exv4w3



 





EXHIBIT 4.3




SALE AND SERVICING AGREEMENT




among




NISSAN AUTO RECEIVABLES                      OWNER TRUST,

as Issuer,




NISSAN AUTO RECEIVABLES CORPORATION II,

as Seller,




and




NISSAN MOTOR ACCEPTANCE CORPORATION,

as Servicer




Dated as of                     , 200_




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I

	DEFINITIONS

	 
	 	 	 	 	 	 
	SECTION 1.01

	 	DEFINITIONS
	 	 	1	 
	SECTION 1.02

	 	USAGE OF TERMS
	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE II

	CONVEYANCE OF RECEIVABLES

	 
	 	 	 	 	 	 
	SECTION 2.01

	 	CONVEYANCE OF RECEIVABLES
	 	 	19	 
	SECTION 2.02

	 	CUSTODY OF RECEIVABLE FILES
	 	 	21	 
	SECTION 2.03

	 	ACCEPTANCE BY ISSUER
	 	 	22	 
	 
	 	 	 	 	 	 
	ARTICLE III

	THE RECEIVABLES

	 
	 	 	 	 	 	 
	SECTION 3.01

	 	REPRESENTATIONS AND WARRANTIES OF THE SELLER WITH RESPECT TO THE RECEIVABLES
	 	 	22	 
	SECTION 3.02

	 	REPURCHASE UPON BREACH
	 	 	26	 
	SECTION 3.03

	 	DUTIES OF SERVICER AS CUSTODIAN
	 	 	26	 
	SECTION 3.04

	 	INSTRUCTIONS; AUTHORITY TO ACT
	 	 	27	 
	SECTION 3.05

	 	CUSTODIAN’S INDEMNIFICATION
	 	 	27	 
	SECTION 3.06

	 	EFFECTIVE PERIOD AND TERMINATION
	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE IV

	ADMINISTRATION AND SERVICING OF RECEIVABLES

	 
	 	 	 	 	 	 
	SECTION 4.01

	 	DUTIES OF SERVICER
	 	 	28	 
	SECTION 4.02

	 	COLLECTION OF RECEIVABLE PAYMENTS
	 	 	30	 
	SECTION 4.03

	 	REALIZATION UPON RECEIVABLES
	 	 	30	 
	SECTION 4.04

	 	MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES
	 	 	30	 
	SECTION 4.05

	 	COVENANTS OF SERVICER
	 	 	30	 
	SECTION 4.06

	 	PURCHASE OF RECEIVABLES UPON BREACH
	 	 	31	 
	SECTION 4.07

	 	SERVICING FEE AND EXPENSES
	 	 	31	 
	SECTION 4.08

	 	SERVICER’S CERTIFICATE
	 	 	32	 
	SECTION 4.09

	 	ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT
	 	 	32	 
	SECTION 4.10

	 	ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS’ REPORT
	 	 	33	 
	SECTION 4.11

	 	ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING RECEIVABLES	 	 	33	 





(Nissan                      Sale and Servicing Agreement)



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TABLE OF CONTENTS
(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 4.12

	 	APPOINTMENT OF SUBSERVICER
	 	 	33	 
	SECTION 4.13

	 	AMENDMENTS TO SCHEDULE OF RECEIVABLES
	 	 	33	 
	SECTION 4.14

	 	ACKNOWLEDGEMENT BY SERVICER OF ITS OBLIGATIONS UNDER THE INDENTURE
	 	 	34	 
	SECTION 4.15

	 	COMPLIANCE WITH REGULATION AB
	 	 	34	 
	 
	 	 	 	 	 	 
	ARTICLE V

	DISTRIBUTIONS; ACCOUNTS; STATEMENTS TO THE

	CERTIFICATEHOLDERS AND THE NOTEHOLDERS

	 
	 	 	 	 	 	 
	SECTION 5.01

	 	ESTABLISHMENT OF ACCOUNTS
	 	 	34	 
	SECTION 5.02

	 	COLLECTIONS
	 	 	36	 
	SECTION 5.03

	 	APPLICATION OF COLLECTIONS
	 	 	37	 
	SECTION 5.04

	 	ADVANCES
	 	 	37	 
	SECTION 5.05

	 	ADDITIONAL DEPOSITS
	 	 	39	 
	SECTION 5.06

	 	PAYMENTS AND DISTRIBUTIONS
	 	 	39	 
	SECTION 5.07

	 	RESERVE ACCOUNT
	 	 	44	 
	SECTION 5.08

	 	YIELD SUPPLEMENT ACCOUNT
	 	 	46	 
	SECTION 5.09

	 	STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
	 	 	47	 
	SECTION 5.10

	 	NET DEPOSITS
	 	 	49	 
	SECTION 5.11

	 	SWAP AGREEMENT
	 	 	49	 
	 
	 	 	 	 	 	 
	ARTICLE V

	THE SELLER

	 
	 	 	 	 	 	 
	SECTION 6.01

	 	REPRESENTATIONS OF SELLER
	 	 	50	 
	SECTION 6.02

	 	ADDITIONAL COVENANTS OF THE SELLER
	 	 	51	 
	SECTION 6.03

	 	LIABILITY OF SELLER; INDEMNITIES
	 	 	53	 
	SECTION 6.04

	 	MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, SELLER
	 	 	54	 
	SECTION 6.05

	 	LIMITATION ON LIABILITY OF SELLER AND OTHERS
	 	 	55	 
	SECTION 6.06

	 	SELLER MAY OWN CERTIFICATES OR NOTES
	 	 	55	 
	 
	 	 	 	 	 	 
	ARTICLE VII

	THE SERVICER

	 
	 	 	 	 	 	 
	SECTION 7.01

	 	REPRESENTATIONS OF SERVICER
	 	 	56	 
	SECTION 7.02

	 	INDEMNITIES OF SERVICER
	 	 	57	 
	SECTION 7.03

	 	MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, SERVICER	 	 	58	 
	SECTION 7.04

	 	LIMITATION ON LIABILITY OF SERVICER AND OTHERS
	 	 	59	 






(Nissan                      Sale and Servicing Agreement)



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TABLE OF CONTENTS
(continued)




	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 7.05

	 	NMAC NOT TO RESIGN AS SERVICER
	 	 	59	 
	 
	 	 	 	 	 	 
	ARTICLE VIII

	DEFAULT

	 
	 	 	 	 	 	 
	SECTION 8.01

	 	SERVICER DEFAULT
	 	 	60	 
	SECTION 8.02

	 	APPOINTMENT OF SUCCESSOR
	 	 	61	 
	SECTION 8.03

	 	REPAYMENT OF ADVANCES
	 	 	62	 
	SECTION 8.04

	 	NOTIFICATION
	 	 	62	 
	SECTION 8.05

	 	WAIVER OF PAST DEFAULTS
	 	 	62	 
	 
	 	 	 	 	 	 
	ARTICLE IX

	TERMINATION; RELEASE OF RECEIVABLES

	 
	 	 	 	 	 	 
	SECTION 9.01

	 	OPTIONAL PURCHASE OF ALL RECEIVABLES
	 	 	63	 
	SECTION 9.02

	 	RELEASE OF RECEIVABLES
	 	 	64	 
	SECTION 9.03

	 	TERMINATION
	 	 	64	 
	 
	 	 	 	 	 	 
	ARTICLE X

	MISCELLANEOUS

	 
	 	 	 	 	 	 
	SECTION 10.01

	 	AMENDMENT
	 	 	65	 
	SECTION 10.02

	 	PROTECTION OF TITLE TO TRUST
	 	 	67	 
	SECTION 10.03

	 	NOTICES
	 	 	68	 
	SECTION 10.04

	 	ASSIGNMENT BY THE SELLER OR THE SERVICER
	 	 	69	 
	SECTION 10.05

	 	LIMITATIONS ON RIGHTS OF OTHERS
	 	 	69	 
	SECTION 10.06

	 	SEVERABILITY
	 	 	69	 
	SECTION 10.07

	 	SEPARATE COUNTERPARTS
	 	 	69	 
	SECTION 10.08

	 	HEADINGS
	 	 	69	 
	SECTION 10.09

	 	GOVERNING LAW
	 	 	69	 
	SECTION 10.10

	 	ASSIGNMENT BY ISSUER
	 	 	69	 
	SECTION 10.11

	 	NONPETITION COVENANTS
	 	 	70	 
	SECTION 10.12

	 	LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE TRUSTEE
	 	 	70	 
	 
	 	 	 	 	 	 
	SCHEDULE A

	 	Schedule of Receivables	 	 	 	 
	SCHEDULE B

	 	Location of the Receivable Files	 	 	 	 
	EXHIBIT A

	 	Form of Yield Supplement Agreement	 	 	 	 
	APPENDIX A

	 	Regulation AB Representations, Warranties And Covenants	 	 	 	 





(Nissan                      Sale and Servicing Agreement)




iii









 





     SALE AND SERVICING AGREEMENT, dated as of                     , 200_, among NISSAN AUTO RECEIVABLES                     
OWNER TRUST, a Delaware statutory trust (the “Issuer”), NISSAN AUTO RECEIVABLES CORPORATION II, a
Delaware corporation (the “Seller”), and NISSAN MOTOR ACCEPTANCE CORPORATION, a California
corporation in its individual capacity (in such capacity, “NMAC”) and as Servicer (in such
capacity, the “Servicer”). 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                     ,
200_, among the Administrator, the Issuer, the Indenture Trustee and the Owner 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.



(Nissan                      Sale and Servicing Agreement)





 









 





     “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 with respect to such Distribution Date.



     “Agreement” means this Sale and Servicing Agreement among Nissan Auto Receivables
                     Owner Trust, as Issuer, NARC II, as Seller, and NMAC, as Servicer.



     “AICPA” shall have the meaning assigned to such term in Section 4.10.



     “Amount Financed” with respect to any Receivable, means the amount advanced under the
Receivable toward the purchase price of the related Financed Vehicle and any related costs,
including but not limited to accessories, insurance premiums, service and warranty contracts and
other items customarily financed as part of retail automobile and light-duty truck installment sale
contracts.



     “Annual Percentage Rate” or “APR” of a Receivable means the annual rate of
finance charges stated in such Receivable.



     “Assignment” shall have the meaning assigned to such term in the Purchase Agreement.



     “Available Amounts” means, with respect to any Distribution Date, the sum of Available
Interest and Available Principal for such Distribution Date.



     “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 Liquidated Receivable in
accordance with the Servicer’s customary servicing procedures, (iii) all Advances made by the
Servicer pursuant to Section 5.04, (iv) [all Net Swap Receipts and Swap Termination Payments made
by the Swap Counterparty]; (v) 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,
(vi) 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 (vii) the Yield Supplement Deposit plus
the sum of (x) reinvestment income on the Yield Supplement Account and (y) the amount, if any,
deposited into the Collection Account pursuant to the second or third sentence of Section 5.08(b);
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), 5.06(d)(ii), 5.06(e)(i) and 5.06(e)(ii) on such Distribution Date shall be excluded.



(Nissan                      Sale and Servicing Agreement)



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     “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 attributable to principal, (ii) without duplication of amounts described in clause (i),
Net Liquidation Proceeds attributable to principal due on a Liquidated 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.



     “Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. § 101 et
seq.



     “Base Servicing Fee” means the fee payable to the Servicer on each Distribution Date
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 close of business on the last day of
the immediately preceding 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 Interest
Rate Swap 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, Nashville, Tennessee, Irving, Texas, Wilmington, Delaware or
Minneapolis, Minnesota are authorized or obligated by law, regulation, executive order or
governmental decree to remain closed.



     “Calculation Agent” means                     , acting in such capacity under the Indenture.



     “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),
(d) and/or (e) 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 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.



(Nissan                      Sale and Servicing Agreement)



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     “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.



     “Certificateholder” shall have the meaning assigned to such term in the Trust
Agreement.



     “Certificateholders’ Percentage” means (a) until the Distribution Date on which the
principal amount of the Class A-1 Notes has been paid in full, zero, and (b) with respect to any
Distribution Date on or after the principal amount of the Class A-1 Notes has been paid in full,
100% minus the Noteholders’ Percentage.



     “Certificateholders’ Principal Distributable Amount” means, with respect to any
Distribution Date, an amount sufficient to reduce the outstanding principal amount of the
Certificates to an amount equal to the product of the Certificateholders’ Percentage and the Pool
Balance as of the end of the related Collection Period.



     “Certificates” shall have the meaning assigned to such term in the Trust Agreement.



     “Class” means any one of the classes of Notes.



     “Class A-1 Final Scheduled Distribution Date” means                     .



     “Class A-1 Interest Rate” means                     % per annum.



     “Class A-1 Note” means any of the                     % Asset Backed Notes, Class A-1, issued
under the Indenture.



     “Class A-1 Noteholder” means the Person in whose name a Class A-1 Note is registered
in the Note Register.



     “Class A-2 Final Scheduled Distribution Date” means                     .



     “Class A-2 Interest Rate” means                     % per annum.



     “Class A-2 Note” means any of the ___% Asset Backed Notes, Class A-2, issued under
the Indenture.



     “Class A-2 Noteholder” means the Person in whose name a Class A-2 Note is registered
in the Note Register.



     “Class A-3 Final Scheduled Distribution Date” means                     .



     “Class A-3 Interest Rate” means ___% per annum.



(Nissan                      Sale and Servicing Agreement)



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     “Class A-3 Note” means any of the ___% Asset Backed Notes, Class A-3, issued under
the Indenture.



     “Class A-3 Noteholder” means the Person in whose name a Class A-3 Note is registered
in the Note Register.



     “Class A-4 Final Scheduled Distribution Date” means                     .



     “Class A-4 Interest Rate” means ___% per annum.



     “Class A-4 Note” means any of the ___% Asset Backed Notes, Class A-4, issued under
the Indenture.



