the delivery of a prospectus shall be
required by law in connection with sales of any Class A Certificates, either (i)
any event shall have occurred as a result of which the Prospectus would include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (ii) for any other
reason it shall be necessary to amend or supplement the Prospectus, the Seller
will promptly notify the Representative and will promptly prepare and file with
the Commission an amendment or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance. Neither your consent to,
nor the Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(e)The Seller will cause the Trust to make generally available
to Class A Certificateholders as soon as practicable, but not later than
fourteen months after the Effective Date, an earnings statement of the Trust
covering a period of at least twelve consecutive months beginning after such
Effective Date and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 promulgated thereunder).
(f)The Seller will furnish to you copies of the Registration
Statement (two of which will be signed and include all exhibits), each related
preliminary prospectus, the Prospectus and all amendments and supplements to
such documents, in each case as soon as available and in such quantities as the
Representative may from time to time reasonably request.
(g)So long as any of the Class A Certificates are outstanding,
the Seller will furnish to the Representa tive copies of all reports or other
communications
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financial or otherwise) furnished to Class A Certificate holders, and deliver
to the Representative during such same period, (i) as soon as they are
available, copies of any reports and financial statements furnished to or filed
with the Commission and (ii) such additional information concerning the business
and financial condition of the Seller as the Representative may from time to
time reasonably request.
(h)The Seller will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing (or otherwise reproducing) and filing of the Registration
Statement as originally filed and of each amendment thereto; (ii) the
preparation, issuance and delivery of the certificates for the Class A
Certificates to the Underwriters; (iii) the fees and disbursements of the
Seller's and the Servicer's counsel and accountants; (iv) the fees of DTC in
connection with the book-entry registration of the Class A Certificates; (v) the
qualification of the Class A Certificates under state securities law in
accordance with the provisions of Section 5(c) hereof, including filing fees and
the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey; (vi)
the printing (or otherwise reproducing) and delivery to the Underwriters of
copies of each preliminary prospectus and the Prospectus and any amendments or
supplements thereto; (vii) the reproducing and delivery to the Underwriters of
copies of the Blue Sky Survey and (viii) the fees charged by Moody's Investors
Service, Inc. ("Moody's") and Standard & Poor's Ratings Services ("S&P") for
rating the Class A Certificates. The Underwriters shall not be responsible for
the fees and disbursements of the Trustee and its counsel.
(i)Until the retirement of the Class A Certificates, or until
such time as the Underwriters shall cease to maintain a secondary market in the
Class A Certificates, whichever occurs first, the Seller will deliver to the
Representative the annual statements of compliance and the annual independent
certified public accountants' reports furnished to the Trustee pursuant to
Article IV of the Pooling and Servicing Agreement, as soon as such statements
and reports are furnished to the Trustee.
(j)On or before the Closing Date, the Seller shall cause its
and the Servicer's computer records
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relating to the Receivables to be marked to show the Trust's absolute ownership
of the Receivables, and from and after the Closing Date neither the Seller nor
the Servicer shall take any action inconsistent with the Trust's ownership of
such Receivables, other than as permitted by the Pooling and Servicing
Agreement.
(k)To the extent, if any, that the rating provided with
respect to the Class A Certificates by Moody's or S&P is conditional upon the
furnishing of documents or the taking of any other actions by the Seller, the
Seller shall furnish such documents and take any such other actions.
6.Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Class A
Certificates will be subject to the accuracy of the representations and
warranties on the part of the Seller herein, to the accuracy of the statements
of officers of the Seller made pursuant to the provisions hereof, to the
performance by the Seller of its obligations hereunder and to the following
additional conditions precedent:
(a)At the time this Agreement is executed and delivered by the
Seller and at the Closing Date, Deloitte & Touche LLP shall have furnished to
the Representative letters dated respectively as of the date of this Agreement
and as of the Closing Date substantially in the forms of the drafts to which the
Representative previously agreed.
(b)If the Effective Time is not prior to the execution and
delivery of this Agreement, the Effective Time shall have occurred not later
than 10:00 p.m., New York time, on the date of this Agreement or such later date
as shall have been consented to by the Representative. If the Effective Time is
prior to the execution and delivery of this Agreement, the Prospectus shall have
been filed with the Commission in accordance with the Rules and Regulations and
Section 5(a) of this Agreement. Prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or, to the
knowledge of the Seller, shall be contemplated by the Commission.
(c)You shall have received an officer's certificate, dated the
Closing Date, signed by the Chairman of the Board, the President or any Vice
President and by a
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principal financial or accounting officer of the Seller representing and
warranting that, to the best of such officers' knowledge after reasonable
investigation, as of the Closing Date, the representations and warranties of the
Seller in this Agreement are true and correct in all material respects, that the
Seller has complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to the Closing Date in all
material respects, that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or, to the best of their knowledge, are contemplated by the
Commission.
(d)Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Seller, Nissan Motor Co. Ltd., Nissan Motor Corporation in U.S.A. ("NMC") or
the Servicer which, in the judgment of the Representative, materially impairs
the investment quality of the Class A Certificates or makes it impractical or
inadvisable to proceed with completion of the sale of and payment for the Class
A Certificates; (ii) any downgrading in the rating of any debt securities of NMC
or any of its direct or indirect subsidiaries by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act), or any public announcement that any such organization has under
surveillance or review its rating of any such debt securities (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any suspension or
limitation of trading in securities generally on the New York Stock Exchange or
any setting of minimum prices for trading on such exchange; (iv) any banking
moratorium declared by Federal or New York authorities; or (v) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of the Representative,
the effect of any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the sale of
and payment for the Class A Certificates.
(e)Joy Crose, Esq., General Counsel of the Seller, or other
counsel satisfactory to the Representative in its reasonable judgment, shall
have furnished to the
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Representative such counsel's written opinion, dated the Closing Date, in
substantially the form set forth below, with such changes therein as counsel for
the Underwriters shall reasonably agree:
(i) The Seller has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or the ownership of
its property requires such qualification.
(ii) The Servicer has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of California with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or the ownership of
its property requires such qualification.
(iii) The Pooling and Servicing Agreement and the Purchase
Agreement have been duly authorized, executed and delivered by the
Servicer.
(iv) The indemnification agreement dated the date hereof (the
"Indemnification Agreement") between the Servicer and Representative,
on behalf of the several Underwriters, has been duly authorized,
executed and delivered by the Servicer; and this Agreement has been
duly authorized, executed and delivered by the Seller.
(v) The Pooling and Servicing Agreement and the Purchase
Agreement have been duly authorized, executed and delivered by the
Seller.
(vi) The Yield Supplement Agreement has been duly authorized,
executed and delivered by the Seller and by Nissan Motor Acceptance
Corporation (in its own capacity and not in its capacity as Servicer).
(vii) The execution, delivery and performance of
this Agreement by the Seller, the Pooling and
Servicing Agreement and the Purchase Agreement by the
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Seller and the Servicer and the Indemnification Agreement by the
Servicer will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of
the properties or assets of the Seller or the Servicer, pursuant to the
terms of the Certificate or Articles of Incorporation or the By-Laws of
the Seller or the Servicer, any statute, any rule, regulation or order
of any governmental agency or body or any court having jurisdiction
over the Seller or the Servicer or any of their respective properties
or any material agreement or instrument to which the Seller or the
Servicer is a party or by which either the Seller or the Servicer or
any of their respective properties is bound.
(viii) No authorization, approval or consent of any court or
governmental agency or authority is necessary in connection with the
execution, delivery and performance by the Seller of this Agreement,
the Pooling and Servicing Agreement or the Purchase Agreement or by the
Servicer of the Indemnification Agreement, the Pooling and Servicing
Agreement or the Purchase Agreement, except such as may be required
under the Act or the Rules and Regulations and state securities laws,
and except for such authorizations, approvals or consents (specified in
such opinion) as are in full force and effect as of the Effective Date
and the Closing Date.
(ix) The Class A Certificates have been duly authorized and,
when executed and authenticated by the Trustee in accordance with the
Pooling and Servicing Agreement and delivered and paid for pursuant to
this Agreement, the Class A Certificates will constitute valid and
binding obligations of the Trust entitled to the benefits provided by
the Pooling and Servicing Agreement.
(x) Nothing has come to such counsel's attention that would
cause it to believe that as of the Effective Date and at the Closing
Date the Registration Statement and the Prospectus (other than the
financial statements and the other accounting information contained
therein or omitted therefrom, as to which such counsel need express no
belief) contained or contain any untrue statement of a material fact or
omitted or omit to state any material
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fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or that the descriptions therein of statutes and
governmental proceedings and contracts and other documents are
inaccurate and do not fairly present the information required to be
shown therein.
(xi) Such counsel does not know of any contract or other
document of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus which is not filed or described as
required.
(xii) There are no legal or governmental proceedings pending
to which the Seller or the Servicer is a party or of which any property
of the Seller or the Servicer is the subject, and no such proceedings
are known by such counsel to be threatened or contemplated by
governmental authorities or threatened by others, (A) that are required
to be disclosed in the Registration Statement or (B)(1) asserting the
invalidity of all or part this Agreement, the Indemnification
Agreement, the Purchase Agreement or the Pooling and Servicing
Agreement, (2) seeking to prevent the issuance of the Certificates, (3)
that could materially and adversely affect the Seller's obligations
under this Agreement, the Purchase Agreement or the Pooling and
Servicing Agreement or the Servicer's obligations under the
Indemnification Agreement, the Purchase Agreement or the Pooling and
Servicing Agreement, or (4) seeking to affect adversely the federal or
state income tax attributes of the Class A Certificates.
(xiii) The Servicer has full power and authority to sell and
assign the property to be sold and assigned to the Seller pursuant to
the Purchase Agreement and has duly authorized such sale and assignment
to the Seller by all necessary corporate action.
