EXHIBIT 4.3
SALE AND SERVICING AGREEMENT
among
NISSAN AUTO RECEIVABLES ______-_ OWNER TRUST
as Issuer,
NISSAN AUTO RECEIVABLES CORPORATION,
as Seller,
and
NISSAN MOTOR ACCEPTANCE CORPORATION,
as Servicer
Dated as of [_______]
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.....................................................................1
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01 Conveyance of Receivables......................................................20
SECTION 2.02 Custody of Receivables Files...................................................22
SECTION 2.03 Acceptance by Owner Trustee....................................................22
ARTICLE III
THE RECEIVABLES
SECTION 3.01 Representations and Warranties of the Seller with Respect to
the Receivables................................................................23
SECTION 3.02 Repurchase upon Breach.........................................................26
SECTION 3.03 Duties of Servicer as Custodian................................................26
SECTION 3.04 Instructions; Authority To Act.................................................27
SECTION 3.05 Custodian's Indemnification....................................................27
SECTION 3.06 Effective Period and Termination...............................................27
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01 Duties of Servicer.............................................................28
SECTION 4.02 Collection of Receivable Payments..............................................29
SECTION 4.03 Realization upon Receivables...................................................29
SECTION 4.04 Maintenance of Security Interests in Financed Vehicles.........................30
SECTION 4.05 Covenants of Servicer..........................................................30
SECTION 4.06 Purchase of Receivables upon Breach............................................30
SECTION 4.07 Servicing Fee and Expenses.....................................................31
SECTION 4.08 Servicer's Certificate.........................................................31
SECTION 4.09 Annual Statement as to Compliance; Notice of Default...........................31
SECTION 4.10 Annual Independent Certified Public Accountants' Report........................32
SECTION 4.11 Access to Certain Documentation and Information Regarding
Receivables...................................................................32
SECTION 4.12 Appointment of Subservicer.....................................................33
SECTION 4.13 Amendments to Schedule of Receivables..........................................33
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ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.01 Establishment of Accounts......................................................33
SECTION 5.02 Collections....................................................................34
SECTION 5.03 Application of Collections.....................................................36
SECTION 5.04 Advances.......................................................................36
SECTION 5.05 Additional Deposits............................................................37
SECTION 5.06 Payments and Distributions.....................................................37
SECTION 5.07 Reserve Account................................................................41
SECTION 5.08 Yield Supplement Account.......................................................43
SECTION 5.09 Statements to Certificateholders and Noteholders...............................44
SECTION 5.10 Net Deposits...................................................................45
ARTICLE VI
THE SELLER
SECTION 6.01 Representations of Seller......................................................45
SECTION 6.02 Additional Covenants of the Seller.............................................47
SECTION 6.03 Liability of Seller; Indemnities...............................................48
SECTION 6.04 Merger or Consolidation of, or Assumption of the Obligations
of, Seller.....................................................................50
SECTION 6.05 Limitation on Liability of Seller and Others...................................50
SECTION 6.06 Seller May Own Certificates or Notes...........................................51
ARTICLE VII
THE SERVICER
SECTION 7.01 Representations of Servicer....................................................51
SECTION 7.02 Indemnities of Servicer........................................................52
SECTION 7.03 Merger or Consolidation of, or Assumption of the Obligations
of, Servicer...................................................................53
SECTION 7.04 Limitation on Liability of Servicer and Others.................................54
SECTION 7.05 NMAC Not To Resign as Servicer.................................................54
ARTICLE VIII
DEFAULT
SECTION 8.01 Servicer Default...............................................................55
SECTION 8.02 Appointment of Successor.......................................................56
SECTION 8.03 Repayment of Advances..........................................................57
SECTION 8.04 Notification...................................................................57
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SECTION 8.05 Waiver of Past Defaults........................................................57
ARTICLE IX
TERMINATION; RELEASE OF RECEIVABLES
SECTION 9.01 Optional Purchase of All Receivables...........................................58
SECTION 9.02 Release of Receivables.........................................................58
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Amendment......................................................................59
SECTION 10.02 Protection of Title to Trust...................................................61
SECTION 10.03 Notices........................................................................63
SECTION 10.04 Assignment by the Seller or the Servicer.......................................63
SECTION 10.05 Limitations on Rights of Others................................................63
SECTION 10.06 Severability...................................................................63
SECTION 10.07 Separate Counterparts..........................................................63
SECTION 10.08 Headings.......................................................................63
SECTION 10.09 Governing Law..................................................................64
SECTION 10.10 Assignment by Issuer...........................................................64
SECTION 10.11 Nonpetition Covenants..........................................................64
SECTION 10.12 Limitation of Liability of Owner Trustee and Indenture Trustee.................64
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
EXHIBIT A Form of Yield Supplement Agreement
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SALE AND SERVICING AGREEMENT, dated as of [_______], among NISSAN AUTO
RECEIVABLES _____-_ OWNER TRUST, a Delaware business trust (the "Issuer"),
NISSAN AUTO RECEIVABLES CORPORATION, a Delaware corporation, and NISSAN MOTOR
ACCEPTANCE CORPORATION, a California corporation. Capitalized terms used herein
without definition shall have the respective meanings assigned to such terms in
Article I.
WHEREAS, the Issuer desires to purchase a portfolio of receivables
arising in connection with retail installment sales contracts secured by new,
near-new or used automobiles and light-duty trucks generated by NMAC in the
ordinary course of business and sold to the Seller;
WHEREAS, the Seller is willing to sell such receivables to the
Issuer; and
WHEREAS, the Servicer is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. Except as otherwise provided in this
Agreement, whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following respective meanings:
"ACCOUNTS" means the Collection Account, the Yield Supplement Account
and the Reserve Account.
"ACTUAL PAYMENT" means, with respect to a Receivable and a Collection
Period, all payments received by the Servicer from or for the account of the
related Obligor on such Receivable during such Collection Period (and, in the
case of the first Collection Period, all payments received by the Servicer from
or for the account of such Obligor since the Cutoff Date through the last day of
such Collection Period), net of any Supplemental Servicing Fees attributable to
such Receivable.
"ADMINISTRATIVE PURCHASE PAYMENT" for any Administrative Receivable as
of the last day 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 related APR, after giving effect to the receipt of monies collected (from
whatever source other than the Advances) on such Administrative Receivable, if
any, during such Collection Period.
"ADMINISTRATION AGREEMENT" means the Administration Agreement, dated as
of [_______], among the Administrator, the Issuer and the Indenture Trustee.
"ADMINISTRATIVE RECEIVABLE" means a Receivable purchased as of the
close of business on the last day of a Collection Period by the Servicer
pursuant to Section 4.06 or Section 9.01.
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"ADMINISTRATOR" means NMAC, or any successor Administrator under the
Administration Agreement.
"ADVANCE" means the amount, as of the last day of a Collection Period,
that the Servicer is required to advance on the respective Receivable pursuant
to Section 5.04.
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control," when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the term "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGGREGATE CERTIFICATEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means,
with respect to any Distribution Date, the sum of the Certificateholders'
Interest Distributable Amount for all Classes of Certificates for such
Distribution Date.
"AGGREGATE NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the sum of the Noteholders' Interest
Distributable Amount for all Classes of Notes for such Distribution Date.
"AGREEMENT" means this Sale and Servicing Agreement among Nissan Auto
Receivables [___-___] Owner Trust, as Issuer, NARC, as Seller, and NMAC, as
Servicer.
"AICPA" shall have the meaning assigned to such term in Section 4.10.
"AMOUNT FINANCED" with respect to any Receivable, means the amount
advanced under the Receivable toward the purchase price of the related Financed
Vehicle and any related costs, including but not limited to accessories,
insurance premiums, service and warranty contracts and other items customarily
financed as part of retail automobile and light-duty truck installment sale
contracts.
"ANNUAL PERCENTAGE RATE" or "APR" of a Receivable means the annual rate
of finance charges stated in such Receivable.
"ANNUAL USAP REPORT" shall have the meaning specified in Section 4.10.
"AVAILABLE AMOUNTS" means, with respect to any Distribution Date, the
sum of Available Interest and Available Principal.
"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 other than Defaulted Receivables
allocable to interest, (ii) Net Liquidation Proceeds to the extent allocable to
interest due on a Defaulted 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 Administrative Purchase Payment of each Receivable
that became an Administrative Receivable during the related Collection Period to
the extent attributable to interest thereon, (v) without duplication of
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any amounts described above in clauses (i) and (ii), the Warranty Purchase
Payment of each Receivable that became a Warranty Receivable during the
related Collection Period to the extent attributable to interest thereon, and
(vi) the Yield Supplement Deposit; PROVIDED, HOWEVER, that in calculating
Available Interest, amounts to be paid to the Servicer as reimbursement for
Advances pursuant to Sections 5.06(c)(i), 5.06(c)(ii), 5.06(d)(i) and
5.06(d)(ii) on such Distribution Date 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 other than Defaulted Receivables
allocable to principal, (ii) Net Liquidation Proceeds attributable to principal
due on a Defaulted Receivable in accordance with the Servicer's customary
servicing procedures, (iii) without duplication of any amounts described above
in clauses (i) and (ii), the Administrative Purchase Payment of each Receivable
that became an Administrative Receivable during the related Collection Period to
the extent attributable to principal, and (iv) without duplication of any
amounts described above in clauses (i) and (ii), the Warranty Purchase Payment
of each Receivable that became a Warranty Receivable during the related
Collection Period to the extent attributable to principal.
"BASIC DOCUMENTS" means the Purchase Agreement, the Trust Agreement,
the Certificate of Trust, this Agreement, the Indenture, the Administration
Agreement, the Securities Account Control Agreement, the Yield Supplement
Agreement, the Note Depository Agreement, the Certificate Depository Agreement
and the other documents and certificates delivered in connection herewith and
therewith.
"BASE SERVICING FEE" means the fee payable to the Servicer on each
Distribution Date, calculated pursuant to Section 4.07, for services rendered
during the related Collection Period, which shall be equal to one-twelfth of the
Servicing Rate multiplied by the Pool Balance as of the first day of the related
Collection Period or, with respect to the first Distribution Date, the Original
Pool Balance.
"BOOK-ENTRY CERTIFICATES" and "BOOK-ENTRY NOTES" mean, respectively,
beneficial interests in Certificates or Notes, as the case may be, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in the Trust Agreement and the Indenture, respectively.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York, or Los Angeles, California
are authorized or obligated by law, regulation, executive order or governmental
decree to remain closed.
"CERTIFICATE OF TRUST" shall have the meaning assigned to such term in
the Trust Agreement.
"CERTIFICATES" shall have the meaning assigned to such term in the
Trust Agreement.
"CERTIFICATE BALANCE" means, as of any Distribution Date and for each
Class of Certificates, the Original Certificate Balance of such Class, reduced
by all amounts distributed to the Certificateholders of such Class pursuant to
Section 5.06(c) and/or (d) hereof (but in no event less than zero). When the
term "Certificate Balance" is not used in respect of any Class of
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Certificates, then it shall mean the sum of the Certificate Balance of the
Class C Certificates and the Class D Certificates. For the purposes of
determining whether the vote of the requisite percentage of
Certificateholders necessary to effect any consent, waiver, request or demand
shall have been obtained, the Certificate Balance shall be deemed to be
reduced by the amount equal to the balance (without giving effect to this
provision) evidenced by any Certificate registered in the name of the Seller,
the Servicer or any Person actually known to a Trust Officer of the Owner
Trustee or Indenture Trustee, as the case may be, to be the Seller or the
Servicer or any of their Affiliates.
"CERTIFICATE DEPOSITORY AGREEMENT" shall have the meaning assigned to
such term in the Trust Agreement.
"CERTIFICATE FACTOR" means, with respect to any Class of Certificates
and any Distribution Date, a seven-digit decimal figure obtained by dividing the
Certificate Balance of such Class of Certificates as of the close of business on
such Distribution Date by the Original Certificate Balance of such Class of
Certificates.
"CERTIFICATEHOLDERS" shall have the meaning assigned to such term in
the Trust Agreement.
"CERTIFICATEHOLDERS' DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Aggregate Certificateholders' Interest
Distributable Amount and the Certificateholders' Principal Distributable Amount,
if any, for the most senior Class of Certificates for such Distribution Date.
"CERTIFICATEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect
to any Distribution Date and a Class of Certificates, the excess, if any, of the
sum of the Certificateholders' Monthly Interest Distributable Amount for such
Class for the preceding Distribution Date plus any outstanding
Certificateholders' Interest Carryover Shortfall for such Class on such
preceding Distribution Date, over the amount in respect of interest that is
actually paid on the Certificates of such Class on such preceding Distribution
Date, plus, to the extent permitted by applicable law, interest on the
Certificateholders' Interest Carryover Shortfall at the related Pass-Through
Rate for such Class.
"CERTIFICATEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with respect
to any Distribution Date and a Class of Certificates, the sum of the
Certificateholders' Monthly Interest Distributable Amount for such Class and the
Certificateholders' Interest Carryover Shortfall for such Class for the
immediately preceding Distribution Date.
"CERTIFICATEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date and a Class of Certificates, interest accrued
for the related Interest Period at the related Pass-Through Rate for such Class
of Certificates on the Certificate Balance of such Class on the immediately
preceding Distribution Date, after giving effect to all payments of principal to
Certificateholders of such Class on or prior to such Distribution Date (or, in
the case of the first Distribution Date, on the Original Certificate Balance of
such Class of Certificates).
"CERTIFICATEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT" means,
with respect to any Distribution Date, the Certificateholders' Percentage of the
Available Principal for such
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Distribution Date.
"CERTIFICATEHOLDERS' PERCENTAGE" means the following: (i) for each
Distribution Date until the principal amount of all of the Notes has been paid
in full, 0%; and (ii) for each Distribution Date after the Distribution Date on
which the principal amount of all of the Notes is reduced to zero, 100%.
"CERTIFICATEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, with respect
to any Distribution Date and a Class of Certificates, the excess, if any, of the
Certificateholders' Monthly Principal Distributable Amount for such Class plus
any outstanding Certificateholders' Principal Carryover Shortfall for such Class
for the preceding Distribution Date over the amount in respect of principal that
is actually distributed to the Certificateholders on such current Distribution
Date.
"CERTIFICATEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date and a Class of Certificates, the sum of (i) the
Certificateholders' Monthly Principal Distributable Amount for such Distribution
Date, (ii) any outstanding Certificateholders' Principal Carryover Shortfall for
such Class as of the close of the immediately preceding Distribution Date, and
(iii) on the Final Scheduled Distribution Date for such Class of Certificates,
the amount necessary to reduce the outstanding principal amount of such Class of
Certificates to zero; PROVIDED, HOWEVER, that the Certificateholders' Principal
Distributable Amount with respect to a Class of Certificates shall not exceed
the Certificate Balance of such Class of Certificates.
"CERTIFICATE POOL FACTOR" means, with respect to any Class of
Certificates and any Distribution Date, a seven-digit decimal figure obtained by
dividing the Certificate Balance of such Class of Certificates as of the close
of business on the last day of the related Collection Period by the Original
Pool Balance.
"CERTIFICATE REGISTER" means the register maintained by the Owner
Trustee pursuant to the Trust Agreement recording the name of each
Certificateholder.
"CLASS" means any one of the classes of Notes or Certificates, as the
case may be.
"CLASS A-1 INTEREST RATE" means ___% per annum.
"CLASS A-1 NOTE" means any of the [__%] Asset Backed Notes, Class A-1,
issued under the Indenture.
"CLASS A-1 NOTEHOLDER" means the Person in whose name a Class A-1 Note
is registered in the Note Register.
"CLASS A-2 INTEREST RATE" means ___% per annum.
"CLASS A-2 NOTE" means any of the [__%] Asset Backed Notes, Class A-2,
issued under the Indenture.
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"CLASS A-2 NOTEHOLDER" means the Person in whose name a Class A-2 Note
is registered in the Note Register.
"CLASS A-3 INTEREST RATE" means ___% per annum.
"CLASS A-3 NOTE" means any of the [__%] Asset Backed Notes, Class A-3,
issued under the Indenture.
"CLASS A-3 NOTEHOLDER" means the Person in whose name a Class A-3 Note
is registered in the Note Register.
"CLASS B INTEREST RATE" means ___% per annum.
"CLASS B NOTE" means any of the [__%] Asset Backed Notes, Class B,
issued under the Indenture.
"CLASS B NOTEHOLDER" means the Person in whose name a Class B Note is
registered in the Note Register.
"CLASS C CERTIFICATEHOLDER" means the holder of any Class C Certificate
as evidenced by the Certificate Register.
"CLASS C PASS-THROUGH RATE" means [_______]% per annum.
"CLASS D CERTIFICATEHOLDER" means the holder of any Class D Certificate
as evidenced by the Certificate Register.
"CLASS D PASS-THROUGH RATE" means [_______]% per annum.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means [_______].
"CODE" means the Internal Revenue Code of 1986.
