EXHIBIT 4.1
SALE AND SERVICING AGREEMENT
among
NISSAN AUTO RECEIVABLES 1999-A OWNER TRUST
as Issuer,
NISSAN AUTO RECEIVABLES CORPORATION,
as Seller,
and
NISSAN MOTOR ACCEPTANCE CORPORATION,
as Servicer
Dated as of August 1, 1999
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions................................................................................1
SECTION 1.02 Usage of Terms............................................................................18
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01 Conveyance of Receivables.................................................................19
SECTION 2.02 Custody of Receivables Files..............................................................20
SECTION 2.03 Acceptance by Issuer......................................................................21
ARTICLE III
THE RECEIVABLES
SECTION 3.01 Representations and Warranties of the Seller with Respect to the Receivables..............21
SECTION 3.02 Repurchase upon Breach....................................................................24
SECTION 3.03 Duties of Servicer as Custodian...........................................................25
SECTION 3.04 Instructions; Authority To Act............................................................25
SECTION 3.05 Custodian's Indemnification...............................................................25
SECTION 3.06 Effective Period and Termination..........................................................26
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01 Duties of Servicer........................................................................26
SECTION 4.02 Collection of Receivable Payments.........................................................28
SECTION 4.03 Realization upon Receivables..............................................................28
SECTION 4.04 Maintenance of Security Interests in Financed Vehicles....................................28
SECTION 4.05 Covenants of Servicer.....................................................................28
SECTION 4.06 Purchase of Receivables upon Breach.......................................................28
SECTION 4.07 Servicing Fee and Expenses................................................................29
SECTION 4.08 Servicer's Certificate....................................................................29
SECTION 4.09 Annual Statement as to Compliance; Notice of Default......................................30
SECTION 4.10 Annual Independent Certified Public Accountants' Report...................................30
SECTION 4.11 Access to Certain Documentation and Information Regarding
Receivables...............................................................................31
SECTION 4.12 Appointment of Subservicer................................................................31
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SECTION 4.13 Amendments to Schedule of Receivables.....................................................31
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO THE
CERTIFICATEHOLDERS AND THE NOTEHOLDERS
SECTION 5.01 Establishment of Accounts.................................................................31
SECTION 5.02 Collections...............................................................................33
SECTION 5.03 Application of Collections................................................................34
SECTION 5.04 Advances..................................................................................34
SECTION 5.05 Additional Deposits.......................................................................35
SECTION 5.06 Payments and Distributions................................................................35
SECTION 5.07 Reserve Account...........................................................................38
SECTION 5.08 Yield Supplement Account..................................................................40
SECTION 5.09 Statements to Certificateholders and Noteholders..........................................41
SECTION 5.10 Net Deposits.................................................................(Nissan 1999-42
ARTICLE VI
THE SELLER
SECTION 6.01 Representations of Seller.................................................................42
SECTION 6.02 Additional Covenants of the Seller........................................................43
SECTION 6.03 Liability of Seller; Indemnities..........................................................45
SECTION 6.04 Merger or Consolidation of, or Assumption of the Obligations of, Seller...................46
SECTION 6.05 Limitation on Liability of Seller and Others..............................................47
SECTION 6.06 Seller May Own Certificates or Notes......................................................47
ARTICLE VII
THE SERVICER
SECTION 7.01 Representations of Servicer...............................................................48
SECTION 7.02 Indemnities of Servicer...................................................................49
SECTION 7.03 Merger or Consolidation of, or Assumption of the Obligations
of, Servicer..............................................................................50
SECTION 7.04 Limitation on Liability of Servicer and Others............................................51
SECTION 7.05 NMAC Not To Resign as Servicer............................................................51
ARTICLE VIII
DEFAULT
SECTION 8.01 Servicer Default..........................................................................52
SECTION 8.02 Appointment of Successor..................................................................53
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SECTION 8.03 Repayment of Advances.....................................................................54
SECTION 8.04 Notification .............................................................................54
SECTION 8.05 Waiver of Past Defaults...................................................................54
ARTICLE IX
TERMINATION; RELEASE OF RECEIVABLES
SECTION 9.01 Optional Purchase of All Receivables......................................................55
SECTION 9.02 Release of Receivables....................................................................55
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Amendment.................................................................................56
SECTION 10.02 Protection of Title to Trust..............................................................58
SECTION 10.03 Notices...................................................................................60
SECTION 10.04 Assignment by the Seller or the Servicer..................................................60
SECTION 10.05 Limitations on Rights of Others...........................................................60
SECTION 10.06 Severability..............................................................................60
SECTION 10.07 Separate Counterparts.....................................................................60
SECTION 10.08 Headings..................................................................................60
SECTION 10.09 Governing Law.............................................................................60
SECTION 10.10 Assignment by Issuer......................................................................61
SECTION 10.11 Nonpetition Covenants.....................................................................61
SECTION 10.12 Limitation of Liability of Owner Trustee and Indenture Trustee............................61
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 August 1, 1999, among
NISSAN AUTO RECEIVABLES 1999-A 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.