(xiv) 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.
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(xv)The Receivables are "chattel paper" as defined in the
Uniform Commercial Code, as in effect in the State of California.
(xvi)The undersigned is familiar with the Servicer's standard
operating procedures relating to the Servicer's acquisition of a
perfected first priority security interest in the vehicles financed by
the retail installment sale contracts purchased by the Servicer in the
ordinary course of the Servicer's business and relating to the sale by
the Servicer to NARC of such contracts and such security interests in
the financed vehicles in the ordinary course of the Servicer's and
NARC's business. Assuming that the Servicer's standard procedures are
followed with respect to the perfection of security interests in the
Financed Vehicles (and such counsel has no reason to believe that the
Servicer has not or will not continue to follow its standard procedures
in connection with the perfection of security interests in the Financed
Vehicles), the Servicer has acquired or will acquire a perfected first
priority security interest in the Financed Vehicles.
(f)Weil, Gotshal & Manges LLP, special counsel to the Seller,
shall have furnished to the Representative their written opinion, dated as of
the Closing Date, in substantially the form set forth below, with such changes
therein as counsel for the Underwriters shall reasonably agree:
(i) Each of the Pooling and Servicing Agreement and the
Purchase Agreement constitutes a valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its
terms.
(ii) Each of the Pooling and Servicing Agreement and the
Purchase Agreement constitutes a valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms.
(iii) The Yield Supplement Agreement constitutes a valid and
binding obligation of each of the Seller and Nissan Motor Acceptance
Corporation (in its own capacity and not in its capacity as Servicer),
and is enforceable against each of them in accordance with its terms.
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(iv) The execution, delivery and performance of this Agreement
by the Seller, the Pooling and Servicing Agreement, the Purchase
Agreement and the Yield Supplement Agreement by the Seller and the
Servicer, and the Indemnification Agreement by the Servicer will not
conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property
or assets of the Seller or the Servicer, pursuant to any statute, rule
or regulation or any order known to such counsel of any governmental
agency or body or any court having jurisdiction over the Seller or the
Servicer or any of their respective properties.
(v) The Class A Certificates, when executed and authenticated
by the Trustee in accordance with the Pooling and Servicing Agreement
and delivered and paid for pursuant to this Agreement, will be duly
issued and entitled to the benefits provided by the Pooling and
Servicing Agreement.
(vi) Nothing has come to such counsel's attention that would
cause it to believe that as of the Effective Date and at the Closing
Date the Registration Statement and the Prospectus (other than the
financial statements and the other accounting information contained
therein or omitted therefrom, as to which such counsel need express no
belief) contained or contain any untrue statement of a material fact
and omitted or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and that
the descriptions therein of statutes and governmental proceedings and
contracts and other documents are accurate and fairly present the
information required to be shown therein.
(vii) The statement in the Prospectus under the caption
"Certain Legal Aspects of the Receivables," to the extent they
constitute matters of New York or federal law or legal conclusions, are
correct in all material respects.
(viii) The Pooling and Servicing Agreement is not required to
be qualified under the Trust Indenture Act of 1939, as amended, and the
Trust is not required
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to be registered as an "investment company" under the
Investment Company Act of 1940, as amended.
(ix) No authorization, approval or consent of any court or
governmental agency or authority is necessary under the Federal law of
the United States or the laws of the state of New York in connection
with the execution, delivery and performance by the Seller of this
Agreement, the Pooling and Servicing Agreement or the Purchase
Agreement or by the Servicer of the Indemnification Agreement, the
Pooling and Servicing Agreement or the Purchase Agreement, except such
as may be required under the Act or the Rules and Regulations and state
securities laws, and except for such authorizations, approvals or
consents (specified in such opinion) as are in full force and effect as
of the Effective Date and the Closing Date.
(x) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceeding for
that purpose has been instituted or, to the best of such counsel's
knowledge, threatened by the Commission; the Registration Statement and
the Prospectus (other than the financial statements and other
accounting information contained in the Registration Statement or the
Prospectus, or omitted therefrom, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
(xi) The Class A Certificates, the Pooling and Servicing
Agreement, the Purchase Agreement and this Agreement each conform in
all material respects with the descriptions thereof contained in the
Registration Statement and the Prospectus.
Such opinion may be made subject to the qualifications that the
enforceability of the terms of the Pooling and Servicing Agreement and the
Purchase Agreement may be limited by bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting the enforcement of creditors' rights
generally and by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
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(g)Weil, Gotshal & Manges LLP shall have furnished their
written opinion, dated the Closing Date, with respect to the characterization of
the transfer of the Receivables by the Servicer to the Seller and such opinion
shall be in substantially the form previously discussed with the Representative
and its counsel and in any event satisfactory in form and in substance to the
Representative and its counsel.
(h)Weil, Gotshal & Manges LLP, special tax counsel to the
Seller, shall have furnished to the Representative their written opinion, dated
the Closing Date, in form and substance satisfactory to the Representative and
its counsel, in substantially the form set forth below, with such changes
therein as counsel for the Underwriters shall reasonably agree:
(i)the statements in the Registration Statement and the
Prospectus under the heading "Federal Income Tax Consequences" and
"ERISA Considerations," to the extent they constitute matters of
federal law or legal conclusions with respect thereto, have been
reviewed by such counsel and are correct in all material respects; and
(ii)under the law in effect on the Closing Date, assuming
compliance with the Pooling and Servicing Agreement and the Custody and
Pledge Agreement, the Trust created by the Pooling and Servicing
Agreement will be classified for federal income tax purposes, as a
grantor trust, and not as an association taxable as a corporation.
(i)You shall have received an opinion of Cravath, Swaine &
Moore, dated the Closing Date, with respect to the validity of the Class A
Certificates and such other related matters as the Representative shall require
and the Seller shall have furnished or caused to be furnished to such counsel
such documents as they may reasonably request for the purpose of enabling them
to pass upon such matters.
(j)You shall have received an opinion addressed to you, the
Seller and the Servicer of Eaton & Van Winkle, counsel to the Trustee, dated the
Closing Date and satisfactory in form and substance to the Representative and
its counsel, to the effect that:
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(i) The Trustee is a banking corporation duly incorporated,
validly existing and in good standing under the laws of the State of
New York with full power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by it, and
to enter into and perform its obligations under the Pooling and
Servicing Agreement.
(ii) The Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Trustee, and, assuming that
such agreement is a legally effective and enforceable obligation of
each of the other parties thereto, constitutes the legal, valid and
binding agreement of the Trustee, enforceable against the Trustee in
accordance with its terms, except as the enforceability thereof may be
(a) limited by bankruptcy, insolvency, reorganization, moratorium,
liquidation or other similar laws affecting the enforceability of
creditors' rights generally and (b) subject to general principles of
equity (regardless of whether considered in proceedings in equity or at
law) as well as concepts of reasonableness, good faith and fair
dealing.
(iii) The Certificates have been duly executed, authenticated
and delivered by The Fuji Bank and Trust Company as Trustee under the
Pooling and Servicing Agreement.
(iv) Neither the execution nor delivery by the Trustee of the
Pooling and Servicing Agreement nor the consummation of any of the
transactions by the Trustee contemplated thereby requires the consent
or approval of, the giving of notice to, the registration with, or the
taking of any other action with respect to, any governmental authority
or agency under any existing Federal or New York State law governing
the banking or trust powers of the Trustee.
(k)You shall have received an opinion of counsel addressed to
you of Weil, Gotshal & Manges LLP, special tax counsel to the Seller, dated the
Closing Date and satisfactory in form and substance to the Representative and
its counsel to the effect that for Texas franchise tax purposes, the Trust will
not be subject to Texas franchise taxes.
(l)The Representative shall have received an officer's
certificate dated the Closing Date of the
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Chairman of the Board, the President or any Vice President and by a principal
financial or accounting officer of each of the Seller and the Servicer in which
each such officer shall state that, to the best of such officer's knowledge
after reasonable investigation, the representations and warranties of the Seller
or the Servicer, as applicable, contained in the Pooling and Servicing Agreement
and the representations and warranties of the Servicer or the Seller, as
applicable, contained in the Purchase Agreement are true and correct in all
material respects and that the Seller or the Servicer, as applicable, has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied under such agreements at or prior to the Closing Date in
all material respects.
(m)The Class A Certificates shall have been rated in the
highest rating category by Moody's and S&P.
(n)On or prior to the Closing Date, the Seller shall have
furnished to the Representative such further certificates and documents as the
Representative shall reasonably have required.
7.Indemnification and Contribution. (a) The Seller shall
indemnify and hold each Underwriter harmless against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Seller will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
information furnished to the Seller by any Underwriter through the
Representative specified in the last sentence of subsection (b) below
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specifically for use therein; and provided, further, that the Seller shall not
be liable to any Underwriter or any person controlling any Underwriter under the
indemnity agreement in this subsection (a) with respect to any of such documents
to the extent that any such loss, claim, damage or liability of such Underwriter
or such controlling person results from the fact that such Underwriter sold the
Class A Certificates to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Prospectus or of
the Prospectus as then amended or supplemented (excluding documents incorporated
by reference), whichever is most recent, if the Seller has previously furnished
copies thereof to such Underwriter.
(b) Each Underwriter shall indemnify and hold harmless the
Seller against any losses, claims, damages or liabilities to which the Seller
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with information furnished to the Seller
by such Underwriter through the Representative specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by the Seller in
connection with investigating or defending any such action or claim as such
expenses are incurred. The Seller acknowledges and agrees that the only such
information furnished to the Seller by any Underwriter through the
Representative consists of the following: (i) the statements in the last
paragraph of the cover page of the Prospectus; (ii) the statements in the first
paragraph on page 2 of the Prospectus concerning stabilizing and other
activities; and (iii) the statements in the second and third sentences in the
second paragraph (concerning initial offering prices, concessions and
reallowances) and in the third paragraph (concerning stabilizing and other
activities) under the heading "Underwriting" in the Prospectus.