"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, or, in the case of the initial Distribution Date, the
period from the Cutoff Date to [__________]. 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:
(i) all applications of collections, (ii) all Advances and reductions of
Outstanding Advances and (iii) all distributions.
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"COMMISSION" means the Securities and Exchange Commission, and any
successor thereto.
"CONTROLLING CLASS OF CERTIFICATES" means, on any date of
determination, until the Class C Certificates have been paid in full, the Class
C Certificates, and thereafter, the Class D Certificates.
"CONTROLLING CLASS OF NOTES" means, on any date of determination, until
the Class A Notes have been paid in full, the Class A Notes, and thereafter, the
Class B Notes.
"CORPORATE TRUST OFFICE" shall have the meaning assigned to such term
in the Indenture.
"CUTOFF DATE" means [_______].
"DAMAGES" shall have the meaning assigned to such term in Section 7.02.
"DEALER" means the dealer who sold a Financed Vehicle and who
originated and assigned the related Receivable to NMAC under an existing
agreement between such dealer and NMAC.
"DEALER RECOURSE" means, with respect to a Receivable, all recourse
rights against the Dealer which originated the Receivable, and any successor
Dealer.
"DEFAULTED RECEIVABLE" means a Receivable (other than an Administrative
Receivable or a Warranty Receivable) 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.
"DEFINITIVE CERTIFICATES" and "DEFINITIVE NOTES" shall have the
meanings ascribed thereto in the Trust Agreement and the Indenture,
respectively.
"DEPOSITOR" means the Seller in its capacity as Depositor under the
Trust Agreement.
"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
calendar day of the following calendar month, or if the 15th day is not a
Business Day, the next following Business Day, commencing [_______].
"DTC" means The Depository Trust Company.
"ELIGIBLE DEPOSIT ACCOUNT" means an account maintained (i) with the
Indenture Trustee or the Owner Trustee as long as the Indenture Trustee's or the
Owner Trustee's short-term unsecured debt obligations have a rating of "P-1" by
Moody's and a rating of "A-1+" by Standard & Poor's (the "REQUIRED DEPOSIT
RATING"), or (ii) in a segregated trust account in the trust department of the
Indenture Trustee or the Owner Trustee, as the case may be.
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"ELIGIBLE INVESTMENTS" means, at any time, any one or more of the
following obligations and securities:
(i) direct obligations of, and obligations fully
guaranteed as to timely payment of principal and interest by, the
United States of America;
(ii) 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 in the highest investment
category granted thereby;
(iii) commercial paper having, at the time of the investment
or contractual commitment to invest therein, a rating from each of the
Rating Agencies in the highest investment category granted thereby;
(iv) investments in money market funds having a rating from
each of the Rating Agencies in the highest investment category granted
thereby (including funds for which the Owner Trustee, the Indenture
Trustee or any of their respective Affiliates is investment manager or
advisor);
(v) bankers' acceptances issued by any depository
institution or trust company referred to in clause (ii) above;
(vi) 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
(ii);
(vii) 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 (ii) above (except
that the rating referred to in the proviso in such clause (ii) shall be
"A-1" or higher in the case of Standard & Poor's) (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 Exchange Act
(a "broker/dealer"), the unsecured short-term debt obligations of which
are rated "P-1" by Moody's and at least "A-1" by Standard & Poor's 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 and at least "A-1" by Standard &
Poor's at the time of entering into such repurchase obligation (a
"Rated Holding Company"), or (d) an unrated
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wholly-owned subsidiary of a direct or indirect parent Rated Holding
Company, which guarantees such subsidiary's obligations under such
repurchase agreement (a "Guaranteed Counterparty"); 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 a Guaranteed
Counterparty in respect of which the unsecured short-term
ratings of Standard & Poor's 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 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 Reserve Account and the
Yield Supplement Account, the rating from Standard & Poor's 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 Indenture Trustee or the
Owner Trustee, 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 behalf of the Indenture Trustee or the Owner Trustee,
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:
(1) the Indenture Trustee or the Owner
Trustee, 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 to the effect of bankruptcy, insolvency,
reorganization and moratorium or other similar laws
affecting creditors' rights generally and to general
equitable principles;
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(2) the Indenture Trustee or the Owner
Trustee, 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;
(3) 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 Indenture Trustee or the
Owner Trustee, as applicable, shall make a demand on
the Rated Holding Company to make the payment due
under such guarantee;
(4) 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
(5) each of the Rating Agencies has
confirmed in writing to the Indenture Trustee or the
Owner Trustee, 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 Notes or
the Class C 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 unsatisfied portion of the repurchase
obligation; and
(viii) any other investment with respect to which the Servicer
has received written notification from the Rating Agencies that the
acquisition of such investment as an Eligible Investment will not
result in a withdrawal or downgrading of the ratings on the Notes or
the Class C Certificates;
provided that, unless otherwise expressly stated herein, each of the foregoing
investments shall mature no later than the Business Day prior to the
Distribution Date immediately following the date of purchase, and shall be
required to be held to such maturity.
For purposes of this definition, any reference to the highest available
credit rating of an obligation shall mean the highest available credit rating
for such obligation (excluding any "+" signs associated with such rating), or
such lower credit rating (as approved in writing by each
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Rating Agency) as will ont result in the qualification, downgrading or
withdrawal of the rating then assigned by such Rating Agency to any of
the Notes.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in the
Indenture.
"EXCESS PROCEEDS" shall have the meaning assigned to such term in
Section 6.02(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"FINAL SCHEDULED DISTRIBUTION DATE" means, with respect to the Class
A-1 Notes, the Distribution Date in [_______]; with respect to the Class A-2
Notes, the Distribution Date in [_______]; with respect to the Class A-3 Notes,
the Distribution Date in [_______]; with respect to the Class B Notes, the
Distribution Date in [_______]; with respect to the Class C Certificates, the
Distribution Date in [_______]; and with respect to the Class D Certificates,
the Distribution Date in [_______].
"FINANCED VEHICLE" means a new, near-new or used automobile or
light-duty truck, together with all accessions thereto, securing an Obligor's
indebtedness under the related Receivable.
"HOLDER" or "SECURITYHOLDER" means the registered holder of any
Certificate or Note as evidenced by the Certificate Register (as defined in the
Trust Agreement) or Note Register (as defined in the Indenture) except that,
solely for the purposes of giving certain consents, waivers, requests or demands
pursuant to the Trust Agreement or the Indenture, the interest evidenced by any
Certificate or Note registered in the name of NARC or NMAC, or any Person
actually known to a Trust Officer to be an Affiliate of NARC or NMAC, shall not
be taken into account in determining whether the requisite percentage necessary
to effect any such consent, waiver, request or demand shall have been obtained.
"INDENTURE" means the Indenture dated as of [_______], between the
Issuer and the Indenture Trustee.
"INDENTURE TRUSTEE" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"INITIAL YIELD SUPPLEMENT AMOUNT" means $[_____________].
"INSOLVENCY EVENT" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or all or substantially all of its property
in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for all or substantially all of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 90 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver,
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liquidator, assignee, custodian, trustee, sequestrator or similar official
for such Person or for all or substantially all of its property, or the
making by such Person of any general assignment for the benefit of creditors.
"INTEREST PERIOD" with respect to any Distribution Date and (i) the
Class A-1 Notes, means the period from, and including, the preceding
Distribution Date (or, in the case of the initial Interest Period, from and
including the Closing Date) to, but excluding, such Distribution Date; and (ii)
in the case of each other Class of Notes or Certificates, means the period from,
and including, the 15th day of the preceding calendar month (or, in the case of
the initial Interest Period, from and including the Closing Date) to, but
excluding, the 15th day of the month in which such Distribution Date occurs.
"INTEREST RATE" means the Class A-1 Interest Rate, the Class A-2
Interest Rate, the Class A-3 Interest Rate or the Class B Interest Rate.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940.
"ISSUER" means Nissan Auto Receivables ____-_ Owner Trust.
"LIEN" means any 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 that attach to such Financed Vehicle by
operation of law.
"LIQUIDATED RECEIVABLE" means a Defaulted Receivable that has been
liquidated by the Servicer.
"MONTHLY REMITTANCE CONDITIONS" shall have the meaning assigned to such
term in Section 5.02.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NARC" means Nissan Auto Receivables Corporation, a Delaware
corporation.
"NET LIQUIDATION PROCEEDS" means the monies collected from whatever
source 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.
"NISSAN" means Nissan Motor Co., Ltd.
"NMAC" means Nissan Motor Acceptance Corporation, in its individual
capacity and not as Servicer.
"NONRECOVERABLE ADVANCE" means any Outstanding Advance with respect to
(i) any Defaulted Receivable or (ii) any Receivable as to which the Servicer
determines that any recovery from payments made on or with respect to such
Receivable is unlikely.
"NOTE" means any one of the notes issued under the Indenture.
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"NOTE DEPOSITORY AGREEMENT" shall have the meaning assigned to such
term in the Indenture.
"NOTE FACTOR" means, with respect to any Class of Notes and any
Distribution Date, a seven-digit decimal figure obtained by dividing the
Outstanding Amount of such Class of Notes, as of the close of business on such
Distribution Date, by the initial Outstanding Amount of that Class of Notes.
"NOTEHOLDER" shall have the meaning assigned to such term in the
Indenture.
"NOTEHOLDERS' DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the Aggregate Noteholders' Interest Distributable Amount with
respect to such Distribution Date plus the Noteholders' Principal Distributable
Amount with respect to such Distribution Date for the most senior Class of
Notes.
"NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date and a Class of Notes, the excess, if any, of the sum of the
Noteholders' Monthly Interest Distributable Amount for such Class for the
preceding Distribution Date plus any outstanding Noteholders' Interest Carryover
Shortfall for such Class on such preceding Distribution Date, over the amount in
respect of interest that is actually paid on the Notes of such Class on such
preceding Distribution Date, plus, to the extent permitted by applicable law,
interest on the Noteholders' Interest Carryover Shortfall at the related
Interest Rate for the related Interest Period (calculated on the same basis as
interest on that Class of Notes for the same period).
"NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with respect to
any Distribution Date and a Class of Notes, the sum of the Noteholder's Monthly
Interest Distributable Amount for such Class plus any outstanding Noteholder's
Interest Carryover Shortfall for such Class as of the close of the immediately
preceding Distribution Date.
"NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date and a Class of Notes, interest accrued for the
related Interest Period (calculated on the basis of, in the case of Class A-1
Notes, the actual number of days in such Interest Period and a year assumed to
consist of 360 days, and in the case of all other Classes of Notes, such
Interest Period being assumed to consist of 30 days and a year assumed to
consist of 360 days) at the related Interest Rate for such Class of Notes on the
outstanding amount of the Notes of such Class on the immediately preceding
Distribution Date, after giving effect to all payments of principal to
Noteholders of such Class on or prior to such Distribution Date (or, in the case
of the first Distribution Date, on the original principal amount of such Class
of Notes).
"NOTEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, the Noteholders' Percentage of the Available
Principal for such Distribution Date.
"NOTEHOLDERS' PERCENTAGE" means (i) for each Distribution Date until
the aggregate principal amount of all of the Notes has been paid in full, 100%;
and (ii) thereafter, 0%.
"NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, with respect to any
Distribution Date and a Class of Notes, the excess, if any, of the Noteholders'
Monthly Principal
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Distributable Amount for such Class plus any outstanding Noteholders'
Principal Carryover Shortfall for such Class for the preceding Distribution
Date over the amount in respect of principal that is actually paid as
principal on such Class on such current Distribution Date.
"NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to
any Distribution Date and a Class of Notes, the sum of (i) the Noteholders'
Monthly Principal Distributable Amount for such Distribution Date, (ii) any
outstanding Noteholders' Principal Carryover Shortfall for such Class as of the
close of the immediately preceding Distribution Date, and (iii) on the Final
Scheduled Distribution Date for such Class of Notes, the amount necessary to
reduce the outstanding principal amount of such Class of Notes to zero;
PROVIDED, HOWEVER, that the Noteholders' Principal Distributable Amount with
respect to a Class of Notes shall not exceed the outstanding amount of such
Class of Notes.
"NOTE OWNER" shall have the meaning assigned to such term in the
Indenture.
"NOTE POOL FACTOR" means, with respect to any Class of Notes and any
Distribution Date, a seven-digit decimal figure obtained by dividing the
Outstanding Amount of such Class of Notes as of the close of business on the
last day of the related Collection Period by the Original Pool Balance.
"NOTE REGISTER" means the register maintained by the Indenture Trustee
pursuant to the Indenture recording the name of each Noteholder.
"OBLIGOR" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle or any other Person who owes payments under the Receivable (but
excluding 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 the case may be.
"OPINION OF COUNSEL" means one or more written opinions of counsel who
may, except as otherwise provided herein, be an employee of or counsel to the
Issuer, the Seller or the Servicer, which counsel shall be reasonably acceptable
to the Indenture Trustee, the Owner Trustee or the Rating Agencies, as the case
may be.
"OPTIONAL PURCHASE PERCENTAGE" means 10.00%.
"OPTIONAL PURCHASE PRICE" means, with respect to any Distribution Date,
the sum of (i) the Outstanding Amount of all Classes of Notes, (ii) the
Noteholders' Interest Distributable Amount for all Classes of Notes for such
Distribution Date, (iii) the Certificate Balance of the Class C Certificates,
and (iv) the Certificateholders' Interest Distributable Amount for the Class C
Certificates for such Distribution Date.
"ORIGINAL CERTIFICATE BALANCE" means $[_________] for the Class C
Certificates and $[_________] for the Class D Certificates.
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"ORIGINAL POOL BALANCE" means the aggregate Principal Balance of the
Receivables on the Cutoff Date.
"ORIGINAL PRINCIPAL AMOUNT " means $[_________] for the Class A-1
Notes, $[_________] for the Class A-2 Notes, $[_________] for the Class A-3
Notes and $[_________] for the Class B Notes.
"OUTSTANDING ADVANCES" means, with respect to a Receivable and the last
day of a Collection Period, the sum of all Advances made as of or prior to such
date, minus all payments or collections as of or prior to such date that are
specified in Sections 5.04(b) and 5.04(d) as applied to reimburse all unpaid
Advances with respect to such Receivable.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes,
or, if indicated by the context, all Notes of any Class, outstanding at the date
of determination; PROVIDED that for the purposes of determining whether the vote
of the requisite percentage of Noteholders necessary to effect any consent,
waiver, request or demand shall have been obtained, the Outstanding Amount shall
be deemed to be reduced by the amount equal to the principal amount (without
giving effect to this provision) evidenced by any Note registered in the name of
the Seller, the Servicer or any Person actually known to a Trust Officer of the
Owner Trustee or Indenture Trustee, as the case may be, to be an Affiliate of
the Seller or the Servicer.
"OWNER TRUST ESTATE" means all right, title and interest of the Trust
in and to the Receivables (other than the Warranty Receivables for which the
Seller has paid the Warranty Purchase Payment in accordance with Section 3.02
and Administrative Receivables for which the Servicer has paid the
Administrative Purchase Payment in accordance with Section 4.06), and all monies
paid thereon, and all monies accrued thereon, on or after the Cutoff Date;
security interests in the Financed Vehicles and any accessions thereto; funds
deposited in the Collection Account; all property (including the right to
receive Net Liquidation Proceeds) that shall have secured a Receivable and that
shall have been acquired by or on behalf of the Owner Trustee; proceeds from
claims on any physical damage, credit life or disability insurance policies
covering the Financed Vehicles or the Obligors; all Dealer Recourse; all right,
title and interest of the Seller in and to the Purchase Agreement and the Yield
Supplement Agreement; all right, title and interest of the Owner Trustee and the
Trust pursuant to this Agreement and the Administration 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.
"OWNER TRUSTEE" means the Person acting as Owner Trustee under the
Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.
"PASS-THROUGH RATE" means the Class C Pass-Through Rate or the Class D
Pass-Through Rate.
"PAYING AGENT" shall have the meaning assigned to such term in the
Indenture.
"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.
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"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 Administrative Receivables, Warranty Receivables and Defaulted
Receivables) as of the close of business on such day; PROVIDED, HOWEVER, that
where the Pool Balance is relevant in determining whether the requisite
percentage of Certificateholders or Noteholders (or relevant Class or Classes of
Certificates or Notes, as the case may be) 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 applicable Certificate or Note registered in the name of the Seller, the
Servicer or any Person actually known to a Trust Officer of the Owner Trustee or
the Indenture Trustee, as the case may be, to be an Affiliate of the Seller or
the Servicer.
"POOL FACTOR" for a particular Class of Notes or Certificates on any
Distribution Date means a seven-digit decimal figure indicating the principal
amount of such Class of Notes or the Certificate Balance of such Class of
Certificates, as the case may be, as of the close of business on the last day of
the related Collection Period as a fraction of the Original Pool Balance.
"PREPAYMENT" means, with respect to any Receivable, any prepayment,
whether in part or in full, in respect of such Receivable.
"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
allocable to principal, (ii) any refunded portion of extended warranty
protection plan or service contract costs, or of physical damage, credit life or
disability insurance premiums included in the Amount Financed, (iii) any payment
of the Administrative Purchase Payment or the Warranty Purchase Payment with
respect to the Receivable allocable to principal and (iv) any Net Liquidation
Proceeds allocable to principal.
