EXHIBIT 10.2
[Draft - 10/17/97]
FORM OF YIELD SUPPLEMENT AGREEMENT
Nissan Auto Receivables Corporation
000 Xxxx 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Dated as of
October 1, 1997
YIELD SUPPLEMENT AGREEMENT
The Fuji Bank and Trust Company
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Nissan Auto Receivables Corporation (the "Company") hereby confirms
arrangements made as of the date hereof with you, as Class A Agent for the
benefit of the Class A Certificateholders ("Class A Agent"), to be effective
upon (i) receipt by the Company of the enclosed copy of this letter agreement
(the "Yield Supplement Agreement"), executed by Class A Agent, (ii) execution of
the Purchase Agreement dated as of the date hereof (the "Purchase Agreement")
between the Company and Nissan Motor Acceptance Corporation ("NMAC"), (iii)
receipt by NMAC of the payment by the Company of the purchase price under the
Purchase Agreement and (iv) the receipt by the Company of the capital
contribution of NMAC in connection with the payment of the purchase price under
the Purchase Agreement. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings given to them in the Pooling and
Servicing Agreement, dated as of the date hereof, among NMAC, in its individual
capacity and as Servicer, the Company and The Fuji Bank and Trust Company, in
its capacity as Trustee (the "Pooling and Servicing Agreement").
1. On or prior to the fifth calendar day before each Distribution Date,
the Servicer shall notify the Company of the "Yield Supplement Amount" for such
Distribution Date and the amount on deposit in the Yield Supplement Reserve
Account (as defined below). The "Yield Supplement Amount" means, with respect
to any Distribution
Date, the sum of all Receivable Yield Supplement Amounts for all Receivables.
"Receivable Yield Supplement Amount" means, with respect to any Receivable
(other than a Liquidated Receivable, after the Collection Period in which such
Receivable became a Liquidated Receivable) for any
Collection Period, the amount (only if positive) calculated by the Servicer
equal to one-twelfth times (i) interest at a rate equal to the sum of (a) the
Pass-Through Rate and (b) the Servicing Rate minus (ii) interest on such
Receivable at its Annual Percentage Rate on such Receivable's Principal Balance
as of the first day of such Collection Period.
2. On or before the Closing Date (as defined in the Purchase Agreement),
the Company shall establish and maintain with the Class A Agent for the benefit
of the Class A Certificateholders a separate trust account in the name of the
Class A Agent (the "Yield Supplement Reserve Account"), or such other account as
may be acceptable to the rating agencies then rating the Class A Certificates,
and the Company hereby grants to the Class A Agent for the benefit of the
Certificateholders a first priority security interest in the monies on deposit
and the other property that from time to time comprise the Yield Supplement
Reserve Account, and any and all proceeds thereof (collectively, the "Yield
Supplement Property"). The Class A Agent shall possess all right, title and
interest in the Yield Supplement Property and its proceeds. The Yield
Supplement Property and the Yield Supplement Reserve Account shall be under the
sole dominion and control of the Class A Agent. Neither the Seller nor any
Person claiming by, through or under the Seller shall have any right, title or
interest in, any control over the use of, or any right to withdraw from amounts
from, the Yield Supplement Property or the Yield Supplement Reserve Account.