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(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnity may be sought pursuant
to either of the two preceding paragraphs, such person (the "Indemnified Party")
shall promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Party") in writing of the commencement thereof, but the omission
to so notify the Indemnifying Party will not relieve it from any liability which
it may have to any Indemnified Party otherwise than under such preceding
paragraphs. In case any such action is brought against any Indemnified Party and
it notifies the Indemnifying Party of the commencement thereof, the Indemnifying
Party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other Indemnifying Party similarly notified, to assume
the defense thereof, with counsel satisfactory to such Indemnified Party (who
shall not, except with the consent of the Indemnified Party, be counsel to the
Indemnifying Party) and after notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense thereof and after
acceptance by the Indemnified Party of counsel, the Indemnifying Party will not
be liable to such Indemnified Party under this Section for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the contrary or (ii) the Indemnifying Party
has elected to assume the defense of such proceeding but has failed within a
reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person. It is understood that the Indemnifying Party shall not, with respect to
any action brought against any Indemnified Party, be liable for the fees and
expenses of more than one firm (in addition to any local counsel) for all
Indemnified Parties, and that all such fees and expenses shall be reimbursed
within a reasonable period of time as they are incurred. Any separate firm
appointed for the Underwriters and such control persons of Underwriters in
accordance with this subsection (c) shall be designated in writing by the
Representative, and any such separate firm appointed for the Seller, its
directors, its officers who sign the Registration Statement and such control
persons of the Seller in accordance with this subsection (c) shall be
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designated in writing by the Seller. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent, with respect to an action which the Indemnifying
Party was notified of and had the opportunity to participate in (whether or not
it chose to so participate), the Indemnifying Party agrees to indemnify any
Indemnified Party from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
Indemnified Party shall have requested an Indemnifying Party to reimburse the
Indemnified Party for fees and expenses of counsel as contemplated by the fourth
sentence of this paragraph, the Indemnifying Party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 60 days after receipt by such
Indemnifying Party of the aforesaid request and during such 60 day period, the
Indemnifying Party has not responded thereto and (ii) such Indemnifying Party
shall not have reimbursed the Indemnified Party in accordance with such request
prior to the date of such settlement. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an Indemnified Party under
subsection (a) or (b) above, then each Indemnifying Party shall contribute to
the amount paid or payable by such Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above in
such proportion as is appropriate to reflect the relative benefits received by
the Seller on the one hand and the Underwriters on the other from the offering
of the Class A Certificates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
Indemnifying Party shall contribute to such amount paid or payable by such
Indemnified Party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Seller on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted
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in such losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by the Seller on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion that the total net proceeds from the offering (before deducting
expenses) received by the Seller bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Seller or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an Indemnified Party as a result of the losses, claims, damages
or liabilities referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Class A Certificates
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Seller under this Section shall be
in addition to any liability which the Seller may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Seller, to each officer of the Seller
who has signed the Registration Statement and to each person, if any, who
controls the Seller within the meaning of the Act.
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8.Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Seller or its officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation or statement as to the results thereof, made by or on
behalf of any Underwriter or the Seller or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Class A Certificates. If this Agreement
is terminated pursuant to Section 9 or if for any reason the purchase of the
Class A Certificates by the Underwriters is not consummated, the Seller shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 5, and the respective obligations of the Seller and the Underwriters
pursuant to Section 7 shall remain in effect. If the purchase of the Class A
Certificates by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 9 or the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(d),
the Seller will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Class A Certificates.
9.Failure to Purchase the Class A Certificates. If any
Underwriter or Underwriters default on their obligations to purchase Class A
Certificates hereunder and the aggregate principal amount of Class A
Certificates that such defaulting Underwriter or Underwriters agreed but failed
to purchase does not exceed 10% of the total principal amount of Class A
Certificates, the Representative may make arrangements satisfactory to the
Seller for the purchase of such Class A Certificates by other persons, including
the nondefaulting Underwriter or Underwriters, but if no such arrangements are
made by the Closing Date, the nondefaulting Underwriter or Underwriters shall be
obligated, in proportion to their commitments hereunder, to purchase the Class A
Certificates that such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount of Class A Certificates with respect to which such default or
defaults occur exceeds 10% of the total principal amount of Class A Certificates
and arrangements satisfactory to the nondefaulting Underwriter or Underwriters
and the Seller for the purchase of such Class A Certificates by other
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persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any nondefaulting Underwriter or the
Seller, except as provided in Section 8.
As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter or Underwriters from liability for its default.
10.Notices. All communications hereunder will be in writing
and, if sent to the Representative or the Underwriters will be mailed, delivered
or sent by facsimile transmission and confirmed to J.P. Morgan Securities Inc.,
60 Wall Street, New York, New York 10260, Attention: Syndicate Desk (facsimile
number (212) 648-5909); and if sent to the Seller, will be mailed, delivered or
sent by facsimile transmission and confirmed to it at Nissan Auto Receivables
Corporation, 990 West 190th Street, Torrance, California 90502-1019, attention
of the Assistant Secretary (facsimile number (310) 324-2542).
11.No Bankruptcy Petition. Each Underwriter agrees that, prior
to the date which is one year and one day after the payment in full of all
securities issued by the Seller or by a trust for which the Seller was the
depositor which securities were rated by any nationally recognized statistical
rating organization, it will not institute against, or join any other person in
instituting against, the Seller any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other proceedings under any Federal or
state bankruptcy or similar law.
12.Successors. This Agreement will inure to the benefit of and
be binding upon the Underwriters and the Seller and their respective successors
and the officers and directors and controlling persons referred to in Section 7,
and no other person will have any right or obligations hereunder.
13.Representation of Underwriters. The Representative will act
for the several Underwriters in connection with the transactions described in
this Agreement, and any action taken by the Representative under this Agreement
will be binding upon all the Underwriters.
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14.Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
15.Counterparts. This Agreement may be executed by each of the
parties hereto in any number of counterparts, and by each of the parties hereto
on separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
27
<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return to us a counterpart hereof, whereupon it will become a
binding agreement between the Seller and the several Underwriters in accordance
with its terms.
Very truly yours,
NISSAN AUTO RECEIVABLES
CORPORATION,
by /s/ Yoichiro Nagashima
---------------------------------
Name: Yoichiro Nagashima
Title: President
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written:
J.P. MORGAN SECURITIES INC.,
by /s/ Robert W. Flanigan
-------------------------
Name: Robert W. Flanigan
Title: Vice President
Acting on behalf of itself and as the Representative of the several
Underwriters.
28
<PAGE>
SCHEDULE I
Initial Principal
Amount of
Underwriter Class A Certificates
J.P. Morgan Securities Inc. $126,064,579
Chase Securities Inc. 125,900,000
Credit Suisse First Boston
Corporation 125,900,000
Goldman Sachs & Co. 125,900,000
Merrill Lynch, Pierce,
Fenner & Smith Incorporated 125,900,000
Salomon Brothers Inc 125,900,000
- -----------------------------------------------------------------------------
Total $755,564,579
- -----------------------------------------------------------------------------
EXHIBIT 4.1
EXECUTION COPY
NISSAN AUTO RECEIVABLES 1997-A GRANTOR TRUST
6.15% ASSET BACKED CERTIFICATES
- --------------------------------------------------------------------------------
NISSAN AUTO RECEIVABLES CORPORATION
Seller
NISSAN MOTOR ACCEPTANCE CORPORATION
Servicer and in its individual capacity
THE FUJI BANK AND TRUST COMPANY
Trustee
- --------------------------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I.
INTRODUCTION. ................... 1
Section 1.01. DEFINITIONS................................................. 1
Section 1.02. USAGE OF TERMS.............................................. 20
Section 1.03. CUTOFF DATE AND RECORD DATE................................. 20
Section 1.04. SECTION REFERENCES.......................................... 20
ARTICLE II.
THE TRUST...................... 21
Section 2.01. CREATION OF TRUST........................................... 21
Section 2.02. CONVEYANCE OF RECEIVABLES................................... 21
Section 2.03. ACCEPTANCE BY TRUSTEE....................................... 22
ARTICLE III.
THE RECEIVABLES................... 22
Section 3.01. REPRESENTATIONS AND WARRANTIES OF
SELLER...................................................... 22
Section 3.02. REPURCHASE UPON BREACH...................................... 26
Section 3.03. CUSTODY OF RECEIVABLE FILES................................. 27
Section 3.04. DUTIES OF SERVICER AS CUSTODIAN............................. 28
Section 3.05. INSTRUCTIONS; AUTHORITY TO ACT.............................. 28
Section 3.06. CUSTODIAN'S INDEMNIFICATION................................. 28
Section 3.07. EFFECTIVE PERIOD AND TERMINATION............................ 29
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
<PAGE>
Page
----
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
Section 5.02. COLLECTIONS................................................. 36
Section 5.03. APPLICATION OF COLLECTIONS.................................. 38
Section 5.04. ADVANCES.................................................... 38
Section 5.05. ADDITIONAL DEPOSITS......................................... 39
Section 5.06. DISTRIBUTIONS............................................... 39
Section 5.07. [RESERVED] ................................................. 42
Section 5.08. NET DEPOSITS................................................ 42
Section 5.09. STATEMENTS TO CERTIFICATEHOLDERS............................ 43
Section 5.10. NO PETITION................................................. 45
ARTICLE VI.