     “Class A-4 Noteholder” means the Person in whose name a Class A-4 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                     , 200_.



     “Code” means the Internal Revenue Code of 1986.



     “Collection Account” means the account designated as such, established and maintained
pursuant to Section 5.01.



     “Collection Period” means, with respect to any Distribution Date, the preceding
calendar month. 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.



     “Currency Sway Agreement” shall mean any currency swap agreement, including all
schedules and confirmation thereto, entered into by the Issuer and the Currency Swap Counterparty,
as the same may be amended, supplemented, renewed, extended or replaced from time to time.



     “Currency Swap Counterparty” shall mean an unaffiliated third party, as currency swap
counterparty, under the Currency Swap Agreement, or any successor or replacement Currency Swap
Counterparty from time to time.



     “Cut-off Date” means                     , 200_.



     “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.



(Nissan                      Sale and Servicing Agreement)



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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.



     “Default” shall have the meaning assigned to such term in the Indenture.



     “Defaulted Receivable” means (a) a Receivable (other than an Administrative Receivable
or a Warranty Receivable), which, by its terms, is delinquent for 120 or more days, (b) with
respect to Receivables that are delinquent for 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, or (c) a Receivable with respect to which the Servicer has
received notification that the related Obligor is subject to proceedings under Chapter 13 of the
Bankruptcy Code.



     “Definitive Notes” shall have the meaning ascribed thereto in the Indenture.



     “Designed LIBOR Page” means the display on Bridge Telerate, Inc. or any successor
service or any service or any page as may replace the designated page on that service or any
successor service that displays the London interbank rates on major for U.S. dollars.



     “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 succeeding Business
Day, commencing                     , 200_.



     “DTC” means The Depository Trust Company.



     “Eligible Deposit Account” means an account maintained (i) with the Indenture Trustee
or the Owner Trustee so 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,
and for any account in which deposits in excess of 30 days are to be made, so long as the Indenture
Trustee’s or the Owner Trustee’s long-term unsecured debt obligations have a rating of at least
“AA-” by Standard & Poor’s (such short-term and long-term (if applicable) ratings being 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. Notwithstanding anything to the
contrary, as of the Closing Date, the Indenture Trustee shall be deemed to have met the
requirements in clause (i).



     “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



(Nissan                      Sale and Servicing Agreement)



6









 







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
(including applicable plus signs);




     (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



(Nissan                      Sale and Servicing Agreement)



7









 







Guaranteed Counterparty, such rating being that of the related Rated Holding
Company) shall not exceed 20% of the outstanding Pool Balance (there being no limit
on the amount of funds that may be invested in repurchase obligations in respect of
which such Standard & Poor’s rating is “A-1+” (in the case of an unrated
broker/dealer or Guaranteed Counterparty, such rating being that of the related
Rated Holding Company));




     (B) in the case of the Reserve Account and the Yield Supplement Account and the
Swap Collateral 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;



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     (3) the only conditions to the obligation of such Rated Holding Company
to pay on behalf of the Guaranteed Counterparty shall be that the Guaranteed
Counterparty shall not have paid under such repurchase obligation when
required (it being understood that no notice to, demand on or other action
in respect of the Guaranteed Counterparty is necessary) and that the
Indenture Trustee or the Owner Trustee, as applicable, shall make a demand
on the Rated Holding Company to make the payment due under such guarantee;




     (4) the guarantee of the Rated Holding Company shall be irrevocable
with respect to such repurchase obligation and shall not be subordinated to
any other obligation of the Rated Holding Company; and




     (5) each of the Rating Agencies has confirmed in writing to the
Indenture Trustee or the Owner Trustee, as applicable, that it has reviewed
the form of the guarantee of the Rated Holding Company and has determined
that the issuance of such guarantee will not result in the downgrade or
withdrawal of the ratings assigned to the Notes; 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; and provided, further, that,
notwithstanding clauses (i) through (viii) above, “Eligible Investments” shall not include any
security having an “r” subscript attached to its Standard & Poor’s rating.




     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.



     “Exchange Act” means the Securities Exchange Act of 1934.



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     “Final Scheduled Distribution Date” means, the Class A-1 Final Scheduled Distribution
Date, the Class A-2 Final Scheduled Distribution Date, the Class A-3 Final Scheduled Distribution
Date, and the Class A-4 Final Scheduled Distribution Date.



     “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.



     “HB3” shall mean House Bill No. 3 (signed by the Governor of the State of Texas on May
19, 2006) and the corresponding sections of Title 2 of the Texas Tax Code implementing House Bill
No. 3 and the rules and regulations promulgated thereunder implementing House Bill No. 3.



     “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 II or NMAC, or any Person
actually known to a Trust Officer to be an Affiliate of NARC II 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 II or NMAC are the only holders.



     “Indenture” means the Indenture dated as of                     , 200_, between the Issuer and
Wells Fargo Bank, National Association, as 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 Interest Rate Swap Agreement” means the ISDA Master Agreement, dated as of
the Closing Date, between the Initial Swap Counterparty and the Issuer, the Schedule and the Credit
Support Annex thereto, dated as of the Closing Date and, the Confirmation thereto, each dated as of
the Closing Date, and entered into pursuant to such ISDA Master Agreement, as the same may be
amended or supplemented from time to time in accordance with the terms thereof.]



     [“Initial Swap Counterparty” means                     , as the swap counterparty under the
Initial Interest Rate Swap Agreement.]



     “Initial Yield Supplement Amount” means $                                        .



     “Insolvency Event” means, with respect to a specified Person, (a) the filing of a
petition seeking entry 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 petition shall remain
unstayed and in effect for a period of 90 consecutive days; or (b) the commencement by such Person
of a voluntary case



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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 Date Determination” means, with respect to any Interest Period with respect
to the Class A-4 Notes, the day that is two London Business Days prior to the related Interest
Reset Date.



     “Interest Period” means, with respect to any Distribution Date and the Class A-1 Notes
and the Class A-4 Notes, the period from (and including) the preceding Distribution Date to (but
excluding) such Distribution Date, except that the initial Interest Period will be from (and
including) the Closing Date to (but excluding)                     , 200_, and, with respect to any Distribution
Date and the Class A-2 Notes and the Class A-3 Notes, the period from (and including) the 15th day
of the preceding calendar month to (but excluding) the 15th day of the month in which such
Distribution Date occurs, except that the initial Interest Period will be from (and including) the
Closing Date to (but excluding)                     , 200_.



     “Interest Rate” means the Class A-1 Interest Rate, the Class A-2 Interest Rate, the
Class A-3 Interest Rate, or the Class A-4 Interest Rate, as the case may be.



     [“Interest Rate Swap Agreement” means the Initial Interest Rate Swap Agreement and any
Replacement Interest Rate Swap Agreement.]



     “Interest Reset Date” means, with respect to any Interest Period with respect to the
Class A-4 Notes, the first day of such Interest Period.



     “Issuer” means Nissan Auto Receivables ___Owner Trust, a Delaware statutory trust.



     “LIBOR” means, for any Interest Period, the rate for deposits in U.S. dollars having a
maturity of one month (commencing on the related Interest Reset Date) that appears on the
Designated LIBOR Page as of 11:00 a.m. London time, on the applicable Interest Determination Date.



     With respect to an Interest Determination Date on which fewer than two offered rates appear,
or no rate appears, as the case may be, on the Designated LIBOR Page, LIBOR for the applicable
Interest Determination Date will be the rate calculated by the Calculation Agent as the arithmetic
mean of at least two quotations obtained by the Calculation Agent after requesting the principal
London offices of each of the four major reference banks in the London interbank market, which may
include the Calculation Agent and its affiliates, as selected by the Calculation Agent, to provide
the Calculation Agent with its offered quotations for deposits in U.S. dollars for the period of
one month, commencing on the second London Business Day immediately following the applicable
Interest Determination Date, to prime banks in the London interbank market at approximately 11:00
a.m., London time, on such Interest Determination Date and in a principal amount that is
representative of a single transaction in U.S. dollars in that market at that time. If at least
two such quotations are provided, LIBOR determined on the applicable Interest



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Determination Dare will be the arithmetic mean of the quotations. If fewer than two
quotations referred to in this paragraph are provided, LIBOR determined on the applicable Interest
Determination Date will be the rate calculated by the Calculation Agent as the arithmetic mean of
the rates quoted at approximately 11:00 a.m., in New York, New York, on the applicable Interest
Determination Date by three major banks, which may include the Calculation Agent for loans in U.S.
dollars to leading European banks in a principal amount that is representation of a single
transaction in U.S. dollars in that market at that time.. If the banks so selected by the
Calculation Agent are not quoting as mentioned in this paragraph, LIBOR for the applicable Interest
Determination Date will be LIBOR in effect on the applicable Interest Determination Date.



     “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 as to which the related Financed
Vehicle has been liquidated by the Servicer.



     “London Business Day” means any day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market.



     “Monthly Remittance Conditions” shall have the meaning assigned to such term in
Section 5.02.



     “Moody’s” means Moody’s Investors Service, Inc.



     “NARC II” means Nissan Auto Receivables Corporation II, 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.



     [“Net Swap Payment” means for the Interest Rate Swap Agreement, the new amount with
respect to regularly scheduled payments, if any, owed by the Issuer to the Swap Counterparty on any
Distribution Date, including prior unpaid Net Swap Payments and any interest accrued thereon, under
such Interest Rate Swap Agreement; provided, that “Net Swap Payments” do not include Swap
Termination Payments.]



     [“Net Swap Receipts” means, for the Interest Rate Swap Agreement, the net amounts owed
by the Swap Counterparty to the Issuer, if any, on any Distribution Date, excluding Swap
Termination Payments.]



     “Nissan” means Nissan Motor Co., Ltd.



     “NMAC” means Nissan Motor Acceptance Corporation, a California corporation.



(Nissan                      Sale and Servicing Agreement)



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     “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.



     “Noteholder” shall have the meaning assigned to such term in the Indenture.



     “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’ Percentage” means for any Distribution Date, the percentage equivalent
of a fraction, the numerator of which is the aggregate of the principal balances of the Class A-2,
Class A-3, and the Class A-4 Notes as of the Closing Date, and the denominator of which is the
aggregate of such principal balances plus the principal amount of the Certificates as of the
Closing Date.



     “Noteholders’ Principal Carryover Shortfall” means, with respect to any Distribution
Date, the excess, if any, of the Noteholders’ Principal Distributable Amount for the preceding



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13









 







Distribution Date over the amount in respect of principal that is actually paid as principal
on the Notes on such previous Distribution Date. Noteholders’ Principal Carryover Shortfall is not
used to determine the amount of principal due on the Notes on any Distribution Date, but is used
solely for reporting purposes.



     “Noteholders’ Principal Distributable Amount” means, (a) with respect to any
Distribution Date until the principal amount of the Class A-1 Notes is reduced to zero, an amount
equal to the excess, if any, of (i) the Pool Balance as of the end of the Collection Period
preceding the related Collection Period, or as of the Cut-off Date, in the case of the first
Collection Period, over (ii) the Pool Balance as of the end of the related Collection Period,
together with any portion of the Noteholders’ Principal Distributable Amount that was to be
distributed as such on any prior Distribution Date but was not because sufficient funds were not
available to make such distribution; and (b) with respect to any Distribution Date on or after
which the principal amount of the Class A-1 Notes is reduced to zero, an amount sufficient to
reduce the aggregate outstanding principal amount of the Class A Notes to an amount equal to the
product of the Noteholders’ Percentage and the Pool Balance as of the end of the related Collection
period provided, however, that (i) the Noteholders’ Principal Distributable Amount
on the Class A-1 Final Scheduled Distribution Date shall not be less than the amount that is
necessary to reduce the outstanding principal amount of the Class A-1 Notes to zero; (ii) the
Noteholders’ Principal Distributable Amount on the Class A-2 Final Scheduled Distribution Date
shall not be less than the amount that is necessary to reduce the outstanding principal amount of
the Class A-2 Notes to zero; (iii) the Noteholders’ Principal Distributable Amount on the Class A-3
Final Scheduled Distribution Date shall not be less than the amount that is necessary to reduce the
outstanding principal amount of the Class A-3 Notes to zero; and (iv) the Noteholders’ Principal
Distributable Amount on the Class A-4 Final Scheduled Distribution Date shall not be less than the
amount that is necessary to reduce the outstanding principal amount of the Class A-4 Notes to zero.



     “Note Owner” shall have the meaning assigned to such term in the Indenture.



     “Note Pool Factor” means, with respect to any Class of Notes and any Distribution
Date, a seven-digit decimal figure obtained by dividing the Outstanding Amount of such Class of
Notes as of the close of business on the last day of the related Collection Period by the Original
Pool Balance.



     “Note Register” means the register maintained by the Indenture Trustee pursuant to the
Indenture recording the name of each Noteholder.



     “Notes” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, and the
Class A-4 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).



(Nissan                      Sale and Servicing Agreement)



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     “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” shall have the meaning assigned to such term in Section 9.01(a).



     “Optional Purchase Percentage” means 5.00%.



     “Optional Purchase Price” means, an amount equal to the aggregate Administrative
Purchase Payments for the Receivables (including Receivables that became Defaulted Receivables in
the Collection Period preceding the Distribution Date on which a purchase pursuant to Section 9.01
is effected), plus the appraised value of any other property held by the Trust, such value to be
determined by an appraiser mutually agreed upon by the Servicer and the Indenture Trustee (less
liquidation expenses); provided, however, that the Optional Purchase Price shall be
equal to or greater than 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, and (iv) all amounts payable to [the Swap Counterparty] under [the
Interest Rate Swap Agreement].



     “Original Certificate Balance” means $                    .



     “Original Pool Balance” means the aggregate Principal Balance of the Receivables on
the Cut-off Date.