"PURCHASE AGREEMENT" means that certain agreement, dated as of
[______________]. among ___________, relating to the purchase by the Seller from
NMAC of the Receivables.
"RATING AGENCY" means, as of any date, any of the nationally recognized
statistical rating organizations that has been requested by the Seller or one of
its Affiliates to rate any Class of Certificates or Notes and that is rating
such Class of Certificates or Notes, as the case may be, on such date.
"RECEIVABLE" means any retail installment sale contract that appears on
Schedule A to this Agreement (which Schedule A may be in the form of microfiche,
CD, datatape or paper) and that has not been released by the Owner Trustee from
the Trust.
"RECEIVABLE FILE" means the documents specified in Section 2.02
pertaining to a particular Receivable.
"RECORD DATE" means, with respect to the Notes or Certificates of any
Class and each Distribution Date, the 14th day of the calendar month in which
such Distribution Date occurs, or, if Definitive Notes representing any Class of
Notes or Definitive Certificates representing any Class of Certificates have
been issued, the last day of the Collection Period preceding the related
Distribution Date. Any amount stated "as of a Record Date" or "on a Record Date"
shall give
16
effect to (i) all applications of collections, and (ii) all distributions to
any party under this Agreement, the Indenture and the Trust Agreement or to
the related Obligor, as the case may be, in each case as determined as of the
opening of business on the related Record Date.
"RELEVANT TRUSTEE" means (i) with respect to the control over or
appropriate designation denoting ownership or control over any property
comprising a portion of the Owner Trust Estate that either is not conveyed or
pledged to the Indenture Trustee for the benefit of the Noteholders pursuant to
the Granting Clause of the Indenture or that has been released from the lien of
the Indenture, the Owner Trustee, and (ii) with respect to any property
comprising a portion of the Trust Estate (as defined in the Indenture) that has
not been released from the lien of the Indenture, the Indenture Trustee;
PROVIDED, HOWEVER, that with respect to any property that is under the joint or
separate control of a co-trustee or separate trustee under the Trust Agreement
or the Indenture, respectively, "Relevant Trustee" shall refer to either or both
of the Owner Trustee and such co-trustee or separate trustee or to either or
both of the Indenture Trustee and such co-trustee or separate trustee, as the
case may be.
"REQUIRED DEPOSIT RATING" shall have the meaning assigned to such term
in the definition of "Eligible Deposit Account."
"REQUIRED RATE" means, with respect to each Collection Period, the sum
of the Servicing Rate and [specify rate].
"REQUIRED YIELD SUPPLEMENT AMOUNT" means, with respect to any
Distribution Date, an amount equal to the lesser of (i) the maximum aggregate
Yield Supplement Deposit that will become due under the Yield Supplement
Agreement, assuming that payments on the Receivables are made on their scheduled
due dates and no Receivable becomes a prepaid Receivable, or (ii) the Initial
Yield Supplement Amount.
"RESERVE ACCOUNT" means the account designated as such, established and
maintained pursuant to Section 5.07.
"RESERVE ACCOUNT INITIAL DEPOSIT" means $[_______].
"SCHEDULE OF RECEIVABLES" means the schedule of receivables attached as
Schedule A to this Agreement, as it may be amended from time to time.
"SCHEDULED PAYMENT" on a Receivable means the payment required to be
made by the Obligor during each Collection Period that is sufficient to amortize
the related Principal Balance under the Simple Interest Method over the term of
the Receivable and to provide interest at the related APR.
"SECURITIES ACCOUNT CONTROL AGREEMENT" means the Securities Account
Control Agreement dated [__________], among the Seller, [___________], as
Securities Intermediary thereunder, [__________], as Indenture Trustee, and
[___________], as Owner Trustee, pursuant to which the Reserve Account and the
Yield Supplement Account will be established and maintained.
17
"SECURITIES INTERMEDIARY" shall have the meaning assigned to such term
in the Securities Account Control Agreement.
"SECURITIES ACT" means the Securities Act of 1933.
"SECURITYHOLDERS" - see the definition of "Holder."
"SELLER" means NARC, as the seller of the Receivables under this
Agreement, and each successor to NARC (in the same capacity) pursuant to Section
6.04.
"SERVICER" means NMAC, as the servicer of the Receivables, and each
successor to NMAC (in the same capacity) pursuant to Section 7.03 or 8.02.
"SERVICER'S CERTIFICATE" means a certificate completed and executed on
behalf of the Servicer by the president, any executive vice president, any vice
president, the treasurer, any assistant treasurer, the controller or any
assistant controller of the Servicer pursuant to Section 4.08.
"SERVICER DEFAULT" means an event specified in Section 8.01.
"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.
"SPECIFIED RESERVE ACCOUNT BALANCE" means with respect to any
Distribution Date, an amount equal to [INSERT FORMULA].
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
Division of the XxXxxx-Xxxx Companies.
"SUCCESSOR SERVICER" means any entity appointed as a successor to the
Servicer pursuant to Section 8.02.
"SUPPLEMENTAL SERVICING FEE" means, with respect to any Distribution
Date, all late fees, prepayment charges and other administrative fees and
expenses or similar charges allowed by applicable law with respect to the
Receivables received by the Servicer during the related Collection Period and
any interest earned from the investment of monies in the Accounts (other than
the Yield Supplement Account and the Reserve Account) during the related
Collection Period.
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"TOTAL SERVICING FEE" means the sum of the Base Servicing Fee and the
Supplemental Servicing Fee.
"TRUST" means the Issuer.
"TRUST AGREEMENT" means the Amended and Restated Trust Agreement, dated
as of [_______], between the Seller and the Owner Trustee.
"TRUST COLLECTION ACCOUNT" shall have the meaning assigned to such term
in Section 5.01(c).
"TRUST ESTATE" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
the Indenture for the benefit of the Noteholders (including, without limitation,
all property and interests granted to the Indenture Trustee pursuant to the
Granting Clause of the Indenture), including all proceeds thereof.
"TRUST OFFICER" means, in the case of the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.
"USAP" shall have the meaning assigned to such term in Section 4.10.
"UNITED STATES" means the United States of America.
"WARRANTY PURCHASE PAYMENT" for any Warranty Receivable as of the last
day 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 related
APR, after giving effect to the receipt of monies collected (from whatever
source other than Advances) on such Warranty Receivable, if any, during
Collection Period.
"WARRANTY RECEIVABLE" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Seller pursuant to
Section 3.02.
"YIELD SUPPLEMENT ACCOUNT" means the segregated trust account
established and maintained for the benefit of the Noteholders and the Class C
Certificateholders pursuant to Section 5.08(a).
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"YIELD SUPPLEMENT AGREEMENT" means the agreement, dated as of the date
of this agreement, between [___________________], substantially in the form
attached hereto as EXHIBIT A.
"YIELD SUPPLEMENT AMOUNT" means, with respect to any Distribution Date,
the aggregate amount on deposit in the Yield Supplement Account after giving
effect to the withdrawal therefrom of the related Yield Supplement Deposit and
without regard to any amounts on deposit therein in respect of interest or
investment earnings earned on the investment of amounts on deposit therein in
Eligible Investments for any period.
"YIELD SUPPLEMENT DEPOSIT" means, with respect to any Distribution
Date, the amount by which (i) the aggregate amount of interest that would have
been due during the related Collection Period on all Yield Supplemented
Receivables if such Yield Supplemented Receivables bore interest at the Required
Rate exceeds (ii) the amount of interest accrued on such Yield Supplemented
Receivables at their respective APRs and due during such Collection Period.
"YIELD SUPPLEMENTED RECEIVABLE" means any Receivable that has an APR
less than the Required Rate.
SECTION 1.02 USAGE OF TERMS. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments, amendments and restatements and supplements thereto or
changes therein entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; references to laws include their amendments and
supplements, the rules and regulations thereunder and any successors thereto;
and the term "including" means "including without limitation."
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01 CONVEYANCE OF RECEIVABLES.
(a) In consideration of the premises and the agreements, provisions and
covenants herein contained and other good and valuable consideration to be
delivered to the Seller hereunder, on behalf of the Issuer, the Seller does
hereby sell, transfer, assign and otherwise convey to the Owner Trustee on
behalf of the Issuer, without recourse (but subject to the Seller's obligations
in this Agreement), in trust for the benefit of the Noteholders and the
Certificateholders:
(i) all right, title and interest of the Seller in and to
the Receivables listed in SCHEDULE A hereto and all monies due thereon
or paid thereunder or in respect thereof (including proceeds of the
repurchase of Receivables by the Seller pursuant to
20
Section 3.02 or the purchase of Receivables by the Servicer pursuant
to Section 4.06 or 9.01) on or after the Cutoff Date;
(ii) amounts on deposit in the Accounts;
(iii) the right of the Seller in the security interests in
the Financed Vehicles granted by the Obligors pursuant to the
Receivables and any related property;
(iv) the right 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;
(v) the right of the Seller through NMAC in any Dealer
Recourse;
(vi) the right of the Seller under this Agreement, the
Purchase Agreement and the Yield Supplement Agreement;
(vii) the right of the Seller to realize upon any property
(including the right to receive future Net Liquidation Proceeds) that
shall have secured a Receivable;
(viii) the right of the Seller in rebates of premiums and
other amounts relating to insurance policies and other items financed
under the Receivables in effect as of the Cutoff Date;
(ix) all other assets comprising the Owner Trust Estate; and
(x) all proceeds of the foregoing.
Concurrently therewith and in exchange therefor, the Issuer shall
deliver to, or to the order of, the Seller the Notes and the Certificates.
(b) It is the intention of the Seller that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables from
the Seller to the Issuer and the beneficial interest in and title to the
Receivables shall not be part of the Seller's estate in the event of the filing
of a bankruptcy petition by or against the Seller under any bankruptcy law. The
Seller agrees to execute and file all filings (including filings under the UCC)
necessary in any jurisdiction to provide third parties with notice of the sale
of the Receivables pursuant to this Agreement and to perfect such sale under the
UCC.
(c) Although the parties hereto intend that the transfer and assignment
contemplated by this Agreement be a sale, if such transfer and assignment is
deemed to be other than a sale, the parties intend that all filings described in
the foregoing paragraph shall give the Owner Trustee on behalf of the Issuer a
first priority perfected security interest in, to and under the Receivables, and
other property conveyed hereunder and all proceeds of any of the foregoing. This
Agreement shall be deemed to be the grant of a security interest from the Seller
to the Owner Trustee on behalf of the Issuer, and the Owner Trustee on behalf of
the Issuer shall have all the rights, powers and privileges of a secured party
under the UCC.
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(d) In connection with the foregoing conveyance, the Servicer shall
maintain its computer system so that, from and after the time of sale of the
Receivables to the Owner Trustee on behalf of the Issuer under this Agreement,
the Servicer's master computer records that refer to any Receivable indicate
clearly the interest of the Issuer in such Receivables and that such Receivable
is owned by the Issuer and controlled by the Owner Trustee on behalf of the
Issuer. Indication of the Issuer's ownership of a Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
Receivable has been paid in full, repurchased or assigned pursuant to this
Agreement.
(e) Ownership and control of the Receivables, as among the Issuer, the
Owner Trustee and the Indenture Trustee (on behalf of the Noteholders and
Certificateholders) shall be governed by the Indenture.
SECTION 2.02 CUSTODY OF RECEIVABLES FILES. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Owner Trustee
on behalf of the Issuer, upon the execution and delivery of this Agreement,
appoints the Servicer, and the Servicer accepts such appointment, to act as the
agent of the Issuer as custodian of the following documents or instruments that
are hereby constructively delivered to the Owner Trustee with respect to each
Receivable:
(a) the original of such Receivable (or a photocopy or other image
thereof that the Servicer shall keep on file in accordance with its customary
procedures) fully executed by the Obligor;
(b) the original credit application fully executed by the related
Obligor (or a photocopy or other image thereof that the Servicer shall keep on
file in accordance with its customary procedures);
(c) the original certificate of title (or a photocopy or other image
thereof or such documents that the Servicer shall keep on file in accordance
with its customary procedures), evidencing the security interest of the Servicer
in the related Financed Vehicle; and
(d) any and all other documents that the Servicer shall keep on file,
in accordance with its customary procedures, relating to such Receivable, the
related Obligor or Financed Vehicle.
SECTION 2.03 ACCEPTANCE BY OWNER TRUSTEE. The Owner Trustee hereby
acknowledges its acceptance, on behalf of the Issuer, pursuant to this
Agreement, of all right, title and interest in and to the Receivables conveyed
by the Seller pursuant to this Agreement and declares and shall declare from and
after the date hereof that the Owner Trustee holds and shall hold such right,
title and interest, upon the terms and conditions set forth in this Agreement.
ARTICLE III
THE RECEIVABLES
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SECTION 3.01 REPRESENTATIONS AND WARRANTIES OF THE SELLER WITH RESPECT
TO THE RECEIVABLES. The Seller makes the following representations and
warranties as to the Receivables on which the Issuer is deemed to have relied in
acquiring the Receivables. Such representations and warranties speak as of the
execution and delivery of this Agreement and as of the Closing Date, but shall
survive the sale, transfer and assignment of the Receivables to the Issuer and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) CHARACTERISTICS OF RECEIVABLES. Each Receivable (i) 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, (ii) created a valid, subsisting and
enforceable security interest in favor of NMAC in such 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 Owner Trustee in accordance with the
terms hereof, (iii) 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
(iv) provides for level monthly payments (provided that the payment in
the first or last month in the life of the Receivable may be minimally
different from the level payment) that fully amortize the Amount
Financed over an original term of no greater than [___] months and
yield interest at the related APR.
(b) SCHEDULE OF RECEIVABLES. The information set forth in
SCHEDULE A to this 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 (other than contracts originated in Alabama) 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.
(c) 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 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 Xxxxxxxx-Xxxx 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.
(d) 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,
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reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general equitable principles.
(e) SECURITY INTEREST IN FINANCED VEHICLE. (i) Immediately
prior to the sale, assignment and transfer thereof to the Owner
Trustee, each Receivable was secured by a validly perfected first
priority security interest in the Financed Vehicle in favor of NMAC as
secured party or all necessary and appropriate actions shall have been
commenced that would result in the valid perfection of a first priority
security interest in the Financed Vehicle in favor of NMAC as secured
party, and (ii) as of the Cutoff Date, according to the records of
NMAC, no Financed Vehicle has been repossessed and not reinstated.
(f) 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.
(g) NO WAIVER. No provision of a Receivable has been waived in
a manner that is prohibited by the provisions of Section 4.01 or that
would cause such Receivable to fail to meet all of the other
requirements and warranties made by the Seller herein with respect
thereto.
(h) 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.
(i) 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.
(j) 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 (other than deferrals and waivers of late payment
charges or fees permitted hereunder).
(k) INSURANCE. NMAC, in accordance with its customary
procedures, has determined at the time of origination of each
Receivable that the related Obligor has agreed to obtain physical
damage insurance covering the Financed Vehicle and the Obligor is
required under the terms of the related Receivable to maintain such
insurance.
(l) TITLE. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute a sale of the Receivables
from the Seller to the Trust and that the beneficial interest in and
title to the Receivables not be part of the Seller's estate in the
event of the filing of a bankruptcy petition by or against the Seller
under any bankruptcy law. Immediately prior to the transfer and
assignment herein contemplated,
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the Seller had good and marketable title to each Receivable free and
clear of all Liens and immediately upon the transfer thereof, the
Owner Trustee, for the benefit of the Noteholders and the
Certificateholders, shall have good and marketable title to each
Receivable, free and clear of all Liens and rights of others.
(m) 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 Notes or the Certificates are unlawful,
void or voidable.
(n) ALL FILINGS MADE. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give the
Relevant Trustee a first priority perfected ownership interest in the
Receivables have been made or have been delivered in form suitable for
filing to the Relevant Trustee.
(o) CHATTEL PAPER. Each Receivable constitutes "chattel
paper," as such term is defined in the UCC.
(p) SIMPLE INTEREST RECEIVABLES. All of the Receivables are
Simple Interest Receivables.
(q) ONE ORIGINAL. There is only one original executed copy of
each Receivable.
(r) NO AMENDMENTS. No Receivable has been amended such that
the amount of the Obligor's Scheduled Payments has been increased.
(s) APR. The APR of each Receivable equals or exceeds [__%].
(t) MATURITY. As of the Cutoff Date, each Receivable had a
remaining term to maturity of not less than [____] months and not
greater than [____] months.
(u) BALANCE. Each Receivable had an original Principal Balance
of not more than $[_______] and, as of the Cutoff Date, had a principal
balance of not less than $[_______] and not more than $[_______].
(v) DELINQUENCY. No Receivable was more than 29 days past due
as of the Cutoff Date and no Receivable has been extended by more than
two months.
(w) BANKRUPTCY. No Obligor was the subject of a bankruptcy
proceeding (according to the records of NMAC) as of the Cutoff Date.