ADDITIONAL AGREEMENTS................ 45
Section 6.01. YIELD SUPPLEMENT RESERVE ACCOUNT............................ 45
Section 6.02. CUSTODY AND PLEDGE AGREEMENT. .............................. 45
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.
<PAGE>
Page
----
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
Section 10.03. REPAYMENT OF ADVANCES...................................... 66
Section 10.04. NOTIFICATION TO CERTIFICATE-HOLDERS........................ 66
Section 10.05. WAIVER OF PAST DEFAULTS.................................... 66
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
<PAGE>
Page
----
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
Section 12.02. OPTIONAL PURCHASE OF ALL RECEIVABLES....................... 81
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>
EXHIBITS
- --------
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
- ---------
Schedule A List of Receivables
Schedule B Location of Receivables
<PAGE>
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 corporation, as Servicer ("Servicer") and in its individual capacity
("NMAC"), and THE FUJI BANK AND TRUST COMPANY, a bank organized under the laws
of New York (the "Trustee").
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 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 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, 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 restatements, and supplements thereto.
"Amount Financed" with respect to a Receivable means the
amount advanced 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 finance charges stated in the Receivable.
<PAGE>
"Annual USAP Report" shall have the meaning
specified in Section 4.11.
"Available Interest" means, for any Distribution Date, the sum
of the 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,
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 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 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 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.
"Certificate Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Certificateholder" or "Holder" means the Person
in whose name a Certificate shall be registered in the
2
<PAGE>
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
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, 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 maintained and the registrar appointed pursuant to Section 7.03.
"Class A Agent" means The Fuji Bank and Trust
Company, or any successor.
"Class A Certificate" means any one of the Certificates
executed by the 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 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-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.
3
<PAGE>
"Class A Distributable Amount" means, with respect to any
Distribution 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 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 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 87%
"Class A Pool Factor" means, as of any Distribution Date, a
seven-digit 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 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 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
4
<PAGE>
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 any Distribution Date shall be $13,026,975.51; provided, however,
that in the event that 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 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 2.5% 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 60 days or more to the outstanding
number of Receivables exceeds 2.0%, then the Class A Specified Subordination
Spread Account Balance for such Distribution Date (and for each succeeding
Distribution Date until the relevant averages have not exceeded the specified
percentages in clauses (i) an (ii) above for three successive Distribution
Dates) shall be a dollar amount equal to (x) 22% 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 $86,846,503.39 or
less than $13,026,975.51; and provided further, that on any Distribution Date on
which the aggregate balance of the Class A Certificates is $113,334,686.85 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 $21,711,625.85.
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 maintained pursuant to the Custody
5
<PAGE>
and Pledge Agreement for the benefit of the holders of the Class A Certificates.
"Class B Certificate" means any one of the Certificates
executed by the 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 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 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 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 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 13%.
"Class B Principal Carryover Shortfall" means, as of the close
of any 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 Distribution Date, the Class B
Percentage of the sum of: (i) the principal portion of all
payments on Receivables, including prepayments of principal,
6
<PAGE>
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 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 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 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" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Collection Period" means, with respect to any
Distribution Date, the 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 hereof, is located at The Fuji Bank and Trust Company, Two
World Trade Center, 81st Floor,
7
<PAGE>
New York, New York 10048 Attention: Corporate Trust Administration Department.
"Custodian" means the party named as such in the Custody and
Pledge Agreement.
"Custody and Pledge Agreement" means the agreement,
substantially in the form attached hereto as Exhibit E.
"Cutoff Date" shall be October 1, 1997.
"Damages" shall have the meaning specified in Section 9.02.
"Dealer" means the dealer who sold a Financed Vehicle and who
originated 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 against the Dealer which originated the Receivable and any
successor Dealer.
"Definitive Certificates" shall have the meaning
specified in Section 7.08.
"Delivery" when used with respect to Subordination Spread
Account Property 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 securities intermediary (as defined in Section 8-102(a)(14) of the
UCC) indorsed to, or registered in the name of, the Custodian or indorsed in
blank (as defined in Section 8-304 of the UCC) and the making by such securities
intermediary of entries on its books and records identifying such certificated
securities as belonging to the Custodian and the sending by such securities
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(a)(5) of the UCC) and the making by
8
<PAGE>
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 securities intermediary by the amount of such
certificated security, the identification by the clearing corporation of the
certificated securities for the sole and exclusive account of the securities
intermediary, the maintenance of such certificated securities by such clearing
corporation or its nominee subject to the clearing corporation's exclusive
control, the sending of a confirmation by the securities intermediary of the
purchase by the Custodian of such securities and the making by such securities
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
securities intermediary which is also a "depositary" pursuant to applicable
federal regulations and issuance by such securities 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 securities 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 securities 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
9
<PAGE>
under Article 8 of the UCC and that is not governed by clause (b) above,
registration on the books and records of the issuer thereof in the name of the
securities intermediary, the sending of a confirmation by the securities
intermediary of the purchase by the Custodian of such uncertificated security
and the making by such securities 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 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, 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 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 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
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therein, a rating from each of the rating agencies 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 Moody's 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 Moody's
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
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as principal, that is a wholly-owned subsidiary of 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
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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
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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
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distributions to the Servicer and the Certificateholders pursuant to Section
5.06(c).
"Final Scheduled Distribution Date" shall be February 17,
2003.
"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.
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"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 $755,564,579.00.
"Original Class B Certificate Balance" is $112,900,454.86.
"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 6.15% 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
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<PAGE>
protection plan or service contract costs, or of physical damage, credit life or
disability insurance premiums 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 Moody's 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.
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"Residual Certificate" has the meaning assigned to
such term in Section 7.01 hereof.
"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.
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"State" means any state or commonwealth of the United States
of America or the District of Columbia.
"Subordination Initial Deposit" is $8,684,650.34.
"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
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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 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."
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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.
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;
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(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.
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
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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.
(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 Magnuson-Moss 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
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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 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
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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 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.
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(xxi) Balance. Each Receivable had an original Principal
Balance of not more than $50,000.00 and, as of the Cutoff Date, had a
principal balance of not less than $298.74 and not more than
$47,421.00.
(xxii) Delinquency. No Receivable was more than 30 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 origination 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 Moody's 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
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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 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);
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(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
(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
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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 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,
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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 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
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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.
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.
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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 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
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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.
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
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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.
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.
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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 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
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expenses incurred in connection with distributions and reports to
Certificateholders.
ARTICLE V.
DISTRIBUTIONS; SUBORDINATION SPREAD ACCOUNTS;
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 (such direction to be in a format reasonably acceptable to the
Trustee), 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
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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
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 Moody's 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
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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 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
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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 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
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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.
(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
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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 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)
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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 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]
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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 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,
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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;
(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
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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 (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
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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.
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
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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
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
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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 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
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if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
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 CERTIFICATEHOLDERS' 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.
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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
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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.
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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.
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(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
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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
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(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
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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 connection 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;
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(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
obligations 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 indebtedness 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
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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 appointment 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 creditors,
or admit in writing its inability to pay its debts generally
as they become due, or take corporate 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
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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,
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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
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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,
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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
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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 writing at the earliest practicable time) and any such
determination 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
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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,
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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 Corporate 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
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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
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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
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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
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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 Moody's 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.
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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 Trustee.
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
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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
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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
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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
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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 Rose Kennedy, 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
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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 Moody's
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.
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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
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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
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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
ss. 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.
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(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
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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
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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 Joy Crose, General Counsel, Nissan
Motor Acceptance Corporation, 990 West 190th Street, Torrance, CA 90502,
telephone: (310) 719-8024, facsimile: (310) 515-6750, (b) in the case of the
Trustee, at the Corporate Trust Administration Department, (c) in the case of
Moody's Investors Service, Inc., at the following address: Moody's Investors
Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York
10007, and (d) in the case of Standard & Poor's Ratings Services, at the
following address: Standard & Poor's Ratings Services, 25 Broadway, 20th Floor,
New York, New York 10004, 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
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mailed within the 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
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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. No party to this
Agreement shall take any action to cause the Trust to be treated as other than a
grantor trust for federal income tax and state tax purposes.
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
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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.
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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 1st day of October 1997.
NISSAN AUTO RECEIVABLES
CORPORATION, as Seller
By: /s/ Yoichiro Nagashima
---------------------------
Name: Yoichiro Nagashima
Title: President
NISSAN MOTOR ACCEPTANCE
CORPORATION, as Servicer
By: /s/ Katsumi Ishii
---------------------------
Name: Katsumi Ishii
Title: Vice President, Finance
NISSAN MOTOR ACCEPTANCE
CORPORATION, in its individual
capacity
By: /s/ Katsumi Ishii
---------------------------
Name: Katsumi Ishii
Title: Vice President, Finance
THE FUJI BANK AND TRUST COMPANY, as
Trustee
By: /s/ Sharon Moore
---------------------------
Name: Sharon Moore
Title: Vice President
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SCHEDULE A
[LIST OF RECEIVABLES DELIVERED TO TRUSTEE AT CLOSING]
<PAGE>
SCHEDULE B
LOCATION OF RECEIVABLES
1. NISSAN MOTOR ACCEPTANCE CORPORATION
2901 Kinwest Parkway
Irving, Texas 75063
2. Nissan Motor Acceptance Corporation
Massachusetts Office
Four Cambridge Center
Cambridge, Massachusetts 02142
3. Kestrel Records Management
1235 N. Union Bower
Irving, Texas 75061
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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:
- ----------------------
Authorized 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
<PAGE>
[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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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:
- ----------------------
Authorized 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
<PAGE>
[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
<PAGE>
$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
<PAGE>
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
<PAGE>
EXHIBIT C
[DTC Symbol]
BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)
(WITHOUT OWNER OPTION TO REDEEM)/
OTHER ASSET-BACKED SECURITIES/AND PASS-THROUGH CERTIFICATES
Form of Letter of Representations
[To be Completed by Issuer and Trustee]
Nissan Auto Receivables Corporation
-----------------------------------
[Name of Issuer]
The Fuji Bank and Trust Company
-------------------------------
[Name of Trustee]
October 29, 1997
----------------
[Date]
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: Nissan Auto Receivables 1997 - A Grantor Trust 6.15 %
Asset Backed Certificates, Class A; Nissan Auto
Receivables Corporation - Originator of the Trust,
Registrant under the Securities Act of 1933.