     “Original Principal Amount” means $                     for the Class A-1 Notes, $                    
for the Class A-2 Notes, $                     for the Class A-3 Notes, and $                     for the Class A-4
Notes.



     “Outstanding” shall have the meaning assigned to that term in the Indenture.



     “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.



     “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, after the Cut-off Date; security



(Nissan                      Sale and Servicing Agreement)



15









 







interests in the Financed Vehicles and any accessions thereto; the Collection Account and all
funds deposited in the Collection Account; the Yield Supplement Account and all funds deposited in
the Yield Supplement 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 right to receive payments in respect
of any Dealer Recourse with respect to the Receivables; all right, title and interest of the Seller
in and to the Purchase Agreement and the Assignment; the proceeds of [the Interest Rate Swap
Agreement]; all right, title and interest of the Owner Trustee and the Trust pursuant to this
Agreement, the Yield Supplement Agreement and the Administration Agreement [and the Interest Rate
Swap 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 Cut-off 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 (reduced by the principal balance of any
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
II 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
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



(Nissan                      Sale and Servicing Agreement)



16









 







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, (iv) any Net Liquidation Proceeds allocable to
principal, and (v) any Prepayments or other payments applied to reduce the unpaid principal balance
of that Receivable (to the extent not included in clauses (i) or (iii) of this definition).



     “Purchase Agreement” means that certain agreement, dated as of                     , 200_, 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.



     “Rating Agency Condition” means, with respect to any event or circumstance and each
Rating Agency, either (a) written confirmation by such Rating Agency that the occurrence of such
event or circumstance will not cause it to downgrade, qualify or withdraw its rating assigned to
any of the Notes or (b) that such Rating Agency shall have been given notice of such event or
circumstance at least ten days prior to the occurrence of such event or circumstance (or if ten
days’ advance notice is impracticable, as much advance notice as is practicable) and such Rating
Agency shall not have issued any written notice that the occurrence of such event will cause a
downgrade, qualify or withdraw its rating to the Notes.



     “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, data tape 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 of any Class and each Distribution
Date, the Business Day immediately preceding such Distribution Date, and, with respect to the
Certificates or if Definitive Notes, representing any Class of Notes, 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



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under the joint or separate control of a co-trustee or separate trustee under the Trust
Agreement or the Indenture, respectively, “Relevant Trustee” shall refer to either or both of the
Owner Trustee and such co-trustee or separate trustee or to either or both of the Indenture Trustee
and such co-trustee or separate trustee, as the case may be.



     [“Replacement Interest Rate Swap Agreement” means any ISDA Master Agreement, dated
after the Closing Date, between a Replacement Swap Counterparty and the Issuer, the Schedule and
Credit Support Annex thereto, dated after the Closing Date, and the Confirmations thereto, each
dated after the Closing Date, and entered into pursuant to such ISDA Master Agreement, and pursuant
to the conditions set forth in the Initial Interest Rate Swap Agreement, as the same may be amended
or supplemented from time to time in accordance with the terms thereof.]



     [“Replacement Swap Counterparty” means, with respect to any Swap Counterparty, any
Replacement Swap Counterparty under a Replacement Interest Rate Swap Agreement that satisfies the
conditions set forth in the Interest Rate Swap Agreement.]



     “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,                     %.



     “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 (1)
that payments on the Receivables are made on their scheduled due dates, (2) that no Receivable
becomes a prepaid Receivable, and (3) a discount rate of 2.00%, and (ii) the Initial Yield
Supplement Amount.



     “Reserve Account” means the account designated as such, established and maintained
pursuant to Section 5.07.



     “Reserve Account Initial Deposit” means $                                        .



     “Schedule of Receivables” means the schedule of receivables attached as Schedule A to
this Agreement, as it may be amended from time to time.



     “Scheduled Payment” on a Receivable means the payment required to be made by the
Obligor during each Collection Period that is sufficient to amortize the related Principal Balance
under the Simple Interest Method over the term of the Receivable and to provide interest at the
related APR.



     “Securities Account Control Agreement” means the Securities Account Control Agreement
dated as of                     , 200_, among the Seller, the Trust, Wells Fargo Bank, National Association, as
Securities Intermediary thereunder and Wells Fargo Bank, National Association, as Indenture Trustee
pursuant to which the Reserve Account and the Yield Supplement Account will be established and
maintained.



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18









 





     “Securities Intermediary” shall have the meaning assigned to such term in the
Securities Account Control Agreement.



     “Securityholders” has the meaning set forth in this Section 1.01 under the definition
of “Holder.”



     “Seller” means NARC II, as the seller of the Receivables under this Agreement, and
each successor to NARC II (in the same capacity) pursuant to Section 6.04.



     [“Senior Swap Termination Payment” means any Swap Termination Payment owed by the
Issuer to the Swap Counterparty under the Interest Rate Swap Agreement arising due to (1) the
failure of the Issuer to make New Swap Payments due under that Interest Rate Swap Agreement, (2)
illegality of performance under the Interest Rate Swap Agreement or (3) the occurrence of
bankruptcy or insolvency events with respect to the Issuer.]



     “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
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 or 366, as appropriate.



     “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 $                    ; provided, however, that in the event that on any
Distribution Date (a) the annualized average for the preceding three Collection Periods (or such
smaller number of Collection Periods as have elapsed since the Cut-off 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
2.75 % or (b) the average for the preceding three Collection Periods (or such smaller number of
Collection Periods as have elapsed since the Cut-off Date) of the percentage equivalents of the
ratios of the number of Receivables that are delinquent ___days or more to the outstanding number
of Receivables exceeds 2.00%, then the Specified Reserve Account Balance for such



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Distribution Date (and for each succeeding Distribution Date until the relevant averages have
not exceeded the specified percentages in clauses (a) and (b) above for three successive
Distribution Dates) shall be a dollar amount equal to the greater of (i) $                     and (ii)
5.00 % of the Outstanding Amount of the Notes and the Certificate Balance 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, a division of The McGraw-Hill Companies,
Inc.



     [“Subordinated Swap Termination Payment” means any Swap Termination Payment owed by
the Issuer to the Swap Counterparty under an Interest Rate Swap Agreement other than a Senior Swap
Termination Payment.]



     “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) during the related Collection Period.



     [“Swap Collateral Account” means a single, segregated trust account in the name of the
Indenture Trustee, which shall be designated as the “Swap Collateral Account” which shall be held
in trust for the benefit of the Noteholders established pursuant to Section 5.12 of this
agreement.]



     “Swap Counterparty” shall mean an unaffiliated third party, as swap counterparty under
the Interest Rate Swap Agreement, or any successor or replacement swap counterparty from time to
time.



     [“Swap Event of Default” means any event defined as an “Event of Default” under the
Interest Rate Swap Agreement.]



     [“Swap Replacement Proceeds” means any amounts received from a Replacement Swap
Counterparty in consideration for entering into a Replacement Interest Rate Swap Agreement for a
terminated Interest Rate Swap Agreement.]



     [“Swap Termination Event” means any event defined as a “Termination Event” in the
Interest Rate Swap Agreement.]



     [“Swap Termination Payments” means any payments due to the Swap Counterparty by the
Issuer or to the Issuer by the Swap Counterparty, including interest that may accrue thereon, under
the Interest Rate Swap Agreement due to a termination of the Interest Rate Swap Agreement due to an
“event of default” or “termination event” under the Interest Rate Swap Agreement.]



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     [“Swap Termination Payment Account” means an Eligible Account held in the United
States in the name of the Indenture Trustee which shall be held in trust for the benefit of the
Noteholders and the Swap Counterparty pursuant to Section 5.12 of this Agreement.]



     “Total Servicing Fee” means the sum of the Base Servicing Fee and the Supplemental
Servicing Fee.



     “Trust” means the Issuer.



     “Trust Agreement” means the Trust Agreement, dated                     , 200_, as
amended by the Amended and Restated Trust Agreement, dated as of                     , 200_, between the Seller
and Wilmington Trust Company, as 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.



     “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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21









 





     “Yield Supplement Agreement” means the agreement, dated as of the date of this
Agreement, among the Seller, NMAC, Wells Fargo Bank, National Association, as Indenture Trustee,
and the Trust, 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; the term “including” means “including without limitation;” and the term “or” is not
exclusive.



ARTICLE II




Conveyance of Receivables




     SECTION 2.01 Conveyance of Receivables.




     (a) In consideration of the promises 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):




          (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 Cut-off Date;



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          (ii) 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;




          (iii) 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;




          (iv) the right of the Seller through NMAC to receive payments in respect of any Dealer
Recourse with respect to the Receivables;




          (v) the rights of the Seller under the Purchase Agreement and the Assignment;




          (vi) 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;




          (vii) 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
Cut-off Date;




          (viii) all other assets comprising the Owner Trust Estate; and




          (ix) all proceeds of the foregoing.




     On the Closing Date, the Seller shall deliver to, or to the order of, the Issuer all
property conveyed pursuant to this Section 2.01(a), except for monies received in respect of
the Receivables after the Cut-off Date and before the Closing Date which shall be deposited
by NMAC (in its individual capacity or as the Servicer) into the Collection Account no later
than the first Record Date after the Closing Date. 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 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.



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23









 






     (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 between 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 Receivable 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 that is tangible chattel paper (as such term is
used in Section 9-105 of the UCC)(or a photocopy or other image thereof that the Servicer
shall keep on file in accordance with its customary procedures) and a single “authoritative
copy” (as such term is used in Section 9-105 of the UCC) 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 and other property
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 or
authenticated 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 validly assigned pursuant to the Purchase Agreement by NMAC to the Seller, which in
turn has been validly 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, (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 63 payments, and (v) provides for 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 Cut-off Date; the Receivables were selected from NMAC’s retail installment
sale contracts (other than contracts originated in                                                             )
meeting the criteria of the Trust set forth in this Agreement; and no selection procedures
believed to be adverse to the Securityholders were utilized in selecting the Receivables.




     (c) Compliance with Law. Each Receivable, the origination of such 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
Magnuson-Moss Warranty Act, the Servicemembers Civil Relief Act, the Federal Reserve Board’s
Regulations B and Z, the Gramm-Leach-Bliley Act 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



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25









 







automobiles and other consumer credit laws and equal credit opportunity and disclosure
laws.




     (d) Binding Obligation. Each Receivable represents the genuine, legal, valid
and binding payment obligation in writing of the Obligor, enforceable by the holder thereof
in accordance with its terms subject to (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights generally, (ii)
the effect of general equitable principles and (iii) the potential unenforceability of
waivers of jury trial provisions in certain states.




     (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 Cut-off Date, according to the records
of NMAC, no Financed Vehicle has been repossessed and the possession thereof 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 Cut-off 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



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26









 







agreed to obtain physical damage insurance covering the Financed Vehicle and the
Obligor is required under the terms of the related Receivable to maintain such insurance.




     (l) Title. It is the intention of the Seller that the transfer and assignment
herein contemplated constitute a sale of the Receivables from the Seller to the Trust and
that the beneficial interest in and title to the Receivables not be part of the Seller’s
estate in the event of the filing of a bankruptcy petition by or against the Seller under
any bankruptcy law. Immediately prior to the transfer and assignment herein contemplated,
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. To the extent the transfer and assignment contemplated
under this Agreement is deemed to be other than a sale, this Agreement and all filings
described under this Agreement create a valid and continuing security interest (as defined
in the applicable UCC) in the Receivables in favor of the Issuer, which security interest is
prior to all other Liens, and is enforceable as such as against creditors of and purchasers
from the Seller.




     (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 are unlawful, void or voidable.




     (n) All Filings Made. All actions have been taken, and all filings (including,
without limitation, UCC filings) in any jurisdiction have been made or have been delivered
to the Relevant Trustee in a form suitable for filing to give the Relevant Trustee a first
priority perfected ownership interest in the Receivables.




     (o) Chattel Paper. Each Receivable constitutes either “tangible chattel paper”
or “electronic chattel paper” as such terms are defined in the UCC.




     (p) Simple Interest Receivables. All of the Receivables are Simple Interest
Receivables.




     (q) One Original or Authoritative Copy. There is only one original executed
copy of each Receivable that is tangible chattel paper and a single “authoritative copy” (as
such terms are used in Section 9-105 of the UCC) of each Receivable that is electronic
chattel paper and such electronic chattel paper was not in the form of tangible chattel
paper prior to being created as electronic chattel paper.




     (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 0.00%.




     (t) Maturity. As of the Cut-off Date, each Receivable had a remaining term to
maturity of not less than 3 payments and not greater than ___payments.



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27









 






     (u) Balance. Each Receivable had an original Principal Balance of not more
than $                     and, as of the Cut-off Date, had a principal balance of not less than
$                     and not more than $                    .




     (v) Delinquency. No Receivable was more than 29 days past due as of the
Cut-off 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 Cut-off Date.




     (x) Transfer. Each Receivable prohibits the sale or transfer of the Financed
Vehicle without the consent of NMAC.




     (y) New, Near-New and Used Vehicles. Each Financed Vehicle was a new, near-new
or used automobile or light-duty truck at the time the related Obligor executed or
authenticated the retail installment sale contract.




     (z) Origination. Each Receivable has an origination date on or after
                    , 200_.




     (aa) Receivable Files. The Receivable Files shall be kept at one or more of
the locations listed in Schedule B hereto. The Receivable Files that constitute or
evidence the Receivables do not have any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed by the Seller to any Person other than the Issuer.
All financing statements filed or to be filed against the Seller in favor of the Issuer in
connection herewith describing the Receivables contain a statement to the following effect:
“A purchase of or security interest in any collateral described in this financing statement,
except as permitted in the Sale and Servicing Agreement, will violate the rights of the
Issuer.”




     (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.