"ADMINISTRATION AGREEMENT" means the Administration Agreement, dated
as of August 1, 1999, among the Administrator, the Issuer and the Indenture
Trustee.
"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.
"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.
"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.
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"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 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 1999-A Owner Trust, as Issuer, NARC, as Seller, and NMAC, as
Servicer.
"AICPA" shall have the meaning assigned to such term in Section 4.10.
"ALLOCABLE PRINCIPAL" means, for any Distribution Date, an amount
equal to the excess, if any, of (i) the sum of the Outstanding Amount of the
Notes and the Certificate Balance as of the close of business on the
immediately preceding Distribution Date over (ii) the Principal Balance of
the Receivables as of the end of the related Collection Period.
"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 allocable to interest, (ii) without
duplication of amounts described in clause (i), 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 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 plus
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reinvestment income on the Yield Supplement Account; 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, (ii) without duplication of
amounts described in clause (i), 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.
"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.
"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.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, Los Angeles,
California, Wilmington, Delaware or Minneapolis, Minnesota are authorized or
obligated by law, regulation, executive order or governmental decree to
remain closed.
"CERTIFICATE BALANCE" means, as of any Distribution Date, the
Original Certificate Balance, reduced by all amounts distributed to the
Certificateholders pursuant to Section 5.06(c) and/or (d) hereof (but in no
event less than zero). 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 the 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.
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"CERTIFICATE FACTOR" means, with respect to any Distribution Date, a
seven-digit decimal figure obtained by dividing the Certificate Balance as of
the close of business on the last day of the related Collection Period by the
Original Certificate Balance.
"CERTIFICATE OF TRUST" shall have the meaning assigned to such term
in the Trust Agreement.
"CERTIFICATE POOL FACTOR" means, with respect to any Distribution
Date, a seven-digit decimal figure obtained by dividing the Certificate
Balance 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
Certificate Registrar pursuant to the Trust Agreement recording the names of
the Certificateholders.
"CERTIFICATEHOLDERS" means the holders of the Certificates as
evidenced by the Certificate Register.
"CERTIFICATEHOLDER" shall have the meaning assigned to such term in
the Trust Agreement.
"CERTIFICATEHOLDERS' DISTRIBUTABLE AMOUNT" means, with respect to
any Distribution Date, the Certificateholders' Principal Distributable
Amount, if any, for such Distribution Date.
"CERTIFICATEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT" means,
with respect to any Distribution Date, the Certificateholders' Percentage of
the Allocable Principal for such 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, the excess, if any, of the
Certificateholders' Monthly Principal Distributable Amount 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, (i) the Certificateholders' Monthly
Principal Distributable Amount for such Distribution Date, and (ii) on the
Final Scheduled Distribution Date for the Certificates, the amount necessary
to reduce the outstanding principal amount of the Certificates to zero;
PROVIDED, HOWEVER, that the Certificateholders' Principal Distributable
Amount shall not exceed the Certificate Balance.
"CERTIFICATES" shall have the meaning assigned to such term in the
Trust Agreement.
"CLASS" means any one of the classes of Notes or Certificates, as
the case may be.
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"CLASS A-1 INTEREST RATE" means 5.619% per annum.
"CLASS A-1 NOTE" means any of the 5.619% 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 6.120% per annum.
"CLASS A-2 NOTE" means any of the 6.120% Asset Backed Notes, Class
A-2, issued under the Indenture.
"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 6.470% per annum.
"CLASS A-3 NOTE" means any of the 6.470% 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.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLOSING DATE" means September 1, 1999.
"COLLECTION ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 5.01.