------------------------------------------------------
[Issue Description]
Ladies and Gentlemen:
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 October 29, 1997, 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
<PAGE>
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 Department atepository 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 even 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 (212) 709-6897, and receipt of such notices shall be confirmed by
telephoning (212) 709-6870. 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 (516) 227-4039 or (516) 227-4190. 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 (516) 227-4070. 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
711 Stewart Avenue
Garden City, NY 11530-4719
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 (212) 709-1093
-2-
<PAGE>
or (212) 709-1094, and receipt of such notices shall be confirmed by telephoning
(212) 709-6884. 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
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
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 (212) 709-1723, or if by mail or by any other means to:
Manager: Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
7. [NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS OUT THE
OTHER:] [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 same- day 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 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
The Trustee shall provide principal and interest payment information directly to
DTC in advance of the principal or 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 (212) 709-1723 or
-3-
<PAGE>
(212) 709-1686, and receipt of such notices shall be confirmed by telephoning
(212) 709-1270. 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
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
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 021000021
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 021000021
For credit to A/C The Depository Trust Company
Reorganization 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.
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-
<PAGE>
appropriate action to make available one or more separate certificates
evidencing Securities to any DTC Participant 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:
- -----
A. If there is a Trustee (as defined in this Letter of Representations). 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 forth
herein.
B. Schedule B contains statements that DTC believes accurately describe DTC, the
method of effecting book-entry transfers of securities distributed through DTC,
and certain related matters.
VERY TRULY YOURS,
NISSAN AUTO RECEIVABLES CORPORATION
(ISSUER)
BY:
(AUTHORIZED OFFICER'S SIGNATURE)
THE FUJI BANK AND TRUST COMPANY
(TRUSTEE)
BY:
(AUTHORIZED OFFICER'S SIGNATURE)
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
BY:
CC: UNDERWRITER
UNDERWRITER'S COUNSEL
-5-
<PAGE>
SCHEDULE A
----------
Nissan Auto Receivables 1997 - A Grantor Trust 6.15%
Asset Backed Certificates, Class A
(Describe Issue)
CUSIP NUMBER PRINCIPAL AMOUNT MATURITY DATE INTEREST RATE
- ------------ ---------------- ------------- -------------
654737AB1 $200,000,000 Feb. 17, 2003 6.15%
654737AB1 $200,000,000 Feb. 17, 2003 6.15%
654737AB1 $200,000,000 Feb. 17, 2003 6.15%
654737AB1 $155,564,000 Feb. 17, 2003 6.15%
<PAGE>
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 issue to be
redeemed.
-i-
<PAGE>
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 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.
-ii-
<PAGE>
[DTC Symbol]
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.)
<PAGE>
Modifications
1. This Letter is hereby modified such that the defined terms
"Securities" shall read "Certificates" throughout this Letter, and the defined
term "Document" shall read "Pooling and Servicing Agreement" throughout this
Letter.
2. The initial paragraph of this Letter, which is found on
page 1 hereof, is hereby modified and restated to read as follows:
This letter sets forth our understanding with respect to the
above-referenced issue (the "Certificates"). Trustee will act as trustee with
respect to the Certificates pursuant to a Pooling and Servicing Agreement, dated
as of October 1, 1997, among the Issuer, the Trustee and Nissan Motor Acceptance
Corporation (the "Pooling and Servicing Agreement"). Pursuant to an Underwriting
Agreement dated October 21, 1997 (the "Underwriting Agreement"), by and between
the Issuer and J.P. Morgan Securities Inc., on behalf of itself and Chase
Securities Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Salomon Brothers Inc
(the "Underwriters"), the Issuer has agreed to issue, and the Underwriters have
agreed to purchase, the Certificates. The Underwriters are distributing the
Certificates through the Depository Trust Company ("DTC").
3. Paragraph 3 of this Letter, which appears on page 2 hereof,
is hereby modified to replace the words "30 days" following the words "not less
than" in such paragraph with the words "20 days."
4. The first paragraph of Paragraph 9 of this Letter, which
appears on page 3 hereof, is hereby modified to insert the following provision
at the end of the first sentence of such paragraph: "provided that in connection
with the final payment of the Certificates the Certificates held by DTC are
first presented and surrendered to Trustee."
5. The second paragraph of Paragraph 9 of this Letter, which
appears on page 3 hereof, is hereby modified by deleting the first sentence
thereof, and modifying the second sentence thereof as follows:
<PAGE>
The Trustee shall provide principal and interest payment
information directly to DTC in advance of the principal or interest payment date
as soon as the information is available.
6. Paragraph 13 of this Letter, which appears on page 4
hereof, is hereby modified as follows:
(a) the words "(other than as a result of monthly
amortization)" are hereby inserted following the words "an advance refunding of
part of the Securities outstanding";
(b) the phrases "Issuer's or" and "Issuer or" are hereby
deleted throughout such paragraph.
(c) The words "may request Issuer or Trustee" following the
words "in its discretion: (a)" are hereby replaced with the words "shall cause
the Trust".
7. Each of Paragraph 14 of this Letter, which appears on page
4 hereof, and Paragraph 11 of Schedule B, is hereby modified and restated to
read as follows:
In the event that Issuer determines that beneficial owners of
Certificates shall be able to obtain Definitive Certificates, Trustee shall
notify DTC of the availability of Definitive Certificates. In such event Trustee
shall cause the Trust to issue, transfer and exchange Definitive Certificates in
appropriate amounts, as required by DTC and others.
8. The following words are hereby inserted following paragraph
17 of this Letter:
18. In the event that (a) Issuer advises Trustee in writing
that DTC is no longer willing or able to discharge properly its responsibilities
as depository with respect to the Certificates and Issuer is unable to locate a
qualified successor, (b) Issuer, at its sole option, elects to terminate the
book-entry system through DTC with respect to the Certificates, or (c) after the
occurrence of a Servicer Default under the Pooling and Servicing Agreement
Certificate Owners representing Fractional Undivided Interests aggregating not
less than 51% of the Class A Certificate Balance advise DTC through its Clearing
Agency Participants in writing that the continuation of a book-entry system
through DTC (or a successor thereto) is no longer in the best interests of the
Certificate Owners of the Class A Certificates, DTC shall notify its Clearing
2
<PAGE>
Agency Participants of the occurrence of any such event and of the availability
through DTC of certificates representing the Certificates ("Definitive
Certificates"). In the event of (a), (b) or (c) above and upon surrender by DTC
to Trustee of the Certificates held by DTC accompanied by instructions for
re-registration from DTC, the Trustee shall authenticate and deliver at its
Corporate Trust Office the entire principal amount of the Class A Certificates
then outstanding in Definitive Certificates in appropriate amounts as requested
by DTC, and shall thereafter recognize the holders of such Definitive
Certificates as Certificateholders pursuant to the provisions of the Pooling and
Servicing Agreement. Until such time as such Definitive Certificates have been
issued, for all purposes with respect to the Class A Certificates, Trustee shall
recognize DTC as the only Holder of the Certificates.
19. This Agreement shall be binding and inure to the benefit
of the parties hereto and their respective personal representatives, successors
and assigns, except that, without the prior written consent of the Trustee,
Issuer may not assign or delegate any of its rights or obligations hereunder.
20. Capitalized terms used but not defined herein shall have
the meanings given such terms in the Pooling and Servicing Agreement.
21. This Letter may be executed in one or more counterparts,
each of which shall be delivered to be deemed to be an original, and such
counterparts shall constitute but one and the same instrument.
DTC makes the following representations to the Issuer and the
Trustee:
1. DTC will take any action permitted to be
taken by a Certificateholder under the
Pooling and Servicing Agreement only at the
direction of one or more of its participating
organizations ("Participants") to whose
account with DTC an undivided interest in the
Certificates are credited. Additionally, DTC
will take such actions pursuant to the
Pooling and Servicing Agreement requiring a
specified aggregate percentage of the Class A
Certificate Balance only at the direction of
and on behalf of the Participants whose
3
<PAGE>
holdings include undivided interests in the Class A
Certificates at least equal to the specified
aggregate percentage for the Certificates as a whole.
DTC may take conflicting actions with respect to
other undivided interests to the extent that such
actions are taken on behalf of Participants whose
holdings include such undivided interests.
2. Unless and until Definitive Certificates are Issued
pursuant to Section 7.10 of the Pooling and Serving
Agreement, DTC will take book-entry transfers among
the participants and receive and transmit
distributions of principal and interest on the
Certificates of such Participants.
4
<PAGE>
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.
------------------------------
<PAGE>
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__.
------------------------------
<PAGE>
EXHIBIT E
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.
<PAGE>
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 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
2
<PAGE>
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 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
3
<PAGE>
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 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
4
<PAGE>
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 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
5
<PAGE>
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
securities intermediary (as such term is defined in Section
8-102(a)(14) 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 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
6
<PAGE>
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.
(e) If the Servicer pursuant to Section 5.04 of the Pooling
and Servicing Agreement is required to make an
7
<PAGE>
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.