     (ee) No Pledge or Assignment of Receivables. Other than the security interest
granted to the Issuer pursuant to this Agreement, the Seller has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the Receivables. The
Seller has not authorized the filing of and is not aware of any financing statements against
the Seller that include a description of collateral covering the Receivables other than any
financing statement relating to the security interest granted to the Issuer hereunder or a
financing statement as to which the security interest covering the



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Receivables has been released. The Seller is not aware of any judgment or tax lien
filings against the Seller.




     (ff) No Government Obligors. None of the Receivables shall be due from the
United States or any state, or from any agency, department subdivision or instrumentality
thereof.



     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 the interests of the Securityholders
in 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 the Securityholders’ interest in which
was 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 [or the Swap
Counterparty], with respect to a breach of the Seller’s representations and warranties pursuant to
Section 3.01 shall be to require the Seller to repurchase Receivables pursuant to this Section and
to enforce the obligation of NMAC to the Seller to repurchase such Receivables pursuant to the
Purchase Agreement.



     SECTION 3.03 Duties of Servicer as Custodian.




     (a) Safekeeping. The Servicer shall hold the Receivable Files as custodian for
the benefit of the Issuer and maintain such accurate and complete accounts, records and
computer systems pertaining to each Receivable File as shall enable the Issuer to comply
with this Agreement. In performing its duties as custodian, the Servicer shall act with
reasonable care, using that degree of skill and attention that the Servicer exercises with
respect to the receivable files relating to all comparable automotive receivables that the
Servicer services for itself or others. In accordance with its customary practices with
respect to its retail installment sale contracts, the Servicer shall conduct, or cause to be
conducted, periodic audits of the Receivable Files held by it under this Agreement and of
the related accounts, records and computer systems, 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



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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 the Receivable Files and the related
accounts, records and computer systems maintained by the Servicer at such times during
normal business hours as the Owner Trustee or the Indenture Trustee shall instruct. The
Servicer shall permit the Owner Trustee, the Indenture Trustee and their respective agents
at any time during normal business hours upon reasonable prior notice to inspect, audit and
make copies of and abstracts from the Servicer’s records regarding any Receivable.




     (c) Release of Documents. Upon the occurrence and during the continuation of a
Servicer Default or to the extent necessary for the Indenture Trustee to comply with its
obligations under this Agreement, the Servicer shall, upon instruction from the Indenture
Trustee, release any Receivable File to the Indenture Trustee, the Indenture Trustee’s agent
or the Indenture Trustee’s designee, as the case may be, at such place or places as the
Indenture Trustee may designate, as soon as practicable.



     SECTION 3.04 Instructions; Authority To Act. The Servicer shall be deemed to have
received proper instructions with respect to the Receivable Files upon its receipt of written
instructions signed by a Trust Officer of the Owner Trustee or the Indenture Trustee.



     SECTION 3.05 Custodian’s Indemnification. The Servicer, as custodian, shall indemnify
the Issuer, the Owner Trustee and the Indenture Trustee for any and all liabilities, obligations,
losses, compensatory damages, payments, costs or expenses of any kind whatsoever that may be
imposed on, incurred by or asserted against any of them as the result of any improper act or
omission in any way relating to the maintenance and custody by the Servicer as custodian of the
Receivable Files; provided, however, that the Servicer shall not be liable to the
Owner Trustee for any portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Owner Trustee, and the Servicer shall not be liable to the Indenture Trustee
for any portion of any such amount resulting from the willful misfeasance, bad faith or negligence
of the Indenture Trustee.



     SECTION 3.06 Effective Period and Termination. The Servicer’s appointment as
custodian shall become effective as of the Cut-off 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 II or any of their Affiliates unless all of the Notes are held or
beneficially owned by NMAC, NARC II or any of their Affiliates) or, with



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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 II or any of their Affiliates unless all of the
Certificates are held or beneficially owned by NMAC, NARC II 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 or to the extent required by law, the Servicer shall not change the amount of or
reschedule the due date of any Scheduled Payment, change the APR of, or extend any
Receivable except as provided herein or change any material term of a Receivable;
provided, however, that:




     (1) if a default, breach, violation, delinquency or event permitting
acceleration under the terms of any Receivable shall have occurred or, in the
judgment of the Servicer, is imminent, the Servicer may (A) extend such Receivable
for credit related reasons that would be acceptable to the Servicer with respect to
comparable new, near-new or used automobile or light-duty truck receivables that it
services for itself, but only if (i) 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-4 Notes, and (ii)
the rescheduling or extension would not modify the terms of such Receivable in a
manner that would constitute a cancellation of such Receivable and the creation of a
new receivable for federal income tax purposes; or (B) reduce an Obligor’s monthly
payment amount in the event of a prepayment resulting from refunds of credit life
and disability insurance premiums and service contracts and make similar adjustments
in an Obligor’s payment terms to the extent required by law;



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          (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-4 Notes; and




          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. In
addition, the Servicer’s duties shall include the execution and delivery of any filings,
certificates, affidavits or other instruments required under the Sarbanes-Oxley Act of 2002.




     (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
required to be held by the Trust under the laws of any jurisdiction 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



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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) The Servicer shall not do anything to impair the rights of the Securityholders in
the Receivables.




     (c) Except with respect to Defaulted Receivables, Administrative Receivables or
Warranty Receivables or to the extend required by law, the Servicer shall not alter the APR
of any Receivable or forgive payments on a Receivable. Except as provided in Section 4.01,
the Servicer shall not modify the number of payments under a Receivable, increase the amount
financed under a Receivable, or extend the due date for any payment on a Receivable.



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     (d) If the Servicer shall determine not to make an Advance related to delinquency or
non-payment of any Receivable pursuant to Section 5.04 because it determines that such
Advance would not be recoverable from subsequent collections on such Receivable, such
Receivable shall be designated by the Servicer to be a Defaulted Receivable, provided that
such Receivable otherwise meets the definition of a Defaulted Receivable.




     (e) If the Seller is required to pay tax under the second sentence of Section 6.03(a)
and if such tax is not paid by the Seller, then the Servicer shall pay such tax (or cause
such tax to be paid) to the applicable taxing authority on behalf of the Issuer.



     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 or the Swap Counterparty] 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. 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). If each Rating Agency for a series of Notes or Certificates
confirms that it will not reduce the rating of any class of Notes or Certificates in that series,
as the case may be, the Base Servicing Fee in respect of a Collection Period (together with any
portion of the Base Servicing Fee that remains unpaid from the prior Distribution Dates) will be
paid at the beginning of that Collection Period out of collections of interest on the related
Receivables.



     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 [and the Swap



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Counterparty], with a copy to each Rating Agency, a Servicer’s Certificate containing
all information necessary to make the distributions pursuant to Sections 5.06, 5.07 and 5.08
(including the amount of the aggregate collections on the Receivables; the aggregate
Advances to be made by the Servicer, if any, the aggregate Administrative Purchase Payments
for any Administrative Receivables to be purchased by the Servicer, and the aggregate
Warranty Purchase Payments for any Warranty Receivables to be purchased by the Seller) for
the Collection Period preceding the date of such Servicer’s Certificate, all information
necessary for the Owner Trustee to send statements to 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[, the Swap
Counterparty] and each of the Rating Agencies, on or before the last day of the third month
after the end of each fiscal year of the Issuer, beginning                     , 200_, an Officers’
Certificate with respect to the prior fiscal year of the Servicer ended such calendar year
(or with respect to the initial Officer’s Certificate, the period from the date of the
initial issuance of the Notes to                     , 200_), stating that (i) 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 (ii) 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 failure to fulfill of any such obligation, specifying each such failure
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[, the Swap
Counterparty] 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 a Servicer Default under Section



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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[, the Swap Counterparty] and each of the Rating Agencies, on or before the last day of the
third month after the end of each fiscal year of the Issuer, beginning                     , 200_, with
respect to the prior fiscal year (or with respect to the initial reports, the period from the date
of the initial issuance of the Notes to                     , 200_) 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. 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.




     (a) 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.




     (b) The Servicer shall provide to each Rating Agency any information regarding the
Receivables that is reasonably requested by such Rating Agency.




     (c) 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



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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.



     SECTION 4.14 Acknowledgement by Servicer of its Obligations under the Indenture. The
Servicer hereby agrees and consents to the provisions of the Indenture applicable to it (including,
without limitation, Sections 8.03(a) and 8.03(b) thereof) and agrees to be bound by such
provisions.



     SECTION 4.15 Compliance with Regulation AB. The Servicer agrees to perform all duties
and obligations applicable to or required of the Issuer set forth in Appendix A attached hereto and
made a part hereof in all respects and makes the representations and warranties therein applicable
to it.



ARTICLE V



Distributions; Accounts;



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 [and the Swap Counterparty]. 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;
provided that if (x) the Servicer shall have failed to give investment directions
for any funds on deposit in the Collection Account to the Indenture Trustee by 5:00 p.m.
Eastern Time (or such other time as may be agreed by the Servicer and the Indenture Trustee)
on any Business Day, or (y) a Default or Event of Default shall have occurred and be
continuing with respect to the Notes but the Notes shall not have been declared due and
payable pursuant to the Indenture, or (z) if the Notes shall have been declared due and
payable following an Event of Default, amounts collected or receivable from the Trust Estate
are being applied in accordance with Section 5.05 of the Indenture as if there had not been
such a declaration, then the Indenture Trustee shall, to the fullest extent practicable,
invest and reinvest funds in the Collection Account in one or more Eligible Investments
specified in clauses (i), (iv) or (vi) of the definition of 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 distributions 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; provided,



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however, that such investment shall be sold not later than the Business Day preceding
the next Distribution Date. The Servicer will not direct the Indenture Trustee, and the
Issuer shall cause the Servicer not to make any investment of any funds or to sell any
investment held in the Collection Account unless the security interest granted and perfected
in such account will continue to be perfected in such investment or the proceeds of such
sale, in either case without any further action by any Person, and, in connection with any
direction to the Indenture Trustee to make any such investment or sale, if requested by the
Indenture Trustee, the Servicer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect. 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 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 [and the Swap Counterparty]. The Indenture Trustee shall
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 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 [or the Swap Counterparty], to the Owner Trustee for the benefit of the
Certificateholders, subject to the limitations set forth in the Indenture with respect to
amounts held for payment to Noteholders that do not promptly deliver a Note for payment on
such Distribution Date. After the transfer to the Trust Collection Account described in the
immediately preceding sentence, references in this Agreement to “Collection Account” shall
be deemed to be references to the “Trust Collection Account.”




     (d) With respect to the Collection Account and all property held therein, the Owner
Trustee agrees, by its acceptance hereof that, on the terms and conditions set forth in the
Indenture, for so long as Notes of any Class remain outstanding, the Indenture Trustee shall
possess all right, title and interest therein (excluding interest or investment



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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[, the Swap
Counterparty] 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 second
Business Day after identification thereof. 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. 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 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 second Business Day after identification thereof.



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     (b) The Indenture Trustee will promptly, on the date of receipt, deposit into the
Collection Account all New Swap Receipts received by it under the Interest Rate Swap
Agreement in immediately available funds.




     (c) 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 evidencing not less than 25% in principal amount of the Outstanding
Amount of the Notes, 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.




     (d) 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).




     (e) 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.



     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-



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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), Section 5.06(d)(i), or Section 5.06(e)(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), Section 5.06(d)(ii), or Section
5.06(e)(ii).




     (d) Notwithstanding anything to the contrary in this Agreement, for so long as NMAC is
the Servicer, in lieu of causing the Servicer first to deposit and then the Relevant Trustee
to remit to the Servicer the amounts described in clauses (i) through (iii) in Section
5.04(b) reimbursable in respect on Outstanding Advances, or the amounts described in Section
5.04(c) applicable in respect of Nonrecoverable Advances, the Servicer may deduct such
amounts from deposits otherwise to be made into the Collection Account.




     (e) Notwithstanding the provisions of Section 5.04(a), no Successor Servicer, including
the Indenture Trustee, shall be obligated to make Advances unless it has expressly agreed to
do so in writing.



(Nissan                      Sale and Servicing Agreement)




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     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 cash 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), plus amounts described
in the second sentence of Section 5.08(b) 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 Section 5.05(a) 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 12:00 P.M. New York City Time, on the related Distribution Date.




     (c) The Servicer will promptly, on the date of receipt, deposit into the Collection
Account all Net Swap Receipts and Swap Termination Payments received from the Swap
Counterparty.



     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 [and the rights of the Swap Counterparty] to
be paid [the Swap Termination Payments] under [the Interest Rate Swap Agreement], 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 Yield Supplement Deposit, the Noteholders’ Principal
Distributable Amount, the Certificateholders’ Principal Distributable Amount, the amount to
be distributed to Noteholders of each Class and to Certificateholders pursuant to Section
5.06(c), (d) or (e), the amount of [the Net Swap Payments] and [Swap Termination Payments]
to be paid to [the Swap Counterparty] and all other distributions, deposits and withdrawals
to be made on the related Distribution Date.




