Exhibit 10.2
Nissan Auto Receivables Corporation
000 Xxxx 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Dated as of
[____________], 1998
FORM OF YIELD SUPPLEMENT AGREEMENT
Norwest Bank Minnesota, N.A.
[Address]
Ladies and Gentlemen:
Nissan Auto Receivables Corporation (the "Company") hereby confirms
arrangements made as of the date hereof with you, as Class A Agent for the
benefit of the Class A Certificateholders ("Class A Agent"), to be effective
upon (i) receipt by the Company of the enclosed copy of this letter agreement
(the "Yield Supplement Agreement"), executed by Class A Agent, (ii) execution of
the Purchase Agreement dated as of the date hereof (the "Purchase Agreement")
between the Company and Nissan Motor Acceptance Corporation ("NMAC"), (iii)
receipt by NMAC of the payment by the Company of the purchase price under the
Purchase Agreement and (iv) the receipt by the Company of the capital
contribution of NMAC in connection with the payment of the purchase price under
the Purchase Agreement. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings given to them in the Pooling and
Servicing Agreement, dated as of the date hereof, among NMAC, in its individual
capacity and as Servicer, the Company and Norwest Bank Minnesota, N.A., in its
capacity as Trustee (the "Pooling and Servicing Agreement").
1. On or prior to the fifth calendar day before each Distribution Date,
the Servicer shall notify the Company of the "Yield Supplement Amount" (as
defined below) for such Distribution Date and the amount on deposit in the Yield
Supplement Reserve Account (as defined below). The "Yield Supplement Amount"
means, with respect to any Distribution Date, the sum of all Receivable Yield
Supplement Amounts for all Receivables. "Receivable Yield Supplement Amount"
means, with respect to any Receivable (other than a Liquidated Receivable, after
the Collection Period in which such Receivable became a Liquidated Receivable)
for any Collection Period, the amount (only if positive) calculated by the
Servicer equal to one-twelfth
times (i) interest on such Receivable at a rate equal to the sum of (a) the
Pass-Through Rate and (b) the Servicing Rate minus (ii) interest on such
Receivable at its Annual Percentage Rate on such Receivable's Principal Balance
as of the first day of such Collection Period.
2. On or before the Closing Date (as defined in the Purchase
Agreement), the Company shall establish and maintain with the Class A Agent for
the benefit of the Class A Certificateholders a separate trust account in the
name of the Class A Agent (the "Yield Supplement Reserve Account"), or such
other account as may be acceptable to the rating agencies then rating the Class
A Certificates, and the Company hereby grants to the Class A Agent for the
benefit of the Class A Certificateholders a first priority security interest in
the monies on deposit and the other property that from time to time comprise the
Yield Supplement Reserve Account, and any and all proceeds thereof
(collectively, the "Yield Supplement Property"). The Class A Agent shall possess
all right, title and interest in the Yield Supplement Property and its proceeds.
The Yield Supplement Property and the Yield Supplement Reserve Account shall be
under the sole dominion and control of the Class A Agent. Neither the Seller nor
any Person claiming by, through or under the Seller shall have any right, title
or interest in, any control over the use of, or any right to withdraw from
amounts from, the Yield Supplement Property or the Yield Supplement Reserve
Account. All Yield Supplement Property in the Yield Supplement Reserve Account
shall be applied by the Class A Agent as specified in this Yield Supplement
Agreement and the Pooling and Servicing Agreement. The Class A Agent shall, not
later than 12:00 noon on the Business Day preceding each Distribution Date,
withdraw from the Yield Supplement Reserve Account and deposit in the
Certificate Account an amount equal to the Yield Supplement Amount for such
Distribution Date. On the date of issuance of the Certificates, the Company
shall deposit $[ ] (the "Initial Yield Supplement Reserve Amount")
into the Yield Supplement Reserve Account. The amount required to be on deposit
in the Yield Supplement Reserve Account on the date of issuance of the
Certificates and from time to time thereafter (the "Required Yield Supplement
Reserve Account Balance"), as determined by the Servicer and notified to the
Class A Agent, will be the lesser of, (i) the maximum Yield Supplement Amount
that will become due on all future Distribution Dates under this Yield
Supplement Agreement, assuming that payments on the Receivables are made on
their scheduled due dates, that no Receivable is prepaid in full or accelerated
and that no related Financed Vehicle underlying such Receivable is repossessed
or becomes a total loss, and (ii) the Initial Yield Supplement Reserve Amount.