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
8
<PAGE>
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, remedies,
powers and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
9
<PAGE>
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
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
10
<PAGE>
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 such amendment which affects the Custodian's own rights,
duties or immunities under this Agreement or otherwise.
11
<PAGE>
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
<PAGE>
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 1st day of October 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
<PAGE>
EXHIBIT F
Nissan Auto Receivables Corporation
990 West 190th Street
Torrance, California 90502
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
<PAGE>
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 $1,898,666.90 (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
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
2
<PAGE>
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 the initial rating of
the Class A Certificates, any amounts on deposit in the Yield Supplement Reserve
Account shall be paid to the Company.
3
<PAGE>
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 other person as the relevant party shall have designated
for such purpose in a written notice.
4
<PAGE>
The Company:
Nissan Auto Receivables Corporation
990 West 190th Street
Torrance, California 90502
Attention: Treasurer
Facsimile No.: 310-324-2542
Class A Agent:
The Fuji Bank and Trust Company
Two World Trade Center
New York, New York 10048
Attention: Trust Administration Department
Facsimile No.: 212-321-2468
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
<PAGE>
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 October 1, 1997
NISSAN MOTOR ACCEPTANCE CORPORATION
By:
-------------------------------
Name:
Title:
THE FUJI BANK AND TRUST COMPANY, AS TRUSTEE
AND CLASS A AGENT
By:
-------------------------------
Name:
Title:
6
EXHIBIT 4.2
EXECUTION COPY
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.
<PAGE>
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 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
2
<PAGE>
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 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
3
<PAGE>
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 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
4
<PAGE>
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 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
5
<PAGE>
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
securities intermediary (as such term is defined in Section
8-102(a)(14) 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 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
6
<PAGE>
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.
(e) If the Servicer pursuant to Section 5.04 of the Pooling
and Servicing Agreement is required to make an
7
<PAGE>
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.
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
8
<PAGE>
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, remedies,
powers and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
9
<PAGE>
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
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
10
<PAGE>
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 such amendment which affects the Custodian's own rights,
duties or immunities under this Agreement or otherwise.
11
<PAGE>
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
<PAGE>
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 1st day of October 1997.
NISSAN AUTO RECEIVABLES CORPORATION,
as Seller and as initial holder of the
Class B Certificates
By: /s/ Yoichiro Nagashima
---------------------------
Name: Yoichiro Nagashima
Title: President
THE FUJI BANK AND TRUST COMPANY,
as Custodian
By: /s/ Sharon Moore
-------------------------
Name: Sharon Moore
Title: Vice President
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By: /s/ Sharon Moore
--------------------------
Name: Sharon Moore
Title: Vice President
Acknowledged and Agreed:
NISSAN MOTOR ACCEPTANCE CORPORATION,
as Servicer
By: /s/ Katsumi Ishii
-------------------
Name: Katsumi Ishii
Title: Vice President, Finance
13
NYFS11...:\95\65595\0025\1856\AGR9297T.46D
EXHIBIT 10.1
EXECUTION COPY
PURCHASE AGREEMENT
This PURCHASE AGREEMENT is made as of this 1st day of October,
1997, by and between NISSAN MOTOR ACCEPTANCE CORPORATION, a California
corporation (the "Seller"), having its principal executive office at 990 W.
190th Street, Torrance, California 90502 and NISSAN AUTO RECEIVABLES
CORPORATION, a Delaware corporation (the "Purchaser"), having its principal
executive office at 990 W. 190th Street, Torrance, California 90502.
WHEREAS, in the regular course of its business, the Seller
purchases certain motor vehicle retail installment sale contracts secured by new
and used automobiles and light duty trucks from motor vehicle dealers.
WHEREAS, the Seller and the Purchaser wish to set forth the
terms pursuant to which the Receivables (as hereinafter defined) are to be sold
by the Seller to the Purchaser, which Receivables will be transferred by the
Purchaser, pursuant to the Pooling and Servicing Agreement (as hereinafter
defined), to the NISSAN AUTO RECEIVABLES 1997-A GRANTOR TRUST to be created
thereunder, which Trust will issue certificates representing fractional
undivided interests in such Receivables and the other property of the Trust (the
"Certificates").
NOW, THEREFORE, in consideration of the foregoing, other good
and valuable consideration, and the mutual terms and covenants contained herein,
the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Terms not defined in this Agreement shall have the meaning set
forth in the Pooling and Servicing Agreement. As used in this Agreement, the
following terms shall, unless the context otherwise requires, have the following
meanings (such meanings to be equally applicable to the singular and plural
forms of the terms defined):
"Agreement" shall mean this Purchase Agreement and all
amendments hereof and supplements hereto.
"Assignment" shall mean the document of assignment attached to
this Agreement as Exhibit A.
<PAGE>
"Closing" shall have the meaning specified in Section 2.02.
"Closing Date" shall mean October 29, 1997.
"Collections" shall mean all amounts collected by the Servicer
(from whatever source) on or with respect to the Receivables.
"Damages" shall have the meaning specified in Section 5.04(a).
"Distribution Date" shall mean, for each Collection Period,
the 15th day of the following month or, if such 15th day is not a Business Day,
the next succeeding Business Day.
"Pooling and Servicing Agreement" shall mean the Pooling and
Servicing Agreement by and among the Seller, as servicer and in its individual
capacity, the Purchaser, and The Fuji Bank and Trust Company, as trustee, dated
as of October 1, 1997, as the same may be amended, amended and restated,
supplemented or modified.
"Prospectus" shall have the meaning assigned to such term in
the Underwriting Agreement.
"Purchaser" shall mean Nissan Auto Receivables Corporation, a
Delaware corporation, and its successors and assigns.
"Rating Agency" shall mean each of Moody's Investors Service,
Inc. and Standard & Poor's Ratings Services or any successors thereto.
"Receivable" shall mean any retail installment sale contract
which appears on Annex A to the Assignment.
"Receivables Purchase Price" shall mean $868,465,033.86.
"Repurchase Event" shall have the meaning specified in
Section 6.02.
"Schedule of Receivables" shall mean the list of Receivables
annexed to the Assignment as Annex A thereto.
2
<PAGE>
"Seller" shall mean Nissan Motor Acceptance Corporation, a
California corporation, and its successors and assigns.
"Trust" shall mean the Nissan Auto Receivables
1997-A Grantor Trust.
"Underwriting Agreement" shall mean the
Underwriting Agreement by and between J.P. Morgan Securities
Inc. and the Purchaser, dated October 21, 1997.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2.01. Purchase and Sale of Receivables
--------------------------------
On the Closing Date, subject to the terms and conditions of
this Agreement, the Seller agrees to sell to the Purchaser, and the Purchaser
agrees to purchase from the Seller, the Receivables and the other property
relating thereto (as defined below).
(a) Transfer of Receivables. On the Closing
Date and simultaneously with the transactions pursuant to the Pooling and
Servicing Agreement, the Seller shall sell, transfer, assign and otherwise
convey to the Purchaser, without recourse, (i) all right, title and interest of
the Seller in and to the Receivables, 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) the interest of the Seller
in Dealer Recourse; (v) 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; and (vi) the
proceeds of any and all of the foregoing.
(b) Receivables Purchase Price. In con-
sideration for the Receivables and other properties described in Section
2.01(a), the Purchaser shall, on the Closing Date, pay to the Seller the
Receivables Purchase
3
<PAGE>
Price. An amount equal to approximately 87% of the Receivables Purchase Price
shall be paid to the Seller in cash, net of any costs of the Purchaser related
to the establishment of the Trust and the offering of the Class A Certificates,
by federal wire transfer (same day) funds. The remaining approximately 13% of
the Receivables Purchase Price shall be deemed paid by the Purchaser to the
Seller and then immediately returned by the Seller to the Purchaser as a
contribution to capital.
2.02. The Closing. The sale and purchase of the Receivables
-----------
shall take place at a closing (the "Closing") at the offices of Weil, Gotshal &
Manges LLP, 767 Fifth Avenue, New York, New York 10153 on the Closing Date,
simultaneously with the closings under: (a) the Pooling and Servicing Agreement
pursuant to which (i) the Purchaser will assign all of its right, title and
interests in and to the Receivables and other property conveyed pursuant to
Section 2.01(a) hereof to the Trustee for the benefit of the Certificateholders;
and (ii) the Purchaser will deposit the foregoing into the Trust in exchange for
the Class A Certificates and Class B Certificates; and (b) the Underwriting
Agreement, pursuant to which the Purchaser will sell to the underwriters named
therein the Class A Certificates.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01. Warranties of the Purchaser. The Purchaser hereby
---------------------------
represents and warrants to the Seller as of the date hereof and as of the
Closing Date:
(a) Organization, etc. The Purchaser has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, and has full corporate power and
authority to execute and deliver this Agreement and to perform the terms and
provisions hereof.
(b) Due Authorization and No Violation.
This Agreement has been duly authorized, executed and delivered by the
Purchaser, and is the valid, binding and enforceable obligation of the Purchaser
except as the same may be limited by insolvency, bankruptcy, reorganization or
other laws relating to or affecting the enforcement of
4
<PAGE>
creditors' rights or by general equity principles. The consummation of the
transactions contemplated by this Agreement, and the fulfillment of the terms
thereof, will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under (in each case material to the
Purchaser), or result in the creation or imposition of any Lien material to the
Purchaser upon any of the property or assets of the Purchaser pursuant to the
terms of, any indenture, mortgage, deed of trust, loan agreement, guarantee,
lease financing agreement or similar agreement or instrument under which the
Purchaser is a debtor or guarantor, nor will such action result in any violation
of the provisions of the Certificate of Incorporation or the By-laws of the
Purchaser.