     (c) Subject to Sections 5.06(d) and (e), 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



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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 to be reimbursed 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 to be reimbursed 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) [to the Swap Counterparty, the Net Swap Payment, if any, for such Distribution
Date;]




          (v) on a pro rata basis (based, for the Noteholders, on the amounts distributable
pursuant to this clause to each Class of Noteholders), (A) [to the Swap Counterparty, any
Senior Swap Termination Payments for such Distribution Date,] and (B) 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, to the Class A-3
Noteholders, the Noteholders’ Interest Distributable Amount for such Class, to the Class A-4
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);




          (vi) to the Class A-1 Noteholders until the principal amount thereof is reduced to
zero, an amount equal to the Noteholders’ Principal Distributable Amount for such
Distribution Date, such amounts to be paid from Available Amounts (after giving effect to
any reduction in Available Amounts described in clauses (iii) and (iv) above);




          (vii) after the principal amount of the Class A-1 Notes is reduced to zero, to the
Class A-2 Noteholders until the principal amount of the Class A-2 Notes is reduced to zero,
then to the Class A-3 Noteholders until the principal amount of the Class A-3 Notes is
reduced to zero, and then to the Class A-4 Noteholders until the principal amount of the
Class A-4 Notes is reduced to zero, an amount equal to the Noteholders’ Principal
Distributable Amount for such Distribution Date (after giving effect to any reduction in
Noteholders’ Principal Distributable Amount described in clause (v) above), such amounts to
be paid from Available Amounts (after giving effect to any reduction in Available Amounts
described in clauses (iii) through (v) above);




          (viii) to the Reserve Account, the amount, if any, necessary to cause the balance of
funds therein to equal the Specified Reserve Account Balance with respect to such
Distribution Date, such amounts to be paid from Available Amounts (after giving



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43









 







effect to any reduction in Available Amounts described in clauses (iii) through (vi)
above);




          (ix) [to the Swap Counterparty, any Subordinated Swap Termination Payments for such
Distribution Date;]




          (x) to the Certificateholders, or, to the extent amounts are payable to a Currency Swap
Counterparty pursuant to a Currency Swap Agreement as described in Section 5.11, to such
Currency Swap Counterparty, except on any Distribution Date that occurs after the Class A
Notes are accelerated, the Certificateholders’ Principal Distributable Amount, such amounts
to be paid from Available Amounts (after giving effect to any reduction in Available Amounts
described in clauses (iii) through (vii) above); and




          (xi) any Available Amounts remaining after giving effect to the foregoing, to the
Certificateholders.




     (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 and unless and until such
acceleration has been rescinded, 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 to be reimbursed 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 to be reimbursed 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) [to the Swap Counterparty, the Net Swap Payment, if any, for such Distribution
Date;]




          (v) on a pro rate basis (based, for the Noteholders, on the amounts distributable to
this clause to each Class of Noteholders), (A) to [the Swap Counterparty, and Senior Swap
Termination Payments for such Distribution Date,] and (B) to the Class A-1 Noteholders, the
Noteholders’ Interest Distributable Amount for such Class (after giving effect to any
reduction in Available Amounts described in clause (iii) above);



(Nissan                      Sale and Servicing Agreement)



44









 






          (vi) to the Class A-1 Noteholders, 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);




          (vii) on the Distribution Date on which the Class A-1 Notes have been paid in full and
on each Distribution Date thereafter, on a pro rata basis (based on the amounts
distributable pursuant to this clause to each such Class), to the Class A-2 Noteholders, the
Noteholders’ Interest Distributable Amount for such Class, to the Class A-3 Noteholders, the
Noteholders’ Interest Distributable Amount for such Class, and to the Class A-4 Noteholders,
the Noteholders’ Interest Distributable Amount for such Class, such amounts to be paid from
Available Amounts (after giving effect to any reduction in Available Amounts described in
clauses (iii) through (v) above);




          (viii) to the Class A-2 Noteholders, the Class A-3 Noteholders, and the Class A-4
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) through (vi) above);




          (ix) [to the Swap Counterparty, and Subordinated Swap Termination Payments for such
Distribution Date;]




          (x) on the Distribution Date on which the Notes have been paid in full and on each
Distribution Date thereafter, to the Certificateholders, or, to the extent amounts are
payable to a Currency Swap Counterparty pursuant to a Currency Swap Agreement as described
in Section 5.11, to such Currency Swap Counterparty, until the total amount paid to the
Certificateholders in respect of principal from the Closing Date is equal to the Original
Certificate Balance, such amount to be paid from Available Amounts (after giving effect to
the reduction in Available Amounts described in clauses (iii) through (vii) above); and




          (xi) any Available Amounts remaining after giving effect to the foregoing, to the
Certificateholders.




     (e) Notwithstanding the provisions of Sections 5.06(c) and 5.06(d), after the
occurrence of an Event of Default that results in the acceleration of any Notes, on and
after the date on which such acceleration has been rescinded, 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:



(Nissan                      Sale and Servicing Agreement)



45









 






          (i) to the Servicer, from amounts on deposit in the Collection Account, any payments in
respect of Advances required to be reimbursed 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 to be reimbursed 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) [to the Swap Counterparty, the Net Swap Payment, if any, for such Distribution
Date;]




          (v) on a pro rata basis (based, for the Noteholders, on the amounts distributable
pursuant to this clause to each Class of Noteholders), (A) [to the Swap Counterparty, any
Senior Swap Termination Payments for such Distribution Date,] and (B) 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, to the Class A-3
Noteholders, the Noteholders’ Interest Distributable Amount for such Class, and to the Class
A-4 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);




          (vi) to the Class A-1 Noteholders, until the total amount paid to such Noteholders in
respect of principal from the Closing Date is equal to the Original Principal Amount for the
Class A-1 Notes, such amounts to be paid from Available Amounts (after giving effect to any
reduction in Available Amounts described in clause (iii) and clause (iv) above);




          (vii) to the Class A-2 Noteholders, until the total amount paid to such Noteholders in
respect of principal from the Closing Date is equal to the Original Principal Amount for the
Class A-2 Notes, such amounts to be paid from Available Amounts (after giving effect to any
reduction in Available Amounts described in clauses (iii) through (v) above);




          (viii) to the Class A-3 Noteholders, until the total amount paid to such Noteholders in
respect of principal from the Closing Date is equal to the Original Principal Amount for the
Class A-3 Notes, such amounts to be paid from Available Amounts (after giving effect to any
reduction in Available Amounts described in clauses (iii) through (vi) above);




          (ix) to the Class A-4 Noteholders, until the total amount paid to such Noteholders in
respect of principal from the Closing Date is equal to the Original Principal Amount for the
Class A-4 Notes, such amounts to be paid from Available Amounts (after giving effect to the
reduction in Available Amounts described in clauses (iii) through (vii) above);



(Nissan _____ Sale and Servicing Agreement)




46









 






          (x) [to the Swap Counterparty, and Subordinated Swap Termination Payments for such
Distribution Date;]




          (xi) on the Distribution Date on which the Notes have been paid in full and on each
Distribution Date thereafter, to the Certificateholders, or, to the extent amounts are
payable to a Currency Swap Counterparty pursuant to a Currency Swap Agreement as described
in Section 5.11, to such Currency Swap Counterparty, until the total amount paid to the
Certificateholders in respect of principal from the Closing Date is equal to the Original
Certificate Balance, 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




          (xii) any Available Amounts remaining after giving effect to the foregoing, to the
Certificateholders.




     (f) 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 paid in full on or before the Final Scheduled Distribution Date for such
Class, meaning that the Class A-1 Noteholders are entitled to have received on or before
such date payments in respect of principal in an aggregate amount equal to the Original
Principal Amount for such Class, together with all interest accrued thereon through such
date; (ii) the Class A-2 Notes are required to be paid in full on or before the Final
Scheduled Distribution Date for such Class, meaning that the Class A-2 Noteholders are
entitled to have received on or before such date payments in respect of principal in an
aggregate amount equal to the Original Principal Amount for such Class, together with all
interest accrued thereon through such date; (iii) the Class A-3 Notes are required to be
paid in full on or before the Final Scheduled Distribution Date for such Class, meaning that
the Class A-3 Noteholders are entitled to have received on or before such date payments in
respect of principal in an aggregate amount equal to the Original Principal Amount for such
Class, together with all interest accrued thereon through such date; and (iv) the Class A-4
Notes are required to be paid in full on or before the Final Scheduled Distribution Date for
such Class, meaning that the Class A-4 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.




     (g) 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



(Nissan _____ Sale and Servicing Agreement)




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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 [and the Swap Counterparty], the Seller will, pursuant to the Securities
Account Control Agreement, establish and maintain with the Securities Intermediary a
segregated trust account (the “Reserve Account”) in the name of the Indenture
Trustee which will include the money and other property deposited and held therein pursuant
to Section 5.06 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), 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 amounts in the Collection
Account and/or Available Amounts, as the case may be, are insufficient to fully fund the
payments and distributions described in clauses (i) through (vi) of Section 5.06(c), clauses
(i) through (vii) of Section 5.06(d), or clauses (i) through (viii) of Section 5.06(e), 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 payment in full of the Notes under the Indenture [and the Swap
Termination Payments to the Swap Counterparty under the Interest Rate Swap Agreement], as
directed in writing by the Servicer, the Relevant Trustee will release to the Seller any
amounts remaining on deposit in the Reserve Account, and all rights to the Reserve Account
and all other collateral registered or held therein shall revert to the Seller in accordance
with the Securities Account Control Agreement. Upon any such distribution to the Seller,
the Issuer, Owner Trustee, Certificateholders, Indenture Trustee[, Swap Counterparty] 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; provided that if
(x) the Servicer shall have failed to give investment directions for any funds on deposit in
the Reserve Account to the Indenture Trustee by 5:00 p.m. Eastern Time (or such other time
as may be agreed by the Servicer and the Indenture Trustee) on any Business Day, or (y) a
Default or Event of Default shall have occurred and be continuing with respect to the Notes
but the Notes shall not have been declared due and payable pursuant to the Indenture, or (z)
the Notes shall have been declared due and payable following an Event of Default, but
amounts collected or receivable from the Trust Estate are being applied pursuant to Section
5.05 of the Indenture as if there had not been such a declaration, then the Indenture
Trustee shall, to the fullest extent practicable, invest and reinvest funds in the Reserve
Account in one or more Eligible Investments specified in clauses (i), (iv) or



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(vi) of the definition of 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. The Servicer will not direct the Relevant Trustee to
make any investment of any funds or to sell any investment held in the Reserve Account
unless the security interest granted and perfected in such account will continue to be
perfected in such investment or the proceeds of such sale, in either case without any
further action by any Person, and, in connection with any direction to the Relevant Trustee
to make any such investment or sale, if requested by the Relevant Trustee, the Servicer
shall deliver to the Relevant Trustee an Opinion of Counsel, acceptable to the Relevant
Trustee, to such effect. Earnings, if any, on investment of funds in the Reserve Account
shall be paid to the Seller, 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 and
5.07(a), 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[, the Swap Counterparty] or the
Indenture Trustee. The Issuer, the Owner Trustee, the Seller[, the Swap Counterparty] 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 hereby grants to the Owner Trustee and the Indenture Trustee for the
benefit of the Noteholders [and the Swap Counterparty] a security interest in the Reserve
Account and all funds (including Eligible Investments) in the Reserve Account (including the
Reserve Account Initial Deposit) and the proceeds thereof to secure the payment of interest
on and principal of the Notes [and the Swap Termination Payments to the Swap Counterparty
under the Interest Rate Swap Agreement], and the Owner Trustee and the Indenture Trustee
shall have all of the rights of a secured party under the UCC with respect thereto; provided
that all income from the investment of funds in the Reserve Account, and the right to
receive such income are retained by the Seller and are not transferred, assigned or
otherwise conveyed hereunder. If for any reason the Reserve Account is no longer an
Eligible 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.



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     SECTION 5.08 Yield Supplement Account.




     (a) In order to assure that sufficient amounts to make required distributions of
interest to Noteholders [and to pay the Swap Termination Payments to the Swap Counterparty]
will be available, the Owner Trustee will, pursuant to the Securities Account Control
Agreement and the Yield Supplement Agreement, establish and maintain with the Securities
Intermediary a segregated trust account (the “Yield Supplement Account”) in the name
of the Indenture Trustee which will include the money and other property deposited and held
therein pursuant to the Yield Supplement Agreement and this Section 5.08.




     (b) On or prior to the Closing Date, the Seller shall make a capital contribution to
the Trust by depositing 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 then on deposit in the Yield Supplement Account are sufficient
therefor, the Relevant Trustee will withdraw amounts then on deposit in the Yield Supplement
Account in an amount equal to the Yield Supplement Deposit with respect to such Distribution
Date 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 deposit such excess into the Collection Account for distribution by the
Relevant Trustee in accordance with the terms of Section 5.06(c). Upon payment in full of
the Notes under the Indenture [and the Swap Termination Payments to the Swap Counterparty
under the Interest Rate Swap Agreement], as directed in writing by the Servicer, the
Indenture Trustee will release any amounts remaining on deposit in the Yield Supplement
Account, and all rights to the Yield Supplement Account and all other collateral registered
or held therein to the Seller.




     (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; provided
that if (x) the Servicer shall have failed to give investment directions for any funds on
deposit in the Yield Supplement Account to the Indenture Trustee by 5:00 p.m. Eastern Time
(or such other time as may be agreed by the Servicer and the Indenture Trustee) on any
Business Day, or (y) a Default or Event of Default shall have occurred and be continuing
with respect to the Notes but the Notes shall not have been declared due and payable
pursuant to the Indenture, or (z) the Notes shall have been declared due and payable
following an Event of Default, but amounts collected or receivable from the Trust Estate are
being applied pursuant to Section 5.05 of the Indenture as if there had not been such a
declaration, then the Indenture Trustee shall, to the fullest extent practicable, invest and
reinvest funds in the Yield Supplement Account in one or more Eligible Investments specified
in clauses (i), (iv) or (vi) of the definition of 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. The Servicer



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will not direct the Relevant Trustee to make any investment of any funds or to sell any
investment held in the Yield Supplement Account unless the security interest granted and
perfected in such account will continue to be perfected in such investment or the proceeds
of such sale, in either case without any further action by any Person, and, in connection
with any direction to the Relevant Trustee to make any such investment or sale, if requested
by the Relevant Trustee, the Servicer shall deliver to the Relevant Trustee an Opinion of
Counsel, acceptable to the Relevant Trustee, to such effect. 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) The Trust, the Owner Trustee, the Seller[, the Swap Counterparty] 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 Trust for federal income tax and all other
purposes.