The Class A Agent shall have no duty or liability to determine the Required
Yield Supplement Reserve Account Balance and
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may fully rely on the determination thereof by the Servicer. If, on any
Distribution Date, the funds in the Yield Supplement Reserve Account are in
excess of the Required Yield Supplement Reserve Account Balance for such
Distribution Date after giving effect to all distributions to be made on such
Distribution Date, the Class A Agent shall pay the Company the amount of such
excess. The Yield Supplement Reserve Account shall not be part of the Trust. It
is the intent of the parties that the Yield Supplement Property be treated as
property of the Company for all federal, state and local income and franchise
tax purposes. The provisions of this Yield Supplement Agreement should be
interpreted accordingly. Further, the Company shall include in its gross income
all income earned on the Yield Supplement Property and the Yield Supplement
Reserve Account.
3. All or a portion of the Yield Supplement Reserve Account may be
invested and reinvested in the manner specified in Section 5.01 of the Pooling
and Servicing Agreement with respect to monies in the Collection Account and
Certificate Account in accordance with written instructions from the Servicer;
provided that, if permitted by the rating agencies then rating the Class A
Certificates, monies on deposit therein may be invested in obligations or
securities specified in Section 5.01 that mature later than the Business Day
preceding the next Distribution Date. All such investments shall be made in the
name of the Class A Agent and all income and gain realized thereon shall be
solely for the benefit of the Company and shall be payable by the Class A Agent
to the Company on each Distribution Date from time to time upon the Company's
request to the Class A Agent. Upon termination of the Pooling and Servicing
Agreement, or in the event that the Company otherwise satisfies the requirements
established by the agencies initially rating the Class A Certificates, as
evidenced by the written reaffirmation by such agencies of the initial rating of
the Class A Certificates, any amounts on deposit in the Yield Supplement Reserve
Account shall be paid to the Company.
4. All payments to the Company pursuant hereto shall be made by federal
wire transfer (same day funds) or immediately available funds, to such account
as the Company, or any assignee of the Company referred to in Section 6 hereof,
may designate in writing to the Class A Agent, prior to the relevant
Distribution Date.
5. Our agreements set forth in this Yield Supplement Agreement are our
primary obligations and such obligations are irrevocable, absolute and
unconditional, shall not be subject to any counterclaim, setoff or defense
(other than full and strict compliance by us with our obligations hereunder) and
shall remain in
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full force and effect without regard to, and shall not be released, discharged
or in any way affected by, any circumstances or condition whatsoever.
6. In order to more fully protect the interests of the
Certificateholders, the Company will transfer, assign and convey its interest in
this Yield Supplement Agreement to the Nissan Auto Receivables 1998-A Grantor
Trust established under the Pooling and Servicing Agreement (the "Trust").
Following such transfer, assignment and conveyance, this Yield Supplement
Agreement shall not be amended, modified or terminated without the consent of
Norwest Bank Minnesota, N.A., in its capacity as trustee for the Trust, except
in accordance with the provisions for amendments, modifications and terminations
of the Pooling and Servicing Agreement as set forth in Section 13.01 of the
Pooling and Servicing Agreement.
7. THIS YIELD SUPPLEMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
8. Except as otherwise provided herein, all notices pursuant to this
Yield Supplement Agreement shall be in writing, personally delivered, sent by
telecopier, sent by courier or mailed by certified mail, return receipt
requested, and shall be effective upon receipt thereof. All notices shall be
directed as set forth below, or to such other address or telecopy number or to
the attention of such other person as the relevant party shall have designated
for such purpose in a written notice.
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The Company:
Nissan Auto Receivables Corporation
000 Xxxx 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Treasurer
Facsimile No.: 000-000-0000
Class A Agent:
Norwest Bank Minnesota, N.A.
[Address]
9. This Yield Supplement Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, all
of which shall be deemed to be one and the same document.
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If the foregoing satisfactorily sets forth the terms and conditions of
our agreement, please indicate your acceptance thereof by signing in the space
provided below and returning to us the enclosed duplicate original of this
letter.
Very truly yours,
NISSAN AUTO RECEIVABLES CORPORATION
By:
--------------------------------
Name:
--------------------------
Title:
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Agreed and accepted as of __________ ___, 1998
NISSAN MOTOR ACCEPTANCE CORPORATION
By:
--------------------------
Name:
---------------------
Title:
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NORWEST BANK MINNESOTA, N.A., AS TRUSTEE
AND CLASS A AGENT
By:
-------------------------------
Name:
--------------------------
Title:
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