EXHIBIT 4.6
Nissan Auto Receivables Corporation
000 Xxxx 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Dated as of August 1, 1999
YIELD SUPPLEMENT AGREEMENT
Norwest Bank Minnesota, National Association
Xxxxxxx Xxxxxx
0xx Xxxxxx and Marquette Avenue
MAC X0000-000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Nissan Auto Receivables 1999-A Owner Trust
Ladies and Gentlemen:
Nissan Auto Receivables Corporation (the "Company") hereby confirms
arrangements made as of the date hereof with you, as Indenture Trustee for the
benefit of the Noteholders, to be effective upon (i) receipt by the Company of
the enclosed copy of this letter agreement (the "Yield Supplement Agreement"),
executed by the Indenture Trustee, (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 Sale and Servicing Agreement, dated as
of the date hereof, among NMAC, in its individual capacity and as Servicer, the
Company, and Nissan Auto Receivables 1999-A Owner Trust, as Issuer (the "Sale
and Servicing Agreement").
1. On or prior to each Determination Date, the Servicer shall notify
the Company of the "Yield Supplement Deposit" (as defined below) for the
related Distribution Date, the amount on deposit in the Yield Supplement
Account (as defined below) and the amount of reinvestment income during the
related Collection Period on the Yield Supplement Account. The "Yield
Supplement Deposit" means, with respect to any Distribution Date, the amount
by which (i) the aggregate amount of interest that would have been due during
the related Collection Period on all Yield Supplemented Receivables (as
defined below) if such Yield Supplemented Receivables bore interest at the
Required Rate (as defined below) exceeds (ii) the amount of interest accrued
on such Yield Supplemented Receivables at their respective APRs and due
during such Collection Period. "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%. "Yield Supplemented Receivable" means any
Receivable that has an APR less than the Required Rate.
2. On or before the date hereof, the Company shall establish and
maintain with the Indenture Trustee for the benefit of the Noteholders a
segregated trust account in the name of the Indenture Trustee (the "Yield
Supplement Account") in accordance with the Securities Account Control
Agreement and the Indenture, or such other account as may be acceptable to
the Rating Agencies, and the Company hereby grants to the Indenture Trustee
for the benefit of the Noteholders a first priority security interest in the
monies on deposit and the other property that from time to time comprise the
Yield Supplement Account (including the Initial Yield Supplement Amount), and
any and all proceeds thereof (collectively, the "Yield Supplement Account
Property"). The Relevant Trustee shall possess all of the rights of a secured
party under the UCC with respect thereto. The Yield Supplement Account
Property and the Yield Supplement Account shall be under the sole dominion
and control of the Relevant Trustee. Neither the Company nor any Person
claiming by, through or under the Company 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 Account Property or the Yield Supplement
Account. All Yield Supplement Account Property in the Yield Supplement
Account shall be applied by the Relevant Trustee as specified in this Yield
Supplement Agreement and the Sale and Servicing Agreement. The Relevant
Trustee shall, not later than 5:00 P.M., New York City time on the Business
Day preceding each Distribution Date, withdraw from the Yield Supplement
Account and deposit in the Collection Account an amount equal to the Yield
Supplement Deposit plus the amount of reinvestment income on the Yield
Supplement Account for such Distribution Date.
On or prior to the date hereof, the Company shall deposit
$19,198,358.85 (the "Initial Yield Supplement Amount") into the Yield Supplement
Account. The amount required to be on deposit in the Yield Supplement Account on
the date of issuance of the Notes and for any Distribution Date (the "Required
Yield Supplement Amount"), as determined by the Servicer and notified to the
Relevant Trustee, means an amount equal to the lesser of (i) the aggregate
amount of each Yield Supplement Deposit that will become due on each future
Distribution Date, 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% and (ii) the Initial Yield Supplement Amount. The Required Yield
Supplement Amount may decline as a result of prepayments or repayments in full
of the Receivables. The Relevant Trustee shall have no duty or liability to
determine the Required Yield Supplement Amount and may fully rely on the
determination thereof by the Servicer. If, on any Distribution Date, the funds
in the Yield Supplement Account are in excess of the Required Yield Supplement
Amount for such Distribution Date after giving effect to all distributions to be
made on such Distribution Date, the Relevant Trustee shall pay the Company the
amount of such excess. The Yield Supplement Account shall not be part of the
Trust. It is the intent of the parties that the Yield Supplement Account
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 Account Property
and the Yield Supplement Account.
3. All or a portion of the Yield Supplement Account may be invested and
reinvested in the manner specified in Section 5.08 of the Sale and Servicing
Agreement in accordance with written instructions from the Servicer; PROVIDED
that, if permitted by the Rating Agencies, monies
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on deposit therein may be invested in Eligible Investments that mature later
than the Business Day preceding the next Distribution Date. All such
investments shall be made in the name of the Relevant Trustee. Earnings 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. Upon
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 Company any amounts remaining on deposit in the Yield
Supplement Account. If for any reason the Yield Supplement Account is no
longer an Eligible Deposit Account, the Relevant Trustee shall promptly cause
the Yield Supplement Account to be moved to another institution or otherwise
changed so that the Yield Supplement Account becomes an Eligible Deposit
Account.
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 Relevant Trustee, 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 Noteholders,
the Company will transfer, assign and convey its interest in this Yield
Supplement Agreement to the Nissan Auto Receivables 1999-A Owner Trust
established under the Trust Agreement (the "Trust"). Following such transfer,
assignment and conveyance, this Yield Supplement Agreement shall not be
amended, modified or terminated except in accordance with the provisions for
amendments, modifications and terminations of the Sale and Servicing
Agreement as set forth in Section 10.01 of the Sale 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
Indenture Trustee:
Xxxxxxx Xxxxxx
0xx Xxxxxx and Marquette Avenue
MAC X0000-000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Nissan Auto Receivables 1999-A Owner Trust
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.
10. Each of the parties hereto agrees and acknowledges that all of the
rights and interests of the Indenture Trustee hereunder shall be automatically
transferred to the Owner Trustee, and the Owner Trustee shall succeed to all
such rights and interests, upon the payment in full of the Notes in accordance
with the terms of the Indenture and the Sale and Servicing Agreement.
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.
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Very truly yours,
NISSAN AUTO RECEIVABLES CORPORATION
By: /s/ XXXXXXX XXXXXXX
-----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Treasurer
Agreed and accepted as of August 1, 1999
NISSAN MOTOR ACCEPTANCE CORPORATION
By: /s/ XXXXXXXX XXXXXXXXX
---------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: President
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
AS INDENTURE TRUSTEE
By: /s/ X. XXXXXX
---------------------------------
Name: X. Xxxxxx
Title: Corporate Trust Officer
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