     (e) Pursuant to the Yield Supplement Agreement and the Securities Account Control
Agreement, the Trust will grant to the Indenture Trustee, for the benefit of the
Noteholders[, and the Swap Counterparty[, a security interest in all funds (including
Eligible Investments) in the Yield Supplement Account (including the Initial Yield
Supplement Amount) and the proceeds thereof to secure the payment of interest on the Notes,
and the Indenture Trustee shall have all of the rights of a secured party under the UCC with
respect thereto. If for any reason the Yield Supplement Account is no longer an Eligible
Deposit Account, the Relevant Trustee shall promptly cause the Yield Supplement Account to
be moved to another institution or otherwise changed so that the Yield Supplement Account
becomes an Eligible Deposit Account.




     (f) Neither the Owner Trustee nor the Indenture Trustee shall enter into any
subordination or intercreditor agreement with respect to the Yield Supplement Account.



     SECTION 5.09 Statements to Certificateholders and Noteholders.




     (a) On each Distribution Date, the Indenture Trustee shall include with each
distribution to each Noteholder [and the Swap Counterparty] 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;



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     (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 and the amount of the
Supplemental Servicing Fee, if any, paid to the Servicer with respect to the related
Collection Period;




     (vi) the Noteholders’ Interest Carryover Shortfall and the Noteholders’
Principal Carryover Shortfall, if any, with respect to each Class of Notes, 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;




     (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;




     (x) the amount of defaults and net losses on the Receivables for the related
Collection Period;




     (xi) the number of delinquencies on the Receivables as a percentage of the
number of Receivables;




     (xii) the amount of the currency Swap Payments and the Currency Swap
Termination Payments, if any, due to the Currency Swap Counterparty under the
Currency Swap Agreement described in Section 5.11;




     (xiii) any material change in practices with respect to charge-offs, collection
and management of delinquent Receivables, and the effect of any grace period,
re-aging, re-structuring, partial payments or other practices on delinquency and
loss experience;



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     (xiv) any material modifications, extensions or waivers to Receivables terms,
fees, penalties or payments during the Collection Period;




     (xv) any material breaches of representations, warranties or covenants
contained in the Receivables;




     (xvi) any new issuance of notes or other securities backed by the Receivables;




     (xvii) any material change in the underwriting, origination or acquisition of
Receivables;




     (xviii) [the Net Swap Receipts and Net Swap Payment, if any;]




     (xix) [the Swap Replacement Proceeds, if any; and]




     (xx) [the Swap Termination Payment, if any.]




     (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. So long as NMAC is the Servicer, 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.



     SECTION 5.11 Currency Swap Agreement. Pursuant to the Trust Agreement, the Issuer may,
from time to time, as directed by the Certificateholders by means of notice to the Administrator,
enter into a Currency Swap Agreement with a Currency Swap Counterparty to swap amounts payable to
Certificateholders from U.S. dollars to Japanese yen; provided, that (1) at the time the Issuer
enters into the Currency Swap Agreement, the rating agencies have confirmed the then-existing
ratings of the Notes, and (2) any payments to the Currency Swap Counterparty (including termination
payments) are payable only from amounts that are otherwise payable to the Certificateholders. Any
payments received by the Issuer from the Currency Swap Counterparty under such a Currency Swap
Agreement shall not be deposited in the Collection Account and shall be paid by the Indenture
Trustee directly to or to the order of the Certificateholders on the related Distribution Date. In
connection with executing any such Swap Agreement, the Issuer, Indenture Trustee, Owner Trustee,
Seller and Servicer will enter into an amendment to this Sale and Servicing Agreement, subject to
Section 10.01 in a form approved by the Certificateholders, that will specify the creation of any
necessary accounts and modifications of any provisions hereof to the extent necessary or
appropriate to effectuate the intention of such Currency Swap Agreement.



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     [SECTION 5.12 Interest Rate Swap Agreement.




     (a) The Issuer shall enter into the Initial Interest Rate Swap Agreement with the
Initial Swap Counterparty. Subject to the requirements of this Section 5.12, the Issuer may
from time to time enter into one or more Replacement Interest Rate Swap Agreements in the
event that the Initial Interest Rate Swap Agreement is terminated due to any “Termination
Event” or “Event of Default” (each as defined in the Initial Interest Rate Swap Agreement)
prior to its scheduled expiration and in accordance with the terms of such Interest Rate
Swap Agreement. Other than any Replacement Interest Rate Swap Agreement entered into
pursuant to this Section 5.12(a), the Issuer may not enter into any additional interest rate
swap agreements.




     (b) In the event of any early termination of any Interest Rate Swap Agreement, (i) upon
written direction and notification of such early termination, the Indenture Trustee shall
establish the Swap Termination Payment Account, (ii) any Swap Termination Payments received
from the Swap Counterparty will be remitted to the Swap Termination Payment Account and
(iii) any Swap Replacement Proceeds received from a Replacement Swap Counterparty will be
remitted directly to the Swap Counterparty; provided, tat any such remittance to the Swap
Counterparty shall not exceed the amounts, if any, owed to the Swap Counterparty under the
Interest Rate Swap Agreement; provided, further that the Swap Counterparty shall only
receive Swap Replacement Proceeds if all Swap Termination Payments due from the Swap
Counterparty to the Issuer have been paid in full and if such amounts have not yet been paid
in full then the amount of Swap Replacement Proceeds necessary to make up any deficiency
shall be remitted to the Swap Termination Payment Account.




     (c) The Issuer shall promptly, following the early termination of any Initial Interest
Rate Swap Agreement due to an “Event of Default” or “Termination Event” (each as defined in
the Initial Interest Rate Swap Agreement) and in accordance with the terms of such Interest
Rate Swap Agreement, enter into a Replacement Interest Rate Swap Agreement to the extent
possible and practicable trough application of funds available in the Swap Termination
Payment Account unless entering into such Replacement Interest Rate Swap Agreement will
cause the Rating Agency Condition not to be satisfied.




     (d) To the extent that (i) the funds available in the Swap Termination Payment Account
exceed the costs of entering into a Replacement Interest Rate Swap Agreement or (ii) the
Issuer determines not to replace the Initial Interest Rate Swap Agreement and the Rating
Agency Condition is met with respect to such determination, the amounts in the Swap
Termination Payment Account (other than funds used to pay the costs of entering into a
Replacement Interest Rate Swap Agreement, if applicable) shall be allocated in accordance
with the order of priority specified in Section 5.06 on the following Distribution Date. In
any other situation, amounts on deposit in the Swap Termination Payment Account at any time
shall be invested pursuant to Section 5.08(e) and on each Distribution Date after the
creation of a Swap Termination Payment Account, the funds therein shall be used to cover any
shortfalls in the amounts payable under clauses (i) through (vii) of Section 5.06(c),
clauses (i) through (viii) of Section



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5.06(d), or clauses (i) through (ix) of Section 5.06(e), provided, that in no
event will the amount withdrawn from the Swap Termination Payment Account on such
Distribution Date exceed the amount of t New Swap Receipts that would have been required to
be paid on such Distribution Date under the terminated Interest Rate Swap Transaction in the
Swap Termination Payment Account after payment in full of the Class A-4 Notes shall be
included in Available Funds and allocated in accordance with the order of priority specified
in Section 5.06 on the following Distribution Date.




     (e) If the Swap Counterparty is required to post collateral under the terms of the
Interest Rate Swap Agreement, upon written direction and notification of such requirement
the Indenture Trustee shall establish the Swap Collateral Account (the “Swap Collateral
Account” over which the Indenture Trustee shall have exclusive control and the sole
right of withdrawal, and in which no Person other than the Indenture Trustee, the Swap
Counterparty and the Noteholders shall have any legal or beneficial interest. The Indenture
Trustee shall deposit all collateral received from the Swap Counterparty under the Interest
Rate Swap Agreement into the Swap Collateral Account. Any and all funds at any time on
deposit in, or otherwise to the credit of, the Swap Collateral Account shall be held in
trust by the Indenture Trustee for the benefit of the Swap Counterparty and the Noteholders,
The only permitted withdrawal from or application of funds on deposit in, or otherwise to
the credit of, the Swap Collateral Account shall be (i) for application to obligations of
the Swap Counterparty to the Issuer under the Interest Rate Swap Agreement in accordance
with the terms of the Interest Rate Swap Agreement or (ii) to return collateral to the Swap
Counterparty when and as required by the Interest Rate Swap Agreement.




     (f) All amounts held in the Swap Collateral Account shall be invested by the Indenture
Trustee, as directed in writing by the Servicer, in Eligible Investments; provided,
that if (x) the Servicer shall have failed to give investment direction for any funds on
deposit in the Swap Collateral Account to the Indenture Trustee by 5:00 p.m. Easter Time (or
such other time as may be agreed by the Servicer and the Indenture Trustee) on any Business
Day, or (y) a Default of Event of Default shall have occurred and be continuing with respect
to the Notes by the Notes shall not have been declared due and payable pursuant to the
Indenture, or (z) the Notes shall have been declared due and payable following an Event of
Default, but amount collected or receivable from the Trust Estate are being applied pursuant
to Section 5.05 of the Indenture as if there had not been such a declaration, then the
Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in the
Swap Collateral Account in one or more Eligible Investments specified in clauses (i), (iv)
or (vi) of the definition of 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. The Servicer will not direct the Indenture Trustee to
make any investment of any funds or to sell any investment held in the Swap Collateral
Account unless the security interest granted and perfected in such account will continue to
be perfected in such investment or the proceeds of such sale, in either case without any
further action by any Person, and, in connection



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55









 






with any direction to the Indenture Trustee to make any such investment or sale, if
requested by the Indenture Trustee, the Servicer shall deliver to the Indenture Trustee an
Opinion of Counsel, acceptable to the Indenture Trustee, to such effect. Earning, if any,
on investment of funds in the Swap Collateral Account shall be paid to the Seller, and
losses and any investment expenses shall be charged against the funds on deposit therein.
The Indenture Trustee shall incur no liability for the selection of investments or for
losses thereon absent its own negligence or willful misfeasance. The Indenture 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 directors.




     (g) Subject to the right of the Indenture Trustee to make withdrawals therefrom, as
directed by the Servicer, for the purposes and in the amounts set forth in Section 5.06 and
5.07(a), the Swap Collateral Account and all funds held therein shall be the property of the
Seller and not the property of the Seller and not the property of the Issuer, the Owner
Trustee, the Swap Counterparty or the Indenture Trustee. The Issuer, the Owner Trustee, the
Seller, the Swap Counterparty and the Indenture Trustee will treat the Swap Collateral
Account, all funds therein and all net investment income and all other purposes, respect
thereto as assts of the Seller for federal income tax and all other purposes.




     (h) The Seller hereby grants to the Indenture Trustee for the benefit of the
Noteholders and the Swap Counterparty a security interest in the Swap Collateral Account and
all funds (including Eligible Investments) in the Swap Collateral Account (including the
Swap Collateral Account Initial Deposit) and the proceeds thereof to secure the payment of
interest on the principal of the Notes and the Swap Termination Payments to the Swap
Counterparty under the Interest Rate Swap Agreement, and the Indenture 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 Swap Collateral Account, and the right to receive
such income are retained by the Seller and are not transferred, assigned or otherwise
conveyed hereunder. If for any reason the Swap Collateral Account is not longer an Eligible
Deposit Account, the Indenture Trustee shall promptly cause the Swap Collateral Account to
be moved to another institution or otherwise changes so that the Swap Collateral Account
becomes an Eligible Deposit Account




     (i) If at any time the Interest Rate Swap Agreement becomes subject to an early
termination due to the occurrence of an “Event of Default” or “Termination Event” (as
defined in the Interest Rate Swap Agreement), the Issuer and the Indenture Trustee shall use
reasonable efforts (following the expiration of any applicable grace period) to enforce the
rights of the Issuer thereunder as may be permitted by the terms of the Interest Rate Swap
Agreement and consistent with the terms hereof. To the extent not fully paid from Swap
Replacement Proceeds, and Swap Termination Payment owed by the Issuer to the Swap
Counterparty under the Interest Rate Swap Agreement shall be payable to the Swap
Counterparty in installment made on each following Distribution Date until paid in full in
accordance with the order of priority specified in Section 5.06. To the extent that the
Swap Replacement Proceeds exceed any such Swap Termination Payments (or if there



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are no Swap Termination Payments due to the Swap Counterparty), the Swap Replacement
Proceeds in excess of such Swap Termination Payments, if any, shall be included in Available
Funds and allocated and applied in accordance wit the order of priority specified in Section
5.06 on the following Distribution Date.]



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 is in Nashville,
Tennessee.




     (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, and has duly authorized such sale and assignment to the
Trust by all necessary corporate action; and the execution, delivery and performance of this
Agreement has been duly authorized by the Seller by all necessary corporate action.




     (d) Valid Sale; Binding Obligations. This Agreement evidences a valid sale,
transfer and assignment of the Receivables, enforceable against creditors of and purchasers
from the Seller (other than a good faith purchaser for value in the ordinary course of
business who takes actual possession of one or more Receivables); and this Agreement is a
legal, valid and binding obligation of the Seller enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and by general equitable principles.