"COLLECTION PERIOD" means, with respect to any Distribution Date,
the preceding calendar month. Any amount stated "as of the close of business
of the last day of a Collection Period" shall give effect to the following
calculations as determined as of the end of the day on such last day: (i) all
applications of collections, (ii) all Advances and reductions of Outstanding
Advances and (iii) all distributions.
"CORPORATE TRUST OFFICE" shall have the meaning assigned to such
term in the Indenture.
"CUTOFF DATE" means July 31, 1999.
"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.
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"DEALER RECOURSE" means, with respect to a Receivable, all recourse
rights against the Dealer which originated the Receivable, and any successor
Dealer.
"DEFAULTED RECEIVABLE" means a Receivable (other than an
Administrative Receivable or a Warranty Receivable as to which a Warranty
Purchase Payment or an Administrative Purchase Payment has been made), 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.
"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 September 15, 1999.
"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.
"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;
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(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 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));
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(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;
(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
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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; 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;
PROVIDED that, unless otherwise expressly stated herein, each of the
foregoing investments shall be denominated in U.S. dollars, shall not be
purchased at a premium, 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
Rating Agency) as will not result in the qualification, downgrading or
withdrawal of the rating then assigned by such Rating Agency to any of the
Notes.
"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 September, 2000; with respect to the
Class A-2 Notes, the Distribution Date
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in September, 2003; with respect to the Class A-3 Notes, the Distribution
Date in September, 2003.
"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 unless NARC or NMAC are the only holders.
"INDENTURE" means the Indenture dated as of August 1, 1999, 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 $19,198,358.85.
"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, 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, 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.
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"INTEREST RATE" means the Class A-1 Interest Rate, the Class A-2
Interest Rate or the Class A-3 Interest Rate.
"ISSUER" means Nissan Auto Receivables 1999-A 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.
"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 the
last day of the related Collection Period, by the initial Outstanding Amount of
that 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
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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.
"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.
"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 Noteholders' Monthly
Interest Distributable Amount for such Class plus any outstanding Noteholders'
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 Allocable
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 Distributable Amount for such Class for the preceding
Distribution Date over the amount in respect of
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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, (i) the Noteholders' Monthly
Principal Distributable Amount for such Distribution Date, and (ii) 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.
"NOTES" means the Class A-1 Notes, the Class A-2 Notes and the Class
A-3 Notes.
"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, and (iii) the Certificate Balance.
"ORIGINAL CERTIFICATE BALANCE" means $69,553,742.24.
"ORIGINAL POOL BALANCE" means the aggregate Principal Balance of the
Receivables on the Cutoff Date.
"ORIGINAL PRINCIPAL AMOUNT " means $195,850,000 for the Class A-1
Notes, $260,000,000 for the Class A-2 Notes and $206,740,000 for the Class A-3
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
13
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.
"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.
"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, unless all of the Certificates or Notes, as the case may be, are
held or beneficially owned by NMAC, NARC or any of their Affiliates.
"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
14
Certificate Balance, 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 August
1, 1999, between NMAC and the Seller, 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 Notes and that is rating such Class of Notes
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 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 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
15
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 (i) the Servicing Rate plus (ii) the Class A-3 Interest Rate plus (iii)
0.50%.
"REQUIRED YIELD SUPPLEMENT AMOUNT" means, with respect to every
Distribution Date, an amount equal to the lesser of (i) the aggregate amount of
Yield Supplement Deposits that would become due for all future Distribution
Dates under the Yield Supplement Agreement, assuming that payments on the
Receivables are made on their scheduled due dates, no Receivable becomes a
prepaid Receivable, and a discount rate of 2.5%, 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 $5,491,078.07.
"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 August 1, 1999, among the Seller, Norwest Bank
Minnesota, National Association, as Securities Intermediary thereunder and
Norwest Bank Minnesota, National Association, as Indenture Trustee pursuant to
which the Reserve Account and the Yield Supplement Account will be established
and maintained.
"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 DEFAULT" means an event specified in Section 8.01.
"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
16
assistant treasurer, the controller or any assistant controller of the
Servicer pursuant to Section 4.08.