(x) TRANSFER. Each Receivable prohibits the sale or transfer
of the Financed Vehicle without the consent of NMAC.
(y) NEW, NEAR-NEW AND USED VEHICLES. Each Financed Vehicle was
a new, near-new or used automobile or light-duty truck at the time the
related Obligor executed the retail installment sale contract.
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(z) ORIGINATION. Each Receivable has an origination date on or
after [_______].
(aa) LOCATION OF RECEIVABLE FILES. The Receivable Files shall
be kept at one or more of the locations listed in SCHEDULE B hereto.
(bb) FORCED-PLACED INSURANCE PREMIUMS. No contract
relating to any Receivable has had forced-placed insurance premiums
added to the amount financed.
(cc) NO FRAUD OR MISREPRESENTATION. To the 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
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery of
any breach of the Seller's representations and warranties pursuant to Section
3.01 that materially and adversely affects any Receivable. Unless the breach
shall have been cured by the last day of the second Collection Period following
such discovery (or, at the Seller's election, the last day of the first
Collection Period following such discovery), the Seller shall be obligated
(whether or not such breach was known to the Seller on the Closing Date), and
the Owner 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. A breach of the
representation in Section 3.01(a)(iv), (t) or (u) shall be deemed to affect
materially and adversely the related Receivable. In consideration of the
purchase of the Receivables, the Seller shall remit the Warranty Purchase
Payment in the manner specified in Section 5.05. For purposes of this Section
3.02, the Warranty Purchase Payment of a Receivable that is not consistent with
the Seller's warranty pursuant to Section 3.01(a)(iv) 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 Owner
Trustee, the Trust, the Indenture Trustee (by operation of the assignment of the
Owner Trustee's rights hereunder pursuant to the Indenture) or any
Securityholder with respect to a breach of the Seller's representations and
warranties pursuant to Section 3.01 shall be to require the Seller to repurchase
Receivables pursuant to this Section and to enforce the obligation of NMAC to
the Seller to repurchase such Receivables pursuant to the Purchase Agreement.
SECTION 3.03 DUTIES OF SERVICER AS CUSTODIAN.
(a) SAFEKEEPING. The Servicer shall hold the Receivable Files as
custodian for the benefit of the Issuer and maintain such accurate and complete
accounts, records and computer systems pertaining to each Receivable File as
shall enable the Issuer to comply with this Agreement. In performing its duties
as custodian, the Servicer shall act with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to the receivable
files relating to 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
this Agreement and of the related accounts, records and computer systems,
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in such a manner as shall enable the Issuer, the Owner Trustee or the
Indenture Trustee to verify the accuracy of the Servicer's record keeping.
The Servicer shall promptly report to the Issuer and the Indenture Trustee
any material failure on its part to hold the Receivable Files and maintain
its accounts, records and computer systems as herein provided in all material
respects and shall promptly take appropriate action to remedy any such
material failure. Nothing herein shall be deemed to require an initial review
or any periodic review by the Issuer, the Owner Trustee or the Indenture
Trustee of the Receivable Files.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall maintain
each Receivable File at one of its offices specified in SCHEDULE B or at such
other office as shall be specified to the Owner Trustee and the Indenture
Trustee by written notice from the Servicer not later than 90 days after any
change in location. The Servicer shall make available to the Owner Trustee and
the Indenture Trustee or their respective duly authorized representatives,
attorneys or auditors a list of locations of the Receivable Files and the
related accounts, records and computer systems maintained by the Servicer at
such times during normal business hours as the Owner Trustee or the Indenture
Trustee shall instruct. The Servicer shall permit the Owner Trustee, the
Indenture Trustee and their respective agents at any time during normal business
hours upon reasonable prior notice to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(c) RELEASE OF DOCUMENTS. Upon the occurrence and during the
continuation of a Servicer Default or to the extent necessary for the Indenture
Trustee to comply with its obligations under this Agreement, the Servicer shall,
upon instruction from the Indenture Trustee, release any Receivable File to the
Indenture Trustee, the Indenture Trustee's agent or the Indenture Trustee's
designee, as the case may be, at such place or places as the Indenture Trustee
may designate, as soon as practicable.
SECTION 3.04 INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Trust Officer of the Owner
Trustee or the Indenture Trustee.
SECTION 3.05 CUSTODIAN'S INDEMNIFICATION. The Servicer, as custodian,
shall indemnify the Issuer, the Owner Trustee and the Indenture Trustee for any
and all liabilities, obligations, losses, compensatory damages, payments, costs
or expenses of any kind whatsoever that may be imposed on, incurred by or
asserted against any of them as the result of any improper act or omission in
any way relating to the maintenance and custody by the Servicer as custodian of
the Receivable Files; PROVIDED, HOWEVER, that the Servicer shall not be liable
to the Owner Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Owner Trustee and the
Servicer shall not be liable to the Indenture Trustee for any portion of any
such amount resulting from the willful misfeasance, bad faith or negligence of
the Indenture Trustee.
SECTION 3.06 EFFECTIVE PERIOD AND TERMINATION. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date, and
shall continue in full force and effect until terminated pursuant to this
Section. If NMAC shall resign as Servicer in accordance with the provisions
of this Agreement or if all of the rights and obligations of any Servicer
shall have been terminated under Section 8.01, the appointment of NMAC as
custodian may be terminated
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by the Indenture Trustee or by the Holders of Notes evidencing not less than
25% of the Outstanding Amount of the Notes (but excluding for purposes of
such calculation and action all Securities held or beneficially owned by
NMAC, NARC or any of their Affiliates) or, with the consent of Holders of the
Notes evidencing not less than 25% of the Outstanding Amount of the Notes, by
the Owner Trustee or by the Certificateholders evidencing not less than 25%
of the Certificate Balance (but excluding for purposes of such calculation
and action all Securities held or beneficially owned by NMAC, NARC or any of
their Affiliates), in the same manner as the Indenture Trustee or such
Holders may terminate the rights and obligations of the Servicer under
Section 8.01. The Indenture Trustee or, with the consent of the Indenture
Trustee, the Owner Trustee may terminate the Servicer's appointment as
custodian, with cause, at any time upon written notification to the Servicer,
and without cause upon 30 days' prior written notification to the Servicer.
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 Relevant Trustee or the agent
thereof at such place or places as the Relevant Trustee may reasonably
designate.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01 DUTIES OF SERVICER.
(a) 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 Defaulted
Receivables, Administrative Receivables or Warranty Receivables, the Servicer
shall not change the amount of or reschedule the due date of any Scheduled
Payment, change the APR of, or extend any Receivable except as provided herein
or change any material term of a Receivable; PROVIDED, HOWEVER, that:
(1) if a default, breach, violation, delinquency or event
permitting acceleration under the terms of any Receivable shall have
occurred or, in the judgment of the Servicer, is imminent, the Servicer
may (A) extend such Receivable for credit related reasons that would be
acceptable to the Servicer with respect to comparable new, near-new or
used automobile or light-duty truck receivables that it services for
itself, if the final scheduled payment date of such Receivable as
extended would not be later than the last day of the Collection Period
preceding the Final Scheduled Distribution Date for the Class C
Certificates; or (B) 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; or
(2) if 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
28
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
last day of the Collection Period preceding the Final Scheduled
Distribution Date for the Class C Certificates; and
(3) 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.
(b) The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of Obligors on the Receivables, investigating
delinquencies, sending remittance advises to Obligors, reporting tax information
to Obligors, accounting for collections, furnishing monthly and annual
statements to the Owner Trustee and the Indenture Trustee with respect to
distributions and making Advances pursuant to Section 5.04.
(c) Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the Trust,
the Owner Trustee, the Indenture Trustee and the Securityholders or any of them,
any and all instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to the
Receivables or to the Financed Vehicles securing the Receivables. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Owner
Trustee (in the case of a Receivable other than an Administrative Receivable or
a Warranty 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 Owner 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 Indenture Trustee or the
Securityholders. The Owner 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.
(d) The Servicer, at its expense, shall obtain on behalf of the Trust
all licenses, if any, required by the laws of any jurisdiction to be held by the
Trust in connection with ownership of the Receivables, and shall make all
filings and pay all fees as may be required in connection therewith during the
term hereof. Nothing in the foregoing or in any other section of this Agreement
shall be construed to prevent the Servicer from implementing new programs,
whether on an intermediate, pilot or permanent basis, or on a regional or
nationwide basis, or from modifying its standards, policies and procedures as
long as, in each case, the Servicer does or would implement such programs or
modify its standards, policies and procedures in respect of comparable assets
serviced for itself in the ordinary course of business.
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 the 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.
SECTION 4.03 REALIZATION UPON RECEIVABLES. On behalf of the Trust, the
Servicer shall use commercially reasonable efforts, consistent with its
customary servicing procedures, to repossess or otherwise convert the ownership
of the Financed Vehicle securing any Receivable
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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 related 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 Net Liquidation Proceeds.
SECTION 4.04 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 Servicer is
hereby authorized to take such steps as are necessary to re-perfect such
security interest on behalf of the Issuer and the Indenture Trustee in the event
of the relocation of a Financed Vehicle or for any other reason. If the
assignment of a Receivable to the Trust is insufficient, without a notation on
the related Financed Vehicle's certificate of title, to grant to the Trust a
first priority perfected security interest in the related Financed Vehicle, the
Servicer hereby agrees to serve as the agent of the Trust for the purpose of
perfecting the security interest of the Trust in such Financed Vehicle and
agrees that the Servicer's listing as the secured party on the certificate of
title is in this capacity as agent of the Trust.
SECTION 4.05 COVENANTS OF SERVICER.
(a) The Servicer shall not release the Financed Vehicle securing any
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.
(b) 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, such Receivable shall be designated by the
Servicer to be a Defaulted Receivable, provided that such Receivable otherwise
meets the definition of a Defaulted Receivable.
SECTION 4.06 PURCHASE OF RECEIVABLES UPON BREACH. The Servicer or the
Owner Trustee shall inform the other party and the Indenture Trustee promptly,
in writing, upon the discovery of any breach by the Servicer of its obligations
under the second sentence of Section 4.01 or under Section 4.02, 4.04 or 4.05
that would materially and adversely affect any Receivable. 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 discovery), the Servicer shall (whether or not such
breach was known to the Servicer on the Closing Date) purchase any Receivable
materially and adversely affected by such breach as of such last day. In
consideration of such Receivable, the Servicer shall remit the Administrative
Purchase Payment (as reduced by any Outstanding Advances with respect to such
Receivable) in the manner specified in Section 5.05. For the purposes of this
Section 4.06, the Administrative Purchase Payment shall consist in part of a
release by the Servicer of all rights of reimbursement with respect to
Outstanding Advances with respect to the purchased Receivable. The sole remedy
of the Indenture Trustee, the Owner Trustee, the Trust or the Securityholders
30
against the Servicer with respect to a breach by the Servicer of its obligations
under the second sentence of Section 4.01 or under Section 4.02, 4.04 or 4.05
shall be to require the Servicer to purchase Receivables pursuant to this
Section 4.06.
SECTION 4.07 SERVICING FEE AND EXPENSES. As compensation for the
performance of its obligations hereunder, the Servicer shall be entitled to
receive on each Distribution Date the Total Servicing Fee. The Base Servicing
Fee in respect of a Collection Period shall be calculated based on a 360 day
year comprised of twelve 30-day months. Except to the extent otherwise provided
herein, the Servicer shall be required to pay all expenses incurred by it in
connection with its activities under this Agreement (including fees and
disbursements of the Indenture Trustee and independent accountants, taxes
imposed on the Servicer, expenses incurred in connection with distributions and
reports to Securityholders and all other fees and expenses not expressly stated
under this Agreement to be for the account of the Securityholders).
SECTION 4.08 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 the Owner Trustee, each Paying Agent, and the Indenture
Trustee, with a copy to each Rating Agency, a Servicer's Certificate containing
all information necessary to make the distributions pursuant to Sections 5.06,
5.07 and 5.08 (including the amount of the aggregate collections on the
Receivables, the aggregate Advances to be made by the Servicer, if any, the
aggregate Administrative Purchase Payments for any Administrative Receivables to
be purchased by the Servicer, and the aggregate Warranty Purchase Payments for
any Warranty Receivables to be purchased by the Seller) for the Collection
Period preceding the date of such Servicer's Certificate, all information
necessary for the Owner Trustee to send statements to Certificateholders and the
Indenture Trustee to send statements to the Noteholders pursuant to the Trust
Agreement or Indenture, as the case may be. Each of the Owner Trustee and the
Indenture Trustee may conclusively rely on the information in any Servicer's
Certificate and shall have no duty to confirm or verify the contents thereof.
(b) Concurrently with delivery of the Servicer's Certificate in each
month, the Servicer shall deliver to the underwriters of the Class A Notes,
the Class B Notes, the Class C Certificates and, if any Class D Certificate
is held by a Person other than the Seller or any Affiliate of the Seller, to
such Class D Certificateholder, the Note Factor for each Class of Notes, the
Certificate Factor for each Class of Certificates, and the Pool Factor for
each Class of Notes and Certificates, in each case as of the close of
business on the Distribution Date occurring in such month.
SECTION 4.09 ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT. (a)
The Servicer shall deliver to the Owner Trustee, the Indenture Trustee and each
of the Rating Agencies, on or before June 30 of each year, beginning June 30,
_____, an Officers' Certificate with respect to the prior twelve months ended on
March 31 of such calendar year (or with respect to the initial Officer's
Certificate, the period from the date of the initial issuance of the Securities
to March 31, ______), stating that that (1) a review of the activities of the
Servicer during the preceding 12-month (or shorter) period and of its
performance under this Agreement has been made under such officer's supervision
and (2) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
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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 or Noteholder by a request in writing
to the Owner Trustee or the Indenture Trustee addressed as set forth in Section
10.03 hereof.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency, 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 that with the giving of notice
or lapse of time, or both, would become a Servicer Default under Section 8.01.
The Seller shall deliver to the Owner Trustee, the Indenture Trustee and to each
such Rating Agency, 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 that with the giving of notice or lapse of time, or
both, would become an Event of Default under Section 8.01(a)(ii) or of any
lowering of the rating described in clause (ii)(A) of the definition of "Monthly
Remittance Condition."
SECTION 4.10 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT.
The Servicer shall cause a firm of independent certified public accountants, who
may also render other services to the Servicer, the Seller or their Affiliates,
to deliver to the Owner Trustee, the Indenture Trustee and each of the Rating
Agencies, on or before June 30 of each year, beginning June 30, ______, with
respect to the prior 12 months ended on March 31 of such year (or with respect
to the initial reports, the period from the date of the initial issuance of the
Securities to March ______) 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 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-duty
truck loans serviced for others, and expressing such firm's opinion on such
management assertion (the "Annual USAP Report"). Upon the request of any
Certificate Owner or Note Owner, the Owner Trustee or the Indenture Trustee, as
the case may be, shall promptly provide such Certificate Owner or Note Owner
with a copy of such Annual USAP Report. For all purposes of this Agreement, the
Owner Trustee and the Indenture Trustee may rely on the representation of any
Person that it is a Certificate Owner or a Note Owner, as the case may be.
SECTION 4.11 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to the Owner Trustee and the Indenture
Trustee access to the Receivable Files in such cases where the Securityholders
shall be required by applicable statutes or regulations to review such
documentation. In each case, such access shall be afforded without charge, but
only upon reasonable request and during the normal business hours at the
respective offices of the Servicer. Nothing in this Section shall affect the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the
32
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.
SECTION 4.12 APPOINTMENT OF SUBSERVICER. So long as NMAC acts as the
Servicer, the Servicer may at any time without notice or consent subcontract
substantially all its duties under this Agreement to any corporation more than
50% of the voting stock of which is owned, directly or indirectly, by Nissan.
The Servicer may at any time perform specific duties as servicer under this
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 4.13 AMENDMENTS TO SCHEDULE OF RECEIVABLES. If the Servicer,
during any Collection Period, assigns to a Receivable an account number that
differs from the original account number identifying such Receivable on the
Schedule of Receivables, the Servicer shall deliver to the Owner Trustee and the
Indenture Trustee, on or before the Distribution Date relating to such
Collection Period, an amendment to the Schedule of Receivables reporting the
newly assigned account number, together with the old account number of each such
Receivable. The first such delivery of amendments to the Schedule of Receivables
shall include monthly amendments reporting account numbers appearing on the
Schedule of Receivables with the new account numbers assigned to such
Receivables during any prior Collection Period.
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.01 ESTABLISHMENT OF ACCOUNTS.
(a) The Servicer, on behalf of the Owner Trustee and the Indenture
Trustee, shall establish the Collection Account in the name of the Indenture
Trustee for the benefit of the Securityholders. The Collection Account shall be
a segregated trust account initially established with the Indenture Trustee and
maintained with the Indenture Trustee as long as (i) the deposits of the
Indenture Trustee have the Required Deposit Rating or (ii) the Collection
Account is maintained in a segregated trust account in the trust department of
the Indenture Trustee; PROVIDED, HOWEVER, that all amounts held in the
Collection Account shall, to the extent permitted by applicable laws, rules and
regulations and as directed by the Servicer, be invested by the Indenture
Trustee in Eligible Investments; otherwise, such amounts shall be maintained in
cash. All 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.