     (e) No Violation. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result in any



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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 Interest Rate Swap Agreement], 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 Interest Rate Swap Agreement,] the Notes or
the consummation of any of the transactions contemplated by this Agreement, the Trust
Agreement, the Indenture[, the Interest Rate Swap Agreement], 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 Interest Rate Swap Agreement], 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 securities or deposit assets into a trust that
issues any securities, the issuance of which could reasonably be expected to materially and
adversely affect the rating of any Class of Notes unless it shall have first obtained the
written consent of each Rating Agency to the effect that such issuance will not materially
adversely affect such rating; provided that, the issuance of another series of certificates
or notes pursuant to agreements 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



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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 Moody’s 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 the issuance of
any certificates or notes (as defined in the Seller’s Certificate of Incorporation),
provided that any such future indebtedness incurred in connection with the issuance
of any certificates or notes must be rated at least with the same ratings given the
outstanding certificates or notes secured or supported by assets acquired by the
Seller from NMAC by each nationally recognized statistical rating organization that
has rated such outstanding certificates or notes or, prior to the issuing of such
future indebtedness incurred in connection with such certificates or notes, the
Seller shall have received confirmation from each nationally recognized statistical
rating organization that has rated such outstanding certificates or notes that the
ratings of such outstanding certificates or notes will not be adversely affected by
the issuance of such future indebtedness; and (B) (i) any indebtedness to NMAC or
any of its Affiliates incurred in connection with the acquisition of receivables,
which indebtedness shall be fully subordinated (and which shall provide for payment
only after payment in respect of all outstanding rated debt) and nonrecourse against
any assets of the Seller other than the assets pledged to secure such indebtedness,
(ii) such indebtedness does not constitute a claim against the Seller in the event
the assets pledged to secure such indebtedness are insufficient to pay such
indebtedness, (iii) holders of such indebtedness agree that they have no rights in
any assets of the Seller other than the assets pledged to secure such indebtedness,
and (iv) to the extent that any holder of such indebtedness is deemed to have any
interest in any assets of the Seller other than the assets pledged to secure such
indebtedness, holders of such indebtedness agree that their interest is subordinate
to claims or rights of holders of other indebtedness issued by the Seller, and that
such agreement constitutes a subordination agreement for purposes of Section 510(a)
of the Bankruptcy Code;




     (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 Article Three,
Article Four and Article Fifteen of the Seller’s Certificate of Incorporation, as
amended;



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          (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;




          (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 secured or supported by assets acquired by the
Seller from NMAC 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;




     (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; or




     (7) modify any provision of the “Restricted Articles,” as defined in the
Seller’s Certificate of Incorporation, of the Seller’s Certificate of Incorporation,
as amended, in any material respect.



     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



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Receivables to the Trust or the issuance and original sale of the Notes and the
Certificates, including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes and any and all other taxes levied or assessed upon the
Issuer or upon all or any part of the Trust Estate (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. Without limiting the
generality of the foregoing, if a tax is levied or assessed upon the Issuer or upon all or
any part of the Trust Estate under HB3, which tax becomes due and payable after the Closing
Date, the Seller shall pay such tax (or cause such tax to be paid) to the applicable taxing
authority on behalf of the Issuer. Notwithstanding anything to the contrary contained
herein, nothing in this Agreement should be read to imply that the Issuer is doing business
in Texas, has sufficient nexus with Texas in order for HB3 to apply to the Issuer or is
otherwise subject to the tax described in HB3.




     (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).




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     SECTION 6.04 Merger or Consolidation of, or Assumption of the Obligations of, Seller.
Subject to Section 6.02, any Person (i) into which the Seller may be merged or consolidated, (ii)
resulting from any merger, conversion or consolidation to which the Seller shall be a party, (iii)
succeeding to the business of the Seller or (iv) that is a corporation more than 50% of the voting
stock of which is owned directly or indirectly by Nissan, which Person in any of the foregoing
cases executes an agreement of assumption to perform every obligation of the Seller under this
Agreement, will be the successor to the Seller under this Agreement without the execution or filing
of any document or any further act on the part of any of the parties to this Agreement;
provided, however, that (x) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 6.01 shall have been breached and no Servicer
Default, and no event that, after notice or lapse of time, or both, would become a Servicer
Default, shall have occurred and be continuing, (y) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee an Officer’s Certificate stating that such consolidation, merger
or succession and such agreement or assumption comply with this Section 6.04 and that all
conditions precedent, if any, provided for in this Agreement relating to such transaction have been
complied with and (z) the Seller shall have delivered to the Owner Trustee and the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, based on
customary qualifications and assumptions, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to perfect the interest of
the 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
[or the Swap Counterparty], 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



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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 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
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 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 Trust and the Indenture Trustee. The location of the Servicer’s chief
executive office is in Nashville, Tennessee.




     (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



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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, 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 Purchase Agreement], the Interest Rate Swap 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 Interest Rate Swap Agreement], or the Purchase
Agreement; (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 Purchase
Agreement[, the Interest Rate Swap Agreement], 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[, the Swap Counterparty] 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 Swap Counterparty], 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,



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the Trust[, the Swap Counterparty], the Certificateholders or the Noteholders through
the negligence, willful misfeasance or bad faith of the Servicer in the performance of its
duties under this Agreement or by reason of reckless disregard of its obligations and duties
under this Agreement.




     (c) The Servicer shall indemnify, defend and hold harmless the Owner Trustee and the
Indenture Trustee from and against all Damages arising out of or incurred in connection with
the acceptance or performance of the trusts and duties herein contained, except to the
extent that such Damage: (i) shall be due to the willful misfeasance, bad faith, or
negligence (except for errors in judgment) of the Owner Trustee or the Indenture Trustee, as
the case may be; (ii) relates to any tax other than the taxes with respect to which the
Seller shall be required to 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).




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     SECTION 7.03 Merger or Consolidation of, or Assumption of the Obligations of,
Servicer. Any Person (i) into which the Servicer may be merged or consolidated, (ii) resulting
from any merger, conversion or consolidation to which the Servicer shall be a party, (iii)
succeeding to the business of the Servicer, or (iv) so long as NMAC acts as Servicer, that is a
corporation more than 50% of the voting stock of which is owned directly or indirectly by Nissan,
which Person in any of the foregoing cases executes an agreement of assumption to perform every
obligation of the Servicer under this Agreement, will be the successor to the Servicer under this
Agreement without the execution or filing of any paper or any further act on the part of any of the
parties to this Agreement; provided, however, that (x) immediately after giving
effect to such transaction, no Servicer Default, and no event which, after notice or lapse of time,
or both, would become a Servicer Default, shall have occurred and be continuing, (y) the 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 perfect 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 [or the Swap Counterparty], 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



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respect of the Basic Documents and the rights and duties of the parties to the Basic
Documents and the interests of the Certificateholders under this Agreement and the
Noteholders under the Indenture. In such event, the legal expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities of the
Servicer, and the Servicer will not be entitled to be reimbursed therefor.



     SECTION 7.05 NMAC Not To Resign as Servicer. Subject to the provisions of Section
7.03, NMAC shall not resign from the obligations and duties hereby imposed on it as Servicer under
this Agreement except upon determination that the performance of its duties under this Agreement
shall no longer be permissible under applicable law. Notice of any such determination permitting
the resignation of NMAC shall be communicated to the Owner Trustee and the Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall be confirmed in
writing at the earliest practicable time), and any such determination 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



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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 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 II or any of their Affiliates unless all of the Notes are held or
beneficially owned by NMAC, NARC II or any of their Affiliates), acting together as a single Class,
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 Receivable
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.




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     SECTION 8.02 Appointment of Successor.




     (a) Upon the Servicer’s receipt of notice of termination pursuant to Section 8.01 or
the Servicer’s resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this Agreement, in the
case of termination, only until the date specified in such termination notice or, if no such
date is specified in a notice of termination, until receipt of such notice and, in the case
of resignation, until the earlier of (i) the date 45 days from the delivery to the Owner
Trustee and the Indenture Trustee of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this Agreement and (ii) the
date upon which the predecessor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In the event of
the Servicer’s resignation or termination hereunder, the Indenture Trustee shall appoint a
Successor Servicer, and the Successor Servicer shall accept its appointment (including its
appointment as Administrator under the Administration Agreement as set forth in Section
8.02(b)) by a written assumption in form acceptable to the Owner Trustee and the Indenture
Trustee. If a Successor Servicer has not been appointed at the time when the predecessor
Servicer has ceased to act as Servicer in accordance with this Section 8.02, the Indenture
Trustee without further action shall automatically be 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,



(Nissan _____ Sale and Servicing Agreement)




69









 




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.



     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 II or any of their Affiliates
(unless all of the Notes or the Certificates, as the case may be, are held by NMAC, NARC II 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, or cause to be purchased, 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 (the “Optional Purchase”). 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 (or the deposit in cash of such lesser amount as provided in Section
9.01(b)), and shall succeed to all interests in and to the Trust Estate and the Owner Trust
Estate; provided, however, that the Servicer shall not effect any such
purchase so long as the rating of NMAC by Moody’s, or if NMAC shall then be unrated by
Moody’s, then the rating of Nissan Capital of America, Inc., is less than “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



(Nissan _____ Sale and Servicing Agreement)




70









 






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) The Servicer, at its option, may pay all or a portion of the Optional Purchase
Price by issuing a demand note in favor of the Trust, the terms of which, on the whole,
shall be commercially reasonable and substantially similar to terms that would prevail in an
arms-length negotiation between unaffiliated parties; provided, however,
that (i) the Servicer shall pay in cash the portion of the Optional Purchase Price that is
equal to or greater than the sum of (x) the Outstanding Amount of all Classes of Notes and
(y) the Noteholders’ Interest Distributable Amount for all Classes of Notes for such
Distribution Date, and [(z) all New Swap Payments, if any, and the Swap Termination
Payments, if any, to the Swap Counterparty, and] (ii) the Servicer may issue a demand note
to a Certificateholder pursuant to this Section 9.01 only if such Certificateholder consents
to the receipt of such demand note.




     (c) Notice of any such purchase of the Owner Trust Estate shall be given by the Owner
Trustee and the Indenture Trustee to each Securityholder [and the Swap Counterparty] as soon
as practicable after their receipt of notice thereof from the Servicer.




     (d) 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 under 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 9.02.



(Nissan _____ Sale and Servicing Agreement)




71









 






     (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.



     SECTION 9.03 Termination.




     (a) The respective obligations of the Seller, the Servicer, NMAC (so long as NMAC has
rights or obligations hereunder), the Owner Trustee, and the Indenture Trustee, as the case
may be, pursuant to this Agreement shall terminate upon the earliest of (i) the maturity or
other liquidation of the last Receivable and the final disposition of all amounts received
upon liquidation of any remaining Receivables, or (ii) the election by the Servicer to
purchase the corpus of the Trust as described in Section 9.01 and the payment or
distribution to Securityholders of all amounts required to be paid to them under the
Indenture or the Trust Agreement, as the case may be.




     (b) Notice of any such termination under this Section 9.03 shall be given by the
Indenture Trustee or the Owner Trustee to each Securityholder of record as specified in the
Indenture or the Trust Agreement, as appropriate [and to the SwapCounterparty].



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, the
Certificateholders or [the Swap Counterparty]; provided, that such amendment shall
not materially and adversely affect the rights or obligations of the Swap Counterparty or
the Issuer under the Interest Rate Swap Agreement unless the Swap Counterparty shall have
consented in writing to such amendment (and such consent shall be deemed to have been given
if the Swap Counterparty does not object in writing within ten (10) Business Days after
receipt of a written request for such consent).




     (1) to cure any ambiguity, correct or supplement any provision herein that may
be inconsistent with any other provision herein, or make any other provisions with
respect to matters or questions arising hereunder that are not inconsistent with the
provisions herein; provided that (i) the amendment will not materially and adversely
affect the interest of any Noteholder, Certificateholder [or the Swap Counterparty]
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, Certificateholder [or the Swap
Counterparty]; and



(Nissan _____ Sale and Servicing Agreement)




72









 






     (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 Securityholder.



          An amendment will be deemed not to materially and adversely affect the interests of any
Noteholder or Certificateholder of any Class[, or the Swap Counterparty] 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); or


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:





     (1) 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
described above under clause (2) of subsection (a) above) without the consent of
each “adversely affected” Noteholder or Certificateholder; or




     (2) 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.



(Nissan _____ Sale and Servicing Agreement)




73









 






     (3) materially and adversely affect the rights or obligations of the Swap
Counterparty under this Agreement unless the Swap Counterparty shall have consented
in writing to such amendment (and such consent shall be deemed to have been given of
the Swap Counterparty does not object in writing within ten (10) Business Days after
receipt of a written request for such consent).



     An amendment referred to 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[, the Swap Counterparty] and each of the Rating Agencies.



     It shall not be necessary for the consent of the Certificateholders or the 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(h)(A). The Owner Trustee and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee’s or the Indenture
Trustee’s, as applicable, own rights, duties or immunities under this Agreement or otherwise.



     SECTION 10.02 Protection of Title to Trust.




     (a) The Seller shall execute and file such financing statements and cause to be
executed and filed such continuation statements, all in such manner and in such places as
may be required by law fully to preserve, maintain and protect the interest of the Issuer
and of the Indenture Trustee in the Receivables and in the proceeds thereof. The Seller
shall deliver (or cause to be delivered) to the Owner Trustee and the Indenture Trustee
file-stamped copies of, or filing receipts for, any document filed as provided above, as
soon as available following such filing.




     (b) The Seller and the Servicer shall notify the Owner Trustee and the Indenture
Trustee within 30 days after any change of its name, identity or corporate structure in any
manner that would, could or might make any financing statement or continuation statement
filed in accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-507(c) of the UCC, and shall promptly file appropriate amendments to all
previously filed financing statements or continuation statements.



(Nissan _____ Sale and Servicing Agreement)




74









 






     (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 or state of
incorporation 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. The Servicer shall at all times maintain control
of the Receivables constituting electronic chattel paper. 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.



(Nissan _____ Sale and Servicing Agreement)




75









 






     (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 Trust 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;




          (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 Trust 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




          (C) with a copy to each Rating Agency then rating the Notes, no less frequently
than every twelve months (commencing on the Closing Date), an Opinion of Counsel, in
substantially the form delivered to the Rating Agencies on the Closing Date, either
as to the Servicer’s control of the Receivables evidenced by electronic contracts,
or as to the Servicer’s control of other automobile receivables evidenced by
electronic contracts sold and serviced by the Servicer.