"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 $5,491,078.07, PROVIDED, HOWEVER, that in
the event that on any Distribution Date (i) the annualized average for the
preceding three Collection Periods (or such smaller number of Collection Periods
as have elapsed since the Cutoff Date) of the percentage equivalents of the
ratios of net losses (i.e., the net balances of all Liquidated Receivables, less
any Net Liquidation Proceeds with respect to such Liquidated Receivables from
that or prior Collection Periods) to the Pool Balance as of the first day of
each such Collection Period exceeds 3.5% or (ii) the average for the preceding
three Collection Periods (or such smaller number of Collection Periods as have
elapsed since the Cutoff Date) of the percentage equivalents of the ratios of
the number of Receivables that are delinquent 60 days or more to the outstanding
number of Receivables exceeds 2.0%, then the Specified Reserve Account Balance
for such Distribution Date (and for each succeeding Distribution Date until the
relevant averages have not exceeded the specified percentages in clauses (i) and
(ii) above for three successive Distribution Dates) shall be a dollar amount
equal to the greater of (i) $5,491,078.07 and (ii) 10% of the outstanding
principal balance of the Notes and the Certificates as of the preceding
Distribution Date (after giving effect to payments of principal made on such
Distribution Date).
"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 Trust Agreement, dated August 6, 1999, as
amended by the Amended and Restated Trust Agreement, dated as of August 6, 1999,
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.
"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 such
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 pursuant to
Section 5.08(a).
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"YIELD SUPPLEMENT AGREEMENT" means the agreement, dated as of the date
of this agreement, among the Seller, NMAC and Norwest Bank Minnesota, National
Association, as Indenture Trustee, 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 (a) 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 (b) 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 Issuer, without
recourse (but subject to the Seller's obligations in this Agreement), in trust
for the benefit of the Noteholders and the Certificateholders:
19
(i) all right, title and interest of the Seller in and to the
Receivables (including all related Receivable Files) 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 Section 3.02 or the purchase of Receivables by the
Servicer pursuant to Section 4.06 or 9.01) 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 the Financed Vehicles or the 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 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
20
grant of a security interest from the Seller to the Issuer, and the Issuer
shall have all the rights, powers and privileges of a secured party under the
UCC.
(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 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 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 and
the Indenture Trustee (on behalf of the Noteholders and the 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 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 Issuer 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 ISSUER. The Issuer acknowledges its
acceptance 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 Issuer holds
and shall hold such right, title and interest, upon the terms and conditions set
forth in this Agreement.
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ARTICLE III
THE RECEIVABLES
SECTION 3.01 REPRESENTATIONS AND WARRANTIES OF THE SELLER WITH RESPECT
TO THE RECEIVABLES. The Seller makes the following representations and
warranties as to the Receivables on which the Issuer is deemed to have relied in
acquiring the Receivables. Such representations and warranties speak as of the
execution and delivery of this Agreement and as of the Closing Date, but shall
survive the sale, transfer and assignment of the Receivables to the Issuer and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) CHARACTERISTICS OF RECEIVABLES. Each Receivable (i) 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 Issuer 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 60 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, Hawaii or Maryland) 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.
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(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, 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 Issuer, 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.
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(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, the Seller
had good and marketable title to each Receivable free and clear of all Liens,
and immediately upon the transfer thereof, the Issuer, 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. Each
Receivable File contains the original certificate of title (or a photocopy or
image thereof) or evidence that an application for a certificate of title has
been filed.
(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 3.90%.
(t) MATURITY. As of the Cutoff Date, each Receivable had a remaining
term to maturity of not less than 3 months and not greater than 59 months.
(u) BALANCE. Each Receivable had an original Principal Balance of not
more than $48,841.86 and, as of the Cutoff Date, had a principal balance of not
less than $255.79 and not more than $39,869.16.
(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.
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(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.
(z) ORIGINATION. Each Receivable has an origination date on or after
July 19, 1994.
(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.
(dd) NO FURTHER AMOUNTS OWED ON THE RECEIVABLES. No further amounts are
owed by the Seller to any Obligor under the Receivables.
SECTION 3.02 REPURCHASE UPON BREACH. The Seller, the Servicer or the
Issuer, 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 Issuer 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 Trust, the Indenture Trustee (by operation of the assignment of the
Issuer'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.
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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, 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
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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 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 Notes held or beneficially owned by NMAC,
NARC or any of their Affiliates unless all of the Notes are 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 Certificates held or beneficially owned by NMAC, NARC
or any of their Affiliates unless all of the Certificates are 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 Issuer 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:
27
(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 A-3
Notes; or (B) make adjustments in an Obligor's 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 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
A-3 Notes; 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 Issuer
(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 Issuer 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 Issuer 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, including those required under the Pennsylvania Motor Vehicle
Sales Finance Act, required by
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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 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
29
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
Issuer 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
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
30
statements to the 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 Notes the Note
Factor for each Class of Notes, the Certificate Factor, and the Pool Factor for
each Class of Notes and for the 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,
2000, 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, 2000), 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
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 would result
in any lowering of the ratings described in Section 5.02(a)(ii)(A).