Should the short-term unsecured debt obligations of the Indenture Trustee no
longer have the Required Deposit Rating then, unless the Collection Account is
maintained in segregated trust accounts in the trust department of the Indenture
Trustee, the Servicer shall, with the Indenture Trustee's assistance as
necessary and within ten Business Days of receipt of notice from the Indenture
Trustee that the Indenture Trustee no longer has the Required Deposit Rating,
cause the Collection 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 Indenture Trustee.
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(b) Earnings on investment of funds in the Collection Account shall be
paid to the Servicer on each Distribution Date as servicing compensation, and
any losses and investment expenses shall be charged against the funds on deposit
in the Collection Account.
(c) Subject to the foregoing, the Servicer, on behalf of the Owner
Trustee and the Indenture Trustee, shall establish and maintain the Collection
Account as an Eligible Deposit Account in the name of and under the exclusive
control of the Indenture Trustee, bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Securityholders. The
Indenture Trustee will be obligated to transfer all amounts remaining on deposit
in the Collection Account on the Distribution Date on which the Notes of all
Classes have been paid in full (or substantially all of the Trust Estate is
otherwise released from the lien of the Indenture) to another Eligible Deposit
Account established pursuant to the Trust Agreement for the benefit of the
Certificateholders (the "Trust Collection Account"), and to take all necessary
or appropriate actions to transfer all of its right, title and interest in the
Collection Account, all funds or investments held therein and all proceeds
thereof, whether or not on behalf of the Securityholders, to the Owner Trustee
for the benefit of the Certificateholders, subject to the limitations set forth
in the Indenture with respect to amounts held for payment to Noteholders that do
not promptly deliver a Note for payment on such Distribution Date. After the
transfer to the Trust Collection Account described in the immediately preceding
sentence, references in this Agreement to "Collection Account" shall be deemed
to be references to the "Trust Collection Account."
(d) With respect to the Collection Account and all property held
therein, the Owner Trustee agrees, by its acceptance hereof that, on the terms
and conditions set forth in the Indenture, for so long as Notes of any Class
remain outstanding, the Indenture Trustee shall possess all right, title and
interest therein (excluding interest or investment income thereon payable to the
Servicer or the Seller, as the case may be), and the Accounts shall be under the
sole dominion and control of the Indenture Trustee for the benefit of the
Noteholders and the Certificateholders, as the case may be, as set forth in the
Indenture. The parties hereto agree that the Issuer, the Owner Trustee and the
Holders of the Class D Certificates have no right, title or interest in the
Reserve Account or any amounts on deposit therein at any time. The parties
hereto agree that the Servicer shall have the power, revocable by the Indenture
Trustee or by the Owner Trustee with the consent of the Indenture Trustee, to
instruct the Indenture Trustee to make withdrawals and payments from the
Collection Account for the purpose of permitting the Servicer, Indenture Trustee
or the Owner Trustee to carry out its respective duties hereunder or under the
Indenture or the Trust Agreement, as the case may be.
Notwithstanding the foregoing, the Servicer shall be entitled
to withhold, 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 posting.
SECTION 5.02 COLLECTIONS. (a) Except as otherwise provided in this
Agreement, the Servicer shall remit daily to the Collection Account all payments
received by or on behalf of the Obligors on or in respect of the Receivables
(excluding payments on the Warranty Receivables or the Administrative
Receivables) and all Net Liquidation Proceeds not later than the first Business
Day after receipt thereof. Notwithstanding the foregoing, for so long as (i)
NMAC is
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the Servicer, (ii) (A) NMAC's short-term unsecured debt obligations are rated
at least "P-1" by Moody's and NMAC's short-term unsecured debt obligations
(or, if NMAC is the Servicer and the Servicer then has no short-term rating
from Standard & Poor's, Nissan Capital of America, Inc.'s short-term
unsecured debt obligations) are rated "A-1" by Standard & Poor's (so long as
Moody's and Standard & Poor's are Rating Agencies), or (B) certain
arrangements are made that are acceptable to the Rating Agencies, and (iii)
no Event of Default or Servicer Default shall have occurred and be continuing
(unless waived by the appropriate Securityholders), except that the
requirement in clause (ii) shall not apply if only the Class C Certificates
are outstanding and the Class C Certificates do not have an investment grade
rating, (collectively, the "Monthly Remittance Conditions"); the Servicer
shall not be required to remit such collections to the Collection Account on
the foregoing daily basis but shall be entitled to retain such collections,
without segregation from its other funds, until the Business Day before each
Distribution Date at which time the Servicer shall remit all such collections
in respect of the related Collection Period to the Collection Account in
immediately available funds. Commencing with the first day of the first
Collection Period that begins at least two Business Days after the day on
which any Monthly Remittance Condition ceases to be satisfied and for so long
as any Monthly Remittance Condition is not satisfied, all collections then
held by the Servicer shall be immediately deposited into the Collection
Account and all future collections on or in respect of the Receivables (other
than payments on Warranty Receivables and the Administrative Receivables) and
all Net Liquidation Proceeds shall be remitted by the Servicer to the
Collection Account on a daily basis not later than the first Business Day
after receipt thereof.
(b) The Indenture Trustee or the Owner Trustee shall not be deemed to
have knowledge of any event or circumstances under clause (iii) of the
definition of the Monthly Remittance Condition unless the Indenture Trustee or
the Owner 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 Notes
or Certificates evidencing not less than 25% in principal amount of the
outstanding amount of the Notes and the aggregate balance of the Certificates,
acting together as a single class, or a Trust Officer of the Indenture Trustee
or the Owner Trustee with knowledge hereof or familiarity herewith has actual
knowledge of such event or circumstances. For purposes of this Article V, the
phrase "payments received by or on behalf of the Obligors" shall mean payments
made by Persons other than the Servicer.
(c) The Servicer shall give the Owner Trustee, the Indenture Trustee
and each Rating Agency written notice of the failure of any Monthly Remittance
Condition (and any subsequent curing of a failed Monthly Remittance Condition)
as soon as practical after the occurrence thereof but in no event later than 10
Business Days after obtaining knowledge thereof (it being understood that if the
Monthly Remittance Condition is not satisfied as of the Closing Date, no such
notice shall be required in connection therewith).
(d) 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 Owner Trustee and the Indenture Trustee written confirmation from each
Rating Agency that such alternative remittance schedule will not result in the
downgrading or withdrawal by such Rating Agency of the ratings then assigned to
any Class of Notes or the Class C Certificates.
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SECTION 5.03 APPLICATION OF COLLECTIONS. As of the Business Day
immediately preceding the related Distribution Date, all collections for the
related Collection Period with respect to each Receivable shall be applied by
the Servicer as follows:
(a) First, to interest accrued to date on such Receivable;
(b) Second, to principal until the Principal Balance of such Receivable
is brought current;
(c) Third, to reduce the unpaid late charges (if any) as provided in
such Receivable; and
(d) Fourth, to prepay principal on such Receivable.
SECTION 5.04 ADVANCES.
(a) The Servicer shall make a payment with respect to each Receivable
(other than an Administrative Receivable, a Warranty Receivable or a Liquidated
Receivable) (each, an "Advance") 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 one-twelfth of 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 Administrative Purchase Payment or the Warranty Purchase
Payment, as the case may be, during such Collection Period. The Servicer will
not be obligated to make an Advance in respect of a Receivable (other than an
Advance in respect of an interest shortfall arising from the prepayment of a
Receivable) to the extent that the Servicer, in its sole discretion, shall
determine that the Advance constitutes a Nonrecoverable Advance. With respect to
each Receivable, the Advance shall increase the Outstanding Advances. No
Advances will be made with respect to the Principal Balance of the Receivables.
The Servicer shall deposit all such Advances into the Collection Account in
immediately available funds no later than 5:00 p.m., New York City time, on the
Business Day immediately preceding the related Distribution Date. 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; 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) The Servicer shall be entitled to reimbursement for Outstanding
Advances, without interest, with respect to a Receivable from the following
sources with respect to such Receivable pursuant to Section 5.06(c)(i) or
Section 5.06(d)(i): (i) subsequent payments made by or on behalf of the related
Obligor, (ii) Net Liquidation Proceeds, and (iii) the Warranty Purchase
Payments.
(c) To the extent that the Servicer has determined that any Outstanding
Advance is a Nonrecoverable Advance, the Servicer may provide to the Owner
Trustee and the Indenture Trustee an Officer's Certificate setting forth the
amount of such Nonrecoverable Advance, and on the related Distribution Date, the
Relevant Trustee shall remit to the Servicer from funds on
36
deposit in the Collection Account an amount equal to the amount of such
Nonrecoverable Advance pursuant to Section 5.06(c)(ii) or Section 5.06(d)(ii).
(d) For so long as the Monthly Remittance Conditions are satisfied, in
lieu of causing the Servicer first to deposit and then the Relevant Trustee to
remit to the Servicer the amounts described in clauses (i) through (iii) in
Section 5.04(b) reimbursable in respect on Outstanding Advances, or the amounts
described in Section 5.04(c) applicable in respect of Nonrecoverable Advances,
the Servicer may deduct such amounts from deposits otherwise to be made into the
Collection Account.
(e) Notwithstanding the provisions of Section 5.04(a), no Successor
Servicer, including the Indenture Trustee, shall be obligated to make Advances
unless it has expressly agreed to do so in writing.
SECTION 5.05 ADDITIONAL DEPOSITS. (a) The following additional deposits
shall be made to the Collection Account: (i) the Seller shall remit the
aggregate Warranty Purchase Payments with respect to Warranty Receivables
pursuant to Section 3.02; (ii) the Servicer shall remit (A) the aggregate
Advances pursuant to Section 5.04(a), (B) the aggregate Administrative Purchase
Payments with respect to Administrative Receivables pursuant to Section 4.06,
and (C) the amount required upon any optional purchase of the Receivables by the
Servicer, or any Successor Servicer, pursuant to Section 9.01; and (iii) the
Indenture Trustee shall transfer (A) the Yield Supplement Deposit from the Yield
Supplement Account to the Collection Account pursuant to Section 5.08 (in
assuring the availability therein of the related Available Interest) and (B) the
amounts described in Sections 5.06 and 5.07 from the Reserve Account to the
Collection Account pursuant to Section 5.07.
(b) All deposits required to be made pursuant to this Section 5.05 by
the Seller or the Servicer, as the case may be, may be made in the form of a
single deposit and shall be made in immediately available funds, no later than
5:00 P.M., New York City time, on the Business Day immediately preceding the
related Distribution Date. At the direction of the Servicer, the Relevant
Trustee shall invest such amounts in Eligible Investments maturing not later
than 3:00 P.M. New York City Time, on the related Distribution Date.
SECTION 5.06 PAYMENTS AND DISTRIBUTIONS.
(a) The rights of the Certificateholders to receive distributions in
respect of the Certificates shall be and hereby are subordinated to the rights
of the Noteholders to receive distributions in respect of the Notes to the
extent provided in this Section 5.06.
(b) On each Determination Date, the Servicer shall calculate the
Available Interest, the Available Principal, the Noteholders' Distributable
Amount, the Certificateholders' Distributable Amount, the amount to be
distributed to Noteholders and Certificateholders of each Class pursuant to
Section 5.06(c) or (d), and all other distributions, deposits and withdrawals to
be made on the related Distribution Date.
(c) Subject to Section 5.06(d), on each Distribution Date, the Relevant
Trustee shall make the following payments and distributions from the Collection
Account (after payment of the Supplemental Servicing Fee to the extent not
previously retained by the Servicer) in the
37
following order of priority and in the amounts set forth in the Servicer's
Certificate for such Distribution Date; PROVIDED, HOWEVER, that such payments
and distributions shall be made only from those funds deposited in the
Collection Account for the related Collection Period:
(i) to the Servicer, from amounts on deposit in the
Collection Account, any payments in respect of Advances required and to
the extent set forth in Section 5.04(b);
(ii) to the Servicer, from amounts on deposit in the
Collection Account, any payments in respect of Nonrecoverable Advances
required and to the extent set forth in Section 5.04(c);
(iii) to the Servicer, from Available Amounts, the Base
Servicing Fee (including any unpaid Base Servicing Fees from one or
more prior Collection Periods);
(iv) on a pro rata basis (based on the amounts distributable
pursuant to this clause to each such Class), to the Class A-1
Noteholders, the Noteholders' Interest Distributable Amount for such
Class, to the Class A-2 Noteholders, the Noteholders' Interest
Distributable Amount for such Class, and to the Class A-3 Noteholders,
the Noteholders' Interest Distributable Amount for such Class; such
amounts to be paid from Available Amounts (after giving effect to any
reduction in Available Amounts described in clause (iii) above);
(v) to the Class B Noteholders, the Noteholders' Interest
Distributable Amount for such Class; such amounts to be paid from
Available Amounts (after giving effect to any reduction in Available
Amounts described in clauses (iii) and (iv) above);
(vi) to the Class A-1 Noteholders, an amount equal to the
Noteholders' Principal Distributable Amount for such Class, such amount
to be paid from Available Amounts (after giving effect to any reduction
in Available Amounts described in clauses (iii) through (v) above),
until the principal amount of the Class A-1 Notes is reduced to zero;
(vii) on each Distribution Date after the Class A-1 Notes
have been paid in full, to the Class A-2 Noteholders, an amount equal
to the Noteholders' Principal Distributable Amount for such Class, such
amount to be paid from Available Amounts (after giving effect to any
reduction in Available Amounts described in clauses (iii) through (vi)
above), until the principal amount of the Class A-2 Notes is reduced to
zero;
(viii) on each Distribution Date after the Class A-2 Notes
have been paid in full, to the Class A-3 Noteholders, an amount equal
to the Noteholders' Principal Distributable Amount for such Class, such
amount to be paid from Available Amounts (after giving effect to any
reduction in Available Amounts described in clauses (iii) through (vii)
above), until the principal amount of the Class A-3 Notes is reduced to
zero;
(ix) on each Distribution Date after the Class A-3 Notes
have been paid in full, to the Class B Noteholders, an amount equal to
the Noteholders' Principal Distributable Amount for such Class, such
amount to be paid from Available Amounts (after giving
38
effect to any reduction in Available Amounts described in clauses
(iii) through (viii) above), until the principal amount of the Class B
Notes is reduced to zero;
(x) to the Class C Certificateholders, an amount equal to
the Certificateholders' Interest Distributable Amount for such Class,
such amount to be paid from Available Amounts (after giving effect to
any reduction in Available Amounts described in clauses (iii) through
(ix) above);
(xi) on each Distribution Date after the Class B Notes have
been paid in full, to the Class C Certificateholders, an amount equal
to the Certificateholders' Principal Distributable Amount for such
Class, such amount to be paid from Available Amounts (after giving
effect to any reduction in Available Amounts described in clauses (iii)
through (x) above), until the principal amount of the Class C
Certificates is reduced to zero;
(xii) to the Reserve Account, the amount, if any, necessary
to cause the balance of funds therein to equal the Specified Reserve
Account Balance, such amounts to be paid from Available Amounts (after
giving effect to any reduction in Available Amounts described in
clauses (iii) through (xi) above);
(xiii) to the Class D Certificateholders, an amount equal to
the Certificateholders' Interest Distributable Amount for such Class,
such amounts to be paid from Available Amounts (after giving effect to
any reduction in Available Amounts described in clauses (iii) through
(xii) above);
(xiv) after the Class C Certificates have been paid in full,
to the Class D Certificateholders, an amount equal to the
Certificateholders' Principal Distributable Amount for such Class, such
amount to be paid from Available Amounts (after giving effect to the
reduction in Available Amounts described in clauses (iii) through
(xiii) above); and
(xv) any Available Amounts remaining after giving effect to
the foregoing, to the Seller.