     (i) Each Opinion of Counsel referred to in clause (h)(A), (h)(B) or (h)(C) 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 II, P.O. Box 685001, Franklin, Tennessee,
37068-5001, Attention: Treasurer, (b) in the case of the Servicer, to Nissan Motor Acceptance
Corporation, BellSouth Tower, 333 Commerce Street, 10th Floor, B-10-C, Nashville,
Tennessee, 37201-1800, Attention: Treasurer, (c) in the case of the Issuer or the Owner Trustee, to
Nissan Auto Receivables ___Owner Trust, c/o Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890, Attention: Nissan Auto Receivables ___Owner
Trust, (d) in the case of the Indenture Trustee, at the Corporate Trust Office, (e) in the case of
Moody’s, to Moody’s Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York,
New York 10007, and (f) in the case of Standard & Poor’s, to Standard & Poor’s, a division of The
McGraw-Hill Companies, Inc., 55 Water Street, New York,



(Nissan _____ Sale and Servicing Agreement)




76









 




New York 10041-0003, Attention: Asset Backed Surveillance Department[, and (g) in the case of
the Swap Counterparty, as provided in the Interest Rate Swap Agreement]; 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 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 (other than
Section 5-1401 of the General Obligations Law of the State of New York), 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 the related property acquired hereunder
and/or the assignment of any or all of the Issuer’s rights and obligations hereunder to the
Indenture Trustee.



(Nissan _____ Sale and Servicing Agreement)




77









 





     SECTION 10.11 Nonpetition Covenants.



     (a) Notwithstanding any prior termination of this Agreement, the Servicer and the Seller shall
not, prior to the date which is one year and one day after the termination of this Agreement with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the
process of any court or government authority for the purpose of commencing or sustaining a case
against the Issuer under any federal or state bankruptcy, insolvency or similar law, or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property, or ordering the winding up or liquidation of the
affairs of the Issuer.



     (b) Notwithstanding any prior termination of this Agreement, each of the Servicer and the
Owner Trustee (not in its individual capacity but solely as Owner Trustee), prior to the date which
is one year and one day after the Notes are paid in full, covenants and agrees that it will not at
any time file, join in any filing of, or cooperate with or encourage others to file any bankruptcy,
reorganization arrangement, insolvency or liquidation proceeding or other proceeding 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
Wilmington Trust Company, not in its individual capacity, but solely in its capacity as Owner
Trustee of the Issuer, and by Wells Fargo Bank, National Association, not in its individual
capacity, but solely in its capacity as Indenture Trustee under the Indenture. In no event shall
Wilmington Trust Company or Wells Fargo Bank, 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.



     SECTION 10.13 Waivers. No failure or delay on the part of the Issuer in exercising
any power, right or remedy under this Agreement or the Assignment shall operate as a waiver hereof
or thereof, nor shall any single or partial exercise of any such power, right or remedy preclude
any other or further exercise hereof or thereof or the exercise of any such power, right or remedy
preclude any other or further exercise hereof or thereof or the exercise of any other power, right
or remedy. Notwithstanding anything to the contrary, the Issuer shall not waive any breach of
representations and warranties as set forth in Sections 3.01(e), (l), (n), (o), (aa) or (ee)
without the written consent of at least a majority of the Outstanding Amount of the Notes, voting
as a single class (excluding for such purposes the outstanding principal amount of any Notes held
of record or beneficially owned by NMAC, NARC II or any of their Affiliates, unless at such time
all of the Notes are held of record or beneficially owned by NMAC, NARC II or any of their
Affiliates.



(Nissan _____ Sale and Servicing Agreement)




78









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.



	 	 	 	 	 	 	 	 	 
	 	 	NISSAN AUTO RECEIVABLES _____ OWNER TRUST	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	WILMINGTON TRUST COMPANY,

not in its individual capacity but solely as
Owner Trustee on behalf of the Trust	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	NISSAN AUTO RECEIVABLES CORPORATION II, as Seller	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	NISSAN MOTOR ACCEPTANCE CORPORATION, individually and
as Servicer	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 






	 	 	 	 	 
	ACKNOWLEDGED AND ACCEPTED AS OF 

THE DAY AND YEAR FIRST ABOVE WRITTEN:	 	 
	 
	 	 	 	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION, 

not in its individual capacity but solely as Indenture Trustee	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 






(Nissan _____ Sale and Servicing Agreement)




S-1









 





SCHEDULE A




SCHEDULE OF RECEIVABLES




To be delivered by NMAC upon request.




(Nissan _____ Sale and Servicing Agreement)




Schedule A-1









 





SCHEDULE B




LOCATION OF THE RECEIVABLE FILES





	1.	 	Nissan Motor Acceptance Corporation, including its Infiniti Financial Services Division, 8900
Freeport Parkway, Irving, TX 75063-2438
	 
	2.	 	Iron Mountain, 1235 N. Union Bower, Irving, Texas 75061
	 
	3.	 	Nissan North America, Inc., Denver Data Center, 106 Inverness Circle, East Englewood,
Colorado 80112-5312
	 
	4.	 	Iron Mountain, 8879 Fox Drive, Thornton, Colorado 80260
	 
	5.	 	FDI Computer Consulting, Inc. (dba FDI Collateral Management), at the following locations:
	 
	 	 	(a) Operations Facility (where paper titles are stored): 1650 Tribute Road, Sacramento, CA
95815-4400
	 
	 	 	(b) Data Center (where production e-data is stored): 1140 Striker, Sacramento, CA 95834
	 
	 	 	(c) Corporate Office (where daily backups are transferred): 1610 Arden Way, #145,
Sacramento, CA 95815-4010
	 
	 	 	(d) Offsite storage (where long-term backup tapes are stored): Iron Mountain, 711 Striker
Avenue, Sacramento, CA 95834
	 
	6.	 	DealerTrack, Inc., 300 Boulevard East, Weehawken, New Jersey 07086
	 
	7.	 	DealerTrack, Inc., 1 First Avenue, Waltham, Massachusetts 02451





(Nissan _____ Sale and Servicing Agreement)




Schedule B-1









 






EXHIBIT A




FORM OF YIELD SUPPLEMENT AGREEMENT




See attached.




(Nissan _____ Sale and Servicing Agreement)




Exhibit A-1









 





Nissan Auto Receivables Corporation II

P.O. Box 685001

Franklin, Tennessee 37068-5001




Dated as of                     , 200___




YIELD SUPPLEMENT AGREEMENT




Wells Fargo Bank, National Association

Wells Fargo Center

Sixth and Marquette Avenue

MAC N9311-161

Minneapolis, MN 55479

Attn: Asset Backed Securities Department




Nissan Auto Receivables ___Owner Trust

In care of: Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

Attn: Nissan Auto Receivables ___Owner Trust




Ladies and Gentlemen:




     Nissan Auto Receivables Corporation II (the “Company”) hereby confirms arrangements made as of
the date hereof with you, Wells Fargo Bank, National Association, as Indenture Trustee, and
Wilmington Trust Company, as Owner Trustee for the Nissan Auto Receivables ___Owner Trust (the
“Trust”), 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 Nissan
Motor Acceptance Corporation (“NMAC”), the Indenture Trustee and the Owner Trustee, (ii) execution
of the Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), between the
Company and 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, as Servicer, the
Company, and Nissan Auto Receivables ___Owner Trust, as Issuer (the “Sale and Servicing
Agreement”).



     1. On or prior to each Determination Date, the Servicer shall notify the Company and the Owner
Trustee 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), the Servicing Payment Deposit
with respect to the related Distribution Date and the amount of reinvestment income during the
related Collection Period on the Yield Supplement Account.



(Nissan _____ Sale and Servicing Agreement)




Exhibit A-1









 




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, ___%.
“Yield Supplemented Receivable” means any Receivable that has an APR less than the Required Rate.




     2. On or before the date hereof, the Owner Trustee shall establish and maintain with the
Securities Intermediary and pledge to the Indenture Trustee a segregated trust account in the name
of the Indenture Trustee for the benefit of the Noteholders (the “Yield Supplement Account”) in
accordance with the Securities Account Control Agreement to secure the payment of interest on the
Notes, or such other account as may be acceptable to the Rating Agencies, and the Trust hereby
grants to the Indenture Trustee for the benefit of the Noteholders a first priority security
interest in the Yield Supplement Account and 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
Indenture 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 Indenture Trustee. Neither the Company, the Trust nor any Person
claiming by, through or under the Company or the Trust shall have any right, title or interest in,
any control over the use of, or any right to withdraw 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.



     3. On or prior to the date hereof, the Company shall make a capital contribution to the Trust
of $                     (the “Initial Yield Supplement Amount”), by depositing such 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 each Distribution Date until the Notes of all Classes have
been paid in full or the Indenture is otherwise terminated (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 2.00%, 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



(Nissan _____ Sale and Servicing Agreement)




Exhibit A-2









 




distributions to be made on such Distribution Date, the Relevant Trustee shall deposit the
amount of such excess into the Collection Account for distribution by the Relevant Trustee in
accordance with the terms of Sections 5.06(c), (d) and (e) of the Sale and Servicing Agreement.
The Yield Supplement Account shall be part of the Trust. It is the intent of the parties that the
Yield Supplement Account Property be treated as property of the Trust for all federal, state and
local income and franchise tax purposes. The provisions of this Yield Supplement Agreement should
be interpreted accordingly. Further, the Trust shall include in its gross income all income earned
on the Yield Supplement Account Property and the Yield Supplement Account.




     4. 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 or the Secured Party (as defined in the Securities Account Control
Agreement) under the Securities Account Control Agreement, as the case may be. 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 payment in full of the Notes under the Indenture, as directed in writing by the Servicer, the
Indenture Trustee will release any amounts remaining on deposit in the Yield Supplement Account to
the Owner Trustee for the benefit of the Certificateholders, which amounts the Owner Trustee shall
deposit into the Trust Collection Account, and the Company shall have no further obligation to pay
to the Servicer the Servicing Payment Deposit. 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.



     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. 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, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW 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



(Nissan _____ Sale and Servicing Agreement)




Exhibit A-3









 





     number or to the attention of such other person as the relevant party shall have designated
for such purpose in a written notice.


The Company:



Nissan Auto Receivables Corporation II

P.O. Box 685001

Franklin, Tennessee 37068-5001

Attention: Treasurer

Facsimile No.: (615) 725-1720



Indenture Trustee:



Wells Fargo Bank, National Association

Wells Fargo Center

Sixth and Marquette Avenue

MAC N9311-161

Minneapolis, MN 55479

Attn: Asset Backed Securities Department

Facsimile No.: (612) 667-3464



Trust:



Nissan Auto Receivables _____ Owner Trust

In care of: Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

Attn: Nissan Auto Receivables _____ Owner Trust




          10. 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.




          11. 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.




(Nissan _____ Sale and Servicing Agreement)




Exhibit A-4









 





	 	 	 	 	 
	 	Very truly yours,



NISSAN AUTO RECEIVABLES CORPORATION II

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Agreed and accepted as of _______, 200_	 	 
	 
	 	 	 	 
	NISSAN MOTOR ACCEPTANCE CORPORATION	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION, 

AS INDENTURE TRUSTEE	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 






	 	 	 	 	 	 	 
	NISSAN AUTO RECEIVABLES _____
OWNER TRUST	 	 
	 
	 	 	 	 	 	 
	By:	 	WILMINGTON TRUST COMPANY,

not in its individual capacity but solely as
Owner Trustee on behalf of the Trust	 	 
	 
	 	 	 	 	 	 
	 	 	By:
	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






(Nissan _____ Sale and Servicing Agreement)




Exhibit A-5









 





APPENDIX A




REGULATION AB REPRESENTATIONS, WARRANTIES AND COVENANTS




PART I




DEFINED TERMS




     Section 1.01. As used in this Appendix A, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural forms of the terms
defined); unless otherwise defined herein, terms used in this Appendix A that are defined in the
Agreement to which this Appendix A is attached shall have the same meanings herein as in the
Agreement:



     “Commission”: The United States Securities and Exchange Commission.



     “Regulation AB”: Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17
C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such
clarification and interpretation as have been provided by the Commission in the adopting release
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7,
2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from
time to time.



     “Securities Act”: The Securities Act of 1933, as amended.



PART II




COMPLIANCE WITH REGULATION AB




Section 2.01. Intent of the Parties; Reasonableness.




     Each of the Issuer, the Seller and the Servicer acknowledges and agrees that the purpose of
Part II of this Appendix A is to facilitate compliance by the Issuer, the Seller, and the Servicer
with the provisions of Regulation AB and related rules and regulations of the Commission.



     Neither the Issuer nor the Seller shall exercise its right to request delivery of information,
reports or other performance under these provisions for purposes other than compliance with
Regulation AB. Each of the Issuer, the Seller and the Servicer acknowledges that interpretations
of the requirements of Regulation AB may change over time, whether due to interpretive guidance
provided by the Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and the Servicer hereby agrees to reasonably
comply with all reasonable requests made by the Issuer (including any of its assignees or
designees) or the Seller, as the case may be, in good faith for delivery of such information or
reports, including, without limitation, any Servicer compliance statements and reports, and
assessments of compliance and attestation, as may be required under the then-current
interpretations of Regulation AB.



     Notwithstanding the foregoing, the parties hereby agree to comply with all applicable sections
of Regulation AB, including, without limitation, Item 1122 of Regulation AB, which includes



(Nissan _____ Sale and Servicing Agreement)




Appendix A-1









 




the delivery by the Servicer of compliance statements and assessment and attestation reports,
and the Servicer shall obtain from each party participating in the servicing function the reports
required by Item 1122 of Regulation AB.




(Nissan _____ Sale and Servicing Agreement)





Appendix A-2