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, 2000, 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 31, 2000) 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
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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
Certificateholder or Note Owner, the Owner Trustee or the Indenture Trustee, as
the case may be, shall promptly provide such Certificateholder 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 Certificateholder 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 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.
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ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO THE CERTIFICATEHOLDERS AND THE 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.
(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
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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 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 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) (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
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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.
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.
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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 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.
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(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, plus
reinvestment income on the Yield Supplement Account (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 Allocable 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 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);
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(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 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 (iv) above),
until the principal amount of the Class A-1 Notes is reduced to zero;
(vi) 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 (v) above),
until the principal amount of the Class A-2 Notes is reduced to zero;
(vii) 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 (vi) above),
until the principal amount of the Class A-3 Notes is reduced to zero;
(viii) 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 (vii) above);
(ix) after the Notes have been paid in full, to the
Certificateholders, an amount equal to the Certificateholders'
Principal Distributable Amount, such amount to be paid from Available
Amounts (after giving effect to the reduction in Available Amounts
described in clauses (iii) through (viii) above); and
(x) any Available Amounts remaining after giving effect
to the foregoing, to the Seller.
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(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 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 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) after the Notes have been paid in full, to the
Certificateholders, an amount equal to the Certificateholders'
Principal Distributable Amount, such amount to be paid from Available
Amounts (after giving effect to the reduction in Available Amounts
described in clauses (iii) through (v) above); and
(vii) 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(b) 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
39
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; and (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.
(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
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 (vii) of Section 5.06(c) or clauses (i) through (v) of
Section 5.06(d), the Relevant Trustee will withdraw amounts then on deposit in
the Reserve Account, 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
40
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 to the extent that funds on deposit in the Reserve Account
exceed the Specified Reserve Account Balance, 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 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, to the extent
that funds on deposit exceed the Specified Reserve Account Balance, and the
right to receive such income are retained by the Seller and are not transferred,
assigned or otherwise conveyed hereunder. If for any reason the Reserve Account
is no longer an Eligible Deposit Account, the 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 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
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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 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 deposited in the
Collection Account 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.
(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, 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.
If for
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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;
(ii) the amount of the payment allocable to interest on or
with respect to each Class of Notes;
(iii) the amount of the distribution allocable to the Yield
Supplement Deposit, if any, plus reinvestment income, if any, on the
Yield Supplement Account;
(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;
(vi) the Noteholders' Interest Carryover Shortfall, the
Noteholders' Principal Carryover Shortfall, and the Certificateholders'
Principal Carryover Shortfall, if any, with respect to each Class of
Notes and the Certificates, and the change in such amounts from the
preceding Distribution Date;
(vii) the Outstanding Amount, the Note Factor and the Note
Pool Factor with respect to each Class of Notes, and the Certificate
Balance, the Certificate Factor and the Certificate Pool Factor with
respect to the Certificates, in each case after giving effect to all
payments in respect of principal on such Distribution Date;
(viii) 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
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(ix) 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 the Certificateholders
or the 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.
(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. The location of
the Seller's chief executive office and principal place of business is Torrance,
California.
(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
44
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 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 Certificateholders, 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 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
45
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 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 (other than Moody's) (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) and, upon the Seller's receipt of
such written consent from each Rating Agency (other than Moody's), the Owner
Trustee and the Indenture Trustee shall, without any exercise of its own
discretion, also provide its written consent to the Seller (promptly after the
occurrence of any of the following, the Seller shall provide notice of such
occurrence to Moody's, so long as Xxxxx'x is then rating any outstanding
Notes)):
(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;
(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 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
46
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;
(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;
(5) cease to have an "Independent Director," as
defined in the Seller's charter;
or
(6) without the affirmative vote of at least one "Independent
Director," as defined in the Seller's charter, enter into any transactions with
the Servicer not in the ordinary course of business.
SECTION 6.03 LIABILITY OF SELLER; INDEMNITIES. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the 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
47
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, a 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).
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
48
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 Issuer 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 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
49
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. The location of the Servicer's
chief executive office and principal place of business is Torrance, California.