(c) No Litigation. No legal or governmental
proceedings are pending to which the Purchaser is a party or of which any
property of the Purchaser is the subject, and no such proceedings are threatened
or contemplated by governmental authorities or threatened by others; other than
such proceedings which will not have a material adverse effect upon the general
affairs, financial position, net worth or results of operations (on an annual
basis) of the Purchaser and will not materially and adversely affect the
performance by the Purchaser of its obligations under, or the validity and
enforceability of, this Agreement.
3.02. Representations and Warranties of the Seller. (a) The
--------------------------------------------
Seller hereby represents and warrants to the Purchaser as of the date hereof and
as of the Closing Date:
(i) Organization, etc. The Seller
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of California and is in good
standing in each jurisdiction in the United States of America in which
the conduct of its business or the ownership of its property requires
such qualification.
(ii) Power and Authority. The
Seller has full power and authority to sell and assign the property
sold and assigned to the Purchaser hereunder and has duly authorized
such sale and assignment to the Purchaser by all necessary corporate
action. This Agreement has been duly authorized, executed and delivered
by
5
<PAGE>
the Seller and is the legal, valid and binding obligation of the Seller
except as the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting the enforcement
of creditors' rights or by general equity principles.
(iii) No Violation. The
consummation of the transaction contemplated by this Agreement, and the
fulfillment of the terms hereof, will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under (in each case material to the Seller and its subsidiaries
considered as a whole), or result in the creation or imposition of any
Lien material to the Seller and its subsidiaries considered as a whole
upon any of the property or assets of the Seller pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement, guarantee,
lease financing agreement or similar agreement or instrument under
which the Seller is a debtor or guarantor, nor will such action result
in any violation of the provisions of the Articles of Incorporation or
the By-Laws of the Seller.
(iv) No Proceedings. No legal or
governmental proceedings are pending to which the Seller is a party or
of which any property of the Seller is the subject, and no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others, other than such proceedings which will not
have a material adverse effect upon the general affairs, financial
position, net worth or results of operations (on an annual basis) of
the Seller and its subsidiaries considered as a whole and will not
materially and adversely affect the performance by the Seller of its
obligations under, or the validity and enforceability of, this
Agreement.
(b) The Seller makes the following
representations and warranties as to the Receivables on which the Purchaser
relies in accepting the Receivables. Such representations and warranties speak
as of the execution and delivery of this Agreement, but shall survive the sale,
transfer, and assignment of the Receivables to the
6
<PAGE>
Purchaser hereunder and the subsequent assignment and transfer pursuant to the
Pooling and Servicing Agreement:
(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 such Dealer under an existing dealer agreement with the
Seller, and has been validly assigned by such Dealer to the Seller, (b)
created a valid, subsisting and enforceable first priority security
interest in favor of the Seller in the Financed Vehicle, (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 that 60 months and yield interest at the Annual
Percentage Rate.
(ii) Schedule of Receivables. The
information set forth in Annex A to the Assignment 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 the Seller's retail
installment sale contracts meeting the criteria of the Trust; 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 this Agreement complies
in all material respects with all requirements of applicable federal,
State and local laws, and regulations thereunder, including, without
limitation, usury laws, the Federal Truth-in- Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt
7
<PAGE>
Collection Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Soldiers and Sailors Civil Relief Act
of 1940, the Federal Reserve Board's Regulations B and Z, State "Lemon
Laws" designed to prevent fraud in the sale of automobiles and State
adaptations of the National Consumer Credit Protection Act and of the
Uniform Consumer Credit Code, 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 Purchaser, each Receivable was secured by a validly
perfected first priority security interest in the Financed Vehicle in
favor of the Seller 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 the Seller as secured party, and (b) as of the
Cutoff Date, according to the records of the Seller, no Financed
Vehicle has been repossessed and not reinstated.
(vi) Receivables in Force. No
Receivable has been satisfied, subordinated or rescinded, nor has any
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
8
<PAGE>
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 best of 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 pay-
ment 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. The Seller, in
accordance with its customary procedures, has determined that the
Obligor has obtained or 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 Purchaser
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 Purchaser. Immediately prior to the
transfer and assignment herein contemplated, the Seller had
9
<PAGE>
good and marketable title to each Receivable free and clear of all
Liens and rights of others (including, without limitation, Liens or
other rights of any creditor of any Dealer) and no offsets, defenses or
counterclaims against it had been asserted or threatened and,
immediately upon the transfer thereof, the Purchaser 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. Such 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 this 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 Purchaser 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 shall 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 has a remaining maturity of not less than three months
and not greater than 57 months.
10
<PAGE>
(xxi) Balance. Each Receivable had an
original principal balance of not more than $50,000.00 and, as of the
Cutoff Date, has a principal balance of not less than $298.74 and not
more than $47,421.00.
(xxii) Delinquency. No Receivable is
more than 30 days past due as of the Cutoff Date and no Receivable has
been extended by more than 2 months.
(xxiii) Bankruptcy. No Obligor was the
subject of a bankruptcy proceeding (according to the records of the
Seller) as of the Cutoff Date.
(xxiv) Transfer. Each Receivable
prohibits the sale or transfer of the Financed Vehicle without the
consent of the Seller.
(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 origination 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) Forced-Placed Insurance
Premiums. No contract relating to any Receivable has
had forced-placed insurance premiums added to the
amount financed.
(xxix) 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.
ARTICLE IV
CONDITIONS
11
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4.03. Conditions to Obligation of the Purchaser. The
-----------------------------------------
obligation of the Purchaser to purchase the Receivables is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True.
The representations and warranties of the Seller hereunder shall be true and
correct on the Closing Date with the same effect as if then made, and the Seller
shall have performed all obligations to be performed by it hereunder on or prior
to the Closing Date.
(b) Computer Files Marked. The Seller
shall, at its own expense, on or prior to the Closing Date, indicate in its
computer files that the Receivables have been sold to the Purchaser pursuant to
this Agreement and shall deliver to the Purchaser the Schedule of Receivables
certified by an officer of the Seller to be true, correct and complete.
(c) Documents to be delivered by the Seller
at the Closing.
(i) The Assignment. At the Closing,
the Seller will execute and deliver the Assignment.
(ii) Evidence of UCC Filing. On or
prior to the Closing Date, the Seller shall record and file, at its own
expense, a UCC-1 financing statement in each jurisdiction in which
required by applicable law, executed by the Seller, as seller or
debtor, and naming the Purchaser, as purchaser or secured party, the
Trustee, as assignee of the Purchaser, naming the Receivables and the
other property conveyed hereunder as collateral, meeting the
requirements of the laws of each such jurisdiction and in such manner
as is necessary to perfect the sale, transfer, assignment and
conveyance of such Receivables to the Purchaser. The Seller shall
deliver a file-stamped copy, or other evidence satisfactory to the
Purchaser of such filing, to the Purchaser on or prior to the Closing
Date.
(iii) Other Documents. At the Closing,
the Seller shall deliver such other documents as the
Purchaser may reasonably request.
(d) Other Transactions. The transactions
contemplated by the Pooling and Servicing Agreement shall be
consummated on the Closing Date.
12
<PAGE>
4.04. Conditions to Obligation of the Seller. The obligation
--------------------------------------
of the Seller to sell the Receivables to the Purchaser is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True.
The representations and warranties of the Purchaser hereunder shall be true and
correct on the Closing Date with the same effect as if then made, and the Seller
shall have performed all obligations to be performed by it hereunder on or prior
to the Closing Date.
(b) Receivables Purchase Price. On the
Closing Date, the Purchaser will deliver to the Seller the Receivables Purchase
Price, as provided in Section 2.01(b).
13
<PAGE>
ARTICLE V
COVENANTS OF THE SELLER
The Seller agrees with the Purchaser as follows; provided,
however, that, to the extent that any provision of this ARTICLE V conflicts with
any provision of the Pooling and Servicing Agreement, the Pooling and Servicing
Agreement
shall govern:
5.01. Protection of Right, Title and Interest.
---------------------------------------
(a) The Seller shall execute and file such
financing statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Purchaser in the
Receivables and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the Purchaser file-stamped copies of, or filing receipts for,
any document filed as provided above, as soon as available following such
filing.
(b) The Seller shall not 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
ss. 9- 402(7) of the UCC, unless it shall have given the Purchaser 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 shall give the Purchaser 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 Seller 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 Seller shall maintain accounts and
records as to each Receivable accurately and in sufficient
detail to permit the reader thereof to know at any time the
14
<PAGE>
status of such Receivable, including payments and recoveries made and payments
owing (and the nature of each).
(e) The Seller shall maintain its computer
systems so that, from and after the time of sale hereunder of the Receivables to
the Purchaser, the Seller's master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly the interest of the
Purchaser in such Receivable and that such Receivable is owned by the Purchaser.
Indication of the Purchaser's ownership of a Receivable shall be deleted from or
modified on the Seller's computer systems when, and only when, the Receivable
shall have been paid in full or repurchased.
(f) If at any time the Seller 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 Seller 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
Purchaser.
(g) The Seller shall permit the Purchaser
and its agents at any time during normal business hours to inspect, audit and
make copies of and abstracts from the Seller's records regarding any Receivable.
(h) Upon request, the Seller shall furnish
to the Purchaser, within 20 Business Days, a list of all Receivables (by
contract number and name of Obligor) then owned by the Purchaser, together with
a reconciliation of such list to the Schedule of Receivables.
5.02. Other Liens or Interests. Except for the conveyances
------------------------
hereunder and contemplated pursuant to the Pooling and Servicing Agreement, the
Seller will not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any interest therein, and
the Seller shall defend the right, title and interest of the Purchaser in, to
and under such Receivables against all claims of third parties claiming through
or under the Seller; provided, however, that the Seller's obligations under this
Section 5.02 shall terminate upon the termination of the Trust pursuant to the
Pooling and Servicing Agreement.