(d) Notwithstanding the provisions of Section 5.06(c), after the
occurrence of an Event of Default that results in the acceleration of any
Notes, on each Distribution Date, the Relevant Trustee shall make the
following payments and distributions from the Collection Account (after
payment of the Supplemental Servicing Fee to the extent not previously
retained by the Servicer) in the following order of priority and in the
amounts set forth in the Servicer's Certificate for such Distribution Date;
PROVIDED, HOWEVER, that such payments and distributions shall be made only
from Available Amounts deposited in the Collection Account for the related
Collection Period:
(i) to the Servicer, from amounts on deposit in the
Collection Account, any payments in respect of Advances required and to
the extent set forth in Section 5.04(b);
(ii) to the Servicer, from amounts on deposit in the
Collection Account, any payments in respect of Nonrecoverable Advances
required and to the extent set forth in Section 5.04(c);
39
(iii) to the Servicer, from Available Amounts, the Base
Servicing Fee (including any unpaid Base Servicing Fees from one or
more prior Collection Periods);
(iv) on a pro rata basis (based on the amounts distributable
pursuant to this clause to each such Class), to the Class A-1
Noteholders, the Noteholders' Interest Distributable Amount for such
Class, to the Class A-2 Noteholders, the Noteholders' Interest
Distributable Amount for such Class, and to the Class A-3 Noteholders,
the Noteholders' Interest Distributable Amount for such Class; such
amounts to be paid from Available Amounts (after giving effect to any
reduction in Available Amounts described in clause (iii) above);
(v) to the Class A-1 Noteholders, the Class A-2 Noteholders
and the Class A-3 Noteholders, on a pro rata basis (based on the
Outstanding Amount of each Class), until the total amount paid to such
Noteholders in respect of principal from the Closing Date is equal to
the Original Principal Amount for such Class of Notes, such amounts to
be paid from Available Amounts (after giving effect to any reduction in
Available Amounts described in clauses (iii) and (iv) above);
(vi) to the Class B Noteholders, the Noteholders' Interest
Distributable Amount for such Class; such amounts to be paid from
Available Amounts (after giving effect to any reduction in Available
Amounts described in clauses (iii) through (v) above);
(vii) on each Distribution Date after the Class A Notes have
been paid in full, to the Class B Noteholders, until the total amount
paid to the Class B Noteholders in respect of principal from the
Closing Date is equal to the Original Principal Amount for the Class B
Notes, such amount to be paid from Available Amounts (after giving
effect to any reduction in Available Amounts described in clauses (iii)
through (vi) above);
(viii) to the Class C Certificateholders, an amount equal to
the Certificateholders' Interest Distributable Amount for such Class,
such amount to be paid from Available Amounts (after giving effect to
any reduction in Available Amounts described in clauses (iii) through
(vii) above);
(ix) on each Distribution Date after the Class B Notes have
been paid in full, to the Class C Certificateholders, until the total
amount paid to the Class C Certificateholders in respect of principal
from the Closing Date is equal to the Original Certificate Balance of
the Class C Certificates, such amount to be paid from Available Amounts
(after giving effect to any reduction in Available Amounts described in
clauses (iii) through (viii) above);
(x) to the Class D Certificateholders, an amount equal to
the Certificateholders' Interest Distributable Amount for such Class,
such amounts to be paid from Available Amounts (after giving effect to
any reduction in Available Amounts described in clauses (iii) through
(ix) above);
(xi) after the Class C Certificates have been paid in full,
to the Class D Certificateholders, an amount equal to the
Certificateholders' Principal Distributable
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Amount for such Class, such amount to be paid from Available Amounts
(after giving effect to the reduction in Available Amounts described in
clauses (iii) through (x) above); and
(xii) any Available Amounts remaining after giving effect to
the foregoing, to the Seller.
(e) For purposes of determining whether an Event of Default pursuant to
Section 5.01(c) of the Indenture has occurred, the amount of principal required
to be paid to the Holders of any Class of Notes on any Distribution Date is the
amount available to be paid thereto pursuant to Section 5.06(c); PROVIDED,
HOWEVER, that (i) the Class A-1 Notes are required to be paid in full on or
before the Final Scheduled Distribution Date for such Class, meaning that the
Class A-1 Noteholders are entitled to have received on or before such date
payments in respect of principal in an aggregate amount equal to the Original
Principal Amount for such Class, together with all interest accrued thereon
through such date; (ii) the Class A-2 Notes are required to be paid in full on
or before the Final Scheduled Distribution Date for such Class, meaning that the
Class A-2 Noteholders are entitled to have received on or before such date
payments in respect of principal in an aggregate amount equal to the Original
Principal Amount for such Class, together with all interest accrued thereon
through such date; (iii) the Class A-3 Notes are required to be paid in full on
or before the Final Scheduled Distribution Date for such Class, meaning that the
Class A-3 Noteholders are entitled to have received on or before such date
payments in respect of principal in an aggregate amount equal to the Original
Principal Amount for such Class, together with all interest accrued thereon
through such date; and (iv) the Class B Notes are required to be paid in full on
or before the Final Scheduled Distribution Date for such Class, meaning that the
Class B Noteholders are entitled to have received on or before such date
payments in respect of principal in an aggregate amount equal to the Original
Principal Amount for such Class, together with all interest accrued thereon
through such date.
(f) Except with respect to the final payment upon retirement of a Note
or Certificate, the Servicer shall on each Distribution Date instruct the
Relevant Trustee to pay or distribute to each Securityholder of record on the
related Record Date by check mailed to such Securityholder at the address of
such Holder appearing in the Certificate Register or Note Register, as the case
may be, (or, if DTC, its nominee or a Clearing Agency is the relevant Holder, by
wire transfer of immediately available funds or pursuant to other arrangements),
the amount to be paid or distributed to such Securityholder pursuant to such
Holder's Note or Certificate. With respect to the final payment upon retirement
of a Note or Certificate, the Servicer shall on the relevant final Distribution
Date instruct the Relevant Trustee to pay or distribute the amounts due thereon
only upon delivery for cancellation of the certificate representing such Note or
Certificate in accordance with the Indenture or the Trust Agreement, as the case
may be.
SECTION 5.07 RESERVE ACCOUNT.
(a) In order to assure that certain amounts will be available to make
required payments to Noteholders, the Seller will, pursuant to the Securities
Account Control Agreement and the Indenture, establish and maintain with the
Relevant Trustee a segregated trust account (the "RESERVE ACCOUNT") which will
include the money and other property deposited and held therein pursuant to
Sections 5.06(c), 5.06(d) and this Section 5.07. On or prior to the Closing
41
Date, the Seller shall deposit an amount equal to the Reserve Account Initial
Deposit into the Reserve Account. As and to the extent set forth in Section
5.06(c) or (d), the Relevant Trustee will deposit Available Amounts into the
Reserve Account on each Distribution Date as provided in the Servicer's
Certificate, until the amount on deposit therein equals the Specified Reserve
Account Balance. On each Distribution Date, to the extent that Available Amounts
are insufficient to fully fund the payments and distributions described in
clauses (i) through (x) of Section 5.06(c) or clauses (i) through (viii) of
Section 5.06(d), the Relevant Trustee will withdraw amounts then on deposit in
the Reserve Account (excluding net investment income on Eligible Investments,
which amounts are payable to the Seller therefrom), up to the amounts of any
such deficiencies, and deposit such amounts into the Collection Account for
application pursuant to such clauses. On each Distribution Date, as provided in
the Servicer's Certificate, the Relevant Trustee will release to the Seller any
amounts remaining on deposit in the Reserve Account in excess of the Specified
Reserve Account Balance. Upon the termination of the trusts established under
the Trust Agreement and the Indenture, as directed in writing by the Servicer,
the Relevant Trustee will release to the Seller any amounts remaining on deposit
in the Reserve Account. Upon any such distribution to the Seller, the Issuer,
Owner Trustee, Certificateholders, Indenture Trustee and Noteholders will have
no further rights in, or claims to, such amounts.
(b) All amounts held in the Reserve Account shall be invested by the
Relevant Trustee, as directed in writing by the Servicer, in Eligible
Investments. All 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 deposits on the
Distribution Date; provided that if permitted by the Rating Agencies, monies on
deposit therein may be invested in Eligible Investments that mature later than
the Business Day preceding the next Distribution Date. Earnings, if any, on
investment of funds in the Reserve Account shall be paid to the Seller on each
Distribution Date, and losses and any investment expenses shall be charged
against the funds on deposit therein. The Relevant Trustee shall incur no
liability for the selection of investments or for losses thereon absent its own
negligence or willful misfeasance. The Relevant Trustee shall have no liability
in respect of losses incurred as a result of the liquidation of any investment
prior to its stated maturity date or the failure of the Servicer to provide
timely written investment directions.
(c) Subject to the right of the Relevant Trustee to make withdrawals
therefrom, as directed by the Servicer, for the purposes and in the amounts set
forth in Section 5.06, the Reserve Account and all funds held therein shall be
the property of the Seller and not the property of the Issuer, the Owner Trustee
or the Indenture Trustee. The Issuer, the Owner Trustee, the Seller and the
Indenture Trustee will treat the Reserve Account, all funds therein and all net
investment income with respect thereto as assets of the Seller for federal
income tax and all other purposes.
(d) The Seller will grant to the Relevant Trustee for the benefit of
the Noteholders and the Class C Certificateholders a security interest in all
funds (including Eligible Investments) in the Reserve Account (including the
Reserve Account Initial Deposit) and the proceeds thereof, and the Relevant
Trustee shall have all of the rights of a secured party under the UCC with
respect thereto; provided that all income from the investment of funds in the
Reserve Account and the right to receive such income are retained by the Seller
and are not transferred, assigned or otherwise conveyed hereunder. If for any
reason the Reserve Account is no longer an Eligible
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Deposit Account, the Relevant Trustee shall promptly cause the Reserve
Account to be moved to another institution or otherwise changed so that the
Reserve Account becomes an Eligible Deposit Account.
(e) Neither the Owner Trustee nor the Indenture Trustee shall enter
into any subordination or intercreditor agreement with respect to the Reserve
Account.
SECTION 5.08 YIELD SUPPLEMENT ACCOUNT.
(a) In order to assure that sufficient amounts to make required
distributions of interest to Noteholders and the Class C Certificateholders will
be available, the Seller will, pursuant to the Securities Account Control
Agreement, the Yield Supplement Agreement and the Indenture, establish and
maintain with the Relevant Trustee a segregated trust account (the "YIELD
SUPPLEMENT ACCOUNT") which will include the money and other property deposited
and held therein pursuant to Section 5.06 and this Section 5.08.
(b) On or prior to the Closing Date, the Seller shall deposit an amount
equal to the Initial Yield Supplement Amount into the Yield Supplement Account
pursuant to the Yield Supplement Agreement. On each Distribution Date, to the
extent amounts on deposit in the Yield Supplement Account are sufficient
therefor, the Relevant Trustee will withdraw amounts then on deposit in the
Yield Supplement Account (excluding net investment income on Eligible
Investments, which amounts are payable to the Seller therefrom) and deposit such
amounts into the Collection Account for application pursuant to Section 5.06. On
each Distribution Date, if the amount on deposit in the Yield Supplement Account
(after giving effect to all deposits thereto or withdrawals therefrom on such
Distribution Date) is greater than the Required Yield Supplement Amount, the
Relevant Trustee will distribute such excess to the Seller. Upon the termination
of the trusts established under the Trust Agreement and the Indenture, as
directed in writing by the Servicer, the Relevant Trustee will release to the
Seller any amounts remaining on deposit in the Yield Supplement Account. Upon
any such distribution to the Seller, the Issuer, Owner Trustee, Indenture
Trustee and Certificateholders will have no further rights in, or claims to,
such amounts.
(c) All amounts held in the Yield Supplement Account shall be invested
by the Relevant Trustee, as directed in writing by the Servicer, in Eligible
Investments. All 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 deposits on the
Distribution Date; provided that if permitted by the Rating Agencies, monies on
deposit therein may be invested in Eligible Investments that mature later than
the Business Day preceding the next Distribution Date. Earnings, if any, on
investment of funds in the Yield Supplement Account shall be paid to the Seller
on each Distribution Date, and losses and any investment expenses shall be
charged against the funds on deposit therein. The Relevant Trustee shall incur
no liability for the selection of investments or for losses thereon absent its
own negligence or willful misfeasance. The Relevant Trustee shall have no
liability in respect of losses incurred as a result of the liquidation of any
investment prior to its stated maturity date or the failure of the Servicer to
provide timely written investment directions.
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(d) Subject to the right of the Relevant Trustee to make withdrawals
therefrom, as directed by the Servicer, for the purposes and in the amounts set
forth in Section 5.06, the Yield Supplement Account and all funds held therein
shall be the property of the Seller and not the property of the Issuer, the
Owner Trustee or the Indenture Trustee. The Issuer, the Owner Trustee, the
Seller and the Indenture Trustee will treat the Yield Supplement Account, all
funds therein and all net investment income with respect thereto as assets of
the Seller for federal income tax and all other purposes.
(e) The Seller will grant to the Relevant Trustee, for the benefit of
the Noteholders and the Class C Certificateholders, a security interest in all
funds (including Eligible Investments) in the Yield Supplement Account
(including the Initial Yield Supplement Amount) and the proceeds thereof, and
the Relevant Trustee shall have all of the rights of a secured party under the
UCC with respect thereto; provided that all income from the investment of funds
in the Yield Supplement Account and the right to receive such income are
retained by the Seller and are not transferred, assigned or otherwise conveyed
hereunder. If for any reason the Yield Supplement Account is no longer an
Eligible Deposit Account, the Relevant Trustee shall promptly cause the Yield
Supplement Account to be moved to another institution or otherwise changed so
that the Yield Supplement Account becomes an Eligible Deposit Account.
(f) Neither the Owner Trustee nor the Indenture Trustee shall enter
into any subordination or intercreditor agreement with respect to the Yield
Supplement Account.
SECTION 5.09 STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS.
(a) On each Distribution Date, the Indenture Trustee shall include with
each distribution to each Noteholder and the Owner Trustee shall include with
each distribution to each Certificateholder a statement (which statement shall
also be provided to each Rating Agency) based on information in the Servicer's
Certificate furnished pursuant to Section 4.08, setting forth for the Collection
Period relating to such Distribution Date the following information:
(i) the amount of the payment allocable to the principal
amount of each Class of Notes and to the Certificate Balance of each
Class of Certificates;
(ii) the amount of the payment allocable to interest on or
with respect to each Class of Notes and Certificates;
(iii) the amount of the distribution allocable to the Yield
Supplement Deposit, if any;
(iv) the Pool Balance as of the close of business on the
last day of the related Collection Period;
(v) the amount of the Base Servicing Fee paid to the
Servicer with respect to the related Collection Period, the amount of
any unpaid Base Servicing Fees and the change in such amount from that
of the prior Distribution Date;
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(vi) the Interest Rate or the Pass-Through Rate for the
Interest Period relating to the succeeding Distribution Date for any
Class of Notes or Certificates with variable or adjustable rates;
(vii) the Noteholders' Interest Carryover Shortfall, the
Noteholders' Principal Carryover Shortfall, the Certificateholders'
Interest Carryover Shortfall, the Certificateholders' Principal
Carryover Shortfall, if any, with respect to each Class of Notes and
Certificates, and the change in such amounts from the preceding
Distribution Date;
(viii) the Outstanding Amount, the Note Factor and the Note
Pool Factor with respect to each Class of Notes; the aggregate
Certificate Balance, the Certificate Balance, Certificate Factor and
Certificate Pool Factor with respect to each Class of Certificates, in
each case after giving effect to all payments in respect of principal
on such Distribution Date;
(ix) the amount of Advances made in respect of the
Receivables during the related Collection Period and the amount of
unreimbursed Advances on such Distribution Date; and
(x) the balance of the Reserve Account and the Yield
Supplement Account on such Distribution Date, after giving effect to
changes thereto on such Distribution Date and the amount of such
changes.
(b) Copies of such statements may be obtained by Certificate Owners or
Note Owners from the Owner Trustee or the Indenture Trustee, as the case may be,
by a request in writing. The Owner Trustee or the Indenture Trustee, as the case
may be, shall provide such copies promptly after such requests.
SECTION 5.10 NET DEPOSITS. For so long as each Monthly Remittance
Condition is satisfied (or the rating agency confirmation described in Section
5.02(d) has been obtained), the Servicer (in whatever capacity) may make the
remittances pursuant to Sections 5.02 and 5.05 above net of amounts to be
distributed to the Servicer (in whatever capacity) pursuant to Section 5.06.
Accounts between the Seller and the Servicer 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.
ARTICLE VI
THE SELLER
SECTION 6.01 REPRESENTATIONS OF SELLER. The Seller makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Receivables. The representations speak as of the execution and delivery of this
Agreement and as of the Closing Date, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
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(a) 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 corporate 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, corporate power,
authority and legal right to acquire and own the Receivables.
(b) 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 and where the
failure to so qualify would have a material adverse effect on the ability of the
Seller to perform its obligations under this Agreement.
(c) POWER AND AUTHORITY. The Seller has the corporate power and
authority to execute and deliver this 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 as part of the Owner Trust Estate or the Trust
Estate, as the case may be, and has duly authorized such sale and assignment to
the Trust, the Owner Trustee or the Indenture Trustee, as the case may be, by
all necessary corporate action; and the execution, delivery and performance of
this Agreement has been duly authorized by the Seller by all necessary corporate
action.
(d) VALID SALE; BINDING OBLIGATIONS. This 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 this Agreement is a legal, valid and binding obligation of the
Seller enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general equitable principles.
(e) NO VIOLATION. The consummation of the transactions contemplated by
this 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 certificate 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 Basic Documents); nor violate any law or, to the best of the
Seller's knowledge, any order, rule or regulation applicable to the Seller of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Seller or its
properties; which breach, default, conflict, Lien or violation in any case would
have a material adverse effect on the ability of the Seller to perform its
obligations under this Agreement.