(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 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,
50
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
51
required to 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 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, a 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
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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 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 Issuer 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
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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 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 Holders of Notes evidencing not less
than 25% of the Outstanding Amount, 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 (including its obligation to purchase Receivables
pursuant to Section 4.06), which failure shall materially and adversely affect
the rights of the Certificateholders or the 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
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Indenture Trustee by Holders of Notes evidencing not less than 25% of the
Outstanding Amount or Holders of Certificates evidencing not less than 25% of
the Certificate Balance; 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 Notes held or beneficially owned by NMAC, NARC
or any of their Affiliates unless all of the Notes are 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 Indenture Trustee, the original Servicer
hereunder shall reimburse the Indenture Trustee for all reasonable costs and
expenses as described in the immediately preceding sentence. Upon receipt of
notice of the occurrence of a Servicer Default, the Indenture Trustee shall give
notice thereof to the Rating Agencies.
SECTION 8.02 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,
55
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 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 Issuer 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 Issuer, the Indenture 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 the Certificateholders, and the
Indenture Trustee shall give prompt written notice thereof to Noteholders and
the Rating Agencies.
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SECTION 8.05 WAIVER OF PAST DEFAULTS. The Holders of Notes
evidencing a majority of the Outstanding Amount of the 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, 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 (unless all of the Notes or the Certificates, as the case
may be, are held by NMAC, NARC and their Affiliates), may, on behalf of all
the Noteholders and the 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 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 then "Ba1" by Moody's, 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.
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(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 Issuer will succeed to the rights 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 Issuer and
the Indenture Trustee on behalf of the Noteholders, shall, without further
action, be deemed to transfer, assign, set-over and otherwise convey to the
Seller or the Servicer, as the case may be, all right, title and interest of the
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 Issuer 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 Issuer, 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, the Certificateholders or the 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
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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, and
(ii) delivery by the Servicer to the Indenture Trustee and the
Owner Trustee of an Officer's Certificate stating that 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 (or,
for any period during which there is not more than one beneficial owner of a
Certificate, the Trust's status as an entity that is disregarded as an entity
separate from the Certificateholder) for federal income tax purposes, (y)
each Rating Agency confirms that that amendment will not result in a
reduction or withdrawal of its rating on the Notes of that Class, and (z) the
Servicer has delivered the Officer's Certificate described in this Section
10.01(a).
(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 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 (but excluding for purposes of
calculation and action all Certificates held by the Seller,
the Servicer or any of their Affiliates, unless all of the
Certificates are 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 Specified Reserve Account
Balance (except as
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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 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 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.
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 the 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
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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.
(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 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.
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(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.
(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
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Notes evidencing not less than 66 2/3% of the Outstanding Amount and the
Holders of Certificates evidencing not less than 66 2/3% of the Certificate
Balance.
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.
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.
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(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 Chase Manhattan Bank Delaware, not
in its individual capacity, but solely in its capacity as Owner Trustee of
the Issuer, and by Norwest Bank Minnesota, National Association, not in its
individual capacity, but solely in its capacity as Indenture Trustee under
the Indenture. In no event shall Chase Manhattan Bank Delaware or Norwest
Bank Minnesota, National Association 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 1999-A OWNER TRUST
By: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely as
Owner Trustee on behalf of the Trust
By: /s/ XXXX X. XXXXXX
---------------------------------
Name: XXXX X. XXXXXX
---------------------------------
Title: VICE PRESIDENT
---------------------------------
NISSAN AUTO RECEIVABLES
CORPORATION, as Seller
By: /s/ XXXXXXX XXXXXXX
---------------------------------
Name: XXXXXXX XXXXXXX
---------------------------------
Title: TREASURER
---------------------------------
NISSAN MOTOR ACCEPTANCE
CORPORATION, as Servicer
By: /s/ XXXXXXX XXXXXXX
---------------------------------
Name: XXXXXXX XXXXXXX
---------------------------------
Title: TREASURER
---------------------------------
ACKNOWLEDGED AND ACCEPTED AS OF
THE DAY AND YEAR FIRST ABOVE WRITTEN:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Indenture Trustee
By: /s/ X. XXXXXX
---------------------------------
Name: X. XXXXXX
---------------------------------
Title: CORPORATE TRUST OFFICER
---------------------------------
S-1
SCHEDULE A
Schedule of Receivables
(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
EXHIBIT A
Form of Yield Supplement
Agreement
(See Exhibit 4.6)