15
<PAGE>
5.03 Costs and Expenses. The Seller agrees to pay all
------------------
reasonable costs and disbursements in connection with the perfection, as against
all third parties, of the Purchaser's right, title and interest in and to the
Receivables.
5.04 Indemnification.
---------------
(a) The Seller shall defend, indemnify and
hold harmless the Purchaser from and against any and all costs, expenses,
losses, damages, claims and liabilities (collectively, "Damages"), arising out
of or resulting from the failure of a Receivable to be originated in compliance
with all requirements of law and for any breach of any of the Seller's
representations and warranties contained herein.
(b) The Seller shall defend, indemnify and
hold harmless the Purchaser from and against any and all Damages arising out of
or resulting from the use, ownership or operation by the Seller or any affiliate
thereof of a Financed Vehicle.
(c) The Seller shall defend, indemnify and
hold harmless the Purchaser from and against any and all taxes that may at any
time be asserted against the Purchaser with respect to the transactions
contemplated herein, including, without limitation, any sales, gross receipts,
general corporation, tangible personal property, privilege, or license taxes and
costs and expenses in defending against the same.
(d) The Seller shall defend, indemnify and
hold harmless the Purchaser from and against any and all Damages to the extent
that such Damage arose out of, or was imposed upon the Purchaser through, the
negligence, willful misfeasance or bad faith of the Seller in the performance of
its duties under the Agreement or by reason of reckless disregard of the
Seller's obligations and duties under this Agreement.
(e) The Seller shall defend, indemnify and hold
harmless the Purchaser from and against all Damages arising out of or incurred
in connection with the acceptance or performance of the Seller's trusts and
duties as Servicer under the Pooling and Servicing Agreement, except to the
extent that such Damages shall be due to the willful
16
<PAGE>
misfeasance, bad faith or negligence (except for errors in
judgment) of the Purchaser.
These indemnity obligations shall be in addition to any
obligation that the Seller may otherwise have.
5.05 Sale. The Seller agrees to treat the conveyance under
----
this Agreement for all purposes (including, without limitation, tax and
financial accounting purposes) as a sale of the Receivables on all relevant
books, records, tax returns, financial statements and other applicable
documents.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.01 Obligations of Seller. The obligations of the Seller
---------------------
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable.
6.02 Repurchase Events. The Seller hereby covenants and agrees
-----------------
with the Purchaser for the benefit of the Purchaser, the Trustee and the
Certificateholders, that the occurrence of a breach of any of the Seller's
representations and warranties contained in Section 3.02(b) hereof shall
constitute events obligating the Seller to repurchase Receivables hereunder
("Repurchase Events"), at the Repurchase Amount from the Purchaser or, as
described in Section 6.04 below, from the Trust. The repurchase obligation of
the Seller shall constitute the sole remedy of the Certificateholders, the
Trustee and the Purchaser against the Seller with respect to any Repurchase
Event.
6.03 Seller's Assignment of Purchased Receivables. With
--------------------------------------------
respect to all Receivables repurchased by the Seller pursuant to this Agreement,
the Purchaser (without the need of any further written assignment) shall assign
hereby, without recourse, representation or warranty, to the Seller all the
Purchaser's right, title and interest in and to such Receivables, and all
security and documents relating thereto.
6.04 Trust. The Seller acknowledges that the Purchaser will,
-----
pursuant to the Pooling and Servicing Agreement, sell the Receivables to the
Trust and assign its
17
<PAGE>
rights under this Agreement to the Trustee for the benefit of the
Certificateholders, and that the representations and warranties contained in
this Agreement and the rights of the Purchaser under Section 6.02 and the
obligations under 6.03 hereof are intended to benefit the Trust and the
Certificateholders. The Seller hereby consents to such sales and assignments.
6.05 Amendment. This Agreement may be amended from time to
---------
time by a written amendment duly executed and delivered by the Seller and the
Purchaser; provided, however, that any such amendment must be consented to by
the Holders of 51% of the Class A Certificate Balance and 51% of the Class B
Certificate Balance.
6.06 Accountants' Letters. (a) Deloitte & Touche LLP will
--------------------
review the characteristics of the Receivables described in the Schedule of
Receivables and will compare those characteristics to the information with
respect to the Receivables contained in the Prospectus.
(b) The Seller will cooperate with the
Purchaser and Deloitte & Touche LLP in making available all information and
taking all steps reasonably necessary to permit such accountants to complete the
review set forth in Section 6.06(a) above and to deliver the letters required of
them under the Underwriting Agreement.
6.07 Waivers. No failure or delay on the part of the Purchaser
-------
in exercising any power, right or remedy under this Agreement or the Assignment
shall operate as a waiver hereof or thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other or further
exercise hereof or thereof or the exercise of any other power, right or remedy.
6.08 Notices. All communications and notices pursuant hereto
-------
to either party shall be in writing (including via telecopy) and addressed or
delivered to it at its address (or in the case of telecopy, at its telecopy
number at such address) shown in the opening portion of this Agreement or at
such other address as may be designated by it by notice to the other party and,
if mailed or delivered shall be deemed given when mailed or delivered, or
transmitted by telecopy.
6.09 Costs and Expenses. The Seller will pay all
------------------
expenses incident to the performance of its obligations
18
<PAGE>
under this Agreement and the Seller agrees to pay all reasonable out-of-pocket
costs and expenses of the Purchaser, excluding fees and expenses of counsel, in
connection with the perfection as against third parties of the Purchaser's
right, title and interest in and to the Receivables and the enforcement of any
obligation of the Seller hereunder.
6.10 Representations to the Seller. The respective agreements,
-----------------------------
representations, warranties and other statements by the Seller and the Purchaser
set forth in or made pursuant to this Agreement shall remain in full force and
effect and will survive the Closing.
6.11 Headings and Cross-References. The various headings in
-----------------------------
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in this
Agreement to Section names or numbers are to such Sections of this Agreement.
6.12 Governing Law. THIS AGREEMENT AND THE ASSIGNMENT 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.
6.13 Counterparts. This Agreement may be executed in two
------------
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
6.14 Sale. The Purchaser agrees to treat the conveyance under
----
this Agreement for all purposes (including, without limitation, tax and
financial accounting purposes) as a sale of the Receivables on all relevant
books, records, tax returns, financial statements and other applicable
documents.
19
<PAGE>
IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date and year first written above.
NISSAN MOTOR ACCEPTANCE CORPORATION
By: /s/ Katsumi Ishii
---------------------------
Name: Katsumi Ishii
Title: Vice President-Finance
NISSAN AUTO RECEIVABLES CORPORATION
By: /s/ Yoichiro Nagashima
---------------------------
Name: Yoichiro Nagashima
Title: President
20
<PAGE>
Exhibit A
---------
ASSIGNMENT
----------
For value received, in accordance with the Purchase Agreement
dated as of October 1, 1997, between the undersigned and Nissan Auto Receivables
Corporation (the "Purchaser") (the "Purchase Agreement"), the undersigned does
hereby sell, assign, transfer and otherwise convey unto the Purchaser, without
recourse, (i) all right, title and interest of the undersigned in and to the
Receivables listed on Annex A hereto, and all monies paid thereon, and due
thereon, on or after the Cutoff Date; (ii) the interest of the undersigned in
the security interests in the Financed Vehicles granted by Obligors pursuant to
the Receivables and any accessions thereto; (iii) the interest of the
undersigned in any proceeds from claims on any physical damage, credit life,
credit disability or other insurance policies covering Financed Vehicles or
Obligors; (iv) the interest of the undersigned in Dealer Recourse; (v) the
interest of the undersigned 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; and (vi) the proceeds of any and all of the
foregoing. The foregoing sale does not constitute and is not intended to result
in any assumption by the Purchaser of any obligation of the undersigned to the
Obligors, insurers or any other person in connection with the Receivables,
Receivables Files, any insurance policies or any agreement or instrument
relating to any of them.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Purchase Agreement and is to be governed by the Purchase
Agreement.
Capitalized terms used herein and not otherwise defined shall
have the meaning assigned to them in the Purchase Agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment
to be duly executed as of the ___ day of _______ 1997.
NISSAN MOTOR ACCEPTANCE CORPORATION
By:
Name:
Title:
<PAGE>
Annex A
Schedule of Receivables
[Delivered to the Purchaser at Closing]
NYFS11...:\95\65595\0025\1856\AGR9297P.20E
EXHIBIT 10.2
EXECUTION COPY
Nissan Auto Receivables Corporation
990 West 190th Street
Torrance, California 90502
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
<PAGE>
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 $1,898,666.90 (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
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
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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 the initial rating of
the Class A Certificates, any amounts on deposit in the Yield Supplement Reserve
Account shall be paid to the Company.
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<PAGE>
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 other person as the relevant party shall have designated
for such purpose in a written notice.
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The Company:
Nissan Auto Receivables Corporation
990 West 190th Street
Torrance, California 90502
Attention: Treasurer
Facsimile No.: 310-324-2542
Class A Agent:
The Fuji Bank and Trust Company
Two World Trade Center
New York, New York 10048
Attention: Trust Administration Department
Facsimile No.: 212-321-2468
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.
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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: /s/ Yoichiro Nagashima
--------------------------
Name: Yoichiro Nagashima
Title: President
Agreed and accepted as of October 1, 1997
NISSAN MOTOR ACCEPTANCE CORPORATION
By: /s/ Katsumi Ishii
-------------------------------
Name: Katsumi Ishii
Title: Vice President, Finance
THE FUJI BANK AND TRUST COMPANY, AS TRUSTEE
AND CLASS A AGENT
By: /s/ Sharon Moore
-------------------------------
Name: Sharon Moore
Title: Vice President
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