(f) 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: (i) asserting the
invalidity of this Agreement, the Trust Agreement, the Indenture, the Securities
Account Control Agreement, the Yield Supplement Agreement, the Certificates or
the Notes; (ii) seeking to prevent the issuance of the Certificates or the Notes
or the consummation of any
46
of the transactions contemplated by this Agreement, the Trust Agreement, the
Indenture, the Securities Account Control Agreement or the Yield Supplement
Agreement; (iii) seeking any determination or ruling that would materially
and adversely affect the performance by the Seller of its obligations under,
or the validity or enforceability of, this Agreement, the Trust Agreement,
the Indenture, the Securities Account Control Agreement, the Yield Supplement
Agreement, the Certificates or the Notes; or (iv) relating to the Seller and
that would adversely affect the federal or any state income tax attributes of
the Issuer, the Certificates or the Notes.
SECTION 6.02 ADDITIONAL COVENANTS OF THE SELLER.
(a) The Seller agrees with the Certificate Owners, the Note Owners and
each Rating Agency that the Seller shall not issue any additional securities
that could reasonably be expected to materially and adversely affect the rating
of any Class of Notes or the Class C Certificates issued pursuant to the Basic
Documents unless it shall have first obtained the written consent of each Rating
Agency to the effect that such issuance will not materially adversely affect
such rating; provided that, the issuance of another series of certificates or
notes pursuant to an agreement with terms substantially similar to the terms of
the Basic Documents shall not be deemed to materially and adversely affect the
ratings on the Certificates or the Notes. The Seller shall provide a copy of any
such consent to the Owner Trustee and the Indenture Trustee.
(b) The Seller shall not do any of the following (without the prior
written consent of each Rating Agency (which consent shall be to the effect that
the acts set forth below shall not affect materially adversely the rating on any
Class of Notes or the Class C Certificates) and, upon the Seller's receipt of
such written consent from each Rating Agency, the Owner Trustee and the
Indenture Trustee shall, without any exercise of its own discretion, also
provide its written consent to the Seller):
(1) engage in any business or activity other than those set
forth in Article Three of the Seller's Certificate of Incorporation, as
amended;
(2) 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
statistical rating organization 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
statistical rating organization that has rated the outstanding
certificates or notes that the ratings of the outstanding certificates
or notes will not be adversely affected by the issuance of such future
indebtedness and (B) any indebtedness to NMAC or any of its Affiliates
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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(3) 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:
(i) 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 the Basic Documents, 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
(ii) 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
(iii) 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 space separate
from any direct or ultimate parent of such entity; and
(iv) each nationally recognized statistical rating
organization that has rated any issue of certificates or notes
pursuant to any agreement or any series of class of
certificates or notes shall confirm in writing that the rating
of such certificates or notes shall not be adversely affected
by such consolidation or merger; or
(4) without the affirmative vote of 100% of the members of the
Board of Directors of the Seller, 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 all or substantially
all of its property, or make any assignment for the benefit of
creditors.
SECTION 6.03 LIABILITY OF SELLER; INDEMNITIES. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
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(a) The Seller shall indemnify, defend and hold harmless the Trust, the
Owner Trustee, the Indenture Trustee from and against any taxes that may at any
time be asserted against any such Person with respect to, as of the date hereof,
the sale of the Receivables to the Trust or the issuance and original sale of
the Notes and the Certificates, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but, in the
case of the Trust, not including any taxes asserted with respect to ownership of
the Receivables or federal or other income taxes arising out of the transactions
contemplated by this Agreement and the Basic Documents) and costs and expenses
in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee, the Trust, the Certificateholders and the
Noteholders from and against any loss, liability or expense incurred by reason
of (i) the Seller's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement and (ii) the
Seller's or the Issuer's violation of federal or state securities laws in
connection with the registration or the sale of the Certificates and the Notes.
Indemnification under this Section 6.03 shall survive the
termination of this Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Seller shall have made any indemnity
payment to any Person entitled thereto pursuant to this Section 6.03 and such
Person thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest (except to the
extent the recipient collects interest from others).
Promptly after receipt by a party indemnified under this Section 6.03
(for purposes of this paragraph, an "Indemnified Party") of notice of the
commencement of any action, such Indemnified Party will, if a claim is to be
made in respect thereof against the Seller under this Section 6.03, notify the
Seller of the commencement thereof. If any such action is brought against any
Indemnified Party under this Section 6.03 and it notifies the Seller of the
commencement thereof, the Seller will assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Party (who may, unless there is, as
evidenced by an Opinion of Counsel to the Indemnified Party stating that there
is an unwaivable conflict of interest, be counsel to the Seller), and the Seller
will not be liable to such Indemnified Party under this Section 6.03 for any
legal or other expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof, other than reasonable costs of
investigation. The obligations set forth in this Section 6.03 shall survive the
termination of this Agreement or the resignation or removal of the Owner Trustee
or the Indenture Trustee and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Seller shall have made any indemnity
payments pursuant to this Section 6.03 and the Person to or on behalf of whom
such payments are made thereafter collects any of such amounts from others, such
Person shall promptly repay such amounts to the Seller, without interest (except
to the extent received by such Person).
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SECTION 6.04 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER. Subject to Section 6.02, 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, 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 6.01 shall have been
breached and no Servicer Default, and no event that, after notice or lapse of
time, or both, would become a Servicer Default, shall have occurred and be
continuing, (y) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee an Officer's Certificate stating that such consolidation,
merger or succession and such agreement or assumption comply with this Section
6.04 and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with and (z) the Seller shall
have delivered to the Owner Trustee and the Indenture Trustee an Opinion of
Counsel either (A) stating that, in the opinion of such counsel, based on
customary qualifications and assumptions, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to perfect the interest of the Owner Trustee and the
Indenture Trustee, respectively, in the Receivables, and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interest. The Seller
shall provide notice of any merger, consolidation or succession pursuant to this
Section 6.04 to each Rating Agency. 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 6.05 LIMITATION ON LIABILITY OF SELLER AND OTHERS.
(a) Neither the Seller nor any of the directors, officers, employees or
agents of the Seller shall be under any liability to the Trust, the
Certificateholders or the Noteholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement or for errors in judgment; PROVIDED, HOWEVER, that this provision
shall not protect the Seller or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties under this Agreement. The Seller and any director, officer, employee
or agent of the Seller may rely in good faith on the advice of counsel or on any
document of any kind, prima facie properly executed and submitted by any Person
respecting any matters arising under this Agreement.
(b) The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may 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 this
Agreement and the rights and duties of the parties to this Agreement and the
interests of the Certificateholders and the Noteholders under this Agreement. In
such event, the legal expenses
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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 6.06 SELLER MAY OWN CERTIFICATES OR NOTES. The Seller and any
Affiliate of the Seller may in its individual or any other capacity become the
owner or pledgee of Certificates or Notes with the same rights as it would have
if it were not the Seller or an Affiliate thereof, except as otherwise provided
in the Basic Documents. Certificates or Notes 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 this Agreement, without
preference, priority or distinction as among all of the Certificates or the
Notes, as the case may be, except as otherwise expressly provided in the Basic
Documents.
ARTICLE VII
THE SERVICER
SECTION 7.01 REPRESENTATIONS OF SERVICER. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date.
(a) 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 corporate 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, corporate 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 Owner Trustee and the Indenture Trustee.
(b) DUE QUALIFICATION. The Servicer 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 relating to the servicing of the Receivables as
required by this Agreement shall require such qualifications and where the
failure to so qualify would have a material adverse effect on the ability of the
Servicer to perform its obligations under this Agreement.
(c) POWER AND AUTHORITY. The Servicer has the power and authority to
execute and deliver this Agreement and to carry out its terms; and the
execution, delivery and performance of this Agreement have been duly authorized
by the Servicer by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Servicer enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and by general
equitable principles.
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of
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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 Basic
Documents); 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; which breach, default,
conflict, Lien or violation in any case would have a material adverse effect
on the ability of the Seller to perform its obligations under this Agreement.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending,
or, to the best of the Servicer's knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or its properties: (i) asserting the
invalidity of this Agreement, the Trust Agreement, the Indenture, the
Certificates or the Notes; (ii) seeking to prevent the issuance of the
Certificates or the Notes or the consummation of any of the transactions
contemplated by this Agreement, the Trust Agreement or the Indenture; (iii)
seeking any determination or ruling that would materially and adversely affect
the performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Trust Agreement, the Indenture, the
Certificates or the Notes ; or (iv) relating to the Servicer and that would
adversely affect the federal or any state income tax attributes of the
Certificates or the Notes.
SECTION 7.02 INDEMNITIES OF SERVICER. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:
(a) The Servicer shall defend, indemnify and hold harmless the
Owner Trustee, the Indenture Trustee, the Trust, the Certificateholders and the
Noteholders from and against any and all costs, expenses, losses, damages,
claims and liabilities (collectively, "Damages") arising out of or resulting
from the use, ownership or operation by the Servicer or any of its Affiliates
(other than the Trust) of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Owner Trustee, the Indenture Trustee, the Trust, the Certificateholders and the
Noteholders from and against any and all Damages to the extent that such Damage
arose out of, or was imposed upon the Owner Trustee, the Indenture Trustee, the
Trust, the Certificateholders or the Noteholders through the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its duties under
this Agreement or by reason of reckless disregard of its obligations and duties
under this Agreement.
(c) The Servicer shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture 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: (i) shall be
due to the willful misfeasance, bad faith, or negligence (except for errors in
judgment) of the Owner Trustee or the Indenture Trustee, as the case may be;
(ii) relates to any tax other than the taxes with respect to which the Seller
shall be required to
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indemnify the Owner Trustee or the Indenture Trustee; (iii) shall arise from
the breach by the Owner Trustee or the Indenture Trustee of any of their
respective representations or warranties set forth in the Basic Documents;
(iv) shall be one as to which the Seller is required to indemnify the Owner
Trustee or the Indenture Trustee and as to which such Person has received
payment of indemnity from the Seller; or (v) shall arise out of or be
incurred in connection with the performance by the Owner Trustee or the
Indenture Trustee of the duties of Successor Servicer hereunder.
Promptly after receipt by a party indemnified under this
Section 7.02 (for purposes of this paragraph, an "Indemnified Party") of notice
of the commencement of any action, such Indemnified Party will, if a claim in
respect thereof is to be made against the Servicer under this Section 7.02,
notify the Servicer of the commencement thereof. If any such action is brought
against any Indemnified Party under this Section 7.02 and it notifies the
Servicer of the commencement thereof, the Servicer will assume the defense
thereof, with counsel reasonably satisfactory to such Indemnified Party (who
may, unless there is, as evidenced by an opinion of counsel to the Indemnified
Party stating that there is an unwaivable conflict of interest, be counsel to
the Servicer), and the Servicer will not be liable to such Indemnified Party
under this Section 7.02 for any legal or other expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof, other than
reasonable costs of investigation. The obligations set forth in this Section
7.02 shall survive the termination of this Agreement or the resignation or
removal of the Servicer, the Owner Trustee or the Indenture Trustee and shall
include reasonable fees and expenses of counsel and expenses of litigation. If
the Servicer shall have made any indemnity payments pursuant to this Section
7.02 and the Person to or on behalf of whom such payments are made thereafter
collects any of such amounts from others, such Person shall promptly repay such
amounts to the Servicer, without interest (except to the extent received by such
Person).
Indemnification under this Section 7.02 by NMAC (or any
successor thereto pursuant to Section 7.03) 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 this 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 7.02 and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts to the Servicer, without interest (except to the extent the
recipient collects interest from others).
SECTION 7.03 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 NMAC acts as Servicer, that is a corporation more
than 50% of the voting stock of which is owned directly or indirectly by Nissan,
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 Servicer Default, and no event which, after notice or lapse of
time, or both, would become a Servicer Default, shall have occurred and be
continuing, (y) the
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Servicer shall have delivered to the Owner Trustee and the Indenture Trustee
an Officer's Certificate stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section 7.03 and
that all conditions precedent provided for in this Agreement relating to such
transaction have been complied with and (z) the Servicer shall have delivered
to the Owner Trustee and the Indenture Trustee an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, based on customary
qualifications and assumptions, all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Owner Trustee and
the Indenture Trustee 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 prefect such interest. The Servicer shall provide
notice of any merger, consolidation or succession pursuant to this Section
7.03 to each Rating Agency. 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 7.04 LIMITATION ON LIABILITY OF SERVICER AND OTHERS.
(a) Neither the Servicer nor any of the directors, officers, employees
or agents of the Servicer shall be under any liability to the Trust, the
Certificateholders or the Noteholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement or for errors in judgment; PROVIDED, HOWEVER, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on the advice
of counsel or on any document of any kind, prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement.
(b) Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Receivables in accordance
with this Agreement, and that in its opinion may 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 Basic Documents
and the rights and duties of the parties to the Basic Documents and the
interests of the Certificateholders under this Agreement and the Noteholders
under the Indenture. 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 7.05 NMAC NOT TO RESIGN AS SERVICER. Subject to the provisions
of Section 7.03, NMAC 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 NMAC shall be communicated to the Owner Trustee and the
Indenture 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
54
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Owner Trustee and the Indenture Trustee concurrently with or promptly after
such notice. No such resignation shall become effective until the Indenture
Trustee or a Successor Servicer shall (i) have taken the actions required by
Section 8.01 of this Agreement to effect the termination of the
responsibilities and rights of the predecessor Servicer under this 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, (ii) have assumed the responsibilities and
obligations of NMAC as Servicer under this Agreement in accordance with
Section 8.02 of this Agreement (other than the initial Servicer's obligation
to make Advances), and (iii) become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
ARTICLE VIII
DEFAULT
SECTION 8.01 SERVICER DEFAULT. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer (or the Seller, so long as NMAC is the
Servicer) to deliver to the Relevant Trustee for deposit in any of the Accounts
any required payment or to direct the Relevant Trustee to make any required
distributions therefrom, which failure continues unremedied for a period of
three Business Days after (i) receipt by the Servicer (or the Seller, so long as
NMAC is the Servicer) of written notice of such failure given by the Owner
Trustee or the Indenture Trustee, (ii) receipt by the Servicer (or the Seller,
so long as NMAC is the Servicer), the Owner Trustee or the Indenture Trustee of
written notice of such failure given by the holders of Notes or Certificates
evidencing not less than 25% of the sum of the Outstanding Amount and the
Certificate Balance, acting together as a single class, or (iii) discovery of
such failure by any officer of the Servicer;
(b) any failure by the Servicer (or the Seller, as long as NMAC is the
Servicer) to duly observe or perform in any material respect any other covenants
or agreements of the Servicer (or the Seller, as long as NMAC is the Servicer)
set forth in this Agreement, which failure shall materially and adversely affect
the rights of Certificateholders or Noteholders and shall continue unremedied
for a period of 90 days after giving of written notice of the failure to (i) the
Servicer (or the Seller, as long as NMAC is the Servicer) by the Owner Trustee
or the Indenture Trustee, or (ii) the Servicer (or the Seller, as long as NMAC
is the Servicer) and the Owner Trustee or the Indenture Trustee by the holders
of Notes or Certificates evidencing not less than 25% of the sum of the
Outstanding Amount and the Certificate Balance, acting together as a single
class; or
(c) the occurrence of an Insolvency Event with respect to the Servicer;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee or the Holders of Notes evidencing a
majority of the Outstanding Amount of the Notes (but excluding for purposes of
such calculation and action all Securities
55
held or beneficially owned by NMAC, NARC or any of their Affiliates), by
notice then given in writing to the Servicer (and to the Indenture Trustee
and the Owner Trustee if given by the Noteholders) may terminate all of the
rights and obligations (other than the obligations set forth in Section 7.02
hereof) of the Servicer under this Agreement. On or after the receipt by the
Servicer of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Notes, the Certificates or
the Receivables or otherwise, shall, without further action, pass to and be
vested in the Indenture Trustee or such Successor Servicer as may be
appointed under Section 8.02; and, without limitation, the Indenture Trustee
and the Owner Trustee are hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the Successor Servicer and the
Owner Trustee in effecting the termination of the responsibilities and rights
of the predecessor Servicer under this Agreement, including, without
limitation, the transfer to the Successor Servicer for administration by it
of all cash amounts that shall at the time be held by the predecessor
Servicer for deposit, or have been deposited by the predecessor Servicer, in
the Accounts or thereafter received with respect to the Receivables that
shall at that time be held by the predecessor Servicer and the delivery of
the Receivables Files and the related accounts and records maintained by the
predecessor Servicer. All reasonable costs and expenses (including attorneys'
fees) incurred in connection with transferring the Receivable Files to the
Successor Servicer and amending this Agreement to reflect such succession as
Servicer pursuant to this Section 8.01 shall be paid by the predecessor
Servicer upon presentation of reasonable documentation of such costs and
expenses. Notwithstanding the foregoing, in the event the predecessor
Servicer is the Owner Trustee, the original Servicer hereunder shall
reimburse the Owner Trustee for all reasonable costs and expenses as
described in the immediately preceding sentence. Upon receipt of notice of
the occurrence of a Servicer Default, the Owner Trustee shall give notice
thereof to the Rating Agencies.