All Yield Supplement Property in the Yield Supplement Reserve Account shall be
applied by the Class A Agent as specified in this Yield Supplement Agreement and
the Pooling and Servicing Agreement. The Class A Agent shall, not later than
12:00 noon on the Business Day preceding each Distribution Date, withdraw from
the Yield Supplement Reserve Account and deposit in the Certificate Account an
amount equal to the Yield Supplement Amount for such Distribution Date. On the
date of issuance of the Certificates, the Company shall deposit [$_________]
(the "Initial Yield Supplement Reserve Amount") into the Yield Supplement
Reserve Account. The amount required to be on deposit in the Yield Supplement
Reserve Account on the date of issuance of the Certificates and from time to
time thereafter (the "Required Yield Supplement Reserve Account
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Balance"), as determined by the Servicer and notified to the Class A Agent, will
be the lesser of, (i) the maximum Yield Supplement Amount that will become due
on all future Distribution Dates under this Yield Supplement Agreement, assuming
that payments on the Receivables are made on their scheduled due dates, that no
Receivable is prepaid in full or accelerated and that no related Financed
Vehicle underlying such Receivable is repossessed or becomes a total loss, and
(ii) the Initial Yield Supplement Reserve Amount. The Class A Agent shall have
no duty or liability to determine the Required Yield Supplement Reserve Account
Balance and may fully rely on the determination thereof by the Servicer. If, on
any Distribution Date, the funds in the Yield Supplement Reserve Account are in
excess of the Required Yield Supplement Reserve Account Balance for such
Distribution Date after giving effect to all distributions to be made on such
Distribution Date, the Class A Agent shall pay the Company the amount of such
excess. The Yield Supplement Reserve Account shall not be part of the Trust. It
is the intent of the parties that the Yield Supplement Property be treated as
property of the Company for all federal, state and local income and franchise
tax purposes. The provisions of this Yield Supplement Agreement should be
interpreted accordingly. Further, the Company shall include in its gross income
all income earned on the Yield Supplement Property and the Yield Supplement
Reserve Account.
3. All or a portion of the Yield Supplement Reserve Account may be
invested and reinvested in the manner specified in Section 5.01 of the Pooling
and Servicing Agreement with respect to monies in the Collection Account and
Certificate Account in accordance with written instructions from the Servicer;
provided that, if permitted by the rating agencies then rating the Class A
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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
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the initial rating of the Class A Certificates, any amounts on deposit in the
Yield Supplement Reserve Account shall be paid to the Company.
4. All payments to the Company pursuant hereto shall be made by federal
wire transfer (same day funds) or immediately available funds, to such account
as the Company, or any assignee of the Company referred to in Section 6 hereof,
may designate in writing to the Class A Agent, prior to the relevant
Distribution Date.
5. Our agreements set forth in this Yield Supplement Agreement are our
primary obligations and such obligations are irrevocable, absolute and
unconditional, shall not be subject to any counterclaim, setoff or defense
(other than full and strict compliance by us with our obligations hereunder) and
shall remain in full force and effect without regard to, and shall not be
released, discharged or in any way affected by, any circumstances or condition
whatsoever.
6. In order to more fully protect the interests of the Certificateholders,
the Company will transfer, assign and convey its interest in this Yield
Supplement Agreement to the Nissan Auto Receivables 1997-A Grantor Trust
established under the Pooling and Servicing Agreement (the "Trust"). Following
such transfer, assignment and conveyance, this Yield Supplement Agreement shall
not be amended, modified or terminated without the consent of The Fuji Bank and
Trust Company, in its capacity as trustee for the Trust, except in accordance
with the provisions for amendments, modifications and terminations of the
Pooling and Servicing Agreement as set forth in Section 13.01 of the Pooling and
Servicing Agreement.
7. THIS YIELD SUPPLEMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
8. Except as otherwise provided herein, all notices pursuant to this Yield
Supplement Agreement shall be in writing, personally delivered, sent by
telecopier, sent by courier or mailed by certified mail, return receipt
requested, and shall be effective upon receipt thereof. All notices shall be
directed as set forth below, or to such other address or telecopy number or to
the attention of such
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other person as the relevant party shall have designated for such purpose in a
written notice.
The Company:
Nissan Auto Receivables Corporation
000 Xxxx 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Treasurer
Facsimile No.: [000-000-0000]
Class A Agent:
The Fuji Bank and Trust Company
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Trust Administration Department
Facsimile No.: 000-000-0000
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: ___________________
Agreed and accepted as of __________ ___, 1997
NISSAN MOTOR ACCEPTANCE CORPORATION
By:__________________________
Name:_____________________
Title:____________________
THE FUJI BANK AND TRUST COMPANY, AS TRUSTEE
AND CLASS A AGENT
By: _______________________________
Name:__________________________
Title:_________________________
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