SECTION 8.02 APPOINTMENT OF SUCCESSOR.
(a) Upon the Servicer's receipt of notice of termination pursuant to
Section 8.01 or the Servicer's resignation in accordance with the terms of this
Agreement, the predecessor Servicer shall continue to perform its functions as
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the earlier of (i) the date 45 days from the delivery to the
Owner Trustee and the Indenture Trustee of written notice of such resignation
(or written confirmation of such notice) in accordance with the terms of this
Agreement and (ii) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of the Servicer's resignation or
termination hereunder, the Indenture Trustee shall appoint a Successor Servicer,
and the Successor Servicer shall accept its appointment (including its
appointment as Administrator under the Administration Agreement as set forth in
Section 8.02(b)) by a written assumption in form acceptable to the Owner Trustee
and the Indenture Trustee. If 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 8.02, the Indenture Trustee without further action shall
automatically be
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appointed the Successor Servicer and the Indenture Trustee shall be entitled
to the Total Servicing Fee. Notwithstanding the above, the Indenture Trustee
shall, if it shall be legally unable so to act, appoint or petition a court
of competent jurisdiction to appoint, and the predecessor Servicer, if no
successor Servicer has been appointed at the time the predecessor Servicer
has ceased to act, may 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 include the servicing of automobile and/or
light-duty truck receivables, as the successor to the Servicer under this
Agreement.
(b) Upon appointment, the Successor Servicer (including the Indenture
Trustee acting as Successor Servicer) shall (i) be the successor in all respects
to the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer (except the initial Servicer's obligation to make Advances)
and shall be entitled, subject to the arrangements referred to in paragraph (c)
below, to the servicing fee and all the rights granted to the predecessor
Servicer by the terms and provisions of this Agreement and (ii) become the
Administrator under the Administration Agreement in accordance with Section 8 of
such Agreement.
(c) In connection with such appointment, the Owner 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 this Agreement. The Owner Trustee and such Successor
Servicer shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.
SECTION 8.03 REPAYMENT OF ADVANCES. If the Servicer shall resign or be
terminated, the Servicer shall continue to be entitled to receive, to the extent
of available funds, reimbursement for Outstanding Advances pursuant to Sections
5.03 and 5.04 with respect to all Advances previously made thereby.
SECTION 8.04 NOTIFICATION . Upon any termination of, or appointment of
a successor to, the Servicer pursuant to this Article VIII, the Owner Trustee
shall give prompt written notice thereof to Certificateholders, and the
Indenture Trustee shall give prompt written notice thereof to Noteholders and
the Rating Agencies.
SECTION 8.05 WAIVER OF PAST DEFAULTS. The Holders of Notes evidencing a
majority of the Outstanding Amount of the Controlling Class of Notes, or, in the
case of any Servicer Default which does not adversely affect the Indenture
Trustee or the Noteholders, the Holders of Certificates evidencing a majority of
the Certificate Balance of the Controlling Class of Certificates, in each case
excluding for purposes of such calculation and action all Securities held or
beneficially owned by NMAC, NARC or any of their Affiliates, may, on behalf of
all Noteholders and Certificateholders, waive in writing 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 in accordance with this Agreement. Upon any such waiver of a
past default, such default shall cease to exist, and any Servicer Default
arising therefrom shall be deemed to have been remedied for every purpose of
57
this Agreement. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereto.
ARTICLE IX
TERMINATION; RELEASE OF RECEIVABLES
SECTION 9.01 OPTIONAL PURCHASE OF ALL RECEIVABLES.
(a) On each Distribution Date following the last day of a Collection
Period as of which the Pool Balance shall be less than or equal to the Optional
Purchase Percentage multiplied by the Original Pool Balance, the Servicer or any
successor to the Servicer shall have the option to purchase the corpus of the
Owner Trust Estate (whether or not such assets then comprise all or a portion of
the Trust Estate) for an amount equal to the Optional Purchase Price. To
exercise such option, the Servicer or any successor to the Servicer shall notify
the Owner Trustee and the Indenture Trustee of its intention to do so in
writing, no later than the tenth day of the month preceding the month in which
the Distribution Date as of which such purchase is to be effected and shall, on
or before the Distribution Date on which such purchase is to occur, deposit
pursuant to Section 5.05 in the Collection Account an amount equal to the
Optional Purchase Price, and shall succeed to all interests in and to the Trust
Estate and the Owner Trust Estate; PROVIDED, HOWEVER, that the Servicer shall
not effect any such purchase so long as the rating of NMAC by Moody's, or if
NMAC shall then be unrated by Moody's, then the rating of Nissan Capital of
America, Inc., is less than "Bal" by Moody's, and the Seller shall not effect
any such purchase so long as the rating of NARC by Moody's, or if NARC shall
then be unrated by Moody's, then the rating of Nissan Capital of America, Inc.,
is less than "Ba1" by Moody's, in each case unless the Owner Trustee and the
Indenture 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. Amounts so
deposited will be paid and distributed as set forth in Section 5.06 of this
Agreement. Upon such deposit of the amount necessary to purchase the corpus of
the Owner Trust Estate, the Servicer shall for all purposes of this Agreement be
deemed to have released all claims for reimbursement of Outstanding Advances
made in respect of the Receivables.
(b) Notice of any such purchase of the Owner Trust Estate shall be
given by the Owner Trustee and the Indenture Trustee to each Securityholder as
soon as practicable after their receipt of notice thereof from the Servicer.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder other
than Section 5.06 and the Owner Trustee will succeed to the rights of, and
assume the obligations of, the Indenture Trustee provided for in this Agreement.
SECTION 9.02 RELEASE OF RECEIVABLES.
(a) Upon repurchase of any Receivable by the Seller pursuant to Section
3.02 or by the Servicer pursuant to Section 4.06 or Section 9.01, the Owner
Trustee on behalf of the Issuer and the Certificateholders, and the Indenture
Trustee on behalf of the Noteholders, shall, without
58
further action, be deemed to transfer, assign, set-over and otherwise convey
to the Seller or the Servicer, as the case may be, all right, title and
interest of the Owner Trustee on behalf of the Issuer in, to and under such
repurchased Receivable, all monies due or to become due with respect thereto
and all proceeds thereof and the other property conveyed to the Issuer
hereunder pursuant to Section 2.01 with respect to such Receivable, and all
security and any documents relating thereto, such assignment being an
assignment outright and not for security; and the Seller or the Servicer, as
applicable, shall thereupon own each such Receivable, and all such related
security and documents, free of any further obligation to the Issuer, the
Owner Trustee, the Certificateholders, the Indenture Trustee or the
Noteholders with respect thereto.
(b) The Owner Trustee and Indenture Trustee shall execute such
documents and instruments of transfer and assignment and take such other actions
as shall be reasonably requested by the Seller or the Servicer, as the case may
be, to effect the conveyance of such Receivable pursuant to Sections 3.02, 4.06
and 9.01.
(c) If in any enforcement suit or legal proceeding it is held that the
Seller or the Servicer may not enforce a repurchased Receivable on the ground
that it is not a real party in interest or a holder entitled to enforce the
Receivable, the Owner Trustee on behalf of the Issuer and the
Certificateholders, and the Indenture Trustee on behalf of the Noteholders,
shall, at the written direction and expense of the Seller or Servicer, as the
case may be, take such reasonable steps as the Seller or the Servicer deems
necessary to enforce the Receivable, including bringing suit in the name or
names of the Issuer, Certificateholders or Noteholders.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 AMENDMENT.
(a) This Agreement may be amended by the Seller, the Servicer and the
Issuer, with the consent of the Indenture Trustee, but without the consent of
any of the Noteholders or the Certificateholders,
(1) to cure any ambiguity, correct or supplement any
provision herein that may be inconsistent with any other provision
herein, or make any other provisions with respect to matters or
questions arising hereunder that are not inconsistent with the
provisions herein; provided that (i) the amendment will not materially
and adversely affect the interest of any Noteholder or
Certificateholder and (ii) the Servicer shall have delivered an
Officer's Certificate to the Indenture Trustee and the Owner Trustee
stating that such amendment will not materially and adversely affect
the interest of any Noteholder or Certificateholder; and
(2) to change the formula for determining the required
amount for the Specified Reserve Account Balance upon (i) confirmation
from each Rating Agency that such amendment will not result in the
qualification, reduction or withdrawal of any rating it currently
assigns to any Class of Notes or Certificates, and (ii) delivery by the
Servicer to the Indenture Trustee and the Owner Trustee of an Officer's
Certificate stating that
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such amendment will not materially and adversely affect the interest of
any Noteholder or Certificateholder.
An amendment will be deemed not to materially and adversely affect the
interests of any Noteholder or Certificateholder of any Class if (x) the
amendment does not adversely affect the Trust's status as a partnership for
federal income tax purposes, and (y) each Rating Agency confirms that that
amendment will not result in a reduction or withdrawal of its rating on the
Certificates or the Notes of that Class.
(b) This Agreement may also be amended from time to time by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee and the
consent of:
(1) the holders of Notes evidencing a majority
of the Outstanding Amount of the Controlling Class of Notes;
or
(2) in the case of any amendment that does not
adversely affect the Indenture Trustee or the Noteholders, the
Holders of the Certificates evidencing a majority of the
outstanding Certificate Balance of the Controlling Class of
Certificates (but excluding for purposes of calculation and
action all Certificates held by the Seller, the Servicer or
any of their Affiliates), 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 those Noteholders or Certificateholders;
PROVIDED, HOWEVER, that no amendment shall:
(x) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on
the Receivables or distributions that are required to be made
for the benefit of those Noteholders or Certificateholders or
change the Interest Rate or the Pass-Through Rate or the
Specified Reserve Account Balance (except as described above
under clause (2) of subsection (a) above) without the consent
of each "adversely affected" Noteholder or Certificateholder;
or
(y) reduce the aforesaid percentage of the Outstanding Amount
of the Notes or Certificate Balance of the Certificates which
is required to consent to any amendment, without the consent
of the holders of all the then outstanding Notes or
Certificates.
An amendment referred to in clause (x) above will be deemed not to
"adversely affect" a Certificateholder or Noteholder of any Class only if each
Rating Agency confirms that that amendment will not result in a reduction or
withdrawal of its rating on the Certificates or Notes of that Class. In
connection with any amendment referred to in clause (x) above, the Servicer
shall deliver an Officer's Certificate to the Indenture Trustee and the Owner
Trustee stating that those Noteholders and Certificateholders whose consents
were not obtained were not adversely affected by such amendment.
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Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and
each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section 10.01 to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section
10.02. The Owner Trustee and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's or
the Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.
SECTION 10.02 PROTECTION OF TITLE TO TRUST.
(a) The Seller shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain and
protect the interest of the Issuer and of the Indenture Trustee in the
Receivables and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the Owner Trustee and the Indenture Trustee file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.
(b) The Seller and the Servicer shall notify the Owner Trustee and the
Indenture Trustee within 30 days after any change of its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC, and
shall promptly file appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of the Seller and the Servicer shall notify the Owner Trustee
and the Indenture Trustee of any relocation of its principal executive office
within 30 days after such relocation, 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 or new financing statement.
The Servicer shall at all times maintain each office from which it shall service
Receivables, and its principal executive office, within the United States of
America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
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(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Trust, the
Servicer's master computer records that refer to any Receivable shall indicate
clearly the interest of the Issuer, the Owner Trustee and the Indenture Trustee
in such Receivable and that such Receivable is owned by the Issuer and has been
pledged to the Indenture Trustee. Indication of these respective interests in a
Receivable shall be deleted from or modified on the Servicer's computer systems
when, and only when, the related Receivable shall have become a Liquidated
Receivable or been repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to, any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts that, if they shall refer in any manner
whatsoever to any Receivable, shall indicate clearly that such Receivable has
been sold and is owned by the Issuer and has been pledged to the Indenture
Trustee.
(g) Upon receipt of a written request from the Owner Trustee or the
Indenture Trustee, which request shall be made no more frequently than annually,
the Servicer shall furnish to the Owner Trustee or the Indenture Trustee, as the
case may be, within 20 Business Days after receipt of such request, 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. The Servicer
shall permit the Indenture Trustee and its agents at any time during normal
business hours upon reasonable prior notice to inspect, audit and make copies of
and abstracts from the Servicer's records regarding any Receivable.
(h) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(A) upon the execution and delivery of this Agreement and
of each amendment hereto, an Opinion of counsel, based on customary
assumptions and qualifications, stating that, in the opinion of such
counsel, either (A) all financing statements and continuation
statements have been executed and filed that are necessary to perfect
the interest of the Owner Trustee and the Indenture Trustee in the
Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) no
such action shall be necessary to preserve and protect such interest;
and
(B) if requested by the Indenture Trustee or the Owner
Trustee, not more frequently than annually, an Opinion of Counsel,
dated as of a date during such 90-day period, either (A) stating that,
in the opinion of such counsel, based on customary assumptions and
qualifications, all financing statements and continuation statements
have been executed and filed that are necessary to perfect the interest
of the Owner Trustee and the Indenture Trustee in the Receivables, and
reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) no such action shall be
necessary to preserve and protect such interest.
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(i) Each Opinion of Counsel referred to in clause (h)(A) or (B) above
shall specify any action necessary (as of the date of such Opinion of Counsel)
to be taken in the following year to preserve and protect such interest.
SECTION 10.03 NOTICES. All demands, notices, communications and
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in
the case of the Seller, to Nissan Auto Receivables Corporation, 000 Xxxx
000xx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, Attention of Secretary ((310)
719-8013), (b) in the case of the Servicer, to Nissan Motor Acceptance
Corporation, 000 Xxxx 000xx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, Attention of
Secretary ((000) 000-0000), (c) in the case of the Issuer or the Owner
Trustee, at the Corporate Trust Office, (d) in the case of the Indenture
Trustee, at the Corporate Trust Office, (e) in the case of Moody's, to
Xxxxx'x Investors Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, and (f) in the case of Standard & Poor's, to
Standard & Poor's Ratings Group, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Asset Backed Surveillance Department; or, as to each
of the foregoing, at such other address as shall be designated by written
notice to the other parties.
SECTION 10.04 ASSIGNMENT BY THE SELLER OR THE SERVICER. Notwithstanding
anything to the contrary contained herein, except as provided in Sections 6.04
and 7.03 of this Agreement and as provided in the provisions of this Agreement
concerning the resignation or termination of the Servicer, this Agreement may
not be assigned by the Seller or the Servicer without the prior written consent
of the Indenture Trustee, the Owner Trustee, the Holders of the Certificates and
Notes evidencing not less than 66 2/3% of the Outstanding Amount and the
Certificate Balance, voting as a single class.
SECTION 10.05 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Seller, the Servicer, the Issuer,
the Owner Trustee, the Certificateholders, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 10.06 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.07 SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.08 HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
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SECTION 10.09 GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10.10 ASSIGNMENT BY ISSUER. The Seller hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest by
the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders of all right, title and interest of the Issuer in, to and under
the Receivables and/or the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
SECTION 10.11 NONPETITION COVENANTS.
(a) Notwithstanding any prior termination of this Agreement, the
Servicer and the Seller shall not, prior to the date which is one year and one
day after the termination of this Agreement with respect to the Issuer,
acquiesce, petition or otherwise invoke or cause the Issuer to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce, petition or
otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller under any federal or state bankruptcy, insolvency or similar law,
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Seller.
SECTION 10.12 LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE
TRUSTEE. Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by [________________], not in its individual
capacity, but solely in its capacity as Owner Trustee of the Issuer, and by
[________________], not in its individual capacity, but solely in its capacity
as Indenture Trustee under the Indenture. In no event shall [______________] or
[________________] have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered by the Seller or the Servicer,
or prepared by the Seller or the Servicer for delivery by the Owner Trustee on
behalf of the Issuer, pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.
NISSAN AUTO RECEIVABLES [___-___]
OWNER TRUST
By: ___________________________________,
not in its individual capacity but solely as
Owner Trustee on behalf of the Trust
By: ___________________________________
Name: _________________________________
Title: ________________________________
NISSAN AUTO RECEIVABLES CORPORATION, Seller
By:
Name:
Title:
NISSAN MOTOR ACCEPTANCE
CORPORATION, Servicer
By:
Name:
Title:
ACKNOWLEDGED AND ACCEPTED AS OF
THE DAY AND YEAR FIRST ABOVE WRITTEN:
___________________________________, not in its
individual capacity but solely as Indenture Trustee
By: _______________________________
Name: _____________________________
Title: ____________________________
S-1
SCHEDULE A
Schedule of Receivables
(To be Delivered to the Trust on the Closing Date)
SCHEDULE B
LOCATION OF THE RECEIVABLES
1. NISSAN MOTOR ACCEPTANCE CORPORATION
0000 Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
2. NISSAN MOTOR ACCEPTANCE CORPORATION
000 X. 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
3. KESTREL RECORDS MANAGEMENT
0000 X. Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
4. DATA LOK DATA STORAGE CENTER
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
